New from the Institute for Free Speech
Court Hearing on Nonprofit Donor Privacy Set for 9/17
Attorneys from the Institute for Free Speech will appear in federal court on Tuesday to represent the Massachusetts Fiscal Alliance (MassFiscal) in a donor privacy case. MassFiscal is challenging a state law that requires ads that name candidates within 90 days of a general election to include a list of the organization’s top five contributors and a lengthy disclaimer. The hearing will consider a motion to compel MassFiscal to disclose those same donors to the state as part of the litigation discovery process.
“Vindicating First Amendment rights in federal court should not involve the government rummaging through constitutionally-protected donor information, especially when, as here, that information is of no value to the Commonwealth’s case,” said Institute for Free Speech Legal Director Allen Dickerson.
The hearing will be held at 10:30 AM ET in Courtroom 12 of the John Joseph Moakley U.S. Courthouse, 1 Courthouse Way, Boston, Massachusetts.
The case began in 2018 when MassFiscal wished to run ads about proposed tax increases and a legislative pay raise. Because the ads named an incumbent officeholder who was up for re-election, state law required the ads to list MassFiscal’s top five contributors, even though the candidate was running unopposed. The law would also force the group’s chairman to appear on televised communications and personally read the state’s mandated disclaimer, which takes up nearly 20 percent of the length of an ad.
Unwilling to forfeit the privacy of its donors or publish irrelevant information on the face of its ads, MassFiscal sued the state in November 2018 for violating its constitutional right to private association and free speech. The group ultimately ran the ads after the election without the disclaimers…
To read the Institute’s brief, click here. For more information about the case, Massachusetts Fiscal Alliance v. Sullivan, click here.
In the News
Massachusetts Fiscal Alliance: Lawsuit Challenging Intimidation Legislation Heads to Court
The Massachusetts Fiscal Alliance (MassFiscal), a non-partisan non-profit organization represented by the Institute for Free Speech (IFS), heads to federal court on Tuesday in an ongoing lawsuit against the state’s intimidation legislation. The lawsuit was filed on October 10 of 2018 and challenges some of Massachusetts’ campaign finance laws as unconstitutional…
Campaign finance laws were created to hold government officials and candidates seeking office accountable for corruption. Too often they are used to hold voters, citizens, watchdog organizations, and donors “accountable” for their dissenting political views. Massachusetts Attorney General Maura Healey’s office has proven that point in the lawsuit. Even though a major point of the lawsuit is to protect the privacy of MassFiscal’s supporters, Healey’s office has argued that MassFiscal should be compelled to disclose its members for examination by the state. The Attorney General’s office is, unironically, using a case about MassFiscal members’ privacy to invade their privacy.
On July 26, MassFiscal and IFS filed a motion to counter the state’s demands. Our argument notes that the essence of our First Amendment freedoms-the freedom of speech, the freedom to organize, the freedom to raise money, and the freedom to associate with like-minded persons- is under attack from the intimidation legislation. The First Amendment right to associational privacy is longstanding, and “all legitimate organizations are the beneficiaries of [its] protections.”…
“Massachusetts should be working to expand our First Amendment rights, not contract them. The intimidation legislation should be repealed and publicly condemned by all those who want fairer elections and more open debate. Our lawsuit aims at removing intimidation from the process,” commented Paul Craney, a member of the Massachusetts Fiscal Alliance Board of Directors and spokesman for the organization.
The Courts
Courthouse News Service: Bid to Unmask Dark Money Donor Lands in DC Circuit
By Megan Mineiro
The D.C. Circuit heard arguments Friday in a lengthy legal battle entangling Washington federal courts over the issue of so-called dark money campaign contributions.
For the second time, a three-judge panel in Washington took up a case in which the Supreme Court last year allowed a lower court decision forcing Crossroads Grassroots Policy Strategies to disclose donors to take effect…
Wiley Rein attorney Thomas Kirby, representing Crossroads GPS, argued U.S. District Judge Beryl Howell had wrongly struck down the FEC regulation that allowed political groups to not disclose their donors unless the donors met certain conditions…
But Chief Judge Garland took issue with Kirby’s claims, saying the lawyer’s interpretation differed from the definition found in Buckley.
