[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]



 
                     CONSTITUTIONAL PERSPECTIVE OF
                        CAMPAIGN FINANCE REFORM
=======================================================================

                                HEARING

                               before the

                   COMMITTEE ON HOUSE ADMINISTRATION
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

             Hearing Held in Washington, DC, June 14, 2001

                               __________

      Printed for the Use of the Committee on House Administration








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                   COMMITTEE ON HOUSE ADMINISTRATION

                           BOB NEY, Chairman
VERNON J. EHLERS, Michigan           STENY H. HOYER, Maryland,
JOHN L. MICA, Florida                  Ranking Minority Member
JOHN LINDER, Georgia                 CHAKA FATTAH, Pennsylvania
JOHN T. DOOLITTLE, California        JIM DAVIS, Florida
THOMAS M. REYNOLDS, New York

                           Professional Staff

                     Paul Vinovich, Staff Director
                  Bill Cable, Minority Staff Director















         CONSTITUTIONAL PERSPECTIVE OF CAMPAIGN FINANCE REFORM

                              ----------                              


                        THURSDAY, JUNE 14, 2001

                          House of Representatives,
                         Committee on House Administration,
                                                    Washington, DC.
    The committee met, pursuant to call, at 11:20 a.m., in Room 
1310, Longworth House Office Building, Hon. Robert W. Ney 
(chairman of the committee) presiding.
    Present: Representatives Ney, Mica, Linder, Reynolds, Hoyer 
and Davis.
    Staff present: Jeff Janas, Professional Staff; Paul 
Vinovich, Counsel; Roman Buhler, Counsel; Luke Nichter, Staff 
Assistant; Sara Salupo, Staff Assistant; Robert Bean, Minority 
Staff Director; Keith Abouchar, Minority Professional Staff 
Member; and Matt Pinkus, Minority Professional Staff Member.
    The Chairman. The committee will come to order.
    I want to initially apologize for the wait. As you know, we 
never know particularly when there are going to be votes in the 
U.S. House.
    Today the House Administration Committee is holding a 
hearing on campaign finance reform legislation. Today's hearing 
will focus on the constitutionality of the reform legislation 
currently before this Congress and this committee, namely, the 
Shays-Meehan bill and the McCain-Feingold bill.
    We will hear a lot today about the First Amendment, so I 
just want to start by reading that amendment. It says:
    ``Congress shall make no law respecting an establishment of 
religion, or prohibiting the free exercise thereof; or 
abridging the freedom of speech, or of the press, or the right 
of the people peaceably to assemble, and to petition the 
government for the redress of grievances.''
    I am not an attorney by degree, but the words ``Congress 
shall make no law'' abridging the freedom of speech, or the 
right of the people to petition their government, seem pretty 
clear to me. Some people, I understand, do not have the same 
opinion.
    One prominent congressional leader who has advocated 
reforms once said, ``What we have is two important values in 
direct conflict: Freedom of speech and our desire for healthy 
campaigns in a healthy democracy. You can't have both.''
    I think basically that tends to be a shocking statement, 
but it pretty much sums up the thinking of some proponents of 
some reform measures. To their way of thinking, our first 
amendment is an inconvenient obstacle that must be knocked down 
to preserve our democracy. I respect their opinion, but I 
disagree. Under this philosophy, to promote speech, we must 
restrict it. To preserve our liberties, we must forfeit them.
    Well, I do not share that view.
    I believe our democracy is best secured when the people, 
not the government control the extent to which they will speak 
and assemble to discuss public issues. Our democracy is the 
strongest and oldest in the world because of our first 
amendment, not in spite of it.
    As the Supreme Court noted 25 years ago in the Buckley 
decision, ``In the free society ordained by our Constitution, 
it is not the government but the people individually as 
citizens and candidates and collectively as associations and 
political committees who must retain control over the quantity 
and range of debate on public issues in a political campaign.''
    Some have described certain reform bills before this 
committee as ``an assault on the first amendment.'' Major 
newspapers that normally jealously guard and protect the first 
amendment are virtually unanimous in their support of reform in 
this instance.
    Perhaps not surprisingly, the media is explicitly exempted 
from the speech restrictions in this bill before us. It is 
unfortunate that rather than cry out in protest, as they do 
when they perceive threats to their own rights of expression--
and they should cry out when they perceive threats or some type 
of grievance against their own rights of expression--the media 
has, for the most part, wholeheartedly endorsed the proposed 
limits on speech. Sadly, they do not seem to hold the first 
amendment rights of others as dear as they do their own.
    I do realize these statements I am making prompt an 
editorial, but that is also free speech. Instead, having 
diagnosed a cancer of corruption on the body politic, they have 
bought into the notion that nothing short of a radically 
invasive treatment will save the patient.
    I think we need to look at both the so-called disease and 
the proposed cure. If the disease is corruption, what are the 
symptoms, and how should we combat that corruption? What are 
the proposed cures and what will be their impact? Only by 
examining and answering these questions will we be able to 
determined if the cure really is worse than the disease. It 
would be foolish, dangerous and irresponsible to swallow the 
cure without knowing all of the potential side effects.
    I have made my views pretty clear, but I also want to make 
it clear that I realize that people of goodwill can disagree on 
this issue. I am not necessarily personally questioning their 
integrity.
    I also think statements have been made before the Congress 
and before the committees about corruption in general and 
rampant corruption and also statements about how the political 
parties are money laundering machines. I do not happen to share 
that belief. I think there are a lot of good people in both 
major political parties and all other philosophy parties in 
this country, and I think that the vast majority of people in 
public office across the United States, although we may not 
philosophically agree with each other, tend to be here for the 
right reasons, which is to serve the people.
    We need to have a real debate on this subject. It is time 
to move past the simplified stereotypes that cast all those who 
support reform as heroic and virtuous, while all those who 
oppose it are portrayed as self-serving and corrupt. I do not 
necessarily believe that to be either case. Reform proponents 
genuinely believe that the proposals are necessary to preserve 
our democracy and enhance the voice of the average citizen. 
Opponents fear that enactment of these proposals will have the 
opposite effect, discouraging citizen involvement and, thereby, 
endangering our democracy itself.
    I hope that today and in all the weeks ahead we will be 
able to conduct this debate in a fashion that shows respect for 
the difference of viewpoints. We have a distinguished panel 
today and I believe that this panel brings to us, whether they 
are for or against reform measures, a broad and thoughtful 
range from a constitutional perspective.
    Mr. Hoyer is detained. I would note to you this is his 39th 
birthday today. Trying to keep the great comity that we do have 
together, please tell him I said it is his 39th birthday.
    With that, I yield to Mr. Davis.
    Mr. Davis. Thank you, Mr. Chairman. It is my honor to be 
here in place of Mr. Hoyer who is celebrating his 39th 
birthday, as he has done so many times before.
    I was not going to speak, but I feel compelled to do so, 
because you expressed such heartfelt views.
    I have heard that Buckley case, and, you know, Buckley 
really describes the tension that we are trying to work through 
today and that is that the first amendment is balanced against 
the need to protect the republic from corruption, even the 
appearance of corruption, because, ultimately, the confidence 
of the voters and how we make decisions is what empowers us and 
empowers this country, and it is the fundamental value on which 
our republic is based.
    The devil is in the details, and I think this committee has 
a very, very important job to do here. Because one of the 
things that always makes our life more difficult is when we do 
not just have different opinions, we have different versions of 
the facts. Reasonable people will disagree, but I am hopeful 
that this committee can do a service to everybody by focusing 
on what the facts are surrounding this issue. I think that is 
terribly important.
    The last think I would say is I think what is very, very 
important about this particular debate is that we--I know I 
feel this way for myself--have to try very hard not to look at 
this from the standpoint of our rights as candidates or 
incumbents, but how this affects the voters, how this affects 
their ability to make informed judgments about the candidates, 
how it affects their ability ultimately to control the outcome 
of elections based on the vote, which is so sacred. It is the 
other issue we have been spending so much time on, and I laud 
your work on this issue, and Mr. Hoyer has been focusing on it 
as well. So I look forward to the hearing.
    The Chairman. Any other opening statements or comments?
    Mr. Mica.
    Mr. Mica. Thank you, Mr. Chairman, for convening this 
hearing. I think it is an important topic, the constitutional 
perspective of campaign finance reform.
    One of the problems we have as we undertake this task is 
that we have 535 experts in the House and the Senate on the 
issue. Unfortunately, we are also handicapped by having an 
inordinate number of attorneys who are also part of that mix of 
535. I think all of us would like to see confidence and faith 
in the system that we hold so dear to our electoral process by 
the same perspective as we celebrate Flag Day today and the 
appreciation of the great constitutional government we live 
under. We do not want to disrupt people's right to express 
themselves in an open and free society for which so many 
sacrificed their life under the symbol that we celebrate today.
    So there are some tough questions here. We want to have a 
good, fair, open system, but we want to also keep it within the 
constitutional framework that is so important.
    So I look forward to working with you on that. I think 
there is a lot of sincerity on both sides, and I do not think 
people should question motivation. Thank you.
    The Chairman. Thank you, Mr. Mica.
    We will begin with the first panel. We have James Bopp, 
Jr., with the law firm of Bopp, Coleson & Bostrom from Terre 
Haute, Indiana; Cleta Mitchell of Foley & Lardner, Washington, 
D.C.; Joel M. Gora, American Civil Liberties Union, New York, 
New York; Laurence E. Gold, Associate General Counsel, AFL-CIO, 
Washington, D.C.; E. Joshua Rosenkranz, President and CEO of 
the Brennan Center for Justice, New York, New York; Donald J. 
Simon, Sonosky, Chambers, Sachs, Endreson & Perry, Washington, 
DC.
    I want to welcome the panel, and I appreciate your 
testifying here today.

 STATEMENTS OF JAMES BOPP, JR., BOPP, COLESON & BOSTROM, TERRE 
 HAUTE, INDIANA; CLETA MITCHELL, FOLEY & LARDNER, WASHINGTON, 
 D.C.; JOEL M. GORA, AMERICAN CIVIL LIBERTIES UNION, NEW YORK, 
NEW YORK; LAURENCE E. GOLD, ASSOCIATE GENERAL COUNSEL, AFL-CIO, 
WASHINGTON, D.C.; E. JOSHUA ROSENKRANZ, PRESIDENT AND CEO; THE 
 BRENNAN CENTER FOR JUSTICE, NEW YORK, NEW YORK; AND DONALD J. 
SIMON, SONOSKY, CHAMBERS, SACHS, ENDRESON & PERRY, WASHINGTON, 
                              D.C.

    The Chairman. We will start with Mr. Bopp.

                  STATEMENT OF JAMES BOPP, JR.

