[House Report 112-571]
[From the U.S. Government Publishing Office]
112th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 112-571
_______________________________________________________________________
Union Calendar No. 411
THIRD SEMIANNUAL REPORT ON THE ACTIVITIES
of the
COMMITTEE ON HOUSE ADMINISTRATION
of the
HOUSE OF REPRESENTATIVES
during the
ONE HUNDRED TWELFTH CONGRESS
together with minority views
June 29, 2012.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
LETTER OF TRANSMITTAL
----------
House of Representatives,
Committee on House Administration,
Washington, DC, June 29, 2012.
Hon. Karen Haas,
Clerk of the House,
The Capitol, Washington, DC.
Dear Ms. Haas: Pursuant to Rule XI, clause 1, paragraph (d)
of the Rules of the U.S. House of Representatives, I hereby
transmit the Third Semiannual Report on the Activities of the
Committee on House Administration. This report summarizes the
activities of the Committee with respect to its legislative and
oversight responsibilities in the 112th Congress from December
2011 to June 2012.
Sincerely,
Daniel E. Lungren,
Chairman.
Union Calendar No. 441
112th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 112-571
======================================================================
THIRD SEMIANNUAL REPORT ON THE ACTIVITIES OF THE COMMITTEE ON HOUSE
ADMINISTRATION DURING THE 112TH CONGRESS
_______
June 29, 2012.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Daniel E. Lungren of California, from the Committee on House
Administration, submitted the following
R E P O R T
together with
MINORITY VIEWS
INTRODUCTION
The Committee on House Administration (Committee) is
charged with the oversight of federal elections and the day-to-
day operations of the House of Representatives. During the
112th Congress, the Committee has two subcommittees: the
Subcommittee on Elections, which examines issues related to
elections and voting systems, and the Subcommittee on
Oversight, which focuses on identifying and reducing wasteful
spending within House operations and establishing best
practices to help improve services to the House community.
COMMITTEE FUNDING
Under House rule X, clause 6, the Committee on House
Administration is charged with the responsibility of reporting
an expense resolution to grant authorization for the expenses,
including salaries, of the select and standing committees of
the House.
In November 2011, the Committee held an oversight hearing
to review the budgets for all the standing and select
committees (except the Committee on Appropriations) in 2011,
and to review budget planning for 2012. During the hearing,
Committee members asked the Chairs and Ranking Members about
how each committee operated with their lower budgets and
whether the committees could continue to perform their
responsibilities with future cuts to their budgets. Each
committee was also questioned on whether they have held to the
practice of giving the minority one-third of the committee's
budget.
On December 14, 2011, Chairman Lungren introduced a
resolution regarding committee funding, H. Res. 496, which
reduced most House Committee budget authorizations by 6.4% for
the second session of the 112th Congress. This reduction,
matching the appropriated funds provided for 2012, further
reduced House spending and promoted a greater level of
efficiency within Committee operations. On December 16, 2011,
the Committee, by voice vote, agreed to a motion to favorably
report the resolution to the House. On February 1, 2012, the
House considered H. Res. 496, adjusting the amount provided for
the expenses of certain committees of the House of
Representatives in the 112th Congress. The resolution was
considered under a motion to suspend the rules. The resolution
was agreed to by voice vote. H. Res. 496, when combined with
the enactment of H. Res. 22--a resolution introduced by Mr.
Walden which cut House committee budgets by 5% at the beginning
of the 112th Congress--represents the largest percentage cut to
committee budgets since the 104th Congress.
MEMBERS' REPRESENTATIONAL ALLOWANCE
The Committee has jurisdiction over the use of
appropriations from the accounts of the U.S. House of
Representatives for the Members' Representational Allowance
(MRA) as well as official travel by Members and staff, and
compensation, retirement and other benefits of Member office
employees. The MRA is the annual authorization made to each
Member of the House to obligate U.S. Treasury funds not to
exceed a certain amount. These funds may be used by the Member
to pay ordinary and necessary business expenses incurred by the
Member and his or her congressional office employees in support
of the conduct of the Member's official and representational
duties on behalf of the district from which the Member is
elected.
On July 22, 2011, the House passed H.R. 2551, the
Legislative Branch Appropriations Act, 2012. This bill
appropriates $573,939,282 for Members' Representational
Allowances for 2012. That amount represents a 6.4% reduction
from the 2011 appropriation level for committee budgets.
The Committee adjusted MRA authorizations by 6.4% to
reflect the change in appropriation level. The total amount
authorized for all Members' Representational Allowances for
2012 was $597,313,512. The average MRA for 2012 was $1,354,452.
This reduction, matching the appropriated funds provided for
2012, promoted a greater level of efficiency within office
operations.
COMMISSION ON CONGRESSIONAL MAILING STANDARDS
On January 9, 2012, the Commission on Congressional Mailing
Standards (Franking Commission) sent a Dear Colleague letter on
the pre-approval process for generic communication templates.
Members can request a template advisory opinion for recurring
communications, such as meeting notices, that will not change
throughout the year.
On January 17, 2012, the Franking Commission sent a Dear
Colleague letter explaining the United States Postal Service
price increases on mailing services. For example, the letter
informed offices of the increase of the price of first class
postage.
As an advisory measure, the Franking Commission sent thirty
Dear Colleague letters to the state delegations to notify them
of the 90-day election cut-off dates. These letters explained
that Members are prohibited from sending unsolicited mass
mailings and mass communications 90 days prior to an election
in which they will appear on a ballot as a candidate for public
office.
OVERSIGHT AND LEGISLATIVE ACTIVITIES OF THE COMMITTEE
Officers of the House
One of the key responsibilities of the Committee is to
provide oversight of the Officers of the House, whose
organizations serve primary roles in the operation of the
legislative process and in providing the day to day
administrative and operational infrastructure necessary to
support the Members and staff of the House.
Clerk of the House
The Office of the Clerk is charged with overseeing nine
departments including the Office of Art and Archives, the
Legislative Resource Center, and the Office of Official
Reporters. However, the Clerk's primary responsibilities reside
with the legislative activities of the House. This includes
managing the legislative bills originating in the House as well
as overseeing the voting system.
On January 17, 2012, with the technical leadership and
direction of House Leadership, the Committee on House
Administration and the Committee on Rules, the Clerk launched a
new website, docs.house.gov, to serve as the central location
for all legislation to be considered by the House. The
documents are displayed in XML, an open, machine-readable
format. The Committee continues to work with the Clerk, House
Leadership and the Committee on Rules regarding the posting
requirements for Committee documents. Additionally, the
Committee stayed apprised of the Clerk's progress on the
development of a system to capture the financial disclosure
requirements necessitated by the passage of S. 2038, the STOCK
Act.
The Committee worked with the Clerk's office on the
implementation of Congressman Paulsen's legislative branch
appropriations amendment, effective January 4, 2012, that
prohibited the use of funds to deliver the Congressional Record
to Member offices and the use of funds to deliver bills,
resolutions and joint resolutions unless requested by a Member
office. The Clerk made more copies available for pickup in the
Legislative Resource Center and Rayburn Resource Center to
accommodate Member office needs.
Sergeant at Arms
With the upcoming party conventions and presidential
inauguration, oversight of the House Sergeant at Arms (HSAA)
and the United States Capitol Police (USCP) is as always, a
main focal point for the Committee. Working with our colleagues
in the minority, the Committee continued to ensure that both
the HSAA and the USCP have the appropriate resources and
personnel to provide the high level of security to the Capitol
grounds that we have come to expect. The Committee has resumed
the regular bi-weekly oversight meetings with the HSAA and
continues to meet with the USCP on a continuous basis to
receive updates on topics vital to security.
Regarding emergency response planning and execution, the
Committee has asked the HSAA to continue the emergency response
training of staff culminating in multiple emergency response
drills and alternate chamber exercises. During the past
quarter, the Office of Emergency Management (OEM) has conducted
five separate evacuation drills, testing new procedures that
were implemented based on the lessons learned from the real-
world evacuations of the earthquake on August 23rd, 2011. In
addition, the Committee has asked the HSAA to explore technical
solutions for emergency response messaging. As requested by the
Committee, the HSAA has updated their website to include Law
Enforcement Coordinator training and security tools to
supplement district security efforts. In conjunction with the
Law Enforcement Coordinator program, the HSAA continues to work
the physical security outreach to Member district offices
through ADT. Along with the ADT security outreach and the
assignment of Law Enforcement Coordinators, the Committee asked
the HSAA to determine possible recommendations for additional
security measures for the beginning of Fiscal Year 2013.
Chief Administrative Officer
The Office of the Chief Administrative Officer (CAO)
provides support functions for the House. The office supports
the budget, finance, procurement, facilities, and information
technology needs of the House and all of its components. The
Committee is charged with overseeing the CAO's office.
At the direction of the Committee, the CAO accomplished
several process improvement and cost-savings initiatives over
the past six months. These included expansion of the Purchase
Card program, online ordering and payment for flags, and giving
staff the option to receive earnings statements electronically
rather than on paper.
House Information Resources
The Committee continued to work with HIR to improve
technological services and energy efficiency for the House
community.
The Committee also worked with HIR to support a House.gov
website for mobile devices. This new website will enhance the
experience for visitors and staff who use smart phones to
access information about the House and the Capitol Complex. The
URL is M.HOUSE.GOV.
On February 2, 2012, the Committee held a conference on
Legislative Data and Transparency in the Cannon Caucus room.
One hundred and fifty attendees representing House, academic
and private sector stakeholders participated. House, Library,
and GPO administrative offices responsible for drafting and
publishing legislative documents presented the work of their
offices and participated in panel discussions with outside
parliamentary, transparency, and technology speakers. The
conference enabled the exchange of technical and policy
information and helped House stakeholders map future
transparency initiatives.
Inspector General
House Rule II creates the Office of the Inspector General
(OIG) and charges the Committee with oversight of the office.
During the first half of the year the OIG, with the approval
and support of the Committee, produced four management advisory
reports and nine audit reports.
Of particular note was the FY 2011 House Financial
Statement Audit which the Committee approved on March 27, 2012.
The House received a clean opinion on its financial statements
and internal controls over financial reporting. This is a
direct result of CAO Dan Strodel's ability to restore the
House's good financial standing through the successful
implementation of a comprehensive internal controls program and
a new financial management system. It is an improvement over
the 2009 and 2010 audits which received adverse opinions on
internal controls. Also noteworthy, this is the first time in
the history of the House that the audit has been completed this
soon after the close of the fiscal year.
The Committee also worked with the OIG to create awareness
in the House community of several schemes involving newspaper
subscriptions and renewals. Offices appreciated the
notifications and were able to prevent payments to unscrupulous
vendors.
The Architect of the Capitol
The Architect of the Capitol (AOC) is responsible for the
maintenance, operation, development, and preservation of the
entire Capitol Complex, which includes 17.4 million square feet
of buildings and more than 460 acres of land. Certain decisions
regarding management of the House Office buildings and the
House side of the Capitol reside with the House Office Building
Commission, but the Committee supervises and oversees AOC
implementation of all its programs.
The Committee met regularly with the Architect of the
Capitol, his senior staff, the House Office Building
Superintendent, his senior staff, and other AOC management and
staff. The Committee continued to monitor the operations of the
AOC, including, but not limited to, the AOC's waste-to-energy
initiative, which diverts up to 90% of the Capitol Complex's
non-recyclable solid waste from landfills through the
utilization of local waste-to-energy facilities, the American
Veterans Disabled for Life Memorial (AVDLM), the Union Square
(and Capitol Reflecting Pool) transfer and maintenance, the
House Office Building garage repairs, the RFP solicitation
(posted in March) for the Library's Residential Scholars
Center, completion of the Botanic Garden's Bartholdi Fountain
(which opened in April after a multi-year renovation), the
Statue of Freedom Conservation, the Dome Skirt renovation, and
its various staff changes. Committee staff and representatives
from House Leadership and the AOC have continued to work
through the planning phases and continued to spread awareness
among Members and staff of major renovations of the Cannon
House Office Building, Phase I of which is scheduled to begin
in FY2017.
Office of Congressional Accessibility Services
The Office of Congressional Accessibility Services (OCAS)
was created by the Capitol Visitor Center Act of 2008. OCAS
operates under the direction of the Congressional Accessibility
Services Board and is charged with providing and coordinating
accessibility services for individuals with disabilities
including Members of Congress, officers and employees of the
House and Senate, and visitors in the U.S. Capitol Complex. The
Committee on House Administration is charged with overseeing
the agency and meets with OCAS staff monthly.
During the last six months, the Committee approved minor
revisions to the Communication Access Real-time Translation
(CART) and Sign Language Interpreting Services Policies. OCAS
also worked with the Committee and the CVC to ensure the CVC
experience is as accessible as possible. In the next few
months, the audio-descriptive tour for Exhibition Hall will be
complete. OCAS also provided accessibility services at various
special events including the State of the Union Address, the
unveiling of the slave labor commemorative marker in the CVC,
and the Memorial Day Concert. Finally, OCAS trained over 1,000
Congressional staff in the past six months on disability
etiquette and accessibility services so they can better serve
constituents with special needs.
Library of Congress
The Committee's Subcommittee on Oversight conducted an
oversight hearing on the Library of Congress (LOC) on April 18,
2012, entitled ``Library of Congress: Ensuring Continuity and
Efficiency During Leadership Transitions.'' Law Librarian David
Mao, CRS Director Mary Mazanec, Register of Copyrights Maria
Pallante, and Associate Librarian for Library Services Roberta
Shaffer, testified before the subcommittee. Questions for the
record were received on May 9.
In March, oversight staff conducted a site visit to the
LOC's Audio-Visual Conservation Center in Culpeper, VA. The
Packard Campus continues to be the focus of the Library's
FY2012 revolving fund legislative proposals for the Committee
and the Committee's video archiving project.
The Committee also oversaw the appointment of several high-
profile positions within the Library this year. David Mao was
appointed the 23rd Law Librarian on January 4; Gayle Osterberg
was appointed the new Director of Communications, effective
January 30; Karen Keninger became the new Director of the
National Library Service for the Blind and Physically
Handicapped, effective March 26; and Mark Sweeney was named
Director of Preservation on April 2.
Joint Committee on Printing and U.S. Government Printing Office
The Government Printing Office (GPO) produces, preserves
and distributes the official publications and information
products of the Congress and federal government. At the end of
the first session of the 112th Congress, William J. Boarman's
recess appointment as Public Printer expired. Pursuant to 44
U.S.C. 304, the Deputy Public Printer, Ms. Davita Vance-Cooks,
assumed the duties of Acting Public Printer at the start of the
second session of the 112th Congress. The Committee and the
Joint Committee on Printing (JCP) Chairman, Representative
Gregg Harper, provided support to Ms. Vance-Cooks during her
transition and have actively ensured GPO continues to meet the
goals set out in GPO's Strategic Plan for FY2012-2016.
As demonstrated through recent actions, the Joint
Committee's primary focus has been on decreasing Congress's
reliance on tangible documents while still maintaining the
government's interests in preservation, authentication, and
availability for perpetuity. This year, the House printed fewer
copies of the President's FY2013 Budget and adopted a
resolution reducing by 50% the quantity of pocket Constitutions
produced for the House. The House also adopted an amendment to
the Legislative Branch Appropriations Act, 2013, offered by
Representative Harper to strictly limit the printing of the
2012 edition of the U.S. Code for the House, thereby providing
Congress with significant savings. Finally, in this effort to
eliminate unnecessary printing, the Committee and JCP continue
aggressive outreach to Member and House committee offices
urging them to opt out of receiving printed versions of House
publications.
The Committee on House Administration and JCP have also
examined methods to make the House more efficient and
transparent through its distribution of legislative
information. In the first quarter of 2012, at the direction of
the Committee on House Administration, the Government Printing
Office and the Library of Congress unveiled a Congressional
Record Application for tablet and mobile devices. This
application is updated at the same time the information is
released on GPO's Federal Digital System (FDsys) and is
typically available before the print edition, thereby allowing
the public at large to see the information concurrently with
Congress.
The Committee on House Administration has been working with
GPO and its Inspector General to review billing practices for
committees and support offices in the House. The goal of GPO is
to use best practices, utilize additional controls and
streamline the billing process for the House.
Furthermore, the conference report to the Consolidated
Appropriations Act, 2012 (Public Law 112-74), included a
requirement for the National Academy of Public Administration
(NAPA) to conduct an independent operational review of GPO to
update past studies of GPO's operations and offer
recommendations for additional cost saving opportunities beyond
those that GPO has already implemented. The Committee on House
Administration participated in interviews and has agreed to
assist NAPA in various capacities.
Finally, to help ensure the printing practices of the
federal government are conducted at the best price and agencies
are continuing to follow the law, the Joint Committee on
Printing asked the Government Accountability Office to audit
the total number of internal printing plants, the total amount
of in-plant work produced, and the print procurement practices
of all Federal departments and agencies.
Smithsonian
The Committee serves as the primary legislative and
oversight body for the Smithsonian Institution, a federal trust
instrumentality composed of 19 museums, numerous research
centers, and the National Zoo. Approximately two-thirds of the
Institution's funding is from direct federal appropriations.
Trust funds, which include private donations and revenues from
museum shops, restaurants and theaters, provide the remaining
funding.
In early January 2012, the Committee became aware that
Smithsonian Journeys, part of the Smithsonian Enterprises
Division, began offering trips to Cuba as part of a people-to-
people exchange. Although the Smithsonian had met the legal
requirements to offer such trips, the program raised concerns
because of the benefits it could provide Cuba's regime, a
nation which has remained on the U.S. Department of State's
State Sponsors of Terrorism list since 1982. On January 18,
2012, Chairman Lungren requested documentation regarding the
Smithsonian's decision and the application to the Treasury to
offer people-to-people exchanges. The Smithsonian responded on
February 3, 2012. The materials provided generated additional
questions and inquiries to the Smithsonian regarding the trips.
In April, the Smithsonian indicated modifications would be made
to the Cuba trip's planned itinerary including the addition of
a briefing for trip participants by the U.S. Interests section
in Havana. The first Smithsonian Journey's trip to Cuba
occurred May 4-13, 2012 and the Committee requested post-trip
materials for review.
The Committee has also been actively engaged in providing
regular oversight of the Smithsonian Institution through
ongoing staff meetings and briefings.
In February, Committee staff met with the newly-appointed
Inspector General, Scott Dahl. Mr. Dahl provided background on
ongoing initiatives of his office, including an assessment of
the management of the design and construction of the National
Museum of African American History and Culture (NMAAHC). On
February 22, Committee staff attended the Groundbreaking
Ceremony for the NMAAHC. Authorized in 2003, the NMAAHC is
scheduled to open to the public in 2015. Construction costs are
estimated at $500 million; the authorizing legislation provided
for a 50-50 public-private funding ratio. The Museum will be
built on a five-acre site adjacent to the Washington Monument
on the National Mall. The Committee will continue to monitor
progress of the NMAAHC construction to determine if the project
remains on schedule and within budget.
Elections
In response to the request made at the Subcommittee on
Elections hearing on November 3, 2011, the Federal Election
Commission (FEC) on December 2, 2011, provided to the Committee
over 1,300 pages of documents relating to its enforcement,
reports analysis, and audit processes. The Committee and the
FEC entered into a period of consultation regarding redactions
and exclusions proposed by the FEC. At the conclusion of this
process, on May 23, 2012, the FEC posted the documents in the
form agreed on its web site. This marked the first time the
documents had been made available to the public and the
regulated community. The FEC also announced that it will hold a
public hearing on September 12, 2012, to provide an opportunity
for the public to ask questions about the documents and the
FEC's processes.
The Committee continued to exercise its responsibilities
for oversight of the Federal Election Commission and the
Election Assistance Commission (EAC), reviewing information
provided by the commissions and meeting with staff of both
commissions and the FEC commissioners (the EAC has had no
commissioners since December 2011) regarding the operations and
policy initiatives of the commissions. The Committee also
continued to seek the elimination of the Election Assistance
Commission as provided for in H.R. 672 and H.R. 3463.
ADDITIONAL OVERSIGHT ACTIVITIES OF THE COMMITTEE
Congressional Internship Program for Individuals with Intellectual
Disabilities
Established by Representative Gregg Harper in the spring of
2010, and administered by the Committee on House
Administration, the Congressional Internship Program for
Individuals with Intellectual Disabilities provides students
with varying intellectual disabilities an opportunity to gain
congressional work experience. The program, which includes
spring, summer and fall sessions, pairs congressional offices
with students from George Mason University's Mason LIFE
Program--a postsecondary education program for young adults
with intellectual disabilities. In 2010, the program started as
a pilot with six House offices participating. By May 2012,
fifty-seven Congressional offices had begun to participate in
the program. Participating interns receive stipends for their
work on Capitol Hill through a grant provided by The HSC
Foundation.
HEARINGS AND MEETINGS OF THE COMMITTEE
On April 18, 2012, the Subcommittee on Oversight held a
hearing entitled ``Library of Congress: Ensuring Continuity and
Efficiency During Leadership Transitions.'' There was one panel
of witnesses for this hearing. The Subcommittee heard testimony
from Mr. David Mao, Law Librarian for the Law Library of
Congress, Ms. Roberta Shaffer, Associate Librarian for Library
Services, Ms. Mary Mazanec, Director of the Congressional
Research Service, and Ms. Maria Pallante, Register of
Copyrights for the U.S. Copyright Office.
LEGISLATION WITHIN THE COMMITTEE'S JURISDICTION CONSIDERED BY THE HOUSE
On February 1, 2012, the House considered H. Con. Res. 90,
authorizing the printing of the 25th edition of the pocket
version of the United States Constitution. The concurrent
resolution was agreed to by unanimous consent.
Also, on February 1, 2012, the House considered H. Res.
496, adjusting the amount provided for the expenses of certain
committees of the House of Representatives in the One Hundred
Twelfth Congress. The resolution was considered under a motion
to suspend the rules. The resolution was agreed to by voice
vote.
Also, on February 1, 2012, the House considered H.R. 3835,
to extend the pay limitation for Members of Congress and
federal employees. The House considered the bill under a motion
to suspend the rules. The bill passed by a vote of 309-117.
On February 9, 2012, the House considered H. Con. Res. 99,
authorizing the use of Emancipation Hall in the Capitol Visitor
Center for a ceremony to unveil the marker which acknowledges
the role that slave labor played in the construction of the
United States Capitol. The House passed the measure by
unanimous consent.
On March 1, 2012, the House considered H. Res. 562,
directing the Office of the Historian to compile oral histories
from current and former Members of the House of Representatives
involved in the historic and annual Selma to Montgomery,
Alabama, marches, as well as the civil rights movement in
general, for the purposes of expanding or augmenting the
historic record and for public dissemination and education. The
resolution was considered under a motion to suspend the rules.
The resolution was agreed to by a vote of 418-0.
On March 22, 2012, the House considered H. Con. Res. 108,
permitting the use of the rotunda of the Capitol for a ceremony
as part of the commemoration of the days of remembrance of
victims of the Holocaust. The House agreed to the concurrent
resolution by unanimous consent.
On May 7, 2012, the House considered H. Con. Res. 105,
authorizing the use of Emancipation Hall in the Capitol Visitor
Center for an event to celebrate the birthday of King
Kamehameha. The House considered the concurrent resolution
under a motion to suspend the rules. The concurrent resolution
was agreed to by a vote of 376-0.
On June 5, 2012, the House considered H. Con. Res. 128,
authorizing the use of Emancipation Hall in the Capitol Visitor
Center for an event to award the Congressional Gold Medal,
collectively, to the Montford Point Marines. The House agreed
to the concurrent resolution by unanimous consent.
APPENDIX A
Committee Resolutions Adopted During the Period of This Report
ADOPTION OF COMMITTEE'S VIEWS AND ESTIMATES
(Committee Resolution 112-11)
Adopted March 9, 2012
MINORITY VIEWS OF RANKING MEMBER ROBERT A. BRADY, REP. ZOE LOFGREN AND
REP. CHARLES A. GONZALEZ
It is our purpose in these Minority views to sharpen the
focus on particular subject matter of great concern to us, as
well as to express our disagreement with some of the views of
the Committee Majority. We are especially concerned about the
Committee's activities, and lack of activity, with respect to
our jurisdiction over federal election law. Within these views,
we provide an array of materials on that subject to create a
record that we wish had been created during the last six
months.
Elections
H.R. 5799, The Voter Empowerment Act
In the wake of the 2010 election cycle, state legislatures
passed an unprecedented number of restrictive voting laws.
Obstacles to the ballot--new voter ID requirements, arbitrary
voter registration restrictions including the elimination of
same-day registration, shortening of early voting and absentee
voting periods, requiring proof of citizenship, and making it
more difficult to restore voting rights--have endangered our
democracy. While the purported justification for these
disenfranchising laws is to curb voter fraud, there is scant
evidence that voter fraud of the type addressed by these laws
actually exists. As a result of this phantom problem, millions
of eligible Americans will lose their right to vote.
The Florida Division of Elections, at the direction of
Governor Rick Scott, is currently engaged in a large-scale
voter purge effort in an attempt to remove eligible voters from
their rolls. In 2011, Scott instructed then-Secretary of State
Kurt Browning to remove from Florida's rolls a list of non-
citizens culled from the Department of Highway Safety and Motor
Vehicle database, even though the database did not contain up-
to-date citizenship information. This effort produced a list of
approximately 180,000 names. Then-Secretary Browning, however,
considered the list too unreliable to be used.
Secretary Browning resigned in February 2012, and Governor
Scott continued with the purge, sending to local election
officials instead a list of 2,600 names of people he claimed
were non-citizens and directing that they be purged. He did so
despite evidence that the list was based on unreliable data. So
far, a considerable number of individuals identified on the
list have come forward to prove their citizenship. Most county
elections officials in the state have refused to use the list.
On June 12th, the Department of Justice filed suit in the U.S.
District Court in Miami seeking an injunction to stop the
purge, alleging violations of the National Voter Registration
Act. On June 27, 2012, U.S. District Judge Robert Hinkle denied
the Department of Justice's request for an injunction.
The Democratic Members of the Committee on House
Administration refuse to stand idly by while the
Constitutionally protected right to vote is mercilessly
assailed. They worked extensively with the Democratic staff of
the House Committee on the Judiciary, numerous voting and civil
rights groups, and dozens of Members of Congress to draft
legislation by which the federal government could meet its
Constitutional obligation to regulate voting and protect the
right to vote of millions of American citizens. As a result,
Rep. John Lewis, with 126 original cosponsors, introduced H.R.
5799, the Voter Empowerment Act (VEA), on May 17, 2012. The
Voter Empowerment Act would protect and enhance the right to
vote by providing access, protecting integrity, and ensuring
accountability.
The Majority has given no indication that the Committee
will be considering the Voter Empowerment Act or any other
legislation on the subject in the remaining six months of this
Congress.
PROVISIONS OF THE VOTER EMPOWERMENT ACT
1. Access to the polls
If enacted, the VEA would provide increased access to polls
to eligible citizens through a number of methods. Current voter
registration processes can be inefficient and exclusionary and
are vulnerable to mistakes or manipulation. The VEA modernizes
the registration system and automatically and permanently
registers all eligible, consenting citizens and updates changes
of registration information, while also protecting voters'
privacy. Further, by providing for online registration, the VEA
alleviates time and transportation constraints that are
sometimes obstacles to registering to vote.
While every American's right to vote is under attack,
voters with disabilities have always endured additional, often
unique, challenges when attempting to cast a ballot. The VEA
removes some of these impediments by ensuring that disabled
voters have easy access to registration and absentee ballots,
providing grants to states to ensure access to the ballot, and
by exploring other methods of safe and effective voting for the
disabled community.
Young voters also face many obstacles at the polls. State
laws with confusing and arbitrary residency requirements can
pose particular challenges to college students. To combat this
problem, the VEA requires universities that receive federal
funding to offer and encourage voter registration to students.
The bill also allows prospective voters as young as 16, if they
will be 18 years old and otherwise eligible to vote at the next
election, to pre-register. This will help to ensure that they
are able to address all of the paperwork in advance, so that
their right to vote is not denied simply because their
birthdays fall too close to election day.
The VEA would also make voting easier for members of our
Armed Forces. By simplifying the registration process, ensuring
that military voters are not improperly removed from
registration lists, and ensuring that military absentee ballots
make it to their destination, the VEA ensures that defending
democracy abroad does not mean losing the right to vote at
home.
The VEA also makes voting more accessible to all eligible
Americans by implementing ``vote by mail'' programs and
requiring adequate notification if a polling place is moved.
2. Accountability
If no one is held accountable for failures in election
management, there is little incentive for improvement. As a
result, even easily redressed problems are allowed to fester.
State and local governments have no greater responsibility than
protecting the republican system by which our leaders are
elected. Though the new Majority failed to read that provision
during their farcical exercise at the beginning of the 112th
Congress, Section 4 of Article IV of the Constitution demands
it of ``every State in this Union'' and calls upon the Federal
government to ensure that this is so. The VEA, therefore, would
take great strides to create new provisions by which citizens
can hold accountable those who are responsible for running
their elections.
The first step to accountability is recognition of what
problems there are. It is cliche to recognize that the many
eyes of our millions of voters are apt to see many problems
more quickly than even the best analysis. The VEA, therefore,
creates a national voter hotline to ensure that problems can be
reported, addressed, corrected, and prevented. The lessons
learned from this centralized resource can also help every
state and locality learn from the others, so that no mistake
need be repeated and best practices can be learned.
Sometimes mechanical failure prevents voters from casting a
ballot. The VEA sets standards for voting machines, confirms
that voters voted for their intended candidate, and provides a
fail-safe paper copy of a cast ballot while still protecting
voters' privacy.
The Election Assistance Commission, created by the Help
America Vote Act in the wake of Florida's disastrous handling
of the 2000 election, is the only federal agency responsible
for providing assistance and guidance to local election
officials in administering elections. The VEA reauthorizes EAC,
which saves cash-strapped states critical resources, to ensure
the highest election standards are being met nationwide. The
Majority has pursued a misguided course by unsuccessfully
seeking to abolish the agency several times during the 112th
Congress.
H.R. 4010, DISCLOSE 2012 Act
On February 9, the Disclosure of Information on Spending on
Campaigns Leads to Open and Secure Elections Act of 2012
(``DISCLOSE 2012 Act'') was introduced by Rep. Chris Van
Hollen. The DISCLOSE 2012 Act is similar to a bill passed by
the House in the 111th Congress but defeated in the Senate
after falling short of defeating a Republican filibuster
despite receiving a strong and bipartisan majority vote.
H.R. 4010 seeks to restore the American people's trust in
our elections process in the aftermath of the U.S. Supreme
Court's disastrous 2010 decision in Citizens United v. Federal
Election Commission. Among the primary components of the
legislation:
The DISCLOSE 2012 Act would require any
corporation, labor organization, section 501(c) organization,
Super PAC or section 527 organization that spends $10,000 or
more on a ``campaign-related disbursement'' to file a
disclosure report with the Federal Election Commission within
24 hours of the expenditure, and to require disclosure for each
additional $10,000 or more that is spent. The FEC must post the
report on its website within 24 hours of receiving it.
The legislation strengthens the ``Stand by Your
Ad'' requirements enacted under the Bipartisan Campaign Reform
Act of 2002, ensuring that they apply to all outside spending
groups. Any covered organization that pays for an independent
expenditure or electioneering communication broadcast on radio
or TV must disclose in the ads its top five funders (for a TV
ad) or top two funders (for a radio ad). The head of the
organization also must appear in the ad and state that he or
she approves the broadcast message; and
The legislation requires any covered organization
that submits regular reports to its shareholders, members or
donors to include in such reports any information that is
required to be reported to the FEC under the legislation, and
to post a hyperlink on its homepage to the location of the
organization's disclosure report on the FEC website.
We strongly support DISCLOSE 2012 Act and promptly called
on the majority to hold hearings on the bill. As the majority
declined to hold any hearings, Rep. Gonzalez, Ranking Member of
the Subcommittee on Elections, asked for and received use of
the Committee hearing room to hold a forum, ``The Most
Expensive Seat in the House: The State of Our Campaign Finance
System,'' to address the explosion of money in politics during
the current election cycle, on April 18, 2012. [A full
transcript of the Forum follows at the end of these views]
American Tradition Partnership, Inc. v. Bullock Amicus Brief
In May, 2012, the Democratic Members of the Committee filed
an amicus brief in support of the Montana State Supreme Court's
decision in American Tradition Partnership, Inc. v. Bullock.
That court in American Tradition Partnership upheld a Montana
law banning corporations from making campaign contributions in
state elections. The Democratic Members were hopeful that the
U.S. Supreme Court would seize the opportunity to remedy some
of the mess that has resulted from the ruling in Citizens
United.
The brief highlighted that Citizens United was decided on
false premises. The Supreme Court based its decision on the
idea that transparency and disclosures would prevent the
corruption long associated with unfettered and undisclosed
campaign contributions. However, in the years since the
Citizens United opinion, attempts to require disclosure of
corporate campaign financing have been unsuccessful. On June
25, 2012, the Supreme Court summarily reversed the Montana
State Supreme Court's decision.
The Democratic Members view this outcome as a missed
opportunity to reverse the ruling in Citizens United. While the
Democratic Members would prefer to see the passage of
legislation that mandates disclosure of corporate
contributions, they maintained in their brief, and still
maintain in light of the Supreme Court's ruling, that Citizens
United was wrongly decided, under false premises and poses a
grave threat to our democracy.
Smithsonian Institution
Service by staff on corporate boards
We are concerned about recent discussions at the
Smithsonian of a proposal to reverse current Smithsonian policy
and the 2007 recommendations of the Independent Review
Commission by allowing Smithsonian personnel to serve again on
the boards of directors of profit and nonprofit corporations.
In 2007, when scandals involving Smithsonian governance
exploded, then-Chairman Brady criticized this practice of
corporate board service and commended the Board of Regents for
acting quickly to implement reforms. Now is not the time for
backsliding. At a time of severe budget constraints and pay
freezes, at the Smithsonian and government-wide, the Board has
more important priorities than to encourage the staff to
moonlight from their official responsibilities, and we hope
this proposal will be dropped.
We were pleased to learn that the Board has delayed
potential action and may be having second thoughts.
Smithsonian Museum of African-American History and Culture
On February 22, 2012, President Obama attended the ground-
breaking for the Smithsonian's National Museum of African
American History and Culture on the National Mall. Congress
authorized the Museum in 2003 and it is anticipated to open in
2015. We urge fulfillment of Congress's bipartisan commitment
of remaining Federal funds, funds which, along with private
funds being raised by the Smithsonian, will help to ensure
completion of this historic project on schedule.
Smithsonian Journeys to Cuba
Under clause 1(k) of House Rule X, our Committee has no
jurisdiction over foreign policy. This fact has apparently been
overlooked in the majority's continuing criticism of
Smithsonian Journeys's new ``people to people'' exchange trips
to Cuba. The Majority complained in the Committee's ``Views and
Estimates'' to the Budget Committee earlier this year that the
Smithsonian's participation ``lends an imprimatur of government
support for these trips.'' In the current activities report,
the majority expresses concern that the trips could benefit the
Castro regime.
Just to be clear, it is the United States government,
through the Departments of State, Treasury and other agencies
which have authorized and licensed these trips.
Smithsonian Journeys is part of Smithsonian Enterprises,
which operates in the commercial marketplace to produce
unrestricted trust fund revenues which may be spent for the
Smithsonian's operations. The Smithsonian's travel program,
like many similar ones by museums, universities and other
organizations across the country, has been licensed by the
Office of Foreign Assets Control of the Department of the
Treasury, is consistent with American law and policy, and
buttresses the Smithsonian's overriding mission to support
``the increase and diffusion of knowledge.''
As of late June, two trips to Cuba have been successfully
conducted and two additional ones are scheduled by the end of
the year.
Architect of the Capitol
The minority was very disappointed by the decision to
eliminate continued funding for the restoration and maintenance
of the Capitol Dome. It has been well documented that the cast-
iron dome is eroding from water leaks stemming from pinholes in
the Statute of Freedom. In Fiscal Year 2011, Phase I of the
Dome restoration plan was started. This first Phase will repair
and restore ironwork, sandstone and brick masonry along the
skirt. The last time that the dome underwent major renovation
was in 1960, 52 years ago. As the most recognizable symbol of
our republic, we should spend what is prudent to properly care
for this icon.
Cuts are a risk to safety
Lead is a health hazard and, according to the EPA, exposure
could result in high blood pressure or reproductive or memory
problems, with more significant risks for children including
nervous system and brain development. Phase IIA funds would
allow for the renovation and repair of the dome's exterior
including, priming, resurfacing, and repainting of the Dome's
exterior.
In addition, Phase II funds would allow safety improvements
for the AOC workers that maintain the dome such as a new fall
protection system. The Architect of the Capitol included in his
statement to the Legislative branch appropriation bill that,
``The planned Phase IIA repairs . . . will provide the
appropriate life-safety systems are in place for the protection
of AOC employees charged with the continuous care and
maintenance of the Dome.'' Without these steps, the millions of
visitors to the Capitol may be exposed to potentially unsafe
conditions during their visit.
Dome will deteriorate further
The next phase in Dome funding would prevent a further
degradation to the dome. Continued deferred maintenance only
increases corrosion to the ironwork on the exterior of the
dome, and without the gutter system water will continue to
deteriorate the dome.
Deferred maintenance means higher costs
According to the Architect of the Capitol, if the project
is not funded this fiscal year, the total cost of the
rehabilitation of the dome will increase due to the rapidly
deteriorating conditions. Deferred maintenance may also mean
that the taxpayer money spent on Phase I will be wasted if the
first part of work to be completed this fall needs to be re-
done.
Major Architect and Engineering Groups Opposed
A coalition of architectural, engineering and trade groups
sent a letter to Congressional leaders in opposition to the
cuts to the AOC's FY2013 budget, warning of further
deterioration of the U.S. Capitol, as well as increased costs
and safety concerns. Signatories include: American Institute of
Architects, American Society of Civil Engineers, the National
Trust for Historic Preservation, the Glass Association of North
American, the Illuminating Engineering Society of North
America, Ingersoll Rand, the Institute for Market
Transformation, the National Institute of Building Sciences,
AEC Science & Technology, Ecobuild America, American Society of
Heating, Refrigerating and Air-Conditioning Engineers, and
International Facility Management Association. These are
experts in their fields and their opinions should be respected.
Union Square
We regret that neither this Committee nor the Senate
Committee on Rules and Administration has yet reported a bill
to resolve questions left unanswered when Congress, utilizing
an appropriations bill, transferred control of Union Square
from the National Park Service to the Architect of the Capitol
last December. Given the apparent bipartisan agreement over the
policy issues presented, we are mystified at the delay.
Congress transferred control of Union Square, the small
portion of the National Mall at the foot of Capitol Hill
containing the Reflecting Pool, to the Architect on the
recommendation of security officials concerned about the
potential effects of a comprehensive Park Service plan to
renovate the Mall, which could offer significant implications
for security of the Capitol and the Capitol Grounds. To avoid
entangling the Park Service's plan to improve the entire Mall
with the unique security issues surrounding the Capitol,
Congress simply incorporated Union Square into the Capitol
Grounds and got out of the Park Service's way. Unfortunately,
the transfer provision failed to state whether the Architect
should allow limited commercial activity on the Square, as the
Park Service had traditionally done, or instead administer
Union Square consistently with the rest of the Grounds, where
commercial use is generally prohibited by law.
