As the war in Ukraine grinds on, a look at the economic battlefield and how the conflict might permanently reshape the global economy. Diane talks to Sebastian Mallaby, senior fellow for international economics at the Council on Foreign Relations.
Guest Host: Indira Lakshmanan
Election finance experts predict the 2016 presidential race could see a record $10 billion in campaign spending. Much of the growth in spending is coming from outside groups untethered by the U.S. Supreme Court’s Citizens United decision. But the head of the Federal Election Commission, tasked with keeping watch over campaign finance, says the agency is in a state of extreme dysfunction. She fears the FEC won’t be able to curb 2016 abuses. Many Republicans say the concerns are exaggerated. We explore the role of the FEC and what changes – if any – are needed.
- Eric Lichtblau Reporter for The New York Times.
- Jan Baran Head of the election law group at Wiley Rein LLP, former general counsel to the Republican National Committee and author of "The Election Law Primer for Corporations."
- Trevor Potter Former chair of the Federal Election Commission; president and general counsel of The Campaign Legal Center; and head of the political activity practice at Caplin & Drysdale.
- Ann Ravel Chair of the Federal Election Commission.
MS. INDIRA LAKSHMANANThanks for joining us. I'm Indira Lakshmanan out of Bloomberg News sitting in for Diane Rehm. She's having a voice treatment. The head of the federal election commission says the agency isn't doing its job and might not be able to curb abuses of spending and disclosure by candidates or groups supporting them in the 2016 campaign season. The FEC has six commissioners, three Democrats and three Republicans and some see that down-the-middle makeup as a recipe for paralysis.
MS. INDIRA LAKSHMANANOthers say the agency is operating just as it should. Joining me in the studio to talk about the FEC, Jan Baran, head of election law group at Wiley Rein and former general counsel to the Republican National Committee, Eric Lichtblau of The New York Times and Trevor Potter, former chair of the Federal Election Commission and president of the Campaign Legal Center.
MS. INDIRA LAKSHMANANBut first, joining us by phone from her office in Washington, Ann Ravel. She's chair of the Federal Election Commission. Thank you so much for joining us, Ann.
MS. ANN RAVELThank you very much. I'm glad to be invited to participate.
LAKSHMANANIn an interview with The New York Times, you said that the FEC is worse than dysfunctional. What did you mean by that?
RAVELWell, actually, before I answer that question, let me say at the outset something that is concerning me a little bit about the title of the program. I actually do not believe that the issues at the FEC are partisan, although it is now manifested in that way. Instead, it seems to be a difference of views about the very purpose of the agency and that is essentially why it is dysfunctional.
RAVELI think that the FEC plays a really important role in our democracy. It was established to insure disclosure and enforce the laws so that the public could have trust and confidence in the political process as well as to provide guidance to the political community about how to comply with the law. But because we have been unable in many significant cases to provide that guidance and to actually enforce the law, I think that we are failing in our function.
RAVELYou know, if I could take another minute and tell you that I don't believe that it is a partisan issue because I know that in the past, over the years, there has been willingness on the part of all commissioners to find common areas of agreement and I, myself, when I arrived at the commission in 2013, I was committed to working with my fellow commissioners to find resolutions to matters so that the community could have clarity.
RAVELAnd what has happened, however, from November 2013 to July 2014, only the Democrats have crossed the aisle to provide the fourth vote in an enforcement matter to dismiss. And in that time period, there were 25 cases dismissed so they weren't investigated and of those 25 matters, I was the fourth vote on 20 of those cases. And I also -- I'm sorry, go ahead.
LAKSHMANANWell, I was just gonna say, in effect...
RAVELI didn't mean to have a soliloquy here.
LAKSHMANANThat's okay. So in effect, the partisan divide that you're talking about, you're saying there's not a partisan divide, but, in fact, there's actually a fundamental disagreement between the Republican and the Democratic commissioners over the mission of the FEC. It's...
RAVELI believe that's true.
LAKSHMANANAnd it sounds like that, though, is getting in the way of enforcing the law, from what you're saying.
RAVELYes. It certainly has been getting in the way. I think that there has been enforcement of the law, but not in anything but the most egregious and obvious cases or minor cases. But the problem then is, in those cases, the Republicans are only willing to give civil penalties that are a fraction of what the office of general counsel has recommended.
LAKSHMANANSo are there abuses that are occurring right now that aren't being reined in? Can you tell us some of them?
