In most years, August is a quiet month for public policy advocacy, but not in 2022; lots and lots of newsworthy items this month. 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, the First Tuesday Lunch Group or their members and participants. Suggestions and corrections welcome. (Author’s note: why is a mastiff adorning this month’s Highlights? There’s a question about mastiffs and public policy advocacy which might come before federal campaign finance regulators, as shown in the last item in this month’s FEC section.)
An Era Ends, Another Begins – Steven Walther Retires From FEC; Dara Lindenbaum Joins: From a Federal Election Commission release: “Walther’s FEC legacy includes a dedication to improving due process and procedural fairness, a commitment to increasing public disclosure and transparency concerning agency actions, and a devotion to promoting democratic institutions worldwide.” He was a recess appointment to the Commission on Jan. 10, 2006, and confirmed in 2008. His last day was July 31, 2022. On August 4, Walther issued a farewell Statement, commending the Democratic Commissioners and wishing all Commissioners “well as they move forward with the task of enforcing the law.
Dara Lindenbaum, confirmed by the Senate in May, was sworn in on August 2 to replace Walther as a Democratic Commissioner. She will also take Walther’s place as Vice-Chair of the FEC for the remainder of 2022, which may set her up as the FEC Chair in the near future. Soon after joining the Commission, when considering a controversial Advisory Opinion Request from Google to pilot test allowing registered political committees to have their emails screened only by user responses rather than Google’s regular three-part algorithmic review process (as noted in more detail below), new Commissioner Dara Lindenbaum announced that she would vote to approve, even though she didn’t “want to, for the same reasons as the commenters [presumably, concern that political spam would increase in their mailboxes], but the law, the regs and the FEC’s precedents permit this. … I don’t want to hamstring innovation and pilot programs, but I hope Google will reduce, not increase, spam, and will increase best practices for bulk senders.” A ray of hope for the FEC’s future?
FEC Votes 4-1 To Adopt Draft Advisory Opinion on Google’s Request to Relax Spam Filtering for Registered Candidates: Google, faced with complaints about Republican emails being rejected by its Gmail spam filters at vastly higher rates than Democratic emails (especially as elections approached), asked the Federal Election Commission to approve a pilot program which would test an alternative spam testing mechanism driven almost entirely by user responses (e.g., “this message is spam”) rather than its usual three-step algorithmic test (is the material harmful, individual recipient feedback, and aggregate trends in recipient feedback). The proposal, AOR 2022-14, generated thousands of public comments, a record number, of which the vast majority were negative (mostly concerns about increasing political spam) and much media coverage, including some in the Washington Post Tech 202 column. The FEC Office of General Counsel produced, as is often the case, two draft Advisory Opinions, one approving the request, the other (filed by a late request from Commissioners Weintraub and Broussard) would have rejected the request as permitting a prohibited in-kind contribution.
At its August 11 meeting, the FEC voted 4-1 (Weintraub) -1 (Broussard, abstaining) to approve the Google pilot project as AO 2022-14 (Google). The major question was whether the Google proposal met the statutory definition of an in-kind contribution: is the provision of free or lower-cost services driven by an electoral purpose or commercial purpose? In other words, is the company providing a prohibited thing of value to political committees?
Google’s counsel, Claire Rajan of Allen & Overy, pointed out that Google was testing user response to improve its user experience. That was a big point of contention, as with Chairman Dickerson’s question of “this is a pilot program for what?” Commissioner Weintraub noted that “anytime I see something that everyone would like, but we’re only offering it to political committees, that raises all sorts of alarm bells because that sounds like the classic definition of an in-kind contribution.” Rajan countered that the “ultimate purpose is not electoral.” The reason for piloting on political committees was that it would be “an efficient way to test how users view the product” and Google would have a large enough but defined group of similar entities, whose eligibility could be verified by the FEC’s records and who were likely to send large amounts of bulk emails in a relatively short time. In June, the Post’s Tech 202 column noted that Google CEO Sundar Pichai used the project to “assuage” Republicans that it was working on the bias problem, but Democrats were opposing the proposal.
There is a deeper question raised by the Google proposal and the FEC’s consideration: Google is going to filter spam based on popularity of the content of the messages sent (which it is entitled to do as a private entity), but the FEC’s approval of its user appeal-driven program raises First Amendment questions because of an apparent willingness to approve the selective use of the popularity of content as a basis for silencing political speech. This is the same problem that has arisen in the context of “an appearance of corruption,” one of only two government interests sufficient to block political speech, and one in which lower courts have used public opinion polls as evidence of an “appearance of corruption.” See, e.g., FEC v. Ted Cruz for Senate, 596 U.S. , 142 S.Ct. 1638 (May 16, 2022) (FEC’s drafting of a flawed public opinion poll was not sufficient to support limit on candidate loan repayment).
In other words, can a government agency, in effect, block unpopular speech indirectly by approving a private company’s “crowd sourcing” its censorship decisions in a manner that simple statistics indicate is biased? There have been many criticisms of indirect agency action substituting for actions not within the agency’s power, including the Regulatory Transparency Project’s 2017 Regulating in the Shadows report. In Cummings v. Missouri, 71 U.S. 277, 325 (1883), the Supreme Court noted that “what cannot be done directly cannot be done indirectly. The Constitution deals with substance, not shadows. Its inhibition was leveled at the thing, not the name. It intended that the rights of the citizen should be secure against deprivation for past conduct by legislative enactment under any form, however disguised. If the inhibition can be evaded by the form of the enactment, its insertion in the fundamental law was a vain and futile proceeding.” See, also, Denezpi v. U.S., No. 20-7622, June 13, 2022, (Gorsuch, J., dissenting), slip op., at 10; In re Tiburcio Parrott, 1 F. 481, 515 (9th Cir. 1880).
Nevertheless, there is also substantial evidence that spam is a problem for both users and Google. Google’s spam filters block 10,000,000 spam messages every minute, and spam is a major concern for both users and platforms. That is something that prior FEC precedents take into account. See, e.g. AO 2018-11 (Microsoft), where a company was able to provide “election-sensitive customers” with free cybersecurity services not only because it would help customers, but because the company would “protect its brand reputation and allow it to obtain valuable data on security threats” for its own use, “based on commercial and not political considerations, in the ordinary course of its business and not merely for promotional consideration or to generate goodwill”. Id, at 5. See, also, AO 2018-05 (CaringCent), at 5 (corporation “may charge different fees to political committee clients than it charges to non-political clients,” as long as it charges “a commercially reasonable fee at the ‘ordinary and usual charge’” and “any variation in fees will be based on business considerations and will not be based on political considerations”); AO 2012-31 (AT&T), at 4 (approving a rate structure for processing text message contributions to political committees that charged less than what AT&T charged for commercial content providers but more than it charged for donations to charities as long as the rate structure “reflects commercial considerations and does not reflect considerations outside of a business relationship”).
Balancing those two considerations suggests that Google’s “pilot project” may not be the end of this discussion, on constitutional grounds if not others. Much may depend on the next steps. The Commissioners’ discussions, particularly Commissioner Lindenbaum’s comments, pointed to this as a continuing focus. Google did not get a “hall pass” using its commercial interests, mainly because it positioned the project as a “pilot” leading to some additional steps. But if it had not done so, it might not have gotten approval, and still would be stuck trying to figure out how to deflect partisan complaints. Google’s lawyer Claire Rajan appeared well aware of that concern when, answering Commissioner Broussard’s questions, she tried to get ahead of the curve by asserting: “Google long ago made a commercial decision to apply its spam filters in a non-biased manner.” But the partisan criticism indicates that, at least in appearance, Google failed.
