Redstate

By krempasky Posted in FEC — Comments (2) / Email this page » / Leave a comment »

A few days ago, FEC Vice-Chairman Toner posted an article here at RedState making the case for HR 1606 and pointing out that the charges made against the legislation were largely without merit.

FEC Chairman Scott Thomas has written a response that I'm happy to post here at RedState. (How surreal is it to see Senate-confirmed Commissioners duking it out at RedState?)

My colleague Michael Toner, currently Vice Chairman of the FEC, recently posted a piece relating to the ongoing debate about legislation to exempt Internet communications from the definition of "public communication" in federal campaign finance law. While he is certainly entitled to his view, I hope you will permit me to explain where I believe his analysis is faulty.

He suggests that when passing the Bipartisan Campaign Reform Act of 2002, Congress was silent about how to treat Internet communication and that we should therefore infer that Congress intended to leave Internet communication unregulated. In fact, the particular statutory definition at issue defines "public communication" to include not only messages via broadcast, cable, satellinte, newspaper, magazine, outdoor advertising, mass mailing, or telephone bank, but also via "any other form of general public political advertising." Carving out an exception for paid Internet advertising actually conflicted with the plain meaning of the statute. Congress was not at all silent on this question. Further, even if Congress had not been so clear, the FEC's longstanding pre-BCRA inclusion of Internet communications in the virtually identical language of the disclaimer rules ("any other type of general public political advertising"), suggests that Congress must have had in mind the same approach for the post-BCRA rules. Because of these fairly clear-cut circumstances, the U.S. District Court found the FEC's attempt to broadly exempt all Internet communication from the law to be problematic. The Court directed the FEC to go back to the drawing board to determine how to apply the "any other form of general public political advertising" language in the statute to Internet communications.

The Vice Chairman also indicates he agrees with those who believe the Hensarling bill, which parallels the FEC regulation struck down by the Court, would not override other provisions in the statute that prevent corporations or unions from making "expenditures." This is a new 'Catch 22' argument I never heard uttered when the FEC was adopting its 2002 regulation that created a 'carve out' from provisions using the "public communication" definition. The evidence suggests that the Commission intended "expenditure" analysis to flow from "coordinated communication" analysis. In its Explanation and Justification of its new regulations, the FEC noted that the statute treats a coordinated "expenditure" as a "contribution" and then said: "The Commission has determined that a payment that satisfies the content and conduct standards of 11 CFR 109.21 satisfies the statutory requirements for an expenditure in the specific context of coordinated communications, and therby constitutes a contribution under 2 USC 441a(a)(7)(B)(i) and (ii)." There is no hint that the FEC intended with one stroke to exempt coordinated Internet communication, but somehow retain restrictions on such activity for corporations or unions under the "expenditure" rubric. Given my colleagues' stated concerns regarding the FEC's few attempts to apply the corporate prohibition to Internet activity (e.g., regarding the Tweezerman corporation placing ads supporting the company owner's campaign), it was apparent to me there was a desire to create a 'carve out' from both the "contribution" definition and the "expenditure" definition. The legal position suggested by the Vice Chairman is certainly no more valid than the position expressed by others.

Moreover, it would indeed be odd to say that a corporation or union could not pay without limit for a coordinated Internet communication, but the PACs of those entities could. I can just hear someone next attempting to extend the 'Catch 22" analysis to PAC coordinated communications by saying the statutory definition of "contribution" continued to override the FEC's regulatory exclusion of coordinated Internet communication by PACs.

The truth is, the Hensarling bill, just like the FEC regulation before it, leaves many critical legal issues up in the air. As I attempted to lay out in my testimony before the House Administration Committee on September 22, the bill only amends the definition of "public communication," but that definition technically only extends in the statute to activity of state or local parties. How it applies to individuals, PACs, corporations and unions spending for Internet communication is left up to the FEC. Further, the bill does nothing to clarify the rules that relate to non-coordinated Internet communications, since those rules do not rely on the "public communication" definition. As things stand now, a non-coordinated Internet communication is fully subject to the "independent expenditure" rules, which means any person (even an individual) must report to the FEC payment for express advocacy Internet ads that cost more than $250.

What is needed is a little reflection on all the intersecting statutory provisions, and a careful effort by all those interested in this subject to come up with rules that leave the vast majority of Internet activity (including blogging activity) unregulated, while focusing longstanding contribution and expenditure restrictions on paid Internet advertising. That is what the FEC is trying to accomplish with its pending rulemaking. If allowed to proceed, the Commission will endeavor to make the rules as simple as possible, and will make every reasonable effort to help the public understand those few rules that would remain.