In the News
Washington Examiner: Don’t believe the gripes: Politicians just love to complain about their opponent’s money
By Eric Peterson
Candidates saying no to “dark money?” That’s not a bold decision by the candidate; it’s the law. “Dark money” groups cannot give money to candidates in the first place. Federal law bans contributions from corporations or unions to candidates.
Nor are these groups as scary as the label. “Dark money” is a pejorative term given by those who don’t like nonprofit organizations supporting or opposing candidates. Such groups include the U.S. Chamber of Commerce and the American Civil Liberties Union.
Even more absurd than the “dark money” claims is the notion perpetuated in some coverage that candidates are promising not to take super PAC money. Again, candidates are prohibited from accepting any direct funds from these groups. Meanwhile, asking super PACs not to speak out on their own is tantamount to telling citizens to shut up.
That’s because a super PAC is simply a group of people who come together to urge fellow Americans to cast their votes for or against candidates. Because such PACs can’t give money to candidates, they are not subject to the contribution limits that restrict how much regular PACs may raise from each donor. Telling super PACs to stay out of your race is simply asking citizens not to speak in our democracy. That, of course, is their right, but citizens who want to speak are free to ignore the plea.
What about rejecting corporate donations? Again, that’s what the law requires, not a choice candidates makes for themselves. Corporations are prohibited from giving money to federal candidates, despite what some people tell you about the Citizens United decision. Corporate PACs, which can contribute, don’t take corporate funds, only the voluntary donations of executives, employees, stockholders, and their families.
Roll Call: Anti-corruption, campaign finance reform bills preview likely 2020 campaign theme
By Kate Ackley
Rep. Jason Crow, a Colorado Democrat who unseated Republican Mike Coffman in the November midterm elections, introduced his first bill last week: a measure that could lead to disclosures of donors to 501(c)4 “social welfare” tax-exempt groups that play in politics…
Along those same lines, freshman Rep. Max Rose, D-N.Y., has also introduced legislation aimed at the K Street lobbying corridor, while some long-term Democratic lawmakers – including Rep. Marcy Kaptur of Ohio and Sen. Jon Tester of Montana – have offered new bills regulating political money.
Those come as House Democrats are pushing their catch-all campaign finance, ethics, lobbying and voting overhaul, which the House Oversight and Reform Committee plans to examine in a hearing Wednesday…
Crow says during his time on the campaign trail, it became clear to him across issues – including health care, gun violence or climate change – that big money in politics was stymieing proposals he supports.
“I wanted to get to the root of the problem,” he said of his bill, for which he says he is seeking GOP support.
His bill would repeal a prohibition on the IRS from investigating so-called dark money 501(c)4 social welfare organizations…
“I understand their point of view, but I just think the IRS is the wrong agency to do that,” said David Keating, president of the Institute for Free Speech, which favors campaign finance deregulation on free speech grounds. “Imagine putting the [Federal Election Commission] in charge of tax collection – they would completely botch it. We don’t want the IRS serving like a Federal Election Commission, and that’s what this bill is trying to do.”
New from the Institute for Free Speech
Analysis: H.R. 1 Restricts Speech about Public Affairs Under the Guise of Stopping ‘Coordination’
The Institute for Free Speech today released part three of its analysis of H.R. 1, also known as the “For the People Act of 2019.” This part of the analysis finds that H.R. 1 would place sweeping new limitations on the speech of all groups that discuss public affairs.
“H.R. 1’s restrictions on speech about government and public policy often make little or no sense and infringe on both the right to speak and the right to hear others. Rather than empowering Americans to play a greater role in democracy, the legislation would limit public discussion of the issues of the day, leaving citizens less informed and engaged,” said Institute for Free Speech Chairman Bradley A. Smith…
“These limitations would reach far beyond campaign speech to regulate discussion of legislative issues and public affairs,” the analysis states. “The restrictions also extend far beyond ‘super PACs’ to apply to literally any civic or membership organization that engages in such discussion. For advocacy groups, unions, and trade associations, several of the limits proposed in H.R. 1 would operate as a total ban on speech.”