    Mr. Bopp. Thank you very much, Mr. Chairman.
    I am a member of the law firm of Bopp, Coleson & Bostrom in 
Terre Haute, Indiana, and the co-counsel to the Washington, 
D.C. Firm of Webster, Chamberlain & Bean.
    My expertise on campaign finance law has developed over 20 
years of litigation where I have brought more than 50 cases 
challenging on first amendment grounds State and Federal 
election laws, based upon the idea that they violate first 
amendment protections. Of the some 30 cases, over 30 cases that 
have been resolved, I have won 90 percent of those cases, 
winning 1 or more cases in 8 of the 12 Circuit Courts of Appeal 
in the Federal system; and, among those, I am currently 8 and 0 
against the Federal Election Commission specifically.
    Thus, I have won cases, both against the Federal Election 
Commission and the State election laws, that contained 
provisions materially identical to the provisions contained in 
McCain-Feingold and Shays-Meehan. The efforts of McCain-
Feingold and Shays-Meehan to limit issue advocacy by not-for-
profits and labor unions, the efforts of McCain-Feingold to 
severely limit contributions and the activities of political 
parties have been uniformly struck down by the Federal and 
State courts.
    Now, I would characterize McCain-Feingold and Shays-Meehan 
as an unprecedented and broad-based assault on the right of 
citizens, particularly citizens of average means, to 
participate in our political process. The reason for that is 
that Shays-Meehan and McCain-Feingold attack groups, that is, 
not-for-profit and for-profit corporations, labor unions and 
political parties.
    Groups are essential for people of average means to 
participate in our political process. In other words, the 
average janitor does not have the funds to buy an ad in The New 
York Times that would express his or her opinion on major 
issues of the day. Thus, that person needs to join a labor 
union or a citizens' group in order to pool resources and have 
their voices heard.
    The wealthy do not have to join a group. They already have 
all the money they need, and they can run off and buy an ad in 
The New York Times. Thus, when you attack groups, you are 
attacking citizens of average means, because it prevents them 
from putting the money together to pool their resources to 
participate.
    McCain-Feingold and Shays-Meehan expressly does nothing, 
nothing about the wealthy. There is no limit on the ability of 
wealthy people to spend their money. Furthermore, there is no 
limit in McCain-Feingold or Shays-Meehan upon the media and 
their ability to spend money to effect elections. And, of 
course, it finally does nothing to prevent the corruption of 
candidates, because usually, when we are talking about 
corruption, it is surely not about the ability of average 
citizens to participate and speak out about public officials, 
but we are talking about incumbent officeholders who take money 
and, as a result, change their vote. Shays-Meehan and McCain-
Feingold does absolutely nothing about those few incumbent 
officeholders that might be tempted to sell their vote for a 
contribution.
    Thus, we have winners and losers here. Average citizens are 
prohibited, driven from the field, because their only effective 
means of participating, the groups that they join, their speech 
is stifled; and then we have the winners, the news media, the 
wealthy who can spend their own money, and incumbent 
politicians who are now immunized from criticism, immunized 
from having their constituents know, at least to the extent 
that citizens' groups want to talk about this, know what they 
are doing to them or for them while in office.
    Now, McCain-Feingold and Shays-Meehan does this in several 
ways. First is by imposing two gag rules. One gag rule is 
through defining express advocacy as an unmistakable and 
unambiguous support for or opposition to a candidate when taken 
as a whole and with limited reference to external events such 
as the proximity of an election. Thus, a communication that 
talked about, for instance, how an incumbent Member of Congress 
is voting in Congress, praising them or condemning them for 
that, if viewed within the proximity of an election or with 
reference to other external events anytime during the year, 
that group, the labor union or corporation, would be absolutely 
prohibited from engaging in that speech.
    Secondly, if you simply have the audacity to name 
candidates who are, of course, often current officeholders, 
within 60 days of the general election or 30 days of a primary, 
as a group, you would be committing a Federal crime under 
Shays-Meehan and McCain-Feingold. Thus, if there was 
legislation being voted on, as there very often is--in the last 
Congress, nearly the whole budget was being voted on within 60 
days of a general election--all groups would be prohibited from 
engaging in grass-roots lobbying such as, call your Congressman 
and tell him to support raising the minimum wage in the budget, 
or many of the numerous issues that were then being debated in 
Congress. You could not do effective grass-roots lobbying 
because you could not mention the name of somebody running for 
office during that period of time.
    It also prohibits corporations and labor unions from 
engaging in the sort of issue advocacy by creating a 
coordination trap and, that is, if anything of value is 
coordinated with a candidate, which would include any 
communications about a candidate, if they referenced a 
candidate, if coordinated, would be deemed a contribution and 
would also be prohibited, a Federal crime, by a corporation or 
a labor union.
    Now, this coordination trap is, I think, well demonstrated 
by an attachment to my testimony, which is Exhibit C, which 
lists the 45 different ways in which a communication could be 
coordinated. This coordination trap, as does the two gag rules 
contained in McCain-Feingold and Shays-Meehan, also violate the 
well-established express advocacy test of the Court. The 
express advocacy is where a person uses explicit words to 
advocate the election or defeat of a candidate. Each of these 
provisions go way beyond that express advocacy test.
    Now, there is so far, to my count, over 40 cases--two 
Supreme Court, 13 Circuit Court, and 25 lower Federal court and 
State Supreme Court cases--that every single one of them have 
adhered to the express advocacy test, that you must focus on 
the words, not external events like the proximity of election, 
and the words must be specific, that is, explicit words of 
advocacy. I have listed all of those cases that fill up more 
than a page on page 4 of my testimony.
    Now, to indicate the utter death of support on the other 
side for these provisions, all you have to do is look at the 
testimony of Mr. Simon and Mr. Rosenkranz. In all of their 
testimony, the only reference to a court case, one reference to 
a court case is simply referring to the Supreme Court's holding 
on the express advocacy test. They can cite not one case and do 
not cite one case to support their position.
    In other words, their view is not what the law is or what 
the first amendment requires or what the courts have said the 
first amendment requires. What their view is is that they hope 
that the U.S. Supreme Court will cut the heart out of the first 
amendment. That is, allow extensive regulation of political 
speech, cutting the heart out, leaving nude dancing, flag 
burning, pornography on the Internet.
    That is not what the first amendment was about. It was 
about protecting the right of average citizens to speak out, to 
criticize incumbent Members of Congress, to talk about what 
they are doing to us and for us in Congress, and that is 
exactly what Shays-Meehan and McCain-Feingold would 
unconstitutionally prohibit.
    The Chairman. I would have to note that what we want to try 
to do is limit each person, unfortunately, to 5 minutes at this 
point in time until we have rounds of question. So I appreciate 
your testimony, but we should try to keep it to the red light.
    [The statement of Mr. Bopp follows:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Next, Mr. Simon.

                  STATEMENT OF DONALD J. SIMON

    Mr. Simon. Thank you, Mr. Chairman. I appreciate the 
opportunity to testify on behalf of Common Cause regarding the 
constitutionality of campaign finance reform legislation.
    The House reform leaders have said that they intend to 
introduce a bill which is closely modeled on the reform bill 
recently passed by the Senate, the McCain-Feingold bill. For 
purposes of focusing discussion, therefore, I am going to 
discuss the constitutional issues as framed by the McCain-
Feingold bill.
    The two principal provisions of McCain-Feingold are a ban 
on soft money which is contained in Title I of the bill, and 
the Snowe-Jeffords provision in Title II which defines a 
category of electioneering communications that are subject to 
appropriate regulation. Both of these provision do raise 
important constitutional questions, and I will briefly address 
each.
    The provisions banning soft money are clearly 
constitutional. Dozens of constitutional scholars have said so. 
A letter signed by every living former leader of the ACLU says 
so, and multiple rulings of the Supreme Court support this 
position.
    The Buckley v. Valeo case, of course, is the foundation. 
The Court there held in unequivocal terms that Congress serves 
compelling governmental purposes when it regulates money in the 
political process to deter corruption and the appearance of 
corruption. Even though such regulations undoubtedly do impinge 
on first amendment rights, they are nonetheless constitutional 
because they serve those compelling governmental interest.
    Buckley upheld limits on contributions to candidates and 
parties. It did so because the Court took note of the reality 
or appearance of corruption inherent in a system permitting 
unlimited financial contributions. The Court noted that the 
integrity of our system of democracy is undermined by large 
political contributions, and of almost equal concern to the 
Court was the impact of the appearance of corruption stemming 
from large financial contributions.
    Now, the Court strongly reaffirmed these views just last 
year in the Shrink Missouri case. Again upholding contribution 
limits, the Court said, there is little reason to doubt that 
sometimes large contributions will work actual corruption of 
our political system, and no reason to question the existence 
of a corresponding suspicion among voters. The abuses that the 
Court sees as inherent in a system of unlimited financial 
contributions perfectly describes the soft money system which, 
of course, is a system of unlimited financial contributions.
    The Court's repeated recognition that Congress can 
legislate to address those abuses is a complete response to any 
claim that the soft money provisions of McCain-Feingold are 
unconstitutional. These provisions do nothing more than restore 
the integrity of the campaigns finance laws previously enacted 
by Congress and upheld by the Court. They leave the national 
political parties free to engage in any speech or any activity 
they want and to spend as much money as they want for that 
speech or those activities, so long as the money is raised in 
compliance with the fund-raising rules that apply to the 
national parties and that have been sustained by the Supreme 
Court as necessary to guard against corruption and the 
appearance of corruption.
    I also believe that the Snowe-Jeffords provision of the 
Senate bill is constitutional. There is no question that 
Congress can regulate money spent for political speech. If 
speech is aimed at influencing a Federal election, the law is 
clear that Congress can impose limits on the amount of money 
that can be contributed for such purposes. It can ban entirely 
the use of money from corporate or union treasury funds. It can 
require corporations and unions to speak only through their 
affiliated political committees, using money from individuals 
that was voluntarily contributed, and it can require full 
disclosure of that money. All of these provisions have been in 
law for many years, and they all have been sustained by the 
Supreme Court.
    Congress can impose all of these regulations on the money 
spent for speech aimed at election activity not because the 
speech is unprotected by the first amendment--I think we would 
all agree that such speech is at the heart of the first 
amendment--but because the Court has repeatedly recognized that 
first amendment interests must accommodate Congress's purposes 
in protecting the integrity of the election process.
    So the question in this debate is not about whether issue 
ads should be limited or regulated or banned. They should not 
be. The question is how to draw a correct line between issue 
advocacy on the one hand, which is generally not subject to 
regulation, and campaign advocacy on the other hand, which 
clearly and constitutionally is subject to regulation.
    Now, currently that line is drawn by whether the ad 
contains magic words such as ``vote for'' or ``vote against.'' 
That is almost certainly the wrong line, because it is 
radically under-inclusive. Many ads which are clearly campaign 
ads do not use magic words. I dare say in the ads that you ran 
last year in your own elections, they did not use magic words, 
and you would be in good company. Because as a study conducted 
by the Brennan Center found, only 4 percent of ads by 
candidates themselves used words like vote for or vote against. 
These are unquestionably campaign ads, but they flunk the magic 
words test.
    So the one point we can be most certain of in this debate 
is that the magic words test does a poor job of drawing the 
line between issue discussion and campaign discussion. The 
Snowe-Jeffords provision redraws that line by defining as 
electioneering activity a narrow category of speech, those 
radio or TV ads which are broadcast within 60 days of a general 
election or 30 days of a primary which refer to a clearly 
identified candidate and which are targeted to the candidate's 
electorate.
    Now, critics describe this provision as banning speech. 
That is clearly false. These electioneering communications are 
no more banned than the tens of millions of dollars of campaign 
ads we see every 2 years. Like those ads, of which there are 
plenty, this new category of electioneering communications must 
be funded by individuals either alone or in association with 
each other for money which is subject to disclosure.
    Lest anyone think that the Snowe-Jeffords provision is too 
broad, let me state what it does not include. It does not 
include any newspaper, print, pamphlet, leaflet, billboard or 
other nonbroadcast ad. It does into include any ad outside the 
60-day pre-election window. It does not include any ad which 
discusses an issue and does not mention a Federal candidate in 
that election, and it does not include any ad which is 
broadcast anywhere other than to the electorate of that 
candidate.
    Let me emphasize again, the provision bans no speech 
whatsoever and creates no new regulations whatsoever. All it 
does is shift the line between nonelection speech, which is 
generally free from regulation on the one hand and election-
related speech, which is subject to regulations that the 
Supreme Court has upheld as constitutional.
    Finally, let me state the premise behind this. The premise 
is that when someone spends a lot of money to run an ad right 
before an election that mentions a candidate and is targeted to 
that candidate's district, he or she or they are most likely 
trying to influence that election. That is not a bad thing. It 
should not be banned, and it is not. It just means that the 
money behind the ad should be subject to the same rules that 
apply to all of the other campaign ads being run at the same 
time.
    Thank you
    The Chairman. Thank you.
    [The statement of Mr. Simon follows:]



 [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Ms. Mitchell.

