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Paul Ryan

Paul S. Ryan is the FEC Program Director and Associate Legal Counsel at the Campaign Legal Center, which describes itself as “a nonpartisan, nonprofit organization which works in the areas of campaign finance and elections, political communication, and government ethics.” Before that, he was the Political Reform Project Director at the Center for Governmental Studies in Los Angeles.
Sara Fritz interviewed Ryan on June 26, 2007.

I think probably the best way to start is to ask you about yesterday’s [U.S. Supreme Court] decision [in Wisconsin Right to Life v. FEC]. I kind of understand the importance of it, but I don’t understand the details of it. In the paper, it’s portrayed as a decision that affects unions and corporations. Does that mean it’s only PACs [political action committees], or is it anything that a union and a corporation contribute to?

This is spending directly out of a union or a corporation’s treasury funds, unrelated to their PAC. The PACs are not impacted whatsoever by this decision, except for the fact that this law, when it was enacted in 2002, forced corporations and unions to route their political spending and fundraising through their PAC. The law essentially closed down the corporate and union soft-money loophole. The decision yesterday, to some extent, has reopened that corporate and union soft-money loophole.

And they can do the spending directly? Although in the last election, didn’t they mostly give to 527s — at least unions?

Yes, but in large part because this law was on the books. And now there is a new exemption to this law for certain types of ads. The decision yesterday applies only to a fairly narrow range but important type of political activity — that is to say, broadcast, cable, or satellite ads run or disseminated within 30 days of a primary [or] 60 days of a general. That’s the universe of what we are talking about here. Part of yesterday’s decision, a corporation or a union was prohibited from spending money out of its treasury fund to run any such ad if the ad clearly identified a federal candidate or officeholder and was targeted toward that individual’s voters.

Is the 30 days a restriction that’s on other kinds of groups as well?

The law itself requires disclosure of any person who runs these types of ads. The prohibition has been existing in law since the early 1900s on corporations spending their treasury funds. I’ll take one step back. And I’ll make yesterday’s decision, perhaps, clearer and intelligible.

So in the early 1900s, Congress passed a law saying that corporations can’t contribute to federal candidates or officeholders. In the 1940s, Congress extended that to say not only can corporations not contribute directly to candidates, they cannot make independent expenditures to influence federal elections. And they said at that same time, in the 1940s, that this also applies to unions. They can’t use their treasuries to make contributions to candidates or to make expenditures to influence federal elections.

And jump ahead to the 1970s, when the Supreme Court had the occasion to interpret the federal-law definition of expenditure, which at the time read “money spent for the purpose of influencing an election.” The Supreme Court, in its decision in Buckley v. Valeo, said that law, as applied to nonpolitical committees, is unconstitutionally vague. If you were a corporation or a union or an individual human being, you have a First Amendment constitutional right, to some degree of clarity, as to what speech is and is not allowed. This “for the purpose of influencing” phrase doesn’t do the job. It’s insufficiently clear, or the converse of that is unconstitutionally vague.

And in a footnote to that passage in the Supreme Court’s decision, the Court narrowly construed this phrase “for the purpose of influencing” to mean only language that expressly advocated the election or defeat of a candidate, and then went on to provide in a footnote some examples of what it considers to be express advocacy. Phrases such as vote for, vote against, support, oppose, elect, defeat — a string of approximately a dozen phrases.

Debate then swirled for several years among political attorneys and political activists as to whether this footnote list of 12 or so phrases was illustrative of what express advocacy means or exhaustive of the types of phrases that can be regulated as express advocacy. And there was widespread disagreement. There was a decision out of the Ninth Circuit in the mid-1980s by the name of [FEC v. ] Furgatch that articulated a standard broader than what these phrases had become known as in Buckley, which are the magic words, a Buckley footnote. When you hear the term “magic words express advocacy,” it’s referring to this footnote in Buckley that said “vote for” or “vote against.”

The Ninth Circuit, in I think it was about 1987, said that that list in the Buckley decision is not exhaustive, it was illustrative, and that “express advocacy” can be interpreted to include any language that has no reasonable interpretation other than as advocating the election or defeat of a candidate. If you look at the entire ad, what was at issue in this Furgatch case was a newspaper ad that went on, and I believe it was about Jimmy Carter. The ad was actually run in the late ’70s but ended up not reaching the Ninth Circuit until the mid-’80s. And the specific phrase that came closest to looking like these magic words in Buckley was “don’t let him do it,” which the Court said that, taken in the context of all the criticism throughout the course of this full-page newspaper ad of the then-president, could only be reasonably interpreted as, “don’t let him do it” means don’t reelect him.

And the controversy swirled and swirled for another 10, 12 years or even more, where several other jurisdictions looked at this Furgatch decision, including the Federal Election Commission, and said, “OK, we are going to take our cue from Furgatch in the Ninth Circuit, and we are going to apply an express-advocacy test broader than these magic words test.” It was challenged in other circuits. And courts disagreed all over the country on whether or not the Buckley magic words were required.

As a result, in most of the country outside of the Ninth Circuit, it was determined by courts that unless an ad contained these magic Buckley words, it cannot be regulated. So you had corporations, and mostly trade associations and unions as opposed to straight-up business corporations, but in the ’90s spending money on what became referred to as sham issue ads. And they were ads that said: “Representative Joe Smith is a lazy, tax-spending bum. Call him and tell him what you think” — something along those lines. They would avoid “vote for” or “vote against.” They were run in places where courts had already determined that unless it contained words like “vote for” or “vote against,” it’s not covered. But everyone who saw the ad knew that, if it was run a week before the election, it was intended to influence the election.

You did say these were groups that weren’t just unions and businesses, corporations?

They were corporations, but not what we would think of as business corporations. Generally, they were trade associations; 501(c)(5)s, 501(c)(6)s are the tax statuses of unions and trade associations. But they were subject to this corporate-expenditure ban. And they were getting around it by running ads that were fairly cleverly crafted to avoid the Buckley magic words.

These were all in the 30-day period? Or were they any day?

Well, they had a tendency to occur very close to an election. So there were some reports done by the Brennan Center for Justice in the late ’90s and updated again in 2000, I believe, in a report called Buying Time, in which they worked with academics to put together a test to try to quantify what percentage of ads being run by these trade associations, unions, and other corporations were likely intended to, or had the effect of, influencing federal elections but evaded regulation because they didn’t use the magic words. And they found that there was some little bit of dispute over how to interpret the findings of their studies.

