In the News
Hartford Courant: The Supreme Court orders a Constitutional test of the state’s campaign finance reforms after two GOP Senators are punished for criticizing a Democratic governor
By Edmund H. Mahony
The state Supreme Court, in a decision released Thursday, all but guaranteed a free speech fight about who candidates are allowed to criticize when they run publicly financed campaigns for state office under Connecticut’s increasingly fraught campaign finance reform laws.
The court reversed decisions by the State Elections Enforcement Commission and a Superior Court, which fined former Republican state Senate candidates Joe Markley and Rob Sampson for breaking election law in 2014 by spending public campaign grants on literature criticizing then-Democratic Gov. Dannel P. Malloy…
“The Supreme Court, in a decision written by now-retired Justice Richard Palmer, decided that the commission failed to follow its own procedures correctly, that Markley and Sampson were treated unfairly and their free speech defense should be evaluated on its merits.”
[Ed note: The Institute for Free Speech represents Mr. Markley and Sampson in their challenge to Connecticut’s law. Learn more here.]
Office of Senator Mike Braun: Senator Braun & Leader McConnell introduce ‘Don’t Weaponize the IRS’ Act
Senator Mike Braun and Senate Republican Leader Mitch McConnell today introduced a bill to prevent the IRS from being used as a political weapon against conservative non-profit groups.
From 2010 to 2012, the Obama IRS spent over two years systematically targeting conservative tax-exempt groups. The Trump administration released a final rule in May 2020 that prevented the IRS from targeting certain tax-exempt groups based on their political beliefs.
House Democrats’ H.R. 1 – the “For the People Act” – and Senate companion legislation S. 1 seek to repeal and undermine the Trump rule to weaponize the IRS to target nonprofit organizations based on the applicants’ political and policy positions.
The Don’t Weaponize the IRS Act codifies the Trump rule that protects groups regardless of their political ideology or beliefs and prevents the IRS from doxing donors to these groups.
Removing the requirement to report the names and addresses of donors helps protect taxpayers’ First Amendment rights: such information is not needed for tax administration purposes.
The bill is cosponsored by 43 Republican Senators…
The bill is endorsed by the following groups [including the Institute for Free Speech]…
“The IRS should not be the speech police, and the ‘Don’t Weaponize the IRS Act’ would make sure it isn’t. The bill is good for both free speech and good government. It would encourage more Americans to join and support nonprofits by protecting their personal information from prying bureaucrats. The IRS itself has said collecting this information is an unnecessary burden. Senator Braun’s bill offers an alternative to efforts to politicize and weaponize the IRS, like H.R. 1 and S. 1, and lets the agency focus on providing taxpayer service and fair enforcement of the tax laws. The Institute for Free Speech appreciates the efforts of Senator Braun, Leader McConnell, and the other cosponsors of this bill for supporting Americans’ privacy rights.” – David Keating, President, Institute for Free Speech
Congress
New York Times: Four House Democrats urge party leaders to fight for an expansive voting rights bill.
By Astead W. Herndon
In the latest example of divisions among congressional Democrats over voting rights, four House Democrats emailed the party caucus on Thursday pushing for their colleagues to muscle through two election bills now being considered on Capitol Hill, arguing that “democracy is on the line.”
The email, which was signed by Representatives Mondaire Jones of New York, Val Demings of Florida, Nikema Williams of Georgia and Colin Allred of Texas, represented not-so-subtle pushback to recent statements from influential Democrats like Senator Joe Manchin III of West Virginia and Representative James E. Clyburn of South Carolina, who have each expressed to the caucus a preference for a more narrow strategy…
“Any proposal that shuns H.R. 1 in favor of nationwide preclearance alone is either dangerously naïve or simply misinformed about what is happening in states across the country,” the email reads. “Time is running out.”
Protocol: Lawmakers want to force Big Tech to give researchers more data
By Issie Lapowsky and Ben Brody
Facebook’s ad library allows researchers to see the content of ads that run on the platform and information on who those ads reach. But there is one key insight Facebook doesn’t offer: information on how those ads were targeted.
A new bill being introduced Thursday by two House Democrats could change that. The Social Media DATA Act, introduced by Reps. Lori Trahan and Kathy Castor, would force large platforms like Facebook and Google to give researchers and the Federal Trade Commission access to more detailed ad libraries. Those libraries would include, among other things, a description of the audience that was targeted, information about how many people interacted with the ad and details about whether the ad was optimized for awareness, traffic or some other purpose…
[Facebook] recently tried to shut down a project spearheaded by academics at New York University, who use a browser extension to scrape political ads users see and then collect and publish targeting data from those ads. Facebook says that activity violates its policies against scraping, a legally murky practice that’s currently being debated in U.S. courts.
