Daily Media Links 8/29: Clinton’s vow threatens the First Amendment, Judge tosses out effort to keep Missouri campaign contribution limits off ballot, and more…


Campaign Finance Regulations Increase the Influence of Super PACs

Joe Albanese

Traditional political actors, such as candidates and parties, are increasingly seeing their public platform encroached by ads from independent groups. Some candidates have tried to harness the potential of independent expenditures by outsourcing advertising and other operations to friendly super PACs, but this has proven to be difficult in practice, given the illegality of direct coordination between the two entities.

Even for those who don’t believe that contribution limits curtail free speech rights (in spite of Supreme Court precedent noting that limits do infringe upon First Amendment rights but are justifiable to prevent corruption or the appearance of corruption), this is a practical dilemma. Limiting one type of contribution will inevitably give rise to new, unforeseen methods, which is exactly how traditional PACs and bundling of donations originally entered the political lexicon decades ago.

Regulatory activists should ask themselves who they prefer to be the main actors in political discourse: candidates, parties, PACs, independent groups, or some other group. The instinct to simply contain all of them is not a viable option, as engaged citizens will continue to innovate new participation strategies, and tacking on new regulations to such innovations will continue to stifle free speech. Regulatory whack-a-mole is not an effective solution.

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In the News

Roll Call: New Sanders Group Illustrates Legal Compliance Challenges

Eric Wang

Often derided (unfairly) as “dark money groups” because they are not required to disclose their donors, 501(c)(4) organizations like Our Revolution are legally permitted to engage in all of these activities under current tax law. However, a sitting U.S. senator’s involvement in such a group is unusual and raises several knotty campaign finance and congressional ethics issues.

The campaign finance laws explicitly recognize only two types of “political committees” that may be “established, financed, maintained or controlled” by a federal candidate or elected official: a campaign committee and a leadership PAC. Both are subject to contribution limits and source prohibitions that generally do not apply to 501(c)(4) groups.

Any other type of entity that is established, financed, maintained, or controlled by a federal candidate or officeholder is also subject to federal contribution limits and prohibitions if it engages in any activity “in connection with an election for federal office,” certain federal election activities, or even activity in connection with state or local candidate elections.

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South Dakota War College: Center for Competitive Politics: IM22 is bad law, and full of unintended consequences. Check it out for yourself!

Pat Powers

The Center for Competitive Politics, which devotes it’s efforts to preserving free speech, has taken a hard look at Slick Rick Weiland’s measure to fund political campaigns from taxpayer funds – Initiated Measure 22 – and has found it wanting in several areas they describe in a report they recently issued which points out more flaws than have been identified to date…

So, in addition to the payola for politicians at taxpayer expense, it may cut off one of the State Democrat Party’s few sources of revenue – selling their lists? That’s funny.   Even funnier – it sounds as if the measure passed, it would also prevent candidates from selling off old office equipment, furniture, and other assets.

But don’t take my word for it – read the entire document yourself, and catch the multitude of sins & flaws they’ve identified with initiated measure 22.

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Argus Leader: Koch brothers-backed group says ballot measure could invite lawsuits

Dana Ferguson

The Center for Competitive Politics, a Virginia-based group funded in part by the David and Charles Koch, conservative industrialists, released a report Thursday critical of the South Dakota ballot measure. In the assessment, an analyst said the so-called “South Dakota Government Accountability and Anti-Corruption Act” would require reporting of political speech and donations and it would impose a “straightjacket” on fundraising.

“We’re just putting the issues out there and alerting people to the legal issues that could arise,” Eric Wang, Center for Competitive Politics analyst, said. The group didn’t endorse or oppose the measure.

Supporters of the proposal said the response wasn’t surprising, given the Center for Competitive Politics’ history of suing cities and states that enact similar laws.

“This is a group with an ax to grind,” Paul S. Ryan, deputy executive director of the Campaign Legal Center, said Friday.

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Free Speech

Wisconsin State Journal: Clinton’s vow threatens the First Amendment

Donald A. Downs

It’s one thing to criticize Citizens United and hope a different court would overrule the decision. The case is controversial, and the court has overruled its own opinions dozens of times in its history.

It is another thing, however, to open Pandora’s box by passing a formal constitutional amendment creating a specific limit on free speech.

Clinton’s focus on going the amendment route is among a growing and disturbing number of instances in which certain groups of people believe that certain other parties, holding views with which they disagree, are such a threat to society that they should be shut down…

In the United States, we don’t silence our critics and those with whom we disagree. We fight them with facts and ideas. The heavy hands of government stay out of the fray.

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Executive Action

National Law Journal: Exxon Mobil is Being Investigated, But Here’s the Real Problem

Merritt B. Fox

A number of prior Martin Act investigations provide insight into the likely strategy in this investigation. After an extensive search of corporate documents, some of which inevitably will be embarrassing, the investigation will end with an “Assurance of Discontinuance,” where the target agrees to undertake certain measures or changes in behavior.

Because these documents have been obtained without a court order or the filing of a complaint, the attorney general can secure this agreement without ever having to articulate a theory, reviewable by a court, of how alleged facts constitute a violation of law.

Use of this strategy is a tempting way for an attorney general to force changes in corporate behavior. But it is inconsistent with responsible government that one official, without any legislative guidance or judicial oversight, can use such a strategy to make public policy over almost any kind of business activity.

At the extreme, the Martin Act subpoena power could be used to bully corporations into any kind of desired reform under the guise of a securities investigation.

