By Mark Cantora
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Wednesday, June 22, 2011
Filed under: Government & Politics
The administration may not realize it, but it is possible to protect Americans’ right to speech while attacking corruption.
President Obama has a history of making very strong statements in support of the First Amendment. On the importance of free speech, the president has reached out beyond the mere positive law embodied in the Constitution and the Bill of Rights, flirting with a natural law concept of free speech as an inherent right of mankind. In a 2009 statement, the president used strong words in support of the inalienable right to speech. “The universal rights to assembly and free speech must be respected, and the United States stands with all who seek to exercise those rights.”
The president should have added, “Except with those who seek to exercise those rights in ways that are objectionable to me.”
The current administration’s latest shot in its fusillade against the foundations of American democracy comes in the form of a draft executive order requiring that potential government contractors disclose their political contributions in order to be eligible for the contract bidding process. The executive order, titled “Disclosure of Political Spending by Government Contractors,” seems innocuous enough, and its stated goal of “ensur[ing] the integrity of the federal contracting system in order to produce the most economical and efficient results for the American people,” is honorable and difficult to argue against. However, not only does the draft executive order act as yet another attack on the First Amendment, but its implementation would condemn the order to failure in achieving its intended goals.
In order to understand why this draft executive order would be such a detriment to the American people, one must understand the history leading up to this unfortunate draft executive order.
The War on Speech After Citizens United
Whoever would have thought that a commercial promoting a movie—and a relatively silly movie at that—would have been the catalyst for the biggest presidential attack on the freedom of speech in recent memory? The case started as a District of Columbia District Court ruling that a commercial promoting non-profit group Citizens United’s film “Hillary: The Movie” violated the Bipartisan Campaign Reform Act’s (popularly known as the “McCain-Feingold Act”) campaign finance laws. This decision was eventually appealed all the way up to the Supreme Court, with the dispute focusing on whether or not the McCain-Feingold laws were proper anti-corruption laws or overreaching unconstitutional restrictions on speech.
When the Court announced its decision, it was considered by many to be a watershed victory for the First Amendment. After years of federal discrimination among different speakers, favoring some and excluding others, the Court had struck a blow to those who would muzzle speech simply because it is spoken by a politically disfavored association. But only a few short days later, President Obama gave a State of the Union Speech in which he urged “Democrats and Republicans to pass a bill that helps to right this wrong,” the “wrong” referred to being the Supreme Court’s decision in Citizen’s United that restrictions on corporate speech are unconstitutional. Ignoring for the time being the irony of a constitutional law professor’s failure to realize that Congress cannot merely “pass a bill” that trumps the Constitution—at least as the Supreme Court interprets the Constitution, as was laid out in the landmark case of Cooper v. Aaron—this small part of the 2010 State of the Union marked the beginning of the Obama administration’s official attack on the First Amendment.
The required disclosure of political contributions could actually result in greater potential for corruption and abuse, since the government officials granting government contracts would then be privy to political donations given to themselves or political causes they support.
Four months later, largely as a result of President Obama’s encouragement, the DISCLOSE Act was introduced in the House of Representatives. This bill would have required all people or organizations bidding for government contracts to disclose all political expenditures and electioneering communications. While couched in “anti-corruption” and “transparency” language, the Act’s main effect would have been to offer Americans choosing to associate in corporate form an untenable choice: Either vie for government contracts in the regular course of business or freely and fully exercise core political speech rights. President Obama “welcomed” this bill “so the American people can follow the money and see clearly which special interests are funding political campaign activity and trying to buy representation in our government.”
Although the bill passed in the House, it later stalled in the Senate, and has since failed to gain any traction. The rejection of this proposed law by the American people’s representatives has seemed to convince the president that the American people have merely misunderstood their true interests, and thus, that these speech chilling mandatory disclosures must become law through an alternate route: The “Disclosure of Political Spending by Government Contractors” executive order.
