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September 21, 2014

Posts by Eliza Newlin Carney

52 Posts

September 18, 2014

Conservation Group to Spend Record $25 Million on Midterms

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The LCV will spend money on the Senate race in Colorado, where Udall is seeking re-election this cycle. (Tom Williams/CQ Roll Call File Photo)

The League of Conservation Voters will spend a record $25 million this cycle, organizers announced Thursday, five times what the environmental group spent on the 2010 midterms.

“We are poised to spend by far the most money we have ever spent in an election cycle,” President Gene Karpinski said in a conference call with reporters.

Most of the money, approximately $20 million, will be targeted to help Democrats running for Senate in Colorado, Iowa, Michigan and New Hampshire. The league’s Alaska affiliate is also backing incumbent Democrat Mark Begich there. Another $5 million will go to assist pro-environment gubernatorial and legislative candidates in tandem with the league’s state affiliates. Full story

McDonnell Appeal Begs Question: What Is Corruption?

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McDonnell is appealing his conviction of 11 counts of bribery, conspiracy and extortion. (Bill Clark/CQ Roll Call File Photo)

As Bob McDonnell’s lawyers gear up to appeal the former Virginia Governor’s conviction on 11 counts of bribery, conspiracy and extortion, federal prosecutors, legal experts and elected officials around the country are all watching closely.

The McDonnell case hinges on a question that goes to the heart of the national campaign finance debate, namely: What is corruption? Must it involve out-and-out bribery — the deliberate exchange of money or favors for official acts? Or can corruption take the form of ingratiation, influence and distortions of public policy?

McDonnell’s lawyers argued during his dramatic public trial that businessman Jonnie Williams Sr. received nothing beyond routine courtesies in exchange for his $177,000 in gifts and loans to the McDonnells. Some experts argue that McDonnell has strong grounds for an appeal, and that his indictment effectively criminalizes politics and constituent service.

But a Virginia jury lost no time indicting McDonnell on 11 criminal counts and his wife, Maureen, on nine, after hearing descriptions of the designer clothes, $6,500 engraved Rolex watch, lakeside vacation, free golf outings, wedding catering and a low-interest loan that the McDonnells received from Williams. Particularly damning was an email McDonnell sent to an aide to discuss Anatabloc, the dietary supplement Williams sought to promote, just six minutes after McDonnell spoke with Williams about a $50,000 loan.

McDonnell’s official appeal must wait until his sentencing in January. The appeals process is likely to drag on for months as it wends through the courts — possibly reaching as high as the Supreme Court. Though the McDonnells were indicted under ethics and not campaign finance laws, the question of what constitutes corruption cuts across both sets of rules. And the Supreme Court has defined campaign finance corruption increasingly narrowly.

In April, McCutcheon v. Federal Election Commission struck the aggregate campaign contribution limits, a court plurality concluded that election laws may only target ‘quid pro quo’ corruption in the form of official acts exchanged for money.

But in a strongly-worded dissent, Justice Stephen Breyer and three other justices objected that McCutcheon flies in the face of previous court rulings, including the high court’s 2002 McConnell v. FEC ruling. That ruling, which upheld the soft money ban enacted with the McCain-Feingold law, concluded that Congress had an interest in preventing more than “simple cash-for-votes corruption,” wrote Breyer. He quoted that 2002 ruling as follows:

“Just as troubling to a functioning democracy as classic quid pro quo corruption is the danger that officeholders will decide issues not on the merits or the desires of their constituencies, but according to the wishes of those who have made large financial contributions valued by the officeholder.”

Indeed, many on Capitol Hill – mostly Democrats but some Republicans, too – complain that the pressure to constantly raise money has contributed to partisanship, gridlock and a sense of disconnect from average constituents.

“It is a very rare exception where there is a quid pro quo – a donation for an action,” Sen. Christopher S. Murphy, D-Conn., recently told CQ Roll Call. “But when you are spending a lot of time with people who believe a certain set of things, it’s hard not to be influenced by that viewpoint.”

Colorado Democrat Michael Bennet sounded a similar note during debate last week on the constitutional amendment that he introduced with Sen. Tom Udall, D-N.M. Turned back on a procedural vote, the amendment would have authorized Congress and the states to limit political spending, contrary to prior Supreme Court rulings.

