Transparency and Modesty

With DISCLOSE, disclosure has become the means to pursue the time-honored campaign finance goal of buggering up your rivals' and opponents' political efficacy. Partly this is because arguments resisting disclosure (even disclosure of trivial information or very low-level donations, e.g.) come up against a question with tons of populist appeal - "what are you trying to hide?"

Daniel Solove, of GWU Law, thinks this argument is dangerous, and you can read his paper here on SSRN.

This is the abstract:

In this short essay, written for a symposium in the San Diego Law Review, Professor Daniel Solove examines the nothing to hide argument. When asked about government surveillance and data mining, many people respond by declaring: "I've got nothing to hide." According to the nothing to hide argument, there is no threat to privacy unless the government uncovers unlawful activity, in which case a person has no legitimate justification to claim that it remain private. The nothing to hide argument and its variants are quite prevalent, and thus are worth addressing. In this essay, Solove critiques the nothing to hide argument and exposes its faulty underpinnings.

Reax to DISCLOSE

The Blog of the Legal Times collected several.  My favorite:

Theodore Olson, partner in the Washington office of Gibson, Dunn & Crutcher, and winning counsel in Citizens United: “Though it comes wrapped up in language of ‘transparency,’ the plain intent of the Schumer and Van Hollen legislation—the purpose invoked by its sponsors—is to discourage people from exercising their constitutional right to free speech. One can understand why today's party leaders may want to silence discussions on their continued fitness for office, but the First Amendment simply does not tolerate it.”

No mention made of any other campaign finance case he might have argued.

Redistricting and elections

The FEC did not produce an advisory opinion 2010-03 yesterday, reports CQ.  Which raises the disturbing possibility that the long-held precedent at the agency of construing "in connection with an election" to exclude the redistricting litigation process is under a threat.

And by precedent, I mean an interpretation that has been the rule since even before 1990!

Vat can Ve Learn from Valdo?

Werner Herzog discuses the futility of life, which would of course include campaign finance reform.

We've Got Van Hal[l]en

right here.  It's ten pages shorter than the Senate counterpart.  Thank goodness for small favors.

No David Lee Roth, however.

UPDATE: The two notable differences between the two bills are that Van Hollen does not tackle media rates or the Senate filing with the FEC.  If there are other differences I didn't spot them.

Media Rates and Davis v. FEC

If I am reading the Schumer bill correctly, the section on media rates starting at about p. 80 provides that if expenditures/electioneering communications are made in a race, once those expenditures exceed $50,000, the candidate or party targeted can avail themselves of the lowest unit cost.  Given the broad definition of "electioneering communication" in the new bill, it seems the upshot of this is to provide an incumbent who has been called out in an issue ad a subsidized means to respond.

In Davis v. FEC, the Court held unconstitutional a statute that provided candidates in races with wealthy self-funded opponents a higher contribution limit.  Of course this is different, but I think the principle is similar - since when can Congress provide a benefit to one side of a political debate not available to the other side?

Senate Filings

Don't worry about a poison pill being added to the Schumer bill - it's already there! (p. 75)

Section 302(g) of the Federal Election Campaign Act of 1971 (2 U.S.C. 432(g)) is amended to read as follows:

‘‘(g) FILING WITH THE COMMISSION.—All designations, statements, and reports required to be filed under this Act shall be filed with the Commission.’’

The Senate would give up its prerogative to file with the Secretary of the Senate instead of the FEC?  Has hell frozen over?

Deemed Donations

About p. 35 has this gem:

RULES FOR DEEMING TRANSFERS MADE FOR PURPOSE OF MAKING EXPENDITURES.—For purposes of clause (i) in determining whether a covered organization or any other person who transfers amounts to another person shall be deemed to have transferred the amounts for the purpose of making a public independent expenditure, the following rules apply:

 ‘‘(I) The person shall be deemed to have transferred the amounts for the purpose of making a public independent expenditure if—

 ‘‘(aa) the person making the public independent expenditure or another person acting on that person’s behalf solicited funding from the person or from the person to whom the amounts were transferred for making any public independent expenditures,

 ‘‘(bb) the person and the person to whom the amounts were transferred engaged in substantial discussion (whether written or verbal) regarding the making of public independent expenditures,

 ‘‘(cc) the person or the person to whom the amounts were transferred knew or should have known of the covered organization’s intent to make public independent expenditures, or

 ‘‘(dd) the person or the person to whom the amounts were transferred made a public independent expenditure during the election cycle involved or the previous election cycle (as defined in section 301(25)).