It is enlightening to explore the ways in which the order must necessarily fail to succeed in achieving its own stated goals. The draft executive order vaguely states that its goal is “to produce the most economical and efficient results for the American people.” Its method of doing so is to require all people and organizations to publicly disclose all political contributions exceeding $5,000 made by the organization and the organization’s officers, directors, affiliates, and subsidiaries within two years of an offer or bid for a government contract.
It can be assumed that what the president means by this order’s goal of producing more “economical” and “efficient” results for the American people, is that the order would allow for a more competitive market for government contracts, that competition therefore giving the government (and thus, the American people-qua-taxpayers) a wider array of options, which would necessarily include options with lower priced and/or higher quality work. The order hints at this understanding when it goes on to state that “When the public lacks confidence that the contracting system works fairly, it may deter participation and deprive the government of the most robust competition and the best providers.”
It is uncontroversial that more competition results in more options, lower prices, and oftentimes, higher quality. Competition is the lifeblood of economic innovation, in that it spurs people and organizations to work harder to provide a product or service that is “better” than those offered by competitors.
However, it is a very strange assumption that the disclosure of a business’s and its officers’ political expenditures would actually result in more competition. The draft order makes two spurious assumptions. First, the order argues that the public’s lack of confidence in the government contracting process is a result of the public’s perception that contracts are unduly influenced by political favoritism based on politicians granting contracts to publicly anonymous corporate donors as a “quid-pro-quo” for political contributions. President Obama’s order assumes that the public will have a greater confidence in the fairness of the government contracting process if the public has knowledge of which organizations (and its officers) are donating to which political candidates.
The Federal Acquisition Regulation already requires that the granting of government contracts be based on numerous economic factors, related to the contract offers business merit.
But this can’t possibly be adduced from some logical principle about transparency. Were a business required to publicly disclose its political contributions to the presidential administration in power, and that corporation was later awarded a contract, would there no longer be people who would cry “favoritism” and “corruption?” Similarly, were a business’s donations to a presidential administration’s main rivals made public, and time after time that business’s contract bids were rejected, would not a substantial proportion of the American people cry foul? There is simply no reason to believe that these disclosures would result in greater confidence in the contracting process. If anything, the accusations and charges of corruption would potentially increase, as partisan conspiracy theorists would be given new material with which to expound daily pay-to-play and no-pay-no-play schemes and plots.
The second wrongheaded assumption is that by mandating businesses to disclose contributions that they would otherwise prefer remain anonymous, a greater amount of businesses would be encouraged to participate in the government contracting process, thus giving the government the “robust competition” that it claims to desire. This assumption is little more than sophistry masquerading in economic buzzwords. Does anyone doubt that the government’s “shining a light on” businesses’ political expenditures, whether those businesses want those expenditures publicized or not, would result in substantial amounts of businesses dropping out of the government contracting process—especially considering the overwhelmingly negative response to the draft executive order from over 60 industry organizations, including the U.S. Chamber of Commerce, representing hundreds of thousands of businesses throughout the U.S.?1 Put somewhat differently, businesses are, by definition, self-interested. If it is in a business’s best interest to publicly disclose its political contributions, it will already have done so, with or without this being required by the government. But if it is against a business’s best interest to make these disclosures, then requiring that business to make these disclosures involuntarily will give that business one more check-mark in the “con” column when weighing the pros and cons of bidding for a government contract. And for many businesses, this new “con” will be enough to tip the balance against entering the government contract bidding process altogether, thus decreasing the amount of competition in this particular market.
The bottom line is that although the Obama administration says the executive order’s aim is for more robust competition, leading to more economic efficiency and the betterment of the American people, the only possible result of the order’s implementation will be less competition leading to higher prices and less efficiency for the government and, eventually, the American taxpayers.
Attacking Freedom of Speech
But the most insidious effect of the president’s draft executive order is its stifling of free speech.
Former Supreme Court Justice Hugo Black, in one of his most poignant concurring opinions, enunciated the crux of the First Amendment’s right to the freedom of speech: “That Amendment provides, in simple words, that ‘Congress shall make no law . . . abridging the freedom of speech, or of the press.’ I read ‘no law . . . abridging’ to mean no law abridging.”2 Although the Supreme Court’s jurisprudence has proceeded in fits and starts, occasionally sliding back into allowing more onerous regulations impinging—and dare we say, “abridging”—the freedom of speech, any honest study of the First Amendment’ tumultuous history must conclude that it has been a long, slow climb back toward the absolute freedom of speech envisioned by the Framers and explicated clearly by the constitutional text.
