12 for ’12

It’s been nearly two years now since the Supreme Court’s Citizens United decision triggered an earthquake that cracked the foundations of our campaign finance system and altered the political landscape.  The case roused a dormant Section 527 of the Internal Revenue Code, opened up new channels for soft money, and gave rise to the creation of “SuperPACs.”

Looking back, the 2010 elections looked nothing like the 2008 elections.  And as we look ahead to the 2012 elections, we can see that the dust is still settling.  In no particular order, here is a non-exhaustive list of twelve political law issues to watch as they unfold this year in the spotlights and shadows of the presidential election:

1.  The Crumbling Regulatory Infrastructure.  With its commissioners deadlocking along party lines on big questions of policy and enforcement, many fear the FEC as presently constituted appears to have reached the outer limits of its ability—if not its authority—to regulate politics.  The Election Assistance Commission, set up in the wake of the disputed election of 2000, is now a commissionerless “zombie agency.”  Our system of public financing for presidential campaigns appears to be dead.  What will it take to reverse the deregulatory spiral?

2.  The Role of the Supreme Court.  The Supreme Court, and in particular its conservative majority, has been battered for its decisions in consequential election law cases like Bush v. Gore, Citizens United and McComish v. Bennett, but to what effect?  Earlier this week, the Court summarily affirmed a lower court’s decision upholding the prohibition on political contributions by foreign nationals.  It also heard oral arguments in a pair of Texas redistricting cases in which Section 5 of the Voting Rights Act was said to be at risk of falling, but commentators have suggested, based on the arguments, that Section 5 appears to be safe, at least for now.  Has the Court gone as far as it wishes to go in deregulating politics, or perhaps been brushed back by the uproar over Citizens United?  A number of other controversial political cases percolating in the lower courts may provide the ultimate answer—including Danielczyk, challenging the corporation contribution ban, Wagner v. FEC, challenging the ban on contributions by federal government contractors, and Shelby County v. Holder, in which the constitutionality of Section 5 will be more directly at issue.

3.  The Coming War Over Voter ID.  Simply put, this is going to be huge.

4.  Coordination.  For decades, the linchpin of our campaign finance law was the ban on corporate contributions.  Now that even Section 441b may be teetering, the FEC’s much maligned coordination regulations are emerging as the most important provisions in Title 11 of the Code of Federal Regulations.  As candidates and outside groups continue searching for the outer boundaries of those regs, and reform groups search for opportunities to file complaints like this one, 11 C.F.R. §§ 109.20, 109.21 and 109.22 are going to get a workout this coming year.

5.  The John Edwards Trial.  Political lawyers from across the ideological spectrum seem to have concluded that United States v. Johnny Reid Edwards is a real stretch.  (I disagree, but appear to be in a small minority.)  Nevertheless, the case survived Edwards’ motions to dismiss and is presently scheduled for trial this Winter.  Resolution of the ultimate question will be interesting enough—whether a federal candidate committed a crime by orchestrating or signing off on a plan to funnel a million dollars from wealthy campaign donors to his mistress—but there are other issues as well, including whether the judge will permit two former FEC commissioners to offer opinion testimony as expert witnesses—not on issues of fact, but on the ultimate legal issue in the case.

6.  The Wisconsin Recall Election.  Whether or not Mitt Romney runs the table and puts the GOP presidential primary away early, by Spring the center of the political universe likely will have shifted to Wisconsin, where Governor Scott Walker probably will be facing a recall election.  Legal issues already have arisen, including a successful claim that the equal protection rights of voters who refused to sign recall petitions are violated by lax validation of the signatures that do appear on the petitions.  We can’t know what other legal issues may arise in connection with the Wisconsin recall, but with the amount of attention, money and political talent that probably will be pouring into the Badger State this Spring, we can be certain that legal issues will arise—and that when they do, they will be interesting, consequential and fiercely contested.