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Independent Groups

Huffington Post: Yes, Citizens United And Other Court Rulings Led To A Rise In Dark Money

Paul Blumenthal

In case there was still any argument left on the matter, a new report from the Wesleyan Media Project and the Center for Responsive Politics shows how much spending by groups that don’t disclose their donors soared in response to Supreme Court decisions that deregulated campaign finance.

Although there has been a lot of ink spilled (or keyboards mashed) showing how undisclosed or “dark” money surged following the court’s recent campaign finance decisions, this new report goes one step further by examining the actual number of advertisements these groups ran from 2000 through 2016. This unprecedented look at dark money shows definitively that there can be no other reason for the dark money surge than deregulatory court rulings.

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Political Parties

Louisville Courier-Journal: Ky Democrats did not get July cash windfall

Tom Loftus

In response to questions about the FEC letter, Daniel Lowry, spokesman for the Kentucky Democratic Party, said Friday that the party’s report contains a mistake. Lowry said the money the party got from Hillary Victory Fund last month was actually transferred by the state party to the Democratic National Committee. Lowry said the party will file a corrected report with the FEC next week.

Lowry said he did not know why the Hillary Victory Fund money was transferred to Kentucky only to, in turn, be transferred immediately out to the DNC. He did say that the Kentucky Democratic Party expects financial support later during the fall campaign from both the DNC and the Hillary Victory Fund.

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The Hill: Clinton fundraiser to be DNC finance director

Jesse Hellman

Angelique Cannon-Harris, Clinton’s deputy national finance director for the mid-Atlantic region, will move to the DNC’s offices in D.C. “but her main job is to be mid-Atlantic finance director,” Clinton finance director Dennis Cheng told DNC staff on a Saturday conference call, according to Politico.

A DNC official called the move “another step since the Convention to seamlessly integrate our respective operations in order to help elect Hillary Clinton and Democrats up and down the ballot.”

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National Review: Hillary and Her Wheelbarrows

Jonah Goldberg

Being able to say to business partners, creditors, local politicians, etc., “When I met with Secretary of State Clinton last week . . .” is a gift. In America and even more so abroad, possessing a reputation for having friends in the highest places is a priceless asset.

All campaigns understand this. Donors could always just send the check by mail. But politicians understand that one of the things a donor is “buying” is the ability to strut like an insider and dine out on your political connections.

When Bill Clinton rented out the Lincoln Bedroom in the White House to big donors, the donors didn’t get to keep the furniture, but they did get to begin sentences, “The last time I stayed at the White House…”

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Vox: 4 experts make the case that the Clinton Foundation’s fundraising was troubling

Jeff Stein

Indeed, a cynic might wonder if there’s any difference at all between the Clinton Foundation and the routine campaign fundraising that every politician does. The answer is that it is somewhat different because, as a private nonprofit, the foundation exists in an entirely different legal framework from campaign fundraising organizations.

Private nonprofits have much looser disclosure requirements, for instance (though the Clinton Foundation went beyond what the law requires on this front), and don’t have really any restrictions on foreign or corporate donations.

“Everyone knows money is involved in politics, but we try to keep parameters around it to make sure it’s fair and transparent,” says English, the Georgetown professor. “The foundation appears to be an anomaly, because the Clintons have something outside the parameters from the campaign finance system.”

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Candidates and Campaigns

The Atlantic: How One Donor Is Profiting Off the Trump and Sanders Campaigns

Russell Berman

The entrepreneur and one-time professional poker player has, according to FEC filings, contributed just shy of $25,000 in total to the two candidates, more than any other person in America has given to both the Trump and Sanders campaigns combined. But Treibel isn’t donating all this money out of devotion to these unlikely political insurgents.

He’s just trying to make a profit.

Treibel has been buying Trump and Sanders campaign merchandise in bulk—stickers, buttons, and the like—and reselling it through his retail company on Amazon.com at a considerable markup…

The FEC only requires that campaigns refund excess contributions after they are given; it doesn’t force them to reject them in the first place. This loophole allows Treibel to make an even bigger killing than he imagined. Although he shelled out nearly $25,000 for the merchandise initially, he will get all but $8,100 back in refunds from the campaigns.

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The States

St. Louis Post-Dispatch: Judge tosses out effort to keep Missouri campaign contribution limits off ballot

Kurt Erickson

A push to bring campaign contribution limits back to Missouri has survived its latest legal challenge.

In a ruling handed down Thursday, Cole County Circuit Judge Patricia Joyce rejected an attempt to remove a voter initiative from the Nov. 8 ballot. If voters approve, it will would impose caps on contributions for the first time since 2008.

In a six-page decision, Joyce said the proposal mirrors federal law and is not unconstitutional.

The ruling will be appealed.

In arguments before Joyce this week, attorney Chuck Hatfield said the initiative financed by Clayton businessman Fred Sauer unfairly limits some classes of businesses and associations from giving money to campaigns.

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San Francisco Chronicle: Political disclosure bill gets amended in secret

John Diaz

On Aug. 11, the bill emerged from the Appropriations Committee, and advanced to the Senate on a 5-2 vote.

But there were changes.

Phillip Ung of the state’s Fair Political Practices Commission said the amendments were written “with almost surgical precision” by a lawyer obviously familiar with the nuances of campaign finance law.

“We came to the conclusion that the amendments were coming from someone outside the building who was highly connected,” said Ung, the director of legislative and external affairs.

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The Center for Competitive Politics is now the Institute for Free Speech.