Note: This is an unedited rush transcript. Please check any quotations against the audio recording.
Nico Perrino: Bradley Smith, thanks for coming on the show today.
Bradley Smith: Hey, it’s my pleasure.
Nico Perrino: You have to tell me, what compelled you to get interested in campaign finance issues? At least in the First Amendment world, this is thought of as a confusing, somewhat arcane area of First Amendment law.
Bradley Smith: Well, it is somewhat confusing. You know one of my favorites is Antonin Scalia, who whether you love him or not, was a pretty good legal mind, pretty good judge, actually said from the bench in a Supreme Court oral argument one time, he said this campaign finance law is so confusing I can't figure it out.
I got into it a little bit by happenstance. When I began teaching, I was asked to teach a seminar in additional to regular courses and I said, what do you want the seminar in? They said, it can be whatever you want. And at that time I had published one academic article, which was on the rights of minor political parties. So, I said, why don’t I teach election law, which is then almost entirely unheard of in law school curriculums. And that’s how I actually got into it. Had they told me instead we want you to teach immigration or labor or something like that, my career would have been very different.
The somewhat ironic thing is that years later when I was nominated for the position at the Federal Election Commission. You know you have to go back through all your background stuff. And I discovered something I totally forgotten, which was when I was an undergrad I had written my senior comps thesis on campaign finance and I hadn't even remembered that.
Nico Perrino: And then they got that during the confirmation process?
Bradley Smith: Well, yeah, yeah, that popped up.
Nico Perrino: Oh, really? What is the nexus between campaign finance law and the First Amendment? Some people listening to this podcast might think campaign finance is how you raise money for your campaign. Where is the speech nexus?
Bradley Smith: Sure. I mean it’s very common for the man on the streets, so to speak, just to say, you know this is not speech, it’s money, it’s raising and spending money, money isn't speech. And that’s a powerful initial argument that we often have to overcome.
On the other hand, it’s pretty easy to overcome as soon as you point out to anybody, well, look, it costs money to speak. You can't do this podcast without spending money. You know you’ve spent it on the hardware, the microphones, and the recording devices and so on. You’ve got your time, unless you're gonna do this all for free. You’ve got the office we’re in. You know what does the New York Times spend each year to produce a newspaper? They spend millions. Now, they make money on it, but they're also spending millions of dollars. And people quickly realize that.
You can draw analogies, for example, suppose you said, look, you're perfectly free to practice your religion. You just can't spend any money to build churches or buy hymnals or pay a pastor. I think everybody would immediately recognize that that’s a First Amendment problem.
You know if you said – regardless of how extensive you think the Second Amendment should be read, I think you can see that you couldn’t just go in and say if there is a right to own weapons, to own handguns, you couldn’t just go in and say, well, it should be illegal to spend any money on the manufacture, importation, or purchase of handguns in the United States, but that would destroy the underlying right. So, that’s the nexus.
Nico Perrino: So, I'm Nico Perrino and you're Brad Smith and you're running for political office and I like your campaign and I give you $100.00, how you spend that $100.00 implicates the First Amendment in what way?
Bradley Smith: You bet. Because if I can't spend money, I'm not gonna reach very many people. Now, folks say you can always –
Nico Perrino: So, it’s the messaging nexus?
Bradley Smith: Right, you could say – they can say you can go out and speak on the soapbox on the corner, but you're not gonna reach very many people that way.
Remember, the average congressional district now has more than a half million people in it. It cost money to communicate with a mass audience and that’s what people, I think, very quickly realize when you sort of point it out to them that you can't ignore the First Amendment implications.
Nico Perrino: So, when you're talking about the amount of money that you donate to a candidacy, that’s, in essence, the amount that a candidate might be able to reach its audience. So, if you play – so $1000.00 cap on how much you get to a candidate, that sort of caps how they can get their message out to the world?
Bradley Smith: Right, that’s exactly right. I mean if I can't spend – you know it costs money to buy a television ad, but it also costs money for, again, the campaign infrastructure, to have speech writers to help with the messaging, to have telephones so we can communicate. But all of that is necessary to support the messaging, just as, again, if we look at a TV network or a movie or a book publisher, those things are all speech activities, but they have to have that infrastructure too. They have to have officers where they can go and cameras to film with and so on.
Nico Perrino: But money can corrupt, right? So, if I give you a ton of money, there's no caps on how much I can donate to you, the implication could be that I am buying influence with you, right? Why is that wrong in your mind or is it right?
Bradley Smith: Well, it’s certainly a concern that people have and I don’t think it’s a frivolous concern. I think in the end there's a couple responses to that.
And one, let’s start with the very technical response where the constitutional law is. Under constitutional law is interpreted by the supreme court. The legislature can limit the size of contributions directly to a candidate. Okay, so it can place limits there. What it cannot do is limit what you can just go spend on your own.
So, let’s say I'm either a wealthy individual or more likely, like most Americans, I'm a member of some group. I'm a member of Handgun Control Inc or I'm a member of the National Rifle Association, I'm a member of Planned Parenthood or I'm a member of Right to Life, you know whatever it is, right? When my group speaks and we just speak publicly, we’re not corrupting a candidate; he's not getting money from us. He may like what we’re saying, but that’s part of what speech is about, is liking or not liking it.
Nico Perrino: So, there are or have been laws in the United States that limit what you as an individual or you as a participant of a group, Planned Parenthood, the Foundation for Individual Rights in Education or other sort of – you know advocacy efforts can spend in support of a candidate or in support of a political message?
Bradley Smith: There have been efforts to limit how much groups like that can spend both in support of a candidate and in support of a political message, you know like talking about issues or events. But the Supreme Court said that’s unconstitutional, that’s directly aimed at sort of suppressing the amount of speech that those organizations can do.
On the other hand, it has allowed limits again on contributions directly to candidates on the theory that they're – and it’s widely criticized by some people on the speech side, but the argument there is, look, there's at least a possibility that you have a sort of quid pro quo give and take, that in that situation the candidate can say, look, if you give money to my campaign, I will take this or that position or I will try to achieve this legislative objective for you.
But the opportunity for quid pro quo bargaining isn't there when an organization is just speaking on its own and not talking with the candidate. And the supreme court said I think quite correctly, that gratitude is not a reason to sensor speech, right?
I mean we can't say let’s suppose that Barack Obama’s endorsement is worth $100,000.00 to a candidate for congress in terms of the publicity it gets him, the number of people it persuades, and so on. You can't say, well, Mr. President, you know he’ll be very grateful to you if you endorse him, so we’re not going to let you do that. You know the Supreme Court says, no, you can't, gratitude is not enough. There has to be that corruption [inaudible] [00:07:02].
Nico Perrino: So, you're drawing a line. Gratitude is fine, but if they give you something as a result of that gratitude, it’s not okay?
Bradley Smith: Well, I would say a little more precisely, if they give you something to either take or not to take a specific action or something to enrich you personally is normally what we would think of as bribery or quasi-bribery, that’s when you have a problem.
On the other hand, let’s suppose a group simply says, look, Congressman Jones, we really like him. He's thinking about taking a stand on this issue. I'm not – you know bold stand, right? Politicians hate the word bold, okay?
Nico Perrino: Yeah.
Bradley Smith: They say, we need to pave the way for him; we need to run ads in that district telling people this will be the best thing since sliced bread if this legislation passes. No, they're not saying anything about the election, the reelection, maybe not even mentioning the candidate’s name, but it may be something the candidate is very grateful for and it may be what enables him to feel that he can publicly take that position and push for that legislation.
But there's nothing corrupting about that, there's nothing wrong with that. That’s exactly what democracy is about, the interplay of voices and ideas and attitudes.
Nico Perrino: So, lately there has been concern amongst some outdoors brands, Columbia, Patagonia, about the Trump’s administration’s use of public lands because a lot of their customers go to the national parks, yadda, yadda, yadda. And they’ve been taking out advertisements kind of criticizing some of these efforts.
Before the courts paved the way for spending on political messages, would these sorts of ads be prohibited? Would they have been considered political advocacy and therefore bound by certain restraints on what you can and can't spend?
Bradley Smith: Well, let’s – you know to review the history a little bit, you know people begin to think that something is normal when it’s really not. In American history, generally, we have historically not placed any limits on what people can say about political issues. Really none at all. There were no campaign finance regulations like this at all, really, until the very late 19th century.