“The court imagined a world where people with bags of money are wandering around Capitol Hill and only then could you regulate it, trying to get people to do something for them,” Bennet said on the Senate floor. “Ninety-nine percent [of] what happens around here is people trying to keep you from doing something, trying to keep things the same. Trying to keep the incumbent interests embedded in our tax code, in our regulatory code, in our statute book. The Supreme Court was silent completely on that corruption, and I would argue that is at the core of our dysfunction as a Congress.”

Republicans denounced the proposed amendment as a violation of the First Amendment, and as an election year ploy by Democrats, who have railed against large, unrestricted contributions throughout the midterm.

Such anti-big money attacks have failed to resonate much in the past, partly because voters tend to regard both parties as equally reliant on special interests. But there are signs that voters are beginning to pay attention. Advocates of the constitutional amendment delivered thousands of petitions to Capitol Hill and staged events at congressional offices around the country last week.

Virginia voters, too, are taking notice. State legislators may or may not toughen up Virginia’s historically lax ethics rules in response to the McDonnell indictments. (Virginia also imposes no limits on campaign contributions.)

But the scandal has reportedly sent a chill through the legislature, prompting state officials to think twice before taking the lavish gifts that had become routine to doing business in the Old Dominion. Judges and prosecutors will continue to haggle over what constitutes corruption. But jurors — and voters — have a tendency to know it when they see it.

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September 8, 2014

Constitutional Amendment Debate Roils ACLU | Rules of the Game

The emotional debate over free speech versus free political spending, which erupted onto the Senate floor this week, exposes a deep rift on Capitol Hill and at the nation’s leading civil rights group, the American Civil Liberties Union.

“There is a very, very significant divide within the ACLU on this,” said New York University law professor Burt Neuborne, one of six prominent former ACLU officials who wrote to members of the Senate Judiciary Committee on Sept. 4 to publicly denounce the national ACLU’s campaign finance position. The letter was released as the Senate prepared to take up a resolution authored by New Mexico Democrat Tom Udall to amend the Constitution to permit political spending limits, something the Supreme Court has ruled violates the First Amendment.

“While, as present and former leaders at the ACLU, we take no position in this letter on whether a constitutional amendment is the most appropriate way to pursue campaign finance reform, we believe that the current leadership of the national ACLU has endorsed a deeply contested and incorrect reading of the First Amendment as a rigid deregulatory straitjacket that threatens the integrity of American democracy,” read the letter, which was signed by Neuborne, the ACLU’s former national legal director, and by its former executive director, Aryeh Neier, and its onetime general counsel, Norman Dorsen, among others.

In an interview with CQ Roll Call, Neuborne said he spearheaded the letter in response both to a June ACLU letter to the Judiciary panel strongly opposing a constitutional amendment, and to conservative leaders’ tendency to invoke the ACLU in denouncing the amendment. Full story

September 2, 2014

Moelis CEO Donated Thousands to Cantor Before Hiring Him

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(Tom Williams/CQ Roll Call File Photo)

The head of the investment bank that just hired Republican Eric Cantor for more than $1 million a year has been a loyal political supporter of the former House majority leader from Virginia.

Ken Moelis, chairman and CEO of Moelis & Co., gave $5,000 to Cantor’s leadership political action committee, Every Republican is Crucial, just 12 weeks before he reportedly opened talks with Cantor about joining the bank. Moelis also personally gave the maximum $5,200 in this election cycle to Cantor’s campaign committee. Cantor’s new gig as vice chairman and managing director for the bank will earn him $400,000 this year, with a $400,000 signing bonus and $1 million worth of stock.

The Cantor donations were among $100,000 that Moelis gave to Republican candidates and party committees in the 2012 and 2014 election cycles, according to Federal Election Commission data tallied by the Center for Responsive Politics. Full story

July 22, 2014

GOP Struggles With Fundraising for Women’s Initiatives | Rules of the Game

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Capito raised more than her opponent in the race for Senate in West Virginia. (Bill Clark/CQ Roll Call File Photo)

It’s been a promising year for Republican women who have set out to fix their party’s “woman problem,” but not good enough for their bank accounts.

Republicans launched a new crop of super PACs, recruitment programs and messaging campaigns to boost the GOP’s female candidates and win over women who vote. The latest such effort, an unrestricted super PAC unveiled in June by former Hewlett-Packard CEO Carly Fiorina, cleared $1 million in its first four weeks.

