After a hiatus, ads that refer to federal candidates but that stop short of calling for their election or defeat may soon be returning to the airwaves.  Only two business days after oral argument, a three-judge D.C. Circuit panel today unanimously reversed a lower court decision that required issue advocacy groups that paid for an “electioneering communication” to disclose all of their donors since January of last year.  An “electioneering communication” is a broadcast ad that refers to a clearly identified federal candidate and that airs shortly before an election where the candidate is running.  Electioneering communications do not contain the usual appeals to vote for or against specific candidates that campaign ads do.  For a variety of reasons, these ads are sometimes preferred over express advocacy ads, particularly by tax-exempt organizations.  The opinion comes despite a different D.C. Circuit panel earlier deciding not to stay enforcement of the lower court decision.

At issue in today’s opinion is a provision in the Bipartisan Campaign Reform Act that requires groups making electioneering communications to disclose, in some situations, “the names and addresses of all contributors who contributed an aggregate amount of $1,000 or more to the person” making the disbursement for the communication.  After the portion of the statute that banned corporations and labor unions from making electioneering communications was declared unconstitutional by the Supreme Court, the FEC wrote disclosure rules for corporate and union electioneering communications, but limited disclosure to those donors whose contribution “was made for the purpose of furthering electioneering communications.” 

Van Hollen challenged this regulation.  Relying on the absence of an explicit “purpose” requirement in the statute, Van Hollen argued, and the district court agreed, that Congress plainly intended that all contributors to these issue advocacy groups be disclosed, not just those who donated “for the purpose of furthering electioneering communications.”  The D.C. Circuit disagreed, holding that the words “contributed” and “contributors,” as used in the statute, could be understood as referring only to contributions made for a specific purpose.

So what is next?  The D.C. Circuit suggested that the FEC consider promulgating new rules clarifying “the intended reach of the disputed regulation.”  While the FEC could take the court up on its offer, the agency will not issue a new rule before Election Day.  Second, there could be more litigation ahead.  The D.C. Circuit did not conclude that the regulation at issue was immune from court challenge; rather, it held that the argument the district court relied on in striking down the regulation was faulty.  The court left open the possibility that, after the parties have a chance to weigh in on the issue before the lower court, the regulation might still be struck down as arbitrary and capricious.  This result, however, seems unlikely given language in the D.C. Circuit opinion that hints that the regulation would survive arbitrary and capricious review. 

The bottom line: An important legal barrier to spending on television and radio political ads has fallen.  While the airways are already flooded with candidate and SuperPAC ads, voters may again see ads that urge them to “Tell President Obama to repeal ObamaCare” and “Tell Governor Romney that it’s time for the wealthy to pay their fair share.”  Some tax-exempt organizations sidelined by the more stringent disclosure rules might now decide to jump in.  On the other hand, groups that adapted to the district court’s decision by replacing their electioneering communications with ads containing express advocacy might choose to stay the course.  There are both tax and FEC consequences for groups that choose to rely on independent expenditures, which may weigh in favor of reverting to the use of electioneering communications.