Public Policy Advocacy Highlights for July 2022

Public Policy Advocacy Highlights for July 2022

The flood of news about the Federal Election Commission continues, but there were a lot of other important highlights in July. Characterizations, editorial comments, abbreviations and shorthand references are solely PPA Highlights author Barnaby Zall’s, and do not represent the views or positions of the Public Policy Legal Institute or the First Tuesday Lunch Group or their members and participants. Suggestions and corrections welcome.

FEC

FEC Extends Deadline to Respond to Google’s Advisory Opinion Request 2022-14 to August 5: Several times in the last few months, the First Tuesday Lunch Group has discussed Alphabet/Google’s Gmail spam filtering of Republican emails at dramatically different rates than other political emails. Quick summary from Axios.  Google has thrown up its hands at whether and how to remedy this question, which raises very interesting questions about contributions of “things of value,” and has now thrown the matter to the FEC in AOR 2022-14 (Google), asking whether it can resolve its questions by significantly changing its filtering algorithms to reduce any and all “spam” definitions for political mail. Thousands of people and organizations have submitted comments so far. So, the agency has extended the comments deadline to August 5.

OGC Rejects NRCC AOR for Guidance Under FEC v. Cruz for Senate, but Does It Have Statutory Authority To Do That? According to a comment filed in AOR 2022-15 (Rouda for Congress, discussed at the July First Tuesday Lunch Group meeting), the NRCC apparently filed a request for FEC guidance on how to proceed after the Supreme Court’s decision in FEC v. Cruz for Senate, No. 21-12, 596 U.S., 142 S.Ct. 1638 (May 16, 2022), but the Office of General Counsel rejected the request as “incomplete or otherwise not qualified.” The Holtzman Vogel attorneys who filed the request for guidance added a footnote that “2 11 C.F.R. § 112.1(d) purports to authorize OGC to exercise the Commission’s authority to determine the sufficiency of advisory opinion requests and appears to contravene 52 U.S.C. § 30106(c).” Nevertheless, the “helpful” OGC attorneys suggested that the NRCC file a comment on the subject as part of the FEC’s consideration of AOR 2022-15. Perhaps this is an outgrowth of the suddenly-loquacious Commissioners filing so many explanatory statements? Oh, and so as not to embarrass certain persons, we won’t point out a math mistake in a different AOR, but we will point out the old adage that you shouldn’t let lawyers near math may be untrue for a significant percentage of lawyers.

Commissioner Weintraub Fires A Solo Shot Across the Bow of Her Colleagues (#1) Who Believe That A Vote Against Enforcement Closes A Case: The pure legal firepower directed recently at the FEC’s ministerial acts has been of “shock and awe”-magnitude. Recently, for example, Commissioners who vote against enforcement in a particular matter have been issuing Statements of Reasons explaining their refusal to vote for agency action, as required by controlling judicial opinions. See, e.g., Statement of Reasons in MUR 7784, citing Nat’l Republican Senatorial Comm. v. FEC, 966 F.2d 1471, 1476 (D.C. Cir. 1992); Campaign Legal Ctr. & Democracy 21 v. FEC, 952 F.3d 352, 355 (D.C. Cir. 2020). Indeed, in May, Commissioners Dickerson, Cooksey and Trainor issued a Statement Regarding Concluded Enforcement Matters:

This cascade threatens to continue. But it need not. It is premised on the thin fiction that a deadlocked vote to close the file in a particular Matter Under Review (“MUR”) keeps the matter open perpetually—even where the Commission has voted on all the underlying merits. This assertion is unsupportable. In our view, the eight matters our colleagues refuse to close have, nevertheless, long concluded. Where, as in these cases, votes have been taken as to all parties and statements of reasons have been included in the file by the commissioners declining to move forward, there is no basis for claiming that the Commission is continuing to deliberate. In these cases, our work is done and a vote to close the file, while welcome and administratively convenient, is legally immaterial.

Id., at 1-2.

Now, Commissioner Weintraub has filed a solo Statement of Reasons in MUR 7422 (Greitens for Missouri) arguing, without further explication, that “A case remains open until it is closed by a successful motion to do so (which typically requires four votes), and motions remain in order until that happens. … Dismissing a case is a significant decision and does not happen by virtue of a partisan 3-3 vote on a motion that fails. There are no magical or automatic dismissals.” Note that in a July 7 Statement of Reasons for MUR 7516 (Heritage Action), Commissioner Weintraub noted that “Unfortunately, our Republican colleagues voted against moving forward and the Commission once again was unable to enforce the law.” (emphasis added).

Thus, the continuing impasse seems to have boiled down to whether “the Commissioner once again was unable to enforce the law” (Broussard and Weintraub) is the same as “Where, as in these cases, votes have been taken as to all parties and statements of reasons have been included in the file by the commissioners declining to move forward, there is no basis for claiming that the Commission is continuing to deliberate. In these cases, our work is done” (Dickerson, Cooksey and Trainor).  

Commissioner Weintraub Fires A Solo Shot Across the Bow of Her Colleagues (#2) Who Believe That “Prosecutorial Discretion” Should Be Nothing More Than A Straight Legal and Factual Analysis Of This Matter: In CREW v. FEC, 993 F.3d 880 (D.C. Cir. 2021) (“New Models”) and in CREW v. FEC, 892 F.3d 434 (D.C. Cir. 2018) (“Commission on Hope”), the D.C. Circuit, citing numerous earlier cases, held that the FEC could exercise “prosecutorial discretion” to decide not to pursue enforcement action after a complaint. In her 2021 opinion, Judge Rao noted that “Here, the Commissioners who voted against enforcement invoked prosecutorial discretion to dismiss CREW’s complaint, and we lack the authority to second guess a dismissal based even in part on enforcement discretion.” 993 F.3d at 882. In New Models, the D.C. Circuit noted that the Commissioners who voted against enforcement of a defunct committee’s alleged violations wrote 32 pages of reasons why they rejected the enforcement recommendation, and one paragraph invoking prosecutorial discretion, 993 F.3d at 883, but that was enough:

CREW contends that the Commission’s decision must be judicially reviewable under FECA’s “contrary to law” standard. We disagree because a Commission decision that rests even in part on prosecutorial discretion cannot be subject to judicial review. This conclusion follows inexorably from our recent decision in Commission on Hope as well as other longstanding precedents recognizing the constitutionally grounded limits of judicial review over prosecutorial and administrative discretion.

993 F.3d at 884.

Nevertheless, Commissioner Weintraub recently dismissed entirely the reasons her colleagues gave for rejecting enforcement when they wrote too much in addition to invoking prosecutorial discretion: “This statement explains why our colleagues’ factual and legal analysis of this matter is all there is.” Id., at 2. Weintraub’s reasoning appears to be that if the Commission fails to achieve a vote to exercise prosecutorial discretion, then discretion was not exercised. Id., at 2-3. “Commissioners’ factual and legal analyses of matters cannot form the sole basis of an application of prosecutorial discretion: I voted to dismiss the matter as an exercise of prosecutorial discretion because I did not believe the facts and the law warranted moving forward. That is nothing but a factual and legal judgment with Heckler [v. Chaney, 470 U.S. 821 (1985)] fairy dust sprinkled inappositely on top.” Id., at 5.

In taking this approach, Commissioner Weintraub has posed an interesting question, though not the one she thought she was asking. Heckler recognizes that a court has no jurisdiction when prosecutorial discretion is invoked, and held that the Administrative Procedures Act was not intended to disturb that jurisdictional removal. “An agency’s decision not to take enforcement action … has traditionally been ‘committed to agency discretion,’ and it does not appear that Congress, in enacting the APA, intended to alter that tradition. Accordingly, such a decision is unreviewable unless Congress has indicated an intent to circumscribe agency enforcement discretion, and has provided meaningful standards for defining the limits of that discretion.” 470 U.S. at 835. Weintraub has restructured that question as:

When four or more commissioners vote affirmatively to exercise prosecutorial discretion in a matter, the Commission formally exercises the legal authority granted to it by the Act, in the bipartisan manner intended by the Act. That decision is entitled to the deference that any formal and final agency action is due…. Now, the opinion of two commissioners might be useful for a court to consider when deliberating upon whether a dismissal of an FEC complaint was contrary to law. But the opinion of two commissioners cannot work to actually exercise the Commission’s legal authority.

Id., at 3 n. 11 (quoting herself in a Statement requesting en banc reconsideration by the D.C. Circuit in New Models). Reliance on general APA principles to support judicial reviewability would not be sufficient; to carry her argument to its conclusion, Commissioner Weintraub must show that FECA itself contains the Congressional intent and standards required by Heckler.

She has not pointed out where, in FECA, “Congress has indicated an intent to circumscribe agency enforcement discretion, and has provided meaningful standards for defining the limits of that discretion.” 470 U.S. at 835. It’s an interesting question, but there’s no extant decision on all fours or even on point. The D.C. Circuit’s recent decisions don’t appear to have rested on any Congressional intent or standards for review. In fact, Weintraub’s own argument shows that there is no such Congressional tailoring. Which means that this isn’t a slam dunk view by any means, especially given the D.C. Circuit’s recent and historic acceptance of just such discretion.

Dead Men Tell No Tales, or Do Winding Up Payments to Campaign Vendors Constitute Personal Use of Campaign Resources After the Candidate Is Dead? In MUR 7310 (Mark Takai for Congress), the Commission’s battle of Statements of Reasons continued, but this time with a substantive and open question of what “personal use” means when campaign vendors have the power to convert campaign assets. Commissioners Dickerson, Cooksey and Trainor summed up their position by saying:

The Commission has consistently declined to second-guess what candidates and campaigns decide to pay their vendors and consultants—especially in the context of arm’s-length contracts for bona fide services. Absent a relevant regulation, our inquiry in this context is limited to whether there is a commercially reasonable relationship between the parties. We are satisfied of that here. Moreover, to proceed with enforcement on these facts would risk exceeding our authority, contravening the rulemaking process, and assuming an unauthorized price-setting role for which we are entirely ill-equipped. We decline to do so and, accordingly, declined to find probable cause to believe that Respondents violated 52 U.S.C. § 30114(b) by converting campaign funds to personal use.

Id., at 8.

Commissioners Broussard and Weintraub countered that payments after the candidate died are different. Here winding up payments went on for 18 months after the candidate’s death, and the vendors’ activities “dwindled” to the occasional payments to NGP Van and the like, while the payments of more than $5,000 per month continued. So, were the vendors (who now had control of the campaign’s assets) being overpaid, and was that prohibited payments of personal expenses, not by the candidate, but by the vendors? When the local newspaper got involved, more things started happening, and payments got much smaller. So the question ended up being what the three Commissioners opposing enforcement posed – when is it worthwhile for the agency to get into the weeds and when do the burdens of enforcement outweigh the benefit to the public? 

And the Hits Just Keep Coming: Democratic SuperPAC American Bridge has now filed suit against the Federal Election Commission for its alleged failure to rein in former President Donald Trump’s nascent 2024 presidential campaign. The claim is that the FEC is giving an advantage to Trump over other potential rivals by not requiring him and his organizations to register as a candidate or committee while he claims he has not yet declared his candidacy. Id., § 13.  American Bridge filed a similar FEC complaint in March, but the agency so far has not agreed with the claim.

More on Interim Regulation on Donor Disclosure for IE-Sponsoring Organizations: Following up on the continuing story of FEC stalemate and statements on how to respond to D.C. Circuit ruling that organizations sponsoring Independent Expenditures must disclose all donors, Wiley offers an analysis:

there are serious concerns with expecting the regulated community to adhere to an interim legal interpretation buried in a press release on the FEC’s website. Thus, FEC Chairman Allen Dickerson and Commissioner Shana Broussard led the Commission’s effort to reach an agreement on a more permanent solution. Ultimately, however, the Commission’s Republican and Democratic caucuses could not settle on new substantive text, and so they agreed the best course of action was to (1) remove the specific regulatory language invalidated by the court; and (2) add a citation in the regulatory text back to the district court decision just remove the specific regulatory language invalidated by the court. Rather than go through the traditional notice-and-comment process, the Commission made this change effective immediately so that the public would have guidance well in advance of the November 2022 election.

Should the FEC Use Heckler v. Chaney Even More Often? Robert Lenhard and Zach Parks from Covington have a new article out – “Picking Battles: The FEC and the Constitution – that argues the answer is Yes. “Perhaps no citation has been more favored in Federal Election Commission (‘FEC’) decisions over the past decade than Heckler v. Chaney, 470 U.S. 821 (1985), a Supreme Court decision that gives an agency broad discretion over which enforcement cases to pursue.  But there is a category of cases where the FEC is not employing Heckler when it should:  Cases where the constitutional support for the statute no longer exists.”

Can Save America – Trump Leadership PAC – Use Its Millions To Support 2024 Candidate Trump? Dartmouth College student (and apparently Forbes staffer) Kyle Mullins’s take on the issue in Forbes: “The moment he declares another run for the presidency, however, Trump’s grasp on that money will loosen. The exact amount of control he’ll lose is an open question—one that depends on how much the former president is willing to push campaign-finance boundaries and whether the Federal Election Commission is willing to rein him in.”

IRS

More Possible Bombshells From Judicial Watch’s FOIA Requests to IRS EO – IRS DoJ “Recap Memo:” Following up on Judicial Watch’s last release celebrating court orders forcing FOIA responses from IRS EO officials, Judicial Watch released the FOIA responses. “Judicial Watch today released new Department of Justice (DOJ) and Internal Revenue Service (IRS) documents that include an official “DOJ Recap” report detailing an October 2010 meeting between Lois Lerner, DOJ officials and the FBI to plan for the possible criminal prosecution of targeted nonprofit organizations for alleged illegal political activity. … The FBI and Justice Department worked with Lois Lerner and the IRS to concoct some reason to put President Obama’s opponents in jail before his reelection. And this abuse resulted in the FBI’s illegally obtaining confidential taxpayer information. How can the Justice Department and FBI investigate the very scandal in which they are implicated?” The Judicial Watch data dump included earlier FOIA releases as well: “Those documents contained an email exchange between Lerner and Nikole C. Flax, then-chief of staff to then-Acting IRS Commissioner Steven T. Miller discussing plans to work with the DOJ to prosecute nonprofit groups that ‘lied’ (Lerner’s quotation marks) about political activities.”

Are Private Schools Subject to Title IX Because of Their Tax-Exemption? Regan v. Taxation With Representation, 461 U.S. 540 (1983) rears its ugly head again. In M.H.D. v. Westminster Sch., 172 F.3d 797 (11th Cir. 1999), the Eleventh Circuit concluded that the appellant’s allegation that tax exemption qualifies as “federal financial assistance” under Title IX provisions was “neither immaterial nor wholly frivolous.” 172 F.3d at 802 n.12. Now Judge Richard Bennett of the District of Maryland has ruled in Buettner-Hartsoe v. Baltimore Lutheran High School Association, that, because Regan said that tax-exemption was a governmental subsidy, tax-exempt private schools are subject to Title IX.  