RAVELWell, I can't talk to you about things that are right now because those are still confidential so I can't discuss matters that are presently before us. But on past matters where it had to do with some of the biggest spenders in election campaigns in the 2010 cycle and those included Crossroads GPS, America For Job Security, American Action Network and American Future Fund, these are 501 (c)(4) s and the question was whether or not they were political committees and had to disclose their donors.
RAVELAnd, of course, disclosure is the central role of the FEC and it's what the public expects. And we were never able to achieve even an investigation of those big spenders to determine whether or not they met our requirements of the law.
LAKSHMANANOkay. Well, bottom line, is the FEC being derelict in his duty or, in effect, after the Supreme Court Citizens United and McCutchon decisions, are there simply fewer laws to enforce?
RAVELWell, there are fewer laws to enforce. In fact, the FEC still has really important responsibilities. I feel very strongly that the FEC is a breathtakingly important agency today. One, to give guidance to the public, to the political committees and candidates and others and, well, to give information to the public. All of our disclosure requirements are still in effect and the Supreme Court has upheld them.
LAKSHMANANWell, Ann Ravel, tell us how does this get fixed. What needs to be done now?
RAVELWell, you know, I am probably not the best person to talk about specific fixes for it, but the reason that I have spoken out so openly about it is that I believe that it's important to shine a light on the problem and exposing the problem is the first step to a solution and I'm hoping that the public will understand that it is a major concern and will be an even greater concern as there are new ways of conducting politics in the 2016 election.
RAVELAnd it is important for us to have a functioning agency.
LAKSHMANANAnn Ravel, chair of the Federal Election Commission, thank you so much for joining us.
RAVELThank you. I appreciate it.
LAKSHMANANAnn Ravel referred to the public concerns about the way that the 2016 campaign is gonna be conducted. We want to hear your concerns and your comments. And throughout the hour, we will be taking calls. Reach out to us on 1-800-433-8850 or send us an email at firstname.lastname@example.org or you can join us on Facebook or Twitter. So welcome to our three guests here in the studio. Thank you so much.
LAKSHMANANTrevor Potter, I'd like to start out with you. You were once chair of the FEC. Do you agree with Ann Ravel's current assessment?
MR. TREVOR POTTERI do. I think it is currently dysfunctional in the phrase she used in The New York Times' article. Let me just point out the underlying issue here, which is the commission has six commissioners. It is only one of two agencies in the entire federal government that have an even number of commissioners. What that mean, of course, is -- and there are three of each party. Statute says not more than three of any one party, but effectively we have three Democrats, three Republicans who get there through recommendations by the party leadership that is negotiated out inside the political parties and the leadership in Congress, the partisan leadership, and then the president nominates and the Senate confirms.
MR. TREVOR POTTERSo you have an agency that takes four votes to do anything. It takes four votes to decide to open a meeting. More importantly, four votes to initiate and investigation. So if there's a complaint that comes before the FEC, then you have to have a majority of the commissioners to agree to even look at it, then to proceed with the investigation and then finally to reach the resolution of it. So when the chair was talking about all these deadlocks, what that means is that in most cases, there was 3-3 vote.
MR. TREVOR POTTERIt has in, I think the last five years, always, when it's been a deadlock, been three Republicans versus three Democrats, whether to investigate, whether to have an audit, the conclusions of finding of any of that, an advisory opinion issued to the public. And if there is not four votes, then the commission's practice is to finally agree to close the matter. So effectively, three commissioners can stop the FEC from doing anything.
LAKSHMANANSo we end up with deadlock. Jan Baran, what is your reaction to this?
MR. JAN BARANWell, it's not only one of the few agencies that has an even number of commissioners. It's the only agency of the government that's empowered to regulate political speech and political association and political activities. This is a very touchy, highly sensitive area of regulation and the commission was set up this way intentionally to make sure that it would not be subject to partisan or political abuse.
MR. JAN BARANIt is an agency that has also the distinction of having been declared unconstitutional twice by the Supreme Court because of its composition.
LAKSHMANANWe'll be taking a short break, but I look forward to hearing your questions and your comments. Stay with us.
LAKSHMANANWelcome back. I'm Indira Lakshmanan. I'm sitting in for Diane Rehm. Joining me in the studio, Jan Baran, head of the election law group at Wiley Rein, former general counsel to the Republican National Committee and author of "The Election Law Primer for Corporations." Also with me, Eric Lichtblau, reporter for The New York Times who's been writing a lot about campaign finance in the 2016 election, and Trevor Potter, former chair of the Federal Election Commission appointed by President George H. W. Bush, president and general counsel of the Campaign Legal Center and former campaign counsel to Senator John McCain for both of his runs for president.
