Campaign-finance debate spills onto the Web

Friday, October 22, 1999

When Zach Exley launched last spring, he never expected the modest parody site to garner much Web traffic and certainly not the attention of Texas governor and presidential contender George W. Bush.

But during a May news conference, Bush lashed out at the 29-year-old computer consultant, calling Exley a “garbage man” for posting humor columns about him. Bush even offered a shocking sound bite: “There ought to be limits to freedom.”

Exley's free-speech adventure has taken him far beyond simple parody: He now faces a campaign-finance predicament.

Last May, the Bush campaign filed a complaint with the Federal Election Commission against, contending that Exley's site constitutes an “independent expenditure” under federal election law.

And now Exley worries that he might be forced to shut down the Web site, since he has neither the time nor money to file any reports or disclosures the FEC might require.

“It doesn't matter what I'm saying on the Web site or how much I'm spending on it,” Exley said. “I shouldn't have to register with the FEC.”

With Bush's complaint now before the FEC, advocates and opponents of campaign-finance reform have embarked on a debate as to how the agency should or should not regulate political contributions and expenditures on the Internet.

Although agreement is almost universal that the Internet will become a significant part of political campaigns in the future, few experts will even hazard a guess as to how big or in what way.

Former GOP presidential hopeful Lamar Alexander compares predicting the impact of the Internet on politics with trying to guess years ago how television would affect campaigns. Although he says he can only speculate, Alexander says he knows the effect will be huge.

“The Internet may be the last, best hope for democratizing the presidential nomination process,” Alexander said. “It may permit lesser-known candidates to become better known and able to compete. Under existing laws — these severe campaign-finance restrictions — it basically freezes out of the process anyone who isn't already famous or rich.”

Don Simon, vice president of Common Cause, a leading group advocating campaign-finance reform, agrees that the impact of the Internet, although unpredictable, will be considerable. But Simon says the Internet shouldn't be exempt from federal campaign laws.

“There are important questions that need to be studied in terms of how campaign-finance reform rules apply to activity on the Internet,” Simon said. “It's important to strike the right balance of allowing activity on the Internet to proceed in an unfettered fashion but assuring that the protection of federal election laws — which are designed to safeguard the political process against corruption — are not in any way undermined.”

But Alexander and others say the Internet may defy even the most persistent federal regulator.

“I can't for the life of me see how the government can regulate speech on the Internet,” Alexander said. “My view is that the federal government should step back and let people speak more freely in politics and stop trying to stop money and regulate their campaigns.”

Simon says that with the FEC considering several changes to federal election rules — particularly with regard to their application to the Internet — perhaps debate should wait until after the commission reveals its thinking.

But some say they can't wait for the FEC.

In its report “Square Pegs and Round Holes,” the Center for Democracy and Technology says that efforts to date to apply the Federal Election Campaign Act to the Internet “have yielded troubling results, threatening to burden – even silence – the voice of average citizens in American political life.”

The Supreme Court, the report continues, has recognized that the Internet is entitled to the highest protection under the First Amendment.

“It would be worse than ironic if rules designed to deemphasize the unfair advantage of money, to broaden the diversity of groups that can have an impact on the election process and to return our electoral process to the people were applied to deter individuals from using the electronic soapbox of the Internet,” the report states.

Old rules, new medium

Although Congress created the FEC to clarify election laws, most campaign-finance observers agree that the agency has provided little guidance on Internet-related electoral spending issues.

Despite several key advisories during the past four years, the agency has failed to draw a clear line between what should and shouldn't be regulated on the Internet in terms of political spending.

Responding to a request from Alexander's campaign in 1995, the FEC approved the solicitation of campaign contributions on the Internet, provided that the Web site include disclaimers required under federal election law. The commission noted that the contributions obtained through the Internet should be disclosed in the same manner as contributions received through traditional methods.

In another 1995 opinion, the FEC stated that the creator of a political Web site may have to file an election report with the government if the site expressly supports or opposes a candidate or provides links to a candidate's Web site. Providing free Web sites, the FEC ruled, is a prohibited corporate contribution.

In a 1998 opinion, commissioners told a Connecticut man that the Web site he created to endorse the election of one candidate over another constituted an independent expenditure. If he spent more than $250 annually, he would be required to file reports with the FEC.

Because the site expressly advocated the election of the candidate, the FEC required the man to disclose his full name on his site and to indicate whether the site was authorized by the candidate he endorsed.

The FEC also rejected the claim that the site was built at no cost. Although the commission didn't rule on whether the costs breached the threshold, it said the figure should include the cost of registering the domain name, overhead costs of hardware and software and a portion of the cost of the equipment and Internet services.