                  STATEMENT OF CLETA MITCHELL

    Ms. Mitchell. Thank you, Mr. Chairman, members of the 
committee.
    I, too, want to commend the committee for conducting this 
hearing on this very important subject. I know that the media 
is clamoring for swift action: no hearings, do not read the 
bill, pass it, and go home. The fact of the matter is, this 
reminds of that guy, Jim Jones, who took those people from San 
Francisco to Guyana a few years back and handed out Kool Aid 
and all of those people died. I have always wondered why 
somebody did not look up and say, hey, what is in this Kool 
Aid? I think it is important for Members of Congress to say, 
what is in this campaign finance Kool Aid? It is easy for the 
media to clamor, drink the Kool Aid, drink the Kool Aid, 
because the media is exempt, and they do not have to worry 
about ingesting any poison.
    So I think it is important to note that in both Shays-
Meehan and in McCain-Feingold, particularly McCain-Feingold, 
there are 3\1/2\ pages in McCain-Feingold of directives to the 
United States Sentencing Commission to enhance the criminal 
penalties for violation of the law by candidates and high 
campaign officials. There are increased civil penalties--
substantial increased civil penalties to be imposed by the 
Federal Election Commission for violation of the law. This is 
something that the Congress needs to pay very close attention 
to.
    By way of introduction I am an attorney. Our practice is 
entirely devoted to advising people how to participate in the 
political process without violating the law. Believe me, I 
would commend the chairman's comments at the beginning of this 
hearing, because the truth of the matter is, people get 
involved in political activity, they are not there to try to 
corrupt anything and, oftentimes, after advising people who 
want to participate in the process, the proverbial chilling 
effect has occurred. They say, I do not want to deal with all 
of this regulation, and they walk away. I think that is 
terribly unfortunate.
    I want to mention in my brief period of time here a couple 
of things. I have attached to my testimony two things I hope 
the members of the committee will look at. One is the impact on 
State and local political parties, the practical impact on 
State and local political parties of McCain-Feingold as it was 
passed by the Senate, I think with some modification; and the 
same thing would be true by passage of Shays-Meehan.
    The other is, one of the reasons that this issue is so 
front-and-center is because there has been spent over the last 
5 years--we have documented in a report by the American 
Conservative Union Foundation--over $73 million spent by the 
pro-campaign finance regulation movement in the last 5 years 
alone, yet there is not one organization who would essentially 
exist solely on what I would consider my side of the issue, 
which is to say we do not think that these additional 
regulations are a good idea. There is not one organization that 
exists solely to do that on our side. So I think it is very 
important to realize that we have been subjected to a mass 
media and financial cabal urging that Congress enact more 
regulations on citizens who want to participate in the 
political process.
    Now, as the chairman pointed out at the outset, the first 
responsibility of this committee is to identify what is the 
corruption or the appearance of corruption which Congress is 
trying to solve by enacting legislation in this arena. Because 
this is legislating in the first amendment arena, Congress is 
obligated to identify the problem.
    The Supreme Court has said the only compelling governmental 
interest in enacting legislation in this area is corruption or 
the appearance thereof. So what is the corruption that people 
are concerned about? Those--
    I heard Mr. Hoyer's opening comments at the first hearing 
conducted by this committee, and I was struck by your comments 
with respect to this issue of corruption and the sense that the 
public has that there is something corrupt going on.
    Do not, please, members of the committee, do not just allow 
yourselves to be stampeded by these epithets of corruption. 
Identify specific instances. Do the committee members know of 
specific instances of corruption that have occurred because of 
contributions to the political parties? If so, have hearings on 
that. Ferret out the information. Do not let the appearance of 
corruption argument be like a modern-day McCarthyism of 
screaming that there is communism behind every tree.
    I would argue and submit to the committee that if it is 
concerned that there is corruption in terms of special 
interests having influence with Members of Congress, then 
perhaps the committee ought to recommend to the House the 
enactment of then candidate and now President Bush's proposal a 
year ago which was to prohibit contributions to Members of 
Congress from lobbyists during the congressional session. There 
are a dozen States that have such a prohibition, that 
legislators and elected officials may not solicit or receive 
contributions during the session. If it is corruption because 
of the relationship between special interests with bills before 
the Congress, then it seems to me that Congress ought to do 
something about that which affects you directly, rather than 
stampeding the rights of ordinary citizens and political 
parties.
    Secondly, I am not going to read to you all the language 
from Buckley, although I would like to, because I really think 
that people--it is like the Federalist Papers where everybody 
has said we have read them and I do not think we really have. 
But remember that the Supreme Court in Buckley created the 
express advocacy test, and they said that there had to be a 
bright line, that citizens had the right to know in advance 
what speech would be regulated by the government and what 
speech would not.
    And if you come up to the line, if you do not cross it, if 
you do not use, using their words, the constitutional 
deficiencies can be avoided only by reading the law as limited 
to communications that include explicit words of advocacy, of 
election or defeat of a candidate. It must be construed to 
apply only to expenditures for communications that in express 
terms advocate the election or defeat of a clearly identified 
candidate for Federal office. This construction would restrict 
the application of the statute to communications containing 
express words of advocacy, of election or defeat such as ``vote 
for,'' ``elect,'' ``support,'' ``cast your ballot for Smith for 
Congress,'' ``vote against,'' ``defeat,'' ``reject.''
    It is important to note that the Supreme Court created that 
bright line.
    I have heard Members of Congress and so-called reformers 
argue in favor of restrictions on issue advocacy because of two 
problems, only two that I can recall. One, the anonymity that 
groups run issue ads and you do not really know who they are. 
The other is that voting records or positions on issues are 
distorted.
    I would submit to the committee that there is a more 
narrowly tailored--I do this at my peril because I basically do 
not believe that you should be regulating this area. But I 
would submit to you that when you are legislating in the first 
amendment arena you are obligated to ascertain if there is a 
more narrowly tailored solution to the problem you have 
identified. I would submit to the committee that there is a 
more narrowly tailored solution than that contained in either 
Shays-Meehan or McCain-Feingold.
    One, the Federal Communications Act already provides that a 
nonpolitical ad is subject to the same standards of accuracy as 
an aspirin commercial. An issue ad is not defined under the 
Federal communications law as a political ad, only candidate 
ads; and candidate ads cannot be rejected for content. I have 
advised clients and worked with stations on ascertaining 
accuracy. And if issue ads were accompanied by a disclosure 
statement that simply tied the content to the specific public 
record, that substantiates the assertions, and if you are 
concerned about anonymity, the FCC already requires that all 
broadcast advertising must disclose the true identity of the 
sponsors. And in the disclosure statement you could simply 
require a certain minimum threshold that a percentage of who 
pays for the production or broadcast of the advertisement to be 
identified, to identify the legal entity.
    The Chairman. I have to let you know we are running over. 
We want to get to questions.
    Ms. Mitchell. But I just wanted to make sure that the 
committee knows----
    Mr. Mica. Mr. Chairman, could we by unanimous consent have 
their entire statements made a part of the record?
    The Chairman. Yes. Your statements, without objection, will 
be entered into the record.
    Mr. Mitchell. I urge the committee to carefully consider 
that there are other solutions, and in order to make certain 
that the committee does its job to propose those solutions that 
are more narrowly tailored to address the problem rather than 
the meat-ax approach that these bills represent.
    Thank you.
    The Chairman. Thank you.
    [The statement of Ms. Mitchell follows:]



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    The Chairman. Mr. Rosenkranz.

               STATEMENT OF E. JOSHUA ROSENKRANZ

    Mr. Rosenkranz. Thank you, Mr. Chairman. I thank the entire 
committee for inviting me here. It is an honor to testify about 
such an important set of issues that are so fundamentally 
important to the health of our democracy.
    Let me begin with some pretty significant common ground. I 
agree with the basic thesis of people who often view themselves 
as opposed to me on this set of issues. Certainly the people 
before this committee representing vitally important 
institutions in American life, the AFL-CIO, the American Civil 
Liberties Union, the various right-to-life committees, these 
are fundamentally important committees that do empower average 
citizens in their voices on important issues of public policy. 
What these various institutions are not are vehicles for 
electoral advocacy, and they do not claim to be.
    It is important to keep in mind as we consider this set of 
issues that what is before this committee is the regulation of 
elections, and the Supreme Court has made abundantly clear that 
elections are special. Elections are different. Elections, 
therefore, are subject to different constitutional constraints, 
that every other set of issues of public policy, that speech 
relating to elections and the funding of that speech are 
subject to special rules, precisely because it is so important 
to protect this critical mechanism of our self-government.
    Those specific rules really fall into three categories.
    The first are fund-raising restrictions, restrictions on 
the money that is raised that goes toward electoral speech.
    The second is disclosure. If you are going to try to 
influence our vote in an election, you have to tell us who you 
are and who is paying for what you are saying.
    Third and most significantly for today's conversation are 
source restrictions, restrictions on corporations or unions 
that, according to the Supreme Court, and this is black letter 
law, are not permitted to spend a single penny directed at 
influencing a vote in elections and restrictions on other 
organizations that rely on corporate and union money. This is 
black letter law, Mr. Chairman. There is no dispute within this 
committee about what the law is as it relates to election 
communications.
    The critical issue before this committee and before 
Congress is where exactly the line falls. Other members of this 
panel will insist that we are stuck with a rule that they claim 
the Supreme Court adopted in 1976, a claim that I disagree 
with, but, most importantly, they believe that that rule is 
chiseled into stone, despite what might be enormous evidence 
that this rule does not even begin to describe the correct 
boundary between electioneering and all other speech.
    Mr. Simon already mentioned some of the evidence that the 
rule the Supreme Court articulated as an amendment, in essence, 
as to what Congress had adopted when Congress put in the 
definition is really, truly an absurd rule.
    The Supreme Court, Mr. Chairman, does not live in a fantasy 
world. It lives in practical reality. And if there is any 
lesson that we can draw from the last Supreme Court case, 
Shrink Missouri, it is really twofold.
    First, the Supreme Court is concerned about practical 
rules, constitutional rules that actually describe what goes on 
in the real world; and, secondly, in this context of electoral 
reform, the Supreme Court wants to defer in the very narrow, 
specific line-drawing to the legislature, which is most 
familiar with how campaigns work.
    While we are talking about practical reality, let me just 
end with one point. You are going to hear today--you have 
already heard, and certainly the testimony, the written 
testimony, is rife with hypotheticals of ads that various 
groups would want to bring but cannot any longer bring if the 
McCain-Feingold legislation passes. What we should look for are 
the actual facts of what campaigning is about and what these 
groups are actually doing.
    So I will end with a challenge to the various other members 
of this panel, really two challenges. To the ACLU, I would ask 
them to identify a single ad that was run in 1998 or 2000, an 
actual ad that they ran within the time frame regulated by the 
McCain-Feingold bill and claim that that ad could not be run 
under McCain-Feingold. I believe, because we actually have the 
data of all of the ads, that they will not be able to identify 
a single one.
    To the AFL-CIO and Mr. Bopp who represents right to life, 
yes, they run such ads. While they are testifying here under 
oath, I would ask them to point to two or three that run afoul 
of the McCain-Feingold test, but they can attest to this 
committee that they were actually not intended--I would even 
say fundamentally, predominantly intended to influence the 
election. If you do not hear a satisfactory answer to that 
question, you should feel more confident that these rules do 
not actually infringe the rule of these very important 
organizations in educating the public about important issues of 
public policy.
    Thank you.
    The Chairman. Thank you very much.
    [The statement of Mr. Rosenkranz follows:]



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    The Chairman. Next, Mr. Gora.

