Congratulations to our friends at the Center for Competitive Politics, who yesterday won a victory for free speech in Patriotic Veterans, Inc. v. Indiana. The case concerned an Indiana law that prohibited pre-recorded political phone calls unless the recorded message was introduced by a live operator. The effect of the law was to favor well-funded, well-established interests that could afford live operators over newer groups that could not.
The court did not reach the First Amendment issue, instead holding that the state law was “preempted” by the Federal Telephone Consumer Protection Act. But as CCP Chairman Brad Smith notes, “the end result is the same: [yesterday’s] ruling advances the First Amendment and provides for more competitive elections in the state.”
The full text of the opinion is available here.
Make No Law readers may remember the Institute for Justice’s victory in Sampson v. Buescher, where the Tenth Circuit Court of Appeals ruled that grassroots groups have the right to speak about ballot issues without registering with the government and disclosing their activity. Now the positive effects of that ruling are being felt in other states. Last Wednesday, in the case of Hatchett v. Barland, No. 2:10-cv-00265 (E.D. Wis. Sept. 14, 2011), a federal trial court in Wisconsin followed the Sampson ruling to conclude that it violates the First Amendment to force a citizen to tell the government that he sent a few political postcards to his neighbors.
“Mailing post cards?” you ask. “That doesn’t sound like those ‘fat cats’ we keep hearing about.” Indeed, this case is just the latest example of how the burdens of disclosure laws fall hardest on ordinary citizens who don’t have lawyers to alert them to the pitfalls of campaign finance laws.
Here’s what happened. In 2006, only a few days before a Spring election, Charles Hatchett discovered that a referendum concerning liquor sales was on the ballot in his town. Afraid the referendum would pass because of lack of publicity he sent out 524 postcards advocating that people vote against it. It worked—the referendum was defeated.
Unfortunately for Mr. Hatchett, he did not know that under Wisconsin campaign finance law he should have placed a disclaimer on the postcards and reported his spending if it was over $25. His total came to about $300.
Once the postcards became public, police officers questioned him and his son about whether he had sent them out. Imagine that—police interrogating an American citizen because he had had the audacity to exercise his freedom of speech.
Thankfully, Mr. Hatchett fought back and won. The Wisconsin court, citing Sampson v. Buescher, ruled that applying a disclosure law to ordinary citizen speech such as Mr. Hatchett’s violates the First Amendment. This should not be a surprise: No American should have to register with the government for the “privilege” of sending postcards to his neighbors. What’s surprising is that the law ever existed in the first place.
In a story that demonstrates almost everything that is wrong with the breadth and complexity of campaign finance laws in this country, the Washington Public Disclosure Commission has weighed in on an issue that threatens our very democracy to its core: whether the purchase of used campaign signs for $10 each in a race for the Edmonds, WA, city council was a campaign contribution or not. While reformers constantly talk about “plutocrats,” “big-money special interests,” and “sugar daddies,” in reality the burden of campaign finance laws fall heavily on new comers, small campaigns and grassroots organizations, who do not have the lawyers, accountants, and funding necessary to comply with the government’s increasingly incomprehensible but exacting regulations on political speech. Byzantium at its most decrepit could not have conceived of a law as petty and intrusive as this.
The end result, of course, is that these laws drive amateurs and regular citizens from politics and leave the playing field to professionals and large, well-funded interests. In other words, politics becomes the sole preserve of the very “plutocrats” campaign finance reformers claim to abhor. Nonetheless, we can expect reformers to continue to assail “big money” interests while they promote laws that drive “small money” actors from politics altogether.
As campaign season heats up, we are seeing the inevitable uptick in news stories about campaign finance. The hottest topic this election seems to be the increasing number of “Super PACs” that are forming to support or oppose federal candidates.
“Super PAC” is the term that the media has adopted to describe what the Federal Election Commission calls “independent-expenditure-only committees.” As the FEC’s label suggests, these are groups that raise money for the sole purpose of making “independent expenditures,” which is FEC-speak for ads that support or oppose candidates but are not coordinated or prearranged with those candidates in any way. As of this posting, there are more than 100 active Super PACs registered with the FEC.