“We cannot permit liberal orthodoxy to marginalize women or suppress their enthusiasm for our candidates,” declared Fiorina, chairwoman of the American Conservative Union Foundation, in the mission statement for her new Unlocking Potential Project. The Unlocking Potential PAC’s top donors last month were Marmik Oil Co. President Michael Murphy and his wife, Arkansas designer Sydney Murphy, who each gave $500,000. Full story

July 16, 2014

Reforms May Fade, but Voter Anger Won’t | Rules of the Game

Opponents of big money in politics celebrated some small victories lately: A constitutional amendment to curb campaign spending cleared a key Senate committee and was introduced in the House. And a new “super PAC to end all super PACs” raised $5 million in a matter of weeks.

At first glance, such long-shot causes look inevitably doomed to fail. No one really expects two-thirds of Congress and three-quarters of the states to amend the Constitution in an area as disputed as campaign financing. And numerous super PACs bent on banning unrestricted money have come and gone in recent years, most of them now terminated.

But the latest campaign finance push, however impractical or constitutionally suspect, has tapped a well of voter anger that politicians ignore at their peril. Public disgust with Congress, which according to Gallup now enjoys a record-low 7 percent approval rating, may not impact this fall’s midterm elections. But as erstwhile House Majority Leader Eric Cantor discovered in his stunning loss in Virginia’s GOP primary, voter wrath over big money can exact a political price. Cantor’s primary opponent, tea party Republican Dave Brat, had made the majority leader’s cozy Wall Street and special interest ties a central campaign theme. Brat is now trumpeting the $400,000 he’s raised from small donors as evidence that he’s running a “campaign of the people.”

“People think you can’t win on the basis of this issue, and we want to say, ‘Actually, you can,’ ” said Lawrence Lessig, a Harvard Law School professor who on May 1 founded the Mayday PAC, a crowdfunded super PAC that will back congressional candidates committed to campaign finance changes. “And we want to do it in a way that surprises Washington, inside the Beltway.”

Lessig has already surprised himself and others by pulling in $1 million in the PAC’s first 13 days, then another $5 million by July 4. In an interview with CQ Roll Call, Lessig said he developed his own open source software to raise the money, since the popular Kickstarter crowdfunding tool lacked a platform for political donations. Mayday PAC has now raised $7.7 million of an anticipated $12 million once matching funds from large donors roll in, probably by the end of this month.

If Lessig hits his $12 million target, Mayday PAC will be among the top five highest-grossing super PACs in this midterm. The American Crossroads super PAC organized by GOP operative Karl Rove, for example, raised just $11 million through June 30 of this year, Federal Election Commission records show. Granted, the conservative super PAC’s social welfare affiliate, known as Crossroads GPS, appears to be raising and spending the largest share of the operation’s money in this election.

Still, Lessig’s anticipated $12 million haul is all the more noteworthy given how many super PACs formed with the aim of ending super PACs have fallen flat in recent years. A whole slew of do-gooder super PACs, many of them inspired by comedian Stephen Colbert’s super PAC contests and spoofs, sprung up in 2012. But virtually all of them, from Citizens Against Super PACs to No Dirty Money Elections, raised virtually no money and closed up shop within a year.

An exception is Friends of Democracy, a super PAC headed by David Donnelly, executive director of the Public Campaign Action Fund. That PAC raised and spent about $2.5 million in the 2012 elections, and managed to oust eight of the nine candidates it targeted for defeat. In this cycle, Friends of Democracy had raised $2.5 million through the second quarter, and will announce by the end of this month a new slate of state and federal candidates.

“There’s a tremendous amount of interest in it, and we’re very excited about the work that Mayday PAC and Larry Lessig are doing,” Donnelly said, noting the two PACs do not compete for donors and will coordinate their efforts. “There’s clearly an appetite for expanding this type of work.”

Lessig has generated media buzz and checks thanks in part to his public persona and promotional savvy. An author, progressive organizer and advocate of Internet deregulation, Lessig’s won backing from such Silicon Valley heavyweights as Apple co-founder Steve Wozniak and PayPal co-founder Peter Thiel. His crowdfunding model — donors were told they would get their money back if the PAC didn’t meet its targets in time — went viral to draw in 53,000 contributors.

The constitutional amendment push has also fueled surprising popular support. The amendment proposed by New Mexico Democrat Tom Udall in the Senate and introduced this week in the House by Rep. John B. Larson, D-Conn., flies in the face of more than one landmark Supreme Court ruling. Republicans deride it as a blatant First Amendment violation.

