With the stroke of a pen, a federal appeals court ruling has drastically altered the calculus for nonprofits and trade groups poised to spend millions of dollars in this election, from well-funded partisan players to grass-roots groups on the left and right.
The ruling by a three-judge appeals court panel last week has the odd effect of imposing stricter disclosure rules on ads that simply picture or name a candidate at election time than on messages explicitly urging people to vote for or against a candidate.
Beyond forcing advocacy groups of all political stripes to re-evaluate their game plans, the decision underscores how the organizations are moving to the front lines of the battle over unrestricted campaign spending in the wake of the Supreme Court’s 2010 Citizens United v. Federal Election Commission ruling.
“It’s changed the rulebook in the middle of the game,” said Abby Levine, legal director of advocacy programs at the Alliance for Justice, a progressive umbrella group. Levine said she’s spoken with a number of organizers who plan to simply squelch election-eve ads that they had planned, rather than disclose the names of donors who expected to remain anonymous.
Other groups might scramble to set up segregated accounts that disclose only the donors who paid for a certain ad or opt to run straight campaign messages instead. But tax rules bar social welfare organizations from making partisan political activity their primary purpose, meaning that nonprofits that run too many campaign ads may run afoul of the IRS.
“It makes nonprofit management a nightmare,” said David Keating, president of the Center for Competitive Politics, a pro-First Amendment group, “because you have money sitting in this account, which you will be afraid to use.”
Last week’s ruling by the Court of Appeals for the D.C. Circuit has heartened reform advocates but alarmed grass-roots lobbyists, who argue that it could stifle players who simply want to weigh in on public policy issues at election time.
It all began when Rep. Chris Van Hollen (D-Md.) sued the Federal Election Commission last year, arguing that the agency’s disclosure rules for “electioneering communications” were contrary to the 2002 Bipartisan Campaign Reform Act. In March, a federal district court agreed and ordered the FEC to write new disclosure regulations. The FEC didn’t appeal, but a pair of conservative groups that had intervened in the case asked the appeals court to stay the federal district court’s ruling.