Monday, September 19, 2016

FEC Commissioner Ann Ravel on Disloyal Americans – A Gilda Radner Moment

People over the age of 40 probably recall Gilda Radner’s character Miss Emily Litella on SNL.  She would harangue and spout off about a misperceived problem until her mistaken premise was corrected at which point she would abruptly squeal, “Never mind.”  She once editorialized against the harm to children due to violins on television, until corrected that the issue was violence on television.  Never mind.

Well, Ann Ravel had a Gilda Radner moment last week at the FEC.  She harangued against the right of American citizens to associate in PACs sponsored by their employers if those employers are U.S. companies owned by foreign companies.  Chrysler and Ben & Jerry’s are two examples.  She argued that American citizens who work for U.S. companies owned by foreign companies are loyal first and foremost to foreign interests and cannot be trusted to associate and make contributions through employer-sponsored PACs.  Based upon this rationale, she moved the Commission to reverse a 2006 advisory opinion acknowledging the First Amendment right of American citizens to so associate.

Ravel’s proposal presumed that American citizens who work for Chrysler or Ben & Jerry’s are inherently disloyal Americans.  When confronted with this mistaken premise, she at first doubled down, but 55 minutes later, after it sunk in, she changed her mind.  Changing her tune, she said that perhaps she had not portrayed her concern correctly, that perhaps American citizens who work for Chrysler could be trusted, and the FEC simply needed greater assurances that Chrysler employees were indeed exercising America-first loyalties.  It ended with a “never mind” moment.

Ravel for weeks had demagogued a false premise.  And she completely missed that the advisory opinion she assailed, along with a dozen or more that preceded it and post-dated it, indeed set forth an elaborate set of guardrails to ensure that Americans associating in corporate-sponsored PACs make their political decisions free from foreign national participation or influence.  But here she was engaged in a thoughtless effort to completely jettison four decades of careful thinking on those appropriate guardrails as well as the First Amendment rights of American citizens. 

We doubt this was well-considered by a commissioner more interested in grabbing headlines than understanding the meaning or consequences, or constitutionality, of her regulatory actions.  At least public debate by Republican commissioners corrected her misconception.        

It's about the corporate sponsored PAC and there's no question that they as Americans or citizens with foreigners with green cards or all of the others, can participate in the political process. And that's what we want. It's the question of whether or not they can be influenced as Commissioner Weintraub talked about but also there is some evidence. There is a recent study put out and I believe one of the authors is from the University of Arizona. I can provide it to you offline where say said they found that political giving and political activity by employees is very influenced by CEOs of corporations. So there is evidence of that. And then just if you look at corporate structure as I referred to before. The subsidiaries, the employees they are all working for the corporation. The fact that they're a subsidiary. It's not an entity unto it. They are loyal to and must do what is in the best interest or perceived best interest by the CEOs of that corporation. That's the difficulty that we have in formulating some kind of a rule here honestly and why we have to look at what we have set forth in the AO as being incomplete because it doesn't actually address that problem.

I take it, so that's why I said you're questioning their loyalty and whether their loyalty is an American interest or it's to Fiat in Italy.

I think their loyalty is to the corporation. Through the senior leadership, the CEO and the senior leadership which happens to be a different foreign corporation. That's the rule of corporate law. That is. I'm not saying anything about loyalty per se of a particular employee.

If we have totally different ideas of what a foreign national is, if we believe that, by that, you mean not from a foreign national, that no foreign national is involved in the decision and that any monies were from, you know, domestically-generated revenue, if that's what we're thinking, but you're thinking that if anything were to come from a corporation that has foreign shareholders or a significant number of foreign shareholders, then even that becomes a difficult hill to climb. So, what I'm saying is that I don't want to foreclose the possibility of us trying to find some common ground, because I think that our interests in enforcing the ban are there, but I think that there may need to be a little bit more discussion or legwork to figure out, are there some first principles that we can start from that would allow a potential compromise to be reached.

I think you do, and maybe I portrayed that in a way that made you think that, but what I was saying was in the AO, in the [TransCanada] AO, those constraints were insufficient…. They were insufficient to ensure that there really isn't foreign influence, and that's the concern. I mean, if we were to devise some scheme that comes up, for an SSF that comes up in the course of the rule-making where we would get information from people and be able to consider ways to have that clear assurance, despite the corporate structure, that we could put in, and I don't know that certification would be the thing that I would feel comfortable with necessarily, but some way that would enable us to even enforce that rule, I think what we have now, we don't have the capability of enforcing the prohibition on foreign nationals.

Okay, because the concern I had had about the earlier comments was the statement that one cannot help, even if someone who's an American citizen and who's on the board of directors and is in charge of making decisions for, um, a domestic subsidiaries pack or independent expenditure effort, if the notion is that they can't help but be influenced by the fact that I've met the foreign nationals who own this organization, and therefore, just the way in which the corporation is organized, you can't help but be influenced by that foreign source, that's what I thought was being said earlier, in which case that would have seemed to exclude all domestic subsidiaries.

That was not my intention.

That was Ann Ravel’s Gilda Radner moment.  Never mind!  All that demagoguery for months about rescinding one advisory opinion that permitted an American company (owned by a foreign company) to sponsor a PAC for its American employees because the employees would be loyal first and foremost to the foreign owner in an instant disappeared with a simple “That was not my intention” after all.  Perhaps Ravel should think through her proposals before she moves to abandon decades of law.  The term half-baked comes to mind.  Surely somebody thought of the problems with her proposal years ago.  But thoughtfulness has never constrained Ravel, who has been more eager to grab superficial headlines than understand the law, consequences, or constitutionality of her regulatory actions.    
Commissioner Weintraub had her moment of backtracking too.  In March she published an op/ed inthe New York Times setting forth an all-new legal rule prohibiting all publicly-traded U.S. corporations from exercising their First Amendment right to make independent expenditures or contribute to PACs that do.  She threatened all U.S. corporations and their attorneys with findings of legal violations, and she reiterated her threats at the beginning of the FEC’s meeting.  But when challenged with the correctness of her op/ed, she backtracked:  “What I wrote in the New York Times was intentionally provocative. It was intended to stimulate discussion and I hope that it has but I am not saying today that that is the only thing that I would consider or is there aren't many other ideas that I think would be well worth entertaining….
So much for the credibility of two Democrat Commissioners.  They change their tunes to say whatever it takes in the moment to advance their ulterior motive – reverse the decision their agency lost in Citizens United v. FEC and take away corporate free speech rights in America.  Democrats clearly view the FEC not just as a First Amendment free zone but a credibility free zone.  

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