Our Committee staffs worked diligently with bipartisan
Senate Rules Committee staff to fashion a provision to maintain
the Park Service's practice of permitting limited commercial
use and provide the Architect, the Capitol Police Board and the
Capitol Police with the necessary legal authority. However, the
House Appropriations Committee has complicated the process by
including a somewhat different provision in the Legislative
Appropriations legislation for fiscal year 2013.
Whatever the merits of the Appropriations Committee's
provisions, we are worried that if the legislative committees
of both Houses simply yield to the appropriations bill as a
vehicle, the questions and potential legal problems caused by
the transfer provision enacted last December will very likely
have remained unresolved for at least a full year and probably
longer. In the meantime, the Architect, the Capitol Police
responsible for administering and protecting Union Square, and
the commercial firms interested in continuing to use it,
deserve prompt answers to these concerns. We believe the House
Administration Committee should report the necessary
legislation and work with others to pass it through the House
as soon as possible.
Library of Congress
Library Hearing and Copyright
We thank Chairman Gingrey for convening the Oversight
Subcommittee on April 18, 2012, to examine continuity and
efficiency at the Library of Congress in a period of
transition. The subcommittee received testimony from four
recently appointed heads of key service units (Ms. Roberta
Shaffer, Associate Librarian for Library Services; Ms. Maria
Pallante, the Register of Copyright; Dr. Mary Mazanec,
Director, Congressional Research Service; and Mr. David Mao,
the Law Librarian of Congress).
Transition is never simple and the tasks undertaken by each
of the service-unit leaders will not be easy in an era of
shrinking budgets. We hope that each and every member of
Library management will bring to the Committee's attention any
concern we may need to address, especially in areas where the
Library provides services directly to the American public. In
order to provide proper oversight of Library activities, we
will continue to monitor the operations of these service units
to ensure a smooth leadership transition--particularly the
Register of Copyrights, whose travel itinerary and public
comments have caused some to question her impartiality. We
trust that the Register, whose position is largely ministerial,
will redouble efforts to allay such concerns.
Rayburn Research Center
The Congressional Research Service, in response to budget
cuts, has been reducing some of its traditional services to
Members and staff. In recent years, it has closed the CRS
reference centers in the U.S. Capitol and the Longworth
Building and drastically reduced the size of the congressional
staff reading room in the Madison Building under the guise of a
``renovation'' which transferred most of the space to library
communications staff.
Changes in the way Members and staff seek and use
information provide some justification for these cutbacks.
However, when CRS decided to pull back its staff and resources
from the Rayburn Research Center, the Committee staff thought
it odd that they still wanted to retain use of the room for
other CRS functions. A bipartisan recommendation by the
Committee was made to the House Leadership that, since CRS
would no longer be providing useful functions to the House in
this space, that the House should reclaim the room to meet its
own needs.
DEFENSE OF MARRIAGE ACT (DOMA)
We continue to be confused by the Republican Leadership's
stubborn insistence that taxpayer dollars be used to defend
discrimination. In case after case, judges have held DOMA an
unconstitutional violation of the Fifth Amendment to the U.S.
Constitution, just as the Obama Administration stated in their
explanation for the discontinuance of defending constitutional
challenges to Section 3.
The House has filed briefs in twelve DOMA lawsuits thus
far, and out of the four that have been adjudicated, the House
has lost in each matter based on the courts' opinion that
Section 3 of DOMA is unconstitutional.
On February, 22, 2012, in Golinski v. OPM, a Federal
district court judge in California found DOMA unconstitutional
under the Equal Protection clause and protections afforded by
the Fifth and Fourteenth Amendments.
On May 24, 2012, in Dragovich v. United States Department
of Treasury, a federal judge in California found the denial of
benefits under DOMA unconstitutional for the same reason.
On May 31, 2012, in Gill v. OPM, DOMA was ruled
unconstitutional by the First Circuit Federal Appeals Court in
Boston. In a unanimous decision, the three judge panel found
that the Federal Government cannot deny rights and privileges
such as pension, tax and health benefits to same sex couples in
states where they can legally marry.
On June 6, 2012, in Windsor v. United States, a U.S.
District judge for the Southern District of New York found
section 3 of DOMA unconstitutional.
Despite these repeated losses, the Majority continues to
abuse precious taxpayer dollars for perceived political
advantage and to prolong discrimination which has gone on far
too long.
VIEWS OF REP. CHARLES A. GONZALEZ (TX-20) TO ACCOMPANY THE THIRD
SEMIANNUAL REPORT ON ACTIVITIES OF THE COMMITTEE ON HOUSE
ADMINISTRATION
After consideration of the Third Semiannual Report on
Activities of the Committee on House Administration prepared by
the Majority, I find that I cannot approve it. The principal
reason for my disapproval is that the report is not a
comprehensive accounting of the activities of the Committee.
The extent of this failure is partially indicated by the issues
covered by the Minority Views submitted by Ranking Member Brady
that find no mention in the Majority's report. The Committee is
obligated to make a more complete accounting to the House of
what the Committee has done than was offered by the Majority.
Because it fails to meet that standard, I disapprove of the
Majority's report.
Charles A. Gonzalez,
Member of Congress.
``The Most Expensive Seat in the House: The State of Our Campaign
Finance System''
A Congressional Forum Reviewing the Impact of Citizens United
As soon as the Supreme Court handed down its decision in
Citizens United, the need for a review of our campaign finance
system was clear. Regardless of how one viewed that decision,
it was indisputable that it represented a major change in how
campaigns for federal offices would be run. The magnitude of
this change was only made clearer by the 2010 election. After
the Republican Majority blocked all efforts to examine these
changes and their significance for the country, the Ranking
Member of the Subcommittee on Elections convened a
congressional forum in the hopes that he could shed some light
on this subject. When the Court ruled, they had no idea what
the impact of their decision would be. Now, we can show what it
has been and what we can expect for the future. This subject is
too important to go unremarked upon by the House of
Representatives. The following will lay out a brief history of
the changes that led to the forum, what was discussed, and what
comes next. It is hoped that this record will inform the
American people and lay a foundation for the essential
congressional action to come.
A CAMPAIGN FINANCE SYSTEM NIXON WOULD HAVE LOVED
In 2012, we commemorate the 40th anniversary of the scandal
known as Watergate. Watergate remains a touchstone,
exemplifying many of the worst excesses of political scandal
and shaming our entire country.\1\ The most shocking thing
about this anniversary, however, is that many of the things
that made Watergate so shocking wouldn't even be illegal today.
---------------------------------------------------------------------------
\1\Bernstein, Jonathan, ``Nixon Against Government'', ``A plain
blog about politics'', June 08, 2012 (http://
plainblogaboutpolitics.blogspot.com/2012/06/nixon-against-
government.html).
---------------------------------------------------------------------------
``A lot of us believe Watergate might never have happened
without all that money sloshing around.''\2\ That's what John
Dean told the Washington Post's Dan Eggen in early June, but
Eggen notes that, today:
---------------------------------------------------------------------------
\2\Dan Eggen, ``Post-Watergate campaign finance limits undercut by
changes'', The Washington Post, June 16, 2012 (http://
www.washingtonpost.com/politics/post-watergate-campaign-finance-limits-
undercut-by-changes/2012/06/16/gJQAinRrhV_print.html).
there's little need for furtive fundraising or secret
handoffs of cash. Many of the corporate executives
convicted of campaign-finance crimes during Watergate
could now simply write a check to their favorite Super
PAC or, if they want to keep it secret, to a compliant,
non-profit group. Corporations can spend as much as
they want to help their favored candidates, no longer
prohibited by law from spending company cash on
elections.\3\
---------------------------------------------------------------------------
\3\Id. It is, of course, also worth noting that some of those
executives didn't suffer all too greatly at the time, with one rising
to spend 18 years as a member of the United States Senate.
Even opponents of campaign finance regulation agree that
the current system is a threat. Former Republican National
Committee Chairman Haley Barbour has called it a ``bad system''
that leads to donations given ``under the table''.\4\ While
Barbour's preferred solution is to allow unlimited donations to
candidates and political parties, we are encouraged that he
recognizes some of the dangers inherent in the present system.
Those dangers were laid out most starkly more than 30 years ago
by John Terry Dolan, the founder of National Conservative
Political Action Committee, another group\5\ seeking to
influence elections through independent expenditure:
---------------------------------------------------------------------------
\4\Justin Worland, ``Haley Barbour Criticizes Campaign Finance
Law'', Roll Call, June 15, 2012 (http://atr.rollcall.com/haley-barbour-
criticizes-campaign-finance-law/).
\5\Chuck Lane, ``NCPAC's Waterloo: TAKING SIDES'', The Harvard
Crimson, September 25, 1982 (http://www.thecrimson.com/article/1982/9/
25/ncpacs-waterloo-pbbbefore-1980-a-hit/).
Groups like ours are potentially very dangerous to the
political process. We could be a menace, yes. Ten
independent expenditure groups, for example, could
amass this great amount of money and defeat the point
of accountability in politics. We could say whatever we
want about an opponent of a Senator Smith and the
senator wouldn't have to say anything. A group like
ours could lie through its teeth and the candidate it
helps stays clean.\6\
---------------------------------------------------------------------------
\6\Myra MacPherson, ``The New Right Brigade; John Terry Dolan's
NCPAC Targets Liberals And the Federal Election Comission [sic]'', The
Washington Post, August 10, 1980.
These are chilling words, but their truth is beyond
question. A recent study of campaign ads in the 2012
presidential race was headlined, ``Presidential Ads 70 Percent
Negative in 2012, Up from 9 Percent in 2008''.\7\ One of the
reasons for this is the 1100% increase in spending by interest
groups, 86% of which has gone for negative advertising.\8\
Restore Our Future, Inc., for example, spent $42.5 million on
independent expenditures between December 08, 2011, and April
11, 2012, of which 93.5% was spent on negative ads.\9\ These
ads are also filled with misleading and outright false
allegations.
---------------------------------------------------------------------------
\7\Erika Franklin Fowler, ``Presidential Ads 70 Percent Negative in
2012, Up from 9 Percent in 2008'', Wesleyan Media Project, May 02, 2012
(http://mediaproject.wesleyan.edu/2012/05/02/jump-in-negativity/).
\8\Paul Steinhauser, ``Study: Campaign ads much more negative than
four years ago'', CNN.com, May 03, 2012 (http://
politicalticker.blogs.cnn.com/2012/05/03/study-campaign-ads-much-more-
negative-than-four-years-ago/).
\9\Federal Election Commission, ``Report on Independent
Expenditures of Restore Our Future, Inc.''', retrieved June 18, 2012
(http://query.nictusa.com/cgi-bin/com_supopp/C00490045/).
---------------------------------------------------------------------------
UNACCOUNTABLE AND UNTRUE
According to the Annenberg Public Policy Center of the
University of Pennsylvania, ``from December 1, 2011 through
June 1, 2012, 85% of the dollars spent on presidential ads by
four top-spending third-party groups known as 501(c)(4)s were
spent on ads containing at least one claim ruled deceptive by
fact-checkers''.\10\ The highest spender covered was Crossroads
GPS as ``contain[ing] so many factually misleading attacks\11\
that it took two articles for us to cover them\12\ all.''\13\
In Annenberg's analysis of third-party spending from the Iowa
Caucuses through the Wisconsin primary, ``23.3 million (56.7%)
of the 41.1 million dollars were spent on 19 ads containing
deceptive or misleading claims.''\14\ The pro-Romney Super PAC
``Restore Our Future, Inc.'' was responsible for 89% of the
misleading funding, and ``outspent the pro-Gingrich and pro-
Santorum super PACs by 20 to 1.''\15\ There is no question that
these ads were designed to help the Republican Party to defeat
President Obama, and that those by Restore Our Future helped
Mitt Romney to become its presidential nominee, but neither the
Republican National Committee nor Romney himself would ``have
to say anything'' and each ``stays clean'', exactly as Mr.
Dolan warned.
---------------------------------------------------------------------------
\10\Annenberg Public Policy Center, ``High Percent of Presidential
Ad Dollars of Top Four 501(c)(4)s Backed Ads Containing Deception,
Annenberg Study Finds'', June 20, 2012 (http://www.docstoc.com/docs/
123115463/High-Percent-of-Presidential-Ad-Dollars-of-Top-Four-
501(c)(4)s-Backed-Ads-Containing-Deception-Annenberg-Study-Finds). The
study notes that, ``[a]s of June 1st, no Democratic leaning 501(c)(4)
had paid for advertising in the presidential race.'' The missing comma
after ``2011'' is in the original.
\11\FactCheck.org, ``A Bogus Tax Attack Against Obama'', May 17,
2012 (http://factcheck.org/2012/05/a-bogus-tax-attack-against-obama/).
\12\FactCheck.org, ```Obama's Promise,' Part II'', May 18, 2012
(http://factcheck.org/2012/05/obamas-promise-part-ii/).
\13\FactCheck.org, ``Soft Glove, Same GPS Fist'', May 23, 2012
(http://factcheck.org/2012/05/soft-glove-same-gps-fist/). This article
is a description of Crossroads GPS's second major ad, which
FactCheck.org summarizes as, ``an attack [that] uses factual claims to
deceive, not to inform.''
\14\FlackCheck.org, ``APPC calculates dollars spent by four highest
spending third party groups on deceptive TV ads'', April 27, 2012
(http://www.flackcheck.org/press/april-27-2012/) ` FlackCheck.org,
``Calculating Dollars Tied to Deception in the 2012 Republican
Presidential Ads--FlackCheck.org'', YouTube, April 27, 2012 (http://
www.youtube.com/watch?v= j5PdH0AvRh4).
\15\FlackCheck.org, ``APPC calculates dollars spent by four highest
spending third party groups on deceptive TV ads'', April 27, 2012
(http://www.flackcheck.org/press/april-27-2012/).
---------------------------------------------------------------------------
This ability to smear an opponent with falsehoods
unreservedly is an insidious twist in American campaigns. When
advertisements are produced by a political campaign, the
candidate risks a backlash if the public perceives her as lying
to them. The requirement a candidate ``Stand-by-your-ad'' via
the now familiar, ``I'm Mitt Romney, and I approved this
message'' tag at the beginning or end of each advertisement,
further cemented that check.\16\ But Mr. Romney can say--
indeed, to avoid legal liability he must say so and honestly--
that he had no control over those Crossroads GPS or Restore Our
Future advertisements, disclaiming any responsibility for their
deceptive\17\ content. Dr. Ornstein explained the impact of
this unaccountability during the forum:
---------------------------------------------------------------------------
\16\Dr. Ornstein said at the forum, ``one of the most significant
and commendable provisions of the Bipartisan Campaign Reform Act was
the `stand by your ad' provision that David Price authored.'' See
Transcript 47:929-32 (http://www.youtube.com/watch?v=tTt5VbHUxNA#t=
3105).
\17\Annenberg Public Policy Center, ``High Percent of Presidential
Ad Dollars of Top Four 501(c)(4)s Backed Ads Containing Deception,
Annenberg Study Finds'', see note 10, supra.
[I]t really used to be [that] Members of Congress . . .
were recruited to come here by people in their
communities who went to them and said, ``You have done
wonderful things. You have built a great reputation.
How about spending some time in public service?''
Now if I wanted to go to somebody like that now, I
would say, ``It is time to spend some time in public
service. And here is what is going to happen: The first
thing is, brace yourself for the $5 million that will
come in by your opponent and other related groups,
designed to strip the bark off you and destroy that
reputation you have spent your career building. And
they will know they have succeeded when your kids come
home from school crying and say they can't go back
anymore because of all the embarrassment that they face
from their friends and fellow students.''\18\
---------------------------------------------------------------------------
\18\See Transcript 79:1619-34 (http://www.youtube.com/
watch?v=tTt5VbHUxNA#t= 5380).
Is this really the world we want? Is this what campaign finance
is supposed to mean? Is this what elective office is supposed
to be?
A NEW WORLD OF CAMPAIGN FINANCE
In 2010, the law of campaign finance changed dramatically.
In January, the Supreme Court released its decision in Citizens
United v. FEC (558 U.S. (2010), 130 S.Ct. 876), striking down
limitations on spending for so-called ``independent
expenditures''. In March, the Court of Appeals for the District
of Columbia Circuit released its decision in SpeechNOW.org v.
FEC (599 F.3d 686) (2010), holding that the logic of Citizens
United meant that such unlimited donations could also go to
political action committees (PACs). Thus was born the Super
PAC. This represented a major change in the law surrounding
campaign finance. Major parts of the Bipartisan Campaign Reform
Act of 2002, properly known as ``Shays-Meehan'' but more
commonly referred to as ``McCain-Feingold'',\19\ a law duly
passed less than eight years earlier with bipartisan majorities
by a divided Congress,\20\ were ruled unconstitutional. By
March, outside spending had increased 767% over the previous
mid-term election.\21\
---------------------------------------------------------------------------
\19\Pub. L. No. 107-155, 116 Stat. 81 (codified in various sections
of title 2 of the United States Code).
\20\148 Cong. Rec. H465-66 (http://clerk.house.gov/evs/2002/
roll034.xml); 148 Cong. Rec. S2160-61 (http://www.gpo.gov/fdsys/pkg/
CREC-2002-03-20/pdf/CREC-2002-03-20-pt1-PgS2096- 2.pdf).
\21\Richard Hasen, ``The Numbers Don't Lie: If you aren't sure
Citizens United gave rise to the super PACs, just follow the money'',
Slate.com, March 09, 2012 (http://www.slate.com/articles/
news_and_politics/politics/2012/03/
the_supreme_court_s_citizens_united_decision_
has_led_to_an_explosion_of _campaign_spending_.html).
---------------------------------------------------------------------------
This was clearly a new world and it was recognized as such.
In his address on the State of the Union in January, 2010, days
after the decision in Citizens United and before that in
SpeechNow, President Obama spoke of how, ``the Supreme Court
reversed a century of law that I believe will open the
floodgates for special interests--including foreign
corporations--to spend without limit in our elections.''\22\
The President's statement, though certainly not without
foundation,\23\ was criticized even as he was making it and by
no less an authority than Associate Justice Samuel Alito.\24\
Clearly, this was an issue of great moment and one it was
incumbent on Congress to address. The Committee on House
Administration, recognizing our role in oversight over
elections and campaign finance law, held three hearings on the
subject between February and May, 2010\25\, and marked up the
DISCLOSE Act\26\ which passed the House on June 24, 2010.\27\
While companion legislation was blocked in the Senate by
Republican filibuster, a strong majority of 58 senators voted
in support.\28\
---------------------------------------------------------------------------
\22\Barack Obama, ``Remarks by the President in State of the Union
Address'', January 27, 2010 (http://www.whitehouse.gov/the-press-
office/remarks-president-state-union-address).
\23\See Citizens United v. FEC, 130 S.Ct. 876, 930 (Stevens, J.,
dissenting).
\24\Martin Kady, II, ``Justice Alito mouths `not true''',
Politico.com, January 27, 2010 (http://www.politico.com/blogs/
politicolive/0110/Justice_Alitos_You_lie_moment.html).
\25\H.R. Rep. No. 111-492, pt. 1 at 39-40 (2010) (http://
www.gpo.gov/fdsys/pkg/CRPT-111hrpt492/pdf/CRPT-111hrpt492-pt1.pdf).
\26\H.R. 5175, 111th Cong. Sec. 2 (2010) http://thomas.loc.gov/cgi-
bin/bdquery/z?d111:h.r.05175:. See also Chris Van Hollen, Section-by-
Section Summary of ``DISCLOSE Act'' (http://vanhollen.house.gov/
UploadedFiles/DISCLOSE_Summary_042910.pdf).
\27\156 Cong. Rec. H4828 (http://clerk.house.gov/evs/2010/
roll391.xml).
\28\156 Cong. Rec. S6285 (http://www.gpo.gov/fdsys/pkg/CREC-2010-
07-27/pdf/CREC-2010-07-27-pt1-PgS6278-5.pdf). N.B. While a supporter of
the legislation, Senate Majority Leader Harry Reid changed his vote
from Yea to Nay for a procedural reason, q.v., David M. Herszenhorn,
The New York Times, July 27, 2010 (http://www.nytimes.com/2010/07/28/
us/politics/28donate.html).
---------------------------------------------------------------------------
THE OPENING OF THE 112TH CONGRESS
All of these steps, of course, were taken when the
implications of Citizens United and SpeechNow remained largely
speculative, however. Until the next election had run its
course, there was limited data on which to act. That data soon
arrived. In the 2010 election cycle, outside spending rose to
$299.8 million, an increase of 335% over the previous mid-term
election, which had itself set a new record for mid-terms.\29\
``[I]ndependent expenditures by PACs, groups and individuals
jumped from $43.6 million in 2008 to $204 million in the 2010
cycle'', an increase of 369%.\30\ Spending on the average House
campaign rose 32%, in real dollars, over 2008. This was the
largest increase in decades despite coming in a mid-term
election when we were still recovering from the Great
Recession. Such increases have historically come in
presidential election years.\31\ Such drastic change called on
the Committee on House Administration, as the congressional
body with jurisdiction over this issue, to act, especially as
races for House seats are the most likely to be affected by
independent expenditures.\32\
---------------------------------------------------------------------------
\29\Center for Responsive Politics, ``Total Outside Spending by
Election Cycle, Excluding Party Committees'', Retrieved June 26, 2012
(http://www.opensecrets.org/outsidespending/cycle_tots.php).
\30\Cynthia Bauerly, Keynote Address to Symposium, ``Accountability
After Citizens United'', April 29. 2011 (http://www.brennancenter.org/
content/pages/accountability_after_citizens_
united_transcript_section_ii).
\31\See ``Campaign Expenditures Since 1990--2012 Dollars'',
Appendix B. http://democrats. cha.house.gov/sites/
democrats.cha.house.gov/files/Campaign%20Expenditures%20Since%201990%
20-%202012%20Dollars.xlsx.
\32\E.J. Dionne, Jr., ``Secret money fuels the 2012 elections'',
The Washington Post, June 13, 2012 (http:''www.washingtonpost.com/
opinions/secret-money-fuels-the-2012-elections/2012/06/
13gJQAsZ4FaV_story.html).
---------------------------------------------------------------------------
The newly empowered Majority did nothing.
In August, 2011, campaign finance became a national story
when it was revealed that someone or some ones had created
phony, shell corporations just to disguise their donations to
Restore Our Future, Inc., the Super PAC created to support Mitt
Romney's run for president.\33\ Mr. Gonzalez wrote to FEC and
the Department of Justice urging them to investigate whether
this practice was a violation of federal law, by the donor or
by Restore Our Future.\34\
---------------------------------------------------------------------------
\33\Campaign Legal Center, ``FEC Complaint Filed Against Apparent
`Straw Company' that Gave $1 million to Romney-linked `Super PAC''',
August 05, 2011, (http://www. campaignlegalcenter.org/
index.php?option=com_content`view=article`id=1427:august_5-2011-
fec-complaint-filed-against-apparent-straw-company-that-gave-1-million-
to-romney-linked-super-pac-`catid= 63:legal-center-press-
releases&Itemid=61) & Campaign Legal Center, ``FEC and DOJ Asked to
Investigate More `Straw Companies' Making Million Dollar Contributions
to Romney-linked `Super PAC''', August 11, 2011 (http://
www.campaignlegalcenter.org/index.
php?option=com_content&view=article&id=1436:-fec-and-doj-asked-to-
investigate-more-straw-companies-making-million-dollar-contributions-
to-romney-linked-super-pac-8-11-11&catid= 63:legal-center-press-
releases&Itemid=6).
\34\Committee on House Administration, Democratic Office,
``Gonzalez Calls for Investigation of Potential Campaign Finance Law
Violations'', August 16, 2011 (http://democrats.cha.house.gov/press-
release/gonzalez-calls-investigation-potential-campaign-finance-law-
violations).
---------------------------------------------------------------------------
The Majority took no action.
In September, 2011, an article on the front page of the New
York Times concluded with a startling admission: ``I had
someone else pay for me to go [to ``a recent Romney fund-
raising event,''] because I didn't want people to know I was
there.''\35\ In October, 2011, it was reported that teenage
children with no obvious means of income had maxed out their
donations to the presidential campaign of Texas Governor Rick
Perry.\36\ Both actions would be illegal under the Federal
Election Campaign Act.\37\ October also saw revelations of
financial misconduct surrounding the campaign of Hermann Cain,
revelations that would lead to a federal probe.\38\
---------------------------------------------------------------------------
\35\Mimi Swartz, ``A Crisis of Confidence Deep in the Heart of
Texas'', The New York Times, September 28, 2011 (http://
www.nytimes.com/2011/10/02/magazine/a-crisis-of-confidence-deep-in-the-
heart-of-texas.html).
\36\Christina Wilkie, ``Contributions To Rick Perry From Big
Donors' Children Raise Questions'', The Huffington Post, October 25,
2011 (http://www.huffingtonpost.com/2011/10/25/perry-2012-donations-
children_n_1030771.html).
\37\2 U.S.C. 441f.
\38\Daniel Bice, ``Activities of former Cain operative
scrutinized'', Milwaukee Journal Sentinel, March 29, 2012 (http://
www.jsonline.com/watchdog/noquarter/activites-of-former-cain-operative-
scrutinized-nc4pt5q-145029735.html).
---------------------------------------------------------------------------
The Majority was uninterested.\39\
---------------------------------------------------------------------------
\39\It is worth noting that Stephen Colbert, whose platform is
broad but limited to approximately 88 minutes per week, and whose
jurisdiction is broader than that of any single congressional
committee, has expended vastly more time exploring our campaign finance
law than has the House Committee responsible for elections in the
entire 112th Congress. Mr. Colbert has spent hours of airtime
explaining and exploring how campaigns are financed and the
implications thereof. Millions of Americans know what Super PACs are
only because of Mr. Colbert's efforts and his explanations, with the
able assistance of former FEC Chairman and his ``personal lawyer''
Trevor Potter, are so good that they played an invaluable role in the
forum. Anyone seeking an entertaining and educational introduction to
the issue would do well to visit http://www.colbertnation.com/video/
tags/Colbert%20Super%20PAC and simply start watching some of the many
clips. See also Dahlia Lithwick, ``Colbert v. the Court: Why, in the
battle over Citizens United, the Supreme Court never had a chance'',
Slate.com, Feb. 2, 2012 (http://www.slate.com/articles/news--and--
politics/jurisprudence/2012/02/stephen_colbert_is_
winning_the_war_against_the_supreme_court_and_citizens_united_
.single.html).
---------------------------------------------------------------------------
Much ado was made of the Subcommittee on Elections hearing
of November 3, 2011, it being the first hearing in years
dedicated explicitly to providing oversight of the Federal
Election Commission.\40\ There was reason to hope that the
subject of campaign finance and the implications of the system
created since Citizens United would be discussed. Perhaps the
subcommittee would focus on the greater than 400% increase in
the rate of deadlocked votes preventing FEC from enforcing
campaign finance law?\41\ As the subcommittee's Ranking Member,
Mr. Gonzalez raised all of these concerns in his opening
statement and questions.\42\ The Chairman's focus, and that of
every Member of the Majority, however, was on getting FEC to
release documents, some obsolete,\43\ describing how it
enforces campaign finance laws.\44\ The document release that
followed, after much expenditure of time and energy, may ``have
made it a little easier for campaign operatives to decide
whether violating campaign finance laws is worth the fines they
might have to pay'',\45\ but they did nothing to examine the
changes in campaign financing, let alone to attempt to explore
or address the problem.
---------------------------------------------------------------------------
\40\Committee on House Administration, ``Federal Election
Commission: Reviewing Policies, Processes and Procedures'', November
03, 2011 (http://cha.house.gov/hearing/subcommittee-elections-hearing-
federal-election-commission-reviewing-policies-processes-and).
\41\Public Citizen, ``Roiled in Partisan Deadlock, Federal Election
Commission Is Failing'', October 13, 2011 (http://www.citizen.org/
documents /fec-deadlock-statement.pdf); Wang, Marian, ``As Political
Groups Push Envelope, FEC Gridlock Gives `De Facto Green Light''',
ProPublica, November 07, 2011 (http://www.propublica.org/ article/as-
political-donors-push-envelope-fec-gridlock-gives-de-facto-green-light/
single); Jesse Zwick, ``Broken Federal Election Commission Fails to
Enforce Campaign-Finance Laws'', The Washington Independent, September
28, 2010 (http://washingtonindependent.com/98816/broken-federal-
election-commission-fails-to-enforce-campaign-finance-laws).
\42\Federal Election Commission: Reviewing Policies, Processes And
Procedures Hearing before the Subcomm. on Elections of the H. Comm. on
House Administration, 112th Cong. 3-4 (statement of Rep. Charles A.
Gonzalez) , 54-55 (questions from Rep. Gonzalez) (2011) (http://
www.gpo.gov/fdsys/pkg /CHRG-112hhrg72282/pdf/CHRG-112hhrg72282.pdf).
\43\Id. at 50 (answer of Ellen Weintraub, FEC Commissioner) (``The
document that I think of as the enforcement manual is a large,
cumbersome, rather out of date collection of memoranda that are not--a
number of them have been superseded.'').
\44\Committee on House Administration, ``Harper Calls on FEC to
Disclose Enforcement Standards'', November 03, 2011 (http://
cha.house.gov/press-release/harper-calls-fec-disclose-enforcement-
standards).
\45\Committee on House Administration, Democratic Office,
``Gonzalez Calls for Increased Action on Campaign Finance and Electoral
Protection from FEC and House Republicans'', May 23, 2012 (http://
democrats.cha.house.gov/ press-release/gonzalez-calls-increased-action-
campaign-finance-and-electoral-protection-fec-and).
---------------------------------------------------------------------------
On February 15, 2012, more than two years after Citizens
United and more than a year after the 112th Congress convened,
the Committee's three Democrats wrote a letter to Chairman
Lungren, urging him ``to convene the Committee on House
Administration to conduct oversight hearings on the increasing
role and influence of undisclosed money in our electoral
system.''\46\ The Chairman did not respond. Nor did the
Committee take any action in this area beyond continuing to
press FEC for those enforcement guidelines.
---------------------------------------------------------------------------
\46\Committee on House Administration, Democratic Office, ``House
Administration Democrats Urge Oversight on the Role of Money in
Elections and the DISCLOSE 2012 Act'', February 15, 2012 (http://
democrats.cha.house.gov/press-release/house-administration-democrats-
urge-
oversight-role-money-elections-and-disclose-2012).
---------------------------------------------------------------------------
THE MINORITY ACTS
These issues are so important, so vital to the working of
our democracy, that the public must be made aware of them. They
demanded the scrutiny of a congressional hearing and, with the
Majority blocking one of those, a Minority-called forum was the
next step. We had to get the word out and this was the only
route we had left. In his capacity as Ranking Member of the
Subcommittee on Elections, Mr. Gonzalez asked Chairman Lungren
for use of the Committee's hearing room as a venue in which he
could conduct a forum of his own on the subject and the
chairman graciously agreed. On April 18, 2012, Mr. Gonzalez
gaveled to order, ``The Most Expensive Seat in the House: The
State of Our Campaign Finance System''. Mr. Gonzalez sat in the
chair and was joined by Democratic Leader Nancy Pelosi (CA-8),
Committee Ranking Member Robert A. Brady (PA-1), Michael
Capuano (MA-8), Keith Ellison (MN-5), David Price (NC-4), and
Chris Van Hollen (MD-8), author of the DISCLOSE Acts of 2010
and 2012.\47\
---------------------------------------------------------------------------
\47\Further information about the forum is available at http://
democrats.cha.house.gov/event/congressional-forum-campaign-finance and
the full video is available at http://www. youtube.com/
watch?v=tTt5VbHUxNA.
---------------------------------------------------------------------------
It had been hoped that the first panel would consist of
Super PACs donors. Mr. Gonzalez invited the eight largest
donors to the largest Super PACs to testify.\48\ At the time
the invitations went out, these largest donors were:
---------------------------------------------------------------------------
\48\These letters may be found in Appendix C.
---------------------------------------------------------------------------
1. Sheldon & Miriam Adelson, whose family's $18.9
million in contributions constituted 80% of the
receipts of ``Winning Our Future'';
2. Harold Simmons, whose $10 million in individual
and corporate contributions to ``American Crossroads''
was 28% of their reported receipts;
3. Bevin Albertani, Political Director of Laborers'
Political League--Education Fund, which gave $350,000
to ``House Majority PAC'', 12% of its total receipts;
4. Virginia James, who gave $1 million to ``Club for
Growth Action'', 19% of their total;
5. Jeffrey Katzenberg, who contributed $2 million,
fully 32% of the receipts of ``Priorities USA Action'';
6. Bob Perry, whose $4 million in contributions was
9% of the total reported by ``Restore Our Future,
Inc.'';
7. Foster Friess, whose $1.6 million contribution was
28% of the total received by ``Red White and Blue
Fund'';
8. Peter Thiel, whose $2.6 million dollars was 71% of
the total contributions received by ``Endorse Liberty,
Inc.''
These donors were invited to testify, in writing or in person,
about how they felt about our campaign finance system,
including why they were contributing. It would have been
particularly interesting to hear Mr. Adelson describe the
sentiments of a conflicted donor. As Mr. Gonzalez noted in his
opening remarks, Mr. Adelson had recently told a reporter,
``I'm against very wealthy people attempting to [influence] or
influencing elections. But as long as it is doable, I am going
to do it.''\49\ It is to be regretted that Mr. Adelson declined
to speak further to the American people and to Congress on such
an important topic. The forum was fortunate, however, to have a
most distinguished panel of experts who were eager to discuss
this subject with the Members.
---------------------------------------------------------------------------
\49\Steve Bertoni, ``Billionaire Sheldon Adelson Says He Might Give
$100M To Newt Gingrich Or Other Republican'', Forbes.com, February 21,
2012 (http://www.forbes.com/sites/stevenbertoni/2012/02/21/billionaire-
sheldon-adelson-says-he-might-give-100m-to-newt-gingrich
-or-other-republican/).
---------------------------------------------------------------------------
The first witness recognized was Dr. Norman Ornstein, a
longtime observer of Congress and politics who hold a Ph.D. in
political science from the University of Michigan. Next to
testify was Monica Youn, J.D., the inaugural Brennan Center
Constitutional Fellow at NYU School of Law. Zephyr Teachout,
J.D., associate professor of law at Fordham University School
of Law, followed Ms. Youn. The final witness was Paul S. Ryan,
J.D., senior counsel at the Campaign Legal Center. The
witnesses' testimony and the questions from the Members covered
a great deal of ground, from the Founders' great concerns about
corruption to the misunderstandings upon which the Supreme
Court had decided Citizens United to the impact the decision
had already had, not only on campaign finance but on the nature
of American politics and the public perception of our
government.
THE $44 MILLION ELEPHANT IN THE ROOM
In the months since the forum, the problems with our
campaign finance system have only become more obvious to those
paying attention. For several reasons, most coverage of the
rise of Super PACs and of campaign finance in general has
focused on presidential campaigns. First, the race for the
presidency is the premier race in the country. Second, it
begins earlier, at least in the most public forms of
advertising, than congressional races. Third, the amounts of
money are vastly larger.\50\ Ironically, the same reasons make
Super PAC spending less influential in presidential races than
it is in congressional races. Because there is more information
and so much money, it is harder for a Super PAC to mislead
voters or to completely overwhelm a given candidate. This is
not to suggest it is impossible. ``The super PAC money kept
Gingrich afloat for longer than he would have [been] without
it--and when it dried up, his campaign faded''.\51\ It was
Super PAC spending that defeated Romney in South Carolina\52\,
Gingrich in Florida\53\, and Santorum in Ohio\54\ and
Illinois.\55\ The Romney campaign did not even air ads in
Louisiana, while his Super PAC spent $667,990.\56\ It would be
a grave mistake, however, to ignore the much greater role Super
PACs can play at the congressional level, and one of the goals
was to shine some light on this influence.
---------------------------------------------------------------------------
\50\Mike Allen & Jim VandeHei, ``GOP groups plan record $1 billion
blitz'', Politico, May 30, 2012 (http://www.politico.com/news/stories/
0512/76849.html).
\51\Jim Garofoli, ``Gingrich's failed run shows super PACs'
power'', The San Francisco Chronicle, May 02, 2012 (http://
www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/05/02/MN801OCM7C.DTL).
\52\National Journal Staff, ``Gingrich Wins South Carolina
Primary'', National Journal, March 05, 2012 (http://
www.nationaljournal.com/2012-presidential-campaign/gingrich-wins-south-
carolina-primary-20120121).
\53\The $15.3 million of the pro-Romney ``Restore Our Future'' was
450% more than the $3.4 million spent by the pro-Gingrich ``Winning Our
Future''. Alexander Burns, ``Gingrich forces outspent by nearly $12
million on Florida airwaves'', Politico, January 29, 2012 (http://
www.politico.com/blogs/burns-haberman/2012/01/ gingrich-forces-
outspent-by-nearly-million-on-florida-112749.html).
\54\Arden Farhi, ``Santorum cries foul over Romney's Ohio
spending'', CBS News.com, March, 06, 2012 (http://www.cbsnews.com/8301-
503544_162-57391887-503544/santorum-cries-foul-over-romneys-ohio-
spending/).
\55\David Espo & Steve Peoples, ``Romney routs Santorum'', Deseret
News, March 20, 2012 (http://www.deseretnews.com/article/765561518/
Romney-routs-Santorum-in-GOP-primary-in-Illinois.html).
\56\Kristin Jensen & Lisa Lerer, ``Santorum Wins In Louisiana As
Romney Struggles In South'', March 25, 2012 (http://www.bloomberg.com/
news/2012-03-25/santorum-wins-republican-
primary-in-louisiana-ap-projects-1-.html).
---------------------------------------------------------------------------
At the forum, Mr. Price told of how, two weeks before one
election, one Super PAC, ``dumped $680,000 into that race in
the form of a media buy'',\57\ pushing an ``endangered''
candidate to victory, while ``[h]undreds of thousands of
dollars parachuted into [another] race in the last 2 weeks''
helped to defeat a second candidate.\58\ One of the major
players in such congressional races in 2010 was a group called
the Center to Protect Patients' Rights, which ``gave more than
$44 million in 2010 to other tax-exempt groups, many of which
spent millions on TV ads attacking Democrats running for the
House and Senate''.\59\ Despite its ``name giv[ing] the
misleading impression that it is solely concerned about health
care'', CPPR has not limited its influence to one issue. For
example, one of its few fully disclosed donations, of
$100,000,\60\ went to a group focused on influencing
redistricting in Florida.\61\ The full extent of causes
receiving support from CPPR can only be guessed at. Certainly,
there are congressional candidates who must recognize that, if
they take certain positions, they may face a sudden, $600,000
media buy, but they'd never know from whence the money came.
