Money from outside political groups has poured in to today’s special election in Upstate New York. One of the biggest donors has been the Republican-backed American Crossroads. In South Carolina, the pro-Democratic group Priorities U.S.A. has begun running ads against Mitt Romney. In the year following the Supreme Court’s Citizens United decision, dozens of groups known as “super PACs” have sprung up. The groups can raise and spend unlimited sums of money. Non-profit groups have also gotten more involved in politics, and they don’t have to disclose donors. Advocates for campaign finance reform say the influence of these outside groups could be dangerous. Fundraisers say they’re perfectly legal. A look at the changing rules of campaign finance.

Guests

  • Dan Eggen reporter, Washington Post
  • Trevor Potter former chair of the Federal Election Commission, president and general counsel of The Campaign Legal Center, and a lawyer at Caplin & Drysdale
  • Stanley Brand is partner with the Brand Law Group, former counsel to the House of Representatives, and a law professor at Penn State University

Transcript

  • 10:06:54

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Today's special election in Upstate New York is drawing attention to campaign finance laws. More than $2 million from outside political groups has poured into the three-way House race. Some of that money has been raised through super PACs. Dozens of these groups have emerged in the last year following the Supreme Court's Citizen United ruling.

  • 10:07:30

    MS. DIANE REHMJoining me to talk about the changing landscape of campaign finance laws, Trevor Potter of the Campaign Legal Center, Dan Eggen, he's a reporter with The Washington Post, and Stan Brand, he's a partner with the Brand Law Group. We will take your calls throughout the hour. Join us on 800-433-8850. Send us your email to drshow@wamu.org. Join us on Facebook or send us a tweet. Good morning to all of you.

  • 10:08:16

    MR. TREVOR POTTERGood morning.

  • 10:08:16

    PROF. STAN BRANDGood morning.

  • 10:08:17

    REHMDan Eggen, if I could start with you, talk about what the definition of a super PAC is and why we're seeing so many of them.

  • 10:08:31

    MR. DAN EGGENWell, put simply, it's a political committee that is able to raise and spend as much money as it wants. The only wrinkle is that it does have to report both its donors and any spending to the Federal Election Commission. So -- but that is a big change from years past in that it's the most unlimited kind of committee that's come up in a political system because of the -- largely stemming from the Citizens United decision and related decisions in the courts.

  • 10:09:10

    REHMAnd we're seeing a lot more of the super PACs, and especially in this race in Upstate New York?

  • 10:09:19

    EGGENWell, yeah, in general. I mean, since the summer of last year or so, I think, it's more than 100 now. There's more than 100 of these super PACs, basically, of every stripe and size. And the Upstate New York race is just -- I think it appears to be providing a bit of a glimpse of what the future is going to look like in 2012 because you've got all the normal players that you have in a political race, the political parties, the campaigns themselves.

  • 10:09:47

    EGGENAnd then you've got all these big -- several, you know -- a handful of these big outside groups that are spending big to help one candidate or another.

  • 10:09:56

    REHMI see your two colleagues making notes, so I'm sure they want to add to what you're saying. I want to know about this business of not having to disclose donors. Or do they, Trevor?

  • 10:10:12

    POTTERWell, that's the good thing about super PACs. As Dan said, super PACs came out of the Supreme Court's Citizens United case, which said that corporations and unions have a right to make unlimited, independent spending. So these super PACs are registered with the Federal Election Commission. They can't give to candidates. They can only make independent spending, and they can take unlimited corporate and labor, as well as unlimited individual, funds.

  • 10:10:37

    POTTERBut they have to disclose because they're a federally-registered committee, and they disclose their donors. So that's the good side of them, is that at least we know where the money is coming from. There are a lot of other groups that are spending money in the New York race and spent a lot of money last year in the mid-terms and are getting ready to spend money next year that don't disclose their donors at all because they don't register with the Federal Election Commission.

  • 10:11:02

    POTTERThey are -- many of them -- tax-exempt groups formed under Section 501 (c)(4) of the tax code or (c)(6), which is how they get referred to in the trade, which means either they are social welfare groups or they're trade associations, groups of corporations. They file with the IRS, and they disclose their total spending. But they don't publicly disclose their donors, so that if someone wants to spend money on elections today, including unlimited corporate or labor and they don't want anyone to know it, they will give through one of these groups, which seem to pop up in every election season.

  • 10:11:41

    REHMSo, on the one hand, we have these super PACs, where donors do need to be disclosed. On the other hand, these 527 (c)(4) s, which do not need to disclose. Go ahead, Stan.

  • 10:11:58

    BRANDWith one very critical proviso, not to descend into the minutiae of the law.

  • 10:12:03

    REHMBut it is minutiae.

