Wednesday, September 27, 2023
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D.C. Circuit Upholds FEC |Donor Disclosure Rule

(CN) - The D.C. Circuit upheld an FEC rule that allows organizations to run political ads on television, radio and cable prior to federal elections without disclosing who donated the funds behind them.

The three-judge panel unanimously rejected a challenge to an election commission rule that requires disclosure of donors only when the funds were donated "for the purpose of furthering" issue ads that run prior to federal elections and mention a candidate.

Rep. Chris Van Hollen, D-Md., successfully sued the FEC in 2011, arguing that recent revisions in campaign law contradicted the language of the Bipartisan Campaign Reform Act requiring disclosure of anyone sharing the cost of paying for such ads.

Van Hollen said changes promulgated by the FCC and a series of court decisions culminating in the U.S. Supreme Court's 2010 resolution of Citizens United v. Federal Election Commission, frustrated Congress' intent by "creating a major loophole" in disclosure, which allows corporations "to disclose only some contributors of $1,000 or more, i.e. donors who have manifested a particular state of mind or 'purpose.'"

U.S. District Judge Amy Berman Jackson sided with Van Hollen in a 2014 ruling, but the D.C. Circuit reversed that decision on Thursday, concluding the FCC had struck a reasonable balance between respecting free speech rights and promoting some transparency.

"The arc of campaign finance law has been ambivalent, bending toward speech and disclosure," U.S. Circuit Judge Janice Brown wrote on behalf of the panel. "Indeed what has made this area of election law so challenging is that these two values exist in unmistakable tension. Disclosure chills speech. Speech without disclosure risks corruption. And the Supreme Court's track record of expanding who may speak while simultaneously blessing robust disclosure rules has set these two values on an ineluctable collision course."

Brown said this tension is on "full display" in the FEC's rule, which requires corporations or labor unions to disclose donations only if they are "made for the purpose of furthering electioneering communications."

Donations over $1,000 not made for a particular purpose need not be disclosed.

The panel found the FEC's effort to tailor the disclosure requirements to protect donor privacy was legitimate while also giving consideration to the public's interest in contribution disclosures.

"By affixing a purpose requirement to BCRA's disclosure provision, the FEC exercised its unique prerogative to safeguard the First Amendment when implementing its congressional directives," Brown said. "Its tailoring was an able attempt to balance the competing values that lie at the heart of campaign finance law."

The court concluded with a comment on the instability of the current law governing campaign finance.

"The Supreme Court's campaign finance jurisprudence subsists, for now, on a fragile arrangement that treats speech, a constitutional right, and transparency, an extra-constitutional value, as equivalents. But 'the centre cannot hold,'" Brown said, quoting the poet William Yeats. "Until then, however, the FEC's purpose requirement survives, and the judgment of the district court is therefore reversed."

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