7.  GOP Presidential Primaries in NH, SC, FL, AZ & MI.  The Republican National Committee has stripped New Hampshire, South Carolina, Florida, Arizona and Michigan of half of their delegates for failing to abide by the RNC’s presidential primary calendar—the second consecutive cycle in which this type of action has been taken.  Perhaps someone will put the GOP nomination away early and arrive in Tampa with a first ballot majority, in which case this probably won’t become a major issue.  But what if no one locks up the nomination early, and two or more candidates find themselves locked in a state-by-state, delegate-by-delegate slog—as was the case for the Democrats in 2008?  All of the sudden those extra delegates would become incredibly important, and you can bet lawyers on all sides would be looking for a way out from under this decision from 2008.

8.  Americans Elect.  As the American electorate’s approval of the incumbents and institutions of our government plunges to generational if not historic lows, Americans Elect is planning to hold an open, online nominating convention that will result in a bipartisan ticket it hopes will be on the ballot in all 50 states.  But already the group has been the subject of controversy surrounding its tax status (501(c)(4)), its donors (they’re not disclosed), as well as a veto the organization will hold over the ticket that ultimately emerges from the nominating process.

9.  Redistricting Battles.  Redistricting always spawns litigation, and this year is no exception, with over 100 redistricting cases now pending in the courts.  But some of this year’s cases will go beyond usual issues like contiguity, compactness and communities of interest.  Virginia is facing a lawsuit alleging that the General Assembly forfeited its chance to draw new congressional districts because it did not do so in Calendar Year 2011, as required by the state constitution.  At least four other states, too, have not been able to pass one or more maps, giving rise to the possibility of judge-drawn maps in those states.  The 11th Circuit is considering the constitutionality of a “Fair Districts Amendment” to Florida’s state constitution, which opponents allege violates the Elections Clause of the U.S. Constitution by placing the responsibility for drawing new lines in a commission comprised of unelected citizens.  It’s possible that similar laws in a handful of other states could fall too if the Florida law is struck down.

10.  Outside Money:  You Can’t Stop It; You Can Only Hope to Contain It.  Mitt Romney’s call to abolish them notwithstanding, SuperPACs are here to stay, at least for the foreseeable future.  So are corporate contributions to (c)(4)s, (c)(5)s and (c)(6)s.  So expect reform advocates to attempt to hamstring these groups with new disclosure requirements—aimed at the organizations and their potential donors.  Earlier this year, the FEC deadlocked on a request by Maryland Rep. Chris Van Hollen to initiate a new rulemaking to change the disclosure requirements for independent expenditures, but a federal court yesterday heard arguments in a related lawsuit Van Hollen filed concerning electioneering communications.  Also, calls for more voluntary disclosure of corporate political spending and shareholder approval of certain political contributions and expenditures are continuing.  And then, of course, are the forces pulling the other way, including the newly-formed “SuperPAC for Hire,” as well as Dan Backer of DB Capitol Strategies, who wants to give every PAC the chance to be Super.

11.  Tax Status Complaints.  Reform groups have filed numerous IRS complaints against politically-active 501(c)(4) organizations, all generally alleging that the groups violated the tax law’s “primary purpose” requirement by engaging in excessive election-related expenditures.  Will the IRS move this year against any of these groups?  Still other complaints allege that the FEC should be required to regulate certain politically-active (c)(4)s as federal political committees.  Would the FEC reach that far across the U.S. Code?  Action along these lines by either agency would be a very significant development in this area of the law.

12.  Just How Super Will the Colbert SuperPAC Be?  Comedian Stephen Colbert’s independent expenditure only committee, Americans for a Better Tomorrow, Tomorrow, has been satirizing SuperPACs for months now, but it has yet to file an FEC report of its own.  When it does file later this month, just how super will it be—meaning how many corporate contributions, and individual contributions in excess of $5,000, will it report?  Will it continue to be an effective exercise in satire if it does not raise significant soft money contributions?  And will it actually attempt to influence a federal election by making a communication that constitutes an independent expenditure?

