arrowSection 3.1 - Campaign Finance

arrowSection 3.1.1 - Federal Law

This topic is monitored by Moritz Law Professor Edward B. Foley

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Can the Media Coordinate With Candidates on What They Say About Campaigns?

The short answer is yes. Here's why.

Federal campaign finance laws prohibit corporations from directly spending or contributing money in connection with a federal election. 1  However, a media exception exists for corporations if the expenditure is made for a news story, commentary, or editorial by a media organization. Because the media exception provides a means for corporations to directly participate in political communications, corporations are becoming increasingly aggressive in seeking to be classified as a media organization. The National Rifle Association's recent creation of NRA News is a well-publicized example of this phenomenon.

Even if media corporations can spend corporate dollars to advocate for or against a candidate, when doing so as part of their media operations, is this spending subject to the general restriction that it must not be coordinated with a candidate (so that it is not classified as prohibited contribution to the candidate)? An explanation of how federal law treats coordinated spending as campaign contributions is available here. However, because media communications are exempted from the definition of expenditures and contributions, media corporations are allowed to directly coordinate media communications with a candidate.

The Media Exception

Under the Federal Election Campaign Act (FECA or Act), it is unlawful for "any corporation … to make a contribution or expenditure in connection with any election to any political office." 2  FECA defines expenditures as "any purchase, payment, distribution, loan, advance, deposit, or gift of money or anything of value, made by any person for the purpose of influencing any election for Federal office." 3  Although this statutory language has been judicially limited to the category of "express advocacy" (messages that expressly advocate for or against a candidate's election), Congress in the McCain-Feingold legislation also prohibited corporations from spending any funds on "electioneering communications," defined as broadcast messages to the electorate referring to a candidate within 60 days of an election. From these statutory prohibitions, FECA expressly carves out the media exception by stating that "any news story, commentary, or editorial distributed through the facilities of any broadcasting station, newspaper, magazine, or other periodical publication, unless such facilities are owned or controlled by any political party, political committee, or candidate" shall not be considered an expenditure. 4

The FEC has used similar language in defining the media exception in its regulations, but has extended the list of media organizations to cable television operators, programmers, and producers and has stated that the media exception applies to both expenditures and contributions. 5  The regulation concerning contributions states "Any cost incurred in covering or carrying a news story, commentary, or editorial by any broadcasting station (including a cable television operator, programmer or producer), newspaper, magazine, or other periodical publication is not a contribution unless the facility is owned or controlled by any … candidate … ." 6  The FEC has also extended the media exception to Internet news organizations "whose activities fulfill the requirements of the "press exemption.'" 7 

One critical element of the media exception is that in order to qualify for the exception, the media facility must not be owned or controlled by a candidate. This "own or control" standard recognizes that a media organization loses its informative and independent nature if a candidate has control over content production. A second element of the media exception is that the news story, commentary, or editorial must "represent[] a bona fide news account" and "is part of a general pattern of campaign-related news account[s] that give reasonably equal coverage to all opposing candidates in the circulation or listening area… ." 8

The Supreme Court has determined that media corporations are entitled to an exception to the ban on corporate political spending because of the critical role the media plays in our society. 9  In Austin v. Michigan Chamber of Commerce, the Court explained that it is possible, without a media exception, to read the Act as banning media coverage of election-related news stories. 10  In order to clarify the issue, the media exception "ensures that the Act does not hinder or prevent the institutional press from reporting on, and publishing editorials about, newsworthy events." 11

No Coordination Concerns for Media Corporations

In addition to using the media exception to bypass the prohibition on corporate spending in connection with federal campaigns, media corporations can also use the media exception to lawfully coordinate communications with a candidate. The FEC has created very specific regulations describing when a communication is considered coordinated with a candidate. When a communication is coordinated with a candidate, the communication is treated as a contribution. Even though FECA bars general corporations from making direct contributions or expenditures in connection with a federal election, media corporations are allowed to coordinate communications with a candidate.

The FEC rules dealing with coordinated communications do not contain a media exception. However, because coordinated communications are treated as expenditures by a candidate and contributions by the group, and media communications are exempted from the definitions of expenditures and contributions, a coordinated communication by a media organization technically cannot be an expenditure or a contribution. Therefore, even if a candidate has substantial discussions with a media organization about the timing or content of a particular news story, commentary, or editorial, such communications would be allowed under the media exception and would not fall under the regulations on coordinated communications.

This regulatory exemption is somewhat in tension with the basic principle that coordinated spending is equivalent to a campaign contribution. For example, Fox News clearly is not permitted to write a check directly to the Bush campaign, and CNN likewise is completely prohibited from making a contribution directly to the Kerry campaign. Therefore, the basic principle would seem to suggest that neither news organization can work with either campaign to air programming that the favored candidate would like to see. Nevertheless, the actual language of the FEC rules makes coordinated media communications exempt from coordination laws.

Perhaps the best explanation of this apparent anomaly is that a media corporation acts no differently from any other entity when it writes a check to the candidate., but it does play a different role when it publishes a news story or editorial on the candidate's behalf. To be sure, if the candidate is providing the content for a story or editorial, the situation seems little different than if the media organization gave the candidate free advertising space, which is rather like writing a check to the candidate so that the campaign can purchase advertising. Nonetheless, our soceity's desire to give the media some extra latitude might justify allowing them to work with candidates when the media engages in the production of its own journalistic content, since that is a function that distinguishes the media from other organizations.

The "ownership or control" limitation on the media exemption guarantees that this special privilege for the press applies only when they do produce their own journalistic content separate from the candidate's own campaign materials. If the candidate "controlled" what the media entity distributed, then the benefit of the exception would not be available. To be sure, this "control" test falls considerably short of the standard for finding coordination: "cooperation, consultation, or [otherwise acting in] concert with" a candidate counts as coordination. Thus, a media corporation can cooperate and consult with the candidate when producing its journalistic content, and yet not be under the candidate's control. This kind of coordinated activity gets the benefit of the media exemption and thus does not trigger the rules barring contributions to candidates by corporations.

There may be circumstances in which, as a practical matter, it is difficult to tell whether a media entity's coordination with a candidate rises to the level of "control" over the media entity by the candidate. In general, there should be a reluctance to finding such "control" because regulation of the media inevitably raises First Amendment sensitivities. Nonetheless, enforcement of campaign finance rules requires that, when such control clearly does exist, monies donated from such purportedly media activities be considered campaign contributions. As more organizations attempt to qualify for the media exemption, there will be increasing need to make sure that none abuse this privilege by serving essentially as alter egos of the candidate's campaign but without regulation.

Notes

1. 2 U.S.C. § 441 (a) (2004).

2. Id. However, corporations are allowed to make limited contributions via Political Action Committees (PACs).

3. 2 U.S.C. § 431 (9) (a) (2004).

4. 2 U.S.C. § 431 (9) (b) (i) (2004) (emphasis added).

5. 11 C.F.R. § 100.132 (a)-(b) (2004); 11 C.F.R. § 100.73 (2004).

6. 11 C.F.R. § 100.73 (2004).

7. Federal Election Advisory Opinion 1999-17.

8. 11 C.F.R. § 100.132 (a)-(b) (2004).

9. See Austin v. Michigan Chamber of Commerce, 494 U.S. 652, 667 (1990).

10. See Id. at 668.

11. Id.

12. 11 C.F.R. § 100.132 (a)-(b) (2004).

13. See 11 C.F.R. §109.21 (2004).

14. 47 U.S.C. § 315 (a) (2004).

15. 47 U.S.C. § 315 (a) (1)-(4) (2004).

16. Austin, 494 U.S. at 668.

17. Id.