FEC ruling may exempt Citizens United from the DISCLOSE Act

Kyle Peterson Contributor
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The Supreme Court’s landmark 5-4 decision earlier this year in Citizens United v. Federal Election Commission, which upheld the right of corporations to make certain independent election expenditures, brought Democrats together for one overriding purpose: curbing the effects of the ruling.

The result of these efforts is the DISCLOSE Act, which if passed would restrict the election spending of companies that are partially foreign-owned and require corporations to tag sponsored advertisements with their names. (“When you buy toothpaste now, the money you spend can be used directly for television ads attacking people that you believe in without you even knowing,” states the bill’s website.)

But after a Thursday FEC vote, the proposed law — introduced to curb the effects of the court case that made Citizens United famous in the first place — may not even apply to the advocacy group any longer.

What the FEC afforded Citizens United in its ruling is a “press exemption” — an exception to the Federal Election Campaign Act of 1971 designed to free media outlets from undue oversight. Its basis, according to an FEC spokesperson, is a clause in the text that excludes from regulation “any news story, commentary, or editorial distributed through the facilities of any broadcasting station, newspaper, magazine, or other periodical publication, unless such facilities are owned or controlled by any political party, political committee, or candidate.”

That exact phrase is used in the text of the DISCLOSE Act to define exemptions to the bill.

In a 4-1 decision, the FEC voted Thursday that Citizens United qualifies.

“Prior to this decision, we would have had to comply with burdensome FEC reporting obligations,” said Chris Berg, assistant general counsel with Citizens United. “If you run a commercial, you’d have to have a disclaimer at the end of it. If you make an ad buy within that statutory period, you’d have to file paperwork with the FEC.”

In order to receive the press exemption, according to the ruling, an entity has to prove that it fulfills a “legitimate press function.”

Citizens United filed a request for press exemption in 2004 that was unsuccessful, in part, because the group had only made two films and therefore did not “regularly produce documentaries or pay to broadcast them on television.”

Now, with 14 films completed and four more in production, that wasn’t a hangup.

“It basically recognizes that our documentaries are legitimate press,” Berg said. “At the end of the day, we’re offering timely commentary on a wide variety of subjects.”

Paul Ryan, a lawyer with the Campaign Legal Center, said that if the DISCLOSE Act is passed, Citizens United should remain exempt under Thursday’s ruling, since the bill is based on previous law — such as the defined rules surrounding “expenditure” and “electioneering communication.”

“What Citizens United got yesterday is an exemption from those two terms,” Ryan said. “The DISCLOSE Act doesn’t rewrite these terms.”

Congress could clarify the media exemption before the bill is passed, or change the code so that the FEC would need to re-evaluate existing press exemptions. But if the two clauses remain unchanged, Citizens United and other groups currently exempt will likely remain so under the new law.

Complicating the matter is the fact that Citizens United v. FEC has effectively changed the nature of the press exemption by softening the consequences of having an exemption denied. FEC Commissioner Steven T. Walther, the lone dissenter in Thursday’s ruling, cited this change in a released statement.

“In the past, I have supported a broad interpretation of the press exemption in large part because concluding that a communication was not eligible for the press exemption had the consequence that costs related to the communication were treated as a prohibited corporate expenditure. This no longer the case, however, as a result of the Supreme Court’s recent decision in Citizens United v. Federal Election Commission,” Walther wrote. “Because the consequence of not extending the press exemption is no longer a complete silencing of the speaker, but rather the consequence is disclosure of information about the flow of funds that are being spent for the purpose of influencing an election, I believe that it is no longer appropriate to apply the press exemption as broadly as before.”

Representatives for Sens. Schumer, Feingold and Leahy, cosponsors of the DISCLOSE Act, could not be reached for comment.