But as a practical matter, in terms of actual sort of enforcement and bite to these laws, there was nothing until the 1970s. I mean this is an invention of the last half century and barely that. And so historically these groups would be exactly free to do any of these things.
Now, some of the earliest laws did limit, for example, how much corporations could spend or contribute to a candidate’s campaign. And the response of corporations was to then just spend money on campaigns independently again. Congress did attempt to ban that and it wasn’t challenged for about 30 years. But it wasn’t challenged because it didn’t really matter very much.
That is to say there was no real enforcement mechanism and while a corporation maybe couldn’t say, you know vote against Donald Trump, they were perfectly free to go out and say, Donald Trump’s environmental policies are terrible, they're gonna destroy the national parks, you know you, our loyal customers, need to fight him on this issue, right? And that might make people vote against Trump.
It was only the 1970s that congress and states began to pass laws saying anything that might influence an election could be limited or prohibited. And that, the Supreme Court has struck down because the Supreme Court realizes everything can influence an election. You know you and I talking here this morning and people listening to us, might influence some elections. Somebody might say, you know, I never thought about it that way. Now, I'm gonna support people who oppose campaign finance regulation or something.
You know everything we do can influence an election and the Supreme Court said we can't let the First Amendment be swallowed up in this concern that somebody might influence an election. That’s why we participate in politics, that’s why we participate in public life is to try to influence the debate.
So, in that respect, you know you kind of asked, would these ads have been banned in the past? There was never really a time when they were banned in the past. The congress kind of passed a law that briefly might have been thought of as banning those ads, but very quickly it was struck down by the Supreme Court as unconstitutional.
Nico Perrino: So, we have two cases that loom large in peoples’ minds when they think about campaign finance. Well, I guess we have three. We have that Buckley v. Valeo situation, which I guess comes in – that’s a 1970s Supreme Court case that you're referencing. There were laws that came about in the wake of Watergate when I believe Richard Nixon was using campaign funds to buy people off, right?
Bradley Smith: Right.
Nico Perrino: And then so you get legislation, then you get Buckley v. Valeo, which kind of spells out what you can and can't do.
And then you get SpeechNOW, which I believe the Institute for Free Speech which you're with, Center for Competitive Politics back then, and the Institute for Justice litigated and Citizens United. What did those two cases do?
Bradley Smith: Yeah, let me go back to just Buckley a little bit because very interesting. You know, again, these laws first come in the 1970s and it’s the Federal Election Campaign Act Amendments of 1974. And those laws limit it to $1,000.00, what any group could spend relative to a candidate, in some parts the law said – and in other parts of the law it said for the purpose of influencing election.
Again, think about that. That would mean that the Sierra Club couldn’t spend more than $1,000.00 to advocate for anything that might influence an election? This might be anything they would do.
Nico Perrino: So, this is corporations and individuals?
Bradley Smith: Well, it applied to nonprofit corporations like the Sierra Club and, yes, it applied to individuals as well. You know $1,000.00 is nothing to try to reach even a local audience, let alone a national audience and persuade them on anything relative to a candidate. So, it shows how extreme these laws could be, were the court not in fact saying, no, you just can't do that, you can't tell people they can't try to communicate to their fellow citizens about public issues.
So, that’s really Buckley v. Valeo. Buckley is the case that says, yeah, you can limit these contributions directly to candidates because there's at least some possibility for the greatest corruption there, kind of direct giving of money to the candidate’s campaign.
And remember this law was passed. Before this law was passed, you could walk into a congressman’s office with a paper bag full of cash, put on his desk and say, now I really hope you're gonna vote for that tariff bill. And he might say, well, I'm thinking about it. You say, well, we really hope you do. It’d be very, very important to us. And he says, well, I'm pretty sure I'm gonna vote for it. And you'd say, well because this would mean an awful lot to our organization, I'm sure [inaudible] [00:12:58]. He says, I am gonna vote for that tariff bill. And you say, good, because I've left a campaign contribution on your desk, but by the way, I just see that no one know about it, right?
You could do that prior to this. So, I'm not saying all regulation in this field is totally wrong here, but once that kind of thing is gone, once you have to the candidate has to account for his expenditures and his income and so on, the court says, look, you know you can limit contributions, but it has to be a reasonable limit and it does leave some possibility that sense of quid pro quo bargaining.
So, that’s Buckley v. Valeo, but Buckley also strikes down the limits on expenditures, again, the idea that anything relative to a candidate or for the purpose of influencing election can be limited. The court just says, no, you can't do that, people get to talk.
The other two cases are kind of twinned, SpeechNOW.org and Citizens United. Citizens United holds simply that you can't prohibit corporations or unions from engaging in that same type of independent expenditure. So, prior to that, an individual could spend money, but a corporation could not spend money, at least not to explicitly advocate the election or defeat of a candidate. They could spend money now on those ads influencing or relative to a candidate, but they couldn’t say vote for this guy, vote against that guy.
Nico Perrino: When you're talking about independent expenditures, you mean they're not coordinated with the candidate.
Bradley Smith: Right, it means they're –
Nico Perrino: They're done just completely separate from the candidate?
Bradley Smith: Done separately from the candidate, right. So, that was the deal there.
And note that that ban – Citizens United often talks about a lot of corporations to spend money, but remember we’re not just talking corporations like Exxon or Apple or something. You know we’re talking corporations like the Sierra Club or FIRE or the Institute for Free Speech, you know nonprofit organizations that people join precisely to engage in public discussion and public debates and they're all nonprofit corporations. They were all prohibited as well from saying specifically vote for/vote against that candidate. And so that was struck down in Citizens United.
Actually, it’s a very ordinary First Amendment decision, if you think about it. And if you'd like, we can go into that in greater detail.
But to cover SpeechNOW, SpeechNOW adds to Citizens United. It’s to say it’s also okay for people to pool their resources. The Federal Election Commission’s reaction to SpeechNOW – or to Citizens United was to say, okay, Charles Koch wants to spend $10 million, that’s fine. And if his brother, David Koch, wants to spend $10 million, that’s fine, but as soon as the two of them get together, now they're not really spending money, they're contributing it to a common fund.
Remember Buckley said you could limit contributions so there was people who said so now it’s a contribution, so it can be limited. Well, that’s just semantic games playing, right? There's still no corruption there. There's no giving the money to a candidate. So, that’s really all SpeechNOW does is it says people can pool their money in order to make these independent expenditures as well as make them on their own.
Nico Perrino: And SpeechNOW came after Citizens United. And if I recall correctly during oral argument, the justices, or the judges on the D.C. circuit said, what can you tell us today that the supreme court hasn’t already told us?
Bradley Smith: Right, you know it was kind of a funny case because SpeechNOW was actually filed before Citizens United and Citizens United kind of jumped it in the framework. I will tell you I think our thinking was after we won SpeechNOW, we always felt confident we would win SpeechNOW, that then SpeechNOW was an unincorporated group, a bunch of friends that were just unincorporated.
We always thought that then probably the next step would be for them to incorporate themselves and then say, okay, now why can't they do it just because they're an incorporated nonprofit organization? But Citizens United jumped it in the queue and that was great.
Nico Perrino: So, you have a lot less regulation when groups of citizens just get together and spend money on political issues or advocating for or against a candidate without coordination with the candidate. You have more regulation when you're actually talking about giving money to a campaign. And there's been some recent supreme court cases that raised the limit, if I'm not mistaken, and how much you can give to a candidate, correct? Or they struck down –
Bradley Smith: Well, they haven't raised how much you can give to a candidate. There is one decision –
Nico Perrino: Because you would have to do that by law from [inaudible] [00:16:54].
Bradley Smith: There's one decision from – yeah, there's one decision from 2006 called Randall v. Sorrell, which says that if you make the limits too low, it’s unconstitutional. For example, if I said, okay, we have to let you do independent expenditures, but you can only give one dollar to a candidate. You know it would be very hard for a candidate to get the resources together to actually get a message out again.
Nico Perrino: Unless they're Donald Trump and independently wealthy.
Bradley Smith: Unless they can spend their own money, right. And so the Supreme Court said again, you can't kind of play games. You have to have a limit that’s high enough that candidates can actually raise money to communicate with folks.
And then there is the other case that you just mentioned, McCutcheon v. FEC. McCutcheon doesn’t alter how much a person can give to a candidate. It merely says that you can't limit the number of candidates he can give to. Prior to McCutcheon, you know this guy, Shaun McCutcheon, exactly wanted to do this. He wanted to give $1,776.00, kind of a symbolic number, to a whole bunch of candidates. Giving $1,776.00 was legal. I think the limit at the time was $2,000.00 was the max you could give.
