Hearings on coordinated communications rules

On March 2 and 3, 2010, the Commission held public hearings on proposed changes to the coordinated communications regulations in response to the decision by the U.S. Court of Appeals for the District of Columbia Circuit in Shays v. FEC, 528 F.3d 914 (DC Cir. 2008) (Shays III). At issue in the rulemaking are the content and the conduct standards of the coordinated communications regulations, at 11 CFR 109.21. The Commission also proposes adding a safe harbor for certain public communications in support of 501(c)(3) organizations and a safe harbor for certain business and commercial communications. Eleven witnesses,[FN1]  representing party committees, non-profit organizations, business associations and election law practitioners, testified before the Commission on the proposed changes.

Background

When a person pays for a public communication that is coordinated with a candidate, authorized committee or party committee, the communication is an in-kind contribution to that candidate or committee.[FN2]  The current regulations provide for a three-part test to determine whether a communication is coordinated. The three prongs consider the source of the payment (payment prong); the subject matter of the communication (content prong); and the interaction between the person paying for the communication and the candidate, authorized committee or party committee (conduct prong). 

The content prong

Under the current regulations, the content prong of the coordinated communication test contains four standards: express advocacy; electioneering communications; republication of campaign materials; and references to a candidate or party committee distributed in certain jurisdictions within either 90 days or 120 days before an election. 

The Court of Appeals in Shays III found that the Commission’s application of the express advocacy standard as the only content standard outside of the 90/120 day window was contrary to the Bipartisan Campaign Reform Act’s (BCRA) purpose and does not rationally separate election-related speech from other advocacy. In response to the appellate court’s decision, the Commission issued a Notice of Proposed Rulemaking (NPRM) that sought comments on proposed revisions to the coordinated communications rules.[FN3]  Specifically, the Commission proposed retaining the existing content standards at 11 CFR 109.21(c) and: 

• Adopting a content standard to cover public communications that promote, support, attack or oppose (PASO) a political party or clearly identified federal candidate (the PASO standard); 
  
• Adopting a content standard to cover public communications that are the “functional equivalent of express advocacy,” as articulated in FEC v. Wisconsin Right to Life, Inc., 551 U.S. 449 (2007) (the Modified WRTL standard);
  
•  Clarifying that the existing content standard includes express advocacy as defined under both 11 CFR 100.22(a) and (b); and/or 
  
• Adopting a standard that pairs a public communication standard with a new conduct standard (the Explicit Agreement standard). 
  

Witness testimony at the hearing focused on the proposed PASO and Modified WRTL standards. A summary of the testimony concerning each is provided below.[FN4] 

The PASO standard 

The PASO standard would be satisfied if a public communication promoted, supported, attacked or opposed a political party or a clearly identified federal candidate. It would replace, but also incorporate, the express advocacy standard. The Commission also is considering whether to define PASO and offered two possible approaches: Alternative A would provide a specific definition for each of the component PASO terms, which would apply when any one of those terms is used in conjunction with one or more of the other terms. Alternative B would utilize a multi-prong test to determine whether a given communication PASOs a federal candidate. 

Paul Ryan and Craig Holman testified in support of the Commission’s adoption of the PASO standard. Both witnesses felt that the PASO standard best addressed the appellate court’s concerns in Shays III, and was a clear standard that has withstood Supreme Court scrutiny. Mr. Ryan testified that the PASO standard would effectively capture any election-related communications taking place outside of the 90/120 day windows and noted that the Supreme Court wrote that persons of ordinary intelligence understand what PASO means. Mr. Holman noted the importance of effective coordination rules to prevent circumvention of contribution limits, especially since the dynamics of communications post-Citizens United are still unclear. Mr. Holman felt that the PASO standard would effectively guard against communications that circumvent the limits, without regulating lobbying or grassroots activity.

