[Congressional Record Volume 161, Number 115 (Wednesday, July 22, 2015)]
[Senate]
[Pages S5459-S5460]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY (for himself and Mr. Udall):
  S. 1838. A bill to amend the Federal Election Campaign Act of 1971 to 
clarify the treatment of coordinated expenditures as contributions to 
candidates, and for other purposes; to the Committee on Rules and 
Administration.
  Mr. LEAHY. Mr. President, although we are still a year and a half 
from the next presidential election, our perpetual campaign cycle 
already seems to be in full swing. Among the many troubling trends we 
are seeing is the rise of ``independent'' super PACs that support 
candidates. These super PACs are supposed to operate completely 
independent from the candidates' campaigns, but no one believes this to 
be true. It is the worst kept secret in America.
  A July 6, 2015, article in the Washington Post entitled ``It's bold, 
but legal: How campaigns and their super PAC backers work together'' 
documents just how easily these super PACs and campaigns coordinate 
their messages and skirt the rules. As the author notes:

       For the first time, nearly every top presidential hopeful 
     has a personalized super PAC that can raise unlimited sums 
     and is run by close associates or former aides. Many also are 
     being boosted by nonprofits, which do not have to disclose 
     their donors.
       The boldness of the candidates has elevated the importance 
     of wealthy donors to even greater heights than in the last 
     White House contest, when super PACs and nonprofits reported 
     spending more than $1 billion on federal races. Although they 
     are not supposed to coordinate directly with their 
     independent allies, candidates are finding creative ways to 
     work in concert with them.

  Five years ago, in Citizens United v. FEC, five justices on the 
Supreme Court departed from principles of judicial restraint and 
decided to overturn an act of Congress under the broadest grounds 
possible. In so doing, they overruled a century of practice and decades 
of doctrine. The Court declared that corporations have a First 
Amendment right to spend endlessly to finance and influence our 
elections. This precedent then led to another court decision--
SpeechNow.org v. FEC--in the D.C. Circuit that resulted in the creation 
of the super PAC. Super PACs are supposed to be independent 
expenditure-only committees, and may raise unlimited sums of money from 
corporations, unions, associations and individuals, then spend 
unlimited sums to advocate for or against political candidates. But 
nobody believes that they truly act independently.
  That is why I am introducing the Stop Super PAC-Candidate 
Coordination Act today. This bill would end the sham practice of 
presidential candidates boldly and shamelessly exploiting our campaign 
finance laws by coordinating with allegedly independent super PACs.
  First, the bill codifies a definition of what constitutes 
``coordination'' based on Supreme Court case law to make it more 
difficult for coordination to occur. Second, it prohibits outside 
groups from skirting the coordination provisions by stating that they 
cannot simply create a ``firewall'' and claim that the there is an 
independent division that is making independent expenditures. Third, it 
prevents single-candidate super PACs from acting as an arm of the 
candidates' campaign. It does this by including factors of when a super 
PAC should be deemed a ``coordinated spender.'' Once the super PAC 
falls into this category, the super PACs expenditures are then 
considered to be ``coordinated expenditures'' and the super PAC is 
subject to Federal contribution limits and prohibitions. Under existing 
law, coordinated expenditures are defined as also being in-kind 
contributions and are subject to the PAC contribution limit of $5,000 
per year.
  The penalty for any person who knowingly violates the coordination 
provisions of this act is a civil fine that is three times the amount 
of the coordinated expenditures involved in excess of the applicable 
contribution limit. The act also imposes joint and several liability on 
any director, manager, or officer of an outside spending group for any 
unpaid penalties by the group violating the coordination rules.
  Lastly, the bill prohibits candidates and their agents from raising 
money for super PACs by prohibiting the raising of funds for any super 
PAC or political committee that is not subject to Federal contribution 
limits and reporting requirements. This bill would provide real rules 
and put into place some regulations that would make it more difficult 
for these super PACs to coordinate with candidates.
  The issue of how our politics are paid for is an issue that is 
important to the American people, and it is also important to 
Vermonters. We have always remained steadfast in our belief that our 
democracy should not be for sale, and that the size of your bank 
account should not determine whether or not the government responds to 
your views or needs.
  This bill I introduce today is an incremental measure that would help 
eliminate the sham of single-candidate super PACs and provide some real 
rules to a process in which the American public is becoming more 
cynical about every day. I hope that my fellow Senators from both sides 
of the aisle will support this modest measure.
  I understand why Vermonters are outraged by the devastating effects 
of Citizens United and its progeny. In recent years I have held several 
hearings to highlight the damage that Citizens United has done to our 
political process. Last summer, I led the charge in the Senate 
Judiciary Committee to consider a constitutional amendment to restore 
the ability of lawmakers at both the Federal and State levels to rein 
in the influence that billionaires and corporations now have on our 
elections. The amendment would also have made clear that corporations 
are not people. Although Senate Democrats were able to vote the 
constitutional amendment out of the Judiciary Committee, Senate 
Republicans filibustered the amendment on the floor and refused to 
allow it an up-or-down vote. I will continue to do all I can to reverse 
the devastating effects of Citizens United and its subsequent 
decisions. This bill is one step towards addressing one of the problems 
that has resulted from those decisions.
  Mr. President, I ask unanimous consent that the Washington Post 
article referenced above be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