---------------------------------------------------------------------------
\57\This American Life: ``Take The Money and Run For Office'',
Chicago Public Media (March 30, 2012) (http://www.thisamericanlife.org/
radio-archives/episode/461/transcript). See Appendix A.
\58\See Transcript 45:889-46:896 (http://www.youtube.com/
watch?v=tTt5VbHUxNA#t=2902).
\59\Viveca Novak & Robert Maguire, ``Mystery Health Care Group
Funneled Millions to Conservative Nonprofits'', Center for Responsive
Politics, May 18, 2012 (http://www.opensecrets.org/news/2012/05/
cppr.html); Appendix A. Except where otherwise noted, all facts in this
and the next paragraph may be found within the same article.
\60\National Institute on Money in State Politics, ``Report on 2010
activities of `Protect Your Vote''', retrieved June 24, 2012 (http://
www.followthemoney.org/database/StateGlance/committee.phtml?c=4538).
\61\Abel Harding, ``Effort fighting Florida redistricting stokes
ACORN fears'', The Florida Times-Union, September 22, 2010 (http://
jacksonville.com/opinion/blog/403455/abel-harding/2010-09-22/effort-
fighting-florida-redistricting-stokes-acorn-fears).
---------------------------------------------------------------------------
Much like the mysterious corporations that sprung up solely
to contribute to the pro-Romney Super PAC and then
disappear,\62\ CPPR appears to exist solely to move undisclosed
money from donors to recipients. Because CPPR and many of its
recipients are 501(c)(4) organizations, it is not required to
disclose its donors and most of them do not need to disclose
that they had received money from it. In this way, donors to
CPPR are able to wield great influence on our political
campaigns with no way for the public to learn about who is
behind these efforts. Indeed, we cannot know whether CPPR's $44
million came from one person, one company, or one million
different donors. This mysterious font of funding has had a
major impact not only on American elections but on the lives of
every one of our citizens affected by the legislators CPPR
helped to defeat or to elect, but we do not know whom to praise
or blame.
---------------------------------------------------------------------------
\62\See note 34, supra.
---------------------------------------------------------------------------
Now, casino mogul Sheldon Adelson, who has a net-worth of
more than $24 billion, has pledged ``limitless'' donations,
exceeding $100 million, to Restore Our Future, Inc., the Super
PAC supporting Mitt Romney's presidential campaign.\63\ (While
it is implicit that Restore Our Future is focused on Mr.
Romney, its public claim is that it is explicitly focused on
supporting congressional candidates and only those ``in the
know'' would be aware of its connection to Romney.\64\ That
puts congressional candidates in a position of either fearing
or competing for its many millions.) Interestingly, this comes
after Adelson's family donated more than $20 million to Winning
Our Future, a different Super PAC with the mission of defeating
Mr. Romney's campaign, and which funded ads calling Romney
``more ruthless than Wall Street''.\65\ As Ms. Youn mentioned
at the forum, those donations to defeat Mr. Romney were made
openly, and were disclosed to FEC.\66\ The recent donation to
Restore Our Future became public only when an anonymous source
leaked the information to the magazine Forbes, and Adelson has
said that he plans to make his future donations to ``non-
profits affiliated with political PACS, which don't have to
disclose the names of donors'' such as the Karl Rove-run
Crossroads GPS.\67\ Of course, the co-founder of Crossroads GPS
and its affiliated Super PAC American Crossroads is former
Republican National Committee Communications Director Ed
Gillespie, who left those groups to become ``Mitt Romney's
senior adviser''.\68\ Rove himself recently attended the
``First National Romney Victory Leadership Retreat'', along
with the head of Restore Our Future.\69\ These actions show how
thin a veneer the ``independence'' of ``independent
expenditures'' truly is.
---------------------------------------------------------------------------
\63\Steve Bertoni, ``Exclusive: Adelson's Pro-Romney Donations Will
Be `Limitless,' Could Top $100M'', Forbes.com, June 13, 2012 (http://
www.forbes.com/sites/stevenbertoni/2012/06/13/exclusive-adelsons-pro-
romney-donations-will-be-limitless-could-top-100m/).
\64\Restore Our Future's home page declares, ``we restore our
future by supporting candidates'' (emphasis added). http://
restoreourfuture.com/ (retrieved June 25, 2012). Only by searching
other portions of the website or gaining extrinsic knowledge would a
citizen know of Mr. Romney's strong ties to the group. Interestingly,
one campaign donation Restore Our Future has disclosed was of $25,000
to the Independent Expenditure-Only Committee ``CITY ATTORNEY JAN
GOLDSMITH 2012 COMMITTEE'' on March 30, 2012 (http://query.nictusa.com/
cgi-bin/com_rcvd/C00490045/), one day before Restore Our Future
received a contribution of $25,000 from ``CITY ATTORNEY JAN GOLDSMITH
2012 C''. (http://query.nictusa.com/cgi-bin/com_ind/C00490045/).
\65\Christopher Palmeri & Beth Jinks, ``Adelson's $10 Million PAC
Bet Gives Gingrich Boost For Southern Primaries'', Bloomberg, January
25, 2012 (http://www.bloomberg.com/news/2012-01-25/adelson-s-10-
million-pac-bet-gives-gingrich-boost-for-southern-primaries.html);
Alicia Mundy & Sarah Murray, ``Adelson Gives $10 Million to Pro-Romney
Super PAC'', Washington Wire, June 13, 2012 (http://blogs.wsj.com/
washwire/2012/06/13/adelson-gives-10-million-to-pro-romney-super-pac/).
\66\See Transcript 76:1559ff (http://www.youtube.com/
watch?v=tTt5VbHUxNA#t=5185).
\67\See Mundy & Murray at note 65, supra.
\68\FactCheck.org, ``A New Front in the `War on Women''', May 01,
2012 (http://www.factcheck.org/2012/05/a-new-front-in-the-war-on-women/
).
\69\Josh Israel, ``Rove `Makes A Mockery' Of Law: Super PAC Co-
Founder To Attend Romney Strategy Session This Weekend'',
ThinkProgress, June 21, 2012 (http://thinkprogress.org/justice/2012/06/
21/503791/rove-makes-a-mockery-of-law-super-pac-co-founder-to-attend-
romney-strategy-session-this-weekend/mobile=nc). ``Karl Rove, of
course, runs a superPAC. And there have been reports that the head of
the pro-Romney superPAC, Restore Our Future, was also on hand. Is there
a conflict of interest in that at all?'' Guy Raz, ``Romney Backers Wrap
Up Utah Retreat'', Weekends on All Things Considered, June 24, 2012
(http://www.npr.org/2012/06/24/155673445/romney-backers-wrap-up-utah-
retreat).
---------------------------------------------------------------------------
CORPORATE INFLUENCE
Although Mr. Adelson's and his family members made their
contributions as individuals, the greatest concern unleashed by
Citizens United is the idea of corporations becoming able to
make unlimited spending on campaigns for the first time since
the Gilded Age. More than a century ago, Theodore Roosevelt
declared, in Osawatomie, Kansas, ``every special interest is
entitled to justice, but not one is entitled to a vote in
Congress, to a voice on the bench, or to representation in any
public office. The Constitution . . . does not give the right
of suffrage to any corporation. . . . The citizens of the
United States must effectively control the mighty commercial
forces which they have themselves called into being.''\70\ This
seems a simple concept.
---------------------------------------------------------------------------
\70\Theodore Roosevelt, ``The New Nationalism'', August 31, 1910
(http://www.pbs.org/wgbh/americanexperience/features/primary-resources/
tr-nationalism/).
---------------------------------------------------------------------------
Unlike people, corporations are creations of the state.
They can be called into existence at any time and, as happened
with several donors to Restore Our Future, wink out of
existence just as quickly.\71\ As Mr. Ryan explained at the
forum:
---------------------------------------------------------------------------
\71\Democracy 21 and Campaign Legal Center Call for FEC and Justice
Department Investigations of Additional $1 Million Contributions to
Pro-Romney Super PAC, Thursday, August 11, 2011; http://
www.democracy21.org/index.asp?Type=B_PR&SEC=%7B91FCB139-CC82-4DDD-AE4E-
3A81E6427C7F%7D&DE=%7B79EE1D8A-56BC-4168-A3DE-8CF4E07503F8%7D.
These (c)(4)s that are going to be spending tens or
hundreds of millions of dollars in this year's
elections on attack ads--and they will be doing the
dirty work of candidates, they will be doing the attack
ads--they can dissolve overnight. They can dissolve at
the drop of a hat.
And those of us sitting in this room today, God
willing, we will be here in December. We will be alive.
We will be held accountable for the actions we take
between now and then. That can't be said for these
501(c)(4) and other types of outside groups that,
again, can dissolve with the filing of some paperwork
with a secretary of state's office at the drop of a
hat. That is a big problem.\72\
---------------------------------------------------------------------------
\72\See Transcript 50-988-99 (http://www.youtube.com/
watch?v=tTt5VbHUxNA#t=3271).
Less than six months into 2012, corporations have donated tens
of millions of dollars to Super PACs, and that is counting only
the money about which we know.\73\ There is simply and
literally no way to know how much undisclosed and unlimited
corporate money has been pledged, donated, or already spent
influencing this year's elections.
---------------------------------------------------------------------------
\73\See Appendix B.
---------------------------------------------------------------------------
Some commentators have focused on the absence of Fortune
500 companies on FEC disclosure forms, confidently stated that
big corporations have not begun to contribute as many
feared.\74\ It may be that they have not for, as Prof. Teachout
pointed out, ``The culture of corporations has not yet adopted
the Citizens United law. They have not yet hired the best
campaigners. They have not yet figured out all the loopholes.
This is 2 years in.''\75\ So, the fact that we have not seen a
Fortune 500 company on a Super PAC's FEC disclosure forms
doesn't indicate that we shouldn't expect to see one or many or
even all of them very soon indeed.
---------------------------------------------------------------------------
\74\Stuart Rothenberg, ``How Citizens United Is Affecting
Campaigns'', Roll Call, May 22, 2012 (http://www.rollcall.com/issues/
57_139/How-Citizens-United-Is-Affecting-Campaigns-214705-1.html).
\75\See Transcript 31:607-10 (http://www.youtube.com/
watch?v=tTt5VbHUxNA#t=2012).
---------------------------------------------------------------------------
Of course, the fact that we don't actually know who is
providing the money is also part of the point.\76\ We know that
undisclosed spending jumped from effectively 0% in 2006 to 47%
in 2010, while spending from donors who are fully disclosed
plummeted from roughly 90% to below 50%.\77\ There is only one
way to know that one of the multiple $10 million donations to
Crossroads GPS--to say nothing of undisclosed donations about
which we know nothing--didn't come from Exxon-Mobil or
JPMorganChase, Inc., and that's for the donor or recipient to
tell us.\78\ In fact, we cannot even be sure that those
companies know that they didn't make the donations. At the
forum, Ms. Youn told the story of ``a multinational
pharmaceutical corporation that . . . found out that one of its
mid-level managers was spending corporate funds to support an
openly racist candidate in Mississippi, and he was doing that
without the knowledge of upper management.``\79\ Had there been
disclosure requirements, this company would have found out
immediately. For that matter, we cannot know that the money
wasn't donated by a foreign corporation or even a foreign
government, in violation of United States law.\80\
---------------------------------------------------------------------------
\76\``We don't know who these donors are. We don't even know
whether these donors are individuals or whether they are
corporations.'' Monica Youn, see Transcript 23:452-24:454 (http://
www.youtube.com/watch?v=tTt5VbHUxNA#t=1477).
\77\Spencer MacColl, ``Citizens United Decision Profoundly Affects
Political Landscape'', Center for Responsive Politics, May 05, 2011
(http://www.opensecrets.org/news/2011/05/citizens-united-decision-
profoundly-affects-political-landscape.html). See Appendix B.
\78\T.W. Farnam, ``Mystery donor gives $10 million to Crossroads
GPS group to run anti-Obama ads'', The Washington Post, April 13, 2012
(http://www.washingtonpost.com/politics/mystery-donor-gives-10-million-
to-crossroads-gps-group-to-run-anti-obama-ads/2012/04/13/gIQ
AzdtdFT_story.html).
\79\See Transcript 72:1476-14821 (http://www.youtube.com/
watch?v=tTt5VbHUxNA#t=4900).
\80\2 U.S.C. 441(e). Stephen Braun, ``Super PAC Foreign Donations A
Risk In 2012 Presidential Election'', The Huffington Post, February 10,
2012 (http://www.huffingtonpost.com/2012/02/10/super-pac-
donations_n_1267750.html). Professor Teachout also has described the
rise of ``extraterritorial electioneering'', ways in which foreign
individuals and even governments have already worked directly to
influence the outcome of American elections. Teachout, Zephyr,
``Extraterritorial Electioneering and The Globalization of American
Elections'', 162 Berkeley Journal of International Law [Vol. 27:1],
February 08, 2009, pp. 161-190 (http://www.boalt.org/bjil/docs/
BJIL27.1_Teachout.pdf).
---------------------------------------------------------------------------
Whether the donor knows or not, we can be fairly confident
that they won't tell us. In the recent case out of Montana, a
Super PAC promoted itself by writing to potential donors,
``[W]e're not required to report the name or the amount of any
contribution that we receive. So, if you decide to support this
program, no politician, no bureaucrat, and no radical
environmentalist will ever know you helped make this program
possible.''\81\ With even Mr. Adelson embracing anonymous
giving,\82\ despite the protections his vast wealth provides,
secrecy will be the norm unless Congress changes the law. We
can, however, be sure that the recipients of this largesse will
know who contributed, as well as who didn't.\83\ How could this
not cause ``corruption or the appearance of corruption''?\84\
In fact, we know that it has. A recent study by the Brennan
Center reported that,``69% of respondents agreed that new rules
that let corporations, unions and people give unlimited money
to Super PACs will lead to corruption.'''\85\
---------------------------------------------------------------------------
\81\Western Tradition Partnership, Inc. v. Attorney General, 271
P.3d 1, 13 (MT, 2011), 2011 MT 328, para.19 (http://
applicationengine.mt.gov/getContent?vsId=(1C0B7886-01C0-49E3-A71A-
C06CA7E71040)&impersonate=true&objectStoreName=PROD%20OBJECT%20STORE&obj
ect Type=document).
\82\See note 67, supra.
\83\``[T]he problem is not just that the source of the money is
publicly secret, it is that it is privately very much not secret--word
will get back to the powers that be, on Capitol Hill and, presumably, a
Romney White House, about who gave and who did not give. . . . Those
who are hit up for money know this, and have to worry about whether
they will be at a disadvantage in future intra-industry fights, if
their competitor gives and they don't. If it starts to look like a
shakedown, that's because it is.'' Alec MacGillis, ``Full Disclosure:
Praise For Fred Hiatt'', The New Republic, June 19, 2012 (http://
www.tnr.com/blog/plank/104133/full-disclosure-praise-fred-hiatt).
\84\Citizens United, 130 S.Ct. at passim, and Buckley v. Valeo, 424
U.S. 1, 26 (1976). Cf. American Tradition Partnership, Inc. v. Bullock,
567 U.S._(2012) (Breyer, J., dissenting) (``Montana's experience, like
considerable experience elsewhere since the Court's decision in
Citizens United, casts grave doubt on the Court's supposition that
independent expenditures do not corrupt or appear to do so.'') (http://
www.supremecourt.gov/opinions/11pdf/11-1179h9j3.pdf).
\85\Brennan Center for Justice, ``National Survey: Super PACs,
Corruption, and Democracy'', April 24, 2012 (http://
www.brennancenter.org/content/resource/national_survey_super_
pacs_corruption_and_democracy/). See Appendix C.
---------------------------------------------------------------------------
THE 501(C)(4) BLACK HOLE OF LEGALLY UNDISCLOSED GIVING
The situation has become so bad that prominent Republicans,
non-federal officials whose campaigns have always been funded
by large, corporate donations, are aghast. Texas Governor Rick
Perry has been ``decrying `Washington special interests' trying
to buy a Texas Senate seat.''\86\ Those ``Washington special
interests'' are the Super PACs ``Club for Growth Action'' and
``FreedomWorks for America''.\87\ The former has disclosed 791
donations from 597 donors in this cycle, but 73% of its money
has come from just 16 donors, each having given more than
$100,000.\88\
---------------------------------------------------------------------------
\86\Priya Anand & Richard S. Dunham, ``Senate candidate Cruz
pockets big bucks across U.S.'', San Antonio Express-News, June 12,
2012 (http://www.mysanantonio.com/news/local--news/article/Senate-
candidate-Cruz-pockets-big- bucks-across-3629079.php).
\87\Jonathan Gurwitz, ``Washington groups misfire in Senate race'',
San Antonio Express-News, June 09, 2012 (http://www.mysanantonio.com/
opinion/columnists/jonathan_gurwitz/article/Washington-groups-misfire-
in-Senate-race-3620108.php).
\88\Analysis of FEC data, see Appendix B.
---------------------------------------------------------------------------
As of June 18, 2012, of the $3.3 million the Super PAC
``FreedomWorks for America'' reported receiving in this
election cycle, 52% was donated in 204 separate donations by
its sister organization, the 501(c)(4) FreedomWorks.\89\ The
way this works is that contributions to the 501(c)(4) are not
disclosed, since it is registered with the Internal Revenue
Service as a ``tax-exempt . . . social welfare organization'',
barred from ``direct or indirect participation or intervention
in political campaigns''.\90\ So a donor can contribute to
FreedomWorks without disclosure, FreedomWorks then contributes
to ``FreedomWorks for America'', and the only name disclosed is
``FreedomWorks.'' Similarly, the 17th largest donor to ``Club
for Growth Action'' is the Club for Growth 501(c)(4).\91\ As
satirist Stephen Colbert, who has taken to calling 501(c)(4)s
``Spooky PACs'',\92\ asked, in a segment of his show played at
the forum, ``What is the difference between that and money
laundering?'' We join former FEC Chairman Trevor Potter in
responding, ``It's hard to say.''\93\
---------------------------------------------------------------------------
\89\Id.
\90\Internal Revenue Service, ``Social Welfare Organizations'',
Page Last Reviewed or Updated: April 04, 2012 (http://www.irs.gov/
charities/nonprofits/article/0,,id=96178,00.html).
\91\Analysis of FEC data, see Appendix B.
\92\``Colbert Super PAC SHH!--Corporate Campaign Players & Super
Secret `Spooky PACs''', The Colbert Report, May 08, 2012 (http://
www.colbertnation.com/the-colbert-report-videos/413970/may-08-2012/
corporate-campaign-players_super-secret_spooky-pacs-).
\93\``Colbert Super PAC_Trevor Potter & Stephen's Shell
Corporation'', The Colbert Report, September 29, 2011 (http://
www.colbertnation.com/ the-colbert-report-videos/398531/september-29-
2011/ colbert-super-pac_ trevor-potter_ stephen-s-shell_ corporation).
---------------------------------------------------------------------------
But a 501(c)(4) doesn't even need a sister Super PAC to
engage in this negative advertising. In implementing the ban on
social welfare organizations engaging in politics, IRS has
ruled that ``a section 501(c)(4) social welfare organization
may engage in some political activities, so long as that is not
its primary activity.''\94\ As Mr. Ryan explained at the forum,
this means that a 501(c)(4)
---------------------------------------------------------------------------
\94\See note 88, supra.
can spend . . . 49 cents out of every dollar you have
given it on hard-hitting, express advocacy ads urging
the election of [a specific candidate] and [then] spend
the other 51 cents on ads that are nearly as hard-
hitting, sham issue ads that either attack an opponent
on the basis of some issue, but certainly identify the
candidates in the race, yet don't contain words of
express advocacy and, therefore, don't fall under the
rubric of ``candidate election intervention'' for tax
law purposes.\95\
---------------------------------------------------------------------------
\95\See Transcript 75:1544-76:1552 (http://www.youtube.com/
watch?v=tTt5VbHUxNA#t= 5138). It should be noted that IRS has begun to
look into the implications of its policy and whether such groups are
abusing the policy to procure a tax-exempt status not intended to cover
political committees. Jonathan D. Salant, ``IRS Denial Of Tax Exemption
To U.S. Political Group Spurs Alarms'', Bloomberg, June 08, 2012
(http://www.bloomberg.com/news/2012-06-08/irs-denial-of-tax-exemption-
to-u-s-political-group-spurs-alarms.html).
Similarly, the Federal Communications Commission has taken steps to
increase transparency for political advertising on broadcast stations
by moving to require that stations post their ``political file
information online.'' This would allow the public to learn who is
actually paying for radio and television campaign advertisements.
Federal Communications Commission, ``Standardized and Enhanced
Disclosure Requirements for Television Broadcast Licensee'', Second
Report and Order, April 27, 2012, at 17 (http://transition.fcc.gov/
Daily_Releases/Daily_Business/2012/db0508/FCC-12-44A1.pdf).
On March 30, 2012, the District Court for the District of Columbia
granted Mr. Van Hollen summary judgment in his suit to require FEC to
demand ``that every person who funds electioneering communications must
disclose all contributors.'' Federal Election Commission, ``Summary of
Van Hollen v. FEC'', retrieved June 24, 2012 (http://www.fec.gov/law/
litigation/van_hollen.shtml).
On June 12, 2012, the Fourth Circuit Court of Appeals affirmed the
FEC's ruling that the producers of a video much like that at the heart
of Citizens United were clearly producing ``electioneering
communications'' and, therefore, subject to FEC's disclosure
requirements. Campaign Legal Center, ``Donor Disclosure Provisions
Again Upheld by Fourth Circuit in Real Truth About Obama'', June 12,
2012 (http://www.campaignlegalcenter.org/index.php?option=com_
content&view= article&id=1759:june-12-2012-donor-disclosure-provisions-
again-upheld-by-fourth-circuit-in-real-truth-about-obama).
Thus, the Executive Branch, independent federal agencies, and the
federal judiciary have all taken steps aimed at increasing disclosure
of campaign spending, while the House of Representatives, designed to
be the most responsive part of the Federal government, has failed to
act.
These Super PACs and 501(c)(4)s provide examples of some of
the holes in our disclosure law never contemplated in the
Citizens United decision. Indeed, the Court in Citizens United
called for and explicitly relied upon disclosure to be our
chief protection from the impact of its decision.\96\
``[D]isclosure permits citizens and shareholders to react to
the speech of corporate entities in a proper way. This
transparency enables the electorate to make informed decisions
and give proper weight to different speakers and
messages.''\97\ This was also, once, the view of most Members
of Congress.\98\ As a result of this clear mandate for
disclosure, ``The courts, especially since Citizens United blew
away campaign finance limits, seem much more apt to uphold
broad disclosure rules.''\99\ Unless and until Republicans, in
Congress and among FEC commissioners,\100\ stop blocking the
enactment and enforcement of new disclosure laws and rules,
however, we are faced with a situation never contemplated by
the eight justices of the Supreme Court\101\: unlimited
contributions without disclosure.
---------------------------------------------------------------------------
\96\As Professor Teachout explained at the forum, bribery laws have
been so interpreted as to be no protection against corruption when it
comes to campaign finance. ``[I]n the context of bribery laws, we say,
`Don't worry, campaign finance laws will cover it.' And then, in
Citizens United and other cases, Kennedy says, `Don't worry, bribery
laws will cover it.' And what you end up is this great cavity where
what you and I and the rest of the country knows is corruption in the
sense the Founders meant is allowed to go on.'' See Transcript 30:592-
31:598 (http://www.youtube.com/watch?v=tTt5VbHUxNA#t=1915).
\97\Citizens United v. FEC, 130 S.Ct. at 916. See also, Bauerly at
note 30, supra, and Thomas Jefferson as quoted at note 104, infra.
\98\See, ``Remember When Washington Republicans Supported
Disclosure and Transparency?'', Appendix C.
\99\Rick Hasen, ``Breaking News: 4th Circuit Upholds FEC's `Major
Purpose' Test for Political Committees, Subjecting Groups Like
Crossroads GPS to Potential Liability for Not Registering as Super
PACs'', Election Law Blog, June 12, 2012 (http://electionlawblog.org/
?p=35602).
\100\Norman Ornstein, ``Mitch McConnell Vs. Himself on Disclosure
Issues'', Roll Call, June 20, 2012 (http://www.rollcall.com/issues/
57_154/Mitch-McConnell-Vs-Himself-on-Disclosure-Issues-215491-1.html),
Appendix A.
\101\``The section of the opinion upholding the constitutionality
of federal disclosure requirements had added force behind it. All the
justices except Clarence Thomas signed on--providing a resounding 8-1
endorsement.'' Trevor Potter, ``Was the Court Conned in Citizens
United?'', Bloomberg, May 23, 2011 (http://www.bloomberg.com/news/2011-
05-23/was-the-court-conned-in-citizens-united-.html).
---------------------------------------------------------------------------
This brings us back to the subject of just how involved
large corporations have become in campaigns. As bad as the
501(c)(4) black hole may be, the public would at least know
which specific 501(c)(4) had spent the money, even if,
``Americans for A Better America''\102\ isn't very revealing.
Perhaps we would learn to be suspicious of anyone hiding behind
anodyne names or anonymity. But, in this post-Citizens United
world, companies don't even need to spend the money to
influence how legislators vote. Ms. Youn told the story of a
case from North Carolina in 2008.\103\ It was a matter of state
law, and North Carolina already allowed the independent
expenditures now made possible in federal campaigns. One Super
PAC-equivalent, created by a group of North Carolina farmers:
---------------------------------------------------------------------------
\102\See Transcript 48:935ff (http://www.youtube.com/
watch?v=tTt5VbHUxNA#t=3105).
\103\Brennan Center for Justice, ``Duke v. Leake'', November 05,
2008 (http://www.brennancenter.org/content/resource/jackson_v_leake/).
supported a particular farm subsidy [so] they made up a
whole campaign of attack ads against particular
legislators they knew were the swing votes. They then
took these ads to the legislators and screened them
behind closed doors and said, ``These are the ads we
will run against you if you do not support our position
on this legislation.'' And some of these legislators
changed their votes.\104\
---------------------------------------------------------------------------
\104\See Transcript 51:1012-21 (http://www.youtube.com/
watch?v=tTt5VbHUxNA#t=3328).
This group never had to run a single ad, but that does not mean
disclosure laws could not prevent such abuses. If the group
would have been forced to disclose the farmers behind any ads
it did run, the effectiveness of the ads and, thus, of the
threat, could have been substantially weakened. This is the
full power of disclosure. By arming American citizens with the
facts, we empower them to control events. In the words of
Thomas Jefferson, ``well informed [citizens] can be trusted
with their own government; that whenever things get so far
wrong as to attract their notice, they may be relied on to set
them to rights.''\105\ There are many layers to this
fundamental truth. The first is that the public must know about
the problems before it ``may be relied on to set them to
right.'' We hope that this forum has helped to inform in this
regard. The second is that the public should know who is
financing the campaign ads that have so dominated during the
elections since Citizens United. And the third is that the lack
of such disclosure has, as discussed above,\106\ lead to ads
full of misleading and outright false claims, creating a
misinformed public. This is not what our Founder intended.
---------------------------------------------------------------------------
\105\Thomas Jefferson, letter to Richard Price, January 8, 1789.
The Papers of Thomas Jefferson, ed. Julian P. Boyd, vol. 14, p. 420
(1958). See also Doe v. Reed, 130 S.Ct. 2811, 2837 (2011) (Scalia, J.,
concurring) (``There are laws against threats and intimidation; and
harsh criticism, short of unlawful action, is a price our people have
traditionally been willing to pay for self-governance. Requiring people
to stand up in public for their political acts fosters civic courage,
without which democracy is doomed.''). For an analysis of opposing
views, see Richard L. Hasen, ``Citizens: Speech, no consequences'',
Politico, May 31, 2012 (http://dyn.politico.com/
printstory.cfm?uuid=54DFD684-5DA5-4F88-A1D8-3FB4B227EB12).
\106\See subsection ``Unaccountable and Untrue'' on page 2, supra.
---------------------------------------------------------------------------
THIS IS NOT WHAT OUR FOUNDERS WANTED
We've heard a great deal in the past three years about the
Tea Party. I'm sorry to say that the story behind the real Tea
Party, the Boston Tea Party, is sadly misunderstood. The cry in
1773 was a simple one: No taxation without representation.\107\
The modern Tea Party seems to have forgotten the second half,
but it's the key to the whole thing. Those Massachusetts
patriots weren't protesting taxation. They accepted taxation as
a fair price to pay for membership in what was then the
greatest country in the world. What drove them, on the night of
December 16, 1773, to commit a felony by breaking into those
tea ships and casting their cargo into Boston Harbor was the
fact that they had no say in what those taxes would be and how
they would be spent because they had no say in the setting of
those taxes because they could not vote for their own
representatives. That was the injustice. Not the taxation but
the lack of representation.
---------------------------------------------------------------------------
\107\This simple request, of course, is still denied our fellow
American citizens who live in the nation's capital, and we hope to see
the day that their right to full participation in our shared government
is realized.
---------------------------------------------------------------------------
It was the quest to have a representative government that
led to our country's founding. That's why no right is more
important or more protected by the Constitution than the right
to vote. In the past 207 years, we have amended the
Constitution 15 times. Seven of those amendments, almost half
of the amendments over more than two centuries, are about
protecting, in the words of the 14th Amendment, ``the right to
vote''. Our elections are a vital part of what makes this
country great. Oversight of elections is the greatest
responsibility under the jurisdiction of the Committee on House
Administration. If something is happening which is proven to
distort the opportunity of our populace to vote as it wishes,
something must be done. We have factual information that the
result of Citizens United is a misinformed populace. This
misinformation is interfering with free and public elections.
As Members of this Committee, we have not just the opportunity
but the responsibility to bring this fact to the public's
attention and to act to remedy it. The Committee has failed to
meet that responsibility.
Almost 130 years ago, the Supreme Court listed two great
threats to our democracy: the violent suppression of the right
to vote and the corrupting influence of money in politics. On
March 03, 1884, Mr. Justice Miller wrote, for a unanimous
Supreme Court, that the ``right to vote for a member of
congress [is] fundamentally based upon the constitution [and
i]t is as essential to the successful working of this
government that the great organisms of its executive and
legislative branches should be the free choice of the
people''\108\ He closed his opinion with this peroration:
---------------------------------------------------------------------------
\108\Ex parte Yarbrough ``The Ku Klux Cases'', 110 US 651, 665-66.
If the recurrence of such acts as these prisoners
stand convicted of [i.e., beating potential Black
voters to intimidate them] are too common in one
quarter of the country, and give omen of danger from
lawless violence, the free use of money in elections,
arising from the vast growth of recent wealth in other
quarters, presents equal cause for anxiety.
If the government of the United States has within its
constitutional domain no authority to provide against
these evils--if the very sources of power may be
poisoned by corruption or controlled by violence and
outrage, without legal restraint--then indeed is the
country in danger, and its best powers, its highest
purposes, the hopes which it inspires, and the love
which enshrines it are at the mercy of the combinations
of those who respect no right but brute force on the
one hand, and unprincipled corruptionists on the
other.\109\
---------------------------------------------------------------------------
\109\Id. at 667.
From the Founders debating how to prevent corruption at the
Constitutional Convention in the 18th Century,\110\ through the
Supreme Court listing unrestricted use of ``money in
elections'' as one of the great threats to our democracy in the
19th Century,\111\ to the Congress passing the Tillman Act of
1907\112\ and the Federal Elections Campaign Act of 1971\113\
in the 20th Century, and the Bipartisan Campaign Finance Reform
Act of 2002\114\ in the 21st Century, campaign finance
regulation has always been one of the top priorities of
government. In that Osawatomie speech, Theodore Roosevelt would
go on to say, ``There can be no effective control of
corporations while their political activity remains. To put an
end to it will be neither a short nor an easy task, but it can
be done.''\115\ The Members of Congress and witnesses who
supported and participated in our forum have contributed to
that long and hard work, but there is much more to be done.
Indeed, the failure of Congress to enact new legislation in the
immediate aftermath of Citizens United has only made the task
harder. As Prof. Teachout put it during the forum, when it
comes to corporate spending on elections, ``We are playing
checkers now, and it is about to be chess. I mean, this hasn't
begun yet.``\116\
---------------------------------------------------------------------------
\110\Zephyr Teachout, ``The Anti-Corruption Principle'', Cornell
Law Review [Vol. 94:341], pp. 341-414 (http://
www.lawschool.cornell.edu/research/cornell-law-review/upload/Teachout-
Final.pdf).
\111\Ex parte Yarbrough ``The Ku Klux Cases''. (110 US 651).
\112\Pub. L. No. 59-36, 34 Stat. 864 (codified as amended at 2
U.S.C. 441b (2006)).
\113\Pub. L. 92-225, 86 Stat. 3, enacted February 7, 1972, 2 U.S.C.
431 et seq. (1971) See also the Federal Election Campaign Act
Amendments of 1974, Pub. L. 93-443, 88 Stat. 1263 (codified as amended
at 2 U.S.C. 431-455 (2006)).
\114\Pub. L. No. 107-155, 116 Stat. 81 (codified in various
sections of title 2 of the United States Code); see also, Federal
Election Commission, ``Bipartisan Campaign Reform Act of 2002'',
retrieved June 24, 2012 (http://www.fec.gov/pages/bcra/
bcra_update.shtml).
\115\Roosevelt, ``The New Nationalism'', at note 70, supra.
\116\See Transcript 52:1027-28 (http://www.youtube.com/
watch?v=tTt5VbHUxNA#t=3404).
---------------------------------------------------------------------------
The 112th Congress has failed to meet its obligation in
this regard but our country will survive and we will have
another opportunity to do what was not done in this Congress.
It is hoped that the record from this forum will serve as a
foundation for the work that is to come. Because it must come.
Our history and the American people demand it.
APPENDIX A: NEWS ARTICLES
[From the Los Angeles Times, Apr. 17, 2012]
Secret Donors Pour Millions of Dollars Into Crossroads GPS
(By Matea Gold)
Washington.--Crossroads GPS, a conservative nonprofit group
that is one of the most prominent critics of President Obama,
raised nearly $77 million in its first 19 months from a small
cadre of secret donors, including two dozen who wrote checks of
$1 million and more.
The organization, founded in part by GOP strategist Karl
Rove, received two single donations worth $10 million each
between June 1, 2010 and the end of 2011, according to newly
filed tax documents the group released Tuesday. It is
impossible to know who gave the money, as the group simply
listed each individual contribution and left blank the areas on
the form for the names and addresses of the donors.
Crossroads GPS reported the identity of the donors to the
IRS, as required, but does not have to reveal them publicly.
As a 501(c)4 social welfare organization, Crossroads GPS
cannot make political activity its primary purpose, unlike its
sister ``super PAC,'' American Crossroads. Both are able to
accept unlimited donations from both individuals and
corporations.
Together, the two groups have emerged as the most muscular
new players in the political landscape, aiming to spend $300
million this year to promote conservatives and defeat Obama.
As a tax-exempt group, Crossroads GPS ostensibly faces more
limits on its political activity, but it is free to run so-
called ``issue ads'' that stop short of calling for the
election or the defeat of a candidate.
Earlier this month, Crossroads GPS spent $1.7 million to
run one such ad in six presidential swing states attacking
Obama's energy policy.
Campaign finance reform advocates argue that the
organization is essentially a political player hiding behind
its tax status. Democracy 21 and the Campaign Legal Center on
Tuesday repeated their calls to the IRS to investigate
Crossroads GPS's tax status, as well as that of several others,
including the conservative group American Action Network and
Priorities USA, a tax-exempt group affiliated with a pro-Obama
super PAC.
``It is essential that the IRS act to stop the farce that
Crossroads GPS is a `social welfare' organization,'' Fred
Wertheimer, president of Democracy 21, said in a statement.
``Karl Rove and Crossroads GPS are thumbing their nose at the
American people. They are injecting secret, million dollar and
multi-million dollar contributions into federal elections in
direct conflict with the basic right of citizens to know the
donors financing campaign expenditures to influence their
votes.''
Crossroads GPS spokesman Jonathan Collegio said the group
carefully hews to its nonprofit role, saying it only spends ``a
portion of its resources on political activity that furthers
its social welfare mission.''
He said its donors ``are individuals and businesses that
support its vision of lower taxes and smaller government.''
``Environmental groups and labor groups have been airing
ads promoting their causes and targeting politicians for years,
but the brunt of Wertheimer's criticism focuses on conservative
groups engaging in the same activity,'' Collegio said.
In 2010 and 2011, Crossroads GPS spent at least $43 million
on media, according to its tax documents. It also doled out
nearly $16 million in grants to an array of conservative
organizations, including $4 million to Grover Norquist's
Americans for Tax Reform and $2.75 million for the Center for
Individual Freedom, a group that was originally launched more
than a decade ago by former tobacco industry executives who
sought to counter government restrictions on smoking. After
getting involved in an eclectic range of causes over the years,
the center emerged as a player in the 2010 midterm elections,
spending at least $2.5 million on negative ads against about 10
Democratic members of Congress.
The fund-raising success of Crossroads and its super PAC
counterpart was reflected in the robust compensation paid to
the groups' president, Steven Law, a former general counsel of
the U.S. Chamber of Commerce and deputy secretary of the
Department of Labor. Over the 19-month period, Law earned $1.09
million in salary and bonuses from the two groups, the tax
records show.
The Tribune Washington Bureau/Los Angeles Times reported in
February that many political operatives are reaping financial
rewards as super PACs and their nonprofit kin have proliferated
with little oversight.
------
[From Fresh Air from WHYY, Feb. 23, 2012]
Examining the SuperPAC With Colbert's Trevor Potter
Republican and Democratic SuperPACs, empowered by the
Supreme Court's Citizens United decision, can collect unlimited
contributions from individuals, corporations and unions. Potter
became a celebrity when he signed on as Stephen Colbert's
lawyer and advised the satirical TV host on how to create his
own SuperPAC.
TERRY GROSS, HOST: This is FRESH AIR. I'm Terry Gross.
SuperPACs have led to what was described in the New York Times
yesterday as a new breed of super-donor. About two dozen
individuals, couples or corporations have given a million
dollars or more this year to Republican superPACs that have
poured that money directly into this year's presidential
campaign.
SuperPACs, both Republican and Democratic, are empowered by
the Supreme Court's Citizens United decision and other rulings
to collect unlimited contributions from individuals,
corporations and unions. We're going to talk about this new
post-Citizens United world of campaign financing.
Our first guest is Trevor Potter, who has become something
of a celebrity since he became Stephen Colbert's lawyer and
advised Colbert on how to create his own superPAC. Potter is
the founding president of the Campaign Legal Center and helped
defend the 2002 McCain-Feingold law, which enacted campaign
finance restrictions.
From 1991 to '95, he served on the Federal Election
Commission. He served as general counsel to John McCain's
presidential campaigns in 2000 and 2008. Potter has not only
been advising Stephen Colbert on his PAC, Potter helped Colbert
set up an organization known as a 501(c)(4). Officially
designated as social welfare organizations, 501(c)(4)s have
spent tens of millions on advertising in political campaigns,
and they are not required to disclose their donors. Here's
Stephen Colbert and Trevor Potter on ``The Colbert Report,''
setting up a 501(c)(4).
