High Court Opens Door to Campaign Finance Rule Challenge - January 24, 2006 Vol. 7, No. 2

January 24, 2006 Vol. 7, No. 2:

Published: 01/24/2006

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Nov. 29, 2005 OMB Watcher Nonprofits Urge Supreme Court to Protect Grassroots Lobbying Rights

Text of amicus brief from 501(c)(3) organizations

Jan. 11, 2006 OMB Watcher FEC: No Exceptions for Charities to Electioneering Communications Rule

High Court Opens Door to Campaign Finance Rule Challenge

Less than a week after oral arguments were held the Supreme Court ruled on Jan. 23 that the Bipartisan Campaign Reform Act of 2002's (BCRA) ban on "electioneering communications" can be challenged on a case-by-case basis. The ruling opens the door for the Wisconsin Right to Life Committee (WRTL) to pursue its claim that BCRA is unconstitutional as applied to its grassroots lobbying communications. The unanimous opinion in Wisconsin Right to Life Committee v. Federal Election Commission referred the case back to the lower court to determine if WRTL's broadcast is a genuine grassroots lobbying communication that should therefore be exempt. For nonprofits looking to the 2006 election cycle, the ruling will likely leave in place the prohibition on ads that mention a federal candidate 30 days before a primary and 60 days before an election, since the Federal Election Commission (FEC) has revoked its earlier exemption for 501(c)(3) organizations, and the lower court may not act quickly enough.

In 2004 WRTL, a 501(c)(4) social action organization, sought to broadcast grassroots lobbying messages urging Sens. Russ Feingold (D-WI) and Herb Kohl (D-WI) to oppose Senate filibusters of President Bush's judicial nominees. Because Feingold was running for re-election, the ads violated BCRA's electioneering communications rule, which prohibits corporate (including nonprofit) funding of broadcast ads referencing a federal candidate within 30 days before a primary election or 60 days before a general election. WRTL filed suit seeking an injunction to this restriction.

Both the lower court and federal appeals court denied WRTL's bid for an injunction, relying on language in the Supreme Court's decision in McConnell v. Federal Election Commission that upheld the constitutionality of the rule on its face, and that it read as disallowing as-applied challenges (i.e., "this law is unconstitutional as applied to me") to the provision.

The Supreme Court opinion holds that such challenges are not foreclosed by its opinion in the McConnell case, noting that, "In upholding Sec. 203 [electioneering communications] against a facial challenge, we did not purport to resolve future as-applied challenges."

On Jan. 24 WRTL asked the lower court to expedite its consideration of the case, noting that BCRA mandates speedy consideration of all challenges to it. WRTL also noted that "throughout 2006 there are 30 day blackout periods befor each state's primaries, beginning with the Texas primary of March 7th, and any exemption for grassroots lobbying will benefit not just WRTL but all lobby groups."

In related news, on Dec. 21, 2005 the FEC voted to drop exemptions for 501(c)(3) nonprofits to BCRA rules that restrict electioneering communications. The new rule eliminates exemptions for television, radio and cable advertisements that mention a federal candidate 30 days before a primary or 60 days before a general election paid for by charities and religious organizations, as well as "public service announcements" (PSAs) that are aired for free.

During oral argument the court appeared split on whether WRTL's ad should be exempt as a pure grassroots lobbying communication. WRTL's political action committee opposed Feingold in the election. This issue could again come before the Supreme Court, if the lower court's ruling is appealed by the losing party.

A diverse coalition of charities filed an amicus brief in the case on Nov. 14, 2005,urging the court to protect the right of nonprofits to broadcast grassroots lobbying communications. The brief, filed on behalf of 35 charities, argued that the electioneering communications restrictions deny charities the right to petition the government for redress of grievances, which is protected by the First Amendment. The electioneering communication restrictions in BRCA cannot be constitutionally applied to 501(c)(3) charities, according to the brief, because such organizations are, and must be to retain their tax-exempt status, nonpartisan and nonpolitical.