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Brian Svoboda, has issued a reply to the comments made by the reform lobby on AOR 2005-16 (Fired Up). The entire thing is available from the Election Law Listserv archives, but with Brian’s permission here is a substantial excerpt:

It’s tempting to see application of the media exemption as a Potter Stewart-like exercise in finding obscenity — you know it when you see it. Indeed, one can view the Commission’s past advisory opinions through this lens. “Good” organizations, those well regarded by those who attend book signings at Politics and Prose and who shop at the “Social Safeway,” get the exemption. See, e.g., C-Span. “Bad” organizations with partisan slants do not get the exemption. See, e.g., Republican Associates. Fledgling organizations see the question ducked. See, e.g., the Democracy Network.

Perhaps the best expression of this view can be found in Trevor Potter’s comments as counsel to the Democracy Network, a self-described nonpartisan, nonprofit web portal that proposed to publish candidate-generated content under the media exemption. Contending that DNet’s lack of paid subscribers or advertisers was irrelevant to the application of the exemption, Trevor delivered what must have seemed to be the coup de gras: if subscribers or advertisers were necessary, “public radio would not qualify for the exemption either, a clearly untenable conclusion.”

Yet the media exemption is not a gift that the FEC bestows on worthy recipients like NPR, the National Review or MTV. It is an exemption conferred by statute under fixed criteria.

(snip)

The criteria of the media exemption are clear. First, you must be a press entity described by the statute and rules: i.e., a “broadcasting station, newspaper, magazine, or other periodical publication.” 2 U.S.C. 431(9)(b)(i). The legislative history expressly refers to “other media.” Second, you must neither be owned nor controlled by a political party, a political committee or a candidate; and you must be acting as a press entity when performing your activity. This latter requirement — acting as a press entity — is a key consideration. It does not mean that you are acting from a nonpartisan motive; it means that you are doing the sorts of things that media entities normally do.

(snip)

To one familiar with these criteria — or at least to this lawyer, who represents Fired Up along with Marc Elias in their pending advisory opinion request — the comments made by the Campaign Legal Center, Democracy 21 and the Center for Responsive Politics and forwarded by Trevor are spectacularly unconvincing.

First, to say that Fired Up has posed a “hypothetical question” is a dodge. Fired Up has four live sites that are publishing content every day. (Those pages, I am told, have received many “hits” from the FEC since the request was filed. That’s totally appropriate; the Commission and the Office of General Counsel have a right to learn as much as they can about a requestor, and Fired Up’s sites are meant to be read. But this fact might give some pause to some of the bloggers out there who might consider seeking similar requests of their own.)

Second, to say that Fired Up does not qualify for the exemption because it is a partisan political organization is a misstatement of law and fact. The statute does not withhold the exemption from entities with “an overtly partisan purpose.” It withholds the exemption from entities that are owned or controlled by a political party, political committee or candidate. Moreover, while the comment makes much ado about the election-related activities that Fired Up proposed, such as advocating and soliciting contributions for candidates, it must be noted that these are activities in which the conventional, bricks-and-mortar media engage also. A look at the main Fired Up web site (http://www.firedupamerica.com ) reveals the true nature of the requestor: it is a progressive blog, plain and simple.

If there is any logic to be discerned in the commenters’ analysis of the media exemption, that logic should be very frightening to the Daily Kos, RedState.org, and the many others like them. If you have “an overtly partisan purpose,” if you do not “provide a function identical or similar to classic media activities,” and if you take in or spend more than $1,000, then you are a political committee, and you must register with the FEC. The comment tries to evade this conclusion. This is why it falsely claims that Fired Up “poses a hypothetical question” and is free to engage in its proposed activities notwithstanding the media exemption. Yet I would like to know this: if you expressly advocate the election or defeat of candidates; if you take in or spend more than $1,000 in a calendar year; and if your receipts and disbursements are not exempt from the FEC’s definitions of “contribution” and “expenditure,” then what are you, if not a political committee?

I also think that Adam Bonin is right; that the reasoning urged in this thread by Trevor and by the commenters in the Fired Up AOR forces FEC consideration of Internet activity into a case-by-case review, where the FEC is continually forced through the advisory opinion process to sort the protected wheat from the regulated chaff.