 The (dd) clause seems to mimic the approach of the California "one-bite" rule. (Regulation 18215(b)(1) for the geeks in the crowd).  Ask any Californian - it's very popular.  (Not).  That legal conduct can alter the rights of individual and groups post hoc by such a presumption is sketchy, if you ask me.

What about winks?  Nods?  Nudges? Say no more.  There's hope:

‘‘(II) The person shall not be deemed to have transferred the amounts for the purpose of making a public independent expenditure if the transfer was a commercial transaction occurring in the ordinary course of business between the person and the person to whom the amounts were transferred.

That this even needs to be said should underline how broad the "donation" at issue could be.  Yet it is incumbent on the donor - not the recipient anybody else - to establish that funds are NOT meant for political spending.

Express Yourself. Carefully.

Moving through the Schumer bill, on p. 25-26 we find a new definition of express advocacy.  Like platform shoes, every decade needs its own definition of express advocacy:

(A) that, when taken as a whole, expressly advocates the election or defeat of a clearly identified candidate, or is the functional equivalent of express advocacy because it can be interpreted by a reasonable person only as advocating the election or defeat of a candidate, taking into account whether the communication involved mentions a candidacy, a political party, or a challenger to a candidate, or takes a position on a candidate’s character, qualifications, or fitness for office; . . .

 If a message can only be reasonably construed as advocating the election or defeat of a candidate, of what possible use is the "taking into account" clause following it, except to broaden the category of regulated communications beyond those that could only have one reasonable interpretation?  Mentions of a party?  An opponent?  Opinions about the fitness for office?  The safe path would appear to be to say nothing about a federal officeholder.  Which may be the idea . . .

Party Coordinated Expenditures

From p. 24 of the Schumer DISCLOSE copy linked below:

(b) REQUIRING CONTROL OR DIRECTION BY CANDIDATE FOR TREATMENT AS COORDINATED PARTY EXPENDITURE.—

 (1) IN GENERAL.—Paragraph (4) of section 315(d) of such Act (2 U.S.C. 441a(d)) is amended

to read as follows:

‘‘(4) SPECIAL RULE FOR DIRECT COSTS OF COMMUNICATIONS.—The direct costs incurred by a political committee of a political party for a communication made in connection with the campaign of a candidate for Federal office shall not be subject to the limitations contained in paragraphs (2) and (3) unless the communication is controlled by, or made at the direction of, the candidate or

 an authorized committee of the candidate.’’.

 (2) CONFORMING AMENDMENT.—Paragraph (1)

 of section 315(d) of such Act (2 U.S.C. 441a(d)) is

 amended by striking ‘‘paragraphs (2), (3), and (4)’’

 and inserting ‘‘paragraphs (2) and (3)’’.

If I am reading this right, while at  the same time this bill expands the scope of "coordinated expenditure" to things that aren't expenditures (that is, mere mention of a "candidate") - as far as parties are concerned, coordination for 441a(d) limits' purposes is only when the candidate benefitting from the party's expenditure is in charge of it.  This would seem to be an effort to strengthen the parties in the tug of war with other groups.

We've been struggling for quite a while now to come up with ONE standard for coordination.  Is two necessarily better?  Is a standard that necessarily requires the feds to engage in invasive discovery to figure out whether a massive expenditure is exempt or not great news?  If party coordinated expenditures aren't a hazard to democracy, why not deregulate them?

Senate DISCLOSE has been disclosed!

The Senate version of DISCLOSE (f/k/a Schumer-Van Hollen) is uploaded for your reading enjoyment here!

Mention has been made that the Senate and House version are "similar" but not identical.  Someone must be relishing the potential for a conference committee on campaign finance reform.

