Fallout Could Impact Political Ad Ruling

--asked for comments on the effects of the ruling on proposed new rules for "coordinated" (with candidates) communications before holding hearings on them. The FEC has been trying to adopt those rules for seven years.

--issued a Feb. 5 statement that due to the ruling the FEC is no longer enforcing laws and rules  prohibiting corporations and labor unions from making independent expenditures (broadcasts not coordinated with a candidate or campaign and expressly advocating election or defeat of clearly identified federal candidates) or electioneering communications (TV or radio broadcasts, cable or satellite communications that refer to a clearly identified federal candidate, aired within 30 days of a primary or 60 days of a general election, and able to be received by at least 50,000 people in a state). 

Congressional Activity

At least 16 separate bills have been introduced in the House and Senate to address aspects of the Citizens result.

Even before the Supreme Court issued Citizens United, more than 100 members of Congress signed on to the Fair Elections Now Act. It would create a system of public financing of Congressional campaigns. Legislators, especially in the House, are seeking freedom from constant pressure to raise campaign funds. 

Members of Congress were not alone in this. Two days after the Court ruled, 40 corporate executives wrote Congressional leaders (through the group Fair Elections Now) urging passage of such legislation. Among them were leaders of Ben & Jerry's, Playboy Enterprises, Delta Airlines, Hasbro and MetLife.

"Members of Congress already spend too much time raising money from large contributors," the executives said. "And often, many of us individually are on the receiving end of solicitation phone calls from members of Congress. With additional money flowing into the system due to the court's decision, the fund-raising pressure on members of Congress will only increase."

In the Senate, a proposal would finance congressional campaigns with a fee on businesses having more than $10 million in government contracts. In the House, a bill would use money obtained by the government from the auctioning of spectrum that TV stations had to return when they switched to all-digital operation.

Probably the most comprehensive proposal is being written by Senator Charles Schumer (D-N.Y.), chairman of the Senate Rules Committee, and Rep. Chris Van Hollen (D-Md.), chairman of the Democratic Congressional Campaign Committee and assistant to the Speaker of the House. Closely coordinated with the White House, this legislation has not been introduced at this writing but its principal authors released a summary on Feb. 11.

The main provisions:

Foreign influence: Banning corporations from spending money on U.S. elections if they are 20 percent or more foreign-owned, or a majority of their board of directors is foreign principals, or their U.S. operations or political decision-making is controlled by a foreign entity, including a foreign government.

"Pay to Play": A prohibition against government contractors and TARP (Troubled Asset Relief Program) recipients (federal relief for distressed companies due to the recession) from making political expenditures with taxpayer funds. The ban would apply to TARP recipients until the money is repaid.

Enhanced disclaimers to identify ad sponsors: A requirement that corporate political ads include their CEOs on camera to say they "approve this message" as candidates must continue to do under Citizens United.  The "top funder" of the ad must also record a "stand-by-your-ad disclaimer" and the top five contributors that donate for political purposes would be listed on-air at the end.

Strengthened disclosure to the FEC (and, through it, the public): Require separate "political broadcast spending" bank accounts by corporations/unions, and organizations formed under sections 501(c)4, 5 or 6 or 527 of  federal law. All funds spent or transferred from the accounts would have to be reported to the FEC and become public.

Other provisions:

--Require all political expenditures by a corporation to be disclosed within 24 hours on the company website, and to shareholders in quarterly and annual reports.

--Require federally registered lobbyists to disclose information on all campaign expenditures over $1,000.

--Strengthen current coordination rules for House and Senate campaigns by banning coordination between a corporation or union and candidates on ads referencing a congressional candidate within 90 days of the start of the primary-through-general election season. For all federal elections, coordination would be prohibited, regardless of timing, when the ads promote, support, attack, or oppose a candidate.

--Expand the lowest unit rate. If a corporation buys broadcast, cable or satellite TV ads that support or oppose a candidate, the candidate or his or her political party or authorized committee would be entitled to lowest unit rate for that media market, perhaps including outside the 45- and 60-day lowest unit rate periods if the corporate ads run then. 

Note that some provisions of the Schumer/Van Hollen summary have been introduced in both houses as stand-alone bills.