February 26, 2015

February 26, 2015 | Testimony on Legal Issues

Advance Notice of Proposed Rulemaking on Aggregate Biennial Contribution Limits

Testimony before the Federal Election Commission
February 11, 2015
Hans A. von Spakovsky
Senior Legal Fellow
The Heritage Foundation
Introduction

My name is Hans A. von Spakovsky.[1] I am a Senior Legal Fellow in the Edwin Meese III Center for Legal and Judicial Studies at The Heritage Foundation. The views I express in this testimony are my own, and should not be construed as representing any official position of The Heritage Foundation.

As you are aware, I served as a commissioner on the Federal Election Commission (FEC) in 2006 and 2007. I have jointly filed a comment on this Advanced Notice of Proposed Rulemaking (“ANPR”) in my personal capacity along with three other former commissioners: Lee Ann Elliott (1982–2000), Bradley A. Smith (2000–2005), and Darryl R. Wold (1998–2002). We have a combined 30 years of FEC experience administering and enforcing federal campaign finance laws.

The ANPR requests comments on whether revised regulations should be issued for earmarking of contributions, affiliation factors, joint fundraising committees, and disclosure requirements in light of the U.S. Supreme Court’s recent decision in McCutcheon v. FEC. The ANPR also asks whether the FEC should “make any other regulatory changes.”

In a separate statement, Commission Chairwoman Ann M. Ravel urges the FEC to re-examine “the Commission’s approach to the Internet and other emerging technologies,” which has nothing to do with the McCutcheon decision. She mistakenly claims that the current regulation regarding campaign activity on the Internet “does not make sense” and turns “a blind eye to the Internet’s growing force in the political arena.”[2]

Taking each of these in turn, the Earmarking Regulation, 11 CFR §110.6, defines “earmarked” as meaning “a designation, instruction, or encumbrance, whether direct or indirect, express or implied, oral or written, which results in all or any part of a contribution or expenditure being made to, or expended on behalf of, a clearly identified candidate or a candidate’s authorized committee.” This regulation is more than sufficient to prevent earmarking—in fact, it is a wide-ranging regulation that has been successfully enforced by the FEC and in federal court.[3]

The FEC Affiliation Regulation, 11 CFR §100.5, provides an extensive list of ten factors considered by the FEC in determining affiliation. That 10-factor test prevents affiliated organizations from circumventing base contribution limits, and there is no evidence that affiliated organizations have been able to avoid compliance.

The FEC regulation on joint fundraising committees, 11 CFR §102.17, is comprehensive in outlining the rules, limits, and restrictions on such committees, which were specifically authorized by Congress.

Although McCutcheon noted that one of the options with regard to joint fundraising committees would be to limit the size of such committees, the FEC does not have the authority to do so. In fact, the opinion specified that such a limit could be implemented “if Congress [not the FEC] believes that circumvention is especially likely to occur through creation of a joint fundraising committee.”[4] Congress has not chosen to do so.

Instead, Congress recognized the important associational rights of political parties and their candidates that are protected by the First Amendment. The FEC has no authority to issue regulations that would restrict such transfers or otherwise limit and interfere with the statutory system that Congress laid out for joint fundraising committees.

Finally, the proposal to regulate political speech on the Internet is profoundly misguided and poses a serious threat to free speech. The FEC has no authority to regulate political speech simply because it is a “growing force in the political arena.”

A proposal that would implicate the First Amendment and greatly expand regulation into an area that has been regulated only lightly or not at all should come from Congress, not the FEC. And it is worth noting that Congress, well aware of the Commission’s appropriate “hands off” approach for a decade, has not passed such legislation.

This proposal to regulate political commentary on the Internet would take the FEC into an area far outside of its authority. It has no relevance to the only type of corruption in the campaign process the Supreme Court has said Congress can permissibly target, which is “‘quid pro quo’ corruption.”[5] That such commentary might influence elections or election officials “does not give rise to such quid pro quo corruption.” The government and specifically the FEC cannot “seek to limit the appearance of mere influence or access.”[6]

Candidates running for federal office must disclose any payments to Internet websites to post political advertising for their campaigns. That is all that is needed.

Claims about the supposed dangers of so-called dark money connected with political commentary on the Internet are unproven, undocumented speculation and conjecture. As the Supreme Court warned in McCutcheon, we “have never accepted mere conjecture as adequate to carry a First Amendment burden.”[7]

Chairwoman Ravel claims that in today’s world, “the distinctions between the Internet and other modes of communication are not what an earlier group of Commissioners may have anticipated” when the Internet regulation was issued in 2006. With all due respect, I was on the FEC at the time and that claim is completely wrong.

In fact, modern technology has led to a Renaissance of ordinary citizens being able to influence public debate in the political arena. Anyone with access to a computer or smart phone can publish political opinion, social commentary, YouTube videos, or tweets on important issues and public policy problems at little cost.