The way they did it was they bought a huge database of ads from a company called CMAG [Campaign Media Analysis Group], which is in the business of compiling ads that are broadcast on radio, television, et cetera. Their business is mainly to compile those ads in the political sphere to allow candidates and political parties to find out what their opponents are doing. But this database proved very useful for this research. It enabled a study to be designed where student coders, I think at the University of Wisconsin, would sit down and view these ads and decide, simply upon viewing them, whether they believed they were genuine issue advocacy or a candidate-election-influencing ad, regardless of whether they contained the magic words.

And the coders found that somewhere in the neighborhood of upper-80s to mid-90s, depending upon how you interpret their findings, were clearly for the purpose of influencing an election. And they tended to be clustered immediately preceding an election. It was at that time that there were several members of the House and Senate here in D.C. who were interested in campaign-finance reform, interested in closing the sham-issue-ad loophole. And they looked at these studies and consulted attorneys who said: “The problem in Buckleywas that the language of the statute the Court was applying was vague in the Court’s view. So we need to avoid vagueness. We need a crystal-clear, bright-line test.”

The other constitutional requirement in the First Amendment field is that a restriction on speech be narrowly tailored to address a compelling government interest, or at the very least an important government interest. Here the government interest is that corruption can result in the political process from corporations and unions, both of which enjoy state-conferred benefits. They’re artificial people under the law. They can leverage those benefits that are state conferred to exert undue influence in the political sphere, unlike individual human beings. For example, a corporation has limited liability. A corporation has perpetual life, luxuries that natural human beings don’t enjoy. So that’s the justification for limiting corporate and union political speech in the first place.

So members of Congress came to be the primary sponsors of the McCain-Feingold bill, where Senators [John] McCain [Republican from Arizona] and [Russ] Feingold [Democrat from Wisconsin] in the Senate and [Chris] Shays [Republican from Connecticut] and [Marty] Meehan [Democrat from Massachusetts] in the House worked with their advisers and political-reform attorneys and crafted this election-year and communication test that they hoped and believed would avoid all of the vagueness problems that the Court saw in Buckley and get at the ads that are most likely intended to or do likely impact federal elections.

So they decided to draw a circle. Within 30 days preceding a primary or 60 days preceding a general election, if the ad is broadcast cable or satellite, clearly identifies a federal candidate, and is targeted to the candidate’s electorate, we will establish a presumption, by statute, that these ads are the functional equivalent of express advocacy and can be regulated.

So it got around the phrasing.

Right. And there was no problem with vagueness. This law was immediately challenged. And back in 2003 the Supreme Court issued its decision in McConnell v. FEC, where it entertained a facial challenge to this election-year and communication law. And that means that there were no precise fact patterns before the Court. But instead it was plaintiffs walking into the Court and saying, “As I read this statute, it’s unconstitutional, as it applies to anyone.” And the Court rejected that in 2003. They said, “No, this ad passes constitutional muster.” This was the phrase that the Court used in 2003. The vast majority of ads that would be captured by this statutory definition of election year and communication has an election year in purpose and went on to say, “So long as the ads caught within this definition are functional equivalent of express advocacy, then they can be regulated.”

At issue in these ads in the McConnell decision, what were the ads? Who was it? Was it just the unions and the corporations that were challenging? This wasn’t everybody. Or trade associations? Are they considered corporations in this sense?

Yeah. Any incorporated entity which would . . .

OK, so it really applied up and down the board.

Yeah. Basically, any group that goes to the government and says, “We don’t want to be liable for anything we do, so we are going to incorporate.” And as a result of that, their own self-identification as a corporation, usually for liability-limiting purposes and to some extent tax purposes, is what brought them within the scope.

So were there a lot of these, actually?

Yeah. Millions and millions and millions of dollars of sham issue ads — ads that, from the view of these students who did the coding and the Buying Time study, and the view of the casual observer who was watching elections in the 1990s, were run a week before an election. I’ll give you an example of a script. I am working on a blog piece right now on one of the ads that the Supreme Court in 2003 in the McConnell decision identified as a “striking example” of the type of ads which I would refer to as sham issue ads that can constitutionally be regulated and the Congress was hoping to regulate.

It was an ad that was run in Montana in [Democrat] Bill Yellowtail’s congressional race. The ad said: “Who is Bill Yellowtail? He preaches family values but took a swing at his wife. And Yellowtail’s response? He only slapped her, but her nose was not broken. He talks law and order, but is himself a convicted felon. And though he talks about protecting children, Yellowtail failed to make his own child-support payments, then voted against child-support enforcement. Call Bill Yellowtail. Tell him to support family values.” So this is a TV or radio ad. I forget which it was, but it was running in the weeks up to a congressional election. It doesn’t say, “Vote against Bill Yellowtail.” It says Bill Yellowtail is a wife-beater, call him and . . .

Tell him to stop it. This is, literally, stop beating your wife.

So there is no reasonable interpretation of that ad as a legitimate lobbying ad of any sort. It’s an ad that was intended to, and had the effect of, influencing a federal election. But it evaded regulation prior . . .

What was the group that had this ad?

I don’t know.  [Editor’s note: the ads were run by was Citizens for Reform, a tax-exempt group.]

OK, I’ll find out.

And I don’t think the Supreme Court decided that. But it’s well known and it’s often pointed to. And even this week you are hearing discussion of would the Bill Yellowtail ad be covered or not covered by the exemption the Court created yesterday. That’s one of the things that’s up in the air right now.

Oh, I see. So let’s go to today now.

Yes. So the Court upheld this law in 2003 on its face. But I’ll put it this way. As a general matter of constitutional law, there are two types of challenges. You can challenge the statute on its face as unconstitutional. But even if that doesn’t succeed, you can walk into court later with a specific set of facts and say, “This law might be fine as it’s applied to most people, but it’s unconstitutional as it applies to me and here is why.” That’s what we refer to as an “as applied” challenge. And that’s precisely the type of challenge that Wisconsin Right to Life brought in the case that was resolved yesterday.

So it was basically the same issue, but as to on a specific case.

Yeah. They had specific ads that they wanted to run dealing with or addressing the judicial-filibuster issue. They wanted to run these ads in close proximity to Russ Feingold’s reelection in his home state. And they clearly met the statutory definition of election year and communication, because they were broadcast ads that clearly had identified Senators [Herb] Kohl [Democrat from Wisconsin] and Feingold. And they were planning on disseminating them within 30 days of a primary or 60 days of a general. And they were targeting them to these senators’ voters. The Wisconsin Right to Life’s argument was, “Yeah, we meet the definition. But these are grass-roots lobbying ads. We don’t care about the election. All we care about is the judicial filibuster.”

