Congress Shall Make No Law...

Peter Nelson, director of public policy at the Center for the American Experiment in Minneapolis, had a great oped on the costs of disclosure in the Minneapolis Star Tribune last week.  Be sure to check it out.  Here’s a taste:


In my election law seminar in law school, I recall an interesting discussion on the impact of disclosure on professors. Whether the threat to their job is real or perceived, politically conservative professors tend to hide their beliefs until they get tenure. Disclosure, of course, compromises their right to keep their politics private. The Supreme Court has protected groups like the NAACP when there was a reasonable probability of threats and harassment.


The burden of disclosure on First Amendment rights is even greater when tied to a single, controversial issue on a ballot. It's one thing to be linked to the beliefs of a candidate or a party when no one expects agreement down the line; it's quite another thing to be tied to a single issue where there is no question about your position.


For what it’s worth, I was in that election law seminar with Peter, and it was a very interesting discussion.  There seemed to be a feeling, even among some more liberal participants, that in an age when you can know someone’s political contributions through a Google search, disclosure truly can chill a person’s speech.

On Monday the Institute for Justice filed a friend-of-the-court brief urging the U.S. Supreme Court to grant review in Bluman v. FEC. As Make No Law readers may recall, Bluman is a First Amendment challenge to a federal law that prohibits noncitizens—except for those classified as “permanent residents”—from making political contributions or spending any money to support or oppose political candidates. Despite the fact that the Supreme Court in Citizens United v. FEC held that speech restrictions based on the identity of the speaker are unconstitutional, in August a three-judge panel upheld the law as a permissible means of preventing “foreign influence” on American politics. Last month, the attorneys for the plaintiffs asked the Supreme Court to review the case.


bluman_groupBluman is a fascinating and important case that absolutely merits review by the Supreme Court. As we argue in our brief, the law at issue is unconstitutional as applied to aliens like the plaintiffs, a Canadian lawyer and a Canadian-Israeli doctor, both of whom lawfully reside in the United States.  Simply put, individuals who are lawfully within the United States should enjoy the full protection of the First Amendment.  This means that, like Americans and permanent residents, they presumptively enjoy the right to spend money on political speech and even make political contributions.


Under well-established First Amendment principles, the government can only overcome this presumption if it can prove that its restriction on speech by non-permanent-resident aliens satisfies “strict scrutiny,” the highest level of judicial review.  Strict scrutiny requires the government to come forward with genuine evidence that the speech it seeks to restrict is harming some interest the government is charged with protecting and that it is restricting no more speech than necessary to address that harm.  The government didn’t do that in this case, therefore the law is unconstitutional.


As we argue in our brief, there is no reason to depart from these well-established First Amendment principles simply because the speakers in this case were not born in the United States. To understand why, it helps to first recognize that we already live in a world where “foreign influence” on American politics happens all the time, and we are none the worse for it. For example:


-Under the Foreign Agents Registration Act, foreigners—and even foreign governments—are permitted to spend unlimited amounts of money directly lobbying elected officials, and have been for decades;


-Foreigners, even those living abroad, are permitted to make unlimited “in-kind” contributions of volunteer services to political candidates, even if the value of those services is significantly greater than the legal limit for monetary contributions, as when Elton John volunteered as a performer at an event that raised $2.5 million for then-Senator Hillary Clinton’s presidential campaign; and


-Foreign-owned magazines and newspapers—like the British-owned weekly magazine, The Economist, which has a U.S. circulation of over 760,000—routinely advocate the defeat or election of American political candidates through editorial endorsements.


These types of “foreign influence” on American politics have been tolerated for decades, and for good reason: It’s all just political speech and association. Democracy isn’t imperiled by too much political speech. To the contrary, political markets, like economic markets, function better when decision-makers (in this case, voters) are permitted to acquire information from diverse sources.


More fundamentally, the First Amendment doesn’t protect speech merely because it may advance “democracy” or be useful to voters during elections.  It protects speech because freedom is good, and because the right to speak freely and associate with others for peaceful political purposes is an inherent natural right that belongs to all people.  Not every country recognizes that right—and even fewer protect it robustly—but the United States does.  That’s why the government can only restrict speech if it can prove that speech is harmful.  And that's why the Supreme Court should grant review in Bluman and reaffirm that there is no exception to this foundational principle for campaign finance laws.


The full text of IJ’s amicus brief in Bluman v. FEC is available below the fold.