(SOUNDBITE OF TV SHOW, ``THE COLBERT REPORT'')
STEPHEN COLBERT: So how do I gets me one, Trevor?
TREVOR POTTER: Well, lawyers often form Delaware
corporations, which we call shell corporations, that
just sit there until they're needed.
COLBERT: So like some anonymous shell corporation?
POTTER: Right, and I happen to have one here in my
briefcase.
COLBERT: Let's see it. OK, what's it called?
POTTER: It's called Anonymous Shell Corporation.
(SOUNDBITE OF LAUGHTER)
COLBERT: OK, brrmm, brrmmm, Anonymous Shell
Corporation filed in Delaware. OK, I got this. So now I
have a (c)(4)?
POTTER: Right, now we need to turn it into your shell
corporation, your anonymous one, and we do that by
having normally a board of directors meeting.
COLBERT: And who's on the board of directors?
POTTER: Well, just you. We can just have you do this.
COLBERT: Sounds like a nice group of people.
(SOUNDBITE OF LAUGHTER)
COLBERT: All right, let's do it. Call to order. Let's
do this thing.
POTTER: All right. So this says that you are the sole
director of the corporation.
COLBERT: I am.
POTTER: And that you are now electing yourself
president, secretary and treasurer.
COLBERT: Sounds like a great board.
POTTER: And you are authorizing the corporation to
file the papers with the IRS in May 2013.
COLBERT: So I could get money for my (c)(4), use that
for political purposes, and nobody knows anything about
it till six months after the election?
POTTER: That's right, and even then they won't know
who your donors are.
COLBERT: That's my kind of campaign finance
restriction. OK, OK, so now I've signed it. I have a
(c)(4)?
POTTER: You have a (c)(4). It's up and going.
COLBERT: Can I take this (c)(4) money and then donate
it to my superPAC?
POTTER: You can.
(SOUNDBITE OF LAUGHTER)
COLBERT: But wait, wait, superPACs are transparent.
POTTER: Right, and . . .
COLBERT: And the (c)(4) is secret. So I can take
secret donations of my (c)(4) and give it to my
supposedly transparent superPAC . . .
POTTER: And it'll say given by your (c)(4).
COLBERT: What is the difference between that and
money laundering?
(SOUNDBITE OF LAUGHTER)
POTTER: It's hard to say.
(SOUNDBITE OF LAUGHTER)
COLBERT: Well, Trevor, thank you so much for setting
me up.
GROSS: That's my guest, Trevor Potter, with Stephen Colbert
on ``The Colbert Report.'' Trevor Potter, welcome to FRESH AIR.
POTTER: Thanks, Terry, good to be with you.
GROSS: So what can Stephen Colbert now use his 501(c)(4) to
do?
POTTER: Well, it can engage in direct political activity.
It can urge the election or defeat of candidates. It could
lobby Congress, any number of public efforts related to public
policy, essentially.
GROSS: So the 501(c)(4) is officially supposed to be a
social welfare organization?
POTTER: Yes, that's the oddity here, of course, is that
I've started by saying it could engage in political activity
and run radio and television ads, which is not what we think of
(c)(4)s doing. But through a combination of lassitude by the
IRS and general confusion, (c)(4)s are now being used to engage
in political activities. That wasn't the idea. They were set up
by Congress to do public policy work, which was usually thought
of as lobbying or arguing for one side or another of an issue
in public.
But they've become very popular because they do not
disclose their donors, and they can engage in some amount of
political work. There's a dispute in the--amongst tax lawyers
as to how much work they can engage in, but many lawyers would
say up to just under half of their spending can be for directly
political activities, including urging the election or defeat
of federal candidates, and they can do all that with money that
is not disclosed to the public.
GROSS: So you were an advisor to John McCain's campaign in
2000 and 2008. You served on the Federal Elections Commission.
What can candidates do now when raising money that they weren't
allowed to do before, that they weren't allowed to do under
McCain-Feingold?
POTTER: We're really in a different world. Part of it
involves candidates raising money, but most of it involves
these new so-called superPACs. Throughout the--almost all of my
career, until this year, what candidates could do was raise a
small amount of money from each individual donor, it used to be
$1,000, and then under McCain-Feingold it became $2,000 and was
inflation-adjusted, so it's 2,500. But that's still a very
small amount of money that an individual can give to a
candidate.
So throughout the campaigns I've been involved with,
candidates would have fundraisers and accept contributions of
maybe as little as 250 or $500 from donors. They would hope to
have someone max out, as they call it, at the full $2,500 this
year, and then if their spouse gave, you could double that to
now 5,000.
And that's the sort of money that candidates have been
looking for. It has led, over the last couple cycles, to what
we call bundlers, which means people who have a lot of wealthy
friends they can ask money for, so that you go to a fundraiser,
and your host gives you the 5,000, themselves and their spouse,
but then they've asked their friends, their neighbors, their
business associates, people in the same line of work to come to
the fundraiser.
And in the McCain experience, where you may recall he was
running really a low-funded campaign for a long period of time,
they'd be thrilled if they could raise $25,000 at a fundraiser.
$50,000 was a very successful fundraiser. Well, you jump from
that sort of world to the world of the superPACs, where
individuals can and do give $100,000, $500,000, some have given
more than a million.
Famously, one of Newt Gingrich's supporters has given, I
believe, 10 million between himself and his spouse to these
supposedly outside groups that then spend money to elect the
candidates. So we've changed the game from what really are
small donors, either over the Internet or a couple hundred
dollars, to a world where one person or a handful of people can
bankroll a presidential candidate.
GROSS: So the people who you're referring to, the husband
and wife who gave to the Newt Gingrich campaign, that's Sheldon
Adelson and his wife, they apparently saved the Newt Gingrich
campaign because Gingrich wouldn't have had the money to carry
on; a similar thing with Rick Santorum and one of his major
funders, Foster Friess. Would they have been able to do that in
previous years? I mean, would there be a way that they could
have just given as individuals to the campaigns, as opposed to
giving through a PAC?
POTTER: No, there really isn't. What they could have done
in previous years is taken their own personal money and spent
it, in the case of Gingrich in South Carolina, in the case of
the Romney backers, they could have spent it in Iowa, but they
would have had to do so by putting their own names on an ad.
So it would have said, you know, I'm Adelson and I approved
this ad and it's paid for by me. And no donor, no matter how
wealthy, has ever really done that in the 30 years since
Watergate, when these laws were put into effect. What changed
this . . .
GROSS: Why not? Why not?
POTTER: That's a good question. I think because people
first of all are much more comfortable giving to an organized
political entity, which is what these political committee
superPACs are. What you would have had to have done, before
this year, is decide that you wanted to support a particular
candidate. You would have had to go out and find somebody who
knew how to do political ads, where to spend them, what the
most effective approach was.
You'd create your budget. You then would have hired the
professionals, done the ads and then put your name on them. So
you essentially would become a political player yourself. And I
think the wealthy individuals who are giving, in most cases
that just doesn't occur to them to do something like that. They
say what entity can I give to.
GROSS: So the Supreme Court decision Citizens United opened
the door for the creation of superPACs, and superPACs can get
as much money as any individual corporation wants to give, but
they have to reveal who they are. So . . .
POTTER: Right. To be fair on this--to the court, at least--
what they said is corporations have the same right as
individuals to make independent political expenditures. Then
along came a lower court, the D.C. Circuit, which said if you
have a right, a constitutional right to make independent
expenditures on your own, you have a constitutional right to do
so through a political committee.
And so superPACs didn't come directly from Citizens United,
but they came from a lower court effectively sort of guessing
that the Supreme Court meant to include the sort of groups we
are now seeing, where they take unlimited contributions from a
number of people and then engage in this unlimited spending.
GROSS: So watching this campaign, what are some of the
loopholes you've seen playing out in ads, in funding--you know,
some of the things that weren't in--that you think the Supreme
Court didn't necessarily count on but people have found
loopholes and ways around so that they can do it anyways?
POTTER: I think there are two things that we are seeing
play out here that are clearly contrary to what the Supreme
Court was thinking, maybe three. So the first is that the court
assumes, as a matter of law, that this spending is going to be
independent of the candidates. In their original case, the
Buckley v. Valeo case, they talk about independent spending
being spending that is wholly independent of candidates and
campaigns.
And because it's wholly independent, the court says it
can't corrupt the candidate, you're not buying anything,
there's no agreement with the candidate. The candidate might
not even like the spending, and therefore since it's wholly
independent, and there's no danger of corruption, it cannot be
constitutionally limited. That's the theory.
Well, the practice is we are seeing these committees are
actually pretty closely tied to candidates. They are not
anyone's definition of wholly independent. They are created and
run by friends of the candidates, family members of the
candidates, former employees of the candidates, longtime
fundraisers of the candidates, business partners of the
campaign manager.
There is a whole web of ties here. The effect of that is
that when donors give to these committees, they feel they are
safely giving to a group that has the candidate's best
interests in mind and knows what the candidate wants. This is
amplified by the fact that candidates refer to them as my
superPAC, which a number of candidates do, or the superPAC run
by my good friends.
Under an advisory opinion from the Federal Election
Commission last year, it is permissible for these candidates to
attend meetings of donors, potential supporters for these PACs,
and endorse the PAC. They can't solicit an unlimited amount of
money, but they can go in and say you're doing great work, this
is really important to my campaign. If the message is these are
my people, I want you to support this group, then someone can,
in fact, go out and write a check for a million dollars. They
just can't be directly solicited by the candidate.
So we've ended up in a world that I think the Supreme Court
did not understand or expect in Citizens United, where these
supposedly wholly independent groups are closely linked to the
candidates, where the people running the groups say, well, I
decide what to do because I watch the candidate on television
and do what he suggests, which is what one of the Gingrich
people said.
So there's a close tie in the fundraising, in the
personnel, in the goals of these groups, with individual
candidates. And that's simply, I think, functionally very
different from what the court thought was going to happen.
GROSS: So theoretically the head of the superPAC and the
candidate are not supposed to coordinate, but given all the
ties that you've just pointed out, one has to assume that
there's some amount of knowledge of what the other is doing.
And I want to play another clip from ``The Colbert Report''
that kind of--that I think kind of, you know, really
illustrates really well the kind of loopholes to help you get
around the no-coordination rule. And this is a scene from ``The
Colbert Report'' after Colbert has decided to run for president
of South Carolina. So he has to give up his superPAC, the
superPAC that you helped him create.
So he hands it over to Jon Stewart, in spite of the fact
that they're business partners, and it's legal, in spite of the
fact that they're business partners. And in this scene, Colbert
and Stewart are asking for your advice, since you are at this
point not only Colbert's lawyer, but you've become Stewart's
lawyer too, since he now heads the superPAC. And that's legal.
POTTER: Right, something they point out they think is also
a little odd that is legal.
GROSS: Right, OK, so here we go. Jon Stewart speaks first.
(SOUNDBITE OF TV SHOW, ``THE COLBERT REPORT'')
JON STEWART: Now that I have the superPAC, can I run
ads supporting Stephen Colbert, who I believe in very
deeply, perhaps attacking his potential opponents, who
I don't believe in at all?
POTTER: Yes, you can, as long as you do not
coordinate.
(SOUNDBITE OF LAUGHTER)
COLBERT: Well, that's interesting.
(SOUNDBITE OF LAUGHTER)
STEWART: Red flag.
COLBERT: What?
STEWART: I am busy.
COLBERT: Of course. You have a show.
STEWART: Can I legally hire Stephen's current
superPAC staff to produce these ads that will be in no
way coordinated with Stephen?
POTTER: Yes.
STEWART: Whew. . . !
POTTER: As long as they have no knowledge of
Stephen's plans.
COLBERT: Well, that's easy. I don't know what the
hell I'm doing.
(SOUNDBITE OF LAUGHTER)
COLBERT: OK, Jon, I guess you'd better leave for fear
that we would coordinate with each other. I cannot let
you know my plans.
STEWART: I don't want to know.
COLBERT: From now on, Jon, from now on, I will just
have to talk about my plans on my television show and
just take the risk that you might watch it.
GROSS: OK, so that was a scene from ``The Colbert Report''
with Jon Stewart and Stephen Colbert. That's an interesting
point there, that, you know, you're not supposed to coordinate,
but the PAC, the people who are running the PAC at the very
least know what you're saying from your speeches. I mean, they
know what your priorities are. They know what you want.
POTTER: Well, and in this election cycle, whether it's life
imitating art or the other way around, but you had a situation
in South Carolina where Newt Gingrich went out and said I can't
coordinate with my superPAC, but I can speak to them publicly,
and I am speaking to them right now, and I am asking them to
take down certain ads or to at least correct the text of them.
So you have this example in real life of a candidate not
communicating while communicating with a superPAC. I think what
that Colbert episode points out, as you sort of walk through
it, is that the rules that the Federal Election Commission has
established for what constitutes coordination are just
ridiculously narrow. In fact, two federal courts have told the
Federal Election Commission that they are inadequate and
ordered them to come up with new rules, but they haven't done
so.
So for the moment the rules simply cover a candidate
requesting or advising a PAC on the content of the message or
where it is broadcast, as opposed to any of the other things
that they might do, such as help with fundraising, share staff
over time, something like that.
GROSS: Now, do you think that the Supreme Court anticipated
any of the loopholes that we're seeing or even anticipated the
existence of superPACs or anticipated that 501(c)(4)s and
(c)(6)s would be used as ways of funneling opaque money into
the theoretically transparent superPAC?
POTTER: Well, we actually know the answer to that, which is
no, they didn't anticipate it. The reason we know it is that
Justice Kennedy wrote in his majority opinion in Citizens
United that today for the first time corporations will be able
to give unlimited--spend unlimited amounts for independent
expenditures and also that will be fully disclosed, so that
shareholders will know where their money is going, and citizens
will know who is spending on the ads they're seeing.
And then he goes on for several pages to talk about how
important it is to have that sort of disclosure, how people
need to know where the money is coming from so that it isn't
just some unknown group giving, but they have a sense of what
the interests are being the spending.
So he obviously thought that all of this spending was going
to be disclosed. That's a little bit of a mystery because even
in 2010, when that decision came down, there had been a fair
amount of stories about spending by 501(c)(4)s and (c)(6)s and
how that money wasn't disclosed. But they also hadn't had any
real experience here.
They appear not to have been aware of the details of some
of the FEC's regulations and enforcement actions, where the
commission has not enforced the existing spending laws. And
this is a case--that's an element of the case. It was not
briefed to the Supreme Court.
You may recall that one of the things about Citizens United
is that it was really on a rush schedule. It was a special case
with its own day of oral argument, and there a lot of aspects
that were not considered when the court was saying do
corporations have a right as people, as persons, to make this
independent expenditures. So the court assumed and stated that
there would be full disclosure, when, in fact, that's not how
the system is working. And I think that has to be a big
surprise to Justice Kennedy who wrote that.
GROSS: So let's talk about where the FEC, the Federal
Election Commission, comes in. You used to serve on the
commission. Part of its job is to hold candidates and PACs
accountable. How good of a job has it been doing?
POTTER: Well, it's had its critics for years. One of the
reasons I joined the commission is that as a lawyer in private
practice I was frustrated by the commission. I thought it
wasn't being very effective or very efficient. And I thought,
well, this is an opportunity to improve the way the agency
operates.
However, the criticism the commission is really changed in
recent years--because people used to say the commission was
ineffective or disorganized. Now the complaint is the
commission is again, and again, and again deadlocked and unable
to act at all.
There are three--effectively--Republicans, three Democrats
on the commission. It takes four votes to do anything. And the
three Republicans currently on the commission do not appear to
believe that the commission should be a regulator of spending
in elections. They are largely deregulatory in philosophy. They
opposed or have criticized McCain-Feingold, the law that
they're supposedly enforcing. And what we're seeing is a split
on the commission between those commissioners who want to
enforce the law and those who say it would be wrong to do so or
that it would crimp speech.
The result of that is the commission is essentially now
missing in action. It is not a watchdog because it's sitting
there tied up, unable to move by this 3-3 deadlock in a whole
range of important cases.
GROSS: So, if the FEC isn't serving as a watchdog is
anybody else, or is any other group?
POTTER: No. I think that's our current problem. The
commission should be doing that. That's the role that Congress
has assigned it--and it is not. By the way, five of the six
commissioners have--are serving expired terms. They shouldn't
be there. But the President has to nominate successors and
Congress has to confirm them. And that hasn't happened.
GROSS: You--the President hasn't even nominated people? Or
that Congress just hasn't confirmed them?
POTTER: He nominated one person who then withdrew. There
are no nominees now for any of the five seats that are supposed
to be vacant. And therefore, Congress hasn't done anything
because there's no one to do anything with.
The White House says privately that they haven't done
anything because the Republicans' leadership on the Hill has
not cooperated in helping them nominate names, identify
Republicans who could serve. But either way, we have a deadlock
on the commission, a deadlock in the nomination process between
the White House and Congress, and a commission that is unable
to function.
At the same time, the IRS, which could be dealing with
these C4s and the disclosure issues we've been talking about--
the political spending--has visibly done nothing. There is no
sign that it is involved. In fact, they backed off recently
when some of their agents--professional career people--were
asking questions about C4s and their tax status and
contributions to them, a number of Republican members of
Congress objected and the IRS commissioner announced that it
was all a mistake, they would no longer ask those questions of
the C4s. So the IRS seems to be out of action, afraid, I think,
of political controversy. That leaves the Justice Department.
There two problems with that. One is, of course, it's part
of the Obama administration, so that anything it does runs the
risk of being seen as political and anti-Republican. And the
other problem is that its jurisdiction is only if there is an
actual criminal act. The FEC is supposed to enforce the laws,
unless the violation is so bad that it is what the legal
standard is knowing and willful--that you knew you were
breaking the law and you did it anyway. And in that case, the
Justice Department has jurisdiction. So that's a much higher
standard for them to get involved.
GROSS: So, let's get to like the bottom line of all this.
Obviously, you think this kind of unlimited and often opaque
campaign spending that is in a lot of ways actually kind of
coordinated with the candidates, is not a good thing for the
electoral process. That's your point of view, otherwise you
wouldn't be opposed to this kind of unlimited spending. So make
the case for us. What's the problem? I mean, why do you think
that individuals and corporations shouldn't be allowed to give
as many millions as they want?
POTTER: Well, first . . .
GROSS: And anonymously or by name.
POTTER: Right. I mean first my initial objection as a
lawyer is that I don't think what we're seeing now is what the
law provides. I don't think it's what the Supreme Court was
doing in the Buckley case and the Citizens United case. They
didn't expect this coordination and this lack of disclosure.
It's not what Congress provided for in McCain-Feingold in the
parts that are still good law and should be enforced. So I
think as what sometimes gets called an officer of the court, a
person who is supposed to, as a lawyer, focus on public policy,
I have a problem with the fact that what we're seeing now is
not what the law says we should be seeing.
Beyond that, when we look to the future and I think the
only way we're going to get out of this mess is to have
Congress again write a new law after this election cycle. The
question of should you have unlimited, undisclosed spending in
a democracy is the question on the table, because that's what
we're heading to unless we change.
I don't think that is healthy. It seems to me that you do
have a real problem here of corruption. It becomes effectively
bribery if you can give an unlimited amount to a candidate for
office, who then acts on your legislative agenda--either to
vote for legislation you want or to sink legislation you don't
want. If that is secret, so that that money is given and the
donor or the spender knows it and the beneficiary knows it but
the public doesn't, I think you will see more mistrust of the
political system.
We run a risk here of citizens feeling that their vote
doesn't count because the Members of Congress are going to do
what the major donors tell them to do. We run a risk that
people will think their small contribution doesn't count
because candidates are going to get millions of dollars from
people who can give that kind of money, not the average small
donor. That, to me, is not how a democratic system works.
GROSS: Trevor Potter, thank you so much for talking with
us.
POTTER: Thanks very much.
GROSS: Trevor Potter is the founding president of the
Campaign Legal Center and is Stephen Colbert's lawyer, advising
Colbert on his superPAC.
[From Roll Call, June 20, 2012]
Mitch McConnell vs. Himself on Disclosure Issues
(By Norman Ornstein)
``I think you'd have to go back to Richard Nixon to find
the last time you had group of people both through the campaign
and through the power of the federal government really trying
to harass and silence critics, and I think they need to be
called on it.''
That was Senate Minority Leader Mitch McConnell (R-Ky.)
talking to Fox News in his renewed public campaign against
disclosure of contributors to campaigns and to groups trying to
influence lawmakers and elections. It was startling to me: the
Nixonian McConnell accusing proponents of transparency of
Nixonian behavior. This may set a new standard for chutzpah.
McConnell's comment was only part of his efforts; the
central focus last week was his ballyhooed speech in ostensible
support of the First Amendment at the American Enterprise
Institute.
Regrettably, I was on an airplane when McConnell gave his
speech. Had I been there, I would have tried to ask the first
question. (It would not be the first time I would have asked a
question that cut against the grain at AEI; commendably, no one
at my institution has ever tried to dissuade me or muzzle me.)
My question, not surprisingly, would have started with
McConnell's own eloquent words repeated many times in the years
leading up to the passage of the Bipartisan Campaign Reform Act
in 2002, his mantra about campaign finance reform for much of
his career. Namely, that Republicans are in favor of
disclosure, that disclosure is the core of campaign finance
reform, including disclosure for so-called electioneering
communications or ``issue advocacy'' that is clearly designed
to influence election outcomes. It would have included
McConnell's full-throated support for more and more disclosure
during the debate on law. It would have asked what has
changed--except the law and the presumed advantage McConnell
and his partisans now have with huge and secret contributions
to super PACs, 501(c)(4)s and other shadow and sham nonprofits
set up to change election outcomes.
McConnell now sings a different tune, one that complains
about the criticism that the poor billionaires and corporations
face when their contributions to these shadow groups are
disclosed.
His comment to Fox was a complaint about agencies such as
the IRS enforcing their regulations and holding accountable
organizations that manipulate the law to avoid lawful
disclosure. In complaining that this is Nixonian, McConnell was
trying to intimidate the IRS (which has long been too timid
about cracking down on groups that have flaunted their clear
political goals while claiming status as nonprofits that claim
only modest involvement in political activities).
If I had been able to follow up, I would have included a
reference to the Supreme Court's full-throated support for full
disclosure--8-1 even in Citizens United--and to Justice Antonin
Scalia's statement in another case about the need for civic
courage, for people to stand up in public for their political
acts. As Scalia wrote, ``Harsh criticism, short of unlawful
action, is a price our people have traditionally been willing
to pay for self-governance.''
And I would have asked why it is appropriate, even good,
for powerful corporations and wealthy individuals to hide their
deep involvement in political campaigns, leaving voters in the
dark about who is paying millions for attack ads.
McConnell is not the only hypocrite here, although he wins
the title of Hypocrite-in-Chief. When the DISCLOSE Act came up
in the Senate in the aftermath of Citizens United, it passed
the House and got 59 votes in the Senate--but died on a
filibuster because not a single Republican, including those who
had supported campaign reform, was willing to support it.
Now a stripped-down version is coming up--simply requiring
disclosure of the name of anyone who gives more than $10,000 to
a group to influence elections. There is no excuse for anyone
who has voiced support for disclosure--even if they have not
expressed the support as expansively as McConnell did in 2007,
when he said, ``I think what we ought to do is we ought to have
full disclosure, full disclosure of all the money that we raise
and how it is spent''--to vote against this bill.
McConnell's anti-disclosure stance has extended beyond his
opposition to this bill. He is the driving force behind the
failure of the Federal Election Commission, despite repeated
rebukes by the courts, to enforce the laws on the books and
court rulings about disclosure. Far more often than not, it is
the three Republicans virtually handpicked by McConnell who
have stymied the FEC from doing its job.
Once, after I wrote a column criticizing FEC Commissioner
Donald McGahn, McConnell wrote a pious rejoinder, saying that
his oath was to enforce not just the laws passed by Congress
but the rulings of the Supreme Court--except, apparently, when
he doesn't like what the court has written. Thus, McGahn and
his posse have repeatedly flouted the 8-1 Supreme Court
position on disclosure.
The DISCLOSE Act is a modest step to bring us the kind of
system that McConnell used to lionize. It will likely fail on a
filibuster. And that should at least open up the way for
another action by President Barack Obama, using his recess
appointment authority to replace McGahn and four other
commissioners whose terms have expired to bring back a
commission that will do its job and counter the real Nixonian
actions, evasion of disclosure.
[From OpenSecretsblog, May 18, 2012]
Mystery Health Care Group Funneled Millions to Conservative Nonprofits
(By Viveca Novak and Robert Maguire)
A secretive, well-funded group whose name gives the
misleading impression that it is solely concerned about health
care gave more than $44 million in 2010 to other tax-exempt
groups, many of which spent millions on TV ads attacking
Democrats running for the House and Senate and have begun
spending for the same purpose this year.
None of the groups--including eight of the most politically
active nonprofits in 2010--disclose their donors, and the role
of the Center to Protect Patients' Rights (CPPR) in funding
them has not previously been reported.
Based in Arizona, CPPR provided large grants to a cluster
of well-known conservative organizations that operate under
section 501(c)(4) of the tax code, which classifies them as
``social welfare'' groups and allows them to keep their funding
sources from public view. Politics is not supposed to be their
primary purpose, although critics say many of the organizations
have stretched the rules too far.
American Future Fund received the largest grant from CPPR,
a total of $11.7 million for ``general support.'' That amount
exceeded the nearly $10 million the group told the Federal
Election Commission it spent supporting or opposing Democratic
candidates in ads in the midterm elections (``independent
expenditures'') or broadcasting slightly less explicit appeals
close to election day (``electioneering communications''). In
fact, the gift was more than half of the $23.3 million the
group raised all year.
American Future, which is based in Iowa, ran a series of
hard-hitting ads against Democratic candidates around the
country in 2010 that left little doubt where the group stood,
even when the ads didn't refer to the election. ``With the
biggest tax cut in American history looming, [Bruce] Braley was
the deciding vote to adjourn the house. Instead of fighting for
lower taxes, Braley went home,'' one ad, which ran in October
2010, said of the Iowa Democrat. ``Tell Braley: Don't vote to
raise taxes on Iowa families.''
LAYERS OF ANONYMITY
The donors to the Center to Protect Patient Rights are
almost entirely unknown. Such tax-exempt organizations must
detail the groups to whom they gave grants, but not the sources
of their own funds. A small grant of $200,000 came to CPPR from
American Action Network, yet another 501(c)(4), according to
the Form 990 tax return that American Action filed with the
Internal Revenue Service this week.
And if its donors are unknown, so is much else about CPPR.
According to its own 2010 tax return, which was filed last
November, it is run by Sean Noble, who is listed as its
director, president and executive director. Noble describes
himself on his Twitter account as a ``PR/Political consultant,
conservative strategist/operative, former GOP Hill chief of
staff, blogger, proud father, fighting for liberty.'' Noble was
chief-of-staff to former Republican Rep. John Shadegg of
Arizona, for whom he worked for 13 years, and since then has
worked as a political consultant and in public relations.
Noble took no salary from CPPR, but his firm, Noble
Associates, was paid $340,000 by the group for ``management
services.'' Noble was also paid $10,000 to lobby for the group.
He is currently managing partner of DC London Inc., a
political consulting firm that offers robo-calling and other
services. CPPR's other director and secretary is Courtney
Koshar, an anesthesiologist in the Phoenix area.
The organization's mission, as listed on the tax form, is
``Building a coalition of like-minded organizations and
individuals, and educating the public on issues related to
health care with an emphasis on patients rights. Engaging in
issue advocacy and activities to influence legislation related
to health care.''
Noble did not return our calls seeking comment. But in a
piece last year, Politico described Noble as a ``Koch
operative,'' referring to the wealthy conservative brothers
from Koch Industries who have been instrumental in funding a
conservative network of groups. Open Secrets Blog has been
unable to confirm the Koch connection independently.
Adding to the confusion is the fact that CPPR's name is
almost exactly the same as that of another group, the Coalition
to Protect Patients' Rights, a group that organized lobbying
efforts against health care overhaul proposals being debated in
Congress in 2009. And CPPR gave the Coalition $205,000 in 2010.
Further, the records for both groups were listed as being
stored at the same Glendale, Ariz., address by a woman who
describes herself as an employee of DCI Group, a lobbying firm
practiced in manufacturing ``grassroots'' campaigns for the
tobacco industry and others that has handled public relations
for the Coalition.
But the Coalition's spokesman, physician and lawyer, Donald
Palmisano, told Open Secrets Blog he'd never heard of the other
group, as did a publicist with DCI Group.
The second-largest grant from CPPR, $5.6 million, went to
Americans for Limited Government, also for ``general support,''
as were all the CPPR gifts. That amounted to more than half the
group's $9 million budget for 2010. The creation of libertarian
real estate mogul Howard Rich, Americans for Limited Government
distributes money to its own large network of 501(c)(3) and
(c)(4) organizations. One such group, Colorado at Its Best, in
turn funded a group called Clean Government Colorado in 2008,
which backed a ballot initiative that critics said would limit
the ability of public employees' unions to make political
contributions. In 2010, ALG funded a group called Alaskans for
Open Government, which in turn provided money to another group
backing an ``anti-corruption'' ballot initiative. The Alaska
group eventually ran into trouble over failing to disclose its
own sources of funding.
Americans for Job Security received $4.8 million from CPPR.
That group, which is a 501(c)(6) business association under the
tax code, spent about $9 million in the 2010 elections
expressly attacking Democrats and running electioneering ads,
according to Center for Responsive Politics figures. It has a
history of running attacks on Democrats dating back to the late
1990s.
Other beneficiaries of CPPR funding included anti-tax maven
Grover Norquist's Americans for Tax Reform, which received $4.2
million and spent about that amount on independent expenditures
in 2010, almost all against Democrats; Americans for
Prosperity, which has strong ties to Charles and David Koch and
which received close to $2 million from CPPR and spent a little
less than that on negative issue ads mentioning candidates
close to the election; and Club for Growth, which received
$690,000 from CPPR and spent more than $8 million on
independent expenditures against Democrats in 2010, as well as
against some Republicans in primary contests.
All these groups may have spent more--and in some cases
definitely did so--on political ads that escaped reporting
requirements. For instance, according to its 990 form, American
Future spent a total of $21.4 million in 2010, of which $14.7
went to ``media services,'' indicating possible spending on ads
that was greater than the $10 million it reported to the
Federal Election Commission.
This table shows all the recipients of CPPR grants in 2010:
------------------------------------------------------------------------
Non-Profit 2010 CPPR Grant
------------------------------------------------------------------------
American Future Fund................................. $11,685,000
60 Plus Assn......................................... 8,990,000
Americans for Limited Government..................... 5,585,000
Americans for Job Security........................... 4,828,000
Americans for Tax Reform............................. 4,189,000
Revere America....................................... 2,300,000
Americans for Prosperity............................. 1,924,000
US Health Freedom Coalition.......................... 1,430,000
Susan B Anthony...................................... 1,025,000
Club for Growth...................................... 690,000
Americans United for Life Action..................... 559,000
The Institute for Liberty............................ 457,000
American Energy Alliance............................. 250,000
Coalition to Protect Patient Rights.................. 205,000
Freedom Vote......................................... 200,000
Protect Your Vote.................................... 100,000
Hispanic Leadership Fund............................. 47,000
Americans United for Life............................ 45,000
Tea Party Patriots................................... 30,000
Common Sense Issues Coalition........................ 25,000
Common Sense Issues.................................. 10,000
Concerned Women 4 America............................ 4,500
------------------------------------------------------------------------
Another recipient of CPPR's money is Freedom Vote, a 501c4
based in Columbus, Ohio that was created by Republican
operatives in 2010 to finance get-out-the-vote operations
usually done by the party. The group had a total income of $1.3
million that year, according to its 990; $200,000 of it came
from CPPR. Another $900,000 came from Crossroads GPS.
Jim Nathanson, who identified himself as Freedom Vote's
executive director, told Open Secrets Blog that the group is
still active and planning on participating in the 2012
election, but said the organization is ``still in the planning,
formulating stage. We are doing things, but nothing is
finalized.'' Asked whether the group is fundraising, Nathanson
said it is, but wouldn't go into details. ``It probably
wouldn't be appropriate to say anything, simply because things
are not fully developed.''
LINKS BETWEEN GRANTEES
The tax documents of American Action, the Center to Protect
Patients Rights and some other politically active groups--
especially on the Republican side, where such groups are more
prevalent--make it plain that a number of deep-pocketed donors
are willing to help finance tax-exempt groups that spend at
least a portion of their resources attacking the other party.
Many seem to prefer remaining anonymous and hence prefer making
gifts to c(4)s rather than super PACs. Each super PAC must
disclose its donors.
Some of the groups receiving CPPR funds did, in fact,
concentrate on health care, or at a minimum on opposition to
the Patient Protection and Affordable Care Act signed into law
by President Obama on March 23, 2010. One of those, the US
Health Freedom Coalition, was given $1.4 million by CPPR and
bankrolled a proposition on the Arizona ballot in 2010
rejecting the requirement in the federal health care overhaul
that all individuals have health insurance. (It passed.)
Several of the recipients of funds from CPPR are anti-
abortion groups: the Susan B Anthony List, Americans United for
Life and Americans United for Life Action received a total of
$1.85 million. Another $35,000 went to two arms of an
organization called Common Sense Issues, which had used
controversial ``push-polling'' to help former Arkansas Gov.
Mike Huckabee's presidential bid in 2008. In 2010, it asked
candidates to sign a pledge to oppose taxpayer funding of
abortion and ran ads in a number of House and Senate races.
Some of the recipients of CPPR's largesse are linked in
another way: they use the same vendors. For instance, five of
the groups, led by Americans for Limited Government and the
American Future Fund, paid a total of about $7.5 million to a
Phoenix firm called Direct Response for telecommunications and
direct mail.
Mentzer Media made more than $25 million in 2010 from four
CRRP grant recipients plus American Crossroads and Crossroads
GPS, the super PAC and 501(c)(4) linked to Karl Rove. The
American Future Fund paid Mentzer the largest sum, $10 million.
Mentzer is being used this year by the pro-Mitt Romney
super PAC Restore Our Future, and in 2004 made more than $18
million running the Swift Boat Veterans for Truth attacks on
the war record of Democratic presidential candidate John Kerry.
Staff at the Democratic Congressional Campaign Committee
were unaware of CPPR, though they are highly familiar with its
grantees, many of which ran ads against the House candidates
the DCCC was supporting in 2010. ``Voters have a right to know
who is behind the ads they see so they can evaluate the
claims,'' said Deputy Executive Director Jennifer Crider,
bemoaning the fact that some 501(c)(4) organizations are
extremely active on the political front but, unlike other
political organizations, don't have to release the names of
their donors.
The DCCC's former chairman, Rep. Chris Van Hollen of
Maryland, recently won a lawsuit challenging an FEC rule that
allowed groups like those funded by CPPR to avoid disclosing
their donors when they ran electioneering communications ads.
This month an appellate court refused to stay the decision.
It's unclear, though, what that means for disclosure in this
cycle. There's evidence that groups have responded to the
ruling by not running ads that fit the definition of
electioneering communications.
APPENDIX B: DATA SOURCES
SUPER PAC DONATIONS THROUGH 18 JUNE, 2012, TO SUPER PACS REPORTING AT LEAST $1M IN TOTAL RECEIPTS
[Accounting for 89.75% of total disclosed donations]
----------------------------------------------------------------------------------------------------------------
Super PAC Donors Donations Total Donated Average Donation Average per Donor
----------------------------------------------------------------------------------------------------------------
1 RESTORE OUR 602 752 $56,512,634.77 $75,149.78 $75,149.78
FUTURE, INC.
2 AMERICAN 261 326 $29,884,896.20 $91,671.46 $91,671.46
CROSSROADS.
3 WINNING OUR 152 174 $23,809,014.33 $136,833.42 $136,833.42
FUTURE.
4 PRIORITIES USA 334 405 $10,543,760.62 $26,033.98 $26,033.98
ACTION.
5 CLUB FOR GROWTH 597 790 $6,409,709.13 $8,113.56 $8,113.56
ACTION.
6 MAJORITY PAC.... 100 121 $6,114,774.36 $50,535.33 $50,535.33
7 WORKERS' VOICE.. 12 18 $5,908,363.73 $328,242.43 $328,242.43
8 HOUSE MAJORITY 80 111 $5,881,363.59 $52,985.26 $52,985.26
PAC.
9 AMERICAN BRIDGE 70 121 $5,872,747.72 $48,535.11 $48,535.11
21ST CENTURY.
10 MAKE US GREAT 60 66 $5,585,174.00 $84,623.85 $84,623.85
AGAIN, INC.
11 CONGRESSIONAL 38 42 $5,223,752.65 $124,375.06 $124,375.06
LEADERSHIP FUND.
12 ENDORSE LIBERTY, 89 102 $3,570,296.27 $35,002.90 $35,002.90
INC.
13 NEA ADVOCACY 3 5 $3,510,951.65 $702,190.33 $702,190.33
FUND.
14 FREEDOMWORKS FOR 500 741 $3,302,311.66 $4,456.56 $4,456.56
AMERICA.
15 OUR DESTINY PAC. 24 37 $3,188,364.25 $86,172.01 $86,172.01
16 CAMPAIGN FOR 63 71 $2,869,667.00 $40,417.85 $40,417.85
PRIMARY
ACCOUNTABILITY
INC.
17 COOPERATIVE OF 2 34 $2,556,100.94 $75,179.44 $75,179.44
AMER.
PHYSICIANS IE
COMMITTEE.
18 NAT'L ASSOC. OF 1 14 $1,810,778.00 $129,341.29 $129,341.29
REALTORS
CONGRESSIONAL
FUND.
19 TEXAS 21 21 $1,430,000.00 $68,095.24 $68,095.24
CONSERVATIVES
FUND.
20 PLANNED 7 10 $1,113,663.28 $111,366.33 $111,366.33
PARENTHOOD
VOTES.
--------------------------------------------------------------------------------
Totals:......... 3,016 3,961 $185,098,324 $46,730.20 $61,372.12
----------------------------------------------------------------------------------------------------------------
The mean average donation reported to FEC during this cycle was for $23,947. The median donation was for $500.
Data courtesy of Federal Election Commission; Analysis and Aggregation by Mr. Gonzalez's Personal Staff.
