Tag: campaign finance regulations

Can You Vague That Up for Me?

As the IRS scandal thickens, targeted groups are coming out to describe their ordeals in dealing with that most-reviled of government agencies. The Ohio Liberty Coalition was one of the groups targeted by the IRS, and Tom Zawistowski of the OLC recently sat down with Cato’s Caleb Brown to discuss the experience.

Among the many lessons we can take from this scandal is to realize how bureaucrats enforcing vague government regulations can chill free speech. Campaign finance laws are filled with vague regulations–such as whether an ad is the “functional equivalent of direct advocacy”–and they are anything but harmless to political speech.

In assessing applications for (c)(4) status, the IRS looked for whether political campaigning was an applicant’s “primary activity.” Due to the vagueness of this term, “rogue” IRS agents were free to harass applicants for the “content of their prayers” and other uncouth requests.

Advocates for campaign finance restrictions often do not understand how political speech can be killed by a thousand cuts as much as it can by one fatal blow. Some FEC regulations clearly prohibit certain types of spending. Others tell would-be speakers to judge whether their ads “in context, can only be interpreted by a reasonable person as advocating a candidate’s election or defeat.” Complying with these regulations ultimately comes down to a silly “magic words” test–that is, a search for words such as “vote for,” “elect,” “support,” etc.

Some campaign finance advocates who understand what Citizens United was actually about–that is, a non-profit corporation prohibited from showing a movie critical of Hillary Clinton on Pay-Per-View–concede that Citizens United should have narrowly won the case. Rather than allowing all corporations to spend independently in elections, as the case turned out, they argue the Court should have carved out an exception for “genuine ideological organizations,” “voluntary media choices” (Pay-Per-View), or some other vague criterion that would ultimately have been enforced by bureaucrats at the FEC. We can now can see how such vague standards are applied and abused. 


Discouraging Speech through Disclosure

David Price, a Democratic member of the House of Representatives from North Carolina, has introduced a bill, the Stand by Every Ad Act,  to mandate disclosure of support for political speech by business and union officials.

Rep. Price cites three harms from such speech: “the opportunity for corporations, unions and associations to dominate the playing field, intimidating public officials and drowning out the candidates’ own messages.”

Notice that these alleged harms are caused by the speech itself and not by the fact that the speech might be anonymous. Notice also that Rep. Price provides no evidence at all that such harms will take place. Where would such evidence be found? Prior to McCain-Feingold, corporations and unions could fund speech. Several states also have permitted independent corporate expenditures. What happened in those years or those states to support Rep. Price’s extreme claims?

It is striking that two of the three harms cited by Rep. Price concern only members of Congress. He claims members will be intimidated or have their “own messages” drowned out. What Rep. Price does not say is how these problems for members of Congress would translate into problems for voters.  Of course, such arguments about the welfare of voters exist, but they are not obvious to most people. Rep. Price, however, saw no need to make the connection between an alleged harm done to a member and the interests of voters.  His argument is centered on the interests and concerns of incumbent members of Congress.  Apparently members consider first their own interests in thinking about campaign finance regulations.

Rep. Price also ignores the fact that voters are likely to receive more information about candidates for office after Citizens United since the hand of the censor has been lifted.

Rep. Price clearly believes mandated disclosure by business and union leaders will effectively discourage them from speaking out during elections.  Given that motivation behind the new disclosures laws, at what point does mandated disclosure translate into chilled speech?

One other disturbing part of Rep. Price’s case for his bill: he hopes to extend disclosure to the Internet.  Of course, disclosure of Internet speech may well lead to other restrictions on speech online.

An Issue Campaign Passing as Intellectual Inquiry

I was pleased when I learned that Harvard professor Lawrence Lessig had asked to come speak to us at Cato. Julian Sanchez has done a terrific job of capturing some of the subjects highlighted by his visit last week. Lessig is very keen on public financing of elections. In the end, however, Lessig’s visit reminded me of a birthday party I attended many years ago – something had been wrong with the cream sauce on the tortellini.