So, it was a legal contribution to each candidate, but the law said, oh, once you’ve given to like ten candidates, you can't give to anymore. And again, the argument in the court was, well, what's the point of that, right? I mean why are the first 10 candidates not corrupted by getting this money, but the 11th and 12th candidates are?
Nico Perrino: Could you make the argument that the party, say the Republican party or the Democratic party, if you're giving that much money to that many candidates, it’s corrupted by the level of your influence on that party?
Bradley Smith: Well, again –
Nico Perrino: By the nature of how much money you’ve donated, of course.
Bradley Smith: Again, you get back in – I think the basic answer is no because remember this is giving money to each individual candidate. There are also limits on how much you can give to “the party,” right? And so unless you want to try to lump every Democrat together or every Republican, you say they're all one big blob and they're all corrupted in some way. I just don’t think you can get there by doing that.
In other words, we’re back again to this idea that influence is not corruption. You know sometimes people say everybody should have equal political influence. If we all had equal political influence, that would be none of us had any political influence. And if it was illegal to get political influence, then why would anybody participate in politics? And if nobody participated in politics, then, I don’t know, maybe that’s good?
Some people, they want the anarchy and they think that’d be great, but other people think that there should at least be a limited government and some people think there should be a really big government. And that requires folks trying to influence other folks. It can't be illegal to try to get influence.
Nico Perrino: So, the justification for campaign finance regulation is that corruption, the quid pro quo corruption, but there's also this other justification that courts have laid down, which is the appearance of corruption. And the idea is that if one person or one group is giving too much money to a candidate, it might not actually corrupt the candidate, but it would corrupt the public at large’s perception of democracy, thinking that a few rich people can influence our election. And as a result, that is a justification for the government to intervene and –
Bradley Smith: Yeah, that’s –
Nico Perrino: Keep up public morale, I should say.
Bradley Smith: That’s how the argument is sometimes put. That’s not actually what the Supreme Court means when they talk about the appearance of corruption. What they mean about the appearance of corruption is exactly what I sort of described earlier, where people could walk into a candidate’s office with a bagful of money. And you know it was very hard to prove – well, was that a campaign contribution intended to help them speak out to the public or is that just a bribe?
And what the court meant by the appearance of corruption was exactly the appearance that there might be this kind of quid pro quo exchange. We don’t know what's going on in the back room, right? So, we’re gonna say if you contribute directly to the candidate’s campaign, we’re gonna allow a prophylactic measure that limits how much that is, so that that way people won't have to be concerned of what kind of bargains did you strike outside of the public eye, right?
So, that’s what they meant. By the appearance of corruption, they meant the appearance of that actual quid pro quo exchange. Not just anything that people don’t like about elections. And if you – you know if you go out and you ask again the man on the street, do you think politicians are corrupt? Oh, yeah, politics is corrupt. Do you think this guy is corrupt? Yeah, he's corrupt. You know they're all corrupt, everything is corrupt. The ads are corrupt, they're too negative, you know the bills are. But that’s not what you can do with campaign finance. It’s not sort of a scattershot all-purpose remedy for anything that’s bothering people about elections at a particular moment.
Nico Perrino: So, this might appear confusing to a lot of people. I was reading in your biography that during your time on the Federal Election Commission you kept a file of letters from ordinary citizens who were struggling, in the bio’s words, through the web of oppressive campaign finance laws.
And you had one letter, in particular that said, I will never be involved with the political campaign again. Tell me what it’s like to be an individual who gets involved in a political campaign, who doesn’t have a machine behind them? What do I, Nico Perrino, need to keep in mind so that I don’t run afoul of the law?
Bradley Smith: Sure. One of the things people don’t understand, you know they tend to think of campaign finance reform as something that gets the fat cats, you know the rich people. But like regulation in a lot of areas of life, you know the big spenders, the big money folks, they can hire the lawyers and the consultants and the accountants and work around a lot of these things and do that. And it’s the real grassroots efforts that often have the toughest time complying. For the life of me, I do not understand why there is this insistence on having very low thresholds at which these laws kick in.
So, let me start giving some examples of what it’s like. In some states, spending as little as a $1.00, two or more people spending as little as $1.00, makes them a political committee that has to then start filing all kinds of reports with the state government, right? At the federal level it’s $1,000.00, which, again, is not very much money for a handful of people to spend.
Nico Perrino: And is this just in candidate campaigns or could it also be the thing they're trying to pass to get school funded, for example, or bonds?
Bradley Smith: Sure. Federally it’s candidate campaigns, of course, because we don’t have federal initiative and referendum, but in many states it’s spending that money on initiatives or referenda. If they have those, that will also trigger that status.
And this requires ongoing reporting, it requires a certain sort of organizational form and structure usually, appointment of a treasurer and things like that. And a lot of this is very, very difficult, especially for the most longshot operations to do.
You know filling out these forms, so, it’s just filling out forms. It is hard. They are complex, they're difficult. Jeffrey Milo, who is a professor at the Truman School of Government at the University of Missouri, did an experiment some years ago where they actually paid people to try to fill out these forms correctly. So, the people had incentive to do it right because they were getting paid if they did it correctly. And they had a whole bunch of college graduate students, pretty smart people, right? None of them could do it. Not one of them got all the forms filled out correctly. And you can liable for this kind of thing.
So, what I see at the FEC a lot of the times was these small campaigns, the true grassroots efforts, the real one that are run by volunteers. And these people, the reason they'd be writing to us directly was typically because they couldn’t afford a lawyer to defend them in the charges that were being brought against them.
And you'd get these letters addressed to the commission and the commissioners would get copies. And they would say – I remember one guy saying it’s Easter Sunday and I'm taking my Sunday afternoon to try to write to you guys. You know my business is being destroyed.
You know I remember this one letter, and it may have been the letter you quoted, there was persons saying I was a school teacher, I'm a school teacher, I've always taught my kids that this is the best country ever and they need to participate in democracy, but what I've learned from this is you don’t want people participating in democracy. You know, again, I’ll never be involved in politics again.
We had people that would write in and note – you know I was a CPA, I assumed I could be a treasurer for a committee. You know I'm a professional accountant, that’s what I do. And saying I remember one accountant writing nothing has ever caused me so much stress in my entire lifetime.
I remember we had a physician who had run for office and he – they don’t really care who pays the fines, actually. So, he had some money because he was a prosperous physician and he paid a bunch of fines for his staffers because he wouldn’t let his staffers who had just made errors be on the hook for these kinds of fines. But it was just destructive. I mean as he pointed out, you know people around him look at him, he's been reported in the paper as violating campaign finance laws, and these are just sort of technical little things that weren't corrupting anybody, weren't intended to corrupt anybody.
It’s very scary to be caught in the crosshairs of the US government with all its resources and it’s very – you know people who feel like they're good people just trying to participate in democracy get a letter from the Federal Election Commission saying, we have reason to believe that you may have violated federal campaign finance law and then that’s reported in the local newspaper and nowadays in blogs and goes out on Twitter and everything. That’s pretty crushing to a lot of people.
Nico Perrino: So, just so we understand what these laws mean, and I'm talking on the state level because it’s kind of a patchwork across the country. Some states don’t have any campaign finance laws. I recall Oregon has very few, for example.
Bradley Smith: Yeah, every state has some because ever state requires at least disclosure of contributions into the campaign. And all but one require disclosure expenditures by the campaign. But there are states like Oregon and Virginia and Utah that have no limits on how much you can give to a candidate at all or how much, of course, a candidate can spend, which the supreme court have held that you can't limit how much a candidate can spend.
And what's interesting is that those states that are like that are often among the best governed states in the country. You know the Pew Charitable Trust, which gives a lot of money to groups promoting campaign finance reform also does periodic surveys of what are the best governed states. And oddly enough, under their own surveys, the best governed states are routinely states that have no limits on campaign contributions.
You know even Citizens United, which allowed corporate contributions, right, or corporate expenditures, I should say. A corporation could spend money, corporation could say, if Donald Trump is elected, he's gonna start a trade war and that’s gonna devastate this country. And you people out in this little town, we employ 300 people directly, plus all the other people we employ. And if you vote for this guy, we’re probably gonna go out of business. It’s gonna devastate this town, right?