THE MOST EXPENSIVE SEAT IN THE HOUSE: THE STATE OF OUR CAMPAIGN FINANCE SYSTEM
House Campaign Spending (In Constant 2012 Dollars)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
% D
Average Spent Increase From % D Year-over- D of Average Winner % D of Most Expensive Increase From Year- % D of
Year per House Seat Previous Year Year 1990 Spent 1990 Single Previous Year over- 1990
Campaign Year
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1990......................................................... $948,686 .............. .............. 0% $715,303 0% $2,996,907 ................. ...... 0
1992......................................................... 1,239,637 $290,951 30.67 31 888,790 24 8,886,573 $5,889,665.18 197 197
1994......................................................... 1,231,840 -7,798 -0.63 30 798,888 12 4,057,667 -4,828,905.09 -54 35
1996......................................................... 1,420,559 188,720 15.32 50 985,024 38 8,154,769 4,097,101.23 101 172
1998......................................................... 1,285,093 -135,466 -9.54 35 915,356 28 10,665,625 2,510,856.03 31 256
2000......................................................... 1,576,481 291,388 22.67 66 1,119,385 56 9,278,164 -1,387,460.26 -13 210
2002......................................................... 1,541,815 -34,666 -2.20 63 1,145,282 60 10,392,436 1,114,271.20 12 247
2004......................................................... 1,623,283 81,468 5.28 71 1,255,917 76 6,088,721 -4,303,714.96 -41 103
2006......................................................... 1,966,348 343,065 21.13 107 1,622,323 127 9,231,153 3,142,432.16 52 208
2008......................................................... 1,979,024 12,676 0.64 109 1,558,049 118 7,802,737 -1,428,415.41 -15 160
2010......................................................... 2,615,963 636,938 32.18 176 1,514,858 112 12,268,240 4,465,502.46 57 309
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Amounts derived from the Campaign Finance Institute (http://www.cfinst.org/data/pdf/VitalStats_.pdf) and the Center for Responsive Politics (http://www.opensecrets.org/bigpicture/
elec_stats.php?cycle=2010).
Inflation calculated via the Bureau of Labor Statistics CPI Inflation Calculator (www.bls.gov/data/inflation_calculator.htm).
SUPER PAC DONATIONS FROM FED-CODED ``ORGANIZATIONS'' THROUGH 18 JUNE, 2012, TO SUPER PACS REPORTING AT LEAST $1M IN TOTAL RECEIPTS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Corporate Total Corporate Average Corporate Average per Corp.
Super PAC Corporate Donors Donations Donations Donation Donor Total Donations
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1 RESTORE OUR FUTURE, INC........... 84 95 $10,733,600.00 $112,985.26 $75,149.78 $56,512,634.77
2 AMERICAN CROSSROADS............... 25 30 8,727,569.60 290,918.99 91,671.46 29,884,896.20
3 WINNING OUR FUTURE................ 1 1 1,000.00 1,000.00 136,833.42 23,809,014.33
4 PRIORITIES USA ACTION............. 6 8 485,234.42 60,654.30 26,033.98 10,543,760.62
5 CLUB FOR GROWTH ACTION............ 2 44 90,457.63 2,055.86 8,113.56 6,409,709.13
6 MAJORITY PAC...................... 12 14 471,680.36 33,691.45 50,535.33 6,114,774.36
7 WORKERS' VOICE.................... 6 12 4,706,776.23 392,231.35 328,242.43 5,908,363.73
8 HOUSE MAJORITY PAC................ 80 111 5,881,363.59 52,985.26 52,985.26 5,881,363.59
9 AMERICAN BRIDGE 21ST CENTURY...... 9 37 1,202,319.24 32,495.11 48,535.11 5,872,747.72
10 MAKE US GREAT AGAIN, INC.......... 17 19 1,867,000.00 98,263.16 84,623.85 5,585,174.00
11 CONGRESSIONAL LEADERSHIP FUND..... 4 8 75,252.65 9,406.58 124,375.06 5,223,752.65
12 ENDORSE LIBERTY, INC.............. 7 7 12,500.00 1,785.71 35,002.90 3,570,296.27
13 NEA ADVOCACY FUND................. 3 5 3,510,951.65 702,190.33 702,190.33 3,510,951.65
14 FREEDOMWORKS FOR AMERICA.......... 7 210 1,967,024.26 9,366.78 4,456.56 3,302,311.66
15 OUR DESTINY PAC................... 1 1 22,819.35 22,819.35 86,172.01 3,188,364.25
16 CAMPAIGN FOR PRIMARY 7 7 131,000.00 18,714.29 40,417.85 2,869,667.00
ACCOUNTABILITY INC.
17 COOP. OF AMER. PHYSICIANS IE 2 34 2,556,100.94 75,179.44 75,179.44 2,556,100.94
COMMITTEE.
18 NAT'L ASSOC. OF REALTORS CONG. * * * * * 1,810,778.00
FUND.
19 TEXAS CONSERVATIVES FUND.......... 5 5 265,000.00 53,000.00 68,095.24 1,430,000.00
20 PLANNED PARENTHOOD VOTES.......... 3 6 3,663.28 610.55 111,366.33 1,113,663.28
----------------------------------------------------------------------------------------------------------------------------
Totals:........................... 281 654 42,711,313 65,307.82 151,997.56 185,098,324.15
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
N.B. ``Organization'' includes corporations including Yahoo! and Contran, LLC, as well as unions. E.g., 99.09% of donations to NEA Advocacy Fund came from three donations from NEA itself.
``Entity type is not a data element the FEC codes or validates,'' and these numbers reflect the filings by the Super PACs.
*The National Association of Realtors Congressional Fund disclosed 14 donations to FEC, each from ``Association of Realtors, National.'' However, as these were coded as coming from an
individual rather than from an organization, they are not included here.
The mean average donation from an ``Organization'' reported to FEC during this cycle was for $44,593. The median donation from an ``Organization'' was for $2,543.
The mean average donation reported to FEC during this cycle was for $23,947. The median donation was for $500.
Data courtesy of Federal Election Commission; Analysis and Aggregation by Mr. Gonzalez's Personal Staff.
SUPER PAC DONATIONS FROM FEC-CLASSIFIED ORGANIZATIONS THROUGH 18 JUNE, 2012, TO SUPER PACS REPORTING AT LEAST 1M IN CORPORATE DONATIONS
[Accounting for 81.82% of total disclosed donations from organizations]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Corporate Corporate Total Corporate Average Corporate
Super PAC Donors Donations Donations Donation Average per Donor
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 RESTORE OUR FUTURE, INC....... 84 95 $10,733,600.00 $112,985.26 $127,780.95
2 AMERICAN CROSSROADS........... 25 30 8,727,569.60 290,918.99 349,102.78
3 WORKERS' VOICE................ 6 12 4,706,776.23 392,231.35 784,462.71
4 NEA ADVOCACY FUND............. 3 5 3,510,951.65 702,190.33 1,170,317.22
5 COOP. OF AMERICAN PHYSICIANS 2 34 2,556,100.94 75,179.44 1,278,050.47
IE COMMITTEE.
6 FREEDOMWORKS FOR AMERICA...... 7 210 1,967,024.26 9,366.78 281,003.47
7 MAKE US GREAT AGAIN, INC...... 17 19 1,867,000.00 98,263.16 109,823.53
8 HOUSE MAJORITY PAC............ 12 20 1,213,500.00 60,675.00 101,125.00
9 AMERICAN BRIDGE 21ST CENTURY.. 9 37 1,202,319.24 32,495.11 133,591.03
---------------------------------------------------------------------------------------------
Totals:....................... 165 462 36,484,841.92 78,971.52 221,120.25
--------------------------------------------------------------------------------------------------------------------------------------------------------
N.B. Organization Includes corporations including Yahoo! and Contran, LLC, as well as unions. E.g., 99.09% of donations to NEA Advocacy Fund came from
three donations from NEA itself. ``Entity type is not a data element the FEC codes or validates'', and these numbers reflect the filings by the Super
PACs.
Data courtesy of Federal Election Commission; Analysis and Aggregation by Mr. Gonzalez's Personal Staff.
SUPER PAC DONATIONS THROUGH 18 JUNE, 2012, TO SUPER PACS REPORTING AT LEAST %1M IN TOTAL RECEIPTS
[Accounting for 89.75% of total disclosed donations]
----------------------------------------------------------------------------------------------------------------
Average
Super PAC Donors Donations Total Average per
Donated Donation Donor
----------------------------------------------------------------------------------------------------------------
1 RESTORE OUR FUTURE, INC...... 602 752 $56,512 $75,149. $75,149
,634.77 78 .78
2 AMERICAN CROSSROADS.......... 261 326 29,884, 91,671.4 91,671.
896.20 6 46
3 WINNING OUR FUTURE........... 152 174 23,809, 136,833. 136,833
014.33 42 .42
4 PRIORITIES USA ACTION........ 334 405 10,543, 26,033.9 26,033.
760.62 8 98
5 CLUB FOR GROWTH ACTION....... 597 790 6,409,7 8,113.56 8,113.5
09.13 6
6 MAJORITY PAC................. 100 121 6,114,7 50,535.3 50,535.
74.36 3 33
7 WORKERS' VOICE............... 12 18 5,908,3 328,242. 328,242
63.73 43 .43
8 HOUSE MAJORITY PAC........... 80 111 5,881,3 52,985.2 52,985.
63.59 6 26
9 AMERICAN BRIDGE 21ST CENTURY. 70 121 5,872,7 48,535.1 48,535.
47.72 1 11
10 MAKE US GREAT AGAIN, INC..... 60 66 5,585,1 84,623.8 84,623.
74.00 5 85
11 CONGRESSIONAL LEADERSHIP FUND 38 42 5,223,7 124,375. 124,375
52.65 06 .06
12 ENDORSE LIBERTY, INC......... 89 102 3,570,2 35,002.9 35,002.
96.27 0 90
13 NEA ADVOCACY FUND............ 3 5 3,510,9 702,190. 702,190
51.65 33 .33
14 FREEDOMWORKS FOR AMERICA..... 500 741 3,302,3 4,456.56 4,456.5
11.66 6
15 OUR DESTINY PAC.............. 24 37 3,188,3 86,172.0 86,172.
64.25 1 01
16 CAMPAIGN FOR PRIMARY 63 71 2,869,6 40,417.8 40,417.
ACCOUNTABILITY INC. 67.00 5 85
17 COOPERATIVE OF AMER. 2 34 2,556,1 75,179.4 75,179.
PHYSICIANS IE COMMITTEE. 00.94 4 44
18 NAT'L ASSOC. OF REALTORS 1 14 1,810,7 129,341. 129,341
CONGRESSIONAL FUND. 78.00 29 .29
19 TEXAS CONSERVATIVES FUND..... 21 21 1,430,0 68,095.2 68,095.
00.00 4 24
20 PLANNED PARENTHOOD VOTES..... 7 10 1,113,6 111,366. 111,366
63.28 33 .33
Totals:...................... 3,016 3,961 185,098 46,730.2 61,372.
,324 0 12
----------------------------------------------------------------------------------------------------------------
The mean average donation reported to FEC during this cycle was for $23,947. The median donation was for $500.
Data courtesy of Federal Election Commission; Analysis and Aggregation by Mr. Gonalez's Personal Staff.
APPENDIX C: SUPPLEMENTAL MATERIALS
[From the Honorable Chris Van Hollen (D-MD), June 24, 2010]
Remember When Washington Republicans Supported Disclosure and
Transparency?
WHAT HAPPENED???
Rep. John Boehner: ``I think what we ought to do is we
ought to have full disclosure, full disclosure of all of the
money that we raise and how it is spent. And I think that
sunlight is the best disinfectant.'' (NBC, Meet the Press
Transcript, 02/11/2007)
Sen. Mitch McConnell: ``We need to have real disclosure.
And so what we ought to do is broaden the disclosure to include
at least labor unions and tax-exempt business associations and
trial lawyers so that you include the major political players
in America. Why would a little disclosure be better than a lot
of disclosure?'' (The Hill, Campaign finance bill has GOP wary,
04/22/2010)
Rep. John Boehner: ``The House is going to take up 527
legislation next week. And there may be several proposals on
the floor in terms of how we rein in their activity. I think
this was a gaping loophole in the McCain-Feingold campaign
finance reform bill. I think it needs to be fixed. To have all
of this unregulated campaign cash going to these organizations
and allowing them to engage in campaign activities without any
disclosure is--it's wrong. And so we've worked closely with
Senator McCain. The House needs to deal with this, and we will
next week.'' (Boehner Press Conference, 3/30/06)
Rep. John Boehner: ``The 527s were created out of the
bipartisan campaign finance reform, something that many of us
foresaw, that we were pushing money out of a regulated system
into an unregulated system. You know, most people wanted to get
rid of soft money because they didn't think it was regulated,
even though soft money had to be disclosed in terms of who gave
it, what amounts, and how you spent it--and there were rules
around how you could spend it. And when you look at what
happened after campaign reform passed, these 527 organizations
erupted. There is no disclosure of where their money comes from
or how they spend it or what they do with it. And they're
spending hundreds of millions of dollars trying to influence
federal elections. And I believe that these organizations ought
to be covered under the same kind of regulations that govern
political parties.'' (Boehner Remarks, 3/16/06)
Rep. Vern Ehlers: ``Republican Vernon J. Ehlers of
Michigan, called 527s ``a curse to the political process'' that
lacks accountability.'' (Congressional Quarterly, 6/29/05)
Rep. Eric Cantor: ``Anything that moves us back towards
that notion of transparency and real-time reporting of
donations and contributions I think would be a helpful move
towards restoring confidence of voters.'' (Newsweek, SCOTUS
Ruling Spells Disaster for Political Transparency, 01/21/2010)
Sen. Lamar Alexander: ``I support campaign finance reform,
but to me that means individual contributions, free speech and
full disclosure. In other words, any individual can give
whatever they want as long as it is disclosed every day on the
Internet. Otherwise, you restrict free speech and favor super-
rich candidates--candidates with famous names, the media and
special interest groups, all of whom can spend unlimited
money.'' (Washington Post, Presidential Candidate Lamar
Alexander, 05/19/1999)
Sen. John Cornyn: ``I think the system needs more
transparency, so people can more easily reach their own
conclusions.'' (McClatchy, What do both parties have in common?
Wall Street donations, 04/25/2010)
Sen. John McCain: ``This is not a partisan issue. It should
not advantage one party over the other. What reform does is
create transparency, equality, and participation, and inspire
confidence in those we represent. The strength and real muscle
in this fight lies with the American people. During the long
battle in the Senate to pass campaign finance reform, we called
on the American public to make their voices heard on Capitol
Hill. They answered, and the impact was astounding.''
(Congressional Record, Speech on Bipartisan Campaign Reform
Act, 02/04/2004)
Sen. Susan Collins: ``Sen. Collins . . . believes that it
is important that any future campaign finance laws include
strong transparency provisions so the American public knows who
is contributing to a candidate's campaign, as well as who is
funding communications in support of or in opposition to a
political candidate or issue.'' (The Hill, GOP senators avoid
co-sponsoring campaign finance reform legislation, 04/20/2010)
Sen. Jeff Sessions: ``I don't like it when a large source
of money is out there funding ads and is unaccountable . . . To
the extent we can, I tend to favor disclosure.'' (The Hill,
Campaign finance bill has GOP wary, 04/22/2010)
Sen. Thad Cochran: ``We are Senators with varying political
views, but we agree that the public has a right to expect
electronic filing and online disclosure of campaign finance
records.'' (Roll Call, Four Senators Urge Expansion of
Mandatory Electronic Filing, 09/12/2009)
Rep. Kevin McCarthy: ``The best way, the fairest way, is
greater transparency. Let people understand where it is going
and what's happening.'' (Newsweek, SCOTUS Ruling Spells
Disaster for Political Transparency, 01/21/2010)
Rep. Fred Upton: ``But advocates of full disclosure say the
groups skirt the law with barely concealed electioneering, such
as messages that encourage viewers to call a certain lawmaker
if they agree with the group's views. `It's a gigantic loophole
that needs to be closed,' said Rep. Fred Upton, R-Mich., a
moderate who supports campaign finance reform.'' (Newport News
Daily Press, 6/10/00)
Rep. David Dreier: ``Well, let me just say at the outset,
Ray, that I, I agree with him that we need to move ahead with
campaign finance reform. I'm one who wants to empower the
voters and have greater disclosure, that's really my priority
when it comes to campaign finance reform.'' (NPR, 1/6/97)
Rep. David Dreier: ``Well, the fact of the matter is George
Bush has, in fact, reformed. He's reformed frivolous lawsuits,
he's reformed education, he's reformed taxes, he's reformed
patient protection. He's done all that as the governor of
Texas. Now, there has not been a lot of attention focused on
it, but that's something to which we can all look and be
extremely proud. On the issue of campaign finance reform, he's
been out there arguing vigorously for full disclosure. He wants
to make sure that we have parity established, if we eliminate
soft money for both unions and businesses. And so, Yes, he's
been reforming. He's been doing it and he's got proposals for
when he gets to the White House that he wants us to move.''
(MSNBC, 2/15/00)
------
Annenberg Public Policy Center Calculates Dollars Spent by Four Highest
Spending Third Party Groups on Deceptive TV Ads Attacking or Supporting
Republican Presidential Contenders
For Immediate Release: April 27, 2012
Contact: Kathleen Hall Jamieson at [email protected] or 215-898-9400
Drawing on spending estimates from Kantar Media CMAG and
the fact checking of FactCheck.org, the Annenberg Public Policy
Center has created a dollars in deception measure (DDs)
calculating dollars spent on televised presidential third party
ads by the groups calling themselves ``The Red White and Blue
Fund,'' ``Winning Our Future,''``Restore Our Future,'' and the
American Federation of State, County and Municipal Employees
(AFSCME).
From Iowa through Wisconsin, 23.3 million (56.7%) of the
41.1 million dollars were spent on 19 ads containing deceptive
or misleading claims.
Most of the dollars in deception (an estimated $20.8
million) were aired by the pro-Romney super PAC ``Restore Our
Future'' (estimated 8.8 million DDs--dollars in deception--
attacking former House Speaker Newt Gingrich, an estimated 9.4
million DDs attacking former Pennsylvania Senator Rick
Santorum, and an estimated 2.6 million in DDs making the case
for the election of former Massachusetts governor Mitt Romney).
``Restore Our Future'' outspent the pro-Gingrich and pro-
Santorum super PACs by 20 to 1.
The pro-Gingrich super PAC ``Winning Our
Future'' an estimated $917,670
The pro-Democratic labor union American
Federation of State, County and Municipal
Employees an estimated $846,380
``Restore Our Future'' spent DDs against Gingrich and
Santorum on such deceptions as:
``Gingrich not only teamed up with Nancy
Pelosi on global warming, but together they co-
sponsored a bill that gave $60 million a year to a U.N.
program supporting China's brutal `One Child' policy.''
(est. $2,394,813)
Two versions of a claim against Santorum:
``Santorum voted to let convicted felons
vote.'' Ad shows visual of men walking in
orange prison jumpsuits, suggesting felons
currently serving their time would be allowed
to vote. (est. $4,849,010)
``With your values, how would you have
voted? Would you have voted to let convicted
violent felons regain the right to vote? Rick
Santorum voted `yes,' joining Hillary
Clinton.'' Ad shows visual of men walking in
orange prison jumpsuits, suggesting felons
currently serving their time would be allowed
to vote. (est. $3,879,830)
The pro-Santorum super PAC ``Red White and Blue Fund'' made
this deceptive claim:
``Romney left Massachusetts $1 billion in
debt.'' (est. $603,140)
The pro-Gingrich super PAC Winning Our Future made the
following deceptive claim against Romney:
``Romneycare costs spiraled out of control,
hiking premiums squeezing household budgets.'' (est.
$412,530)
The amounts spent on television ads advancing the deceptive
claims (when multiple misleading claims appeared in the same
ad, the total spent airing the ad is apportioned by claim):
``While Romney was a director at the Damon
Corporation, the company was defrauding Medicare of
millions.'' Ad shows visual of Mitt Romney morphing
into Florida Governor Rick Scott, who was accused of
Medicare fraud, while Romney was not, with text and
voiceover saying: ``Corporate Greed, Medicare Fraud.
Sound Familiar?'' (AFSCME, est. $423,190)
``The company was fined $100 million, but
Romney, himself, made a fortune.'' Ad shows visual of
Mitt Romney morphing into Florida Governor Rick Scott,
who was accused of Medicare fraud, while Romney was
not, with text and voiceover saying: ``Corporate Greed,
Medicare Fraud. Sound Familiar?'' (AFSCME, est.
$423,190)
``Romney supervised a company guilty of
massive Medicare fraud'' Visual in ad called ``Blood
Money'' pastes the text, ``ILLEGAL ACTIVITY . . . UNDER
ROMNEY'S NOSE.'' A shorter version of the ad pastes the
text, ``Company (in small print) GUILTY OF MASSIVE
MEDICARE FRAUD (in large, bold print)'' over Romney's
face, and pastes the text, ``ILLEGAL ACTIVITY'' over an
image of Romney. (``Winning Our Future,'' est.
$325,980)
``Romney left Massachusetts $1 billion in
debt.'' (``Red White and Blue Fund,'' est. $603,140)
``Meet the Real Mitt Romney: Supported the
Wall Street Bailout, putting Americans trillions in
debt'' (``Red White and Blue Fund,'' est. $81,910)
``Romneycare costs spiraled out of control
hiking premiums, squeezing household budgets''
(``Winning Our Future,'' est. $412,530)
``[Romney] thinks judges can overrule
parents on abortions.'' (``Winning Our Future,'' est.
$179,160)
``Gingrich not only teamed up with Nancy
Pelosi on global warming, but together they co-
sponsored a bill that gave $60 million a year to a U.N.
program supporting China's brutal One Child' policy.''
(``Restore Our Future,'' est. $2,394,813)
``Newt was fined $300,000 for ethics
violations'' (``Restore Our Future,'' est. $2,440,769)
``Gingrich took $1.6 million dollars from
Freddie Mac just before it helped cause the economic
meltdown'' (``Restore Our Future,'' est. $2,211,690)
``With your values, how would you have
voted? Would you have voted to let convicted violent
felons regain the right to vote? Rick Santorum voted
yes,' joining Hillary Clinton.'' Ad shows visual of men
walking in orange prison jumpsuits, suggesting felons
currently serving their time would be allowed to vote.
(``Restore Our Future,'' est. $3,879,830)
``Santorum voted to let convicted felons
vote.'' Ad shows visual of men walking in orange prison
jumpsuits, suggesting felons currently serving their
time would be allowed to vote. (``Restore Our Future,''
est. $4,849,010)
``While Newt was speaker, earmarks
exploded.'' Ad shows on-screen text: ``While Newt Was
Speaker, Earmarks Nearly Doubled To $14.5 Billion.''
Fact checking found this figure to be inaccurate.
(``Restore Our Future,'' est. $1,255,480)
``As speaker, Gingrich supported tax payer
funding of some abortions.'' (``Restore Our Future,''
est. $152,237)
``On the economy, Rick Santorum says, I
don't care what the unemployment rate's gonna be.'''
(``Restore Our Future,'' est. $696,990)
``Freddie Mac helped cause the economic
collapse, but Gingrich cashed in. Freddie Mac paid Newt
$30,000 an hour, $1.6 million.'' (``Restore Our
Future,'' est. $325,583)
``[Romney] turned a deficit into a surplus
without raising taxes.'' (``Restore Our Future,'' est.
$2,486,785)
``[Mitt Romney] took over a state facing
huge deficits, and he turned it around without raising
taxes, vetoing hundreds of bills.'' (``Restore Our
Future,'' est. $154,765)
To see a video release illustrating these findings and an
analysis of what is deceptive about each of these claims, click
here to go to FlackCheck.org's ``Stand by Your Ad'' deception
log.
High Percent of Presidential Ad Dollars of Top Four 501(c)(4)s
Backed Ads Containing Deception, Annenberg Study Finds
For Immediate Release: June 20, 2012
Contact: Kathleen Hall Jamieson at 215-898-9400
An analysis by the Annenberg Public Policy Center conducted
for the Center for Responsive Politics found that from December
1, 2011 through June 1, 2012, 85% of the dollars spent on
presidential ads by four top-spending third-party groups known
as 501(c)(4)s were spent on ads containing at least one claim
ruled deceptive by fact- checkers at FactCheck.org,
PolitiFact.com, the Fact Checker at the Washington Post or the
Associated Press.
Under IRS rules, a 501(c)(4) operates ``only to promote
social welfare to benefit the community.'' As long as it is
organized primarily to promote the community's general welfare,
it may lobby for legislation and participate in political
campaigns.
These groups don't have to disclose their donors.
From December 1, 2011 through June 1, 2012, the four top
presidential campaign- spending 501(c)(4)s spent an estimated
$24.9 million\1\ ($24,916,690) of their $29.3 million
($29,320,110) presidential ad dollars on ads containing
deceptions.
---------------------------------------------------------------------------
\1\All monetary figures are estimates provided by Kantar Media
CMAG, 12/1/2011 through
6/1/2012.
The claims\2\ ruled deceptive by the fact-checkers
included:
---------------------------------------------------------------------------
\2\Dollars spent per deceptive claim is calculated by dividing the
total dollars spent on the ad by the number of deceptive claims in the
ad, so when multiple deceptive claims appeared in the same ad, the
total spent airing the ad is apportioned by claim.
---------------------------------------------------------------------------
``Obama personally lobbied to kill a
pipeline bringing oil from Canada'' (Est. $191,490
spent on claim)--Crossroads GPS
``Obama opposed exploring for energy in
Alaska'' (Est. $1,634,500 spent on claim)--American
Energy Alliance
``The stimulus bill sent tens of millions of
dollars to build traffic lights in China'' (Est.
$2,509,000 spent on claim)--Americans for Prosperity
``Obama's White House is full of Wall Street
executives.'' (To support this claim, the viewer is
shown photos of seven people. But one never worked as
an investment banker (Geithner); two have resumes that
fall far short of being ``Wall Street executives''
(Rahm Emanuel and Louis Caldera); and one was not part
of the White House (Jon Corzine). While the ad's
narrator focuses on these seven ``Wall Street
executives,'' 27 names scroll up the screen under the
header of ``Obama's Wall Street Inner Circle.''
FactCheck.org found 14 of those names don't belong on
the list.) (Est. $2,647,445 spent on claim)--American
Future Fund
To see other deceptive claims by these 501(c)(4) groups as
well as evaluations of them by the major fact-checking groups,
go to the FlackCheck.org Deception Log.
A study released by APPC in April found that from the Iowa
Caucus through the Wisconsin primary 56.7 percent of the
dollars spent by the four top-spending third-party groups
(three super PACs and AFSCME) on presidential campaign ads was
spent on ads containing at least one deception.
``Across the history of campaign communication, third-party
ads have been both more attack-driven and more deceptive than
candidate-sponsored ones,'' noted APPC Director Kathleen Hall
Jamieson at the Center for Responsive Politics' ``Shadow
Money'' seminar at the National Press Club today.
``Unsurprisingly, our 2012 APPC studies of third-party
deception confirm that as the level of donor disclosure drops,
the level of duplicity rises. This year, presidential super PAC
ads are more deceptive than those sponsored by presidential
candidates and C4 presidential ads more duplicitous than super
PAC ones.''
------
[From the Brennan Center for Justice]
National Survey: Super PACs, Corruption, and Democracy
AMERICANS' ATTITUDES ABOUT THE INFLUENCE OF SUPER PAC SPENDING ON
GOVERNMENT AND THE IMPLICATIONS FOR OUR DEMOCRACY
SUMMARY
A recent national survey conducted on behalf of the Brennan
Center for Justice at NYU School of Law demonstrates that the
spending of Super PACs in this year's election cycle has given
rise to a large, bipartisan consensus that such outsized
spending is dangerous for our democracy. Historical polling has
repeatedly shown that Americans believe elected officials favor
the interests of large contributors to their own campaign war-
chests. This new poll reveals for the first time that Americans
have similar fears of elected officials favoring big donors to
nominally independent Super PACs--and also that many are less
likely to vote because of Super PAC spending.
From April 12-15, 2012, the independent Opinion Research
Corporation conducted a national telephone survey of 1,015
adults living in the continental United States.\1\ A summary of
responses to each polling question is provided below. A
detailed Appendix, including the poll's script, methodology,
and responses broken down by demographics, is available on the
Brennan Center's website at http://www.brennancenter.org/
Super_PAC_Poll_Appendix.
The poll reveals that nearly 70 percent of Americans
believe Super PAC spending will lead to corruption and that
three in four Americans believe limiting how much corporations,
unions, and individuals can donate to Super PACs would curb
corruption. Of those who expressed an opinion, more than 80
percent believe that, compared with past elections, the money
being spent by political groups this year is more likely to
lead to corruption. And, most alarmingly, the poll revealed
that concerns about the influence Super PACs have over elected
officials undermine Americans' faith in democracy: one in four
respondents--and even larger numbers of low-income people,
African Americans, and Latinos--reported that they are less
likely to vote because big donors to Super PACs have so much
more sway than average Americans.
SUPER PAC SPENDING HAS PRODUCED WIDESPREAD PERCEPTIONS OF CORRUPTION
By significant margins, Americans believe new rules that
allow individuals, corporations, and unions to donate unlimited
amounts to Super PACs will lead to corruption. These beliefs
are held equally by both Republicans and Democrats.
69% of respondents agreed that ``new rules that
let corporations, unions and people give unlimited money to
Super PACs will lead to corruption.'' Only 15% disagreed.\2\
Notably, 74% of Republicans and 73% of Democrats agreed with
this statement.\3\
73% of respondents agreed that ``there would be
less corruption if there were limits on how much could be given
to Super PACs.'' Only 14% disagreed. Here, 75% of Republicans
and 78% of Democrats agreed.
Only about 1 in 5 Americans agree that average
voters have the same access to candidates (and influence on
candidates) as big donors to Super PACs. Two-thirds of
Americans disagree.
OF THOSE EXPRESSING AN OPINION, MORE THAN FOUR IN FIVE BELIEVE SPENDING
IN THIS ELECTION CYCLE IS MORE LIKELY TO LEAD TO CORRUPTION
Half of respondents--and 85% of those expressing
an opinion--agreed that spending in this election is more
likely to lead to corruption than in previous elections. Only
9% of respondents thought that, compared to previous elections,
it was less likely that the money spent by political groups in
this election will lead to corruption. Republicans (51%) and
Democrats (54%) both agreed that spending in this election is
more likely to lead to corruption.
BROAD BIPARTISAN MAJORITIES BELIEVE ELECTED OFFICIALS FAVOR THE
INTERESTS OF SUPER PAC DONORS OVER THE PUBLIC INTEREST
Large majorities of Americans believe that members of
Congress will favor the interests of those who donate to Super
PACs over those who do not--and that Super PAC donors can
pressure elected officials to alter their votes.
More than two-thirds of all respondents (68%)--
including 71% of Democrats and Republicans--agreed that a
company that spent $100,000 to help elect a member of Congress
could successfully pressure him or her to change a vote on
proposed legislation. Only one in five respondents disagreed.
More than three-quarters of all respondents--
77%--agreed that members of Congress are more likely to act in
the interest of a group that spent millions to elect them than
to act in the public interest. Similar numbers of Republicans
(81%) and Democrats (79%) agreed. Only 10% disagreed.
THE PERCEPTION THAT SUPER PACS HAVE EXCESSIVE INFLUENCE OVER GOVERNMENT
THREATENS GRAVE CONSEQUENCES FOR PARTICIPATORY DEMOCRACY
An alarming number of Americans report that their concerns
about the influence of donors to outside political groups make
them less likely to engage in democracy. Communities of color,
those with lower incomes, and individuals with less formal
education are more likely to disengage due to concerns about
how much influence is wielded by Super PAC donors.
Two in three Americans--65%--say that they trust
government less because big donors to Super PACs have more
influence than regular voters. Republicans (67%) and Democrats
(69%) uniformly agree.
One in four Americans--26%--say that they are less
likely to vote because big donors to Super PACs have so much
more influence over elected officials than average Americans.
Less wealthy and less educated Americans were
significantly more likely to say they would be less
likely to vote because of Super PAC influence: 34% of
respondents with no more than a high school education,
and 34% of those in households with an annual income
less than $35,000, said they would be less likely to
vote.\4\
A higher number of African-American and Hispanic
voters also stated that the disproportionate influence
of Super PAC donors will discourage them from voting:
29% of African Americans and 34% of Hispanics said they
were less likely to vote because of Super PAC
influence.\5\
41% of respondents--including 49% of those who
have no more than a high school education and 48% of those with
household incomes under $35,000--believe that their votes don't
matter very much because big donors to Super PACs have so much
more influence.\6\
ENDNOTES
\1\The survey included 764 landline interviews and 251 cell
phone interviews, and was weighted to account for geographic,
demographic, and socioeconomic underrepresentation.
\2\Unless otherwise indicated, the margin of error for
reported survey results is 3.1%.
\3\The margin of error for all reported results for
Republicans is 4.9%, and the margin of error for all reported
results for Democrats is 4.6%. Smaller numbers of independent
voters agreed with the statements in the survey; this was
largely because independent voters were more likely to report
having no feeling about whether they agreed or disagreed.
\4\The margin of error for all reported results for those
with a high school education or less is 5.1%, and the margin of
error for all reported results for those with household incomes
less than $35,000 is 5.3%.
\5\The margins of error for this particular result for
African-Americans and Hispanics are 9.6% and 13.0%,
respectively. Because of low sample sizes, we were not able to
conclude that these results were statistically significant.
\6\Respondents with a high school education or less, and
respondents with household incomes under $35,000, were
significantly more likely to believe that their votes don't
matter very much because big donors to Super PACs have so much
more influence.
------ --
--------
(Order List: 565 U.S.), Friday, February 17, 2012, Order in Pending
Case
11A762: AMERICAN TRADITION PARTNERSHIP, INC., ET AL. V. BULLOCK, ATT'Y
GEN. OF MT, ET AL.
The application for stay presented to Justice Kennedy and
by him referred to the Court is granted, and the Montana
Supreme Court's December 30, 2011, decision in case No. DA 11-
0081, is stayed pending the timely filing and disposition of a
petition for a writ of certiorari. Should the petition for a
writ of certiorari be denied, this stay shall terminate
automatically. In the event the petition for a writ of
certiorari is granted, the stay shall terminate upon the
issuance of the mandate of this Court.
Statement of Justice Ginsburg, with whom Justice Breyer
joins, respecting the grant of the application for stay.
Montana's experience, and experience elsewhere since this
Court's decision in Citizens United v. Federal Election Comm'n,
558 U.S. __ (2010), make it exceedingly difficult to maintain
that independent expenditures by corporations ``do not give
rise to corruption or the appearance of corruption.'' Id., at
__ (slip op., at 42). A petition for certiorari will give the
Court an opportunity to consider whether, in light of the huge
sums currently deployed to buy candidates' allegiance, Citizens
United should continue to hold sway. Because lower courts are
bound to follow this Court's decisions until they are withdrawn
or modified, however, Rodriguez de Quijas v. Shearson/American
Express, Inc., 490 U.S. 477, 484 (1989), I vote to grant the
stay.
Cite as: 567 U.S. __ (2012)
Per Curiam
SUPREME COURT OF THE UNITED STATES
American Tradition Partnership, Inc., FKA Western Tradition
Partnership, Inc., et al. v. Steve Bullock, Attorney General of
Montana, et al.
ON PETITION FOR WRIT OF CERTIORARI TO THE SUPREME COURT OF MONTANA
No. 11-1179. Decided June 25, 2012
Per Curiam.
A Montana state law provides that a ``corporation may not
make . . . an expenditure in connection with a candidate or a
political committee that supports or opposes a candidate or a
political party.'' Mont. Code Ann. 13-35-227(1) (2011). The
Montana Supreme Court rejected petitioners' claim that this
statute violates the First Amendment. 2011 MT 328, 363 Mont.
220, 271 P. 3d 1. In Citizens United v. Federal Election
Commission, this Court struck down a similar federal law,
holding that ``political speech does not lose First Amendment
protection simply because its source is a corporation.'' 558
U.S. ___, ___ (2010) (slip op., at 26) (internal quotation
marks omitted). The question presented in this case is whether
the holding of Citizens United applies to the Montana state
law. There can be no serious doubt that it does. See U.S.
Const., Art. VI, cl. 2. Montana's arguments in support of the
judgment below either were already rejected in Citizens United,
or fail to meaningfully distinguish that case.
The petition for certiorari is granted. The judgment of the
Supreme Court of Montana is reversed.
It is so ordered.
Cite as: 567 U. S. -------- (2012)
Breyer, J., dissenting
SUPREME COURT OF THE UNITED STATES
American Tradition Partnership, Inc., FKA Western Tradition
Partnership, Inc., et al. v. Steve Bullock, Attorney General of
Montana, et al.
ON PETITION FOR WRIT OF CERTIORARI TO THE SUPREME COURT OF MONTANA
No. 11-1179. Decided June 25, 2012
JUSTICE BREYER, with whom JUSTICE GINSBURG, JUSTICE SOTOMAYOR, and
JUSTICE KAGAN join, dissenting.
In Citizens United v. Federal Election Commission, the
Court concluded that ``independent expenditures, including
those made by corporations, do not give rise to corruption or
the appearance of corruption.'' 558 U.S. ___, ___ (2010) (slip
op., at 42). I disagree with the Court's holding for the
reasons expressed in Justice Stevens' dissent in that case. As
Justice Stevens explained, ``technically independent
expenditures can be corrupting in much the same way as direct
contributions.'' Id., at ___ (slip op., at 67-68). Indeed,
Justice Stevens recounted a ``substantial body of evidence''
suggesting that ``[m]any corporate independent expenditures . .
. had become essentially interchangeable with direct
contributions in their capacity to generate quid pro quo
arrangements.'' Id., at ___ (slip op., at 64-65).
Moreover, even if I were to accept Citizens United, this
Court's legal conclusion should not bar the Montana Supreme
Court's finding, made on the record before it, that independent
expenditures by corporations did in fact lead to corruption or
the appearance of corruption in Montana. Given the history and
political landscape in Montana, that court concluded that the
State had a compelling interest in limiting independent
expenditures by corporations. 2011 MT 328, para.para.36-37, 363
Mont. 220, 235-236, 271 P. 3d 1, 36-37. Thus, Montana's
experience, like considerable experience elsewhere since the
Court's decision in Citizens United, casts grave doubt on the
Court's supposition that independent expenditures do not
corrupt or appear to do so.
Were the matter up to me, I would vote to grant the
petition for certiorari in order to reconsider Citizens United
or, at least, its application in this case. But given the
Court's per curiam disposition, I do not see a significant
possibility of reconsideration. Consequently, I vote instead to
deny the petition.
CONGRESSIONAL FORUM: THE MOST EXPENSIVE SEAT IN THE HOUSE: THE STATE OF
OUR CAMPAIGN FINANCE SYSTEM
----------
WEDNESDAY, APRIL 18, 2012
Washington, DC.
The forum met at 1:59 p.m., in Room 1310, Longworth House
Office Building, Hon. Charles A. Gonzalez, presiding.
Present: Representatives Gonzalez, Pelosi, Brady of
Pennsylvania, Price of North Carolina, Ellison, Van Hollen, and
Capuano.
Mr. Gonzalez. Good afternoon, everybody. We will start off
with an apology. But, obviously, we had votes, and that is
always the first order of business.
At this time, I want to call this forum to order, and I
would like to begin by thanking House Administration Chairman
Dan Lungren for allowing us to use the committee room.
The past 2 years since the Supreme Court's decision in
Citizens United have seen a revolution in campaign finance
laws, and it is time that we looked into it. Even before
Citizens, the Jack Abramoff scandal and others showed how
corruption damages our nation.
But even the appearance of corruption is destructive.
Seventy-five percent of Americans believe campaign
contributions buy results in Congress. That is a threat to our
democracy itself.