But, like the giant boulder of Sisyphean legend, President Obama’s draft executive order attempts to push the First Amendment back down into the valley of arbitrary speech restrictions. And what the president could not succeed in doing through the proper legislative avenues, he now attempts to do through fiat with an executive order that, if successful, would chill and suppress core political speech—the very same speech which was years ago decided to be the most important expression in need of protection in the entire marketplace of ideas.
It has all along been uncontroversial that although money is not speech, laws restricting the expenditure of money that is intended for the purposes of advancing speech, especially core political speech, can be gross violations of the First Amendment.3 In the landmark First Amendment case, Buckley v. Valeo, the Court noted that restrictions on the expenditure of money intended to further the dissemination of political speech is, in many cases, functionally equivalent to restricting speech itself. Although the Supreme Court has also recognized that in many cases restricting the spending of money intended to disseminate political speech is not equivalent to restricting speech itself, it suffices to say that the Court’s failure to recognize that all restrictions on all expenditures of money intended to further the dissemination of all political speech is merely a result of the Court’s failure to apply its own reasoning to its logical conclusion. As the Supreme Court explicitly points out in Buckley v. Valeo, a law restricting political speech, especially political speech connected to a campaign for political office, “necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached.”4
Yet, the Supreme Court itself has quoted none other than the “Father of the Constitution,” James Madison, for the proposition that core political speech is rigorously protected by the First Amendment because “‘the value and efficacy of [the right of electing members of the government] depends on the knowledge of the comparative merits and demerits of the candidates for public trust, and on the equal freedom, consequently, of examining and discussing these merits and demerits of the candidates respectively.’”5 In the same case, the Supreme Court goes on to favorably quote famed judge and jurist Learned Hand for the authoritative proposition that the First Amendment “presupposes that right conclusions are more likely to be gathered out of a multitude of tongues than through any kind of authoritative selection. To many, this is, and always will be, folly, but we have staked upon it our all."6 A Supreme Court which can declare at once that freedom of political speech is the basis and foundation upon which rests the entire Republic, while also proclaiming that laws which practically restrict some forms of this speech through restrictions on campaign donations do not violate the First Amendment, is not a Supreme Court that takes its own arguments—or the Constitution—seriously.
One of the most important explanations for the eminently reasonable understanding of the First Amendment as disallowing laws restricting any form of political speech is that the First Amendment is written in language that refers to "speech" and not "speakers." What this means, in practice, is that the effect of a restriction on a “speaker”7 is largely irrelevant to the question of whether or not the First Amendment is being violated. If “speech itself” (as opposed to speakers) is abridged, then the right of free speech granted by the First Amendment has been violated. Period. And if there is speech, it shall not be abridged, no matter what other interests—including corruption and transparency—may or may not exist as well. As Justice Black once wrote: “[T]he First Amendment’s unequivocal command that there shall be no abridgment of the rights of free speech and assembly shows that the men who drafted our Bill of Rights did all the ‘balancing’ that was to be done in this field.”8 This same absolute command that freedom of speech shall not be abridged, and that no form of political speech shall be restricted, also necessarily includes the idea that there is a right to anonymous speech, including but not limited to when requiring non-anonymity would result in substantial chilling of free speech in general.9 In other words, if all political speech is protected by the First Amendment, and anonymous speech is just one of the multitude forms of political speech that citizens may choose to engage in, than that speech must be protected as zealously as any other.
However, the president’s draft order throws any pretense of adhering to the spirit and letter of the First Amendment out the window, by specifically targeting anonymous speech for suppression. The order would require all entities submitting offers or bids for government contracts to disclose all “political contributions and expenditures” contributed within two years prior to submitting the bid by the entity itself and by the entity’s directors, officers, and affiliates within its control, whenever these contributions exceed $5,000 dollars to a given recipient in a given year.
