Thursday, May 31, 2012

501(c)s Avoid "Electioneering Communications" in Wake of Disclosure Decision

The Washington Post reports that the U.S. Chamber of Commerce will change it communication strategy to avoid "electioneering communications" - broadcast, cable, or satellite ads that clearly identify a candidate, reach a significant number of relevant electorate, and are run within a certain timeframe before the relevant election - while embracing express advocacy, that is ads that expressly support or oppose candidates.  The shift for the U.S. Chamber's planned $50 million of spending during the 2012 election cycle is driven by the recent federal district court decision in Van Hollen v. FEC, and the decision by the U.S. Court of Appeals for the District of Columbia Circuit not to stay the lower court decision pending appeal. 

The lower court decision rejected a Federal Election Commission promulgated regulation limiting the public disclosure of contributors to organizations making electionering communications to contributors who made their contributions for the purpose of furthering electioneering communications.  Instead, the court concluded the language of the relevant statute requires the public disclosure of all contributors (above a certain dollar threshold) to organizations that make electioneering communications, unless such organizations establish a separate segregated fund for making such communications and then all contributors (again, above a certain dollar threshold) to such a fund must be disclosed.  The decision does not, however, reach the rules for disclosing contributors to organizations that engage in express advocacy, which apparently is the basis for the U.S. Chamber's shift.  Other section 501(c) organizations are likely to follow suit, although many will probably avoid both electioneering communications and express advocacy altogether.  For more information, see the FEC summary of the case.  Law firm alerts regarding the decision are publicly available from Caplin & Drysdale (my former firm), Covington & BurlingHarmon, Curran, Spielberg & Eisenberg, and King & Spalding.


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