The Social Media DATA Act would ensure that researchers like the ones at NYU could have access to this information without putting themselves in legal jeopardy. It would also require platforms to maintain databases of this information — currently, doing so is voluntary — and ensure that platforms’ databases are searchable and machine-readable…
The bill also establishes a working group within the Federal Trade Commission that would develop a set of best practices around social media research. The group would help address the risks, often cited by social platforms, that even academics sometimes abuse user data, as was the case in the Cambridge Analytica scandal.
FEC
ProPublica: Marjorie Taylor Greene Appeared in a Super PAC Ad Asking for Money. That Might Break the Rules.
By Isaac Arnsdorf
Not long after her election to Congress, Rep. Marjorie Taylor Greene, R-Ga., helped raise money for a super PAC by appearing in a video ad that tests the boundaries of rules limiting fundraising by elected officials…
Legal experts differed in their assessments of whether Greene’s appearance follows the law, depending on their views of how strictly campaign finance rules should be interpreted…
Paul S. Ryan, a campaign finance expert with the good-government advocacy group Common Cause, said he believes the Greene ad clearly crosses the line.
“This communication constitutes an illegal solicitation by a member of Congress of unlimited funds,” Ryan said. The ban on soliciting unlimited donations, he said, “becomes meaningless if a candidate can do this.”
Ryan said he’s never before seen a candidate reading a super PAC’s script in an ad that explicitly asks for money. That goes further, he said, than other instances where super PACs have repurposed footage of a candidate or hosted candidates at fundraisers that people have already paid to attend…
Still, Jan Baran, a prominent Republican campaign finance lawyer, said he believes the ad complies with FEC rules because the solicitation for money flashes up while Greene is not on screen. She also doesn’t appear on the super PAC’s online donations page, he said.
“The ad and Ms. Greene seem in compliance since there is no solicitation by Ms. Greene and no evidence direct or indirect that impermissible [federal election] funds are being solicited by using Ms. Greene’s name or likeness,” Baran said in an email.
Daily Beast: The Political Donations That Have the Feds Running Scared
By Roger Sollenberger
For better or worse, despite the popularity of Bitcoin and alternative coins, crypto isn’t likely to disrupt the campaign finance world any time soon. While a number of young candidates made media splashes in the 2020 cycle by announcing that their campaigns would accept Bitcoin contributions, the current federal rules restrict those donations to a degree that reduces such announcements to little more than PR stunt.
Despite the explosive growth of cryptocurrencies in the last year, however, those rules aren’t formalized. They stem from a 2014 Federal Election Commission advisory opinion specific to Bitcoin, but which allows room for materially similar transactions that would extend to alternative denominations as well. Candidates looking to appeal to new donors through cryptocurrency also bristle at other restrictions, such as the $100 cap on individual contributions—roughly three percent of the $2,900 limit for donations made with cards or checks.
But the FEC argues these policies aren’t simply one more instance of a stodgy federal government unwilling or unable to adapt to a transformative new technology. From the agency’s perspective, the features most responsible for crypto’s appeal—privacy and institutional independence—pose threats to the very foundation of campaign finance law.
DOJ
By Dave Levinthal
Former President Donald Trump loves promising to match your political contributions…
House Speaker Nancy Pelosi loves promising the same…
But this wildly popular — and demonstrably bogus — fundraising gimmick could soon be dead.
That’s because the Department of Justice on Monday indicated that fraudulent “match” solicitations were one of several misdeeds that factored into a political scam artist’s guilty plea Monday on one count of wire fraud…
Two former leaders of the Federal Election Commission told Insider that political candidates and committees should now proceed with great caution when wooing prospective donors with “match” promotions.
“Objectively false representations in fundraising solicitations, made to induce contributions, are a legal problem,” said Lee Goodman, a former Republican chairman of the FEC who’s now a partner at law firm Wiley Rein LLP. “The most recent case should be a wake-up call for political fundraisers.”
Ann Ravel, a former Democratic chairwoman of the FEC who’s now an attorney at the law firm McManis Faulkner, agreed that the DOJ’s mention of the “5x match” was conspicuous.
“The fact that it was an element of this case should be a warning to campaigns that if they use this as an enticement to donate, they need to be absolutely sure that they are in fact matching the contributions — or the request could be considered fraudulent,” said Ravel, who also served at DOJ during the Obama administration as deputy assistant attorney general for torts and consumer litigation.
Corporate Disclosure
MarketWatch: Shareholders fight to rein in risk by demanding transparency into public companies’ political spending
By Eleanor Laise
Advocates of political-spending disclosure aren’t accustomed to such winning streaks. Many, like the New York State Common Retirement Fund, have been focused on the issue ever since the U.S. Supreme Court’s 2010 Citizens United decision loosened restrictions on corporate political spending, and they’ve had plenty of proposals fail along the way. But this year the New York pension fund isn’t the only disclosure proponent that’s on a roll. In 2021 through mid-May, about 24% of disclosure resolutions concerning political spending and lobbying put before shareholders of U.S. companies won majority support, a far higher proportion than in the equivalent period of any year going back to 2014, according to data from Proxy Insight.