You look at the facts of the case, the context in which these ads were saw to be run, and it seems like a pretty clear-cut and easy case. This is an organization that was publicly endorsing Feingold’s opponent, was publicly bashing Feingold and advocating his defeat on Election Day. But they were doing so through other types of media that aren’t covered by the election year and communications ad. They were doing so on their website. They were doing so via e-mail blasts, press releases, et cetera. None of those are broadcast cable or satellite. So they don’t fall into the ban.

They had a PAC through which they could have run these ads if they had chosen to run these ads, notwithstanding. And that’s a very important point of this election-year and communications provision that we are talking about here. It prohibits corporations and unions from using their treasury funds to run these ads. One of the reasons the Court said we are fine with that, back in 2003, was because corporations and unions have, under the law, the alternative to set up a PAC and to raise money from human beings, not from their treasury funds. Individual contributions [can be] up to $5,000 per year to run these ads and saying anything they want.

But the problem with the PAC is it’s got to be individual contributions in a limited amount. And it can’t come from the corporate treasury. And it can’t be unlimited.

Right. And in this particular instance, Wisconsin Right to Life could not raise money from its actual human-being members to support this ad campaign into its PAC. Or it barely even attempted to do so, although it has a federal PAC. Instead it went to a handful of corporate donors and raised over $300,000 in corporate contributions to run these ads. And then walked into court and said, “We should be able to do it.”

One of the greatest points of contention in this litigation was whether or not it’s even permissible for a court to take into consideration all of this context, all of these facts that I have just presented you with. They were not disputed or not credibly disputed. But Wisconsin Right to Life’s argument, and their attorney Jim Bopp’s argument, was that context is irrelevant; you need to stay within the four corners of the ad, look at the script of the ad and determine whether it is genuine grass-roots lobbying, whatever that means. And we still don’t know what that means. Or, by comparison, the functional equivalent of express advocacy, which the Court said back in 2003, “so long as an ad is function equivalent of express advocacy, it may constitutionally be regulated under this McCain-Feingold law.”

Grass-roots lobbying — that distinction is hard for me to understand. 

Well, the reality is that most often in a campaign ad, there is overlap between political campaign ads and issue ads. Political campaign ads talk about issues. That’s how you motivate voters to go to the polls. You identify an issue that resonates with them. You present them with your favorite or disfavorite candidate’s view on it and encourage them to vote based on that issue. Single-issue voters are a huge part of our politics. And in our view, any ad that constitutes the equivalent of express advocacy, even if it talks about issues, should be regulated, because all of campaign ads do talk about issues.

There were other views presented to the Court that, regardless of whether or not an ad is talking about elections and candidates, it should be free from regulation if it is, likewise, talking about legislative issues, because we have a First Amendment to petition our government and lobby. Who cares if it’s close to an election? That’s when these issues really matter. So there are certainly different sides to this story.

Oh, I see. That’s a distinction that’s hard to grasp. 

And the Court in 2003 in McConnell discussed this notion of genuine or pure issue ads. Although it didn’t provide any examples of what such an ad would look like, it engaged in this discussion in the context of saying almost all of these ads have been run and were studied in this Buying Time report. They weren’t pure or genuine issue ads. They were clearly campaign ads that were disguised as issue ads to avoid regulation. And that’s why we are letting Congress do this. That’s why we are saying Congress is fully within its purview to get at this stuff, because we have been saying since the early 1900s that it’s constitutionally permissible to regulate corporate expenditures to influence elections or contributions and expenditures.

So what is uncertain at this point, as of yesterday’s decision, is the breadth of this new exemption that the Court articulated yesterday. One thing is certain: To the extent that an ad is materially indistinguishable from the ads that Wisconsin Right to Life sought to run — I think there were three ads at issue in this case — it likely qualifies for this new exemption. How far you can stray from the ad script in terms of distinguishability of Wisconsin Right to Life ads and still qualify for this exemption is entirely open to speculation.

And the issue is the 30 days. Can you put it in the 30 days? You can always do it out of the 30 days.

Right. And 60 days pre-general.

Right. So the Wisconsin ads would be fine if they had been 61 days out.

Yeah. And that was an interesting constitutional argument that was raised in this case. From Wisconsin Right to Life’s perspective, they said, “How could a single ad script be perfectly legal 61 days before an election and all of a sudden trigger federal criminal penalties if the same group runs it 60 days before an election?” And the response to that from the sponsors of the McCain-Feingold filing and from the federal government, in this case, was that Congress in virtually every area of regulation is forced to draw lines.

The Court considered whether the 60-day line and 30-day line were reasonable back in 2003. And based on this abundance of evidence of data from the Buying Time studies, they determined that’s a pretty sensible place to draw the line. So the fact that you may fall on one side or the other of the line is not of great constitutional significance. And in the decision yesterday, the Court doesn’t get into that issue. They don’t really talk about it. But it is something that was raised.

So it’s not clear what will happen then?

No. I will tell you, for your own sake, what the actual exemption articulated yesterday, because it’s only, essentially, a sentence long. And as I mentioned earlier, the McConnell court in 2003 made it clear that any ads that are the functional equivalent of express advocacy can constitutionally be regulated. And the vast majority or the ads captured by this rule were the functional equivalent. So at issue in this case, in a nutshell, was: Are Wisconsin Right to Life’s proposed ads the functional equivalent of express advocacy? Can they be regulated or not?

The Court said an ad is the functional equivalent of express advocacy only if the ad is susceptible of no reasonable interpretation other than as an appeal to vote for against a specific candidate. That’s the new test. So reasonable interpretation, what does that mean? I am writing a blog post right now in which I write, “The problem with this test is that reasonable minds often disagree regarding what the reasonable interpretation of an ad is.” And this level of common disagreement of what’s reasonable and what isn’t, I think that’s illustrated by the fact the Court itself split very sharply on this decision. You had four justices in dissent in this opinion who wrote, “It is beyond all reasonable debate that the ads are constitutionally subject to regulation under McConnell.” And then you had two justices writing for the majority in part, Chief Justice [John] Roberts and Justice [Samuel] Alito saying, “The WRTL three ads are plainly not the functional equivalent of express advocacy.” So four justices say they are the functional equivalent; two justices say they aren’t. And then three justices, [Antonin] Scalia, [Anthony] Kennedy, and [Clarence] Thomas, reject the test of Chief Justice Roberts and Alito, because it’s so open to interpretation and, in their view, unconstitutionally vague.

And they just abolished the whole thing.

