The Intimidation Game

by Kimberley Strassel

  Both Brad Smith and Don McGahn make similar points. The left might wish the FEC were more powerful, but in truth the place is plenty powerful already. It freaks out even seasoned campaign lawyers. The mere suspicion that the FEC is gunning for one side and running unauthorized investigations is enough to alter actions and chill speech.

  McGahn says that to him the bias is as concerning as outright targeting. “The hard-left elites think regulation is always the answer, and that people need to be controlled. And in their view, whatever the left does is for the greater good, whereas the people who aren’t playing by the rules are the people on the right. Those folks annoy and scare them. Lots of the lawyers who end up at the FEC are typical ruling-class elites who view conservatives as backwoods simpletons who aren’t smart enough to appreciate all that leftist progress can offer. I was certainly treated that way—because I am Republican, I was dumb, I was a rube, unable to grasp their ‘big thinking.’

  “And in a way that is more scary. I’d love to say what goes on is simple partisanship—a desire to ‘get’ the right. But it’s deeper than that. It’s a way of thinking, and in some manner, that’s far more troubling, and a worrisome use of government power.”

  This was McGahn’s insight: that the institution itself needed an overhaul. He’d already witnessed that the staff was primed for action, and willing to take it when nobody was looking. He worried that it might not take much for the place to ramp up into a full-scale IRS-like targeting operation.

  * * *

  A lot of Republican commissioners arrive at the FEC hopeful of getting rid of this or that stupid finance regulation. They quickly discover that getting four commissioner votes to change existing regulations is usually impossible, and whatever change happens quickly disappears after they leave. McGahn decided to focus on the FEC itself. He knew he could expose the FEC staff’s behavior; he knew he could tell them not to do it. But given their overwhelming belief in their rightness, and given that bureaucracies operate in the dark, he knew it would just happen again. So instead of focusing on this rule or that enforcement case, McGahn did something very un-Republican (and more like what Democrats do): He focused on reforming the process.

  And so he began a years-long battle to change internal FEC procedures. He won several victories, at least on issues that Democrats struggled to defend against. By the time the Republican left the FEC in 2013, the agency had far greater requirements for transparency and due process. Groups that were audited were finally allowed to formally tell their side of the story—which they’d never been able to do before. Groups that were the subject of the complaints were finally allowed to answer queries from commissioners in real time—rather than watch them talk, which is how it had always been.

  But McGahn never got his top priority. He sweat blood and tears, working for years to revise the agency’s official enforcement manual, thereby putting the reins back on the staff and the commissioners back in control. It was an effort to get “a hold of the process, which was simply rigged,” he says.

  His push for a new enforcement manual set the left howling that he was attempting to “block enforcement” and “weaken the agency.” The Republican notes that he didn’t want to stop investigations or even stop interaction with Justice. As he says, his only goal was to clarify who got to make the decisions: “The presidentially appointed, Senate-confirmed commissioners, who answer to the public, or an unaccountable staff?” The left wants the latter, since it provides more running room to harass conservative groups that engage in free speech.

  McGahn’s drama over the enforcement manual hit fever pitch in the summer of 2013, in the wake of the Lerner scandal. The Republican gave it one last hurrah, ramping up his reform efforts internally. His new manual proposed to halt staff’s unsanctioned interaction with other agencies and require Justice to file written requests or subpoenas to the FEC if it wanted to lay hands on internal documents—which was simply a return to the process of years past. It also would have truly limited staff’s ability to launch sweeping investigations without the commission’s say-so.

  The push inspired Herman, the general counsel, to write a long memo opposing McGahn’s changes, a document quickly made public. Herman, hilariously, argued that the staff was better placed to make decisions than the commissioners. His precise words were that sensitive FEC decisions were best left in the hands of “non-partisan, career leadership.” The nonpartisan bit practically had McGahn rolling on the floor.

  Outside “reform” groups jumped in to back up the bureaucrats, accusing McGahn of wanting a staff “gag rule,” and of engaging in a “lame-duck power play.” So McGahn started publicly releasing some of the details of staff misbehavior and pushing back against the liberals complaining that he was trying to dilute FEC enforcement. “This isn’t a power grab,” he at one point told a Washington Post reporter, explaining that the reform went to the FEC’s basic credibility. “You just can’t have an agency where the staff is sort of left to their own devices to come up with lists and do their own thing, because it creates such an opportunity for people to accuse the place of playing political games.”

  Herman was so bitter that McGahn was questioning staff’s right to run the asylum that he took the extraordinary step of publicly complaining about a sitting commissioner. The lawyer essentially called McGahn a liar, claiming that his portrayal of the general counsel’s office was “not true.” He brushed off his Justice chumminess as nothing more than a routine FEC practice of responding to prosecutors’ requests, and airily noted that until recently no commissioners had objected. He confessed himself “perplexed by the allegation.”

