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February 13, 2015

FEC Commissioner Goodman Got It Wrong:  CREW Seeks to Close Loophole, Not Censor Internet

By Adam Rappaport

Federal Election CommissionDuring a public hearing this week FEC Commissioner Lee Goodman accused CREW of trying to regulate the Internet through a proposal to treat certain advertisements run on the Internet the same as identical ads run on television.  Commissioner Goodman simply is wrong about CREW’s aims.  CREW seeks to close a loophole in campaign finance law, a loophole Commissioner Goodman is ignoring even as groups are exploiting it to secretly spend millions of dollars to influence elections.

CREW’s proposal involves disclosure of “electioneering communications” — paid advertisements run within 60 days of a general election that mention a candidate by name but do not explicitly advocate voting for or against the candidate.  Under current law, groups that spend more than $10,000 a year to make and run these ads on over-the-air, cable, or satellite television must report this spending to the FEC, but the rules do not apply to ads run on the Internet.

As a result, an outside group that pays $1 million to run an electioneering communication on television must disclose that spending, but if the same group pays the same $1 million to run the same ad exclusively on the Internet, none of that spending needs to be disclosed to the public. 

Aware of this loophole, outside groups increasingly are paying for electioneering communications posted exclusively on the web, streaming video sites, Facebook, and other Internet-based media.  The Kentucky Opportunity Coalition, for example, which reported spending more than $7.5 million in 2014 on independent expenditures urging voters to reelect Sen. Mitch McConnell (R-KY) or vote against his opponent, also spent $750,000 on a digital ad campaign, most of which ran between September 26, 2014 and Election Day.  None of these ads were disclosed to the FEC, and other groups similarly exploited the loophole in 2014.

CREW recently suggested the FEC should examine whether the language of the law can be construed to cover electioneering communications carried on the Internet.  CREW further proposed the FEC encourage Congress to expand the law to cover electioneering communications transmitted over the Internet in future legislative recommendations.

At an FEC hearing Wednesday, Commissioner Goodman said CREW would have the FEC “expand regulation of Internet communications that merely mention candidates,” and gave as an example an issue ad that had been previously placed on YouTube and was left up through the beginning of the 60-day window before an election.  In a subsequent interview, Commissioner Goodman went further, calling CREW’s proposal “an insidious regulatory scheme” that would require “anyone who communicates about policy issues on the Internet within 60 days of an election” to file expenditure reports about communications on YouTube or a blog and force groups that do so to disclose all of their donors.  These contentions are in line with Commissioner Goodman’s propensity to characterize as “censorship” every suggestion the FEC have an open discussion about how to treat political activity on the Internet.

Commissioner Goodman is mistaken about the intent of CREW’s proposal.  The goal is to close a loophole in disclosure laws, not censor speech about issues on the Internet.

CREW is aware that applying the current electioneering communications rules to Internet ads, without changes, could impact individuals and groups producing and placing issue ads on the Internet.  The law’s $10,000 threshold, however, should exclude nearly all the individuals posting these kinds of advertisements.  There would be no regulation, and no censorship, of the Internet activities of these individuals.  Moreover, there is no reason to expect Congress or the FEC would not make changes to the electioneering communications rules — written for television and radio ads — before applying them to Internet ads.  Gathering information about an issue and tailoring a response to it is the point of a legislative process or rulemaking proceeding, and any new statute or rule should be drafted carefully to address the different characteristics of placing ads on the Internet.

FEC Chair Ann Ravel suggested last year the FEC should examine whether and how to update campaign finance rules to deal with changes in technology and communication that are revolutionizing how campaigns are run.  CREW agrees.  Those changes have opened up a loophole in disclosure of electioneering communications.  The intent of CREW’s proposal is to close that loophole, not censor the Internet.

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