SuperPACs: Giving Closure On PAC Disclosure?

It's noT news to broadcasters that independent expenditure committees, freed up by the Citizens United case to organize as legal entities, are changing the landscape of political advertising.  It seems that it's no longer feasible to run for a major office without a supporting SuperPAC. Dozens of political and media commentators have opined on how Citizens United case has changed the face of politics and political campaign expenditures. Financially, this has been a good thing for broadcasting, still considered the most effective media for communicating a political message, even in the presence of growing use of Internet and social media. 

This comes at a needed time for broadcasters. Arguably, the economy may be on the rebound and regular commercial advertising is in the process of a comeback, but new sources of revenue are still needed to keep the books balanced.

This new source of political advertising also raises new issues for broadcasters.  Most broadcasters already know that SuperPACs are not entitled to mandatory access or Lowest Unit Charge. However, many are unsure about whether there are broadcaster reporting requirements for these ads, and if so, what record must be added to the station local public file. This could be a particularly touchy subject where public interest advocates are arguing that broadcasters need to obtain and disclose. 

Indeed, in a recent article in the political newspaper Politico, former FCC Chairman Newton Minow and former FCC General Counsel Henry Geller took PAC advertising practices to task.  They criticized "television and radio ads broadcast across the nation by groups trying to hide the real sources of the thousands or millions of dollars behind them," claiming that section 317 of the Communications Act requires those sources to be disclosed in the station's political file. 

In a recent Huffington Post article , Dan Froomkin and Jake Bialer reported that while the Supreme Court's Citizens United ruling was written to free corporations to spend their own money on political advertising, the real effect has been to flow big money into newly created third-party Super PACs; a new kind of political action committee legalized last year. They can accept unlimited donations and often have a very specific agenda to support a particular candidate and oppose the opposing candidate, and they have spent far more than ever imagined for commercial corporations. 

The article reports that in the 2010 election cycle, SuperPACs brought $65 million into the campaign season, compared with corporate treasury money of only about $15.5 million.  A more recent chart than they cited shows that outside spending in 2012 has dwarfed all previous spending, clocking in already at $91,496,624. This pretty well, and pretty dramatically demonstrates the point. 

See Chart & Data

By Permission of Center for Responsive Politics

Some groups are required to disclose their donors . But some don't have to report their donors to the Federal Election Commission and their spending has shot up.

See Chart Outside Spending by Disclosure, Excluding Party Committees

By Permission of Center for Responsive Politics

Broadcaster Obligations

So, let's clarify it.  In fact, all the broadcaster obligations cannot be found in section 317 of the Communications Act and the FCC rules implementing it.  The applicable FCC rule section, §73.1212(e), requires a licensee to provide a sponsorship ID and "fully and fairly disclose the true identity" of the entity paying for or furnishing the broadcast material.   Where the material is political or involves the discussion of a controversial issue of public importance, the licensee must also list the chief executive officers or members of the executive committee or of the board of directors of the corporation, committee, association or other unincorporated group, or other entity in its Local Public File.  Note, these options are alternatives; they are not all required.  That's all that you will find in the FCC rules.

However, the Bipartisan Election Reform Act (BCRA) added new broadcaster obligations to Section 315(e) of the Communications Act that have never been added to FCC regulations.  Inquiry to the FCC staff reveals that there are no plans for a rulemaking, so we have to look to the Act for guidance. As revised, 315(e) requires a licensee to include in its public file a complete record of a request to purchase broadcast time for a message that relates to any political matter of national importance, including a national legislative issue of public importance.  The information pretty much mirrors the information required for candidate inquiries.  It must include:

• Whether the request to purchase broadcast time is accepted or rejected by the licensee;
• The rate charged for the broadcast time;
• The date and time on which the communication is aired;
• The class of time that is purchased;
• The issue to which the communication refers (as applicable);
• The name of the person purchasing the time, the name, address, and phone number of a contact person for such person, and a list of the chief executive officers or members of the executive committee or of the board of directors of such person.

So if it's clear that, while the message may relate to a controversial issue of public importance, it is not an issue of national importance, then only the list of officers, as required by 73.1212(e) need be included in the file.  However, if the message is one of national importance, including a national legislative issue of public importance, then the station must include the additional requirements of §315(e).  The only difference is whether issue is one of "national importance."  There are various opinions on that question, but there is no case guidance on the question.  As far as SuperPAC ads are concerned, however, most of us would be pretty hard pressed to claim that the issues are not ones of national significance.

What is not required, in either case, is a full list of the donors or source of funds to the SuperPAC/independent expenditure committee.

This column is provided for general information purposes only and should not be relied upon as legal advice pertaining to any specific factual situation. Legal decisions should be made only after proper consultation with a legal professional of your choosing.