Nixonian “Enemies List” Redux? As recently explored in Americans for Prosperity Foundation/Thomas More Legal Center v. Bonta, tax records provide ready ammunition for government officials to use against “enemies;” Richard Nixon’s mis-use of IRS resources was the second Article of his 1974 Impeachment: “He has, acting personally and through his subordinates and agents, endeavored to obtain from the Internal Revenue Service, in violation of the constitutional rights of citizens; confidential information contained in income tax returns for purposes not authorized by law, and to cause, in violation of the constitutional rights of citizens, income tax audits or other income tax investigations to be initiated or conducted in a discriminatory manner.”  Impeachment Of Richard M. Nixon, Articles of Impeachment, II(2), H. Rept. 93-1305, at 3 (1974).

So recent reports that former FBI officials James Comey and Andrew McCabe were subject to audits after refusing to heed calls from former President Trump raised a furor. Washington Post: “Congressional Democrats and Republicans on Thursday seethed over new reports that the IRS may have targeted President Donald Trump’s political enemies with audits, issuing shared calls — backed by the tax agency itself — for a full federal probe into the matter.”

To their credit, the Post reporters pointed out that the audits may have been triggered by the National Research Program (an existing program of intensive audits of high-income self-employed people – which Comey and McCabe became after being fired) and the IRS sprang into action immediately upon hearing of the audits to investigate if improper political influence triggered them. And, of course: “But political controversies still have dogged its work, including an incident more than a decade ago that left Republicans seething over audits targeted at conservative nonprofit groups, including those associated with the tea party. The trouble loomed large over then-President Barack Obama and helped bring about a generation of steep budget cuts at the IRS, depleting its staff and its ability to carry out audits that target tax cheats.”

Are Churches Really the Future of Public Policy Advocacy So They Can Protect Donor Privacy? Tax-exempt media site ProPublica publishes explainer about how the Family Research Council sought and received redesignation as a church in 2020. “According to documents obtained via the Freedom of Information Act and given to ProPublica, the FRC filed an application to change its status to an “association of churches,” a designation commonly used by groups with member churches like the Southern Baptist Convention, in March 2020. The agency approved the change a few months later.” Why? According to ProPublica (citing a 2020 Washington Post article), it’s so they can hide their financial activities, meaning not file a 990. More specifically, though, ProPublica does note that FRC’s parent organization, Focus on the Family, changed its designation to a church in 2016, issuing a statement that “it made the switch largely out of concern for donor privacy.” It would be quite interesting if the reaction to the weaponization of the 990 and “cancel culture” is classifying publicly-active policy organizations as associations of churches, but often the result of regulatory complexity is unexpected consequences.

Practitioner Tip: Sweat the Details: Along the same lines of regulatory complexity, the Wall Street Journal reports (paywall) that a widow lost a $465,000 deduction for a contribution to a museum because the museum forgot to include the usual “no goods or services were received in exchange for this gift” language in a five-page “contemporaneous written acknowledgement.” Even a late acknowledgement of the appropriate clause and a later apparent agreement with the Service couldn’t save the deduction because it wasn’t “timely.” The May 2022 Tax Court opinion in Albrecht v. Comm’r noted “We appreciate what appears to have been a good faith attempt by petitioner to substantially comply with the Code by executing the deed with the Wheelwright Museum. Substantial compliance, unfortunately for petitioner, does not satisfy the strict requirements of section 170(f)(8)(B).” And footnote 4 says: “In assessing whether a taxpayer has strictly complied with section 170(f)(8), the focus is exclusively on what the taxpayer obtained from the donee organization at the earlier of the time the return was filed or the filing due date.” Template, anyone?

COURTS

Court Holds Montana’s Political Committee Definition Too Vague: Montana has long been very active in attempting to control campaign and public policy advocacy. The Helena Independent Record noted: “Ed Butcher, a former Republican state lawmaker who maintains Legistats, a website well-known in conservative political circles that grades GOP legislators on party loyalty … and another defendant, Lonny Bergstrom, spent several thousand dollars of their own money in 2019 and 2020 traveling the state to give political presentations to local Republican groups. They acknowledged offering endorsements of legislators during some of those presentations. … Commissioner of Political Practices Jeff Mangan determined in September 2020 that the pair had become a political committee under state law and ordered them to register. Prior to Mangan issuing his decision, Butcher and Bergstrom sued the state in U.S. District Court in Helena, arguing the rule was unconstitutionally vague.”

Now, in Butcher v. Knudsen, the Ninth Circuit has ruled that the state’s definition of “political committee” was unconstitutionally vague, and did not give notice to unpaid advocates that their travel expenses might be enough to trigger registration and reporting obligations as a political committee:

Butcher and Bergstrom were engaged in core political speech that lies at the heart of the First Amendment. The protections against impermissibly vague laws, rooted here in the Due Process Clause of the Fourteenth Amendment, are at their maximum in this most sensitive area, in which insufficiently defined legal regimes can discourage valuable speech and invite unbalanced government regulation of less popular views. In this case, Montana law did not give Butcher and Bergstrom fair notice that the travel expenses associated with their hobbyist speaking engagements transformed them into a two-person political committee subject to demanding disclosure and reporting requirements.

Maine Can’t Stop Out-of-State Petition Signature Collectors: Courthouse News reports that “Maine’s requirement that only people who live in the state and are registered to vote there can collect signatures for ballot initiatives likely infringes on the First Amendment, the First Circuit said Thursday in upholding a preliminary injunction.” In We The People PAC v. Bellows, Chief Judge David Barron, faced with an assertion that there were only six qualified petition circulators in the entire state, slip op., at 33, wrote that: “The requirement thus would appear to bar the petition proponents from reaching into a pool of more than 250 million people of voting age to assist in the collection of signatures — and to engage in the face-to-face, interactive communication designed to bring about political change that accompanies that collection of signatures – that the Supreme Court has deemed core political speech.” Slip op. at 30-31.

Maine argued that its interests in preventing fraud and governing the petition collection process permitted this burden, but Barron noted that the question was controlled by the Supreme Court’s decisions in Meyer v. Grant, 486 U.S. 414 (1988), and Buckley v. American Constitutional Law Foundation, Inc., 525 U.S. 182 (1999), a pair of cases from Colorado which applied First Amendment principles to ballot petition circulators (and in a historical aside, whose cross-partisan cooperation among counsel and litigants laid some of the groundwork for the formation of the First Tuesday Lunch Group in 2010). The two cases combined to prohibit a state from arguing that it could use indirect means (such as voter registration requirements) to bar out-of-state circulators; We The People meant the First Circuit had to look beyond voter registration requirements to see if residency alone could be the basis for limiting circulators, which Meyer and Buckley had not reached specifically. Slip op., at 32, citing Lux v. Rodrigues, 561 U.S. 1306, 1308 (2010) (Roberts, C.J., in chambers) (noting that difference). In fact, Chief Judge Barron extensively discussed the standard of review for a residency requirement for circulators and concluded that it would likely be subject to strict scrutiny despite some Circuits holding otherwise in past cases. Slip op., at 37-40.

Cruising Under the Radar: The First Tuesday Lunch Group has discussed the importance of the Supreme Court’s May decision in FEC v. Cruz for Senate, No. 21-12, 596 U.S., 142 S.Ct. 1638 (May 16, 2022). The Institute for Free Speech has now published an article – “Important First Amendment Supreme Court Decision Cruises Under the Radar” – explaining Barnaby Zall’s assertions about the importance of the decision in a bit more detail.

One Year After AFPF/TMLC v. Bonta:  On July 1, 2021, the Supreme Court handed down Americans for Prosperity Foundation/Thomas Moore Legal Center v. Bonta, holding that the California Attorney General’s policy of compelling tax-exempt organizations to file unredacted copies of their IRS Form 990, Schedule B lists of major donors was an unconstitutional “dragnet” which violated the First Amendment. One of the surprises during briefing in that case were the amici briefs filed by Chinese dissent groups, hoping to educate the Court about the real-world impacts of compelled donor disclosure. Now one of the amici has offered an op-ed celebrating the anniversary of its victory and cautioning that “It is no exaggeration to say that privacy is a matter of life and death for our members and donors as well as for our organization itself. Our work would be unsustainable without the ability to shield our supporters. The same is true for many other important causes supported by nonprofits throughout the United States.”

New Paper on Political Question Doctrine Says Lower Courts Are Using the Doctrine Widely; Supreme Court Reticence May Change: After the Supreme Court’s climate change decision in West Virginia v. EPA, No. 20-1530, using the “Major Questions Doctrine” (summary: Congress can’t hide statutory elephants in statutory mouse holes), there was much discussion about how, in that and other recent cases, the current Court was forcing Congress to do its job. Now, as a logical extension of forcing Congressional action, some people are wondering about the similar but different Political Questions Doctrine (summary: some things are reserved for the political branches, and are not reviewable by the courts), rarely addressed by the Supreme Court. In PQ Doctrine cases, if Congress acts (or doesn’t, in some cases), the courts affirmatively won’t step in to fill asserted gaps. For example, in Nixon v. United States, 506 U.S. 224 (1993), the Court rejected a challenge to an impeachment committee’s receiving evidence, saying that, despite the Constitution clearly saying ““The Senate shall have the sole Power to try all impeachments”, U.S. Const. Art. I, § 3, cl. 6, the word “try” “lacks sufficient precision to afford any judicially manageable standard review of the Senate’s actions.” 506 U.S. at 230. So, the Court would not limit the Senate’s reach without a basis in the Constitution.

In Rucho v. Common Cause, 139 S. Ct. 2484 (2019), the Court said that North Carolina’s congressional redistricting was a political question not subject to judicial review because ““the Constitution provides no basis whatever to guide the exercise of judicial discretion.” 139 S.Ct at 2506. As in Nixon, the Court was concerned about the difficulty of formulating a “clear, manageable and politically neutral” test for determining when gerrymandering is illegal.

Now University of Chicago Law Professors Curtis Bradley and Eric Posner have written a paper they describe as “the first empirical account of how the [Political Question] doctrine has operated in the lower courts since” the modern doctrine was first enunciated in Baker v. Carr, 369 U.S. 186, 217 (1962). They propose five findings:

  • The lower courts apply the PQ Doctrine regularly, even after the Supreme Court has signaled a lack of enthusiasm for it.
  • Second, the application of the PQ Doctrine is concentrated in the foreign affairs area, a finding that is not necessarily surprising but that until now has not been documented.
  • Third, even though the academic literature on the PQ Doctrine is almost entirely focused on constitutional adjudication, the Doctrine is often applied by the lower courts in non-constitutional cases—that is, cases involving claims brought under federal statutes, state law, or international law.
  • Fourth, the PQ Doctrine as applied in the lower courts is more prudential in its orientation than one would expect just by reading the post-Baker Supreme Court decisions. …
  • Finally, “[c]ontrary to what has been assumed (and which is a key part of the “judicial abdication” critique), we show that the political question doctrine does not typically have the effect of permanently disallowing adjudication of an issue.”

CONGRESS

Bipartisan Group of Senators Introduce Legislation to Reform 1887 Electoral Count Act: Sen. Collins reports on the two multi-faceted parts of the reform proposal: the Electoral Count Reform and Presidential Transition Improvement Act and the Enhanced Election Security and Protection Act.

ByteDance Spends As Much on Lobbying as Google: Chinese-owned company ByteDance (which operates TikTok) reported spending more than $2.1 million in the last quarter on lobbying. CNBC reports that this 130% quarterly increase comes on top of almost $5 million in reported 2021 lobbying expenditures. Stewart Baker and his colleagues on Steptoe’s July 26 CyberLaw Podcast note that ByteDance’s 2022 lobbying budget is $8 million, which is about what Google spends.

STATES

In NY, InCEL Takes Over For JCOPE: For many years, political activity in New York state was regulated by the Joint Commission on Public Ethics. The Independent Ethics Commission Reform Act of 2022, part of New York’s FY2023 Budget Bill, created a new Independent Commission on Ethics and Lobbying to take over after JCOPE was challenged for cronyism, including okaying a lucrative book deal for former Governor Andrew Cuomo. Covington has a brief explainer predicting “This change in the enforcer and a new group of commissioners could spell more rigorous enforcement of the state’s lobbying disclosure and ethics rules.” There may be some confusion about the proper acronym for the new organization.

New Employee’s Connecticut Cause of Action Against Employer Who Requires Attendance at Political or Religious Meeting: Wiley offers an alert about a new Connecticut law, effective July 1, 2022, that gives a statutory cause of action to employees whose employer “subjects or threatens to subject any employee to discipline or discharge” because the employee refuses to “attend an employer sponsored meeting … the primary purpose of which is to communicate the employer’s opinion concerning religious or political matters” or to “listen to speech or view communications, the primary purpose of which is to communicate the employer’s opinion concerning religious or political matters.” The Alert notes significant First Amendment issues involved in drafting the statute: “The path to Senate Bill 163’s passage was cleared in 2019, when new Attorney General William Tong advised that laws might avoid federal preemption if they focused on the First Amendment rather than labor relations, and sought to protect employees’ ‘right to freedom of speech, freedom of religion and freedom of association’ including ‘the right not to be required to listen to speech’ rather than expressly seeking to regulate or prohibit employers’ speech.”

On One-Year Anniversary of AFPF/TMLC v. Bonta, This Year Four States (and 14 Overall) Have Enacted Statutory Protections for Donor Privacy: People United for Privacy reports: “On June 30, 2022, Missouri Governor Mike Parson (R) signed House Bill 2400 into law, an omnibus bill that establishes the Personal Privacy Protection Act (PPPA). Under the PPPA, state agencies are generally forbidden from requiring nonprofit causes to report the private information of their members and supporters to the government. Additionally, safeguards are included to prohibit the public disclosure of nonprofit donor and member information already collected by certain state agencies.” The ACLU of Missouri and other organizations backed the bill. PUP later reported that: “On July 25, 2022, New Hampshire Governor Chris Sununu (R) signed Senate Bill 302 into law, establishing the “Personal Privacy Protection Act” (PPPA). … The passage of this law in New Hampshire marks the fourth victory for donor privacy in the states this year, after Kansas, Virginia, and Missouri, and the 14th state overall.”

GENERAL

Federal Advisory Commission Rejects Need for DHS Disinformation Governance Board: To save face when the proposal to create a new governmental “Governance Board” at the U.S. Department of Homeland Security imploded in disarray two months ago, former Department of Justice officials Michael Chertoff and Jamie Gorelick were appointed as heads of a new DHS Homeland Security Advisory Council, and its Disinformation Best Practices and Safeguards Subcommittee. That Subcommittee has now issued its “Interim Final Recommendations” on the need for a “Disinformation Governance Board.”

The memo was short and to the point: the Subcommittee had met with “with leaders and subject matter experts from every DHS component that plays a role in the mis-, dis-, and mal-information mission” and “we have concluded that there is no need for a Disinformation Governance Board.” (emphasis in original.) Meanwhile, Nina Jankowicz, the former director of the “Governance Board” who channeled Mary Poppins to explain disinformation has vented publicly, but no one seemed to notice.  