                   STATEMENT OF JOEL M. GORA

    Mr. Gora. Good morning, Chairman Ney. Thank you for holding 
these hearings, and thank you for introducing your remarks by 
reading from the text of the first amendment because I think 
the first amendment imposes a special injunction upon Members 
of Congress, because its first words are ``Congress shall make 
no law abridging the freedom of speech,'' a special injunction 
on you that when you consider laws that do abridge the freedom 
of speech, the first amendment must be your guideline.
    I am a professor of law at Brooklyn Law School, counsel to 
the ACLU, and I was one of the ACLU attorneys who challenged 
the campaign finance laws in Buckley v. Valeo. But even before 
the Buckley case, we got our first test of what it was like 
when the government wanted to regulate what we now call issue 
advocacy.
    A group critical of then President Nixon ran an ad in The 
New York Times criticizing his foreign policy. Within a month, 
that group was visited by the Justice Department, which filed 
suit against the group on the ground that, since it was an 
election year and Richard Nixon was a candidate for reelection 
as President, that ad was for the purpose of influencing the 
outcome of the election and would subject that group to all of 
the regulations and controls of the Federal Election Campaign 
Act.
    We defended that group in court, and we secured a ruling 
from the Second Circuit Court of Appeals which said, such issue 
advocacy, even though it mentions and criticizes incumbent 
officeholders, is protected wholly by the first amendment, and 
the government cannot be allowed to impose rules and 
regulations that would suppress that kind of citizen issue 
advocacy about government and politics and the politicians that 
run government. Issue advocacy was born.
    Despite the injunction of that case, Congress passed a 
provision in the Buckley statute which regulated groups that 
simply reported voting records of Members of Congress. The D.C. 
Circuit struck down that provision as unconstitutional. A court 
which upheld every other feature of that bill struck that down. 
What they said was you cannot regulate groups simply because 
they put out public information about the records of Members of 
Congress.
    Finally, just to be sure that the point was made, the 
Supreme Court said that any information that is communicated 
about the politician is completely free and immune from any 
governmental regulation, unless that communication expressly 
advocates the election or defeat of that politician. The Court 
knew that people would be able to come close to the line, as 
Ms. Mitchell said, and they draw that line clearly and high to 
allow people to remain on the nonregulated free speech side of 
that line. For 25 years, that line has stayed firm, and the 
bills before you now are efforts to obliterate that line.
    The 300,000 members of the ACLU have long been devoted to 
trying to make sure that campaign finance reform is consistent 
with free speech and democratic values embodied in the first 
amendment. For that entire period of time, we have insisted 
that campaign finance laws must serve two vital goals: 
protecting freedom of political speech and association and 
expanding political opportunity and participation.
    The bills before you, unfortunately, do neither of those 
things. They are fundamentally inconsistent with these goals. 
Instead, they are distractions from, really, the serious 
business of campaign finance reform.
    Some people mistakenly think that the ACLU is not in favor 
of campaign finance reform. We certainly are. We support a 
comprehensive program of public financing of Federal campaigns 
consistent with the first amendment, a program which would 
develop programs for providing public resources, benefits and 
support for all qualified Federal political candidates.
    Twenty-five years of experience that we have had with these 
campaign finance laws have shown that limits do not work and 
that what we must seek is a more first amendment-friendly way 
to deal with the problem that some people have more resources 
with which to get their message out than others. We think the 
first amendment, least drastic alternative is a system of 
public funding.
    But McCain-Feingold contains nothing of that. McCain-
Feingold, Shays-Meehan are basically about limits, limits and 
more limits. They limit issue advocacy in a way I think which 
is clearly unconstitutional, under Supreme Court guidelines and 
all of the lower court cases that have followed that, and even 
the cases that predated the Supreme Court. Simply putting out 
information about a Member of Congress, no matter how much you 
praise or criticize them, is privileged from any kind of 
governmental regulation unless it crosses that line into 
express advocacy.
    Once again, the Court understood that people would tiptoe 
up to that line. But it put that line there so that speakers 
would feel free to criticize you, Members of Congress, without 
fear of retribution or regulation; and these bills basically 
fly in the face of over 30 years of doctrine that make it clear 
that issue advocacy cannot be regulated.
    If I might just for a moment, the ACLU has not run TV ads 
recently that might fit my friend Josh's description, but the 
NAACP certainly has. It ran a series of television ads last 
fall harshly critical of then Governor George Bush and his 
record on hate crimes legislation, harshly critical. Those ads 
would be outlawed under the bill before you.
    To my mind, any bill that would outlaw the ability of the 
NAACP to run ads like that is a bill that is flatly 
inconsistent with the first amendment. And if he answers, well, 
the NAACP can reorganize as a PAC and have its individual 
members run those ads and have their names disclosed, well, I 
hope the irony of that does not escape, since the most 
important first amendment precedent on the right of groups to 
speak for their members without having to disclose their 
members to the government is called NAACP v. Alabama.
    So, yes indeed, television ads by issue advocacy groups 
would be interdicted and prohibited by this legislation; and 
that is why we think the issue advocacy provisions are flatly 
unconstitutional.
    Secondly, the coordination issues. The coordination rules 
are so complicated and detailed that they do need a tax lawyer 
to understand them, but their basic practical effect is they 
make it impossible for representatives of citizens' groups to 
have conversations with you, Members of Congress, for fear that 
those conversations a year from now, if those groups put out 
information about how you voted on the issue they discussed 
with you, will deem them in coordination with you, and then 
anything that they do that might be viewed as helping your 
cause will be viewed either as an illegal corporate 
contribution or as a limited individual contribution, and 
ensnare them in all of the campaign finance rules and 
regulations. These new provisions will set up almost a campaign 
finance witch-hunt to trace down every possible conversation 
that might lead to these new conclusions of coordination.
    Finally--Mr. Chairman, I realize I have exceeded my time--
these bills also cut to the heart of the ability of political 
parties to do the things that they do which are really the 
essence of democracy: registering voters, putting out issues, 
developing ideas, and the soft money bans would undercut the 
rights and the abilities of parties.
    Finally, in conclusion, Mr. Chairman, I think the committee 
should make no mistake about the radical agenda that these 
bills promote and about the drastic departure from settled 
first amendment doctrine that they represent. It is the ACLU's 
hope that this committee will educate its colleagues in the 
House about the grave constitutional defects contained in 
McCain-Feingold and Shays-Meehan and that will help us turn 
away from those fatally flawed first amendment rights and 
perhaps that will help us turn toward what we believe at ACLU 
is a less drastic and constitutionally less offensive means to 
achieve reform, and that is public financing of political 
campaigns.
    If I might just have one more moment, Mr. Chairman. I, too, 
was shocked when I heard a distinguished member of this House 
say that we had to choose between free speech or clean 
elections, we could not have both. Well, in my mind, under the 
first amendment, we cannot have one without the other.
    Thank you.
    [The statement of Mr. Gora follows:]





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    The Chairman. Our last witness on the panel is Mr. Gold.

                 STATEMENT OF LAURENCE E. GOLD

    Mr. Gold. Thank you, Mr. Chairman. Good afternoon, Mr. 
Hoyer and Mr. Linder.
    I represent the AFL-CIO, a federation of 65 national and 
international unions with a total membership of more than 13 
million men and women throughout the United States. We welcome 
this opportunity to comment on some of the constitutional 
issues implicated by the ongoing debate over whether and how to 
revise the Federal Election Campaign Act.
    The AFL-CIO has articulated a comprehensive set of campaign 
finance reform principles to guide legislation that would best 
promote greater working family and overall civic involvement, 
promote the free flow of ideas and information, and minimize 
the raw influence of pure financial power on electoral 
outcomes. The key elements of our policy include the public 
financing of Federal election campaigns; elimination of soft 
money donations to national political parties; maintenance of 
the current limits on hard money contributions to candidates 
and parties, insofar as the privately financed campaign system 
remains in place; provision of free or reduced broadcast time 
to candidates; and vigilant protection of the speech and 
association all rights of individuals and organizations 
concerning issues and candidates. Unfortunately, the parameters 
of the Congress's current focus on campaign finance reform fall 
well short of embracing these goals and in several key aspects 
are antithetical to them. I will briefly address two of these 
aspects today.
    In Buckley v. Valeo, the Supreme Court in 1976 made clear 
that political communications are entitled to the highest 
degree of protection afforded by the first amendment. The Court 
recognized that election-related speech often includes both 
partisan and issue commentary. In order to ensure that citizens 
would not be chilled from discussion of issues during an 
election campaign and recognizing that the discussion of public 
issues is often tied to discussion of candidates, particularly 
incumbents, the Court in Buckley insisted that any restriction 
of political expression be narrowly and clearly drawn. 
Essential to that specificity, the Court held, was a standard 
that depended entirely upon the text of the communication and 
did not delve into matters concerning the Speaker's intent, 
whether actual or as perceived by a listener. For these 
reasons, the Court established the express advocacy issued 
advocacy line between permissible and impermissible regulation 
under the act, a line that the court and the lower courts, 
particularly in recent years, have uniformly maintained.
    The election time broadcast censorship provisions of S. 27, 
the McCain-Feingold bill, and the all-media, all-the-time 
censorship provisions of H.R. 380, the Shays-Meehan bill, are 
utterly in conflict with the substantial and one-sided case 
law. These provisions would preclude, for example, references 
to sponsors of legislation. In fact, the bills, would outlaw 
references to the McCain-Feingold or Shays-Meehan bills 
themselves. They would outlaw public appeals to name 
legislators to vote for or against a pending bill; voter guides 
or other comparisons of candidate positions; public statements 
intended to prompt candidates to address or to commit to 
sponsor or vote for or against particular kinds of measures if 
they are elected; and a host of other messages, related and 
unrelated, to an election itself.
    One of the fundamental flaws in the argument favoring these 
provisions is that the first amendment does or should tolerate 
a line of legality that distinguishes between all speech that 
concerns elections or candidates and all speech that does not. 
It is simply not so that ``black letter law'' says that 
corporations and unions cannot spend money in a way that might 
influence an election. That is the opposite of what Buckley 
plainly stated where it said, so long as persons and groups 
issue expenditures and in express terms advocate the election 
or defeat of a clearly identified candidate, they are free to 
spend as much as they want to promote the candidate and his 
views. We urge the Congress to refrain from legislating the 
wishful thinking that would outlaw such speech and force 
affected groups to litigate to uphold their first amendment 
rights.
    The provisions in these bills establishing new definitions 
of what conduct constitutes coordination with a candidate, 
rendering that conduct either unlawful or limited depending on 
who is doing it, also fail the first amendment test. The 
McCain-Feingold standard applies to coordinated expenditures 
and disbursements if they are made ``in connection with an 
election, regardless of whether the expenditure or disbursement 
is for a communication that contains express advocacy.'' But 
the Supreme Court in the Massachusetts Citizens for Life case 
in 1986 construed the same language in FECA's prohibition of a 
corporate or union ``expenditure in connection with any 
election'' to be limited to express advocacy communications in 
order for it to meet the constitutional requirement of clarity. 
The same McCain-Feingold language cannot be applied any 
differently.
    S. 27 also defines coordination to include, in part, ``any 
general or particular understanding between the spender and the 
candidate or a party.'' That phrase, found nowhere else in the 
United States Code, invites civil and criminal enforcement 
against groups and candidates not on the basis of how they act 
but on how it is inferred that they have thought.
    The Shays-Meehan coordination provisions are identical to 
those originally included in S. 27 and which Senators McCain 
and Feingold abandoned after they were convinced of their 
confusion and overbreadth. Indeed, they are so hopelessly 
convoluted that they would ban and, through any particular 
enforcement, could criminalize a broad range of political and 
legislative activity and advocacy, substantially chilling 
routine citizen and group contacts with Federal officeholders, 
candidates and political parties.
    The AFL-CIO recommends that the censorship proposals in 
these bills be dropped entirely and that the coordination 
provisions either be dropped as well or revised to reflect the 
precisely tailored standard such as that set forth on pages 17 
and 18 of my full testimony.
    Thank you. I welcome your questions and comments.
    The Chairman. Thank you.
    [The statement of Mr. Gold follows:]



