committees or reporting how much they spend on megaphones or smartphones. there is one more complex challenge is extending current disclosure rules to the internet. the traditional regulations from the fec and the sec require disclosures by the media running the ads for they are receiving the insertion orders and payment for those ads. no programming runs that hasn't been vetted by those companies. in the digital world, every page is cobbled together from multiple sources and assembled on the fly inside a user's internet browser. sponsored links and social commentary come together from scores of computers. scores of other suppliers may be contributing measurement, ad verification and auction pricing services. only a portion of the advertising is sold directly by publishers. the greater portion is sold and distributed by third party

technology companies which do their work via automated systems, programmatically in the industry parlance. legislative proposals that would require web sites to field expensive disclosure mechanisms create burdens on struggling media organizations, yet would barely capture the illicit political communication which is placed programmatically. this is why we would like the congress' support for strengthening the self-regulatory mechanisms we already have built by which digital media companies police their supply chains for bad actors and provide greater transparency into who is putting what on their sites. we can monitor the financing chain whether the paid support takes the form of conventional advertising or whether it shows up in less familiar formats. thank you for the opportunity to appear before you today. >> thank you, mr. rothenberg. you're now recognized for your opening statement of five minnesotas. >> thank you. good afternoon -- five minutes. >> i thank the subcommittee for

holding this hearing. we appreciate the opportunity to share with you our recommendations concerning federal political advertisement laws and regulations, particularly as they relate to the ability of foreign powers to interfere in american elections. the brennan center is focuses on democracy and justice and has studied campaign finance for 20 years working to develop and defend constitutionally sound policies. there are gaping holes in our regulation of paid political ads. in contrast to radio and television, much of the election spending on the internet is untouched by key regulations. these include the requirement to report spending on mass media ads that mention candidates in a period before an election, the ban on foreign nationals buying such ads and the requirement that broadcasters retain public files of political ads. it's time for this to change. the internet is only going to grow in its importance to politics. the 1.4 billion spent online in 2016 was almost eight times higher than 2012.

failure to subject ads on the internet to the same diss closure regime -- disclosure regime -- [inaudible] and it will allow more mischief from foreign adversaries like russia's med untiling 2016. meddling in 2016. the act introduce by senators cloak shar, mccain and warner, offers a promising framework to insure such disclosure. congress could also close other loopholes that allow secrecy and potentially foreign money like spending by dark money organizations and foreign-owned corporations. these steps are surely needed. investigations into the 2016 election have reveal a multi-pronged effort by the russian government to alter the course of debate by injecting dedivisive messages into the american political discussion. as has been mentioned, firms linked to the kremlin bought thousands of online ads on platforms seen by millions of people. the ads have still not been

released to the public, but they reportedly discussed political issues including messages advocating the election of candidates all while the russians disguised their identities. russia will be back and, of course, we must watch for copycats china, north korea and even isis. most immediately, this challenge so to the american people's political sovereignty and the first amendment values of transparency in politics requires updating campaign finance laws for the internet age. congress should include paid ads on the internet and the definition of election nearing communications from the mccain-feingold bill. this would have two bin fits. it would -- benefits. it would expand the ban on foreign spending and increase transparency around online ads making information about who is paying for them publicly available. in addition, online platforms should be required to maintain

public files of political ads. that would essentially extend to the internet the federal communications commission requirement that broadcasters maintain a public file of political ads. and online platforms along with other businesses that sell ads should be required to make reasonable efforts to prevent political ads from being sold to foreign nationals. all of these elements are present in the honest ads act. moving beyond the internet, holes in campaign finance disclosure rules allow dark money organizations to spend on politics without revealing their donors. in order to close the holes, congress should enact the disclose act. another blind spot in campaign finance results from corporations' ability to spend in elections. congress should expand the ban on foreign election spending to domestic corporations substantially owned or controlled by foreign nationals as representative rahs kins -- [inaudible] get money out of u.s. elections would do. finally, these proposals need

vigorous enforcement, yet deadlocks at the fec have increased. congress can reform the agency including by making the number of commissioners odd and requiring at least one member to be nonpartisan. thank you, and i'm happy to answer any questions you may have. >> i'd like to thank all the gentlemen for your opening remarks, and we're going to start the first line of questioning with the gentleman from michigan, mr. mitchell. you're recognized for five minutes. >> thank you, mr. chair. it appears to me that a number of the individuals testifying today are conflating general or social ads, opinion posts -- admittedly political ads -- as being the same thing. as mr. rothenberg notes, there were a lot of sophisticated posts, i'm quoting, about social-political issues by

operators of those outside the united states. how are we going to determine what's fake news and real news? who determines that for us? >> well, i wouldn't ask the platforms to determine it. i mean -- >> that doesn't answer my question, sir. who determines that? if we're going to say we're going to stop fake news in america and, trust me, i'm not a -- you should see my facebook posts. it's not exactly a wonderful thing to read some days, trust me. who's going to stop it? >> no one's going to determine what's fake news. there's a pre-existing -- i agree with you that conflating political ads with, you know, bad content is incorrect. and the, there is a pre-existing regulatory regime about political ads. >> well, let me -- >> and on the quote-unquote fake news front, there's a twofold problem. people get garbage over their news feeds online in the same way that -- >> i only get five minutes, sir.

