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Recently a couple of stories broke about attempts to bring disclosure back into the political fundraising process. The first was about a draft executive order that will make it harder for federal contractors to use campaign finance vehicles like American Crossroads GPS to support candidates without disclosing that fact. The second article covers DCCC chairman Rep. Chris Van Hollen's (D-MD) suit against the FEC as part of an attempt to get that very same group (Crossroads GPS) to disclose its donors. 

Neither article mentions the larger context:

In 2010, a Republican filibuster doomed the DISCLOSE act in the Senate. The DISCLOSE act was a response to the Supreme Court's decision in Citizens United v FEC, and would've enacted the disclosure requirements explicitly called for by Justice Anthony Kennedy in his majority opinion. Republicans killed the bill because they knew disclosure would limit the amount of money they could raise through vehicles like Crossroads GPS. There are plenty of corporations out there that support Republicans, but not all of them are looking to be Target

With the Senate deadlocked, the FEC seemed like another route for protecting disclosure. Unfortunately, it's also paralyzed. By law, the FEC is composed of 3 Democratic and 3 Republican comissioners. As in the Senate, the Republican members of the FEC are hostile to anything that might increase disclosure and bring transparency into the system. So the FEC remains deadlocked (for more on exactly how/why this is happening, see the link above).

That context is important because, when the legislative and regulatory routes are closed down by Republican obstruction, only the courts and executive branch remain. Any right-wing vitriol directed against these measures that doesn't acknowledge the GOP's role in closing off all other routes is an attempt to deceive the audience.  

The issue of disclosure is of critical importance to our democracy. Think of it this way: speech, as most of us understand it, is associated with identifiable voices. Accordingly, if money is speech, we need to know who is speaking. When that link breaks down, it's hard for voters–and the reporters they depend on–to tell what interests are moving through our political process. The advertisements run by Mom 'n Pop Apple Pie Shop could be a underwritten by money from Big Pie, and there'd be no way for anyone to know. Ultimately, there's no way to make an informed decision about who to vote for if you don't and can't know who's backing them.

One option is to take money out of politics, but I'm not sure there's an effective way to use politics to keep money out of politics. If you accept the proposition that interest groups can affect political outcomes, then it seems only natural that they'd work to ensure their main avenue for exerting that influence isn't cut off by an act of Congress. Even if you're willing to assume a perfect piece of campaign finance legislation, you still run into the problem that the law is constantly evolving. A decision down the road that couldn't possibly have been forseen can punch a hole through even the most well-crafted campaign finance law. In fact, we just saw that very thing happen with the Citizens United decision that undermined years of precedent and opened huge gaps in McCain-Feingold. 

That reality is why ActBlue is so important. We're taking the most settled aspect of campaign finance law (the right of individuals to give to candidates) and using it as a way to demonstrate that small donors can have a powerful voice in our politics. By disclosing those donations, we're working to remove the stigma of political giving and make it an easy and regular part of American life. In the end, we're working to restore the very confidence in our political system that Republicans are actively undermining in search of an ever larger, ever less accountable grip on our political system.

Five conservative justices on the Supreme Court appear poised once again to strike down a law favored by the campaign finance reform community. Late last month, the Court heard oral arguments in the case McComish v. Bennett, which involves the matching funds provision of Arizona’s public financing program, a measure intended to protect participating candidates from the threat of being outspent by privately funded opponents. The provision is in many ways similar to the federal Millionaire’s Amendment, which operated to increase contribution limits for publicly funded candidates facing an opponent who is self-financed, until it was struck down by the Court in 2008. And this case comes on the heels of the most notorious campaign finance case decided by the Supreme Court in recent memory, Citizens United v. FEC, in which the conservative majority struck down laws limiting corporate spending in elections, permitting them to spend unlimited amounts of money in support of candidates.