We have waited 15 months for the committee of jurisdiction
to hold hearings. We can't wait any longer. I am only sorry
this is the first discussion the House has held on this
subject, and the only hope is to see official hearings some
day. But we will do what we can to bring light to the issue.
Since Citizens United, we have entered a different world.
As we see on Chart 1, outside spending in campaigns has
drastically increased. The spending on the most expensive
campaign for the House of Representatives rose from $1.7
million in 1990 to $11.7 million in 2010.
Spending by groups that don't disclose their donors
increased from 1 percent to 47 percent, Chart 2, as you can
see. Part of this has been facilitated by this new invention
referred to as the ``Super PAC.'' And we will have a clip on
what, in essence, is a Super PAC.
[Video shown.]
Ted Koppel. [What is the difference] between a PAC
and a Super PAC?
Stephen Colbert. Well, it gets technical but, without
going into too much detail, one of them has the word
``Super'' in front of it and that makes it a Super PAC.
Other than that, as far as I can tell, the difference
between a PAC and a Super PAC is a cover letter.
Because I formed a PAC but a PAC can only take so much
money, it can only spend so much money and I wanted to
spend unlimited amounts of money and receive, more
importantly, unlimited amounts of money. And so my
lawyer told me all I had to do is add a cover letter
that said `I intend this to be a Super PAC,' and it was
a Super PAC.
Ted Koppel. So now you can take all the money that
people are unwise enough to send you?
Stephen Colbert. Any amount. Did you bring your
checkbook?
Ted Koppel. Of course. How much money have you
collected so far?
Stephen Colbert. Oh, the fun thing about that is I
don't have to tell you.
[End video]
Mr. Gonzalez. What was the Supreme Court thinking? The
justices were fully aware of the threat that is posed by
political contributions to judges who run for judicial posts,
but they saw no such threat to the legislative branch. And we
know that Justice Scalia laughed at the idea that people who
sign political petitions should remain anonymous because, as he
said at oral argument, ``The fact [is] that running a democracy
takes a certain amount of civic courage, and the First
Amendment does not protect you from criticism or even nasty
phone calls when you exercise your political rights to
legislate or to take part in the legislative process.''
In his concurring opinion in that case, Justice Scalia was
even more blunt. ``Requiring people to stand up in public for
their political acts fosters civic courage without which
democracy is doomed.'' Yet an individual or a corporation can
remain anonymous when making a monetary contribution.
And we should also have a clip here on how that can be done
and effectuated.
[Video shown.]
Stephen Colbert. Ok, so now I can get corporate
individual donations of unlimited amount for my (c)(4).
What can I do with that money?
Trevor Potter. Well, that (c)(4) could take out
political ads and attack candidates or promote your
favorite ones as long as it's not the principal purpose
for spending its money.
Stephen Colbert. No, my principle purpose is an
educational entity. Right?
Trevor Potter. There you go.
Stephen Colbert. I want to educate the public that
gay people cause earthquakes.
Trevor Potter. There are probably some (c)(4)s doing
that.
Stephen Colbert. Ok, can I take my (c)(4) money and
then donate it to my Super PAC?
Trevor Potter. You can.
Stephen Colbert. Wait, wait. Super PACs are
transparent!
Trevor Potter. Right.
Stephen Colbert. And the (c)(4) is secret. So I can
take secret donations of my (c)(4) and give it to my
supposedly transparent Super PAC?
Trevor Potter. And it'll say, Given by your (c)(4).
Stephen Colbert. What is the difference between that
and money laundering?
Trevor Potter. It's hard to say.
Stephen Colbert. Well, Trevor, thank you so much for
setting me up.
[End video]
Mr. Gonzalez. Now, Mr. Colbert may be using satire, but his
point is very real. Phony corporations have been set up to
disguise donations. W Spann LLC gave $1 million to the Super
PAC, Restore Our Future, and only investigative journalism and
the donor's embarrassment revealed the millionaire behind the
money. There are criminal probes into other such donations, but
some are completely legal.
It used to be that every politician, whatever else they
thought about campaign finance reform in general, was for
disclosure. There is a list of old quotes on the press table
that are available to those that want to see those previous
positions taken by the same individuals that would oppose
DISCLOSE today. All that, of course, has changed, as I just
mentioned.
Even some of the biggest donors to super PACs are opposed
to the idea of unlimited donations. One prominent contributor,
whose family has contributed more than $15 million to a Super
PAC, said, ``I'm against very wealthy people attempting to or
influencing elections. But as long as it is doable, I am going
to do it.''
I am sorry that none of the major Super PAC donors accepted
my invitation to testify today, but we do have four panelists
here today that are very familiar with the subject and some
very articulate Members of Congress that are supporting that
which we can do in the way of disclosure.
I will begin by recognizing the distinguished Democratic
leader Nancy Pelosi for an opening statement.
Ms. Pelosi. Thank you very much, Ranking Member Gonzalez,
for your leadership in bringing us here today on this important
issue, so important that it is fundamental to our great
democracy.
I am honored to be here with you and with our ranking
member of the full committee, Congressman Brady, and our other
colleagues: Congressman Chris Van Hollen, author of the
DISCLOSE Act; with David Price, a respected Member of Congress,
who brings academic as well as governmental credentials to this
discussion; Keith Ellison, Congressman Keith Ellison, who is
working at the grassroots level to try to offset some of the
cynicism that is growing regarding the use of money in
campaigns; and Congressman Capuano, a respected member of this
committee who has worked hard on this issue.
It is important because our Founders had intended that we
were a democracy, which meant we are a government of the people
and that the votes and the voices of the people would determine
the outcomes of elections, not the bank books of a very few
people.
Nearly a century ago, Supreme Court Justice Louis Brandeis
wrote about the dangers of corporate interests dominating our
economy, stifling competition, and harming our Nation. And he
reminded us in the face of these forces that, ``Sunlight is
said to be the best of disinfectants.'' We agree.
Today, we come together in that same tradition to shed
sunlight on our democratic process and preserve the integrity
of our elections, our democracy, to call on our colleagues to
protect the voices and the votes of the American people. Our
effort today is necessary because more than 2 years ago, with
the Citizens United decision, the Supreme Court opened the
floodgates of uninhibited special interest spending; secret,
undisclosed spending in our elections; and unlimited corporate
influence over our public policy debate.
In response to the Citizens United ruling, Democrats have
worked to restore transparency, fairness, and accountability to
our political process. We have worked to create what we believe
is necessary, a new politics free from special interest and big
money.
It is with that goal in mind that today we have come
together for a forum--thank you, Mr. Ranking Member Gonzalez
and Mr. Brady--for a forum called ``The Most Expensive Seat in
the House: The State of our Campaign Finance System.''
While I appreciate the recognition that Ranking Member
Gonzalez made to the chairman, who gave us permission to use
the room, I think it is really necessary to say if you need any
more argument about the need for openness, you only need look
to the fact that the chairman denied us the ability to use the
cameras, the room's built-in cameras so that we can transmit
what is happening here more fully.
In fact, the Republican majority has denied us hearings on
legislation called the DISCLOSE Act, which would require
corporations to report their campaign-related activities and,
as Mr. Van Hollen leads us in saying, calling upon them to
stand by their ads the same way candidates must do.
Already 160 Members have cosponsored this legislation, and
I hasten to add that our Mr. Brady, when he was chairman,
enabled the Republicans in the minority to have at least three
hearings at their request. We hope that the Republican majority
will enable this to be a full-fledged hearing. They won't let
this proceeding be called a hearing, so it is a forum.
This legislation, the DISCLOSE Act, passed the House in
2010 with bipartisan support only to be blocked in the Senate
by the Republicans. We must fight for full disclosure to get
unlimited secret donations out of our politics. We must fight
for reform to empower small donors and the grassroots to have a
greater role in our elections, and I contend that when we
reduce the role of money in politics--and not just Citizens
United, but all big money in politics--we will increase the
number of women, minorities, and young people in elective
office. It will have a very wholesome impact on our system.
Ultimately, we must fight to amend our Constitution to
overturn the Supreme Court decision that had strengthened the
hands of the special interest at the expense of the people's
interest. So I am very honored to join my colleagues in
welcoming this very distinguished panel to our forum today.
Norman Ornstein of the American Enterprise Institute; Paul
Ryan, FEC Program Director; Zephyr--like the wind--Teachout,
Professor, Fordham University School of Law; and Monica Youn,
Brennan Center Constitutional Fellow. They will be more
appropriately introduced.
But today's forum, this effort is about nothing less than
our democracy. The votes of the many must determine the outcome
of elections, not the bankroll of the very privileged few.
With that, Mr. Chairman, I once again commend you for
holding this forum and salute you for your leadership on this
subject.
Mr. Gonzalez. Madam Leader, thank you. Thank you for your
leadership and your participation today.
To the witnesses, you will be given 5 minutes to make your
oral remarks. If you submit anything in writing, please
understand that will become part of the record, and you can
supplement that, of course. But we are going to try to keep it
to 5 minutes, and then we will have Q&A and maybe even a second
round of Q&A.
Our first witness is Norman J. Ornstein, who received his
B.A. from the University of Minnesota and a Master's and a
Ph.D. in political science from the University of Michigan. Dr.
Ornstein is a longtime observer of Congress and politics. He
writes a weekly column for Roll Call and is an election analyst
for CBS News.
He served as coordinator of the American Enterprise
Institute-Brookings Election Reform Project and participates in
AEI's Election Watch series. He also serves as a senior
counselor to the Continuity of Government Commission. Mr.
Ornstein led a working group of scholars and practitioners that
helped shape the law known as McCain-Feingold that reformed the
campaign finance system. He was elected as a fellow of the
American Academy of Arts and Sciences in 2004.
His many books include ``The Permanent Campaign and Its
Future.'' He coauthored ``The Broken Branch: How Congress Is
Failing America and How to Get It Back on Track'' and also has
coauthored, the most recently, ``Vital Statistics on Congress
2008.''
And with that, I will turn it over for testimony by Dr.
Ornstein.
STATEMENTS OF NORMAN ORNSTEIN, RESIDENT SCHOLAR, AMERICAN
ENTERPRISE INSTITUTE; MONICA YOUN, BRENNAN CENTER
CONSTITUTIONAL FELLOW, NYU SCHOOL OF LAW; ZEPHYR TEACHOUT,
ASSOCIATE PROFESSOR, FORDHAM UNIVERSITY SCHOOL OF LAW; AND PAUL
S. RYAN, FEC PROGRAM DIRECTOR, CAMPAIGN LEGAL CENTER
STATEMENT OF NORMAN ORNSTEIN
Mr. Ornstein. Thanks, Mr. Chairman, Madam Leader, and
members of this panel, many of whom I have worked with on some
of these issues.
I do have a written statement. I just want to make three
quick points.
The first is about the Citizens United decision, a decision
that I think has reverberated around the country, and I have
seen it in my own travels, in discussions with people more than
any other in the last several decades. The first thing I want
to say is I actually have never seen a decision more poorly
reasoned or removed from reality as this one.
The idea, first of all, that corporations should be treated
the same as people when it comes to political involvement. When
individuals in the society have a multiplicity of interests and
motives, some of them very personal related to their own lives,
but others that reach out to the larger society and with an
interest in the futures of our children and grandchildren.
Corporations have one motive, which is profits.
At the same time, the idea that money equals speech--the
more money, the more speech, the better--flies in the face of
another reality. If I am speaking with my own voice or just
with one microphone to amplify it and you have 30-foot speakers
and an amplifier that can shake the seats at Nationals Park,
and we are both trying to speak at the same time, I don't view
that as something that is good for dialogue in a society. But
we have now created a situation where there is enormous
leverage for those with those amplifiers.
And I have to say that sitting in the Supreme Court, as it
argued--had an oral argument over the McComish decision,
another in a string of destructive decisions made by the court,
the logic applied there, which was involving the public funding
system in Arizona, where if a multimillionaire spent
significant sums of his or her own money and opted out of that
public funding system, that the candidate who had opted in
could raise a little bit more money. The idea that that would
damage the speech of the multimillionaire is a kind of logic
that, it seemed to me, belonged on another planet or in another
galaxy. But that is what we are talking about here.
And finally, the idea in Citizens United and Justice
Kennedy's decision that independent expenditures can't be
corrupting also belongs in another galaxy. The point I would
make there is, For anybody who has been for more than 10
minutes around the halls of this body or in any legislative
body, but now especially in the aftermath of Citizens United,
watching the pressures to raise money, watching what happens
when Members no longer have to worry simply about competing
against a candidate but against now the nightmare that, with 3
weeks to go in an election, some alien predator group
anonymously can parachute in behind your lines and spend $20
million to slime you, and you have to raise money in small
increments--there is no time to do it--has put everybody on
notice that they better raise war chests in advance.
And that means whether you are in this building or standing
outside, watching Members stream out in any odd moment to do
call time, which has now become far more significant, and
knowing what, as a member of this committee Barney Frank has
said, the demeaning process of having to go out and either beg
for money or shake people down. If that is not corrupting, I am
not sure what is.
And frankly, the independent amounts, the large amounts
that can be spent, the unlimited amounts, I have had lots of
people--senators in particular--tell me of their experiences
sitting down with somebody who says the equivalent of, you
know, ``I am working with Americans for a Better America, and
they have got more money than God. They really want this
amendment. And, if anybody challenges them and doesn't do it, I
don't know what they will do. But $20 million in the last few
weeks of a campaign, that is not beyond them.'' The result is,
we not only will have more money, but we are going to have more
amendments, more provisions that nobody will know about,
without a dime being spent. That is what unlimited money can
do.
My final point is, this is a problem with the Supreme
Court. That is a big lift until we get a change in the court.
We have to turn to other agencies where we can begin to get
some other impact that can bring us back to true independence
instead of the farce that we have now that Stephen Colbert and
our colleague, Trevor Potter, have pointed out so well, and to
real disclosure.
It would be nice if we could have gotten--it would have
been nice if we had gotten one Republican in the Senate to
support the DISCLOSE Act, including those who now talk
eloquently about the need for it in the last Congress. It would
be nice now if we can get a Federal Election Commission not to
deadlock 3-3 on almost every instance in which we enforce the
law.
The problem is not just Citizens United. It is that laws on
the books, everybody who is involved in this process knows you
can do almost anything that you want.
I hope you will support the Federal Communications
Commission as it moves forward now, commendably, with its
action to require broadcasters to put in their public file
online, in real time, the donors to the ads that they are
giving, which is being resisted strenuously by the same
broadcasters who are making billions of dollars in profits from
all of the ads that are going up. And I hope that you will also
work with the IRS to enforce its own regulations and the
Securities and Exchange Commission to require public
corporations to disclose all of their expenditures in this
area.
And finally, let me just say, it is worth thinking about an
idea that has been raised by a lawyer named Gregory Colvin to
introduce a law that would limit the political expenditures of
501(c)(4)s. I am not sure how much we can rely on the IRS, and
it may be worthwhile, as well, to pass a law that makes this
more explicit.
Thank you very much.
[The statement of Mr. Ornstein follows:]
Testimony of Norman J. Ornstein, Resident Scholar, American Enterprise
Institute, Before the Congressional Forum on Campaign Finance Reform,
April 18, 2012
Mr. Chairman and members of the Forum, thank you for the
opportunity to testify on the new world of campaign finance since the
Citizens United decision. I have written a fair amount about this
decision and its destructive and disastrous consequences for the
nation, and I will draw on some of that writing here.
I cannot recall a Supreme Court decision that has generated more
interest and more dismay. As I travel around the country and abroad, it
comes up repeatedly as a disaster in the making. The decision itself,
in my judgment, was an embarrassment in terms both of reasoning and a
lack of attachment to reality. The idea that corporations are
fundamentally the same as individuals when it comes to participation in
the electoral arena is at best wrong-headed. Individuals have multiple
interests and motives, some intensely personal but others more public
interested, including a long-term concern for the wellbeing of one's
children and grandchildren, while corporations have one interest,
maximizing profits.
The idea that money equals speech, and the more speech the better,
ignores what happens when one entity might have only his or her own
voice while the next one has thirty foot speakers and a ten-foot high
amplifier that can wholly drown out everyone else. The notion that
``independent'' contributions cannot be corrupting reflects a
breathtaking naivete--something underscored in a recent commentary by
conservative jurist Richard Posner. Consequences aside, Justice Anthony
Kennedy's decision may go down as one of the most poorly reasoned and
bolstered decision in modern times.
For all its problems, Citizens United at least offered full-
throated, 8-1 support for robust disclosure and made it clear that the
decision applied only to corporate involvement in independent
expenditure campaigns, not in direct involvement in the campaigns
themselves. But that unequivocal support for disclosure and clear
invocation of the need for real independence, has been met with
chicanery and obfuscation on the part of the Federal Election
Commission, a near-total lack of action to enforce its own clear
regulations by the Internal Revenue Service, and the new ardent
opposition to disclosure by former champions like Mitch McConnell and
John Boehner, making disclosure a farce and independence non-existent.
On the IRS, the recent revelation that an anonymous donor gave $10
million to American Crossroads GPS to run negative ads against
President Obama shows what a farce it is to enable Karl Rove's
organization to qualify as a ``social welfare'' group, when it could
not be more clear that American Crossroads GPS exists for one purpose,
to influence elections and to provide a safe haven for those who do not
want to disclose their identities. The same is true for many other
501(c)4s.
As for the idea that Citizens United and its progeny could not be
corrupting, anyone who has spent more than a nanosecond in the real
world has seen the reality. I have had conversations with several
incumbents in the Senate who are up in 2012 who say the same thing:
They can handle any of the several prospective opponents they might
face--but all of them fear a stealth campaign, landing behind their
lines and spending $20 million on ``independent'' campaigns designed to
trash the incumbent as someone who should be behind bars, not serving
in the Senate.
Most politicians understand that constituents who like them don't
really know a lot about them; voters don't spend a lot of time focusing
on politics and politicians. So a vicious and unrelenting ad campaign
can work. What do candidates then do? All of them are working overtime
to raise their own, protective war chests--meaning every spare moment
is spent on ``call time,'' begging for money or shaking down potential
donors.
Ask almost any lobbyist. I hear the same story there over and
over--the lobbyist met with a lawmaker to discuss a matter for a
client, and before he gets back to the office, the cell phone rings and
the lawmaker is asking for money. The connections between policy
actions or inactions and fundraising are no longer indirect or subtle.
Now comes the third component. As one Senator said to me, ``We have
all had experiences like the following: A lobbyist or interest
representative will be in my office. He or she will say, `You know,
Americans for a Better America really, really want this amendment
passed. And they have more money than God. I don't know what they will
do with their money if they don't get what they want. But they are
capable of spending a fortune to make anybody who disappoints them
regret it.''' No money has to be spent to get the desired outcome.
This is what Citizens United hath wrought. It is thoroughly
corrupting. And it is why, at minimum, we need to encourage the IRS to
do its job and implement its own regulations related to 501(c)(4)s,
rejecting the status for sham organizations that manipulate the process
only to shield the identity of donors and making big donors pay a gift
tax on their sham contributions; encourage and defend the Federal
Communications Commission in its commendable decision to put online
information from TV stations about the funders of political ads; urge
the Securities and Exchange Commission to require public companies to
disclose their political spending to shareholders in their annual
reports; and extend the current regulations for private contractors
with the government who have to disclose their direct campaign
contributions and expenditures to include the stealth contributions to
influence campaigns. Besides urging the president to implement the
executive order to accomplish the latter goal, I encourage you also to
urge the president to use his recess appointment authority to replace
the five of six Federal Election Commission members whose terms have
expired.
Finally, I would encourage you to examine a proposal by lawyer
Gregory Colvin to amend the Internal Revenue Code to put an annual
limit on political expenditures by 501(c)4s, which might be a more
fruitful route than relying on the IRS itself to act.
Mr. Gonzalez. Thank you very much, Dr. Ornstein.
I am going to be going a little out of order. I don't mean
to throw you all off, but the next witness is going to be
Monica Youn from the Brennan Center, Constitutional Fellow. Her
education consists of a B.A. from Princeton, Master's in
philosophy from Oxford, and J.D. from the Yale Law School.
Monica Youn is the inaugural Brennan Center Constitutional
Fellow at NYU School of Law, where she focuses on election law
and First Amendment issues. She is the editor of ``Money,
Politics, and the Constitution: Beyond Citizens United,'' a
book of essays by leading constitutional scholars, and she has
published law review articles on election law issues.
She has litigated election law cases in federal courts
across the Nation and has testified before Congress on multiple
occasions. Her political commentary has been published in Roll
Call, Slate, the L.A. Times, among other publications. She has
appeared on MSNBC; PBS; the NewsHour; Democracy Now!; and the
Bill Moyers Journal.
Her work at the Brennan Center has been recognized by the
New Leaders Council, which named her one of their ``40 under
40'' nationwide leaders in 2010 and by Common Cause, which
awarded her the John Gardner Award for Extraordinary
Leadership.
Ms. Youn.
STATEMENT OF MONICA YOUN
Ms. Youn. Thank you.
Well, it is 6 months out from the general election, and it
seems a little bit early for a weather report. But it seems
already clear to everyone in this room and outside this room
that the 2012 election is shaping up to be a perfect storm of
money in politics.
We have unprecedented levels of outside spending, combined
with massive loopholes in federal disclosure laws, which has
led to a situation that is really kind of the worst of all
possible worlds.
I wanted to focus my testimony, first of all, on the
definition and derivation of Super PACs. I then wanted to talk
specifically about what changed in the law between the post-
Citizens United era and the pre-Citizens United era, and then
to talk about--very briefly about some of the faulty
assumptions underlying the logic of Citizens United.
So Super PACs are the latest and greatest soft money
loophole, a phenomenon that threatens to overwhelm our
politics. Unlike the other major players in campaign
fundraising--candidates, political parties, and traditional
PACS--Super PACS have a court-conferred advantage. They do not
have to play by the same fundraising rules as everyone else.
Those other entities are all bound by federal contribution
limits, which regulate that both the source and amount of
contribution, and none of those entities can receive
contributions from corporate or union general treasury funds.
By contrast, Super PACs can raise and spend unlimited funds not
only from wealthy individuals, but also directly from corporate
treasuries. And, because of loopholes in federal election
disclosure laws, including the (c)(4) loophole discussed by
Stephen Colbert and, you know, the anonymous shell corporations
also created by Stephen Colbert, many of the sources of these
funds remain cloaked in secrecy.
So this morning's L.A. Times, for instance, reported that
Crossroads GPS, which is the (c)(4) that funds American
Crossroads, has received $77 million in undisclosed donations,
money that we can expect to have a major impact on what happens
with--on the electoral spending that Crossroads GPS is
permitted under current laws to engage in. We don't know who
these donors are. We don't even know whether these donors are
individuals or whether they are corporations.
So how did we get to this state of affairs? There has been
a lot of debate over whether the Supreme Court created Super
PACs in its Citizens United decision. I find a lot of that
discussion, frankly, beside the point.
The Supreme Court didn't create or even mention Super PACs.
Super PACs didn't exist at the time of Citizens United. But the
logic of Citizens United directly dictated that when the D.C.
Circuit heard the case, SpeechNow, that created Super PACs, it
had no choice but to follow along with that reasoning.
So what has actually changed? Because a lot of people will
say, ``Well, you know, this is politics. Politics ain't
beanbag. There was already corporate money in politics. There
were already wealthy donors pouring millions of dollars into
independent spending.''
But you know, prior to Citizens United, corporations and
unions could participate in politics, but they had to do so
through their separate segregated funds or PACs. These
consisted, crucially, of money that was limited and money that
was voluntarily contributed by individuals--by shareholders, by
corporate officers. And so, they had to abide by the same
fundraising rules as everyone else. Go, hat in hand and say,
``Hey, who wants to support the corporation's political
agenda?''
So, for example, in the 2008 election cycle, ExxonMobil did
exactly that. They went around, hat in hand, to their employee
shareholders. They collected about $700,000, which is a very
respectable amount of money.
But during the same election cycle, ExxonMobil's corporate
profits were $80 billion. That is a difference of more than
100,000 times. And what Citizens United does is it allows the
amount of money that every corporation has available to it to
act as a potential election war chest to increase by these
kinds of exponential figures. After Citizens United,
corporations can spend money, often through a shell corporation
or other loophole, and do so in an undisclosed manner.
So, secondly, about wealthy individuals. So, some people
have said, look, we all know about the Wyly brothers way back
in the day. We know about George Soros, all spending money. You
know, the Swift boat advertising. You know, wealthy donors have
always poured money into politics.
But that money had to be disclosed. Now that donors can
cloak their electoral influence in secrecy, we are seeing dark
money overwhelm the system. So as these slides will show you,
the amount of total outside spending until March 8th of this
year was $88 million, which is more than twice as much as 2008
and more than six times as much as in the 2004 cycle. So, now
that that money is in the dark, we are seeing individual
wealthy donors just flood to this new dark avenue.
So why did the court do this? And without--I am out of time
here. So I am just going to briefly mention the three faulty
assumptions that underlay the court's reasoning in Citizens
United.
First of all, that independent expenditures are truly
independent. As I explain in my written testimony, that would
depend on having a workable definition of what constitutes a
coordinated expenditure, a definition that the FEC has utterly
failed to promulgate or to enforce.
The second, that existing disclosure laws will protect
against corruption. Corporate political spending is not
required to be disclosed either to shareholders or to corporate
boards or to voters. It is very easy to keep this law in the
dark. But even if disclosure laws worked, disclosure is
necessary, but not sufficient. Disclosure points out the
outliers, but it doesn't really take care of the heart of the
problem.
And thirdly, that quid pro quo corruption is the only
problem Congress can constitutionally protect against. As Mr.
Ornstein mentioned in his testimony, we now have lots of
instances of ``Americans for a Better America'' or other,
similarly euphemistic, wealthy interests throwing their weight
around, you know, and acting in a way that is utterly
unaccountable.
This may resemble an oligopoly. This may resemble a
plutocracy. But it very little resembles what we have come to
think of as democracy.
Thank you very much.
[The statement of Ms. Youn follows:]
Testimony of Monica Youn, Brennan Center Constitutional Fellow at NYU
School of Law, before the Congressional Forum on ``The Most Expensive
Seat in the House: The State of Our Campaign Finance System'' April 18,
2012
I thank Ranking Member Gonzalez for convening this forum and for
inviting me to testify.
In previous congressional testimony,\1\ I explored the aftermath
and implications of the Supreme Court's watershed campaign finance
decision Citizens United v. FEC.\2\ Rather than reiterating that
analysis here, I will focus my testimony more narrowly on the linkage
between Citizens United and recent developments in our campaign finance
system, paying particular attention to the ``Super PAC'' phenomenon
that has dominated the early phases of the 2012 election cycle.
---------------------------------------------------------------------------
\1\The Fair Elections Now Act: A Comprehensive Response to Citizens
United: Hearing Before the S. Jud. Comm., Subcomm. on Constitution,
Civil Rights & Human Rights, 111th Cong. (2011) (statement of Monica
Youn); The First Amendment and Campaign Finance Reform after Citizens
United: Hearing Before H. Jud. Comm., Subcomm. on Constitution, Civil
Rights & Civil Liberties, 110th Cong. (2010) (statement of Monica
Youn). On the issue of campaign finance disclosure, I would also
respectfully refer the Committee to the recent written testimony of my
Brennan Center colleagues in the Senate Rules Committee's hearings on
the DISCLOSE Act of 2012. The Democracy Is Strengthened by Casting
Light On Spending in Elections Act (``DISCLOSE'') Act of 2012: Hearing
on S. 2219 Before the S. Comm. on Rules and Admin., 112th Cong. (2012)
(statement of Adam Skaggs and Mimi Marziani).
\2\130 S.Ct. 876 (2010).
---------------------------------------------------------------------------
the rise of super pacs
Although the 2012 election cycle is still in its beginning stages,
it is already clear that campaign fundraising will be dominated by the
massive new independent expenditure vehicles nicknamed ``Super PACs.''
Unlike traditional federal PACs, Super PACs only engage in independent
expenditures, and do not donate money directly to federal candidates.
Also unlike traditional PACs, which are bound by federal contribution
limits and cannot accept corporate or union contributions, Super PACs
can take in and spend unlimited amounts, including monies from
corporate and union treasury funds.\3\
---------------------------------------------------------------------------
\3\See also FEC Advisory Opinion 2010-11, July 22, 2010, at http://
saos.nictusa.com/aodocs/AO%202010-11.pdf.
---------------------------------------------------------------------------
As of May 2012, Super PACs have raised almost $160 million dollars
this election cycle and have spent close to $90 million--more than six
months from the general election.\4\ In state after state, Super PACs
have outspent the campaigns of those they are supporting.\5\ And, in
numerous primaries, Super PAC spending has been credited as the
deciding factor in electoral results.\6\
---------------------------------------------------------------------------
\4\2012 Outside Spending, by Super PACs, Opensecrets.Org, http://
www.opensecrets.org/outsidespending/summ.php?cycle=
2012&chrt=V&disp=O&type=S (last visited April 13, 2012).
\5\For instance, in Alabama and Mississippi almost all of the
television ads promoting presidential contenders were paid for by Super
PACs rather than the candidates' campaigns. Greg Giroux, Super-PAC Ads
Dominate Republican Race in Alabama, Mississippi, Bloomberg
Businessweek (March 13, 2012), http://www.businessweek.com/news/2012-
03-12/super-pacs-dominate-republican-ads-aired-in-alabama-mississippi-
primaries.
\6\See, e.g., Paul Blumenthal, Newt Gingrich South Carolina Surge
Boosted By Super PAC Spending Spree, HuffingtonPost.Com (Jan. 20, 2012,
2:05 PM), http://www.huffingtonpost.com/2012/01/20/newt-gingrich-south-
carolina-super-pacs-pending-n-1219093.html.
---------------------------------------------------------------------------
Although the Supreme Court's opinion in Citizens United did not
create or contemplate Super PACs, the logic of Citizens United directed
the result in SpeechNow v. FEC,\7\ the D.C. Circuit decision that
legalized Super PACs. In Citizens United, Justice Kennedy's opinion
stated that ``independent expenditures, including those made by
corporations, do not give rise to corruption or the appearance of
corruption.''\8\ Accordingly, under the Court's reasoning, since
restrictions on independent expenditures serve no anti-corruption
interest, they fail to pass constitutional muster. Following this
reasoning, the SpeechNow court held that corporations and unions could
make unlimited donations to PACs, so long as those PACs only engaged in
``independent expenditures'' and did not directly coordinate with a
campaign.
---------------------------------------------------------------------------
\7\599 F.3d 686 (D.C. Cir. 2010), cert. denied, 131 S.Ct. 553
(2010).
\8\130 S.Ct. at 909.
---------------------------------------------------------------------------
The Super PAC phenomenon throws into sharp relief the faulty
assumption that underlies the majority's reasoning in Citizens United--
that no risk of corruption attaches to expenditures that are
technically ``independent'' of a candidate's campaign. While Super PACs
were freed from contribution limits because they declared themselves
legally ``independent'' of candidate campaigns, the reality is that
they are anything but independent.
the myth of ``independence''
Despite the Supreme Court's repeated explanation that independent
expenditures must be truly and wholly independent--made ``without any
candidate's approval (or wink or nod),''\9\--the FEC has failed to
promulgate regulations that ``rationally separate[] election-related
advocacy from other activity'' since the Bipartisan Campaign Reform Act
was enacted in 2002.\10\ As a result, under the FEC's current
regulations, candidates can coordinate extremely closely with a
supportive Super PAC, and yet still be deemed not to have produced any
``coordinated communications,''\11\ and not to have ``coordinated''
with that candidate's campaign.\12\
---------------------------------------------------------------------------
\9\Colorado Republican Federal Campaign Comm. v. FEC, 533 U.S. 431,
442 (1996); McConnell v. FEC, 540 U.S. 93, 221-22 (2003).
\10\See, e.g., Shays v. FEC, 414 F.3d 76, 102 (D.C. Cir. 2005),
aff'g 337 F. Supp. 2d 28 (D.D.C. 2004); Shays v. FEC, 528 F.3d 914, 925
(D.C. Cir. 2008), aff'g 508 F. Supp. 2d 10 (D.D.C. 2007).
\11\See 11 C.F.R. Sec. 109.21.
\12\See 11 C.F.R. Sec. 109.20.
---------------------------------------------------------------------------
Since Citizens United, the FEC has deadlocked on several opinions
concerning the meaning of ``coordination'' and ``independent,''
establishing beyond question that the agency will not meaningfully
distinguish wholly independent groups from those that, in reality,
coordinate closely with candidates. Most egregiously, the FEC failed to
reject a Super PAC's request that it be permitted to claim continued
legal independence, and not be deemed to issue ``coordinated
communications'' despite producing television ads that were ``fully
coordinated'' with candidates. That the FEC deadlocked on this request,
issuing no binding ruling, underscores that the agency tasked with
overseeing the nation's campaign finance laws is unable or unwilling to
enforce any meaningful lines between groups that meet the Court's
strict definition as ``wholly independent'' from candidates, and those
that claim independence while actually coordinating closely with
candidates and undermining campaign finance rules. Indeed, the FEC has
allowed candidates to appear at fundraisers, and solicit funds, for
Super PACs that exist for the sole purpose of electing those
candidates--while permitting the Super PACs to continue claiming legal
independence.\13\ In short, the dysfunctional FEC has now effectively
sanctioned almost limitless cooperation between Super PACs and the
candidates they seek to elect--defying any notion that the groups meet
any commonly-held definition of ``independence.''
---------------------------------------------------------------------------
\13\13 Derek Willis Federal Officials Can't Raise Unlimited Funds,
F.E.C. Says, Caucus Blog, NYTimes.com (June 30, 2011), http://
thecaucus.blogs.nytimes.com/2011/06/30/federal-officials-cant-raise-
unlimited-funds-f-e-c-says/ (explaining that while the FEC rejected a
request to allow federal officials to raise unlimited funds for Super
PACs, such candidates would be allowed to solicit contributions for
Super PACs up to the legal limits).
---------------------------------------------------------------------------
The result is that many candidates (including all of the
competitive presidential candidates) have an affiliated Super PAC
acting as a de facto arm of their campaign. The proliferation of
candidate-specific Super PACs provides ample opportunity for
corruption, as contribution limits have become irrelevant and
supporters can give unlimited gifts that are functionally
indistinguishable from contributions to the candidates. For this
reason, Judge Richard Posner recently concluded, after considering the
current state of affairs:
It thus is difficult to see what practical difference there
is between super PAC donations and direct campaign donations,
from a corruption standpoint. A super PAC is a valuable weapon
for a campaign. . . . [T]he donors to it are known; and it is
unclear why they should expect less quid pro quo from their
favored candidate if he's successful than a direct donor to the
candidate's campaign would be.\14\
---------------------------------------------------------------------------
\14\Richard Posner, Unlimited Campaign Spending--A Good Thing?, The
Becker-Posner Blog (April 8, 2012), http://www.becker-posner-blog.com/
2012/04/ unlimited-campaign-spendingagood-thing-posner.html.
Super PACS have further blurred the already problematic distinction
between direct contributions and independent expenditures.
the end-run around contribution limits
Campaign contribution limits--including the century-old ban on
corporate contributions to candidates--are one of the cornerstones of
federal campaign finance regulation. The creation of Super PACs that
function as shadow campaigns has eviscerated contribution limits and
the ban on corporate campaign contributions.
First, Super PACs have rendered the dollar limits on individuals'
direct contributions to candidates toothless, if not entirely illusory.
Individuals who have donated the legal maximum to their favored
candidate can still give unlimited amounts to a super PAC dedicated to
electing that candidate, with knowledge that the latter contribution is
just as valuable to the candidate as the former. Wealthy donors have
seized on this contribution limit end-run. For example, in 2011, 84% of
the 205 donors to the super PAC supporting Mitt Romney had given the
maximum donation to Romney's primary campaign--including five donors
who each gave $1 million or more to the super PAC.\15\ The Super PAC
supporting President Obama has also benefitted from the largesse of
donors who have given the maximum amount to his campaign, receiving $2
million from DreamWorks CEO Jeffrey Katzenberg (and another $100,000
from DreamWorks partner Stephen Spielberg) and $1 million from comedian
Bill Maher. The $2,500 contributions that all these donors have given
to the candidate's actual campaign committees pale in comparison to
what they have donated to candidates' shadow campaigns.
---------------------------------------------------------------------------
\15\Paul Harris, Super PAC Donors Often Max Out on Individual
Donations, Study Finds, Guardian, Feb. 21, 2012.
---------------------------------------------------------------------------
Second, candidate-specific Super PACs have made a mockery of the
prohibition on corporate campaign contributions by allowing
corporations to contribute millions for electioneering expenditures
that are as valuable to candidates as contributions to their own war-
chests. Even at this early stage of the campaign, numerous corporations
have donated more than $1 million to Super PACs working to elect
specific candidates; other companies have made valuable, albeit lesser,
Super PAC contributions.\16\ We can expect corporate participation in
Super PACs to increase as the election cycle moves from party primaries
to the general election.
---------------------------------------------------------------------------
\16\See Phil Hirschkorn, Super PAC Donors by the Numbers, CBS NEWS
(Mar. 22, 2012), http://www.cbsnews.com/8301-503544_162-57402073-
503544/super-pac-donors-by-the-numbers (listing several corporations
that each gave $1 million to super PACs).
---------------------------------------------------------------------------
Moreover, corporations have made political contributions that favor
candidates while avoiding public disclosure of this spending by routing
their dollars through nonprofit organizations that spend money to
influence elections--including by donating to Super PACs--but are not
required to disclose their donors.\17\
---------------------------------------------------------------------------
\17\Andrew C. Byrnes & Cortlin H. Lannin, I Went Down to the
Crossroads: Lifting the Blindfold about the Origin of 501(c)(4)
Political Advertisements, 46 U.S.F. L. REV. 481, 483, 493-96 (2011);
see also Jonathan D. Salant, Payday Lender Political Donors Hidden in
Corporate Names, Bloomberg.Com (Mar. 21, 2012, 8:00 PM), http://
www.bloomberg.com/news/2012-0322/payday-lender-political-donors-hidden-
in-corporate-names.html (describing businesses' use of limited
liability corporations to secretly donate to super PAC supporting
Romney).
---------------------------------------------------------------------------
the concentration of political influence
Super PACs allow a few wealthy donors to wield disproportionate
influence over candidates. Over $50 million in contributions to
Republican Super PACs during the current election has come from
``[a]bout two dozen individuals, couples or corporations.''\18\ More
than 78% of the money donated to the super PACs active in the
presidential election has come from just ninety donors who each gave
more than $100,000.\19\ Over two-thirds of the money donated to Super
PACs came from donors who gave $500,000 or more.\20\ A super PAC
backing Newt Gingrich received almost all of its money from casino
magnate Sheldon Adelson and his family, who donated over $16
million.\21\ On the other side of the aisle, more than three-fourths of
the money contributed to the Super PAC supporting President Obama has
come from donors giving over $500,000.\22\
---------------------------------------------------------------------------
\18\18 Nicholas Confessore et al., In G.O.P. Race, a New Breed of
Superdonor, N.Y. Times, Feb. 22, 2012, at A1.
