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Regulation of Phony "Issue Ads" Is Constitutional

During the 2000 election, independent groups running phony issue ads (such as the AFL-CIO, Handgun Control, NAACP, Citizens for Better Medicare, Business Roundtable and Americans for Job Security) spent more than $60 million for TV time alone, according to New York University’s Brennan Center for Justice. The Brennan Center and researchers at Brigham Young University also concluded that nearly all pre-election broadcast "issue ads" were in reality campaign ads and perceived as such by their audiences as well as academic reviewers.

The McCain-Feingold-Cochran bill (S. 27) would bring these phony pre-election TV and radio "issue ads" -- which are actually campaign ads designed to elect or defeat candidates -- under the contribution limits and disclosure requirements of federal election law. It would therefore end wholesale evasions of campaign finance law. Under S. 27:

Corporations and unions would be banned from financing TV or radio ads referring to clearly identified candidates that are aired within 60 days of a general election and 30 days of a primary.

Direct mail, print, phone and Internet communications to the public would not be covered, no matter what type of organization made the communication.

Non-profit section 501(c)(4) and 527 groups would be exempt from any restriction on spending if it was paid for by individuals rather than by corporate or union contributions; and

Non-profits would be required only to disclose all persons contributing $1,000 or more toward total expenditures over $10,000 for "electioneering" broadcasts in an election cycle.

Opponents of these provisions argue they violate the Constitution, specifically the First Amendment’s guarantees of freedom of speech and association. They point particularly to the Supreme Court’s 1976 Buckley v. Valeo decision which, in order to protect constitutionally mandated free discussion of public issues, interpreted federal campaign law as regulating only communications that "expressly" advocated the election or defeat of a clearly identified candidate. In a footnote, the Court gave the use of words such as "vote for" and "vote against" as examples of what could be regulated.

Pre-Election "Issue Ads" Are Indistinguishable from Campaign Ads

Many noted legal scholars believe that the Court would not automatically reject new congressional action narrowly regulating certain phony issue ads. These ads represent a major new development in the evolution of "express advocacy" since the Buckley case. They don’t say "vote for" or "vote against" a candidate, but are understood by their audiences as communicating the same messages. In fact, the same message has largely replaced traditional ads and now is commonly used by candidates themselves. Careful studies by the Brennan Center and researchers at Brigham Young University have confirmed that not only independent groups but even candidates and parties no longer generally run ads that say "vote for" or "vote against." In deciding on the constitutionality of new regulations, the Supreme Court would necessarily take into account the explosion of this new campaign technique in the last few years. Indeed, in a recent case conservative Justice Anthony Kennedy criticized "so-called issue advocacy, advertisements that promote or attack a candidate’s positions without specifically urging his or her election or defeat" as one of the "ever more elaborate methods of avoiding contribution limits."

Constitutionality of the Corporate and Union Financing Ban

S. 27’s strongest restrictions (bans on financing issue ads that mention candidates) fall hardest on corporations and unions. But the Court has upheld federal bans on corporate and union campaign spending since they were first enacted, in 1907 and 1947 respectively. In order to maximize protection for individual speech and association, the bill exempts from the ban non-profit section 501(c)(4) and 527 advocacy groups which advertise only with funds provided by individuals.

The likelihood that the Court would sustain S. 27’s provisions is heightened by its limited coverage and time-frame -- designed to curb any possible interference with pure issue discussion. In an October 1, 1997 letter to Senators McCain and Feingold, 18 legal scholars wrote, "As long as the definitional line is appropriately narrow, and the scope of the statute's coverage is predictable, we see no constitutional objection to closing the 'issue advocacy' loophole by covering speech whose predominant intent and effect is to urge or induce a vote for or against a candidate."

Constitutionality of Disclosure of Large Donors

Finally, the legislation’s carefully drawn provision requiring disclosure of $1,000+ contributors to non-profit ads would surely be upheld by the Court. The Buckley decision upheld disclosure of even small campaign contributions and independent expenditures for such compelling public interests as providing essential information for voters and deterring corruption. As an added privacy protection, S. 27 contains an option for a group to establish a separate fund for contributions to the ads, preventing any wholesale disclosure of all of the group’s $1,000+ contributors.

February 23, 2001

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