Campaign finance reform has been getting a substantial black eye at the hand of the Court lately, and the McComish case will most likely cause this trend to continue. The effect of these cases on public opinion hasn’t yet been definitively measured, but these cases have forced states such as Connecticut to rethink their approach to public financing. And if the Arizona law is struck down in McComish, a number of states around the country will be forced to take legislative action to replace or abandon similar provisions in their public financing schemes. With each change, political leaders are forced to resubmit their argument to the electorate for why public financing of campaigns is a worthy cause in an environment of increasingly high-profile criticism compounding severe budgetary concerns.

The particular variety of public financing at issue in McComish provides a grant of government funds to a candidate in exchange for a ban on private contributions to that candidate, effectively creating a spending limit as the candidate is not permitted any other source of campaign funds. For over thirty years, virtually all of our presidential campaigns have been funded this way. But President Obama opted out of the public financing system in the 2008 election, and is likely to opt out once again in 2012, because the amount of the grant has not kept pace with the cost of campaigning. The Arizona matching funds provision is one response to this problem: Rather than providing a larger grant, the government provides additional 1-to-1 matches for every dollar spent by an opponent over the amount of the initial grant. Like the Millionaire’s Amendment, this approach attempts to deal with the competitive limitations of public financing only in the event that an opponent takes advantage of this limitation. It is the reactive nature of these provisions which has led to all of the trouble public financing has had with the Constitution.

The prospect of being outspent by an opponent is a real threat to the attractiveness of a public financing program. And if participation is viewed as a disadvantage, that could mean the end public financing since it is a voluntary program (the Supreme Court has long held that spending limits are only constitutional if voluntary). But attempts at addressing this shortcoming on a candidate-by-candidate basis, rather than rethinking the system itself, have proven counterproductive. In the case of both the Millionaire’s Amendment and Arizona’s matching funds, the result has been unstable public financing regimes which ultimately cause embarrassment in the highest court in the land. It is becoming clear that selectively using government grants to compensate for the spending disadvantage inherent in such a public financing program will not pass constitutional muster. The answer lies in rethinking public financing systems entirely to bake competitiveness right in.

Mechanisms for financing campaigns which rely on public grants alone suffer from an additional infirmity: They do not promote participation in the political process among the citizenry. It is convenient, then, that there is (at least) one common solution to both problems. Permitting candidates to receive a mixture of both public and private funding prevents corruption and gives non-traditional candidates the boost they need in public grants — either in the form of a lump sum payment or as matching funds for small-dollar private contributions — while also avoiding the potential competitive disadvantage. Public matching funds for small-dollar contributions to a publicly funded candidate (as opposed to matching the spending of a privately funded opponent) gives all publicly funded candidates the means to be competitive, and leaves it to the candidate to decide whether to increasing her spending in the event of a well-funded challenger. The sponsors of the Fair Elections Now Act, which would provide for public financing of congressional campaigns, have embraced just such a solution, as have many states and municipalities around the country. And the Supreme Court has already given the constitutional stamp of approval to just such a matching funds provision in the presidential public financing program, so there is little likelihood that this approach is vulnerable to a court challenge.

Public funds used to match private small-dollar contributions increases the impact of private funding by ordinary citizens without any risk of corruption. This encourages more participation by those citizens and solves the competitiveness problem. More profoundly, this hybrid approach does not foreclose one of the most meaningful avenues citizens may employ to express their opinions on matters of public concern, such as collective bargaining rights in Wisconsin, defending the legitimacy of our first African-American president, and marriage equality. Incorporating private campaign contributions into a system of public financing — or rather, not walling publicly funded candidates off entirely from non-corrupting forms of private financing is the best way to ensure that campaign finance reform will no longer be kicked around by the Supreme Court. Fortunately, it will also make public financing a more perfect system, incorporating the best of both worlds.