\19\19 Lee Drutman, The Presidential Super PACs: Five Takeaways,
Sunlight Foundation Blog (Feb. 1, 2012, 3:35 PM), http://
sunlightfoundation.com/blog/2012/02/01/ superpac-takeaways.
\20\20 Fredreka Schouten et al., Big-bucks Donations to Super PACs
Keep the GOP Race Going, USA Today, Mar. 21, 2012.
\21\21 Id.
\22\Id.
---------------------------------------------------------------------------
The enormous amounts given by a small number of donors raise the
clear possibility that candidates will feel indebted to donors and
grant them favors once in office. For instance, Billionaire Julian
Robertson has acknowledged that, in light of the $1.25 million he has
given to Restore Our Future, Romney might take Robertson's phone call
if he became president.\23\ It has long been an unfortunate truth of
our politics that major donors receive increased access to candidates
and officeholders,\24\ but to have such expectations of access
predicated on supposedly ``independent'' expenditures highlights the
extent to which Super PACs' purported ``independence'' is a widely-
recognized fiction.
---------------------------------------------------------------------------
\23\Wyatt Andrews & Phil Hirschkorn, Billionaire Super PAC Donor
Julian Robertson Speaks Out, CBS News (Apr. 6, 2012), http://
www.cbsnews.com/8301-503544_162-57410709-503544/billionaire-super-pac-
donor-julian-robertson-speaks-out.
\24\Mike McIntyre & Michael Luo, White House Opens Door to Big
Donors, and Lobbyists Slip In, NY Times, April 14, 2012, at A1.
---------------------------------------------------------------------------
the erosion of public confidence
Finally, Super PACs have created the appearance of corruption and
seriously undermined public confidence in elections and democracy, as
shown by media coverage and public opinion polls. There has been
thunderous opposition to the opportunities for corruption created by
unlimited Super PAC money in elections.\25\ Public opinion polls reveal
wide agreement with the news media's concerns about super PACs and
corruption. Americans strongly disapprove of Super PACs and independent
spending in elections:
---------------------------------------------------------------------------
\25\See, e.g., Editorial, The Power of Super PACs, Wash. Post, Jan.
9, 2012 (``The risk of corruption in candidate-specific super PACs is
as great as the size of supporters' checkbooks.''); Editorial, The
Broken System of Campaign Finance, San Diego Union-Tribune, Dec. 5,
2011 (arguing that super PACs collaborate with campaigns and expressing
concern about ``the corrupting influence of money, or the appearance of
such influence''); Editorial, The Campaign Jungle, N.Y. Times, Nov. 13,
2011, at SR10 (arguing that super PACs coordinate with candidates and
concluding, ``Limits on spending used to prevent donations from
becoming outright bribes, but now the limits are gone, and the path to
corruption is clear.''); Editorial, Not So Super, Raleigh News &
Observer, Oct. 14, 2011 (arguing that interest groups that donate to
super PACs are ``betting on dividends'' once candidates are elected);
Editorial, Our View: Presidential Race Not the Place for Secret Donors,
USA Today, Aug. 21, 2011 (comparing use of super PACs and nonprofit
corporations in election spending to organized crime).
---------------------------------------------------------------------------
One poll found that 69% of all Americans agree that Super
PACs should be made illegal; the poll found majority support for
banning Super PACs across political parties and the political
spectrum.\26\
---------------------------------------------------------------------------
\26\Damla Ergun, Seven in 10 Would Send Super PACs Packing, ABC
News (Mar. 13, 2012), http://abcnews.go.com/blogs/politics/2012/03/
seven-in-10-would-send-super-pacs-packing.
---------------------------------------------------------------------------
Sixty-seven percent of Americans--again including
majorities of Republicans, Democrats, and independents--said that there
should be legal limits on the amount independent groups can spend on
advertisements during a presidential campaign.\27\
---------------------------------------------------------------------------
\27\Brian Montopoli, Poll: Most Want Limits on Campaign Spending,
CBS News (Jan. 18, 2012), http://www.cbsnews.com/8301-503544_162-
57361428-503544/poll-most-want-limits-on-campaign-spending.
---------------------------------------------------------------------------
Of those who are aware of the post-Citizens United rules
allowing unlimited independent expenditures on political
advertisements, 65% say the regime is having a negative effect on the
2012 presidential campaign.\28\
---------------------------------------------------------------------------
\28\Super PACs Having Negative Impact, Say Voters Aware of
`Citizens United' Ruling, Pew Research Center. 1 (Jan. 17, 2012),
http://www.people-press.org/files/legacy-pdf/1-17-
12%20Campaign%20Finance.pdf.
---------------------------------------------------------------------------
And a majority of Americans believe the nation needs new
campaign finance laws, ``a marked increase from three years ago.''\29\
---------------------------------------------------------------------------
\29\58% Say U.S. Needs New Campaign Finance Laws, Rasmussen Reports
(Jan. 22, 2012), http://www.rasmussenreports.com/public_content/
politics/general_politics/january_2012/
58_say_u_s_needs_new_campaign_finance_laws.
---------------------------------------------------------------------------
These polling results demonstrate the fallacy of Justice Kennedy's
prediction in Citizens United that ``the appearance of influence or
access will not cause the electorate to lose faith in this
democracy.''\30\ But this crisis of confidence opens up new
opportunities for reform.
---------------------------------------------------------------------------
\30\130 S. Ct. at 884.
---------------------------------------------------------------------------
* * * * * * *
The 2012 general election is barely underway, yet already the
corrosive effects of Super PACs and similar failures of disclosure,
coordination, and enforcement policy threaten to undermine the
integrity of our electoral officials and the citizens' faith in our
electoral system. We strongly urge the Committee to hold hearings and
take further action to prevent further erosion of the foundations of
our democracy.
Mr. Gonzalez. Thank you very much. Excuse me.
The next witness will be Zephyr Teachout, associate
professor of law, Fordham University School of Law. Received
her education, her B.A. from Yale University, her Master's in
political science from Duke, and her J.D. from Duke.
She is a talented and very creative scholar. Professor
Teachout brings a rich background in laws governing political
behavior, both domestically and abroad, as well as the insights
of her original work on corruption and its constitutional
history.
Her 2009 article, ``The Anti-Corruption Principle,'' was
cited by Justice Stevens in his Citizens United dissent for
showing, among other things, that the Founders ``discussed
corruption more often in the Constitutional Convention than
factions, violence, or instability.''
Professor Teachout.
STATEMENT OF ZEPHYR TEACHOUT
Ms. Teachout. Thank you so much. It is Zephyr.
Thank you so much for having me. I am going to do two
things in my remarks. First, talk about history and then talk
about the future.
I want to place Citizens--is that better?--I want to place
Citizens United in a broader historical context. As a friend of
mine, a Texas lawyer who taught at Duke, said about Buckley v.
Valeo, ``They went and got drunk on the First Amendment, didn't
they?''
And since Buckley v. Valeo, the last 30-odd years of
jurisprudence have been wildly outside the initial 180 years of
thinking about the First Amendment and thinking about
Congress's power to limit corruption through political
regulation. Up until Buckley, it was not a sensible argument to
claim that Congress couldn't do what it needed to do to prevent
money overcoming political power.
Just one of many examples: in 1874, the United States
Supreme Court refused to enforce a contract between an old man
and a lobbyist because they said lobbying was against the
public policy of the United States. And if the great
corporations of our day were to hire adventurers to lobby in
the halls of Congress, that would corrupt and degrade the
entire institution. Several states had laws criminalizing
lobbying. And certainly, up until Buckley v. Valeo, the
assumption was that one could limit campaign expenditures, as
well as contributions.
Since Buckley, you know somewhat from what others have said
about the eccentricity of the Court in the context of campaign
contributions, but there has been a parallel eccentricity in
interpreting federal bribery and extortion statutes. So, in
1991, the Supreme Court says even though many campaign
contributions would otherwise count as extortion or violation
of federal extortion laws, in this area alone we are going to
require a specific promise on the part of the legislature in
return for a donation.
So that we are going to carve out an exception within
federal bribery laws and say, ``Here, when it is campaign
contributions, it is not bribery.'' So this creates this
incredible bait and switch.
Because, in the context of bribery laws, we say, ``Don't
worry, campaign finance laws will cover it.'' And then, in
Citizens United and other cases, Kennedy says, ``Don't worry,
bribery laws will cover it.'' And what you end up is this great
cavity where what you and I and the rest of the country knows
is corruption in the sense the Founders meant is allowed to go
on.
So we are, as Monica suggested, in this terrible world
where you spend all your time begging for people to give you
$2,500 and to bring people together who can give you that much.
And, at the same time, you need to be then scared of the
company that might come in or might not and roil your local
constituency and swarm it with ads.
If you don't change this, you know and I know and the
country knows, it is a bad couple of years, but it is about to
get much worse. The culture of corporations has not yet adopted
the Citizens United law. They have not yet hired the best
campaigners. They have not yet figured out all the loopholes.
This is 2 years in. So it is so important to do something now.
Now with--I am former national director of the Sunlight
Foundation, I am a former political campaigner, and I am a
scholar. I think disclosure is extremely important. But I do
not think you can X-ray a sick patient into health, and I do
not think that X-rays alone are sufficient and disclosure alone
is sufficient for the level of threat that we have right now in
this country.
It is critical that this Congress focus on changing the
structure of the way campaigns are funded. Low-dollar matching
funds. I know. I was the director of online organizing for
Howard Dean's presidential campaign. We figured out, and we
have seen Barack Obama do extraordinary things with this. We
know how to allow you to spend your time talking to 100 people
who will give you $100 instead of the richest people in the
world.
You may lose your jobs fighting for changing the structure
of money in politics. But if you don't do this, you can't do
anything else. You can't do anything about too-big-to-fail-
companies if you are scared about them coming into your
district. You know that. You can't do anything about capital
gains tax or the financial transactions tax with this kind of
funding mechanism.
So thank you for having me, and I look forward to seeing
what happens.
[The statement of Ms. Teachout follows:]
Testimony of Zephyr Teachout, Associate Professor, Fordham Law School,
before the Congressional Forum on Campaign Finance Reform, April 18,
2012
Our country was formed in reaction to corrupt British politics. The
Declaration of Independence was, among other things, a declaration of
separation from the politics of dependence which the Founders saw in
Britain. They perceived a country with a basically good constitutional
structure that had rotted from the inside out because of the king's
power to make officers and parliamentarians dependent upon him. They
saw the way that ``rotten boroughs'' could be bought, that allegiances
could be shifted because of money. Corruption fears--fears of a
``conspiracy against liberty . . . nourished by corruption'' were ``at
the heart of the Revolutionary movement.''\1\ The fear of corruption
was ``near unanimous'' as was the sense that corruption needed to be
``avoided, that its presence in the political system produced a
degenerative effect.''\2\ George Mason said as the Constitutional
Convention got under way that ``If we do not provide against
corruption, our government will soon be at an end.''\3\ In the
Federalist Papers, Hamilton explained that ``[n]othing was more to be
desired than that every practicable obstacle should be opposed to
cabal, intrigue, and corruption.''\4\
---------------------------------------------------------------------------
\1\Bernard Bailyn, The Ideological Origins of the American
Revolution, xiii (1992).
\2\James D. Savage, Virtue and Corruption at the Constitutional
Convention, 56 The Journal of Politics 1 (1994).
\3\Notes of Yates, June 22, 1787, in 1 The Records of the Federal
Convention of 1787 (Max Farrand ed.).
\4\Alexander Hamilton, Federalist 68.
---------------------------------------------------------------------------
They were right to be concerned about corruption and how money,
allowed free rein in politics, can corrupt democracy. It is important
to remember how rare self-government is in world history. Most
governments are not representative; in most times and places,
concentrated economic power rules, directly or indirectly. The founders
were well aware of the tendency to oligarchy and monarchy. In John
Dickinson's long speech on the value of mixed government, he argued
that ``If antient republics have been found to flourish for a moment
only & then vanish for ever, it only proves that they were badly
constituted; and that we ought to seek for every remedy for their
diseases.''\5\ After the Philadelphia convention, a woman allegedly
asked Benjamin Franklin, ``what have we got, a republic or a
monarchy?'' Franklin is rumored to have replied, ``A republic, Madame,
if you can keep it.''
---------------------------------------------------------------------------
\5\Notes of Madison, June 2, 1787 in The Records of the Federal
Convention of 1787 (Max Farrand ed.).
---------------------------------------------------------------------------
It is now our challenge to keep it. We are now again facing a new
politics of dependence. Citizens United and its precursors threaten to
destroy the rare self-government that we are privileged enough to have
inherited.
The Supreme Court in Citizens United showed a lack of understanding
of how politics actually worked. But it was also radical--in a
doctrinal sense. To get a sense of how radical the First Amendment
interpretation is, consider that the first century-and-a-half of our
country, no one seriously thought that the First Amendment should be
used to prohibit legislation that built hurdles between economic and
political power. In the 1870s, the Supreme Court refused to enforce a
contract to lobby at all, because it was corrupt and against the public
policy of the United States. The Court warned:
If any of the great corporations of the country were to hire
adventurers who make market of themselves in this way, to
procure the passage of a general law with a view to the
promotion of their private interests, the moral sense of every
right-minded man would instinctively denounce the employer and
employed as steeped in corruption, and the employment as
infamous.\6\
---------------------------------------------------------------------------
\6\Trist v. Child, 88 U.S. at 451 (1874).
The First Amendment was not even raised as an issue in that case.
Half a century later, the First Amendment became a valuable tool in
protecting dissident speech but, starting with Buckley v. Valeo, also
became a radical wedge used by ideologues who proposed that there
should be no levies raised between money and politics. The great
corporations of the country are invited, because of Citizens United,
not only to lobby, but to promote their private interests through
unlimited expenditures. They are invited to threaten would-be
representatives with swift and brutal campaigns if they oppose their
corporate agendas. The Court's use of the First Amendment is bad
history, bad law, and bad political theory.
Obviously, money will always have an influence on politics. But it
is one thing to say that money and politics will always have some
relationship, it is another altogether to give up on responsive self-
government altogether. Structural rules matter. The shape of that
influence is not inevitable. As Members of Congress, you know how laws
shape incentives.
In the short term--and regardless of what happens with
Constitutional interpretation--we need to restructure how campaigns are
funded. I urge Congress to pass a small donor matching funds system
that would grant federal matching funds for small-dollar donations.
Such a law would shape incentives, forcing representatives to think
about the public. Now, faced with millions of dollars in Super PAC
attack ads, candidates' incentives are to raise as much money as they
can from people who can afford $2,000 and more to give--basically,
people in the top 1 to 4% of Americans. This means that their minds
have to be oriented towards the concerns of the richest politically
active people in the world. At the same time, they have to be afraid of
the political activity of corporations. Right now, with Super PACs and
the campaign funding system in place, Members of Congress are inside a
system that corrupts each of them every day, and takes their talents
and turns them towards the 1% instead of the 99%. With a matching funds
system, where a $100 donation was matched 5 to 1, their incentives
would be to raise as many $100 contributions as possible--their
orientation would shift to the concerns of constituents. It wouldn't
address all the problems with Super PACS, but would significantly
change the way representatives think and represent. Similar systems
have been very successful in the states, and have withstood court
challenges.
Disclosure is essential, and any resistance to disclosure is very
troubling. But disclosure is not a sufficient response to Citizens
United. You cannot X-ray a sick man back to health.
We need to understand that the worst is yet to come. Much has been
made of the involvement of Super PACs in the presidential election.
These Super PACs are mere children compared to what Super PACs are
likely to become. They are playing checkers now, and we will soon be
playing chess; the power of Super PACs at the congressional district
level and the local level is far greater than it can be in a
presidential race, where substantial media attention can blunt some of
the power. Moreover, the first banking Super PAC was formed just last
week, after claims by many that corporations would never get directly
involved in electioneering. Scholars and commentators argue that
corporations don't ``want'' to get involved in politics, and that it
will hurt their reputations; in short, that independent spending is
tacky and graceless. We need to remember that the same arguments were
made about lobbying, but--however tacky and graceless the largest
corporations in the world now all lobby, and accept the criticism in
exchange for the power it gives them. I expect the same with
independent expenditures. We are less than three years since Citizens
United gave corporations permission to act. It takes time to change
culture and habits and internal structures, but I anticipate that every
major corporation will participate directly or indirectly in trying to
shape policy through elections if the status quo holds. They will not
be able to resist the temptation, and they, too, will seize the power
they are given, because it will be a rational business decision to do
so. Because it is just at the beginning, it is important to act now,
before the structures are in place that would make change impossible.
Until Congress deals with money and politics, it cannot deal with
much else fairly. Just as one example, it cannot pass a financial
transactions tax, even with enormous popular support, because of the
fear of Wall Street's money; it cannot even fairly address the question
about whether a financial transaction tax makes sense. It cannot, in
short, be responsive--be democratic--and live up to the hope of the
founders.
The fight against corruption follows in the path of Madison,
Hamilton, Franklin, Mason, and the other drafters of the Constitution,
who worked so carefully to craft structures such that representatives
would be able to serve their constituents, not the wealthy and
powerful.
It is my hope that this hearing will be the beginning of the
federal government's effort to focus intensely on ways to restructure
political campaigns within the radically limited framework allowed by
Citizens United. I urge Congress to hold many hearings on this subject,
and fully explore what is possible, and the potential dangers of not
acting quickly. I believe that the country wants a full public debate
about the future of democracy after Citizens United, and it is the
responsibility of the United States Congress to provide that, and to
act as quickly and aggressively as possible to save our democracy.
Mr. Gonzalez. Thank you.
Next witness is Paul S. Ryan of the Campaign Legal Center.
Paul S. Ryan joined the Campaign Legal Center in October 2004.
He has specialized in campaign finance, ethics, and election
law for more than a decade. Mr. Ryan directs the Campaign Legal
Center's Federal Election Commission program and regularly
represents the Campaign Legal Center before the Commission.
Mr. Ryan also litigates campaign finance issues before
federal and state courts throughout the United States and has
published extensively on the subject of election law. Mr. Ryan
has testified as an expert on election law before numerous
legislative bodies and government ethics agencies including the
FEC, the California state legislature, the California Fair
Political Practices Commission, the New York City Council, the
New York City Campaign Finance Board, the Los Angeles City
Council, and the Los Angeles City Ethics Commission.
Mr. Ryan has also spoken on the topics of campaign finance
and ethics laws at conferences around the Nation, has appeared
as a campaign finance law expert on news programs of CNN, NBC,
C-SPAN, and other media outlets, and has been quoted by the New
York Times, Los Angeles Times, the Washington Post, Roll Call,
and news publications. He received his education at the
University of Montana, as well as the University of California,
Los Angeles, School of Law's program in public interest law and
policy in 2001.
Mr. Ryan.
STATEMENT OF PAUL S. RYAN
Mr. Ryan. Madam Leader, distinguished committee members,
thank you for this opportunity to appear before you this
afternoon. As you have already heard, the Citizens United
decision was based on at least two faulty assumptions.
First, that this new flood of corporate money in politics
would actually be disclosed. And, second, that this new flood
of corporate money in politics would actually be spent in a
truly independent manner with respect to candidates and
parties.
I am going to address the nuts and bolts of existing
statutes and regulations that undermine those two assumptions
of the Court, and these assumptions were only made worse by the
D.C. Circuit Court of Appeals in the SpeechNow case, which gave
rise to the super PACs.
Notwithstanding the Supreme Court's promise that the
corporate money it was unleashing would be spent independently
of candidates, current laws have been interpreted by the FEC to
allow very close relationships between Super PACs and
candidates. Congress, in passing the McCain-Feingold law in
2002, ordered the FEC to rewrite its long-ineffective
coordination rules. These coordination rules have twice been
invalidated by federal courts over the past decade and remain
ineffective today.
Many assume that the coordination rules restrict general
interaction between candidates and outside groups but, instead,
current coordination rules regulate only discrete
expenditures--discrete ad buys, for example--made by outside
groups.
Current coordination rules accommodate close personal
relationships between candidates and the individuals operating
Super PACs and, in fact, many of the candidate-specific Super
PACs active in this year's elections are being run by close
associates and friends and former employees of these
candidates.
The McCain-Feingold law prohibits candidates and office
holders from soliciting unlimited funds, as well as corporate
and union funds in any amount, so-called soft money, in
connection with any elections. However, last year, the Federal
Election Commission nonsensically issued an advisory opinion
stating that candidates and their staff and office holders and
their cabinet members can attend, speak, and be featured guests
at these Super PAC fundraising events where unlimited funds are
being raised so long as they do not make the actual pitch for
the unlimited contributions. This is nonsense. The close
relationships between Super PACs and candidates fall far short
of the independence likely envisioned by the Supreme Court in
Citizens United.
On top of this, we have 501(c)(4) organizations. The
Citizens United court's second faulty assumption, that
disclosure laws would provide voters with the information
needed to make informed decisions on Election Day, has not come
to pass.
Section 501(c)(4) organizations like Crossroads GPS will
likely spend hundreds of millions of dollars on election ads in
this year's elections without disclosing any of the sources of
their funds. This is possible because, back in 2007, the FEC
promulgated a rule gutting the McCain-Feingold law's donor
disclosure requirement for electioneering communications.
Whereas the statute requires groups that spend more than
$10,000 in a calendar year on electioneering communications to
disclose the names of all contributors who contributed $1,000
or more to the group, the FEC's 2007 rule, by contrast,
narrowly restricts that disclosure requirement. It only
requires disclosure if the donor gave the funds ``for the
purpose of furthering electioneering communications.'' Under
the FEC's rules, donors to 501(c)(4) groups simply refrain from
designating their contributions to the groups for any
particular purpose and, therefore, evade entirely these McCain-
Feingold law donor disclosure requirements.
Last year, Representative Van Hollen sued the FEC,
challenging this 2007 rule. And several weeks ago, he prevailed
in his challenge with a favorable decision from the Federal
District Court. However, an appeal is pending, and the FEC is
unlikely to act on this court order any time soon. The Campaign
Legal Center is very proud to be part of Representative Van
Hollen's legal team, and we plan to continue fighting on his
behalf in the courts.
The Campaign Legal Center urges Congress to pass the
DISCLOSE Act of 2012 to close these disclosure loopholes, to
address these problems that have been made possible by the
FEC's regulations, as well as by holes in existing statutes.
The IRS itself has a role to play in this as well. The IRS's
faulty interpretation of the tax code has made 501(c)(4)
organizations attractive vehicles for spending these millions
of dollars in election ads while shielding their disclosures.
I am happy to talk further about the tax laws to the extent
that it interests you, and I thank you for this opportunity
again to testify before you today.
[The statement of Mr. Ryan follows:]
Testimony of Paul S. Ryan, Senior Counsel, Campaign Legal Center.
Before the Committee on House Administration Congressional Forum on
Campaign Finance, April 18, 2012
Distinguished committee members, thank you for this opportunity to
provide my views on significant changes that have occurred in campaign
finance law and practice over the past two years, since the Supreme
Court's landmark decision in Citizens United v. Federal Election
Commission (FEC) and the D.C. Circuit Court decision built upon it,
SpeechNow v. FEC.
The Campaign Legal Center (CLC) is a nonpartisan, nonprofit
organization founded in 2002 that works in the areas of campaign
finance, elections and government ethics. The Legal Center offers
nonpartisan analyses of issues and represents the public interest in
administrative, legislative and legal proceedings. The Legal Center
also participates in generating and shaping our nation's policy debate
about money in politics, disclosure, political advertising, and
enforcement issues before the Congress, the FEC, the Federal
Communications Commission (FCC) and the Internal Revenue Service (IRS).
The Legal Center's President is Trevor Potter, former Chair of the FEC,
and our Executive Director is Gerry Hebert, former acting head of the
Voting Section of the Civil Rights Division at the Department of
Justice. I serve as Senior Counsel at the Legal Center and have more
than a decade of experience practicing election law.
citizens united and speech now
The Supreme Court in Citizens United based its decision to unleash
a flood of corporate money into U.S. election on two faulty
assumptions. First, the Court wrongly assumed that such funds would be
spent ``independently'' of candidates and, therefore, could not give
rise to corruption or the appearance of corruption. Second, the Court
assumed that the source of such funds would be disclosed, permitting
``citizens and shareholders to react to the speech of corporate
entities in a proper way'' and enabling the ``electorate to make
informed decisions and give proper weight to different speakers and
messages.''
Several months after the Citizens United decision, the Supreme
Court's faulty assumptions were compounded by the D.C. Circuit Court of
Appeals in SpeechNow, when it relied on Citizens United and held that
if independent expenditures cannot give rise to corruption, then
contributions to groups making such expenditures cannot be limited. The
SpeechNow decision gave birth to ``Super PACs.''
I welcome the opportunity to discuss with you today the Citizens
United Court's faulty assumptions and how they are playing out in the
elections currently underway. Specifically, I will detail how current
laws and regulations, combined with a dysfunctional FEC, have made this
year's elections a ``Wild West'' of money in politics.
super pacs
The ability of Super PACs to accept unlimited contributions,
including contributions from corporations and labor unions that had for
decades been off-limits for federal political committees, poses a
serious threat of corruption in U.S. elections. Notwithstanding the
Supreme Court's promise that the corporate money it was unleashing
would be spent independently of candidates, current laws have been
interpreted by the FEC to allow very close relationships between Super
PACs and candidates.
Coordination Rules
Congress, in passing the McCain-Feingold law in 2002, ordered the
FEC to rewrite its long-ineffective coordination rules. The FEC's
coordination rules (11 C.F.R. 109.21) responding to the mandate of
Congress were woefully, and some would argue intentionally, inadequate.
They have twice been invalidated by federal courts in two separate
lawsuits brought by former Representatives Shays and Meehan over the
past decade and remain ineffective today.
Many assume that the coordination rules regulate and restrict
general interaction between candidates and outside groups, but instead,
current coordination rules regulate only discreet expenditures--
discreet ad buys, for example--made by outside groups. Current
coordination rules accommodate close personal relationships and regular
interaction between candidates and individuals operating Super PACs
wholly dedicated to electing those candidates. Indeed, the most
prominent Super PACs today are operated by friends and former employees
of the candidates they support. And we have seen prominent funders of
Super PACs closely involved with candidate campaigns.
Solicitation
The McCain-Feingold law prohibits candidates and officeholders from
soliciting unlimited funds, as well as corporate and union funds in any
amount--so-called ``soft money''--in connection with any election.
However, last year the FEC nonsensically ruled in an advisory
opinion (AO 2011-12, Majority PAC) that candidates and their staff may
attend, speak and be featured guests at Super PAC fundraising events
without violating the soft money solicitation ban--so long as they do
not make the actual pitch for unlimited contributions.
Threat of Corruption
The FEC's failure to effectively regulate soft money solicitation
and coordination between Super PACs and candidates has allowed the rise
of candidate-specific Super PACs operating as shadow campaign
committees fueled by soft money. The close relationships between Super
PACs and candidates fall far short of the ``independence'' likely
envisioned by the Citizens United Court. And unlimited contributions to
candidate-specific Super PACs pose precisely the same threat of
corruption posed by unlimited contributions directly to candidates.
501(c) organizations
The Citizens United Court's second faulty assumption was that
disclosure laws would provide voters with the information needed to
hold corporate America accountable for its political activities and to
make informed decisions on election day.
Section 501(c)(4) organizations like Crossroads GPS, as well as
501(c)(6) organizations like the U.S. Chamber of Commerce, will likely
spend hundreds of millions of dollars on election ads this year without
disclosing their donors. Indeed, such tax-exempt corporations will
likely play an even bigger role in this year's elections than Super
PACs--precisely because they offer donors anonymity.
This explosion in use of such tax-exempt entities to evade campaign
finance disclosure laws was entirely predictable at the time of the
Supreme Court's decision in Citizens United.
FEC-Created Disclosure Loopholes
Back in 2007, the FEC promulgated a rule (11 Sec. C.F.R.
Sec. 104.20(c)(9)) gutting the McCain-Feingold law's donor disclosure
requirement for ``electioneering communication.'' Whereas the statute
(2 U.S.C. Sec. 434(f)) requires groups that spend more than $10,000 in
a year on electioneering communication to disclose the names of ``all
contributors who contributed . . . a $1,000 or more'' to the group, the
FEC's rule only requires disclosure if the donor gave their funds ``for
the purpose of furthering electioneering communications.'' Under the
FEC's rule, donors to 501(c)(4) groups have simply refrained from
designating their contributions for the specific purpose of funding
electioneering communications and, therefore, have evaded disclosure.
Last year Representative Van Hollen sued the FEC challenging this
2007 regulation and, several weeks ago, prevailed in his challenge
before a federal district court. However, an appeal is pending and it
is unlikely that the FEC will act anytime soon to comply with the
court's order. The Campaign Legal Center is proud to be part of the
legal team representing Representative Van Hollen.
A similar hole exists in the disclosure law and regulation
pertaining to ``independent expenditures'' (2 U.S.C. Sec. 434(c)(2)(C)
and 11 C.F.R. Sec. 109.10(e)(1)(vi)).
The Campaign Legal Center urges Congress to enact the DISCLOSE Act
of 2012, which would close these loopholes and dramatically improve our
federal campaign finance disclosure laws.
Tax Law Disclosure Loopholes
Section 501(c)(4) of the Internal Revenue Code establishes tax-
exempt status for ``[c]ivic leagues or organizations not organized for
profit but operated exclusively for the promotion of social welfare. .
. .'' (26 U.S.C. Sec. 501(c)(4)). Internal Revenue Service (IRS)
regulations make clear that spending to influence candidate campaigns
does not constitute ``promotion of social welfare.'' (26 Sec. C.F.R.
Sec. 1.501(c)(4)-l(a)(2)(ii))
The courts, however, have held that section 501(c)(4) organizations
are permitted to engage in an ``insubstantial'' amount of activities
that do not further their exempt purposes--including candidate election
intervention.
The IRS has interpreted these court decisions allowing
``insubstantial'' candidate election activities by 501(c)(4)s to allow
such organizations to intervene in candidate elections as long as such
campaign activities do not constitute the ``primary'' activity of the
organization. (26 C.F.R. Sec. 1.501(c)(4)-1(a)(2)(i))
These regulations are commonly interpreted by practitioners to
allow section 501(c)(4) organizations to engage in substantial
candidate election intervention--as much as 49 percent of the
organization's activities--so long as such activity does not constitute
the organization's ``primary'' purpose.
Importantly, section 501(c)(4) groups are not required by tax law
to disclose their donors to the public. Consequently, 501(c)(4) groups
have become attractive vehicles for spending millions of dollars on
election ads without having to reveal the identities of donor who would
rather stay hidden from public scrutiny.
Many newly-created 501(c)(4) groups--including Crossroads GPS, the
American Action Network, Americans Elect and Priorities USA--clearly
have the overriding purpose of influencing candidate elections and
should be deemed ineligible for their claimed tax-exempt status under
section 501(c)(4).
The Campaign Legal Center urges Congress to amend the federal tax
code to make clear that 501(c)(4) groups may not engage in more than an
``insubstantial'' amount of candidate election spending, and defining
``insubstantial'' using a bright-line ceiling on campaign expenditures
of no more than 10 percent of an organization's total annual
expenditures.
conclusion
Thank you for the opportunity to testify before you today.
Mr. Gonzalez. Well, we thank the witnesses. We are going to
proceed with 5 minutes of questioning from the Members that are
up here right now, and I will start by recognizing my
colleague, Mr. Brady.
Mr. Brady. Thank you, Mr. Chairman, but I would have
yielded my time to Leader Pelosi.
No, just real quickly--and this is for all of you. The
DISCLOSE Act, do you think that is a good first-step that
closes the information gap between unions and the membership
organizations, as opposed to corporations?
And the reason why I make the distinction, I am a union
member, and I am still a current union member of two unions.
And every donation that I make, I vote on. I get a chance to
vote when I have our meetings, and I submit the request of
people or whoever it may be, the organization that asked for
donations, and we get a chance to vote on it. And a membership
organization is the same.
Corporations, they just do what they want to do with any
money that they collect. And the problem I have with that is a
pen is a company. TVs are companies. Water is companies. These
guys, God knows, are companies--watches, jewelry, clothes. They
are all companies that we all support, and we buy items from
them, and they make a profit.
And then they can use that money, their profit or the money
that we give them, they can now use that against me. They can
use that against any one of my colleagues, and I have a problem
with that. I have a problem with that lack of transparency.
Now talking about transparency, as our Speaker--our
Majority Leader [sic]--just said, that they had asked us, and
me as the Chairman of this Committee, for us to have hearings
on the Citizens United and DISCLOSE Act. And you know, there
are a lot of things above my pay range, and naturally, I had to
go to my Speaker at the time, Speaker Pelosi, and ask her if we
should do that. And she said, ``Yes, give them as many as they
want.'' They wanted three.
We have on our committee, myself, Mr. Gonzalez, Mrs.
Lofgren, asked for a hearing in the same exact way they asked
us for hearings when we were the majority, and they said no.
And now the current chair won't put our pretty faces on TV and
let us--so that the whole Congress, while we are sitting here
waiting for a vote, that they could just watch and listen and
form an opinion on what we are hearing here today from all of
you.
So, you know, that does upset me and bother me a little bit
because, again, it is probably above our chairman's pay-grade.
But it is not above the leadership that sanctions it or not
sanctions us to have these hearings.
So, do you think the DISCLOSE Act, back to my question, is
a good first step into closing that gap between our union
membership and membership organizations, as opposed to our
corporations that are allowed to be in obscurity and do
whatever they want nontransparent? Anyone who would like.
Ms. Youn. I would be interested in addressing that. I am
not prepared to talk about the DISCLOSE Act, but there is a
very interesting asymmetry because the Supreme Court in
Citizens United pretends it is treating corporations and unions
the same. And I think Representative Brady is absolutely
correct in pointing out that, in fact, they are not the same.
That the Supreme Court, among others, has been absolutely
vigilant in making sure that every dollar of member--of union
member funds that goes toward political spending was put there
voluntarily and that members who are not interested in their
money being used for political spending have an opt-out.
Whereas corporations, the money that they are using is not
voluntary. When I give my money to my 401(k), I am not saying
that whatever corporate manager has their hands on my money has
the right to use that to support any political candidate that
they like.
So, yes, unions and corporations can both spend out of
their general treasury funds. But the asymmetry is in amassing
those general treasury funds. Unions are required to use only
voluntary contributions, whereas corporations are not.
Mr. Ryan. I would also like to respond. The Campaign Legal
Center strongly supports the DISCLOSE Act of 2012. We think it
would do great things to improve transparency in U.S.
elections. When it comes to treatment of or spending by labor
unions versus for-profit corporations, nonprofit corporations
like these 501(c)(4) groups, it is the thresholds for
disclosure that are intended to capture the information that
matters: big donors.
In the DISCLOSE Act--I believe the donor disclosure
thresholds in the DISCLOSE Act of 2012 are $10,000. So it is
only when a person or an entity, a corporation, gives money to
the spender in excess of that $10,000 threshold that they get
disclosed by the spender as a donor to the group. I think that
is a good thing.
I don't think disclosure thresholds should be so low as to
capture every dollar coming into these groups. It may place an
unreasonable burden on groups that are funded or driven
principally by a huge number of small donors. They don't worry
me in terms of democracy. Large numbers of small contributions
aren't the problems here. It is small numbers of huge
contributions swaying elections that are-- that is what
matters. That is what needs to be disclosed.
Mr. Ornstein. Just one quick comment. And I also support
the DISCLOSE Act, but I would take it further.
The campaign monies given by corporations are nondeductible
business expenses. If I am a shareholder in a corporation, I
ought to know when that company is spending money that is not
for legitimate business purposes directly that would be
deductible.
And it seems to me that two things ought to happen here
that perhaps you could participate in. One is to urge the
Securities and Exchange Commission to promulgate a regulation
that requires in annual reports that all nondeductible business
expenses are disclosed. And the second is to talk to major
shareholders, and that includes big pension funds, and have
them go to corporations and demand that it is in their interest
as shareholders to know how they are spending their money that
doesn't get a tax deduction.
Mr. Brady. Thank you. And thank you all for being here
today, and thank you, Mr. Chairman.
Mr. Gonzalez. Thank you very much, Mr. Brady.
I would recognize Mr. Price for 5 minutes.
Mr. Price. Thank you, Mr. Chairman.
Thanks to all of you for outstanding testimony in every
case. Very, very well done, and very helpful.
We all could multiply examples here of how far this has
gone already and where it may well take us in the future. On
March 30th, This American Life ran a show entitled ``Take the
Money and Run for Office.'' And, during the second segment, the
show focused on a California race--actually, the race of the
chairman of this committee.
Three weeks before the election, the Times ran a piece
calling incumbent Dan Lungren ``endangered.'' Guess what
happened. The next week, Karl Rove's Super PAC, American
Crossroads, dumped $680,000 into that race in the form of a
media buy, and we all know the result.
I had a similar experience right next door in North
Carolina, my colleague, Bob Etheridge, in the Second District.
Hundreds of thousands of dollars parachuted into that race in
the last 2 weeks, and he lost by a very few votes. And,
needless to say, not one dime of that money was spent on
anything but negative ads.
So the examples are multiplying. The future is before our
eyes, I think, in what is happening this year, including the
Republican presidential primary. So, I would like to ask a
couple of questions, which, maybe, help us understand the
gravity of this trend and some of the consequences.
All of you, in your own way, have spoken about corruption
or the appearance of corruption and about the otherworldliness
of the court's reasoning about it. I wonder about the effects
on this institution and the effects on the functionality of
American politics and American government.
Norm Ornstein, I want to ask you to start because I know
you have thought about it, but I expect all of you have. How is
this money spent, and in what ways is it spent differently from
money spent by other kinds of political groups? Are these ads
different? Are they more negative? Are they more personal? Is
there any study of this? I mean, we all have our impressions. I
wonder if those impressions are confirmed.
And what effect does this avalanche of negative ads from
undisclosed sources--what effect is that likely to have on what
we all know is an overly charged, overly polarized political
environment that we're already dealing with, with the
dysfunctionality of this institution, our inability, our
failure, to come to grips with the major issues of the day?
We can't even pass a transportation bill! We can't pass an
education reauthorization. And we now aren't even going to be
able to pass appropriations bills because that has blown up. We
are not functioning well, and the American people are not being
well served.
And Norm, I know you have thought about the connection of
campaign financing, the way campaigns are paid for, and I would
like to have you elaborate on it.
Mr. Ornstein. Thanks.
Let me start by saying that one of the most significant and
commendable provisions of the Bipartisan Campaign Reform Act
was the ``stand by your ad'' provision that David Price
authored. I think it has now become familiar to most Americans,
and it has changed the nature of campaigning. It has changed
those commercials.
When a candidate has to stand up in a television commercial
and say to the camera, ``I am fill-in-the-blank, and I stand by
this message,'' it makes a difference. And if you have watched
any of the ads that have been out, the Super PAC and 501(c)(4)
ads in the presidential campaign where the disclaimer at the
end is, ``This message paid for by Americans for a Better
America, unaffiliated with any candidate or campaign'', what
you see--and we need more systematic research, but it is pretty
evident on the surface--is scorched earth.
