US Ad-Disclosure Duties Ordered to Face Review

     WASHINGTON (CN) — A federal judge ruled Monday that the Federal Election Commission must revisit whether two center-right nonprofits’ anti-Obamacare ads meant to influence a Congressional election, which would require the groups to disclose their backers.
     In 2010, the right-leaning policy advocacy groups American Action Network and Americans for Job Security, or AJS, spent more than $1 million to run the following television advertisement in the districts of three Congressional candidates: “Congress doesn’t want you to read this. Just like [candidate]. [Candidate] and Nancy Pelosi rammed through government healthcare. Without Congress reading all the details. $500 billion in Medicare cuts. Free healthcare for illegal immigrants. Even Viagra for convicted sex offenders. So tell [candidate] to read this: In November, fix the healthcare mess Congress made.”
     The Federal Election Commission reviewed the ad, but found that the nonprofits’ percentage of annual spending on the ads should not be considered in evaluating whether their “major purpose” was the “nomination or election of a candidate.”
     Although AJS spent approximately 75 percent of its annual expenditures in 2010 on electioneering communications, the commissioners only considered how much the organization had spent over its lifetime. Founded over 15 years ago, AJS spent about 10 percent of its lifetime budget on express advocacy.
     On Monday, a federal judge in Washington, D.C. found merit in a challenge to the FEC’s decision brought by Citizens for Responsibility and Ethics in Washington, or CREW, a left-leaning government watchdog organization.
     “The controlling commissioners premised their conclusion on an erroneous interpretation of Supreme Court precedent and the First Amendment,” U.S. District Judge Christopher Cooper said. “Indeed, it blinks reality to conclude that many of the ads considered by the commissioners in this case were not designed to influence the election or defeat of a particular candidate in an ongoing race.”
     The FEC separated consideration of the nonprofits’ spending on express-advocacy ads and spending on issue ads, and evaluated the two spending objectives without consideration of the other.
     Cooper declined to go as far as CREW urged it to and apply a rigid 50-percent spending threshold when evaluating an entity’s major purpose.
     He said the court would “limit itself to identifying the legal error in the commissioners’ statements — that is, the erroneous understanding that the First Amendment effectively required the agency to exclude from its consideration all non-express advocacy in the context of disclosure.”
     Cooper also called the commissioners’ refusal to give weight to the organizations’ relative spending in the most recent calendar year an “arbitrary” and “serious” failure.
     “Looking only at relative spending over an organization’s lifetime runs the risk of ignoring the not unlikely possibility that an organization’s major purpose can change,” the judge wrote. (Emphasis in original.)
     CREW Executive Director Noah Bookbinder called the ruling “a huge victory on many important grounds.”
     “From now on, we hope to see a major change in the way the FEC approaches investigations of non-profit organizations engaged in politics. This could be the beginning of meaningful enforcement of rules meant to ensure transparency and restrict the ability of powerful interests to influence politics without disclosure,” Bookbinder said in a statement.

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