CU v FEC - Five Years of Freedom

8/9/2019 CU v FEC - Five Years of Freedom

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CITIZENS UNITED v. FEDERAL ELECTION COMMISSION

FIVE YEARS OF FREEDOM

BY MICHAEL BOOS

GENERAL COUNSEL

CHRIS BERG

DEPUTY GENERAL COUNSEL

CITIZENS UNITED


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Dear Citizens United Supporter,

In 2007 all eyes were on Hillary Clinton and her presumptive road to the White House.She appeared to be a juggernaut that could not be toppled. In the eyes of the mainstream pressshe could do no wrong. I knew better.

I had spent the 1990s investigating dozens of Clinton scandals in both the United StatesSenate and House of Representatives.

This was a story that needed to be told.

I had seen liberals turn to Hollywood to advance their agendas. They effectivelyweaponized the film industry. Liberal Michael Moore was successful in bringing his extremistideology to movie theaters across the country with his film Fahrenheit 9/11. I knew that CitizensUnited could be just as effective using film to spread a conservative message.

Our plan was to produce, distribute, and promote a film exposing Hillary Clinton and thepast that the Clinton team and the liberal media tried so hard to cover up. When I took the ideato my lawyers I learned that if Citizens United released this film we could be subject to civilfines, or worse, criminal penalties, including jail timeprison for daring to speak out against theClinton machine.

We could not stay silent. We sued the Federal Election Commission. It took years forour lawsuit to work its way through the legal system, but in the end, what started as our attemptto stand up for the ideas and principles that you and I believe in, resulted in restoring FirstAmendment protections to political speech.

Yours in Freedom,

David N. BossiePresidentCitizens United


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EXECUTIVE SUMMARY

Citizens United did not set out to change the campaign finance landscape, we set out totell a story. Rather than publish a book or a pamphlet our chosen medium was film. In choosingto produce and distribute a film we set in motion a series of events that has toppled overbroad

campaign finance laws and restored First Amendment protections to political speech.

This research paper explores the campaign finance regime that prohibited CitizensUniteds speech, the legal battle which led to the landmark Supreme Court decision in CitizensUnited v. Federal Election Commission, and the impact that the case has had on subsequentelections and speakers.

The paper specifically addresses the following:

The Federal Governments heavy-handed, unconstitutional, attempts to chill theFreedom of Speech. From an outright ban on corporate electioneering, to

burdensome reporting and disclosure provisions the government had gone too far, andCitizens Unitedhelped restore the balance.

Citizens Uniteds long journey through the Court system to restore First Amendmentprotections to political speech. Faced with potential fines and jail time for daring toproduce and distribute a film exploring the record of Hillary Clinton, Citizens Unitedwent to Court to defend our rights and those of our 500,000 members.

Subsequent litigation that has continued to restore First Amendment protections topolitical speech that has built upon and strengthened the principles set forth inCitizens United. Citizens Unitedhas been relied on by numerous courts throughout

the country as grounds for strengthening First Amendment protections.

The changing nature and role of the press and its impact on political speech. For

years, state and federal law had afforded protection to media conglomerates whileignoring citizen journalists. These distinctions no longer apply. Citizens United hasbeen leading this battle and has been recognized by the Federal Election Commissionand the 10thCircuit Court of Appeals as a member of the press.

The impact that Citizens Unitedhas had on subsequent elections. Since the Courtdecision on January 21, 2010 three federal election cycles have passed. While eachcycle showed an increase in spending by outside groups, the data shows that

messaging still matterscontrary to President Obamas warnings, you cant simplybuy an election.

Citizens Uniteds continuing efforts to protect the First Amendment and political

speech, ensure government accountability and transparency, and preventunconstitutional overreach by the President and Executive Branch.


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AN UNCONSTITUTIONAL REGIME

The Federal Election Campaign Act (FECA) was passed in 1971 and laid thegroundwork for much of the campaign finance regime we know today. The Act was signed intolaw by President Nixon in 1972 months before the notorious Watergate burglary and ensuing

scandal. As Watergate played out in the pages of The Washington Post and on nationaltelevision, Americans distrust of the government and elected officials grew.

With President Nixons resignation and the Watergate scandal fresh on their minds, thepublic, and Congress were eager for reform or at the very least measures they hoped mightlead to reform. A citizenry, weary of politicians, desired changes which would help clean upthe political processthey had the best of intentions.

In the wake of Watergate FECA was revised to provide for reporting and disclosure,contribution limitations, and the creation of the Federal Election Commission (FEC).

The scandal prompted Congress to finally tackle these bigger issues about campaigns.As then Sen. Joseph Biden explained, "Watergate isn't the question. Watergate is merelya vehicle through which we can get through what we originally could not get throughbecause the fellows on the other team are in a very compromising position as aconsequence of it." Congress passed legislation that established contribution andspending limits, public financing for presidential elections and an independent electionscommission.1

FECA was intended to regulate political campaigns and campaign related speech. Overthe course of four decades the law had been expanded and came to regulate most speakers whodared utter the name of a candidate. The most radical expansion of FECA was the BipartisanCampaign Reform Act of 2002, better known as McCain-Feingold.

Beyond just regulating the speech of candidates and political committees the federalcampaign finance laws had come to regulate, and in some cases ban, speech by third partyspeakers. Two classes of speech made by third parties were broadly regulated: independentexpenditures and electioneering communications.

An independent expenditureis defined as:

an expenditure by a person(A) expressly advocating the election or defeat of a clearly identified

candidate; and(B) that is not made in concert or cooperation with or at the request or

suggestion of such candidate, the candidates authorized politicalcommittee, or their agents, or a political party committee or its agents.2

Simply put, independent expenditures are advertisements paid for by a third party thatadvocate the success or defeat of a candidate.

