Super PACs and Financing the 2012 Presidential Election

On Data, Media, and the Deconstruction of the Administrative State

Why Limits on Contributions to Super PACs Should Survive Citizens United

255 WITH THE ATTENTION OF MUCH OF THE POLITICAL WORLD—especially its campaign finance reform combatants—focused on the pending federal court litigation and expected Supreme Court review of the Bipartisan Campaign Reform Act of 2002 (“BCRA”),1 the Supreme Court on November 18, 2002, quietly granted certiorari in a little-noticed electionlaw case from the U.S. Court of Appeals for the Fourth Circuit, Beaumont v. Federal Election Commission, No. 02-403. Although Beaumont involves the narrowly-drawn issue of whether the Federal Election Campaign Act’s ban on corporate contributions to federal candidates may constitutionally be applied to a nonprofit political advocacy corporation such as the plaintiff North Carolina Right to Life, the Court’s decision in this relatively obscure case could well turn out to be a harbinger of the Court’s ruling in the much-anticipated appeal over the constitutionality of the BCRA itself. At issue in Beaumont is the constitutionality of section 441b(a) of the Federal Election Campaign Act (“FECA”), 2 U.S.C. § 441b(a), along with two implementing regulations adopted by the Federal Election Commission, 11 C.F.R. §§ 114.2(b) and 114.10.2 Section 441b(a) makes it unlawful, inter alia, for “any corporation whatever, or any labor organization, to make a contribution or expenditure in connection with any election” for federal office. Instead, FECA allows corporations and labor organizations to participate in the federal electoral process by permitting them to establish and administer a “separate segregated fund,” more commonly known as a political action committee or PAC, which may solicit funds for political purposes from the corporation’s or labor union’s stockholders, executive employees, and members, and which may in turn use the funds it receives to make either direct contributions to candidates or independent expenditures in connection with federal elections. See 2 U.S.C. § 441b(b). On January 3, 2000, plaintiffs North Carolina Right to Life (“NCRL”), its officers, and an eligible voter (Christine Beaumont) filed suit against the Federal Election Commission (the “FEC” or “Commission”), challenging the constitutionality of FECA’s prohibitions on corporate independent expenditures and contributions both on their face and as applied to NCRL, a 501(c)(4) nonprofit corporation that

Amicus Brief for Scholars Supporting Appellants’ Petition for Initial Hearing en banc, Lieu v. Federal Election Commission, No. 1:16-cv-02201-EGS (D.C. Cir.)

Citizens United, States Divided: Evidence of Elasticity in Independent Expenditures

In the wake of Citizens United, political action committees (PACs) face new sources of competition from super PACs and 501(c)4 social welfare organizations and 501(c)6 professional associations for both donor contributions and electoral influence. Using itemized and summary committee files from the U.S. Federal Election Commission, I investigate factors that predict PACs’ fundraising success between 2008 and 2014 and I examine the impact of PAC contributions on House candidates’ vote margins since 1992. While I uncover evidence of PAC fundraising challenges that may relate to growing competition from other groups, I also find PAC contributions to House candidates have increased in importance. Taken together, the results suggest PACs continue to occupy a vital niche in campaign financing.

Transparent Elections after Citizens United

Confronting the Impact of Citizens United

527 Groups and Campaign Finance: The Language, Logic, and Landscape of Campaign Finance Regulation

Section 527 of the Internal Revenue Code generally exempts political organizations from federal income tax, but not on their net investment income. Section 527(f) imposes a similar tax on the “political activity” of Section 501(c) tax-exempt organizations like trade associations, labor unions, and tax-exempt lobbying organizations, in order to discourage use of such organizations to avoid the Section 527 investment income tax. The definition of “political activity” for these purposes was clarified in 1980, when Treasury promulgated regulations under Section 527(f). These regulations left the door open for future investigation and regulation in the form of “Reserved Regulations,” and Treasury assured taxpayers that any adverse changes to the regulations would be prospective. The Reserved Regulations remain reserved to this day. The “reserved” gap in the regulations did not matter much for the first thirty years. Section 501(c) organizations, which are usually corporations (or unincorporated labor unions), were already constricted in their conduct of Section 527-type political activity by federal election laws that prohibited them from making independent expenditures supporting or opposing candidates. When the Citizens United decision came down, the first wave of reaction concerned the potential uses and perceived abuses of this new freedom by business corporations. Quickly, however, commentators noted that the Supreme Court had also created an opportunity for Section 501(c) organizations—free from income taxation, and (if careful) free from disclosure obligations—to engage in heretofore unprecedented levels of independent, expressly political activity. In theory, Section 527(f) and its Treasury Regulations discouraged this free-for-all by taxing the political expenditures of such entities, except that until the Reserved Regulations are promulgated, any political expenditures “allowed” by the FECA escape the tax. After Citizens United, what is “allowable” has mushroomed: A literal reading of the existing regulations renders all of those independent expenditures untouchable under Section 527(f). While some practitioners and their clients may be willing to operate as if this literal, but in our view unreasonable, outcome is the best interpretation under the circumstances, others may prefer a more nuanced and, we believe, credible approach. In this article we examine the background of Section 527(f) and the Reserved Regulations, summarize the Internal Revenue Service's few attempts to interpret the latter, and then present our proposal for a revised interpretation of the current regulations. We hope this proposed framework will be helpful both to practitioners and counsel who are wrestling with similar matters, and to Treasury, should it decide it is finally time to promulgate the Reserved Regulations.