FEC OGC Recommends Allowing Rouda to Repay Loans With Post-Election Funds: Remember Harley Rouda’s Sandler Reiff-drafted AOR 2022-15, based on FEC v. Cruz, 142 S. Ct. 1638 (2022), holding that the previous FEC regulation was unconstitutional as discriminating against challengers and new candidates? The FEC Office of General Counsel has drafted a proposed Advisory Opinion finding that the repayment was fine under FEC v. Cruz.
Still a “Procedural Mess.” Dueling Briefs Argue Whether the FEC’s Refusal To Begin Enforcement Proceedings Actually Triggers Statutory Jurisdiction and Freedom Of Information Act Exceptions? Remember when the byzantine labyrinth of cases involving closing FEC files drove U.S. District Judge Tim Kelly to write: “What a procedural mess.”? Id., at 2. The saga continues in federal court. The FEC itself, through its General Counsel, filed an Opposition to Summary Judgment in a FOIA case, part of the ongoing 45Committee litigation. One of the reasons why an agency can withhold releasing internal documents is that they are protected by the “deliberative privilege,” which applies to “predecisional documents.” The OGC’s Opposition argues that the documents sought by 45Committee are predecisional because “there has been no vote closing the file.” Id., at 4. This is exactly the opposite of the legal analysis by the three Commissioners (Dickerson, Cooksey and Trainor) who have issued a Statement Regarding Concluded Enforcement Matters, and in support of Commissioner Weintraub’s July 7 Statement of Reasons for MUR 7516 (Heritage Action). The OGC Opposition even openly criticizes the three Commissioners’ Statement. Opp., at 6 n. 4. Very curious for an agency position in litigation. In fact, it appears to demonstrate the exact opposite of the position it asserts, especially if the Commission did not vote to adopt that specific assertion in the OGC’s filing.
To make things worse, this is only one part of the 45Committee litigation. And the distinction matters. In the private enforcement suit brought by the Campaign Legal Center, a 45Committee defense team from Jones Day headed by Brett Schumate filed an Opposition to Campaign Legal Center’s Motion For Summary Affirmance And Dismissal in the D.C. Circuit’s consideration of Campaign Legal Center v. FEC (45 Committee), which contains a lengthy explanation of why the District Court did not have jurisdiction over CLC’s case at all when the agency actually voted not to begin enforcement. The 45 Committee’s filing points out that newly-released documents from the FEC “which had never appeared in the case, revealed that the Commission had acted on the administrative complaint in June 2020, thereby rendering authorization of the citizen suit improper.” Opposition, at 1. And in a different case, the group End Citizens United filed a brief in a different D.C. Circuit appeal arguing exactly the opposite position and that the District Court did have jurisdiction.
They’re Not All Stalemates: In AO 2022-07 (Swalwell), Commissioners Dickerson and Broussard teamed up on a Statement pointing out that the AO did not go far enough in holding that payments for overnight childcare are lawful because they would not exist irrespective of [the] campaign: “in our view, the use of campaign funds to pay for childcare while Congressman Swalwell is traveling overnight for his campaign is permissible without regard to whether his spouse is available to care for their children. The question of whether a candidate’s spouse is technically available to provide childcare is an inherently subjective inquiry and determining whether the spouse’s work or other commitments render them unable to provide childcare is well outside the Commission’s purview.”
Having participated in that bipartisan accord, however, Commissioner Dickerson also issued a solo Statement in AO 2022-10 (Sprinkle) which, though agreeing with what the other Commissioners voted on to approve the AO, chided his colleagues: “that Sprinkle’s proposed use of Commission data to supplement its services to contributors is clearly prohibited by the Act and our regulations. As I have said in the past, our governing statute is clear: 52 U.S.C. § 30111(a)(4) states that information copied from disclosure reports ‘may not be sold or used by any person for the purpose of soliciting contributions or for commercial purposes, other than using the name and address of any political committee to solicit contributions from such committee.’” IOW, aggregated data is still a commercial use. But, see Minn. Campaign Finance and Public Disclosure Board Advisory Opinion 418 (2011), pp. 4-5 (some uses of disclosure report data by nonprofit organizations are not commercial use, including solicitation of memberships).
The First Thing We Do Is Sue All The Celebrities: In MUR 7915 (When We All Vote), the Respondents include: Selena Gomez, Tom Hanks, Erin Hannigan, Faith Hill, Valerie Jarrett, Liza Koshy, Kyle Lierman, Laura Miller, Lin-Manuel Miranda, Janelle Monáe, Michelle Obama, Chris Paul, Megan Rapinoe, Shonda Rhimes, Tracee Ellis Ross, Pete Rouse, Tina Tchen, Kerry Washington, Rita Wilson, Stephanie Young, and a couple of c3s. The somewhat incoherent 440-page (with exhibits) Complaint basically said that Michelle Obama and eight close aides used a c3 to covertly direct political activity in support of the Biden Presidential campaign. Despite the opportunity for publicity and selfies with the stars, the Commission dismissed the case because no c3 actually made $1,000 in expenditures or contributions.
Insider View of Democratic Support for Republican Candidates Against Anti-Trump Republicans; Former Dem Leaders Say “STOP:” Cong. Peter Meijer writes in a first-person in-depth Common Sense story about the praise he got for being a Republican who stood up to Trump, only to find the DCCC funding his primary opponent. “My predecessor, libertarian Justin Amash, warned of the ‘death spiral of partisanship’ days after he left the Republican Party on July 4, 2019, after impeaching former President Trump. It is one thing to read and reflect on his warning, and another to live it in real time. If successful, Republican voters will be blamed if any of these candidates are ultimately elected, but there is no doubt Democrats’ fingerprints will be on the weapon.” Spoiler: Meijer lost. Apparently, a backlash is building, among former Democratic Party leaders among others. Politico: “About three dozen former Democratic House and Senate members have signed on to an open letter blistering national Democrats for their meddling in this year’s Republican primaries, often to the benefit of pro-Donald Trump hard-liners. The letter, shared first with POLITICO, is the latest in growing backlash against the controversial practice, in which Democrats have been elevating far-right Republicans they believe will be easier to defeat in the fall.” The Issue One letter referred to by Politico, says, inter alia: “it is risky and unethical to promote any candidate whose campaign is based on eroding trust in our elections. We must stop this practice, and stop today.”
CLC Offers Plan to Remedy FEC Inaction, Explains Why It Sues the Agency, Ignores Commissioners’ Recent Statements of Explanation: As the previous note suggests, the Campaign Legal Center is part of the current stalemate at the Federal Election Commission, suing the agency as an intentional strategy to force judicial resolution when it can’t get enough Commissioners’ votes to begin enforcement of its complaints. As shown by several recent extensive and thoughtful Statements from Commissioners on both sides of the stalemate, the FEC is hamstrung by differences in opinion over basic Constitutional principles, which are now being hammered out in judicial proceedings, many of which involve CLC attempting to get default judgments so that its singular worldview can prevail without hearing from the agency itself. Now five CLC employees, all formerly with the FEC, explain their worldview and rationale. Sadly, not much here beyond conclusory statements about positions and insults about Commissioners (which is odd, given that CLC can produce decent legal work).
“Pet Project:” Is Paying $40K For A Big Family Dog To Provide “Alertness and Protection” A Legitimate PAC Expenditure? The Washington Free Beacon reports that Grassroots Law PAC paid $40,650 to a show dog company for contractor services. The money went to pay for a mastiff named Marz, declared to be a “new member of the King family” by Shaun King, a former Bernie Sanders surrogate who founded the PAC. “Grassroots Law PAC, which aims to ‘elect candidates who are committed to reducing mass incarceration and police violence,’ has spent nearly as much on King’s pet as it has on political candidates.” Sadly, apparently Marz “had a little too much energy to be a family dog” and was returned to the company, which is kind of odd considering that most mastiffs are calm and kid-friendly.