New Private Sector “Campaign Registry” Increasingly Put In Charge of Validity of Campaign Texting: The First Tuesday Lunch Group has discussed the effect of new rules governing “10DLC” or ten-digit long code texts (sometimes called “SMS” or short message service), which has rapidly become one of the principal campaign communications tools. A key advantage of 10DLC texting is an “open” rate as high as 98%, meaning recipients often don’t discard the messages without reading them. Major online sites such as AT&T, Verizon and T-Mobile are increasingly turning to an outside agency to validate the reputation of text authors; the “big three” all use the “Campaign Registry” from Vienna, Virginia. “The Campaign Registry is a reputation authority for business messaging on 10DLC. … in which Brands and Campaign Service Providers (CSPs) are verified prior to being allowed to send messages. … Brands, CSPs, and messaging content are all known upfront, meaning both the ‘Who’ and the ‘What’ of a campaign are traceable.” Vox believes that this will be the end for political campaign 10DLC texting: “Campaigns may have lost their most effective — and annoying — outreach tool.”

Google Not Alone in Facing Suspicions of Manipulating Political Ads: It’s already hard enough to “prospect” for voters and contributors who don’t already agree with your views, but now there’s more evidence that the difficulties are increased by Facebook, one of Google’s principal competitors. Northeastern University reports that its “research scientist Piotr Sapiezynski recently told the European Parliament that Facebook’s ad delivery algorithms may be harmful both to political campaigns and to society at large. … Facebook’s algorithms make it more difficult and [up to four times] more expensive for political parties to reach the potential voters who, according to Facebook, don’t already agree with the advertised message. … This way Facebook limits political advertisers’ ability to reach audiences that, in Facebook’s estimation, do not share those advertisers’ political views,’ Sapiezynski said. ‘This is in stark contrast with advertising in traditional media, where reaching a voter costs the same, regardless of the identity of the political advertiser.’” The study suggests that Facebook’s partisan impact is an unintentional side effect of its seeking maximum profit. The testimony came as the European Union is considering “draft legislation provid[ing] for general transparency obligations of all actors involved in the financing, preparation, placement and dissemination of political advertising, both offline and online, and aims to protect individuals’ personal data by laying down rules on the use of ad targeting and amplification techniques. The proposal intends to increase transparency of political ads across the European Union before the upcoming European Parliament election in 2024.”

New Third Party Launches; Bump Pushes Back: Washington Post publishes an op-ed by former Cong. David Jolly, former Gov. Christine Todd Whitman, and former Presidential candidate Andrew Yang on why they have combined forces to launch a new cross-ideological third party called Forward. “The two major parties have hollowed out the sensible center of our political system — even though that’s where most voters want to see them move. A new party must stake out the space in between. On every issue facing this nation — from the controversial to the mundane — we can find a reasonable approach most Americans agree on.” Not clear how they will find these approaches and determine whether most Americans agree on them. “That’s why we’re proposing the first “open” party. Americans of all stripes — Democrats, Republicans and independents — are invited to be a part of the process, without abandoning their existing political affiliations, by joining us to discuss building an optimistic and inclusive home for the politically homeless majority.”

Then, regular Post columnist Philip Bump, who wrote about this last year, pushed back:

A key point from that article is that our constantly hearing about new “third” parties makes the inherent problem obvious. There are, of course, scores of other parties out there, a third and a fourth and a 20th party that sit in contrast to the Democrats and the Republicans. But since the point of a political party is to amass political power and since none of those parties have amassed much, they’ve been relegated to insignificance. There’s no powerful third party, no counterweight to the Democrats and the Republicans. Largely because the Democrats and Republicans have worked hard to make sure there isn’t one. …

This conflation of “independent” and “centrist” is a fatal flaw in this argument. Both parties are home to centrists (though the Democrats more heavily so). The parties have traditionally worked hard to make their positions palatable to those in the middle. … The detritus of past third-party efforts is all around us, unseen, unnoticed and impotent.

Gallup Finds That Almost No Americans Trust Newspapers and TV News; NYT Poll Finds Majority Believes American Democracy Does Not Work: Gallup release Media Confidence Ratings At All Time Low finds “Just 16% of U.S. adults now say they have “a great deal” or “quite a lot” of confidence in newspapers and 11% in television news.” At the same time, New York Times/Sienna College poll finds that:

A majority of American voters across nearly all demographics and ideologies believe their system of government does not work, with 58% … saying that the world’s oldest independent constitutional democracy needs major reforms or a complete overhaul. The discontent among Republicans is driven by their widespread, unfounded doubts about the legitimacy of the nation’s elections. For Democrats, it is the realization that even though they control the White House and Congress, it is Republicans, joined with their allies in gerrymandered state legislatures and the Supreme Court, who are achieving long-sought political goals.

Recall that one of the rationales for limiting political speech that presents an “appearance of corruption” is that public confidence in democracy will be undercut by such an appearance. “Democracy has long been thought to work “only if the people have faith in those who govern, and that faith is bound to be shattered when high officials and their appointees engage in activities which arouse suspicions of malfeasance and corruption.” United States v. Mississippi Valley Generating Co., 364 U.S. 520, 562 (1961); United States Civil Serv. Comm’n v. Nat’l Ass’n of Letter Carriers, 413 U.S. 548, 565 (1973); Buckley v. Valeo, 424 U.S. 1, 26-27 (1976). Yet the NYT poll is not even the most significant such finding: a long-running Pew survey of trust in government peaked at October 15, 1964, at 77%, fell to 27% on March 12, 1980, spiked to 55% on October 25, 2001, but then fell sharply to 15% on October 4, 2011. Pew Research Center, Public Trust in Government: 1958-2021.

In John Inazu’s Newsletter Some Assembly Required, the Term “Assembly” Is Very Important: The First Amendment expressly protects “the right of the people to peaceably assemble” yet the right to assemble has been called the forgotten right. Now John Inazu, Professor of Law and Religion and Political Science (interesting trilogy) at Washington University, and authors of numerous articles and books on the subject, has started a newsletter called “Some Assembly Required.” “One of the least known provisions of the First Amendment is also one of the most important. … The right of assembly allows people to form and gather in groups of their choosing and to express their values and beliefs even when—and perhaps especially when—those views challenge or upset government officials. It is one of our foundational civil liberties. And most Americans can’t even name it.” Inazu ties in public policy advocacy law with a reference to a recent decision familiar to us all: “Last year, the Court decided Americans for Prosperity [Foundation/Thomas More Legal Center] v. Bonta, an important case involving disclosure of membership lists of private organizations. During the oral argument, three Justices inquired about the right of assembly.”

Turley on “Harm and Hegemony: The Decline of Free Speech in the United States:” The Harvard Journal on Law and Public Policy has published GWU Law Professor Jonathan Turley’s new article on how the historical “boom or bust” cycle of speech suppression in the United States is currently in a rising and exceedingly dangerous suppression phase:

the United States is arguably living through one of its most serious anti-free speech periods, and there are signs that the current period could result in lasting damage for free speech due to a rising orthodoxy and intolerance on our campuses and in our public debate. Where fighting for freedom of speech was once a near-universal rallying cry, opposing free speech has now become an article of faith for some in our society. This has led to a rising movement that justifies silencing opposing views, often on the grounds that stopping others from speaking is, in fact, an exercise in free speech. This movement has both public and private components, but it is different from any prior period due to new technological, political, and economic pressures on the exercise of free speech.

Politico Touts Upcoming Political Memoir Any Given Tuesday: Ready to hear some juicy gossip about Democratic “stars?” Politico has you covered, as it covers the roll-out of Lis Smith’s new Any Given Tuesday: A Political Love Story, an “irreverent, intimate and honest look behind the curtain of modern political image-making — including her own.” The “famously aggressive political operative battle-honed in the brass knuckles politics of New York City and in red-state political tilts” reportedly trashes her own clients, though published excerpts didn’t reveal a lot more than had already appeared in the press. Still, it might be an entertaining insider view.

Institute on Policy Studies Says Inequality Distorts Philanthropy; National Taxpayers Union Begs to Differ: The Institute on Policy Studies, which describes itself as “a multi-issue research center conducting path-breaking research on inequality,” has published Gilded Giving 2022, which posits that: “As inequality has grown in the U.S., the nation’s charitable system is in danger of becoming a taxpayer-subsidized platform of private power for the ultra-wealthy. This poses risks to the independent nonprofit sector and our society as a whole.” Citing “warehousing” of donations by donor-advised funds, IPS recommends, inter alia, greater donor disclosure and higher taxation, as part of an overhaul of federal charitable regulation. The National Taxpayers Union Foundation doesn’t agree:

a set of bad policy recommendations based on unsound methodologies. There is already extensive oversight of donations and charity operations without the need for taxing charitable giving and creating a new federal bureaucracy. NTUF has documented in the past how the proceeds from taxing private philanthropy would represent a drop in the bucket for federal revenues, but would significantly hamper private altruism. Furthermore, invasive donor disclosure is dangerous and subject to close judicial review by the federal courts.

More Than Half of All Americans Believe That There Will be “Civil War” in the Next “Few Years:” A recent survey found that shocking statistic, which was ignored by headlines about a mere 50 million Americans believing in violence to settle political differences. The study, Views of American Democracy and Society and Support for Political Violence, was led by Garen Wintemute, Sonia Robinson and Andrew Crawford of the University of California at Davis.

News Story You Don’t Want to See For Your Client: From Mainstreet-Nashville: “Nashville auto magnate Lee Beaman, who is treasurer and chairman of Andy Ogles’ Congressional campaign, is also the sole donor for a super PAC that made a significant ad buy supporting Ogles, federal campaign finance disclosures show, raising questions of unlawful coordination.”

Public Policy Advocacy Highlights for June 2022

Public Policy Advocacy Highlights for June 2022

Characterizations, editorial comments, abbreviations and shorthand references are solely PPA Highlights author Barnaby Zall’s, and do not represent the views or positions of the Public Policy Legal Institute or the First Tuesday Lunch Group or their members and participants. Suggestions and corrections welcome.

FEC

Another “Concealment Strategy” Complaint Filed Against FEC, While Other Cases Are “A Mess:” Another lawsuit has been filed against the Federal Election Commission alleging that three Commissioners (Weintraub, Broussard and Walther) intentionally concealed from the public and parties to actions the results of Federal Election Commission votes, thus preventing what was assertedly final action by the FEC from being recognized by parties to proceedings. The complaint in this case, filed by 45Committee, Inc., is that this failure to release FEC paperwork, resulted, inter alia, in the U.S. District Court for D.C. permitting a private complainant to pursue a private enforcement action against 45Committee, and was a violation of the Administrative Procedures Act and various court rules.

Meanwhile, Heritage Action, which had filed a similar suit in May alleging that the same “concealment policy” had injured it, filed an opposed motion in the U.S. Court of Appeals for the D.C. Circuit to hold appellate review in abeyance pending the consideration of its motion to dismiss a similar private suit filed against it. On June 6, the District Court for D.C. denied as too filed too late Heritage Action’s motion to intervene, saying “What a procedural mess.” Slip op., at 2. The Court stress that its denial:

says nothing about the validity of Heritage Action’s arguments about whether the Commission acted on CLC’s administrative complaint, whether any failure was contrary to law, or whether the Commission conformed with the Court’s order to act. Nor does it condone the Commission’s unseemly failure to appear and defend itself in this Court, or what Heritage Action casts as a scheme to hide its activity and leave regulated parties in legal limbo. Those issues will have to be addressed in other cases. See Campaign Legal Ctr. v. Heritage Action for Am., No. 22-cv-01248 (CJN) (CLC’s direct lawsuit); see also Heritage Action v. FEC, No. 22-cv-01422 (CJN) (Heritage Action’s APA suit against the Commission).

Three Commissioners (Dickerson, Cooksey and Trainor) released a Statement Regarding Freedom of Information Act Litigation filed by organizations trying to get FEC decisional documents on their own cases: “Because the vote certifications and statements of reasons for these complaints are neither predecisional nor deliberative, and because there is no foreseeable harm that could result from their release to these parties, FOIA requires the Commission to produce them. The plaintiffs in these actions—and similarly situated plaintiffs in the future—deserve to prevail under the law.”

Comments Due by July 14 on FEC’s Proposed Response to Deadlock Over How to Revise Regulations on Reporting Donors to Organizations Which Make Independent Expenditures: On June 14, the FEC published an interim final rule on reporting independent expenditures in the Federal Register and requested public comment by July 14. The interim final rule is intended to comply with the decision in CREW v. FEC, 971 F.3d 340 (D.C. Cir 2020), aff’g, 316 F. Supp. 3d 349 (D.D.C. 2018), holding that a disclosure regulation (11 CFR 109.10(e)(1)(vi)) was inconsistent with the statute because the regulation did not require the disclosure of all significant donors to organizations which made independent expenditures rather than only disclosing those who indicated their contributions were intended to support the IEs. Id., at 350-51. After the FEC deadlocked over how to comply with the D.C. Circuit’s ruling, the new interim final rule simply strikes the regulation. Commenters are encouraged to submit comments electronically, referencing REG 2020-05. Alternatively, commenters may submit comments in paper form, addressed to the Federal Election Commission, Attn.: Mr. Robert M. Knop, Assistant General Counsel, 1050 First Street NE, Washington, DC 20463. Covington reports.

“Interpretive and Policy Statement” of Three FEC Commissioners on Conflict Between Federal Circuits Over How to Report Donors to Organizations Which Make Independent Expenditures: The proposed amended regulation leaves practitioners in a quandary: what, exactly, do you tell clients, including donors and prospective donors, about what will be reported? Three Commissioners (Dickerson, Cooksey and Trainor) wrote an interpretive and policy statement on how they view and will vote on the proper scope and enforcement of the donor disclosure requirement under § 30104(c). Unlike the D.C. Circuit’s opinion in Crew v. FEC, 971 F.3d 340 (D.C. Cir. 2020), the Commissioners’ Statement looks more broadly, including at the limited jurisdiction of the FEC, at constitutional norms for Due Process and fairness, and at the impact on donors who did not intend to engage in political activity.

“[T]he FEC deals with “the behavior of individuals and groups only insofar as they act, speak and associate for political purposes.” Policy Statement, at 7. When there are conflicting decisions and an ambiguous statute, these three Commissioners see as most important the “fundamental pillars of due process: ‘first, that regulated parties should know what is required of them so they may act accordingly; second, [that] precision and guidance are necessary so that those enforcing the law do not act in an arbitrary or discriminatory way.’” Id

The Statement gives public notice of the Commissioners’ reasoning and their intended general future course of decision-making, given due deference to principles of fundamental fairness. They recognize the D.C. Circuit’s decision as binding, but also agree “with the reasoning” of FEC v. Survival Education Fund, Inc., 65 F.3d 285, 294 (2d Cir. 1995), a conflicting decision of the Second Circuit that considers not just those who were, in fact, clearly acting, speaking and associating “for political purposes,” but the larger group of persons who were not. This is a destination test, something the FEC has often used over its existence (though not exclusively), and is consistent not just with the D.C. Circuit’s decision, but also the Supreme Court’s in Amer. For Prosperity Fndtn/TMLC v. Bonta and Munson, NAACP v. Alabama, and other cases. 