  • 10:12:05

    BRANDIt is. Provided that this is not their primary purpose.

  • 10:12:10

    REHMWhat does that mean?

  • 10:12:12

    BRANDThat their primary purpose is not political. Now, the IRS, which is rarely heard from in this area, in the post-Watergate era, has waded into this. Because what is alleged by some outside groups is that their failure to disclose is a violation of existing IRS code provisions, which require them to have other charitable purposes than affecting elections.

  • 10:12:39

    REHMGive me an example.

  • 10:12:41

    BRANDProviding public service announcements or debates over public policy as opposed to engaging in actual electoral-based activity, electing candidates for office, you know, promoting a particular candidate or opposing a particular candidate. And so the IRS, which generally doesn't wade into this area because it's very sensitive in the post-Watergate era where they were burned by having alleged to have been involved in political enemies' lists and auditing people who were out of favor, has now taken this up and is looking at whether these groups are legitimately claiming their 501 (c)(4) status or not.

  • 10:13:30

    BRANDThat, in turn, has raised the hue and cry of some Republicans in the Congress who have, in fact, accused the IRS of playing politics. So the IRS is becoming an issue here in a much more direct way than it has over the last decades.

  • 10:13:47

    REHMAnd to you, Dan Eggen, and who, besides the IRS, cares about all this?

  • 10:13:55

    EGGENWell, the -- you know, when it comes to the super PACs and other committees that are registered with the FEC -- the FEC itself is charged with overseeing the integrity of the election system. That leads to its own controversy because the FEC has been sharply divided for years now, basely in a partisan deadlock, 3-to-3 in most -- in many, many cases because there are three Democrats and three Republicans on that commission.

  • 10:14:27

    EGGENSo there's a lot of complaint from campaign finance reformers that the FEC is basically toothless at this point and does not police these groups the way it should. And, of course, I think many of the campaign finance reformers also don't like the idea of super PACs in the first place, which were essentially made possible by the FEC. The FEC said, in light of Citizens United and other decisions, that it should be allowed.

  • 10:14:56

    EGGENSo that's kind of the -- it's the -- FEC and IRS kind of share different responsibilities for different types of groups, depending on which ones we're talking about.

  • 10:15:05

    REHMTrevor, what are your biggest concerns about these super PACs?

  • 10:15:11

    POTTERWell, what we have here is basically regulatory failure. I know it's probably impolitic to say anything nice about the IRS, but they are understaffed. They are clearly, as Dan said, cowed about getting into areas that are going to be politically controversial. They're being very careful, I think, not to be seen as a tool of the White House or somebody like that. The result is, I see no sign they're actually doing anything in this area.

  • 10:15:41

    POTTERAnd the FEC has essentially gutted the disclosure provisions in the McCain-Feingold law because all these groups, whether super PACs or the (c)(3)s and -- sorry -- (c)(4)s and (c)(6)s we're talking about, are required under McCain-Feingold to disclose what are called electioneering communication funding, which is the ads mentioning candidates right before an election. McCain-Feingold said you have to disclose every donor of over $1,000. That is not happening.

  • 10:16:10

    POTTEREven in Citizens United, the Supreme Court, 8-1 said those disclosure provisions are constitutional. But that's not happening. And the reason is that the FEC has taken an extraordinarily narrow view of the statute and said you don't have to disclose the way the law says, everyone who gives you over $1,000. You only have to disclose the donors who give you specific money for specific advertising.

  • 10:16:35

    POTTERAnd that is just incredibly easy to get around. If you say I want to run ads and here's $100,000 to do it, the FEC has taken the position, you don't have to disclose where that $100,000 came from, only if they say I want to run this ad, in this date, in this election. And that just doesn't happen.

  • 10:16:52

    REHMThere is a newly formed Republican super PAC set up by James Bopp. What does it do, Stan?

  • 10:17:05

    BRANDJames is a famous litigator who has basically challenged all the campaign finance lawyers -- laws in the various courts and, from time to time, has gotten Supreme Court review of these cases. His theory is that all of these restrictions are unconstitutional impingements on free speech. Some of those he's won -- and that's been decided -- and some are pending. And we don't the answer.

  • 10:17:35

    BRANDWe don't know how far Citizens United will be extended beyond the specific elements of that decision. Certainly, we're going to find out because he is going to push the envelope on all these until he gets some answers.

  • 10:17:49

    REHMTell me how this works in the case of a candidate, for example, whose individual take is restricted to a certain amount per person. That candidate, I gather, can say, don't give to me, give to the PAC.

  • 10:18:12

    BRANDYeah, the irony here is that most candidates are always nervous and skittish about independent expenditures because they don't control them. They don't control the messaging. They don't control the timing. And they can't control it, and they can't be involved in coordination or consultation, under the law. Otherwise, those would be illegal.