Yeah. And then you have Justice Alito filing a separate concurring opinion, one page, essentially backing away from the Roberts reasonable-interpretation test, saying maybe Scalia, Thomas, and Kennedy are right, and this thing is unconstitutionally vague. If we find in practice that this standard continues to chill speech because it’s too vague, in that case it will make it to us again and we can decide then. So you have the entire integrity of the McCain-Feingold law as election-year and communications provisions and the continued salience of the 2003 McConnell decision on this point, hinging on this new reasonable-interpretation test that has one and a half justices standing behind it: Chief Justice Roberts, and Alito is with him for now.

So whatever it’s going to do, it’s going to spark more litigation?

I certainly believe so. And in this blog piece I am writing now, I am writing that the defining characteristic of the decision is uncertainty. And I use as an example in my blog piece this Yellowtail ad. There was a conference call yesterday among subscribers to the Election Law Listserv, which if you have not heard of, I am not sure how long you’ll be working on this project, but it may be worth subscribing to. And it is open to journalists and anyone else. It’s the best resource, I think, for discussion among election lawyers. And it’s maintained by Professors Rick Hasen and Dan Lowenstein. Rick is at Loyola Law School in L.A. Dan Lowenstein is at UCLA Law School, my alma mater. And it’s subscribed to by hundreds of election lawyers. It’s surprising that there are that many around the country. And many journalists [subscribe].

Yesterday we had a conference call. I was invited by the facilitator of the call to actually be a participant commentator. And then there were over 130 people listening in. And then there were about six or eight of us giving commentary on the decision. And Jim Bopp, Wisconsin Right to Life’s lawyer, said straight up that he believes that this Bill Yellowtail ad would not be exempt under the exemption that was announced yesterday. And I think that is correct. But I posed the question to him and others. Well, you take that same Bill Yellowtail ad, though, and you simply insert a reference. The ad as it was written simply said that Yellowtail voted against child-support enforcement; call Bill Yellowtail, tell him to support family values.

What if, instead, the ad read, “Call him and tell him to support the Child Support Act of 2007, House Bill 9999, so he can’t get away with it again.” You throw in a specific reference to a piece of legislation. Does that negate what Chief Justice Roberts referred to in his opinion as “indicia of express advocacy?” Which was lacking in Wisconsin Right to Life’s ads. But this is the archetype ad in the McConnell decision of why this law is constitutional. And we all know, you throw in a reference to a House bill, and now what happens? Now is it still the archetype sham issue ad, or is it automatically converted into genuine lobbying? Who knows? And there will be disagreement among attorneys.

So what we’ll see is some people trying to work their way into the exemption. There will be some people who want to test the exemption, so they’ll try to violate it, right? To give some case law.

Yeah.

And basically, everything will go on at least as enthusiastically as it has for the last few years. These groups will be out there doing this.

Yeah. And again, I’ll reiterate that, to the extent that a group wants to use the Wisconsin Right to Life ads as a template, they are on pretty safe ground. But the reality is those ads, though they met the definition of election year and communication, they are not nearly as dramatic as the sham issue ads like the Yellowtail ad. I anticipate that corporate entities and the unions are going to want to push the boundary from WRTL’s ads toward ads that look more like Yellowtail, because the Yellowtail ads are more effective. Jim Bopp wrote these Wisconsin Right to Life ads with the intent of bringing a test case. I mean, he wrote ads intentionally not Yellowtail. He wanted them to be as far removed from election advocacy as possible, yet still meeting the definition of election year and communication. So you can bring this test case. And he’s a smart lawyer. And he brought the test case. And he won the test case. And there is now a little crack in the dike.

And now people will try to expand it a little bit. That’s very, very interesting.

And there are other election lawyers out there, like Rick Hasen, who has this election law blog, and some others who self-identify, or at least are perceived publicly as being reform-oriented election lawyers, who are throwing their hands up in the air today saying, “It’s all over — as long as you mention an issue, it’s done.” We are not conceding that. The Campaign Legal Center certainly isn’t conceding that.

I believe, personally, that the margin of litigation is now somewhere between Yellowtail and the Wisconsin Right to Life ads. And so you had Jim Bopp saying yesterday on the conference call: “Yeah, Yellowtail would still be covered by the law. That’s not a legitimate grass-roots lobbying ad. That’s not what I had in mind when I sought this exemption.” He didn’t respond. And no one else gave a satisfactory response when I said: “OK. You throw in a reference to a legislative bill. Does that negate the fact that this is a character attack ad?” Who knows? So now it’s in the hands of not only the FEC, which is responsible for enforcing this federal statute, but there are state and local governments around the country that have adopted electioneering communications like ordinances statutes modeled on the McCain-Feingold laws.

Colorado, did they do it? Or they were thinking about it?

I am not sure off the top of my head. I have a paper on it that I wrote last fall, that I think is pretty up to date. But I don’t recall. Colorado was debating 527 disclosure earlier this year. I don’t know if they have done election year and communication.

And that leaves them to scramble.

Yeah. There are a bunch of jurisdictions that have adopted laws modeled on this McCain-Feingold election year and communication provision. And they are certainly subject to this Supreme Court decision today, because their laws are so similar. At least 14 states and four local governments have enacted electioneering-communications restrictions modeled on BICRA [Bipartisan Campaign Finance Reform Act of 2002]. And then you have courts. So we have the FEC and other state and local administrative agencies charged with enforcing these campaign-finance laws. And then courts, all of whom are going to need to decide for themselves whether there is any reasonable interpretation or whether there is no reasonable interpretation other than blah, blah, blah.

Let’s move on to this actual election now. Can we go through the various kinds of groups and talk about what the advantage and disadvantage is to being each kind?

Sure.

I mean, the ultimate answer to all of this is they have to find something better. They have got to find a better way to simplify this.

Well, I agree. But I think the better way was the election year and communications law itself. It was clear. It was a bright line. There was a PAC option. It didn’t prohibit any human being from speaking. Although when Jim Bopp is standing before the Supreme Court, he is saying, “This is squelching the rights of grass-roots activists,” when the fact is his organization’s client couldn’t talk their human-being members into giving the money to doing what they wanted to do.

It’s only a controversial issue to the extent that you believe that fictional people, corporate entities, should possess all of those rights that natural persons enjoy. I don’t, personally, subscribe to that notion. Our Supreme Court is somewhere on the fence. They have certainly recognized constitutional rights possessed by corporations, but they have allowed stronger regulation of those corporations.

So if I had a genuinely grass-roots organization?

You would have been covered by an exemption articulated many years ago in the Massachusetts Citizens for Life case. This was back in the realm of the magic words independent-expenditure test. The Court in that case said this is a group that doesn’t take any business corporation money. Yes, they are corporate for liability purposes, but they are a 501(c)(4). They don’t take business money. And they want to do grass-roots advocacy work. And any group that looks like this, you are not covered by the law.

