This month’s cover illustration is yet another example of how Artificial Intelligence represents the Federal Election Commission. For several months, PPLI has been attempting to convince various AI illustration programs to portray pictures or other representations of the six Commissioners of the Federal Election Commission. The text prompt used for this month’s version was “a photo of the six members of the Federal Election Commission dressed in red, white and blue;” the program used was Adobe’s Express beta version of the graphic arts giant’s “Text to Image” generator.
GOVERNMENT CENSORSHIP OF ALLEGED “DISINFORMATION:”
No Ruling Yet Following August 10th Hearing of Fifth Circuit Court of Appeals in Missouri v. Biden Injunction Review: The historic case of State of Missouri v. Joseph Biden, No. 3:22-cv-01213-TAD-KDM, July 4, 2023, W.D.La., is stalled in the U.S. Court of Appeals for the Fifth Circuit after an August 10 hearing produced no ruling on whether District Court Judge Terry Doughty’s July 4th injunction should go into effect against U.S. government agencies interacting with large social media companies in an effort to restrict or stamp out “misinformation” on a variety of topics. The House Judiciary Committee’s Subcommittee on Government Weaponization, which is also investigating the social media censorship actions against private companies, filed an 185-page amicus curiae brief in the Appeals Court supporting the States’ challenge to the alleged federal actions; dozens of other amicus briefs were also filed. As of September 4, there has been no ruling from the Fifth Circuit panel hearing the injunction release request.
House Judiciary Committee Subpoenas Information from U.S. Agencies of Government Officials’ Badgering Social Media Companies: Meanwhile, Fox News reports that Jim Jordan, Chairman of the House Judiciary Committee, complaining about months of various agencies refusing to provide the Committee information requested in the Committee’s ongoing review of U.S. government agencies interacting with large social media companies in an effort to restrict or stamp out “misinformation” on a variety of topics, issued subpoenas to compel the production of the requested information from the Justice Department and the FBI.
Jordan said the committee’s ongoing investigation, along with publicized discoveries out of the ongoing federal court case Missouri v. Biden, has exposed how the federal government “has pressured and colluded with Big Tech and other intermediaries to censor certain viewpoints on social and other media in ways that undermine First Amendment principles. …
Jordan said the Justice Department has produced “only a single document: a publicly available transcript” of a civil deposition of FBI Assistant Special Agent in Charge Elvis Chan from Missouri v. Biden. Through its investigation, the Committee has uncovered evidence that contradicts several statements in Agent Chan’s deposition, particularly as they relate to his communications with social media platforms,” Jordan wrote. “This production is woefully inadequate and omits voluminous responsive material, including communications between DOJ and tech companies, internal communications, and communications between DOJ and other executive branch entities.”
IRS
Is the IRS Complaint Against Leonard Leo and His Organizations For Paying $73 Million to Leo’s For-Profit Companies Part of An Arms Race Including the IRS Complaint Against Arabella Advisors for Paying Eric Kessler’s For-Profit Companies $228 million? In April, the Campaign for Accountability, described by Politico as a “Liberal watchdog group,” filed a complaint with the IRS claiming that tax-exempt organizations related to Leonard Leo, the co-Chair of the Federalist Society, were paying “excessive compensation” to Leo’s for-profit companies. CfA says it can’t figure out what’s going on with all these organizational relationships, and asks IRS to do so. CfA claims violations of private benefit, private inurement, and excess benefit transactions that resulted in the payment of $73 million from 2016-2021, and requests that the IRS investigate. Id., at 17.
According to Politico, Brian Schwalb, was a tax attorney in the U.S. Department of Justice’s Tax Division before becoming the D.C. Attorney General. Now Politico says that Schwalb’s office is investigating the same CfA complaint filed in D.C.
Tit for tat? Though not said in these media articles, there may be a form of “mutual assured destruction” or arms race going on these days between the behemoths of public policy advocacy. On Aug. 15, a week before the Politico story on the CfA IRS complaint ran, Americans for Public Trust filed a very similar IRS complaint alleging that various organizations which were part of the Arabella Advisors network paid $228 million to for-profit companies run by the Arabella founder Eric Kessler from 2006 – 2023. “The transfer of $228,384,481 from the Kessler-Affiliated Nonprofits to Arabella in an indisputable private benefit for Arabella and its creator, Mr. Kessler. Because the Kessler-Affiliated Nonprofits directed their nonprofit resources back into Kessler’s private business, they are not operating exclusively for exempt purposes and their tax-exempt status should be revoked.” Id., at 9. The same sort of private inurement and excess benefit transaction claims made by CfA were made in the APT complaint. No word on whether the D.C. Attorney General has also opened an investigation of the Arabella Advisors complaint.
Both sides in these and other related artillery barrages being fired behind the scenes are lawyered up with top tax-exempt law talent. Let’s just hope there isn’t too much collateral damage during the exchange.
FEC
New Procedure to Avoid FEC Court Defaults Left in Limbo Took Effect on August 17: In July, the FEC adopted a new procedure to notify litigants and courts of FEC decisions to defend or not defend cases where the Commission fails to approve a defense by a majority vote. That procedure took effect upon publication in the Federal Register, which occurred on Aug. 17.
