The Biggest Soft Money Loophole--Endorsements

Yesterday's approval of the Fired Up! Advisory Opinion by the Federal Election Commission is, rightfully, being hailed as a significant step in the protection of bloggers and websites who pursue political commentary and political purposes. At the heart of the AO (found here) is the granting of Fired Up! and other similarly situated websites the press exemption, which allows the site to freely link, discuss and even support candidates for federal office. The AO doesn't discuss, but there should be a debate about, the unfair ability of press entities to make endorsements, using corproate funds, when other entities cannot.

Now that they have the press exemption, Fired Up! will be permitted to openly endorse candidates, including exhortations to vote for or contribute to candidates for federal office. The Hensarling Bill (discussed here) represents the next step in expanding freedom for political discourse on the web. But supporters of a competing bill, have argued that granting the press exemption to websites and the blogosphere would permit the use of corporate and soft money, thus opening a loophole in the federal law.

Many have sought to use fear, uncertainty, and doubt to raise concerns that free speech on the internet is in danger. Here are the real facts about the differences between our bill, H.R. 4194, and the soft money loophole bill, H.R. 1606 introduced by Representative Hensarling.

Soft Money Loophole Under H.R. 1606

Unlike H.R. 1606, our bill would not exempt from the law soft money spent by political parties and by federal candidates in coordination with Washington lobbyists, corporations, labor unions and wealthy individuals, to buy campaign ads on the Internet. We prevent these soft money expenditures for campaign ads on the internet in order to protect both the soft money ban enacted in 2002 and the longstanding ban on corporate and union spending in connection with federal elections. H.R. 1606 would open the door to corruption and the appearance of corruption by allowing Washington lobbyists, corporations, unions and wealthy individuals to coordinate with a federal candidate to spend unlimited soft money to buy campaign ads on the Internet.

Complete bunk, as pointed out by Allison Hayward at Skeptic's Eye and Bob Bauer. But the comments of reformers have brought to light an even bigger problem--the power of the press, both online and traditional, to offer endorsements.

We have all seen the newspaper endorsements around election time. The newspaper's editorial board will write an editorial in which they endorse certain candidates for office, including federal office. But these endorsements are using corporate resources for the express advocacy of federal candidates--something that every other corporation in America is expressly forbidden from doing.

Campaign finance reformers often raise the soft money, corporate money boogeyman when dealing with any sort of regulation. However, media companies, whose business is admittedly the collection, reporting and dissemination of news, are still corporations themselves. The New York Times Co., Gannett, the Washington Post are all publicly traded corporations with a power that no other corporation has in the political arena. While the primary purpose of the media company is news reporting and commenting, the editorial page is the one area of the newspaper in which the editorial board is permitted to express itself without reservation. The editorial page is paid for with corporate resources and often expressly advocactes for the election of a federal candidate. Under FEC rules for all other companies, this would be a prohibited contribution.

Why would another company, say, financial services giant Citibank, not be in a position to offer valuable advice to the public about candidates and even endorse them. Surely the opinion of Citibank is just as informed at the NY Times. But Citibank cannot make such statements using corproate resources--they can use PAC money though. So Citibank cannot comment on politics in the same way as the Washington Post.

Rarely has anyone ever commented on the press endorsement because everyone simply acknowledges the notion that press endorsements are an extension of the freedom of the press. But why can't other corporations make endorsements?

The primary, and so far sole, purpose behind campaign finance regulation to be acknowledged by the Supreme Court is to prevent the corruption or appearence of corrpution of candidates for office. But it is difficult to see how a public endorsement by a corporation is somehow corruptng the candidate. Corporations may make contributions to ballot questions. The 1978 Supreme Court case of First National Bank of Boston v. Bellotti held that corproation may make unlimited contributions to ballot questions because there is no candidate to corrupt.

How is an endorsment issued by a corporation or labor union any more corrupting than an endorsement issued by a newspaper? No money is changing hands and the corporation's name is attached to the endorsement, thus the disclosure of who is making the endorsement is clear. The voter can decide for themselves as to the value of the endorsement.

Of course, some in the reform community will argue that candidates seeking corporate endorsements may present an opportunity for corruption by seeking the endorsement. But every year, candidates appear before an editorial board seeking the endorsement of that newspaper. Again, what is the difference between asking a corporation for an endorsement any differnt than asking an editorial board controlled by a corporation? In short it is not.

I want to be clear. I am not saying we should prohibit newspapers from making and endorsement, I just think we need to allow other organizations the same privilege. Campaign reformers argue all the time about the soft money boogeyman, but not one of these groups ever thinks about the media endorsement as a soft money, corporate contribution. In this arena we need a little consistency.

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