1http://www.cnn.com/2012/01/23/opinion/zelizer-campaign-finance-reform/22 USC 431(17).


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An electioneering communicationis defined as:

any broadcast, cable, or satellite communication which(I) refers to a clearly identified candidate for Federal office;(II) is made within

(aa) 60 days before a general, special, or runoff election for the office

sought by the candidate; or(bb) 30 days before a primary or preference election, or a convention

or caucus of a political party that has authority to nominate acandidate, for the office sought by the candidate;3

These advertisements are known as issue ads - rather than urging support or opposition ofa candidate they take a position on an issue and reference a candidate while doing so.

In the 60 days before a general election and the 30 days before a primary election, issueads were heavily regulated. Independent expenditures were regulated year-round. If the speakerwas a corporation, both of these types of speech were generally prohibited. The federal

campaign finance rules included harsh civil penalties for knowing and willful violations of theseprovisions including fines of up to double the amount of any expenditures made.4 The FECcould also refer the violation to the Attorney General for criminal prosecution with the potentialfor jail time.5

As FECA had been amended, regulations enacted, and advisory opinions issued by theFEC, the sheer volume of campaign finance law had grown to a staggering amount. At the timeCitizens United v. FECwas decided the FEC ha[d] adopted 568 pages of regulations, 1,278pages of explanations and justifications for those regulations, and 1,771 advisory opinions since1975.6 It had reached the point where one could not open their mouth without hiring anattorney.

Under this overregulated regime Citizens United, a non-profit corporation (which couldlegally accept corporate contributions), was prohibited from promoting or distributing a film ontelevision which referenced a candidate for federal office. While a corporation like CitizensUnited could not speak, certain corporate speakers, including the mainstream media andHollywood production companies, could still have their voices be heard.

Many of FECAs prohibitions were enacted at troubled times in our nations historywhen public distrust of government was at all time highs. Rather than empower third partychecks on the government, over time the federal campaign finance laws had evolved to silenceindependent speakers. The unfortunate truth is that they have done little to remedy the actual

problems that Congress sought to address. However well meaning they may have been, effortsto criminalize speech and silence speakers are a bastardization of the First Amendment.

32 USC 434(f)(3)(a).42 USC 437g(a)(5)(B).52 USC 437g(a)(5)(C).6Citizens United v. Federal Election Commission. 558 U.S. 310, at 334 (2010).


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THE FIGHT TO SHOW A FILM

Against the backdrop of the federal campaign finance laws, it becomes clear that anyprospective speaker faced an uphill battle. Having to navigate the complex federal campaignfinance laws, rules, and regulations is a challenge to even the most learned of attorneys.

Despite the challenges that stood before us, Citizens United was determined to tell thestory of how Hillary Clinton placed her ambition over principle, politics before honesty and,arguably, self-interest above the law itself. We pressed forward with plans to produce anddistributeHillary: The Moviein late 2007. Mindful that the marketing and distributing the filmon television would have been prohibited under federal campaign finance law, Citizens Unitedfiled suit against the FEC in the U.S. District Court for the District of Columbia. The lawsuitwas filed in December of 2007.

Citizens United challenged the electioneering communications reporting and disclosureprovisions as they applied to the organization and its film. A three judge panel of the District

Court sided with the FEC and went so far as to declare the film express advocacy.

The Movieis susceptible of no other interpretation than to inform the electorate thatSenator Clinton is unfit for office, that the United States would be a dangerous place in aPresident Hillary Clinton world, and that viewers should vote against her.7

The decision set the stage for Citizens Uniteds appeal to the Supreme Court. Aprovision of McCain-Feingold allows a plaintiff an expedited route to the Supreme Court whenchallenging the constitutionality of the statute.8 A plaintiff could request that a three judge panelof the District Court for the District of Columbia hear the case, which would then be directlyappealable to the Supreme Court.

The drafters of the statute intended for the courts to treat these challenges efficiently: Itshall be the duty of the United States District Court for the District of Columbia and the SupremeCourt of the United States to advance on the docket and to expedite to the greatest possibleextent the disposition of the action and appeal.9

For Citizens United, this expedited process took just over two yearsfrom filing toresolution.

Citizens Unitedwas set for oral argument on March 24, 2009. At oral arguments, theoverreaching nature of the campaign finance laws became crystal clear. In response toquestioning by Justice Alito, Deputy Solicitor General Malcolm Stewart argued that Congress

had the power to regulate other media, including booksthe Government literally argued it hadthe ability to ban books!

7Citizens United v. Federal Election Commission. 530 F.Supp.2d 274, at 279 (D.D.C. 2008).8SeeBCRA 403.9BCRA 403(a)(4).


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JUSTICE ALITO: That's pretty incredible. You think that if -- if a book was published, acampaign biography that was the functional equivalent of express advocacy, that could bebanned?

MR. STEWART: I'm not saying it could be banned. I'm saying that Congress couldprohibit the use of corporate treasury funds and could require a corporation to publish it

using its --

JUSTICE ALITO: Well, most publishers are corporations. And a publisher that is acorporation could be prohibited from selling a book?10

The governments position became even more ludicrous, when the question of whether a bookdistributed on an Amazon Kindle was prohibited under the statute.

JUSTICE KENNEDY: Just to make it clear, it's the government's position that under thestatute, if this kindle device where you can read a book which is campaign advocacy,within the 60-30 day period, if it comes from a satellite, it's under -- it can be prohibitedunder the Constitution and perhaps under this statute?