The Institute for Free Speech previously released two analyses of other speech-chilling provisions of H.R. 1. The Institute’s first analysis concerns sections of the legislation that would regulate political speech on the Internet, violate the privacy of advocacy groups and their supporters, and compel speakers to include lengthy government-mandated messages in their communications. That analysis is available here. The Institute’s second analysis explains how H.R. 1 would transform the bipartisan Federal Election Commission into a partisan agency under the control of the president. That analysis is available here.
Analysis of H.R. 1 (Part Three)
By Bradley A. Smith
Under the guise of “Stopping Super PAC-Candidate Coordination,” H.R. 1 would place sweeping new limitations on speech about campaigns and public affairs. It does so in a very complex, vague, and unintuitive manner. The provisions are so complex and open to so many possible interpretations that the discussion below may well understate the chill this portion of the legislation might place on speech…
The goal seems to be to limit discussion of candidates to the candidates and parties themselves, at the expense of the public at large. However, even candidates are likely to find their speech severely restricted were H.R. 1 to become law…
Title VI, Subtitle B of H.R. 1 deceptively labels itself the “Stopping Super PAC-Candidate Coordination Act.” In fact, it applies not only to super PACs, but to any and every civic organization or membership group that communicates with the public about public affairs and legislation.
Its effect will be to drive independent citizen voices out of advocating on legislation and policy. The candidate and parties themselves, along with the legacy media of major networks and newspapers, might well have a virtual monopoly on the public discussion of such issues and legislation. In addition, H.R. 1 provides for the first time for general regulation of speech by grassroots organizations operating on the Internet, one of the most effective and inexpensive ways for small organizations to compete in the marketplace of ideas.
Many of the provisions in this subtitle – particularly the presumption of coordination where no actual coordination exists – are clearly unconstitutional under Supreme Court precedent.
Comments to FEC on Notice 2018-16, Rulemaking Petition: Definition of Contribution
By Allen Dickerson
The Commission’s notice focuses on the Institute’s discussion of Citizens for Responsibility and Ethics in Washington v. Federal Election Commission. As our previous comments noted, that decision “held that the [then existing] regulation impermissibly narrowed § 30104(c)(2)(C) when it required that speakers disclose only those donors who earmarked their contributions for a particular communication, rather than all donors who earmarked their contributions to support or oppose a specific candidate, regardless of the specific communication.” The district court also properly held that it was bound by Buckley v. Valeo, the Supreme Court’s “seminal campaign finance case.”
While the Commission’s notice correctly characterized the Institute’s petition as a response to the CREW case, it unfortunately truncated the Institute’s rationale for a rulemaking. The district court’s ruling determined that “subsection (c)(1) requires disclosure of ‘only those donors contributing…for political purposes to influence any federal election.'”
The Institute believes that “[e]ven” a definition “limited by Buckley’s ‘political purposes’ language…would still unconstitutionally chill political speech.” As the petition noted, in 1995 the U.S. Court of Appeals for the Second Circuit determined that the phrase “political purposes” involved inherent “‘hazards of uncertainty’…because it was ‘not explained in Buckley’…a problem because the phrase…could encompass all the ‘issue-advocacy activities’ engaged in by many educational, charitable, scientific, and even religious nonprofits, even when their activities are not ‘unambiguously related to the campaign of a particular federal candidate.'”
This vagueness can only be remedied by explicitly declaring that, for entities other than political committees, “contributions” are “only donations given for the express purpose of being used specifically for express advocacy, or in response to express and unambiguous solicitations for that purpose.'”
H.R. 1’s Tax-Financing Program Creates New Incentives for Corruption
By David Keating
Editor’s Note: This is the third in a series of posts examining the speech-limiting effects and record of failure of taxpayer-financed campaign programs, specific to provisions included in the so-called “For the People Act,” which House Democrats have introduced as H.R. 1 in the 116th Congress. Part I is available here, and part II is available here…
The bill would offer participating candidates a 600% match for donations up to $200. So a $50 gift would be worth $350 in total. A $200 contribution would generate $1,400 in cash for the campaign. In some cases, the match soars to 9 to 1. In total, each House candidate would be eligible for up to nearly $5 million in taxpayer funds.