  • 10:18:36

    REHMStanley Brand, he's a partner with the Brand Law Group, former counsel to the U.S. House of Representatives. Short break. Right back.

  • 10:20:03

    REHMWelcome back. We are talking about campaign finance after the Supreme Court Citizens United case. Here in the studio, Dan Eggen. He's a reporter who covers money and politics for The Washington Post. Stan Brand, he's a partner with the Brand Law Group. Trevor Potter is former chair of the Federal Election Commission, president and general counsel of the Campaign Legal Center and an attorney at Caplin & Drysdale.

  • 10:20:39

    REHMWe'll take your calls throughout the hour, 800-433-8850. Trevor, I know you wanted to talk about James Bopp.

  • 10:20:51

    POTTERWell, you had asked about his new Republican super PAC, which he's announced. And the danger here -- I think the real risk of corruption is that what he's proposing is something that has not been done so far, which is to have members of Congress, office holders, candidates, national party committees -- so the insiders, the people in the legislative process -- actually go out and solicit these unlimited amounts of corporate and labor funding for his super PAC.

  • 10:21:18

    POTTERThat's what happened under the old soft money world. That's why we had, largely, McCain-Feingold, is that members of Congress could go out and solicit large sums from corporations with business before Congress. And people felt it was affecting their votes, and it was causing the leadership to push legislation one way or another. So it banned. They can't do it now. They can only solicit limited amounts of individual money.

  • 10:21:42

    POTTERAnd what Mr. Bopp says is if these super PACs can exist under federal law, can spend unlimited amounts and can take unlimited amounts, then members of Congress ought to be able to raise it for them. And that's really dangerous because you get the direct corruption of soliciting this money, and the money is going to be spent to aid their re-elections.

  • 10:22:05

    BRANDAnd I think -- I agree with Trevor. I think this is a quantum attempt to expand Citizens United beyond its term. Citizens United is premised on the theory you can spend as much money as you want as long as it is independent of the candidates and the political parties because the underlying rationale of corrupting the public officials or the elected people is not there.

  • 10:22:32

    BRANDIn Trevor's example, it is there because you are commingling and combining the efforts of the candidates with the large amounts of money. And I don't know if there are five votes on the Supreme Court for that -- allowing that proposition, even on this court.

  • 10:22:49

    REHMYou know, Dan Eggen, it strikes me that, with all the complicating factors here, what happens is that the individual voter is out-monied and that our individual votes count for so much less after this Supreme Court decision and now with the creation of these super PACs.

  • 10:23:21

    EGGENWell, I don't think there's any doubt that -- and whether you think this is right or wrong -- that the system that is now emerging gives much greater weight to those who have more money. It's fairly simple. And so, yes, if you think that that -- and that certainly could put regular voters at an even greater disadvantage, in terms of -- if you presume regular voters being people who don't have $100,000 to dump into a special interest group, you know, to fund their pet causes. So, yes, I think, that's definitely the case.

  • 10:23:56

    REHMAnd, Stanley Brand, I must say I am surprised to find you on the side of those who are saying, sure, we can put this much money, we don't need to be identified. How did you end up here?

  • 10:24:16

    BRANDWell, I ended up here partially through a case I argued -- litigated in the Supreme Court, involving Jack Davis, the gentleman who is now running in Upstate New York who challenged the Millionaires' Amendment -- the proposition being, if you self-funded your campaign, to a certain extent, you had an advantage, and the law shifted the advantage to your opponent. That was premised on the notion that money in politics drives results.

  • 10:24:44

    BRANDOne statistic I love to give on this, if you think that money counts for everything in politics, in last election there were 58 federally funded candidates who used their personal wealth to run beyond the $350,000 range. Eleven of them were elected. In baseball, we would say that's hitting below the Mendoza Line. There is no empirical data that demonstrates that money is an advantage in politics.

  • 10:25:18

    BRANDIn fact, I would submit it may be a disadvantage because it insulates you from going out and raising the money and interacting with the real people and the constituencies and allows you to sit in an ivory tower and collect money and does not test your strength as a candidate the way you have to if you have to raise money from people.

  • 10:25:39

    REHMTrevor.

  • 10:25:40

    POTTERWell, money is, as Tip O'Neill said, the mother's milk of politics. It's completely necessary. And I know more people who would like to run for office but say, I can't possibly afford to do so because I can't raise those sums of money. What Stan is saying is that people who are self-funding win about 20 percent of their general election races. Well, they got the primary probably because they were self-funding.

  • 10:26:05

    POTTERParties are happy to let someone who can afford to self-fund a general election be their candidate, particularly in marginal seats, where there's not a clear shot at winning. Everyone else is going to have to figure out how to raise the money or have outside funding come in. So they get a big head start. Stan's, of course, right. Many people who are self-funding prove not to be particularly good candidates.