MR. STEWART: It -- it can't be prohibited, but a corporation could be barred from usingits general treasury funds to publish the book and could be required to use -- to raisefunds to publish the book using its PAC.11

As the questioning intensified, the Governments position became laughable:

CHIEF JUSTICE ROBERTS: It's a 500-page book, and at the end it says, and so vote forX, the government could ban that?

MR. STEWART: Well, if it says vote for X, it would be express advocacy and it would

be covered by the pre-existing Federal Election Campaign Act provision.

* * *

MR. STEWART: Yes, our position would be that the corporation could be required touse PAC funds rather than general treasury funds.

CHIEF JUSTICE ROBERTS: And if they didn't, you could ban it?

MR. STEWART: If they didn't, we could prohibit the publication of the book using thecorporate treasury funds.12

Months passed after that day in court. Each day that the Court would meet to releaseopinions, the team at Citizens United eagerly awaited its ruling, and each day we received newsthat the Court had yet to release the opinion. Finally, the last day of the Courts term camearound. The Court had no choice but to issue the opinion that dayCitizens Uniteds President

10Citizens United v. FEC, March 24, 2009 Oral Argument Transcript at 27.11Id at 28-29.12Id at 29-30.


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David Bossie and General Counsel Michael Boos headed to the Court in anticipation of receivingthe decision.

The Court surprised Citizens United and the world, and did not issue an opinion in thecase. Instead, the Court, in an extremely rare action, set the case for rehearing to address a

broader question, whether it should overrule two previous Supreme Court cases which permittedthe government to ban corporate speech based on an anti-distortion rationale. Simply put, doesthe government have an interest in regulating political speech to address the corrosive anddistorting effectsof potentially large expenditures made by corporations?13 Setting the case forrehearing was a break from tradition.

In a Supreme Court term that has had its share of surprises, the court saved one of thebiggest for last. Rather than publish an opinion at the end of the term as expected inan obscure campaign finance case, Citizens United v. FEC, the court issued a rare orderfor reargument of the case in September (before the usual start of the term). At that point,the court will consider whether to overrule its two previous decisions thatin 1990 and 2003 upheld limits on corporate spending in federal elections.14

Further breaking from tradition, the Court set oral arguments for September 9, 2009,nearly one month before the Courts traditional first Monday in October start date. When theparties returned to Court, the United States had chosen to rely on then Solicitor General ElenaKagan, perhaps in an attempt to distance themselves from Mr. Stewarts previous enthusiasm forbanning books.

Kagan continued the Governments defense of the overbroad prohibition on politicalspeech. She argued that corporations must be subject to special rules when they participate inelections.15 In an argument littered with references to 100 years of precedent (which she concededwas in reality less than 60) and references to corruption, Kagan also fell down the book banning

rabbit hole. She argued that:

We went back, we considered the matter carefully, and the government's view is thatalthough 441b does cover full-length books, that there would be quite good as-appliedchallenge to any attempt to apply 441b in that context. And I should say that the FEC hasnever applied 441b in that context. So for 60 years a book has never been at issue.16

In essence, yes the government can ban books, but trust us, we wont. After this line ofquestioning, the result of this case was almost certainthe Court was never going to endorsegranting the federal government unchecked power to regulate speech.

Chief Justice Roberts was quick to rebuke then Solicitor General Kagan: we don't put our -

- we don't put our First Amendment rights in the hands of FEC bureaucrats.17

13Austin v. Michigan Chamber of Commerce, 494 U.S. 652, at 660 (1990).14The Supreme Court Gets Ready to Turn on the Corporate Fundraising Spigot.http://www.slate.com/articles/news_and_politics/jurisprudence/2009/06/the_supreme_court_gets_ready_to_turn_on_the_corporate_fundraising_spigot.html15Citizens United v. FECSeptember 9, 2009 Oral Argument Transcript at 35.16Id at 65.17Id at 66.


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When the Citizens Uniteddecision was finally announced on January 21, 2010, itreverberated throughout the nation. The Court went beyond just declaring that Citizens Unitedand its film were exempt from the restrictive campaign finance laws, the Court held that becauseelectioneering communications and independent expenditures are not done in coordination with acandidate they are not a corrupting influence on a candidateas a result the bans on corporate

and union independent expenditures and electioneering communications were struck down.

Because of the Citizens Uniteddecision a wide range of previously silenced speakers hadtheir voices restored. Citizens could band together and speak with one voice. Other speakers,including small business owners, mom-and-pop shops, corporations, and labor unions also hadtheir First Amendment rights restored.

The decision was met with loud criticism from the Left. Senator Chuck Schumer deridedthe decision, stating:

With a stroke of a pen, the court decided to overrule the 100-year-old ban on corporateexpenditures and override the will of millions of Americans who want their voices heardin our democracy.18

Schumers inflammatory statements missed the mark. His 100 year claim has beendisproven.19 He was joined by then Senator Russ Feingold, who argued that Citizens Unitedwould result in corporate bullying of elected officials:

This decision gives a green light to corporations to unleash their massive coffers on thepolitical system. The profits of Fortune 500 companies in 2008 alone were 350 times theentire amount spent on the last presidential election.

Oil companies, with virtually no harm to their balance sheets, can now try to "take out"

members of Congress who don't toe their company line on energy policy.20

In the years following the decision liberal legislators like Senator Tom Udall have goneso far as to propose amendments to the United States Constitution to overturn Citizens United.

While these liberals were quick to decry Citizens United, in the five years that havefollowed the decision they cannot cite a single example of a Member of Congress beingcorrupted by independent expenditures. There is no evidence whatsoever to validate Schumersor Feingolds dire warnings of Congress being bought and paid for by corporate intereststhispurported corruption just does not occur.