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    The Chairman. Again, all additional statements we have, 
without objection, will be entered into the record.
    We will start with Mr. Linder.
    Mr. Linder. Thank you, Mr. Chairman.
    Mr. Gold, you favor the elimination or the use of soft 
money for political parties. Do you favor the inability to use 
soft money for unions?
    Mr. Gold. Well, I think there is a substantial difference 
between these two concepts. The words ``soft money''----
    Mr. Linder. I just asked you a question. Do you favor the 
elimination or the use of unregulated money for unions as you 
do for political parties?
    Mr. Gold. Well, if you are saying we cannot spend our money 
on anything, of course I do not favor it.
    Mr. Linder. I am saying, you want to eliminate what 
political parties can use--in fact, you want to say that they 
cannot use unregulated dollars in political activity. That is 
what you are in favor of, according to your testimony. Are you 
willing to say that unions should not be able to use 
unregulated dollars in political activity, also?
    Mr. Gold. No, Mr. Linder. If you are referring to our own 
treasury money and our own ability to communicate with our 
members on political issues and other issues, our ability to 
talk to the public about what we believe and to promote 
legislation and that sort of thing, we certainly do not favor 
that. But we are talking about--we are comparing apples and 
oranges here.
    Mr. Linder. Political parties cannot do it, unions can.
    Mr. Gold. What we favor is that private donations of soft 
money to national political parties be banned. We do not favor 
the same with respect to State and local parties, and we have 
some issues to raise with the pending legislation that we have 
not covered yet today.
    Mr. Linder. There are three exceptions for the use of soft 
money in political parties and other interested parties, and 
that is you can use it to administer your PAC, which I assume 
the union does, use treasury money; you can use it for party 
billing activities such as turn out the vote and voter 
education and voter registration; and you can use it for 
communicating with your membership. The union uses all three of 
those categories.
    Why do you want to eliminate those opportunities for 
political parties when you are charged with the responsibility, 
it seems, to put together the system, and you want to continue 
to use it for yourself?
    Mr. Gold. Well, there is a difference between our own 
ability--a union's ability to spend money that it derives from 
dues, per capita taxes, and I guess, whatever interest is 
earned on accounts. That is the money flow that arises from the 
union's existence as an associational voluntary membership 
organization.
    Mr. Linder. Is it voluntary?
    Mr. Gold. We believe--if I may finish, we believe that 
there is a difference between that and mass and unlimited 
transfers of cash from private interests to political parties 
or to committees that are controlled by candidates. We believe 
that in regulating elections and regulating campaign finance 
you can draw a line that says that that can be limited, but 
when you are talking about a union or any other membership 
organization--I mean, unions and membership organizations are 
very much the same here. If you are talking about their own 
ability to raise money from their own members through the 
ordinary course of their own operations and spend their money 
on all sorts of matters, not including contributions to 
candidates and parties, because we are, of course, barred from 
using that money in a contribution to a candidate or a party, 
that is entirely proper, and it is very different than the 
circumstance I believe you are describing.
    Mr. Linder. Well, I would suggest that most union members 
do not make voluntary contributions in their dues. I expect 
that is pretty mandatory. You have about an $8.5 billion cash 
flow when you take all the unions together and you use it as 
you see fit, including using it for voting against candidates 
that 42 percent of your membership votes for.
    Mr. Gora, you said my favorite five words in the 
Constitution: ``Congress shall make no law.'' We could stop 
right there.
    Mr. Gora. Pretty much.
    Mr. Linder. You said the Second Circuit Court decided on 
the Nixon ad. Has any other court overruled that since then?
    Mr. Gora. No. In fact, that case was followed in other 
lower court decisions prior to Buckley. It was followed in the 
decision I mentioned to Congressman Hoyer, where we knocked out 
the disclosure provision of the Buckley bill, and it was cited 
in Buckley as part of the Court's reasoning for developing the 
express advocacy doctrine that says, any speech about 
politicians other than expressly advocating their election or 
defeat is completely free.
    One other point--and it has been followed by dozens of 
cases. Mr. Bopp's testimony contains a list of dozens of cases 
ever since. I mean, if there is any doctrine in this area that 
is clear, it is that doctrine.
    Mr. Linder. You talked about the illegal coordination of 
outside groups in writing legislation. Would that have applied 
to the environmental groups in the 1980s when they sat down 
with the members of the Resources Committee and drafted the 
environmental laws?
    Mr. Gora. I think it would, Mr. Linder. I think the 
language on coordination, once one can fathom it, is so broad 
in the kinds of contexts between citizens' groups and members 
that would render the contacts coordination, that any kind of 
discussion--I mean, I think that is one of the most pernicious 
parts of the bill. The part that bans ads on television, we can 
all get the sense that that is a ban and probably violates the 
first amendment. I think that will pretty clearly be declared 
unconstitutional. But it is hard to understand the 
perniciousness of the coordination rules.
    But when I speak to our full-time legislative 
representatives here in Washington, for the ACLU, and they 
describe to me what this bill would do to them and how it would 
chill and structure conversations they have with Members of 
Congress about civil liberties legislation, it really is 
frightening. I am glad I am not a lobbyist to have to live 
under this bill were it enacted.
    Mr. Linder. You mentioned the NAACP ad, which is probably 
one of the most egregious affronts that I have seen in my 27 
years of this business. I do not think I know a single person 
who paid for that ad. Was it ever reported anywhere?
    Mr. Gora. I am not aware of the funding of the ad, nor 
should I be entitled to know the funding of the ad.
    Mr. Linder. Would this bill force the disclosure of the 
funding of that ad?
    Mr. Gora. I think the bill would do two things. As written, 
it would make it a crime for the NAACP to sponsor an ad, 
because it is a corporation and corporations are barred from 
running ads that are deemed to be election ads by this new 
definition. But even were there some way that you could 
reconfigure the NAACP into a PAC, then the first requirement 
would be disclosure of anybody who gives more than $200 and, of 
course, anybody who gives excessive amounts to fund an ad like 
that would have to have their name disclosed.
    Again, I think the irony, you could cut it with a knife, 
that it was the NAACP that established through Supreme Court 
decisions the right of associational privacy, that the 
government cannot learn who members of issue groups are because 
it might chill and deter people from wanting to join those 
groups and make those contributions for fear of harm from the 
disclosure of their association.
    Mr. Linder. Ms. Mitchell, you mentioned $73 million spent 
to pass laws. I have seen some of your writing on this. We have 
talked about it once or twice. Are those dollars subject to 
disclosure and regulation?
    Ms. Mitchell. Part of them. The dollars that are given to--
they are not subject to any kind of regulation. The dollars 
that are given, the bulk of the dollars were given by private 
charitable foundations to 501(c)(3) entities, and those are 
disclosed really by looking at the annual reports of the 
charitable donors, not the recipients.
    Some of them do actually disclose who they get money from. 
The campaign finance groups will say who they get money from. 
Common Cause will tell you they have spent X amount over a 
period of years, but it is not required to be disclosed, no. In 
fact, while you are required--a charitable entity, a 501(c)(3) 
or (4), has to tell the IRS if they get a contribution of over 
$5,000 and who it is from. They are not required to make that 
information public.
    Mr. Linder. Thank you.
    Mr. Simon, you said that the provisions in this bill are 
clearly constitutional. Have they even been held to be 
constitutional, and is that not the job of a court?
    Mr. Simon. Well, I said that the soft money provisions in 
my opinion were clearly constitutional. I think the Buckley 
case and the Shrink Missouri case clearly do stand for the 
proposition that contributions to the political parties can be 
limited because those limits are compelling public purposes.
    Mr. Linder. Thank you.
    Mr. Gold, one more point, if I might.
    Dr. Troy at Rutgers has followed union spending for some 
time. I am sure you heard his name before----
    Mr. Gold. Yes. I testified with him last year before 
Senator McConnell.
    Mr. Linder [continuing]. And I believe he suggested that 
over the last several cycles unions have spent somewhere in the 
range of $500 million to $600 million each cycle of soft money 
influencing elections.
    I can tell you from personal experience that in several 
districts across the country you folks paid for 15 or 20 young 
people--you paid their room and board and salaries and travel 
expenses--to spend all year and three months in one person's 
district to influence that election under party-building 
activities. Did you ever report that?
    Mr. Gold. Sir, that was not party-building activities. That 
is under a provision of the Federal Election Campaign Act that 
says unions and corporations and membership organizations 
cannot be and are not restrained in their ability to spend 
their resources to communicate with their members on any 
subject, political or otherwise.
    Mr. Linder. So going door to door in a community is 
communicating with members?
    Mr. Gold. We do not go door to door communicating with the 
community; we may go door to door, but it is with our own 
members. The premise of your question is factually incorrect.
    If I may say about unions, we are voluntary membership 
organizations. Dr. Troy's figures are purely of his own 
imagination. I do not know what the figures are, and what he 
calls political I think way overstates what truly is.
    Unions are operated--all of our officers are elected by 
secret ballot. Our members have legally enforceable Federal 
rights to participate in our organizations. These are rules 
that do not apply to any other membership organizations, most 
of which operate with self-perpetuating boards, and they 
certainly do not apply to corporations, which are funded in a 
completely different manner and whose soft money, I should 
point out, dwarfs that of the entire labor movement probably 
thousands of times over. We are not looking to restrict their 
ability to speak, their ability to communicate, their ability 
to lobby, as these bills do, any more than we think we should 
be restricted
    Mr. Linder. Let me point out that it is against the law for 
corporations to demand dues from their membership in order to 
put it to action into political activity. They can get 
voluntary contributions only, not dues.
    Mr. Gold. And we do the same.
    Mr. Linder. Let me just point out that I was, in 1998, in 
maybe three or four districts where you had young people on the 
ground going door to door and they seemed to not know which 
door was always owned by a union member, because they were 
going to a lot of other doors, too.
    Thank you, Mr. Chairman.
    The Chairman. Mr. Hoyer.
    Mr. Hoyer. I do not have time to fully develop what I think 
you said there, comparing whatever unions spend and what 
corporations spend in advocacy, however one might describe it. 
I am not going to get into a legal definition, but it is at 
least 10 to 1 at a very minimum. You said maybe 1,000 times, I 
do not know if that is a case, but do we have a figure on that? 
I think I'll recall it----
    Mr. Gold. Well, yes. The figure I was referring to, when I 
say dwarfed by a factor of thousands to 1, I am referring to 
available assets. I do not know that the figures have been 
added up, although I think the Labor Department has them.
    Mr. Hoyer. It is an interesting theory, but there is an 
extraordinary discrepancy between what corporations who have a 
fiduciary responsibility to their stockholders and who do not 
ask individual stockholders how that money is to be spent, and 
an extraordinary difference between what corporations spend in 
advocacy and what labor unions spend in advocacy, and labor 
unions pale almost, not quite, luckily, when that comparison is 
made.
    Mr. Gold. I think that is exactly right, Mr. Hoyer.
    Mr. Hoyer. Now, let me ask a question about these bills. 
First of all, let me thank all of you for coming. I have heard 
some of your testimony before. I think it is all very 
thoughtful testimony. I have said before I think there are 
significant honest differences of opinion on these issues. Very 
frankly, I will make an observation that this Congress and 
previous Congresses have not necessarily been too persuaded in 
passing legislation because they were thought to be 
unconstitutional. Some of your groups advocate legislation that 
is clearly, from my perspective, unconstitutional, if I may say 
so as respectfully as I can. Ultimately, none of us are going 
to know, whether it is a flag amendment, partial birth, or 
campaign finance, until the Supreme Court makes a decision. I 
think any of us who voted on the bill that we clearly believe 
it was unconstitutional would not be appropriate. I would hope 
that our oaths of office would dissuade us from doing that.
    However, clearly we have some very bright, able people at 
this table.
    Now, Mr. Gora, let me ask you a question. Is Mr. Rosenkranz 
correct when he represents that there are literally a large 
score of former presidents of the ACLU and other officials who 
disagree with your conclusion?
    Mr. Gora. Well, there are people----
    Mr. Hoyer. Is that correct?
    Mr. Gora. Yes, he is correct that there are people who used 
to be officials of the ACLU, many of them are my friends, and 
many are my mentors, who disagree with the current position of 
the ACLU.
    Mr. Hoyer. Do you believe that those opinions are honestly 
held?
    Mr. Gora. Oh, they may very well be honestly held, they are 
quite wrong and, more importantly----
    Mr. Hoyer. Mr. Gora, if I can get by your self-confidence, 
which I admire, the point I want to make is am I correct then 
in concluding that because their opinions are honestly held and 
your opinions are honestly held, that there is an honest 