For example, as the Supreme Court recently wrote in striking down an FEC regulation in Ted Cruz for Senate v. FEC, No. 21-12 (May 16, 2022): “The First Amendment ‘has its fullest and most urgent application precisely to the conduct of campaigns for political office.’ Monitor Patriot Co. v. Roy, 401 U. S. 265, 272 (1971).” Cruz, slip op., at 11. Statutes that “inhibit” these fundamental and “urgent” rights likely violate the First Amendment. Slip op., at 1, 10, 11, 12-13. Disclosure of persons who do not “act, speak and associate for political purposes” likely will inhibit at least some non-political donors. As pointed out in footnote 23 of the Commissioners’ Policy Statement: 

See, Ams. for Prosperity Found. v. Bonta, 141 S. Ct. 2373, 2388 (2021) (observing that a “disclosure requirement ‘creates an unnecessary risk of chilling’ in violation of the First Amendment” when it “indiscriminately sweep[s] up the information of every major donor with reason to remain anonymous”) (quoting Sec’y of State of Md. v. Joseph H. Munson Co., 467 U.S. 947, 968 (1984)); Buckley, 424 U.S. at 66 (“[C]ompelled disclosure has the potential for substantially infringing the exercise of First Amendment rights.”); NAACP v. Ala. ex rel. Patterson, 357 U.S. 449, 462 (1958) (“It is hardly a novel perception that compelled disclosure of affiliation with groups engaged in advocacy may constitute as effective a restraint on freedom of association as [other] forms of governmental action.”). 

As a lesson for practitioners, Congress must not just be clear about who should and should not be disclosed, but also precise enough to avoid the obvious unconstitutional inhibitions on those who should NOT be disclosed. The D.C. Circuit decision was not so precise nor protective; the Second Circuit was. As an agency, the FEC must navigate that thin path toward the regulatory interpretations that protect all the rights involved, not just the informational right that disclosure feeds. That is what the three Commissioners’ Statement tried to do.

No Fishing in the Press Pool – “Conclusory”, “Unsourced”, “Anonymous” Media Stories Not Sufficient to Rebut Respondents’ Factual Statements: It’s a declaration against interest, but a number of our FEC practitioners’ practices include making or defending claims of violations of federal law based on media reports. The usual practice is to defend by showing that the media reports are unreliable or untrue. But is that enough either to justify the Federal Election Commission’s decisions to take or, just as important, NOT to take enforcement action? Under Heckler v. Chaney, 470 U.S. 821, 822-23, 831-32, 835 (1985), “An agency’s decision not to take enforcement action … has traditionally been ‘committed to agency discretion,’ and it does not appear that Congress, in enacting the APA, intended to alter that tradition. Accordingly, such a decision is unreviewable unless Congress has indicated an intent to circumscribe agency enforcement discretion, and has provided meaningful standards for defining the limits of that discretion.”

Three Commissioners (Dickerson, Cooksey and Trainor) used Heckler’s 37-year old analysis to explain why they chose to vote against enforcement proceeding in MUR 7784 (Make America Great Again PAC, f/k/a Donald Trump for President) not to begin enforcement proceedings against the successor organization to Donald Trump for President under a complaint filed only on the basis of media reports that were: “imprecise and credit ‘anonymous sources’ for key assertions. In fact, media reports citing ‘anonymous sources’ provide the only support for OGC’s conclusions. … Unsourced reports are not a proper basis for Commission enforcement action (particularly where, as here, they are heavily characterized, conclusory, and laden with innuendo).” Statement of Reasons, supra, at 8-9. The Statement notes that, pursuant to 11 C.F.R. § 111.4(c) and (d)(2), the FEC does not accept or credit anonymous complaints. An opposing Statement of Reasons by Commissioners Broussard and Weintraub contends that “We reject this attempt to discredit news reports as appropriate sources of information for complaints and appropriate bases for investigations under the Federal Election Campaign Act. … This agency might not exist were it not for some exceptional reporting relying on an anonymous source then known to the public only as ‘Deep Throat.’ It is ironic, ahistorical, arbitrary, and capricious for Commissioners to refuse to consider information derived from analogous sources.” Statement, at 5.

This MUR is important for two reasons: first, there has long been a fundamental divide between those who believe that anonymous media reports (or even media reports in general) are not sufficient grounds for subjecting a respondent to a costly and intrusive investigation, and this exchange clarifies the positions with substantive references to underlying law. But, perhaps more importantly, this exchange shows counsel what they must do to present or attack an anonymously-sourced allegation: it is not enough to have a “mountain” of evidence, or a “meticulously documented 81-page Complaint, which cites 80 different sources in its 131 footnotes,” if those “different sources” do not meet the standards in 52 U.S.C. § 30109(a)(1), and 11 C.F.R. § 111.4(c) and (d)(2). In other words, to be a credible and sufficient source, somebody must have either “personal knowledge and statements based upon information and belief,” or “Statements [in a complaint] which are not based upon personal knowledge should be accompanied by an identification of the source of information which gives rise to the complainants’ belief in the truth of such statements.” You can’t just allege something that you hope the agency will investigate and substantiate; in other words, no fishing expeditions.  Otherwise, Heckler counsels the agency that it has discretion that may well be unreviewable over whether or not to begin enforcement.

Calls for Commissioner Trainor to Recuse Because Someone Else Said He Was Conflicted: FEC Commissioner Trey Trainor worked as a lawyer for the 2016 Trump presidential campaign, yet has not recused himself from FEC votes on Trump 2020 campaign questions, notes Business Insider. “Trainor told Insider that what guides him in determining if he should recuse himself from a case is whether or not he has knowledge that may personally impact him in the outcome. He said he hasn’t done any paid work for Trump’s presidential campaign since a brief post-election legal fight in 2016 that has never come before the FEC.” Nevertheless, last November, the Denton County, Texas, Republican Party described Trainor in an ad for his appearance as a speaker as a member of the “Trump Elections Team” rather than as an FEC Commissioner. This has led, according to Insider, to some “campaign finance experts” suggesting that Trainor “should recuse himself from adjudicating matters involving the Trump campaign while he continues to serve with the FEC,” even though they “disagreed as to whether he broke any rule or law.”

IRS

Federal District Court Orders Release of “Missing” Lois Lerner and Holly Paz Depositions From IRS Targeting Scandal: Remember the comments by Sen. Sheldon Whitehouse and others that the IRS targeting scandal never happened? One reason for those false claims may be because some of the background testimony from the top IRS officials behind the scandal has never been released. On June 22, U.S. District Court Judge Michael Barrett from the Southern District of Ohio ordered the release of some of the depositions of Lois Lerner and Holly Paz, four years after he sealed the trial materials following credible claims of threats being made against the two IRS officials and their families.

NorCal Tea Party Patriots v. IRS, the main court case after the scandal, was settled in 2017 with settlement payments of $3.5 million to the affected tax-exempt organizations who were wrongfully screened through the “Be On The Look Out” (“BOLO”) project of the IRS Tax-Exempt Division, and an admission by the IRS of abusing its power. Then-Attorney General Jeff Sessions said at the time:

The IRS’ use of these criteria as a basis for heightened scrutiny was wrong and should never have occurred. It is improper for the IRS to single out groups for different treatment based on their names or ideological positions. Any entitlement to tax exemption should be based on the activities of the organization and whether they fulfill requirements of the law, not the policy positions adopted by members or the name chosen to reflect those views.

But the underlying case lives on, as Judicial Watch and other organizations seek more information on the IRS scandal. Judge Barrett’s June 22 Order said, in part:

The difficulty for the Court is that any time Lerner and Paz are placed in the public spotlight, they seem to be at risk, regardless of what they have actually said in their depositions. This is because the comments, letters and death threats they and their families have received are untethered from the facts and legal issues in this case. Instead, members of the public have chosen to use this case as an opportunity to air any grievances they might have with the government.

While the balance between the public’s interest in these documents and the potential for violence is a tough call, the Court is hopeful that the passage of time will protect Lerner, Paz and their families. In addition, any references to personal information in the depositions and summary judgment materials shall remain under seal so that the sealed portions of the documents are narrowly tailored to the concerns for the safety and privacy of Lerner, Paz and their families.

Slip op., at 11, 13.

Are the Newbie IRS Agents Auditing Tax-Exempt Organizations Adequately Prepared? Richard Caputo and Brian Bernhardt of Fox Rothchild have posted a June 27 Alert to beware of a new wave of Internal Revenue Service audits of tax-exempt organizations with agents who are “newer and less-experienced. It may be that the Tax-Exempt and Government Entity (TE/GE) Division is also hiring new agents and assigning these new Revenue Agents ‘learning experience’ audits. Unfortunately, charities, including our clients, are the ones suffering from this training.”

New York Times Investigating “How – and How Well – the IRS Is Guarding The Gate:” On June 14, the NYT sent out a request for information: “Do You Have Insight Into How the I.R.S. Vets New Charities? The Times is looking for tips about how the Internal Revenue Service scrutinizes new nonprofits — and what they might miss.”

COURTS

No First Amendment Cause of Action Against Law Enforcement Officials Personally Under Bivens: Bivens actions seeking personal liability against law enforcement officials for violations of First Amendment rights are rare, and now likely will go extinct. Tucked away at the end of the elegantly-named Egbert v. Boule, No. 21-147 (June 8, 2022), an opinion about whether law enforcement officials can be personally sued for violations of constitutional rights under the long-standing decision in Bivens v. Six Unknown Fed. Narcotics Agents, 403 U. S. 388 (1971), comes a unanimous refusal by the Supreme Court to extend that doctrine to the invasion of First Amendment rights, with dueling explanations for why not. “[W]e hold that there is no Bivens action for First Amendment retaliation. There are many reasons to think that Congress, not the courts, is better suited to authorize such a damages remedy.” Slip op., at 14. The case was widely reported because it involved a claim by the owner of a bed-and-breakfast inn on the Canadian border that a Border Patrol officer assaulted him during the apprehension of an alleged illegal immigrant, but announcement of a new First Amendment defense doctrine seems to have flown under the radar, except by the perspicacious student editors at the Willamette Law Review Online.

Though the First Amendment portion of the opinions was unanimous in result, the rationales were split, with the majority noting that any Bivens process leads to costs and burdens and the cost-benefit question would be better decided by Congress:

A plaintiff can turn practically any adverse action into grounds for a retaliation claim. And, “[b]ecause an official’s state of mind is easy to allege and hard to disprove, insubstantial claims that turn on [retaliatory] intent may be less amenable to summary disposition.” Crawford-El v. Britton, 523 U. S. 574, 584–585 (1998) (internal quotation marks omitted). Even a frivolous retaliation claim “threaten[s] to set off broad-ranging discovery in which there is often no clear end to the relevant evidence.” Nieves v. Bartlett, 587 U. S. ___, ___ (2019) (slip op., at 11) (internal quotation marks omitted).

“[U]ndoubtedly,” then, the “prospect of personal liability” under the First Amendment would lead “to new difficulties and expense.” Schweiker, 487 U. S., at 425. Federal employees “face[d with] the added risk of personal liability for decisions that they believe to be a correct response to improper [activity] would be deterred from” carrying out their duties. Bush, 462 U. S., at 389. We are therefore “convinced” that, in light of these costs, “Congress is in a better position to decide whether or not the public interest would be served” by imposing a damages action. Id., at 390.

[J]ust because plaintiffs often plead unlawful retaliation to establish a First Amendment violation is not a reason to afford them a cause of action to sue federal officers for money damages. If anything, that retaliation claims are common, and therefore more likely to impose “a significant expansion of Government liability,” Meyer, 510 U. S., at 486, counsels against permitting Bivens relief.

Justice Sotomayor, dissenting with Justice Breyer and Kagan, agreed with the First Amendment result, but disagreed on the new “single-step” deference to Congress on a First Amendment cause of action. Slip op., at Dissent 13-14. In practice, however, her rationale seems quite close to the majority’s concern for impact on officials:

 Unlike the constitutional rights this Court has recognized as cognizable under Bivens, First Amendment retaliation claims could potentially be brought against many different federal officers, stretching substantially beyond the “common and recurrent sphere of law enforcement” to reach virtually all federal employees. Ziglar, 582 U. S., at ___ (slip op., at 11). Under such circumstances, this Court’s precedent holds that “‘evaluat[ing] the impact of a new species of litigation’” on the efficiency of civil service is a task for Congress, not the courts. Wilkie, 551 U. S., at 562; see also Ziglar, 582 U. S., at ___ (slip op., at 13). I therefore concur in the judgment as to the Court’s reversal of the Court of Appeals’ conclusion that Boule’s First Amendment Bivens action may proceed, not for the reasons the Court identifies, ante, at 13–16, but because precedent requires it.

Supreme Court Rejects Chevron Deference Without Mentioning the Name of That Oil Company:  American Hospital Ass’n v. Becerra, No. 20-1114, June 15, 2022 had long been expected to affect courts’ deference to expertise of regulatory agencies (Chevron deference). The first question the Supreme Court chose to review in Amer. Hospital Ass’n was: “whether Chevron deference permits HHS to set reimbursement rates based on acquisition cost and vary such rates by hospital group if it has not collected adequate hospital acquisition cost survey data.” (emphasis added). The Court said no, because deference does not protect an agency which depends on guesses (even educated or experience-based speculation) instead of data. The Court did not mention Chevron because it wanted to make the point that the case could be decided on the basis of simple statutory interpretation without regard to whatever expertise the agency could bring to bear. “The statute expressly authorizes HHS to vary rates by hospital group if HHS has conducted such a survey. But the statute does not authorize such a variance in rates if HHS has not conducted a survey. …But absent that survey data, as Congress determined, HHS may not make billion-dollar decisions differentiating among particular hospital groups.” Slip op., at 10 (cleaned up). 

Possible applications of this new “no guessing” standard? Tax and political regulators’ guesses. Example: Cruz for Senate, No. 21-12 (FEC campaign finance regulation rejected for lack of evidence of a governmental interest sufficient to outweigh the negative effect on candidates, especially challengers and low-income candidates).

STATES

New Jersey Legislation Tries to Reduce Incentives to Evade Campaign Contribution Limits: NJ campaign finance laws overhaul bill, S2866, would trade off higher campaign finance limits and less “pay to play” restrictions for more rapid disclosure of major contributions. One supporter, Republican State Sen. Vince Polistina (Atlantic City) explained his motivation to Politico Pro (paywall): ““They’re going to find ways around every campaign finance reform you try to do. So I think transparency is the key. I think it’s more transparent when you have it going directly to candidates as opposed to super PACs or any other entity.” Now, progressive groups are trying to slow the bill, Politico (New Jersey) notes, “focusing largely on the fact that it would curtail the state’s pay-to-play laws.”

New LA Prohibition on Campaign Contributions by Restricted Developers and Property Owners With Pending Matters: Venable reports on sweeping Los Angeles Gag Rule that affects “Any applicant or property owner associated with a “significant planning entitlement” filing in the city of Los Angeles qualifies as a “restricted developer” and is subject to the new restriction. “Significant planning entitlement” is defined broadly, capturing many discretionary applications filed with the Los Angeles Department of City Planning, including zoning issues and general plan amendments.” Those with “significant planning entitlements” must register their senior management, owners and representatives, and those registrants are barred from contributing to city candidates for the duration of their pending applications or matters, plus 12 months.

