Response to Testimony of Bradley M. Smith to the House Committee on Oversight and Reform

On February 6, 2019, the House Committee on Oversight and Reform conducted a hearing focused on the ethics reform provisions in Title VIII of the For the People Act of 2019, also known as “H.R.1.” One witness, Bradley M. Smith of the Institute for Free Speech, instead focused his testimony on the key campaign finance reforms found in Titles IV-VII of H.R.1. The Brennan Center strongly disagrees with all of Mr. Smith’s criticisms. The following are responses to his key factual and legal assertions:

February 6, 2019
  1. H.R.1’s provisions overhauling the dysfunctional Federal Election Commission (FEC) draw an appropriate balance between making the Commission work and safeguarding against partisan overreach.
  • Mr. Smith’s criticisms of the FEC overhaul provisions ignore the extent to which the Commission as presently constituted is not fulfilling its mission.
    • Enforcement.
      • As a report compiled by the office of Former Commissioner Ann Ravel documents, the Commission today deadlocks on the vast majority of significant enforcement cases. In most cases, staff do not even get the chance to investigate serious alleged violations. While there are also many non-deadlocked votes, most concern routine matters (e.g., to close the file after a deadlock).
        • The Commission also takes far too long to resolve cases, which often linger on its docket for years. For instance, as of late 2015, there were still a number of high-profile cases from the 2012 cycle that had not been resolved.
      • Rulemaking and Advisory Opinions.
        • The Commission’s rulemaking process has virtually ground to a halt. It took the Commission more than five years just to delete the two regulations invalidated by Citizen United. During that time, the Commission repeatedly deadlocked on proposals for a more comprehensive rulemaking to address the effects of Citizens United.  Even a minor rulemaking to put better disclaimers on Internet ads like those Russia used to meddle in the 2016 election has been stalled for months.
        • Instead of rulemakings, the Commission now develops the law through one-off “advisory opinions.” These afford virtually no opportunity to build a factual record for regulatory decisions.
        • Moreover, according to the Brennan Center’s calculations (to be released in a forthcoming paper), deadlocks on advisory opinions are also skyrocketing.
      • Management.
        • Multiple senior positions at the agency are vacant. There has not been a permanent General Counsel in more than five years.
        • The agency’s rank-and-file staff have some of the lowest morale in the federal government, documented in a scathing 2016 inspector general report.
  • H.R.1 provides a sensible, nonpartisan solution.
    • Giving the FEC five instead of six members would not make the Commission partisan.
      • Most independent agencies are made up of a majority from the president’s party. Some other law enforcement agencies, including the Department of Justice, are led by a single official whom the president can fire at will.
      • In contrast, H.R.1 would not give the President’s party control of the FEC. The bill limits both major parties to two seats and requires at least one commissioner to be a political independent.
      • Mr. Smith suggests that the independent would inevitably be a partisan in disguise, but offers no support for this assertion. In fact, H.R.1 provides a specific safeguard against such an appointment, by having a bipartisan advisory panel selected by congressional leaders make public recommendations to the president about who to nominate.
      • If partisanship is still a concern, there are easy ways to write stronger independence requirements for the fifth commissioner into the text of the Act.
      • It also bears mentioning that H.R.1 would not allow the FEC itself to issue civil penalties in most instances. Instead, the agency would have to sue in federal court, as current law provides, creating an additional check on partisan abuse.
  • H.R. 1 will allow every president to have a say in the Commission’s makeup.
    • The use of staggered six-year terms for FEC commissioners means that every president will have the opportunity to name multiple commissioners.
    • It is true that the provisions governing the first three years of the revamped FEC’s existence given the president who term begins in 2021 a small amount of extra power in selecting commissioners. If these provisions are objectionable they are easy to fix with minor changes.
  • The new FEC chair will not be an “election czar.”
    • She or he will continue to have only one vote on matters of substance. As noted, the FEC chair will have less power than the heads of most other independent agencies.
    • The point of a single chair is to have clear accountability for management decisions like the budget, IT, and personnel policies (except hiring the general counsel, which would require a majority vote).
    • Management of the Executive Branch, including independent agencies, is ultimately the president’s responsibility, which is why the president should select the chair.
  1. H.R. 1 contains important provisions to shore up rules governing coordination between candidates and outside groups.
  • Again, Mr. Smith ignores a very real problem, which is that current rules permit virtually limitless coordination between candidates and outside groups that can raise unlimited contributions.
    • Gaps in current rules have permitted the rise of shadow campaigns –  outside groups that work closely with candidates and can raise limitless funds. Every presidential candidate but one in the 2016 race had a shadow campaign they helped establish, for which many of them actually raised money. Importantly, shadow campaigns are not just PACs—many candidates have also used 501(c)(4) dark money entities.
    • Current rules are so weak, they have been interpreted to permit a candidate to literally appear in an outside group’s campaign ad without the ad being deemed coordinated.
    • The Supreme Court has long recognized that coordinated campaign spending is as useful to a candidate as cash. Without strong coordination rules, limits on direct contributions to candidates are virtually meaningless for sophisticated players.
  • The suggestion that these provisions may be unconstitutional is unfounded.
    • Mr. Smith suggests that coordination rules cannot be applied to spenders other than political committees. However, the Supreme Court has long held that campaign expenditures by anyone that are coordinated with a candidate count as contributions to that candidate.
    • When the Court invalidated limits on corporate campaign spending in Citizens United (a ruling not limited to political committees), it made clear its ruling was based on the presumption that this spending would be truly independent.
    • The PASO [Promote Support Attack Oppose] standard H.R.1 uses for judging whether an ad is a campaign ad derives from McCain-Feingold and was upheld by the Supreme Court in McConnell v. FEC. The Court declined to revisit this portion of McConnell as recently as 2017.
