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US: FEC Finds Citizens United Group Free from Disclosure Rule

WASHINGTON — A little-noticed Federal Election Commission ruling that expands the definition of “media’’ to include a partisan film production group is the latest in a series of actions eroding legislative limits on the influence of money in politics.

“We’re really returning, seemingly inexorably, toward an entirely deregulated system,’’ said Thomas Mann, who studies campaign finance at the Brookings Institution, a Washington think tank. “It was a rather breathtaking decision.’’

The commission voted June 10 to designate the filmmaker Citizens United a “press entity,’’ equating its often highly partisan work — includ ing films attacking Democrats Hillary Rodham Clinton and President Obama — with the work of nightly newscasts.

The result, analysts say, is that the group is not required to disclose its role in sponsoring political projects or activities, or reveal the source of its funding. Thus, it becomes impossible to discern its influence in the political process.

No FEC commissioner would agree to be interviewed, according to a spokeswoman. But in defending the commission’s 4-to-1 vote, the panel’s vice chairwoman, Cynthia Bauerly, said in a statement that traditional images of the press no longer apply.

“We all used to know that ”˜press entity’ meant something like ABC News,’’ she said in prepared remarks to the commission. “Today, however, technology has changed nearly everything about media.’’

The FEC ruling has alarmed advocates for campaign finance rules, who say it sets a troubling precedent.

“If a self-proclaimed political advocacy group that has made some very, very slanted so-called documentaries to influence elections constitutes the press, it’s difficult to imagine what types of political advocacy groups would not qualify,’’ said Paul Ryan, an election law specialist at the Campaign Legal Center, a nonpartisan watchdog.

Ryan’s group warns of a proliferation of partisan advocates undermining the law by producing “documentaries’’ that are merely long campaign ads, then advertising them without disclosing their activities. Once a particular type of communication is exempted from disclosure — such as a partisan film — then all advertising to promote the film would also be exempt, Ryan said.

Under current law that remains in effect, political advocacy groups must file public disclosure reports when they buy election ads that mention candidates and run shortly before an election, and must disclose the names of donors who provide money specifically for such political advertising.

The media, however, are exempt from such rules. Now designated as a member of the media, Citizens United can show and advertise films critical of federal candidates without having to file the disclosure forms.

In applying for the media designation, Citizens United told the FEC that it would not pay TV stations to air the films themselves, which helped it win the exemption. The group successfully argued that its films, regardless of their strong conservative viewpoint, define it as a media outlet.

“It’s a fundamental First Amendment issue,’’ said Will Holley, a Citizens United spokesman. “We are filmmakers. [That] we should be discriminated against on the basis of the content of the film is fundamentally wrong.’’

Citizens United is already well known for fighting election law on free-speech grounds. The group was the winning plaintiff in a Supreme Court ruling in January that struck down much of the campaign spending limits passed by Congress in 2002, known as the McCain-Feingold Act.

The landmark case stemmed from the FEC’s ruling that the Citizens United film, “Hillary: The Movie,’’ a highly critical look at the career of 2008 presidential candidate Hillary Rodham Clinton, fell under McCain-Feingold and could not be advertised on television or shown through video on-demand services shortly before an election.

Citizens United won a far-reaching Supreme Court decision that threw out most limits on campaign spending by corporations and unions, though it upheld public disclosure requirements. Advocates of campaign spending limits decried the decision; President Obama scolded the Supreme Court during his State of the Union speech.

The latest FEC ruling left it unclear precisely what a political group has to do to qualify as a media organization. Christian Berg, Citizens United assistant general counsel, noted that the FEC denied his group a media exemption six years ago, after it had made just two films. The group has now made 14 movies, with three in production.

“You couldn’t just pop up a corporation to make extended political ads,’’ Berg said, adding: “We don’t know where the line is. It’s somewhere between two and fourteen films.’’

The group plans to continue distributing its films on DVD, in theater showings, and on television. Two of the group’s films have been televised, including a flattering biography of Ronald Reagan, which aired last year on about a dozen TV stations, Holley said. Another Citizens United film, on developing more domestic energy, has been shown on cable, he said. The group is in discussions over licensing movies for consumers to buy in on-demand format.

Founded in 1988, Citizens United began making films in 2004 in response to the movie “Fahrenheit 9/11’’ by liberal filmmaker Michael Moore. It spends more than $3 million per year on film projects, according to FEC documents. The group acknowledges that its films come from a strong rightward point of view but argues that viewpoint is commonplace in modern media. “Content is very rarely neutral in its position,’’ Berg said. “You’ll see a newspaper endorse a candidate even though it’s a media entity, and that’s meant to swing an election.’’

FEC Commissioner Steven Walther, who opposed extending the exemption to Citizens United, said in a statement that widening the definition of a media entity will deny the public valuable information about spending in elections.

The exemption applies only to Citizens United’s film activities. The group also runs a traditional political action committee that buys advertising and doles out money to Republican candidates, including $5,000 in January to Scott Brown, now a Republican senator from Massachusetts, according to campaign disclosures.

When the group is engaged in purely political work, donors still must be revealed, Berg said. “But a media corporation — Washington Post, Boston Globe — they don’t have to disclose their funding sources. And neither does Citizens United when functioning in that role.’’

This article was published on Boston.com on July 5th, 2010 and was written by Mark Arsenault.