MUR 5634: Express advocacy leads to prohibited corporate expenditure

The Commission settled an enforcement matter with Sierra Club, Inc., regarding a pamphlet the corporation financed that expressly advocated the election and defeat of federal candidates and thus qualified as a prohibited corporate independent expenditure. The Sierra Club agreed to pay a civil penalty of $28,000.

Background

Under the Act, a corporation may not use its treasury funds to make a contribution or expenditure in connection with a federal election. 2 U.S.C. 441b(a). Commission regulations specifically prohibit a corporation from making an expenditure for a communication that expressly advocates the election or defeat of a clearly identified federal candidate and is distributed beyond the corporation’s restricted class. 11 CFR 114.2(b)(2)(ii).

Independent expenditure

Prior to the 2004 general election, the Sierra Club, a 501(c)(4) corporation, distributed a pamphlet in Florida comparing the environmental records of President Bush and Senator John Kerry, as well as U.S. Senate candidates Mel Martinez and Betty Castor, through checkmarks and written narratives. Kerry received checkmarks in every box on all three environmental issues addressed in the pamphlet; Bush received only one checkmark in a single category, and in that category, Kerry received two checkmarks. In the Senate race, Castor received checkmarks in all three categories, while Martinez received none. The accompanying narratives made clear that a checkmark represented a favorable environmental record in the Sierra Club’s view. Wording in large capital letters on the front of the pamphlet urged the reader to “Let Your Conscience Be Your Guide,” accompanied by various nature scenes. The heading of the interior of the pamphlet, again in large capital letters, directed the reader, “And Let Your Vote Be Your Voice.”

The settlement follows the Commission’s determinations, after a probable cause finding, that the pamphlet contained express advocacy, not only because it “in effect” explicitly directed readers to vote for Kerry and Castor, but because the ban on corporate independent expenditures applies not only to communications containing so-called “magic words,” such as “vote for” or “vote against,” but also to a broader set of communications, that are “unmistakable, unambiguous, and suggestive of only one meaning,” and can “only be interpreted by a reasonable person as containing advocacy of the defeat of one or more candidates.” 11 CFR 100.22(b).

This settlement with the Sierra Club represents the first major Commission case to consider the reach of the express advocacy test in light of the landmark Supreme Court case, McConnell v. FEC. Prior to the Supreme Court’s decision in that case, which upheld most of the Bipartisan Campaign Reform Act of 2002, two federal appeals courts had held that, as a constitutional matter, only communications containing the so-called “magic words” could be subject to federal campaign finance law. In McConnell, however, the Supreme Court made clear that “express advocacy” was not a constitutional boundary “that forever fixed the permissible scope of provisions regulating campaign-related speech.”

Because the Sierra Club used corporate treasury funds to pay for the pamphlet containing express advocacy, it violated federal law that prohibits corporations from using treasury funds to make independent expenditures.