The Referee Of Political Campaigns

Sean Cooksey:

My view is the best referees are there to enforce the rules. So the game is played fairly, but is also trying to not interfere with the flow of the game.

Eric Wilson:

I'm Eric Wilson, managing partner of Startup Caucus, the home of campaign tech innovation on the right. Welcome to the Business of Politics Show. On this podcast, you are joining in on a conversation with entrepreneurs, operatives, and experts who make professional politics happen. Today we're speaking with Sean Cooksey, chairman of the Federal Election Commission. The FEC sets the regulations for campaigning at the federal level. To put it bluntly, the business of politics follows their rules, and there are real consequences to that. It's an honor to have Sean on the show. He's a former Chief Counsel to Senator Josh Holly of Missouri, and former counsel to Senator Ted Cruz of Texas. The Senate confirmed Sean as a commissioner in 2020. In our conversation, we get the insider's perspective on how the FEC works, what the commission is working on for the 2024 election cycle, and how they're responding to new advancements in technology. Sean, as a campaigner who has spent my life, my professional life working diligently to comply with FEC regulations, sometimes even when they don't make sense, this feels like Robert talking to the cops or Tom hanging out to Jerry. What's your perspective on the role of the FEC in the electoral process?

Sean Cooksey:

Oh, I appreciate that, Eric, that you're mindful of the rules and always trying to follow them, but I view the FEC at its most basic level, not so much as a cop on the beat or a sheriff that's out trying to get scoff laws, but really more to make a different analogy to sports more as a referee. And people have different philosophies on referees, but my view is the best referees are there to enforce the rules. So the game is played fairly, but is also trying to not interfere with the flow of the game and a way that, as you said, campaigns, everyone's mindful of the rules, but they're also trying to do their jobs. They're trying to run their campaigns and looking forward to election day, it's fast moving, it's often really complicated. And I think the FEC needs to be always mindful of that reality of what we call the regulated community and what they're facing. And we need to be not just enforcing the rules, but explaining them, making them clearer, answering people's questions. I think that is when the FEC is doing its best work, and that's how I really think about the job.

Eric Wilson:

I really like that metaphor of referee and making sure that the playing field is level, but also you're not interfering with the flow of the game as it were. So explain for us how changes get made and what are the levers that you have to pull the different types of guidance that the FVC issues to enforce those rules?

Sean Cooksey:

Yeah, it's a good question because it raises, as you said, the different levels of guidance and the different layers of ways that we interact with the regulated community with candidates and campaigns. I mean, at the highest most broad level, there are formal regulations, right? The code of federal regulations that goes through a long process with public comment periods. But those rules are written pretty broadly and a lot of times what they require in addition to that is what we call informal rulemaking guidance documents. The candidate guide, which is a very large and important document we put out for candidates and campaigns to try to explain the rules and how they're meant to be interpreted. We also have a process that I think is just really critical, which is an advisory opinions process. The ao, this is a process, the AO where candidates campaigns are really anybody, private citizens who have questions about a particular thing they want to do related to campaign finance law can come and ask the FECA question ahead of time and say, can I do this consistent with the law?

Is this proposal okay? And the commission will consider that, and in most circumstances, we have a 60 day deadline, but actually there's a way to get expedited review on a 20 day deadline, and the FEC can give you an answer. And that answer actually gives you then legal immunity to go ahead with that proposal. And I think that is frankly an underused tool at the FEC that candidates and campaigns can get, again, guidance on the front end rather than the backend, which is the enforcement docket. We have a complaint system, we have a process for considering enforcement cases, we can investigate, we can seek penalties, we can sue people in court. That is another way that is sort of a way to make law. I mean, if we conclude something's a violation or we conclude, it's not, that tends to carry forward into future cases.

But those are probably the biggest ways, the different sort of avenues. The FEC makes law. And I think the one thing to really underscore is that all of those things I was talking about, regulations, guidance documents, AOS enforcement cases, they have to be decided by statute with four commissioners. So we're an agency of six evenly divided three Democrats and three Republicans. The statute says that basically everything we do of consequence needs four votes, and that means you need a bipartisan majority to get anything of consequence done at the FEC. And so that's really, I think, adds a lot of important weight and confidence behind what it is that we're doing.

Eric Wilson:

And just to underscore how important this is, is there also criminal action that can be taken for violation of FEC laws and regulations?

Sean Cooksey:

So there is, but not by the FEC.

Eric Wilson:

You don't have a jail there in the building.