And that’s a decision that we are fine with. That’s an exemption that was incorporated into this election year and communications law. But you always see this incremental pushing. So then you see Massachusetts Citizens for Life got their exemption; Wisconsin Right to Life said, “We are not happy with that, because we want to take business corporation money.” So that’s how we got where we are today.

I see. So first we got PACs. We got 527s. We got 501s of all varieties. Can we just go through the list and clarify what can do what?

Yeah. And I think perhaps the most important single thing to understand in this area of the law is the fact that a PAC is a creature of campaign-finance law and the other entities you have described are creatures of tax laws. There is some overlap between these two. But they are, in many respects, distinctly different entities. And the reason I want to point that out is that it’s simply incorrect to distinguish between PACs and 527s or to distinguish between PACs and 501(c)(4)s, for example. Because a 527 can be a PAC, a (c)(4) can be a PAC. You can claim tax exemption under a Section 501(c)(4) or (5) or (6) of the tax code. And you can, nevertheless, be found by the Federal Election Commission . . .

To be a PAC.

Regardless of what the IRS says, the FEC’s job is to say which groups are and are not PACs under federal law. And they have a test that they apply.

And that’s fairly recent, is it not? That’s in response to 527s?

527s, the tax status has been around for a long time.

No, I know, but in response to the use of 527s?

I think the most important thing to realize about the whole 527 issue is that we have come to use the term 527 group to refer to a tiny, tiny, tiny subset of 527 groups: only those that simply refuse to show up at a campaign-finance agency and register as a political committee. The tax-code provision, Section 527, simply establishes tax-exempt status for any group with the primary purpose of influencing the appointment, nomination, or election of human beings to public offices. That means dogcatcher. That means school board. That means president of the United States. That means judicial appointments. Any human beings appointed or elected to public office. That does not mean a lobbying organization. Talking about issues is not the same thing as having the primary purpose of putting human beings in public positions of trust. And so that’s the tax-code status.

And then you have various bodies of campaign-finance laws; federal campaign-finance law deals only with federal elections. Every state has its own laws and its own ideas of what is and is not a political committee. Municipalities in many places have their own laws. And until recently, even today, the statistic is off the top of my head, but it’s probably safe to say that 99 percent of entities that are exempt from taxation under Section 527 are registered PACs somewhere.

It is only in recent years, within the last 10 years, that you have had organizations say: “Well, we like the benefits of tax exemption, so we are going to say we are exempt from taxation. We don’t want to pay the federal government tax on the money we are raising and spending to influence an election. So we can and we are going to claim tax exemption under Section 527. We like those benefits. We do not, however, like the burdens that are accompanied by showing at the FEC and registering as a political committee. We don’t like the contribution limits. We don’t like the prohibition on receiving money from corporate and union treasuries. And we don’t like, perhaps, the frequency of reporting requirements under federal campaign-finance law. So we are just not going to show up. We are going to take the risk that the FEC is not going to come after us. And we are going to hope that even if the FEC does come after us, this thing won’t be resolved until a couple of years after the election and any fine that they impose on us is going to be miniscule in proportion to the amount of money we raise and spend.”

And it turns out that this was a pretty good bet for a lot of these groups. It is only since December of 2006 that the FEC began resolving complaints filed against 527 groups back in 2004. Back in 2004, the Campaign Legal Center and other groups were screaming: “These groups clearly meet the federal campaign-finance law definition of political committees. They should be registered and behaving as such. They are not. They are breaking the law.” The FEC said, “No comment. We’ll look into it.”

Two and a half years later, in December, the FEC announces a fine of a couple hundred thousand dollars on the Swift Boat Veterans for Truth, which spent in the neighborhood of $25 million. And legally, they get a fine of less than $300,000. Progress for America Voter Fund, earlier this year in spring of 2007, I think it was February, got a fine of somewhere in the neighborhood of $800,000 for, if I am recalling off the top of my head, but you should confirm with press releases on the FEC’s website, somewhere in the neighborhood of $40 million in illegal expenditures. So these fines come two and a half years after the elections in which these groups had a profound impact on the election in a manner that was completely illegal. It’s difficult to envision these groups seeing fines as more than the cost of doing business.

Can you still do that? Can you still declare yourself a 527 and wait for the FEC to catch up to you?

You certainly can. But the FEC’s conciliation agreement that they have — I guess I should take one step back and tell you a little bit about the FEC’s enforcement process.

No, I have read a lot about this. And also I am well aware of the history of their enforcement process.

Well, they have no authority to impose a fine on anybody, with one minor exception being what’s called the administrative fines program that has to with missing deadlines and filing reports, which are set fees, and pretty small ones. But as a general matter, they can’t impose a fine on anyone. All they can do is — a majority vote of the commissioners that there is reason to believe a violation has occurred will trigger a full-scale investigation.

And then somewhere down the road, usually a couple of years later, the commission will take another vote as to whether or not a majority of the commissioners believe there is probable cause that a violation has occurred. Anywhere along this road the alleged violator of the law has the ability to enter a settlement with the FEC and say: “We don’t want to deal with the bad press with this. We don’t want to deal with complying with this investigation and paying lawyers. How much do we need to pay you to be done with this without admitting any guilt or liability?” And then, most often, if the FEC gets a group in the position where they are willing to enter a conciliation agreement, they do so.

If a group says, “Forget it — screw you,” then the FEC has to file a civil action in court. So what we are seeing now is, perhaps, the low-hanging fruit from the 2004 election cycle, with respect to these 527 groups. The most egregious violators thought, “We have no defense in court,” or those who simply didn’t want to deal with going to court saying, “We’ll pay you this fine.” There are still complaints outstanding against some of the largest violators in 2004 — in our view violators, although the FEC has not yet announced anything. And even with respect to these conciliation agreements that have already been published, as a legal matter it’s not fair to characterize them as these groups being found to have violated the law because they say, “We didn’t.” The FEC says, “We think you did.” And they agree to pay a fine without admitting guilt.

But getting back to your initial question, can groups still do this? The answer to that question lies in a lawyer’s interpretation of these conciliation agreements and the FEC’s lawyers’ reports. And these are all public record. And it’s the first place lawyers like me go when someone asks, “What’s the law?” You ask, “Well, how has the FEC interpreted it through enforcement actions and advisory opinions?” And what the FEC has, I think, surprised the regulated community by doing in these conciliation agreements that started trickling out late last year is relying on a part of its definition of express advocacy that had been dormant for many years.