(snip)

The result of all this is that bloggers now operate in a world of legal uncertainty. On the one hand, they face a Commission that plainly recoils from regulating their activities. Yet on the other hand, those activities are apt to trigger contributions and expenditures under a literal reading of the statute, and they do not always fall within existing exemptions. Right now, the blogosphere is protected only by the forbearance of the Commission, and by the First Amendment affirmative defense that they would offer if the Commission sought civil penalties from them in court. That’s what the Fired Up AOR is all about.

Comments enabled - just click the heading to get the archives post with the comments form!

You know, it isn’t everyday a state party FEC audit makes the news, and that’s a shame, don’t you think? So, I call your attention to this story from the Rocky Mountain News regarding the Final Audit Report on the Colorado Democratic Party, assessing their records from 2001-02.

The Audit Report itself is here. Interestingly, although the big problems identified in the audit were related to the party’s failure to document allocated expenses (that is, they would allocate spending for an ad, but couldn’t produce the ad to show that allocation was correct) - and that has necessitated FEC efforts to subpoena documents from others, the news article doesn’t mention that. I suspect most reporters, like most people generally, are allergic to allocation.

Danny J. Boggs, Chief Judge of the 6th Circuit Court of Appeals, and all-around great guy, for the O’Connor vacancy.

Absolutely. Fantastic idea. Consider this express advocacy of his appointment and confirmation!

Relevant links: Underneath Their Robes, Volokh, and Erick at ConfirmThem.

As a Boggs clerk, I am completely objective on this issue. And I’ve enabled comments here, too.

The Campaign Legal Center, Democracy 21 and the Center for Responsive Politics have filed comments on the Fired Up! FEC Advisory Opinion, AOR 2005-16. The comments are not posted yet (by the FEC or, seemingly, by any of the commenters), but the CLC has distributed them via email, and so I offer them to you, dear reader, here.

In short, CLC and Co. argue that the request is hypothetical, because Fired Up! is a partnership; and that even were it not hypothetical, Fired Up! is too partisan to qualify for the press exemption. In their own words:

While some Internet-based entities provide a function identical or similar to classic media activities, and thus reasonably can be said to fall within the press exemption, others surely do not. But the test is the same for online entities as it is for off-line entities: is the entity a “press entity” and is it acting in its “legitimate press function”? Here, the requestor has stated that “Fired Up intends to endorse, expressly advocate, and urge readers to donate funds to the election of Democratic candidates for federal, state, and local office.” AOR 2005-16 at 2. It also states that its Web site will contain links to “Democratic and progressive organizations.” Id. It “intends aggressively to support progressive candidates and causes at all levels.” Id. at 7.

In short, Fired Up’s self-avowed purpose is to elect Democratic candidates to office, and indeed, to solicit campaign contributions for Democratic candidates. These purely partisan goals may be appropriate for a political organization, but they do not qualify a group as a “press entity.”

My reflections on the partnership issue were posted here and here. The fact contributions can be made by partnerships is only dispositive of the request if you think the $2,100 contribution limit is no obstacle. But it is.

On the “press exemption,” what this comment advocates is a purpose test for whether an entity is a bona fide press entity. If its purpose is political, that’s not press. The commenters seem stuck on awarding the press exemption based on the character of a group, not the attributes of the activity.

But, under existing law, a publication can be exempt, even if it is controlled by a candidate, political committee, or party. The FEC’s regulations require more of such an entity (its coverage must be bona fide news and give reasonably equal coverage to the opposition), but doesn’t exclude it wholesale from consideration. 11 CFR 100.132.

Of course, Fired Up! promises no such thing — but Fired Up! ISN’T owned or controlled by a candidate, political committee, or party. Now, perhaps the reform lobby think Fired Up! SHOULD be a political committee (given its overtly political posture), and they hint at that possibility. But even in that extreme case, the comment doesn’t acknowledge what exempt activities are available to even the most overtly partisan political committees.

UPDATE: The CLC & Co. Comments are here.

Comments enabled! (If you’re still awake).

A Friend of the Skeptic writes:

When you think about it, there is a link between Sorrell and the Anna Nicole cases. Both involve (roughly) … expenditure limits. Anna Nicole’s case demonstrates the pellucid logic of Buckley that contribution limits can be de facto expenditure limits!

I am sure Ms. Smith could also teach us all a thing or two about coordination. Or facilitation, for that matter.

Comments . . . enabled. Be appropriate!