  • 10:26:27

    POTTERThey haven't been round the track before. Sometimes it takes one or two times. But if you look back at the list of candidates in the Senate today who are self-funding millionaires, there's a long list of them. In the House, a sizable number of members of the House got there because of it. So there is a -- you know, maybe a second-base advantage to being self-funded.

  • 10:26:48

    POTTEROur problem, I think, is that we don't want, as a society, to have just people with enormous personal means, but nor do we want people who are elected because a group of corporations thought they were wonderful and came in with enormous amounts of outside spending.

  • 10:27:05

    REHMDan Eggen, it's going to take a very astute voter to figure out what's happening here. For example, the Democrats have created Priorities USA. Then there's Priority USA Action, which is a political committee organized as a 527 group. So you've got the same name, basically, applied to two very different kinds of PACs.

  • 10:27:42

    EGGENYeah, basically, that group is -- and it's -- and they're basically modeling themselves after the big success of 2010, which was a group called American Crossroads, which was formed with the help of Karl Rove, the long-time Bush adviser.

  • 10:27:56

    REHMIt's going to play a big role in the upcoming election as well.

  • 10:27:58

    EGGENRight. Oh, they're saying they're going to raise $120 million. They may well raise more than that. But the model they have is the two kinds of groups we've been talking about today primarily, one is a super PAC, and one is either a -- I guess, I can't remember in either case -- (c)(4) or (c)(6), which does not have to disclose donors. So, basically, each of these groups has a -- you know, they can go to a donor.

  • 10:28:24

    EGGENAnd if the donor says, oh, I don't mind if my name is out there, fine. Here's the pot of money that -- here's the group you can give to. But it is also able to take in money from corporations or individuals who don't want their identity disclosed. Now, again, those -- the nonprofit side, it has to play this game of appearing to not spend most of its time on politics. So, already, these groups are funding other activities to sort of use up the money, as far as we can tell.

  • 10:28:53

    EGGENSo it's a very complex and sophisticated system that's popped up almost overnight, really. It's quite amazing. I mean, the Democrats alone, they have one -- as you just mentioned, the Priorities USA duo. They're going to concentrate on the presidential race. They've got another one concentrating on Senate races, another one concentrating on House races. So, you know, they've -- they're covering all the bases with these outside groups.

  • 10:29:19

    EGGENThe interesting thing is whether they will be able to keep control of them because they're not supposed to coordinate with the campaigns or the parties. And that's where we're going to see interesting stuff, possibly a year from now, because, as we know, there's a -- there's always big debate over what kind of message you want to send out.

  • 10:29:34

    REHMSee, one of the words you used is the one that bothers me the most. You said, everybody is playing this game. And it has become a game with rules that are really sort of out of play for ordinary citizens.

  • 10:29:55

    BRANDBut it goes back to something, I remember, John McCain said on the floor during the McCain-Feingold debate. He said ethics and campaign finance in Washington is like a water balloon. You squeeze it at one end, eventually it pops out at the other. The incentive, the motive, the drive to participate in the electoral process with money is just too great to be controlled in the way that some of these laws have sought to do it.

  • 10:30:26

    BRANDSo, in many areas of the law, what happens is people get used to looking for ways around rules and regulations that have developed to combat a perceived evil. And over time, if you don't amend or modify those rules to take account of the new entities, you lose the force of some of the regulation.

  • 10:30:52

    REHMYou said earlier that you couldn't point to a single example where money really made a difference. We look, now, up on Capitol Hill. All these men and some women, they couldn't have gotten there without huge sums of money, whether, in part, their own or these enormous amounts of money collected by PACs.

  • 10:31:27

    BRANDTrue. But on the other side of the ledger, we have candidates, some of whom spent $250 million of their own money in the last election -- governor of California, other seats, Senate seats -- and weren't elected, where someone with much less economic resources was elected. Money is not enough. It certainly helps, but if you don't have viability as a candidate and you can't connect to the electorate and you don't have something else to run on, I submit it's not that easy to do it just with money.

  • 10:31:58

    REHMMaybe they all ought to adopt the methods and platforms of a Bernie Sanders. How much did he spend to get re-elected? Not much.

  • 10:32:14

    BRANDWilliam Proxmire used to be prideful of the fact -- the late great senator from Wisconsin -- that he raised $100 during his elections, and he was overwhelmingly returned year after year.

  • 10:32:27

    REHMTime and time again. But are we saying that cannot be done now?

  • 10:32:34

    BRANDWe're saying it's harder to do that now...

  • 10:32:36

    REHMMuch harder.