disagreement to your conclusion?
    Mr. Gora. Well, I think there is a disagreement. I 
certainly would not want to characterize it as honest or 
dishonest, but as lawyers, we can read the law and read the 
decisions and get some sense of what the law is. That is what 
we tell our students.
    Mr. Hoyer. Mr. Rosenkranz and Mr. Simon have done that as 
well.
    Mr. Gora. I understand. Well, but let me just finish my 
point about the ACLU.
    Mr. Hoyer. Yes, sir.
    Mr. Gora. The leadership of the ACLU, the democratically-
elected members of the board of directors of the 300,000-member 
organization, have looked at this issue several times for more 
than 25 years, and each time they have taken the position that 
is reflected in my testimony. And they looked at it most 
recently 2 or 3 years ago and some of the officials that signed 
the letter you are referring to appeared before the board and 
presented their case, and the board, even though it is 
concerned about many of the imbalances of funding, was not 
willing to say that the way to deal with our campaign finance 
problems is to sell out the first amendment.
    So the ACLU's position is as I have stated it.
    Now, honest differences of opinion? Yes.
    Mr. Hoyer. To throw out the first amendment, an 
intellectual argument, or----
    Mr. Gora. Well, I am trying to be pithy in my response. But 
on the honest difference of opinion, I think, for example, the 
case law governing the express advocacy I think is extremely 
clear, and I think most people honestly, if you asked them off 
the record, would say the chances of that provision being 
upheld are very remote.
    Now, in all honesty, the soft money issues are a little 
different. Not that the principle is different, but there are 
not 30 years of precedent saying that Congress cannot regulate 
soft money activity. So on that I think maybe one might say 
there might be more of a difference of opinion. But I do not 
think there is really a well-founded difference of opinion on 
issue advocacy.
    Mr. Hoyer. Mr. Rosenkranz, do you want to respond?
    Mr. Rosenkranz. Yes, thank you, Congressman Hoyer. Two very 
brief points. First, just to be clear, this is not just a few 
former leaders of the ACLU, this is every living former 
president, executive director, legal director and legislative 
director of the ACLU who was living at the time that this 
letter was written.
    Secondly, on sort of reasonable differences of opinion, I 
think the best evidence of the differences of opinion on the 
issue advocacy provision and the openness of the question is an 
ally of the ACLU and the Right to Life Committee, Yon Baron, 
who recently submitted a brief to the Supreme Court requesting 
them to review the case that came out of Mississippi involving 
issue advocacy, sham issue advocacy, listing all of the cases 
that go both ways, claiming it is an open issue that needs the 
Supreme Court's resolution, and saying that the courts are 
increasingly going in the other direction; that is to say, the 
direction that Mr. Simon and I have been supporting.
    Mr. Hoyer. Let me go to some specific questions. Mr. 
Rosenkranz, first to you. What effect to you think the 
elimination of soft money will have on political parties? That 
is obviously one of the issue that has been raised in this 
debate.
    Mr. Rosenkranz. Congressman, it is a great question, and I 
think it is one of the big red herrings in this entire debate. 
The argument we hear from the other side constantly is that 
soft money is necessary for the health of political parties.
    I believe very ardently in strong political parties. 
Political parties are very important to our democracy; they 
play an important mediating role between individuals and the 
legislature and elected office. But to say that enormous 
infusions of monies from special interests is equivalent to 
healthy political parties is like saying that eating mountains 
and mountains of fat-saturated french fries is equivalent to 
creating healthy bodies.
    What you have to be looking at is the reasons that we want 
political parties to be strong, and that has to do with 
mobilizing people to--actually mobilizing them to join 
political parties, which has very little to do with bombarding 
people on the airwaves, which is what 40 percent of soft money 
is used for.
    A final point, just to look at the numbers. In the 2000 
election cycle we had about half a billion dollars of money 
spent by the political parties, that is soft money spent, 
compared to 1988 where it was 1/11th of that amount. I do not 
think that there is a significant difference in the health of 
the political parties that is demonstrated by that 11 to 1 
disparity. Political parties have been vibrant in American 
democracy with and without the ability to spend soft money.
    Finally, 40 percent of the money that political parties 
spend, that is the soft money, is spent on the airwaves. Only 
80 percent is spent on the grass-roots organizing, get-out-the-
vote efforts which, in my mind, is far more critical to what we 
believe as being a function of strong political parties.
    Mr. Hoyer. Ms. Mitchell, you seem to be motivated to 
comment.
    Ms. Mitchell. Mr. Hoyer, thank you for allowing me to 
comment.
    First of all, I think that because of the limits, the 
coordinated party expenditure limits on hard dollars that 
parties are limited to only spending so much to help their 
candidates with hard dollars, that it creates an enormous 
pressure in finding other ways to help support the candidates. 
Now, we can all hope, I hope certainly that the Supreme Court, 
either on Monday or the following Monday, will strike down 
those hard dollar limits, and I think if that happens, and even 
if it does not happen, I would urge Congress to remove those 
expenditure limits, because once those hard dollar limits would 
be removed, I think what we would see again is the parties 
would proceed to help the candidates in the amount that they 
felt was important, and you would not have this kind of attempt 
to circumvent if one exists.
    But I would urge you, Mr. Hoyer, to look at the bullet 
points I put together on the impact of McCain-Feingold on State 
and local parties. It is basically the same, with a few 
changes, in Shays-Meehan. But Federal election activity is 
defined as all sorts of activity, grass-roots activity, 
absentee ballots, slate cards, I mean it includes the mail-in 
programs, the generic party building, voter identification, the 
generic things like the RGA, the Republican Governors' 
Association, Democratic Governors' Association, the Young 
Republicans, Young Democrats. All of these things are covered 
and paid for by soft dollars, and they will no longer be 
available to do that. Even if a Federal candidate is never 
mentioned, it is still defined as Federal election activity. So 
it nationalizes, federalizes all of the State and local 
political parties. Even a local county political party is 
suddenly subject to reporting at the FEC, and it supercedes and 
circumvents supplants, the State campaign finance laws of all 
50 States.
    I will give you one example. A political party in a given 
State with which I am familiar, they operate under the laws of 
the State, they have one guy who is a rich guy who just loves 
the party, and so for years, he has paid out of his pocket for 
their headquarters and phones and all of this kind of thing. 
Under McCain-Feingold, he would be limited to giving his State 
party $10,000, and his contributions to the State party would 
now be subject to his aggregate limits for Federal giving. So 
right now he can give as much money as he wants to the State 
party under the laws of his particular State. Now he is going 
to have to include his contributions to his State party in his 
aggregate limits for what he contributes to his candidates for 
Congress, the Senate or the President, or Federal PACs.
    I think that is what I am saying about look and see what is 
in the Kool-Aid. Look at the practical applications. I deal 
with this every day, and I promise you that there are things in 
this bill that anyone who has run for office and has been 
involved in everyday politics knows that these things are 
impractical, they have a chilling effect on the people who want 
to participate in the process, and I urge you to pay close 
attention to the realities, not the rhetoric but the realities.
    Mr. Hoyer. Mr. Chairman, if I can ask one additional 
question. I have an appropriations----
    Mr. Chairman. Happy birthday, by the way, Mr. Hoyer.
    Mr. Hoyer. Thank you so much.
    Ms. Mitchell. You do not look a day over 38, but he told us 
you were 39.
    Mr. Hoyer. Well, that is in the interest of full 
disclosure. I do not know what the Supreme Court has said on 
the issue of 39, but I would be glad to be advised on that.
    Ms. Mitchell, let me say something as an aside. This Kool-
Aid has been around a long time. This Kool-Aid has been subject 
to review for a long time. It was passed, as you know, pretty 
handily in this House twice, and in the Senate. So it is not as 
if Mr. Jones just took the Kool-Aid out of his pocket. So I 
think the analogy falls short somewhat in that respect.
    Let me tell you something, and all of you that have heard 
me talk before, and Mr. Gora, you will want to speak to this, 
that I am very concerned. I have the absolute right in my 
opinion to write something on this sheet of paper and hand it 
out as extensively as I want and put it anyplace in our country 
that I want to. But when I use the airwaves, as you said, the 
FCC does make a requirement that the American public know who 
is talking to them over their airwaves. The two gentlemen in 
Texas became known after they spent 2\1/2\ million savaging Mr. 
McCain; that is my word, not anybody else's. I think it is a 
very significant concern to democracy that we know who is 
talking to one another, through the public airwaves. Private 
communication, obviously, that can be known as a nondisclosed 
source.
    I would like your comments on that, I think that is of 
great concern to every American who participates in this 
democracy, because the Citizens for Better Government do not 
tell any citizen who is talking to them--and you have heard my 
analogy before. If the Citizens for Better Government are the 
oil companies or the Citizens for Better Government are the 
environmentalists of the world, there is a different hearing, 
there is a different perspective, there is a different 
communication, I suggest to you.
    Now, I understand the NAACP Alabama case, and I am not sure 
how you work that out in terms of membership. I am not saying 
that the entire membership has to be made aware, but I do 
believe that there is a very important question to the sanctity 
of our democracy and communication for voters, prospective 
voters, to know who is talking to them and making 
representations.
    Now, you indicated, Ms. Mitchell, as I understand it, in 
your comments that they ought to be able or are obviously 
required to do the FCC disclosure. But I think I would like to 
hear all of your views on that, because I think it is a very 
critical issue in our democracy.
    Mr. Gora. Well, it is a big question, Mr. Hoyer, and I am 
only able to give you a small answer, and I think the answer is 
we do have slightly different constitutional framework 
surrounding broadcasting, but on the other hand, broadcasters 
and people that communicate on broadcasting have significant 
first amendment rights. I am not sure that we can easily 
balance those two things; namely, the additional regulatory 
authority, if you will, of the government because of the 
airwaves versus the fact that these are still basically people 
and institutions with first amendment rights. Whether it comes 
down to the kind of disclosure of the sponsor because it is on 
television requirement that Ms. Mitchell was talking about, 
whether that would be permissible, I am not sure. But that is a 
far cry. Mr. Hoyer, from the kind of ban that these bills have.
    Mr. Hoyer. I understand. I did not ask you about the ban. 
What I am saying is, if the ban does not do it, is this an 
issue of importance and if so, how do we get at it? I think it 
is an issue of great importance, because I think it impacts 
very substantially on the ability in a democracy of citizens to 
make a rational decision.
    Mr. Bopp. Could I comment on that?
    Mr. Hoyer. Sure.
    Mr. Bopp. I think that is a serious question, and I agree 
with Mr. Gora on that. We do have, to a limited degree, a 
different constitutional contest. However, I am persuaded, as 
the Supreme Court was in McIntyre, that this is really up to 
the listener. In other words, it seems to me that a person who 
puts an ad on TV, coming up with a new name, something that 
nobody recognizes or without disclosing who they are, they, the 
speaker, runs the risk, and that is--the people, as McIntyre 
said, people will take that into account. The listener knows 
that they do not know who the Citizens for Good Government are. 
The listener knows whether or not they recognize the group and 
are prepared to listen to the group and, therefore, consider 
that as part of whether or not they listen to the ad, are 
persuaded by the ad, or simply click the ad or ignore it.
    So it is actually a risk that the speaker is running by 
proceeding anonymously, that the listener will simply ignore or 
turn off, because they consider the source to be important.
    Now, the other part of the analysis was that while this is 
a risk for the speaker to take, it is in our proud tradition 
that people are able to communicate anonymously because often 
the Speaker does not--in many cases the Speaker does not want 
his, the force of his argument to be affected by who is making 
the argument. The Federalist Papers were published anonymously, 
because they did not want the arguments to be taken away from 
by identifying the source, and people could decide on the merit 
of the argument rather than to whom it was from.
    Mr. Hoyer. I apologize to others who want to respond. As 
you heard, my beeper has gone off three times. They are in a 
vote now, so I have to go.
    Mr. Chairman, I have a number of other questions, if I 
could submit them and get some answers. Again, I think your 
testimony has been thoughtful and helpful, and I appreciate it.
    Mr. Linder. Mr. Chairman, may I ask you to yield for a 
moment? Mr. Hoyer asked a question I would like an answer to.
    You said you could influence anything you want on a piece 
of paper, but on the airwaves, that is public airwaves and 
people deserve the right to know who is using them. The 
Christian Coalition, Mr. Bopp, who you, I understand, 
represent?
    Mr. Bopp. One of my clients.
    Mr. Linder. Uses voter guides that go around in paper in 
churches before an election. Would they be in any way impinged 
upon because it was not on the airwaves?
    Mr. Bopp. Oh, sure, because other provisions of McCain-
Feingold and Shays-Meehan would make it unlawful to engage in 
that sort of issue advocacy. There is year-round prohibitions 
on any communication that would be unambiguous--you know, in 
the opinion of the bureaucrats, unambiguously support a 