$80 Billion in Increased Funding For IRS Sparks Controversy: The Internal Revenue Service has been chronically underfunded for many years, including the Exempt Organizations Division. The recently signed Inflation Reduction Act, Pub. L. 117-169, authorizes $80 billion in additional funding over ten years for the IRS. There are also a few provisions in the new law that apply specifically to tax-exempt entities, including one on energy efficiency tax and depreciation benefits for buildings owned by tax-exempt organizations and governments being transferred “to the person primarily responsible for designing the property in lieu of the owner of such property,” (Sect. 13303, amending re-designated IRC § 179D(d)(3)(A)) (presumably to encourage architects to design energy-efficient commercial buildings by giving them a tax benefit that otherwise would accrue to the tax-exempt organization), and another making “clean” vehicles owned by tax-exempts eligible for tax benefits.
But much of the current buzz around the law involves the $80 billion funding boost for the Service. The Commish pleads: “We’re going after tax evaders, not honest Americans.” Citing an earlier version of the legislation, Republicans complain that the money will be used to audit more Americans; Democrats deny that, saying that the money will go to answering phone calls and reducing the agency’s crushing backlogs of cases. Treasury asserted that no audits would be increased on taxpayers with less than $400,000 in annual income; Heritage “fact-checked” the claim, and predictably found that the numbers didn’t add up to what the legislative history had claimed would happen.
The Wall Street Journal came down somewhere in the middle: “The Inflation Reduction Act won’t bring 87,000 new IRS agents with guns to your front door, but it has important changes for taxpayers.” So did Glenn Kessler, the Washington Post’s long-time fact-checker (who was the first journalist to actually figure out what was going on during the Lois Lerner-era BOGO-TAG scandal; see also, “New TIGTA Report on ‘Inappropriate’ Criteria for Evaluating Exemption Applications“), who penned a lengthy historical review of IRS staffing and likely hiring under the new bill. Former Assistant Treasury Secretary for Management (2018-2021) David Eisner writes in The Hill: “Given its history, as well as hiring difficulties being experienced across the public and private sectors today, the IRS is unlikely to be able to prudently hire the number of skilled employees or procure the other resources authorized by the bill. However, in the lead-up to last week’s enactment, there were claims made about the funding from both sides of the aisle that are patently false and misleading — and, often, dangerous.”
And Speaking of Money for Tax-Exempt Organizations: The New York Times reports (h/t ELB) that a new Utah-based 501(c)(4), the Marble Freedom Trust, received a contribution of $1.6 Billion from a single donor. Cue complaints about “dark money” (including explanations of the tax mechanisms involved by several participants in the First Tuesday Lunch Group), even though everyone was able to find out both the donor and the source of the funds, as well as much other information from publicly-available filings (and apparently circulation of the information to progressive media such as The Lever and ProPublica, who admitted that “The donation does not appear to violate any laws.”). The donor’s actual offense was that he “has spent most of his 90 years painstakingly guarding his privacy.” Why? Probably to avoid the inevitable results of “The Lever and ProPublica piec[ing] together the details of his life and his motivations for his extensive donations through interviews, court records and other documents obtained through public-records requests.” A link, not highlighted, in the organizations’ history of this private donor showed that some of these “public-records” documents came from ProPublica’s publication of illegally-leaked tax records, part of ProPublica’s dedication to “Journalism That Holds Power to Account.”
Not mentioned in the Times’ or the Lever/ProPublica’s history is that the donor had a similar unwelcome experience in 2010 with a donation to a college. “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.” NAACP v. Alabama ex rel. Patterson, 357 U. S. 449, 462 (1958); AFPF/TMLC v. Bonta, 594 U.S. ___, slip op., at 17, n. * (“Here the State’s assurances of confidentiality are not worth much. The dissent acknowledges that the Foundation and Law Center ‘have unquestionably provided evidence that their donors face a reasonable probability of threats, harassment, and reprisals if their affiliations are made public’.”); Id., slip op., at 4 (Sotomayor, J., dissenting) (“Publicizing individuals’ association with particular groups might expose members to harassment, threats, and reprisals by opponents of those organizations. Individuals may choose to disassociate themselves from a group altogether rather than face such backlash.”).
The contribution was structured as a stock donation, made just before the company was bought out by Eaton Corp., an Irish multinational conglomerate, the proceeds of which were paid to the tax-exempt organization, which is borne out by the Trust’s 2020 Form 990, on which the boxes for Part IV, Lines 29 and 32 are checked. (For those keeping score, on Part V, Line 14a, the Trust said that it did not receive any payments for indoor tanning services in that tax year.) The Trustee and Chairman of the Trust is Leonard Leo, who was paid $350,000 per year by the Trust, listed on the 990 as spending an average of 35 hours per week on the business of the Trust and its related organizations. Law firms for the Trust include Sullivan & Cromwell, Kirton McConkie, and Holtzman Vogel. In a statement to the Times and repeated by Fox News, Leo said: “It’s high time for the conservative movement to be among the ranks of George Soros, Hansjörg Wyss, Arabella Advisors, and other left-wing philanthropists, going toe-to-toe in the fight to defend our constitution and its ideals.”
Citing, in part, AFPF/TMLC v. Bonta, D.C. Circuit Rules House Ways & Means Committee Can Get Trump’s Tax Returns: In a deceptively simple-looking decision with likely long-term consequences, on August 9, a panel of the D.C. Circuit held that the House Ways & Means Committee could obtain former President Donald Trump’s personal tax returns. CBS News noted: “Citing a renewed request for the tax information in 2021 from Rep. Richard Neal, chairman of the Ways and Means panel, after the change in presidential administrations, Senior Circuit Judge David Sentelle wrote in a 33-page ruling that the request ‘was made in furtherance of a subject upon which legislation could be had,’ and rejected claims from the former president that Democrats’ request for his tax information was unconstitutional.”
IRC § 6103 has protected taxpayers’ tax information for decades, with significant tightening after President Nixon’s “enemies list” scandal and impeachment article based on Nixon’s misusing tax information. As former IRS Commissioner Larry Gibbs, an architect of the § 6103 revisions, noted in a later article, “if politicians are able to obtain and make public the president’s tax returns and tax information, they are likely to do the same thing to anyone else they choose to target in the future, including but likely not limited to political donors or other supporters of any public figure in any political party.”
There are, however, exceptions to the tax privacy protections, including IRC § 6104, which makes tax-exempt organizations’ tax returns generally disclosable, except for information that personally identifies donors. Another exception, not used as often, is IRC § 6103(f), which permits the IRS to respond to requests from certain members of the congressional tax committees, including the House Ways & Means Committee. IRC § 6103(f)(1). There is an exception that “any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure.” Id.
In April 2019, House Ways & Means Chair Richard Neal requested the tax returns of Donald Trump and a variety of his businesses, saying that the Committee was “considering legislative proposals and conducting oversight related to our Federal tax laws, including, but not limited to, the extent to which the IRS audits and enforces the Federal tax laws against a President.” Treasury refused to comply with the request, relying on an OLC opinion that the rationale was pretextual. The Committee sued to obtain the records. When the Biden Administration came into power, it reversed the refusal and revised the rationale; the Committee voluntarily dismissed its Complaint. Trump and his companies intervened, asserting the request’s invalid legislative purpose and facial unconstitutionality under the First Amendment. After the District Court rejected Trump’s defenses, the case was appealed to the D.C. Circuit.