  • 10:32:37

    BRAND...because of the proliferation of media, the fracture of the electorate, the fact that the political parties don't really control the process the way they did 30 or 40 years ago.

  • 10:32:47

    REHMStan Brand, he is former counsel to the U.S. House of Representatives, law professor at Penn State and now a partner with the Brand Law Group. You're listening to "The Diane Rehm Show." We've got lots of callers waiting. Shall we open the phones here? 800-433-8850. First to Troy, Mich. Good morning, Kumar. You're on the air.

  • 10:33:20

    KUMARThank you. I just want to make a quick comment before my question. I think the commentator that's arguing that money doesn't play a factor is completely wrong. All you have to do is look at the Midwestern governor's election last year, and Rick-Scott -- Rick Snyder, Scott Walker -- all these rich Republican businessmen got elected on their money. But my question is, actually, whether they think the Citizens United ruling is fair, considering the fact that more super PACs, and PACs in general, have more capital on the Republican and on the conservative side than on the liberal side.

  • 10:33:55

    KUMARHow is that fair? I mean, you have trade unions going up against corporations. You have the Koch brothers -- I don't know how to pronounce their name -- they're going against, like, everyday people. That's not fair, in my opinion.

  • 10:34:07

    REHMAll right. Thanks for calling. Can you comment, Dan Eggen?

  • 10:34:13

    EGGENWell, it's true, that last year the Republican outside groups outspent the Democratic ones by a fair margin. It's not clear what will happen this year. Basically, the Democrats have decided, even though Obama himself, for example -- President Obama, has been -- has often talked about the need for reform and limits on money in politics, last time, when he was elected, he, you know, signaled that there would be no independent groups on the Democratic side.

  • 10:34:42

    EGGENI mean, he kept it all very controlled within his campaign. This time, seeing what happened in 2010, the Democrats have basically decided to take the gloves off. You know, they argue the old argument about not bringing a knife to a gunfight and that they are going to fight fire with fire. So we will see whether things even out this cycle. It's basically too soon to tell at this point.

  • 10:35:06

    REHMAll right. To Columbia, Mo. Good morning, Brandon.

  • 10:35:12

    BRANDONGood morning. Thank you.

  • 10:35:13

    REHMSure.

  • 10:35:13

    BRANDONSo let's pretend that I'm a campaign politician or political party, and I want to keep my funding sources hidden. So if I assume that the Federal Election Commission has entities at all and would make me disclose my super PAC donors, what's the dollar threshold for using a traditional PAC to keep my funding sources secret? And then, secondarily, is anybody tracking the growth in spending by super PACs?

  • 10:35:33

    REHMTrevor.

  • 10:35:34

    POTTERWell, any PAC that's registered with the FEC, whether a traditional PAC or a so-called super PAC, will have to disclose -- once it has raised and spent $1,000, it will have to disclose its donors and report those to the commission. So the way you would get around disclosure is to use these (c)(4)s or (c)(6)s and groups that are not reporting. Dan Eggen mentioned the American Crossroads.

  • 10:36:02

    POTTERThat's a great example because they started last time saying, we're going to disclose all our donors, we're going to register with the IRS as a 527, and that means we'll show our donors. What they found is they couldn't raise the money they expected to raise. The...

  • 10:36:15

    REHMPoor things.

  • 10:36:16

    POTTER...donors were reluctant, so they created another pocket called a (c)(4). It didn't disclose its donors, and, suddenly, they had tens of millions of dollars in secret money from donors. So the model this year -- because, as Stan said, things change very quickly -- is now people want two pockets, a public disclosed pocket for those who were willing to be disclosed and then a secret pocket, usually a (c)(4) or (c)(6), for people who will only give if their identity is not public.

  • 10:36:45

    REHMNo wonder people are disgusted with the election process, Stan.

  • 10:36:50

    BRANDWell, on the issue of disclosure of donors, mark my words. If the Congress passes a statute that requires the super PACs to disclose donors, there will be lawsuits galore over whether you can force people to disclose their financial activity around the First Amendment and their associational rights. There are people waiting in the wings to challenge that. That will be the next frontier. Whether that's successful or not, I don't know. I just know in my gut that that will be challenged forcefully by those groups.

  • 10:37:24

    REHMAnd Trevor Potter wants to challenge you. When we come back, we'll take more of your calls, your email. I look forward to hearing from you.

  • 10:40:03

    REHMCampaign finance laws are the subject this morning, the creation of new 527 (c)(3) s, -(4) s, -(5) s, -(6) s, whatever is out there. Here's an email from Chris in East Providence, R.I., who says, "I'm confused. I used to work in nonprofit arts and environmental organizations where we've 503 (c) or 501 (c) designations. I thought we were not allowed to do any political campaigning. Can you tell about these designations and what they mean?" Stan.