And this ties directly into the Wisconsin Right to Life decision yesterday. I mention, in our context of discussing Wisconsin Right to Life, this 1980s decision in Furgatch, where the Court articulated a reasonable-interpretation definition of express advocacy. The FEC put that in their regulations. And it’s subpart B of their two-part definition of express advocacy. Part one is magic words. Subpart B is this reasonable-interpretation test. They got sued in several places. Several courts around the country found their regulation to be unconstitutionally vague, and they simply stopped enforcing it in the ’90s.

They resurrected it last year in the context of these 527 groups, without explanation. But instead, simply saying to these 527 groups — their argument, in all fairness to them, back in 2004 was, “Hey, we are not using magic words, so we don’t meet the federal campaign-finance law definition of political committee.” Political committees defined in federal law include groups that make expenditures or receive contributions of $1,000 or more in a calendar year. Expenditure, in their view, meant magic words “express advocacy.”

Expenditure, in our view, and I will refrain from getting too far into the weeds, but our reading of this Buckley decision where this magic words test all came about is that narrowing the magic-words definition applies only to non-major purpose groups, meaning individuals and non-527 groups. And individuals and groups that don’t have a self-identified purpose as primary “purpose of influencing elections” argument. These groups show up at the IRS and they say: “Our primary purpose is influencing elections. Can we be tax-exempt?” So they meet the major-purpose test.

The statutory phrase “for the purpose of influencing” that was considered back in Buckley was narrowed to magic words “for individuals and non-major purpose groups.” We believe that phrase “for the purpose of influencing” is fine on its face. The Supreme Court’s decision in Buckley should be read as such. It’s fine on its face as applied to any group out there saying, “Our major purpose is influencing elections.” Then it knows when it’s spending money for the purpose of influencing elections.

So that’s sort of the technical legal argument that we have been making. And these groups were thinking back in 2004: “We don’t believe the Campaign Legal Center’s interpretation of this. We don’t believe we are covered unless we engage in the magic words.” The FEC had given every indication in the previous six or eight years that they agreed with that.

And they moved back.

Then they resurrect this reasonable-interpretation provision of their regulations to say: “Yeah, you didn’t use magic words. But there is no reasonable interpretation other than that your actions were to influence the election, so we are going to call you a political committee.” I wouldn’t be shocked if I were to learn in the coming months that one or more of the several 527 groups that have not yet had their enforcement actions resolved with the FEC are simply going to challenge the FEC’s application of this reasonable-person test in court. They are going to say, “No, we are not going to enter a conciliation agreement.” The FEC will then go into court and file a lawsuit saying, “They were a political committee [and] they didn’t register as such.” And this group will counterclaim saying: “This reasonable-interpretation test that the FEC is trying to impose on us, all of these courts said it’s unconstitutionally vague. And it still is.”

The plot thickens with yesterday’s decision, where you have a Supreme Court saying, “The new test [is] in this other context, but nevertheless, this new test is reasonable interpretation.”

The same words, yeah. That’s interesting. So are there some notable big violators from the 2004 campaign?

Let’s see. I am pretty sure that the FEC has not yet resolved America Coming Together, the Leadership Forum, the Media Fund. It looks like the Media Fund and Leadership Forum are two of the bigger, more active groups that we filed against in 2004.

Now, the FEC does require some of these people, as they are considered political campaign committees or political committees, to register now with the FEC.

Or disband. Find a new name, a new entity.

And a lot of them have registered, it appears to me. But does that require them to disclose their contributors?

Once you register as a political committee, that’s the first step in triggering disclosure requirements. Every political committee has to file a periodic disclosure report. And also, they are all subject to the amount contribution limits, $5,000 per calendar year, and the source prohibitions.

Now the IRS, at least, gives us the names of the people who go to them as 527s, do they not?

Yeah. These 527 groups that are not registered as political committees are subject to some IRS disclosure requirements. But the frequency of the reports required to be filed are not as useful or strict as the FEC’s requirements, for example. So as you get closer to an election, you don’t get as many reports. And a lot of the money that these groups, if they raise and spend it in the two weeks prior to an election, under the IRS’s disclosure requirements, you don’t learn about it until after the election. Under the FEC’s disclosure requirements, you see reports filed within those weeks.

So you are getting the contributors from the IRS reports?

Yes.

But they also can accept any amount?

Corporate treasury funds, union treasury funds in any amount. So that would distinguish between amount limits and the source prohibition, neither of which apply to unregistered 527 groups. And then the timeliness of disclosure is relevant. So we get some disclosure from the IRS. But it’s not particularly timely. No limits on the funds going into these groups under the IRS.

Citizens United, for example, has one of each. Obviously they are putting their big donors into the 527. I don’t know whether they have been forced to register by the FEC. I am not quite sure yet. But they also have 501 groups, which also don’t have to give their contributors.

Yeah. It’s very common for groups to have what tax lawyers call complex structured organizations. And that means that there will be, affiliated or related, a 501(c)(3), a 501(c)(4), a 527, and tax laws applicable to these organizations. And there are different rules for each of these essentially separate bank accounts. There is also not a firm requirement, but it behooves these organizations to have some variation among board members and, technically, up to three different organizations. But the staffs can be the same. And there can be a lot of shared name. And it is quite easy for it to be a single organization with a complex structure that allows it to maintain various types of bank accounts, the money from which can be used for different types of activities in some respects.

But it’s much more restrictive to have — I mean, you don’t have to disclose if you are a 501(c).

(c)(3) or a (c)(4).

But it is a narrower window to get in there, right?

Yes. And it’s (c)(3) being narrowest. A (c)(3) is prohibited, completely, from intervening in candidate elections. And there is debate among tax lawyers about what that means, what constitutes intervention in an election campaign versus lobbying, for example. But at any rate, the rule is no candidate campaign intervention by (c)(3)s.

Candidate campaigns.

Right.

This group does kind of the right-wing responses to Michael Moore. They do these big documentary kinds of things that are just extremely right-wing in a response to kind of making fun of Michael Moore.

Right. Michael Moore is not a candidate or officeholder.

You can do that even though the subject could be the war in Iraq or national health insurance.

Yeah. The (c)(3) prohibition on political candidate campaign intervention applies, literally, only to the context of candidate elections. Where (c)(3)s have gotten in some trouble in recent years, where this issue has generated the most heated debate, has been pastors in various religious organizations making statements from the pulpit advocating the election or defeat of candidates. And the question is whether a pastor of a (c)(3) church is speaking on behalf of a (c)(3) or on behalf of himself, or whether the IRS has any business monitoring and policing what can be said by a pastor.

