Fec Quotes

Per­fec­tion is nearly al­ways im­possible, but it is never dif­fi­cult. Which is to say that if there is any dif­fi­culty to it, any lack of ease, then it has already failed of per­fec­tion. All per­fect things are easy. But they are not fre­quent. The mar­ried life of Charles Peis­son and Dotty was per­fect. From the mo­ment that Charles re­turned to town, everything was per­fect. The mark of per­fec­tion is its very sim­pli­city. Charles had a knack for un­ty­ing knots, for resolv­ing dif­fi­culties. The knack does not con­sist of ig­nor­ing the dif­fi­culties nor in skirt­ing them. It doesn’t even con­sist of fa­cing them and con­quer­ing them in the old copy-book fash­ion, though ap­par­ently they are faced and conquered in an­other fash­ion. Or some of them are never conquered at all. Part of the idea is just not to be dif­fi­cult about dif­fi­culties. If the rest of the idea were un­der­stood, then every­one would have per­fec­tion; and they do not.

Citizens United was no stranger to the rules governing electioneering communications. Indeed, it had previously alleged that left-leaning filmmakers had violated them. During the 2004 election, the group had asked the FEC to prevent the broadcast and/or advertising of director Michael Moore’s film Fahrenheit 9/11. Moore’s documentary was highly critical of then-president George W. Bush’s handling of events surrounding the terrorist attacks of September 11, 2001, the subsequent “War on Terror,” and the Iraq War. The film was released in theaters late in June 2004, and was distributed on DVD in October of that same year—shortly before the presidential election. Given its anti-Bush slant, a number of conservative organizations sought to limit its release, while liberal groups rallied to the cause. For instance, the left-leaning organization MoveOn.org urged people to see the film, while Move America Forward, a right-leaning group, launched a letter-writing campaign designed to dissuade theater owners from screening it (Kasindorf and Keen 2004).

Considering the long-shot nature of its petition against Fahrenheit 9/11, it is worthwhile to consider whether Citizens United was mainly interested in hectoring the marketing strategy for that film, or whether it had ulterior motives in mind. One possibility is that Citizens United had recognized an opportunity to test whether the FEC would grant a “media exception” from the electioneering rules to companies producing documentary films. The BCRA allowed such exemptions for material that appeared “in a news story, commentary, or editorial distributed through the facilities of a broadcast, cable, or satellite television or radio station.” Though it was banned from traditional “electioneering” due to its corporate structure, Citizens United might have believed in 2004 that the FEC would distinguish between documentary films and campaign advertising, allowing corporate producers of the former to air ads with candidate images. Such a decision would have allowed it to create and market similar movies advocating conservative ideas.

The FEC failed to grant the media exception, however. According to the Commission, in order to be excepted from the electioneering rules, Citizens United would have to demonstrate that it regularly made and distributed films, which it did not do in 2004. The FEC went on to note that by paying to have the film broadcast (as opposed to the opposite arrangement), Citizens United was itself insinuating that it was not a media outlet, since it clearly had to rely on the services of other entities with broadcast abilities to disseminate the film.

Given the FEC’s previous refusal to grant Citizens United a media exception to disseminate its John Kerry movie, there was a high probability that Hillary: The Movie would meet a similar fate in 2008. Citizens United probably knew that the FEC was likely to claim that considering its exclusively negative tone and laser-like focus on Senator Clinton, Hillary: The Movie amounted to a 90-minute campaign commercial well within the BCRA definitions of “electioneering,” and as such could neither be aired on broadcast outlets nor advertised over the airways within the applicable time limits. This presented an obvious marketing challenge. Were it limited to only movie theater screenings and online DVD sales, the film’s audience would be considerably narrower than intended. Citizens United surely realized that the only way to proceed with its plans to market political documentaries was to change the rules of the game. In December 2007, Citizens United brought suit against the FEC in the United States District Court for the District of Columbia. The purpose of the suit was to secure an injunction prohibiting the FEC from enforcing the electioneering provisions of the BCRA with regard to Hillary: The Movie. To that end, Citizens United made a First Amendment challenge, claiming that the BRCA’s bans on electioneering communications amounted to an unconstitutional infringement on its members’ freedom of speech. Moreover, the group alleged that because in its view its electioneering activities could not be banned, the disclosure requirements of the BCRA were also unconstitutional. First Amendment speech protections have long clashed with the restrictions imposed by campaign finance regulations. The general conflict in American campaign finance case law is that restrictions on contribution and/or spending are viewed by some as unreasonable restrictions on political speech, which has traditionally garnered significant protection (for an excellent summary, see: La Raja 2008, Ch. 3).

