DC Circuit Reversed Van Hollen. Players Changed Tactics to Avoid Disclosure. Did It Matter in 2012? by Claudia A. Hrvatin

by King & Spalding
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On September 18, 2012, in Van Hollen v. Federal Election Commission,1 the U.S. Court of Appeals for the District of Columbia Circuit reversed a March 30th ruling of the United States District Court for the District of Columbia that required organizations making electioneering communications to disclose their donors. Electioneering communications are, generally, broadcast, cable or satellite communications that refer to a clearly identified candidate for federal office and are run within 30 days of a primary or 60 days of a general election. For background on the issue, please refer to our earlier report dated April 16, 2012.2

After the March 30th decision, several groups chose to fund independent expenditures instead of electioneering communications in order to avoid disclosure of their donors to the Federal Election Commission (FEC). Independent expenditures are, generally, expenditures for a communication expressly advocating the election or defeat of a clearly identified candidate that is not made in cooperation, consultation or concert with, or at the request or suggestion of, a candidate, a candidate’s authorized committee, or their agents, or a political party committee or its agents.

Thus, paradoxically, those interested in communicating merely on an issue in close proximity to an election - rather than specifically advocating the election or defeat of a particular candidate - were forced to make less-regulated independent expenditures in order to achieve their goals. That is, if they did not want to disclose the identity of their donors.

With the reversal of the lower court’s decision, some groups immediately altered their activities in advance of the election. For example, Americans for Prosperity, an IRC § 501(c)(4) organization that received donations from the Republican-leaning Koch brothers, indicated after the decision that it would “return to sponsoring ads that attack Obama’s ‘agenda’ but do not call directly for votes against the president.”3

In all, the Center for Responsive Politics, a non-partisan Washington watchdog group, estimates that nearly $1.1 billion was spent by outside groups - including Super PACs, non-profits, corporations, unions and individuals - on independent expenditures in this last election cycle.4 These expenditures helped to shape the new post-Citizens United world and, barring legislative or further judicial action, are expected to do so going forward. In the interim, the FEC voted to allow for public comment on the regulations involved in the Van Hollen litigation.

Understanding the rules associated with these types of communications, and monitoring any changes to such rules, will be integral to remaining in compliance while administering a plan to engage in political activity as another election cycle begins.

[1] Van Hollen v. Federal Election Commission, D.C. Cir., Nos. 12-5117 and 12-5118, Sept. 18, 2012.

[2] Thomas J. Spulak & Claudia A. Hrvatin, Federal Court Requires Greater Disclosure of Corporations that Fund Electioneering Communications. Donors Beware., King & Spalding Client Alert (Apr. 16, 2012), http://www.kslaw.com/imageserver/KSPublic/library/publication/ca041612.pdf.

[3] Kenneth P. Doyle, AFP President Says Group Went Back to ‘Issue Ads’ Because of Van Hollen Case, Bloomberg BNA Daily Report for Executives, Sept. 27, 2012 (187 DER A-12).

[4] http://www.opensecrets.org/outsidespending/index.php.

 

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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