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The Federal Election Commission (FEC) enacted a rule requiring disclosure of donors whose donation was made "for the purpose of furthering electioneering communications."  Maryland Rep. Chris Van Hollen challenged this rule on grounds that it created a loophole in the law.  According to Van Hollen, fewer than 10% of the contributors to electioneering communications in 2010 were disclosed to the FEC.

The US District Court agreed with Van Hollen, holding that the statute requires disclosure of ALL contributors of $1000 or more to organizations placing "electioneering communications," even if the contributions were not made for the specific purpose of funding the electioneering communication.  The number of contributors that would need to be disclosed under this ruling could be quite high, particularly since the US Supreme Court allowed corporations and unions to fund independent electioneering communications in its landmark 2009 Citizens United case discussed here.

 So, while some PACs erroneously claim they are "prohibited" from running electioneering communications due to a recent "FCC" ruling, the truth is that they do not want to subject themselves to the broad disclosure requirements established in the Van Hollen case.  The case is on appeal to the DC Circuit, so we should soon know whether the FEC or the US District Court was right in their respective interpretations of the disclosure statute.

In the meantime, "electioneering communications" can be avoided by not referring to a specific candidate, by avoiding states where primaries are to occur within 30 days or by communicating the message to fewer than 50,000 people.  While these ads will still be considered "independent expenditures" that have their own FEC reporting requirements, they are not nearly as burdensome as those recently imposed by the court on "electioneering communications."

An opinion released several weeks ago by the US Court of Appeals for the First Circuit sheds some light on whether statements made in the context of a third party political ad are defamatory.  The ad at issue there was a negative campaign ad against a candidate for the Maine State Senate.  The ad stated that the candidate, as a town selectman (equivalent to city council) "voted to cancel the $10,000 fireworks celebration for the Fourth of July," while also "[giving] 10,000 taxpayer dollars to a political organization."  The ad then stated that "It's wrong for [the candidate] to give your money to a political organization, and it was wrong for [him] to cancel your 4th of July celebration."

The candidate claimed that the word "wrong" implied that he had committed a crime and that the words "political organization" implied that it was the candidate's own organization, therefore implying that he had stolen town funds for his own organization.  The court disagreed and granted the defendant's motion to dismiss.  Why?

First, the court held that a political candidate is "public" figure.  In order for a statement to be defamatory against a public figure, the statement must be made with "actual malice," which means that it must be made with knowledge of falsity or with "reckless disregard for the truth."  The court held that this standard could not be met here because the word "wrong" does not necessarily mean that the candidate broke the law.  Although the court did not elaborate on this, the word "wrong" is often used to convey the speaker's opinion rather than as a statement of fact.  In other words, in a political ad, one party often believes that what the other party does is "wrong," even though it is neither criminal nor immoral. A statement presented as an opinion generally is not defamatory.

The court also refused to draw the inference that the "political organization" referred to in the ad was the candidate's own organization.  In essence, the entire ad was an opinion that the candidate's use of $10,000 would have been better spent on fireworks rather than on a political organization of any kind, and there is nothing defamatory about that allegation/opinion.

In this particular case, the court also found that the allegations were true, which is an absolute defense to defamation, as noted above.  However, for purposes of ruling on the motion to dismiss, the court viewed the allegations in the most favorable light to the plaintiff (the non-dismissing party) and still found that the statements were not defamatory, even if untrue.

The lesson to be learned is that political speech is subject to strong First Amendment protection.  Most of the negative ads do not need to be taken down, even if you get a cease and desist letter.  You may need to be concerned if the statements made are potentially defamatory, charging that a candidate has committed a crime or an immoral or unethical act.  And you should request substantiation of any potentially defamatory claims made in the ad.  But merely stating that a candidate did something "wrong" does not necessarily imply criminality or unethical behavior.  It may simply be "wrong" in the eyes of the advertiser, and that is a mere opinion.

Of course, if there is any question about the content of a political ad, you should consult with legal counsel.  This is one area where it is better to be safe than sorry.