The Supreme Court decided in Citizens United v. FEC (558 U.S. 310 (2010)) that although corporations and labor unions were still barred from contributing money directly to federal candidates, they could spend funds from their treasury to purchase advertising to support or attack candidates by name. At the heart of the Court’s logic was the holding that corporate spending—so long as the money did not go to campaigns as contributions—was tantamount to political speech, which was subject to First Amendment protections and could therefore not be lawfully limited. Following the lead of the Supreme Court on this question, subsequent lower court decisions held that any group wishing to spend money to communicate a message (but not to contribute to candidates) could therefore raise unlimited contributions from both private citizens and corporations. This was an unprecedented expansion of not only outside groups’ ability to spend money in federal elections, but also of the capacity of donors to channel their money to groups with the aim of communicating a political message.

By the time Citizens United’s case reached the federal court system, however, there were signs that the Supreme Court might be willing to soften its position on direct corporate expenditures. In its 2007 opinion in Federal Election Commission v. Wisconsin Right to Life, Inc. (551 U.S. 449), the Court carved out some significant exemptions that allowed corporate funding for express advocacy. In that case, Wisconsin Right to Life, Inc. (WRTL) had run afoul of the FEC for airing ads that were critical of Democratic Wisconsin Senator Russell Feingold’s voting record on abortion, even though the group did not explicitly tell voters to withhold support from him. The group’s defense was that because its ads were ostensibly informative on a policy dimension, they should not be considered “electioneering” and should be protected speech. The Court agreed, holding that in order to be banned under the BCRA electioneering rules, an ad’s only purpose must be to expressly advocate the election or defeat of a named candidate. In formulating their opinion in the case, Chief Justice John Roberts and his colleagues in the majority positioned themselves as defenders of speech rights, writing that “the First Amendment requires us to err on the side of protecting political speech rather than suppressing it.

In June, the Supreme Court informed the parties that it wanted to hear new arguments in the case. The parties were instructed to argue a new question: “For the proper disposition of this case, should the Court overrule either or both Austin v. Michigan Chamber of Commerce and the part of McConnell v. FEC which addresses the facial validity of the Bipartisan Campaign Reform Act of 2002?”11 The order to reargue was a clear signal that the Supreme Court was willing to consider whether those decisions—which held that corporate spending during elections could be banned in most conditions—could stand against the First Amendment.

In June 2011, the FEC and NDPAC reached an agreement in the case (Carey v. FEC, No. 11–259-RMC D. D.C. 2011). The D.C. District Court subsequently issued a stipulated order to halt the FEC from enforcing contribution limitations on PACs when money is contributed to an account that exists solely to hold money destined for independent expenditures.

It is the term “social welfare” that allows some leeway for groups who might be inclined to participate in federal politics, as it can be argued that political advocacy falls within the broad umbrella of promoting the common good. The 501(c)(4) designation therefore allows groups to conduct political activities, but it also affords an additional benefit: 501(c)(4) groups are not required to disclose their donors to the FEC. This latter point became particularly important in the wake of Citizens United. The 527 organizations that began gaining notoriety for their activities in 2004 had long been allowed to pursue political activities exclusively, and had been required to disclose their donors even before passage of the BCRA. Although the BCRA limitations on “express advocacy” constrained the 527s somewhat, the rules did provide an outlet for unlimited—albeit disclosed—contributions for issue advertising prior to 2010. There was effectively no benefit of seeking 501(c)(4) tax status during this period, however. Since the IRS prior to 2010 employed a broad definition of political activities prohibited for 501(c) groups, there was little reason to risk running afoul of the tax code. Groups with a primarily political purpose could achieve tax-free status and avoid IRS scrutiny by organizing as a 527 group and disclosing their donors.15 In expanding permissible election-related activity however, the Citizens United decision immediately made 501(c)(4)s a more attractive option for groups looking to make independent expenditures. Importantly, because they are primarily defined as nonprofit “social welfare” organizations as opposed to political committees, 501(c)(4)s are not allowed to make or sponsor advertisements naming a candidate their primary activity, meaning that they must constrain their election-related spending to half of their overall expenditures. Yet, if corporations and other groups could not be stopped from spending money in elections—even for express advocacy—in the wake of Citizens United, it was considerably more difficult for the IRS to stop a 501(c) group from doing so either. After Citizens United, 501(c)(4)s therefore differed little from 527s either in the type of activities they could legally spend money on or the size of the contributions they could receive. However, the lack of a disclosure requirement for 501(c)(4)s provides a considerable advantage compared to 527s. Seeking 501(c)(4) status in the post–Citizens United world therefore seems like a prudent move for groups wanting to accept unlimited contributions, but who might not be inclined to publicize their donor lists: At present, 501(c)(4)s can pursue electioneering activities using anonymous unlimited funders so long as their activities can plausibly be defended as contributing to the social welfare (broadly defined) and so long as political spending does not constitute their “primary” expenditure (Luo 2010). In practice, the IRS/FEC has taken “primary” to mean more than half of a group’s overall expenditures.

called for the repeal of all campaign-finance laws and the abolition of the Federal Election Commission (FEC). It also favored the abolition of all government health-care programs, including Medicaid and Medicare. It attacked Social Security as “virtually bankrupt” and called for its abolition, too. The Libertarians also opposed all income and corporate taxes, including capital gains taxes, and called for an end to the prosecution of tax evaders. Their platform called for the abolition too of the Securities and Exchange Commission, the Environmental Protection Agency, the FBI, and the CIA, among other government agencies.