The Left was eager to fight the decision because they knew that in striking down therestrictive campaign finance laws and restoring First Amendment protections to political speech,the Court had leveled the playing field. Speakers, whether individuals, corporations, or unions

18Statement of Senator Charles Schumer, January 21, 2010.19http://www.politifact.com/truth-o-meter/statements/2010/jan/22/charles-schumer/campaign-finance-ruling-united-citizens-historical/20http://www.washingtonpost.com/wp-dyn/content/article/2010/01/22/AR2010012203874.html


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were now subject to the same standardsregardless of their identity. This would have aprofound impact in the years to come.

CONTINUING TO ADVANCE FREEDOM IN THE COURTS

Citizens Unitedwas a tsunami that rocked the campaign finance world. It engenderedsuch strong feelings that President Obama decried the decision during his State of the Unionaddress and sought to turn the 2010 midterm elections into a referendum on the case:

With all due deference to separation of powers, last week the Supreme Court reversed acentury of law that I believe will open the floodgates for special interests- includingforeign corporations- to spend without limit in our elections. I don't think Americanelections should be bankrolled by America's most powerful interests, or worse, by foreignentities. They should be decided by the American people. And I'd urge Democrats andRepublicans to pass a bill that helps to correct some of these problems.21

President Obamas accusations have been thoroughly debunked. American elections

have not been bought and paid for by foreign nationals or foreign corporations. Beyond that, thefear-mongering didnt work. Americans did not view the 2010 elections as a referendum onCitizens Unitedor campaign finance lawand if they did, they came down firmly against thePresidents position.

While liberals have sought to turn Citizens Unitedinto a dirty word, conservatives havecontinued the fight to protect the First Amendment in the courts. Three notable cases have builtoff of the Citizens Uniteddecision and further crystallized its precedential value.

SpeechNow v. FEC

Just two months after the Citizens Uniteddecision was released, the U.S. Court ofAppeals for the District of Columbia Circuit as applied its precedent. In SpeechNow v. FEC,theD.C. Circuit had to address whether a political action committee that limited its activity tomaking independent expenditures would itself be subject to contribution limits. Due to theCitizens Uniteddecision the Court reached a very straightforward answer:

Because of the Supreme Courts recent decision in Citizens United v. FEC, the analysis isstraightforward. There, the Court held that the government has no anti-corruption interestin limiting independent expenditures

* * *

In light of the Courts holding as a matter of law that independent expenditures do notcorrupt or create the appearance of quid pro quo corruption, contributions to groups thatmake only independent expenditures also cannot corrupt or create the appearance ofcorruption. The Court has effectively held that there is no corrupting quid for which acandidate might in exchange offer a corrupt quo.

212010 State of the Union Address.


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Given this analysis from Citizens United, we must conclude that the government has noanti-corruption interest in limiting contributions to an independent expenditure groupsuch as SpeechNow.22

The D.C. Circuits decision to eliminate contribution limits to committees that only madeindependent expenditures resulted in the FEC creating a new class of registrants, IndependentExpenditure Only Committees (IEOCsor more commonly Super PACs). Subsequentlitigation has also allowed traditional political action committees to open separate bank accountsto raise funds for independent expenditures that are not subject to contribution limits.23

American Tradition Partnership v. Bullock

From the date Citizens Unitedwas decided it was the law of the land. The decisionplaced a limit on what the federal government, state governments, and regulatory bodies coulddo to regulate speech. It was settled, everywhere -- except Montana.

InAmerican Tradition Partnership v. Bullock24the Supreme Court of the State of

Montana had to address whether Montanas ban on corporate political speech could stand in thewake of Citizens United. Despite the Supreme Court invalidating bans on independent politicalspeech by corporations, the Montana Supreme Court upheld the law:

Citizens Uniteddoes not compel a conclusion that Montana's law prohibiting independentpolitical expenditures by a corporation related to a candidate is unconstitutional. Rather,applying the principles enunciated in Citizens United, it is clear that Montana has acompelling interest to impose the challenged rationally-tailored statutory restrictions.25

The plaintiff, American Tradition Partnership rightly appealed the case to the SupremeCourt. Citizens United, aware that liberal judicial activists would encourage the Court to

overturn the Citizens United decision weighed in with an amicus brief.

This case was over before it even began. The Supreme Court did not even hear oralarguments in the case. It summarily reversed the Montana Supreme Court in a one-page percurium opinion:

The question presented in this case is whether the holding of Citizens United applies tothe Montana state law. There can be no serious doubt that it does. See U. S. Const., Art.VI, cl. 2. Montanas arguments in support of the judgment below either were alreadyrejected in Citizens United, or fail to meaningfully distinguish that case.

The petition for certiorari is granted. The judgment of the Supreme Court of Montana isreversed.26

22SpeechNow.org v. Federal Election Commission. 599 F.3d 686 (D.C. Cir 2010).23Carey v. Federal Election Commission. 791 F.Supp.2d 121 (D.D.C. 2011).24American Tradition Partnership, Inc. v. Bullock(2012).25Western Tradition Partnership, Inc. v. Bullock. 271 P.3d. 1, at 13 (Mont. 2011).26American Tradition Partnership, Inc. v. Bullock(2012).


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member of the press. Just as the First Amendment protects the Freedom of Speech, it alsoprotects the Freedom of the Press. The Supreme Court has recognized that:

In the First Amendment the Founding Fathers gave the free press the protection it musthave to fulfill its essential role in our democracy. The press was to serve the governed,not the governors.The Government's power to censor the press was abolished so thatthe press would remain forever free to censure the Government. The press wasprotected so that it could bare the secrets of government and inform the people.Only a free and unrestrained press can effectively expose deception in government(emphasis added). 29

The Freedom of the Press is clearly established in the First Amendment and our nationshistory. However, the press at the time of our nations founding was far different from thepress we are familiar with today. At that time it was far more common for the press to consistof a solitary figure, like Thomas Paine, distributing his ideas to the public as a pamphleteer.

