Surge in Political Spending By Outside Groups Draws Scrutiny of Legal Limits

March 21, 2008

For Immediate Release: March 21, 2008

Contact:          Tim Bradley, BerlinRosen Public Affairs, 646-452-5637

                       Mike Webb, Brennan Center for Justice, 212-998-6746

SURGE IN POLITICAL SPENDING BY OUTSIDE GROUPS DRAWS SCRUTINY OF LEGAL LIMITS

New Brennan Center Playbook Explains Impact of Supreme Court Campaign Finance Decision on States and Judicial Elections

New Analysis of Disclosure Requirements & Limits on Corporate or Union Funding of Political Ads

New York - In response to the already record-setting expenditures from outside political groups in the 2008 election cycle, the Brennan Center for Justice at the NYU School of Law today released a comprehensive issue brief on how a 2007 U.S. Supreme Court decision could influence the spending of outside interest groups in the upcoming campaign.

"Spending by independent political groups is already more than double what we saw at this time in the 2004 presidential race," said Laura MacCleery, Deputy Director of the Democracy Program at the Brennan Center. "If spending by outside entities keeps pace with current trends, it could near $1 billion by the end of this election," she said.

Recent news reports are already documenting record spending by 527s, political committees and other entities in the 2008 race, and their promises of future spending in the 2008 election, including:

  • $13.4 million spent in the run-up to Super Tuesday, according to The Politico, much of it on "losing causes";
  • $2 million expected from a conservative 501(c)(4) called "Defense of Democracies" to go after House Democrats opposed to the President's electronic spying plan;
  • Freedom's Watch, a conservative 501(c)(4), has pledged to spend some $250 million opposing the Democratic nominee;
  • $10 million from a conservative group, Citizens United, for movies and advertising for "Hillary: The Movie" and a planned, similar film project targeting Barack Obama; and
  • $200 million from a liberal 527 called the "Fund for America" to "define" Senator McCain in the general election.

"Voters will be exposed to a new and unprecedented level of spending by outside groups in the upcoming election. With this analysis, we hope to shed some light on what the Court did and did not say and to help states and the public understand the limits of the Court's decision," stated Deborah Goldberg, Director of the Democracy Program at the Brennan Center.

The Brennan Center memo, "The Impact of FEC v. Wisconsin Right to Life," explains the net effect of this Supreme Court decision - and in particular - the impact of the decision at the state level. A one-page summary of the memo is also available.

"Since 2002, at least 14 states have enacted laws adapting the federal definitions of political ads to their regulations. Right now, Alabama, California, Kansas, and Oregon, are considering revising or adding new rules. It is important that policymakers realize how vital continuing disclosure of spending is, and that the Court decision last summer has not curtailed the ability of states to ensure that independent spending is transparent to voters," stated MacCleery.

The memo also points out that a subsequent Federal Election Commission (FEC) rule clarifies that ads critiquing a candidate's character or qualifications for office are suspect, while ads that merely discuss legislative issues likely may be paid for with corporate or union funds.

Background

Before the Bipartisan Campaign Reform Act of 2002 ("BCRA" - aka "McCain-Feingold"), campaign finance limits on corporate spending on broadcast ads were largely useless because most courts determined whether an ad was for or against a candidate by asking whether the ad contained "magic words," such as "vote for" or "vote against" that candidate. Ads that were carefully crafted to evade this test, but were still obviously campaign ads for a candidate, were frequently funded from corporate treasuries, creating a loophole that hundreds of millions of dollars of corporate and union treasury funds flowed through.

BCRA closed this loophole by banning the use of corporate and union treasury funds for broadcast ads aired just before a primary or general election that refer to a candidate and target the candidate's constituents.  BCRA also required disclosure of funding for electioneering communications.  The U.S. Supreme Court upheld these provisions in McConnell v. FEC in 2003.

On June 25, 2007, in FEC v. Wisconsin Right to Life, Inc. ("WRTL II"), the Supreme Court held that corporations could pay for ads from the corporate treasury, so long as the ad was not express advocacy or its "functional equivalent." WRTL II did not overturn McConnell or invalidate BCRA, and it kept funding disclosure requirements intact.