The day after Professor Lessig spoke to a small group of us at lunch, a friend forwarded me an email he had sent to his followers describing his visit to our “prominent conservative think tank.” His email, PowerPoint presentation, and talk were all framed as if we are on “the right,” which doesn’t sit well with many of us given the profound errors of modern conservatism.

I don’t mind when politicians, reporters, and cab drivers call the Cato Institute “conservative.” I don’t expect them to know better. I’ll even use the “conservative” moniker to advantage as an advocate if it can communicate that our support of civil liberties spans ideologies. But Lessig knows the difference between conservative and libertarian, and he wasn’t trying to show that there’s pan-ideological agreement on certain ideas. Or maybe he was…

His email talked about how, “nearly universally, [we] saw the same problems [he] did,” about our “shared” views, and “agreement that 20 years of conservative Presidents in the last 29 did not produce less government or simpler taxes.” Conspicuously absent was any reference to the polite but persistent challenges we addressed to Professor Lessig’s thesis, framing, and assumptions in the discussion that followed his presentation.

I think most of us believe that money ineluctably follows power. Accordingly, smaller government – not “better” campaign finance laws, and definitely not speech controls – will reduce the need for, and power of, money in politics.

But as I thought about it, I continued to grow doubtful that Professor Lessig was interested in an actual discussion of such issues. Why, for example, did he deliver a 20-minute, canned PowerPoint presentation – decent fare for college students – to ten or so Ph.D.s in economics and political science, top think-tank executives, and deeply experienced Washington hands? (And, ugh, the corny appeal to Ronald Reagan.) It wasn’t to bring the conference staff up to speed. My conclusion is that Lessig came to produce a video he could tout to his fan-base. Lessig tames the conservative lions.

Reviewing the tape with this thesis in mind, I had reason to second-guess Lessig’s assertion that he had convinced Richard Epstein to support public funding of elections in a recent debate. What Lessig said, exactly, was this:

Richard Epstein … at the end of this debate was willing to concede that in his view the only solution he saw – or one solution, he also wants term limits – but one solution to this economy of influence, this economy of corruption, was, as he described it, public funding.

I’d characterize it as a recorded conversation, but Lessig spins it as a full-fledged debate, taking Epstein’s cordiality as concessions on key points.

The image I’ve reproduced here, from Lessig’s PowerPoint, reaffirms to lay audiences that Epstein is a supporter of public funding. Imagery like this is fair in political campaigns. But it’s unfair in intellectual discussions – especially when communicated to thousands of people who don’t know Epstein’s thinking well.

I also went ahead and asked Professor Epstein what he thinks of Professor Lessig’s characterizations – something Lessig might have done before splashing “public funding” across Epstein’s face. Professor Epstein’s thoughts appear in a companion to this post.

Professor Lessig is an important public intellectual, and the issues he has focused on are important. But my sense is that his visit to Cato used the pretext of intellectual inquiry to make the Cato Institute a prop in his campaign to promote public funding of elections. I don’t think he should have associated our organization with that campaign.

Lawrence Lessig, Libertarian

This past week Professor Lawrence Lessig of the Harvard Law School dropped into the Cato Institute to give his stump speech on his new passion: the corruption in government. There is no question that he has picked a subject large enough to test his own ambitions, for the ever expanding size of government opens up new avenues for political intrigue that leave the defenders of small government like myself in tears, no matter which party is in power.

Lessig and I, it seems, share a common bond on the identification of the disease. But his presentation to the Cato Institute did not reflect the chasm on the question of remedy. Lessig is a one-dimensional man. Once he thinks that public funding of elections is the cure for the political disease, he mounts his crusade. I am an academic, not a public crusader. And I don’t much appreciate being enlisted without my knowledge in a campaign not entirely to my liking.

So by way of penance, I think that Lessig should enlist himself in my academic cause. I hope that in the spirit of internet openness he will post on his web site my take on his venture. He could start by adding a third caption to the (unauthorized) use of my picture: After putting the words, Public Funding, he should make the new slide “Public Funding Skeptic”—which best captures the flow of our  discussion. In the course of that exchange, I identified what I thought was the cause of the current malaise.