    • The “coordinated spender” provisions in H.R.1 identify circumstances under which actual, specific ties between a candidate and group make it likely the group will have inside information, such that its spending will be as valuable to the candidate as cash. They are not analogous to a blanket presumption that all political party spending is coordinated regardless of the actual circumstances, which the Supreme Court has disallowed in Colorado Republican Party v. FEC
    • The Act contains an express exemption for exchanges of information as part of legislative or policy discussions, so the suggestion that these provisions might be overbroad is a nonstarter.
  • The relevant provisions are necessary, and consistent with regulatory trends in the states.
    • Non-PAC dark money groups have spent almost $1 billion on federal campaigns. Exempting them from coordination rules would create an enormous loophole.
    • The provisions in H.R.1 have already been enacted by multiple jurisdictions—including states like California, New York, Minnesota, and Connecticut and major cities like New York City and Philadelphia. Nothing in the Act breaks new ground relative to what is already happening in the states.
  1. H.R. 1 provides for sensible fixes to campaign disclosure rules.
  • Mr. Smith and others have been objecting to disclosure laws and asking courts to strike them down for decades.
    • These arguments have failed in court (Citizens United embraced disclosure as an important safeguard by an 8-1 vote) and in the court of public opinion, where disclosure is overwhelmingly popular.
  • H.R.1’s provisions are reasonable responses to pressing challenges that do not unduly burden individual speech.
    • The disclosure provisions of the Act effectively deal with the problem of secret money. While it is often difficult to tell who is giving to dark money groups, it is clear that most of their funds come from deep-pocketed corporations and individuals. There is evidence that some of that money is even coming from foreign sources who are barred from contributing.
    • The dearth of transparency for campaign ads over the Internet has opened up additional vulnerabilities to foreign meddling in our campaigns, as evidenced by Russia’s use of Internet ads to interfere with the 2016 election. The disclaimer and new public file requirements in the Act will help address this problem, without barring anyone from speaking.
    • There is no evidence that large numbers of ordinary Americans contribute to dark money groups to fund campaign ads. In any event, none of HR1’s new transparency requirements prevent anyone from speaking, and courts have already held that persons who can demonstrate that they will face harassment or reprisals as a result of their political activity are entitled to exemptions from disclosure.
  • Mr. Smith’s objections to new rules for paid Internet ads are factually inaccurate and/or misleading.
    • The Act specifically does not cover unpaid postings on an individual’s own website or email, as Mr. Smith suggests. It is limited to “paid Internet and digital communications.” The Act also contains strong media exemptions consistent with current law.
    • The “public file” requirement for online platforms applies only to the very largest platforms, who receive more than 50 million unique visitors per month (Facebook, Twitter, Google, etc.). These platforms themselves have given no indication they think these requirements are burdensome. In fact, major platforms like Twitter and Facebook already support the legislation from which these provisions are derived, the Honest Ads Act, S.1989 (115th Cong.).
  1. H.R.1 would lift up the voices of middle and working class Americans through public financing.
  • Public financing programs like those proposed in H.R.1 work.
    • A key provision of H.R.1 would match small contributions to congressional candidates with public funds. The cost of implementing such a system for Congress would be modest-- less than $1 per citizen per year over the next ten years. Small donor matching has existed for decades in New York City. The Brennan Center’s analysis has shown how it breaks down barriers to running for office and expands the donor pool.
    • Vouchers, which H.R.1 would pilot, are also extremely promising. After implementation of Seattle’s Democracy Voucher program, neighborhoods with household incomes below the city median saw a 44 percent improvement in the share of their giving among voucher donors, compared to their share of giving among donors in the mayoral race (which was not eligible for Democracy Vouchers).
    • Mr. Smith’s attacks on these proposals consist mostly of unsupported statements of opinion (a/k/a “first principles”),  speculation, and references to his organization’s selective criticisms of the public financing systems in Maine and Arizona, on which none of the proposals in H.R.1 are modeled.
  • Small donor matching and vouchers do not foster corruption.
    • Mr. Smith repeats his organization’s long-running claims that New York City’s small donor matching system has fostered corruption. The Brennan Center has already debunked many of the examples to which ISF (formerly the Center for Competitive Politics) frequently cites, most of which either did not involve illegal conduct or had no connection to the public financing system.
    • As for the one example Mr. Smith cites from Seattle, the candidate in that instance was not actually allowed to participate in the program. When her misrepresentations were discovered she was prosecuted by the City Attorney’s office.
    • Ultimately, bad actors exist in every system. The key question is whether a public financing program is well-run, with good enforcement mechanisms that will find and stop misuse of public funds. H.R.1 contains extensive provisions to do exactly that.
  • Small donor matching and vouchers are unlikely to exacerbate polarization.
    • Mr. Smith’s backs up his assertion in this regard by pointing to a few polarizing candidates who have been successful at raising small dollar contributions. But many big campaign spenders are also extremely polarized. For instance, in the 2017 battle over Obamacare it was top super PAC donors, not small contributors, who successfully opposed compromise measures that would have been acceptable to moderate Democrats and Republicans.
    • Simply put, aside from the odd anecdote, there is no evidence that small donor matching, vouchers, or any other common form of public financing exacerbates polarization.
    • In fact, surveys indicate that the general public is actually less polarized than political and media elites. Bringing more people into the political process could thus actually reduce partisan polarization.
  • Bottom line: campaigns cost money, which has to come from somewhere.
    • Right now, that money mostly comes from wealthy donors and lobbyists, who will inevitably want a return on their investment. It is well-documented that the donor class does in fact have far more influence over government policy than other groups.
    • Using public funds to lift up the voices of middle and working class contributors is the best way to ensure that politicians will put the needs and priorities of these voters first.