Some campaign finance experts cast the uphill amendment drive as an ill-advised distraction from more pragmatic changes. Lessig’s Mayday PAC, for one, is focused not on amending the Constitution but on such changes as matching small-dollar donations with public funding. Yet proposals to amend the Constitution are now backed by 16 states and 550 municipalities.

“People are really angry about what’s happening in our democracy,” said Margrete Strand, executive vice president of Public Citizen. The push for an amendment is something that average voters can “understand” and “grab onto,” she added.

To be sure, voters are notoriously fickle when it comes to campaign financing. Gallup’s latest polls on the topic found that half of voters support government funding of elections, and 79 percent support limiting campaign receipts and spending. But Democrats’ perennial assaults on big money have repeatedly failed to help them at the polls.

Lessig has set out to prove the issue can fire up voters as well as donors, and Mayday PAC will announce a slate of at least five federal candidates on July 21. Whatever the merits and demerits of various campaign finance schemes, voters will ultimately have the last word.

“The only way to prove this is to do it,” said Lessig. “We can have all sorts of polling and science and focus groups. But the thing that counts in Washington is victory.”

Eliza Newlin Carney is a senior staff writer covering political money and election law for CQ Roll Call.

July 8, 2014

New FCC Disclosures Reveal Underground Election | Rules of the Game

A trove of new public records recently opened up by the Federal Communications Commission sheds light on the ways undisclosed political ads are creating an underground midterm election that’s increasingly hidden from view.

It’s already well known that unreported political spending is rising, thanks in part to Supreme Court rulings that have nullified campaign finance limits on several fronts. As of April 30, undisclosed political spending was three times higher than at the same point in 2012, according to the Center for Responsive Politics.

But new FCC records, which on July 1 vastly expanded the number of TV stations that must post their political ad files online, offer concrete metrics to document what the Sunlight Foundation’s Kathy Kiely calls the nation’s “gross political product.”

“It really has demonstrated how incessant the advertising is, and how much ‘off-the-radar’ political advertising has been spent,” said Kiely, Sunlight’s managing editor.

The Sunlight Foundation played a lead role in urging the FCC to require full online disclosure of political ad buys. Long required on paper, the political ad files were first made available online in 2012 by the four major broadcast affiliates in the nation’s top 50 markets, about 230 stations. Now 2,000 stations are filing disclosures online, virtually a tenfold increase.

With the help of a new tracking tool, researchers at Sunlight and other investigative outfits have started poring over the disclosures. These show for the first time just how much political air time is being bought by organizations that don’t report their activities to the Federal Election Commission — typically tax-exempt social welfare and trade groups that need not reveal their donors.

Among Sunlight’s findings: In the North Carolina Senate contest between incumbent Democrat Kay Hagan and her GOP challenger Thom Tillis, 65 percent of the ads supporting Tillis or attacking Hagan were not reported to the FEC. That’s because the ads, aired on WBTV Channel 3 in the state’s most costly media market, consisted of “issue” messages that didn’t directly advocate for a candidate’s election or defeat.

“Here is one station in one race,” said Kiely. “And if that is indicative, it’s telling us that almost all the early money spent so far is outside money, and that the FEC — the agency set up to create campaign accountability after Watergate — is not seeing half the money that is going into the political system.”

It’s a measure of the trend toward underground political spending that the Crossroads operation launched by GOP strategist Karl Rove is heavily lopsided in this cycle toward its non-disclosing tax-exempt arm. The group’s American Crossroads super PAC and its social welfare arm, known as Crossroads GPS, have together spent and reserved air time for about $23 million worth of political ads over the summer and into the fall, according to news reports and to sources familiar with the organization.

But less than a third of that — $6.5 million — is being spent by American Crossroads, which reports its activities to the FEC. The majority, some $17.3 million, is being spent by Crossroads GPS, which is exempt from disclosure rules.

It’s all legal, because Crossroads GPS and other politically active tax-exempt groups are airing “issue” messages that ostensibly constitute advocacy, not election activity. But such ads can be awfully hard to tell from campaign ads.

One North Carolina spot by Concerned Veterans for America, a social welfare group heavily funded by the billionaire industrialists Charles and David Koch, spotlighted the scandal involving health care delays at the Department of Veterans Affairs. (Hagan has said she supports a bill to address the delays.)