GENERAL

Eric Wang Goes After Sen. Whitehouse’s Latest Justification – “Dark Money Fueled Jan. 6” – for DISCLOSE Act: Writing in the Washington Examiner, long-time FTLG participant Eric Wang of the Gober Group notes that Sen. Sheldon Whitehouse, who is proposing to use his long-stalled DISCLOSE legislation to go after donors who allegedly funded the January 6 Capitol Hill riot:

posits that the planning and implementation of the riot constitute ‘political activity’ that is reportable to the IRS and FEC under nonprofit and campaign finance laws. … The Jan. 6 riot may have been, in a generic and colloquial sense, ‘political activity,’ just as any violent attempt to overthrow the government is a ‘political activity.’ However, these are not at all the types of activities that campaign finance and nonprofit political activity laws are designed to regulate. Such laws require groups spending money to influence voters in the lead-up to elections to report their spending and, under certain circumstances, their donors.

Legal Proceedings From 2020 Protests Continue: The oft-used phrase “the wheels of justice grind slowly but exceedingly fine,” paraphrases 3rd Century Greek philosopher Sextus Empiricus, but it appears true in the violent wake of 2020 protests. The Portland Examiner reported that 91% of those arrested for rioting were not prosecuted. But the U.S. Attorney for Oregon announced that “An Indiana man was sentenced to federal prison [June 21] for repeatedly and intentionally jeopardizing the lives of police officers, destroying public property, and encouraging others to commit violence during protests that occurred in Portland in 2020.” FBI Portland Special Agent in Charge Kieran Ramsey said, “Malik Fard Muhammad intentionally planned and committed acts of violence that threatened other protestors, members of the public, and law enforcement officers. This type of violence has no place in our community.” The OUSA release cited substantial evidence of Muhammad’s violent rampage through Portland, including a shopping list on his phone, DNA evidence on various weapons and incendiary devices, and video of Muhammad throwing a Molotov cocktail that burned a police officer. “Muhammad’s trip to Portland does not appear to be an isolated event. Investigators obtained evidence that he traveled to Louisville, Kentucky in August 2020 to meet with anti-government and anti-authority violent extremist groups to conduct firearms and tactical training. Investigators also obtained several public social media posts by Muhammad promoting violence toward law enforcement in other cities including Kenosha, Wisconsin, and Chicago.” Meanwhile, six protestors filed a lawsuit challenging an Oklahoma law passed in the wake of 2020 protests increasing penalties for blocking roadways and immunizing drivers who injure or kill rioters; the lawsuit claims the law goes far beyond the “true threats” exception to the First Amendment.

More on Claims of Partisan Differences in Gmail Spam Filtering: Axios reports that the Republican National Committee is claiming even more precisely how Google’s Gmail spam filters adversely affect its fundraising: “Ordinarily, the [RNC] said, Gmail flags up to 10% of its emails as spam. But it says during the final four days of every month since December 2021 — a crucial period for digital fundraising operations — that number has skyrocketed to 100% or close to it, even as the rate of emails marked as spam by recipients remains steady.” Google’s response, also from Axios: “Google has asked the Federal Election Commission to green light a program that could keep campaign emails from ending up in spam folders.”

NJ Police Frustrated —  Justice Alito Moved Away 15 Years Ago – Stop Sending Threatening Packages to That Address: West Caldwell Police Department – Home | Facebook

Public Policy Advocacy Highlights For May 2022

Public Policy Advocacy Highlights For May 2022

An earlier version of these monthly highlights was published in mid-May, before the most recent First Tuesday Lunch Group meeting; new material since that publication is listed at the beginning of each topic section. Characterizations, editorial comments, abbreviations and shorthand references are solely PPA Highlights author Barnaby Zall’s, and do not represent the views or positions of the Public Policy Legal Institute or the First Tuesday Lunch Group or their members and participants. Suggestions and corrections welcome.

FEC

Dara Lindenbaum Confirmed as Commissioner by Senate:

UPDATE: The Senate voted 54-38 to confirm Dara Lindenbaum’s nomination to the Federal Election Commission. The letter from First Tuesday Lunch Group participants in support of Lindenbaum’s nomination was noted by Rules Committee Chair Amy Klobuchar. “Before Ms. Lindenbaum’s nomination hearing, the Rules Committee received a letter from 30 of the Nation’s top campaign finance lawyers. The letter ‘enthusiastically’ recommends Ms. Lindenbaum’s confirmation, and it is signed by Republicans, Democrats, and Independents, including Lee Goodman, a former Republican Chairman of the FEC, and Karl Sandstrom, a former Democratic Commissioner. In the letter – and these are their words, not mine – these attorneys praise her as a ‘thoughtful and conscientious advocate’ and ‘a genial and inclusive colleague.’ I agree with their conclusion that she would be ‘an excellent addition to the Commission.’” Cong. Rec. (daily ed.), May 24, 2022, S2657.

Heritage Action Files Suit Against FEC For Failing to Close File, Leaving It In Limbo: Heritage Action, a c4 that is the Respondent in MUR 7516, filed suit against the FEC for “deliberately conceal[ing] the FEC Commissioners’ voting records and statements of reasons in otherwise terminated enforcement proceedings—even though the APA, the Federal Election Campaign Act (FECA or Act), the Commission’s own regulations, and D.C. Circuit precedent expressly require the FEC to release these matter records.” The organization contends that “The concealment policy’s purpose is to convey the false impression to complainants, respondents, and the courts that the FEC has not yet taken action on administrative complaints in its enforcement matters and to manipulate the courts into enforcing FECA against respondents when in fact the agency has already voted on the merits of the administrative complaint and terminated the matter because fewer than four Commissioners voted in favor of taking enforcement action.” The suit follows closely behind the Statement of Reasons by FEC Chair Dickerson and Commissioners Cooksey and Trainor that bluntly criticized the refusal of the other Commissioners to vote to close cases where the panel deadlocked against proceeding.

FEC Proposes Interim Final Rule to Comply With D.C. Circuit’s Independent Expenditure Donor Disclosure Decision in CREW v. FEC: In CREW v. FEC, 971 F.3d 340 (D.C. Cir 2020), the appeals court affirmed a lower court decision finding that the FEC’s regulation requiring disclosure only of donors who gave for the purpose of supporting a particular independent expenditure be disclosed was inconsistent with FECA. The FEC is now considering how to alter the relevant regulation, and has published an Interim Final rule to do so. After failing to get the four votes to revise the regulation, the proposed new rule would simply strike the portion of the regulation the courts found inconsistent with the statute.

OGC Misunderstands Polling, Statement of Reasons Finds in Explaining that Message Testing Is Not Political Advertising: Polling has always been difficult to draft correctly and compliantly; Exhibit One may be the Federal Election Commission’s inept poll drafting (see, pp. 12-16) that doomed its case in Ted Cruz for Senate (see below). In MUR 7776 (Unknown Respondent), three Commissioners pointed out that: “OGC’s recommendation reflects a fundamental misunderstanding of common methods used by the public opinion and political survey research industry. In its analysis, OGC conflates garden-variety message testing with ‘general public political advertising’ (which falls under the aegis of the Act) by labeling Promark’s call a ‘push poll’—a term that does not appear anywhere in the Act or Commission regulations. Message testing, by its very definition, is not a form of advertising; it is designed and used to elicit, rather than disseminate, reactions and information about political messaging from the public.”  

Format Changes in New Versions 8.4 of FECFile Reporting Software and the FEC’s Online Software Mean Users Should Update Both FECFile and Private Vendors’ Software Accordingly: “The FEC has released new versions of FECFile (8.4) and the FEC Form 1 online webform. FECFile users should download the new version by opening FECFile and following the auto update prompts. Filers that use other electronic filing software should check with their vendor for a new version, as all software must now comply with the FEC’s updated format specifications.”

Unintentional Bias in Filtering Out Republican Emails: Want a deep technical dive (that’s actually understandable) following up on last month’s revelatory Univ. of N. Carolina study that found that overwhelming anti-Republican bias in Google’s Gmail spam filters (and only Google had this problem, not Yahoo or Outlook), and its implications for the Republican Party’s complaint to the FEC? Cyberlawyer and former NSA official Stewart Baker’s May 2 Steptoe’s Cyberblog podcast discussed the possible explanations. Baker and Law Prof. Jane Bambauer, for example, (starting at 31:40 on the podcast) pointed out that the researchers were quite knowledgeable about spam filtering algorithms, and designed the study’s “Propensity Score Matching” process to account for unintentional factors that might have distorted the results. But if, as Baker hypothesized, the distortion was a “hostility to the message of the GOP” reaction to the Republican campaign content, reinforced over time in the algorithm, Prof. Bambauer responded: “That would be explosive. That would be shocking.” Baker responded that he wouldn’t be shocked at all.

So, what are the implications for the (likely technically-uninformed) FEC staff’s review of the GOP complaint against Google’s spam filtering? It all comes down to whether cutting off multiple political communications because of its content would be considered a “thing of value” to a campaign. And complicated as that type of analysis may be, it is something done by lawyers all the time, and could be done by the FEC here. The FEC has decades of experience with direct mail targeting and communications, to which Gmail and its associated advertising and targeting functions is very similar.

Was the Ohio Values/J.D. Vance Campaign Non-Coordination Really “New?” Citing a Politico article on J.D. Vance’s Senate primary campaign, Prof. Rick Pildes, one of the more thoughtful posters on ELB, recently lamented “reverse coordination” in the Ohio GOP Senate primary race: “Vance’s campaign itself was not raising large amounts of money, but the massive contributions from Peter Thiel and others were sent to a super PAC that was supporting Vance. The super PAC leaders decided they had to substitute, in essence, for the campaign. To receive unlimited donations, the super PAC must be independent and cannot coordinate directly with the campaign. So instead they set up a public website on which they posted data and analysis that they hoped the Vance campaign would follow.” Neither “new” nor bigger; the technique’s been around for a decade, but did blossom with the Hilary Clinton presidential campaign.  It’s bold, but legal: How campaigns and their super PAC backers work together – The Washington Post10 Ways Super PACs and Campaigns Coordinate, Even Though They’re Not Allowed To – The Atlantic. And even more sophisticated techniques have been the business model for American Bridge/Correct the Record for a long time. How a super PAC plans to coordinate directly with Hillary Clinton’s campaign – The Washington Post. Even the scale is not new: PAC Profile: American Bridge 21st Century • OpenSecrets. And the reputed strategist behind the Ohio Values, Luke Thompson, did the same sort of thing in 2016 for Jeb Bush’s presidential campaign.

IRS

ICYMI – 990 Filing Deadline This Year For Many Tax-Exempt Organizations Is May 16: The IRS published “Tax Tip 2022-69” beginning: “Even though organizations like charities and foundations may be tax-exempt, the IRS still requires them to file certain information every year. For many of these exempt organizations, the deadline to file their 2021 information return is Monday, May 16, 2022.”

IRS Can Continue To Use Telemeetings: IRS TE/GE employees can continue to use IRS-approved telemeeting programs. H/t McDermott.

IRS Targeting Scandal Was “Imaginary” or “False?” Many of us lived through the Lois Lerner-era targeting scandal, courts have punished the IRS for it, technical details about it have been explained in great detail, but the idea that it wasn’t real refuses to die. One of the latest to try to weasel it away is Jonathan Chait, writer for New York magazine, who, on April 29, tweeted that it was “imaginary.” Completely wrong. As John Sexton wrote in Hot Air the next day: “This was not an imaginary abuse. It happened. People lost their jobs.” But on May 4, Sen. Sheldon Whitehouse opened a hearing on c4s and “dark money” (see item below under Congress) by saying that “no such unfair targeting occurred.” Whitehouse cited a 2017 TIGTA report, which actually shows that the targeting did occur. E.g., P. 102, email from Judy Kindell (who inherited Jack Riley’s perch as the IRS EO political activities maven) to Lois Lerner, July 18, 2012 (“Of the 199 (c)(4) cases, approximately ¾ appear to be conservative leaning while fewer than 10 appear to be liberal/progressive groups”). Fortunately, Ranking Member John Thune corrected the record about the TIGTA report and the scandal as a whole, and Philanthropy Roundtable offered a bit more history on past IRS targeting, as did Prof. Brad Smith’s testimony on behalf of the Institute for Free Speech.  

Nonprofit news outlets are playing a growing role in statehouse coverage; Private or Incidental Benefit? A recent extensive Pew Research Center report notes a ‘relatively new phenomenon: “Nonprofit news organizations are playing an increasingly important role in covering state capitols. … these journalists now account for 20% of the nation’s total statehouse press corps, up from 6% eight years ago. Nonprofit journalists are now the second-largest contingent of all statehouse reporters, following those who work for newspapers. … Many also allow other outlets to republish their original reporting, often at no cost.” (emphasis added.) Is this use of nonprofit resources without charge a form of private benefit to struggling for-profit news outlets, or an incidental benefit (in that the tax-exempt benefit could not be provided without also incidentally providing private benefit). See, IRS CPE 2001 Topic H01 for extensive discussion of the difficult task of determining whether qualitative or quantitative incidental benefit has been provided.

IRS Wants Public Input to Improve Its Website; Survey Filled Up Quickly: The IRS Exempts Organizations Division put out an email blast on May 3: “We want to make it easier for you to use our website by improving how it’s organized. Sign up to participate in our study and tell us how you want to find the information on IRS.gov that you need.” By the end of the day, the survey was full: “This study is full, but we will offer future opportunities. Thank you for your interest.”

IRS Seeking Nominations for Advisory Council: More information on this three-year appointment on the IRS Advisory Council’s page. Applications were accepted through June 3.

DOJ

DoJ says Gambling Mogul Must Register Under FARA As Agent of Chinese Government: Axios reports that Justice has filed against Steve Wynn, billionaire casino owner, for failure to register under FARA. The complaint alleges that Wynn failed to register as an agent for the Chinese government while pressing the Trump Administration to extradite a fugitive Chinese billionaire: “Wynn conveyed the request directly to the then-President over dinner and by phone, and he had multiple discussions with the then-President and senior officials at the White House and National Security Council about organizing a meeting” with senior Chinese officials, DoJ alleged in a press release on the suit.” The Complaint can be downloaded from the DoJ media release.

COURTS

Supreme Court Rejects FEC Limit on Use of Post-Election Contributions to Repay Candidates Personal Campaign Loans, Strongly Reiterates Recent Case Law on Standard of Proof to Support Limits on Political Speech: Even when the Supreme Court is clear and consistent in defending First Amendment rights, government agencies and lower courts sometimes go off the rails and ignore what the Supreme Court says, either intentionally because of disagreements or because of confusion or failure to look at what the Court actually said. That’s what happened in FEC v. Ted Cruz For Senate, No. 21-12, and the Court stepped in and, by reversing a Federal Election Commission rule on a 6-3 vote, firmly and clearly reminded everyone exactly what it had held and what it meant.