On August 9, 2022, a divided panel of the D.C. Circuit upheld the Committee’s request for the records. The panel was unanimous upholding the request, but not on the underlying analysis. The panel first held that “A Congressional request for information ‘is valid only if it is related to, and in furtherance of, a legitimate task of Congress.” Slip op., at 8, quoting Trump v. Mazars USA, LLP, 140 S. Ct. 2019, 2031 (2020) (cleaned up). ““[T]here is no congressional power to expose for the sake of exposure.” Watkins v. United States, 354 U.S. 178, 200 (1957). “No inquiry is an end in itself; it must be related to, and in furtherance of, a legitimate task of the Congress. Investigations conducted solely for the personal aggrandizement of the investigators or to ‘punish’ those investigated are indefensible.” Id., 354 U.S. at 187.
But, “The Speech or Debate Clause, U.S. Const. Art. 1, § 6, cl. 1, protects against inquiry into the motives behind the regular course of the legislative process, Eastland, 421 U.S. at 508. It is not our function to ‘test the motives of committee members for this purpose.’” Watkins, 354 U.S. at 200. “Their motives alone would not vitiate an investigation which had been instituted by a House of Congress if that assembly’s legislative purpose is being served.” Slip op., at 10. Citing the IRS’s failure to adequately audit President Nixon’s taxes, the panel noted that “The Chairman states that the Committee is exploring the need for legislation that would provide further protection to the IRS employees conducting the audit and legislation ensuring that they have sufficient resources to conduct the audit even when the returns in question are ‘inordinately large and complex.’” Slip op., at 12. That was enough to justify the request. Citing AFPF v. Bonta, the panel rejected the Trump defenses, even outside the First Amendment context. Slip op., at 25-26. According to CBS News, the defendants vowed to request Supreme Court review.
After Only 11 Years, IRS Issues Regulations on Disclosure of Tax Records to State and Local Authorities: As long as we’re talking about disclosure of tax records and AFPF/TMLC v. Bonta, the IRS EO Division issued revised regulations on how the Service can disclose tax records to State and local authorities (like the California Attorney General in AFPF/TMLC v. Bonta). The NPRM was issued in March 2011, to implement changes in IRC § 6104(c) made by the Pension Protection Act of 2006 (16 years ago, but who’s counting?). These provisions basically allow the IRS to notify certain state and local officials about applications for and revocation of charitable status under IRC § 501(c)(3), and the PPA expanded the notice and coverage provided (for example, notice can now be provided even before final determinations).
Some observers might find that the new regulations were driven in part by the AFPF/TMLC decision, where the California Attorney General had access to IRS information through information-sharing agreements, but decided those taxpayer privacy rules were too restrictive, and issued her own rules with disastrous results. One of the more sweeping provisions in the PPA, for example, was to apply taxpayer privacy requirements under IRC § 6103(c) and (p) to § 6104. See, e.g., Fed. Reg. 50242 (Aug. 16, 2022, daily ed.) (“The PPA also amended section 6103 to make section 6104(c), in its entirety, subject to its confidentiality and disclosure provisions. … See § 301.6103(p)(4)–1 and IRS Publication 1075, “Tax Information Security Guidelines for Federal, State and Local Agencies.”). One commenter on the proposed regulations predicted that the net effect would be to decrease disclosure to State and local authorities because the IRS privacy rules were too onerous. The Treasury and IRS responded that all 50 States have appropriate information sharing agreements, so imposing those rules on Attorneys General would not cut back on information-sharing that meets statutory minima of privacy protections. Fed. Reg. 50242-50244 (Aug. 16, 2022, daily ed.).
New York Attorney General’s Office Copy of c4’s Schedule B Leaked to Media: And speaking of leaks of donor’s tax records to the media after being filed in a state Attorney General’s office, exactly as condemned by the U.S. Supreme Court in AFPF/TMLC v. Bonta, Politico reports that it obtained a leaked copy of a 2019 Schedule B, complete with stamp from the New York Attorney General’s office, filed by Stand for America, a 501(c)(4) organization set up by former South Carolina Governor and UN Ambassador Nikki Haley as a prelude to an anticipated 2024 presidential run. Politico gushed “The disclosures provide the clearest picture yet of how a prospective 2024 presidential candidate is cultivating a secret network of high-dollar contributors as she builds a political apparatus. And the names of her donors demonstrate the deep connections Haley has formed at the top levels of the Republican Party, with some of the GOP’s biggest super PAC donors among those who gave money to fund the launch of her organization after she left the Trump administration.” Haley has now requested that the U.S. Department of Justice look at the New York Attorney General’s office in light of other leaks of protected information, and pledges to sue the NYAG’s office over the leak.
Newly-Released Lois Lerner Deposition Testimony Shows Her Concern About Citizens United and Tea Party Groups: The Washington Times reported on the release of a 2017 deposition (paywall; h/t IFS) of Lois Lerner, who directed the IRS Exempt Organizations Division and its inappropriate scrutiny of Tea Party and other conservative organizations:
At one point, Ms. Lerner labeled the tea party cases “very dangerous.” She speculated that if a case reached the Supreme Court it could result in the 2010 Citizens United ruling, which extended political speech protections to groups that filed as political committees with the Federal Election Commission, being extended to tax-exempt organizations too.
In one email to someone whose name is redacted from the deposition transcript Ms. Lerner, a former FEC employee, called Citizens United “by far the worst thing that has ever happened to this country.” She also said “We are witnessing the end of America” because of the influence of money. In the deposition she characterized those kinds of comments as jokes and characterized her support of stricter political speech disclosure requirements as a matter of cutting her workload.
New Sign-in Requirements for Form 990-N Filers: Remember ID.me, the company the Internal Revenue Service hired to require facial recognition sign-ins and other biometric verification? The strict requirement for selfies was then reversed, but, effective right now, there’s a new login procedure, still through ID.me, for filers of the online-only Form 990-N annual return for small organizations. This new procedure does not affect regular and EZ versions of the 990. Yet. … Supposedly, all this is a prelude to an eventual government-wide login rewrite.
Congressional Letter Asks IRS to Review Conservative Groups Asking to be Reclassified as Churches: Following up on a ProPublica report, discussed at the First Tuesday Lunch Group’s August meeting, the Religion News Service, reprinted by the Washington Post, reports that forty Democratic lawmakers have asked the IRS to “review the tax-exempt status of a prominent conservative advocacy group recently reclassified as a church, arguing the organization may be exploiting the designation to avoid scrutiny.” The congressional letter says, in part, “Tax-exempt organizations should not be exploiting tax laws applicable to churches to avoid public accountability and the IRS’s examination of their activities.”
California to Pay Quinn Emanuel $8 Million to Settle AFPF Attorneys’ Fee Claims After Losing At Supreme Court: AFPF/TMLC v. Bonta was a long, difficult case, with extensive fact-finding and lots of lawyer involvement in the successful challenge to the California Attorney General’s “dragnet” vacuuming up of nonprofits’ Form 990 Schedule B lists of major donors. Quinn Emanuel’s Derek Shaffer, who led the Americans for Prosperity Foundation’s challenge, was one of the lead lawyers and argued the case before the Supreme Court. Now California Gov. Gavin Newsome has signed legislation to pay $8 million in fees and costs to Quinn Emanuel for the case, which works out to about $1 million a year after the case was filed in 2014.
