Time For Obama To Right The FEC: The Citizens United Ruling Has Put The Election Agency On The Spot

Feb. 16, 2010

Congressional Democrats have moved quickly to sketch out legislation that would blunt the impact of the Supreme Court's recent ruling to free up corporate political spending. But the first official response to the watershed Citizens United v. Federal Election Commission may come from an unlikely quarter: the FEC.

The much-maligned agency has announced that it will re-examine a slew of existing laws, regulations, court cases and investigations in the wake of Citizens United and is poised to issue crucial regulations that will define the ruling's real-world impact. In the meantime, FEC critics have called on President Obama to replace three controversial, lame-duck commissioners.

In particular, the Citizens United ruling lends fresh urgency to the FEC's tortured attempts to write long-overdue regulations defining what constitutes political coordination. That's because the ruling legalized only independent corporate expenditures. Still banned is direct spending by corporations (and unions) that coordinate their activities with candidates or parties. (Coordination, if it gets too close, constitutes an illegal campaign contribution and can be corrupting, the court has held.)

But at the moment, FEC regulations define coordination so narrowly that they're easily skirted, say reform advocates who have successfully challenged those regulations in court. The upshot in light of Citizens United is that newly-unleashed corporations and unions could end up paying for campaign ads that candidates themselves put together.

Until now, the battle over FEC coordination rules has been too arcane to draw much notice. But Citizens United has thrust the issue front and center. In response to legal challenges, lower courts have twice ordered the FEC to write tougher coordination regulations. Now the agency may finally act. The FEC has asked for a new round of public comments on coordination, due by Feb. 24, and will hold public hearings on the matter on March 2 and 3.

Reform advocates both on and off Capitol Hill are watching closely. A post-Citizens United legislative package unveiled on Feb. 11 by Sen. Charles Schumer, D-N.Y., and Rep. Chris Van Hollen, D-Md., includes a measure that would define coordination more broadly than the FEC, widening both the pre-election window and the nature of the activities that would be covered by the rules.

The Schumer-Van Hollen package also includes new spending restrictions for foreign-controlled corporations; expansive disclosure requirements; disclaimer requirements for corporate sponsors of campaign ads; and a ban on direct corporate spending for federal contractors and bailout recipients.

"We do clarify coordination to deal with the new problems here, and we're pretty strict on what coordination is," said Schumer in a Feb. 11 conference call to discuss the package. He added that lawmakers expect to act quickly, and that much of what he and Van Hollen have proposed can take effect without FEC action.

But the coordination question, in particular, can't be settled without the FEC. And the commission's early-March hearings will likely precede any congressional campaign finance votes.

FEC critics say the agency isn't up to the task. The Campaign Legal Center has called on Obama to replace three commissioners whose terms have expired. In the wake of Citizens United, the Legal Center wrote in a letter to Obama this month, "it is more important than ever... that the FEC be comprised of commissioners willing to enforce the law." The six-member FEC has faced growing criticism over the past year for a string of deregulatory rulings and votes that stalemated in 3-3 splits.

In theory, Obama should be receptive to the call for new commissioners. On the campaign trail, he pledged to strengthen the FEC and make it more effective through appointments. "What the FEC needs most is strong, impartial leadership that will promote integrity in our election system," Obama wrote in response to a candidate questionnaire circulated by the Midwest Democracy Network.

But Obama's been strangely silent on the subject of the FEC since taking office. (He's also failed to follow through on campaign promises to overhaul the presidential public financing system, another pledge he outlined to the Midwest Democracy Network.) Reform advocates are mystified by Obama's inaction, especially given the president's power to install new commissioners immediately and without legislation.

"I have no explanation for it," said Democracy 21 President Fred Wertheimer, a leading critic of the FEC. "The bottom line here is that there is no justification for leaving this campaign finance enforcement agency completely paralyzed and dysfunctional."

Reform advocates acknowledge that a fight over FEC commissioners could stir up partisan tensions. But some argue that the president may have trouble enacting his agenda unless he takes steps to fix the campaign finance system -- especially now that corporations appear poised to win still more clout.

"Beating up on lobbyists only takes you so far," said Meredith McGehee, policy director for the Campaign Legal Center. "There's a point at which you have to say, if you're really serious about this, you'll do whatever is in your power [to fix it.] The FEC is example number one of something that is well within the administration's power."