In the News
Courthouse News Service: Debate Over Election Reform Bill Gets Heated in House
By Jennifer Hijazi
Bradley Smith, an expert witness and chairman of the Institute for Free Speech, repeatedly told committee members that the bill would have a “chilling effect” on citizens’ desire to engage in elections…
“You run the risk of regulations swallowing up the entire discourse in which the public engages,” Smith said.
Government Executive: Republicans Blast Democrats’ Effort to Boost Ethics in Government
By Eric Katz
Bradley Smith, a former chairman of the Federal Election Commission who testified at the hearing, criticized a section of the bill that would reduce the number of commissioners from six to five. The move, he said, would allow a majority of one party to preside over the agency.
Federal News Network: OGE ‘lacks real enforcement authority,’ but House Dems look to give it more teeth
By Jory Heckman
Each Congress, the House majority party typically reserves HR 1 for its legislative priority…
Committee Republicans, however, pushed back on the scope of the Democratic bill – which also includes sections on campaign finance reform and voting rights – and expressed doubt about it gaining enough traction to become law.
“It’s not a stretch to call many of these proposals radical,” ranking member Jim Jordan (R-Ohio) said.
Bradley Smith, the chairman of the Institute for Free Speech, said HR 1 amounted to a “grab bag” of disparate legislative ideas that should be broken into smaller bills.
New from the Institute for Free Speech
IFS Chairman Brad Smith Corrects AOC on Campaign Finance Law (Video)
At a February 6, 2019, House Oversight and Reform Committee hearing on H.R. 1, IFS Chairman Bradley A. Smith was asked by Representative Chip Roy (R-TX) to correct the record on a line of misleading questioning by Representative Alexandria Ocasio-Cortez (D-NY) on current U.S. campaign finance laws. In the following clip, Brad clarifies the state of current law and explains some of the problems with the questions that were presented by Representative Ocasio-Cortez…
A copy of Brad’s written testimony to the House Oversight and Reform Committee on a number of issues with H.R. 1 can be accessed here.
AOC Doesn’t Let the Facts Get in the Way of a Good Story
By Scott Blackburn
The press and self-styled “reformers” alike are heralding Rep. Alexandria Ocasio-Cortez for her remarks during yesterday’s House Oversight and Reform Committee hearing on H.R. 1…
Presenting herself as the hypothetical “bad guy” trying to destroy democracy, Ocasio-Cortez spun a tale about how she could (among other things) “use my special interest, dark money-funded campaign to pay off folks that I need to pay off to get elected.”
This dystopic vision of how campaigns work in America bears little semblance to reality. Let’s work backward:
1. You cannot use campaign funds for non-campaign related expenses. That includes “paying off folks.” Here, Ocasio-Cortez appears to be referencing the Stormy Daniels scandal and the “greenlight for hush money” she claims it represents. But she has the argument exactly backwards. Those who believe Trump committed a campaign violation think that the hush money needed to be paid with campaign expenses, and that Trump’s failure to do so was the problem. As IFS Chairman Bradley A. Smith previously argued, IFS believes the opposite is true. The crime would be if you did “pay off folks” with campaign money…
2. “Dark-money funded campaigns” are not a thing. The source of all donations to candidates over $200 are fully disclosed to the FEC, which then publishes that information online for the world to see…
3. “Special interest” money does not dominate campaign coffers, even of the candidates you don’t like. This ties in to Ocasio-Cortez’s earlier assertion that a campaign could be entirely funded by corporate PAC donations. That’s true in the abstract – there’s nothing in the law to stop a candidate from trying – but completely divorced from the reality of how campaigns are funded. Notably, Ocasio-Cortez did not name any examples of this sort of campaign, because there aren’t any. In reality, all congressional campaigns are predominantly funded by individual donors, not corporate PACs.
ICYMI
Testimony of Bradley A. Smith Before the U.S. House Oversight and Reform Committee
By Bradley A. Smith
Despite proponents’ insistence that H.R. 1 is “For the People,” the bill is anything but. More appropriately labeled the “For the Politicians Act,” H.R. 1 would make seismic changes to the long-held ability of Americans to speak and associate with other Americans on the issues about which they are passionate. The bill would radically transform oversight over the labyrinth of laws that regulate political speech, from its historic bipartisan structure to partisan control. It would impose onerous and unworkable standards on the ability of Americans and groups of Americans to discuss the policy issues of the day with elected officials and the public. Other sections of the bill would violate the privacy of advocacy groups and their supporters, stringently regulate political speech on the Internet, and compel speakers to include lengthy government-mandated messages in their communications. The proposal would also coerce Americans into funding the campaigns of candidates with which they may disagree in a system that research has proven hasn’t worked elsewhere. These issues represent only the tip of the iceberg of what’s included in H.R. 1.
