A hearing at the Federal Election Commission on Oct. 17 will help determine just how free corporations and unions will be to speak around election time, and how freely they can spend on TV (broadcast or cable) and radio issue advertising. The hearing date carries with it an appropriate bit of timing: Freedom of Speech Week begins Oct. 15.
At the session, the FEC will hear from stakeholders as it tries to square rules about TV and radio issue ads with the “Wisconsin Right to Life Case” Supreme Court decision last summer.
That case took some of the teeth out of the McCain-Feingold Bipartisan Campaign Reform Act (BCRA) and opened the door to more such ads in the run-up to elections.
The FEC has proposed rewriting the rules in two ways. The first would carve out an exemption from the “electioneering communications” rules to allow corporations and unions to directly fund issue ads on TV and radio in the 30 days before a primary, or 60 days prior to a general election. This reworking would also permit those ads to mention federal candidates—“Call Congressman John Doe and ask him to vote against the immigration bill,” for example—so long as the ads can be interpreted as addressing an issue rather trying to elect or defeat a candidate (see “Court Defines...” at right). The second method would redefine prohibited “electioneering communications” to exclude such ads entirely.
The distinction is vital to broadcasters (the restrictions do not apply to print ads), advertisers and advocacy groups.
In the first instance, advertisers would still have to identify the source of the funding behind the ads to the FEC and on the air—a situation favored by fans of finance reform. In the second case they would not, which would make advocacy groups more willing to advertise. In addition, if the electioneering communications definition were rewritten, other kinds of ads mentioning candidates would also be allowed: for instance, an ad for a local car dealer—with that dealer also running for Congress.
Big media companies and ad agencies are concerned on two fronts. First, they want to protect and strengthen commercial speech freedoms from incursions they say were made by the campaign finance reform laws. But they also want to get as many ad dollars as possible from corporations and unions in the run-up to presidential primaries for what are shaping up to be some hotly contested congressional seats.
The Supreme Court in June held that simply because a broadcast ad mentions a federal candidate does not make it an “electioneering communication,” if it could reasonably be interpreted as addressing an issue rather than opposing or supporting a candidate's election. That means there will be room for marketers to get creative and target candidates so long as they target issues.
Given the number of well-funded groups, says former FEC Deputy General Counsel James Kahl, they will be very willing to push the limits and “quite motivated to use the full breadth of the Supreme Court decision,” particularly in swing states, “so long as the FEC lets them do it.”
According to a study from New York University's Brennan Center for Justice, about $100 million was spent in 2000 on issue ads, the last presidential election before campaign finance reforms kicked in. By the 2006 election, the last major federal election cycle before the 2008 blitz, that figure was about $20 million, says Kahl, now an attorney with Womble Carlyle, who filed comments on the FEC's proposed changes on behalf of the advertising industry.
He also points out that since state laws were modified to reflect BCRA reforms, there could be additional spending on the state level depending on how those laws, too, have to be adjusted to square with the FEC's new rules. “Since many of the states' electioneering communications provisions are modeled on McCain-Feingold,” he says, “those laws will be challenged and issue ad spending is likely to grow with respect to state elections as well.”
Kahl predicts the combination could mean millions to local stations. “A lot of groups are going to be very motivated to get their issue out there,” he says. “I think they're going to be willing to pay an awful lot to put those ads on the air.”
Paul Ryan, FEC program director for the Campaign Legal Center, says broadcasters will likely see more business in the wake of the Supreme Court decision anyway, since before that decision, corporations and unions had to set up political action committees—with $5,000-per-donor limits—to run ads that mention candidates close to election day. “I think we will likely see money flowing into these types of ads in the '08 election cycle,” he says.
But Bill Olson, legal co-counsel for the Free Speech Coalition—which includes nonprofit advocacy groups, including Gun Owners of America, Citizens United and English First—says there could be a chill if the FEC goes with reporting requirements and gets too specific about defining what passes muster. If the FEC comes up with a definition of electioneering communications that is overinclusive and “sweeps into it all sorts of issue advocacy,” he says, “it is going to chill communications by people who seek to preserve their own anonymity.”
Neither Ryan nor Kahl were making any predictions on how the FEC would rule, though Ryan, who supports disclosure, says it would be a “big stretch” to exempt issue ads that name candidates from the disclosure requirement. Olson and Ryan agreed that advocacy groups, like the ones Olson represents, would likely challenge the rules in court if they applied reporting requirements.
Whichever way the hearing goes, the FEC is going to have to move quickly. The commission plans to come out with new rules by the end of November or early December to give advertisers and broadcasters the necessary guidance before primary season kicks off in early January.
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Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.