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Analysis

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.