Ninth Circuit Strikes Down Montana Prohibition on Out-of-State Initiative Petition Circulators, But Upholds Pay-per-signature Ban: Last month, the First Circuit, in We the People PAC v. Bellows, rejected Maine’s prohibition on out-of-state initiative signature gatherers. Now, in Pierce v. Jacobsen, the Ninth Circuit agreed. Both these decisions applied strict scrutiny to the residency requirement for signature circulators and found that diminishing the pool of circulators (who actually engage in face-to-face speech with voters) is a severe burden on political expression. Both also relied on Meyer v. Grant, 486 U.S. 414, 422 (1988) (petition circulation is “core political speech” involving “interactive communication concerning political change”). “While it is one thing to limit carrying out the functions of self-government to residents, limiting core political speech to residents even on matters of state elections is a far broader restriction, and that restriction is not narrowly tailored here.” Pierce, slip op., at 16. The Ninth Circuit, however, rejected a challenge to Montana’s ban on paying circulators based on the number of signatures obtained, mainly because of a lack of sufficient evidence that the compensation scheme imposed a severe burden. “The record provides little more than conclusory assertions about the burden, not actual evidence. We agree with the district court that the factual evidence Plaintiffs have provided is insufficient to demonstrate the existence of a severe burden.” Slip op., at 17. The panel noted that there were other forms of calculating compensation available in Montana. Slip op., at 21-22. There are decisions from other Circuits that conflict with both the Ninth Circuit’s conclusions, so this case may go higher.
Seventh Circuit Ending 50 Years of Federal Court Supervision of Illinois Governors’ Employment Decisions: As Seventh Circuit Judge Michael Scudder wrote in Shakman v. Pritzker, No. 21-1739 (7th Cir., Aug. 5, 2022): “In no way are we saying that the risk of unlawful political patronage no longer exists within Illinois. Of course it does: nobody is naïve to the state’s embarrassing history.” Slip op., at 12. Fifty years ago, the “Shakman decrees” (yes, the same Shakman who brought the latest case) were negotiated to help limit unlawful political patronage corruption. Id., at 1-3. Among other things, the decrees bound the Illinois Governor to federal court oversight of employment-related practices for fifty years. Apparently, these reforms helped reduce the problem: “Indeed, in some two dozen reports by the special master over the past seven years, we see no findings of patronage practices harming individual employees or applicants. … the Governor has instituted or otherwise supported several remedial measures in recent years (under the special master’s and district court’s supervision, to be sure) to minimize the risk of political patronage in employment practices.” Slip op., at 10.
But Judge Scudder’s recent opinion says that, at least for the Governor, fifty years is enough:
The Governor remains subject to the original 1972 decree to this day—50 years later—despite having demonstrated substantial compliance with its terms and objectives in recent years. Principles of federalism do not permit a federal court to oversee the Governor’s employment practices for decades on end in circumstances like this. The power to hire, fire, and establish accompanying policies needs to return to the people of Illinois and the Governor they elected. The federal courts will remain open to decide individual cases of alleged constitutional violations should they arise. But no longer shall the Governor’s employment practices and policies have to win the approval of a United States court. … Be careful not to misread our conclusion. The district court is not closing. … while today’s decision relieves the Governor of complying with the Shakman decree, the First Amendment remains alive and well.
D.C. Circuit Rejects Claim of Judicial Branch to Limit Its Employees’ Off-Duty Political Activity Because Administrative Office Simply Speculated, Not Proved, Harm: The Supreme Court has long upheld the rights of federal employees to engage in political expression while not performing their official duties, so long as there is no suggestion that the government itself is involved. U.S. v. NTEU, 513 U.S. 454, 465-66 (1995). The test balances the government’s interest as an employer and sovereign against the employees’ freedom of expression. Pickering v. Board of Education, 391 U.S. 563, 571 (1968). But what about the special burden placed on the Administrative Office of the U.S. Courts, which has a higher need for the appearance of neutrality than the political branches? Since 2018, the AO has banned involvement in partisan elections even while away from work.
The D.C. Circuit just took up that question in Guffey v. Mauskopf, No. 20-5183, (August 16, 2022), (h/t the eagle-eyed Chip Watkins) and said that the AO’s policy was unconstitutional. The difference was that neutrality of judges and courts can’t be imputed to AO employees to the same degree: “AO employees do not decide cases — only judges do that. Nor do they make recommendations about the outcomes of individual cases, as law clerks and other legal advisors inside a courthouse often do.” Slip op., at 3.
And more importantly, the D.C. Circuit panel, like the Ninth Circuit panel in the Montana case summarized above, used the more stringent First Amendment standard of evidence the Supreme Court has been imposing in recent years:
That threat must be “real, not merely conjectural” — “mere speculation” is not enough. … To see the difference between “mere speculation” and a “real” threat, compare United States v. National Treasury Employees to Williams-Yulee v. Florida Bar. In National Treasury Employees, the Supreme Court addressed Congress’s novel concern that employees accepting honoraria for writing or speaking would lead them to “misuse or appear to misuse power.” 513 U.S. at 472. Because that risk was far from self-evident, Congress needed to provide evidence. Id. at 473. It didn’t. Id. at 472. So the Court decided that Congress’s concern could not justify the ban on honoraria. Id. at 477. In Williams-Yulee, on the other hand, the Court addressed the “regrettable but unavoidable appearance that judges who personally ask for money may diminish their integrity.” 575 U.S. at 447 (emphasis added). That concern was neither novel nor implausible, so “proof by documentary record” was unnecessary. Id.
As in the political corruption cases, the concern over the appearance of judges’ neutrality distills to cover only financial quid pro quo: “To credit the AO’s concern for the perception of judicial impartiality, we would have to assume that the public is aware of the AO. There is nothing in the record to suggest that it is. … Even with eight decades of AO history to draw from, the AO has excavated no instance of off-duty political conduct by an AO employee that has injured the Judiciary’s reputation. That silent record is strong evidence that AO employees can speak on matters of public concern without tarnishing the reputation of the Judiciary.” Slip op., at 10 (cleaned up). Once again, a government agency, even one where its appearance of neutrality is a “state interest of the highest order,” slip op., at 9, cannot just speculate about harm; it must prove it. Slip op., at 9-15, 17.
So why, inquiring minds want to know, doesn’t the Supreme Court review its “appearance of corruption” cases under the same standard (and the Institute for Free Speech just released a report on the appearance of corruption cases)? The Court may have taken a step in that direction in FEC v. Cruz, when it rejected a public opinion poll crafted by the FEC as evidence of a government interest in limiting candidate loan repayments, but it didn’t go very far into that specific question.
Federal Circuit: “Oops. Never Mind. We Won’t Disclose Your Confidential Filings After All.” The U.S. Court of Appeals for the Federal Circuit is (Warning: triskaidekaphobia trigger) the thirteenth Circuit Court, and has a limited jurisdiction, including appeals of some claims against the federal government, patents and trademarks, and several others whose claims are usually document-heavy. So, when it announced on August 17 that, as part of its transition to a more electronic case filing system, it would start unsealing its old files of sealed cases containing confidential paper records unless the parties showed cause why they should remain sealed, few people noticed. But apparently enough did that the Federal Circuit rescinded its new disclosure regime six days later, because “the court finds it impracticable at this time to continue to proceed with the proposed unsealing of previously-identified cases. Specifically, the court finds that there will be insufficient time and considerable, unanticipated administrative difficulty to both the court and to counsel in providing an opportunity for counsel and parties in the previously-identified cases to permit a physical review of the identified cases by the National Archives and Records Administration’s December 31, 2022 deadline for the court to complete the accessioning of its remaining paper case records.”