Sean Cooksey:

We don't have a jail. We don't have prosecutors, but we do have a relationship with the Department of Justice, and many campaigns are familiar with the Public Integrity Unit of the criminal division of the Department of Justice. We do have, we call a memorandum of understanding, just sort of a interdepartmental agreement with DOJ. We do have the power to refer matters that we think rise to the level of criminal violations to DOJ. And people have gone to prison for campaign finance violations as sometimes say FEC jail is real jail, and it is something that does happen sometimes.

Eric Wilson:

And so with the FEC being that bipartisan commission, you've got Republicans and Democrats trying to agree on the rules for political campaigns, that obviously seems like a recipe for deadlock. How are you balancing that need to reach consensus versus partisan interests?

Sean Cooksey:

It's an interesting question, and I think every commissioner approaches it probably a little bit differently. As you said, it's a bipartisan commission, it's not a nonpartisan commission. And I think that that is important. I mean, I don't take off my Red Jersey here on the commission, and my colleagues don't take off their blue ones. It's not the federal judiciary in that sense. That being said, I think we've all come with a commitment to enforcing the law consistently and evenly regardless of the political affiliation of the people in front of us. I know I've done that. I can think of many, many cases that I've voted to dismiss against democratic defendants in the enforcement docket or voted to deny advisory opinions to Republicans. It's not really based on partisan interests, it's based on the law. I think a big thing that informs that too is as commissioners, we are a little bit above the day-to-day concerns, which are the real concerns of campaigns, which is the next election. How does this impact us? In November, the FEC commissioners, I think are usually operating on a longer time horizon and a broader view of the law and not so much say, what's the impact of this one enforcement case on this next election? But we're really thinking about it at a higher level and a broader level of what should this rule be for everyone in all circumstances for the next 10 or 20 years. And I think that really motivates the way a lot of my colleagues and I look at all these issues.

Eric Wilson:

So the polling of an individual race isn't figuring into your decision making.

Sean Cooksey:

Exactly.

Eric Wilson:

So Sean, as campaigns have gotten more sophisticated, we have all these new technologies. You're starting to see a number of different agencies and even private companies deciding to address the conduct of politics. And sometimes these are, I guess I would say contrary to FEC policy. For example, there are many digital advertising platforms that require an FEC style disclosure based on the content paid for by entity name, not whether the entity paying for the ad is bound by those regulations. So how do you think about these competing regulations, whether it's from other agencies or even the private companies?

Sean Cooksey:

Well, when it comes to other agencies, there's a lot at play. As you said. We have sister agencies in the federal government as we were talking about with the Department of Justice. I would also include the Congressional Ethics Committees as another sort of enforcement agency we deal with on a pretty regular basis. To the extent possible, I always try to approach other agencies who touch on these campaign finance issues in a cooperative way. As I referenced, we have a good formal agreement with the Department of Justice, and that is a good agreement that really sets out where we're going to work together and where we're going to work independently. And where the FEC is really in the driver's seat on interpreting the law and do J'S role really is limited to criminal enforcement on other issues. I mean, there are going to be conflicts. There are a lot of agencies who are interested, for example, in the role of artificial intelligence and political ads.

And I think it's really, really important for the FEC to stand up for its own jurisdiction and its primacy in rulemaking on those issues. And so it's kind of a case by case basis and a back and forth, but ultimately, we try to lead with cooperation before we devolve into conflict. On the private company side though, I mean, I think that's a little bit of a different issue, certainly from a legal perspective and from a constitutional perspective. I mean, private companies are private citizens, they're private organizations, and they have a lot more freedom to set their own rules on their own platforms and what they want, whether it's things like, as you said, social media or digital ad disclaimers, or how much disclosure, whether they maintain an ad database, is really ultimately up to them if that's what they want to do. The biggest limitation on that is just that they not do it in a way that's purposefully done to try to influence the outcome of elections, especially if it's done in coordination with candidates or campaigns. That's where they can get into trouble. But otherwise, they tend to be a lot freer to do what they think is appropriate with their own businesses. And I think the FEC has taken a pretty light touch approach to them.

Eric Wilson:

You're listening to the Business of Politics Show. I'm speaking with Sean Cooksey, chairman of the Federal Elections Commission about the work of that agency. Sean, since I've been working in politics, it seems like the FEC has always lagged behind technology in terms of regulation. I think sometimes that's a good thing. If we were regulating it before we understood it, we would be in a bad spot. But for example, the rules around disclaimers are holdovers from print media, and you've got the small item exemption. This election, as you mentioned, there's a lot of focus on artificial intelligence. Is the F'S approach here with AI to apply the same rules, or is this fundamentally something different that we have to address? Well,

Sean Cooksey:

AI is obviously the hottest topic in terms of technology and campaigns lately. It seems there's just been a flurry of activity this year at our agency and a bunch of other agencies about trying to figure out what to do, whether to do anything, and who should be the lead on it. I think the FECs approach is really fundamentally about two specific things. The first is looking at what our authority is to do anything at all. And this is a discussion that my colleagues and I have had in public meetings and we're continuing to have, which is what is our statutory authority to regulate the content of political ads as opposed to just regulating the disclaimers around them. And then what are those disclaimers and what should they say? I think the biggest issue that we're facing right now really is that issue of limited legal authority and how much we can police fraud or fraudulent misrepresentation in campaign ads.