Echoing the concern from across the bench, Judge Williams said Kirby’s definition was “very narrow.”…
But Kirby held his ground, stating that Buckley demands a “very precise and very narrow and very direct linkage” between independent expenditures and a campaign objective.
CREW attorney Stuart McPhail offered a much broader definition, saying that contributions of $200 or more include expenditures not gifted to a specific candidate or campaign objective. This encompasses, he said, politically driven activities such as voter registration.
Williams later responded to arguments from McPhail, saying that while there is “fungibility with money,” the necessity for disclosure seemed “pretty direct” based on the facts laid out by CREW…
The three-judge panel will issue a decision on the case heard Friday in the coming months.
Bloomberg Government: Secret Donor Challenge Brings Court Scrutiny of Karl Rove Group
By Kenneth P. Doyle
Lawmakers and others involved in political campaigns are weighing in on both sides of the transparency issue being considered Friday by the U.S. Court of Appeals for the District of Columbia Circuit.
“Meaningful and thoroughgoing political spending disclosure must actually be required, or American democracy will continue sliding into a bog of anonymity-fueled corruption,” Democratic Sens. Sheldon Whitehouse (R.I.), Jon Tester (Mont.), and Richard Blumenthal (Conn.), said in their brief filed with the court.
Senate Majority Leader Mitch McConnell (R-Ky.), also filed a brief arguing that anonymous spending to influence elections should be allowed in order to protect donors from harassment. Other friend-of-the-court briefs discrediting disclosure were filed by the U.S. Chamber of Commerce, the nation’s biggest business lobby, and an array of conservative groups.
Kansas City Star: Lawsuit demands FEC action against dark money groups that backed Eric Greitens
By Jason Hancock
A liberal watchdog organization filed a lawsuit Monday asking a court to force the Federal Elections Commission to take action on a complaint against four groups that funneled $6 million of anonymous campaign money into Eric Greitens’ 2016 campaign for governor.
Citizens for Responsibility and Ethics in Washington, or CREW, filed a complaint with the FEC in June 2018 alleging two political action committees and two nonprofits violated federal campaign law by directing money into the campaign in such a way as to deliberately hide the identity of the donors…
CREW’s lawsuit, filed in U.S. District Court in Washington, D.C., seeks to force the FEC to take action within 30 days.
“After more than a year, the FEC has still failed to act on our complaint, part of a troubling pattern of excessive delay at the FEC that undermines the enforcement of campaign finance laws,” said Jordan Libowitz, CREW’s spokesman. “Dark money groups and super PACs funneled money to conceal the identity of donors supporting the election of now-former Missouri Gov. Eric Greitens in 2016, in violation of the law. Answers are needed and action needs to be taken.”
Hollywood Reporter: Fox News Must Face Lawsuit From Seth Rich’s Family, Appeals Court Rules
By Eriq Gardner
In a rather stunning turn of events, the 2nd U.S. Circuit Court of Appeals has revived a lawsuit brought by the parents of slain Democratic National Committee staffer Seth Rich against Fox News. On Friday, the federal appeals court rejected the cable news outlet’s First Amendment arguments with a provocative opinion that suggests media companies can be held liable for inflicting emotional distress…
In May 2017, Fox News ran a story about Rich that quoted the family’s hired investigator, Rod Wheeler, who claimed to have evidence the Rich had been in contact with WikiLeaks. After the story came out, the Rich family issued a statement condemning the article. Within 24 hours, Wheeler had retracted his claims. Fox News removed the article and promised an investigation but never apologized.
In their lawsuit, the Riches say they experienced post-traumatic stress disorder because of the reports and attempted to hold the network, its reporter Malia Zimmerman and financial guest commentator Ed Butowsky – the man who’d put Wheeler in touch with the Rich family in the first place – liable for intentional infliction of emotional distress (IIED), tortious interference with the Riches’ contract with Wheeler and negligent supervision.
An August 2018 dismissal from a federal judge seemed to confirm conventional wisdom in media law – that one can’t defame a dead person because that individual’s reputation goes to the grave. Dressing up a defamation claim by artfully pleading emotional distress doesn’t suffice.
Now, 2nd Circuit Judge Guido Calabresi, writing for a three-judge panel, concludes this decision was in error and gives media lawyers much to think about.
