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SpeechNow reaches Court

Seeking the same favorable constitutional treatment that corporations and labor unions now have when they try to influence federal elections, five  individuals who have formed a group known as “SpeechNow” on Friday asked the Supreme Court to spell out the full implications of its controversial ruling in January in the Citizens United case.   The new petition in v. Federal Election Commission can be read here; a docket number has not yet been assigned.

The petition, if granted review by the Court, could clarify the kind of government restrictions that can be imposed upon political campaigning groups — independent of the candidates and the parties —  that do not take the corporate form, but seek to raise and spend unlimited amounts of money to support or oppose specific candidates for Congress and the presidency.  Specifically, the issues are whether such groups must sign up with the government as PACs (political action committees), and thus satisfy all the FEC-imposed rules on how they organize and how much detail they must publicly disclose about what they spend.

The SpeechNow case has been a closely watched sequel to the Justices’ ruling in Citizens United v. FEC, creating a constitutional right for corporations and labor unions to spend unlimited amounts during federal election campaigns.  Although that ruling was limited to corporations and unions, and to their spending, the D.C. Circuit Court followed up in March with a decision in SpeechNow extending Citizens United to allow independent political organizations not only to spend without limits, but also to raise as much money in contributions as they wish, free of any federal ceilings or restrictions on the sources of the money.

The Circuit Court’s removal of any curbs on raising and spending money by independent groups is not being tested in the new appeal in the SpeechNow case.   The organization won on those points in the Circuit Court, and the Justice Department decided not to challenge those expansions in the Supreme Court.  (A letter to Congress explaining why the government opted not to challenge the SpeechNow ruling can be found here.  It was sent in June, but has just become publicly available.)

The new petition by the five organizers of SpeechNow is a test of separate questions that were involved in both Citizens United and in the Circuit Court’s SpeechNow ruling.

While Citizens United ruled that corporations and labor unions must make some public disclosure of their spending, the Justices expressly ruled that this obligation cannot be as heavy as federal law provides for PACs, and that corporations and unions cannot be required to carry on their political activity through PACs, which must satisfy specific organizational and operational requirements.   Those, the Court said, would be too burdensome for corporations and unions, and could limit their freedom to speak out during federal campaigns.

The Circuit Court found that requiring the independent groups to register with the FEC as political committees and to follow disclosure requirements for such committees would not be a significant burden on them.  But SpeechNow, in its new challenge in the Supreme Court, argued that this in essence means that independent groups that are not incorporated must file with the FEC as PACs, and satisfy all the obligations that the Supreme Court said would be a burden on corporations and unions.

Thus, the first question in the new petition seeks to test whether “an unincorporated group that makes only independent expenditures and thus poses no risk of corruption or its appearance must organize as a political committee in order to speak.”

The second question seeks a ruling that such independent groups should only have to meet minimal requirements on disclosing their spending — the same obligations that now exist for non-profit groups that are formed as corporations, and that now apply, under Citizens United, to for-profit corporations and to labor unions.

“This case,” the petition says in its opening, “raises the question of whether the government may impose the full panoply of burdensome requirements that apply to political committees or PACs’ on a group that makes only independent expenditures.  The group…will willingly comply with the same sort of disclosure and disclaimer provisions that Congress provided for groups, other than PACS, that make independent expneditures.  These provisions…are very similar to those this Court upheld in Citizens United….as they applied to corporations.”   They are “far less burdensome” than those imposed on PACs, it added.

“In many ways,” the petition added, “the D.C. Circuit’s decision turned Citizens United on its head.  In Citizens United, this Court concluded that PAC requirements are too burdensome for corporations, yet the D.C. Circuit has now concluded that those same requirements are not too burdensome for a small group of individuals.”  That, it argued, results in a First Amendment violation for such independent groups.

Because of technical details in the way the SpeechNow case developed in lower courts, SpeechNow itself is not directly involved, although the case keeps the same title it had in lower courts.  The Supreme Court petition thus was filed on behalf of David Keating, Fred M. Young, Edward H. Crane III, Brad Russo, and Scott Burkhardt — the principal figures in the new organization.   It attempted to gear up to run campaign ads opposing specific candidates in 2008, but did not do so, fearing what might happen with the FEC if it did.  Instead, it sued to challenge FEC’s regulations for political committees.

Keating, SpeechNow’s president and treasurer, is a long-time political activist who has been working in tax reform or low-tax organizations.  Another of his political operations is Club for Growth, a campaign group that has its own PAC, but also just this week gained FEC approval to organize a new offshoot, an independent organization that can raise and spend free of any of the limits on the PAC.

Although federal campaign finance law does not specify just what kind of political operation must be set up as a regulated “political committee,” SpeechNow protested in the new petition that the FEC follows an approach that any group that has as its “major purpose” federal campaign activity must sign up as such a committee.   SpeechNow is contesting that approach, too.

Another issue that SpeechNow said is involved is what level of scrutiny is to be applied by courts in judging the validity of independent groups’ public disclosure duties.  It said that the Supreme Court applied “strict scrutiny” in the Citizens United case, and thus ruled out for corporations and unions the duties imposed on PACs, but that the D.C. Circuit found that PAC status was “merely a disclosure law that triggered only intermediate scrutiny.”  And, it added, even as the Circuit Court applied that lower level of review, it misapplied it.