[[Page S5460]]

                [From the Washington Post, July 6, 2015]

 It's Bold, But Legal: How Campaigns and Their Super PAC Backers Work 
                                Together

                            (By Matea Gold)

       The 2016 presidential contenders are stretching the 
     latitude they have to work with their independent allies more 
     than candidates in recent elections ever dared, taking 
     advantage of a narrowly drawn rule that separates campaigns 
     from outside groups.
       For the first time, nearly every top presidential hopeful 
     has a personalized super PAC that can raise unlimited sums 
     and is run by close associates or former aides. Many also are 
     being boosted by non-profits, which do not have to disclose 
     their donors.
       The boldness of the candidates has elevated the importance 
     of wealthy donors to even greater heights than in the last 
     White House contest, when super PACs and nonprofits reported 
     spending more than $1 billion on federal races. Although they 
     are not supposed to coordinate directly with their 
     independent allies, candidates are finding creative ways to 
     work in concert with them.
       Before former Florida governor Jeb Bush (R) announced his 
     bid in mid-June, the Right to Rise super PAC filmed footage 
     of him that the group plans to use in ads. Hillary Rodham 
     Clinton's campaign is collaborating directly with Correct the 
     Record, a super PAC providing the Democratic hopeful's team 
     with opposition research.
       Top advisers to Wisconsin Gov. Scott Walker (R) have been 
     positioned at two big-money groups as they await his 
     presidential announcement next week. GOP candidate Carly 
     Fiorina has gone even further, outsourcing core functions 
     such as rapid response and event preparation to her allied 
     super PAC, the aptly named--CARLY for America.
       The 2016 contenders and their big-money backers VIEW 
     GRAPHIC. The widespread cooperation--which many campaign 
     finance-experts say stretches the legal boundaries--indicates 
     that candidates and their advisers have little fear that they 
     will face serious scrutiny from law enforcement, despite the 
     Justice Department's successful prosecution this year of a 
     Virginia campaign operative for illegal coordination.
       One main reason: Under Federal Election Commission rules, 
     there is no wall dividing candidates and independent groups. 
     In practice, it's more like a one-way mirror--with a 
     telephone on each side for occasional calls.
       ``The rules of affiliation are just about as porous as they 
     can be, and it amounts to a joke that there's no coordination 
     between these individual super PACs and the candidates,'' 
     said Rep. David E. Price (D-N.C.), who has sponsored 
     legislation that would put stricter limits in place.
       A close reading of FEC regulations reveals that campaigns 
     can do more than just publicly signal their needs to 
     independent groups, a practice that flourished in the 2014 
     midterms.
       Operatives on both sides can talk to one another directly, 
     as long as they do not discuss candidate strategy. According 
     to an FEC rule, an independent group also can confer with a 
     campaign until this fall about ``issue ads'' featuring a 
     candidate. Some election-law lawyers think that a super PAC 
     could share its entire paid media plan, as long as the 
     candidate's team does not respond.
       But those who defend the current system say that broader 
     rules could infringe on rights to free speech.
       Right to Rise, a super PAC run by Mike Murphy, filmed 
     footage with then-undeclared candidate Jeb Bush to be used in 
     later commercials. (NBCU Photo Bank via Getty Images) ``Every 
     discussion you have cannot trigger illegal coordination,'' 
     said Lee E. Goodman, a Republican appointee to the FEC.
       ``I understand some people look at relationships between 
     candidates and independent spenders and sense that those 
     relationships are too cozy,'' he added. ``Yet the courts have 
     said that you cannot prohibit friendships and knowledge of 
     each other.''
       But many experts say that the limited-coordination rules 
     are emblematic of an outdated, incoherent and often 
     contradictory campaign finance framework.
       ``We're at this transitional point where the way money is 
     raised and spent and the costs of campaigns have changed so 
     dramatically,'' said Bob Bauer, a prominent campaign finance 
     lawyer who served as White House counsel for President Obama. 
     ``The problem isn't that the law isn't being enforced--the 
     problem is that we need to rethink the whole thing from the 
     ground up.''
       Political strategists on both sides of the aisle agree, 
     saying that navigating the complex legal thickets is 
     increasingly difficult.
       ``If you talk to three lawyers, you are likely to get three 
     different answers,'' said Phil Cox, executive director of 
     America Leads, a super PAC supporting Chris Christie, the 
     Republican governor of New Jersey. ``The system makes no 
     sense. It's crying out for reform. We need to put the power 
