February 22, 2008

Have I Made a "Surprising and Elemental Mistake" About the Pro-Clinton 527?

Yesterday I noted Bob Bauer's very strong words in a memo and follow up conference call with reporters. How strong were the words? See here:

    "This is not a case where there's shades of gray. This is not a case where there is room for argument. This is not a case where they will be spared by some version of Philadelphia lawyering," Obama lawyer Bob Bauer said during a conference call with reporters.

    "This is absolutely a cold, calculated move to violate the law to the benefit of the candidate and to assume that any penalty will be so deferred into the future that the immediate benefits can be taken now without consequence."

    "The calculation on their part is that the penalties will be bearable for them," he added. "But I think in the end, the penalties will be unbearable for them. This is going to wind up being a very, very miserable experience for the people involved. Maybe, in some cases, life changing."

At issue is whether the pro-Clinton 527 will be fined for knowingly acting like a political committee but not registering as such and, most importantly, for taking contributions in excess of the $5,000 contribution limit applicable to such committees.

The 527 has claimed it is not a political committee under FECA, and in any case under the Supreme Court's recent WRTL case, it will be entitled to an exemption. The group will not engage in express advocacy. In supporting Clinton it will focus "on issues of importance to the middle class -- the economy, jobs, education, healthcare and the mortgage crisis."

It seems to me that this is quite a plausible argument under WRTL and the follow up FEC regulations (though I am no fan of the case or the regulations) . "Tell Hillary to Keep Working" is exactly the kind of election-related speech that the Roberts Court seemed to bless with a huge exemption in WRTL. True that was an exemption from the limits on corporate and union spending on election related speech, not on political committee status. But it seems to me that the same logic applies: if you can't limit corporate and union spending on these "issue ads" unless they are demonstrably the "functional equivalent of express advocacy," you cannot limit the activity of groups engaged in "issue advocacy," such as with $5,000 contribution limits, unless they too engage in the "functional equivalent of express advocacy."

In today's post, Bob Bauer takes me to task. He says I "seem[] to believe that Wisconsin Right to Life, which put constitutional limits on corporate and union speech regulation, swept away or at least softened up the Federal Election Commission rules directed at individual activity through 527s. And he appears to suggest that I once expressed the same belief." The former is correct. Whether Bob also stated as such in his blog posts, I can't be sure. (His blog does not appear to have a search function. [UPDATE: I made a surprising and elemental mistake about the "search function." It is at the top right of Bob's blog.]

But I do know that Bob is very sympathetic to the argument that even political committees engaged in express advocacy should have a constitutional right to spend unlimited sums independent of candidates. That's at issue in the SpeechNow case currently working its way through the courts. Certainly if political committees will be able to take unlimited sums, this 527 group can as well.

I can see Bob's argument on the other side. The FEC's penalties of the 527s from the 2004 election send a message that groups with a major purpose of supporting candidates for federal office through issue ads will be treated as political committees, and until there's a constitutional ruling otherwise, the contribution limits are the law. I'm not saying Bob is wrong. But there are infinite shades of gray here, not the certainty that Bob has of a day of reckoning.

If there are other campaign finance lawyers out there who think the issue is as certain as Bob says, let me know.

Posted by Rick Hasen at February 22, 2008 09:20 AM