North Carolina Files First Merits Brief Filed in Independent State Legislature Case at U.S. Supreme Court: One of the more interesting pending constitutional arguments in the U.S. Supreme Court is over federalism and the interpretation of the Elections Clause, U.S. CONST. art. I, § 4, cl. 1, which provides that “The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof”. The “Independent State Legislature” Question boils down to whether and which courts have the power to change the legislature’s redistricting decisions. North Carolina has filed its first merits brief in the case (h/t ELB), inter alia relying on a passage from a recent Supreme Court decision: “‘The Framers were aware of electoral districting problems and considered what to do about them. They settled on a characteristic approach, assigning the issue to the state legislatures, expressly checked and balanced by the Federal Congress.’ Rucho v. Common Cause, 588 U.S. —, 139 S. Ct. 2484, 2496 (2019). Their approach did not assign any role in this policymaking process to state judges”. The opening NC brief is a deep dive into history and federalism’s structure. Traditionally, attempts to get courts to crimp their own power have been unavailing, but this Court has been more receptive to some curtailing. “Judicial review of partisan gerrymandering” under constitutional provisions not expressly and concretely addressing the subject depends on questions that are “political, not legal,” rendering the entire enterprise a quintessentially legislative one.” Rucho, 139 S. Ct. at 2500, 2507 (cleaned up).
Whittington Updates His Index of Supreme Court Decisions Finding Acts of Congress Unconstitutional: Princeton Law Prof. Keith Whittington puts out a useful compilation of “Acts Of Congress Held Unconstitutional In Whole Or In Part By The Supreme Court Of The United States” for the entire history of the Court. He has just published an update through the most recent term, and, of course, many of the listed decisions are familiar to First Tuesday Lunch Group participants, including the last on the list: #353. Federal Election Commission v. Cruz, 142 S.Ct. 1638 (2022), Act of March 27, 2002 (116 Stat. 81). Provision of the Bipartisan Campaign Reform Act that limits the amount of post-election contributions that may be used to repay a candidate who lends money to his own campaign is in conflict with the protection for freedom of speech in the First Amendment. Dissent: Kagan, Breyer, Sotomayor.”
Is Filing An Amicus Brief Reportable Lobbying of a Court? Politico published an article by Will Van Sant, “a staff writer for The Trace, a nonprofit newsroom covering gun violence in America,” which channels Sen. Sheldon Whitehouse’s long-term campaign to equate filing an amicus brief with lobbying. In an October 2021“essay” in the Yale Law Journal, for example, Sen. Whitehouse complained about a recent case of particular interest to the participants in the First Tuesday Lunch Group, devoting an entire section to “The Amicus Machine in Action: Americans for Prosperity Foundation v. Bonta.” Sen. Whitehouse wrote: “Americans for Prosperity Foundation v. Bonta provides a recent and extreme example of the ‘flotilla’ phenomenon.”
Why would all those organizations file amicus briefs seeking to protect donors? Sen. Whitehouse accurately points out the First Amendment ramifications of the case: “Indeed, the issue in AFPF was an existential one for the amicus machine: in deciding nonprofit donors’ alleged right to anonymity, the Court would directly impact the ability of dark-money donors to continue shaping judicial outcomes. In effect, the amicus briefs argued for a constitutional right to anonymous dark-money spending in our democracy.” Yes, indeed they did, expressly and often, citing specific Supreme Court precedents outlining that right and real-world examples of harassment and hardship the right protected against. Even the dissent in AFPF agreed with the need for that protection. “Publicizing individuals’ association with particular groups might expose members to harassment, threats, and reprisals by opponents of those organizations. Individuals may choose to disassociate themselves from a group altogether rather than face such backlash.” AFPF/TMLC v. Bonta, Sotomayor, J., dissenting, slip op. at 4.
Of course, Sen. Whitehouse himself also filed a brief in AFPF/TMLC v. Bonta. His amicus brief included the following:
Not only has California’s mandate elicited a facial constitutional challenge by Petitioner; it has drawn rebuke from a veritable flotilla of industry-aligned nonprofits and “think tanks” acting as amici curiae — a number of whose funding sources overlap with Petitioner’s and/or one another’s. It is among the largest such assemblages ever presented to the Court. Their number and their arguments suggest a much bigger game is afoot. Amici Senators submit that this appeal is just the latest move in the steady and methodical campaign pursued by powerful interests to both cement and obscure their influence over the public sphere since this Court’s decision in Citizens United v. Fed. Elec. Comm’n. The effect of these efforts has been to deprive the citizenry of information and make our democracy less representative.
Id., at 4.
Both Sen. Whitehouse and those supporting donor privacy have a First Amendment right to petition the government for redress of grievances. Sen. Whitehouse’s long campaign is undoubtedly sincere and heartfelt; sometimes he literally shakes with intensity while speaking of his feelings of urgency about transparency. But how would Whitehouse’s proposed “flotilla of industry-aligned nonprofits and ‘think tanks … in the steady and methodical campaign … to both cement and obscure their influence over the public sphere” standard work? Would Senators filing an amicus brief require every donor to the Senators’ campaigns and all donors to organizations directly or independently supporting the Senators or their proposals, to be disclosed whenever the Senators file an amicus brief? (Disclosure: the Public Policy Legal Institute, host of this Vox PPLI blog, also filed an amicus brief in AFPF/TMLC v. Bonta, although it is neither “industry-aligned” nor, by any standard, a “powerful interest;” the brief was joined by the National Taxpayers Union Foundation, which might be either or both.)
Infighting Challenges Attempt to Revise Constitution to Reverse Citizens United: Despite agreeing on opposition to the Supreme Court’s decision in Citizens United v. FEC, Insider reports that various progressive organizations are fighting over HOW to do that. Wolf PAC and former Young Turks founder Cenk Uygar, for example, want to host a convention to rewrite the entire Constitution: “‘All of the establishment Democrats like the corruption, it is what gave them power in the first place,’ Uygur told Insider, railing against what he views as a coordinated effort to sink Wolf PAC’s convention push.” Part of that is true, since other progressive groups such as Common Cause and many others fear the outcome of a Con con. “Calling a new constitutional convention under Article V of the U.S. Constitution is a threat to every American’s constitutional rights and civil liberties.”
NPR(!!) Profiles Justice Sam Alito: Much opprobrium is being cast at Justice Sam Alito after the recent abortion decision in Dobbs. Now, however, Nina Totenberg, long-time legal affairs correspondent for NPR, has written a profile of Justice Sam Alito, “a workhorse on the Supreme Court.” He certainly is a workhorse, especially as one of the two Justices who actually reads every one of the 7,000 petitions for certiorari (Supreme Court review of a case) filed each year, rather than participating in the clerk-run “cert pool” that assigns petitions to be read only by one clerk, who then writes a memo for other Justices.
Unlike most media coverage of Alito, Totenberg actually understands why, beyond the recent abortion decision, Alito is worth writing about: “Alito, unlike Marshall, Taney and Warren, is not chief justice, and he may be little known to the public generally. But he has played a key role on the court, often leading the conservative charge not just on abortion, but for expanded religious rights, against LGBTQ rights, against expanded voting rights, against labor unions, for the death penalty, and more. Indeed, within a short time of replacing the more moderate Justice Sandra Day O’Connor in 2006, he became something of the workhorse of the right.” She is not alone among liberal commentators in respecting Alito’s impact: “Liberal Yale law professor Akhil Amar defends Alito too, maintaining that the justice succeeds by staying within the lines and not overreaching. ‘He’s quiet. He’s able to succeed,’ says Amar.”
Less prominent in these profiles, however, is Alito’s attention to the First Amendment, which is significant. In Justice Breyer’s last First Amendment decision, Shertliff v. Boston, for example, Justice Alito’s concurrence challenged Breyer’s freewheeling “holistic” approach to First Amendment questions:
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.
And in Matal v. Tam, Justice Alito rejected the Justice Department’s attempt to argue that a person’s acceptance of government “subsidies” (including trademark protection or even the standard tax deduction) constitutes a waiver of First Amendment protections (as discussed in a different context at the August 3 First Tuesday Lunch). Slip op. at 18-19.