Senator McCain has written the House Administration Committee opposing an internet exemption in campaign finance law. Courtesy of Democracy 21’s email today, here are the guts of the letter (I’ll add a link to the letter when I find one):

I strongly support free speech on the Internet–but this is not free speech, this is paid speech, potentially paid for with unlimited corporate and union contributions to state political parties, and that is a loophole that BCRA firmly closed and which Congress should not rashly re-open. As I stated above, I have, and will continue to urge the Commission to exempt bloggers internet speech from campaign finance regulations. But the proposed exemption in H.R. 1316 would not only allow state parties to spend unlimited soft dollars on Internet advertising to influence federal elections, but also would allow federal candidates to request and coordinate such advertising directly with corporations, labor unions, and wealthy individuals. Just as it is possible to communicate over the Internet at very low cost, it is also possible to spend millions of dollars for Internet activity to influence federal elections–and political parties, corporations and unions should be using federal ‘’hard'’ dollars when they do so in order to avoid the resurrection of the corrupt soft money system Congress shut down only three and one half years ago.

Understand? Sure.

The point left unexplicated, is how the old FECA terms like “contribution” and “expenditure” apply to political speech on the Internet. “Exempting bloggers” sounds nice - except we don’t know who McCain thinks “bloggers” are, or what he thinks an “exemption” is. The questions haven’t changes in the many months of this debate: may incorporated bloggers talk about politics freely? How may blogger use corporate facilities, or the facilities of educational institutions? May group blogs talk about politics without becoming political committees? How will links be treated and valued? Republication? How about the Halli-blogger? Is he exempt?

In fairness, legislation that simply reinserts the BCRA-related Internet exemption doesn’t solve these issues, either, but at least Congress would be making a stand for deregulation, and that itself might have an effect on how these other questions are answered. McCain, for his part, has no appetite for deregulation, as we know.

UPDATE: The Campaign Legal Center has the letter.

The New York Times editorialized today about the Supreme Court’s review of the Vermont expenditure case, the Wisconsin Right to Life case, and Anna Nicole Smith’s assets. (HT How Appealing)

Of the first two (which sadly are the cases most closely related to this site’s topic) the Times says:

Vermont is the only state that has taken the laudable step of limiting not only contributions to campaigns, but candidates’ spending as well. Spending limits for candidates are an important part of an effective campaign finance system. The absence of such limits gives an unfair advantage to wealthy candidates, who can spend vast amounts of their own money.

The presence of such limits gives an unfair advantage to incumbents, who need not buy publicity and name recognition. But nevermind. The Times continues,

… The Vermont law’s supporters hope that the court will use the new case to rule that spending limits can be constitutional. Such a ruling would be great, but that hope may be unduly optimistic.

“Great” ?! Is that a technical term? Is it possibly to be any more shallow and unenlightening. Onward . . .

The Court also agreed to hear a second campaign finance case. In it, a single-issue interest group in Wisconsin is challenging the McCain-Feingold law’s limits on its ability to buy political ads in the weeks leading up to an election. The challenge is an attempt to create a loophole that would allow special-interest money to play a bigger, and corrupting, role in elections. …

Loophole? Or preserving the constitutional liberty of a group to talk about an elected official? And how is allowing Wisconsin Right to Life to speak independently “corrupting” unless that term is defined as “something we don’t like.” What’s the problem with being “single issue?” You can’t just toss this stuff out there, unexplained, can you? Maybe it is just me, but this entire editorial reads like a Daily Show parody.

Comments enabled here, too.

The Houston Chronicle reports. Says the Chron:

The indictment alleges that DeLay conspired with two of his political associates, John Colyandro of Austin and Jim Ellis of Virginia, to convert $190,000 in corporate money into individual campaign contributions through a transfer of funds using the Republican National Committee.

Soome of my thoughts about the problems with the money laundering metaphor are here and here. How the prosecutors in this case think they can get criminal charges to stick when these funds trading practices were engaged in regularly pre-BCRA and tolerated by the FEC is beyond me. Sure, Texas law isn’t federal law, but how do you show criminal intent? This is just nuts.

UPDATE: Bloomberg’s coverage is here.

Comments Enabled!