The potential for abuse is obvious. As has happened in Arizona and New York City, campaigns may be motivated to give money to straw donors who then turn around and give that money right back to the campaign – and receive a 600% match from the government. Or campaigns might simply make up donors. There are some protections in the bill against fraud, but it is not at all clear these would prove to be sufficient deterrents. And it’s not clear the Federal Election Commission will be able to ferret out fraud, or if Congress would give the agency sufficient funds to do so. The number of contributions and total volume of donations matched would be far beyond what the FEC has had to process in the past, back when presidential campaigns usually ran on public subsidies.
The New York City Campaign Finance Board, the local analog to the FEC, has an annual budget of over $20 million, not counting the subsidies it doles out. It only has to monitor fraud every four years, and candidate subsidies run roughly $40 million to $50 million in an election cycle. All candidates who receive subsidies go through audits. Meanwhile, the FEC spent about $78.5 million in 2018.
The total subsidies given to candidates later investigated for fraud or corruption-related offenses in New York City have been considerable. An Institute for Free Speech analysis found that the city’s tax-financing program doled out nearly $20 million to such candidates between 2001 and 2013.
Event
Cato: Who’s Afraid of Big Tech?
Date: March 1, 2019
Time: 8:00AM to 3:30PM EST
Since the 2016 presidential election, the debate over the social role and power of America’s tech giants has intensified. Companies such as Facebook, Twitter, Amazon, and Google have found themselves on the receiving end of an array of complaints and regulatory proposals.
News of foreign interference in elections and allegations of mismanagement have prompted lawmakers to take action. Executives from the largest and most popular technology companies have been called before congressional committees and accused of being bad stewards of their users’ privacy, failing to properly police their platforms, and engaging in politically motivated censorship. At the same time, companies such as Google and Amazon have been criticized for engaging in monopolistic practices.
Are such criticisms and complaints legitimate? If so, how should regulators respond? The Cato Institute’s upcoming conference, “Who’s Afraid of Big Tech?” will feature policy and industry experts tackling these and other timely questions. We hope that you will join us.
Confirmed speakers include:
– Lindsey Barrett, Staff Attorney and Teaching Fellow, Georgetown University Law Center Institute for Public Representation Communications and Technology Clinic
– Allen Dickerson, Legal Director of the Institute for Free Speech
– Thomas Kadri, Resident Fellow, Yale Information Society Project
– Ashkhen Kazaryan, Director of Civil Liberties and Legal Research Fellow, TechFreedom
– Burcu Kilic, Director, Digital Rights Program Public Citizen
– Corynne McSherry, Legal Director, Electronic Frontier Foundation
– Alec Stapp, Technology Policy Fellow, Niskanen Center
– Matt Stoller, Policy Director, Open Markets Institute
– Kristian Stout, Associate Director, International Center for Law and Economics
Congress
House Committee on Oversight and Reform: H.R. 1: Strengthening Ethics Rules for the Executive Branch
Date: Wednesday, February 6, 2019 – 10:00am
Location: 2154 Rayburn House Office Building, Washington, DC 20515
Purpose:
The hearing will examine the proposals in H.R. 1 in the Committee’s jurisdiction, including Title VIII of the bill, the Access to Congressionally Mandated Reports Act, and the Election Day Holiday Act.
Background:
H.R. 1 was introduced by Rep. John Sarbanes on January 3, 2019. The bill includes a package of reforms to clean up corruption, fight big money in politics, and make it easier for American citizens to vote. The bill has 227 cosponsors and is endorsed by more than 65 organizations.