Guest Post by Steve Gold, General Counsel for ActBlue

Stemming the growing tide of money in politics has become a fool’s errand. Recent opinions out of the Supreme Court have made it clear that the entrenched conservative majority have every intention of expanding the scope of constitutionally protected spending in campaigns, which means even more advertising by independent groups. And the Court’s attitude towards political money has now trickled down to the FEC, which is effectively on strike. Commissioner Donald McGahn, the ideological leader of the deregulating Republican commissioners, recently spent 45 pages (.pdf) excoriating what he considers his Democratic colleagues’ overzealous regulation of political activity going back years. Bolstered by opinions from the Roberts Court, McGahn principally argued one overarching point: The FEC is not permitted to exercise their judgment.

Under the law, the FEC may regulate campaign advertising only if the ad expressly advocates the election or defeat of a federal candidate. The statement issued by McGahn — and by extension the other Republican commissioners, who so often follow his lead — makes it clear that he (and they) will block the enforcement of rules on the books which instruct the Commission to consider contextual factors when trying to determine whether it contains express advocacy, not just the words or images within the four corners of an advertisement. McGahn believes that the rule should be that, unless a special interest runs an advertisement containing the “magic words” listed in Buckley v. Valeo (vote for, elect, support, etc.) or their “functional equivalent,” then the FEC has no business regulating it. Insert advertisement; check for magic words; out pops regulation. Or not.

The problem with this approach is that IBM recently demonstrated (although they may not know it) that the vast majority of political spending will fall outside the rule, and thus, regulation. Some very smart engineers at IBM worked for years developing a very smart computer named Watson that could compete with the very smartest Jeopardy contestants. Like McGahn’s “four corners” rule, initially the engineers programmed Watson to rely on millions and millions of “rules” in order to reason out the answers to questions: water is wet; parents love their children; you smile when you’re happy. They quickly found that, unlike the best Jeopardy players who answer correctly 90% of the time, Watson could only find the right answer 10% of the time by relying on matching the magic words with the rules. It wasn’t until the engineers allowed Watson to look for patterns in multitudes of old Jeopardy questions, providing the context needed to decode a Jeopardy clue, that Watson managed to perform like a real contestant and defeat two of the greatest ever to play the game. No simple rule could ever have provided Watson with the key to that lock.

The essence of a Jeopardy clue, and of political advertising, is complex language: puns, double meanings, allusions. Candidates and their surrogates campaign in poetry, but the Supreme Court and the FEC have said campaigns must be regulated in prose. The inevitable result is that campaign finance reform will only ever be able to restrict a very small portion of the spending done by forces which distort our political discourse, at least until there is a significant change in personnel on the Court. The obvious answer, as Yale Law professor Heather Gerken argues, is to focus on “leveling up” and “using politics to fix politics.” Rather than attempting to keep corrupting money out of the system, we should increase the amount of productive money in the system to neutralize that unproductive money. Exciting new approaches in this vein have been suggested and even introduced in Congress, such as four-to-one matches of small-dollar contributions to publicly financed candidates.

But the potential also exists today — without a federal program that would have to get through a Republican-controlled House and survive future attempts at legislative defunding or dismantling (such as the Presidential public financing system now faces) — to achieve this leveling up through greater engagement and smarter fundraising within the existing private system. For example, in the past few weeks activists and organizers fighting to preserve collective bargaining rights in Wisconsin have taken to the Internet and used the tools we offer at ActBlue to generate twenty-five thousands plus contributions, totaling more than half a million dollars. These contributions came from ordinary people using the existing campaign finance rules to stand up to the Koch brothers’ back room plot to hijack Wisconsin public policy. That is a force that neither requires government approval nor is at the government’s mercy; in fact, it’s protected by the Supreme Court! It’s democracy in its purest form, and it can save our political system.

There are many different approaches to using politics to fix politics, and there will certainly be many more great ideas to come. For decades, conservatives have been working diligently to chip away at the lines drawn by campaign finance reformers to keep money from corrupting our democratic system. Clearly, this conservative effort has gained considerable momentum on the Supreme Court and at the FEC of late, and their momentum is not likely to be reversed anytime soon. That is why now is the perfect time to harness that very momentum and use it to usher in the next big thing in campaign finance reform.