Better Things To Do

Today, Thursday, December 22, 2011, is the ballot access deadline for the 2012 Virginia Republican presidential primary.  It also marks the most significant organizational challenge for the presidential campaigns since the Ames Straw Poll on August 13—a labor-intensive task so expensive and time-consuming that at least one and possibly more campaigns will not even attempt it this year.  And, the very real possibility exists that one or more candidates who made a run at it will come up short and be kept off the Virginia primary ballot as a result.

Virginia’s statutory ballot access requirement is, quite simply, one of if not the most daunting in the country:  A minimum of 10,000 petition signatures collected statewide, including at least 400 from each of its 11 congressional districts.  That’s hard enough.  But then there are the additional restrictions:  The petition circulators must be registered or eligible to vote in Virginia.  The signatures must be gathered using the State Board of Elections’ official form, a two-page document which must be reproduced as double-sided.  (Single-sided stapled forms are not accepted.)  Signatures must be collected on forms that are specific to each city, county and congressional district.  Only “qualified” voters may sign a petition.  And every single petition form must be sworn and notarized.

Want a sense of how next-to-impossible this is?  I know top-flight Virginia political consultants who turned down lucrative petition project contracts from presidential campaigns because they did not think it could be done.

And then there’s the Republican Party of Virginia, which is tasked by law with the responsibility of certifying which candidates have qualified for primary ballot access.  RPV has effectively raised the statutory requirement of 10,000/400 by a factor of 50% this year by offering this safe harbor:  The Party first will conduct a facial review of all petitions, and candidates who submit at least 15,000 signatures and 600 from each congressional district will be presumed to have met the statutory 10,000/400 requirement.  Candidates who submit 14,999 or fewer, however, will undergo signature-by-signature scrutiny of his or her petitions—something no statewide candidate in recent memory ever has had to endure.*

For many years, the Virginia GOP generally selected its nominees in conventions.  But the Morse v. Republican Party of Virginia litigation, which challenged RPV’s mandatory convention registration fees as poll taxes, caused the Party temporarily to abandon conventions in favor of primaries.

The first statewide petition drive post Morse was in the 1996 Republican U.S. Senate primary.  Then came the 1997 primaries for Governor, Lieutenant Governor and Attorney General, and in 2000, the Republican presidential and U.S. Senate primaries.

Each successive petition drive has gotten harder and harder as volunteers have grown more and more tired of the arduous, tedious work it takes to gather thousands upon thousands of signatures in ever more frequent petition drives.  The drives have gotten more expensive, too, as campaigns have resorted to paying volunteers to incent their efforts.  What should be a test of a campaign’s organization and grassroots has become a drain on them—exhausting volunteers and siphoning away money better spent contacting voters, delivering messages, identifying supporters and driving turnout, all important objectives that petition drives have proven worthless at advancing.

In 2008, two presidential candidates very nearly failed to meet the minimum requirement of 400 signatures from the Third Congressional District and almost missed the ballot as a result.  Which brings us to this year, when it is probable that at least one and possibly more of the major GOP candidates will fail to qualify for the Virginia ballot.

This is especially unfortunate because this year, for the first time in decades, the GOP nomination likely will not be all-but decided before Virginia’s primary, and thus Virginia’s primary will truly matter.  But due to Virginia’s unreasonable ballot access requirements, all the surviving candidates may not be on the Virginia ballot—which means those candidates wouldn’t campaign here, and Virginia’s voters would have fewer choices.  Even as Virginia has moved up in the primary calendar, it risks marginalizing itself in the presidential selection process as its petition drives become harder and more expensive, and as more candidates fail to succeed or even to attempt them.

It doesn’t have to be this way.  A few years ago, the Virginia Democrats circulated one petition on behalf of all primary candidates, but the Republican Party of Virginia has not seen fit to follow that sensible step.

