Lobby Firm Tells Clients How To Sway Elections While Avoiding ‘Public Scrutiny’

February 17, 2010 7:54 am

In the wake of last month’s Citizens United ruling, a powerhouse Washington lobbying firm is informing its corporate clients on how they can use middlemen like the Chamber of Commerce to pour unlimited amounts of money into political campaigns, while maintaining “sufficient cover” to avoid “public scrutiny” and negative media coverage.

A “Public Policy and Law Alert” on the impact of the Supreme Court’s ruling, prepared by two lawyers for K&LGates and posted on the firm’s site last Friday, notes that, thanks to disclosure rules, corporations could alienate their customers by spending on political campaigns — especially because they could become the target of negative media coverage.So, what’s a corporation looking to advance its political goals to do? According to the alert, written by K&L lawyers Tim Peckinpaugh and Stephen Roberts:

[G]roups of corporations within an industry may form coalitions or use existing trade associations to support candidates favorable to policy positions that affect the group as a whole. While corporations that contribute to these expenditures might still be disclosed, this indirect approach can provide sufficient cover such that no single contributing entity receives the bulk of public scrutiny.

In other words, just use lobby associations as handy pass-throughs, to obscure from the public your involvement in the race. Simple!

In fact, as we’ve reported, that’s a tactic that corporations already routinely use, and that the Chamber of Commerce pioneered over the last decade. But the Citizens’ United decision means these campaigns can now directly advocate for the election or defeat of a candidate — and can do it right up to Election Day.

In an interview with TPMmuckraker, Peckinpaugh denied that the alert represents guidance to clients on how to make an end-run around disclosure rules. “We’re just stating what the law indicates,” he said.

Peckinpaugh characterized the alert as a Q&A that offers an “assessment” of the state of the law, rather than as legal or strategic advice for clients. “It’s just stating the obvious,” said Peckinpaugh. Indeed, a disclaimer makes clear that it does “not contain or convey legal advice.”

Still, the alert is intended for the firm’s corporate clients — and it appears to give a strong hint as to how K&L is advising those clients behind closed doors.

Another section of the alert makes clear that U.S. subsidiaries of foreign corporations will now be able to spend unlimited amounts to sway elections — a point that top Republicans like Sen. Mitch McConnell have tried to muddy.

Peckinpaugh and Roberts write:

Will U.S. subsidiaries of foreign corporations be exempt?
Yes. The definition of “foreign national” exempts any person that is “not an individual and is organized under or created by the laws of the United States or of any State or other place subject to the jurisdiction of the United States and has its principal place of business within the United States.” 22 U.S.C. § 611(b)(2). The Federal Election Commission (“FEC”) has determined that this exemption includes a U.S. corporation that is a subsidiary of a foreign corporation, so long as the foreign parent does not finance U.S. political activities and no foreign national participates in any decision to make expenditures.

On the whole, though, Peckinpaugh and Roberts suggest caution. “Just because a corporation may make an independent direct advocacy expenditure doesn’t mean that it should,” they write.

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