Sean Cairncross, on the other hand, testified that it is difficult to identify what is and is not PASO, which could chill speech. Michael Trister expressed concern that a PASO standard was overly broad and could sweep up legislative advocacy and grassroots lobbying. 

The modified WRTL standard 

The Modified WRTL standard would apply to any public communication that is the “functional equivalent of express advocacy,” that is,if it is susceptible of no reasonable interpretation other than as an appeal to vote for or against a clearly identified federal candidate. This standard would apply without regard to the timing of the communication or the targeted audience.

Seven witnesses [FN5]  testified in support of the Modified WRTL Standard. Jan Baran, for example, testified that this standard is an extension of Supreme Court precedent and was a familiar standard that had been used effectively by different types of speakers. In supporting the Modified  WRTL Standard, Ms. Furst and Mr. Cairncross testified that the Modified  WRTL Standard was clear and well-defined. Laurence Gold also expressed a need for unions and other groups to have reasonable regulations to follow in conducting their policy and election-related activities and that, although the Modified  WRTL Standard was not perfect, it provided clear guidance for committees to follow. Mr. Trister felt that the appeal to vote standard would distinguish electoral from non-electoral activity and would avoid “endless” litigation on the subject.

Mr. Ryan and Mr. Holman, on the other hand, testified that the WRTL appeal to vote test was inapplicable to communications coordinated with candidates. Mr. Holman testified that the standard was very narrow and would not satisfy the appelate court’s concerns in Shays III. 

The conduct prong 

The Shays III appellate court also found that the Commission failed to justify the change in the coordinated communication’s common vendor/ former employee conduct standards from the “current election cycle” to a 120-day period. The current regulations regarding common vendors provide that the conduct prong is satisfied if: 

• The person paying for the communication, or an agent of such person, contracts with or employs a commercial vendor to create, produce or distribute the communication; and 
  
• The commercial vendor has provided certain enumerated services to the candidate who is clearly identified in the communication, or the candidate’s authorized committee, the candidate’s opponent, the opponent’s authorized committee or a political party committee, during the previous 120 days, and the commercial vendor uses or conveys to the person paying for the communication information about the plans, projects, activities or needs of the candidate, the candidate’s opponent or political party committee that is material to the creation, production or distribution of the communication, or information used previously by the commercial vendor in providing services to the candidate, the candidate’s authorized committee, the candidate’s opponent, the opponent’s authorized committee or the political party committee that also is material to the creation, production or distribution of the communication. 109.21(d)(4). 
  

Similarly, the regulations regarding former campaign employees provide that the conduct prong is satisfied if:

• The communication is paid for by a person, or by the employer of a person, who was an employee or independent contractor of the candidate who is clearly identified in the communication, or the candidate’s authorized committee, the candidate’s opponent, the opponent’s authorized committee or a political party committee, during the previous 120 days; and
  
• The former employee or independent contractor uses or conveys to the person paying for the communication information about the campaign plans, projects, activities or needs of the clearly identified candidate, the candidate’s opponent or a political party committee, and that information is material to the creation, production or distribution of the communication; or conveys to the person paying for the communication information used by the former employee or independent contractor in providing services to the candidate who is clearly identified in the communication, or the candidate’s authorized committee, the candidate’s opponent, the opponent’s authorized committee or a political party committee, and that information is material to the creation, production or distribution of the communication. 109.21(d)(5). 
  

The Commission proposed the following alternative revisions to the common vendor and former employee conduct standards: 

• Retain the 120-day temporal limit and provide additional justification for the period; 
  
• Delete the phrase “the previous 120 days” from 11 CFR 109.21(d)(4)(ii) and (d)(5)(i) and replace it with “the two-year period ending on the date of the general election for the office or seat that the candidate seeks”; or
  
• Amend 109.21(d)(4)(ii) and (d) (5)(i) by replacing the existing 120-day period with a “current election cycle” period.
  