The ad featured an ominous soundtrack, unflattering black-and-white images of Hagan and of President Barack Obama, and a voice-over intoning that Obama “won’t hold the VA accountable,” and that Hagan “can, but she’s done nothing, putting her loyalty to her party and the president ahead of America’s veterans.”

Advocates of the First Amendment argue that such ads are a form of constitutionally protected public education, and the donors behind them have a right to remain anonymous. Outspoken Republicans on Capitol Hill opposed the FCC’s move toward greater disclosure and regard the push for transparency as a move to silence political adversaries and tread on free speech.

But Kiely says the disclosures offer valuable information about the increasingly obscure world of election spending: “I think we know a little bit more about what we didn’t know. There are still too many obstacles between voters and the information they need to make informed decisions at the polls. But this is progress.”

Eliza Newlin Carney is a senior staff writer covering political money and election law for CQ Roll Call.

July 2, 2014

Hobby Lobby Ruling Fuels Amendment Push

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(Tom Williams/CQ Roll Call File Photo)

In its recent ruling to confer religious liberties on closely held corporations, the Supreme Court makes no mention of its 2010 Citizens United v. Federal Election Commission ruling.

Yet the high court’s Burwell v. Hobby Lobby Stores ruling grows directly out of its Citizens United decision to reject limits on independent corporate political spending. And the 5-4 Hobby Lobby ruling deepens the rift on Capitol Hill between liberals agitating for limits on corporate power and conservatives railing against government intrusions on free speech.

Senate Democrats have already scheduled a vote on a constitutional amendment that would give Congress and the states the power to restrict political spending. Such an amendment directly challenges both Citizens United and the court’s landmark Buckley v. Valeo ruling, which in 1976 upheld limits on campaign contributions but found caps on political spending unconstitutional.

The Hobby Lobby ruling has stoked liberal anger over the court’s expanding “corporate personhood” doctrine, which critics on the left argue threatens a host of environmental, civil rights and consumer safety laws. Now some Democrats on Capitol Hill are considering additional amendments that go beyond campaign financing to more explicitly spell out that corporations are not people. Full story

June 24, 2014

Democrats Reintroduce DISCLOSE Act

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From left, Blumenthal, Warren and Whitehouse confer before a news conference Tuesday in the Capitol to reintroduce the DISCLOSE Act. (Tom Williams/CQ Roll Call)

Senate Democrats broadened their assault on unrestricted political money Tuesday, introducing a campaign finance disclosure bill that its authors said will be voted on this year.

Senate Majority Leader Harry Reid had already promised a vote on a constitutional amendment that would let Congress and the states curb political spending. Democrats now plan to also vote on the disclosure bill known as the DISCLOSE Act, which Republicans blocked via filibuster in 2010 and 2012.

“Since the Supreme Court’s disastrous Citizens United decision, a torrent of dark money has swept through our political system, giving corporations and billionaires the ability to buy and sell elections,” said Sen. Sheldon Whitehouse, D-R.I., at a Capitol Hill news conference. Whitehouse was joined by Senate Rules Chairman Charles E. Schumer, D-N.Y., and by Democratic Sens. Michael Bennet of Colorado, Richard Blumenthal of Connecticut and Elizabeth Warren of Massachusetts.

Whitehouse’s reintroduction of the DISCLOSE Act coincides with a multi-pronged push by Democrats and their allies off Capitol Hill to score political points by attacking unrestricted, “secret” political money. Reid levels assaults virtually daily on the billionaire industrialists Charles and David Koch, who have helped underwrite tens of millions in political spending by conservative tax-exempt groups that don’t publicly report their donors.

Senate Democrats are also holding a series of hearings on undisclosed political money and on New Mexico Sen. Tom Udall’s proposal for a constitutional amendment, which would challenge a string of Supreme Court rulings, including the 2010 Citizens United v. FEC ruling to overturn limits on independent political spending.

Republicans have rejected Democrats’ proposed constitutional amendment as a blatant free speech violation, and have launched their own public relations campaign to equate campaign finance disclosure with political intimidation. Asked about allegations that disclosure invites harassment, Whitehouse scoffed that “someone who has the capacity to spend tens of millions of dollars in an election to get their way” need not be “worried about being taunted.”

But Democrats’ first version of the DISCLOSE Act, introduced in 2010, drew fire not just from conservatives but from liberal activists who complained that it would curb constitutionally protected lobbying activities. Democrats narrowed the bill considerably in 2012, and that more-limited version of the DISCLOSE Act was the one reintroduced today.

