By Bradley A. Smith
The decision to stop gathering some donor information seems, on the surface, like a no-brainer. First, the IRS neither used nor needed the information in its everyday operations. Because the new rule applies to nonprofit groups that do not get tax-deductible donations, including trade associations, issue groups such as the National Rifle Association and Greenpeace, and organizations such as volunteer fire departments, the information is not necessary to verify that taxpayers made tax-deductible contributions. (The IRS will still be able to demand donor information when necessary, such as for audits or criminal investigations).
Second, though the information is supposed to be kept confidential, this has not always been the case. For example, in 2014 the IRS was forced to pay damages to the National Organization for Marriage, which supports traditional marriage, after an employee, whose specific identity was never publicly uncovered, leaked information on NOM’s donors to an LGBT rights organization. There is simply no need for the IRS to maintain donor information that might be accidentally released, leaked by a rogue employee, or used by unscrupulous politicians to harass political opponents…
Finally, we might ask why, absent a very good reason, the federal government should ever be collecting data on our memberships and donations in the first place. What business of the government is it if you belong to a fishing club or the National Association of Realtors, or want to support Everytown for Gun Safety or the NRA?
By Bradley A. Smith
When Justice Kennedy announced his retirement from the Supreme Court last month, the Institute for Free Speech conducted a thorough review of the First Amendment records of each of the potential nominees for the seat on the President’s shortlist, with an emphasis on political speech. Judge Brett Kavanaugh, the eventual nominee, had the longest record […]
[O]n June 30, 1958, the Supreme Court held that Alabama’s demands for the NAACP’s member and donor information violated the organization’s and its members’ freedom of association. “It is hardly a novel perception,” wrote Justice John M. Harlan II, “that compelled disclosure of affiliation with groups engaged in advocacy may constitute [an] effective . . . restraint on freedom of association.” Alabama’s demand, he continued, “may induce members to withdraw from the Association and dissuade others from joining it because of fear of exposure of their beliefs.”
Today politicians routinely demand that the law be changed to require disclosure of names and personal information of donors to any organization that is involved in public affairs. Concerns about privacy are brushed off with the response that such donors no longer face any substantial threat. And it is true that few causes today generate the potential for violence that faced civil-rights protesters 60 years ago in the deep South.
But NAACP v. Alabama wasn’t a one-off. It was merely the most dramatic of a series of midcentury decisions that protect the right of Americans to support causes without fear of retaliation. The parties protected against compulsory disclosure include union members and organizers (Thomas v. Collins, 1945), those paying for flyers critical of business practices (Talley v. California, 1960), donors to charities (Bates v. Little Rock, 1960), and public-school teachers (Shelton v. Tucker, 1960), among others.
Retaliation from compelled disclosure remains a live risk in the contemporary political scene. Vandalism, boycotts and bullying by both online and real-life mobs are well-documented. In some cases, elected officials have used disclosure information to retaliate against citizens for their lawful support of organizations critical of those same officials.
By Bradley A. Smith
There is no agreed upon definition of “dark money.” Hence it can be used as a pejorative term for any number of things that the person using it does not like.
For example, suppose you give money to the Sierra Club. The Sierra Club then spends some of its money to advocate for the defeat of a political candidate who opposes green energy subsidies. Are you a “dark money” donor? After all, your name will not be publicly disclosed.
Suppose that instead, the Sierra Club uses some its money to run ads urging voters to contact their senators to support green subsidies: Now are you a “dark money” donor? …
In the narrowest sense of the term, “dark money” usually means money spent by a group to promote the election or defeat of a candidate, where that group (like most non-profits and trade associations) does not publicly name all its members and donors. But what does it mean to promote the election or defeat of a candidate, or to use another term bandied out, what is “political spending?” Was the think tank’s spending money on a study that was critical of green energy subsidies “political spending?” If a group like, say, Common Cause, sends out a mailer urging people to demand an end to “dark money,” is that “political spending?” What if it doesn’t actually mention any candidates? What if does, but merely to note their position on a bill to reform campaign finance? …
So here’s the bottom line answer to your question: When somebody talks about “dark money,” they’re not trying to clarify or explain. They’re trying to make something normal sound sinister, something legal sound shady, something complex sound simple. It’s political rhetoric for any spending pertaining to public affairs and elections that the speaker doesn’t like. (Speakers who like the spending call it “donations” or “grassroots advocacy” or something like that).
Illinois Business Journal: Counterpoint: Should the U.S. Constitution be amended to reverse Citizens United? No: Government power over campaign spending is a threat to free speech (In the News)
By Bradley A. Smith
Laws banning corporate speech do not just silence major for-profit firms. They also silence nonprofit advocacy groups. Justice Anthony Kennedy listed examples of speech that would constitute a felony prior to Citizens United: “The Sierra Club runs an ad, within the crucial phase of 60 days before the general election, that exhorts the public to disapprove of a Congressman who favors logging in national forests; the National Rifle Association publishes a book urging the public to vote for the challenger because the incumbent U. S. Senator supports a handgun ban; and the American Civil Liberties Union creates a Web site telling the public to vote for a Presidential candidate in light of that candidate’s defense of free speech. These prohibitions are classic examples of censorship.” …
An amendment reversing Citizens United would be most dangerous for critics of powerful politicians, not those already with money and power. History teaches us that giving government power over speech, however indirect, inevitably harms marginalized groups and critics of the government. America’s strong protections for political speech were developed by generations who discovered that, unless the First Amendment was given a robust interpretation, in practice it was easy for governments to shut down their critics. Those on the outskirts of acceptable political opinion, from civil rights activists to Communist Party members, found themselves at risk of being arrested, fined, and subject to retribution simply for speaking their minds.
