NOTE CONTENTS INTRODUCTION I. CURRENT DISCLOSURE AND DISCLAIMER LAWS A. What Expenditures Must Be Disclosed? B. What Communications Must Carry Disclaimers ? II. MOTIVATIONS FOR BROADER DISCLOSURE AND DISCLAIMER LAWS A. Distortion and the Marketplace of Ideas B. Preventing Corruption III. THE CONSTITUTIONAL VIABILITY OF BROAD DISCLOSURE AND DISCLAIMER LAWS A. The Existing Jurisprudence 1. Buckley and Express Advocacy 2. McIntyre and the Right to Anonymity B. Outlining a Broader Disclosure and Disclaimer Standard for Corporations C. Distinguishing Corporations from the Express Advocacy Rationale D. Distinguishing Corporations from the Anonymity Rationale 1. Corporations and the Danger of Chilling 2. The Public Nature of Corporate Conduct 3. The Right of Shareholders To Be Informed CONCLUSION INTRODUCTION
Until the Supreme Court's decision in Citizens United v. FEC, (1) the effort to prohibit electoral advocacy by corporations had been central to campaign finance reform, most recently in [section] 203 of the Bipartisan Campaign Reform Act of 2002 (BCRA). (2) The legal foundation of this initiative was the Supreme Court's 1990 decision in Austin v. Michigan Chamber of Commerce, (3) which Citizens United overruled. (4) The premise of Austin was that corporations distort the public sphere when they spend general treasury funds on electoral advocacy.
From the start, Austin stood awkwardly alongside the Court's other recent precedents on corporate speech--namely, FEC v. Massachusetts Citizens for Life (5) and First National Bank of Boston v. Bellotti. (6) The Austin Court also had to contend with one of the central dictates of Buckley v. Valeo (7): that equality is not a permissible rationale for curtailing speech rights in the electoral sphere. Whatever the wisdom of that pronouncement, Justice Marshall's attempt to distinguish it in Austin was tortuous. (8) When the Supreme Court ordered reargument in Citizens United at the end of the 2008 Term, it became clear that Austin would not survive as precedent. (9)
This Note does not ask whether Citizens United was rightly decided. Rather, it takes the decision as a starting point to propose a new beginning for the regulation of corporate electoral advocacy--one that recognizes incognito speech as the real source of problems. Corporations may contribute to public discourse on issues of economic growth and job creation, but when they speak without disclosing their identities, they not only misrepresent public support for their positions (10)--the danger on which Austin focused--but they also breach duties to their shareholders and vitiate the informational value of their speech. Instead of curtailing corporate speech rights in narrowly defined domains of electoral advocacy, legislators who aim to reform campaign finance should turn their attention to disclosure and disclaimer rules across a broader range of corporate political speech. Such rules are not just second-best options in the wake of Citizens United; there are reasons to believe that they might be more effective than outright prohibitions of corporate speech in preventing corruption (or the appearance of corruption) and informing the electorate.
Many disclosure and disclaimer provisions already cover the narrow territory of electioneering communications and express candidate advocacy. Even as Citizens United struck down BCRA [section] 203, (11) [section] 201's disclosure requirement for electioneering communications and [section] 311's disclaimer provisions remain in effect, (12) and most states provide their own disclosure and disclaimer requirements. (13) After Citizens United, the House of Representatives passed the DISCLOSE Act, which would have applied additional disclosure and disclaimer requirements to certain forms of corporate political spending. (14) But the bill died in the Senate, (15) and even had it passed, its scope would have been limited to electioneering communications and express candidate advocacy or its functional equivalent. (16) The Act would have broadened slightly the definitions of those activities (17) but done nothing to address the wider array of corporate political speech that neither "expressly advocat[es] the election or defeat of a clearly identified candidate" (18) nor "refers to a clearly identified candidate" (19) in such a way as to be "susceptible of no reasonable interpretation other than as an appeal to vote for or against" that candidate. (20) Provisions of that limited scope do not adequately serve the public interest in an informed electorate.