Why Dissent? To “Appeal to the Brooding Spirit of the Law:” The Hill offers a column by John Kruzel discussing how the liberal Supreme Court Justices are writing pointed dissents (as if biting dissents were anything new), which includes some interesting history, including: “perhaps the most famous utterance on the transformative power of dissent came from former Chief Justice Charles Evans Hughes, a nominee of President Herbert Hoover. According to Hughes, a dissenting opinion is ‘an appeal to the brooding spirit of the law, to the intelligence of a future day, when a later decision may possibly correct the error into which the dissenting judge believes the court to have been betrayed.’”
Can Congress Make Donald Trump Ineligible for Federal Office? Congress has enacted several laws that purport to make former President Donald Trump ineligible to hold federal office, but, as Prof. Ned Foley pointed out last October, Congress cannot override the Constitution, which sets qualifications for President and other federal offices. U.S. Term Limits 514 U.S. 779, 787-98 (1995) (qualifications for office are “fixed” in the Constitution and neither Congress nor states may add to them); Powell v. McCormack, 395 U. S. 486, 540 (1969) (Congress cannot alter or add to list of qualifications). Prof. Rick Hasen continued that discussion on Aug. 9 in the aftermath of claims by Marc Elias and others that Trump would be barred from office if he was convicted of misuse of federal documents. “Consider the basic point here the electoral equivalent of the familiar wedding refrain: ‘Speak now or forever hold your peace.’ Simply put, the time for disqualifying Trump from being on the ballot in 2024 is before those ballots are cast, not after he’s won the election.” Ben Horton from Free Speech for People, founded to fight Citizens United, responds in a guest post on ELB that Foley’s and Hasen’s reliance on In re Griffin 11 F. Cas. 7, 26 (C.C.D. Va. 1869) is misplaced, and “state election officials have the constitutional authority and duty to … exclude oath-violating insurrectionists from the ballot, with or without Congressional action.”
DEPARTMENT OF JUSTICE
California Man Pleads Guilty to Running Scam-PACs That Collected $3.5 Million But Spent Only $19 on Political Activities: The First Tuesday Lunch Group has long discussed the recurring problem of “Scam-PACs” whose main purpose is to enrich their operators by taking money under false pretenses. What’s a Scam-PAC? How about raising $3.5 million promising donors to support candidates, but then spending only $19 (nineteen dollars!) on political causes? Now the U.S. Department of Justice has gotten a guilty plea from one particularly-egregious Scam-PAC operator who did just that. DoJ says:
Robert Reyes … operated two political action committees—Liberty Action Group PAC and Progressive Priorities PAC—which solicited contributions from the public via robocalls and television, radio, and internet advertisements. The two PACs represented that the contributions would be used to support dueling presidential nominees of the two major political parties, respectively. Instead, Reyes and his co-conspirators used the funds to enrich themselves and to fund additional fraudulent solicitations. Specifically, Reyes admitted that the two PACs raised approximately $3.5 million in contributions during the 2016 election cycle and subsequent months, of which Reyes received approximately $714,000. Of the approximately $3.5 million raised, the two PACs contributed approximately $19 to legitimate political causes.
Reyes pled guilty to one count of conspiracy to commit wire fraud and to cause false statements to the Federal Election Commission and one count of money laundering. He could receive up to 20 years in prison, and has agreed to forfeit $809,920.40 that he received for his participation in the scam-PACs during the scheme.
Meta Blasts Washington State Political Ad Disclosure Law: Those who wrestle with California’s or New York’s campaign finance rules find them difficult, but Washington is worse. Facebook’s parent says in a fiesty memo in Washington’s court case for violating the state’s campaign advertising disclosure law: “However well-intentioned Washington’s disclosure rules may be, the First Amendment ‘prohibits such attempts to tamper with the “right of citizens to choose who shall govern them.”’ FEC v. Cruz, 142 S.Ct. 1638, 1652 (2022) (citations omitted). Because the disclosure regime singles out political speech for disfavored treatment (and compels speech to boot), it is presumptively unconstitutional.” It’s a pretty interesting P. 2, explaining how and why none of the big three providers will permit political ads in Washington state. The State Attorney General returns fire by press release (as he is wont to do): “Washington’s state campaign finance law was recently ranked best in the nation by the Coalition for Integrity, a Washington, D.C., nonprofit that promotes transparency and accountability. Despite repeatedly stating publicly that it is committed to ‘providing transparency during elections,’ Meta is attempting to escape accountability and strike down a crucial provision of Washington’s gold-standard law.” Geek Wire has a good play-by-play (h/t IFS).
After Misleading Texts in Kansas, Iowa Considers Whether Political Texts Will Be Subject to State “Attribution” Laws: Following up on recent First Tuesday Lunch Group discussions of 10DLC and other forms of political campaigning by text, the Iowa blog Bleeding Heartland reports that the Iowa Ethics and Campaign Finance Board may soon decide “when text messages are ‘electronic general public political advertising’ subject to Iowa’s law requiring disclosure of who is responsible for express campaign advocacy.” (h/t IFS) In 2000, 2006 and 2016, the Iowa Board held that such statements were required for emails. With upcoming battles likely on controversial ballot initiatives on gun control and abortion, the Board may take up the “attribution” question at its September meeting.
The move comes after thousands of text messages were sent to voters in the recent rejection of a Kansas ballot initiative about abortion. The texts said that voting YES on the initiative would “give women a choice” and “protect women’s health,” instead of explaining that a yes vote would have enabled the legislature to ban abortion, while a no vote would have upheld a Kansas Supreme Court ruling that the state constitution protects abortion rights. The question is not whether misleading or lying is illegal in political material, since, as Bleeding Heartland notes in quoting a 2020 blog post by Alex Boiocco from the Institute for Free Speech, the First Amendment protects false campaign speech. But disclosure rules under Iowa law require a “paid for by” attribution statement on “published material designed to expressly advocate the … passage or defeat of a ballot issue shall include on the published material an attribution statement disclosing who is responsible for the published material.” So, the question is whether texts on ballot initiatives, like campaign emails, are “electronic general public political advertising” subject to Iowa’s “paid for by” attribution requirement.
Georgia Ethics Commission Finds Reason To Believe Allied c3 and c4 Spent Millions to Help Gubernatorial Candidate Stacey Abrams: The Atlanta Journal-Constitution (paywall) and other media outlets report on the Georgia Government Transparency & Campaign Finance Commission vote to move forward with an investigation of two allied tax-exempt organizations – the New Georgia Project and its sister c4 the New Georgia Project Action Fund – for electioneering but not registering and reporting under Georgia’s campaign finance laws. Axios Atlanta: “The hearing is the latest episode in a longstanding fight between the New Georgia Project and the Republican-led state government, including the ethics commission and the Secretary of State’s office, which Abrams and her allies have decried as politically motivated.” AJC: “The state ethics commission on Monday decided there’s probable cause to believe nonprofits raised and spent possibly millions of dollars to back Stacey Abrams’ unsuccessful 2018 gubernatorial bid without disclosing it. … The commission staff says the groups hired canvassers, passed out literature, promoted Abrams’ candidacy — and the candidacy of other candidates — and solicited contributions.” A separate ethics investigation of the 2018 Abrams campaign has been pending since 2019. Curiously, according to Axios Atlanta, the c3’s lawyers responded to the 2019 Complaint that: “the [c4] Action Fund was legally paid as a commercial canvassing vendor by other groups and, therefore, was not an ‘independent committee’ receiving donations” (emphasis added). Odd statement raising all sorts of exemption issues. Unclear whether the IRS will get involved in its current “hunkered-down” state.