LAKSHMANANSo before the break, we were talking with Jan Baran about whether you think that the FEC is deadlocked. Is it a problem that you've got three Commissioners from each party? Or do you think that that's okay?
BARANWell, I think that's the way it was devised, intentionally so. And as I said just before the break, I think it was intended to make sure that the agency would not lend itself to partisan activities and over-regulate in a highly sensitive area of law and political activity. I think that the situation that we have today, we should remind our listeners, is one that really has -- is not new. It's -- even though Chairman Ravel seemed to put a spin on it that this is somehow a new phenomena. This has been going on for a long time. In fact, back in 2009, the Congressional Research Service did a study as to how often does the Federal Election Commission deadlock on various votes.
BARANAnd they took the year 2008 to 2009. And basically the statistics today are exactly the same as they were seven years ago.
BARANAnd they deadlock overall I guess about 5 or 6 percent of the time. And on some enforcement matters, it can be like 13 percent of the time, which means that over 90 percent of the time, the Federal Election Commission does not deadlock. And in fact, it undertakes its responsibilities in its principal area of disclosure very well and very efficiently. All reports, except those for United States Senate campaigns, are filed electronically now with the Federal Election Commission. They're available almost instantaneously. Anyone in the public can access that data and find out who's contributing and who's spending money in our campaigns. And in the last presidential election, that was about $7.4 billion of political activity.
BARANThere is a small portion of all of that money that is disclosed in terms of spending but not in terms of where money may have been raised and that's with these so-called tax-exempt groups, which account for about 3 or 4 percent of all the money spent in campaigns.
LAKSHMANANWell, that's exactly what's raising the attention of, you know, people commenting about the 2016 spending. I mean the concern, of course, is that you have, because of changed laws, because of Supreme Court decisions, that you have fewer big-money donors writing bigger checks and certainly with the case of these outside groups, not having to be accountable, not having to report who their checks are coming from. So, Eric Lichtblau, tell us how much of a problem is this? And at the same time, give us a brief primer about the FEC. Why was it created? And can it solve these problems?
MR. ERIC LICHTBLAUWell, I think you hit on the main issue, which is that to have a toothless FEC at this time in particular is really troubling because we're entering a presidential election. There could be as much as $10 billion spent. And we're going to see -- everyone expects a surge in outside spending by superPACs, by a small number of wealthy donors. The Koch brothers, David and Charles Koch are, alone, they say that they're going to spend $890 million on this election.
LAKSHMANANWow, so almost 10 percent of everything that's sent.
LICHTBLAUYeah. So you have really this freewheeling new system where, um, where corporations are going to play a bigger role than ever before though these outside groups. We have a lot of the lines that we thought existed before kind of fuzzy or stretched completely and really have no one in Washington who's enforcing what seemed to most people to be clear abuses, whether it's groups that should be considered political groups that they'll register as political groups, whether it's coordination between outside groups and candidates, which you're not supposed to do, any number of things. You know, who's really policing the abuses?
LICHTBLAUAnd I think Congress, 40 years ago, after Watergate, after the abuses of Watergate, FEC was created in the hope of being non-partisan. Now, that -- that may be a overly idealistic dream by Congress 40 years ago. But I think the hope was that by putting three members of each party on the commission, somehow you would be able to put aside partisan differences and enforce the law. As Jan says, for the most part over the last four years, it has been dysfunctional. The FEC is known as perhaps the most dysfunctional agency in Washington, which by Washington's standards is saying an awful lot.
LAKSHMANANThat's really saying something.
LICHTBLAUYeah. But it does seem to be even worse. The chairwoman's comments seem to be saying that things have come almost to a dead stop.
LAKSHMANANAnd so this, of course, was created because of Watergate.
LAKSHMANANAnd yet now you have this deadlocked commission. What about the authority of the chair? Can the chair not be a tiebreaker in some way or another?
LICHTBLAUNo. Not -- not under their structure. She has sort of limited authority, and Trevor can speak to this, limited authority to put matters on the agenda. But as far as breaking ties on votes, getting investigations in the pipeline more quickly, her hands are really tied.
LAKSHMANANOkay. Well, Trevor Potter, we're hearing about how in the last four years, it's become particularly dysfunctional. Have things at the Commission really changed since Citizens United?