Many other states require merely the filing of a few forms and payment of a filing fee—and in the case of South Carolina, a substantial one at that.  No doubt Virginia’s political parties—notoriously cash-hungry due to our anything-goes system of campaign finance in which individuals and corporations can contribute unlimited sums directly to candidates—could use such a financial shot in the arm every four years.

And for grassroots-fueled candidacies, or just for those who enjoy the very American act of circulating a petition, Virginia could maintain petitions as an alternative requirement, or perhaps as part of a hybrid system requiring payment of a filing fee and submission of a substantially fewer number of signatures.  (In fact, Virginia might have to retain a petition drive option in order to obtain Section 5 preclearance of a change to a filing fee-based system.)

Regardless of what happens tomorrow, when Republican Party of Virginia officials begin validating  petitions and signatures, it’s time to do away with the 10,000/400 requirement and move to a more sensible ballot access system.  Campaigns have better things to do with their staff and financial resources.  Volunteers’ time and efforts could be better spent.  And when an unresolved presidential primary rolls into Virginia, voters should be able to choose from the full slate of remaining major candidates—not just those who were able to collect 10,000 petition signatures, including 400 from each congressional district.

*  For all candidates who have met the statutory requirement, I think the Party’s plan to scrutinize some candidates’ signatures and not others, based upon the arbitrary standard of whether the candidates submitted a full 50% more than the statutory requirement, violates the Equal Protection Clause under Bush v. Gore.  It seems to me that all candidates who facially meet the statutory requirement should have their petitions and signatures adjudged according to the same standard.  More on that here if it becomes an issue.

Trust, But Verify

No one ever hires a campaign consultant thinking that the consultant might embezzle from the committee.  And yet it happensAgain.  And again.

Following a spate of high-profile political embezzlement cases, the Federal Election Commission and campaign finance lawyers rightfully are placing renewed emphasis on the FEC’s recommended best practices and internal controls as an important safeguard against embezzlement.  Moreover, if adopted and implemented by the committee, the internal controls provide a safe harbor for an innocent treasurer who otherwise could be held personally liable as a result of an embezzlement that happened on his or her watch.

These recent embezzlement cases point up more than the importance of adopting the FEC’s best practices and internal controls, however.  They also demonstrate the need to run a political campaign like a business—and in the case of many House and Senate campaigns, these are multi-million dollar annual businesses.

It’s difficult to envision any new business forming up and launching a product or service into the marketplace without first taking on some type of corporate form to shield the individuals behind the company from personal liability.  But a quick review of public records indicates that a vast majority of political campaigns decline to undertake this simple step.

It’s similarly hard to imagine a company hiring an employee who immediately will be privy to reams of sensitive information, or retaining a vendor to provide hundreds of thousands of dollars in services, without putting a contract in place to memorialize specific points of the parties’ agreement and to protect the company’s assets and interests.  Campaigns routinely hire employees and retain vendors, however, and expose them to the campaign’s research, strategic, financial and operational information, without putting so much as a confidentiality agreement in place.

What could go wrong?  How about unlimited personal exposure on the part of the candidate for the committee’s debts and liabilities, for starters?  Karl Rove taught that lesson to, of all pupils, a former Attorney General of the United States, Dick Thornburgh, after Thornburg failed to incorporate his U.S. Senate campaign.  Still not convinced?  How about having your campaign account frozen by a federal bankruptcy court to satisfy the candidate’s personal and business obligations?  Georgia State Representative Jill Chambers learned that one the hard way after she, too, neglected to incorporate her campaign committee.  (An abominable decision by the bankruptcy court in that case, by the way.)  And then, of course, there are the embezzlement cases, in which campaign treasurers could be held personally liable by the FEC because of diversions of funds they had nothing to do with.

Personal relationships are foundational to politics.  Political candidates tend to surround themselves with people they know and trust.  Florida Congresswoman Corrine Brown probably trusted her fundraisers, too.  Then they sued her for $44,495.