Asked about Democrats’ own unrestricted political spending Tuesday, Whitehouse said “everyone should follow as much transparency as possible,” but that Democrats can’t “unilaterally disarm.” He added that liberal outside spending might actually help spur GOP support for disclosure.

Democrats at the news conference displayed on a poster board a list of Republican senators who have endorsed disclosure in the past, including Sens. Lamar Alexander of Tennessee; John McCain of Arizona; Mitch McConnell of Kentucky, the Senate GOP leader; Lisa Murkowski of Alaska; and Jeff Sessions of Alabama. Whitehouse also quoted aloud several pro-transparency comments from Republicans, including McConnell.

But the likelihood that Democrats will win GOP support for either their constitutional amendment or the recently-reintroduced DISCLOSE Act remain virtually nil. Tuesday’s press conference came on the heels of yet another politically charged hearing in the GOP controlled House, at which Republicans continued their attacks on IRS officials for mishandling IRS attempts to curb political activities by non-disclosing tax-exempt groups.

Mississippi Runoff Takes Financial Toll on GOP (Video)

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In the Mississippi runoff, McDaniel, above, is seeking the GOP nod over Cochran. (Tom Williams/CQ Roll Call File Photo)

Mississippi’s bruising GOP Senate primary, which voters will decide Tuesday in a runoff (get live results here!), has come at great cost — more than $17 million — to Republicans.

More than 30 Republican-friendly outside groups, from Club for Growth Action to the U.S. Chamber of Commerce, have lavished in excess of $11.3 million on the race, according to the Center for Responsive Politics. That’s almost twice the $6.1 million spent by Sen. Thad Cochran and his tea party challenger, state Sen. Chris McDaniel.

Liberal groups have essentially sat out the Mississippi primary, rated a Safe Republican contest by the Rothenberg Political Report/Roll Call. As of early May, conservative groups had spent three times more attacking one another in primaries around the country than they had against Democratic candidates, according to an analysis by the Center for Public Integrity.

Full story

June 10, 2014

Campaign Finance Hearings Showcase Extremes | Rules of the Game

As Senate Democrats gear up for their third in a series of public hearings on the state of campaign finance, Capitol Hill can expect another made-for-TV performance that’s long on political theatrics and short on policy.

If last week’s Senate Judiciary Committee hearing is any indication, lawmakers and witnesses testifying Wednesday at the Judiciary Subcommittee on the Constitution, Civil Rights and Human Rights will put on quite a show.

At last week’s hearing, which focused as this week’s will on whether Congress should amend the Constitution to permit tighter campaign spending limits, Senate Majority Leader Harry Reid, D-Nev., predictably assailed the billionaire industrialists Charles and David Koch for what he called their “phony organizations.”

Sen. Ted Cruz, R-Texas, countered in ringing tones that the proposed amendment “would give Congress the power to ban books and to ban movies.” He promptly posted his public comments to YouTube in a video titled “Sen. Cruz speaks in opposition to repealing the First Amendment” that has more than 26,000 views.

Sen. Charles E. Schumer, D-N.Y., deplored Cruz’s “overheated rhetoric” and “hyperbole,” but the Texas senator and possible 2016 GOP presidential contender will only have a bigger megaphone this week. He’s the ranking Republican on the subcommittee that’s holding Wednesday’s hearing.

And as Senate Majority Leader Mitch McConnell noted in his rare joint appearance with Reid before the full Judiciary Committee last week, Democrats know full well that a constitutional amendment — which would require approval by two-thirds of both chambers of Congress and three-quarters of state legislatures — is dead on arrival.

“This is a political exercise, and that’s all it is,” McConnell told the Judiciary panel. “The goal here is to stir up one party’s political base so they’ll show up in November, and it’s to do it by complaining loudly about certain Americans exercising their free speech and associational rights, while being perfectly happy that other Americans, those who agree with the sponsors of this amendment, are doing the same thing.”

Indeed, Democrats are as much to blame as Republicans for the triumph of symbolism over substance in the increasingly polarized campaign finance debate. Both sides have staked out positions on either extreme in the long-running dispute over how to balance anti-corruption limits with First Amendment rights.

