C&E: Is there anything to this concept of hybrid PACs?
Torchinsky: I don’t think it’s a big deal. If you can raise unlimited money and do independent expenditures, why do you care if you can raise and spend money in a couple thousand dollar chunks and then dole out a little bit to candidates? I understand that the folks behind this are making a big deal of it in the press, but I just don’t see that as being something significant for major operative types.
Lenhard: I completely agree with that.
Elias: I actually agree from a slightly different perspective. Jason, you ask why anyone would even want to do this? My point is, why not just let them do it? As the law firm that represented EMILY’s List—they make contributions to candidates and have a Super PAC. So this just doesn’t feel like quite as much of a novel concept as some folks out there are promoting it as. Maybe I’m just missing what’s novel about it.
Torchinsky: I haven’t had a single political consultant come up to me and say, “I read about that and I want to do it.” With Citizens United, on the other hand, I get calls from people who want to form a Super PAC frequently.
Reiff: I think it’s totally irrelevant in the short term, but in the long term I think you will see a handful of significant ones. If I have a short term goal of doing independent expenditures in the presidential election, I don’t need a contribution account. But over time I do think there will be groups with longer term goals that may set up as hybrid PACs.
Torchinsky: There’s one thing that I’ve been wondering about: how about an independent expenditure committee that spends money and instead of saying, “Vote for Marc Elias,” says “Make a contribution to Marc Elias and go to MarkElias.com.” I almost see a really effective route for Super PACs to spend independently to help candidates raise money. I haven’t seen any of them actually do it yet. But if you can spend independently and say, “Vote for Marc Elias,” why can’t I ask people to give money to Marc Elias? There was no footnote in Citizens United that said you were free to do independent expenditures except if you’re asking somebody to give money to a candidate.
Lenhard: There’s a little bit of that out there, but there’s not much. I do think it’s an area where there’s an opportunity for people to have an impact.
C&E: How about this issue of transfers between c(4) groups and Super PACs?
Lenhard: I’ll be happy to speak on that topic since I’ve thought about it a little bit. This is the problem of what to do with entities that share resources and are attempting to allocate these costs. There’s a range of different ways to go about doing this, but it’s an area the FEC has looked at, and in some situations, which are in some ways analogous, has encouraged entities to place the costs in the federal PAC entity. The plus side of that is that it allows a fair amount of transparency about what the spending side of the equation is. The other side of the coin is that the entities that are making these transfers don’t have the same level of disclosure that federal PACs do. You could also try to have the funds flow the other way and put all the expenses in the c(4).
Reiff: And if you did that, no one would even be talking about this.
Torchinsky: I think the reformers are making more of this than there actually is. In their year end reports, Super PACs reported almost $100 million in receipts. I saw a story about this that identified two transfers totaling less than $100,000.
Elias: I’m mindful that my lunch is being paid for by a news outlet, but this is one of these things that I would get calls on from reporters and I just couldn’t understand what they were talking about. If Citizens United stands for anything it’s that nonprofit corporations can directly make independent expenditures. So if you have an undisclosed contribution into an organization that itself can spend the money, why wouldn’t it just spend the money if that’s what it was trying to do? Why would it go through the mechanism of giving it to a Super PAC to spend?
C&E: To the extent that you all think the media is off the mark in focusing on some of these things, where should the focus be?
Toner: I think that as institutional actors adapt to the changing landscape there is greater pressure placed on certain areas of the law, and that’s really important. Two that stand out for me are coordination, and then the question of how you define the primary purpose of c(4)s and c(6)s under the tax code. I think the significance of both of these areas of the law has really grown in the last couple of years. And again, there has been no litigation brought against the FEC’s coordination rules even though there is a really rich history of litigation challenging the FEC’s rules. If there’s a sense that the rules don’t go far enough, then people should put out their own proposals rather than just saying, “Everybody knows that certain alleged activity is coordinated.” I find that to be a real disservice to this debate. I’m actually very comfortable with the FEC’s coordination rules.
Elias: Well, you were one of the primary architects of them. (Laughter)
Toner: Another point I would make is about the IRS. It obviously has important regulatory jurisdiction here that has grown in importance in recent years, and what it chooses to do regarding the activity of c(4)s and c(6)s is going to be really important in the years ahead.