The Founding Fathers put their words to paper and distributed them anonymouslylook

no further than Alexander Hamilton, James Madison, and John Jay who penned the FederalistPapers under the name Publius. A far cry from ABC, NBC, or the New York Timestheserevolutionaries spread their message from patriot to patriot. Citizens United carries on in thetradition of these citizen journalistsrather than spreading news through a pamphlet, it does sothrough film and the internet.

At the time of the Citizens Uniteddecision, noted campaign finance attorney CletaMitchell addressed the nature of the modern corporation-dominated press:

The Supreme Court has correctly eliminated a constitutionally flawed system thatallowed media corporations (e.g., The Washington Post Co.) to freely disseminate their

opinions about candidates using corporate treasury funds, while denying thatconstitutional privilege to Susie's Flower Shop Inc.30

Under federal campaign finance laws, the definition of electioneering communicationincludes an exception for a communication appearing in a news story, commentary, or editorialdistributed through the facilities of any broadcasting station, unless such facilities are owned orcontrolled by any political party, political committee, or candidate.31 Similarly, statements bythe press are excluded from the definitions of expenditure and independent expenditure.32 Whilesuch exemptions are in keeping with the First Amendment and the Freedom of the Press, findingan effective way to implement them has proven difficult and often resulted in discriminatoryresults that favor one class of speakers over another.

The FEC has a process known as an advisory opinion wherein an entity can petition theCommission for recognition as a media entity. This process, when properly exercised,

29New York Times v. United States. 403 U.S. 713, at 717. (1971).30http://www.washingtonpost.com/wp-dyn/content/article/2010/01/22/AR2010012203874.html312 USC 434(f)(3)(b)(1).322 USC 431(9)(B)(i).


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provides a relatively convenient means for determining whether a speaker will be subjected toburdensome campaign finance regulations or exempted as a media entity.

In 2004 Citizens United sought a media exemption from the FEC to produce anddistribute a film on the life and career of then presidential candidate John Kerry. The FEC

denied Citizens Uniteds request. The Commission made a value judgment in denying CitizensUniteds request, in essence finding that Citizens United had made too few films at the time toqualify:

[T]he Commission concludes that the proposed Film would not be entitled to the mediaexception. Citizens United does not regularly produce documentaries or pay to broadcastthem on television. In fact, the information that you provided indicates that CitizensUnited has produced only two documentaries since its founding in 1988.33

In 2010, after having defeated the FEC at the Supreme Court, Citizens United againasked the Commission to recognize its status as a media entity. This time, with at least 14 filmsin our repertoire, and a Supreme Court victory, Citizens United was declared a media entity, and

its costs for producing and distributing its films were excluded from regulation as expenditures,independent expenditures or electioneering communications.34

Despite having been granted the federal media exemption Citizens United has had tocontinue fighting for recognition as a media entity in the states. For example, the State ofColorados media exemption was written so narrowly that absent ownership of a printing pressor a broadcast station, one would not qualify.35

Colorado defined media as though they had taken a photograph in 1970ignoring whathad come before, including the role that film historically played in conveying news footage, andfailing completely to acknowledge what had come since. The concept of media has evolved as

technology has lessened the impact and reach of traditional print and broadcast mediatodayblogs, live streaming, and even Twitter reach greater audiences than the evening news or theprint edition of The Washington Post. In essence weve embraced a new media culture whereyou report and you decide.

In Colorado, the Secretary of State administers that statesburdensome and complexcampaign finance regulatory regime. Similar to the FEC advisory opinion process, the Secretaryof State has a mechanism for obtaining an advance ruling on the application of the statescampaign finance laws to a proposed undertaking. But when Citizens United petitioned for aruling that a forthcoming film about Colorado politics would be exempt from the regime underthe states media exemptions, the Secretary ruled that the film was not exempt because the

exemptions applied only to printed publications, such as The Denver Post, and broadcastfacilities, such as a television station.

33AO 2004-30.34AO 2010-08 Citizens United.35Colo. Const. art. XXVIII, 2(7)(b);see also Colo. Rev. Stat. 1-45-103(9).


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Despite Citizens Uniteds robust history as a film studio, having produced twenty fourfilms, having secured a victory at the Supreme Court, and having received the federal mediaexemption, Citizens United would be subject to campaign finance reporting and disclosure itpromoted or distributed its film,Rocky Mountain Heist, in Colorado. Refusing to stay silent,Citizens United continued the fight for the First Amendment in court.

In filing its lawsuit, Citizens United is fighting to reconcile the law with what weall know to be fact: The media is changing. We've watched it evolve fromtraditional printed newspapers to radio, television, bloggers and film.

To impose campaign finance reporting obligations on one class of media entitieswhile protecting others is both discriminatory and wrong.

Congressman Ken Buck (CO-4)36

After losing at the trial court, Citizens United appealed and had its rights vindicated bythe 10thCircuit U.S. Court of Appeals, which held the First Amendment requires the Secretary

to treat Citizens United the same as exempted media. Thus, Citizens United was able to releaseand promoteRocky Mountain Heist in Colorado in the days leading up to the 2014 elections.

The question of who, or what entities, are members of the media still has yet to be firmlyresolved. Undoubtedly additional litigation will arise. It wont be confined to the realm ofcampaign finance. This question strikes at the heart of the First Amendment. Certainly thefreedom of the press, the reporters privilege, and to what extent they extend beyond traditionalnews sources to new forms of media, including modern citizen journalists like bloggers will needto be resolved in short order.