POTTERYeah, I would say actually it's the last eight years. So it goes back to that period Jan was citing as having about the same number of deadlocks. It's -- those are the Commissioners who have been there since 2008. I would disagree that this is not a new situation. When I was a Commissioner, I can remember one vote that was deadlocked 3-3 on an advisory opinion. The whole effort of the Commissioners was not to deadlock, on the theory that our job as Commissioners, in the structure we'd been given by Congress, was to move forward in a bipartisan way to ensure that, I think Jan is correct, Congress was concerned that one party or the other would seize control of the Commission and go off on a partisan witch hunt.
POTTERSo it gave you an even number of Commissioners so both sides would have to agree. But when I was there, the debates internally were, if we go after this Democratic candidate, then we'd better go after a Republican candidate who has done the same thing. There was a sense the law had to be enforced evenly.
POTTERBut it had to be enforced. I think the Commissioners' view was that their job was to enforce the law. And it was the court's job, ultimately, to say whether the law was constitutional or not.
POTTERAnd where I think we've seen a change now is we have virtually, I think, doctrine of nullification at the Commission. You have three Commissioners who have the power to stop the agency from enforcing the law. And they're using that power. And I think that puts great strain on the system when we talk about disclosure. It's true the FEC has a wonderful disclosure database. And anyone who chooses to give the Commission that information gets it up online and that is, by law, candidates and parties and political committees.
LAKSHMANANBut it's voluntary? You don't have to put up that information?
POTTERWell, it's not supposed to be voluntary. But the big argument at the Commission now is whether these groups that don't go to the FEC and register as political committees, should.
POTTERThe what's called dark money, which is to say money that's spent in federal elections but not reported to the FEC in terms of the sources of the money. And you go back to Citizens United, which you just mentioned, and they are, the court said, corporations have the same rights as individual to spend money independently of candidates. They've used language talking about independence as wholly, completely, fully independent of candidates and parties. And they said, if you do that, then you don't have a limit on how much money you can take and spend.
POTTERBut today what we're finding is that money is not disclosed despite the fact the Supreme Court and Citizens United said, 8 to 1, that -- the only piece of that decision that was 8 to 1 -- that disclosure was fully constitutional and would occur, that shareholders would know how corporations are spending their money and voters would know who's paying for the ads. And it's the deadlock at the FEC that is preventing that disclosure now.
LAKSHMANANWell, the problem with this whole definition of coordination, that you can spend this dark money as long as you're not coordinating with the candidate, we've read about all of these Super PACs that have been created by putative candidates, particularly on the Republican side, but also Hillary Clinton. And they can just find out what the campaign is doing by reading about it in the newspaper. They don't really need to have a lot of coordination if the campaign is going to say out loud, well this is what we're doing in Iowa, this is what we're doing in New Hampshire, correct?
POTTERActually it's worse because the legal argument, such as it is, appears to be that they can fully coordinate with the putative candidate, as you called them, up until the time that person announces their candidacy. So you have these people going out, raising tens of millions of dollars for, quote, "their Super PAC," staffing them with their staffers. And then, when they become a candidate, saying, now whatever they do with full knowledge of what I'm doing, we'll be independent, even though I can continue to raise money for them within federal limits or appear at events and thank donors. And that seems to me totally contrary to what the Supreme Court has said independent expenditures are.
POTTERAnd their whole theory that they're not corrupting and therefore can be unlimited because they're not connected with a candidate. And yet, in the last election, we referred to Obama's Super PAC and Romney's Super PAC. This time the closeness is much more obvious because you had these people who were taking what I think is an untenable legal position that they can fully coordinate up to the time they become candidates. But it leaves us back where we were, worse than Watergate, with huge contributions solicited by people who may end up being president and will be indebted to the people who have spent that money.
LAKSHMANANWell we've certainly heard about this with the Jeb Bush campaign -- not campaign, he hasn't declared yet -- but raising, he says, record amounts of money and also his Super PAC doing the same. We're heard about it with Carly Fiorina and Ben Carson, who both declared their candidacies yesterday on the Republican side. And they also have Super PACs who are raising money for them. I just want to hear though about -- remind us a little bit about the McCutcheon decision and how has that affected what the FEC can or can't do?
POTTERThe McCutcheon decision was pretty narrow in the sense that it related to the -- what used to be the aggregate limit that individuals could give to party committees combined and political committees combined. And the Supreme Court said, in yet another 5-4 decision, that since there was no corruption inherent in giving to lots of candidates and lots of party committees, that it could not be limited. Now they said, in their decisions, there's no evidence that these committees are going to combine together. We think the suggestion that they'll be contributions of hundreds of thousands of dollars to the committees because they'll form joint committees is speculative.