Which States Offer More Protection to First Amendment Rights, and Which Don’t – 2022 Edition: The Institute for Free Speech has published a big study rating states on ten different areas of speech regulation, including political committees, grassroots activity, and electioneering communications. IFS published this ranking because its legal defense of various Americans across the country who wanted to exercise their rights to free expression exposed how much regulation was throttling unsuspecting citizens simply trying to practice what their civics education had preached. “The Free Speech Index shines a light on the states so that everyone can see how their laws harm First Amendment rights. Hopefully, it also shows a path forward. Armed with this knowledge, the people can work to fix their laws and ensure that every American is truly free to speak.”
An interactive map shows that the rankings cut across geography, partisanship, and size: Only one state (Wisconsin) scores than 80% of the possible ratings points, and only three (Wisconsin, Michigan and Iowa) score higher than 70%. Thirty-five states rank below 50% and eight (Florida, California, Delaware, Maryland, Hawaii, Washington, Connecticut, and New York) score below 30%. New York, the bottom of the barrel, achieved only a 15% score.
Scott Blackburn, author of the IFS report, writes: “speech about government is stringently restricted across the country.” In particular, “Across the country, states are regulating too much speech by broadly defining what kind of groups are regulated and how much of and what types of activity must be regulated. Most states are simply not considering the First Amendment impacts in these areas.”
Ten Years After Citizens United, Corporations Did Not Affect State Tax Policy: The National Bureau of Economic Research released Working Paper 30352 that looked at one common attack on Citizens United v. FEC, 558 U.S. 310 (2010): the claim that corporations would use their new ability to make political independent expenditures to affect state tax policy. The conclusion? “Ten years after the ruling and for a wide range of outcomes, we are not able to identify economically or statistically significant effects of corporate independent expenditures on state tax policy, including tax rates, discretionary tax breaks, and tax revenues.” The paper’s authors posted a more user-friendly (and hedged) explanation in the Harvard Law School Forum on Corporate Governance. The Wall Street Journal editorialized: “Citizens United Bought … Nothing? … If billionaires were able to buy elections to lower state taxes, you’d think they would have done it by now.”
Want to Make A Lot of Money? Start a Politics-Oriented Media Site Like Politico or Axios: Axios has announced that it will be acquired by Cox Enterprises, its most recent lead investor for $525 million. Axios was started in 2016 by three refugees from Politico: Mike Allen, Jim VandeHei (formerly CEO of Politico) and Roy Schwartz. Vox notes that “Money from Meta — and the rest of Big Tech — is pouring into Washington publications.” The Washington Post said “Cox, a 124-year-old media company, had already been a minority investor in Axios before the sale, which is the second major transaction involving a Beltway digital news company in the past year. In October, German publisher Axel Springer purchased Arlington-based Politico for $1 billion after discussing a bid to buy Axios.” What’s driving the tech purchases? Increasing governmental attention to tech and (at least by tech industry standards) rock-bottom prices; that $500 million is a drop in the bucket for multi-billion dollar Meta/Facebook. Not mentioned in the Post article was the purchase of the Post by Jeff Bezos which may have sparked the idea.
What’s Wrong With Democrats AND Republicans? Crazy Ideas At The Top: As with so much in today’s politics, both sides of the political spectrum describe the same bottom-line using different words: those at the top are tone deaf. From the Left, Time says a “massive voter survey” finds that: “Progressives are losing on the top issue of the coming election: the economy. … The data suggests Democrats need a messaging framework that centers the conversation on working-class voters, the elusive reservoir of voters who have supported Republicans for years. …The research finds summoning villains does not work for Democrats. … The remedy? Democrats just need to realize progressive Twitter isn’t real life.” From the Right, the Wall Street Journal’s Gerard Baker writes about too many celebrity candidates:
One of the more intriguing themes in this fall’s midterm elections pits the appeal of outsider candidates against that of professional politicians. … And while it’s true that running for office can get easier with experience, how do you square that with Mr. Biden’s recurrent foot-in-mouth disease or Hillary Clinton’s apparently inexhaustible capacity to lose? The problem isn’t inexperience itself. This year’s crop of leading outsiders owe their difficulty less to being new faces than to the things they say – and purport to believe – and to their inescapable proximity to Mr. Trump and his various toxicities. It would be frustrating if their defeat gave the people who have demonstrated so much experience in screwing things up a chance to do even more damage.
Wall Street Journal Profiles Former ACLU Head Nadine Strossen’s Call For the Left to “Re-Embrace the First Amendment:” Not to be outdone by NPR profiling a conservative (see above), the Wall Street Journal offers a profile of long-time liberal icon Nadine Strossen, who headed the American Civil Liberties Union for many years. Excerpt:
I continue to re-examine my longstanding belief about the mutually reinforcing relationship between free speech and equality, and I continue to be completely convinced that these are two mutually reinforcing values. … we can’t have meaningful liberty, in a meaningful sense, unless it’s equally available to everybody. … Every single one of us should have an equal right to choose how we express ourselves, how we communicate to somebody else, what we choose to listen to. … I see what I call illiberalism in the classic sense on both sides of the political spectrum, and I never want either one to get off the hook.
Can Silicon Valley’s Congressman Woo Rust Belt Voters? Politico puff piece on Ro Khanna’s attempt to sell “new economic patriotism” in Wisconsin, Indiana and Iowa: “’Make more stuff here,’ he said. ‘Build our productive capacity,’ he said. ‘Buy American,’ he said.”
Facebook’s Woes Build, As Academics Build Online Database of Ad Targeting: In the wake of last month’s complaints that both Google and Facebook have limited Republican emails and ads, now Facebook faces Ivory Tower attacks on its basic revenue stream: targeted ads. Politico reports: “At stake is how transparent Facebook should be about how people are targeted with partisan messages and how much data it should give to outside researchers. That standoff is heating up ahead of the midterms. On [Aug. 4], the NYU researchers launched a searchable database of Facebook digital political ads they’ve managed to pull together despite the ban, putting them right back in the company’s crosshairs. ‘I’m scared of getting sued. But what I’m more scared of is another Jan. 6,’ said Laura Edelson, one of the academics behind the project and co-lead at NYU’s Cybersecurity for Democracy project.” This is a harbinger of bigger fights during the mid-terms and the 2024 elections.
Katie Harbath, former National Republican Senatorial Committee and congressional staffer, was brought on by Facebook to help work with Republicans as director for global elections before leaving “disillusioned” last year. Harbath told Politico that partisan concerns over digital ad targeting were likely to get worse: “It’s been very hard to get a sense of what is happening. There are a lot of new vectors that are popping up that are going to remain really tricky for the [online] platforms to deal with.” That’s not new, but may get worse.
Stirewalt, Reporting From Inside Fox News Election-Night Coverage: Chris Stirewalt, now at AEI but formerly Political Editor of Fox News Channel, is renowned for calling Arizona for Biden in the Fox 2020 presidential election coverage, and being dumped because of it. Now he pens a tell-all in Politico: “The number, of course, was how many seats I forecast Republicans to win that night. ‘Our best guess is 64 seats, sir.’ Ailes, mouth set like a bulldog and eyes staring through the back of my head, said, ‘Dick Morris says it could be one hundred. Why is yours so low?’ I figured Ailes, a smart man, knew that Morris, a network contributor at the time, was a joke.” As much a critique of recent media style as political revenge, Stirewalt sums up: “There are lots of books and articles that talk about how the news media is hurting select groups: Republicans or Democrats or populists or minority groups or the family or whatever suits you. But that kind of blame-casting just alienates us further, replicating the core defect of the news media that critics are attacking. There is no trophy for being more harmed by our lazy, alienating press. We’re all losers in this one.”