Online Speech Platforms
Wall Street Journal: Washington, Silicon Valley Struggle to Unify on Protecting Elections
By Dustin Volz and Deepa Seetharaman
At the meeting organized by Facebook Inc. at its headquarters in Menlo Park, Calif., Shelby Pierson-named over the summer to lead the U.S. intelligence community’s new election-threats group-delivered a blunt message to the assembled executives: You need to share more data with us about your users.
The executives and other U.S. officials in the room were caught off guard by Ms. Pierson’s assertion, according to people in attendance or briefed on the conversation. After a tense moment, another official explained that privacy law limited what social-media platforms could hand over to spy agencies.
A Twitter Inc. executive then offered a rebuke: The Trump administration was failing to share enough information with tech firms about election threats, not the other way around, the executive told the room…
The FBI, Department of Homeland Security and intelligence agencies, meanwhile, have sought to cajole social-media firms into more actively policing their networks while sharing more information about what they find, even as regulatory agencies slap companies with record-setting billion-dollar fines for privacy violations…
The companies also have sought to improve their systems for finding and eliminating disinformation.
Facebook in particular has become better equipped to respond to disinformation campaigns, said Nathaniel Persily, a Stanford University professor who studies election integrity. The company has developed machine-learning algorithms to identify inauthentic behavior, has placed restrictions on political advertising and has regularly taken down clusters of accounts that it has associated with information operations. “The capacity of the tech firms is dramatically different from what it was in 2016,” he said.
Still, barriers remain when it comes to information sharing, Mr. Persily said. “They can’t just turn over all of Facebook’s data and Twitter and Google’s data to the government.”
FEC
Columbus Dispatch: FEC fines Ohio GOP $100,000 for payments to firm run by John Kasich buddy
By Darrel Rowland
The Ohio Republican Party has agreed to pay a $100,000 fine by the Federal Election Commission for illegally using state money in federal campaigns…
In March, the federal election panel found “reason to believe” that the Ohio GOP broke federal campaign finance laws. An ensuing investigation led to a conciliation agreement with the state party last month that was made public Friday.
The original complaint was filed by the Ohio Democratic Party.
The Democrats’ communication director, Kirstin Alvanitakis, said “First Steve Chabot and Dave Joyce can’t keep track of their donors’ money. Now we see the Ohio GOP illegally gave more than half a million dollars to a Kasich crony for an unusable database. Why would any donor trust Ohio Republicans with their money?”
Joyce, a GOP congressman from northeast Ohio, saw his former campaign treasurer plead guilty to embezzling $160,000 of campaign funds last month. Chabot, a Republican congressman from Cincinnati, learned last week that authorities are investigating the theft of $100,000 from his campaign coffers…
In November 2013, [Ohio GOP chairman at the time, Matt Borges,] hired FactGem for $50,000 a month for “Project Ruby,” a proposed database that could be tapped to drive voter turnout by the GOP. While the information was used in campaigns for federal offices, about $490,000 of the $568,500 used to pay for it came from non-federal sources, the FEC found.
The distinction is important because federal money has restrictions such as limits on the size of contributions, while non-federal money does not.
The commission also ordered the party to shift $490,000 in internal accounts to satisfy federal election law.
Candidates and Campaigns
The Hill: Warren proposes new restrictions, taxes on lobbying
By Alex Gangitano
Democratic presidential candidate Sen. Elizabeth Warren (D-Mass.) on Monday proposed new restrictions on lobbying as part of a broader plan to end what she called “Washington corruption.”
Her proposal, which goes after lobbyists more aggressively than plans put forth by other White House hopefuls, calls for a new tax on any entity that spends over $500,000 annually on lobbying. Her plan also would expand the legal definition of what constitutes a lobbyist, while banning private lobbying for foreign governments, foreign individuals and foreign companies.
“The fundamental promise of our democracy is that every voice matters. But when lobbyists and big corporations can buy influence from politicians, that promise is broken,” Warren said in her proposal. “The first thing to do to fix it is to end lobbying as we know it.”
The definition of lobbyist should be revamped, Warren said, so that it replaces the portion of the 1995 Lobbying Disclosure Act that says a person must register to lobby if such activities constitute at least 20 percent of their time working for a client. Her plan would require registration by anyone who lobbies…
Warren’s proposal also would ban lobbyists from making political contributions, bundling donations or hosting fundraisers for candidates…
Her plan would require lobbyists to report all meetings with congressional offices or public officials, the documents they provide to those individuals and all government actions they want to influence.