Congratulations to our friends at the Center for Competitive Politics, who yesterday won a victory for free speech in Patriotic Veterans, Inc. v. Indiana. The case concerned an Indiana law that prohibited pre-recorded political phone calls unless the recorded message was introduced by a live operator. The effect of the law was to favor well-funded, well-established interests that could afford live operators over newer groups that could not.


The court did not reach the First Amendment issue, instead holding that the state law was “preempted” by the Federal Telephone Consumer Protection Act. But as CCP Chairman Brad Smith notes, “the end result is the same: [yesterday’s] ruling advances the First Amendment and provides for more competitive elections in the state.”


The full text of the opinion is available here.

wisconsinMake No Law readers may remember the Institute for Justice’s victory in Sampson v. Buescher, where the Tenth Circuit Court of Appeals ruled that grassroots groups have the right to speak about ballot issues without registering with the government and disclosing their activity.  Now the positive effects of that ruling are being felt in other states.  Last Wednesday, in the case of  Hatchett v. Barland, No. 2:10-cv-00265 (E.D. Wis. Sept. 14, 2011), a federal trial court in Wisconsin followed the Sampson ruling to conclude that it violates the First Amendment to force a citizen to tell the government that he sent a few political postcards to his neighbors.


“Mailing post cards?” you ask.  “That doesn’t sound like those ‘fat cats’ we keep hearing about.”  Indeed, this case is just the latest example of how the burdens of disclosure laws fall hardest on ordinary citizens who don’t have lawyers to alert them to the pitfalls of campaign finance laws.


Here’s what happened.  In 2006, only a few days before a Spring election, Charles Hatchett discovered that a referendum concerning liquor sales was on the ballot in his town.  Afraid the referendum would pass because of lack of publicity he sent out 524 postcards advocating that people vote against it.  It worked—the referendum was defeated.


Unfortunately for Mr. Hatchett, he did not know that under Wisconsin campaign finance law he should have placed a disclaimer on the postcards and reported his spending if it was over $25.  His total came to about $300.


Once the postcards became public, police officers questioned him and his son about whether he had sent them out.  Imagine that—police interrogating an American citizen because he had had the audacity to exercise his freedom of speech.


Thankfully, Mr. Hatchett fought back and won.  The Wisconsin court, citing Sampson v. Buescher, ruled that applying a disclosure law to ordinary citizen speech such as Mr. Hatchett’s violates the First Amendment.  This should not be a surprise: No American should have to register with the government for the “privilege” of sending postcards to his neighbors.  What’s surprising is that the law ever existed in the first place.

In a story that demonstrates almost everything that is wrong with the breadth and complexity of campaign finance laws in this country, the Washington Public Disclosure Commission has weighed in on an issue that threatens our very democracy to its core: whether the purchase of used campaign signs for $10 each in a race for the Edmonds, WA, city council was a campaign contribution or not. While reformers constantly talk about “plutocrats,” “big-money special interests,” and “sugar daddies,” in reality the burden of campaign finance laws fall heavily on new comers, small campaigns and grassroots organizations, who do not have the lawyers, accountants, and funding necessary to comply with the government’s increasingly incomprehensible but exacting regulations on political speech. Byzantium at its most decrepit could not have conceived of a law as petty and intrusive as this.


The end result, of course, is that these laws drive amateurs and regular citizens from politics and leave the playing field to professionals and large, well-funded interests. In other words, politics becomes the sole preserve of the very “plutocrats” campaign finance reformers claim to abhor. Nonetheless, we can expect reformers to continue to assail “big money” interests while they promote laws that drive “small money” actors from politics altogether.        

As campaign season heats up, we are seeing the inevitable uptick in news stories about campaign finance. The hottest topic this election seems to be the increasing number of “Super PACs” that are forming to support or oppose federal candidates.


super_pacman“Super PAC” is the term that the media has adopted to describe what the Federal Election Commission calls “independent-expenditure-only committees.” As the FEC’s label suggests, these are groups that raise money for the sole purpose of making “independent expenditures,” which is FEC-speak for ads that support or oppose candidates but are not coordinated or prearranged with those candidates in any way. As of this posting, there are more than 100 active Super PACs registered with the FEC.