Cruz was about a small, highly-technical and complicated section of campaign finance law dealing with repayment of candidates’ personal loans to their campaigns, so it did not get much attention in the media. In a podcast from the National Constitution Center, Prof. Rick Hasen called the decision a “blip.” But, because it was the first clear indication of whether the three newest Justices would support recent Court precedents, it’s a very important decision for regulation of political speech.

More Than Half of the Argued Supreme Court Cases Not Yet Decided: Normally, June is a busy month, as the Supreme Court finishes up its Term and announces all decisions by July 1. This year will be especially hectic, since decisions have not been announced in 33 of this year’s 67 cases chosen for review. The percentages are even more dramatic if the four cases that were decided without argument are subtracted from the total of chosen cases, so that decisions have been announced in fewer than half of the argued cases. But the Court has entered June with more than 35 unannounced cases seven times in the last two decades, so it isn’t a record number waiting.

Fourth Circuit Strikes Bus Ad Policy That Blocks “EAT MORE CHICKPEAS!!” As Too Political For Bus Ads, But Not “Eat Mor Chiken,” Using Yet Another New Standard “Akin to” Exacting Scrutiny: In White Coat Waste Project v. Greater Richmond Transit Company, the U.S. Court of Appeals for the Fourth Circuit held that the Richmond bus company had no reasoned basis for deciding whether an ad could be rejected as being too “political.” Under the company’s policy, “any advertisement from what it calls a “political action group”—i.e., any group that “engage[s] in a specific targeted policy advocacy that would be related to their one side of the political issue”—is prohibited.” Slip op. at 5. For example, it rejected an advertisement from the Physicians Committee for Responsible Medicine encouraging local hospitals to “go #FastFoodFree!” and readers to ‘EAT MORE CHICKPEAS!’” The Fourth Circuit said that bus ads were not a public forum, nor government speech, and, under the Supreme Court’s 2018 “political apparel at the polls” decision in Mansky, could use some content-based distinctions in nonpublic so long as they were capable of a reasoned application using “objective, workable standards.” Slip op. at 21-22, 25, citing Mansky, 138 S.Ct. at 1888-92. Here, Richmond Transit routinely ran ads that related to government or governance, and even government speech, slip op. at 25-26, so it should have had some guidelines. Instead it admitted that it would have blocked “EAT MORE CHICKPEAS!!” but not Chik-Fil-A’s “Eat Mor Chiken.” Slip op., at 28.  The unanimous panel opinion summarized its holding: “While transit companies may prohibit political advertising, they must do so by enacting a neutral policy capable of reasoned application. Otherwise, such a prohibition abridges would-be advertisers’ freedom of speech and is facially unconstitutional under the First Amendment.” Slip op. at 37. 

Supreme Court Denies Cert Asking If Family Campaign Contributions Violate First Amendment: Gerald Lundergan, a former head of the Kentucky Democratic Party, “was convicted in 2019 for making more than $200,000 in un-reimbursed contributions from his catering and events business to his daughter’s 2014 Senate campaign” against Mitch McConnell. As Courthouse News reported, Lendergan’s lawyers argued that the money should not have been classified as a corporate contribution because it was a closely-held family corporation and “the money was given to a family member.” That apparently did not impress the Court, which denied cert on May 2.

Boston Cannot Ban Religious Flag From Public Forum: In Justice Breyer’s likely final First Amendment opinion, Shurtleff v. Boston, he waxed eloquent about Boston architecture and virtues. See, e.g. Slip op. at 2 (“Built in the late 1960s, Boston City Hall is a raw concrete structure, an example of the brutalist style.”). Pictures of the “brutalist” City Hall and the offending flag are in Amy Howe’s SCotUSBlog article, along with detailed analysis.

He also delivered all Justices (though only six joined the main opinion; Justices Alito, Gorsuch and Thomas concurred only in the result; see below): “on balance, Boston did not make the raising and flying of private groups’ flags a form of government speech. That means, in turn, that Boston’s refusal to let Shurtleff and Camp Constitution raise their flag based on its religious viewpoint “abridg[ed]” their “freedom of speech.” Slip op. at 2.

Justice Breyer, as he often does, called for a multi-factor approach (somewhat akin to an IRS “facts and circumstances” test):

In answering these questions, we conduct a holistic inquiry designed to determine whether the government intends to speak for itself or to regulate private expression. Our review is not mechanical; it is driven by a case’s context rather than the rote application of rigid factors. Our past cases have looked to several types of evidence to guide the analysis, including: the history of the expression at issue; the public’s likely perception as to who (the government or a private person) is speaking; and the extent to which the government has actively shaped or controlled the expression. (emphases added by Prof. Josh Blackman).

Justice Alito’s concurrence criticized this “holistic inquiry:”

treating these factors as a freestanding test for the existence of government speech artificially separates the question whether the government is speaking from whether the government is facilitating or regulating private speech. Under the Court’s factorized approach, government speech occurs when the government exercises a “sufficient” degree of control over speech that occurs in a setting connected with government speech in the eyes of history and the contemporary public, regardless of whether the government is actually merely facilitating private speech. This approach allows governments to exploit public expectations to mask censorship. . . . And like any factorized analysis, this approach cannot provide a principled way of deciding cases. The Court’s analysis here proves the point. The Court concludes that two of the three factors—history and public perception—favor the City. But it nonetheless holds that the flag displays did not constitute government speech. Why these factors drop out of the analysis—or even do not justify a contrary conclusion—is left unsaid. This cannot be the right way to determine when governmental action is exempt from the First Amendment. (emphases again Prof. Blackman’s.)

CONGRESS

May 4 Senate Finance Committee, Subcommittee on Taxation and IRS Oversight, Hearing on Political Activities of Tax-Exempt Organizations: The Subcommittee, chaired by Sen. Sheldon Whitehouse, a determined foe of Republican use of tax-exempt entities for political purposes, heard from former FEC Commissioners Ann Ravel and Brad Smith, former IRS lawyer Phil Hackney, and Scott Walter from Capitol Research Center. The hearing featured witnesses invited by the Democratic majority speaking only to the majority Senators, and those invited by the Republican minority speaking only to the minority Senators. No actual dialogue or discussion, and many talking points, but little cross-ideological explanation. Witness statements and video available at the Subcommittee’s web page.

Joint Tax Committee Report on Campaign and Lobbying Activities of Tax-Exempt Organizations: In preparation for the May 4 Senate Finance Subcommittee hearing (see above), the staff of the Joint Tax Committee prepared an April 29 report explaining to Committee members and staff various elements of campaign and lobbying activities which different types of tax-exempt organizations can engage in. The 33-page report is moderate in depth, including such often-overlooked discussions as the application of IRC 527 tax on political activities of 501(c) organizations, when the prohibition on 501(c)(3) political intervention is not absolute, and the recent removal of the Schedule B filing requirement for non-c3s. The JCT report overlaps with, but does not duplicate, Sam Garrett’s (a former First Tuesday Lunch participant) 2021 Congressional Research Service report: The State of Campaign Finance Policy: Recent Developments and Issues for Congress.

STATES

Washington Secretary of State’s Office Mishandling “Multiple” Annual Filings, Erroneously Declaring Compliant Organizations “Delinquent:” Washington state began implementing a new Nonprofit Corporation law this year, patterned on the revised Model Act, which included numerous changes in operational requirements for nonprofit organizations. Now come the headaches, including a requirement that all mandatory annual reports, due April 30, must be filed on paper, not through the usual online process. What could go wrong? Yes, “multiple” organizations were declared delinquent for not filing required reports, when they had filed timely. No apologies, but at least they were sending emails admitting their error to those who wrote in to notify the office that they had a problem.

Texas Ethics Commission Says Ads Commenting on Legislators’ Support or Opposition to Legislative Policies Are Campaign Contributions: In Ethics Advisory Opinion 574 (May 12, 2022), the Texas Ethics Commission cited McConnell and WRTL to find that advertisements on legislative policies which praise candidates or legislators who support or oppose the policies are campaign contributions if they are coordinated with the candidate, legislator or political party. David Keating, who flagged the opinion, wrote: “a new AO from the Texas Ethics Commission … appears to make it very risky to run genuine issue ads on Texas state legislative issues, even when it is not an election year, if a group speaks to a lawmaker about the communications.”

Philanthropy Roundtable Publishes 50-State Case Studies on Anonymous Giving: The Philanthropy Roundtable has published 50 case studies of anonymous giving, one from each state, to illustrate the value of anonymity. The report and analysis are reactions to efforts to expose and punish donors to controversial organizations.

Democracy Capacity Releases New Practical Guides to Lobbying In Three New States: Sue Zachman, head of the Democracy Capacity Project, writes: “We published three new guides in our Practical Guidance – What Nonprofits Need to Know About Lobbying series this week – MI, MN and NH. We also updated the 10 existing Guides to include two new FAQs – one on how to use the Guide and the second on state vs federal lobbying rules. All of the Guides are publicly available both on our Democracy Capacity Project website and in AFJ/Bolder Advocacy’s resource library.

Washington Supreme Court Takes Up Value Village Deceptive Fundraising Appeal, Pitting Sweeping State Consumer Protection Law Against Charitable Solicitation: If a for-profit company is the public-facing solicitation mechanism for charitable organizations, can a powerful state Consumer Protection statute over-ride the First Amendment right to charitable solicitation? That question was just accepted by the Washington Supreme Court for review in Washington v. TVI, No. 100493-1 (h/t Robert Tigner). As “Value Village,” the name used in most U.S. states, TVI operates for-profit thrift stores but donates on average $150 million annually to well-known charities such as Big Brothers Big Sisters; it puts up lots of posters informing consumers of the relationships between the for-profit and the charities. The trial court found that consumers would be deceived as to whether the stores were themselves charitable, which would violate the State’s sweeping Consumer Protection laws; the appeals court reversed on general First Amendment principles. The Washington Attorney General petitioned the state’s Supreme Court for review over “an issue of first impression involving the significant First Amendment implications of a state CPA enforcement action against a for-profit company misrepresenting charitable interests.”

Mississippi Gov. Vetoes Bill Transferring Power to Levy Campaign Finance Fines From Ethics Commission to Secretary of State: The Daily Journal from Northeastern Mississippi reports that Governor Tate Reeves vetoed legislation that would have transferred campaign finance law enforcement from the eight-member state Ethics Commission to the Secretary of State. “The potential for abuse of power by the eight-member Ethics Commission is far less when juxtaposed with a single elected official who could seek to unscrupulously weaponize the power to further his political ambitions,” Tate wrote in his veto message. Republican Secretary of State Michael Watson said in a statement that the legislation was needed to streamline the enforcement process, currently split between three agencies.

Florida Gov. Signs Anti-Ballot Harvesting Bill: According to the Village-News, from The Villages (a massive senior-living community in Florida), Florida “Governor DeSantis signed another election law in a bar in Spring Hill in Hernando County. If you are planning to help people with Mail in Ballots,” you need to be aware that the new law makes it a felony for anyone who “distributes, orders, requests, collects, delivers, or otherwise physically possesses more than two vote by-mail ballots per election in addition to his or her own ballot or a ballot belonging to an immediate family member, except [in] … supervised voting at assisted living facilities and nursing home facilities …” There’s also a similar felony penalty for anyone who knowingly signs someone else’s name on a petition for a ballot position or an issue.

Do Ballot Harvests Grow in Sunny Philadelphia? And in South Philadelphia, where it’s always sunny, apparently ballot harvesting is a problem, as the Inquirer notes:

City elections officials last week received applications from more than three dozen Republican voters across a pocket of the neighborhood. Those applications requested that mail ballots be delivered not to the voters’ homes, but to P.O. Box 54705, an address registered to a recently formed GOP political action committee, according to state data. … Many of those voters told The Inquirer they have no idea why their ballots were sent there. Some said they never even applied to vote by mail. And yet one out of every six Republican ballot requests in the 26th Ward … listed the post office box. That made it the largest single destination for ballots in the city other than nursing homes or elections offices.

GENERAL

UPDATE: DHS “Pauses” “Disinformation Governance Board,” Jankowicz Resigns, Replaced by Former Clinton Officials: The antics resume after a “pause” in the new federal “DGB,” part of the Dept. of Homeland Security, that never had been explained or justified. DHS complained in a tweet that the DGB had been “grossly and intentionally mischaracterized”, (shocking!) and announced that Michael Chertoff and Jamie Gorelick would lead a “a thorough review and assessment” of the unfairly-maligned DGB.

DHS Forms “Disinformation Governance Board” or “DGB” Leads to Pandemonium: CNN: “Mayorkas responds to new disinformation board being compared to ‘1984.’” NY Post: “Disinformation board may be illegal and require vote of Congress, senator tells DHS.” NYT: “Partisan Fight Breaks Out Over New Disinformation Board. The board, an advisory group with the Department of Homeland Security, has become embroiled in the debate over the government’s role in policing online content.” WSJ: “Shut Up, the Disinformation Governance Board Explained.” And then word came that “DHS Standing Up Disinformation Governance Board Led by Information Warfare Expert:” Wilson Center’s Nina Jankowicz, as the DGB’s executive director. Jankowicz had, apparently, repeatedly cast Hunter Biden’s authentic laptop emails as Russian disinformation.  And, had enlisted Mary Poppins in a TikTok to “explain” disinformation in song. Really. (Make it stop!)

Perhaps Eugene Robinson at the Post summarized reactions across the board:

“I can see how disinformation requires monitoring. I can see how it requires fact-checking and refutation. But governance? How do you govern lies? Beyond the issue of the name is the still-mystifying question about what the board is supposed to do. At congressional hearings this past week, [DHS Secretary Alejandro] Mayorkas veered from pitching it as an effort to counteract Russian-style meddling in our elections to portraying it as an effort to protect Spanish-speaking migrants from lies told by the criminals who smuggle them into the country. He failed to make clear exactly how the board was supposed to accomplish either of these tasks.”

Bernstein: “Campaign Finance Abundance” Means “Every Serious Candidate … Will Be Adequately Funded:” Jonathan Bernstein writes in the Post that “One of the oddities of current campaign cash flows is that, every once in awhile, a hopeless general election candidate catches on with the party faithful — generally because he or she has a famous opponent who the party regards as a villain — and that hopeless candidate winds up raising enormous amounts of money. … Loosened laws and regulations have brought big new sources of money — some disclosed, some not — into play. Technological change combined with partisan polarization has produced the phenomenon of big little money — millions of dollars raised in small increments, mostly apparently given by party-loyal voters responding to partisan cues.”

Politico Breathlessly Reports The 2024 Presidential Candidates Are Already Raising As Much Money As They Can! “At least a dozen potential candidates for president have nonprofit groups that can raise undisclosed money aligned with them”, Politico reports. For those who remember our recent First Tuesday Lunch Group discussion on SuperPACs controlling aspects of candidates’ campaigns, here’s Luke Thompson (see note above under FEC) weighing in again: “Anybody thinking seriously about running for president in 2024 needs to have a large, sophisticated soft-dollar operation up and running by no later than this year’s general election,’ said Luke Thompson, a Republican strategist who runs Protect Ohio Values, the super PAC backing J.D. Vance in Ohio’s Senate race. With a small number of donors, you can do a lot of list-building, a lot of polling and research, and another really valuable thing you can do is keep staff members you’re going to hire and lock them down.

