Public Policy Advocacy Highlights – Mid-May Edition

Public Policy Advocacy Highlights – Mid-May Edition

This is a partial month’s PPA Highlights report, since the First Tuesday Lunch Group is meeting this week. 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.

IRS

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 accepted through June 3.

FEC

FEC v. Ted Cruz For Senate Is Still 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.

Dara Lindenbaum Confirmation Hearing Highlights FTLG Participants’ Letter; Committee Sends Nomination to Senate Floor: The Senate Rules and Administration Committee held an April 6 confirmation hearing for Dara Lindenbaum’s nomination to be a Commissioner on the FEC. At the outset of the hearing, Committee Chair Sen. Amy Klobuchar read from the letter sent by First Tuesday Lunch Group participants, describing them as “30 of the Nation’s top campaign finance lawyers.” (video beginning at 18:52 on the Committee’s web page). During her testimony, Lindenbaum said “I am proud to have the bipartisan support of 30 of my colleagues in the political law community, some of whom I have even opposed in court and recounts, and that position of respect is something that I try to bring to everything that I do.” (video beginning at 32:40; also, 41:10, 50:15, 1:04:22).

In her prepared remarks, after describing her family as politically divided but engaged, teaching her to seek consensus, Lindenbaum said:

I take the core mission of the FEC to heart: to protect the integrity of the federal campaign finance process by providing transparency and fairly enforcing and administering federal campaign finance laws. As Senator Blunt has said, we need the FEC to work so that candidates can run in a way that allows the discourse of the campaign to occur while protecting the system from those operating outside of the law.

If confirmed, I intend to be a consensus builder, and I am honored to have support from practitioners on both sides of the aisle. Both as a lawyer as well as a mother to three-year-old twins (for whom I consistently adjudicate disputes), I know that consensus will not come easily, but we must make every effort we can. The consideration of the facts and the law in front of me will be my guideposts as I seek to provide clarity to the regulated community, increase transparency, and collaborate with my fellow Commissioners to further the important mission of the FEC. It will be my duty to instill public confidence in the integrity of our system in a bipartisan manner as directed by Congress.

Under questioning from Sen. Ted Cruz, Lindenbaum committed to vote in favor of the FEC defending itself in lawsuits. (video at 55:49.) Georgia Attorney General Chris Carr urged the Committee to reject the nomination because of Lindenbaum’s support of politically-active Georgia clients, saying: “She has spent the last four years making fake claims of voter suppression and pushing conspiracy theories.”

The Committee sent the nomination to the Senate Floor on May 3. Just before the vote, Roll Call noted that Ranking Member Sen. Roy Blunt mentioned the FTLG participants’ letter as a reason he would vote for her nomination.

Cyber Experts Analyze Gmail SpamGate Controversy, Possibly “Explosive” Findings on Even 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.

COURTS

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 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

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.”

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.