November 20, 2007
Corporate Funded Sham Issue Advocacy Will Soon Hit Election 2008; FEC Votes to Adopt Modified Version of the Lenhard Amendment for WRTL; Rejects Extension to Disclosure Provisions
I don't yet have a copy of the text as finally adopted, but I understand that the Lenhard amendment (see here), with a tweak related to the non-safe harbor portion of the test, was adopted by the FEC. The FEC also voted 4-1 to make this an exemption that applies only to the question of whether corporations or unions can pay for the ads with general treasury funds. Only Commissioner von Spakovksy voted in the end to extend this to the disclosure requirements. (Commissioner Mason initially supported this position too, but changed his vote in the end).
So what does this mean? The worst outcome, as I argued with Richard Briffault here, would have been to extend the exemption to the disclosure requirements. That option failed.
But we now have a very, very broad exemption related to corporate and union spending. To make things clear, the following three examples, which I blogged about last week, will fall into the safe harbor for ads that can be paid for with corporate or union treasury funds:
"Call Mitt Romney and tell him more of our soldiers shouldn't die in an unnecessary war in Iraq."
"Call Rudy Giuliani and tell him that his support for gay rights is ruining the moral fabric of this country."
If those ads also mention a candidacy (e.g., "Call Senator and Presidential candidate Obama...."), then they are out of the safe harbor because they mention a candidacy. But the funder of the ad can still make an argument with the FEC that the funder is entitled to an exemption and can pay for such communications with corporate or union treasury funds.
My prediction is that most corporations or unions (or, more likely, the organizations they give to) will run ads that fit safely in the safe harbor. There won't be a need to go out of the safe harbor to run hard-hitting and effective election-related ads subject to the exemption.
The FEC will have to deal with ads out of the safe harbor coming from two classes of corporate and union entities: (1) entities represented by people like Jim Bopp who will set up test cases to push the law further; and (2) entities that don't understand how easy it is to comply with the law through using the safe harbor.
While the Lenhard version will create some uncertainty on the edges, it is not fair to blame the agency for creating a wide loophole. As I've argued in great detail here, that's exactly what Chief Justice Roberts and Justice Alito were trying to accomplish in the principal opinion in WRTL.