Lies have now become the coin of the realm. Viciousness,
when you don't have to connect yourself to it. And of course,
the perfect opportunity for a candidate who is intimately
connected to the Super PACs to say, ``Well, I had nothing to do
with that.'' It makes it worse.
I think it is demeaning the discourse even more. We live in
a rough and tumble world. Shock to cut through the cacophony is
going to be there all the time. But the ``stand by your ad''
provision at least puts some broad boundaries around this, and
those are going away.
And one of the things that I fear so much is these groups
are coming in with so much money that they can go to television
and radio stations and roadblock all the prime spots by saying,
``I will give you retail or 25 percent over retail.'' And
candidates are going to be relegated to the second tier. They
are going to be in the AAA ballparks rather than in the best
places.
And that is going to make it worse. What does all that do?
It accentuates the tribal politics. This scorched earth
campaign is going to make it that much harder to find
bipartisan compromise when we come back. It is going to make
voters view even less favorably all of those who are engaged in
politics.
I don't know how much lower we can sink below the 9 percent
where we are now in approval, or 9 to 11 percent, but we have
got a little bit of running room there. And the harsh negative
views will increase, and that means the legitimacy of decisions
that are made will come under challenge.
So this is not just a matter of some of the really serious
elements that we made here, that we are back to the gilded age
and you have got people coming in, swooping in and spending
money and getting their way in policy. It also challenges, it
seems to me, the fundamental legitimacy of the system. And how
members of the court who made this misguided decision can't see
some of what they have wrought is beyond me.
Mr. Ryan. I would love to add to Norm's comments because it
is not--stand by your ad requirements are a great thing. But
they are not enough. One of the central flaws in the Citizens
United decision was this notion that corporations are just like
humans. Corporations aren't just like humans.
And these (c)(4)s that are going to be spending tens or
hundreds of millions of dollars in this year's elections on
attack ads--and they will be doing the dirty work of
candidates, they will be doing the attack ads--they can
dissolve overnight. They can dissolve at the drop of a hat.
And those of us sitting in this room today, God willing, we
will be here in December. We will be alive. We will be held
accountable for the actions we take between now and then. That
can't be said for these 501(c)(4) and other types of outside
groups that, again, can dissolve with the filing of some
paperwork with a secretary of state's office at the drop of a
hat. That is a big problem.
Ms. Youn. Representative Price, I also wanted to mention an
example. There is visible negative campaigning, and I think the
available social science research has shown that Super PACs
overwhelmingly engage in these negative attack ads, but there
is also invisible negative campaigning. And there is a terrific
example from your home state of North Carolina that is
mentioned in the dissenting opinion of a case called Duke v.
Leake.
And in that case, there is a lobbying--there is
organization called ``Farmers for Fairness''. This is in the
North Carolina state legislature, which allowed these kinds of
independent expenditures prior to Citizens United. And Farmers
for Fairness supported a particular farm subsidy, and they knew
that the legislature was going to consider this farm subsidy.
So what they did is they made up a whole campaign of attack
ads against particular legislators they knew were the swing
votes. They then took these ads to the legislators and screened
them behind closed doors and said, ``These are the ads we will
run against you if you do not support our position on this
legislation.'' And some of these legislators changed their
votes.
Now that is not going to show up on any disclosure. That is
not--you know, but that is just an example of the sort of a
broader kind of corruption that is a threat to our system that
I don't think the Supreme Court ever envisioned.
Ms. Teachout. I am honored to answer. You were my
Representative for 7 years. We are playing checkers now, and it
is about to be chess. I mean, this hasn't begun yet.
So, right now, we are thinking about ads, but we are in a
technology and data era. So it is not just television ads. It
is using the massive databases and access to data that some of
the largest companies in the world have.
It is not just going to come out in the form that we
recognize of the last 30 years of campaigning. We don't know
exactly what it is going to look like. But we know that we are
just beginning, and the level of sophistication in both threat
and promise at every level of campaigns will be different.
Who is going to run? Maybe we need somebody in this
district because of the nuclear energy industry. Why don't we
just plop down a promised several million dollars and get our
candidate in the primary? This kind of money in primaries in
local races is extraordinary.
The conversations have been at the presidential level, but
that is the least concerning. It is certainly much--small
amounts of money have a much larger impact. And it is happening
at the same time you see this radical concentration in economic
power.
So when Senator Kennedy proposed that no company be allowed
to merge larger than $2 billion in 1978, we are talking about a
much more decentralized economic scene. Right now, it is much
more concentrated, and we know the most concentrated industries
spend the most on politics.
So you see a combination of concentrated economic power,
unlimited potential for use in the political sphere, and you
know, I am a deep patriot. I love this institution, and I love
the promise of it. But it is very rare in human history to have
a truly representative government. It is not the default state.
The default state is, as you know from your own political
science work, the default state is something much more like a
kind of combination of oligarchic power, where there is
concentrated financial power really dominating politics. And
there is this window here before the full threat of Citizens
United is realized, and it is so important to act quickly.
Mr. Price. Thank you.
Mr. Gonzalez. Thank you very much. Mr. Van Hollen for 5
minutes.
Mr. Van Hollen. Well, thank you. Let me start by thanking
you, Mr. Gonzalez and Mr. Brady, for organizing this forum on a
central issue to the integrity of our democratic process.
I also want to thank Leader Pelosi and my colleagues here
on the panel and others who have focused on this issue, and all
of you who just gave wonderful testimony about the urgency and
importance of this issue. And I do think it is an absolute
travesty that Republicans have refused to hold a hearing on
this very important issue that is fundamental to the future of
our democracy.
I think, as everybody knows, we were able to pass the
DISCLOSE Act several years ago. It went over to the Senate, got
59 votes. [sic] In fact, in one of the terrible sort of
unfortunate ironies of history, had Senator Kennedy not passed
away, the DISCLOSE Act might well be the law of the land today,
would have provided the 60th vote. But apparently, our
Republican colleagues want to keep people in the dark when it
comes to hearings, just as they want to keep them in the dark
when it comes to disclosing the sources of a lot of the
expenditures in these campaigns.
Now you have all made very keen observations about Citizens
United. As Mr. Ornstein said, some of the conclusions that were
reached there could only be made by people who had no clue as
to how the American political system was operating in the 20th
and 21st centuries, and it is going to come back to haunt us
unless we act quickly to fix it.
I support a multi-pronged strategy. I think we have to
proceed on all fronts. I also believe we have to engage in some
political triage. We have to focus on where we are likely to be
most successful in the short term as we also proceed
immediately on other fronts.
I do think disclosure is essential, and I think the
testimony today indicates that there is lots of money pouring
into the system today that would not come into the system if
those individuals and corporations and entities knew that their
identities would become public. We have seen an awful lot of
money laundering going on. And the DISCLOSE Act is intended to
get at exactly that. Trace the money laundering, require
disclosure at all different sources and all different levels.
And I think that we have a very sort of solid argument to
take to the American people that, number one, voters have a
right to know who is trying to influence the outcome of these
elections. And therefore, we should end the secret money in
politics, and that is what we are attempting to do.
Now one of the cases, as you know, that may be taken up by
the Supreme Court is the Montana case. I am interested in your
views on what opportunities there may be there or not to make
our case.
Mr. Ryan, let me thank you and the center for your activity
and efforts not only on behalf of DISCLOSE. And Mr. Ornstein,
thank you for your support for DISCLOSE and others, but also
for your efforts in the FEC case. I share your view. It was an
important measure, important step.
But we all know how long the processes can be dragged out
in the FEC and through the court system, and it just goes to my
earlier point that we need to proceed on all fronts and we need
to do it in an urgent manner. And I am interested in all of
your views on whether or not the Montana case provides any
additional opportunity for us to revisit these issues?
Mr. Ryan. I am happy to respond to that. Happy to respond
to that. First, the Campaign Legal Center, my colleagues and I
are right now working on a brief to be filed in that case on
behalf of a bunch of transparency, pro-transparency, pro-
campaign finance reform organizations from around the country.
Justice Ginsburg included a statement in a stay order that
the court issued a couple of months ago, indicating that at
least some members of the court are perfectly ready and willing
to revisit the court's decision in Citizens United. I won't
predict whether or not there will be five or six votes on the
court or more to change direction on Citizens United. But the
door is open a crack, and we are going to take our best shot at
it.
There are a bunch of other very skilled attorneys and
advocates from around the country, including the AG's office in
Montana, that are working hard on that case. So I am hopeful,
but obviously, no guarantees.
Mr. Ornstein. Mr. Van Hollen, let me step back for a second
and say that when we were deep in discussions over BCRA and
putting it together, there was a great deal of consideration
made to making sure that this was evidence based.
We had a lot of work done on electioneering communications
that were transparent campaign ads, on ads financed by soft
money that was supposed to be for party-building activities
that never mentioned the party, that were just aimed at
attacking candidates. There was reasoning that went into that
decision by Congress, and that was, I think, taken seriously by
the court when it upheld the Bipartisan Campaign Reform Act.
Reading Justice Kennedy in the Citizens United decision
with a not only redefining corruption in the narrowest way,
which is dangerous and unconnected to reality but, with no
evidence at all, saying that independent money would have no
connection to corruption or the appearance of corruption or it
wouldn't matter. And seeing what Richard Posner, a very well-
respected conservative jurist, has written now suggesting that
that really doesn't make a lot of sense, and then looking at a
Montana law that uses evidence from Montana to say we don't
want corporations doing this because it corrupts us, I hope
that there are four justices who will bring this up, bring it
forward, and then force the court at least to acknowledge that
evidence doesn't matter to them.
Ms. Teachout. Thank you for all your work on this, and I am
delighted about the multi-pronged approach. I am always going
to be pushing for prong two. But, you know, there is a, you
know, ``What is the 1 percent hiding?'' There is a real sense
of both privilege and secrecy together it is important to
fight.
I do think it is important to demonstrate to the public
that this Congress knows that transparency isn't enough.
Montana is a great question. It is a really tricky one. And you
know, I wrote an article called ``Facts in Exile'' about the
Supreme Court sort of treating facts as this extra, you know, a
luxury.
And whether or not, in court or out of court, the Montana
case provides an opportunity to talk in a really public way
about the water cooler sense of corruption that we all
understand and what we mean when we say your minds are oriented
not towards the public. Your minds are oriented towards the 1
percent.
Ms. Youn. I think the Montana case is going to be, I think,
absolutely fascinating because, as some of you may know, it
takes four justices to grant cert to hear a case in its
entirety, and I think many of us--the Brennan Center is also
working on a brief in the Montana case--and I think many of us
would welcome the chance to put on the record, you know,
exactly the sort of factual evidence that Justice Kennedy
disregarded when he blithely stated, ``Oh, independent
expenditures pose no risk of corruption.''
On the other hand, the flip side of that is it generally
takes five justices to--which could be the same majority as in
Citizens United--to grant a summary reversal of a lower court
decision. And I think we are--you know, we are very much in a
state of Supreme Court practice mystery as to whether the four
justice rule is going to trump the five justice rule or exactly
how this is going to work out.
But in any case, as was referenced earlier, in the
McConnell decision, the court considered hundreds of thousands
of pages, including depositions taken by some of my colleagues
at the Brennan Center, talking about what corporate CEOs
expected when they gave soft money contributions and the way in
which contribution-- the way in which corruption can function
below the surface.
The Supreme Court did not take any of that evidence into
account. I know that lots of the record in McConnell v. FEC was
sealed for privacy purposes at the time of that decision. As
far as I know, that has never been unsealed.
There is a lot of existing evidence and there is a lot of
new evidence from this new super PAC phenomenon that we
certainly deserve--believe deserves a public hearing.
Mr. Gonzalez. Thank you very much, Mr. Van Hollen.
Mr. Ellison for 5 minutes.
Mr. Ellison. Thank you, Mr. Chairman.
Also thanks to the leader and all of our witnesses today.
I just want to say for the record that earlier today we had
a press event that involved over 20 community organizations
that came together with several Members of the U.S. Senate,
double digits of House Members, all coming together around the
idea of an amendment strategy.
On June 11th, there is going to be a Resolution Week in
which municipal leaders all over this country are going to
introduce resolutions to say that we have got to flip Citizens
United. So there is a grassroots movement going on here, and it
is very exciting, which leads me to my question.
I can't--I have got to believe that no matter what side of
the political spectrum you may come from--liberal,
conservative--the idea that your little microphone that all of
us are issued as a citizen is going to be drowned out by
speakers that could, you know, Mr. Ornstein put it better than
I can. But they could, you said, ``shake the seats in Nationals
Stadium'' because somebody has so many more dollars than
another person. This must be something that there is broad
cross section of support across the country.
What are the people saying about the need for disclosure,
and what are the people saying about the need for amendment?
And also what are they saying on the various sides of the
political spectrum? I mean, what are conservative groups saying
about this stuff? I am sure they have got to be concerned about
it.
Mr. Ryan. Our impression, from reading public opinion
polls, is that the public overwhelmingly supports disclosure of
money in politics, overwhelmingly supports it. And I think that
support spans the political spectrum.
When you come to the actual organizations, the actual
Members of the House of Representatives, for example, Members
of the Senate, we have seen flip-flopping, unfortunately, in my
view, from some Republican members who for years and years, for
decades, told the story of ``All we need is disclosure. Let us
get rid of all these limits. All we need is disclosure.''
I was never sold on that because as soon as you allow
incorporated entities into the system, disclosure becomes very
difficult to achieve and sustain. But these same individuals
who--Senator McConnell, for example, appeared on Meet The Press
and went on and on about--and this was fighting against the
McCain-Feingold law--``All we need is disclosure. Let us get
rid of all these limits. Let us not pass this McCain-Feingold
law.''
Fast forward a decade. Many of the substantive limits,
unfortunately, have been struck down, and they are changing
their tune. And I believe that some of the Republican-oriented
organizations here in Washington and nationally are following
suit and changing their tune and realizing dumping secret
influence-buying money into the system is much to their liking.
So, again, that is why we have seen trouble with the
DISCLOSE Act in 2010, why we are seeing trouble with the
DISCLOSE Act now in 2012. We need to hold folks accountable for
their historical positions on these issues. Nothing has changed
except their ability now to get away with legalized money
laundering.
Ms. Youn. I think one of the great things about Super PACs
is they are such an easy phrase to remember that people now
know what you are talking about when you are talking about
campaign finance reform. I think, thanks to Stephen Colbert,
but thanks to a lot of, you know, media coverage of this.
And so, in my written testimony, I reference some of the
more recent polling that says that 67--no, 69 percent of all
Americans now support banning Super PACs, and that support
ranges across the political spectrum. We are talking about
majorities of Republican voters. We are talking about
majorities of Democratic voters and independent voters.
So I think that what the people want and what the
leadership want may tend to diverge here. But I think that we
can only take advantage of the momentum that is caused by this
very high-profile unraveling of our campaign finance system.
Ms. Teachout. Yes, I want to echo that. I mean, there is
extraordinary support for a public funding system now, even
when the alternate arguments are presented. Extraordinary
support for disclosure. But there is also extraordinary room
for leadership.
But, if Members of Congress do not themselves use their
platform to make a fight out of this and make the fight clear,
there is a softness in the support. People are looking for how
to understand the post-Citizens United, post-financial collapse
world. You saw the shifting numbers of support for Occupy Wall
Street with the initial extraordinary, high levels of support
and then an absence of national leadership on defining what
this new economic and political system is going to look like.
So there is both high levels, but there is also a lot of
movement, which is why public clear expression of what
government should look like, who people should be responsible
to, what is possible in Congress is important because,
otherwise, you are going to lose people. You can name an act
anything you want, and people aren't going to believe it
anymore.
So this kind of leadership is really key. Otherwise, I
think you are not going to see the support without--without
making a strong case.
Mr. Ornstein. Let me just make a few points. First, you
can't underestimate the impact that tribal politics have now. I
mean, I watched as the DISCLOSE Act came up in the Senate, and
I had worked with Olympia Snowe on what was the Snowe-Jeffords
amendment that really was the provision singled out by the
court in Citizens United.
And to watch Senator Snowe, Senator Collins, Senator
McCain, and others who had supported reform, all join together
with the rest of their colleagues to vote against this was
stunning. But it is a reflection of Mitch McConnell's ability
to keep his tribe together and to make it a top priority and,
of course, to get everybody to reverse course and now say that
disclosure doesn't matter. So that is one important point to
make.
The second point is that public opinion does support
disclosure and change, but there are a lot of things that
overwhelming majorities of Americans support and never go
anywhere. I think we are going to see a change in this coming
couple of months. If you were in a state where it is
competitive in the presidential contest, you have got a
competitive Senate race, and maybe something else going on, the
months of September and October, there will not be a commercial
on television that will not be a vicious attack ad.
And for an awful lot of Americans, you won't be able to
escape it. And it is going to be a little bit like a goose
being force-fed to get the fois gras. You are going to be
sitting there, and this stuff is just going to come down your
throat whether you like it or not. And I think we are going to
see a very substantial reaction. We will have to seize on it.
And finally, I would say, we are not going to get it from
leadership of conservative organizations. But I actually think
on this issue and on many others, including some of the ethics
questions, that some of these Tea Party colleagues of yours
have no reason to be supportive of the huge money coming in
that is going to sometimes drown them out when you get a
different establishment setting.
They are populists in a different way. And it is worth
talking to them, maybe individually, and perhaps building some
grassroots support for some changes here. It is not going to
come easy, but it is going to be easier to get than it will
coming from the usual suspects on that side.
Mr. Ellison. Any time for a quick follow-up, Mr. Chairman?
So now I want to ask you about shareholders. I think this
is an interesting group to understand how they see this because
I think this was pointed out several times, you know, when you
send your money to your 401(k), somebody is using that money to
say something that you have no interest in them saying. Yet if
you were in a union, as Representative Brady pointed out, you
would at least have some say on that.
They are fighting us on ``say on pay'' and golden
parachutes, and yet shareholders at Citi[group] rejected a
compensation package. So I guess my question to you is, is
there any energy, anything going on among shareholders saying,
``Wait a minute, you spend my money on stuff. You are supposed
to be trying to make me some money to take care of my
retirement. Why in the world are you beating up on this person
and that person and the other? It is not helping me out.''
Care to address this issue?
Mr. Ryan. There is some work being done, some important
work being done on behalf of shareholders. The SEC was
presented with a rulemaking petition that was open for public
comment, received widespread public comment that--urging the
SEC to promulgate rules requiring improved disclosure of
corporate political spending.
Representative Capuano has introduced the Shareholder
Protection Act, which has a national coalition of organizations
advocating its adoption, its enactment, and that would
provide--would require corporations to obtain affirmative
approval from shareholders before making big corporate
political expenditures.
So work is being done. National coalition is working on it.
Very important issue that you have highlighted.
Ms. Teachout. I suspect this is where I am going to differ
from some people on this panel. I do not happen to think that
pursing the shareholder strategy is a good idea at this point.
I do not think that--I think of it a little bit like Dodd-
Frank.
The country is responding to Dodd-Frank, saying, ``You
didn't do anything about too big to fail.'' I don't know if you
have seen the recent polling around this. And at the time,
there was a sense, ``Okay, no, we can manage our way. We don't
have to--we can manage our way, and we can figure out
something, and we will get credit for having figured out
something.''
This is bigger than shareholder protection. We actually
have to restructure the way campaigns are funded. If you don't
do that, everything else is a little bit baroque on the sides.
At the same time, I also think that if you perfect the
agency relationship between the shareholders and companies,
that doesn't necessarily mean you see less funding. In fact,
the rational company might spend a lot more money on campaigns
than they do now, once they have really figured out this chess
game.
So I admire the creativity here, but I actually think that
we should be focusing on the real game, which is how campaigns
are funded and returning to pre-Buckley.
Mr. Ornstein. I am not sure that that is--it is not the top
priority, but I would disagree a little bit with Zephyr here. I
actually think most companies, most public companies, don't
want to do this. They did not react with anger at BCRA. They
don't want to get caught in a couple of terrible dynamics.
One is where you have a party shaking you down and
basically saying, ``Whose side are you on?'' And, ``If you
don't pony up the money, we are going to make you pay.''
The second is the situation that we saw with Target and we
are seeing now with ALEC, the American Legislative Exchange
Council, you know, this group that basically has--talk about
corruption--you know, come in with ready-made laws that
lawmakers are perfectly happy to just channel right through and
get something in return that a lot of companies gave to. And
now it is when that is being disclosed and all of a sudden they
realize that they paid for the ``stand your ground'' laws, they
are saying, ``Whoa, I don't want to be a part of that.''
So I believe that disclosure will change the role of a lot
of public corporations. It is not enough, and the fact is that
even with billionaires and individual money, it was very
different before Citizens United when you, as an individual,
had to go out there if you wanted to put large sums of money
in, and do it all yourself. Where now, you can just give it to
Karl Rove or give it to some other group, and they do all the
work for you.
So we need a lot more than that. We need a short-term
strategy that isn't going to involve overturning Citizens
United. We need a medium-term strategy that can be ready with
the next product when that happens.
Maybe we need the long-term strategy of looking at a
constitutional amendment, although I would prefer to work in
other ways. But you can't abandon any of those, and you can't
abandon every avenue, whether it is the FCC, the FEC, the SEC,
or the IRS, or legislation, or some of these other vehicles.
Ms. Youn. I would just briefly like to address that. I
agree that this is only a partial solution. For one thing,
publicly traded corporations are only a very small part of the
problem that we are talking about. But I do think that we do
need to look at creative avenues to encourage corporate
disclosure, you know, just for the sake of my 401(k) fund.
And I think we are used to thinking of corporations as
monoliths. Like, ``Oh, the corporation is spending money in
politics, and they know about it all the way down.'' They often
don't know about it. Often--there is no requirement that
political spending be disclosed to corporate boards.
There is a multinational pharmaceutical corporation that
has become a leader on the shareholder disclosure front because
they found out that one of its mid-level managers was spending
corporate funds to support an openly racist candidate in
Mississippi, and he was doing that without the knowledge of
upper management. It is that sort of--you know, shareholder
disclosure makes sense for a lot of reasons. It is not a
solution to our current problems of money in politics, but it
is something that is important to do in its own right.
Mr. Gonzalez. Well, thank you very much. And the chair is
going to recognize himself for 5 minutes, and thank you for
your patience.
But quickly, and I want to follow up on something that Dr.
Ornstein pointed out is that some people may figure that there
may be individuals on the other side of the aisle, they may not
relate to the fears that we feel. Citizens United has truly
diminished the role of the individual in the election of their
elected officials.
No one is really recognizing that. And here in Washington
we are so caught in the middle of this thing and I am not real
sure that we have ever gotten that message out.
Now, I understand that an individual can work on my
campaign, knock on doors, put up a sign, have the bumper
sticker. They can also contribute because the way you
communicate today, obviously, is an expensive thing. But there
are limits as to what the individual can contribute to Charlie
Gonzalez, if I were to be seeking reelection.
Yet how--and it also impacts what happens in the future
when candidates are thinking of running for office. And this is
what I mean. Let us just say my good friend Keith Ellison--I am
now a private citizen. I want to help Keith. I love Keith. So I
want to contribute.
So I am going to be limited to contribute X amount for the
primary, X amount for the general election, maybe $5,000, as an
individual. But if I have a whole lot of money, a lot of money,
and I want to help Keith, what would you suggest would be the
best way for me to do it, should this exact circumstance we
find ourselves today on shell corporations, the Super PACs, the
501(c)(4)s, what is the best way for Charlie Gonzalez, private
citizen, to make all his money really felt because I want to
help Keith Ellison?
He is not going to coordinate anything with me. Maybe his
former campaign manager may be running that Super PAC, but
please don't draw any conclusions. What is the best way for me
to get lots of money to support Keith in his reelection?
Mr. Ryan. I would ask you whether or not you are willing to
be disclosed publicly, whether or not you are willing to stand
by this support. If you are willing to stand by the support,
you can write an unlimited-sized check to a Super PAC, and that
Super PAC can spend every penny that you give to that Super PAC
to advocate Representative Ellison's election to office.
You could, of course, go down to local TV or radio station
or to the stations in Representative Ellison's district and
make those ad buys yourself. You have been free as an
individual for decades, forever essentially, to do that.
But if you don't want to be disclosed for this support,
then you identify a 501(c)(4) group. If one doesn't exist, you
encourage some friends to create it, and you write your
unlimited check to that (c)(4) group. You refrain from writing
on the memo line of that check, ``Use this money to air ads for
the reelection of Representative Ellison.'' You refrain from
specifically designating your donation to the (c)(4) for any
particular purpose, and you will remain undisclosed.
The (c)(4), in turn, can spend your money, 49 cents out of
every dollar you give it, on hard-hitting express advocacy ads
urging the election of Representative Ellison. And will spend
the other 51 cents on ads that are nearly as hard-hitting, sham
issue ads that either attack an opponent on the basis of some
issue, but certainly identify the candidates in the race, yet
don't contain words of express advocacy and, therefore, don't
fall under the rubric of ``candidate election intervention''
for tax law purposes.
That is the way to do it. And it is your decision whether
you want to remain anonymous or be disclosed.
Mr. Gonzalez. Anyone else?
Ms. Youn. What I find kind of touching about both your
question and Paul's response is we are talking about this as if
it is a hypothetical. But we already know--I mean, like, so the
poster child of this campaign season so far has been Sheldon
Adelson, who, as we all know, has given upwards of $10 million
to support Newt Gingrich.
But there are, you know--but there are two $10 million
checks that were both written to Crossroads GPS, and we don't
know the name of the person that was on those checks. There
were two separate checks written for $10 million apiece. We
have no idea who that person is or if it is even a person or if
it is a major corporation behind this.
I mean, this is already happening. This is an avenue that
sophisticates have figured out. And Adelson, at least he is
spending his own money. At least we know his name. I think the
biggest problem is when they are not spending their own money,
and we don't know their names.
Mr. Gonzalez. Anyone else?
Ms. Teachout. So I am going to--you know I am a law
professor. So I am going to fight the hypothetical. These are
wonderful answers, and I hope nobody hears them because they
are good advice.
But I just want to respond to something also that Norm
suggested earlier. I think, at first, corporations--I would
love it if we just stuck with the wealthiest individuals trying
to figure this out. It is a terrible situation, but it doesn't
deal with the real threat of concentrated power used
strategically.
We are 2 years in. I think it was Texas Home Builders who
used--it was the first company that actually did itself as a
company, using the ability to have independent expenditures.
Two weeks ago, we had the first banking Super PAC because
Congress doesn't know to be scared of the banks. It was in the
press release, I believe.[]
We are just at the beginning of strategic corporate action.
And if they are then following the same strategy, now we are
talking real money, and we are also talking money that has a
particular ideological bent. So that you no longer see the
range of ideological views that Americans hold.
Mr. Ornstein. Let me answer your question in a couple of
ways, and it will get also at Representative Price's question.
If I am sitting there as a Member of Congress and I know
that American Crossroads GPS, if the presidential contest
doesn't turn out to be completely close, is going to turn all
of its resources into House and Senate campaigns. And I also
know there are going to be others out there, and I am worrying
about somebody coming in at the end and spending $10 million
against me, of course I am going to go out there and try and
raise as much as I can in $2,500 increments. There are limits
to that, especially because everybody else is going to be
looking at the same individuals.
So I am going to try and find a sugar daddy. I am going to
look for somebody who will do for me what the others would do
against me. And to get those, maybe you know a billionaire who
they are ready to be tapped, if necessary. If not, there will
be something in return.
And so, we are going to see a whole lot of additional
corruption as people are going to make side deals, just in
case. And the money may never be spent. But once again, it will
have an impact on the legislative process.
And then another element of what David asked. You know, it
really used to be in the days when I first got here that you
could see a lot of Members of Congress who were recruited to
come here by people in their communities who went to them and
said, ``You have done wonderful things. You have built a great
reputation. How about spending some time in public service?''
Now if I wanted to go to somebody like that now, I would
say, ``It is time to spend some time in public service. And
here is what is going to happen. The first thing is brace
yourself for the $5 million that will come in by your opponent
and other related groups, designed to strip the bark off you
and destroy that reputation you have spent your career
building. And they will know they have succeeded when your kids
come home from school crying and say they can't go back anymore
because of all the embarrassment that they face from their
friends and fellow students.
``And you will do the same thing, and then you will get
elected, and nothing is going to happen around here because the
two parties are completely gridlocked. But you will spend every
spare minute, that you aren't racing to get a plane to go back
home, spending money, raising money for the next time around.''
It is a miracle, under these circumstances, that we get
good people like you who continue to do this. And I don't know
how much longer. Because the ones who are incentivized to do
this now are the ones who are driven totally by naked ambition
or by an ideology that makes them certain that they have the
right answers and that it is all black and white, and
especially those people who pop up and say, ``I am not like the
rest of those bozos up there. I am not a politician.''
So we are leeching out the people who are here to solve
problems, and we are encouraging the worst sorts to come in.
And that is--this is maybe as fundamental a problem in terms of
the future of this institution as anything else, and it has
been driven by a lot of things, including a debasement in the
culture more generally where lying is no longer treated as a
shameful thing and you double down on your lies to get around
it, but also by what Citizens United itself and its progeny
have wrought.
Mr. Gonzalez. Thank you very much.
And I know we have gone over time, but if you will just
indulge us for a couple of minutes, I am going to see if my
colleagues have very short follow-up because we have had some
great discussion since they were able to pose their questions.
I will recognize Mr. Price.
Mr. Price. Thank you.
I will ask a very pointed question, one on a narrow topic
and the other somewhat broader. But I do appreciate especially
what Professor Ornstein just said, getting at the broader
corrosive effects of this system on this institution and on
American politics generally. That isn't a strictly legal
argument, but it sure is an important one. And that is also
what I want to ask about.
First, a very narrow question. I like your quote, Ms.
Teachout, about the limits of disclosure. ``You can't X-ray a
patient back to health.'' That is a good one. I want to
remember that one. The limitations of mere disclosure.
However, as we've all said, we do believe that, at a
minimum, we need to push for disclosure and that, of course,
there is no question that that would pass legal muster. There
is a problem. Stand by your ad. You know who is standing by his
or her ad: the candidate. Or, with the party, the party leader.
That is not so clear with ``Americans For All Good Things.''
So the device that we have come up with, I did this in my
``stand by every ad,'' the latest iteration of ``stand by your
ad''--the Stand by Every Ad Act and its parallel provisions in
the DISCLOSE Act. We have said you have got to put on the
screen those top five donors, one way or another. Flash up
there the top five donors or have a trailer showing the top
five donors.
Is that the best we can do? Is that the equivalent of what
it would mean to saddle someone with personal responsibility
for the ad?
The somewhat broader issue, you know, there is a difference
here between the legal arguments and the broader political
arguments, and Norm Ornstein just articulated one of them. But
we talk time and time again about voices being drowned out,
about the voices of ordinary people, of ordinary citizens, just
coming to count for nothing.
It is not just about corruption. I mean, I guess the most
powerful legal argument is about corruption. Is that true? I
guess that's my question. But in legal terms, how do we
translate this intuition we all have that this is a disaster
for democracy?
The voice of these few wealthy people become so
disproportionate, so overwhelming, drowning out everything
else. There is surely no way that can be healthy for democracy.
Yet, I think our legal arguments often go to the corruption
issue and don't do much else.
I guess I'm just asking, the political argument, of course,
is one thing, and the legal argument is another. But, is there
a legal hook for this intuition we all have that you simply
cannot have a few voices drowning out the others?
Ms. Youn. I represented the Arizona Clean Elections
Commission in the Supreme Court case McComish v. Bennett, which
was about the Arizona public financing system. And I remember
sitting up there and feeling my heart sink when Chief Justice
Roberts said, you know, ``I was looking on the Commission's Web
site this morning, and I came up with a--I saw a reference to
`level the playing field,' and that makes this law
unconstitutional.''
So we are in a situation right now where the Chief Justice
of the United States thinks that equality is somehow
unconstitutional. And this is, I think, the distorted vision of
the Constitution that has been promulgated in decisions like
Citizens United, the idea that the First Amendment and ideas of
equality in democracy are irrevocably at odds. The reason that
so much legal argument has focused on corruption narrowly is
because that is what the Supreme Court has defined the only
legitimate interest in regulating campaign ads to be.
They have said, ``No, we don't care about hearing other
voices. We don't care about equality. God forbid we care about
leveling the playing field. We don't care about saving
candidates' time so that they are not constantly dialing for
dollars. We don't care about the integrity of our electoral
systems. All we care about is this very narrow version of
corruption.'' And I think that that is what we need to push
back really hard against.
Ms. Teachout. So I like the five names. I would like it
even more if they had to themselves say that they stood by the
ad. But, no, I think it is a wonderful way to have, actually,
the names up there. I think this is creative.
This actually also goes to Representative Van Hollen's
question. A majority of the Supreme Court doesn't actually
think corruption is an idea that makes any sense at all. They
say two things.
One is, ``Corruption is the only interest that can be used
to outweigh this First Amendment interest.'' Not our Founder's
First Amendment, this sort of nutty, outer space First
Amendment. And then at a core level, they actually don't know
what corruption is because in Kennedy's opinion, he expects and
accepts, as does Scalia, that Members of Congress will be
dependent and responsive to donors' interests, as opposed to
the public interest.
They, at a core philosophical level, do not believe in the
public good, and they are totally at odds with the country. The
country still believes in the public good, a possibility of
public interest. But for a whole bunch of reasons, there is an
ideological position that doesn't support that.
I have been sort of interested in this question, too, about
legal hooks, and I have been interested in possibly Congress
coming back and redefining bribery. Because one of the things
Kennedy says in Citizens United is, ``Don't worry, our bribery
laws will deal with that.''
So what if Congress came back and said, ``Your 1991 case
where you said campaign donations aren't treated by the normal
bribery laws, we are overturning that because that was just a
matter of construction. We want to say that campaign
contributions and independent expenditures should be treated by
the normal wink and nod provisions of our federal bribery and
extortion statutes.''
There would be an interesting back and forth with the
Supreme Court. But what I think that would show is that this
Congress understands that we, as the public, do believe that
there is a corrupt institutional problem here, and bribery
might be the right word for it.
Mr. Ryan. I will respond to your question with respect to
the stand by your ads. Is that type of provision enough to
create accountability? I am a strong supporter of the ``stand
by your ad'' provisions, the expanded version that you have
advocated. But it is not enough.
Because one of the ways that voters get their information,
one of the ways that people in our society get their
information is through the press, through journalists analyzing
data that is crunched through the hard work of nonprofits like
the Center for Responsive Politics that attach and slice and
dice this contributor data according to occupation and employer
and interest groups.
Those stories reach voters and are just as important as
seeing the name of five folks on the face of an ad at the tail
end when they may or may not be paying attention. It is really
important that all of you continue to support, to strongly
advocate the improvement of collection and fine grain data, of
contributor data, data that is missing now because disclosure
on money going to (c)(4)s, for example, is not required.
That data is really vital to help the journalists who are
working really hard to improve transparency and tell the
stories, the bigger stories about who these interest groups
are, why they are spending what they are spending. And your
work can really help facilitate that.
Mr. Ornstein. Let me say I am a strong supporter of your--
of the ``stand by every ad'' provision, and part of the reason
being that the disclosure regimen that affects Super PACs is
such a farce now anyhow. You know, you get it every 6 months.
It is delayed. It is not there for voters to be able to take
into account when the decisions are actually made.
At the same time, I would come back to the Federal
Communications Commission. They are in the process of putting
together a regulation, which they have done very carefully and,
I think, very conservatively so that small TV stations won't
have a burden. But basically, all stations now are required to
keep information on the funders of ads in a public file. That
public file usually is in stacks of papers stuck in a back
room.
The law says that citizens have access to it. Try and get
access. Go to a local television station. Nine times out of 10,
they will tell you, ``No.'' But there is no reason why it
should be in that setting. And for the kinds of data that Paul
is talking about it, it would require entities like the Center
for Responsive Politics or the Brennan Center to go to every
single station and spend hours looking through files.
What the FCC wants to do is to require the larger stations
now in the biggest markets to put all of that data online, and
it will be accessible on the FCC website. It actually will cost
those stations less. You won't have to get the data, walk it
across a room, put it in a file. You just punch it in, and
almost all of them already have websites, and they have Excel
files in which to do this.
But they are facing huge pushback from television stations.
Television stations will make billions of dollars in additional
profits because of what has happened in this campaign system.
The idea that they won't disclose for the public the
sources of those ads is outrageous. You need to fight against
the broadcasters and provide backing, write letters, and do
other things to tell the FCC that they are on the right track
here.
Mr. Gonzalez. Wrapping it up, Mr. Van Hollen, do you have a
follow-up?
Mr. Van Hollen. Thank you. Thank you, Mr. Chairman.
I just want to thank all of our witnesses. I think they
have made excellent points.
You know, one of the problems with the numerous court
decisions and the direction we are headed is not only has it
provided a whole new source of unlimited amount of money
flowing to these campaigns, it is putting a lot of pressure on
the very fragile campaign finance system we had [sic] because,
as many of you have said, when you look at the situation where
you have got these limits on contributions to candidates and
their campaigns versus the unlimited amounts that can be given
to Super PACs, campaigns and candidates are like fighting with
pea shooters against bazookas these days.
And it goes to the fundamental, one of the fundamental
problems with the court decision. All of you mentioned it. Mr.
Ornstein mentioned it right at the beginning of his comments,
which is the idea that somehow if you give--if Sheldon Adelson
gives more than $2,500 to Newt Gingrich in the primary and then
more than $2,400 [sic] to him in the general, that that will
somehow have a corrupting influence or the appearance of
corruption. But if Sheldon Adelson puts $5 million to the Newt
Gingrich PAC, that that won't, even though he is meeting with
him and has all his campaign guys are involved. I mean, it just
defies common sense.
And how we could have had a Supreme Court that was so out
of touch with reality on this issue just defies logic, and we
are all going to have to work very hard. But I think this has
been instructive.
With respect to the other point the Supreme Court made that
defies logic, with equating corporations with individuals for
these purposes, I would just say to our chairman, and since he
is from the State of Texas, that one of our colleagues remarked
that they would believe that corporations are individuals when
your state of Texas executed a corporation.
So, you know, this is--it is just uncanny the sort of air
of unreality that the court had on all these issues, and we are
going to have to fight to make the changes necessary to
preserve the integrity of our democracy.
So thank you, Mr. Chairman.
Mr. Gonzalez. I want to thank the witnesses. Hopefully, we
have provided you a very unique experience in your professional
lives to say that you may have testified in court before as an
expert, you may have testified before a hearing as an expert.
But today, you testified before a forum. I am not really sure
what that means. But hopefully, that it is going to be
substance over form, and I think we have had a lot of substance
today.
Thank you. I want to thank my colleagues and their staffs
because they worked really hard. I want to thank especially my
staff, but also the staff for the Committee on House
Administration.
And with that, this forum will stand adjourned.
[Whereupon, at 3:43 p.m., the forum was adjourned.]
Robert A. Brady.
Zoe Lofgren.
Charles A. Gonzalez.