Having once endorsed full disclosure and even their own constitutional amendment — albeit one more limited than what Democrats now propose — Republicans have mounted a court challenge to one of the few remaining rules left in place, namely the cap on contributions to the political parties. GOP leaders and their conservative allies off Capitol Hill have also launched an aggressive campaign to discredit both the IRS and the Federal Election Commission, and to equate political disclosure with harassment and intimidation.

Democrats, for their part, have embraced an amendment that would dramatically reorder the campaign finance system and raises legitimate constitutional questions. On the surface, the amendment proposed by Sens. Tom Udall, D-N.M., and Michael Bennet, D-Colo., looks simple enough: It would authorize Congress and the states to limit contributions to candidates — something existing campaign finance laws already do.

But the amendment would also empower Congress to limit “the amount of funds that may be spent by, in support of, or in opposition to such candidates.” This flies in the face of the Supreme Court’s landmark 1976 Buckley v. Valeo ruling, which concluded that caps on campaign contributions are constitutional, but that limits on candidate political spending violate the First Amendment.

Lost in the grandstanding by lawmakers on both sides of the aisle is the opportunity to find middle ground on any number of common-sense campaign finance changes that would require no constitutional tinkering.

These include settling tough questions about how aggressively tax-exempt groups may engage in advocacy before they stray into political territory, an area that’s confounded the IRS and where the agency could clearly use some congressional guidance. Congress could also tackle whether the dysfunctional FEC should be overhauled or replaced with a new type of agency that might actually enforce the rules. Or members could work together to free up the state and national political parties to more effectively compete with unregulated outside groups.

Of course, no one expects either Republicans or Democrats to seriously tackle any of these issues. As Election Day approaches, the tit-for-tat over campaign spending versus free speech will only become more politicized. So far, at least, voters aren’t paying much attention. But if and when they ever do, Congress will have two choices: take action on meaningful fixes, or risk paying a political price.

Eliza Newlin Carney is a senior staff writer covering political money and election law for CQ Roll Call.

June 3, 2014

McConnell, Reid Spar Over Campaign Financing

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McConnell, left, and Reid testify during the Senate Judiciary Committee hearing on “Examining a Constitutional Amendment to Restore Democracy to the American People,” focusing on campaign finance. (Bill Clark/CQ Roll Call)

The Senate’s Majority Leader, Harry Reid, and its GOP leader, Mitch McConnell, delivered sharply clashing views of the campaign finance system Tuesday, at a Senate hearing on a proposed constitutional amendment to allow Congress to restrict political money.

“I am here because the flood of dark money into our nation’s political system poses the greatest threat to our democracy that I have witnessed during my tenure in public service,” Reid said during testimony before the Senate Judiciary Committee. “The decisions by the Supreme Court have left the American people with a status quo in which one side’s billionaires are pitted against the other side’s billionaires.”

McConnell, a staunch and longtime opponent of campaign finance restrictions, countered that the Senate resolution on the table is “embarrassingly bad.” Amending the Constitution as proposed would not only “allow the government to favor certain speakers over others, it would guarantee such preferential treatment,” McConnell told the panel. “It contains a provision, not found in prior proposals, which expressly provides that Congress cannot ‘abridge the freedom of the press.’ That’s really great if you’re a corporation that owns a newspaper. It is not so great for everyone else. The media wins and everyone else loses.” Full story

May 28, 2014

Costly Midterms Fuel Hundreds of Joint Fundraising Committees

House and Senate candidates are stockpiling campaign cash for the costliest midterms on record by making good use of the multi-politician war chests known as joint fundraising committees.

Since the Supreme Court’s April 2 McCutcheon v. Federal Election Commission ruling to overturn aggregate campaign contribution limits, 37 federal candidates have set up joint committees to raise campaign cash. The total number of joint fundraising accounts registered with the FEC now tops 450, according to the Center for Responsive Politics.

More specifically:

  • Amid a $12 million ad blitz leveled by GOP outside groups, Sen. Kay Hagan, D-N.C., has helped launch no fewer than 17 joint committees that have collectively netted more than $1 million.
  • Senate Minority Leader Mitch McConnell of Kentucky, whose race could attract as much as $100 million in spending, has a hand in four joint campaign accounts that have raised $3.4 million between them.
  • More recently, Republicans created a new joint committee that will raise money collectively for 10 GOP House challengers and the National Republican Congressional Committee.

Full story

May 20, 2014

Campaign Bitcoins Proliferate, but FEC Rules Unclear

Candidates testing the waters of bitcoin fundraising are following different sets of rules as they go along, a function of both the freewheeling culture of the digital currency world and of mixed signals from the Federal Election Commission.

