Exploring the Financing of Campaign Advertising

BY Cassie M. Chew  August 13, 2012 at 1:58 PM EDT

Is a low-budget online video that names political candidates, states campaign issues and includes language that could sway opinion in an election, a political advertisement subject to donor disclosure laws, or is it an expression of free speech protected by the First Amendment?

That depends on who you ask.

If it aims to influence federal elections, it should be subject to federal regulation, Paul S. Ryan, senior counsel for the Washington, D.C.-based Campaign Legal Center told NewsHour correspondent Kwame Holman in a recent interview about campaign ad financing, non-profits and the 2012 elections.

In the first presidential election since the U.S. Supreme Court ruled that the First Amendment protects the right of corporations, unions and non-profits to spend unlimited dollars on content that expresses their political views, a whole new landscape in campaign ad financing is emerging. In addition to emergence of advertisements from super PACs, groups that can spend unlimited dollars on campaign messaging, more groups have been asking the Federal Election Commission for permission not to disclose their donors, Ryan said.

In what appears to be a test case, attorneys for Arlington, Va-based National Defense Committee, last month filed a request for an opinion on seven videos it plans to produce and post online this fall. NDC officials said they want to produce and distribute the videos and solicit donations for future advertisements that would “discuss public issues relevant to upcoming federal elections, military voting, and policy positions of candidates for federal office that relate to National Defense’s core mission.”

In the filing, NDC says it “wishes to avoid the public stigma and regulatory burden of being labeled a political action committee,” which would include disclosure requirements.

The proposed ads target President Obama, Senate Majority Leader Harry Reid, (D-Nev.) House Minority Leader Nancy Pelosi (D-Calif.) and Rep. Nydia Velazquez (D-NY). The filing includes a $3,000 quote from a production company to produce the ads, distribute them via YouTube and promote them via Facebook and Google ads, with the aim of reaching 600 views.

“The question presented is whether the ads are political ads as opposed to ads that are discussions of issues,” Allen Dickerson, an attorney representing NDC and legal counsel for the Center for Competitive Politics, told Holman in the NewsHour interview.

In the filing the attorneys argue that in the current regulatory framework, “no clear line of demarcation illustrates just how much discussion or commentary about a candidate’s character, qualifications or accomplishments transforms issue advocacy into express advocacy.”

Despite the dollar of the advertising budget in the filing, attorneys on both sides of this debate say the FEC ruling could set a precedent.

“The opinion has a broad-reaching impact,” Ryan said. “I guarantee that if the FEC tells this group that the ads they want to broadcast are not subject to regulation, very large, very sophisticated and very well-funded organizations will take advantage of the ruling to run virtually identical ads.”

“For NDC it’s about the ability to produce these ads. For the attorneys representing them it’s about getting the FEC to clearly define a political committee,” Dan Backer, who also is representing NDC, told the NewsHour.

An FEC spokesman told NewsHour that it will issue an opinion by Sept. 24.

Cassie M. Chew and Daniel Yang produced this video.