This Note, which proceeds in three Parts, proposes that legislators consider a more sweeping regime of disclosure and disclaimer for corporate-funded speech. Part I describes disclosure and disclaimer laws currently in place at both the federal and state levels. Part II seeks to justify broad disclosure and disclaimer laws. It argues that such laws further two critical objectives of campaign finance reform: informing the electorate and preventing corruption (or the appearance of corruption). Part III defends the constitutional validity of broader disclosure and disclaimer requirements for corporate speakers in the electoral sphere.
CURRENT DISCLOSURE AND DISCLAIMER LAWS
It is helpful to begin with taxonomies--both of speech that may be subject to disclosure and disclaimer requirements and of the requirements themselves. (21) Two relevant categories of speech are independent expenditures and electioneering communications. (22) The former label generally applies to speech that "expressly advocates" for or against a "clearly identified" candidate. (23) (Some provisions apply to advocacy for and against ballot measures as well as candidates.)
Arkansas law offers a typical definition of independent expenditures:
An "independent expenditure" is any expenditure which is not a contribution and:
(A) Expressly advocates the election or defeat of a clearly identified candidate for office;
(B) Is made without arrangement, cooperation, or consultation between any candidate or any authorized committee or agent of the candidate and the person making the expenditure or any authorized agent of that person; and
(C) Is not made in concert with or at the request or suggestion of any candidate or any authorized committee or agent of the candidate. (24)
An "electioneering communication" is speech that references a candidate within a specified time prior to an election. The first criterion, in theory, sweeps more broadly than that of independent expenditures: whereas independent expenditures must expressly advocate for or against a candidate, electioneering communications need only refer to the candidate. (25) But Wisconsin Right to Life more or less eviscerated this distinction by construing the term "refer" to cover only communications "susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate." (26) The time criterion cuts more narrowly: the "electioneering communications" label applies only within a specified period prior to an election. (27) Jurisdictions may also apply a targeting criterion, regulating messages as electioneering communications only when they reach a given population.
Federal law defines an electioneering communication as "any broadcast, cable, or satellite communication" that meets three standards. (28) It must "refer to a clearly identified candidate for Federal office" (29) and, after Wisconsin Right to Life, must be "susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate." (30) It must occur "within... 60 days before a general, special, or runoff election for the office sought by the candidate; or ... 30 days before a primary or preference election, or a convention or caucus." (31) And in a congressional race, it must be capable of being "received by 50,000 or more persons" (32) in the relevant jurisdiction.
A second taxonomy is of the regulations themselves. Disclosure regulations require speakers to file with the government a public accounting of the money they have spent to support a given candidate. (33) Disclosure permits any interested party to discover the source of candidates' support. Disclaimer regulations, by contrast, require that speakers identify themselves in their communications rather than merely in filings with an agency. Disclaimers convey less information than disclosures--a few seconds in a television spot, rather than a detailed form--but they are more vivid and accessible. Disclosure and disclaimer regulations are complements in a thorough regime of transparency for campaign finance.
What Expenditures Must Be Disclosed?
Federal law requires disclosure by "[e]very person ... who makes independent expenditures ... in excess of $250 during a calendar year," (34) as well as disclosure of "disbursement[s] for the direct costs of producing and airing electioneering communications in ... excess of $10,000 during any calendar year." (35) The DISCLOSE Act would have required immediate disclosure of independent expenditures in excess of $10,000 by any person, (36) and it would have imposed additional requirements for the disclosure of independent expenditures and electioneering communications by corporations. (37)
In the states, independent expenditures commonly trigger disclosure requirements. Thirty-four states require disclosure of independent expenditures. (38) They generally hew to the definition of independent expenditures outlined above, though some do not make explicit the requirement that advocacy be "express," (39) and others do not mandate that the candidate in question be "clearly identified." (40) A few definitions do not use the term "advocacy" at all. (41) Of the thirty-four states that require disclosure for independent expenditures, ten also require disclosure for electioneering communications. (42) North Carolina requires disclosure for a third category of speech...