  Democratic commissioner Ellen Weintraub also jumped to the defense of the staff’s right to walk all over her and the rest of the commission. She insisted that the real worry was that staff “had become cowed by commissioners and it may be coloring their independent judgment.” As the debate raged, Herman up and quit. While he never gave a precise reason for leaving, the timing seemed designed to look like a protest resignation.

  The Democratic commissioners refused to budge on the issue (even though they had previously said in a House oversight hearing that a manual was a good idea), and McGahn wasn’t able to get the requisite four votes. When he left his office for the final time in September 2013, it was to widespread applause from free-speech and due-process advocates on both sides of the aisle for what progress he had made. Brad Smith from his perch at the Center for Competitive Politics praised McGahn for “following the law and the Constitution, not treating the FEC as a roving, unbounded, political police force.”

  Still, the FEC staff retains plenty of power and ability to target and intimidate. And the Obama administration has also upped its efforts to make the FEC into a more openly partisan weapon. Democratic chairwoman Ann Ravel landed there in 2013, straight from a job running California’s FEC equivalent, the Fair Political Practices Commission. She arrived with a mission to turbocharge the FEC’s powers. She’s proposed greatly expanding disclosure rules. She wants to give the FEC power to regulate Internet content. Most disturbingly, she wants to get rid of one commissioner, to end tie votes, and allow one party (presumably hers) to steamroll the other. With the IRS on ice, the left has turned its attention back to using the FEC against its opponents.

  As Cleta Mitchell put it to the Washington Examiner in August 2015, “[Ravel] and Lois Lerner are peas in a pod. She wants to weaponize government agencies to shut down and chill free political speech.”

  Government intimidation wasn’t confined to the IRS.

  Chapter 13

  Government Shutdown

  Senator Susan Collins is a Republican, but she’s a Maine Republican, which means she’s something a little different. The Pine Tree State is tough territory for conservatives, and Collins has held on to her seat by bucking her party on key issues. One of these is campaign finance law. She voted with Democrats on McCain-Feingold, and she has long publicly embraced greater “transparency.”

  C
ollins was also one of those rare Republicans who, at least in the early years, expressed a willingness to try to work with Obama. So it was something in the spring of 2011, still early in the Obama tenure, to see Collins fuming and rallying the entire Congress to oppose a presidential action. It isn’t easy to get her that mad.

  The catalyst came on April 20, 2011. White House press secretary Jay Carney took to the podium. Yes, the rumors were true. Obama was contemplating (yet another) executive order, this one to force any federal contractor to disclose its donations to groups that participated in politics.

  Those rumors had started the day before, when Hans von Spakovsky, the former Justice and FEC Republican, posted an explosive blog on PJ Media. “An impeccable source has provided me with a copy of a draft Executive Order that the White House is apparently circulating for comments from several government agencies,” he wrote. That order would seek “to implement—by executive fiat—portions of the DISCLOSE Act.” He quoted his source as saying, “It really is amazing—they lost in the Supreme Court, they lost in Congress, they lost at the FEC, so now the president is just going to do it by edict.”

  Von Spakovsky went on to detail the contents of the order. It would require any potential government contractor, and its directors and officers, to divulge as part of its bidding process any contributions made to political parties or organizations. Even more intrusive, it would require contractors to disclose any money to independent groups that might use that money for political ads. Von Spakovsky pointed out that the focus on “transparency” for companies was largely a ruse, since federal contractors had already long been barred from making any contributions to political parties or to candidates.

  No, this was a backdoor way of delving “into the personal political activities of their officers and directors—and require them to report political contributions those employees have made, not out of corporate funds (which is illegal), but out of their personal funds,” wrote von Spakovsky. It was also a way of outing otherwise anonymous corporate donations to nonprofit groups. The backlash would then intimidate companies out of such speech.

  Carney was quick to spin this as “reform” and “transparency” and to suggest that U.S. taxpayers had a right to know how federal dollars being paid to contractors were being used in campaigns. Free-speech advocates rolled their eyes. The order didn’t cover federal employee unions, which negotiate contracts—paid for with taxpayer dollars—far in excess of government contracts. The White House wasn’t forcing them to explain how they used their dollars. It also didn’t cover any of the many liberal groups (such as Planned Parenthood and environmental organizations) that suck up millions in federal grants.

  The executive order brought instantly to many minds the infamous John Dean memo of that era. The point of Nixon’s “enemies list,” Dean had said, was to “determine what sorts of dealings these individuals have with the Federal Government and how we can best screw them (e.g. grant availability, federal contracts, litigation, prosecution, etc.).”

  The Obama order was in fact far more than just intimidation. It was a partisan threat. Federal contracts are supposed to go to the lowest bidder. But for many this was the federal government making clear that a new standard held: Contracts would go to those who were on Obama’s side of the political aisle. Companies could bid and lose out for the sin of donating to Republican groups. Or they could protect their livelihoods by halting donations to the GOP altogether. It was a new twist on an old phrase. It was “not-pay to play.” And it was a win-win for the White House.