At various times, I extolled the virtues of Lochner v. New York, and championed a narrow reading of the commerce power. I passionately defended the use of term limits—10 in the house and four in the senate—that were short enough to have some bite, but long enough to allow for continuity in government. I attacked the built-in incumbent bias to modern elections. I went out of my way to denounce the limitations on campaign funding contained in the McCain/Feingold Act, which just got beat up in the Supreme Court’s recent decision in Citizens United v. Federal Election Commission, just as I hoped it would do in my prior Forbes.com column. I insisted that limitations on campaign finance could intensify the lobbying on particular issues. Truth be known, he was doing all the back-pedaling, not me.

You can be the judge: just listen to our discussion to see if it lines up with the mock-heroic account of his own intellectual derring-do he gave to his Cato audience, two of whom emailed me to ask, what gives:

Richard Epstein … at the end of this debate was willing to concede that in his view the only solution he saw—or one solution, he also wants term limits—but one solution to this economy of influence, this economy of corruption, was, as he described it, public funding.

Note how much error Lessig can pack into a single sentence. It wasn’t a debate. I didn’t “concede” a thing, least of all to him. I didn’t “also want” term limits. I was gung ho for them. I didn’t particularly support public funding initiatives. I didn’t oppose them in small elections, even though I thought they were likely to fail.

Next note the omissions. Lessig never mentions that most of my remarks were devoted to explaining why efforts to stop political action won’t do much good unless and until the rules of the game are so altered so that politicians have little to sell or little to threaten. So in a spirit of generous reciprocation, I hereby announce that Lessig has “conceded” the soundness of all my attacks on the New Deal and thus count him as a principled ally in the fight for structural reform that returns us to the original constitutional design. Then think just how much harder that task has become. If the self-appointed champion in the war against corruption can’t be counted on to give an accurate account of a recorded dialogue in which he took part, what chance do the rest of us mere mortals have to put an end to political corruption?

Citizens United and Corporate Money in Politics

As several of my colleagues noted yesterday, the Supreme Court handed down its landmark decision in Citizens United v. FEC. While I regarded the decision as a victory for free speech, a large number of folks on the left — many of whom support free speech in other contexts — were aghast at the decision, arguing that it would vastly enhance the influence of large corporations in the political process.

Part of my disagreement with these guys is that I’m just a free speech zealot. The First Amendment says “Congress shall make no law … abridging the freedom of speech,” and I don’t see how that language can be squared with a statute that limits the distribution of a political documentary. The best you can say, I think, is that limiting corporate influence is a “compelling state interest” sufficient to overcome the First Amendment’s ban on speech abridgment, but that’s just another way of saying that you don’t care about free speech very much.

Second, I think it’s important to remember that “corporations” encompass much more than large, for-profit businesses. They also include a wide variety of non-profit and advocacy groups, including the ACLU, the NRA, and NARAL, that are, by any reasonable definition, grassroots organizations advocating the views of large numbers of voters. Indeed, as the ACLU pointed out in its amicus brief, the Bipartisan Campaign Reform Act (BCRA) prohibited the ACLU from running ads criticizing members of Congress who voted for the awful FISA Amendments Act of 2008. Even if you think it’s appropriate for Congress to regulate the speech of Exxon-Mobil and Pfizer, I think it’s awfully hard to square the First Amendment with a law that limits the ability of NARAL or the NRA to advocate for its members’ views.

But more fundamentally, I don’t buy the idea that limiting corruption is a state interest sufficiently compelling to overcome the First Amendment interest in free speech. I think supporters of BCRA misunderstand how corporations wield influence and dramatically overestimate the power of television advertisements. It’s true, of course, that a corporation prepared to spend $1 million on ads criticizing a particular legislator will get that legislator’s attention. But there’s nothing unique about this. It can also get his attention by hiring a lobbying firm that employs a former staffer. It can get his attention by arranging $100,000 in bundled contributions from executives, clients, and friends of the company. It can get his attention by creating astroturf organizations. And there are probably lots of other mechanisms I haven’t thought of.

