The three-member US Court of Appeals for the District of Columbia Circuit has reversed a lower-court decision that would have potentially forced some outside groups to open their books and reveal dark-money donors—an important legal loss for campaign finance reform, but not one likely to have much of a near-term impact.
The dispute traces back to the bipartisan McCain-Feingold legislation, which unambiguously requires groups making “electioneering communications” to disclose donors. This requirement wasn’t knocked out by Citizens United vs. United States, which did vitiate several other parts of that legislation—in fact, the justices wrote that “disclosure is the less-restrictive alternative to more comprehensive speech regulations.”
The reason this has never happened—why Karl Rove’s Crossroads GPS can still keep its donors secret—is that the Federal Elections Commission issued a ruling in 2007 that created a loophole big enough to drive a dump truck of oil-company cash through. The FEC said that for “electioneering communications”—that is, advertisements run within thirty days of federal primaries or within sixty days of federal general elections, that mention candidates but do not expressly advocate for or against them—outside groups must only disclose donations if the donors explicitly mark the money as intended for political expenditure. Donors naturally just stopped making that explicit, and outside groups continued hiding the cash.
Representative Chris Van Hollen called foul last April and sued the FEC in federal court, saying that the 2007 regulation ignored the spirit of the McCain-Feingold legislation. Earlier this year, a district court judge agreed, and in July, the FEC said it would retroactively enforce the original disclosure requirements until the lower-court ruling was overturned—which, unfortunately, is what happened yesterday.
But at least since July, the FEC has forced a bunch of outside groups to disclose their donors, right? Wrong.
Anticipating the potential court rulings on Van Hollen vs. FEC, virtually all outside money groups made yet another simple side-step around election law. This court case would have closed loopholes around “electioneering communications” only—again, ads that mention candidates but don’t advocate for or against them. A related loophole around “independent expenditure” ads still exists—those are ads that do expressly say a candidate must be elected or defeated. (Though Van Hollen has petitioned the FEC to close that one, too.)
So ironically, by throwing in a few words at the end of a political ad asking voters to take a position on a particular candidate, outside groups were able to avoid any potential fallout from Van Hollen vs. FEC—which has now been shot down by the appeals court anyhow. Josh Israel at ThinkProgress did the legwork and found that every outside group made the necessary adjustments except one: Freedom Path, a Utah-based conservative group that has run ads praising Senator Orrin Hatch and Mitt Romney. That group has, to date, failed to disclose donors as was required by the FEC since July.
The FEC, as is sadly typical because of deadlocked commissioners, has not yet taken any action against Freedom Path.
This headache-inducing game where reformers play whack-a-mole with outside groups scurrying through innumerable loopholes is unlikely to be solved without some larger strokes: either Congressional approval of the Disclose Act, a constitutional amendment overturning Citizens United or breaking the deadlock on the FEC.
For more on electoral reform in the courts, check out Voting Rights Watch's latest on Pennsylvania's voter ID law.