candidate, while not using express advocacy. So furthermore, 
there is the coordination trap that is applied year round to 
all communications.
    Mr. Linder. So the notion that we can write down anything 
we want on a piece of paper and disseminate it as broadly as we 
like in any way we like is simply not correct?
    Mr. Bopp. That is correct. Under McCain-Feingold, there are 
numerous restrictions, and if you look at exhibit C, or 
appendix C of my testimony, anybody that is going to engage in 
an issue advocacy-type communication, these are all the tests 
and trip wires and hoops that you have to jump through before 
you finally get to the other end here, which says it is either 
allowed, prohibited or subject to some sort of reporting or 
contribution limits. I mean only the wealthy can afford to hire 
experts in order to work their way through this maze, and only 
the wealthy would have the audacity to take that risk.
    Mr. Simon. Could I respond to that, Mr. Chairman, just to 
sort of narrow the focus of discussion so we can have a 
discussion about it, but I think it will actually be before the 
House. The provisions that I think Mr. Bopp is characterizing 
are provisions that are not in the McCain-Feingold bill and I 
anticipate will not be in the Shays-Meehan bill that is 
ultimately introduced and brought to the floor.
    The Chairman. Well, I think just looking at the two bills, 
not to interrupt, but I think the groups, at least what I have 
looked at and what I have heard, the groups are gotten on one 
end by coordination; if not that, they are gotten on the other 
end by direct language.
    Mr. Bopp. And both are in McCain-Feingold or Shays-Meehan.
    The Chairman. Either bill wraps around somehow to stop the 
payments, because this was a huge issue for debate last time. 
They both have some type of wrap-around language.
    Mr. Simon. Well, if I could just respond to that, I think 
in both areas on the regulation of so-called sham issue 
advocacy and on coordination, there are very significant 
differences between the Shays-Meehan bill that has previously 
been considered by the House and the Senate bill, the McCain-
Feingold bill that was passed in April and that will be brought 
to the House next month.
    In terms of the Snowe-Jeffords provision, which is the 
applicable regulation of sham issue advocacy, as I said in my 
opening statement, that applies only to broadcast ads, it does 
not apply to nonbroadcast ads or the kind of voter guides that 
Mr. Linder was referring to.
    In terms of the coordination provisions, there were very 
extensive coordination provisions of the sort that Mr. Bopp was 
referring to that were in the Shays-Meehan bill previously, 
that were in the original McCain-Feingold bill, and that were 
taken out during the floor consideration of McCain-Feingold, 
and that again I anticipate will not appear in the bill that is 
before the House next month.
    Mr. Bopp. Mr. Chairman, there is a provision of McCain-
Feingold called the electioneering communication provision that 
is a year-round ban on corporations, labor unions from 
communications that go way beyond express advocacy. Mr. Simon 
is simply not familiar with the bill he supports.
    Mr. Gold. Also, I think it is important to note that the 
Shays-Meehan bill as introduced this year, not 2 years ago or 
more, contains that very intrusive and hopelessly, in our view, 
oppressive and unconstitutional language that the McCain-
Feingold bill did abandon a few months ago. This is the bill 
that is pending, and nobody has changed it yet, so that is what 
we have to deal with.
    The Chairman. All of you, all of you on either side of the 
issue raise a point and I have stated, along with a Member of 
Congress who testified here, that we should have done this in 
two weeks, this bill should have been out, and I said to that 
member, what do you think about the millionaire clause? His 
answer was, I think my quote is correct, I do not know, we 
haven't looked at that yet. One person wanted it in 2 weeks, 
one person wanted it in 3 weeks. Exactly all of the statements 
of all of you on either side proves I think these bills have 
changed.
    Plus, I want to make this public point. We have newly 
elected Members of Congress who have not served here before. 
Whether Republican or Democrat, everybody has a right to their 
day before this podium here to testify and their day of debate. 
I just wanted to throw that out, because I think the debate of 
the last 5 minutes shows that there are differences, there have 
been differences. Maybe some of the substantive points are 
still there, but there has been some change.
    I have a couple of questions I wanted to ask, one of Mr. 
Simon. The AFL-CIO has about 13 million members. Do you deem 
the AFL-CIO a special interest group or a public interest 
group? What membership do you become the public in versus the 
special interests? And you know why I am asking this question, 
because their money in some people's minds is tainted because 
they are the special interests. They have 13 million people.
    Mr. Simon. Those obviously are nonprecise and somewhat 
rhetorical terms. I think the point of the legislation is that 
money that is used to influence Federal elections should be 
subject to Federal fund-raising rules which are intended to 
ensure that corruption and the appearance of corruption is not 
created by the use of that money from whatever group it comes 
from.
    The Chairman. But do you, the AFL-CIO, view them as a 
special interest, just as Common Cause is viewed as a special 
interest group?
    Mr. Simon. I guess Common Cause does, and probably a lot of 
people view Common Cause as a special interest group
    The Chairman. But you are deemed to be a public interest 
group?
    Mr. Simon. We are deemed to be a public interest group by 
those who call us that and we are deemed to be a special 
interest group by those who call us that. Again, these are not 
totally imprecise terms.
    The Chairman. This weighs on the discussion because what 
happens in this bill that bothers me significantly is that the 
60 days before the election, the AFL-CIO cannot use its money 
because it is ``tainted and soft,'' and soft means dirty money, 
although it is coming from 13 million people. But it cannot go 
on the radio and it cannot go on television.
    Now, a person worth $50 million, one person, not 13 million 
people, can launch a tirade, let's say in my district, about 
how good Right to Work would be and how bad supporting a labor 
union would be. That is one person. And they then, without any 
restrictions, launch $1 million worth of ads up to the minute 
the polls close. But the AFL-CIO in fact could not defend its 
position on Right to Work, which is very dear issue, because 
its money is tainted. So you still have money in the system. 
Now you have the millionaire controlling free speech without 
the other side being able to come into it, and that is 
juxtaposed to Right to Work, and I use that as just one issue. 
I could use Right to Life. I am just saying, what--the thing I 
cannot clarify in my mind, what makes their money so different 
in what they want to say versus one human being who is loaded 
with money that can do whatever they want.
    Mr. Simon. Well, basically what makes the difference are 
precisely the lines laid down by the Supreme Court that have 
reviewed campaign finance regulations in light of the first 
amendment restrictions, and the Court has said, and did say in 
Buckley, that when you are talking about campaign-related 
speech, electioneering speech, the amount of money an 
individual can spend cannot be limited. When you are talking 
about speech by a union or a corporation, that money comes 
through a Political Action Committee which the AFL-CIO has and 
from when it can raise money for its member to engage in this 
speech.
    The Chairman. And can be limited by Congress, as we know. 
It can limit amounts spent.
    What I am saying is--I am not saying that you shut off the 
multimillionaire from free speech. I am not saying that. But 
the system is not fair when you allow that multimillionaire, 
the wealthy, the rich, the influential--the numbers in this 
body have grown; in fact, some of the caucuses seek out 
millionaires to run in this institution, and I think we need 
diversity here of all income structures and all racial 
backgrounds. But it has become sort of a wealthy--you cannot 
restrict, I understand, the millionaire from speaking, but the 
counter to that is to allow the other groups to speak also. So 
we hide I think behind well, you cannot restrict the speech of 
the millionaire, well then why come over and restrict NOW or 
Right to Life or the AFL-CIO or the corporation? That is my 
question. Why do that?
    Mr. Simon. Well, when you are talking about speech relating 
to issues that do not mention candidates, there is no 
restriction, not in this bill and not otherwise in Federal law. 
When you are talking about speech relating to campaigns, the 
restrictions laid out by Congress previously and approved by 
the Court is that corporations and labor unions speak through 
their political committees, and there is no limit on the amount 
of spending that those political committees can engage in for 
such speech.
    Mr. Bopp. Mr. Chairman, thank you. I challenged Mr. Simon 
and the other witnesses on the other side to name one case, one 
case that supports their argument, one case that supports any 
of the provisions of McCain-Feingold or Shays-Meehan. In fact, 
this is not a matter of subjective opinion or simply hand-
raising.
    The Chairman. I think Mr. Rosenkranz----
    Mr. Bopp. I know----
    Mr. Rosenkranz. I thought there was a challenge.
    The Chairman. Go ahead.
    Mr. Bopp. And of course--and they cited no such testimony 
in their written testimony, and in fact we have cited 40 cases 
that ha held, as has been testified, that it has to be express 
advocacy. That is equally true and most importantly true with 
corporations and labor unions.
    First National Bank of Boston v. Bellotti, Supreme Court, 
1972, and Citizens Against Rent Control v. Berkeley, both hold 
that corporations and inferentially labor unions, have an 
absolute right to issue advocacy. Buckley said that issue 
advocacy encompasses talking about candidates, what their 
positions are on issues, what incumbents have done to us and 
for us while in office. Only express advocacy is limited. And 
then the Supreme Court in 1996 went so far as to say that for a 
not-for-profit idealogical corporation; i.e. Mass Citizens for 
Life v. FEC said that even express advocacy could not be 
limited, even though they are a corporation and segregated into 
a PAC, and, of course, what Shays-Meehan and McCain-Feingold 
does is take issue advocacy that is considered by the Court 
absolutely protected and tries to force it under a PAC when you 
cannot even do that with express advocacy for certain 
corporations.
    Mr. Rosenkranz. Mr. Chairman, I would be happy to take up 
the challenge and I will multiply it by 3. Furgatch in the 9th 
circuit upheld a line that was very different from magic words. 
Crumpton. v. Keesling, out of Oregon, and the Supreme Court 
stated emphatically, while striking down an overly broad 
provision, that it seemed different from the magic words test.
    Ultimately, this will be a Supreme Court case and only the 
Supreme Court will decide, but if I may finish, Bellotti was 
not a case that had anything to do with elections and, in fact, 
the Supreme Court distinguished Bellotti on the ground that 
this was, in fact, a pure issue advocacy case about a ballot 
proposition.
    The Chairman. There might be a vote coming up.
    The Gold. I want to say I appreciate the chairman's example 
of the AFL-CIO and the line of questioning throughout, but I 
think the proponents of this are operating on a real utterly 
false legal distinction, which Mr. Bopp just described, and 
that is that somehow you draw a line between something that 
discusses a nonelection-related issue and noncandidates and 
that you discuss candidates and elections on the other side, 
and that somehow draws a line of legal invalidity. That is 
totally contrary to what Buckley expressly says, and it would 
be terrible public policy for the law to take that direction. 
We do not believe it will. We believe even if Congress were to 
go that route, the Court certainly would strike it down, 
regardless of what an old 9th Circuit decision says, which is 
in the distinct minority and also I think pumped up a little 
more than what it says by the proponents in two State court 
decisions.
    The Chairman. I want to ask a couple of other questions, 
because we have talked about the Supreme Court today. If this 
bill is well thought out and this bill has been around for a 
long time and we should just pass it the first 2 weeks we are 
over there, why are proponents of the bill afraid of 
nonseverability? Why are they opposed to nonseverability?
    Mr. Rosenkranz. I have a very easy answer. The easy answer 
is Buckley v. Valeo, in which the Supreme Court took, you know, 
a wide variety of issues and cut them up in various different 
ways. No one here, I think, would be prepared to say with 100 
percent certainty that every single provision in the McCain-
Feingold bill or whatever version passes is absolutely 100 
percent constitutional.
    Courts are unpredictable.
    The Chairman. But what you get is, the proponents of this 
would say voluntary. I have talked to the other side of the 
aisle, I have talked to unbiased individuals from the legal 
aspects. I think there is a great percentage that think that 
parts of this would be found unconstitutional, and that happens 
in our country. But you are trying to craft a bill that you can 
follow through the campaign process and major components are 
all of a sudden evaporated, and what do you have left?
    And here is my real worry about this--because this bill 
does not affect my reelection, it does not effect one dot or 
paragraph of any money I can raise or not raise, it does not do 
anything to me. In fact, I think we probably, as incumbent 
protection thinkers, should just pass McCain-Reingold or Shays-
Meehan, or both of them, and combine them, and we can live here 
another decade having groups not say anything about us. But 
heaven help a Member of Congress that somebody dares to says 
something about them 60 days before the election. You can say 
something some amount of time before that, but not the last 60 
days.
    My point is, this bill does not have a bearing on 
reelection. Now, having said that, though, it does affect 
people across this country who are trying to run for Congress. 
I came from the State Senate. I was elected 21 years ago. I had 
been in office my third year out of college, the house and the 
Senate, and had been around a while. I had the ability to have 
attorneys, accountants, a press secretary, a campaign manager. 
I had some advantages. You also have disadvantages as an 
incumbent because you have a record that can be attacked. I 
understand that.
    But I think we have a structure that potentially, because 
so much of it is loose, goes to the Supreme Court, you have 