POTTERThat's already occurred. We're already seeing these large contributions coming out. But to go back to your point a moment ago about these Super PACs, one of the things you're seeing in almost the articles about these Super PACs is statements from people associated with the candidates or the PACs that say, you know, the FEC is deadlocked. We are comfortable with our legal position here because we think the Commission isn't going to move forward on any of this. That's the message that's getting out, is it's the Wild West, because the Sheriff isn't around.
LAKSHMANANOkay, the Wild West, Jan Baran. Those are fighting words. Tell us whether you think -- is that -- is that what it is, that there are no laws left that need to be enforced? Or, in fact, are most campaign Super PACs actually operating legally, in your view?
BARANWell I think Trevor's articulate explanation of his position is probably at the heart of what the problem is, which is that there are many people -- myself and at least three Commissioners -- who would dispute many of the characterizations and points that he just made as to what the law is. And that's part of this problem that we're witnessing here. And I was heartened by Ann Ravel saying that, you know, the dispute at the Commission is not partisan. That's what she said. And I think that's correct. And she also then said that one of the missions of the agency is to provide guidance. And they're having trouble providing guidance because they cannot agree on what the law is.
BARANAnd there are long-standing disputes, one of which was mentioned by Ann Ravel, which is what is a political committee? And it's the part of the issue that Trevor was addressing. That is an issue that I recall being debated when I was at the Federal Election Commission working for the chairman back in 1977. What is a political committee? It is, in fact, a issue that is being discussed and debated at another agency -- one that I think is the most dysfunctional agency -- which is the Internal Revenue Service. That's what got, you know, Lois Lerner into all this controversy.
BARANSo we have these issues of law that are supposed to be, first of all, resolved by an agency if at all possible. Even when Congress can't agree on what a political committee is, it can't pass legislation. The Federal Election Commission several years ago had a rule making to define what a political committee is and the rule making collapsed and they decided we can't agree on what a political committee is. So what are we going to do? We'll make a decision on a case-by-case or ad hoc basis. Well what does that do? That means that in order to make a decision on what the legal definition of a political committee is, you have to pick out some guinea pigs in an enforcement action and investigate them and try and come up with a standard, which they have failed to do.
LAKSHMANANI'm Indira Lakshmanan and you're listening to "The Diane Rehm Show." So guinea pigs, that's an interesting way of putting it. It sounds a bit like you're saying that some of the cases that are being brought forward or talked about are actually, you know, punitive and, you know, frivolous.
BARANWell, I think that that's what the disagreement is about. I mean, you know, somebody files a complaint against a group and says this group is a political committee. And the Commissioners take a look at that complaint. They look at the facts. They look at the law. And fundamentally they have a dispute among themselves as to what the law is. Now that can be decided in other ways because there are rights of appeal, you know. People bring cases to the courts to the federal courts and they have litigation. This is how, by the way, we have over the last 40 years, a string of Supreme Court decisions that declare one provision of the Campaign Finance Law after another unconstitutional, you know?
BARANI mean, you can litigate these things and people are guinea pigs. In order to vindicate their constitutional rights as well as their legal rights, they have to go to the courts to get that resolved.
LAKSHMANANEric Lichtblau, in your reporting, is the issue of these potential presidential candidates who we referred to who haven't declared yet but, you know, pretty much everybody knows they're going to be candidates, like Jeb Bush, they're raising money before declaring themselves. How much of a concern is that?
LICHTBLAUOh, sure. I mean that's been just the first of what will likely be a whole series of issues where everyday politics seems to rub up against the law, where you have candidates -- especially Jeb Bush, as you mention -- out there holding fundraisers in Palm Springs and Miami and New York and raising tens of millions of dollars without declaring himself a candidate and, more importantly, not triggering disclosure of his donors and campaign limits on those disclosures. And there's already been a complaint filed by Thurber's group, among others, with the FEC. But given the history of the FEC, no one expects them to act on that, certainly not in time for the elections.
LICHTBLAUSo you again have this, as you said, this Wild West mindset out there where the system will be pushed and pushed until someone pushes back. And so far, the FEC is not the one to do that.
BARANWell, you know, all those contributors are going to be disclosed. They're subject to disclosure reports, are they not?