let me ask the next question for you -- >> okay. >> -- which is a number of the newspapers that you represent printed a variety of articles about the upcoming tax reform and tax cut bill that's pending. they quoted a variety of sources as being that the rich are going to benefit, that the majority of the tax cuts are going to be for the rich and quoted some sources. did you detail the funding sources of those groups that made that, that made that quote? >> with regard to those pieces or other pieces, you know who to complain to. you can complain to the publisher or reporters -- >> all due respect, no newspaper in my community reported any of those sources. and ors n., as it -- and, in fact, the tax brackets have not been published, the bill's not been published. yet somehow if you read the newspapers in my community, they've already determined how the tax bill is going to work based upon some groups that are funded by, i'll admit, progressive groups.

so my question is if we're going to be fair in terms of the information being put out, this comes from a group that's largely funded by pick whatever term you wanted to do, would you not post what their bias is? >> congressman, what i would say is you know who to complain to which is the publisher and the reporters whose names are -- >> well, ai assure you, that hasn't had much difference. the distinction i want to suggest to your group is that there's a difference between your response for the people you employ, their opinions they put forward. you note very clearly in opinion ads or opinion columns who the writer is. i've done a number of them. you're responsible for that content or the individual that makes their opinion pieces is responsible for the content. that's clear. the difference is on the internet, internet posts, that the provider, intermediary is not responsible for it. they didn't write it, they didn't hire them, they didn't determine who they are, yet you want them held to a standard

that's like your newspaper when it's an entirely different format. >> i wouldn't assert that, congressman. >> you did in your testimony, with all due respect. let me move on real quick, i've got just a minute left here. mr. vanderwalker, can you help me understand then given your perspective on it, we're going to allow the federal government to term what is appropriate content in social media? we're going to have them determine, well, that's a political ad, that's not? we're going to leave it up to a group of people to decide that? >> well, no. the idea is to incorporate an existing framework that already is out there. it's a bright line test. candidate mentions within a certain time period above a certain spending threshold. >> clearly, the bright line hasn't worked. reality is an awful lot of these posts are questioned as influencing the election. well outside the bright line. so who's going to determine

that? >> well, again, the bright line keeps you from having someone have to determine it. certainly, there are things outside of the bright line, but, you know, having a bright line and having people understand that they can post if it's below a spending threshold protects speech and protects the ability of people to talk about legislative issues without having a decision maker have to make judgment calls every time. >> let me suggest to the group and i've suggested internally here to other members, our first responsibility here is to protect the constitution. the first amendment is the first amendment for a reason. we need to defeapped that even if some -- defend that even if some people think it's fake news because one person's preponderance on fake news is another person's opinion. thed idea we're going to let -- the idea that we're going to let bure bureaucrats reck late offends me. i yield back. >> the honorable robin kelly from illinois is now recognized. >> thank you, mr. chair. in january of this year, the

intelligence community released its assessment that russian president vladimir putin ordered an influence campaign aimed at the u.s. presidential election. according to that assessment, and i quote, moscow's influence campaign followed a russian messaging strategy that blends covert intelligence operations such as cyber activity with overt efforts by russian agency, state-funded media, paid social media users or trolls. only one month ago, as i said before, facebook revealed that a company linked to the russian government bought 3,000 ads aimed at amplifying divisive issues. these ads are believed to have reached ten million people in the united states. to be clear, this is just the ads we know about, there are likely to be more due to the nature of dingal -- digital advertising. are our current laws and regulations sufficient? if not, why not?

>> well, unfortunately, too much of the internet is left out right now. we have, as i mentioned, a regime that applies to political spending in mass media, and at the time that that regime was enacted, the important mass media were covered. but now the internet is far more important than it was then, and it's only gaining in importance. and it should be brought into the regime that exists so that spending above thresholds should be covered, a similar requirement to disclosures for political ads under the fcc rule for broadcasters should be, should be applied to internet ad s as well when they're paid for. >> okay. mr. rothenberg, your testimony characterizes this as a supply chain issue. what do the members of your industry that are a part of that supply chain need to do to prevent this issue?

