Lyle Denniston’s Take on Today’s DC Circuit Campaign Finance Decision

He concludes:

Aside from its direct impact on the flat ban on contractor contributions, the new decision’s rejection of the First Amendment challenge may have a legal and political effect on two other potential campaign law controversies that have been developing in the Obama administration for several years.

Both of those potential initiatives have been strongly challenged on First Amendment grounds, as potential restrictions on the free-speech aspects of campaign financing.

The first of those possible changes has been under study by President Obama and his White House aides for some time: a plan to issue a presidential order to force business firms doing business with the federal government to disclose publicly all of their political activity.  Although contractors are banned from making direct political contributions to candidates or campaign organizations, they may channel money into politics in other ways..

The second possible revision was a study by the Internal Revenue Service — now suspended, perhaps for an indefinite period, because of political opposition — to revise the rules on eligibility fo tax-exempt status of private groups that are active in funding federal election campaigns.   Current IRS rules allow many such groups to gain tax-exempt status on the theory that they are doing “charitable” work.  The IRS had draft plans to severely restrict that status for such groups.


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