LICHTBLAUWe just don't know who they are yet.
POTTERNot if they -- not if they're to the non-disclosing groups.
BARANWell, they are going to be disclosed. You may even want to have it disclosed on a faster basis. But the law requires disclosure.
LAKSHMANANAll right. Well a great debate. And we're going to take a short break. And when we come back, your calls and your questions for our terrific panel. Stay with us.
LAKSHMANANWelcome back. I'm Indira Lakshmanan, sitting in for Diane Rehm. We are talking about campaign finance and the FEC with a terrific panel, and we've gotten some great emails from listeners, a lot of them touching on the same thing. First, Tom in Baltimore says, "The problem is that we deal with corruption by legalizing it. The Citizens United ruling by the Supreme Court was a knife in the heart of American democracy, but there were already many bleeding wounds."
LAKSHMANANWe have Colleen in Houston, Texas, who is writing, "This is not a country that was set up for we the billionaires." And Pete in Florida says, "Because of Citizens United, extreme gerrymandering, voter suppression and near total gridlock in Washington, I don't even bother to vote anymore. The system is broken, so I don't see the point."
LAKSHMANANTrevor Potter, these are some pretty damning indictments of the system and of these recent Supreme Court decisions. Tell us, within the context of McCutcheon and Citizens United and the law as it is now, tell us about some of the formal complaints that you and other have filed before the FEC recently. And where do you expect them to go?
POTTERThanks, Indira. The complaints you're referring to were filed by The Campaign Legal Center, which is a nonpartisan group that's been around about 10 years to enforce the election laws, to encourage administration of the Federal Election Commission and particularly of disclosure. And the complaints that have been filed recently relate to what we were just discussing before the break, which is the raising of tens of millions of dollars by individuals for super-PACs that are intended to support those candidates' own campaigns for president.
POTTERAnd this goes back to the entire issue of corruption and the contribution limits and what the Supreme Court has upheld, which is the limit on what individuals can give to candidates and what they can solicit as a way of ensuring they're not beholden to large contributors. And what's happening here is these candidates are going out and raising money way above the legal limit, the legal limit is $2,700 from a contributor per election, but these people are going out and raising $100,000 contributions, $500,000 contributions not for their own campaigns but for these super-PACs. And the super-PACs will then be in a position to spend money.
POTTERAnd it's a little worse than that because what we're seeing is not only the super-PACs, which as Jan correctly points out will disclose their contributions on a pretty leisurely schedule because the law has much longer reporting periods for them, but also money is being raised for the so-called 501 (c)(4) s, which are tax-exempt groups that do not disclose their contributions.
POTTERSo it used to be that federal candidates had to campaign with the limited amount you could give to it. This year we're seeing they have their campaign, with the small amount you can give to it. Then they have, quote, their super-PAC, which is supposed to be wholly independent of them under the Supreme Court theory, or they can't do this, but never mind, they have that. Then they have these nonprofits, these (c)(4) s, which will do policy for them and other activity and are not required to disclose their donors.
POTTERAnd I think the issue you have under all this is the question of is it corruption. And there, the Supreme Court has been changing its signals, and I think that presents an issue for us as a country because under Buckley and the earlier Supreme Court decisions, the court said, in its opinions, that we recognize that large sums of money contributed in elections have the potential to corrupt, at least the appearance of corrupting, will diminish people's faith in the independent judgment of the legislators.
POTTERThe current Supreme Court is saying, well, just giving money for influence, to buy access, that we don't think is really corruption. It's only corrupt if you give an officeholder money for a particularly official legislative act, the so-called quid-pro-quo bribery. That's a very narrow definition, and so you're then left with the possibility that it's perfectly okay to solicit and give tens of millions of dollars to president, to candidates for president, because somehow it's okay to buy access and influence.
LAKSHMANANYeah, well, this has really sort of come down, it's been perceived, the reaction to Citizens United and McCutcheon, has been perceived as along sort of partisan lines, as if the Democrats, as if the Democrats are somehow supporting that there should be more controls on campaign finance, and the Republicans are not. And yet I have a personal question for you. You were appointed by a Republican president, and you were counsel to a Republican candidate. Are you still a Republican? Are you going against your party on these issues?
POTTERI think neither party is monolithic on this. I stand in the long tradition not only of John McCain, who fought for the McCain-Feingold reform legislation, but going all the way back to Theodore Roosevelt, who made a centerpiece of his presidency dealing with what he saw as the corruption of corporate money in politics, large sums of money that then inevitably influence members of Congress.