Perhaps candidates who decline to incorporate their campaigns are looking to save a bit of time and money for another round of GOTV robocalls.  Perhaps campaigns that fail to use contracts don’t want to risk offending trusted advisers, vendors and consultants by making them sign a legal document.

Whatever the reason, it’s bad business practice. And in an age when the average House race costs $1.163 million and the average Senate race costs over $8 million, there’s a lot at stake.  So candidates, heed the old Russian proverb and “trust, but verify”:  incorporate your campaign committees; implement the FEC’s best practices and internal controls; and sign contracts with your employees, consultants and vendors.  Your campaign is, after all, a business—with a bank account, office space, employees, assets and liabilities—you should run it like one.

Copyright 2011 – Chris Ashby and Ashby Law PLLC – All Rights Reserved.

An End Run on the Campaign Finance Laws

When the government indicted John Edwards for campaign finance violations stemming from the extra-marital affair he conducted and covered-up during his 2008 presidential campaign, his attorneys assailed the charges as “novel” and “unprecedented.”  They were quick to condemn their client for cheating on his cancer-stricken wife and lying to the American people, but protested that the payment of nearly $1 million in hush money by wealthy Edwards donors to his mistress and mother of his youngest child was not illegal.

Prominent Washington lawyers, law professors and national Democrat surrogates parroted the Edwards talking points and all but predicted dismissal of the charges or a “not guilty” verdict.  Apparently, many of the same people who can’t stand the thought that the Constitution permits a corporation to fund a political ad independently of a candidate can see no crime in the payment of $1 million in hush money to the paramour of a would-be president.

But here’s why Team Edwards shouldn’t print invitations for the acquittal barbecue just yet:

First, of course the charges are unprecedented.  That’s because the conduct itself is unprecedented.  So unprecedented, in fact, that the only person ever before to have conceived of such a scheme had the good sense to ask the Federal Election Commission for permission before implementing it.  The FEC said no, by the way, in a public advisory opinion of the type that campaign finance lawyers cite to their clients as precedent every day.

Just because the charges are unprecedented doesn’t mean they can’t stick.  There is—unfortunately, in this case—a first time for everything.

Second, a general principle of law prohibits one from doing indirectly what one could not achieve directly.  Here, Fred Baron and Bunny Mellon could not have contributed the hundreds of thousands of dollars at issue directly into Edwards’ presidential campaign, because illegal excessive contributions would have resulted.  Neither could Edwards’ campaign have spent that money to pay Rielle Hunter’s rent, car payment, utilities, household food and other similar expenses, because federal campaign finance law prohibits the conversion of campaign funds for personal use.

So instead, Baron and Mellon allegedly made an end run on the law and gave the money directly to Rielle Hunter.  Accomplishing an illegal result through the use of incremental lawful steps, however, does not automatically render the result legal.  Just ask the many individuals the IRS has jailed as a result of tax shelter litigation over the past three decades.

Indeed, no campaign finance lawyer worth his or her hourly rate would have signed off on a plan to divert hundreds of thousands in cash from several max donors to place a roof over the head of the candidate’s secret love child.  Such a ploy would constitute a knowing and willful attempt to evade the limitations and prohibitions of the Federal Election Campaign Act—a matter that is and always has been properly the subject of the federal criminal laws, not the FEC’s civil conciliation process, as Edwards’ lawyers have begged for.

Third, Edwards apparently intends to argue that the donors paid off Hunter not to further his presidential campaign, but rather to conceal the affair from Edwards’ wife. This, they contend, means that the funds never were campaign contributions, because they instead were gifts of a personal nature, if not to Edwards himself then to his lover or her creditors.*

If accepted, this argument would permit wealthy political donors to underwrite presidential and other federal candidates’ living and personal expenses with unlimited and undisclosed cash contributions merely by denominating the payments as “gifts” to a “friend,” paying them to the candidate and his or her family or creditors instead of running them through the campaign.