Intrade line on NV Senate Race

Doesn't look too good for Reid: NV.SENATE2010.REP 15:04

Crossing fingers

Will today be the big day?  The day we finally get to see what's in the "bipartisan"  ("bi" meaning quite literally, "two") reform legislation touted by Rep. Van Hollen and Senator Schumer, affectionately known by some as VH-S?

Will there be any surprises?  Rumor has it that the sponsors may have loosened some restrictions on party coordinated spending.  Which would be a neat way to thank Jan Baran for all the hard work he did a decade ago.  Not to mention a nice belated sayonara to Justice Souter.

When Intraparty Transfers are a Crime

only criminals will make intraparty transfers.

Gah.

UPDATE:  Meanwhile, in Florida . . .

My latest paper

is here.

You Want 20%? I've Got Your 20% Right Here.

Rumor has it - and rumor is all we've got folks, that the Van Hollen-Schumer "fix" to Citizens United will contain a 20% foreign shareholder threshold.  That is, if over 20% of a firm's shares are owned by foreign owners, that company may not make independent expenditures in federal elections.

Recall how it is a person comes to own stock.  When the stock is first issued (the IPO), market makers purchase it from the company.  Afterwards, shareholders purchase their shares through a stock market from other shareholders.  There is no company-based clearinghouse involved.  Giant grocery knows I am a customer, but Citicorp probably doesn't know I am a shareholder. (I say "probably" because I am too lazy to figure out how I hold that particular investment).  Maybe all Citicorp knows is that some person has some amount of its shares in a Schwab account.

Thus, there is no way for the company at any particular time to be able to evaluate the nationality of its shareholders.  Furthermore, this mix changes hourly.   Share ownership is far more fluid than residence, or even union membership.

But it may be that the foreign ownership threshold is not so much about protecting American elections from foreign money.  It may instead be a way to make election expenditures too difficult for corporations to be able to participate.  Serving up dysfunctional obstacles to achieve indirectly what the Court has said Congress may not do directly?  Would that be what this is about?

Scenes from Post Argument

Joe Sandler, amicus briefwriter of the day

Jim Bopp (in middle) and the press.

Surprise, surprise

The Berkeley CA city Council considered a resolution opposing Citizens United. As the article notes, the resolution's supporters suggests attendees bring small signs:

People are bringing small signs to hold up with bold and concise messages such as:

$ = Speech?!

Corporations =?!

End Corporate Personhood!

End Rule Inc.!

Save Democracy!

YES 28th Amendment!

I wonder what Rule Inc. ever did to the good folks of Berkeley?

Dough v. Reed?

Although apparently this case is REALLY about hidden money in campaigns, today the Supremes gave both sides' advocates the full treatment in the oral argument for Doe v. Reed. For the petitioners, the Justices were skeptical how the First Amendment prohibited releasing the names of individuals who had signed petitions, but did not prohibit open voting, campaign disclosure, etc. For the State of Washington, they doubted there was much real help provided the states in reviewing petitions by the public.

The morning got off to a rollicking start with Justice Kennedy delivering the opinion of the Court in Salazar v. Buono, in which it reaffirmed Congress's power to give away land in the middle of nowhere on which a cross had been set 70 years ago.

I must admit I was disappointed. I sped to the Court this morning looking forward to seeing what would happen when circumstances mixed gay activists and Christians in the Bar member line. Instead, I enjoyed catching up with Joe and Cleta. I was hoping for fireworks. Instead, we discussed smartphones and Citizens United.

I detect a new rule in campaign and election cases. You now must attract a brief from a group of scholars as amici. Then, a Justice will mention it from the bench. (Hey - two times makes a trend.) Today's proud amici is the Democracy Scholars for Democratic Democracies, or something like that. Cudos to Joe and Liz for their fine work.

Predictions? Of course! The holding will be to permit disclosure in general of the petition signer's information. There will be a variety of opinions why this is the law. Some Justices will embrace the idea that disclosure is the default in political regulation. Some will see this as an Election Administration case, rather than a First Amendment case, where states enjoy discretion. Some will see a positive role for "enhancing debate" - which seems to confuse the effect of putting one's name on a petition with putting up a yard sign. Justice Thomas will buy none of this, and he may or may not have company this time.

