FEC’s McGahn Says Political Disclosure Overreach May Affect Media

The FCC’s requirement that all TV stations eventually post on fcc.gov political files with all new documents on campaign purchases of airtime may be a good idea of disclosure in theory but is a bad idea in practice, McGahn said Thursday. The Media Bureau that day denied the NAB’s request to hold off until the U.S. Court of Appeals for the D.C. Circuit rules on the association’s lawsuit against the FCC on the public-file online rules taking effect Aug. 2. The public file rule is an “FCC example of something that seems well intentioned -- of what’s really wrong with disclosure -- but that seems like regulation of the media,” McGahn said. “You're going to have media buyers now knowing” what campaigns pay for TV spots that run around the time of elections, and “they're going to be asking for lower rates” from broadcasters, he said.

The presidential campaigns of Barack Obama and Mitt Romney plus “the reform industry” of nonprofits that seek disclosure from others, but not themselves, all agreeing that political contributions via SMS is OK was a “three-legged stool” of unusual agreement, McGahn said: That stool “has just never stood up” before. It was “probably the only time this year you have the Obama and Romney camps saying the same thing, at the Federal Election Commission of all places,” and the FEC didn’t fully seize the opportunity to set easy-to-meet rules, he said. The agency’s vote on an advisory opinion allowing such giving was a “clear” vote yes because of agreement among the commissioners, though “it wasn’t a clear yes” in terms of clear-cut rules, McGahn said. Now carriers are hesitant to allow such contributions using their networks and are apparently asking the agency for guidance on implementing such a system, he said.

Because the FEC has a tendency to interpret court rulings and legislation more broadly than McGahn thinks they're intended to be, that urge could apply to the exception on political disclosure curbs for media companies, he told us during Q-and-A. “It’s in the water of the FEC, it’s just ... how it’s set up,” he said of career staff’s inclination to regulate. “They're not being biased, but there are just so many rules that are a vestige of what really is a rejected” era, he said. Whether staff are “out of control” in recommendations to commissioners depends on the case at hand, McGahn said. “Sometimes they are, sometimes they are not.” An FEC spokeswoman declined to comment.

McGahn’s definition of which entities ought to get the media exemption from curbs on speech: “Everybody.” His agency “needs to revisit its two-part test,” he told us. Post-Citizens United, “it is a whole new world that requires some fresh thinking on who the media is and who the media isn’t,” given the Supreme Court has said media warrant different equal-speech treatment, McGahn said. Media should be considered to be anyone not “on the ballot,” he said. “We've had discussions at the FEC that bloggers maybe should be regulated,” which is “one step away from newspapers,” McGahn said during his speech. “Candidates who take money, that ought to be disclosed in some form,” while “the disclosure of independent speech criticizing the government on the other hand is a whole other can of fish,” he said. “It could end up blowing in other ways, including the media."

Staff and three commissioners think the FEC has a “new license to require disclosure,” while the other three members don’t feel that way, McGahn said. “What you're seeing is, I use the phrase ‘disclosure mania.'” Research including from the Center for Responsive Politics shows all but a “margin of error” of political spending is already disclosed, he said. From the current trend it’s “not a far step to go one step farther, in asking the media to file reports, which I think is a bad, bad thing,” McGahn said. “It actually does ... chill speech.” With “the fickle winds of populism” now “blowing throughout the country,” it means “everybody’s blaming the media for everything,” he said. “So when is somebody going to say, ‘When does the media say who they are?'” through disclosure, McGahn asked. “It’s a matter of time before someone gets a bright idea to introduce a bill to get the media to disclose” because it’s inequitable to make “some companies have to disclose and others” not, he said. The FEC, meanwhile, “routinely turns losses in court into wins,” McGahn said.

Back at the FCC, the bureau denied the NAB’s request for stay of the public-file rule (CD Aug 6 p1). Broadcast lawyers and an association representative said that was expected. The bureau wasn’t persuaded the association showed its lawsuit would succeed, or that broadcasters face irreparable injury from the online posting of political ad rates, Chief Bill Lake wrote in the order (http://xrl.us/bngn7s). “NAB has failed to demonstrate ‘irreparable harm,'” he wrote. “Broadcasters have long been required to make available political file information, including political rates, and anyone, including non-broadcast competitors, can access these data in the stations’ public files. Similarly, the political files of broadcasters’ competitors have been available in paper form to television broadcasters for years.”

Stations will have the time and help they need to upload electronic versions of their paper files to the FCC, Lake wrote, citing a seminar the agency will hold next week. “The Commission also plans to schedule user testing and educational webinars shortly to ensure that the uploading of materials by broadcasters can be conducted smoothly and efficiently,” he said. The agency “will act promptly if any problems arise during user testing” and “provide telephonic support and post the answers to frequently asked questions online on an ongoing basis as needed to help broadcasters,” Lake continued: The industry “should have sufficient information about the database and time to come into compliance” by Aug 2. NAB’s “hopeful the courts will agree that there is a fundamental unfairness to singling out local TV stations for providing sensitive ad pricing information while all of our cable, satellite, newspaper and Internet competitors are exempted,” a spokesman said.