Democratic chairwoman Ann Ravel landed there in 2013, straight from a job running California’s FEC equivalent, the Fair Political Practices Commission. She arrived with a mission to turbocharge the FEC’s powers. She’s proposed greatly expanding disclosure rules. She wants to give the FEC power to regulate Internet content. Most disturbingly, she wants to get rid of one commissioner, to end tie votes, and allow one party (presumably hers) to steamroll the other. With

In 2013, Barack Obama’s presidential campaign was fined $375,000 by the Federal Election Commission for violating federal disclosure laws. An FEC audit of the 2008 records of Obama for America found the group failed to disclose millions of dollars in contributions and delayed refunding millions more in excess contributions.8 Excess contributions—sound familiar? But the FEC, you see, is a bipartisan group with an equal number of Democratic and Republican commissioners. As a consequence of both parties having a say, FEC decisions tend to be more balanced. My case, you may remember, was deliberately not referred to the FEC, as such cases typically are. Rather, the U.S. attorney for the Southern District of New York decided to go ahead and prosecute it. Unlike Obama, I did not benefit from a scheme involving millions of dollars in excess contributions; rather, I paid $20,000 in excess of the campaign finance limit. Yet I ended up in a confinement center, and Obama, for vastly more serious offenses, paid a token fine.

Here’s what I think it should entail: First, we must overturn, through a constitutional amendment, the Citizens United decision, as well as the 1976 Buckley v. Valeo ruling, which introduced the absurd notion that spending money on behalf of a candidate or a political party is a form of protected speech. Moreover, we must fight to overturn the 2014 McCutcheon v. FEC decision, which struck down limits on how much an individual can contribute to a national party and to a candidate’s campaign

As has been the case far too often in the Obama administration, which may go down as the least transparent administration in history, the IRS refused to respond to our FOIA requests. Judicial Watch was forced to sue the IRS in federal court in October 2013, shortly after Lois Lerner had “retired” to avoid the consequences of her actions. Judicial Watch’s efforts through these FOIA requests and subsequent litigation led to the discovery that in addition to targeting conservatives at the IRS, Lois Lerner sent confidential taxpayer information to attorneys at the Federal Election Commission, which enforces federal campaign finance rules, in violation of federal law. Email communications revealed that Lerner, who formerly worked at the Federal Election Commission (FEC), sent extensive materials on conservative organizations—the American Issues Project and Citizens for the Republic—to the FEC, including detailed confidential information, after inquiries from the FEC attorneys. She disclosed this information in spite of Section 6103 of the Internal Revenue Code, which bars the IRS from sending such information to anyone, including other federal agencies. It also turned out that the FEC attorneys were acting without authority to make such an inquiry, because the commissioners who run the agency had never approved an investigation. The emails discovered by Judicial Watch provided a disturbing window into the activities of two out-of-control federal agencies, whose employees, because of their political bias, were trying to target conservative organizations.

Three days after the fire, Mr. Schatzman wakes me from sleep to tell me that he and Mrs. Schatzman have figured out a perfect solution (yes, he says “perfect,” parr-fec, in his German accent; I learn, in this instant, the terrible power of superlatives). They will take me to the Children’s Aid Society, a place staffed by friendly social workers who keep the children in their care warm and dry and fed. “I can’t go,” I say. “My mother will need me when she gets out of the hospital.” I know that my father and brothers are dead. I saw them in the hallway, covered with sheets. But Mam was taken away on a stretcher, and I saw Maisie moving, whimpering, as a man in a uniform carried her down the hall. He shakes his head. “She won’t be coming back.” “But Maisie, then—” “Your sister, Margaret, didn’t make it,” he says, turning away.