Super PACs are a natural outgrowth of the U.S. Supreme Court’s campaign finance decisions. The Supreme Court has held for over 35 years that individuals are allowed to spend unlimited amounts of their own money on political speech, and last year recognized in Citizens United v. FEC that this right also extended to corporations and unions. Shortly thereafter, the Institute for Justice and the Center for Competitive Politics won SpeechNow.org v. FEC, which held that individuals could pool their money to make independent expenditures. Together, Citizens United and SpeechNow.org mean that groups of people—both individuals and associations—have a constitutional right to pool their money to make recommendations directly to the public about who they should vote for.
Unfortunately, given the complexity of campaign finance law, reporters often make mistakes when describing what Super PACs are and what they can do. Here’s a perfect example, from U.S. News & World Report:
[S]uper PACs can . . . pay unlimited amounts for “independent expenditures,” and collect unlimited cash from corporations, nonprofit groups, and labor unions, which would not otherwise be allowed, under the law, to make direct contributions to a campaign.
This description is accurate up until the end, when it says that Super PACs can use “unlimited” corporate and union money to make “direct contributions to a campaign.” In fact, Super PACs can’t make any contributions to campaigns of any money, regardless of the source of that money. That’s why the FEC calls them “independent-expenditure-only committees”—they’re only allowed to make independent expenditures.
“Super PAC” is a convenient shorthand; “independent-expenditure-only committee” is a mouthful. But that shorthand can be misleading. Super PACs are not permitted to do anything that the individuals and groups that give money to them would not be permitted to do if acting alone. Individuals can’t give unlimited amounts of money to candidates, and Super PACs can’t accept unlimited amounts of money to give to candidates. Corporations and unions can’t give money to candidates, and neither can Super PACs.
Super PACs are a super-great thing for free speech and political debate, but they don’t have super powers. They’re just groups that freely raise and spend money on independent political speech—nothing more, nothing less.
Friend of IJ Brad Smith, chairman of the Center for Competitive Politics, has written a thoughtful blog post regarding the strange case of W. Spann, LLC, a corporation that formed earlier this year, gave $1 million to a pro-Romney Super PAC, and then promptly dissolved. The “reform” lobby is in near hysterics over the fact that no one currently knows where the money came from. But Smith takes a hard look at whether we should really be concerned about this latest “scandal”:
[T]the donor probably hasn’t done Restore Our Future, let alone good old Mitt Romney, any favors. Restore Our Future appears to have complied with the law, reporting its donors. Romney—well, he has nothing to do with it. The entire concept of a “SuperPAC” such as Restore Our Future is that the candidate has no role in the organization. But you can bet your a-- that Romney is going to take a political hit for this—indeed, he already is. This suggests once again the wisdom of the Supreme Court’s longstanding view that independent expenditures should not be seen as creating a quid pro quo type obligation between spenders and candidates, and indeed that candidates will often be hurt by the actions of independent speakers. Similarly, if the donation by the “shadowy” W. Spann, LLC hurts Romney, as it appears it will, that seems to suggest that the system may be self-policing—take “murky” contributions, and it is likely to hurt your cause. It hardly screams out for a new law.
Be sure to read the whole thing.
Dave Weigel of Slate reports on a newly introduced bill by freshman Rep. Rob Woodall (R-Ga.) called the Competitive Elections Act of 2011. The bill would prohibit candidates from saving contributions they receive in one election for use in a future election. The goal of the law is help new candidates compete against incumbents by removing the ability of incumbents to amass “war chests.”
Weigel predicts that the legislation is doomed and we think he’s right about that—incumbent politicians generally aren’t interested in passing laws that eliminate the advantages of incumbency. But the law is also clearly unconstitutional. First, it imposes a limit on political spending purely for the purpose of leveling the electoral playing field, which the U.S. Supreme Court has repeatedly said is forbidden. Second, the law has an exemption for candidates who are facing self-funded opponents, just like the Millionaire’s Amendment provision of McCain-Feingold, which the Court held unconstitutional in Davis v. FEC.