This type of payment is exactly what the campaign finance law’s “irrespective of” test forbids.  That is, the law prohibits the use of campaign funds to cover personal expenses, defined as those obligations that would exist “irrespective of” the individual’s status as a federal candidate.  Those types of obligations include mortgage payments, tuition bills, utility charges, health and country club memberships—and, as Edwards apparently will argue, the desire to conceal an extra-marital affair from an unknowing spouse.

If the definition of campaign contribution is broad enough to encompass indirect payments and expenditures such as those at issue in the Edwards case—and it is—then the use of such funds to help conceal an affair from a spouse is per se illegal personal use.  This is particularly true if the candidate or his campaign conceived, directed, facilitated or assented to the scheme.  In this case, it is hard to believe that everyone involved did not know exactly what was going on.

All of this is not to say that the prosecution of John Edwards will be easy, let alone successful.  His legal team is stacked with brilliant, experienced, media savvy trial lawyers.  For all of Edwards’ own flaws as a witness, reports have suggested that the government’s star witnesses may have credibility problems, as well.  And the government will have to prove beyond reasonable doubt that Edwards orchestrated or at least permitted the hush payments.

But to the extent the prosecution of Edwards is, like the conduct the indictment alleges, unprecedented, the case against him is not unsound.  The law limits the amount of money that any single donor can contribute to a candidate, and defines contributions to include both direct and indirect payments and expenditures. Moreover, the law prohibits the use of contributions for personal purposes.  John Edwards should not be able to escape liability merely because his donors funneled their contributions around the system rather than through it.

*  Much of the public debate about this case has centered on whether Baron and Mellon’s payments were made “for the purpose of influencing a federal election.”  It appears most have concluded they were not, such that the payments would not be campaign contributions as a matter of law.  I think Edwards’ attorneys will have a tough time convincing a jury of that underlying fact, especially in light of Bunny Mellon’s widely-reported note.  (“From now on, all haircuts, etc., that are necessary and important for his campaign – please send the bills to me . . . . It is a way to help our friend without government restrictions.”)

More fundamentally, however, there can be no doubt that if Baron and Mellon had sent the money to the campaign instead of directly to Hunter, those funds would have been deemed contributions (albeit excessive ones).  I don’t think, as stated above, they can or should escape liability for that merely by funneling the money around the system rather than through it, and I have a hard time believing any campaign finance attorney would have advised a client that he or she could get away with it.

Note:  The original version of this post, dated June 10, 2011, can be found here: http://ashbylog.tumblr.com/post/6386827987/an-end-run-on-the-campaign-finance-laws.


“Tracking” is a distinctly 21st Century political phenomenon in which a campaign arms one or more volunteers with video cameras and assigns them to follow an opposing candidate with the hope of recording a misstep, misstatement, or other mistake.  Until now, tracking generally has been confined to campaign ralliespost-debate spin roomstown hall meetings and, occasionally, the halls of Congress and the streets of Washington, D.C.

Not anymore.  Earlier this week, tracking crossed a new threshold when a Rutgers University professor stalked Congressman Paul Ryan as he was having dinner at the Capitol Hill power restaurant Bistro Bis.  As the professor slurped down half a bottle of expensive wine in celebration of her birthday, she eavesdropped on the discussion between the Congressman and his two dining companions, and used her smartphone to snap a picture of an even more expensive bottle of wine sitting on Congressman Ryan’s dinner table.  Looking the bottle up on the restaurant’s wine list, the professor determined that it sold for $350.

After dinner, the professor turned tracker angrily confronted Congressman Ryan and asked him—incongruously—“how he could live with himself” for drinking from a $350 bottle of wine in light of his calls for cuts in federal spending.  She also accused his dining companions of the ultimate Washington crime, lobbying, before a waiter intervened and caused the professor to leave.