  Yet Obama’s penchant for issuing law-defying executive orders and regulations wasn’t yet fully honed in 2011. He still needed to get reelected. He was still courting some Republicans. He was more cautious in those days.

  And the blowback to the proposed executive order was extraordinary. Anger from the usual free-speech advocates wasn’t necessarily a surprise, although their outrage was palpable. In an interview with me at the time, Minority Leader Mitch McConnell called the order the “crassest” political move he’d ever seen. “This is almost gangster politics, to shut down people who oppose them.…I assure you that this is going to create problems for them in many ways—seen and unseen—if they go forward.”

  More eye-popping was blowback from Collins. She was all on board with transparency. But she’s also no dummy. And she has an old-fashioned definition of government corruption. She’d spent many of her Senate years trying to weed out the potential for that corruption. What she saw in the Obama order was naked politics, and an order that would roll back seventy years of efforts to get politics out of government contracting.

  Collins was so affronted, she spearheaded a GOP letter to the president, and at a policy lunch briefed Republican senators on its implications. The otherwise calm senator was keyed up. The whole reform language was “Orwellian,” she told me. The administration’s argument that this was about disclosure was a “fraud.” The very notion “offend[ed]” her “deeply.”

  It was, she said, “the equivalent of repealing the Hatch Act”—the 1939 law designed to weed out federal pay-to-play. Collins noted that it had taken decades to create a federal contracting system based on “best prices, best value, best quality.” The Obama order blew this up overnight. Quite aside from the intimidation aspect, the order might cause companies not to bid, reducing competition and raising government costs. It also, she noted, put “thousands of civil servants” who oversaw contracting “in an impossible situation.”

  Other Republicans noted the surreal aspect of Obama floating this order—designed to dry up Republican donations—at a moment when he was holding fund-raisers at breakneck speed and when his supporters were bragging that he was on track to break the $1 billion reelection threshold.

  Collins likely saved the day. Obama was still in a period where he was hoping to nab some Republicans for his budget and other priorities. Collins was a prime target, and her wrath over the executive order made an impression. The White House went mum on it, and it faded from memory. But it is no doubt sitting in a drawer somewhere.

  Government intimidation wasn’t confined to the IRS and the FEC.

  * * *

  The Federal Communications Commission has since the 1940s had a whole host of rules requiring disclosure by groups taking responsibility for running political ads. Those rules were pretty clear. McCain-Feingold added to the requirements, including the new demand that politicians declare on air that they “approve” of their campaign messages. These too were pretty clear.

  Andrew Schwartzman, the senior vice president and policy director of a liberal outfit called the Media Access Project (MAP), in March 2011 nonetheless argued in a petition filed with the FCC that a whole world of smart people had in fact for decades been incorrectly interpreting all these requirements. The laws, he claimed, demanded far more: They required not just disclosure of the group taking responsibility, but of those who actually paid for the advertisement.

  MAP’s petition was specific: It wanted the FCC to force groups to list in public filings with the agency any financial backers who contributed more than 10 percent of the budget for a TV or radio ad. Groups that took more than 25 percent of their TV commercial budget from one donor would have to publicly identify those donors’ names, on air, as part of the commercial. Schwartzman tied all this into the controversy that in 2011 was raging over nonprofits, and said the rule change was necessary to expose the shady characters behind “front” groups. “I would argue it’s a relatively modest change in existing practices,” he disingenuously told the Washington Post.

  It was far from modest. It was another part of the growing war against conservative speech. MAP, like Van Hollen, like Schumer, like Lerner, like Bauer, knew that corporations and individuals were sensitive to having their names broadcast in politics, for fear of retribution. Threaten to put their name in a commercial, and it would increase the likelihood that they’d bow out of political participation altogether.

  The FCC moved cautiou
sly—at first. In April 2012, its majority Democrats voted to force broadcasters to post online records about political advertising sold by the station. Republican commissioner Robert McDowell, in a partial dissent, pointed out that financial details about political ads had been available for inspection by the public in individual broadcasting offices around the country since the 1960s. He added that the commission, and Congress, had long felt that political information in particular should be kept locally, in order to protect broadcasters from having to divulge commercially sensitive information about the rates they charged for TV ads. And he pointed out the unfairness of the requirement, in that it only applied to broadcasters, and not to cable or radio stations or to newspapers or direct mail, which would not have to disclose the pricing of their services.

  This mattered not one bit to the commission Democrats, whose only goal was to get all the spending and pricing information in one central database, the better for liberal groups to troll for targets. And indeed, the Sunlight Foundation, a nice-sounding organization that exists to beat up conservatives (it is also funded by George Soros) immediately began calls for volunteers to help it put together a “searchable, sortable database” of ad buys nationwide.