THE FREEDOM OF SPEECH IN THE CITIZENS UNITED ERA

While Citizens United has continued to cement its position as the nationspremierconservative filmmaker, a slew of other independent speakers have joined the public debate nowthat the Citizens Uniteddecision has restored their First Amendment rights.

At least $560 million in outside spending occurred in the 2014 election cycle.37Approximately $300 million was spent by conservative groups and $225 million by liberals.This is an increase over the nearly $310 million spent in the first post-Citizens United midtermelection in 2010, and the $69 million spent in last pre-Citizens Unitedmidterm election in2006.38 While these total numbers are large they pale in comparison to the $2.5 billion spent onHalloween candy each year or the billions of dollars in advertising revenue spent by McDonalds,

General Motors.

39

36http://www.denverpost.com/opinion/ci_26606922/ken-buck-democrats-chill-free-speech-by-halting37https://www.opensecrets.org/outsidespending/cycle_tots.php38Id.39http://nypost.com/2014/10/12/halloween-candy-sales-expected-to-top-2-5b/

http://www.businessinsider.com/the-35-companies-that-spent-1-billion-on-ads-in-2011-2012-11?op=1
http://nypost.com/2014/10/12/halloween-candy-sales-expected-to-top-2-5b/http://nypost.com/2014/10/12/halloween-candy-sales-expected-to-top-2-5b/http://nypost.com/2014/10/12/halloween-candy-sales-expected-to-top-2-5b/http://nypost.com/2014/10/12/halloween-candy-sales-expected-to-top-2-5b/


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A 2014 study evaluated the impact of post Citizens Unitedspending on state legislativeraces.40 The results founds that Citizens Unitedis associated with an increase of approximatelysix percentage points in the probability that a Republican candidate is elected in state legislativeraces. Furthermore the study found that Citizens Unitedis associated with a statisticallysignificant increase of approximately four percentage points in the probability that a Republican

candidate is elected in state House Races. These numbers were so pronounced thatRepublicans took control of an unprecedented 69 of 99 statehouse chambers in the [2014]midterm elections.41Thats a marked shift from the 36 chambers Republicans controlled duringthe 2009 legislative session.42

Outside spending in politics has increased, and made an impact. Before Citizens Unitedpolitical speech was heavily tilted in favor of incumbents. Sitting legislators and partycommittees had a built in advantage. Its far easier for an incumbent to raise funds in $2,600increments than for an unproven challenger. Incumbents can exercise their influence to open thewallets of donors and special interests.

Independent voices had been silenced by lawmakers sitting in Washington and statecapitals eager to shut down those who dare oppose them. Thats not to even mention the built inadvantage of federal legislators ability to send franked mail to promote their successes to theirconstituentsthey can legally send out self-serving promotional materials to their constituents,paid for by the taxpayers.

Challengers were traditionally the odd man out. Post Citizens Unitedadditionalresources could be spent by independent groups to break this stranglehold incumbents held onWashington and in State Houses throughout the nation.

The Revolution (2010)

Midterm elections are often yawn-inducing. They tend to have low turnout, low energy,and generate little excitement. The 2010 elections were a different story. Outraged by the liberalpolicies of President Barack Obama such as the Affordable Care Act (commonly known asObamaCare) an energized and vocal group burst onto the scene. This group of Tea Partyactivists brought an injection of energy to races across the nation. Their message was simple:

Washington is horribly broken. We are encountering a day of reckoning and thismovement, this Tea Party movement, is a message to Washington that we're unhappy andthat we want things done differently.

Dr. Rand Paul.43

The ability of these activists to join together, raise funds, and fight for core conservativevalues was made possible by Citizens United. Among the groups leading the Tea Party

40http://www.ualberta.ca/~klumpp/docs/cu.pdf41http://www.nytimes.com/2014/11/30/us/gop-gains-by-tapping-democrats-base-for-state-candidates-.html?ref=politics&_r=142http://www.ncsl.org/documents/statevote/LegisControl_2009.pdf43Dr. Rand Paul, Primary Victory Speech, May 18, 2010.


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movement, many were 501(c)(4) non-profit organizations recognized by the IRS. These groupsincluding Freedom Works and Americans for Prosperity were able to make their voices heardusing the rights restored by Citizens Unitedand they whole-heartedly embraced those rights.

In 2010 nearly $310 million was spent by

outside groups.

44

The underlying numbers show thatconservative groups were better prepared and eagerto exercise their restored rights than liberals.Conservative groups spent approximately $190million compared to liberals $105 million.45 $310million was a dramatic increase from the $69 millionspent by outside groups in the last pre-Citizens Unitedmidterm election.46

This Tea Party revolution transformed the House of Representatives and helped set thestage for future wins in the Senate. Republicans gained sixty four seats in the House. This waveelected conservative leaders to Congress including Allen West (FL) and Tim Scott (SC). This

was the single biggest Republican increase since 1938.

47

Not only were the gains widespread, the candidates who were elected were moreconservative. The Tea Party embraced conservative principles and ideas, and they sought outand supported true conservatives. 2010 saw the election of Senators Rand Paul in Kentucky,Ron Johnson in Wisconsin, and Marco Rubio in Florida. One of the more interesting races sawMike Lee, a conservative attorney, challenge and defeat the sitting Senator from Utah, BobBennett, in a heated primary convention. The outside spending in these Senate races showed anuptick: $10 million was spent in Kentucky; $10 million in Florida; and $5 million inWisconsin.48

The Tea Party proved it could win in general elections, but also fought hard to make surethe Republican Party selected true conservatives in their primaries. In his victory speech SenatorPaul described the results as a Tea Party tidal wave, and were sending a message.49

Washington, D.C. heard their message loud and clear. Americans were fed up and notwilling to accept the liberal, big-government, status quo anymore. This sort of revolution wouldnot have occurred without the First Amendment protections restored by Citizens United.