Witnesses:
Mr. Scott Amey
General Counsel, Project on Government Oversight
Ms. Karen Hobert Flynn
President, Common Cause
Mr. Rudy Mehrbani
Spitzer Fellow and Senior Counsel, Brennan Center for Justice
Mr. Walter Shaub Jr
Senior Advisor, Citizens for Responsibility and Ethics in Washington
Mr. Bradley A Smith
Chairman, Institute for Free Speech
Roll Call: House will advance HR 1 government overhaul package this month, Pelosi says
By Lindsey McPherson
The House will advance a package of voting rights, campaign finance and ethics overhauls this month, Speaker Nancy Pelosi said in a “Dear Colleague” letter Monday night…
While Pelosi’s comment about “advancing” HR 1 during Black History Month sounded like a commitment to a floor vote, her spokesman Drew Hammill said it was about House committees holding hearings on the measure. A floor vote could occur in late February but it might not happen until early March, he said…
Pelosi’s announcement marks the first time anyone in senior leadership has in recent weeks provided a timeline for advancing the massive legislative package. Members working on the bill had initially estimated it would be ready for floor action in late January or February but that was before the partial government shutdown that lasted 35 days.
The shutdown caused delays in normal House floor operations, making it unclear when the chamber might get to HR 1. Also the process for doling out committee assignments was slow-moving, lasting through most of January, so committees are just beginning their legislative work.
The Judiciary Committee had a hearing on HR 1 last week and the Oversight and Reform Committee will hold one this week. At least a few of the other eight panels with jurisdiction over the measure may hold hearings as well.
Some of the committees would also need to hold markups before the measure can reach the floor, meaning the House is unlikely to vote on the package before the end of the month.
Online Speech Platforms
Washington Post: Facebook has declared sovereignty
By Molly Roberts
This is not a missive from a dystopian future, but rather a fair reading of the company’s recent announcement that it will move forward with creating a supreme court. Facebook will select “judges” from experts around the world with the authority to overturn decisions about what content or accounts are approved or removed from the platform. The court also may help Facebook shape the policies under which those content-moderating decisions are made.
Facebook isn’t calling its court a court anymore, as chief executive Mark Zuckerberg did when he first floated the idea – probably because a firm under scrutiny every day for abusing its colossal power over people around the world does not want to invite comparison to governments…
Facebook’s empowering of an independent group to rule on its most controversial content moderation may be in part a way to avoid responsibility. Next time an Alex Jones gets an eviction notice, Zuckerberg won’t have to go on a podcast attempting to explain his decision and accidentally end up defending Holocaust deniers. Instead, he can simply say “wasn’t me.”
But that doesn’t take away from a striking shift: A company that once protested that it was merely a platform and not a publisher is now acknowledging that its role in society is so outsize, and its decisions about who can say what so consequential, that it must establish a check on its own dominance…
Facebook’s decisions can fundamentally alter the speech ecosystem in a nation. The company does not only end up governing individuals; it ends up governing governments, too. The norms Facebook or its court choose for their pseudo-constitution will apply everywhere, and though the company will strive for sensitivity to local context and concerns, those norms will affect how the whole world talks to one another.
The Courts
Competitive Enterprise Institute: Ninth Circuit Strikes Down Soda Labeling Ban for Wrong Reasons
By Devin Watkins
This week the federal Ninth Circuit Court of Appeals held unconstitutional the size requirement in San Francisco’s soda warning labeling regulation. However, there are broader problems with the law that the Ninth Circuit failed to identify.
In 2017, the Ninth Circuit held in CTIA v. Berkeley that the city of Berkeley, California could compel sellers of cellphones to include language implying that their phones are potentially dangerous, which the seller did not want to do, especially since the Federal Communications Commission had already ruled the phones were not dangerous. In that case, the Competitive Enterprise Institute filed an amicus brief with the Supreme Court asking the court to hear the case. Thankfully, the court agreed to grant the petition we requested, vacated the Ninth Circuit CTIA decision, and asked the Ninth Circuit to reconsider in light of the free speech precedent in National Institute of Family and Life Advocates v. Becerra.