If the men dining with Congressman Ryan were lobbyists, then they could not have paid for his meal or his wine.  As it turns out, the Congressman’s guests were not lobbyists, but rather economists.  Nevertheless, Congressman Ryan paid for his own meal, and he also paid for an entire bottle of wine despite having consumed only one glass.  He has even produced the receipt.

From a legal perspective, Congressman Ryan did all the right things.  He avoided not only impropriety, but also the appearance of impropriety.  At the end of the day, all that is left of this ridiculous, non-newsworthy story is a very simple but important lesson for all Members, staffers and lobbyists.  Know the ethics and gift rules, follow them scrupulously, and keep your receipts.  In this day and age, you never know who is lurking at the next table.  With a smartphone.  And an 8-megapixel camera.  And an axe to grind.

Unfriending the FEC

Only 18 people like the FEC on Facebook.  It is, perhaps, the federal government agency with the fewest Facebook friends.  And a new draft Advisory Opinion from the Federal Election Commission won’t win it anymore.

In Draft AO 2011-09, the FEC would deny Facebook’s request for recognition that small, character-limited advertisements purchased by federal candidates are excepted from the authorization disclaimer requirement because either the ads are too small to include the disclaimer or because including the disclaimer would be impractical.  The FEC still would permit Facebook to display the ads, however, provided that the ads link to a site that contains the proper disclaimer, and that each ad and the site it links to were paid for and authorized by the same person.

Perhaps Facebook’s team will take this half loaf of an opinion because the end result is the same:  an “Authorized by John Citizen for Congress” disclaimer will not eat up precious letters in a 100- or 160-character ad, but instead will appear on the candidate’s webpage where space is virtually unlimited.

In a world of technological possibility, however, the reasoning behind the draft AO is troublesome and problematic, if not for Facebook, then for others.  Consider the humble No. 2 Pencil, long a favorite of candidates campaigning at county fairs and high school football games across the country.  Former Virginia Fifth District Congressman Virgil Goode handed these pencils out to young and old alike long after the rest of the world had upgraded to mechanical pencils, erasable pens and, eventually, computer keyboards.  A vintage Goode for Congress pencil is practically a collector’s item now in Southside Virginia.

A pencil large enough to bear a “Goode for Congress” message would have to be large enough to include an “Authorized by Goode for Congress” disclaimer, would it not?  Technology certainly would not prohibit it.  If you can print on one side or facet of a pencil, you certainly can do it on another side or facet, right?*

Well perhaps the pencil is too small, or Goode’s message too large, to fit the disclaimer.  Couldn’t Goode’s message be printed smaller, to make room for the important authorization disclaimer?  Alternatively, couldn’t the pencil manufacturer simply make the pencil larger?  Is it not just a business decision by the manufacturer to limit its pencil to a certain size that research and experience have proven consumers are most likely to purchase and use?  Aren’t manufacturers of novelty items still making jumbo pencils?

These questions are important because these two facts — (1) the fact that technology would permit inclusion of the disclaimer, but for (2) the fact that Facebook had made a business decision to limit the size of its ads — appear to have sunk Facebook’s request for an exception.  Indeed, according to the draft AO:

“The limitation on the size or the number of characters that Facebook allows to be included in a Facebook ad is not mandated by the physical limitations of the display medium or Internet technology.  Neither is the limitation on the size of the ad set by a third party who established the technological medium and its use.  Rather, Facebook indicates that it has set the small sizes for its ads because of Facebook’s business decision that ‘larger ads would disrupt the social networking experience for Facebook users.’  Facebook’s business decision in favor of small ads does not justify elimination of the statutory disclaimer requirement given that it remains physically and technologically possible for Facebook to increase both the size of its ads and the number of characters that may be included in its ads.”