There is no debate as to the necessity of fixing the government contracting process, and rendering it free from corruption, bribery, and pay-to-play schemes.
The effect of this would be no different than the speech chilling effects of the disclosure rules pointed out by Justice Thomas in his Citizens United concurrence, including “death threats, ruined careers, damaged or defaced property, or pre-emptive and threatening warning letters as the price for engaging in ‘core political speech.’”10 With the highly probable chance of individuals and companies suffering these types of effects after forced public disclosure of their political contributions, the amount of people choosing to forgo their rights to add political speech to the marketplace of ideas will shrink, as businesspeople will be forced to choose between their livelihoods and their right to express themselves. This is a far cry from John Milton’s call to “Let [Truth] and falsehood grapple . . . in a free and open encounter.”11
Therefore, notwithstanding the Supreme Court’s embrace of the constitutionality of “disclosure” requirements for political donations, the logically, linguistically, and historically correct interpretation of the First Amendment bears out the idea that forced disclosure of political contributions of individuals, individuals associated in the corporate form, and individual officers and directors of corporations is a severe chill on free speech, and thus an unconstitutional, First Amendment violation.
The Way Forward
One potential solution, which should also be obvious to the current administration, is the one suggested in a bipartisan letter by Senators Joe Lieberman, Susan Collins, Claire McCaskill, and Rob Portman: Enforce the regulations already on the books. The Federal Acquisition Regulation already requires that the granting of government contracts be based on numerous economic factors, related to a contract offer’s business merit. The regulations specifically require that governmental business decisions, including decisions to grant government contracts, must be made with “complete impartiality and with preferential treatment toward none.” Considering political donations as a factor in granting a government contract on a quid-pro-quo basis is, under any interpretation of the Federal Regulations, improper and illegal.
As the Senators point out in their letter, the required disclosure of political contributions could actually result in greater potential for corruption and abuse, since the government officials granting government contracts would then be privy to political donations given to themselves or political causes they support. Corruption and the appearance of corruption are, in fact, serious problems in the federal contracting process. But, the existence of a system already in place with which these problems can be solved, without infringing on core political speech rights, makes the president’s draft order not only superfluous, but counterproductive.
However, there will be those who will point to the corruption that continues to exist despite the Federal Acquisition Regulation. They will argue that even strenuous enforcement of these regulations is not enough, and, to quote President Obama, himself quoting Justice Louis Brandeis, that “sunlight is the best disinfectant,” and therefore (in contravention of all logic) disclosure requirements are the only solution.
To answer these skeptics, there is another solution, one that includes both an element of strongly enforced disclosure requirements, yet also protects all Americans’ right to free, anonymous, core political speech.
For years, law professor Ian Ayres (along with law professor Bruce Ackerman) have been recommending a system of Campaign Finance Reform called “mandated anonymity.”12 This system would require all political donations to be made anonymously, to a blind trust, which then would distribute the funds, in discrete chunks over a period of time, to the proper recipients. In order to enforce the mandated anonymity, contributors would have a ten to twenty day period in which to cancel the contribution, thus placing the recipients of the donations in doubt as to whether the alleged donor actually donated the money (which donation the recipient may have even witnessed ), or whether the alleged donor rescinded the donation without informing the putative recipient of the same. Similarly, Professor Ayres recommends that the blind trust also be required to run a check cashing service, thus putting in doubt whether a canceled check presented to the recipient as “proof” of the donation, was really a donation, or was simply a check that was cashed through the trust’s check cashing service.
This ingenious idea, the details of which can be examined in Professor Ayres’s article “Disclosure v. Anonymity in Campaign Finance,” has been unfortunately ignored by Federal policy makers. And that ignorance is so unfortunate because of the idea’s fusion of anti-corruption and free speech principles, which, in every other available scheme, have been considered mutually exclusive. In a scheme of mandated anonymity, all entities are allowed to contribute an unlimited amount of money to any political organization or cause in the furtherance of political speech, without being required to give up their right to anonymous speech. Quite to the contrary, all entities are officially required to contribute—and therefore to speak— anonymously.