But in a more recent development, the FEC's general counsel has drafted a preliminary advisory that concluded that a volunteer could prepare a Web site on his or her own time and computer but would not necessarily be making a campaign contribution in the process. The FEC hasn't approved that opinion.

In an advisory released this year, the FEC approved a request from Minnesota state officials to allow the Secretary of State's office to post on its Web site links to all candidate Web sites.

The Web police?

FEC Commissioner Karl Sandstrom perhaps clouded the issue even further with a guest column in the Sept. 5 edition of The Washington Post where he opined that the Internet “is beyond the capabilities of the FEC to be the Web police.”

He hinted that the Web might not need to be regulated immediately and said that the egalitarian nature of the Internet might brush aside any need for government intervention.

“Here the hope lives that the force of an argument can prevail over the might of the pocketbook,” Sandstrom wrote. “One need only visit the Web page of a sophisticated high school student to see how slim a technical advantage media giants enjoy.”

Sandstrom also suggested that regulation might give foreigners more influence on U.S. elections than American citizens.

“Foreign Web sites that expressly advocate election results are available to our citizens but beyond our regulatory reach,” he wrote. “Should these persons enjoy a broader right to publish than their American readers?”

Reform advocates agree that such questions pose problems in controlling electoral spending. But they say that shouldn't prohibit efforts to change the way Americans pay for political campaigns.

Simon of Common Cause stresses balance.

Simon argues that bills — such as an amendment proposed by Rep. Tom DeLay last month to exempt political activity on the Internet — would return electioneering to the early 1900s. He says such legislation would overturn laws like the 1907 federal statute that forbids direct corporate donations to candidates.

Drew Maloney, spokesman for DeLay, said the congressman offered the amendment because it became clear that campaign-reform efforts would stifle actual speech instead of limiting campaign monies. He disagreed that the proposal would unleash corporate donors.

“Common Cause likes to say the little man has no voice,” Maloney said. “But with the Internet, it's huge. One person can have a major voice.”

Determining how much a person or group has spent on a Web site can be problematic as well, Maloney says.

“At what point would Web sites become regulated by the FEC?” he asked. “What costs would be attributed? Links to another page? The number of e-mails?”

Simon says he welcomes debate over what constitutes an individual contribution and what threshold a person would have to cross.

“Those questions about individual activity are legitimate questions and need to be looked at,” Simon said. “It's very different from an across-the-board exemption which would allow unlimited corporate donations and union funds.”

An anonymous tradition

Roger Pilon, vice president for legal affairs at the Cato Institute, a libertarian think tank, says those insistent on extending campaign-finance reform don't understand Internet technology.

“As usual, the Washington political establishment from Congress to the Washington Post is behind the curve on these matters,” Pilon said. “They persist in believing they can regulate New Deal-style virtually anything that comes down the pike. Fortunately, the market has a way of finding its way around their efforts, and that's good for freedom.”

For example, free-speech advocates say that if Exley of or any other Web site owner wishes to post anonymous political comments, they should be allowed to do so. Although the U.S. Supreme Court hasn't tackled such a specific case, the court did rule as recently as 1995 that laws against anonymous pamphleteering were unconstitutional.

In McIntyre v. Ohio Elections Commission, the court described anonymous speech as an “honorable tradition of advocacy and dissent” that has served as a “shield from the tyranny of the majority.”

Alexander noted that if Thomas Paine or the Federalists were alive today, they would surely post their work on the Internet. And they might very well do it anonymously, as Paine did with Common Sense or under pseudonyms as Alexander Hamilton, John Jay and James Madison did with The Federalist Papers.

But Alexander said that recent campaign-finance efforts before Congress weren't designed to work on the Internet.

“It's like applying the rules of the road that existed for the pony express to space travel,” he said. “Applying regulations that don't work for a world where we used to live to a world we live in now is a really dumb idea.”

But freedom requires some regulation, says Rick Schenkman, managing editor for, an online magazine that promotes public financing for elections.

“That sounds like a bit of a paradox, but you can't have democracy without setting rules requiring people to disclose campaign contributions and detail where their money is going,” Schenkman said.

He notes, however, that the Internet political experience is still young. Therefore, he says Congress should not attempt to solve problems that haven't appeared.

“At the moment, the Internet is not being abused in such a way that rich people are using the medium to further increase their hold on the power,” Schenkman said. “If it turns out that they are able to use the new medium that way, then at that point we should call for regulation.”

But Exley says there is a problem — a major free-speech one. Forcing him to register his Web site with the FEC would essentially force his site off the Internet.

“To register with the FEC is a pretty complex process, and I barely have time to post letters and update the site,” he said, noting that he would have to hire an attorney and an accountant just to weed through all of the necessary paperwork. “You shouldn't have to go through all of that to speak your mind on the Web.”