The Most Expensive Election in History (2012)

Just as 2010 showed a significant increase in outside spending, 2012 broke all of therecords. In 2012 outside spending crossed $1 billion.50 Of that spending, $720 million wasspent by conservative interests as compared to nearly $300 million spent by liberals.51

44https://www.opensecrets.org/outsidespending/cycle_tots.php45https://www.opensecrets.org/outsidespending/cycle_tots.php46Id.47Time for Republicans to Deliver. Karl Rove. http://www.rove.com/articles/26548https://www.opensecrets.org/outsidespending/summ.php?cycle=2010&disp=R&pty=A&type=A49Senator Rand Paul, Victory Speech, November 2, 2010.50https://www.opensecrets.org/outsidespending/cycle_tots.php

2010 FEDERAL ELECTIONS

REPUBLICAN DEMOCRATSENATE 47 51

+6 -6

HOUSE 242 193

+64 -64


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Much of the funds were spent on the presidential election. Conservative outside spendingapproached $420 million, while liberals spent $130 million.52 These numbers helped bridge thefunding advantage that President Barack Obama enjoyed over Republican Challenger MittRomney. Obama raised nearly $270 million more than Romney, and spent over $250 millionmore than his challenger.53

Among the innovations in the 2012 cycle was the creation of candidate specific SuperPACs. Most of the top-tier Republican candidates for president had their primary effortsbolstered by independent groups that were able to raise unlimited funds to support their races.Speaker Newt Gingrich was supported by Winning Our Future. Make Us Great Again supportedTexas Governor Rick Perry. Candidate specific Super PACs were initially attacked by the Leftas an end run around contribution limits.

Further indicating that candidate-specific super PACs are being used to end-runtraditional campaign contribution limits, a new analysis finds that Restore Our Future, thesuper PAC formed to support former Massachusetts Governor Mitt Romney's candidacyfor president, is being primarily funded by donors who have already maxed out on direct

contributions to Romney's campaign.54

Its natural for maxed out donors to drive their support to Super PACs, even wealthy liberals doso. If the Left would rather the funds go to candidates there is a simple solutionraise candidatecontribution limits.

Since 2012 these candidate Super PACs have become commonplace. In the generalelection Mitt Romneys efforts were bolstered by Restore Our Future ($142 million), whileBarack Obama was backed by Priorities USA Action ($65 million).55 Despite these large sumsof money, Romney did not prevail over Obama. The outside spending made possible by CitizensUnitedwas unable to tilt the election in favor of Mitt Romney. While money is an important

tool in any election, it is not the be-all and end-all.

Independent conservative groups are going to have to come to terms with the fact thatthey spent more than $700 million70 percent of all of the reported independentspending in the 2012 electionand walked away with little to show for it.

Republican presidential candidate Mitt Romney was supported by outside groups thatoutspent allies of President Barack Obama by $260 million. And yet he still lost.56

The real story of 2012 was found in Senate races across the country - principle mattered.Regardless of party, voters were eager to embrace strong-minded, principled, candidates whoclearly articulated their beliefs. For the Republicans, the superstar was Ted Cruz, who ran for

51Ibid.52https://www.opensecrets.org/pres12/#out53https://www.opensecrets.org/pres12/#out54Candidate-Specific Super PACs Offer End Run For Maxed-Out Donors: Study Dan Froomkin.http://www.huffingtonpost.com/2011/10/04/candidate-specific-super-pacs-donors_n_994260.html55https://www.opensecrets.org/pacs/superpacs.php?cycle=201256Super PACs, Outside Money Influenced But Didnt Buy The 2012 Election. Paul Blumenthal.http://www.huffingtonpost.com/2012/11/07/super-pacs-2012-election-outside-money_n_2087040.html


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the Senate in Texas. Cruz, the former SolicitorGeneral of Texas, handily defeated the sittingLieutenant Governor David Dewhurst in a primaryrunoff by a margin of 57% to 43%. Cruzs boldprinciples and positive agenda carried the day.

On the other side of the aisle, liberals hungtheir hat on the Senate campaign of Elizabeth Warren in Massachusetts. Warren ran arelentlessly liberal campaign and prevailed. Over $4 million in outside spending was focused onthis Massachusetts Senate seat.57

The Wave (2014)

The dust is just beginning to settle on the 2014 elections. Its too early to fully evaluatethe true impact of outside spending on results in key House and Senate races. What we do know,is that Citizens United v. FECallowed for greater participation in the electoral process.

In 2014 at least $560 million was spent by outside groups (excluding the political partycommittees). That number is a dramatic increase over the funds spent in the 2010 midtermelection. Spending went from approximately $310 million to $560 millionor a 45% increase.This shows increased participation in the political process. Those who invested in the politicalprocess did so wisely. Funds were directed to states where they could make an impact: $80million was spent in North Carolina, nearly $70 million in Colorado, and $60 million in Iowa.58

These independent voices and their messages helped voters send once powerfulDemocrats like Kay Hagan (NC), Mark Pryor (AR), Mark Begich (AK), and Mary Landrieu(LA) into retirement. Independent speech has made it possible to defeat entrenched incumbents,much to the chagrin of party leaders.

Senate Majority Leader Harry Reid saw this comingfor quite some time. What else could explain histaking to the Senate Floor numerous times to attackoutside spending, and seeking to blame all the ills ofthe world on the Koch brothers.59 He sought to stemthe influence of outside speech by giving it a face andattempting to demonize ithe failed. Not only that,

he failed to grasp what issues matter to the American public. Reid, like Obama before him, triedto turn the election into a referendum on campaign finance law and outside speech; it was adesperate tactic they turned to when they could no longer defend their failed liberal agenda.