But the Competitive Elections Act of 2011 isn’t just politically infeasible and unconstitutional: It is yet another example of how every campaign finance regulation eventually becomes a justification for more regulation. The problem the law attempts to solve—the inability of challengers to unseat entrenched incumbents—is itself a symptom of our country’s dysfunctional campaign finance laws. Upstart candidates rarely have a broad base of electoral support. By capping the size of contributions they may receive, federal campaign finance law all but ensures that they will not be able to raise the money necessary to effectively compete against incumbent politicians.
The straightforward solution to that problem—and the solution that is consistent with the First Amendment—is to remove the caps, not to add another unnecessary, unworkable, and unconstitutional layer of regulation.
Nothing is too small to escape the attention of the Speech Police. Matthew LaCorte is a recent high school graduate in the Borough of Woodland Park, New Jersey, who is going to college this fall. Matt is a member of Young Americans for Liberty and a Ron Paul supporter. He wanted to show that support by putting up a Ron Paul 2012 sign on his front lawn.
The next thing Matt knows, Borough officials issued him a warning telling him to take down his Ron Paul sign. When Matt refused, the Borough issued him a ticket for violating an ordinance that says that “[p]olitical signs shall not be posted before thirty (30) days prior to the date of the election to which the sign pertains.”
Matthew is fighting the citation, as well he should. The First Amendment is clearly on Matt’s side. The U.S. Supreme Court in City of Ladue v. Gilleo, 512 U.S. 43 (1994); held that municipalities may not single out political signs for special burdens. And numerous courts across the country have held that cities cannot tell citizens that they can only speak during the few weeks immediately around an election. Indeed, two nearby New Jersey towns had to repeal similar durational restrictions from their books after they were subject to legal challenge.
The First Amendment isn’t something that only exists around Election Day; it protects our freedom of speech 24 hours a day, 365 days a year. Woodland Park’s ordinance is blatantly unconstitutional and the Borough should repeal it immediately. After all, it’s relatively easy and cheap for the Borough to take down the law itself. It will be far more expensive for the Borough—both in terms of time and money—to have a court strike down this unconstitutional law.
Readers of Make No Law are used to hearing stories about how the courts can be used to protect First Amendment rights. Less well known is that courts can be abused to attack First Amendment rights. That’s what happened in 2008 when a Texas developer named H. Walker Royall brought a defamation lawsuit against journalist Carla Main.
Main had written a book, Bulldozed: “Kelo,” Eminent Domain, and the American Lust for Land, that told the story of how Royall teamed up with the city of Freeport, Texas, in a project that would displace a long-running family business by using eminent domain for private gain. Royall didn’t like the way the book portrayed his role in this abuse of government power, so he sued Carla Main and her publisher, Encounter Books, for defamation. He even sued renowned law professor Richard Epstein for contributing a blurb to the book’s back cover.
The lawsuit was a blatant attempt by Royall to bully his critics into silence. And yesterday afternoon, a Texas appellate court held that there was no merit to Royall’s charges.
The ruling is great example of judicial engagement. Royall claimed that 79 separate statements in Main’s book were defamatory. He also claimed that the overall “gist” of the book was defamatory. But the court examined the evidence for each of these 79 claims and found that none of them—not one—was supported by the evidence.
The ruling is also a big win for First Amendment rights. Eminent domain abuse is a matter of public concern—that’s why journalists like Carla Main write books about it. If Royall had succeeded in silencing Main and her publisher, the chilling effect on speech would have been profound.
Finally, the ruling will serve as a helpful adjunct to Texas’s newly enacted Citizens Participation Act, which was enacted in part because of Main’s case. That new law creates a procedure that allows journalists like Main to quickly dismiss abusive defamation cases like Royall’s, which are commonly referred to as “SLAPP suits” (SLAPP is an acronym for “strategic lawsuit against public participation”). Texas is the 28th state to adopt some form of anti-SLAPP legislation.
Congratulations to Carla Main, Encounter Books, Richard Epstein, and all of my colleagues who had a hand in the victory.
For more information about Main’s case, visit IJ’s case page for Texas Eminent Domain Censorship.