On January 21 a three-judge panel on the United States Court of Appeals for the District of Columbia Circuit issued a unanimous opinion upholding a Federal Election Commission (FEC) rulemaking from 2007 and reversing a district court ruling that held the rulemaking violated administrative law. The Van Hollen v. FEC case is not necessarily over, but the strong opinion from Judges Brown, Sentelle and Randolph shows, refreshingly, that the broader case of campaign finance disclosure is certainly not over. To some, privacy and the difficulties of compliance with all-encompassing disclosure are still important constitutional limits to campaign finance regulation, a tension that the United States Supreme Court must inevitably address.  

The Van Hollen case began with a landmark decision from the United States Supreme Court, FEC v. Wisconsin Right to Life (WRTL). Before that case, corporations and unions were completely prohibited from funding “electioneering communications,” which are basically television or radio advertisements aired within 60 days of a general election or 30 days of a primary that mention the name of a candidate running in said election. In WRTL the Court ruled that Congress could prohibit such ads that were the “functional equivalent of express advocacy” for the election or defeat of a candidate, but could not under the First Amendment prohibit the mere mention of a candidate’s name. In 2010, the Supreme Court found WRTL unworkable and ruled in Citizens United that corporations and unions are entitled to engage in election advocacy the same as everyone else.

In the interim between WRTL and Citizens United, the FEC reconciled the disclosure requirements of electioneering communications for organizations—corporations and unions—that previously did not have to disclose because they were prohibited from making electioneering communications in the first place. In a rulemaking in late 2007, the FEC determined that when corporations and unions make electioneering communications they must disclose any donors who contributed to their organization for the purpose of making such communications, but not every single donor who contributes. To so-called campaign finance reformers, this represents a loophole that allows easy circumvention of disclosure: they believe the original wording of the law, which pertained in part to segregated election accounts, must be brought to bear on organizations for disclosure of all contributions. One such proponent, Rep. Chris Van Hollen from Maryland, sued on this basis.

As the D.C. Circuit opinion lays out, the FEC’s rulemaking withstands the scrutiny of administrative law and was both a reasonable interpretation and conducted in a reasoned decision-making. The FEC was right to note the conundrums brought on by bringing general corporate and union funds into the political sphere, limiting disclosure with rationales involving support, administrative burdens and privacy. Notably, the decision hones in on one of disclosure’s contradictions: it sometimes conveys false or misleading information. For example, the court notes that someone might give money to an organization like the American Cancer Society to support research, but under Van Hollen’s argument would be disclosed to the FEC if the Society paid for just one electioneering communication. The donor might have political views wholly different from the content of the ad, but would be disclosed just like people who contributed to support the Society’s political engagement. This contradictory disclosure is much less likely when a person gives to a political committee, which focuses on elections and is properly subject to complete reporting, but is practically inevitable under Van Hollen’s formulation for every organization that might pay for one electioneering communication.

It is in its discussion of the privacy rationale that the panel throws down the proverbial gauntlet, garnering the most attention brought to the case so far. The judges note that Supreme Court precedent on private political speech and campaign finance are on a constitutional collision course. “Both an individual’s right to speak anonymously and the public’s interest in contribution disclosures are now firmly entrenched in the Supreme Court’s First Amendment jurisprudence. And yet they are also fiercely antagonistic.” The opinion’s conclusion is even more pronounced:

As our discussion of the FEC’s rule has shown, the Supreme Court’s campaign finance jurisprudence subsists, for now, on a fragile arrangement that treats speech, a constitutional right, and transparency, an extra-constitutional value, as equivalents. But “the centre cannot hold.” William Butler Yeats, The Second Coming (1919).

The case may not end here, and given the panel’s firm stance on privacy I wonder if they expect as much. As Prof. Rick Hasen suggests, Rep. Van Hollen may seek en banc review—that is, a hearing before the entire D.C. Circuit. From there, if en banc review occurs and reverses the panel, it may tee up a strong certiorari situation for the Supreme Court.

Although certain campaign finance proponents and journalists believe this is a large “loophole,” I agree with attorney Bob Bauer that this is “not all that high on the list” of ways to protect one’s privacy in today’s federal campaign finance regime. Balance this innocuous exception against the burdens of undertaking all-encompassing disclosure for merely running one electioneering communication, if it proceeds the case could still mean the latter outweighs disclosure or, chillingly, show that the views of many of today’s regulatory proponents—that disclosure is an absolute good and poses no burdens on free speech—outweigh any and all objections. So, while the stakes in the Van Hollen case itself are low, its stake in the disclosure debate may be quite high, and it is an important case to watch.