FEC Must Protect Commercial Speech From Excesses of McCain-Feingold Bill

As Rules Are Rewritten, Supreme Court's Intent Must Be Considered

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Earlier this year, in the landmark campaign-finance decision Federal Election Commission vs. Wisconsin Right to Life, the U.S. Supreme Court removed barriers on ads financed by corporations that mention a federal candidate and are run in the days before an election.
James Kahl is the former deputy general counsel at the Federal Election Commission. He and Lawrence Norton, the former general counsel at the Federal Election Commission, lead the Political Law Practice at Womble Carlyle Sandridge & Rice.
James Kahl is the former deputy general counsel at the Federal Election Commission. He and Lawrence Norton, the former general counsel at the Federal Election Commission, lead the Political Law Practice at Womble Carlyle Sandridge & Rice.
This decision freed corporations -- advocacy groups, trade associations, and for-profit businesses -- to pursue more robust communications strategies. But as the Federal Election Commission turns to writing regulations to implement this decision, the extent of advertisers' rights remains in question.

On behalf of an advertising-industry coalition composed of the American Association of Advertising Agencies, the American Advertising Federation and the Association of National Advertisers, I recently filed comments at the FEC. We urged the FEC to free commercial ads from election-law regulation during the crucial pre-election periods. It's the only reasonable way to read the Supreme Court's ruling, and it is a conclusion consistent with the court's long-standing recognition that First Amendment guarantees extend to commercial speech.

Benefit goes to speech
The Wisconsin Right to Life case involved a challenge to the "electioneering communication" provisions of the McCain-Feingold law, which banned corporations and unions from using general-treasury funds to pay for ads on TV, radio or satellite that mention a federal candidate and that are run in the weeks before an election. The Supreme Court concluded that so long as an ad may be reasonably interpreted as something other than an appeal to vote for or against a specific candidate, it is constitutionally protected. In blunt terms, Chief Justice Roberts said, "We give the benefit of the doubt to speech, not censorship."

The FEC began its rulemaking process late this summer. What do commercial advertisers have at stake in this rulemaking? More than might be apparent at first blush.

Many owners and relatives of family-named businesses become candidates for office -- Sen. Herb Kohl, D-Wisc., New York Mayor Michael Bloomberg and the late Sen. H. John Heinz, to name just a few. Should ads for the businesses bearing their names be banned in the blackout periods simply because the business/family name is mentioned? What would the cost of that be for Kohl's department stores? And what about ads for books, movies, and TV programs that mention candidates, political parties or elections? Just recently, Daily Variety reported that HBO Films is shooting a movie about the 2000 presidential election called "Recount," which will air in the heat of the 2008 election. Ads for that film might well depict or mention past and present candidates for federal office. Would such advertising have to cease during the blackout periods?

The FEC may be inclined toward at least some level of protection for commercial ads, as evidenced by the "safe harbor" it has proposed. In our comments, however, we argued that the proposed "safe harbor," while well-intentioned, would leave commercial advertisers unsure if their ads comply with the law.

Not-so-safe harbor
What wouldn't be protected by the FEC's "safe harbor"? Ads for the coming HBO special would be barred if they refer to the 2000 election. Likewise, the FEC's "safe harbor" would not protect an ad for the owner of a car dealer running for Congress that says: "Smith Motors -- a name you've come to trust for a quarter century." Such an ad, in the FEC's view, might be construed as reflecting on the character of the candidate.

This cramped reading of the Supreme Court ruling is neither workable nor consistent with the intent of the decision. The FEC's "safe harbor" protects only ads that could not possibly be construed as concerning an election. Advertisers would air other ads at their peril or be compelled to seek preapproval of their ads from the FEC or from a court. And the stakes are high. Violators of federal campaign-finance laws may face both civil and criminal liability in addition to damaging publicity. That's why we proposed an alternate "safe harbor" that would allow advertisers to easily determine from the ad itself whether it enjoys constitutional protection.

Finally, we urged the FEC that if it agrees with us that the Supreme Court intended to protect commercial ads from regulation, it should not subject commercial advertisers to any reporting obligations. No justification exists for imposing such a burden on advertisers for communications that are unrelated to campaigns.

Whatever measures the FEC adopts, it will have to do so quickly as the first electioneering-communication-blackout periods begin in December. With hearings scheduled for Oct. 17 and 18, the FEC has said it intends to meet an early December deadline.

Commercial advertisers will have to wait until then to see what pitfalls or opportunities lay ahead of them.
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