My view is our authority is actually really, really limited. And if Congress wants us to do anything with ai, they really need to amend the statute. And also this is a democracy and they're the popularly elected leaders, and they should really be leading on this. But the other issue is the one you mentioned, which is whether by intent or just by the design, that the regulations that the FEC have always trailed the development of technology. You can argue one way or the other whether we've trailed too much or too little. But with respect to AI specifically, I am very much in favor of a wait and see approach specifically with the election that's in just over a hundred days from now. At the time of reporting, I have real concerns, major concerns with any agency, whether it's the FEC, the FCC or anyone else imposing a bunch of new rules around AI or really around any kind of election related regulations this close to a general election. I just think that it's really imprudent. We need to see how this technology is used, what its benefits are, in addition to what any potential ill effects are before we just start regulating against what are frankly hypothetical problems at this point. That's

Eric Wilson:

Right. Yeah, I totally agree and glad to hear that. It certainly seems that there are some regulators or lawmakers who are operating from the moral panic around AI and foregoing all of the benefits or the positive aspects that may come from this technology and doing so. No, I think

Sean Cooksey:

That's exactly right, because people don't talk enough about, in my opinion, the benefits, the ability to make more compelling electoral messages to communicate with people more effectively, more cheaply, to really engage voters. And I mean, I'll point out that this was an example from this past week that there are ways to use AI that are not deceptive, but that are really, really empowering. I'll mention specifically representative Jennifer Wex, who was, I believe, an advanced form of Parkinson's disease. It's taken her voice and she's been able to use AI to create a technical voice substitute that sounds like herself. I think that's amazing. And if she had wanted to run for reelection and use that in her campaign ads, I don't think there's any reason to regulate that as a potentially deceptive practice.

Eric Wilson:

But some of your fellow regulators would have done that because they were so hasty, I think, in their rulemaking. I

Sean Cooksey:

Think that's right.

Eric Wilson:

So speaking of unintended consequences, I think one of the unintended consequences of the McCain Feingold Act, which for our listeners is a major reform to federal election law was Citizens United, which led to Super pacs and seeing a lot of money leave the traditional political party infrastructure. I'm curious, how do you view the F'S role in balancing the influence of hard versus soft dollars in politics, for example, do we need to drastically increase the contribution limits for campaigns to keep up with the rising costs of campaigning? Yeah, I mean, at the most basic level, the

Sean Cooksey:

Line between hard and soft dollars, who can raise them, how much they can raise, how much they can contribute is something that's handed down to the FEC by Congress and by the courts. So to a large extent, we're enforcing rules. We don't have a lot of discretion to change. That said, there is a role for the FEC and interpreting and policing the lines around some of those rules. And I'm happy to say that since I've been the chairman, we've made some progress actually in deregulating the limits on candidate's ability to raise dollars outside of their own hard money limits. But to your larger point, the contribution on the contribution limits themselves, I do think that Congress and the courts probably do need to take another look at those limits. And Congress needs to reconsider whether in light of today's spending levels, in light of the expenses of campaigns, whether $3,300 really is the line between risking corruption or the appearance of corruption or not.

I'm not so sure about that question. I think one of the other big issues in contribution limits that is only getting worse over time in this inflationary era is the fact that certain contribution limits are adjusted for inflation and certain ones aren't. I mean, the non-connected PAC contribution limit is $5,000. It's been $5,000 forever. While the contribution limits to candidate committees grow contribution limits to party committees grows, and obviously there's no contribution limit for independent expenditure only committees. And so we've ended up process with a situation very much unlike 40 years ago, where a single married couple can give more money to a candidate than an individual can give to a corporate pac. And that corporate PAC limit is really becoming death by a thousand cuts with every inflation adjustment. And I think that parody needs to maybe be revisited. And I also think it might be the subject of a lawsuit because there are constitutional limits on how low you can make a contribution limit.

