Legal Memo by Michael D. Berg

Court Gives Stations Political Ad Boost

In the first court action following the Supreme Court's Citizens United ruling striking down limits on corporate and union advocacy ad spending, the Federal Election Commission was told it couldn't limit individual contributions to political groups that advertise on TV for or against candidates. The bottom line for stations? A source of campaign-related ads is freed from limits on how much it can spend and, as before, it is not subject to lowest unit charge regulations.
By
TVNewsCheck,

On June 1, the U.S. District Court in Washington permanently enjoined the Federal Election Commission from enforcing limits on contributions by individuals to independent political groups planning to advertise on TV and radio to support or oppose specific candidates for federal office ("express advocacy"). This SpeechNow.org v. FEC development applies to the people who formed and run the advocacy groups as well as members of the general public.

This ruling was based on, and is the first to significantly expand the effects of, the U.S. Supreme Court's January landmark ruling in Citizens United v. FEC. On First Amendment free speech grounds, it struck down all limits on corporate and labor union spending on express advocacy ads. Corporations of all kinds, for-profit and nonprofit, started reworking their election spending strategies. I covered Citizens United and what it portended in my columns of Jan. 29 and March 19.

Notably, SpeechNow, like Citizens United, upheld federal law disclosure requirements to the FEC. Also, SpeechNow does not affect existing limits on contributions to candidates and their authorized committees; it applies only to groups independent of candidates who make expenditures about candidates. SpeechNow also upheld the "organizational" requirement to form a Political Action Committee and comply with related regulation. 

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The legal rationale of the two cases is the same, but the effects are different. The rationale of both is the five-justice Citizens United majority's conclusion that independent expenditures for express advocacy do not give rise to corruption or the appearance of corruption of candidates. That was, according to the majority, the only possibly valid justification for the limits on speech. The U.S. Court of Appeals for the D.C. Circuit, which sent SpeechNow to the District Court to issue the injunction, issued an opinion in March saying it was bound by the Supreme Court's conclusions.   

The effects of the cases differ. Citizens United ended ceilings on express advocacy expenditures by corporations, which had been limited for about a century. SpeechNow ended ceilings on the amounts of contributions to, and that can be accepted by, independent unincorporated groups, which spend the contributions on express advocacy.

SpeechNow is an unincorporated "527" organization under the IRS Code. "Independent" means not affiliated or coordinated with any candidate, candidate's authorized committee or political party committee.

To give you an idea of the scale of the practical impact: a founder of SpeechNow wanted to contribute $110,000 to the group in 2008. The legal limit on individual contributions was $5,000 per year.

SpeechNow is the bellwether of what may be more rulings expanding the effects of Citizens United to other aspects of federal campaign law. These rulings also affect state and local restrictions that are similar to those struck down at the federal level.

The bottom line for stations?  A source of campaign-related ads is freed from limits on how much it can spend and, as before, it is not subject to lowest unit charge regulations.

The SpeechNow injunction is likely to add to what is already shaping up as a record year for political ad and other election-related spending by non-candidate organizations, due to Citizens United and other factors. More than $2 billion has been spent so far on the 2010 elections, according to the nonpartisan Center for Responsive Politics. 

A Washington Post June 3 report said more than 20 big advocacy groups plan to spend more than $400 million on issue-based ads, campaign contributions and other election activity.

Examples on the right are Americans for Prosperity ($45 million on 50 House and six Senate races); U.S. Chamber of Commerce ($50 million); American Crossroads ($52 million); Club for Growth ($24 million).

On the left, examples are big unions, notably the American Federation of State, County and Municipal Employees ($50 million on federal and state elections) and the Service Employees International Union ($44 million), and Emily's List ($43 million).

This column on TV law and regulation by Michael D. Berg, a veteran Washington communications lawyer and the principal in the Law Office of Michael D. Berg, appears periodically. He is also the co-author of FCC Lobbying: A Handbook of Insider Tips and Practical Advice. He can be reached at mberg@michaelberglaw.com or 202-530-8560. Read more of Berg's Legal Memos here.

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Comments (5) -

Bullmoose Nickname posted a year ago
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Good news for those of us defend the First Amendment and for those of us in broadcast television. The lowest unit rate was fiction.
Ted Langdell posted a year ago
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Bad news for broadcasters whose channels suffer the electronic version of putting junk mail in the round file. Hitting "off" or the channel button. Bad news for the general public that is deluged with so many emotional but not completely factual :30 conflicting claims that it frustrates people... to the point of tuning out on not just broadcasting but on the election process, itself. There is so much clutter and noise these days that one can't see the trees for the forest. How does the fact that well heeled corporations and non-profit advocacy groups can now out-spend others to present their version of the "facts" and drown out any competing voices help our country find solutions to the problems that are continuing to grow? We just went through an offensive Republican political primary here in California, where two VERY rich people spent Tens of Millions of dollars to attack and shred each other's reputations. For what benefit? I was deluged with half-truth mailers by candidates for office on a daily basis... sometimes eight or ten different items a day, all screaming at each other. Same thing on the OTA broadcast channels. Around here, we generally watch the much calmer Scripps "how to" channels that don't carry political ads. (YEA!) Reasoned discourse in this country—such as we had reasoned discourse—has given way to a "Christians and Lions at the Coliseum" situation. Keep the people emotionally fired up, all in the name of making money because a fight draws a crowd and a quiet—but more beneficial—meditation experience doesn't. Today, we have megatons of talk from blather and pot-stirring artists (insert names of usual suspects) and little energy being applied to real "sit down and work it out" opportunities. And "leading" Media company executives make 43 million a year... to help the world do what? It isn't to help members of the general public sort out the issues and learn how to make better personal or public policy and then practice same. Much of broadcasting and other media in this country has become a collective "Tower of Babble." And pursuit of the "Almighty Dollar" is behind the curtain, pulling the levers. That's my take.
T Dog posted a year ago
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Another beneficiary are those who manufacture DVRs and Tivos - sales of those will be going through the roof.
Ted Langdell posted a year ago
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Now that the spending and fundraising lids are off... if these special interest advocacy groups raise and spend tons of money and broadcasters decide to sell their inventory to the highest bidder—them—local and regional businesses may find that they're priced out of the market or there's no inventory available? The businesses depend on generating sales to stay in business... and in turn employ people to keep dollars circulating year-round in a community, helping to keep other people employed and businesses open. Will broadcasters—and their employees—feel a pinch if businesses can't advertise and go under? Advertising is commercial business "news" of potential benefit to consumers. If there's no way to get messages out to keep a business "top of mind" or spark sales, there could be some unexpected consequences of the above ruling.
TV Research Guy posted a year ago
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This is another strike against democracy. Paid speech, with unlimited funds to buy it, is in no wise free speech. Where do ordinary Americans (you know, the voters) fit in? From this point forward it will be "the Senator from Exxon-Mobil", "the President from BP", etc. Regardless of how employees of corporations feel, or the shareholders, the Board can put any and all money in the General Fund to elect a friendly politician, like the ones that waived all BP's requirements in the Gulf. Or the newly elected Senator from Wal-mart in Arkansas (Blanche Lincoln). When did we start worshiping corporations over people?

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