That’s a message those people ought to hear, by the way, and they should hear that from the corporation, okay? But what's kind of interesting is that even before Citizens United, a majority of US states allowed corporations to make expenditures in state races for governor, secretary of state, state legislature. And nobody was all freaked out about it, nobody – you know some people thought we should regulate that, some people thought we shouldn’t, but there wasn’t this big freak out about it.
So, Citizens United comes along. It’s really a pretty ordinary decision and all the sudden there's this massive sort of freak out about, oh, corporations are going to take over America.
I remember I testified in front of Senator Leahy’s committee, Patrick Leahy of Vermont, and he was critical. He went off on this long speech about how it was and how these corporations in a little state like Vermont, it wouldn’t take much for corporations to just dominate state politics.
And I remember I responded by saying, you know, Senator, Vermont is one of the oldest states in the nation. I think its No. 14. It’s been around for well over 200 years. And Vermont has never prohibited corporate expenditures in elections and yet you're sitting here saying now because someone on the supreme court says you must keep doing what you’ve always done, you're suddenly saying, oh, my God, Vermont politics are gonna be ruined. You know it’s just absurd, the kind of reaction.
Nico Perrino: And what did he say to that?
Bradley Smith: He yelled at me that I shouldn’t accuse the citizens of Vermont of overreacting and was very angry with me.
Nico Perrino: So, to the extent that donations and expenditures implicate First Amendment concerns and some states don’t have limits on what can be donated to a state candidate or what can be spent by a state candidate. When we’re thinking about First Amendment law, often strict scrutiny is applied. You know the law has to have a very close nexus with a concern the government has for regulating. And if you're telling me that the states that don’t have these limits on donations, don’t have these limits on expenditures, are no more corrupt than states that do, shouldn’t the First Amendment analysis strike those laws down in the states that do have them because they can't find any fact-based justification to support the corruption argument?
Bradley Smith: I would like to see the courts be more skeptical of a lot of the arguments that states make.
Nico Perrino: Because that’s what we see in other First Amendment context.
Bradley Smith: Right.
Nico Perrino: For example, the Charlottesville Protest that happened in 2017. The city tried to move the protest away from the Robert E. Lee statue, which was the nexus of the protest. And the courts did a fact-based intensive analysis to see whether the moving of that protest was a result of security concerns or just to make the lives easier for the municipality and a distaste of the message.
And the court found through that fact-based analysis that there weren't sufficient security concerns. And now post-talk we can, of course, consider whether that was true or not. But they said, no, the protest needs to happen here. You'd think that same analysis would be applied in these cases as well, but is this issue just so polarizing and difficult that the court doesn’t apply those same sort of fact-based analyses?
Bradley Smith: I chuckle because I'm sitting here thinking, yeah, you'd think that, wouldn’t you? But in fact we find it very frustrating, I’ll be honest, with the courts because they do seem to want to say we’re not gonna probe into whether – you know the supreme court has said you can limit contributions and so we’re not gonna probe into that.
Now, it will be interesting if a case is ever again – you know nobody has really pushed a case up to the Supreme Court. At least they haven't taken one that makes a broad challenge on contribution limits. You’ve had, again, some nibbling away, like the McCutcheon case and you can't have this aggregate limit on how much you can give to all candidates. We've had the case I mentioned, Randall v. Sorrell, which took some Vermont limits that were very, very low and said you can't have limits there that low. But nobody has ever tried to go back to the court and just said, look, these contribution limits really don’t make much sense, they don’t pass the strict scrutiny test, as the courts call it.
Where we find the issue is even worse is on the question of disclosure of spending on political matters and public affairs, I really should say because here – you know and most people feel like, well, we ought to know who is trying to influence politics.
Nico Perrino: So, if I give $1,000.00 to a candidate, states have disclosure laws that require –
Bradley Smith: Right.
Nico Perrino: My contribution to be known to anyone who wants to know?
Bradley Smith: Right. But here's the thing we have is, for example, every state now requires that, right? And the Supreme Court said, yeah, you can require that. Again, that there's – you know it helps the public to see if maybe there are quid pro quo exchanges. They can at least kind of see who is giving money and kind of looking at the guy’s voting record.
It’s a queue to voters. They can look and say, okay, I see this person has gotten money from this group or that person and that tells me something about them.
Nico Perrino: It adds information, which in the –
Bradley Smith: It adds information.
Nico Perrino: In First Amendment considerations, you might say adds to the debate and discussion.
Bradley Smith: Right. And it’s worth noting that at this point in time I mean there's no, to my knowledge, no serious effort to roll back any of these laws. But I bring this up because now let’s think about this a different way.
Suppose somebody came to you and said the government is very concerned about Russian and foreign influence in American elections. So, from now on, we’re gonna compile a government database of all of your political affiliations and any political speech you do. And you need to report to us if you engage in any political speech. You need to talk to us about who you talk politics with and what organizations you join. And again, we’re gonna keep that all in a database.
And, oh, by the way, we’re gonna make that database available to people who might want to harm you because of your political beliefs. We’re gonna make it available to future employers or creditors, where some rogue credit officer at the bank may say, I'm not gonna give – approve this guy’s loan. You know we might – college admission’s officers and so on and we’re gonna make that available to them.
What do you think of that law? When I raise that to most people, they immediately go, whoa, that sounds like a really bad idea. That’s exactly what you don’t want government to do.
Nico Perrino: Well, I think people would think differently based on whether the donation is coming from a corporation or individuals. I think people have just kind of a skepticism when they're talking about corporate donations. Individual, I recall, what was this –
Bradley Smith: But I'm gonna be talking about individuals. Let me – because I'm talking about individuals here. Individuals have to disclose all that, right? And so these people say that’s a really bad idea, but then you point out we actually have that law and it’s called the Federal Election Campaign Act in different state laws that require that. At least it’s limited there, traditionally, to just money given directly to the candidate or if you run ads that explicitly say vote for a candidate or oppose a candidate and you give a group money to do that.
But the Supreme Court has always said you can't just blanket-wise require people to tell the government and everybody else who wants to know about their various political affiliations. Now, that’s been the longstanding law here, but of late it’s –
Nico Perrino: And then Alabama back during the Civil Rights Era, tried to compel disclosure of people who were members or contributed to the NAACP and they said, no, you can't do that.
Bradley Smith: Right, right. It’s a great example because had the NAACP been forced to disclose its membership list and its donor list, it would have destroyed the NAACP in the 1950s Alabama. You can destroy an organization by that. And it’s true that we’re not living in 1950s Alabama, but is it really so far-fetched that we’re gonna have bombs sent to the donors who support Planned Parenthood or Right to Life on a hot button issue like that?
We've gotta – you know we live in a society where not long-ago man drove halfway across the country to try to shoot a bunch of Republican congressmen and where another guy sent bombs to a bunch of Democratic congressmen and representative. There are some crazy people out there. We live in this world of Twitter mobs and people trying to destroy businesses.
Nico Perrino: Well, I recall there was this situation a couple years ago when there was Proposition 8, I believe, in California. And the CEO or the president of Mozilla, which is a tech company, I think had given in support of Proposition 8, which would have banned same sex marriage, if I'm recalling it correctly.
Bradley Smith: Right, yeah.
Nico Perrino: And that contribution, I believe, was disclosed as a result of state law, and correct me if I'm wrong. And the mob came after him and I think he resigned his position or something happened.
Bradley Smith: Yeah, he was forced to resign.
Nico Perrino: Yeah.
Bradley Smith: And I think he founded the company or at least been instrumental in founding.
Nico Perrino: Yeah.
Bradley Smith: But and it wasn’t just somebody like – Brendan Eich was his name, who is a pretty well-to-do guy, he founded this company, you know was president of it. Included, for example, there was one woman who had given $100.00, I think it was, to the campaign. And her family had a family-owned restaurant in L.A. and the restaurant was picketed and boycotted and harassed until she finally had to leave town, not just for herself, but to prevent her family restaurant from going bankrupt.
Nico Perrino: And the First Amendment context, I mean we have a long tradition in America of anonymous speech, the Federalist Papers, the Antifederalist Papers. They were written anonymously, I believe, even the Declaration of Independence, of course, written by Thomas Jefferson. It wasn’t revealed that he was the one who wrote it for many years.
Bradley Smith: Sure, Thomas Paine’s The Crisis, John Marshall the first – or the great – not one of the first, but the great Supreme Court early chief justice used to write anonymous letters defending his own decisions.
