Disclosure Gets Another Chance in Court

A federal case may once again uphold the power of citizens to hold secretive political spenders accountable.

August 14, 2017

Since Citizens United was decided in 2010, political groups have raised and spent hundreds of millions of dollars, and they have often skirted the law by keeping their donors secret. At the same time, three of the six members of the Federal Election Commission (FEC) have, notoriously, declined to go after violators. When the FEC doesn’t act, the law allows citizens to step in and ask a court to declare the correct interpretation of law and order the FEC to conform. But a federal trial court recently refused to do so, expressing an extremely deferential regard for the FEC’s decisions.

That case is now on appeal before the Court of Appeals for the D.C. Circuit. Its outcome will say a lot about whether people will be able to hold secretive political spenders accountable and get information they’re entitled to about who is writing seven-figure checks to support which candidates and which interests candidates may therefore be inclined to favor.

The dispute centers on a $4 million ad campaign targeting a raft of congressional contests in 2010. Starting shortly after the Citizens United decision, a group calling itself the Commission on Hope, Growth, and Opportunity (CHGO) bought a series of ads urging voters to “pull the plug” on certain incumbents — election ads where a sponsor is typically required by law to name its donors. But CHGO has shown determination to keep its donors secret.

Even the Citizens United majority that unleashed unlimited political spending like CHGO’s said that disclosure of donors was crucial to democracy. As Justice Kennedy explained, disclosure gives potential voters “the information needed to hold corporations and elected officials accountable for their positions and supporters.” This is not a new idea: Over a century ago, Justice Louis Brandeis famously proclaimed that “sunlight is said to be the best of disinfectants.” But spenders have found some major loopholes for avoiding transparency. One is the route that CHGO took: register as a “social welfare organization” under the tax code and promise that the group’s primary purpose is not political activity.

That promise didn’t fit with CHGO’s actions. The FEC investigated CHGO (though it never punished them), and after the agency issued a subpoena, CHGO was forced to turn over documents including a memorandum that revealed its plan to target certain senate races using “direct, express advocacy.” Then it spent almost all of the money it raised, more than $4 million, on ads in at least 15 congressional races.

The FEC’s investigation was in response to a complaint by Citizens for Responsibility and Ethics in Washington (CREW), a nonpartisan watchdog that promotes ethics in government. After the FEC informed CHGO that it would soon vote on whether there was reason to believe CHGO violated the law, the group quickly dissolved and the people involved denied playing a significant role in its activities. Yet instead of requiring that CHGO disclose its donors (or assess any punishment), three FEC Commissioners refused to go further, claiming (among other things) they were uncertain about the law and that it would be hard to enforce the law against CHGO since it disbanded. This is a common problem: Four votes are needed for action at the FEC, but, as the Los Angeles Times described it, the agency is “worse than useless” because three Commissioners “have, in recent years, said no to virtually any kind of enforcement against donors and candidates.”

Because the FEC did not act, CREW asked the federal trial court to require the FEC to enforce the law against CHGO. But the court dismissed the case — applying a “highly deferential standard” the court accepted the three non-enforcing Commissioners’ claims that it would be difficult to enforce the law against CHGO because it had dissolved. The problem is that the court didn’t examine for itself how difficult it would be to penalize CHGO’s founders and operators, concluding that because three Commissioners said it would be difficult, “it does not matter . . . [if] the FEC could have obtained a remedy.”

Yet if courts accept such claims of difficulty in enforcement without examining them in detail, claims like CREW’s will never succeed — the three non-enforcing Commissioners will keep the FEC from acting, keep private citizens and groups from helping enforce the law, and will encourage likeminded groups to dissolve as soon as an election is over. Further, courts accepting the Commissioners’ position so readily won’t even decide the legal issues that arise, meaning the law will not be clarified and the Commissioners can continue to use the same excuse.

The FEC could and should have done more, including requiring the people behind CHGO to disclose the group’s donors. Fortunately, the U.S. Court of Appeals for the D.C. Circuit now has a chance to vindicate the power of citizens to stop shadowy political groups from ignoring the law with impunity.

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