Abu El-Haj: Does the GOP’s Ground Game Strategy in Minority Communities Signal a New Commitment or “Flailing?” For several years, Drexel Law Prof. Tabatha Abu El-Haj (usually cited for the “neglected” right of assembly) has been promoting her theory of First Amendment jurisprudence as including social considerations in addition to traditional rights. She has a new essay coming out soon in the Columbia Law Review promoting her theory of “associational party building” and questions whether the new GOP engagement centers looking to increase party recruitment in minority communities are working or not.

Has ACLU Changed Its Matrix for Deciding Which Free Speech Cases to Join? It’s not a new topic to question whether the ACLU has changed its traditional sweeping support for free speech. A recent exchange between law professors David Cole and Eugene Volokh has gotten more granular. Cole: “The ACLU Never Stopped Defending Free Speech.” Volokh, quoting Ira Glasser and Wendy Kaminer: “Glasser says he stands by the concerns that he had expressed before, for instance when he was interviewed by Bill Maher. The new Case Selection Guidelines (which he urges people to read), he argues, are a retreat from ACLU’s traditional viewpoint-neutral approach to protecting speakers.” Cole replies: “I remain mystified by their responses, which fail even to acknowledge the record I have pointed to of specific work we have done defending people with whom we disagree.”

Bari Weiss Shakes Up Top Media Leaders at Milken Conference – “Do a Better Job:” Bari Weiss, former editor at the NYT, spoke fiercely to her former employer and other top media outlets on a panel, titled “Adapt or Die? News Media at a Crossroads,” at the May 2 Milken Institute’s Global Conference:

No, because often the people that are trying to grab people by the shirt lapels and tell them that they’re crazy in that it isn’t true also tried to tell us that, you know, that Donald Trump conspired with Russia to steal the election, which turned out to basically not be true. Basically, not be true, guys. Let’s be honest. Do you know how many resources at a place like the New York Times and the Wall Street Journal went into that story? I mean, there’s a reason that people are skeptical of the legacy press. And I think it’s important to acknowledge.

The way to repair it I don’t think is by shaking people and say, ‘You’re so crazy that you don’t trust whatever the New York Times, the CDC,’ we could go on and on and on, right? The way to do it is by just trying to do a better job, I think. By just trying to actually report about the world as it actually is. But a lot of the people I think, who are trying to wake people up about it themselves can’t look in the mirror and apologize for things that they’ve gotten wrong that have created or at least contributed to, let’s say, the disintegration and the deterioration of trust.

Portland Still Rocking Protests (a recurring topic): It’s been a while since we looked into the activities of protests and protestors in Portland, Oregon, but there has been news in the meantime. For example, on April 30, when a Republican gubernatorial candidate tried to hold a campaign rally in Portland before the May 17 primary elections, black-clad protestors, allegedly Antifa members, attacked rally attendees with “mortars,” fireworks, paint-filled balloons, and smoke grenades. Two campaign attendees were injured. Video and photos from the candidate rally were quite vivid [caution advised]. Portland Police, blaming funding cuts, took 20 minutes to arrive. Meanwhile, Willamette Week reports that Portland voters are “angry;” the accompanying picture – “how the sausage is made” – is worth viewing the short article.

Public Policy Advocacy Highlights from April 2022

Public Policy Advocacy Highlights from April 2022

Characterizations, editorial comments, abbreviations and shorthand references are solely PPA Highlights author Barnaby Zall’s, and do not represent the views or positions of the Public Policy Legal Institute or the First Tuesday Lunch Group or their members and participants. Suggestions and corrections welcome.

FEC

FEC v. Ted Cruz For Senate Is Ripe For Decision: The Supreme Court of the U.S. always finishes its caseload by early July, so FEC v. Ted Cruz for Senate, No. 21-12, which was argued on January 19, should be decided in the next two months. Cruz is a First Amendment challenge to the FEC’s limits on use of post-election contributions to reduce campaign debt, but also raises significant questions about the “appearance of corruption” (amicus brief of PPLI), one of the few areas where First Amendment protections are determined by perceptions of public opinion (amicus brief of Institute for Free Speech) and campaign consultant testimony.

End Citizens United v. FEC: Non-Enforcement Decision on Factual Interpretation Non-Justiciable: In End Citizens United v. FEC, Judge Tim Kelly of the U.S. District Court for D.C. dismissed a challenge to the FEC’s closing of a file even though the agency did not appear or defend its action.

          The D.C. Circuit has explained that this test reflects the Administrative Procedure Act’s requirement that courts should “hold unlawful and set aside agency action that is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Citizens for Resp. & Ethics in Washington v. FEC (“Commission on Hope”), 892 F.3d 434, 437 (D.C. Cir. 2018) (cleaned up). But under these circumstances, the Court cannot review the FEC’s nonenforcement decision. Despite FECA’s uncommon provision, an FEC nonenforcement decision is not reviewable if the nonenforcement is “based even in part on prosecutorial discretion.”  

Slip op. at 2.

          And if the Commissioners issue a reasoned, legally-sufficient Statement of Reasons that explains their votes (even by less than a majority if issued by the Commissioners voting not to proceed), then the result is a final explained action, permitted under FECA. Slip op. at 2, quoting Citizens for Resp. & Ethics in Washington v. FEC (“New Models”), 993 F.3d 880, 882 (D.C. Cir. 2021) (quoting 52 U.S.C. § 30109(a)(8)(A), (C)). “Given this exercise of prosecutorial discretion, under the Circuit precedent outlined above, this Court ‘lack[s] the authority to second guess’ such a dismissal, and so may not enter default judgment against the FEC. New Models, 993 F.3d at 882.” Slip op, at 2, 3. IOW, a FACTUAL interpretation sufficient to block action is as important to American jurisprudence as a LEGAL interpretation. FECA non-enforcement access to the courts is governed by both interpretations, not just one. 

CLC v. FEC v. Correct the Record – D.C. Circuit Finds Standing to Sue Over Informational Injury Allegedly Caused by FEC Inaction: In contrast to the End Citizens United v. FEC case above, this decision was just about whether CLC had standing to challenge the FEC’s determination that Correct the Record’s and the Hilary for America campaign committee’s failure to report 2016 coordinated communications expenditures was excused because reporting of unpaid Internet communications was exempt from reporting. “‘The law is settled that a denial of access to information qualifies as an injury in fact where a statute (on the claimants’ reading) requires that the information be publicly disclosed and there is no reason to doubt their claim that the information would help them.’ Campaign Legal Ctr. & Democracy 21 v. FEC, 952 F.3d 352, 356 (D.C. Cir. 2020) (per curiam) (quoting Env’t Def. Fund v. EPA, 922 F.3d 446, 452 (D.C. Cir. 2019)).” See, also, FEC v. Akins, 524 U.S. 11, 21 (1998).

          In particular, CLC claimed that it needed more-detailed “disaggregated amounts” that should have been reported as individual coordinated in-kind contributions from CTR to H4A, but were not:

[D]isaggregation of Brock’s salary to show which portion was coordinated would in fact reveal the numerical amount of Correct the Record’s coordinated contribution to the Clinton campaign, information political committees are required by statute to make public. Appellants do not now know that numerical amount, nor did the District Court; the “suppose[d]” fifty percent or $2,260.78 that might have been contributed in the court’s example is made up; it is but a guess. See id. If Appellants prevail, the actual amount of Brock’s salary that was a contribution to the Clinton campaign would have to be disclosed, along with disaggregated amounts for a myriad of other lump sum expenditures Appellants believe involved coordinated contributions. There is no doubt that those numerical amounts constitute factual information and that FECA requires them to be disclosed.

Slip op. at 18.

Whether this decision will lead to more requests for disaggregation is unclear, but at the motion to dismiss stage on a standing defense, the D.C. Circuit precedents lean toward allowing remand for more information and analysis.

In L’Affaire “Steele Dossier,” FEC Fines Hillary for America and the DNC, Dismisses Some Allegations, Accepts Others, Deadlocks on Others. It’s complicated, but, in MURs 7291 and 7449, the FEC has made some decisions on Dan Backer’s complaints against DNC, Marc Elias, Perkins Coie, Hillary for America, etc., based on the Steele Dossier against Donald Trump containing flawed information about relationships with Russia. The Washington Post summarized the more-newsworthy findings here. Here’s just SOME of the Disposition list in MUR 7449 made public in the last week of April (read the whole thing to find out more details):

  • Voted 6-0: Dismiss the allegations that: 1. Christopher Steele violated 52 U.S.C. § 30121 and 11 C.F.R. § 110.20(b), (f) (g), and (i) (contributions by foreign nationals). 2. Marc Elias and Perkins Coie LLP and Hillary for America violated 52 U.S.C. § 30121 and 11 C.F.R. § 110.20(b) and (h)(1). 3. Fusion GPS violated 52 U.S.C. § 30121 and 11 C.F.R. § 110.20. 4. Approve the appropriate letters. 5. Close the files.
  • Voted 4-2: Find Probable Cause to believe that 1. Hillary for America violated 52 U.S.C. § 30104(b)(5)(A) (reporting detailed information about persons to whom expenditures were made and for what purpose) and 11 C.F.R. § 104.3(b)(4)(i) by failing to report the proper purpose of the funds HFA paid to Perkins Coie for opposition research performed by Fusion GPS. 2. DNC Services Corporation/Democratic National Committee violated 52 U.S.C. § 30104(b)(5)(A) and (b)(6)(B)(v) and 11 C.F.R. § 104.3(b)(3)(i) by failing to report the proper purpose of the funds the DNC paid to Perkins Coie for opposition research performed by Fusion GPS.
  • Voted 4-2:  Accept Various Conciliation Agreements with and Fine: 1. DNC Services Corporation/Democratic National Committee. 2. Hillary for America.
  • Voted 4-0: 1. Find Reason To Believe that Hillary for America, Inc. and DNC Services Corp./Democratic National Committee violated 52 U.S.C. § 30104(b)(5)(A) and (b)(6)(B)(v) and 11 C.F.R. § 104.3(b)(3)(i) and (b)(4)(i) by misreporting the purpose of funds paid to Fusion GPS through Perkins Coie LLP. 2. Dismiss the allegations that Marc Elias and Perkins Coie LLP violated 52 U.S.C. § 30104(b)(5)(A). 3. Not Take Action on several more allegations.
  • Deadlocked 2-2:  Failed to Find Reason To Believe that, by misreporting the payee of funds paid to Fusion GPS through Perkins Coie LLP: 1. Hillary for America, Inc. and DNC Services Corp./Democratic National Committee violated 52 U.S.C. § 30104(b)(5)(A) 2. Hillary for America, Inc. and DNC Services Corp./Democratic National Committee violated 52 U.S.C. § 30104(b)(5)(A) and (b)(6)(B)(v) and 11 C.F.R. § 104.3(b)(3)(i) and (b)(4)(i).

Meanwhile, Fox News reported H4A and the DNC sought to block federal Special Counsel John Durham from obtaining information from Perkins Coie, as part of Durham’s investigations of misconduct involving attempts to generate governmental pressure on the 2016 Trump campaign relating to alleged relationships with Russia. It’s not clear what effect the FEC Conciliation Agreements and Findings will have on this defense or other Durham investigations.  

Practice Tip: Be Careful How You Give Legal Advice – Involvement of Foreign National in $1.75 million SuperPAC Contribution Decision Resulted in $975,000 Record FEC Fine: In MUR 7613 (Wheatland Tube), the FEC settled a claim that a Canadian citizen who owned an American corporation  had conversations with a subsidiary company’s executives that resulted in prohibited foreign contributions to a SuperPAC. “The Commission has specifically determined that “no director or officer of the company or its parent who is a foreign national may participate in any way in the decision-making process with regard to making . . . proposed contributions.’” Id., at 6-7, quoting Advisory Op. 1989-20 (Kuilima) at 2; see also Advisory Op. 1985-03 (Diridon) (stating that no foreign national can have any decision-making role or control with respect to any political contribution made by a domestic company). The foreign national told the FEC that a corporate lawyer “suggested to [him] that a U.S.-based company with which [he is] affiliated should consider contributing” to the SuperPAC, and that suggestion “led [him] to believe that [he] could communicate with others about potential contributions.”

          This is a tricky line to discern. Compare, e.g., MURs 6959 (clerical duties in internship not foreign contribution), and 5987, 5995, 6015 (all involving Sir Elton John, volunteer fundraising services and name endorsement not foreign contributions), with MUR 6093 (Transurban Grp.) (U.S. subsidiary violated Act by making contributions after its foreign parent company’s board of directors directly participated in determining whether to continue political contributions policy of its U.S. subsidiaries); Conciliation Agreement, MUR 6184 (Skyway Concession Company, LLC) (U.S. company violated Act by making contributions after its foreign national CEO participated in company’s election-related activities by vetting campaign solicitations or deciding which nonfederal committees would receive company contributions, authorizing release of company funds to make contributions, and signing contribution checks); Conciliation Agreement, MUR 7122 (American Pacific International Capital, Inc. (“APIC”)) (U.S. corporation owned by foreign company violated Act by making contribution after its board of directors, which included foreign nationals, approved proposal by U.S. citizen corporate officer to contribute). Venable offers suggestions for compliance.

Complaint Filed Against Swiss Citizen Who Used Foundations to Contribute to Arabella Projects: Similarly, The Hill reports on a lawsuit filed against the FEC for failing to respond to a May 2021 complaint against a Swiss citizen who used two foundations to contribute to the Sixteen Thirty Fund and the New Venture Fund, parts of Arabella Advisors’ network. “The watchdog group [Americans for Public Trust] is suing the FEC in a push to get the agency, which oversees and enforces campaign finance law, to examine whether Wyss violated federal law with his contributions.”

Statement of Reasons Explains Conflict Between FECA and FEC Regulations on “Republication:” In MUR 7646, Commissioners Dickerson and Trainor explain their views that FECA makes republication of, in this case, YouTube video from a campaign an “expenditure,” while 11 C.F.R. § 109.23(a) makes it a “contribution,” with resultant differences in legal treatment. “To the extent that 11 C.F.R. § 109.23 treats non-coordinated republication as an in-kind contribution—this regulation contradicts FECA’s text and is therefore contrary to law. … Thus, in order to remain faithful to our enabling legislation, when the Commission enforces the republication provisions, it must establish actual coordination using the same standards applied to any other form of public communication.”

Is Google Making An In-kind Contribution When It Marks Republican Campaign Email as “Spam” 820% More Often Than Democratic Emails? The RNC, RNSC and RCCC jointly filed a complaint against Google based on an academic study from N.C. State which found that Gmail’s Spam Filtering Algorithm suppressed Republican campaign-related emails 820% more often than Democratic campaign emails. ““We further observe that Gmail marks a significantly higher percentage (67.6%) of emails from the right as spam compared to the emails from [the] left (just 8.2%). … Not only that, but as Election Day drew closer, and as voters began focusing more intently on political races, the disparity between how Gmail marked Republican and Democrat emails as spam only steadily grew.”

