Tag Archives: First Amendment

Thoughts from the Menendez Trial: Preventing Corruption from the Start

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Last fall’s corruption trial of U.S. Senator Robert Menendez (D-NJ) ended rather anticlimactically, with the presiding judge declaring a mistrial after the jury announced that it couldn’t reach a decision, and the Department of Justice eventually deciding not to retry him. Senator Menendez had been accused of taking donations and gifts from Florida ophthalmologist Salomon Melgen in exchange for advocating for visas for Melgen’s foreign girlfriends, the award of a government contract, and the resolution of a Medicare billing dispute. Plenty of digital ink has already been spilled on the broader implications of the Menendez case for other bribery prosecutions (on this blog here, and elsewhere here and here).

But putting aside the specifics of the case, what caught my eye about the allegations against Senator Menendez was a background feature of U.S. law that seems to have gone largely undiscussed: It’s perfectly legal (and normal) for non-constituents to contribute to political candidates. In other words, even if you are barred from voting for a candidate because you live outside that candidate’s district, you can still express your support by pulling out your checkbook. That lack of constraint on donations seems to invite the very kind of corruption the government alleged in the Menendez case, because it allows a wealthy donor to find and purchase his or her own “personal United States senator.”

I’m certainly not the first person to voice the concern that allowing non-residents to contribute to political candidates may facilitate corruption. Two states—Alaska and Hawaii—have recognized the risk posed by allowing non-residents to contribute to political candidates. They’ve responded by limiting those donations. But in the Lower 48 and in all federal elections, there are no differential limits on contributions from people residing outside the state, so long as they are American citizens or permanent residents. (Alaska’s law is currently facing a First Amendment challenge from an aspiring donor whose gift was returned because the candidate he supported had already reached the out-of-state contribution limits. A federal judge upheld the law as a “closely drawn” effort by the state to prevent “quid pro quo corruption or its appearance,” but the would-be donor has appealed.) Putting aside the constitutional defenses of the sorts of laws that Alaska and Hawaii have adopted (which you can find in the amicus briefs filed in the Alaska case here, here, and here), there are strong policy reasons for limiting contributions by people living outside a state or district—not least because such limits, as the judge in the Alaska case noted, can be a useful tool for preventing corruption or its appearance:

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Does the First Amendment Protect Payment for Access?

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 As many readers of this blog know, U.S. law on whether (or when) campaign donations can be proscribed by criminal anticorruption statutes is quite complicated, and to some degree unsettled. On the one hand, the Supreme Court has held that campaign contributions are constitutionally protected “speech” under the First Amendment of the U.S. Constitution. On the other hand, U.S. criminal law can and does prohibit campaign donations that are the “quid” in a classic quid pro quo bribery transaction. In other words, it would unconstitutional for the U.S. to prohibit campaign donations to politicians even if such a prohibition is motivated by the generalized worry that politicians might show special solicitude to the interests of their big donors. But it is perfectly constitutional for Congress to prohibit quid pro quo transactions in which a private interest offers a campaign donation as the “quid” in exchange for some “quo.”

It remains an open question, however, what can qualify as the “quo.” Certainly passing legislation, directing federal funding, and securing special regulatory benefits and exceptions would suffice. But what about mere access — an understanding between the donor and elected official that a campaign contribution will get the donor special access to the official? Two recent Supreme Court opinions — Citizens United v. FEC and McCutcheon v. FEC — contain language suggesting that it might be unconstitutional for U.S. law to prohibit an explicit quid pro quo agreement in which a politician offers access in exchange for campaign contributions. According to Citizens United, “[i]ngratiation and access . . . are not corruption,” while McCutcheon cautioned that “government regulation may not target the general gratitude a candidate may feel toward those who support him or his allies or the political access such support may afford” (emphasis added).

Despite this suggestive language, the Supreme Court has not yet had to confront head-on the question of whether the First Amendment protects quid pro quo payment-for-access. The closest it came was last year in United States v. McDonnell (discussed on the blog here, here, and here). In that case, Governor McDonnell helped to arrange meetings between businessman Jonnie Williams and government officials, and accepted personal gifts from Mr. Williams in exchange. By a vote of 7-0, the McDonnell Court reversed the governor’s conviction and construed the federal bribery statute at issue not to cover the governor’s conduct.