  • 10:40:49

    BRANDHe's correct. He worked for a 501 (c)(3) charitable organization whose mission has to be limited to educational, cultural and scientific pursuits. They are barred by existing IRS law and rules from engaging in political activity. We are talking here about offshoots of those (c)(4)s and (c)(6)s, which are not tax deductible but tax exempt, and that is the difference.

  • 10:41:18

    REHMAnd here's the second part of his question. He said, "Please tell us about the original Supreme Court ruling that said corporations were people. It was long before Citizens United." Trevor.

  • 10:41:37

    POTTERYeah, going back to, actually, the railroads in the late 1800s, the Court was asked to interpret the 14th Amendment, which talks about the rights of individuals, and the Court said it applied to railroads. Now, to be clear here, the Court was talking about a specific case, a narrow piece. The Court never said in the 1800s, corporations are people. What they said is, in some cases, the constitutional rights that the Constitution said applies to the people also apply to corporations, but not in others.

  • 10:42:11

    POTTERAnd so what happened in Citizens United is the Court crossed that barrier under the First Amendment for political spending. The Court has, over time, said corporations have some of the rights of people but not of others. For instance, they don't have a right against self-incrimination, which individuals do. But in Citizens United, they said, we find that corporations have the right of free speech in politics the same way that individuals do.

  • 10:42:39

    REHMDan, you said during the break the case didn't quite start out that way.

  • 10:42:45

    EGGENThe original Citizens United case was focused on the disclosure issue. And, in fact, the plaintiffs basically lost on that point. That's my understanding at least. I mean, they -- it was an 8-1 -- there were two -- people forget that the Citizens United ruling was actually in two parts. The part that gets all the attention is the 5-to-4 ruling that decreed that corporations -- and by -- we -- inference, unions can spend as much as they want on -- in political spending as long as it's not -- you know, as long as it's independent.

  • 10:43:17

    EGGENBut another part of the ruling, in an 8-to-1 decision -- so quite overwhelming -- upheld disclosure requirements on the books. And judging from the language in that decision, I think, it laid out fairly strongly that the Court believed that greater disclosure requirements would be perfectly constitutional.

  • 10:43:38

    EGGENAnd that's why Democrats tried and failed to enact broader disclosure requirements for all these new groups that are popping up or -- well, particularly for the nonprofit groups and trade associations, like the Chamber of Commerce. But that was defeated twice in the Senate because they didn't have 60 votes.

  • 10:43:57

    REHMAll right. To Gina in Southampton, N.Y. Good morning. You're on the air.

  • 10:44:04

    GINAHi. I'm just wondering if, say, you were a criminal and you wanted to hide money, if you were to contribute to one of these, you know, organizations that you don't have to disclose who's giving the money, wouldn't that be the perfect way to get rid of money and also support somebody who might support, you know, criminal policies? I mean, it just seems ridiculous that you don't have to disclose the money.

  • 10:44:30

    REHMStan...

  • 10:44:30

    GINAI mean, isn't it, also then, functionally tax-free? I mean, it just seems like it's a ridiculous loophole.

  • 10:44:37

    REHMYeah.

  • 10:44:37

    GINAI don't understand why -- that's my question.

  • 10:44:40

    REHMSure. Stanley.

  • 10:44:41

    BRANDWell, as a criminal defense lawyer, I don't know what you mean by a criminal. If you mean someone who has been convicted of a crime, those people are still United States citizens and, I think, under existing law are permitted to contribute legitimate sums to campaigns. If you're saying that the ill-gotten gains from a criminal enterprise could be secret in a campaign, I would just say, in my 35 years in the criminal milieu, I don't know too many criminals who want to give their money away to political candidates.

  • 10:45:15

    REHMSo you don't see it happening, Trevor?

  • 10:45:17

    POTTERRight, no. But that is an issue...

  • 10:45:19

    REHMYeah, of course.

  • 10:45:20

    POTTER...when you have secret, undisclosed money. You, by definition, don't -- the public doesn't know where it's coming from, the voters don't, and no regulatory agency is really looking at it. So, even though under current law, foreign money is banned in U.S. elections, if there's foreign money in the (c)(4) or (c)(6) , we'd never know it.

  • 10:45:37

    REHMTo Louisville, Ky. Good morning, Ron. You're on the air.

  • 10:45:43

    RONHi. I just wanted to point out that the principle of the Democrats catching up with the Republicans on spending in this manner only means that both parties are going to be beholden to non-public entities that raise huge amounts of money for them. It's not as if the Democrats are really all that Populist right now. I see, you know, Obama wants to raise $1 billion for his campaign this year after making such a big deal out of taking small donations last time. And what's it going to do -- you know, this just poisons the whole political process and leaves the general public with no voice whatsoever.

