Jeff Patch has a must-read account of the latest affront to unfettered speech on the Internet.  The Federal Election Commission on Wednesday denied a request by the social-media website Facebook that would have allowed the company to sell advertising space to candidates and political parties without requiring the ads to contain a lengthy disclaimer stating who paid for the ad.  Because Facebook ads are so small, the ruling makes them far less practical, in turn making it harder for poorly funded candidates to use Facebook as a cheap way to reach out to voters.

Facebook had argued that their ads should be treated like campaign pens or buttons, which are exempt from the disclaimer requirement.  That wasn’t a bad argument, considering the FEC had ruled less than a year ago that short ads on Google were not required to contain a full disclaimer.  But as Patch reports, the three Democratic Commissioners weren’t buying it this time:

“The Internet is nothing like pens and buttons. It has a range of fabulous capabilities,” said [FEC] Commissioner Ellen Weintraub. “My Facebook app on my phone is really smart . . . I will get a chime telling me that my daughter poked me.”

In the end, the FEC denied Facebook’s request by a deadlocked 3-3 vote along party lines. For the whole story, check out Patch’s great write-up in the Daily Caller.

Congratulations are due to friend-of-IJ Steve Hoersting, who, along with Dan Backer, Benjamin Barr, and the Center for Competitive Politics, just scored an early victory in Carey v. FEC, a challenge to federal campaign finance laws.

For those who aren’t well-versed in campaign finance law, the legal issue in Carey is somewhat arcane; it concerns whether so-called “Super PACs” can establish separate bank accounts that will raise limited funds for the purpose of making contributions directly to political candidates. But even though the legal issue is complicated, the principle Carey vindicates couldn’t be simpler: The Federal Election Commission cannot simply ignore court rulings against it.

The fact is, this case never should have had to go to court in the first place. The plaintiffs, retired Adm. James J. Carey and the National Defense Political Action Committee, wanted to engage in activity that the D.C. Circuit Court of Appeals had already ruled was perfectly legal in a case called EMILY’s List v. FEC.

But things are never that simple when you’re dealing with the FEC, whose business, as the U.S. Supreme Court has recognized, “is to censor.” The FEC refused to give Adm. Carey and his group permission to operate, leaving the court as their only alternative. This is a perfect illustration of what the Supreme Court was talking about in Citizens United v. FEC when it noted that federal campaign finance laws “function as the equivalent of prior restraint by giving the FEC power analogous to licensing laws implemented in 16th- and 17th-century England, laws and governmental practices of the sort the First Amendment was drawn to prohibit.”

Lucky for Adm. Carey and NDPAC, Judge Rosemary Collyer of the D.C. District Court knocked this one out of the park. Judge Collyer thought the plaintiffs’ case was so strong that she granted them a preliminary injunction, which will prevent the government from enforcing the campaign finance laws against them and allow them to speak freely in the 2012 election while the case goes forward.

Judge Collyer’s ruling is notable not just for reaching the correct result, but because it takes the FEC to task for its approach both to regulation and litigation. Her ruling describes the FEC’s unconvincing attempt to distinguish the EMILY’s List case as “plain wrong,” and is particularly critical of the FEC’s “questioning of Plaintiffs’ intentions,” which she concludes “does not well serve the agency or its argument.”

All in all, a great way to kick off the case, which will hopefully move quickly to a final ruling on the merits. Congratulations again to all involved for their hard work.

The full text of the Carey opinion is available here (.pdf).

 

It seems that everyone other than the most devoted supporters of campaign-finance laws thinks that the Justice Department’s indictment of John Edwards is overkill. Mr. Edwards cheated on his wife while she was dying of cancer, then he used over $900,000 given by two campaign donors to cover it up. In the process, he paid off an aide to pretend that he was the father of Mr. Edwards’s love child. It’s behavior that would make even Anthony Weiner blush.

 

But being a creep is not illegal. So why is any of this the government’s business?

 

The short answer is that campaign-finance laws make it the government’s business. Those who are outraged at the Edwards indictment should take note that when we have laws that make helping candidates illegal, prosecutions like this are inevitable.

Be sure to check out the whole thing.

Cato Institute Senior Scholar and noted jazz critic Nat Hentoff makes the case for constitutional protection of anonymous speech:

New York City Comptroller John Liu and New York City Public Advocate Bill de Blasio, last seen here enjoying the finer things in life thanks to excess campaign funds provided by the City taxpayer, announced last week that their efforts to require Sprint Nextel to disclose political spending had taken a step forward. The Pension Funds holds over 8 million shares of Sprint Nextel with an asset value of over $41 million—in other words, Liu controls a big share of the ownership of Sprint.