This history should inform the current debate. Government officials typically do not go after the message they want to censor directly. Instead they target the methods employed by groups they wish to stop. Political spending is one method that is always under attack.
Giving Meaning to Narrow Tailoring and Burdens of Proof: IJ Scores a Win for Free Speech in Colorado
One of the problems with campaign finance laws is that, no matter how well-intentioned, in practice, the laws have less to do with “cleaning up government” or “ending special interest influence” than they do with squelching political speech. Despite this reality, judges – including those who are highly skeptical of state claims in areas of […]
TaxProf Blog: The IRS Scandal, Day 1828: Smith Responds To Johnston’s ‘Ad Hominem Attack’ On His WSJ Op-Ed (In the News)
By Paul Caron
TaxProf Blog op-ed: David Cay Johnston’s Ad Hominem Attack On My WSJ Op-Ed, by Bradley Smith (Capital University Law School; former Chair, Federal Election Commission):
David Cay Johnston claims that I have a “moral obligation” to address the claims of his op-ed, Bradley Smith’s WSJ Op-Ed Is A ‘Breathtaking’ Distortion Of The Facts Of The IRS ‘Scandal’. Well, OK then….
First, he argues that “there was no “targeting” of right wing groups,” and that any “hassling” was limited to “dubious applicants.”
Of course, this is not the conclusion of TIGTA, which notes that the inappropriate IRS scrutiny began with organizations with the words “tea party” in their names, later expanded to include many other names, starting with “Patriot” and gradually expanding to include many others. (Here is how the U.S. Court of Appeals for the Sixth Circuit summed up the TIGTA Report: “Those findings include that the IRS used political criteria to round up applications for tax-exempt status filed by so-called tea-party groups; that the IRS often took four times as long to process tea-party applications as other applications; and that the IRS served tea-party applicants with crushing demands for what the Inspector General called ‘unnecessary information.'”)
By Bradley A. Smith
May 10 marks the fifth anniversary of the revelation that President Obama’s IRS targeted conservative groups for more than two years prior to the 2012 presidential election.
While some of the faces at the IRS have changed, the law that enabled their misuse of power has not. Congress’s failure to address the problem leaves the U.S. democratic process vulnerable to further abuses…
The easy fix here would be for Congress simply to scrap restrictions on political activity by social-welfare organizations, thereby stripping the IRS of authority to decide which groups are “political committees” and which aren’t. In a democracy, political activity is part of social welfare. Such a change would not affect federal revenue, as contributions to social-welfare organizations are not tax-deductible. There would be no “subsidizing political activity.”
The Federal Election Commission-a bipartisan agency staffed by experts and created to oversee election-related activities-is the proper authority to determine whether an organization should be subject to regulation under campaign-finance laws. The IRS-an agency under control of the president, with no bipartisan checks, subject to congressional pressure, and tasked with collecting revenue-is not.
There is a long history of presidents from both parties using the IRS to harass political opponents. Democrats and Republicans alike should recognize that, fix the law, and get the IRS out of politics.
Washington Examiner: Trump-appointed judge delivers fantastic campaign finance opinion in first ruling (In the News)
By Bradley A. Smith
“The unfortunate trend in modern constitutional law is not only to create rights that appear nowhere in the Constitution, but also to disfavor rights expressly enumerated by our Founders.”
This is the first line of the first judicial opinion written by Judge James C. Ho of the United States Court of Appeals for the 5th Circuit…
His first opinion, released in April, was a dissent in a case asking whether an Austin, Texas, $350 limit on political contributions was constitutional…
He began with a detailed analysis as to why Austin’s $350 limit on campaign contributions should be struck down as unconstitutionally low under Supreme Court precedent. Straightforward enough. Ho went further, questioning the right of government to limit political participation at all. “As citizens,” he wrote, “we enjoy the fundamental right to express our opinions on who does or does not belong in elected office.”
Ho pointed out that contribution limits prohibit the exercise of protected First Amendment rights to support candidates and voice political views even when there is no corruption whatsoever. Adding a badly needed dose of realism, Ho wrote, “Countless Americans contribute for no other reason than to support candidates who share their beliefs and interests … without any inkling of a quid pro quo agreement. Indeed, many Americans contribute without ever even communicating with the candidate. … A donor might simply be inspired by the candidate’s prior record of public service, proposed future action, or a particular speech or debate performance. Such contributions are far from corrupt.”
By Bradley A. Smith
In the past decade, 18 states have raised contribution limits. But that means more have not. And almost no states have raised their limits to fully account for inflation since the limits were first imposed. Higher limits can reduce time spent fundraising.
Additionally, many states increase compliance costs (a campaign cost) and smother true grassroots campaigns with needless, and needlessly complex, regulations. People should not be discouraged from participating in politics by spools of red tape, but too many states have intricate, confusing campaign laws that desperately need simplification.
Meanwhile, provisions of the federal government’s 2002 Bipartisan Campaign Reform Act, aka the McCain-Feingold Act, have severely hampered fundraising by state and local party committees. State officials should insist that Congress amend the law to free up local parties, easing the burdens of candidate fundraising and enhancing grassroots participation.
Efforts to lower spending through limits and regulation have been unsuccessful-after all, we have far more regulation than 40 years ago. Lower spending also comes at the expense of voter knowledge. Doing away with needless regulations, and thinking about things such as early voting or restructuring legislative chambers, will make it easier and less costly to run for office, without limiting political speech.