Nico Perrino: So, you would think if the courts have held that there at least is a serious speech concern that needs to be considered when we’re talking about contributions and expenditures, you would think that they would take the anonymous speech argument seriously.
Bradley Smith: But here's what happens in that. And you know we started with this, we’re talking about the strict scrutiny. And what we find is that we go into court, these states have these sweeping laws that say any nonprofit organization that talks at all about public issues again. Doesn’t have to talk about candidates. It can just talk about public affairs, right? Has to disclose all of its donors to the state.
And we say, why do you want that? And the states says, well, law enforcement. And we say, well, what law enforcement do you mean? You know because if you think of a group as acting fraudulently, then you do have the power to subpoena that information. You can get it in an individual case. It’s just the idea that you can just broadly collect it from everyone and put it in a database is kind of alarming. I mean that’s how you get the lowest Lois Lerner situations with the Internal Revenue Service a few years ago. It really damaged the IRS’s image and probably harmed a number of people right? You can harm people. Government can harm them or private people can harm them.
So, anyway, we present this, so what do you need this for, to collect this information in bulk from everybody? And the state just says, law enforcement. And again, when you try to press them for what does that mean, they don’t know. In California, in the case, the state actually admitted – the state auditors came and said, no, we’ve never used that information. And even if we did use it, we actually could get it from other sources. But nonetheless the courts – the federal courts still kind of just say, well, you know it seems plausible to us, let it go.
Nico Perrino: You would think they're –
Bradley Smith: So, there's none of this strict scrutiny, none of this careful examination.
Nico Perrino: Yeah, so it seems more like rational basis scrutiny, in that case.
Bradley Smith: It’s almost not even rational basis. It’s almost just any old reason you want to give, I’ll go buy it.
Nico Perrino: So, I guess this is a good point to talk about what people mean when they talk about dark money. In the state context, disclosure is required if you're contributing to a candidate. People say the way you get around that is to give to one of these super PACs or these nonprofits who spend money independently of a campaign to advocate for or against the election of that candidate or for or against a political message.
And if you give money to one of these groups, the Sierra Club, for example, you're not required to disclose your donation or your contribution.
Bradley Smith: Well, this is exactly it. And this is where the disclosure debate is going. They want to know did you give money to a group and then you have to disclose. And it doesn’t matter why you gave the group money.
So, let’s suppose, for example, you give money to an organization that works on health issues because you think it’s really important to work on health issues. And the organization then endorses, say, a single payer plan for national healthcare. Well, you don’t think a single payer plan is a good idea. That’s not why you gave the group money, but they still want to identify you as having funded that group’s advertisement for you.
You know all of us belong to organizations. We don’t agree with everything the organization does. It’s kind of absurd to think we do. So, this effort is to kind of suck in individuals into all of this stuff that’s often misleading and very unfair to the individuals and often can lead them to threats or to harassment or even just some people don’t like to give because they don’t want – or don’t like to be identified because they don’t want people to know how much money they have or what they give. That’s why if you go to the opera or the symphony or the art museum, in the programs you'll see things that say anonymous, right? Some people just don’t like to be identified.
Nico Perrino: So, to address this dark money problem as some people see it would mean, for example, that the NAACP in 1950s Alabama would have had to disclose its donors.
Bradley Smith: Right, they were a dark money group.
Nico Perrino: They were a dark money group.
Bradley Smith: And so dark money is really one of these things that people are most ill-informed about. And there's a number of ways in which they're ill-informed. We should start with the idea of, first, whether there's a lot of dark money. Then we’re gonna come back and talk about what dark money is, right? Let’s talk about what it is, first, okay?
So, what is dark money? Dark money is merely money that is spent on political campaigns, that is promote or support a candidate without identifying who the spender got money from.
Nico Perrino: And these spenders are not the campaigns themselves?
Bradley Smith: These spenders are not the campaigns themselves. So, for example, the Environmental Defense Fund decides it’s gonna run some ads that say you should not vote for Donald Trump because he's not good on the environment, okay? They don’t tell you who gave them money. I mean, remember, a lot of people didn’t give them money to run ads against Donald Trump. They gave them money for all kind of other things, but they don’t have to tell you.
Now, they do have to report that they spent the money and they have to report that they spent it on ads critical of Donald Trump, right? So, it’s not truly dark. We know that the money was spent in this hypothetical by the Environmental Defense Fund. We know how much they spent, we know what they spent it on. We just don’t know who are all of their members or who might have given them money.
So, the question is – so, first of all, I guess I'd say it’s not truly dark in that sense. We might call it opaque or something, but it’s not dark. And by the way, this is not uncommon. We’ve always had this in America, it’s always been there. And it goes even in ways that people don’t think of.
I mean if I give a contribution to a candidate or if I make an expenditure on my own, say I go out and buy $5,000.00 worth of radio ads. I'm a pretty prosperous guy, I could do that if I really wanted to, right? I would have to disclose that I spent that money on those radios. I wouldn’t have to say who paid me. I wouldn’t have to say, well, these are my clients because I'm a lawyer, right, and I do consulting work. I don’t have to say these are my clients and these are who pays me my money. It’s my money, right? And I'm telling you I spend it, right? And that’s perfectly fair, logical thing to do.
By the way, note that if somebody gives money to a group specifically to run the ad, then they do have to disclose it. So, in other words, I can't go to the Environmental Defense Fund and say, here's $50,000.00, I want you run some ads against Donald Trump in Ohio, right? And they do, then they have to disclose it. I gave them 50,000 bucks to run ads against Donald Trump. But I just gave them 50,000 bucks for all their good work. That’s – they can spend it how they want.
Nico Perrino: So, if someone donates to a general operating fund, the donor doesn’t need to be disclosed.
Bradley Smith: Right.
Nico Perrino: If they donate for a specific purpose, than they do have to be disclosed?
Bradley Smith: Right, right. Now, you may think that maybe we should have that disclosed. Okay, but perfectly fine argument, we can have that argument. But it’s first worth noting that just that’s what we’re talking about. We’re not talking about money that nobody knows who’s spending it, where it’s coming from, how much it is, right? You know we know that money in this hypothetical was spent by the Environment Defense Fund, here's what they spent it on, and so we know that.
The second element that people don’t realize is you hear all this stuff about we’re awash in dark money, it’s this huge percentage. It’s not. Dark money amounts to about 2 ½% of total political spending in the United States. That’s spending on ads about candidates and infrastructure for candidate campaigns and so on. It’s a very small portion of the total.
Sometimes you hear that exaggerated. People say, oh, it’s – you know they’ll throw out a number like 20% or 30% and you'll go, wow, well, that sounds like a lot. But what they're doing there is they're playing a little game with you. If you look at that closely, what they're saying is, well, it’s 20% of independent spending. Independent spending is spending by people other than the candidates and the political parties and so on, right? But independent spending is only about the 12 to 15% of the total, so it’s 20% of 12% that gets you right there, down to 6%. And in fact, again, when we really add it all up, it’s about 2 ½% to 3%.
And then the other argument that says they try to play off the name that they’ve given to dark money. They say, well, we don’t really know how much is spent because it’s dark money. But that’s not true, we do know. When you spend the money, the group or the person that spends the money has to report that they spent the money.
Nico Perrino: You just don’t know the individual that gave them money.
Bradley Smith: Right. And so then they’ll go, well, what I mean is like you don’t have to report. Again, we don’t have to report the money that’s spent this morning on this podcast, right? You know if one of our listeners here gives money to some organization, some local environmental group, and that group spends some money just talking about issues in their communities. We need to clean up the Potawatomi River or something like that, right? That’s, technically, you could say that’s “dark money,” nobody knows what it’s been spent on. But realize that if that’s what they mean by dark money, then they're radically expanding the universe of things that have to be disclosed.
Right back into that thing that we spent years and years fighting against. It wasn’t just the NAACP cases. It was the Hollywood Ten Cases, you know the great Hollywood blackball of the McCarthy era. It was cases about involving union organizers, it was in cases involving picketers and so on, where the Supreme Court consistently defended the rights of Americans to engage in group activity without having to report it all to the government and reveal their identities.
And it’s made an exception where you're specifically advocating the election or defeat of a candidate or where you're giving money to a candidate. But what these people do when they say, oh, we don’t know how much dark money means, if they're saying that, they're either being dishonest or they're coming up with a new definition of what should be disclosed, which is a radical expansion of what the law has ever been in the United States.
Nico Perrino: Are these laws enforced consistently?