Eric Wilson:

Let's hope that we get some sanity on that and good lawmaking from Capitol Hill. You mentioned the disclosure and a hallmark of the FEC is disclosure. I go to fec.gov every day. It's a wonderful resource for researching campaigns and following the money who's working on what campaign. And at the same time, we've seen the disclosure of small dollar grassroots contributions via platforms like ActBlue and Win Red lead to unintended consequences like donors being added to other campaigns, fundraising lists, people being harassed for their contributions. How do you think the FEC should balance the public interest of disclosure and the private interests to privacy?

Sean Cooksey:

This is a really, really important issue at the FEC. It's one I care about a lot. As you said, we are facing really a monumental level of disclosure of personal information, largely because of the platforms of Act Blue and Win Red and how they are treated under what are really some much older campaign finance laws

Eric Wilson:

Around Right before you could donate online. Right,

Sean Cooksey:

Exactly. And so what the statute currently says is that if you're just giving money, writing paper checks to a candidate, you only have to have your information disclosed when you give $200 or more in an election cycle. But because these platforms or what we call conduit accounts or conduit platforms, they are treated differently in essentially every contributor through them, no matter how small is subject to the full disclosure regime. And as you said, is put on fec.gov whenever the relevant report gets filed. So we're talking about not just their names, but whatever address they put down their occupation and their employer's name too. So I think it's an important policy question to much like thinking about whether the contribution limits are really preventing the level of corruption that we want to prevent, whether the disclosure of a $15 contribution to a single candidate is really so important that we need to disclose that person's name, their address, and their job.

This is something we've been working on this year. We did consider a policy to think about pairing some of this back. We were considering a process to let individuals seek to have their own information sort of redacted or withheld from reports if they have concerns for their safety or other reasons. And we actually are also, as this was done in a public meeting, we are working on some proposed rulemakings on these privacy issues. And then relatedly, just one week ago from the time we're recording actually a new lawsuit, it was just filed against the FEC over this exact same issue. The Institute for Free Speech, which is a advocacy organization that is often arguing against overroad or overzealous campaign finance laws, has filed a lawsuit against the FEC in Ohio, challenging on First Amendment grounds, the disclosure of small dollar donors information. And so, I mean, that's at the extreme early stages, but it's not a frivolous claim. And I'll be very interested to see how it kind of develops in the courts.

Eric Wilson:

Yeah, we'll be following that pretty closely. And so Sean, the FEC was established in the 1970s as part of major political reform with the goals of increasing transparency, regulation oversight, and integrity. So we're 50 years away from the establishment of the Federal Elections Commission. So do you think it's been a policy success? I

Sean Cooksey:

Do. I think the FEC is a policy success because it's fulfilling the mission that it was given by Congress. And I mean, I can explain what I mean by that, but many people would argue that the agency is failing, that it's hopelessly deadlocked in need of complete structural overhaul because doesn't police political speech or campaigns as much as they would like us to. There are also groups who think that we do too much as it is, but when Congress created the FEC, they wanted to do the things you just said. They wanted us to enforce and interpret campaign finance laws. They wanted us to be a disclosure and transparency agency to create accountability in the political process. At the same time, they were really, really concerned in a post Richard Nixon era with the campaign finance regulator being weaponized and taken over and used for partisan purposes to influence elections.

I mean, arguably, no agency is closer, has a more direct line to interfering with or trying to tilt the scales in an election than the FEC. And so Congress was really deliberate when they created the agency the way they did. And pretty unique evenly divided agency as opposed to the most commissions being odd, numbered, evenly divided between Republicans and Democrats. And then this rule that any major action has to have a bipartisan buy-in of four votes at least. And that was a really important structural safeguard to make sure the FEC never really went astray, never got weaponized for partisan purposes, but still was able to work in a sort of slower consensus building, compromising fashion to fulfill its mission. And I really think that we have done that, and we're continuing to do that. We aren't hopelessly deadlocked, as people would like to say in the press. We're getting big major things done, and I'm really proud of it

Eric Wilson:

For the first time in a while. Yeah, which is great news. That's right. Well, thanks to Sean for a great conversation. You can visit fec.gov. They've got a lot of really great resources there. In addition to all of the disclosure, you can see raising and spending, but good educational materials for candidates, for people who are working in this business, I'll include a link to fvc.gov in the show notes. If this episode made you a little bit smarter or gave you something to think about, all we ask is that you share it with a friend or colleague. You look smarter in the process and more people here about the show. So it's a win-win. Remember to subscribe to The Business of Politics Show wherever you get your podcasts, so you'll never miss an episode. You can also sign up for email updates on our website at business of politics podcast.com. With that, I'll say thanks for listening. See you next time. The Business of Politics Show is produced by Advocacy Content Kitchen, a media production studio.

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