December 14, 2022

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New from the Institute for Free Speech

2022 Midterm Election Cases Again Show that Money Cannot Buy Elections

By Alec Greven

.....While there were many interesting results in this year’s 2022 midterms, the claim that money can simply buy elections was notably dealt another serious blow. In several races this cycle, from the high-profile gubernatorial contests to down ballot contest, politicians were able to pull out victories, despite being largely outspent.

The reason why this happened is straightforward: Money is vital for campaigns to speak and spread their message to voters. But money cannot simply buy political success because sometimes voters don’t like the message candidates have. Ultimately voters, not campaign spending, decide who wins and who loses.

This post looks at some of the ways that spending did not lead to success in 2022:

The Courts

Washington Post: ‘Dark money in politics an even darker place’ now, judges warn

By Rachel Weiner

.....Watchdogs looking to toughen federal enforcement of campaign finance laws will not get any help from the judiciary after an appellate court ruling this week that advocates and some judges warn will lead to more untraceable election spending.

A nonprofit had asked the U.S. Court of Appeals for the D.C. Circuit to take another look at a 2021 decision that prevented courts from reviewing Federal Election Commission decisions or stopped private parties from challenging the commission’s decisions for cases in which the agency invokes “prosecutorial discretion.” ...

Judge Neomi Rao, who wrote the original opinion from the three-judge panel that first ruled on the case, reiterated Monday that “prosecutorial discretion is not judicially reviewable.” In a statement joined by three other judges refusing to have the case sent to the full circuit for review, she wrote that “it is emphatically not the province of the courts to consider whether more vigorous enforcement of election laws would be desirable.”

Judge Patricia Millett, who dissented in both cases, lamented that the decision allows a minority of FEC members to kill any case without review merely by using the words “prosecutorial discretion.”

“In a perverse twist, those who are charged with enforcing the laws that protect the electoral building blocks of our democracy are free to operate outside the law,” she wrote Monday, joined by one colleague. “In this way, the panel decision renders the world of dark money in politics an even darker place.”

Election Law Blog: With Two Judges Not Participating and Two Dissenting, D.C. Circuit Will Not Review En Banc Decision That Allows a Minority of FEC Commissioners to Block Judicial Review By Bare Assertion of “Prosecutorial Discretion”

By Rick Hasen

.....This is a travesty and renders the judicial review procedures of FEC actions mostly meaningless.

Politico (Influence): DOJ appeals Wynn ruling

By Caitlin Oprysko

.....The Justice Department is appealing a federal judge’s dismissal of its lawsuit seeking to compel casino magnate and Republican fundraiser Steve Wynn to register as a foreign agent of Beijing, according to a notice filed Friday.

— The notice of appeal came a day after DOJ counterintelligence chief Jay Bratt shed some light on the department’s thinking about the case in remarks to FARA attorneys. Bratt’s first public comments on the case conceded that the October ruling from U.S. District Court Judge James Boasberg did in fact appear to limit the department in pursuing lawsuits to force some retroactive FARA registrations.

Bloomberg Law: Bankman-Fried Accused of Record Campaign Finance Violations

By Bill Allison

.....Sam Bankman-Fried, the second biggest Democratic donor in the 2022 election cycle, is charged with violating campaign finance laws, in what could be the biggest infusion of illegal corporate money into US politics in decades…

The FTX collapse could pull in the dozens of Republican and Democrat candidates, super-PACS and other fundraising groups into a complicated legal proceeding, and could put them at reputational risk for holding money that may have come unwittingly from FTX’s customers accounts. The ongoing bankruptcy proceeding could also force fundraising committees to pay back the money — plus interest — just as they’re trying to bring in cash for the 2024 presidential election.

Wall Street Journal: Ken Griffin Sues IRS Over Tax Privacy Breach That Also Affected Other Billionaires

By Richard Rubin

.....Billionaire hedge-fund manager Ken Griffin sued the Internal Revenue Service and Treasury Department on Tuesday, seeking damages after disclosure of his tax records.

Tax data about wealthy people such as Elon Musk and Jeff Bezos were published by the news organization ProPublica starting in June 2021, in an unusual breach of the confidentiality of tax returns. The news site published articles mentioning Mr. Griffin and using information from his tax records in April and July this year.

Nonprofits

Chronicle of Philanthropy: Ga. Senate Race Shows Why the Fraying Line Between Charity and Politics Must Be Repaired

By Craig Kennedy

.....Media investigations have documented the growth and influence of for-profit groups, such as Arabella Advisors, which sponsor and support several (c)(3) and (c)(4) organizations. While the transformation of tax-deductible money into politically charged cash occurs across the political spectrum, recent elections have seen more such funds pouring into left-leaning groups. A New York Times analysis found that 15 of the most politically active Democratic-aligned nonprofits spent more than $1.5 billion in 2020 compared with about $900 million spent by 15 of the most politically active Republican-aligned groups.

Free Expression

Free Press: What the Hell Happened to PayPal?

By Rupa Subramanya

.....The people who founded PayPal—the so-called PayPal Mafia—include Peter Thiel, Elon Musk, David Sacks and Max Levchin. All are champions of free speech. All have expressed shock and dismay at what is happening to the company they created. Several founders agreed to talk with The Free Press for this article.

“If the online forms of your money are frozen, that’s like destroying people economically, limiting their ability to exercise their political voice,” Thiel told me. “There’s something about destroying people economically that seems like a far more totalitarian thing.”

Online Speech Platforms

Wall Street Journal: Is Social-Media Censorship a Crime?

By Philip Hamburger

.....Amid growing revelations about government involvement in social-media censorship, it’s no longer enough to talk simply about tech censorship. The problem should be understood as gov-tech censorship. The Biden White House has threatened tech companies and federal agencies have pressed them to censor disfavored opinions and users. So it’s time to ask about accountability.

Revue: A Native Internet Protocol For Social Media

By Jack Dorsey

.....There’s a lot of conversation around the #TwitterFiles. Here’s my take, and thoughts on how to fix the issues identified.

I’ll start with the principles I’ve come to believe…based on everything I’ve learned and experienced through my past actions as a Twitter co-founder and lead:

Social media must be resilient to corporate and government control.
Only the original author may remove content they produce.
Moderation is best implemented by algorithmic choice.

The Twitter when I led it and the Twitter of today do not meet any of these principles. This is my fault alone, as I completely gave up pushing for them when an activist entered our stock in 2020. I no longer had hope of achieving any of it as a public company with no defense mechanisms (lack of dual-class shares being a key one). I planned my exit at that moment knowing I was no longer right for the company.

The biggest mistake I made was continuing to invest in building tools for us to manage the public conversation, versus building tools for the people using Twitter to easily manage it for themselves.

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