Bradley Smith: Um –
Nico Perrino: In the sense that if someone is violating a campaign finance law, regardless of whether you agree with it or don’t agree with it, you can almost always count on them being discovered or are you finding it to be the case that they're being enforced unequally as a tool to go after political opponents?
Bradley Smith: Well, I don’t think those are incompatible assumptions. One of the things you have to realize is that most campaign finance systems, both federally and in most of the states are complaint driven. So, you get a complaint in and that’s what triggers the investigation.
Nico Perrino: Are they anonymous complaints or do you have to put your name in?
Bradley Smith: In most states and at the federal government you definitely have to put your name on it, right?
Nico Perrino: Gotcha.
Bradley Smith: Now, I don’t know if that’s true in every state, but it’s true federally and in many states.
Nico Perrino: Well, from a due process perspective, if it ever went through some sort of process to figure out whether the violation happened or not, you'd almost hope you would know who was filing the complaint, right?
Bradley Smith: Yeah. Well, but what you can see in the way this happens too is so – you know it’s very easy for me to file a complaint. I can say, well, I think this guy is probably doing this, that, or the other thing. Then I have a press conference and I announce serious charges have been filed with the Federal Election Commission. And these would be serious charges if they were true.
And now the respondent know the government takes over the investigation, so the person who made the complaint has spent a few hundred bucks to have their lawyer draw up a complaint, okay, or maybe they just did on their own. The respondent now has to spend thousands and thousands of dollars and go through discovery and production of documents and hire a lawyer to defend them.
Meanwhile, the press is going, wow, these charges, what are these charges about? You know so they get bad press days and everything. So, the law is typically used as a weapon in politics and I think it’s bad in that way. And I think it actually – you know these all are supposed to increase public confidence in the elections. I think actually it does – it tends to do the opposite. It tends to make people skeptical.
Nico Perrino: Just so I'm clear, in some states if I am a citizen who has maybe kids in school and there's a school bond referendum that’s up for a vote and the election took – you know spend $10 million to rebuild the school. And I get together with my neighbors and we hold signs at the corner. In some states, we would be required to disclose that spending?
Bradley Smith: Right. If you’ve pooled any money, and in some states it’s as little as a buck, in other states it’s like $100.00 or something.
So, let’s say you got together to make some signs or you developed an email list together or anything like that, you know in a state where it’s $1.00, right? Then, yeah, you would have to register as a political committee, you have to appoint a treasurer, have a particular structure, a certain type of bank account. You have to file regular reports with the state government.
Nico Perrino: Even if I'm not giving my neighbor money to go buy the signs, we’re just using markers that I had at home?
Bradley Smith: Well, that might depend a little bit on how they interpret it, but certainly if you each say, let’s each pitch in $10.00 and we’re gonna send somebody down to the CVS with $120.00 to buy paper and –
Nico Perrino: And permanent markers.
Bradley Smith: And then, yeah, sign posts and all that kind of stuff, then you're in.
Nico Perrino: And let’s say I oppose this bond and I notice, for example, that these group of neighbors didn’t register with the state election committee or whatever it is. I file a complaint. The state could, theoretically, investigation this group of neighbors for their activity?
Bradley Smith: Right, right. Right, that’s all it takes is filing a complaint and you get the investigation. And a lot of the people, you know folks want these investigations to be tougher. They think we’re not investigating enough complaints.
Nico Perrino: So, let’s move on to the controversies of today.
Bradley Smith: Okay.
Nico Perrino: We’re already at 45 minutes.
Bradley Smith: Okay, sure.
Nico Perrino: If you have 10 or 15 minutes with me? Donald Trump and Stormy Daniels.
Bradley Smith: Okay.
Nico Perrino: So, the allegations are that Michael Cohen, who was Donald Trump’s attorney, paid off Stormy Daniels so she didn’t go public about this alleged affair she had with Donald Trump. The argument is that that $130,000.00, whatever it was, was a campaign contribution or an in-kind campaign contribution because it benefitted Donald Trump because he wasn’t hurt by a national story about his affair, his extramarital affair, with Stormy Daniels.
Michael Cohen seems to have bought into this argument or at least that’s the suggestion from the way it’s played out in his agreement to cooperate. Is it a campaign finance violation if Donald Trump is spending money to shut someone up?
Bradley Smith: Yeah. Well, I maintain it’s not. And this is kind of a technical argument, but we’ll take a couple of minutes to go into it. Let’s start by recognizing that one of the reasons we limit this is to prevent bribery, again, right? I mean what is the difference between bribery and campaign contributions? People sometimes say campaign contributions are just legalized bribery. You know, okay, that’s their rhetoric.
The reality is that pretty much every society recognizes there's a difference. I don’t think there's any democracy that I know that prohibits all campaign contributions and I don’t think there's any democracy I know that makes it legal to accept bribes.
So, at some level, even though it can be hard to tease out the difference, we do understand that there is a difference, right? One of the key differences, I think, is whether or not you're using that contribution to actually run a campaign, trying to persuade citizens vote, or if you're using it to buy yourself new cars and watches and fur coats for your mistress and things like that, all right? So, not everything that you spend for a campaign or that you might spend that might influence a campaign, is a campaign expenditure.
So, for example, I'm a candidate and I decide, you know, I got this debate next week. I'd look really great if I bought that new $1,400.00 suit, right? Not a campaign expenditure. You gotta buy clothing on your own. This is something – I'm a president and I say the people are gonna care – I'm gonna be up for reelection and where I take my vacations might influence how people think of me, right?
We had a president very recently who used to take polls on where he should vacation.
Nico Perrino: The Clinton’s, right?
Bradley Smith: Right.
Nico Perrino: Yeah.
Bradley Smith: Does the vacation become a campaign expenditure? No, it’s not a campaign expenditure. The candidate says I need to have my teeth whitened. No, not a campaign expenditure. The candidate says, ah, I need a massage before I get back on that tough campaign trail. I can't campaign effectively if I don’t get a massage first. Not a campaign expenditure, right?
In other words, what we have in the law is something that’s called personal use. And under FEC Regulations, the Federal Election Commission Regulations, any obligation that would have existed, even if you weren't running for office, is personal use. You can't spend your campaign funds on. We don’t want people spending their campaign funds on it, right? We don’t want our candidates to use their campaign funds to pay off their mistresses, okay?
Or let’s take another example. A businessman runs for office, someone like Senator Johnson from Wisconsin or Donald Trump, right? Businessmen with lots of affairs often have lawsuits that are brought against their companies and against themselves for a wide variety of things. Some have merit, some don’t. If the business man goes in and he says to his lawyers, he says, look, I think we've got these five lawsuits against us. I think these are all a bunch of BS, but I'm gonna run for office, I don’t want them out there, I don’t want the press harping on them or saying in some way I'm being unfair to people. So, just go settle those lawsuits.
You know the only reason he's doing that is to influence the campaign, but it’s not a campaign expense. He can't pay those settlements from this campaign funds. It’s a private expense for him or maybe for his businesses to pay.
So, that’s the first thing. We need to understand that just because you do something that might influence your campaign, doesn’t mean it’s a campaign expense. And if it were, it would take up everything. You know when did Hillary Clinton start running for president? Probably sometime around 1975, right? I mean you can't say everything she does is for the purpose of influencing a presidential campaign.
Nico Perrino: But didn’t – I mean you had that sort of settlement thing that might benefit a campaign in Trump University, right?
Bradley Smith: I don’t know if they – that’s the kind of thing that would not be a campaign expenditure.
Nico Perrino: Be a campaign –
Bradley Smith: If he settled cases like that.
Nico Perrino: If he's paying his lawyers to settle these cases.
Bradley Smith: Right, right.
Nico Perrino: But the idea that – the argument that this stuff should be reported is the argument that we need to know the story so we have more information about the candidate.
Bradley Smith: Right. But you know here's the thing there, is that that’s not what the campaign finance laws do. In other words, if you want to make that argument, then you could have a law that says candidates must disclose any extramarital affairs they’ve had or candidates must disclose payments made to settle lawsuits or potential lawsuits claims against them. You could have that law, right? You could have that and then Trump clearly would have violated that by not publicly reporting it, assuming he would have not reported it.
But that’s not what the campaign finance law does again. And remember, the law was set up precisely because we didn’t want candidates spending their money on these kinds of personal things.