Few recent decisions of the United States Supreme Court have created quite the stir as did Citizens United v. Federal Election Commission. One reason the opinion had such an effect is that it contains a smorgasbord of business-related legal and political issues, including issues relating to election law, ethics, social responsibility, stare decisis, judicial review, selection of Supreme Court Justices, the definition of free speech, and corporate “personhood” for purposes of the First Amendment. Perhaps surprising for a case involving a lawsuit brought by a nonprofit public advocacy organization against the federal agency charged with enforcing federal election laws, the opinion also ventures into one of the most important current issues in corporate governance, the role of shareholders in the business and affairs of a corporation.

Following the decision by the US Supreme Court in Citizens United v. Federal Election Commission in 2010, questions about the impact of unlimited independent expenditures on state supreme court elections emerged. For those critical of the decision, an area of concern was how elected state courts could be adversely affected by outside group spending. Utilizing data from thirteen states that required disclosure of money spent by outside groups between 2006 and 2016, this research explores patterns of independent expenditures to determine if fears about spending in judicial elections were justified. Using both descriptive and regression analyses, the results indicate that independent expenditures have been on the rise, though important differences exist across the states and by sector. Where states once limited outside groups, their spending activity increased in the post-Citizens United era. Where state laws were not affected, outside group spending declined. The impact of the Supreme Court’s decision therefore is most clearly observed in states that once sought to limit the influence of outside groups.

Q UUR KNOWLEDGE about political action committees (PACs) and their impact on the political process comes from research based on the national level data made available by the Federal Election Commission (FEC). Its focus is expenditures on congressional election campaigns (e.g., Schlozman and Tierney 1986: 221-60; Alexander 1984: 94-106; Conway 1983; andJacobson 1980: 77-104), strategies for political influence (Jones and Borris 1985; Gopoian 1984; and Sabato 1984), and/or their relationsip to political parties (Crotty 1984: 277-83; Sabato 1984: 141-59; Arterton 1982; and Sorauf 1980). Its basic unit of analysis is either PACs categorized by the standard FEC classifications: Corporate, Labor, Trade/Membership/Health, Nonconnected, Cooperatives, and Corporations without stock (e.g., Alexander 1984; Sabato 1984; and Sorauf 1984) or individual PACs within those categories (e.g., the studies in Malbin 1980; and Cigler and Loomis 1983). While state PAC data are available, they remain largely in the neglected world of state Jewell 1982). Rather, scholars assume from national data that state PACs are similar to national PACs in national politics (Sorauf 1984: 39; Sabato 1984: 117-21). Ruth Jones (1984: 183-93) from the extant state PAC data, on the other hand, notes the lack of systematic data comparable to those made available by the FEC at the national level. (See also, Adamany 1980: 588-90; Epstein 1980: 362-64.) From a different perspective, in addition to Jones and Borris (1985) on Minnesota, other scholars have reported research on PAC campaign contributions received by state legislators in Georgia (Binford 1981) and Pennsylvania (O'Connor 1984). Yet, the state data remain fragmentary and inconsistent from state to state for the few states which formally report PAC expenditures and contributions. The detailed Louisiana PAC examination which follows seeks

Constitutional Corruption: The Aftermath of Citizens United v. FEC

In what circumstances should there be a private right of action to sue for violations of federal election statutes. Lying at the intersection of federal courts and election law, this question has arisen in several recent cases, as private litigants have increasingly called upon federal courts to resolve election disputes. The question was before the U.S. Supreme Court in Brunner v. Ohio Republican Party (“Brunner”) which alleged that a state chief election official had failed to follow the requirements of the Help America Vote Act of 2002 (“HAVA”) pertaining to statewide voter registration lists. In a one-paragraph, unanimous per curiam opinion, the Court held that a political party could not sue, reversing the lower courts’ conclusion that there was a private right of action. The brevity of the Brunner decision masks the significance and complexity of the larger question. To be sure, the issue in Brunner was a straightforward one under existing private-right-of-action doctrine, which requires an “unambiguously conferred” individual right. The problem is this doctrine fails to account for the vital role that federal courts play in overseeing elections in the United States, especially in pre-election litigation. The availability of a private right of action is especially critical in election cases – and the existing doctrine especially ill-fitting – for both conceptual and practical reasons. On a conceptual level, election cases typically involve non-individuated or collective interests. It follows that the Court’s insistence on an unambiguously conferred individual right makes little sense in election cases. Existing doctrine is also problematic from a practical perspective, given the absence of any institution besides the federal courts with the ability to ensure consistency in the interpretation of federal law. The ultimate consequence is to leave the interpretation of federal election law in the hands of state and local officials, except in those rare instances when the U.S. Attorney General decides to sue. This is particularly troubling given the partisan affiliation of most state and many local election officials, which creates an inherent conflict of interest and makes federal judicial oversight especially important. The Court’s stringent approach to private rights of action is therefore ill-suited to federal election law disputes, because they involve quintessentially public rights for which a federal judicial forum is essential. In Brunner, the Court failed to consider the distinctive character of election controverises. In fact, both the lower courts and the Supreme Court got it wrong in this case – even though they arrived at diametrically opposite conclusions. The lower courts incorrectly applied existing precedent, which foreclosed private enforcement of HAVA’s matching requirement. But the Supreme Court was also incorrect, in failing to reconsider this precedent to account for the especially important role the federal courts play in electoral disputes. Though faithfully applying existing doctrine, the Court missed an opportunity to correct – or at least limit – a line of precedent that has unfortunate consequences in the realm of election law. The Article concludes that, in the appropriate case, the Court should revisit Brunner and relax the standard for private enforcement of federal election statutes under Section 1983.