The Supreme Court just helped stem the tide of dark money? Commentary
The Supreme Court just helped stem the tide of dark money?
Edited by: Brittney Zeller

This week the Supreme Court gave the green light to stemming the tide of dark money being pumped into our political system.

Last month the United States District Court for the District of Columbia made a sound and rational decision to help protect our democracy from an onslaught of dark money as we approach the 2018 midterm elections. The decision was stayed by Chief Justice John Roberts of the United States Supreme Court. Nonetheless, it appeared that this order from Chief Justice Roberts would not go into effect and the public would continue to be kept in the dark about much of the money being spent to persuade them to vote for or against federal candidates. However, at the last moment the full Supreme Court intervened and decided that the district court decision would go into effect.

In August of this year, D.C. District Chief Judge Beryl Howell concluded that a Federal Election Commission (“FEC”) regulation allowed certain groups, like Karl Rove’s Crossroads GPS, to hide the identity of their donors when that information should in fact be disclosed. Howell’s ruling overturned a FEC regulation providing that independent expenditure groups, like Crossroads GPS, only had to disclose their donors if the donation was intended for a specific political communication.

The FEC regulation at issue applied to many groups organized as 501(c)4 non-profit corporations who are pumping large undisclosed sums into our political system. These are social welfare organizations who are allowed to engage in political activity (such as spending money on ads urging people to vote for or against political candidates) as long as that activity does not become its “primary activity.” The Internal Revenue Service (“IRS”) has therefore essentially allowed these so-called social welfare organizations to, at least in part, function like political committees as long as spending money on political ads constitutes less than half of its activities. One of the big differences between a political committee and a social welfare organization is that political committees must disclose their donors, while social welfare organizations do not.

The ability to spend money on political ads through social welfare non-profits represents an enormous opportunity for donors who wish to remain anonymous. Social welfare non-profits can essentially serve as a cloaking device that protects political spenders from having to reveal their identities.

Howell concluded that the FEC’s rule made little sense and thwarted congressional intent when it comes to campaign disclosure. Howell’s ruling gave the FEC the opportunity to pass a new rule that was consistent with his ruling. However, it will not shock anyone who follows the FEC to know that they failed to pass a new rule. If it would have passed, the ruling would have taken effect this week.

Howell’s ruling invalidating the FEC regulation would have been a huge win for the public as we enter the final stretch of the midterm elections. Disclosure laws serve important purposes like providing the public with more information about who is trying to sway their ballot box decisions and providing a service in attempts to reduce corruption or the appearance of corruption. Given our current news cycle, this issue has taken on an urgent importance.

But before the ruling could go into effect, Crossroads GPS asked the D.C. Court of Appeals to halt Howell’s decision. The D.C. Court of Appeals declined to do so. The Supreme Court was the only option left for Crossroads GPS and they filed emergency stay with the high court. Requests for emergency stays are sent directly to an individual justice in charge of that circuit.

Chief Justice Roberts is responsible for all emergency stay requests coming out of the D.C. Circuit. He had the option of ruling on the request on his own or referring the request to the full court. He chose the first option. For the following few days it looked like Crossroads GPS won its argument that the lower court ruling cannot go into effect.

However, the full Supreme Court intervened and demonstrated that there may be some dissension in the ranks because the full court vacated Roberts’ stay. This result indicates that the lower court decision will go into effect and the public will obtain more information about how campaign finance contributions are attempting to affect their ballot box decisions.

Jessica A. Levinson is a Clinical Professor of Law at Loyola Law School, Los Angeles. Her work focuses on election law and governance issues, including campaign finance, ethics, ballot initiatives, redistricting, term limits and state budgets. Professor Levinson currently serves as the President of the Los Angeles Ethics Commission. She was appointed by the Los Angeles City Controller in 2013 to serve a five-year term. Professor Levinson regularly appears as an election law and governance expert on the television and the radio, including programs aired on NBC, CBS, ABC, Fox News, Fox Business Channel, NPR, KNX and KPFK. She is also frequently quoted in the print media, including The New York Times, Wall Street Journal, Associated Press, Los Angeles Times, Sacramento Bee, San Francisco Chronicle and Reuters.

 

Suggested citation: Jessica A. Levinson, The Supreme Court just helped stem the tide of dark money?, JURIST – Academic Commentary, Sep. 27, 2018, http://jurist.org/commentary/2018/09/jessica-levinson-supreme-court-dark-money.php


This article was prepared for publication by Brittney Zeller, an Associate Editor for JURIST Commentary. Please direct any questions or comments to her at commentary@jurist.org


 

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