The FEC noted this at the time, concluding that the

Internet has changed the way in which individuals engage in political activity by expanding the opportunities for them to participate in campaigns and grassroots activities at little or no cost and from remote locations. Accordingly, in the N[otice of] P[roposed] R[ule]M[aking], the Commission proposed new rules to extend explicitly the existing individual activity exceptions to the Internet to remove any potential restrictions on the ability of individuals to use the Internet as a generally free or low-cost means of civic engagement and political advocacy.[8]

There is no question that requiring government registration and reporting by the thousands of online bloggers, websites, commentators, podcasters, and kitchen table journalists and reporters would not only burden their First Amendment right to speak freely, but would be entirely impractical for the FEC. It simply does not have the resources or time to regulate such voluminous activity—it is unfeasible, and would invariably lead to the charge of selective, politically motivated enforcement.

It would create a huge group of violators who would have no idea that there was a reporting requirement, much less how to do it correctly. Such regulation could end up “seriously restricting participation in the democratic process,” something the Supreme Court warned against in McCutcheon.[9]

It would raise the dire specter of a federal agency monitoring everything that is being said on the Internet, something that should scare every American.

This agency, particularly its general counsel, is well aware of how many times the FEC has been in court over the years over claims that it violated the standards for agency rulemaking set out by the U.S. Supreme Court in 1984 in Chevron v. Natural Resources Defense Council.

There is no evidence in the record that the current regulations are inadequate, that they are being circumvented, or that there are substantial problems with noncompliance.

Without such evidence, any changes in the applicable regulations, particularly any further limiting of constitutionally protected political activity would be arbitrary and capricious, a clear and obvious violation of the Chevron standard.

The FEC’s current regulations on earmarking, affiliation, joint fundraising committees, disclosure, and the Internet are more than sufficient to carry out the intent of Congress. As the Supreme Court noted in McCutcheon, the “intricate regulatory scheme that the Federal Election Commission has enacted…limits the opportunity for circumvention.”[10]

These regulations do not need to be revised and the FEC should not attempt to further restrict core First Amendment activity on the Internet.

The ANPR should be withdrawn.

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The Heritage Foundation is a public policy, research, and educational organization recognized as exempt under section 501(c)(3) of the Internal Revenue Code. It is privately supported and receives no funds from any government at any level, nor does it perform any government or other contract work.

The Heritage Foundation is the most broadly supported think tank in the United States. During 2013, it had nearly 600,000 individual, foundation, and corporate supporters representing every state in the U.S. Its 2013 income came from the following sources:

Individuals 80%

Foundations 17%

Corporations 3%

The top five corporate givers provided The Heritage Foundation with 2% of its 2013 income. The Heritage Foundation’s books are audited annually by the national accounting firm of McGladrey, LLP.

Members of The Heritage Foundation staff testify as individuals discussing their own independent research. The views expressed are their own and do not reflect an institutional position for The Heritage Foundation or its board of trustees.

About the Author

Hans A. von Spakovsky Manager, Election Law Reform Initiative and Senior Legal Fellow
Edwin Meese III Center for Legal and Judicial Studies

Related Issues: Legal Issues

Show references in this report

[1] The title and affiliation are for identification purposes. The staff of The Heritage Foundation testify as individuals discussing their own independent research. The views expressed here are my own, and do not reflect an institutional position for The Heritage Foundation or its board of trustees, and do not reflect support or opposition for any specific legislation. The Heritage Foundation is a public policy, research, and educational organization recognized as exempt under § 501(c) (3) of the Internal Revenue Code. It is privately supported and receives no funds from government at any level; nor does it perform any government or other contract work. Heritage is also the most broadly supported think tank in the United States, with nearly 700,000 supporters in every state, 78 percent of whom are individuals, 17 percent are foundations, and 5 percent are corporations. The top five corporate givers provide The Heritage Foundation with 2 percent of its 2011 income. A list of major donors is available from The Heritage Foundation upon request.

[2] Statement of Reasons of Vice Chair Ann M. Ravel, In the Matter of Checks and Balances for Economic Growth, MUR 6729 (Oct. 24, 2014).

[3] See, for example, FEC v. National Republican Senatorial Committee, 966 F.2d 1471 (D.C. Cir. 1992).

[4] McCutcheon, 134 S.Ct. at 1458-59.

[5] McCutcheon, 134 S.Ct. at 1450.

[6] McCutcheon, 134 S.Ct. at 1450-51.

[7] McCutcheon, 134 S.Ct. at 1452.

[8] Internet Communications, Federal Register, Vol. 71 (April 12, 2006), pp. 18589 and 18603, Notice 2006-8, Federal Election Commission.

[9] McCutcheon, 134 S.Ct. at 1442.

[10] McCutcheon, 134 S.Ct. at 1447.