However, there is no restriction on contributors’ free speech as far as openly disclosing the amount and the recipient of any contributions. Contributors could tell anyone and everyone who will listen, including the recipient, that they donated “such-and-such” amount to “so-and-so” politician. But as Professor Ayres states, “talk is cheap.” Just as with secret ballot voting, there would be no official way to prove that one had actually contributed a certain amount to a certain campaign or cause. And this level of doubt is the key to preventing pay-to-play corruption in government contracts. Government officials could never be sure who donated what amount to what political organization. Thus, there would be a marked reduction—if not a complete elimination—of quid-pro-quo government contracting, since corrupt politicians would never know which corrupt businesses were actually “deserving” of special treatment as a result of their donations to the government official’s organization of choice—including his or her own campaign.
There is no debate as to the necessity of fixing the government contracting process, and rendering it free from corruption, bribery, and pay-to-play schemes. Until recently, the real dilemma has been framed as a choice between the government reducing corruption by restricting speech, or allowing more corruption by loosening restrictions on speech. At this point, it should be clear that this is a false dilemma. The government need not pass speech stifling laws or regulations like the draft executive order to succeed in its fight against corruption. The government and the American People merely need to think outside the box. They must realize that the president’s war on speech in the service of “good governance” is, in fact, a good fight, but one that is utilizing all of the wrong methods. Free speech and anti-corruption are not mutually exclusive goals. With any luck, this administration, or those of the future, will realize this simple truth before the United States approaches a time with less speech, more corruption, and an ever more disgruntled citizenry.
Mark Cantora is an attorney and writer in Memphis, Tennessee.
FURTHER READING: Related articles include “When Less Is More for Investors” by Scott Shane, “Extremism in the Defense of Rand Paul Is No Vice” by Lee Harris, “Freedom’s March: Egypt at the Tipping Point” by Ambassador Richard S. Williamson, and “The GOP Field Does Waldo” by Jennifer Marsico.
1. See Letter to President Obama, May 17, 2011 available at http://www.naeda.com/News/Newsletter/De ... order.aspx
2. Smith v. California, 361 U.S. 147 (1959) (Black, J., dissenting).
3. Buckley v. Valeo, 424 U.S. 1 (1976).See Citizens United v. FEC 558 U.S. 50 (2010) (Thomas, J., concurring) (noting that the Court’s reasoning as to why certain forms of speech restrictions are unconstitutional should also be applied to render most, if not all, forms of speech restrictions, unconstitutional—including disclosure requirements).
4. Buckley v. Valeo, 424 U.S. 1 (1976).
5. New York Times Co. v. Sullivan, 376 U.S. 54 (1964) (quoting James Madison, Report on the Virginia Resolutions, (1799) in 4 Elliot's Debates on the Federal Constitution (1876).
7. See Citizens United v. FEC 558 U.S. 50 (2010) (Scalia, J., concurring).
8. Konigsberg v. State Bar of California, 366 U.S. 36 (1961) (Black, J., dissenting).
9. See McIntyre v. Ohio Elections Comm’n, 514 U.S. 334 (1995) (“The interest in having anonymous works enter the marketplace of ideas unquestionably outweighs any public interest in requiring disclosure as a condition of entry.”).
10. Citizens United v. F.E.C. 558 U.S. 50 (2010) (Thomas, J., concurring). Although the president may take small comfort in the fact that the very Supreme Court opinion in Citizens United which the president strongly criticized, itself held disclosure and transparency requirements to be, in most cases, constitutionally permissible. However, if history is any guidance as to the future direction of the Court’s jurisprudence, it should not be long until the Court fully embraces Justice Thomas’s—and the Framers’—understanding of the First Amendment.
11. John Milton, Areopagitica (1644) available at http://www.gutenberg.org/files/608/608-h/608-h.htm.
12. Bruce Ackerman & Ian Ayres, Voting with Dollars (Yale University Press 2004).
Image by Rob Green/Bergman Group.