Big Bopper Bopping in the Morrow

Just a reminder that the truly incomparable Jim Bopp will be arguing at the Supremes tomorrow, tacking the Doe v. Reed contention that petition signers should be served up to their hostile adversaries. Or that the public really needs to know who's grandmother thinks same-sex marriage, or taxes, or school bonds, or whatever, is or isn't a good idea.

Why Candidates Dislike In-Kinds

No word yet on whether Sue Lowden, contrary to typical practice, is taking chickens as contributions to her campaign.

Pop Quiz!

From today's Wall St. Journal comes this excerpt:

[Before Citizens United] outside groups faced restrictions imposed by the 2002 McCain-Feingold campaign-finance law.

For example, campaign attack ads had to be funded by volunteer donations from company employees or union members, rather than from the corporate or union treasury, and those ads couldn't run within 60 days of a general election.

Which of the following best describes this author's mistake?

     a) Corporations are not people.
     b) PACs are not corporations, or people for that matter.
     c) Justice is not blind.
     d) Money is not speech.

Let's not neglect 2010-03

Another advisory opinion up for consideration is 2010-03, which asks the FEC to reiterate its past interpretation of what is "in connection with" a federal election - and exclude from that term of art redistricting.

Don't get me wrong - I am all for stability and for a responsible (narrow) construction of that phrase.  But the advisory opinion isn't content with that and explains:

Moreover, while the outcome of the Trust's activities may incidentally affect elections occurring subsequent to redistricting— for example, an individual's decision whether and where to run may depend on how a particular district is drawn—those strategic considerations can be impacted by any number of factors, such as: changes to campaign finance law, campaign issues that arise and fade with the vicissitudes of current events and pending legislation, changes in the electorate caused by migration, or the effect of State ballot measures on the general political climate, to name a few. The nexus between such considerations, like redistricting, and an individual's decision to run for office are far too attenuated to be considered in connection with an election.

 . .  and sex scandals . . .  are we talking about potential candidates who are deciding whether to run?  Or are we talking about individuals already in Congress, protecting themselves and their colleagues?  Is the funding of redistricting litigation really as attenuated to holding office as "migration?"  Really?

Literary Contributions

Just think.  Without a readily accessible computer database identifying federal campaign donors by occupation, we wouldn't have this!

Now the voting public can take into account which novelists support which nominees when deciding for whom they should vote.  Or they can get mad at a writer for supporting a candidate they dislike.  Which is more likely?  Which serves any governmental interest at all?

Wawa WUT?

You can feel it in the air - the anticipation of a Thursday FEC public hearing.  On the menu?  AO 2010-04, in which the Wawa PAC folks request that five specific managers be considered part of the solicitable class for the PAC.

For those of you not fluent in PAClish, if a PAC is connected to a corporation or union, that means that the connected entity can pay the PACs administrative expenses with treasury funds.  But the bitter with the sweet is that the PAC may only solicit money from certain executive or administrative employees, shareholders, families of each, and in the case of a membership organization, the group's members.

The Draft AO considers each of the five described managers in turn, and concludes that the PAC can solicit them.  Smart guys Mike Toner and Ken Gross have weighed in, however, to suggest that the FEC simplify the whole solicitable class mess by making the FEC rules relate to definitions found in other labor statutes and regulations.  Which would be simplifying if one were already conversant with those standards.  At least it gets at the proliferation of nonsensical distinctions that likely are driving PAC managers and HR folks nuts.

But this comment seems in these interesting times to lack the bold imagination that marks the high art of campaign finance law practice.  Indeed, these solicitations are expenditures, aren't they?  And they are independent.  And independent expenditures, says Citizens United, pose no threat of corruption that justifies a ban.  And isn't a "ban" exactly what we are playing with here - a blanket rule that forbids corporations from talking to certain people about the corporations political activities?  Hmmm?

Ah, you say.  That would blow a hole in the Court's 1982 National Right to Work decision.  Well, yes.  Who are you going to believe, me or your own eyes?

Well, now

We've had a sleep year here on the Skeptic, haven't we? That's about to change.