Is the FEC preparing to take away the long-standing regulatory exceptions to the disclaimer requirement in 11 CFR 110.11 for “bumper stickers, pins, buttons, pens, and similar small items” and “skywriting, water towers [and] wearing apparel”?**  Of course not, although I bet there are some whose hearts flutter at the very thought of it.  Should former Rep. Goode go into hiding until the statute of limitations runs on his disclaimerless pencils?  No.  But at the same time, Draft AO 2011-09 (and 2010-19 (Google) before it) easily could have opined that, like a lapel pin or a small campaign button, a Facebook ad is simply too small to include a disclaimer, or that inclusion would be impractical in light of the 100- to 160-character limit.  (In fact, one draft (Draft B) of the Google AO reached just that conclusion, but failed to obtain four votes.)  Instead, what Draft AO 2011-09 shows is that even as Congress refuses to expand it and courts are slashing away at it, there are those at the FEC who still take the most expansive view of the agency’s regulatory jurisdiction and aren’t prepared to cede an inch — or in this case even a character — of it.

* Have a hard time getting upset about a disclaimerless “Goode for Congress” pencil?  What about a pencil printed with the following — disclaimerless — message:  “John Smith lied. Write in Jane Doe on Nov. 5.”

** The “wearing apparel” exception has always struck me as especially curious.  It seems that all but the tiniest item of apparel would have ample room for a small disclaimer, and that a disclaimer on a piece of clothing bearing a political message would serve the same interest as a disclaimer on any other item, and in fact would be especially important if the clothing item bore a negative message.  Nevertheless, as it stands, an extra-large t-shirt with a negative message is excepted from the disclaimer requirement, but a tiny Facebook ad with a positive message is not.

Just Because You Can Doesn’t Mean You Should.

Just because you can doesn’t mean you should.  Just ask the several Members of Congress who are facing a potential Ethics Committee investigation based upon campaign fundraisers they held around the time of a House Financial Services Committee vote on the Dodd-Frank financial services reform bill in December 2009.

Federal campaign finance law does not address the timing of campaign contributions to Members of Congress.  The federal criminal code, however, would prohibit the making or acceptance of a campaign contribution in exchange for official action, and congressional ethics rules require Members to avoid even the appearance of impropriety.  And it is those provisions, not the Federal Election Campaign Act and FEC regulations, that are at issue here.

Indeed, according to the Office of Congressional Ethics, which has referred the matter to the Ethics Committee, fundraising around committee votes creates the appearance of special treatment or access, and makes it look as if contributions to the event were linked to an official act.  This position no doubt came as news to the targeted Members — who likely scheduled their fundraisers based upon long-standing congressional fundraising practices and the absence of any prohibition in the Federal Election Campaign Act or FEC regulations against them.

But the federal government has a long history of prosecuting public officials and others who engaged in lawful acts with allegedly illicit motives.  The IRS, for instance, has aggressively pursued taxpayers who combine lawful instruments, vehicles and transactions to avoid paying taxes.  More recently, the DOJ has utilized the so-called “Honest Services” statute to prosecute, among others, an Alaska State Senator for not disclosing employment negotiations Alaska law did not require him to disclose.

Now, the investigation of congressional fundraising is especially troublesome.  Federal law limits the amount of money any donor can give to $2,400 per candidate per election.  Congress put that limit in place to combat corruption and the appearance of corruption, and the $2,400 cap represents Congress’ judgment that contributions equal to or less than that amount are too small to corrupt or appear to corrupt the recipient.  Moreover, while the federal campaign finance regulatory scheme fills hundreds of pages in the Federal Register, Congress has not seen fit to include in that scheme a limit on the timing of fundraisers or contributions.

The Ethics Office’s referrals ignore and undermine Congress’ judgment on this matter.  Nevertheless, they illustrate that when it comes to the intersection of law and politics, it is important to consider not only what is legal and illegal, but also what is likely to draw the attention of federal investigators, the media and reform advocates — some of whom are not as interested in what the law says as they are in what they think it should say, and in using your case to make new law.

The best political law attorneys recognize this dynamic and help their clients structure their activities accordingly — saving their clients legal costs, opportunity costs and reputation costs in the process.