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Federal Court Reverses Ruling on Campaign Finance Disclosure

A federal court has, for now, invalidated a decision that
could have taken some of the "dark money" contributions out of a
campaign funding system fueling hundreds of millions of dollars in local and
national TV campaign ad buys.

The U.S. Court of Appeals for the D.C. circuit Tuesday reversed
a lower court decision
(Van Hollen v. FEC) and upheld a Federal Election
Commission interpretation of campaign finance law. That FEC interpretation, of
the Bipartisan Campaign Reform Act (BCRA), was that only contributions by
corporations or unions specifically earmarked for electioneering communications
-- TV and radio ads, for example -- required disclosure to the FEC of the names
and addresses of each person who gave at least $1,000 toward that targeted

That meant those contributing money not specifically
earmarked for campaign ads did not have to be disclosed, opening the door for
so-called "dark money" contributions.

Rep. Chris Van Hollen (D-Md.), one of the leaders for
campaign finance reform legislation, took issue with what he saw as the FEC's
improper narrowing of the BCRA disclosure provision, and a district court
agreed, rendering a summary judgment in favor of Van Hollen, saying that "Congress
spoke plainly [and] did not delegate authority to the FEC to narrow the
disclosure requirement through agency rulemaking."

But in its decision Tuesday, the federal appeals court
reversed that summary judgment and remanded it back to the lower court, saying
it should wait to see if the FEC wants to clarify its stand with a rulemaking,
or if not, take a look at the arguments again. The federal court said it would
give expedited review to whatever came decision came of that process.

The Federal Appeals Court said that the FEC had filled in a
gap in the statute and that the district court had erred when it said Congress
had spoken plainly" on the subject. "The statute is anything but
clear," said the court, "especially when viewed in the light of the
Supreme Court's decisions in Citizens United."

That is the Supreme Court decision in 2010 that allowed
corporations and unions to directly fund electioneering speech in the run-up to
campaigns, direct funding that can come in the form of the kind of
contributions at issue in the Van Hollen case.

The Sunlight Foundation, whose goal is more transparency in
election funding, called it a setback for a lower court decision that had
favored transparency. It took some comfort in the remand back to the district
court for another look. "The district court ruled in favor of transparency
once, and we hope it will do so again," said the group.