Commissioner Allen Dickerson Proposes New Regulation of Office of General Counsel Investigations: In recent years, various Commissioners of the FEC have issued statements complaining about the agency’s Office of General Counsel; on numerous occasions, the Commission’s decisions expressly rejected the OGC’s recommendations. Apparently, this trend has reached an inflection point: on August 23, Commissioner Allen Dickerson, an active participant in the First Tuesday Lunch Group discussions before joining the FEC, proposed changes in how the FEC authorizes and supervises the work of its Office of General Counsel:
It would require OGC to provide the Commission with a proposed Investigation Plan for approval at the time that it circulates a First General Counsel’s Report recommending reason-to-believe and an investigation. That document will lay out the proposed scope and conduct of the anticipated investigation and, upon approval, will govern the conduct of the investigation, subject to modification in light of new information or changed circumstances.
This approach has several practical advantages. It provides a means for regular communication between OGC and commissioners concerning the conduct of a given investigation. It allows the Commission to make informed decisions about the best use of increasingly scarce enforcement resources as the volume of complaints and internally-referred matters continues to grow. It empowers OGC to take the lead in planning and executing investigations while preserving the Commission’s oversight role. And it makes the Commission itself accountable for investigations made under its authority.
The proposal was raised at the FEC’s August 30 meeting, but held over for further consideration.
FEC Asks for Comments on Proposed Regulation of Artificial Intelligence in Campaign Ads: The FEC has requested public comments on whether it should propose regulation on campaign ads produce in whole or in part by artificial intelligence programs. Comments are due by October 16, 2023. Covington explainer.
The cover illustration to this month’s “Public Policy Advocacy Highlights” at the top of this post represents yet another example of how well AI represents the Federal Election Commission. PPLI’s official position remains the same: except for very sophisticated programs with expert users, AI representations of actual people remain relatively crude and easy to distinguish from reality.
Federal Communications Commission
FCC Seeks Comment on Barring Fox News License Application For Knowingly Broadcasting “Fake News:” Fox Television Stations Inc. filed a renewal application for its Philadelphia station WTXF-TV; the Media and Democracy Project filed a petition to deny the license renewal, and asked that the permit be classified as “permit-but-disclose,” which means ordinarily-confidential documents would be revealed in the renewal process. Such requests are usually denied, but the FCC has discretion to grant them “if the public interest so requires.” 47 C.F.R. § 1.1200(a). On August 23, the FCC granted the “permit but disclose” request, saying that granting the disclosures would “permit broader public participation.” The FCC had done the same thing to Fox in 2007. Commission Announces Permit-But-Disclose Ex Parte Status for Renewal Applications filed by Fox Television Stations, Inc., Public Notice, 22 FCC Rcd 11379 (2007)
DoJ
DoJ Resumes Prosecution of Sam Bankman-Fried For Alleged Campaign Finance Violations: Last month, the Department of Justice abruptly dropped the prosecution of Sam Bankman-Fried after the crypto billionaire was charged with numerous illegalities. The New York Times and Forbes had more. Meanwhile, a federal judge revoked Bankman-Fried’s bail and sent him to jail for attempted witness tampering; Bankman-Fried is apparently “subsisting on bread and water” in jail. And DoJ reversed field and filed a new indictment, again raising the issues of whether exempt organizations which have received contributions from the again-indicted Bankman-Fried must return the allegedly-stolen funds to bankruptcy officials.
CONGRESS
Ways & Means Issues Request for Information About Tax-Exempt Organizations’ Political Activities: On August 14, the House Ways & Means Committee and its Subcommittee on Oversight issued a request for information about 501(c)(3) and (c)(4) organizations’ political activities, including ten specific questions including whether there was a need for new IRS guidance on the definition of “political campaign intervention,” the involvement of foreign nationals in American political campaigns, and several related topics. The Committee extended the RFI deadline for comments until September 8, but several comments were filed on the original deadline of September 4 (Labor Day). The Public Policy Legal Institute, host of this blog, filed an extensive set of comments; other comments were filed by Stephanie Robbins and Beth Kingsley from Harmon Curran, and People United for Privacy.
COURTS
Judge Dismisses RNC Lawsuit Against Google For Sending Fundraising Mailings to Spam Folder: In Republican Nat’l Comm. v. Google, No. 2:22-cv-01904-DJC-JBP (Aug. 24, 2023),Judge Daniel Calabretta of the Eastern District of California held that the RNC had not “sufficiently pled that Google acted in bad faith in filtering RNC’s messages into Gmail users’ spam folders.” Slip op., at 2. “In short, the only fact alleged by the RNC to support its conclusory allegation that ‘Google’s interception and diversion of the RNC’s emails, and the harm it is causing to the RNC, is intentional, deliberate, and in bad faith,’ is the North Carolina State University study that expressly states there is no reason to believe Google was acting in bad faith, and the remainder of the allegations in the Complaint are inconsistent with such a conclusion. In light of the multiple reasonable explanations for why the RNC’s emails were filtered as set forth in the Complaint, the Court does not find the RNC’s allegation that Google was knowingly and purposefully harming the RNC because of political animus to be a ‘reasonable inference.’” Slip op., at 12. Judge Calabretta also cited the congressional intent behind Section 230 to minimize mass marketing emails. Id. Basically, the judge said all providers are biased one way or another. “While Google’s bias was greater than that of Yahoo or Outlook, the RNC offers no limiting principle as to how much ‘bias’ is permissible, if any.” Id., at 13.
Tenth Circuit Holds Ballot Initiative Proponents Have Standing to Challenge Colorado’s Disclosure and Registration Requirements for Ballot Question Committees: Colorado has long been a hotbed of legal questions involving the ballot initiative process. See, e.g., Buckley v. Amer. Constitutional Law Found., 525 U.S. 182 (1999)(requirements for ballot circulator unconstitutional). Now, in Colo. Union of Taxpayers v. Griswold, No. 22-1122, Aug. 23, 2023, an organization that spent money advocating on ballot issues was found to have standing to challenge requirements for registration and reporting. The case was sent back to the District Court, which had previously held the organization did not have standing, to consider the CUT’s lawsuit on the merits. Slip op., at 28. Courthouse News has more.
Is The Supreme Court Going to Disqualify Trump From the Ballot? Amidst numerous recent articles (yes) speculating about (no) whether or not former President Trump can be disqualified from the Presidency, or the 2024 Presidential election, under the 14th Amendment, Section 3, comes one blog post speculating on the chances the Supreme Court will seriously consider any pre-election question raised before it. Adam Unikowsky from Jenner & Block, former clerk to Justice Scalia and D.C. Circuit Judge Douglas Ginsburg, writes: “In my view, contingent on Trump continuing to be a candidate for President, there is a 10% chance that the Supreme Court will hold, prior to the 2024 election, that Trump is constitutionally ineligible. … How did I come up with this number?” 75% chance that the Supreme Court won’t take the case, won’t decide the merit, or decides that Section 3 was repealed in Nineteenth Century; 10% chance that it will decide that Trump didn’t engage in insurrection, and 10% chance that because Trump did engage in insurrection, he is disqualified from the Presidency. (Note: Unikowsky graduated from MIT before attending Harvard Law School, and may have a higher proclivity toward probability calculations than many other attorneys.)
STATES
Direct Democracy Proponents Cite Attacks on Initiatives, Pledge to Defend: Initiatives have always been unpopular with State elites in power, but some claim that such efforts are expanding. Ned Foley, for example, wrote in Election Law Blog that “a basic question that I think is going to confront the field of election law (and, more broadly, the law of democratic procedures) over the next decade or so: the extent to which decisions should be made on the basis of majority rule.” Bolt covered the fallout from the popular rejection of Ohio’s proposed constitutional amendment #1 that would have raised the margin of victory for ballot measures to 60%. Direct democracy restrictions are thought to come up increasingly in the future as a result of the Supreme Court’s decision to return decision-making on abortion to the States, though similar restrictions have been proposes in areas such as cannabis, minimum wage and expansion of Medicaid.
GENERAL
Pildes and Edsall on How Changes to Campaign Finance Laws Contribute to Extremism: Extremism in American campaign finance regulation has long been a contentious issue, but recent events, including the January 6, 2020, insurrection on Capitol Hill, have changed some of the hypotheses and conclusions. Law Prof. Rick Pildes has an ELB review of Tom Edsall’s article in the New York Times (paywall) “Small Donors Are A Big Problem.” Pildes studies small donors’ relationship to extremism:
[C]ampaigns have come increasingly to rely on individual donors and spenders. And one of the most robust social-science findings in this area is that individual donors — large and small — are both the most ideologically motivated donors and have more extreme ideological views than average citizens. This is particularly true for small donors. … [W]hen money is funneled away from political parties to outside groups, that also contributes to extremism and polarization. Party funding is a source of moderation because parties support competitive candidates regardless of candidate ideology.
Are Exempt Organizations Losing Their Voices in Washington? So ask a number of articles, summarized by People United for Privacy. Independent Sector, for example, argues that their recent survey indicates that the pullback in lobbying activity in D.C. is the result of uncertainty over IRS guidance on what is permissible. PUFP notes that EO leaders are not “losing their courage.” Instead, their concern is justified by IRS uncertainty and Congressional threats of retaliation against “dark money:” “The IRS has a history of targeting nonprofits for investigations and harassment based on their views about public policy. The last time it happened in a way that snowballed to major scandal – the targeting of Tea Party groups in the early 2010s – the outcry was enormous, but the reforms were minimal.”
Note: the Public Policy Legal Institute’s (which hosts this blog) recent comments to the House Ways & Means Committee (see story above under Congress) suggested that a way to prevent new IRS targeting is to require more oversight and accountability from IRS and Treasury officials, as is done under Internal Revenue Code § 7611 when a church is investigated for political activity. Ironically, PPLI’s responses to the House Committee were filed under a special lobbying exception for responses to official Committee requests for “technical assistance” because PPLI does not lobby.
Vox PPLI 