Super PACs are a natural outgrowth of the U.S. Supreme Court’s campaign finance decisions. The Supreme Court has held for over 35 years that individuals are allowed to spend unlimited amounts of their own money on political speech, and last year recognized in Citizens United v. FEC that this right also extended to corporations and unions. Shortly thereafter, the Institute for Justice and the Center for Competitive Politics won v. FEC, which held that individuals could pool their money to make independent expenditures. Together, Citizens United and mean that groups of people—both individuals and associations—have a constitutional right to pool their money to make recommendations directly to the public about who they should vote for.


Unfortunately, given the complexity of campaign finance law, reporters often make mistakes when describing what Super PACs are and what they can do. Here’s a perfect example, from U.S. News & World Report:


[S]uper PACs can . . . pay unlimited amounts for “independent expenditures,” and collect unlimited cash from corporations, nonprofit groups, and labor unions, which would not otherwise be allowed, under the law, to make direct contributions to a campaign.


This description is accurate up until the end, when it says that Super PACs can use “unlimited” corporate and union money to make “direct contributions to a campaign.” In fact, Super PACs can’t make any contributions to campaigns of any money, regardless of the source of that money. That’s why the FEC calls them “independent-expenditure-only committees”—they’re only allowed to make independent expenditures.


“Super PAC” is a convenient shorthand; “independent-expenditure-only committee” is a mouthful. But that shorthand can be misleading. Super PACs are not permitted to do anything that the individuals and groups that give money to them would not be permitted to do if acting alone. Individuals can’t give unlimited amounts of money to candidates, and Super PACs can’t accept unlimited amounts of money to give to candidates. Corporations and unions can’t give money to candidates, and neither can Super PACs.


Super PACs are a super-great thing for free speech and political debate, but they don’t have super powers. They’re just groups that freely raise and spend money on independent political speech—nothing more, nothing less.

Friend of IJ Brad Smith, chairman of the Center for Competitive Politics, has written a thoughtful blog post regarding the strange case of W. Spann, LLC, a corporation that formed earlier this year, gave $1 million to a pro-Romney Super PAC, and then promptly dissolved.  The “reform” lobby is in near hysterics over the fact that no one currently knows where the money came from.  But Smith takes a hard look at whether we should really be concerned about this latest “scandal”:


[T]the donor probably hasn’t done Restore Our Future, let alone good old Mitt Romney, any favors. Restore Our Future appears to have complied with the law, reporting its donors. Romney—well, he has nothing to do with it. The entire concept of a “SuperPAC” such as Restore Our Future is that the candidate has no role in the organization. But you can bet your a-- that Romney is going to take a political hit for this—indeed, he already is. This suggests once again the wisdom of the Supreme Court’s longstanding view that independent expenditures should not be seen as creating a quid pro quo type obligation between spenders and candidates, and indeed that candidates will often be hurt by the actions of independent speakers. Similarly, if the donation by the “shadowy” W. Spann, LLC hurts Romney, as it appears it will, that seems to suggest that the system may be self-policing—take “murky” contributions, and it is likely to hurt your cause. It hardly screams out for a new law.


Be sure to read the whole thing.

Dave Weigel of Slate reports on a newly introduced bill by freshman Rep. Rob Woodall (R-Ga.) called the Competitive Elections Act of 2011.  The bill would prohibit candidates from saving contributions they receive in one election for use in a future election.  The goal of the law is help new candidates compete against incumbents by removing the ability of incumbents to amass “war chests.”


Weigel predicts that the legislation is doomed and we think he’s right about that—incumbent politicians generally aren’t interested in passing laws that eliminate the advantages of incumbency. But the law is also clearly unconstitutional.  First, it imposes a limit on political spending purely for the purpose of leveling the electoral playing field, which the U.S. Supreme Court has repeatedly said is forbidden.  Second, the law has an exemption for candidates who are facing self-funded opponents, just like the Millionaire’s Amendment provision of McCain-Feingold, which the Court held unconstitutional in Davis v. FEC.


But the Competitive Elections Act of 2011 isn’t just politically infeasible and unconstitutional:  It is yet another example of how every campaign finance regulation eventually becomes a justification for more regulation.  The problem the law attempts to solve—the inability of challengers to unseat entrenched incumbents—is itself a symptom of our country’s dysfunctional campaign finance laws.  Upstart candidates rarely have a broad base of electoral support.  By capping the size of contributions they may receive, federal campaign finance law all but ensures that they will not be able to raise the money necessary to effectively compete against incumbent politicians.


The straightforward solution to that problem—and the solution that is consistent with the First Amendment—is to remove the caps, not to add another unnecessary, unworkable, and unconstitutional layer of regulation.