Guest post by Steve Gold, General Counsel at ActBlue

Tie votes split 3-3 along party lines* have become par for the course at the Federal Election Comission (FEC), which requires a four vote majority to take any action. In the latest deadlock, the FEC failed to take up the task of making rules to comply with last year's Supreme Court decision in Citizens United v. FEC. The result has been increasing uncertainty about campaign finance rules, as well as a Wild West environment where Sean Hannity is permitted to use his position as host of a radio program (paid for by Clear Channel Communications) to openly solicit contributions (.pdf) for a Republican candidate.

Following the Citizens United decision that struck down several campaign finance regulations related to corporate speech, the FEC needed to officially remove these regulations from the books through a formal rulemaking process. They attempted to begin that process late last month.

The Democratic commissioners offered a proposal (.pdf) suggesting that the public be allowed to weigh in on whether the FEC should also implement new regulations to fill in the gaps created by the Supreme Court's decision that corporations could run political ads. Should the public have a say as to whether current disclosure rules require something more than disclaimers like, "Paid for by Americans for Mom and Apple Pie" on political ads run by shell entities created by corporate interests? The Republican commissioners said no, accusing the Democratic commissioners of holding the process of eliminating the defunct regulations hostage to their quest for more regulation of speech.

Who is at fault? Observers of the FEC have long argued that the Republican commissioners are stonewalling any effort at enforcing the law. Republican commissioners and their supporters have begun firing back, saying that everyone agrees these old regulations must be taken off the books, and if the Democratic commissioners would leave it at that there would be no deadlock. After the old regulations are struck from the books, Republicans say the new regulations sought by the Democratic comissioners could be taken up in a separate rulemaking process.

It's an insincere position for many reasons, not the least of which is the Republican commissioners' deeply-held belief that there should be no such additional regulation; one GOP commissioner was quoted as saying, "The last thing we need is even more regulation." Even if the newly sought regulations were included in a separate rulemaking process, the Republican commissioners have signaled they would again vote as a bloc to prevent the process from going forward. The Republican commissioners are hiding behind their anti-regulatory ideology as an excuse to deny the public an opportunity to exercise their First Amendment rights.

There is no harm in leaving the old regulations on the books. Eventually, the regulations need to be taken off of the books, but that's merely a housekeeping matter. When the Supreme Court overruled the regulations in question the FEC immediately (a year ago now) issued a statement saying it would not seek to enforce them, a position that they have abided by. The feigned urgency of removing these regulations is a symbol of the Republican commissioners' desire to deregulate our political system and nothing more; as the same GOP commissioner put it, this is a rare opportunity to shrink the Code of Federal Regulations, as though the existence of a regulation is reason enough to abolish it. In contrast, the Republican commissioners' vote to block necessary new regulations comes with a substantial cost: it leaves corporations free to game the system of existing disclosure requirements in order to clandestinely impact our elections. We saw Target attempt to do so in Minnesota last year, and other corporations that we haven't found out about yet (and maybe never will) surely did the same.

Disclosure is the lifeblood of our campaign finance laws. There is a clear need to adjust the campaign finance disclosure regime in response to the introduction of corporations into the campaign finance business, courtesy of the Supreme Court. The FEC, with three Republican commissioners dead set against any new regulation, appears unable to meet this challenge. What to do about their inability to act will be the topic of a panel I am planning to moderate entitled, "The FEC: Friend or Foe?" at this year's Netroots Nation convention June 16-19 in Minneapolis. A group of experts and practitioners before the FEC will discuss what's causing the deadlock and how to address it. If you'll be at Netroots Nation, keep an eye out for the panel; and if you aren't yet planning to attend, hopefully I've convinced you to stop by and find out the rest of the story.

*By law, the FEC is composed of three Democratic commissioners and three Republican commissioners.

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