So, let’s imagine that Trump had – people are saying, well, Trump should have paid for this with campaign funds and disclosed it. But if Trump had paid for it with campaign funds, I think the very same people who are accusing him saying he should pay for the campaign funds would then have filed a complaint saying you’ve diverted campaign funds to your personal use. This wasn’t running for president. You're settling your personal obligations that you incurred years before.
And note the president could have – well, let me add this.
Nico Perrino: Well, you say in your op-ed that you wrote for The Wall Street Journal on this issue, Stormy Weather for Campaign-Finance Laws, that one of the reasons you got campaign finance laws was because Richard Nixon used his campaign funds as hush money.
Bradley Smith: Right.
Nico Perrino: Or at least that was one of the articles of impeachment against Nixon.
Bradley Smith: Right, right.
Nico Perrino: So, if you're Donald Trump and you're looking at that, okay, we get campaign finance laws because people are using campaign funds to buy people off, to hush them. So, we can't do that, but I can't use my personal funds to pay them off either. You're left in a situation where any money that you're spending –
Bradley Smith: Yeah, that can't be right. You know, and again, what I try to emphasize when I point out this to people, this is not defending or criticizing, frankly, Donald Trump. This is just describing what campaign finance law is.
Nico Perrino: Okay.
Bradley Smith: And then I think it would be very dangerous to expand campaign finance law to start including these things because you could have – settling all kinds of disputes and claims, buying all kind of things for personal use and justifying them as somehow vaguely related to a campaign.
And oddly enough, for example, in Pennsylvania now at the state level, they don’t have a personal use law. In fact, their law is anything that might influence a campaign has to be reported. So, they're having the exact opposite problem. They have state legislators that buy Super Bowl tickets. And they say, well, I'm going with my buddy who might give money to the campaign, so it’s a campaign expense. And they can't do anything about it, right?
And to me that’s exactly what the laws are intended to prevent because people give you money and you can use it to go to the Super Bowl? That’s corruption, right? That’s not trying to persuade people to vote for you. That’s just taking money from people and they're hoping you're gonna do favors for them.
Nico Perrino: So, there's another story involving Donald Trump and alleged campaign finance violations. This is the National Enquirer’s buy and kill practice.
Bradley Smith: Right.
Nico Perrino: The National Enquirer is, of course, a tabloid magazine and the head of the publisher of National Enquirer, I guess, is friend with Donald Trump. And the argument is that National Enquirer was buying stories from people who allegedly had affairs with President Trump and they were buying them and just killing them. They weren't releasing these stories. And doing so is a sort of campaign contribution –
Bradley Smith: Right.
Nico Perrino: Because you're preventing a bad story about a candidate from getting out into the public. Is this any different than the Stormy Daniels that we were just talking about?
Bradley Smith: Well, it’s a tough issue. First, you have to realize that there is what's called, in all of these laws, a press exemption. The press doesn’t have to worry about these laws because they spend all kinds of money, right, endorsing candidates, running editorials even, and slanting their news coverage. They coordinate with candidates. As they go and interview the candidate, talk about what the candidate’s campaign strategy is, then they go back and write stories about it. Okay?
These laws couldn’t operate without a press exemption or if they didn’t have a press exemption I think everybody would recognize they're unconstitutional. You know we go back to one of your first questions, what's the nexus between money and speech, right? I mean you see it here. The press couldn’t report at all if we said, oh, they're spending money and they're reporting on this stuff. So, they get an exception.
Now, this raises –
Nico Perrino: Even if there is this alleged coordination between the candidate and the newspaper?
Bradley Smith: Right. Now, here’s the thing. Their exception does not apply if they're not operating, so to speak, as press. So, for example, The Washington Post can run all the editorials it wants critical of Donald Trump, but it couldn’t just go out and buy a bunch of billboards, right, saying, vote against Donald Trump. It couldn’t just go out and start running ads on television saying you know Donald Trump is gonna extinguish the human race by pulling out of the Paris Climate Accords, you know vote against Donald Trump. It can't do that. It has to be sort of operating as a news agency.
Nico Perrino: To get these exemptions?
Bradley Smith: Right, to get these exemptions.
Nico Perrino: But a corporation, theoretically, could do this, right, as long as it’s not coordinated with the candidate, right?
Bradley Smith: Right. Now, under Citizens United, of course, a corporation now can go out and do that, so the Washington Post can do that now under Citizens United. But if they did that, they would have to report it as an expenditure in the campaign, right?
Nico Perrino: Gotcha.
Bradley Smith: Okay, whereas when they just report on the news, when they run their editorials, they don’t have to tell us how much money they spent or that sort of thing. Okay, so there's that distinction.
So, now the question is, was National Enquirer operating as a press entity or were they just acting sort of like a –
Nico Perrino: Arm of the campaign.
Bradley Smith: Arm of the campaign.
Nico Perrino: This is my corporation that is also kind of my PR operation because it’ll find stories that are gonna harm my candidacy and make sure they don’t get out there.
Bradley Smith: Right. Now, you know in the United States, my understanding – I didn’t attend Columbia Journalism School or anything, but my understanding is that this is not a common practice and would generally be frowned upon. On the other hand, my understanding is that this is quite common in, for example, in the United Kingdom. Downton Abbey fans, there was a whole plotline of Downton Abbey about the guy doing a catch and kill, buying up a story and squelching it to protect the woman that he's fallen in love with, right?
Is that a proper press function? You know I think one can debate that, but here's the problem you have. If you start doing that, you know I'm not sure the press really wants to go there. If we’re gonna have a press exemption, which may show how wrongheaded these laws are under the First Amendment, if we’re gonna have this press exemption, you probably need to have a press exemption.
Consider, for example, let’s suppose The Washington Post assigns a bunch of reporters to go tail Donald Trump, right? We’re gonna find that corruption. They spend $200,000.00 on this in time and energy, right? Eight months later the reporters come back to their editor and let’s just say they say, we can't find a thing. In fact, and as near as we can tell, all these allegations made against him, there's nothing to him and they're false. The editor says, well, that’s not a story, we’re not gonna run that. Is that a campaign contribution? Right? They’re refusing to run something critical of Trump, right? How much different is that than catch and kill?
Now, it is different. You could say their initial intent was to do something, but if they were only gonna do it one way, is that the case?
Nico Perrino: Yeah, I can understand that argument, but I think, again, the distinction would be, is it coordinated with the candidate? If you're exercising independent editorial judgment, newspapers do that every day. But it’s not every day that a newspaper is buddy-buddy with a candidate and working as a PR arm for that candidate.
Bradley Smith: Well, but what it takes us to is what is independent editorial judgment, right? I mean if The Washington Post editors are like, no, our goal is to get Trump, is that independent editorial judgment, any more than the editor and chief, for whatever reason he has of the Enquirer?
Now, here's the thing.
Nico Perrino: But I mean there are publications out there –
Bradley Smith: Yeah.
Nico Perrino: That do have an ideological bend that might want to see, for example, Kamala Harris become president. So, they're not gonna publish this or that story that might be critical of her or they might be pursuing a story because they got a tip and they just kill it.
Bradley Smith: Right. I mean I guess the point that I want to make here is without really venturing an opinion on the underlying elements of all of this claim, right? What would strike me is that it’s a dangerous area to get into and it shows the dangers of these laws, generally. And if I were an editor of a paper or one of the cable networks or something, I'd be very uncomfortable with the idea that a special prosecutor is going to come in and start saying, now, what were you thinking when you made the editorial judgment not to run that story or what were you thinking when you decided to make the editorial judgment to assign a bunch of people to pursue a story?
You know if we’re gonna have a press exemption, you probably need to have a pretty broad press exemption or pretty soon you don’t have a press exemption. You know once the press can be second-guessed by government investigators all the time, it’s pretty tough.
So, this would be about as good a case as I think you're ever gonna get to try to sort of pierce the press exemption, we might say. But I do think it’s one that is fraught with risk and I think it also kind of shows some of the problems here. Why does the press get this exemption, but not the rest of us? Right? Why is it that if Jeff Bezos buys The Washington Post, he's free to say and do whatever he wants. But before he buys the Washington Post, he's not.
And what about the rest of us who can't afford The Washington Post or even people who are rich, but not so rich as Jeff Bezos, so they can't afford The Washington Post, you know?
Nico Perrino: Well, this goes to the long running debate between what exactly is the freedom of the press under the First Amendment.
Bradley Smith: Right.