POTTERAnd I think this comes and goes. I agree with Jan that I think the debate here is a philosophical debate. It happens on the disclosure issue that it has become partisan in Congress because at the moment, this could change, but at the moment, most of the undisclosed money that is being spent is being spent for Republican candidates.
LAKSHMANANAt the moment, all right. Let's go to the phones. Veronica in Cary, North Carolina, you are on the phone. Go ahead, Veronica. Go ahead, Veronica.
VERONICAOh, good morning, and thank you for taking my call.
VERONICABasically those emails said what I was going to say, that money talks. And it seems to me that corporations get double free speech, in more ways than one perhaps, because they get free speech as a private citizen, and the corporation gets a say, as well. So it's very disheartening, and I tell my daughter how important it is to vote, and it just seems hopeless for ordinary people, really.
LAKSHMANANAll right, thank you for calling, Veronica. Jan Baran, can you take that?
VERONICAThank you, bye.
BARANWell, I think the constitutional issue is that money is instrumental in effective advocacy and political participation. It is a fact that free speech is influence when money is regulated. We're sitting here at WAMU, which is a fine free-speech vehicle, but it has a budget of over $25 million a year. I don't think anybody would say, well, let's cut the budget because you don't need that money for the speech that is being undertaken here.
BARANAnd it's the same effect in politics. When you start regulating how people collect money, how they spend money, where they can get money, you are necessarily influencing the ability to engage in speech and association and many other activities that are part of our civil liberties. So the issue then becomes, well, in what can we regulate, in what way can the government regulate this type of activity without unnecessarily interfering with those constitutional activities.
BARANAnd the one principal way in which the Supreme Court has said you can regulate is through disclosure, and of course disclosure requires a law to explain what is to be disclosed. And part of the debate that's going on with the so-called dark money is that Congress has failed to pass a law that would increase that element of disclosure.
LAKSHMANANWell, Eric Lichtblau, let's talk about that, about disclosure and also about the role of the Internet. How much as the Internet helped or hampered what the FEC does?
LICHTBLAUWell, I think disclosure is one of the areas after Citizens United that people hoped would Congress would catch up with the law. The Supreme Court basically endorsed the idea of more disclosure. They all but called out for Congress to pass laws that would require more disclosures of these corporations that were now newly emboldened to contribute unlimited amounts of money. Congress has not done that. So that's really a failing on the part of Congress in the view of many campaign reform advocates.
LICHTBLAUAnd, you know, the Internet is yet another issue where the FEC is gridlocked, where you have Commissioner Ravel, who's been calling for a fresh look at how political ads, for instance, are treated as Internet contributions and expenditures. And Republicans are very wary of doing that because they consider it intrusion onto political speech.
LAKSHMANANTrevor Potter, you wanted to respond to that.
POTTERWell, I did. I think it's true that Congress could do more on disclosure, and the laws, the proposals there, the legislation has been deadlocked, unfortunately on purely partisan grounds. However, Congress has done a fair amount, and this gets us back to the problems with the FEC. Congress said that political committees have to report, and as Jan correctly said, that has led to a debate over, okay, who's a political committee because those groups that spend money on elections are supposed to be reporting their donors.
POTTERThen Congress specifically, in 2002, in the bipartisan Campaign Reform Act, said that what's called electioneering communications had to be reported, which is money that is spent 30 days before the general, 60 before the primary, that mentions a candidate in a paid advertisement. The FEC has been deadlocking over that. They did manage, before the current commissioners arrived, to get a regulation in that essentially gutted that law, was objected to by the congressional sponsors. That has been in court for years. The most recent decision is that the FEC regulation that lets them not disclose that spending is, in fact, contrary to law, and so that is being appealed, I think Jan's firm is involved with that, in the D.C. Circuit.
POTTERSo you have these ongoing battles, and the FEC remains the key agency, and the role they have been doing is to slow-walk it or not give the disclosure that Congress and the Supreme Court in Citizens United said we are constitutionally entitled to, and that's the current big issue I think both at the FEC and more broadly.
LAKSHMANANSlow-walking disclosure. Those are fighting words. All right, let's take another call, Jerry in Miami, Florida, you are on the air. Jerry, go ahead.
JERRYGood morning. I like to do my own fact-checking because I've heard a lot about this. If you Google 501 (c)(4), you will get the IRS teletopic, and it is so short, you can read it while standing on one leg. It provides, the statute actually reads: providing for exemption of civic leagues or organizations, not organized for profit but operated exclusively for the promotion of social welfare, not primarily, not mostly, not 51 percent, exclusively. And everybody seems to have gotten away from that, even Scalia, who believes in following the statute.