But this doesn’t resolve the constitutional question. McDonnell turned on the construction of the existing federal anti-bribery statute, which requires that the “quo” be an “official act,” which the Court construed narrowly as excluding provision of mere access. Moreover, McDonnell was not a First Amendment case, as the alleged bribes were not campaign contributions. Nonetheless, the Court did discuss the concept of corruption in a manner reminiscent of its opinions in Citizens United and McCutcheon. According to McDonnell: “[C]onscientious public officials arrange meetings for constituents, contact other officials on their behalf, and include them in events all the time. . . . The Government’s position [that McDonnell violated the law] could cast a pall of potential prosecution over these relationships if [a donor] had given a campaign contribution in the past . . . . Officials might wonder whether they could respond to even the most commonplace requests for assistance, and citizens with legitimate concerns might shrink from participating in democratic discourse.” Furthermore, McCutcheon — which was a First Amendment case — defined the sort of corruption that could justify restrictions on campaign donations as “a direct exchange of an official act for money” (emphasis added), which might imply that, at least in the campaign donation context, McDonnell’s reading of the anti-bribery statute is constitutionally required.

But is that right? Separate from the question of whether Congress should criminalize payment-for-access, and from the question of whether Congress has in fact done so in the existing federal anti-bribery statutes, is the question of whether Congress could criminally proscribe payment-for-access if it wanted to. In other words, is payment-for-access constitutionally protected? Though some of the Supreme Court’s recent language has suggested such a conclusion, I believe that proposition is wrong, for three reasons:

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Chill Out: Fine-Tuning Anticorruption Initiatives to Decrease Their Chilling Effect

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Who is “harmed” by aggressive anticorruption crackdowns? The most obvious answer is corrupt bureaucrats, shady contractors, and those who benefit from illicit flows of money. And while there are concerns about political bias and other forms of discrimination in the selection of targets, in general most of us rightly shed few tears for corrupt public officials and those who benefit from their illicit acts. But aggressive anticorruption crackdowns may have an important indirect cost: they may have a chilling effect on legitimate, socially beneficial behavior, such as public and private investment in economically productive activities. Although chilling effects are often discussed in other areas, such as with First Amendment rights in the United States, there is little discussion of it in the anticorruption context. That should change.

For example, in Indonesia, recent efforts to crack down on corruption appear to have stunted simultaneous measures to grow the economy through fiscal stimulus. As this Reuters article relates, “Indonesian bureaucrats are holding off spending billions of dollars on everything from schools and clinics to garbage trucks and parking meters, fearful that any major expenditure could come under the scanner of fervent anti-corruption fighters.” Nor is Indonesia the only example. In April 2014, Bank of America estimated that China’s corruption crackdown would cost the Chinese economy approximately $100 billion that year. One can challenge that estimate (as Matthew has discussed with respect to other figures used in reports on the cost of China’s anticorruption drive), but the more general notion that aggressive anticorruption enforcement can have a chilling effect on both public and private investment, which in turn can have negative macroeconomic impacts, is harder to rebut.

Taking this chilling effect seriously does not imply the view that corruption is an “efficient grease” or otherwise economically beneficial. The point, rather, is that although corruption is bad, aggressive measures to punish corruption may deter not only corrupt activities (which we want to deter) but also legitimate activities that might entail corruption risks, or be misconstrued as corruption. So, if we think that corruption is bad but that anticorruption enforcement might have an undesirable chilling effect, what should we do? Continue reading →

Is It Unconstitutional To Compel Extractive Industry Firms To Publish What They Pay?

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“Publish What You Pay” (PWYP) is the slogan of the international civil society movement to promote transparency and accountability in the extractive industry sector (oil, gas, minerals, etc.). The idea is to get firms to disclose what they pay to governments, and to get governments to disclose what they receive, in connection with extraction projects. Viewing voluntary programs like the Extractive Industries Transparency Initiative as insufficient, the PWYP movement has been pressing for mandatory disclosure requirements. But would such requirements violate the right to free speech protected by the First Amendment of the U.S. Constitution?

That question may seem absurd. Requiring truthful disclosures by commercial firms of payments to foreign governments may or may not be an effective anticorruption measure, but is it even plausible that such requirements would violate the constitutional guarantee of free speech? I think the answer should be no. But alas, as is often the case, it’s not clear that my view is shared by the federal judges who are likely to decide this issue. Indeed, there are worrisome signs that the powerful D.C. Circuit Court of Appeals may endorse an absurdly expansive conception of the First Amendment that would block any effective PWYP mandate. Continue reading →