Now the last time I checked on that, the IRS had brought a case against one. And it was a liberal church out in California.

Yeah, I think in Pasadena.

Have they ever gone after any of these others?

I don’t believe so. Just about a month ago they published a new guidance document, a new revenue ruling describing in fairly good detail, or more detail than they had ever before done, what constitutes political intervention. It’s a revenue ruling from June 18 of this year.

So the other organization that got a lot of ink on this question was the NAACP, where I believe it was their former president made some comments at a convention. And the question was, is this illegal campaign intervention or was he speaking in his own capacity?

But that’s the story with (c)(3)s. No political candidate campaign intervention. They can, however, do a limited amount of lobbying. It’s a fairly complex formula based on the organization’s assets. But roughly 20 percent of the organization’s assets can be used to lobby on legislative issues. And within the ambit of what the IRS considers to be lobbying is ballot measure. So that’s when it’s important to distinguish between candidate elections and ballot-measure elections.

Moving to (c)(4)s, they may engage in candidate election intervention, so long as it’s not the organization’s primary purpose. How do you measure primary purpose? It’s a little big squishy, but I think most tax lawyers would agree that it means roughly 50 percent of it. They may not spend 50 percent or more of their assets on political campaign intervention.

So now that the FEC is gathering in some 527s, that looks like a good option.

Well, they have to pay tax. A (c)(4) has to pay tax on its political election year.

Ah, (c)(3)s don’t?

[501](c)(3)s can’t do political campaign intervention. A (c)(4) is generally tax-exempt. But political campaign intervention, which the IRS defines by pointing to Section 527, and says to (c)(4)s: “You can do this stuff so long as it’s not your primary purpose. But you will be subject to tax on this activity unless you create an embedded 527 PAC within the (c)(4).” And this is the avenue that (c)(4)s use.

Oh, man. This is worse than I thought.

Yeah. The IRS calls it in IRS-speak. And conveniently, it sort of overlaps with some terminology used by the FEC and campaign-finance laws. But a (c)(4) can set up a separate segregated fund. The FEC treats it, generally, as a PAC. The IRS treats it as an embedded 527 organization within the (c)(4). The restrictions that apply to 527 groups apply to this embedded 527 within a (c)(4) organization. At the end of the day, the money has to come from individual members of the (c)(4) organization in order to be not subject to tax. The money has to be given by members of the (c)(4) specifically for the separate segregated fund.

Of the (c)(4). OK. But it’s unlimited? And it’s not disclosed?

Sure. Well, from the IRS’s perspective, it’s unlimited. But from the IRS’s perspective, it is disclosed, because the IRS treats this as a separate legal entity as a 527 organization.

And then they list it with their 527s?

Yeah. And then the question whether it’s subject to limits depends on the specific organization. If the (c)(4) is spending money solely to influence state candidate elections, the FEC isn’t going to touch them or care about them. And then it’s a question of whether they meet that state’s definition of political committees. But if the (c)(4) sets up a separate segregated fund, and they are spending money to influence federal elections, the FEC is going to treat that as a 527 group. That is a political committee. It better be registered. If not, it’s breaking the law. There is a lot of language in the code, in the regulations, referring to separate segregated funds, embedded, blah, blah, blah. But in a nutshell, we are talking about a (c)(4) that sets up a 527.

So really, the main advantage you get about going this tax-law route is simply delay. You could probably do whatever you wanted to do. But if I set up a 527 tomorrow and didn’t tell the FEC, how long would it take them to come after me?

Well, it depends on what you are doing with the money. Again, you could set up a 527 tomorrow and spend your money to influence a city council race somewhere. And the FEC doesn’t care. The city clerk in that city may care if they have limits on PACs.

Right. But let’s say I set up a Swift Boat organization.

With one other added factor that you should be aware of. And that is that there are provisions in federal election campaign acts that allow the FEC to seek greater penalties, financial penalties, monetary penalties, and even criminal penalties for knowing and willful violations of the law. Now that the FEC has resolved a handful of these 527 cases, and they have made painfully clear to these groups that they are going to rely on these reasonable-interpretation prongs of their express-advocacy test, it’s no longer going to be a satisfactory excuse to show up at the FEC when they launch an investigation and say: “We didn’t know. We thought it was magic words.” So what was now a fine in the neighborhood of 1 percent to 2 percent of the illegal expenditures may turn into a fine of 5 percent and 10 percent. So it’s not clear how the FEC is going to deal with groups down the road now that the FEC has given more guidance.

But if you were to do this, you would have to be prepared to deal with a lot of possible consequences.

Yeah.

Knowing the FEC, you probably wouldn’t, but . . .

There is potential for the FEC to impose harsher penalties to groups that it now, down the road, deems this was a knowing and willful violation. The ones in 2004 weren’t knowing and willful because we weren’t really clear up until that point how we [the FEC] were going to enforce this law. Since late 2006, we have been abundantly clear. You are flagrantly violating the law. We are going to impose a much stiffer penalty. Whether there are four votes on the FEC to do that, only time will tell.

So what Citizens United does, with all of these different entities — I mean, if I were going to really get around the law, that’s probably the best way to do it, to have all of these funds and lay the contributions here or there depending on what I want to do with them.

Yeah. But the “depending on what I want to with them” part of it is critical here. And as someone who, for a living, encourages or advocates vigorous enforcement of these campaign-finance laws, even I will recognize that probably most of the organizations out there operating in the nonprofit universe are trying to do the right thing. And it’s what they want to do with the money. There is a good reason we have a Section 501(c)(3) of the tax code, and it’s good public policy, I think, for individuals who donate to legitimate charitable organizations to receive a tax deduction. So to the extent a group really wants to do that type of stuff, [it] has to distinguish [itself] from the group that really doesn’t want to do the charitable work but wants to evade laws. Most of the groups, I think, really want to do (c)(3) work. And they really want to do some lobbying work.

I don’t know if you are planning on talking to Fred Wertheimer and Democracy 21, but I mentioned him earlier. They and many other reform organizations have (c)(3)s and [(c)](4) accounts because they want to lobby. They want to do more lobbying than we do. And they can only do a limited amount through their (c)(3). They say: “Well, we want to lobby. Lobbying is important to the work we do. We are going to set up a (c)(4). No, our donors to our (c)(4) won’t get a tax deduction. But hopefully, we’ll be able to talk some of our supporters into giving money to it because it’s important work.”