Nonetheless, the newfound ability to funnel unlimited contributions to electioneering ads without disclosing donor identity is obviously attractive for many groups and donors alike; and it stands to reason that 501(c)(4)s will only become a more popular mechanism for channeling political money. Indeed, according to an audit report from the United States Treasury Inspector General, the IRS saw a sharp increase in 501(c)(4) status applications after the Citizens United decision, with requests rising from about 1,700 in 2009 and 2010, to 2,265 and 3,357 in 2011 and 2012, respectively.17 Since their funding is far less transparent than FEC-regulated political committees like super PACs, reform-minded watchdog groups such as the Sunlight Foundation have classified politically active 501(c)(4)s among “dark money” organizations,

On the steps of the FEC building in June of 2011, he said his new super PAC’s aim would be to “raise unlimited monies and use the monies to determine the winners of the 2012 election.” Later in the same address, Colbert satirically linked spending to his own civil liberties, saying, “I do not accept limits on my free speech. I don’t know about you, but I do not accept the status quo. But I do accept Visa, MasterCard and American Express.”22

Indeed, the years since Citizens United have seen an explosion in the number of independent expenditure–only committees (super PACs) registered with the FEC. Approximately eighty such organizations existed during the 2010 election, spending roughly $90 million during that cycle (Garrett 2013). At the dawn of the 2012 election cycle in July 2011, 108 super PACs had registered with the FEC.9 As of September 2013, that number has risen to 726.10 Meanwhile, a similar trend has occurred with so-called “hybrid PACs” that could accept and spend unlimited contributions via noncontribution accounts consistent with Carey v. FEC. Between the FEC’s August 2011 opinion in Carey and the end of that year, thirteen hybrid PACs formed; another ten followed in the first six weeks of 2012 (Levinthal 2012). Ultimately, forty-seven such organizations registered with the FEC during the 2012 campaign.11

With regard to whether individuals could be legally subjected to contribution limits if SpeechNow or other groups had no intention of contributing to candidates for office, the Court of Appeals looked to Citizens United. There, the Appeals Court justices found a clear answer. “Because of the Supreme Court’s recent decision in Citizens United v. FEC,” they wrote, “the analysis is straightforward. [In Citizens United], the Court held that the government has no anti-corruption interest in limiting independent expenditures” (10). Given that the only legitimate rationale the Supreme Court had traditionally recognized for regulating political money was the government’s anticorruption interest, and because its opinion in Citizens United held that independent expenditures (regardless of size) are not inherently corrupting absent coordination between a group and a candidate, the Appeals Court determined that SpeechNow was free to accept contributions of any size. The majority put it rather succinctly: “No matter which standard of review governs contribution limits, the limits on contributions to SpeechNow cannot stand” (16).

while the Supreme Court’s decision in Citizens United clearly paved the way for the D.C. Court of Appeals’ ruling in SpeechNow, the latter case had far-reaching implications. Indeed, in greatly expanding the ability of private citizens to collectively spend money to influence the outcome of campaigns at all levels of government, SpeechNow was an important case in shaping American elections in its own right. Effectively, SpeechNow lifted contribution limits on PACs if they neither contributed money to candidates or parties nor coordinated their activities with them. Indeed, the FEC moved quickly to clarify the new rules in advisory opinions issued shortly thereafter, which clearly stated not only that corporations could form “independent expenditure-only committees,” but that those committees could accept unlimited contributions from individuals, corporations, and unions.10 The new rules meant that PACs intending to allocate their funds only to independent expenditures—absent guidance from a party or candidate committee—could not be subject to the limitations faced by traditional, donation-focused committees.

Since the decision in SpeechNow, a number of campaign finance cases have made their way through the system, and most have sought to chip away further at the regulatory framework. Perhaps the most notable of such cases decided to date is Carey v. FEC. At issue in Carey was a natural second question in light of the holding in SpeechNow: If super PACs could form for the sole purpose of channeling unlimited money from donors to mass communications, were there circumstances in which traditional PACs could do the same? By 2010, traditional PACs had been making both independent expenditures and donations to federal candidates for more than sixty years. However, under the FECA and the BCRA, donations to PACs were limited, just as they were for candidates, and PACs, in turn, could only give candidates $5,000 per election cycle. These donations were certainly useful for candidates, but for PACs looking to invest, the ability to make unlimited independent expenditures surely posed an attractive option as well. Simply, the SpeechNow decision dramatically changed the calculus for existing PACs. If, some groups reasoned, they maintained a separate account that would fund only communications (and not donations to candidates), then surely they could accept unlimited contributions to that account. The federal courts had held that contributions posed some risk for increasing the appearance of corruption, and so any contributions made to PACs for the purpose of bundling into larger ones destined for campaign coffers would be subject to hard-money limitations. But if donations to groups who promised to make no contributions to candidates could not be limited, then established PACs saw an opportunity to be both a contribution bundler and a super PAC.

In October of 2011, per the terms outlined in the district court’s order, the FEC issued a statement announcing that it would no longer enforce restrictions on contributions to non-connected PACs like the NDPAC, so long as such groups maintained separate accounts for donations and independent expenditures.13 This announcement marked the birth of the “hybrid PAC,” which can make contributions to federal candidates using regulated, limited contributions, and can make independent expenditures using unlimited contributions, including those from corporate and union sources.