It was hardly surprising that the U.S. District Court for the District of Columbia, in Independence Institute v. FEC, would reject a challenge to McCain-Feingold’s disclosure requirements for “electioneering communications.” These are television or radio ads, sponsored by unregistered groups, that refer to candidates before the voters during the thirty or sixty days before the election. But the decision will have no impact on the information voters will receive before November, because of how narrowly the FEC interprets these same requirements. And the decision may face skeptical appellate review.
When Congress passed the electioneering communications restrictions in 2002 as part of McCain-Feingold, it was trying to regulate so-called “sham” issue ads. These were communications that eluded federal campaign finance regulation by eschewing phrases like “vote against,” and using others instead like, “He preaches family values, but he took a swing at his wife.” McCain-Feingold banned corporations and unions from sponsoring electioneering communications, required other sponsors to disclose their donors, imposed disclaimer requirements on these communications, and limited their coordination with federal candidates and party committees.
The Supreme Court initially upheld these restrictions in McConnell v. FEC. But the framework quickly collapsed. In 2007, in Wisconsin Right to Life v. FEC, the Supreme Court narrowed the corporate ban so that it applied only to ads containing “the functional equivalent of express advocacy.” In 2010, in Citizens United v. FEC, the Supreme Court struck down the corporate ban altogether, while leaving in place the disclosure, disclaimer and coordination provisions. (One of Citizens United’s many ironies is how the Supreme Court decried “laws that force speakers to retain a campaign finance attorney,” while striking down the only simple part of the particular law before it—the ban itself.)
While the Supreme Court was rolling back the ban on corporate and union-sponsored electioneering communications, the FEC was sharply narrowing the disclosure provisions. In 2007, the FEC responded to the Wisconsin Right to Life case with a rule requiring corporations and unions to disclose only those who gave specifically to further electioneering communications. In 2010, it deadlocked on whether this narrow rule could be triggered even when a lone donor micro-managed the sponsor’s activities. In Citizens United, the Supreme Court spoke approvingly of how “prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.” But by then, the FEC had already rolled back the disclosure requirements for these very same corporations.
In Independence Institute, the district court was emphatic that neither Wisconsin Right to Life nor Citizens United provided any basis to curtail disclosure. The district court said that Wisconsin Right to Life involved only “the regulation of expenditures,” not “the disclosure requirements,” and that Citizens United “squarely foreclosed” any effort to narrow disclosure. The unavoidable implication of the district court’s opinion is that the FEC’s current rules are contrary to law, insofar as the agency adopted them in response to Wisconsin Right to Life.
But this logic puts the district court at loggerheads with the D.C. Circuit’s opinion two years ago in Center for Individual Freedom v. Van Hollen—which the district court neither discussed nor even cited. In Van Hollen, the D.C. Circuit rejected a challenge to the FEC’s rollback of the disclosure rules, saying: “The statute is anything but clear, especially when viewed in the light of the Supreme Court’s decisions in Citizens United … and Wis. Right to Life, Inc. …” The D.C. Circuit remanded Van Hollen to the FEC, but rebuffed the challenge to the narrower disclosure rules, because they were “an attempt by the agency to provide regulatory guidance under the BCRA following the partial invalidation of the speech prohibition imposed on corporations and labor unions in the context of ‘electioneering communications.’”
Thus, Independence Institute may prove to be a glass half-empty for disclosure proponents, much like the D.C. Circuit’s recent opinion in Stop This Insanity Inc. Employee Leadership Fund v. FEC was. The district court upheld the agency with a full-throated defense of the constitutionality of disclosure requirements. But it teed the issue up for decision by a D.C. Circuit that may prove more skeptical, even while Congress and the FEC each remains at an impasse over disclosure policy. And the district court’s opinion may be vulnerable to review, while securing no additional disclosure in the meantime.