FEC Adopts Rule to Interpret WRTL

Posted November 20, 2007 by Paul S. Ryan

The FEC today unanimously adopted the substance of a rule interpreting the Supreme Court’s June decision in Wisconsin Right to Life, establishing the contours of a new exemption from BCRA’s “electioneering communication” corporation/union funding restrictions. The Commission then voted 4-1 to apply this new exemption only to the corporation/union funding restrictions and not go further than the Court required by likewise exempting WRTL-type ads from BCRA’s disclosure requirements. (Commission von Spakovsky voted against the motion.)

The new rule is based on Chairman Lenhard’s proposed amendment (criticized here) of “Draft B” published by the Commission’s General Counsel on Friday (criticized here)—with an important amendment offered during today’s meeting by Commissioner Weintraub. Commissioner Weintraub is to be commended for fashioning a compromise that significantly improved a seriously-flawed proposal.

The problem with Chairman Lenhard’s original proposal was that it could have exempted from federal campaign finance law any ad that “focuses on a public policy issue and either urges a candidate to take a position on the issue or urges the public to contact the candidate about the issue”—even if the ad contained all of the “indicia of express advocacy” that was absent from the WRTL ads that the Supreme Court considered. Chairman Lenhard’s original proposed 11 C.F.R. § 114.15 read:

"(a) . . . Corporations and labor organizations may make an electioneering communication . . . unless the communication is susceptible of no reasonable interpretation other than as an appeal to vote for or against a clearly identified Federal candidate.

. . . .

(c)(2) A communication has an interpretation other than as an appeal to vote for or against a clearly identified Federal candidate if it:
(i) Focuses on a public policy issue and either urges a candidate to take a position on the issue or urges the public to contact the candidate about the issue; . . . ."

Commissioner Weintraub proposed an important amendment to this critical provision (above in bold), so that subsection (c)(2) now begins: “Content that would support a determination that a communication has an interpretation . . . .” Commissioner Weintraub’s amendment eliminated the per se determination that ads focused on a public policy issue are exempt and, instead, more accurately reflects the Supreme Court’s approach—considering both whether an ad contains “indicia of express advocacy” and whether the ad’s content is “consistent with that of a genuine issue ad” in determining whether the ad is susceptible of a reasonable interpretation other than as an appeal to vote for or against a candidate.

Though Commissioner Weintraub’s amendment was an important one, many important questions remain unanswered. The rule approved today directs the reader to the Commission’s Web site for examples of ads that are/are not permissible under the new exemption, but the Commission has yet to post such example ads on its Web site. These examples will reveal a great deal about how the Commission interprets its own new rule.

Further, the Commission has yet to produce an “Explanation and Justification” for the new rule, which will invariably shine more light on the Commission’s interpretation of its new rule.
Finally, at least one important question pertaining to disclosure requirements remains unanswered. The rule approved today requires a corporation or union to report the name and address of each person who made a donation aggregating $1,000 or more to the organization “for the purpose of furthering electioneering communications.” It is unclear how the Commission will interpret this requirement. Without strict funding source reporting requirements, wealthy individuals and others will be able to be able to evade disclosure by routing funds through shell corporations (e.g., 501(c)(4) advocacy organizations).

For these reasons, the Campaign Legal Center reserves final judgment on the rule adopted by the Commission today. Only time will tell how the Commission will interpret and enforce its new rule and, consequently, how large the flood of corporation and union dollars into the 2008 federal elections will be.

http://www.clcblog.org/blog_item-194.html