Why does Liu care about Sprint’s political spending? As Comptroller, Liu has a fiduciary duty to maximize the benefits to the participants of the New York City Pension Funds—namely, current and former New York City teachers, firefighters, and police officers. As a fiduciary, Liu “must discharge his or her duties … solely in the interest of the plan’s participants and beneficiaries. In the discharge of those duties, the fiduciary must act for the exclusive purpose of providing benefits to participants and defraying the reasonable expenses of administering the plan.” 60 Am. Jur. 2d Pensions and Retirement Funds § 437.

It is unclear how forcing companies to disclose their political giving is “act[ing] for the exclusive purpose of providing benefits to participants.” So who does benefit from this effort? The trustees of the New York City Pension Funds are New York City elected officials and the heads of large public sector unions. These folks could certainly find the political spending of corporations to be very interesting, especially if the corporations are funding challengers to these politicians or supporting candidates who take positions with which the public sector unions disagree. Despite the talk about “transparency and accountability,” knowing a corporation’s political spending makes them susceptible to targeted government retribution or union activism and protest.

Liu and de Blasio should not be using the pensions funds of hundreds of thousands current and former employees of New York City to create an enemies list for incumbent politicians and powerful public sector unions.   Perhaps it is time for New York City retirees to remind Liu that, in administering the Funds, his job requires him to keep their financial interests—and not the political interests of New York’s elected officials and union bosses—foremost in mind.

There have been few politicians who have fallen so far and as fast as John Edwards. It is difficult to argue that he did not earn it, either. However, even someone as oleaginous as he does not deserve his latest problem.

The New York Times reports that the Justice Department will soon be indicting Edwards on criminal charges for misusing campaign funds. The indictment will allege that Edwards used money solicited from two wealthy donors to hide his affair and the child he had with his mistress, Rielle Hunter, as well as to pay off an aide to claim to have fathered that child in order to cover for Edwards. The Justice Department is proceeding under campaign finance laws because, as the Times reports, “[t]he money could be considered campaign contributions if prosecutors can show that Mr. Edwards helped orchestrate donations to hide Ms. Hunter or that he knew the money would be used to keep the affair hidden so it would not hurt his candidacy.”

To put it in technical terms, this is nuts. What Edwards did was a lot of things, none of them very nice, but it is a stretch to call them campaign finance violations. Only through a series of ridiculous assumptions can one call the money solicited to pay off his mistress and a fall-guy campaign contributions. Instead, the government’s desire to prosecute him appears to be a radical expansion of what the law considers campaign funds. If this definition sticks, it would give the government enormous power to investigate and prosecute any solicitation of money used to benefit someone who happens to be a candidate, no matter how tangentially connected to the candidate’s actual campaign. One hopes that Edwards will fight, and stop, this effort to expand campaign finance laws to cover monetary transactions that have nothing to do with campaigning.

The last time we wrote about FEC Commissioner Don McGahn, we were reporting the well-deserved rebuke he delivered to “reform” proponent Norman Ornstein in the pages of Roll Call.  As TPMMuckraker reports, McGahn is continuing to speak his mind in response to his critics:

“I feel bad for” the reform groups that call the agency dysfunctional, [McGahn] said. “Much of their life’s work has been rendered irrelevant by a series of stinging court cases.”

The campaign finance lobby is, naturally, offended by McGahn’s blunt statement.  But there is nothing inaccurate about it.  Much of the reformers’ handiwork has been undone over the last five years, and there is no reason to expect that this will change anytime soon.  And although the “reformers” may despair at these developments, we celebrate them as victories for free speech and we applaud McGahn for calling it like he sees it.

My colleague Steve Simpson and I have an op-ed in The Wall Street Journal today discussing TV funnyman Stephen Colbert’s latest riff on Citizens United v. FEC.  As some of our readers may know, Colbert has been trying to start a federal PAC to satirize the ease with which “unlimited corporate money” can be collected in the wake of Citizens United.  But Colbert is quickly discovering that campaign finance law remains incredibly difficult to navigate, particularly for political novices:

“Why does it get so complicated to do this? I mean, this is page after page of legalese,” Mr. Colbert lamented. “All I’m trying to do is affect the 2012 election. It’s not like I’m trying to install iTunes.”

Well, that’s pretty much what the nonprofit group Citizens United said to the Supreme Court in the case that Mr. Colbert is trying so hard to lampoon.

Be sure to read the whole thing.

Update:  Professor Rick Hasen, proprietor of the invaluable Election Law Blog, offers his thoughts on our op-ed:

Though I don’t agree with these gentlemen on the substance of campaign finance law, I have been thinking similar things about some of the unintended consequences of the Colbert gambit.  This is a lot more dangerous for campaign finance law than Colbert’s Hail to the Cheese candidacy from 2008.