Significantly, when the court intervenes in this way, it is because the justices believe there is a “reasonable probability that the decision below rests upon a premise that the lower court would reject if given the opportunity for further consideration.” And yet today, the Ninth Circuit now decides that its decision in CTIA was exactly correct with no premise that needs to be rejected. The Supreme Court clearly rejected the argument in Becerra that it was okay to limit the speech requirement for only certain speakers-the notion that “the State has left unburdened those speakers whose messages are in accord with its own views,” and that the speech requirement to professionals required strict scrutiny…
While this case is a sweet victory for the First Amendment, there are more problems with these kinds of regulations than just that which was identified by the Ninth Circuit leaving a sour aftertaste.
The Media
Washington Post: The Newseum was a grand tribute to the power of journalism. Here’s how it failed.
By Peggy McGlone and Manuel Roig-Franzia
The new museum’s chief executive, Charles Overby, declared that they were “laying down a marker right here on Pennsylvania Avenue that the First Amendment is the cornerstone of our democracy.”
It was a dazzling start that gave no hint of the dizzying fall to come.
“Everyone was so mesmerized,” recalled University of Maryland journalism professor Edward Alwood. “We thought . . . this thing can’t lose.”
Just 10 years later, the Newseum is shrinking into an uncertain future, the distress sale of its building to Johns Hopkins University marking the end of a troubled tenure that has become a cautionary tale of bloated budgets and unrealized ambition. The museum has been weighted down by crushing debt and beset by management upheaval, and its downfall has long been foretold, but it is still a gut punch to an industry labeled the “enemy of the people” by President Trump and struggling with digital-era financial troubles galore.
The States
MassLive: Massachusetts campaign finance regulators prepared to lower unions’ donation limit
By Shira Schoenberg
The Office of Campaign and Political Finance released draft regulations Monday that would decrease the amount of money a union can contribute to a candidate from $15,000 a year to $1,000 a year…
Under state law until now, unions and trade associations were allowed to contribute up to $15,000 to a candidate. Individuals can contribute up to $1,000 and businesses cannot contribute anything.
Two business owners who are active in the conservative Massachusetts Fiscal Alliance, founder Rick Green and board member Mike Kane, challenged the ban in court…
The Supreme Judicial Court upheld Massachusetts’ ban on corporate contributions, but noted that Massachusetts state law is unclear regarding the different treatment of unions.
The $15,000 union limit was based on an interpretive bulletin, and Common Cause Massachusetts, a government reform group, wrote to the OCPF after the SJC ruling urging the office to reconsider that limit through a traditional rulemaking process.
That rulemaking process, which included a public hearing, resulted in the draft regulations released Monday, which would limit annual union and trade association contributions to $1,000 to a candidate, $500 to a PAC and $5,000 to a political party…
OCPF will hold a public hearing March 15 on the draft regulations and release final regulations in May.
Deadline Detroit: Update: Dearborn Mayor Fires Author Of Magazine Story About Ford’s Anti-Semitism
Update, 9:30 p.m.: The Dearborn Historical Commission Thursday night passed a resolution that supports the article and its author, Bill McGraw, and asks that Mayor Jack O’Reilly allow the magazines that he is holding hostage to be mailed to subscribers.
The resolution is not binding on the mayor. The vote was unanimous, with one abstention.
Thursday afternoon article:
Dearborn Mayor Jack O’Reilly, already under fire for killing the current issue of the city-funded Dearborn Historian because it carried a report on Henry Ford’s anti-Semitism, has now fired the magazine’s editor.
Veteran Detroit journalist Bill McGraw, who was the Historian’s part-time editor, said he was informed of his dismissal Wednesday afternoon by Jack Tate, curator of the Dearborn Historical Museum.
“I continue to be puzzled by the mayor’s actions, which are just bringing more readers to the story he wanted to ban,” McGraw said. “The Dearborn Historical Museum is caught in the middle, and I have nothing but respect for the museum and the people associated with it.”
O’Reilly has not explained why he ordered the museum staff not to mail out the magazine. He and spokeswoman Mary Laundroche have not returned reporters’ calls this week.