“Companies and investors are finally waking up to the fact that spending on politics is inherently risky,” says New York State Comptroller Thomas P. DiNapoli, trustee of the state’s pension fund. “The polarized political climate has greatly amplified how serious the consequences are.”
Whether a company’s lobbying conflicts with its rhetoric on climate change or its donations to politicians rewriting voting laws are off-putting to its customer base, shareholders need to see the details of corporate political activity to understand the risks to the bottom line, transparency advocates say. Based on a company’s political spending, “consumers can shift their buying patterns, [and] employee morale can be affected,” says Bruce Freed, president of the Center for Political Accountability, a nonprofit that advocates for better disclosure. “These are material risks that companies face.”
Online Speech Platforms
Washington Post: Facebook won’t take down an ad that Rep. Ilhan Omar’s office says could lead to harassment and death threats
By Cat Zakrzewski and Tony Romm
Facebook has refused to remove a widely viewed attack ad that links Rep. Ilhan Omar to Hamas, even after her aides told the tech giant the message is inaccurate, hateful and threatened to subject her to death threats.
The controversy could further inflame tensions between Facebook and Democratic lawmakers, who say the social-media company has failed to police its platform against known, viral falsehoods and refused to heed their cries about the real-world consequences of online speech.
The States
Detroit Free Press: Longtime political rivals ask probe of dark money behind GOP initiatives
By Bob LaBrant and Mark Brewer
When Jocelyn Benson ran for Michigan Secretary of State, she pledged to root out dark money…
That’s why we former political adversaries have joined together in an unprecedented complaint attempting to expose the illegal use of dark money in Michigan politics. New evidence has come to light, and Benson is obligated to give this matter a fresh look for the sake of our democracy.
Benson should investigate the dark money operation run by state Senate Majority Leader Mike Shirkey (R-Clarklake), one of the largest and most brazen in Michigan history. Built around The Sterling Corporation, a longtime Lansing-based consulting firm now owned by Lambert Edwards & Associates, this operation has raised and spent millions of dollars to influence Michigan elections.
Shirkey has used that money to create, control and fund the Unlock Michigan petition drive to repeal the Governor’s emergency powers without disclosing it’s the source. That violates the Michigan Campaign Finance Act, as we have set forth in a complaint filed with Benson’s office.
To make matters worse, Shirkey and his consultant team are seeking to shield big donors and big contributions behind an effort to restrict the freedom to vote through a ballot initiative bankrolled and supported by the same dark money network.
By John DiStaso
Legislation to end the state’s voluntary campaign spending limit program and change thresholds for contributions and reporting requirements was among several voting-related bill passed by the state Senate on Thursday.
The campaign finance reform bill, amended from a version that passed the House earlier in the current session, was passed on a voice vote that broke down along party lines.
The Senate-passed bill kept in place the House’s move to end the voluntary spending program, which has been virtually unused for many years…
The House version increased the maximum donor amount to $3,500 per donor per election, and the Senate bill increased the maximum to $5,000 per donor per election – allowing any donor to give as much as $10,000 to a candidate during an election cycle.
The Senate bill, as amended, would also increase from $5,000 to $10,000 the limit on individual contributions to non-candidate political committees.
AP News: Group: Georgia can block internet firms from censoring views
By Jeff Amy
The leader of a conservative group told Georgia state lawmakers Thursday that free speech rights of Americans should at least partially override the private property rights of internet companies, arguing that large technology companies are improperly censoring speech.
The House Science and Technology Committee hearing could lay groundwork for Georgia lawmakers next year to consider bills meant to oppose such censorship, although chairman Ed Setzler, an Acworth Republican, said he didn’t favor the remedies that lawmakers in other states have brought forward thus far. But Setzler said he believed social media companies may be public accommodations, like a restaurant or hotel, that can’t legally discriminate against customers.
The hearing featured testimony from the Heartland Institute, a conservative group that has testified on more than 20 proposals being considered. Leaders of the Illinois-based group said 70 bills have been introduced in 33 states this year. They argue lawmakers should act to force the companies to allow free expression.
Politico: Assembly campaign donations to Union County official expose pay-to-play loophole
By Matt Friedman
Several months after the Union County Improvement Authority awarded a no-bid contract to design a new $100 million county government complex in Elizabeth, top members of the architecture firm that received it opened their checkbooks and donated to the nascent Assembly campaign of a high-ranking authority official.
Bibi Taylor, the UCIA’s project manager who also serves as Union County’s finance director, raised $15,600 from six members of the firm or their spouses for her Democratic primary campaign for Assembly, according to newly disclosed campaign finance reports. The donations account for about a fifth of everything Taylor raised before dropping her candidacy in March.
The donations, which POLITICO is the first to report on, do not appear to violate New Jersey’s pay-to-play law, which bars contractors who receive no-bid contracts from giving to officials and political parties that can influence them. However, they do expose one of many loopholes in the 16-year-old law.