And I don’t think there is anything wrong with that at all. And similarly, in the context of Section 527 tax exemption, there is a good reason. I don’t think it would be good public policy to tax money raised and spent for political purposes. I think we need robust political dialogue.

But you are not suggesting that there is not a worst-case scenario out there in the new election season.

No, I am certainly not suggesting that. But one of the things the FEC made clear last fall is that it doesn’t care about the IRS distinctions between permissible activities of (c)(3)s and (c)(4)s and 527s. It found, in an enforcement action last fall, a (c)(4) to be a political committee under federal law. So it’s made clear that it kind of disregards what tax status you claim for yourself. And it’s going to look kind of independently at your activities. And if it thinks you meet the definition of political committee, it doesn’t care if you are a (c)(4); it’s going to come after you anyway. So these groups, at least with respect to the FEC, are not going to have this defense: “But we are a (c)(4) — we are allowed to do this stuff.” It simply is not the case, as a matter of law, that (c)(4)s can engage in unlimited political candidate campaign advocacy at the federal level without needing to register as a PAC.

Well, you have given me a lot of stuff to digest here. It’s like drinking from a fire hydrant. I just have a couple more questions. Is there any legislation on the horizon on this subject — I mean, that you could reasonably expect would be passed. And certainly nothing would be passed for the 2008 cycle.

No. There have been various bills introduced in the last couple years regarding 527 groups. Probably the one that had the greatest likelihood of passing was one that, I think, was a sham. It was called a 527 reform. It was put in by Representatives [Mike] Pence [Republican from Indiana] and [Al] Wynn [Democrat from Maryland] last year. Its sole purpose was to eliminate the aggregate limits on contributions to parties. They said, “No, this is 527 reform because this will allow parties to keep up with these 527 groups.” That I was a little worried about. And some reform groups here in D.C. did some lobbying against that. But that didn’t pass. I don’t see anything that’s currently pending that has as much the likelihood of passing.

Now this is a hard question to ask, but I have to ask this. The story line for the creation of 527s is that after Congress eliminated soft money in the federal elections, it had to go somewhere. Now I don’t quite buy that, because soft money was not necessarily for ads. I mean, it seems to have happened, maybe coincidentally, at the same time. What caused people to move to the 527s?

Well, I want to distinguish between the claim that the donors moved from putting their money here to putting it there. And I think the best empirical evidence [shows] that is not, in fact, what occurred. Michael Malbin, at the Campaign Finance Institute, has edited a book on this and to answer this question. It’s called The Election After Reform. It was published last year. And they looked very closely, in compiling data for that book, at the actual dollars that used to go into soft-money accounts of parties and that are now going into issue ads. And they have determined that it’s different people.

Different money.

In reality, the 2004 elections garnered more interest in politics, quite possibly because of the war in Iraq, than any election in recent history. And a lot of people got involved. And a lot of these people were newly involved, people who had never given before. And a lot of these people gave to 527 groups.

My impression is right. That story is not, technically, true.

Right. But another piece of it is, from the perspective of the political players who are looking for vehicles through which to raise and spend money, it may be fair to say that those who are satisfied with the ability of parties to raise soft money, that avenue was shut down by the McCain-Feingold law with the soft-money ban. And they did, in fact, seek a new avenue through which to raise and spend money. The donors may have been different. But the players who had been involved closely with parties and then moved to the 527 sector, their goal was, I love my party. They said in 2000: “I love my party. I am going to help my party raise as much money as possible.” That entailed raising soft money.

In 2002, the McCain-Feingold law passes. They still love their party. They still desire to raise as much money to support their party as possible and realize it’s no longer possible to do so lawfully through the party vehicle itself because of the soft-money ban. [They say:] “What else can we do? Let me call my lawyer. Is there any other avenue I can use, any other vehicle?”

The groups themselves are appealing to different donors?

Yeah. I mean, I think the donor groups are different. And even the way I have just characterized the rise of the 527s may be accurate and fair with respect to the ones that were led by people closely affiliated with the parties. But I also think there was a bit of a snowball effect. Because once you see one or two or three or four 527 groups spring up, that may have given the idea to other groups who never heard of Section 527 of the tax code beforehand.

That ran like wildfire through the Democratic Party, obviously.

Yeah. So you have organizations and individuals who have simply wanted to get involved in the 2004 election, who may never have been really deeply involved in an election before that. And they surveyed the landscape and said: “How can we do it? We can set up a PAC — limits source prohibitions, more timely disclosure.” It didn’t look quite as appealing as: “Well, what about all of these other groups that are saying you can do this 527 thing? Can we do that?” And I think there are groups that fell into that category.

It’s just sort of like: “Hey, everybody is going to the party. Let’s go.”

Yeah. So not necessarily saying, “We used to do it this way, now we are going to do it this way.”

That’s often the way things happen. So I guess what I am looking for is, where is the stampede headed this time?

I am not sure where the stampede is headed this time. I will say, though, that the explosion of the illegal use of 527 groups not registered as political committees is, in my view, largely the product of failure by the FEC to enforce existing laws. And the federal law defining political committees has been on the books since the ’70s. The limit is applicable to both groups. And the disclosure requirements have been on the books since the ’70s. This is not something that came out of thin air. The FEC had within its power the ability to regulate these groups. The FEC explicitly decided in 2004 not to promulgate a rule that would have, effectively, regulated these groups.

There was a bipartisan proposal by then-commissioners Michael Toner, a Republican appointee, and Scott Thomas, a Democratic appointee, that would have gotten the job done, that the Campaign Legal Center strongly supported. They couldn’t get four votes among their commissioners to pass their approach. And instead they punted on the issue and they were sued in federal court by Shays and Meehan.

The Campaign Legal Center represents senators McCain and Feingold as friends of the court in that lawsuit that’s still going on today, about challenging the FEC’s refusal to or failure to adopt a rule addressing the 527 problem. The FEC’s response: “We are going to do it on a case-by-case basis.” Our response: “That’s going to take years. And we have no faith that it will be effective.” In fact, it has taken years. And, in fact, only time will tell the degree to which it’s effective. But I am not confident going into 2008 that it will be effective.

So in terms of where the stampede will head, there are a couple of possibilities. And one is simply that political attorneys will look at the conciliation agreements entered into or published by the FEC to say: “OK, this is what these 527 groups did wrong. Let’s use this as a road map of how to, essentially, do the same thing but avoid the FEC’s even broader definition of express advocacy.”

Have you tried to do that?

It’s too soon to tell. I don’t think these groups will really get pumping until late this year or early next year, because it’s rare to see 527 groups getting super-involved at the primary stage. So we’ll see next year at this time. We’ll know if that’s a new strategy.