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.

Photo of Angelle Smith Baugh Angelle Smith Baugh

Angelle Smith Baugh is of counsel in the firm’s Election and Political Law and White Collar Litigation practice groups. She has significant experience in broad-based crisis management, advising clients on legal and political matters presenting complex risks.

Angelle’s practice focuses on defending companies and individuals…

Angelle Smith Baugh is of counsel in the firm’s Election and Political Law and White Collar Litigation practice groups. She has significant experience in broad-based crisis management, advising clients on legal and political matters presenting complex risks.

Angelle’s practice focuses on defending companies and individuals in high-profile congressional investigations, as well as other criminal, civil, and internal investigations. She represents clients before House and Senate Committees, as well as in criminal and civil government investigations before the Public Integrity Section of the Department of Justice, Federal Election Commission, and the Office of Congressional Ethics.

She assists companies and executives responding to formal and informal inquiries from Congress and executive branch agencies for documents, information, and testimony. She has experience preparing CEOs and other senior executives to testify before challenging congressional oversight hearings.

Angelle also has experience and expertise navigating federal and state ethics laws, and provides ongoing political law advice to companies, trade associations, PACs, and individuals.

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