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.
The Courts
The Hill: Judge orders partial release of documents from Michael Cohen raid
By Morgan Chalfant
A federal judge in New York on Thursday ordered the partial release of materials related to the FBI raid on properties belonging to Michael Cohen…
U.S. District Judge William Pauley III partially granted a request by numerous media organizations to release search warrants and other materials justifying the raid on Cohen’s home, hotel room and office last April. The judge ruled that it is in the public interest for the files be released, with appropriate redactions to protect ongoing investigations and FBI methods and procedures.
“The public interest in the underlying subject matter of the Materials-which implicates the integrity of the 2016 presidential election-is substantial,” Pauley wrote in a 30-page opinion.
The New York Times, Associated Press and other news organizations had petitioned for the release of copies of search warrants, warrant applications and supporting affidavits and riders in connection with the searches…
Pauley on Thursday ruled that releasing the materials with certain redactions “strikes an appropriate balance between the strong presumption of public access to search warrant materials and the countervailing interests identified by the Government.”
“In particular, the Government represents that aspects of its investigation remain ongoing, including those pertaining to or arising from Cohen’s campaign finance crimes,” Pauley wrote.
The judge ordered prosecutors to submit a sealed copy of materials with proposed redactions by Feb. 28.
The judge also ordered the government to submit a status report under seal by May 15 identifying any individuals or entities subject to “ongoing investigations” and explaining the need for certain materials to remain redacted.
Congress
Roll Call: Rep. Alexandria Ocasio-Cortez calls out dark money ‘shaping’ questions about reform bill
By Emily Kopp
The hearing was dedicated to HR 1 – the “For the People Act of 2019” – a catch-all campaign finance, ethics, lobbying and voting overhaul introduced as a symbolic first piece of legislation after Democrats gained control of the House.
The bill includes automatic voter registration, super PAC restrictions, public matching funds for small-dollar donations and tighter ethics rules around the behavior of public servants, among other reforms…
Some committee Republicans also voiced opposition to a provision in HR 1 striking a prohibition that prevents the Internal Revenue Service from investigating so-called “dark money” 501(c)(4) social welfare organizations on privacy grounds. The change would allow for more scrutiny of Americans for Prosperity, a conservative-leaning social welfare group linked to Charles and David Koch that boosts Republicans, though the provision could also impact Majority Forward, a 501(c)(4) aligned with wealthy Democratic donors.
CNN: House intelligence chair announces sweeping investigation into Trump’s finances and Russia
By Jeremy Herb and Manu Raju
House Intelligence Committee Chairman Adam Schiff announced Wednesday a broad investigation his committee would undertake “beyond Russia” into whether President Donald Trump’s financial interests are driving his actions.
Schiff said the investigation would “allow us to investigate any credible allegation that financial interests or other interests are driving decision-making of the President or anyone in the administration.”
“That pertains to any credible allegations of leverage by the Russians or the Saudis or anyone else,” Schiff told reporters after the House Intelligence Committee’s first meeting in the new Congress.
In a statement, Schiff said the investigation would include a continued probe into Russia’s actions during the 2016 election and contacts between the Russia and Trump’s team, as well as an examination of “whether any foreign actor has sought to compromise or holds leverage, financial or otherwise, over Donald Trump, his family, his business, or his associates.”
Schiff said the investigation, which could involve additional congressional committees, would also look at whether Trump or his associates have “sought to influence US government policy in service of foreign interests” and any potential obstruction into the various investigations…
The House Intelligence Committee met for the first time in the new Congress Wednesday and took its first action by voting to send more than 50 transcripts from its Russia investigation interviews to Mueller.
