Democrats Propose New Campaign Finance Restrictions

Citizens United v. FEC restored the First Amendment and upheld the right to free speech and the right to freely associate. It overturned part of the McCain-Feingold law and a wrongly-decided prior opinion that had upheld a ban on independent political advocacy by corporations (including nonprofit associations).

No wonder Sen. Chuck Schumer (D-N.Y.) and Rep. Chris Van Hollen (D-Md.) don’t like it. Indeed, they’re proposing new legislation that would reimpose part of the ban and — in turn — probably would be just as unconstitutional.  And what isn’t constitutional in the legislation is redundant, political grandstanding that accomplishes nothing.

Schumer and Van Hollen claim they’re interested only in keeping foreigners out of our elections and protecting shareholders. But their proposals — particularly in what is left out — would do little, if any, to promote First Amendment interests. To the contrary, they would have the effect of assuring that those who the Left disfavors are silenced.

First, they propose that no domestic corporations with foreign shareholders of more than 20 percent or foreigners on their board of directors could engage in independent political advocacy, i.e., political speech. Second, they would prevent government contractors and recipients of TARP funding from making political expenditures.  Third, they would require corporate CEO’s to identify themselves on political ads and require top corporate donors to be disclosed.  Fourth, they would require detailed disclosure of all donations and expenditures and separate accounts for political expenditures, as well as filings with both the Federal Election Commission and the SEC.  Finally, if a corporation buys airtime to run television ads against a particular candidate, that candidate would get “the lowest unit rate for that media market.”

Of course, foreigners, including foreign corporations, are already banned from participating directly or indirectly in American elections. Any U.S. corporation whose activities and decisions are directed by foreign nationals is currently prohibited by federal law (that was not overturned by the Supreme Court) from taking any part in American elections — and that would include independent political advocacy.

American subsidiaries that employ American workers, have American officers, and pay American taxes should be able to participate in political advocacy to the same extent as other American companies, as long as all the money being used comes from, and all of the decisions are being made by, Americans — and that’s already the law.

A ban on companies with foreign shareholders is also impractical. Large public companies don’t always know who owns all of their outstanding shares. This rule would, however, once again violate the First Amendment rights of Americans and domestic subsidiaries. Their right to engage in political speech would be restricted because of non-controlling foreign shareholders.

While foreign shareholders are deemed a threat to the American way of life, apparently foreign union members are not. The SEIU boasts about its Canadian members on its Web site and even recruits illegal aliens. So why doesn’t this proposed ban extend to unions with such foreign members? Perhaps because the history of union PACs shows that they give almost all of their contributions to Democrats.

The ban on government contractors and TARP recipients is unneeded, unfair, and potentially unconstitutional.  Remember, the Citizens United decision didn’t overturn the federal ban on direct contributions to federal candidates by corporations and unions — just the ban on independent political advocacy. So government contractors and TARP recipients that are incorporated still can’t give directly to candidates.  But this ban would restrict their First Amendment rights to engage in independent political speech and almost certainly be held unconstitutional in accordance with Citizens United.

Schumer and Van Hollen’s ban on political advocacy isn’t extended to liberal nonprofit corporations that get government funding like Planned Parenthood or unions like the American Federation of Government Employees that have government employees as members. This despite the fact that whatever conflict of interest it is believed that contractors and TARP recipients have would apply also to these other groups that profit from government appropriations.

All kinds of new, complex disclosure requirements are being proposed. For example, the names of the top five contributors to an organization like the NRA whose donations are used to purchase political advertising would have to be listed on the ads.  This type of intrusive requirement is something the NAACP went to court decades ago to stop to prevent the intimidation of its members. Such harassment has not ended. Just look at the vandalism, threats and job losses suffered by those who donated money to support Proposition 8 in California after state officials disclosed their names. And requiring disclosure to the SEC as well as the Federal Election Commission is just another way to make political advocacy so burdensome that corporations will be deterred from doing so — particularly since they, unlike unions, don’t support Democratic candidates 100 percent of the time.

Naturally, members of Congress couldn’t come up with proposed legislation that does not profit them even more directly. So Schumer and Van Hollen propose that they will get “the lowest unit rate” to reply to any political ads run against them by corporations. In other words, the senators will get the lowest rate possible to run their political ads, while any incorporated group who disagrees with them will have to pay the much higher commercial rate. This is obviously unfair and intended to marginalize the speech of those who might disagree with members of Congress — and it is almost certainly unconstitutional because it mandates unequal treatment in the political arena.

Congress just can’t seem to stop itself from interfering with our First Amendment rights. As Justice Antonin Scalia said 20 years ago in a blistering dissent in Austin v. Michigan Chamber of Commerce, the case Citizens United overruled, too many think “that too much speech is an evil that the democratic majority can proscribe.”

As Scalia correctly recognized, that view is “incompatible with the absolutely central truth of the First Amendment: that government cannot be trusted to assure, through censorship, the "fairness" of political debate.”