  • 10:46:23

    REHMDan Eggen.

  • 10:46:26

    EGGENWell, the -- I mean, first of all, to -- in terms of the Obama campaign, it should be remembered, they raised $750 million last time. And a big chunk of it was smaller donors. It was not a majority, but it was a sizable chunk. I mean, they sort of broke records on every scale -- large donors, small donors, medium donors. So the speculation is that they will do that again or that they're striving to do that again.

  • 10:46:51

    EGGENThey're tamping down this billion-dollar number, which has sort of been floating around as the scenario. But even if they did 750, they don't have to run a primary campaign. So it's -- it will be a juggernaut, no matter what. In their defense -- or what they would say in their defense is that all of that money is raised through the regular system. In other words, that's subject to the normal individual limits, contribution limits and such.

  • 10:47:15

    EGGENSo they would argue that is not the same as the concern about unlimited and secret money that we've been talking about. But you're right, that the Democrats have decided not to sit this one out. They feel like they got burned in 2010 by being sort of aloof from the outside money race. So they are determined not to let it happen again.

  • 10:47:39

    REHMTrevor.

  • 10:47:40

    POTTERWell -- and this just shows you the vast gap, though, between these outside groups and the candidate. The most the Obama campaign can take from an individual or the Republican nominee is $2,500 per elections -- $2,500 for the primary, $2,500 for the general.

  • 10:47:55

    REHMPer person.

  • 10:47:56

    POTTERPer person. That's the total. So, you know, in the scheme of things, that's still small money compared to $25,000, $250,000, $25 million that can be given to these outside groups. And when you add given and not disclosed, and the outside groups are going to be run by Republican or Democratic Party operatives who are well-connected, then you throw into the mix the suggestion that candidates, including the president, should be able to raise money for these outside groups.

  • 10:48:23

    POTTERAnd you have two radically different systems, the one with limited, small contributions actually for candidates and then the big money in these outside groups.

  • 10:48:32

    REHMAll right. Here's an email from Lee, for you, Stan. He says, "Anonymous donations from wherever and whomever just should not be permitted. We shouldn't be hiding behind an organization. I want to know who are contributing to these places. It will make a difference in my vote. We need to know where the bias is. Our Supreme Court should not be promoting anonymous political activity."

  • 10:49:09

    BRANDI'm not advocating nondisclosure. I'm just suggesting there will be forces afoot who will seek to take a safe harbor under the existing law. I don't know that they're going to be successful. And, as Dan pointed out, there were at least eight members of the Supreme Court who felt that was an appropriate regulatory response. I'm all for disclosure.

  • 10:49:33

    REHMDan Eggen.

  • 10:49:35

    EGGENThe -- yeah, I mean, that's -- the battleground is definitely going to be around disclosure. But it's really -- it is not accurate to say that the Supreme Court endorsed anonymous spending. You can argue they were naïve in some portions of their Citizens United ruling.

  • 10:49:51

    REHMNaïve?

  • 10:49:52

    EGGENBut -- well, there's some language in there that seems to indicate a much greater degree of disclosure, or that they believe there was greater -- I think it was Justice Kennedy, in particular, that believed there was a greater degree of disclosure than perhaps there really is. But they came down fully on the side of existing disclosure laws. And, as I said, I think most observers believe that they would endorse broader requirements as well.

  • 10:50:22

    POTTERYes. Justice Kennedy said, today, for the first time, we will have corporate speech and elections, and it will be fully disclosed. So the Court thought we were going to have disclosure. They said it's constitutional. The onus is on Congress, which hasn't broadened disclosure at all, and the Federal Election Commission, which has gutted the existing disclosure requirements.

  • 10:50:43

    REHMYou know, I think that our caller Shandana (sp?) in Columbia City, Ind., may have it right on. Good morning to you.

  • 10:50:54

    CHANDARAGood morning, Diane. I'm Chandara. (sp?) And thanks for taking this call.

  • 10:50:58

    REHMSure.

  • 10:50:59

    CHANDARAI'm a physician. And I know in my field financial disclosure has been very important. And they say it's directly linked to patient care, and we should be upfront with it. And I feel that in a democratic country, why do politicians have such a hesitation in disclosing their finances or the contribution to their finances?

  • 10:51:23

    CHANDARAThe -- I'm saying this because if I'm taking a grant from a drug company or any side-effect research ones, I have to disclose that, which I am totally eager to do because I want people to know who I stand for or what my interests and what my (word?) are. Likewise, this should be the same for the politicians. I mean, this is directly linked to our electoral -- people who make laws and execute laws.

  • 10:51:55

    REHMStan.