     back in the hands of the candidates and their campaigns, not 
     the outside groups.''
       At the moment, though, an overhaul of campaign finance has 
     little bipartisan support in Congress. And members of the 
     long-polarized FEC appear more divided than ever. A 
     discussion at a recent public meeting about stricter 
     regulations devolved into hostile barbs.
       The public is left with the sense that no one is following 
     the rules, said Ellen L. Weintraub, one of the Democrats on 
     the FEC.
       ``There is this basic notion that super PACs are supposed 
     to be separate from the candidates,'' she said. ``They look 
     at what's going on, and they say: `This doesn't look 
     separate. Where are the lines?' ''
       A sweeping boundary was drawn by the Supreme Court in its 
     seminal 1976 Buckley v. Valeo decision, which said that 
     political activity by outside groups must be done ``totally 
     independently'' of candidates and parties. A similar standard 
     was set in the 2002--McCain-Feingold Act, which said that 
     independent expenditures cannot be made ``in cooperation, 
     consultation, or concert'' with a candidate.
       But in practice, defining coordination has not been easy. 
     The FEC wrestled mightily with where to draw the lines, 
     issuing regulations that were challenged repeatedly in the 
     courts.
       A set of FEC rules approved in 2010 prohibits a campaign 
     from coordinating with an independent group on a paid 
     communication. The agency laid out specific tests to 
     determine whether a campaign has illegally shared internal 
     strategy used to guide an independent group's advertising.
       But the rules do not ban coordination in general--much less 
     conversations between each side.
       Bobby Burchfield, a Republican campaign finance lawyer, 
     said that the clarity of current regulation helps avoid the 
     kind of intrusive investigations into groups, such as the 
     Christian Coalition, that the FEC once pursued. ``That had 
     the effect of suppressing and chilling political activity,'' 
     he said.
       Now, there's plenty of room to maneuver. Although a 
     campaign cannot share private strategy with a super PAC, it 
     can give a campaign information about its plans, as long the 
     group is not sharing something of value that could be 
     considered a contribution.
       The FEC also has given candidates its blessing to appear at 
     super PAC fundraisers, as long as they do not solicit more 
     than $5,000--a decision that came in response to a query from 
     two Democratic super PACs in 2011.
       Taken together, critics say, the narrow rules offer far too 
     many opportunities for candidates and their well-funded 
     outside allies to work in agreement.
       The FEC ``couldn't imagine how bold people would be,'' said 
     Larry Noble, senior counsel at the Campaign Legal Center, 
     which supports tougher restrictions.
       Right to Rise, the super PAC run by longtime Bush adviser 
     Mike Murphy, is set to serve as a massive external ad 
     operation bolstering the former governor's campaign. Murphy 
     told donors in a recent conference call that before Bush 
     announced his candidacy, the super PAC filmed footage of him 
     that the group plans to use in digital and TV spots, 
     according to an account in BuzzFeed.
       ``One of the new ideas that, you know, the governor had--
     he's such an innovator--is we're going to be the first super 
     PAC to really be able to do just positive advertising,'' 
     Murphy said.
       Paul Lindsay, a spokesman for Right to Rise, said that 
     Murphy was referring to ``Governor Bush's historical 
     preference for positive advertising, which was consistent in 
     his previous elections and is no secret.''
       Clinton's campaign is working closely with Correct the 
     Record, a liberal rapid-response group that refashioned 
     itself as a super PAC this year. The group says it can 
     coordinate directly with the campaign under a 2006 FEC rule 
     that made content posted free online off-limits to 
     regulation.
       Correct the Record has more than 20 staffers and plans to 
     disseminate much of its research on its Web site and through 
     social media.
       Any nonpublic information of value that it shares with the 
     Clinton staff will be purchased, according to a campaign 
     official.
       Already, partisan critics have pounced, filing complaints 
     with the FEC alleging that the pro-Bush and pro-Clinton super 
     PACs are engaged in illegal coordination.
       But if the agency launches an investigation, it would be a 
     first. Since 2010, the FEC has yet to open an investigation 
     into alleged illegal super PAC coordination, closing 29 such 
     complaints. In 28 of those cases, the agency's general 
     counsel did not recommend pursuing the matters, according to 
     Goodman of the FEC.
       ``We could capture all of this stuff if we had real 
     rules,'' said Fred Wertheimer, a longtime advocate of 
     reducing the influence of big money on politics. ``For all 
     practical purposes, there are no prohibitions against 
     coordination.''
                                 ______