Complaint Filed Against Texas c4 For Failure to File FEC Reports: The Texas Tribune reports that a 501(c)(4), “the political arm of La Unión del Pueblo Entero, a nonprofit founded by the famed labor-rights activists César Chávez and Dolores Huerta,” is being accused of failing to file required FEC reports in a Democratic primary contest in the 15th Congressional District (Rio Grande Valley). According to the complaint, the c4 recruited a candidate, formed a PAC, received contributions and made expenditures, conducted an active campaign in support of its candidate, and more, but failed to disclose its campaign activities timely. Its candidate came in second in the primary, by only 302 votes, and forced a runoff election. The Tribune notes: “The runoff is being closely watched because the 15th District is Republicans’ top pickup opportunity in November as they push to make new inroads in South Texas.”

FEC to Start Enforcing Its Own Form of “True Source” Rule: In MUR 7454 (Blue Magnolia Investments), four Commissioners issued a Statement of Reasons discussing what LLCs, and by extension other entities, must disclose when reporting contributions. “The Commission’s rules for reporting attribution information for LLC contributions are intended to ensure that the source of a contribution is not obscured and that individuals may not use LLCs to avoid lawful disclosure.” Under 11 C.F.R. § 110.1(g)(5), the burden of sufficiently disclosing is on an LLC to “at the time it makes the contribution, provide information to the recipient committee as to how the contribution is to be attributed, and affirm to the recipient committee that it is eligible to make the contribution.” Penalties had not been issued before because of a concern that reporting requirements were not clear enough, but the Statement says that penalties will now be issued. Politico comments: “Good-government groups hailed the decision — where a Republican commissioner sided with liberal-leaning commissioners — as a hopeful sign that the often-deadlocked commission could start finding more common ground.”

New Crypto-supporting SuperPAC’s First FEC Filing Sparks Questions: Apparently, the FEC Commissioners’ concerns are well-founded. Politico reports: “Protect Our Future — a super PAC that’s spent millions supporting candidates ‘who take a long-term view on policy planning’ — disclosed $14 million in contributions from the Nevada-based fintech Prime Trust LLC in its quarterly filing on Friday. … So who is actually the source of the funds — and why the obfuscation in the first place? … Sam Bankman-Fried, 30-year-old founder of the crypto exchange FTX and emergent political megadonor, was responsible for $13 million” of the $14 million.

COURTS

Supreme Court Muddies Standard of Review for Sign Cases: In City of Austin v. Reagan Nat’l Advertising, No. 20-1029, a fractured Supreme Court reversed the Fifth Circuit’s finding that an ordinance treating signs differently depending on where they were located was content-based, and thus subject to strict scrutiny. In Reed v. Gilbert (2015), the Court struck down a sign code that treated some speech differently, including “ideological” or “political” speech, than signs promoting church services or educational events; the Fifth Circuit had held (as do most observers) that Reed ruled that a law which required reading the content of the sign to see if the sign was subject to restrictions under the law was content-based and was subject to strict scrutiny review. Justice Sotomayor’s majority opinion for five Justices said that was a “too extreme interpretation,” and that Austin’s ordinance took only location into account, rather than content. Justice Sotomayor also said that even if the less stringent “exacting scrutiny” standard was applied, however, the Court did not have enough information to determine whether the ordinance was drawn narrowly to advance a significant governmental interest, and remanded the case for more fact-finding. Justice Breyer concurred to complain that Reed “too rigidly ties” content to strict scrutiny, while Justice Alito concurred in the result but not in the standard of review in the majority opinion. Justice Thomas dissented, joined by Justices Gorsuch and Barrett, complaining that the majority’s analysis replaces Reed’s “clear rule” with “an incoherent and malleable standard.” Harvard Law Prof. Larry Tribe tweeted: “SCOTUS made a total mess of 1st Am law. Only the 3 dissenters, pointing to the agreement of scholars as far apart as Michael McConnell and me on the key legal point, came close to offering coherent guidance.” Prof. Eugene Volokh is less agitated, saying the cutback in content-based doctrine is “likely only a little bit.”

Supreme Court Rejects Latest Batch of Challenges to Mandatory Bar Membership and Non-germane Use of Dues; What’s Different This Time: The Supreme Court denied cert in four challenges to mandatory bar requirements and use of dues for matters not “germane” to the core functions of regulating the bar. Keller v. State Bar of Calif., 496 U.S. 1 (1990), remains in place, but is still not fully explained. The difference between earlier cert petitions (which sought to challenge Keller under Janus v. AFSCME, 585 U.S. ___ (2018) (compulsory union dues violate First Amendment rights)) and the latest batch is a stronger focus on what Keller and other cases identify as permissible (germane) uses of dues and what is non-germane use for which mandatory dues may not be used. The Fifth Circuit’s McDonald v. Firth and Boudreaux v. Louisiana State Bar (both of which held mandatory state bar uses of dues were non-germane and thus unconstitutional) remain in place, and circuits are still split on important questions.

Supreme Court Denies Cert to Challenge to Rhode Island Campaign Finance Law Requiring On-Ad Donor Disclosure: The Supreme Court denied review in Gaspee Project v. Maderos, No. 21-890, a case which challenged Rhode Island’s 2012 donor disclosure rules for organizations which made independent expenditures on issue ads. The First Circuit’s Sept. 2021 decision upholding the Rhode Island donor disclosure law said that listing an organization’s top five donors on-screen during issue ads only “burdens speech modestly.”

What’s a Victory That’s Reversed on Appeal? Kerfuffle over Marc Elias’s reporting as a “victory” lower court opinions despite those opinions being reversed on appeal. Rick Hasen fans flames: “Democratic and Voting Rights Organizations Ultimately Lost Election Law Cases ‘By a Ratio of More than 7 to 1’.” New Yorker article on Marc as a “middle-aged white guy living in Northern Virginia” stirs the coals. Hasen continues to quote anonymous commenter: “The New Yorker piece helpfully notes disagreement within the election law community. … Like most lawyers, athletes, and, for that matter, politicians whose profession depends on future success, Elias is inclined to play up past successes; and to play down past failures. … All of us who care about the vitality of American democracy are on edge; but litigation is no outlet for our primal scream.”

IRS

Supreme Court Tells Tax Court to Narrowly Read Jurisdictional Restrictions, Opening the Door Slightly for Equity Claims: For decades, the Tax Court has interpreted jurisdictional tolling statutes generously; for example, it would turn away Collection Due Process filings that were even one day late. But, in an opinion by Justice Amy Coney Barrett in Boechler v. Commissioner, No. 20-1472, the Supreme Court clarified that not all procedural requirements are jurisdictional. Non-jurisdictional rules “promote the orderly progress of litigation but do not bear on a court’s power.” Slip op. at 2-3 (cleaned up). “[W]e treat a procedural requirement as jurisdictional only if Congress ‘clearly states’ that it is. Slip op. at 3. Congress must “plainly … imbue[] a procedural bar with jurisdictional consequences.” Id. It’s in large part a grammatical review, as it was in this case, of what Congress wrote.

Why is this obscure case important to public policy lawyers? Though not stated plainly in Justice Barrett’s unanimous opinion, this decision is another step along the “square corners” path the Supremes are treading these days, and it is being again applied to the IRS and the Tax Court. “If individuals ‘must turn square corners when they deal with the government,’ the taxpayers insist, ‘it cannot be too much to expect the government to turn square corners when it deals with them.’ Niz-Chavez v. Garland, 141 S. Ct. 1474, 1486 (2021).” Mann Construction Co. v. U.S., 6th Cir., Mar. 3, 2022 (Sutton, C.J.). The Supreme Court apparently believes that using equitable rules to judge tolling is subject to the same rules.

Military Aid to Ukraine Charitable as “Lessening Burdens of Government?” Lively discussion on First Tuesday Lunch Group mailing list of how to treat military, as opposed to humanitarian, aid provided by a charity. Main takeaway: it is much harder today to demonstrate lessening of government burdens as a charitable purpose. Side note: after 2014 Russian invasion of Ukraine, one counsel was comfortable with providing protective vests to protestors, but not guns and bullets, even for defensive use.

CONGRESS

Senate Finance Committee, Subcommittee on Taxation and IRS Oversight, Hearing on Political Activities of Tax-Exempt Organizations: On May 4, the Subcommittee, led by Sen. Sheldon Whitehouse, an unrelenting foe of Republican use of tax-exempt entities for political purposes, will look at “Laws and enforcement governing the political activities of tax-exempt entities.” Witnesses include former FEC Commissioners Ann Ravel and Brad Smith, former IRS lawyer Phil Hackney, and Scott Walter from Capitol Research Center. Live video available at the Subcommittee’s web page.  

GAO Annual Report on Lobbying Disclosure Act – Low Compliance, Enforcement Action Slow and Rare: Covington reports that the 2021 LDA Report, compiled by the U.S. Attorney’s Office for D.C., has some interesting findings, including: almost three-quarters of all complaints reported to the USAO from 2012 to 2021 were still pending in 2022; an estimated 35% of registered lobbyists had not properly disclosed former governmental positions; and, USAO brought LDA charges against only one person in 2020 (who pled guilty).

DEPT OF JUSTICE

House Judiciary Hearing on Problems with FARA: Covington reports on April 7 Committee hearing on Foreign Agents Registration Act. “While the witnesses broadly acknowledged the problematic ambiguity and lack of clarity of the statute, they varied in their views about how to reform FARA and provide more certainty to the regulated community. … This divide between more aggressive enforcement of FARA and narrowing the statute was a common theme throughout the hearing, by both the witnesses and the members of the Subcommittee. There also seemed to be few substantive openings for bipartisan consensus. … Surprisingly, the hearing addressed very few substantive proposals that FARA practitioners and the Department of Justice have focused on recently in the context of DOJ’s Advance Notice of Proposed Rulemaking (“ANPRM”) to modernize FARA.”

STATES

California Legislation to Increase Donor Disclosure: Going against a trend in state legislation to protect donors in the wake of AFPF/TMLC v. Bonta, California’s Legislature is moving Senate Bill 1360, California’s Disclosure Clarity Act, jointly authored by Senators Thomas J. Umberg (D-Santa Ana), and Ben Allen (D-Santa Monica). The Orange County Breeze reports: “SB 1360 will give California the first law in the nation to require online image and banner ads to clearly and prominently show their top funder on the ad itself. It will also require formatting changes to make television and video ad disclosures more readable and stop committees from purposefully using extremely long committee names to make it difficult for voters to read the top three funders in the five seconds the disclosure is on the screen.”

California FPPC Tightens Reporting of Online “Amplification:”  Covington reports on new regulation of “amplification” of online advertising in California. “In the digital age, it has become common to accuse opponents of propping up their online presence through paying influencers, buying followers or likes, or of being supported by bots.  A California law new this year is looking to shed light on at least some of that activity.” New Fair Political Practices Commission rules “require committees with reportable expenditures for amplification measures to specifically describe the payments in their reporting statements.”

Tennessee Legislature Passes New Bill to Combat “Dark Money,” In Part By Limiting Unitemized Small Donations: The Tennessee Legislature overwhelmingly passed H.B. 1201/S.B. 1005, a controversial bill which contains a variety of changes to the state’s campaign finance rules. Some of the changes include requiring c4, 5 and 6 organizations to report all independent expenditures over $5,000 made in the 60 days before an election, candidates cannot have more than $2,000 of unitemized contributions in a reporting period, any person who personally controls a PAC’s expenditures is personally liable for any reporting or violation fines, and companies that provide campaign services will have to disclose if they pay a member of the general assembly or a staff member of the general assembly.

California Consumer Privacy Protection Board Holds First Meeting, Says Its Authorizing Legislation is “Unclear” About Its Authority: In 2020, California voters created the new agency tasked with helping consumers use new privacy tools and rights created by the California Consumer Privacy Act in 2018. The statute requires the new agency to issue its first regulations by July 2022. Neilsen Merksamer reported on the new agency’s first meeting, modestly predicting: “Due to California’s influential status domestically, as well as its massive economy, the agency is poised to become one of the most significant data privacy authorities and regulatory bodies in the world.”

GENERAL

More on Golden Globes’ Tax-Exemption: TheWrap reports that “The plan to reinvent the Golden Globes by turning the Hollywood Foreign Press Association into a for-profit company owned by billionaire Todd Boehly, the group’s interim CEO, raises a host of legal and ethical red flags, multiple legal experts told TheWrap.” [Partial paywall] Legal experts included First Tuesday Lunch participants.

Amazon Criticized for Sending Injured Workers to Charities During Their Recuperation: The Financial Times (paywall) and Engadget report that mega-corporation Amazon’s Community Together program sends injured Amazon workers to “charities like Salvation Army and Habitat for Humanity to do whatever work they’re capable of with their injuries. Over 10,000 workers have been placed at non-profits since the program launched in 2016, but Amazon had to scale back its operations during the pandemic.” The workers get full pay instead of lower compensation benefits and the charities get good workers, but critics contend that the program allows Amazon to report lower injury rates at the warehouses.

Is a “Nonprofit Industrial Complex” and “Donor Elite,” Having “Quashed” the American Right, Now Destroying the Democratic Party? An article in Table Magazine explores: “How the foundation-NGO complex quashed innovative thinking and open debate, first on the American right and now on the center left. … Having crowded out dissent and debate, the nonprofit industrial complex—Progressivism Inc.—taints the Democratic Party by association with its bizarre obsessions and contributes to Democratic electoral defeats, like the one that appears to be imminent this fall…. It is this donor elite, bound together by a set of common class prejudices and economic interests, on which most progressive media, think tanks, and advocacy groups depend for funding.”

BLM Leaders Call 990 “Triggering” and For Most People It Probably Is: At least in the classic sense of causing fear of negative consequences from being identified in tax reporting. Yahoo News reported that, confronted with public criticism over the organizations’ purchasing a $6 million mansion, “Patrisse Cullors, a BLM founder, said she found it ‘triggering’ — emotionally compromising — when she hears about financial documents being made public. ‘It is such a trip now to hear the term “990,”’ Cullors said at the Vashon Center for the Arts Friday. ‘I’m, like, ugh.’”

Will Increasing Partisan Polarization Result in Parties Not Reaching Outside Their Base Supporters? Provocative op-ed in The Hill from Nancy Jacobson, founder and CEO of No Labels, suggests that the 2024 Presidential battleground will see little or no appeals to independents and ideologically undecideds. “This time, a moderate independent third ticket could run and win.”

Practice Tip – Free Tacos For Everyone Is Not Criminal Inducement to Vote in California: Carefully threading the California criminal bans on inducing voting, candidate manages to offer free tacos to those showing up at the polls. Court opines on value of tacos: “the Court does not find the tacos to be materially different than the so-called ‘trinkets’ that candidates often hand out for free to generate goodwill. At most, each taco cost between $2.35 and $2.67. This is comparable to, if not less than, the cost of shirts, sweatshirts, baseball caps, pens, signs, or posters that are often given out for free by a candidate during an election. Moreover, unlike those items—which are usually emblazoned with the candidate’s name, logo, or slogan—nothing on the tacos or taco truck connected them to Lopez.” Slip op. at 17.