Nico Perrino: I mean are we talking about news institutions, are we talking about general commentary and writing about –
Bradley Smith: Yeah. And you know the funny thing is here – so, for example, The New York Times gets the press exemption. This is a wealthy outfit, which by the way for a long time was a foreign national, a Mexican, a Carlos Slim, right? They were always worried about foreign interference in our elections. They could do whatever they wanted.
If you go out, you're a nonprofit organization, and starts a small blog, all of the sudden you spend a couple hundred bucks on that, you could be subject to all kinds of reporting requirements, perhaps restrictions on how you raise your money under certain laws and so on, right?
Nico Perrino: Although the press would like to say that they're not – a reporter, yeah.
Bradley Smith: Right. So, The New York Times, which is a big, powerful corporation with lots of influence can spend what it wants and the smalltime volunteer effort is gonna be subject to all these laws.
Nico Perrino: So, Brad, I have to ask you, so I mean you sound very skeptical, a lot of these campaign finance regulations.
Bradley Smith: I'm glad you sensed that.
Nico Perrino: Are there regulations you like? I mean what do you think is within the government’s scope or what should the government do to maintain the integrity of our elections, where money is involved?
Bradley Smith: Mm-hmm. Well, let’s say this. First, my general view is that we should keep pushing in the direction of deregulation. And if we start to see bad consequences, we can stop.
Nico Perrino: Like Russian trolls.
Bradley Smith: Right. We should remember –
Nico Perrino: [Inaudible] [01:03:12]. What do you think about that?
Bradley Smith: Well, that’s another issue. It’s not directly related to campaign finance; we can cover that in a second. But let me – you know if you – most of our history we have not had any restrictions or any meaningful restrictions on campaign finance. And that’s how we elected Truman and Roosevelt and Lincoln and all those guys.
Nico Perrino: Well, wasn’t there something, though, with George Washington and the amount of liquor he was –
Bradley Smith: Yeah, he spent a lot and there were no limits on it. You know I forget what it was, it was like 50 pounds per vote or something like that on buying people liquor in taverns, which is a common way to campaign in those days. So, you need money to campaign and most of our history we’ve not really worried too much about that. We’ve left it up to the voters to then make decisions on what's right or wrong and I would like to see us press in that direction.
Now, having said that, you know we’ve allowed for 40+ years now, the disclosure of contributions made directly to candidate campaigns. And again, that’s where the greatest possibility is there for corruption, so that’s probably one of the more defensible regulations and one that we might want to hesitate to take on.
You know when I was on the FEC, one of the areas where I was among the most vigorous members of the commission was on this question of personal use that we talked about a little bit, saying that candidates cannot redirect their campaign contributions to things that are really personal use. And I was sometimes dissenting from some of my colleagues who normally thought of themselves as the big enforces and I was the laissez-faire guy. And I was saying, you can't let the candidate spend his money on that because that looks a lot more – you know that’s only very tenuously related to his campaign. It looks a lot more he's taking a bribe, so to speak. So, you know I do think personal use regulations might make some sense. And, of course, that would also require some degree of disclosure.
Now, note, by the way, also, disclosure doesn’t mean it has to be public disclosure. For example, we don’t disclose our tax returns publicly. You disclose them to the government and they can monitor, but your neighbors can't look up your tax return.
Nico Perrino: Although congress can compel the disclosure.
Bradley Smith: Congress can, but you know –
Nico Perrino: As we might see here in the near future.
Bradley Smith: So, those are the kinds of things that I think make the most sense. You know I do think that there's an argument, although I've argued that we should not limit contributions at all. I do think it is more justifiable to limit contributions than to limit expenditures. At a minimum, I think we should raise most contribution thresholds considerably, particular in many states that have very, very low thresholds. You know we don’t – people who give like 50 bucks are not gonna corrupt a candidate. We don’t need to know who those people are, we really don’t.
So, I would raise thresholds across the board, but there may be some things that a pretty good case can be made for. And I'm not saying that I would wholeheartedly support them, but I think we can move in the direction of saying freedom is probably a good thing. And let’s see, we shouldn’t be so frightened.
We have very little to show for campaign finance reform. You know if you go back and you look at where we were and who we were electing to office, Eisenhower and Truman and Roosevelt and Coolidge –
Nico Perrino: Then you got Nixon.
Bradley Smith: You got Nixon, right. Okay, well, so now people are upset because we got Trump, right?
Nico Perrino: Yeah.
Bradley Smith: And we’re much more heavily regulated at the time. You know people want to say it’s the wild west out there. It’s not the Wild West at all. I mean you’ve got hundreds of thousands of pages, hundreds and thousands of pages, I should say, of regulation of this stuff. We’re more heavily regulated in many ways than we’ve ever been.
And this has all been since the 1970s and it’s a very dangerous power to give to government. I often point out the very first prosecution under the Federal Election Campaign Act was undertaking by the Nixon administration against a number of sort of middle class, upper middle-class New York citizens who had taken out an ad in The New York Times calling for Nixon to be impeached. Not because of Watergate, this was before Watergate. They wanted him to be impeached for invading Cambodia.
And the Nixon folks said, well, if they're trying to get me impeached that might persuade some people they should vote against me. Remember the law was for the purpose of influencing a campaign. And they prosecuted these folks. And the federal court finally said, no, you can't do that.
But that’s the danger here is that we turn people’s speech into a weapon that can be used by a rogue government and that’s very dangerous.
Nico Perrino: A way of closing up here, I mean we could go on all day, this is a fascinating topic. What's the biggest challenge you and your colleagues face now in your efforts to reform some of these laws? And I know campaign finance reform is usually on the side of people who want more laws, but I mean in a sense you're trying to reform the laws and deregulating them.
Bradley Smith: I think from our perspective, you know it’s sort of odd to say this because having said, I think money is speech and I don’t think we should regulate it. And one of the things is we get heavily outspent and outgunned, so to speak, in the battle for public opinion. You know the newspapers are almost entirely in favor of this stuff in part because they're not subject to it, they're exempt from it. They're perfectly happy to have regulation on everybody else.
There isn't an issue with most people. It’s not because people are foolish or dumb or anything like that. It’s because most people don’t have the time nor the incentive nor the desire to spend their life thinking about this, right? I'm the oddball and to some extent even your listeners here who have waited for this whole podcast are the oddballs. Most people don’t really want to focus on it, so to them they hear – you know it’s campaign, it’s money, it’s not speech, I don’t like the rich guys having more influence.
And you know you have to kind of battle that natural assumption, those prejudices that people bring. But again, I don’t think are irrational, I just think when you really examine it they don’t hold water. And that makes it a challenge all the time.
Nico Perrino: I just kind of had a thought. You think about New York Times v. Sullivan, this is a defamation case involving an ad taken out that criticized, what was it, an Alabama sheriff?
Bradley Smith: Right. They criticized Alabama sheriffs who were suppressing Civil Rights protestors.
Nico Perrino: Yeah.
Bradley Smith: And the sheriffs and some other public officials brought a libel ad against the Times and the people who had run an ad in the Times.
Nico Perrino: And I'm thinking you're describing campaign finance regulation. I don’t know what the laws in the state were at the time, but presumably if the sheriff and some of these other elected officials were running for office and there was a campaign going on, they could have used the election laws to go after The New York Times if there wasn’t this sort of –
Bradley Smith: Right, that’s an excellent point. They didn’t have those laws at the time. But had they, that would have been an alternative grounds for, yeah, pursuing the people. Because remember it wasn’t just the –
Nico Perrino: I mean that’s the argument you can make to those in the press who are skeptical of this stuff. I mean your ox could have been gored here.
Bradley Smith: And remember, it wasn’t just the Times. I mean the Times was defending it because the other people in the dock were – it was a paid ad. And so it was the people who had bought the paid ad that you could have gone after under the campaign finance laws. It said they can't pay an ad in The New York Times. It doesn’t matter whether it’s libelous or not, we’re just regulating money, right?
Nico Perrino: Yeah.
Bradley Smith: And that would have been the problem.
Nico Perrino: It’s all very fascinating stuff here, Brad. I'm gonna encourage our listeners to check out the organization that you founded, what was it, in 2005?
Bradley Smith: 2005, after I left the FEC. It’s called the Institute for Free Speech and its site is www.ifs.org. I-F-S. And if you can't get enough of this stuff, boy, you can get a lot of it there.
Nico Perrino: All right, well, thanks again for coming on the show today.
Bradley Smith: Thank you, Nico.
Nico Perrino: And hopefully we can do it again sometime in the future.
Bradley Smith: Thank you.