  • 10:51:56

    BRANDAll the contributions to individual candidates are disclosed. Remember, what we're talking about here under Citizens United are not contributions by people to candidate committees. They are so-called independent expenditures. Now, you may not accept that fiction. But that fiction is that those are made as a incident of a person's free speech right to talk about anything they want to talk about and pay for it, as long as that is not in coordination, consultation or cooperation with the candidate or his committee or the parties.

  • 10:52:35

    REHMBut doesn't the candidate have a way to get around that, Stan?

  • 10:52:40

    BRANDWell, theoretically, at his peril because that would be -- that would violate the strictures existing in the law between candidates and those committees. And those are punishable by a range of sanctions. Now, whether the FEC will ever enforce that or not is another question.

  • 10:52:57

    REHMAnd you're listening to "The Diane Rehm Show." Dan Eggen, do you want to comment?

  • 10:53:04

    EGGENNo. I didn't have anything else to say.

  • 10:53:06

    REHMYou didn't -- all right, Trevor does.

  • 10:53:07

    POTTERWell, the point here is that these outside groups can always tell office holders -- and you know they do -- that they're going to spend a lot of money on their behalf, or they have spent a lot of money on their behalf. There's nothing that prevents officeholders from knowing who is spending this money to get them elected and even where the money came from. So it may be the public doesn't know.

  • 10:53:30

    POTTERBut the officeholder knows who the major donors to these groups are. The coordination rules only limit, in theory, the amount that the officeholder or the candidate can coordinate on the content of the advertising, not the identity of the donors, or the fact that the spending is going on to get them elected to Congress.

  • 10:53:49

    REHMSo, Dan Eggen, Stanley Grant has said Congress, unlikely to do anything about this. Is it -- is that your view as well?

  • 10:54:04

    EGGENOh, absolutely. I mean, they...

  • 10:54:05

    REHMThey're just going to let it go.

  • 10:54:06

    EGGENWell, the House, they don't -- again, this was -- it was an initiative by the Democrats. It was called the DISCLOSE Act. The -- since they couldn't get it through in the last session when they had more seats in the Senate and they held the House, they certainly have very little chance of pushing anything through in the current environment. I think everyone is just basically buckling up for the ride for 2012, and this is the landscape we're going to be looking at.

  • 10:54:32

    REHMStan, you remember that 527 Swift Boat Veterans for Truth that opposed Sen. Kerry. Now, are we likely to see more of that kind of thing?

  • 10:54:50

    BRANDI mean, I would think so. We've seen all the arguments about where the president was born and whether he's a citizen. That's just plain, old, free speech. As long, again, as they are complying with existing law, those are going to be part of the landscape.

  • 10:55:06

    REHMI understand that you are a free speech advocate to the nth degree. Doesn't any of this bother you?

  • 10:55:19

    BRANDI think money and politics has been with us from the beginning. George Washington used to hand out rum to the voters in Virginia when he ran for the House of Burgess. I think money and politics in a democracy can be regulated to an extent. It can't be eliminated. And the shifting view of the Supreme Court about what is permissible is a shift that occurs in every area of the law as the Court changes.

  • 10:55:48

    BRANDSo there are limits on what can be done in this area constitutionally. You can certainly amend the Constitution, but we know what kind of process that is.

  • 10:55:57

    REHMTrevor.

  • 10:55:58

    POTTERWell, the Court, very recently, 5-4, said that corporate and union spending could constitutionally be prohibited in federal elections. It took the change of one justice, the retirement of Justice O'Connor, to turn that constitutional theory on its head. We may see it go back the other way. We don't know. What, I think, we have to face now is the current law of the land, is that you can have unlimited independent spending from these non-persons, corporations and unions.

  • 10:56:23

    POTTERAnd we can have, according to the Supreme Court, full disclosure of that spending. And that's what we don't have. And that's what, I think, we now need to focus on, is how to get the secret spending disclosed.

  • 10:56:35

    REHMTrevor Potter, former chair of the Federal Election Commission. He's now an attorney at Caplin & Drysdale. Dan Eggen is a reporter who covers Money and Politics for The Washington Post. And Stan Brand, former counsel to the U.S. House of Representatives, he's a partner with the Brand Law Group. Thank you all so much. And thanks for listening. I'm Diane Rehm.

  • 10:57:06

    ANNOUNCER"The Diane Rehm Show" is produced by Sandra Pinkard, Nancy Robertson, Susan Nabors, Denise Couture, Monique Nazareth and Sarah Ashworth. The engineer is Tobey Schreiner. Dorie Anisman answers the phones. Visit drshow.org for audio archives, transcripts, podcasts and CD sales. Call 202-885-1200 for more information. Our email address is drshow@wamu.org.

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