The FEC approved bitcoin fundraising in a unanimous advisory opinion on May 8, but the agency’s six commissioners immediately began a public dispute over what that decision actually means. At issue is whether digital currency contributions must be capped at $100 per election per donor, or whether candidates, political action committees and parties may accept the virtual currency in larger amounts.

The commission’s three Democrats maintain that they approved of bitcoin fundraising only to the $100 cap, and in a statement cited “serious concerns” about the potential difficulty verifying virtual transactions.

But the commission’s GOP chairman, Lee E. Goodman, countered in his own statement that bitcoins are in-kind donations, and must therefore be capped only at existing contribution limits — $2,600 for a candidate and $5,000 for a PAC per election. “Innovation and technology should not and will not stand idly by while the commission dithers,” he declared.

The upshot is that some political players say they’ll collect large, even unlimited, virtual contributions, and others will be capping bitcoins at $100. The political action committee known as Bit PAC, for one, will take donations well over $100, said its treasurer, GOP election lawyer Dan Backer. Bit PAC operates both a conventional PAC and an unrestricted super PAC, and will therefore take bitcoins donations up to $5,000 in one account, and unlimited virtual donations in another.

“The whole purpose of Bit PAC is to push the envelope” and “to move the ball on the full normalization of bitcoins in campaign finance,” Backer said in an interview with CQ Roll Call. Backer was the first to ask the FEC about bitcoin fundraising last fall. At that time, the commission deadlocked 3-3 and took no action.

By contrast, GOP House candidate Paul Dietzel, a technology entrepreneur running for an open seat in Louisiana’s 6th District, will cap his bitcoin contributions at $100, “just to stay safe.” Dietzel, a free market conservative, posted a neon yellow “Donate Now With Bitcoins!” banner on his website as soon as the FEC issued its May 8 opinion — even though, as Dietzel put it, “it’s still slightly unclear” exactly how bitcoin fundraising will play out.

Rep. Jared Polis, D-Colo., also lost no time collecting bitcoins, and like Dietzel, he will be capping contributions at $100. Other federal candidates accepting bitcoins include Libertarian Jim Fulner, who’s running for Senate in Michigan, and Blaine Richardson, who’s running as an independent in Maine’s 2nd District.

Rep. Steve Stockman, R-Texas, who lost his primary challenge to Sen. John Cornyn in March, was one of several candidates who accepted bitcoins prior to the FEC’s approval. Other bitcoin pioneers include the national Libertarian Party; Darryl W. Perry, a fringe presidential candidate from Alabama; and eight state legislative candidates in California, Maine, Michigan, New Hampshire and Texas.

“The doors are opening instead of closing for the use of bitcoin in order to support candidates,” said Sinclair Skinner, treasurer of the 1911 United Political Action Committee, the first super PAC to accept bitcoins. Skinner called the FEC’s move a “positive step forward in using crypto currency in America.”

“The important thing here is that the FEC actually agreed on the process,” concurred David Mitrani, an associate at Sandler Reiff Lamb Rosenstein and Birkenstock. But Mitrani acknowledged that the FEC’s frequent internal disputes can leave things hazy for political players: “When the commission votes 3-3, what does it mean?”

Goodman downplayed the FEC’s clash over bitcoins, saying it was “like a lot of other areas where there appears to be some philosophical disagreement, or policy disagreement among commissioners.” But Democratic Commissioner Ellen L. Weintraub didn’t mince words: “I think our ability to provide clear guidance is undermined when commissioners take an advisory opinion and say it means something other than what it does.”

Election law blogger Rick Hasen, who teaches law at the University of California, Irvine, summed it up on the day the dispute erupted: “You can bet your bottom bitcoin that Democratic and Republican Commissioners will continue to clash on just about anything controversial coming before the Commission.”

May 8, 2014

FEC Clears Campaigns to Solicit Bitcoins

The Federal Election Commission has unanimously ruled to permit the use of bitcoins for political contributions, a move that lends legitimacy to the virtual currency but leaves unclear how valuable or useful bitcoins will prove to be in elections.

The commission approved bitcoin campaign contributions 6-0 Thursday in response to an advisory opinion request from the Make Your Laws PAC, which promotes direct citizen participation in the legislative process. The FEC had deadlocked on a previous, similar request submitted last year. Full story

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