JERRYPolitically, I'm a Teddy Roosevelt Republican, and I would just add that when he was president, he fought, actually he fought political corruption his whole life, but when he was president, he was horribly politically, publicly chastised by Henry Frick, who was a steel magnate, and he said we bought the SOB, and he didn't stay bought.
LAKSHMANANAll right, thank you.
JERRY...political campaign money is strictly to buy the candidates.
LAKSHMANANAll right, thank you, Jerry, for your call. I'm Indira Lakshmanan, and you're listening to "The Diane Rehm Show." Eric Lichtblau, can you respond to what Jerry said?
LICHTBLAUSure, well, he makes a good point, that these 501 (c)(4) s that are supposed to be social welfare organizations, are actively involved in political activities. There was a recent case that of course the FEC deadlocked on involving Karl Rove's group, Crossroads GPS, that spent over $100 million on political activity but in the view of the Republican commissioners was not primarily involved in politics, even though that standard has been debated, as the caller said. Originally the statute said exclusively. So is it primarily? Is it exclusively? That makes a big difference.
LICHTBLAUAnd I'd point out that the FEC has not always been deadlocked on this issue. In our reporting, we pointed out that as recently as 2006, when the commission was also often deadlocked, they did agree on both a conservative and a liberal group that were actively involved in the 2004 election, moveon.org and Swiftboat Veterans, and both of those were found to have been engaged in massive political activity without registering as political committees. So that was a case where the FEC came together and said, you know, we're going to ding both sides because this is going on. And no one expects that to happen this time.
LAKSHMANANEric, give us some of your quick thoughts on solutions here. What needs to be done to ensure that the FEC reins in campaign finance abuses?
LICHTBLAUBoy, that's a tough one. I mean, short of a complete overhaul in the structure that might create a seventh member, and that would be difficult to get through Congress, I'm not sure what the answer would be.
LAKSHMANANSo you don't see a way to break the deadlock. Jan, what about you?
BARANWell first of all, there are other law enforcement options. You know, the Department of Justice does not sit by idly if there is a criminal violation of the campaign finance law. In fact, they had a case very recently on coordination and found a campaign manager here in Northern Virginia who plead guilty to violating the campaign finance laws as a criminal matter, which means that it involves an intentional violation of the law.
BARANThat's not what we're talking about here at the Federal Election Commission. We're talking about civil enforcement, of which there's still quite a bit. In fact the Federal Election Commission automatically fines filers, political committees, candidates, if they file their reports late or not at all, and it's an automatic system that produces fines and payments I think almost $500,000 just in the last year.
BARANSo there is enforcement that's going on. I think it's erroneous to say that somehow there's no enforcement going on. There's quite a bit of it. It's just that it's not occurring in these highly controversial, disputed areas of law where there are differences of opinion.
LAKSHMANANOkay, we have an email from Brian in St. Louis, who writes: I am neither a Republican nor a Democrat. I don't belong to any political party. Yet the FEC seems to have been set up to protect only the interests of Republicans and Democrats. How is that legal? And he's asking about a history of involvement with partisan politics and how it should disqualify someone from a seat at the FEC. Trevor, is there any validity to Brian's point?
POTTERCertainly when I was at the commission, some of the third-party groups came in, I'm thinking particularly of Ross Perot and his campaign, and basically said where are our commissioners, you have them, where are ours. And I think that is a reality of life not envisioned by the framers of Constitution, who didn't expect there would be political parties, they called them factions and said they were a mistake. But we ended up fairly quickly with several political parties, and really for the last many years we've had the two dominant parties controlling Congress, and Congress writes the laws.
BARANAnd that's true in the states, as well. Every once in a while, independent parties, third parties, will come in and sue, particularly at the state level, saying the laws have been so rigged against us that we can't even get our candidates on the ballots. But that is the reality you deal with in a constitutional system, where we don't at the federal level have an initiative or referendum process, as many of the states do, and therefore whatever happens legally is going to happen through Congress in terms of changing the laws.
LAKSHMANANVery interesting. Trevor Potter, former chair of the Federal Election Commission, Eric Lichtblau reporter for The New York Times, Jan Baran head of the Election Law Group at Wiley Rein, thank you all so much for joining us, and we appreciate your listening.
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