This morning the Senate Judiciary Committee Subcommittee on Crime and Terrorism held a hearing on “Current Issues in Campaign Finance Law Enforcement.” The focus of the hearing was what the Department of Justice and Internal Revenue Service are doing to enforce campaign finance law violations post-Citizens United with respect to contributions to Super PACs and 501(c)(4) organizations. (As a refresher, our Primer on Super PACs can be found here.)
Chairman Sheldon Whitehouse (D-RI) opened the hearing by implying the current state of enforcement is making a mockery of campaign finance laws. Specifically, Chairman Whitehouse is concerned that the DOJ and IRS are not adequately prosecuting the violation of false statement statutes in applications for tax-exempt status, the coordination of activities between Super PACs and campaigns, and contributions to Super PACs through shell corporations.
Mythili Raman, Acting Assistant Attorney General of the Criminal Division, testified that DOJ’s primary challenge in the post-Citizens United landscape is showing coordination between Super PACs and campaigns. She said DOJ’s challenge is to understand when an independent expenditure is not independent. When there is coordination, the so-called independent expenditure becomes an illegal contribution to get around contribution limits. She said it would be “exceedingly difficult” for DOJ to prove whether and when a Super PAC and campaign engage in coordination due to current FEC regulations and MURs.
Senator Ted Cruz (R-TX) pressed Raman for the government’s interest in regulating independent expenditures. Raman said the government’s primary interests are corruption, bribery, and violations of campaign contribution limits. Raman said the government’s primary purpose was to ensure campaign contribution limits are robustly enforced and DOJ is “simply hampered” from doing that without i) a clear and common-sense understanding of what coordination is and ii) adequate transparency. She added that DOJ advocates for a reasonable disclosure regime that balances the need for people to speak freely and have their voices heard in the political arena with the need to combat corruption.
With respect to the IRS, Chairman Whitehouse said the IRS is not particularly well-suited or well-staffed for campaign finance investigations and suggested the DOJ and IRS work together to re-think how election laws are prosecuted. The Chairman advocated that DOJ should not wait for referrals from the IRS to prosecute campaign finance violations because – unlike other complicated criminal tax matters – campaign finance violations do not require the expertise of IRS investigators.
The testimony from all witnesses at the hearing is available here.