The overall proposal expands on a bill she introduced last year, which focused on a lifetime ban on lobbying by former lawmakers, prohibiting lobbyists from making campaign contributions, prosecuting companies that mislead government agencies and tackling pay issues for congressional staffers.
Wall Street Journal: Elizabeth Warren Pushes Further Restrictions on Lobbyists
By Joshua Jamerson
The plan, outlined Monday morning on the blog site Medium, builds on anticorruption legislation Ms. Warren announced last year. It adds the new lobbying prohibitions, as well as a ban to prevent senior executive branch officials and members of Congress from serving on for-profit boards-whether or not they receive compensation from such positions. Ms. Warren, a Massachusetts Democrat, unveiled the proposal ahead of one of the splashiest events of her presidential campaign: an evening speech at New York City’s Washington Square Park.
The ideas are unlikely to become law while Republicans control the Senate and the White House. GOP lawmakers have generally lined up against similar proposals, citing constitutional concerns.
Typically, new restrictions on registered lobbyists lead to more Washington operatives deciding not to register, instead referring to themselves as consultants or strategic advisers. Ms. Warren says her plan would close that workaround by expanding the definition of lobbyist to include “all individuals paid to influence government.”…
“Look closely, and you’ll see-on issue after issue, widely popular policies are stymied because giant corporations and billionaires who don’t want to pay taxes or follow any rules use their money and influence to stand in the way of big, structural change,” Ms. Warren wrote Monday.
Ms. Warren is also pushing to alter the definition of a “thing of value” in campaign finance laws to include tangible benefits made for campaign purposes, in what appeared to be a nod to President Trump.
CBS News: Andrew Yang offered $1,000 a month to 10 random families. Is that legal?
By Kathryn Watson
When CBS News’ Ed O’Keefe asked Yang after the debate if he checked that with an election lawyer, Yang responded “Oh yeah, of course. We have this whole army of lawyers who signed off on it. But I want everyone to reflect for a moment that we live in a world where a billionaire can spend over $10 million buying his way onto the election stage and everyone thinks that is totally appropriate. But then I’m literally giving money to Americans around the country to do whatever they’d like to help improve their lives, and that seems problematic.”
Deborah Hellman, a law professor at the University of Virginia School of Law who has written about campaign finance law, said she doesn’t think the offer is illegal, because it doesn’t implicitly or explicitly ask for anything in return.
“I would think that Yang’s proposal is not illegal as he isn’t suggesting that he will give money to voters in exchange for their votes, either explicitly or implicitly,” Hellman said. “Why the proposal may seem problematic is that we may worry that the voters will feel grateful to Yang and vote for him for that reason.”
But the Supreme Court, she noted, has been clear that ingratiation isn’t corruption…
Campaign finance expert Rick Hasen, who teaches campaign finance at the University of California’s Irvine School of Law, also tweeted Thursday night that Yang’s tactic doesn’t appear to violate campaign finance laws.
“I don’t see a legal problem so long as it is not tied to voting or registering,” Hasen tweeted, adding, “I don’t see it as personal use for the candidate. It is a form of campaign advertising.”
The States
Seattle Times: Tim Eyman hit with new sanctions, ordered to disclose source of nearly $800K in donations
By David Gutman
After spending more than 18 months in contempt of court for refusing to disclose information about his finances and his business in the long-running campaign finance lawsuit against him, anti-tax activist Tim Eyman was hit Friday with further sanctions, as a Thurston County judge ruled he must disclose the source of nearly $800,000 in contributions he’s collected since 2012.
It’s the latest in a series of setbacks for Eyman, in an investigation now nearly five years old that alleges his two-decade career as a serial initiative filer has coincided with a scheme to launder political donations through a complex web of political committees, businesses and kickbacks to flout campaign-finance laws and enrich himself.
Eyman has twice been held in contempt of court for refusing to cooperate with court rules in Attorney General Bob Ferguson’s lawsuit against him. He faces a potential lifetime ban on directing the finances of political committees. He also remains in contempt of court. He and his company, Watchdog for Taxpayers, are being charged $500 a day and have racked up more than $225,000 in fines.