bits and pieces. You are going to have the FEC making all kinds 
of rules and regulations, because they do it and it has force 
of law. And you have people running all over this country that 
are going to be challenging, and we are probably going to end 
up in court and in jail with the party chairmen of all the 
political parties.
    This question of nonserverability. Why can't we try to 
craft something that is more solid? People that support this 
bill say we know that is--I think part of this is a litany I 
have given you. I understand that, but----
    Mr. Simon. If I might, just on the specific nonseverability 
point. Part of the problem with that is that it sort of invites 
a sand-bag tactic, that a nonseverability is put on the bill 
and opponents of the bill have an incentive to put in a 
provision regulating internal communications that would be 
unconstitutional, precisely for the sake of bringing the whole 
bill down. And I think that is a risk that the sponsors of the 
legislation do not want to open themselves up to.
    I assure you that in all likelihood, the day after this 
bill is signed into law, that it will be challenged in court, 
probably by four of the lawyers sitting to Mr. Rosenkranz's 
left. This is a case, as Mr. Rosenkranz said, is a case that 
will get to the Supreme Court. And the bill has provisions for 
an expedited review, and we will get a definitive and, I 
believe, quick Supreme Court decision about these very 
contentious legal issues.
    The Chairman. Isn't that sort of a ``take what we can get'' 
philosophy and we do not care about the consequences? Because 
no matter what that Court decides, no matter what pieces all of 
a sudden are taken out of the McCain-Feingold, Shays-Meehan 
bill that has 10 major points to it, now you have three, who 
knows how the FEC is going to rule on it? It does not affect 
the incumbent. It does not. We have attorneys, we have campaign 
funds, we can hire attorneys, you can hire accountants, 
lawyers. But it affects the challengers, I think.
    So it just goes back to my point again. Things have changed 
in this bill. And for those who said we should have passed it 
in 2 weeks, I think we are being as expeditious as we can. But 
I think it is the duty of this committee to at least look at 
some really outstanding unconstitutional--admittedly 
unconstitutional by proponents of the bill--clauses of the bill 
to see what we can do to clean them up.
    I have one question, and I will get to you, Ms. Mitchell. 
The AFO-CIO suit. Do you oppose both McCain-Feingold and Shays-
Meehan in their current form?
    Mr. Gold. In their current form, we don't believe they 
should be passed. We believe that there are elements of both 
that are meritorious, and, as I said, we are very much for 
campaign finance reform and a principled approach to it.
    Ms. Mitchell. Mr. Chairman, I want to return to something 
that you said. I really want to applaud you again for holding 
these hearings. I know that there has been enormous pressure on 
this committee and on you as Chairman to not hold hearings and 
just whisk these bills through to the floor. So we know that 
you have done a very, very great service by having hearings.
    I want to go back to something and hope that you will 
perhaps consider having a hearing specifically on the 
coordination issue. One of the things that McCain-Feingold does 
is that it repeals, even before final enactment, the 
coordination rule that the Federal Election Committee has spent 
the last 18 months or longer trying to promulgate. And it 
directs the Commission to promulgate new regulations on 
coordination and sets out some parameters, and in some cases 
doesn't even say what it is that Congress wants them to decide, 
but says look at this and decide if this or this can be done.
    I would urge the committee to spend a lot of time looking 
at some of the things that the Commission has already been 
doing in this coordination realm. And in particular in my 
testimony, I refer specifically to the investigation conducted 
by the Commission over 5 years, first against the AFL-CIO, 
which was closed last August. There were 11 separate complaints 
filed against the AFL-CIO, various people associated with the 
AFL-CIO, and the most egregious for the ad campaign that the 
AFL-CIO ran in the 1995-1996 time frame, which were issue ads 
which mentioned at that particular time various Republican 
Members of the House.
    The Chairman. I was subject to the AFL-CIO's myself.
    Ms. Mitchell. And I disagreed with the content of those 
ads. But I believe the first amendment protects the right of 
the AFL-CIO to run those ads. And one of the most outrageous 
things to me in the general counsel's report in closing that 
case after 5 years and 35,000 documents and after 28 Democratic 
House candidates were interviewed, subpoenas, depositions, the 
works, the comment there is a part of that report that talks 
about how the FEC sent investigators out to investigate the 
Wyden for Senate campaign in January 1996, the special 
election. And the Federal investigators went and interviewed 
union members and/or their spouses who had volunteered for what 
were called ``labor walks'' in that campaign.
    I think it is incumbent upon the Congress to stop and think 
about what that means. It means you volunteer in a campaign--
you are a working person. You volunteer in a campaign and you 
get a letter from a Federal investigative agency saying, we are 
going to come and interrogate you. And I don't think that is 
what the United States of America is all about. But that is 
happening today. It is happening today.
    And I would urge the committee to spend some time on this 
coordination issue, because it is an egregious assault on the 
rights of citizens to participate in the process.
    The Chairman. The AFL-CIO was, you know, involved with the 
1996 election, for example. I have never argued about that. 
They have a right to do it. They were wrong in the ads, but 
they have a right to be involved in the election. But I knew 
they were involved. I do like disclosure.
    But my whole point is the AFL-CIO has that right. And 
somebody coming and running our campaign ads to say they were 
wrong, we have that right, too. In 1996 they ran ads against 
me. We are going to shut them off 60 days before the election 
because their money is now tainted. But the millionaire can 
come in, let's say, to my favor, without any coordination, but 
some millionaire likes what I do and they can run all kinds of 
ads. That is fair, and it is fair for the AFL-CIO, or Right to 
Life or NOW or Gun Control Incorporated or NRA, if everybody is 
in the mix, there is where I personally think it is fair. I 
don't understand where it is not fair.
    The bells rang. A couple more questions, if anybody would 
want to answer these. Can you explain to me why all of a sudden 
the tainted money can't be used on just radio or TV?
    Mr. Rosenkranz. I can, Mr. Chairman.
    Mr. Chairman. What about newspapers?
    Mr. Rosenkranz. I think this is a perfect example of 
exactly how carefully drawn this provision was. The drafters of 
the provision have changed it over the years to focus 
specifically on the areas where, you know, the authority to 
regulate is at its height. Broadcasters, we have already heard 
from Ms. Mitchell, is a place which is much more heavily 
regulated. Clearly identified candidate is another example. A 
threshold of $10,000 is yet another example. And the targeting 
is yet another example.
    All of these are designed to tailor this as narrowly as 
possible so that nobody can claim, A, to be caught off guard by 
a regulation; or B, that their intent was actually other than 
to engage in electioneering--directly intended, predominantly 
intended to influence the election. I haven't heard anyone yet, 
except for Mr. Gora, take up my challenge to claim that any of 
these ads are not intended to engage in electioneering. Mr. 
Gora took it up by saying, no, in fact the ACLU never ran such 
ads.
    The Chairman. The bells rang. I have one other question 
that is also bothering me about the bill. What is wrong with 
the Republican, Democrat parties, Natural Law, whoever's party, 
what is wrong with those parties receiving support from unions 
or corporations and taking that money and registering people to 
vote?
    Now, you know, 120 days before, you can't do it. I don't 
understand what is wrong with that.
    Mr. Simon. Well, if I may, Mr. Chairman. What is wrong is 
that since 1907 there has been a Federal law, which has been 
sustained multiple times by the Supreme Court, which says 
corporate money should not be spent to influence elections. 
There is a comparable law for union money.
    The Chairman. I should clarify. If corporations or unions 
would like to make donations and this is not influencing 
elections but registering people to vote, just registering 
people. We all want young people to vote. They do not vote.
    Mr. Simon. They can conduct their own vote or registration 
drives. The problem comes in donating the money to political 
parties and having that money solicited by Federal 
officeholders raises the concerns about corruption and the 
appearance of corruption----
    The Chairman. I don't think the Federal officeholders 
should solicit that money to give to them to use for that 
purpose. I am saying you take a company and if they have 
contributed into a political party of any type, then all of a 
sudden they cannot use that money for voter registration.
    Mr. Bopp. You know, the thing about that provision, too, 
Mr. Chairman, is that it applies to State and local parties. 
And State and local parties in over 20 States lawfully can 
receive corporate and labor union contributions and the 
expenditure of those funds for voter registration is 100 
percent legal under State law.
    But, because of the obsession by some people about Federal 
elections as opposed to State and local elections, because 
there is one Federal candidate on the ballot, one candidate, 
then it is now unlawful under Federal law to use lawfully 
raised State and local money under State law.
    The Chairman. That is the point. That is the point I have 
made about the fact that this is also federalizing the local 
elections. It says we don't care what your law says in these 
States, this is what you will follow, because I happen to be on 
the ballot when Governor Taft is on the ballot and all of a 
sudden my election makes the whole difference for the statewide 
executive officeholders in Ohio. And somebody says, no, there 
is a $10,000 per county kick-in right now, that they can spend 
X amount soft money, sort of $10,000 per county. That is not 
really accurate because of the fact that if anybody happens to 
be a volunteer and knocks on a door and happens to say, gee, I 
am supporting Bob Ney, or I am running against Bob Ney, all of 
a sudden they or the party chairman of the political party is 
going to be dragged to Washington, D.C., and stand before the 
FEC.
    We have now put our fingers in State elections, all because 
one of us are on the ballot. And all of us are always on the 
ballot after 2 years in these elections.
    Mr. Bopp. State and local parties really care much more 
about State and local elections than the Federal elections.
    The Chairman. Twenty-one years ago I ran against the former 
chairman of this committee. When I went into the incumbent 
structure to try to run--he was very well liked in our area, 
and when I went to that structure, I couldn't get assistance. 
Either I wasn't the right type of Republican or, in fact, it 
was hopeless for me to win. The only people who would take a 
look at me was the party structure itself, who never asked me 
for anything, didn't ask me for a vote, didn't worry how I was 
going to vote. They were willing to take a look at me as a 
chance.
    I think if this bill were in existence 21 years ago, I 
think a lot of people like me would not be sitting here. We 
would have to go to the good old boy network and do the litmus 
test and see if I am the kind of candidate for them. The 
parties are more generous in looking at picking up seats versus 
your background, where you come from, and what kind of votes 
are you going to cast.
    I view these bills as also gutting the political ability of 
the two political parties and all other blossoming parties in 
the country.
    Ms. Mitchell. Mr. Chairman, can I make one comment about 
your question that I think Mr. Simon or Mr. Rosenkranz failed 
to consider? Under existing law, a corporation or a labor union 
cannot spend its treasury funds registering voters on a 
partisan basis. If the AFL-CIO wants to register people to 
vote, under the law they are supposed to register people 
Republicans or Democrats. Corporations, the same thing. So if 
they want to be able to affiliate and use some of their 
treasury funds to encourage more registration in the Democratic 
Party or the Republican Party, they have to give that money to 
the party to do it. And that is one of the things that bothers 
me, is that people do not know how the current law will work 
with the proposals and the practical--again, the practical 
implications.
    And I would close with responding to Mr. Hoyer. This bill 
may have been around for a while, but I do not think--I think 
that a lot of people thought it would die in the Senate, so 
they did not pay much attention to its contents. When it comes 
from the Senate and the President says I will sign it, now is 
the time I think to start looking at what it does.
    The Chairman. Again, it is not my intent or the committee's 
intent in fact to kill this bill. I said that from day one. 
There are those who think we have this nefarious plot to all of 
a sudden not have a vote. That is not going to happen. We are 
going to do something. If it makes people feel good, we want to 
do some things. If it makes people more confident in the 
system, then Congress ought to act.
    I am just saying there are a couple of provisions that we 
need to have a serious debate on and hopefully construct a bill 
that will take care of some of the problems, some of the 
perceptions, but also not gag the groups that we do not think 
maybe we like their form of money that they have been able to 
raise.
    I want to thank each and every one of you. It has been very 
interesting testimony from everybody concerned. And I want to 
thank you.
    I ask unanimous consent the witnesses be allowed to submit 
their statements for the record and members have 7 legislative 
days to insert extraneous material into the record and that 
those statements and materials are to be entered into the 
appropriate place in the record.
    Without objection, the material will be entered.
    The Chairman. I also ask unanimous consent that staff be 
authorized to make technical and conforming changes to all 
matters considered at today's hearing.
    Without objection, so ordered.
    Having completed our hearing today on campaign finance 
reform, the committee is now adjourned.
    [Whereupon, at 1:22 p.m., the committee was adjourned.]

                                
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