This Is No Time to Reopen the Floodgates for Unreported, Illegal Campaign Money; District Court Erred in Wisconsin Right to Life Case

Dec. 21, 2006

This Is No Time to Reopen the Floodgates for Unreported, Illegal Campaign Money; District Court Erred in Wisconsin Right to Life Case

Statement of Joan Claybrook, President, Public Citizen

In what is hopefully a temporary setback to campaign finance reform, a three-judge federal district court today opened a new loophole in federal election law. The court ruled that some broadcast ads, which otherwise qualify as “electioneering communications” that corporations are prohibited from funding, could be exempt from the law – if it is shown the ads address a pending legislative matter and, using a narrow and formulaic test, do not appear on their face to be an attempt to affect an election.

The 2-1 ruling involves a Wisconsin anti-abortion group – Wisconsin Right to Life, Inc. – that has challenged campaign finance restrictions on a nearly perennial basis. In this particular case, Wisconsin Right to Life designed a television ad that directly challenged the electioneering communications provisions of the Bipartisan Campaign Reform Act of 2002 (BCRA, also known as the McCain-Feingold law).

BCRA effectively closed a gaping loophole in campaign finance law, under which corporations and special interest groups would air “sham issue ads” intended to affect campaigns by sharply criticizing an identified candidate right before an election. The ads would avoid using the “magic words” of “vote for” or “elect,” and therefore were deemed not subject to the ban on corporate electioneering or to disclosure requirements and contribution limits otherwise applicable to election expenditures.

BCRA changed all that. It established a bright-line test to determine when an ad is an issue ad (not subject to regulation) versus a campaign ad (subject to regulation). Under BCRA, if a television or radio ad identifies a specific candidate within 60 days of a general election and targets voters in that candidate’s election district, it is a campaign ad. If the ad airs outside the 60-day window and does not expressly urge a vote for or against a candidate, it is an issue ad. The court’s decision upsets this clear distinction by allowing some electioneering communications targeting candidates shortly before an election to be paid for by corporate money if a court finds that they are not explicit enough in seeking to influence voters.

If the decision of the court stands, how badly the loophole will be exploited depends on how loosely election officials at the Federal Election Commission and the courts define “issue ads.” Given that federal election officials appointed by politicians are, more often than not, opponents of campaign finance reform, this ruling could open a huge floodgate of unreported and otherwise illegal money into campaigns.

The ruling is likely to be appealed to the U.S. Supreme Court. We remind the Court of the eminently sound reasoning behind its earlier decision upholding BCRA: “In the future, corporations and unions may finance genuine issue ads during those time frames by simply avoiding any specific reference to federal candidates.” Given the ready availability of this option for groups that genuinely want to talk only about issues, there is no reason to allow candidates to be targeted in the guise of issue advertising.

We are finally climbing out of the era of sham issue advocacy, paid for by stealth groups using illegal money for campaign ads. As we enter what will be the most expensive presidential election in history, this is no time to tear down this crucial pillar of campaign finance law.

###