The 2014 elections showed a Republican wave with Senate candidates like Tom Cotton(AR) or Joni Ernst (IA) winning decisively. There were however many tight races that weredetermined by a point or two. In close races like the victory of Thom Tillis over Kay Hagan in

57https://www.opensecrets.org/outsidespending/summ.php?cycle=2012&disp=C&type=A58https://www.opensecrets.org/outsidespending/summ.php?disp=R59http://www.politico.com/story/2014/07/harry-reid-koch-brothers-108632.html


REPUBLICAN DEMOCRAT

SENATE 47 51

-2 +2

HOUSE 234 201

-8 +8


REPUBLICAN DEMOCRAT

SENATE 54 44

+9 -9

HOUSE 247 188

+13 -13


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North Carolinas Senate race, or in closely contested House races, the impact of Citizens Unitedand independent speech cannot be discounted. The voice of the people has been restored, andtheyve taken to the megaphone to make sure their voices are heard.

Where outside spending gave voice to what Americans have been thinking and feeling it

had a tremendous impact. Super PAC and 501(c)(4) advertising that represented the interestsand values of an electorate eager for meaningful change helped secure victories. Look no furtherthan advertisements run by Americans for Prosperity highlighting Democrat candidates supportfor President Obama and his failed policies in Georgia and North Carolina, or the advertisementsCitizens United Political Victory Fund ran in Arkansas highlighting Mark Pryors lax attitudetowards securing our borders.

These are examples of grassroots organizations, supported by millions of freedom lovingAmericans, speaking out and having their voices heard. These messages spoke to voters andconnected with them because they focused on issues that matter to real people. Americans arehungry for leadership. They want a government that enacts policies that allow individuals to

succeed rather than trap them in a cycle of dependency. Channeling that voice undoubtedlyhelped sway what could have otherwise been tight races in states like Arkansas, Colorado,Georgia, and Iowa.

Where outside spending merely gave voice to liberal special interests it overwhelminglyfailed. Out of touch elites like Tom Steyer spent millions on pet projects such as NextGenClimate that were attempts to shove a liberal agenda down the throats of voters who were neitherhungry nor eager for it. Its reported that Steyer spent $57 million of his own dollars across thecountry, with barely any results to show for it.60

Similarly, the liberal elites who backed the Mayday PAC failed miserably. DespiteHarvard Professor Larry Lessigs aggressive attempts to woo media attention to his liberalagenda, Americans were not moved by a Super PAC that existed to oppose money in politics.This effort squandered $10 million on an issue that did not resonate with voters.61

The takeaway is simple, the message matters. Citizens Unitedrestored voices andopportunities for Americans to speak out against a government run amok. Liberal elites, despitetheir best efforts, could not hijack this election from the millions of hard working Americanswho stood up for what they believe in. Citizens Unitedallowed citizens to stand together anddemand real change. On Tuesday November 4, 2014 they got it.

60http://www.nationaljournal.com/energy/tom-steyer-spent-74-million-on-the-election-he-didn-t-get-much-to-show-for-it-2014110561http://www.politico.com/story/2014/11/2014-elections-mayday-pac-larry-lessig-112617.html


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THE LONG LOUD ROAD AHEAD

When the Citizens Uniteddecision was announced on January 21, 2010 it made animpact. It changed the way elections are conducted by restoring the voices of millions ofAmericans who wished to join together and speak with one voice. It allowed independent

speakers to break the stranglehold that entrenched establishment incumbents held over ourpolitical system.

When Citizens United went to court to defend our First Amendment rights and those ofour 500,000 members few others were willing to stand with us. We embarked on a long andcostly legal battle to defend the Freedom of Speech, confident that the Constitution was on ourside. We know firsthand the critical role the courts play in defending liberty.

This important victory was a new beginning. While the case was the end of CitizenUniteds multi-year effort to broadcast a film, it also helped define Citizens Uniteds missiongoing forward. There are still important battles to be waged and we will not stand idly by while

liberal activists work to encroach on our rights and freedoms.

Defending the First AmendmentWhere states or the federal government seek totrample on the Freedom of Speech, Citizens United has taken action. Currently CitizensUnited is fighting outdated campaign finance regulations in Colorado that silencepolitical speech. Weve secured an important victory at the 10thCircuit, but the battlecontinues. Were also leading the charge to protect our donors right to privacy by suingNew York State. The New York Attorney General had demanded Citizens United andother non-profits turn over their confidential donor information, which would have achilling effect on speech and the freedom of association.

Holding the Government AccountableTransparency in government helps citizenshold officials accountable. Citizens United has filed dozens of Freedom of InformationAct (FOIA) requests with various government agencies seeking disclosure of publicrecords. Where the government has failed to meet its legal obligations under FOIA,Citizens United will sue to compel disclosure. The publics watchful eyes serve as animportant check on government power, and only through monitoring its activities can weensure that it stays true to the principles we hold dear.

Preventing Executive OverreachPresident Obama is determined to finish his term in

office ruling by fiat, legislating from the Oval Office by Executive Order, rather thanrespecting the Constitutions separation of powers. Where Obama ignores Constitutional

limits and usurps legislative powers, we must work aggressively to blunt his overreach.

Continuing to Spread Conservative Ideas Through FilmIn the years since theSupreme Court decision in Citizens Unitedwe have continued to tell impactful storiesthrough film. Through our films weve given a voice to conservatives and helped spreadtheir message of the importance of free market economic principles, the need for a strongnational defense, and conservative family values. Thanks to our decisive victory at theSupreme CourtHillary: The Sequelwill be coming soon to theaters across the country.

CU v FEC - Five Years of Freedom

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