Citizens for Responsibility and Ethics in Washington, a/k/a CREW, has released its report listing the sins of the Thirteen Most Corrupt Members of Congress. I’ll save you the trouble of clicking the link and list them. They are: Rep. Roy Blunt (R-MO); Rep. Randy Cunningham (R-CA); Rep. Tom Feeney (R-FL); Rep. William Jefferson (D-LA); Rep. Marilyn Musgrave (R-CO); Rep. Bob Ney (R-OH); Rep. Richard Pombo (R-CA); Rep. Rick Renzi (R-AZ); Rep. Charles Taylor (R-NC); Rep. Maxine Waters (D-CA); Sen. Conrad Burns (R-MT); Sen. Bill Frist (R-TN) and Sen. Rick Santorum (R-PA).

You might wonder about the Republican to Democrat ratio of the list. But of course there couldn’t be a partisan purpose to a CREW-funded effort. CREW is, after all, a tax exempt 501(c)(3) prohibited by the IRS from engaging in partisan activity.

Of course. Take for example, the alleged ethics violations of Senator Rick Santorum, who — coincidentally, of course — happens to be a prime target for Democrats in 2006. CREW says this about Santorum:

Since the 2001-2002 school year, at least three of Sen. Santorum’s children have attended a Pennsylvania cyber charter school in Penn Hills, PA, costing local taxpayers about $67,000, although the Senator and his family spend most of the year in Virginia. … Two days before he introduced a bill that would benefit private national weather companies, the Senator’s political action committee, America’s Foundation, received a $2,000 donation from the chief executive officer of a leading weather data provider located in State College, PA., called AccuWeather, Inc.

So, because the Senator enrolled his children in a charter school at his official residence (as a Senator he also has a place in the DC metro area - find me one that doesn’t) and received a contribution under the legal $5,000 limit from an individual whose company, (as well as that company’s competitors) could benefit from a weather data bill — he’s one of the most corrupt members of Congress? Really? Then, we should declare victory over corruption and throw a party.

Who’s on the CREW crew? A number of hard-working and prominent Democrats, it appears. Now, of course party affiliation is not available on-line, but biographical and campaign donor histories are. Moreover, the group’s filing with the IRS are here (registration required).

What we learn from all this is that Melanie Sloan, Executive Director, has had a career on the Hill working for prominent Democrats, as has spokesperson Naomi Seligman, formerly of Media Matters who has also donated to Democrats. Among the group’s officers, directors, and key employees are Daniel Berger, a prominent Philadelphia attorney and active Democrat (and 527) donor, Mark Penn, prominent Democrat pollster, and Donna Edwards, Executive Director of the ARCA Foundation who, according to donor records also gives to Democrat committees and candidates.

Where does CREW get its money? Who knows? Unlike a 527-exempt group or a federal or state political committee, that donor information isn’t publicly available. What we can tell, from Part IV-A of their IRS Form 990 is that CREW is funded by large donations from “persons” who are not governmental entities or “publicly supported” organizations.

So, CREW can file suits based on public donor records against entities like Westar, TRMPAC, or whatever hapless Republican member catches their fancy, but itself is insulated from such scrutiny.

Is CREW a vehicle for soft money to influence the political system? Well, quite possibly yes. Would it be interesting to compare CREW’s donors with a list of Democrat soft-money contributors of years past (NOT George Soros, that’s so 2004) . . .? Of course.

Would I ordinarily defend the right of such donors to be free from such scrutiny? Yes. BUT the problem here is that CREW seems to be using tax-exempt money to smear Senator Santorum, for reasons that only make sense if one takes partisan politics into account. Generally, groups should have greater rights to speak in partisan politics than they now have, and donor disclosure under the existing laws is too invasive. But in our legal system groups have never enjoyed the right to use tax-preferred dollars in partisan activity. Maybe if our laws were more straightforward and sensible, CREW’s crew would have a more reasonable vehicle available to them.

Even hung over, I would never write this, taken, without editing of any sort, from Democracy 21s press release yesterday (in which they vow to fight for the right of the government to regulate democracy, naturally). Here it is:

Democracy 21 will join with others involved in the successful legal defense of the McCain-Feingold law to participate in these two cases in order to ensure that longstanding and well-established precedents to protect against the corruption of democracy are not overturned or undermined by a Supreme Court currently in transition.

I am defeated by the relentless march of prepositional phrases.

Actually, it could be made worse, now I think about it. It could start: “Others involved in the successful blah blah will be joined by Democracy 21 . . .”