William McGinley encouraged the Commission to adopt the first alternative and to provide additional justification for the current regulation. Mr. Cairncross and Ms. Furst also encouraged the Commission to retain the current limit. They felt that there was a short “shelf-life” to campaign-related information and that the regulations should not further restrict a committee’s ability to hire vendors and employ individuals that have no material information. Mr. Baran encouraged the Commission to retain the current limit because he said it is a familiar standard that seems to work for the regulated community. He also encouraged the Commission to look to the polling regulations as an example when considering the time periods and stated that polls lose value after 180 days. He stated that this may be relevant to whether an employee’s knowledge is valuable after leaving the campaign. Ms. Mitchell added that the polling regulations are outdated, and that polls no longer retain their value for even 180 days. 

Mr. Ryan instead supported a two-year or “current election cycle” period as appropriate for approximating the length of time that a vendor or campaign employee is likely to possess information useful to the campaign. Mr. Trister encouraged the Commission to eliminate the common vendor/former employee standards. He felt that the general conduct standards in 109.21(d)(1)-(3) should apply regardless of when a vendor or employee worked on a campaign. He also testified that, should the Commission retain the common vendor and former employee conduct standards, he supported shortening the time periods.

Proposed safe harbors

Finally, the Commission proposed adding new safe harbors for certain communications in support of 501(c)(3) organizations and for certain business and commercial communications. The first proposed safe harbor would address public communications in which federal candidates endorse or solicit support for 501(c)(3) non-profit entities, or for public policies or legislative proposals espoused by those organizations. Mr. Ryan opposed a safe harbor for such solicitations during the 90/120 day pre-election window, on the ground that it would open the door for candidates to coordinate with such groups in ways intended to influence elections, but he endorsed a PASO standard outside of those timeframes. Mr. Gold and Mr. Hoersting stated that because 501(c) (3) organizations are already wary of dealing with candidates and are hesitant to engage in the type of political activity that would threaten their tax-exempt status, no such danger is posed by a safe harbor.

The second proposed safe harbor, which Mr. Ryan supported, would address certain communications made for commercial or business purposes. 

Additional information 

The Notice of Proposed Rulemaking, Supplemental Notice of Proposed Rulemaking, public comments submitted in response to these proposals and a transcript of the hearing are available on the FEC’s website at sers.fec.gov (Editor's note: REG 2008-03). 

FOOTNOTES: 

1 The witnesses who testified before the Commission were Paul Ryan, representing the Campaign Legal Center; Craig Holman, with Public Citizen; Steve Hoersting from the Center for Competitive Politics; Michael Trister, representing Alliance for Justice; Laurence Gold, representing the AFL-CIO; Jan Witold Baran, representing the Chamber of Commerce of the United States of America; Cleta Mitchell from Foley & Lardner LLP; Sean Cairncross, representing the National Republican Senatorial Committee; Jessica Furst, representing the National Republican Congressional Committee; William McGinley from Patton Boggs LLP; and Marc Elias, representing the Democratic National Committee, the Democratic Senatorial Campaign Committee, and the Democratic Congressional Campaign Committee. 

2 Separate rules regulate communications paid for by political party committees and coordinated with candidates or their authorized committees; however, the Commission did not propose revisions to those rules since they were not addressed by the Court of Appeals in Shays III. 

3 The Commission issued a Supplemental Notice of Proposed Rulemaking on February 10, 2010, seeking comment on the effect of the Supreme Court’s decision in Citizens United v. FEC, 558 U.S. ____(2010), on the Commission’s proposals in the NPRM. 

4 To read the Commission’s Proposed Rules on Coordinated Communications go to: http://www.fec.gov/pdf/nprm/coord_commun/2009/notice_2009-23.pdf. Written comments and a transcript of the hearing are at sers.fec.gov (Editor's note: REG 2008-03). 

 5 Steve Hoersting, Michael Trister, Jan Witold Baran, Sean Cairncross, Jessica Furst, William McGinley and Laurence Gold testified in support of the WRTL Standard.