The key difference between independent expenditures and the other mechanisms is that independent expenditures are the most open and transparent. To run an effective “issue ad,” a corporation has to make an argument that is persuasive to voters. I don’t want to sugar coat the situation; sometimes independent expenditures finance ads that are sleazy and misleading. But given a choice between corporations spending their money on ads about how Senator Smith hates America or spending their money on K Street, I’ll take the ads, because at least voters still get the final decision.

Moreover, I think we’re moving toward a world in which traditional high-dollar advertising campaigns will become increasingly ineffective. One smart liberal compares the post-Citizens United world to a debate in which “you get 10 seconds to make your case. I’ll take an hour.” This description of the world had a certain plausibility when most people got their news from newspapers and television — media characterized by severe, technologically imposed bottlenecks. These bottlenecks meant that those willing to spend more money could get a significantly bigger soapbox.

This is a lot less true online where users have practically unlimited choices. The web is littered with lavishly funded corporate propaganda that gets a fraction of the traffic of grassroots blogs like Boing Boing. When people have lots of choices, they aren’t likely to stick around very long at a site that dishes up corporate talking points. So while deep pockets will always be an asset in politics, they won’t give 21st century corporations the huge advantages they gave to 20th century corporations.

So I’m not thrilled at the idea of Fortune 500 companies spending a ton of money on bogus “issue ads.” But I think the dangers of such ads are frequently exaggerated. I’m far more worried about preserving the right of organizations like the ACLU to spread their message. And I don’t see any plausible way to stop the former without seriously restricting the latter. So I’m glad to see the Supreme Court take the words of the First Amendment — “Congress shall make no law” — literally.

The Empire Strikes Back

The Citizens United decision is barely out, and incumbent members of Congress are vowing to restore restrictions on political speech.

Sen. Russell Feingold (D-WI) said: “In the coming weeks, I will work with my colleagues to pass legislation restoring as many of the critical restraints on corporate control of our elections as possible.”

In the House of Representatives, Robert Brady, Chairman of the House Administration Committee - the panel responsible for campaign finance regulations - sent out an email that said: “I will be working directly with my colleagues, the Leadership and the White House to study the Court’s decision and to put together a timeline for legislative action that ensures the Court’s decision will not define the ways elections are conducted in 2010.”

It is difficult to see how Feingold, Brady and other members of Congress will be able to get around the clear and certain language of the Citizens United decision. But they will try. Nothing worries members more than free and critical speech, especially when the upcoming election already looks really bad for incumbents.

Supreme Court Ruling on Hillary Movie Heralds Freer Speech for All of Us

Today the Supreme Court struck a major blow for free speech by correctly holding that government cannot try to “level the political playing field” by banning corporations from making independent campaign expenditures on films, books, or even campaign signs.

As Justice Kennedy said in announcing the opinion, “if the First Amendment has any force, it prohibits jailing citizens for engaging in political speech.”

While the Court has long upheld campaign finance regulations as a way to prevent corruption in elections, it has also repeated that equalizing speech is never a valid government interest.

After all, to make campaign spending equal, the government would have to prevent some people or groups from spending less than they wished. That is directly contrary to protecting speech from government restraint, which is ultimately the heart of American conceptions about the freedom of speech.

No case demonstrates this idea better than Citizens United, where a nonprofit corporation made no donations to candidates but rather spent money to spread its ideas about Hillary Clinton independent of the campaigns of primary opponent Barack Obama, potential general election opponent John McCain, or any other candidates. Where is the “corruption” if the campaign(s) being supported have no knowledge, let alone control over what independent actors do? – be they one person, two people, or a large group?

Today’s ruling may well lead to more corporate and union election spending, but none of this money will go directly to candidates – so there is no possible corruption or even “appearance of corruption.” It will go instead to spreading information about candidates and issues. Such increases in spending should be welcome because studies have shown that more spending — more political communication — leads to better-informed voters.

In short, the Citizens United decision has strengthened both the First Amendment and American democracy.

For more background on the case, here’s a primer: