FEC Claws Further Into Your Mouth

The Federal Election Commission (See here for details from the FEC) announced

“major settlements in ‘527’ cases involving Swift Boat Veterans for Truth, the League of Conservation Voters and Moveon.org. Civil penalties to be paid by the respondents exceed $600,000 in the aggregate, with the largest amount paid by Swift Boat Veterans ($229,500). As in its recent settlement with the Sierra Club, the FEC has signaled an aggressive use of the “part b” or second prong of the express advocacy standard, which provides that it includes public communications “taken as a whole” that “could only be interpreted by a reasonable person as containing the advocacy of the election or defeat” of a federal candidate. 11 CFR 100.22(b). …

There are several implications here:

The FEC had been ordered by a court considering the reach by McCain-Feingold to reach further, and detail regulations of 527 organizations. These settlements will be used by the FEC to argue to the court that further regulations are not necessary. Whether this or other overreaching courts will agree is another matter.

It will bring these settlements to the courtroom of Judge Emmett Sullivan to support its contention that, because its regulatory authority is sufficient to address claims against 527s, it has not abdicated its responsibility in declining to adopt new 527 rules.

This Campaign Finance Law site ponders other implications.

What is that message?

One is that the FEC will hold organization's liable for their intended "purpose," reflected, for example, in fundraising solicitations—and this may be the decisive finding regardless of whether the public communications eventually issued cross over into express electoral advocacy. A number of examples cited by the FEC focus on what was said to prospective donors. An example, appearing in the MoveOn settlement, is the stated intention to "challenge George Bush’s policies and record in order to reduce support for his re-election."

Now the FEC has no standards for judging purpose—no such term is defined, and the FEC has so far been able or unwilling to adopt any such definition. But it is apparently current enforcement policy to consider what is said internally, and not only to the public.
This means, of course, that public criticism, which might be devoid of terms of "express advocacy," would have its legal fate tied, to some undetermined degree, to the expected purpose of those statements as presented more privately to donors and others. The expected effect of the statements will heavily influence the regulatory judgment passed on its content.

Some might say that in the case of 527s, organized as political committees for IRS purposes, this shouldn't trouble anyone. And yet this same rationale will pose challenges for other nonprofits active in politics and, inevitably, in the criticism of candidates and of officeholders who are candidates.

Of course, what is said publicly still matters and this is the other notable feature of the case: It is apparent that the agency is now committed to an elastically applied "express advocacy" standard, on the books but until now rarely invoked, for determing when the criticism of an officeholder is a regulatory event. The facts and circumstances all matter in judging whether the purpose of the criticism is one of influencing an election.

An early indicator of the FEC's use of this standard appeared in the recent Sierra Club settlement. In the cases released today, the FEC applied this flexible standard to find an election-influencing purpose where a public communication attacks or questions a candidate's "character, qualifications and accomplishments." Such appraisals, the Commission concludes in the Swift Boats case, can have, in context, "no other reasonable meaning than to encourage actions to defeat [Democratic candidate Kerry]."

The cases do not, notably, rest on "coordination," that is, on conspiracies with candidates and parties to skirt the law. Liability in these matters followed an inquiry—described by the FEC's General Counsel as a "thorough investigation"—into intent ("purpose") and the meaning and effect of speech. Rick Hasen rightly predicts that this is a development destined to come before the courts. It is too early to gauge the extent to which this will affect non-527 nonprofit community—but it is clear that that the question is not whether it will be affected, but simply how much and how soon.

There’s no doubt that big money will continue to find ways into electoral influence. Moveon.org already has, and true to its Sorosish double-standards is pleased that others may have a harder time expressing their rights of free political speech:

MoveOn.org shut down its Voter Fund organization in 2004, and drove its campaign activity through its political action committee, which raised more than $27 million in the 2006 election cycle. MoveOn also operates a nonprofit organization, MoveOn.org Civic Action, that advocates positions on national issues.

"We welcome the FEC clamping down on pop-up 527s, set up just to influence elections and funded only by big money, since that would almost certainly put Swift Boat Veterans and similar groups out of business," said Wes Boyd, a co-founder of MoveOn.org.

The Swiftboat Veterans for Truth, which instead has contributed the almost $2-million it had remaining to disabled veterans, issued the following press release:

… In the settlement agreement the FEC made it abundantly clear that Swift Boat Veterans and POWs for Truth were operating in good faith based on its understanding of the law at the time. In addition, the FEC voted to take no action against any individual members of the group. The Swift Boat Veterans agreed to settle this dispute without any finding of probable cause that the group violated the Federal Election Campaign Act or the McCain-Feingold amendments to it….

"It is far better to end this legal confrontation now rather than continue a costly battle against government bureaucrats in an area where the law is unconscionably vague," said Rear Admiral Roy Hoffmann, founder of the Swift Boat Veterans and POW's for Truth. "Despite the opinions of reputable legal counsel who believe that the Swift Boat Veterans would win on this issue in court, we are settling this dispute now so the bulk of our remaining cash can go to financially assist seriously wounded veterans," Hoffmann added.

The first question that Senator McCain should be asked at every campaign stop is whether he believes politicians should only speak to us but not us to them? Then, if McCain believes that only small donors have that right to speak to politicians, will McCain eschew any donations from big donors, as equity would seem to demand a two-way street? There's many more questions about the silencing of free speech that McCain must answer for.