New York Daily News: Alexandria Ocasio-Cortez rails against ‘broken’ political finance laws, takes aim at Trump and ‘bad guys’
By Chris Sommerfeldt
The Bronx-born democratic socialist blasted U.S. campaign finance laws as “fundamentally broken” during a congressional hearing Wednesday, charging that the current state of political spending permits “bad guys” to “do all sorts of terrible things.” …
In a thinly-veiled reference to Trump’s pre-2016 election payments to Stormy Daniels and Karen McDougal, Ocasio-Cortez continued, “Green light for hush money, I can do all sorts of terrible things, it’s totally legal right now for me to pay people off and that is considered speech.” …
She also posed a scenario to the finance experts in which she was another type of “bad guy,” who was elected to Congress after accepting barrels of cash in political donations from special interest groups like fossil fuel lobbies and corporate super PACs.
Associated Press: The Latest: House panel backs sending transcripts to Mueller
The House intelligence committee has postponed closed-door testimony from President Donald Trump’s former lawyer, according to the panel’s chairman.
Cohen was scheduled to speak with the committee Friday. California Rep. Adam Schiff said in a statement that the interview has been rescheduled for Feb. 28 “in the interests of the investigation.” He did not say which investigation he was talking about.
Trump’s former fixer is a central figure in special counsel Robert Mueller’s investigation into possible coordination between Russia and Trump’s campaign. He begins a three-year prison sentence in March after pleading guilty to campaign finance violations and lying to Congress.
Cohen was also scheduled to speak to the House Oversight and Reform Committee this week but pulled out, citing threats from Trump and the president’s attorney-spokesman, Rudy Giuliani.
Fundraising
Roll Call: Will the ‘green wave’ return for House Democrats?
By Bridget Bowman
For one, they’ll be competing with a growing field of Democratic presidential contenders, several of whom have already pledged to lean heavily on grassroots donors as they bid to take on President Donald Trump.
The presidential race likely also means less earned media attention for House Democrats…
“Donors don’t just show up. They’re just not some magical ATM,” said Erin Hill, the executive director of ActBlue, a Democratic online fundraising platform. “They’re cultivated like a community, like you would cultivate any other constituency in a campaign.” …
With the presidential race commanding much of the attention, it’s unclear how much of the “drive-by” money directed at Democrats in 2018 will return, said one Democratic digital consultant. “Drive-by” money refers to funds raised from progressive groups directing their own donors toward specific candidates…
Media attention in 2018 also led to spikes in donations for House challengers, particularly in longer-shot races…
Donor fatigue after a successful midterm election could hurt many vulnerable freshmen who are looking to post strong numbers in the first fundraising quarter.
Another challenge facing House Democrats is their shifting posture from offense to defense. Donors may not be as excited about defending the new majority as they were about ousting House Republicans last cycle, particularly in the first year of the new Congress…
“It’s not just that people are giving more, it’s that more people and new people are giving,” said Adam Bozzi, a spokesman for End Citizens United. The campaign finance group will continue to back candidates who reject corporate PAC money and direct its donors to support those contenders.
The States
Denver Post: Pro Prop 112 group to be investigated for possible campaign finance violation
By John Aguilar
The Secretary of State’s Office announced Wednesday it will investigate a campaign finance complaint against the group that spearheaded last November’s unsuccessful ballot measure that would have reduced new oil and gas production in Colorado.
Republican Charles Heatherly filed the complaint last month against Colorado Rising, alleging the organization incorrectly reported a large campaign contribution from the Sergey Brin Family Foundation shortly before the Nov. 6 election. The complaint also claims ProgressNow Colorado, a political advocacy organization that supports liberal causes, should have registered as an issue committee because it used the foundation’s money to do campaign work on behalf of Proposition 112, the drilling setbacks measure pushed by Colorado Rising.
Former Colorado Secretary of State Scott Gessler, who is representing Heatherly, said it appears that ProgressNow Colorado and Colorado Rising attempted to obfuscate the source of the funds – the Sergey Brin Family Foundation was started by Google founder Sergey Brin – by filing multiple amended campaign finance reports in late October that show a $170,000 donation coming from a changing list of contributors…
Martha Tierney, an attorney for Colorado Rising, dismissed the complaint as unfounded.
“They make a whole bunch of suppositions that are not true,” she said. “And when the facts are known, I’m confident the complaint will be dismissed.”
In a letter Tierney sent the secretary of state’s office in October, she stated that the Sergey Brin Family Foundation was not the source of the $170,000 contribution, but instead the ProgressNow Education Fund was. According to her letter, Colorado Rising simply made a clerical “mistake” that was properly corrected.
The state’s Elections Division has 30 days to make a decision on whether a violation occurred.
