Shut Up, They Explained
The Obama campaign tries to suppress an ad.
Sep 8, 2008, Vol. 13, No. 48 • By ALLISON R. HAYWARD
It's not so much what you say, as how you say it. Never is that more true than in the funding of campaign speech. The latest presidential dust-up involves the irresistible combination of a billionaire corporate raider, the sixties, the Department of Justice, and something judges dreamed up called the "major purpose" test.
The billionaire, Harold Simmons, is number 136 on the Forbes 400 ranking of the super rich, with a net worth of $6.9 billion. A group called the American Issues Project (AIP), with roughly $2.9 million of funding from Simmons, has produced and purchased air time to set before the American people--in certain swing states--their issue du jour.
The AIP spot, shot in dark tones with ominous music, asks viewers whether they "know enough" to elect Barack Obama president. Knowing enough, in this context, means knowing about his ties to a Weather Underground activist turned college professor. To fully appreciate the significance, the viewer must also learn that William Ayers, said activist, is not (as one might assume from the name of the group) a climatology blogger. No, he was instead a leading man of the left during the sixties, whose group, among other exploits, set off bombs at the U.S. Capitol, the Pentagon, police stations, banks, and courthouses, not to mention in their own Greenwich Village townhouse, killing three and injuring two members.
Stipulate for a second that a presidential candidate with ties to such a character would prefer not to account for those ties. The Obama campaign, faced with this broadcast, has mounted a multifaceted campaign to break AIP's kneecaps. Supporters have flooded TV stations running the ad with complaints. Obama's lead attorney has written the criminal division of the Department of Justice, demanding prosecution for "blatant" violations of the law. (Likely, the Federal Communications Commission and the Federal Election Commission will be hearing from him, too, but agents for these departments don't carry sidearms so they are a bit further down the list.) Obama's aggressive reaction will also no doubt give his other critics reason to pause before launching their own messages.
I leave for others to debate the accuracy of AIP's facts. Instead, it is worth taking seriously the claim by Obama's camp that the means chosen to make the communication are "blatantly" unlawful. Is it the case, as the Obama complaint contends, that "facts have come to light that underscore the patently illegal nature of AIP's formation and operation"? That this "disregard of federal law is motivated by [AIP's] need for unlimited amounts of Mr. Simmons's money"? Unfortunately for the campaign's credibility, AIP's setup may be completely sound. Or it may not. Beneath it all lurk unanswered legal questions that make law professors swoon and candidates curse.
One fundamental tenet of American campaign finance law is that an individual may spend as much of his own money spouting off about candidates as he desires, provided his efforts are not coordinated with a campaign. Coordinated spending equals contribution, and Simmons's contributions could then not exceed $2,300 per election per candidate. Harold Simmons qua Harold Simmons could produce an ad and buy television time, spending his own money. The problem is whether he can do exactly the same thing through AIP.
The Amerian Issues Project is a tax-exempt social welfare organization, meaning that it pays no tax on money it receives, yet donors do not get a tax deduction as they might if AIP were a charity. It is also incorporated. Federal law in general prohibits corporations from spending money on campaign advocacy. Aha! This must be the blatant violation, you say.
Not aha. Justice William Brennan, writing for the Supreme Court in 1986's Mass-achusetts Citizens for Life, articulated an exception to the corporate spending ban. If an incorporated group was formed to promote political ideas, had no shareholders, and took no corporate or labor funding, the Court concluded that the corporate spending ban could not constitutionally apply. Unless . . . the campaign activity became the major purpose of the group. Then, the group would be required to register and report as a political committee, could take no more than $5,000 per year from any one donor, and couldn't take any money from corporations or unions.
AIP declares that it was formed to promote political ideas, but that campaign advocacy is not its major purpose. Can you measure "purpose"?
AIP is a new name for an older tax-exempt group. Do the activities of its former incarnation count when assessing its present purpose? You might argue that new name equals new group. Or you might argue that the name change is immaterial.
You might measure its purpose by how much it spends (this is what the IRS does) during some period of time. Or you might look at how it depicts its purpose in advertising and solicitations. Must campaign activity be the "major purpose" or must it register if that activity is a "major purpose"?
By the way, AIP has filed FEC reports documenting the source of funding for the expenditures, so nobody can complain about theirs being a shadowy enterprise.
The smattering of court cases involving the major purpose test offer no definitive answer. The FEC has attempted several times to write a "major purpose" rule, but has never produced language that would satisfy a majority on the commission. "Major purpose" has been a factor in some FEC enforcement matters, but these carry no precedential power. As former Vice President Gore might observe, there is no controlling legal authority. To buttress Obama's criminal complaint, his counsel contends not only that Simmons has done something illegal, but has been knowing and willful in breaking the law. (Knowing and willful violations can be prosecuted criminally, less odious violations are pursued in civil enforcement.) But when the question is as bereft of clear standards as this one, how could that be?
Harold Simmons undeniably has the right to spend his own money on a campaign ad berating Barack Obama. But that right buckles under the weight of campaign finance regulation as soon as Simmons sponsors a group effort. Does this make sense? How can it be that the distinction between laudable and criminal rests in filing the right paper?
And what does it say about the Obama campaign's lawyering priorities that it is so eager to make a moral crusade and pathbreaking political prosecution out of campaign finance hyperformalism? Heads explode at the DNC at the mention of Alberto Gonzales or Monica Goodling for their alleged politicization of the Bush Justice Department. Well? Here's one context in which we can anticipate Obama will be something other than the candidate for "change."
Allison R. Hayward is assistant professor of law at George Mason University School of Law.