>> i think they need to participate in both our existing programs of industry-wide self-regulation that have been very successful. we've built them to give consumers disclosure and control over their privacy, other their data flows in digital advertising environments, and we've built another that requires disclosure to prevent fraudulent activity from taking place. so i think we need much more aggressive participation in those, and we would welcome congress' support for that. and i think we can, we can build out from those programs to create better conditions for not just disclosure, but i call it supplier qualification. i mean, basically, if you take a couple steps back, if you think about your local supermarket or even something as large as your

local walmart, nothing goes on those shelves without it having gone through a series of sluice gates that give everyone a bit of assurance that those products are safe. we have created mechanisms that can do the same thing, and i think we ought to build out those mechanisms and get more, more comprehensive participation in them. >> thank you. besides lax self-regulation of advertising a appearing on social media, there's also the proliferation of fake accounts. on election day thousands of fake accounts coordinated messages aimed at disparaging secretary clinton and democrats. print media still contains a large amount of advertising. what are its responsibilities in terms of political advertising? >> well, its responsibilities are those that it's traditionally had and upheld which is to develop a safe and trusting environment for its

readers. most of our content is now delivered digitally, and the biggest things we can do there are let people know where the information has come from, what is the source of the information. the ig best -- biggest issue, from my perspective, with fake news is that it comes out of nowhere and is fed to them the same way other legitimate news the is fed to them. the best thing is to be clear about where the news is coming from, what the source of it is. >> just out of curiosity, do you, with print media, do you feel like -- you said you want to provide a safe and trusting -- do you feel like most of your readers feel that way or trust what they read -- >> i think they do can find -- we have a extremely loyal and growing audience for our news product. the audience is bigger than it's ever been in history across all the platforms. and the fact of the matter is people want credible information about the world and their

community. they primarily come to us to get it. >> should digital political ads be held to a different standard than other political ads in media? >> no. i come back to the -- we're in a platform-agnostic world where you get information 16 different ways, which is all good. but the rules can't be, can't be divvied up by platform. we're going to need to come up with a set of rules that goes with the content, not with the platform. >> what do you think that you can do to do a better job helping readers distinguish between the real news and content that comes from questionable sources or the fake news? >> i mean, there's always been crazy conspiracy theories. i think we've all got uncles that have told us crazy stuff, but that's always been different from the newspaper in your driveway or what's on tv. what's happened now is it all gets nut a blender and fed to you so that the real news sources and crazy conspiracy

theories come the same way. you don't want anybody censoring content, but you need to give readers more information, indicate much more clearly where it's coming from and these algorithms to which we are all subject to the in our lives need to give credit to people who pay reporters for real reporting. >> thank you. yield back. >> now i'd like to recognize my friend and colleague from the great state of texas, mr. farenthold, you're recognized for five minutes for questions. >> thank you very much, mr. chairman. ms. kelly asked you a question, and i don't think you adequately answered. are there any federal government regulations on political ads placed in the newspaper? is there anything a newspaper has to do? by law? >> as the primary responsible party, no, it's on the advertiser. >> so, and you say federal regulations should be platform-neutral. so it would also, by extension, be the federal government should not place any regulations on internet platforms as well.

treat them the same as a print newspaper, is that correct? >> as long as the regulation around the advertisement itself is the same. as long -- if there are disclosure regulations on whoever they're from, they have to be whether it's online or on your watch, it's, you know, people are consuming content in every way. so the requirements, whoever they may fall on, should fall without regard to the platform. >> all right. so, mr. rothenberg -- actually, is there anybody on the panel who disagrees with that? >> well, i would, i would just add one kind of code da to it. the law has long -- and i'd defer to mr. goodman on this too. law has long recognized that broadcasting is different -- >> scarcity of the airwaves, held to the public trust. i'm an old radio guy. >> right. so with that as a known exception, platform-agnosticism makes sense, yes. >> all right. so let's talk a little bit about there's a difference in the way

that ads are placed. there's been a lot about, you know, who's buying these ads and the disclosures. typically in the newspaper you actually probably talk to a salesman or talk to somebody on the phone. if you're going to buy something on an online platform, it's typically done online. let's say i'm boris or natasha from moscow and have a pile of rubles i've converted into american dollars. i go buy a cash card visa, rent a post office box, and ain't nobody going to know i'm a foreign national. do you see that as a problem? >> yeah. well, as i said in my testimony -- and it's not necessarily a popular point of view across my entire industry -- every company should know to some degree of comfort and certainty who it's doing business with. that's a fundamental principle whether you're making a car or whether you're running a grocery store. so i think that it is not just possible, but necessary to have

some kind of supplier qualification and customer qualification safeguards in place. >> all right. so now let's go to the other problem that people are complaining about in social media. i think there's -- you may actually have more effect in elections on, say, twitter or maybe facebook with bots. just posting something at no cost. a bad actor may spend $100,000 hiring a programmer to create bots and start posting stuff. that's -- how do we deal, is there a technological way to detect that? i understand that's a problem in the industry worldwide dealing with bots. what do you do about that, and how do you not get legitimate people who are trying to exercise their first amendment rights wrapped up in that? >> sir, you have just identified the absolute, total nut of the problem, the dilemma. but it's not unsolvable.

i don't think you can come up with anything that will ever be 100% full proof because the technology is very low barrier to entry and will always evolve. it's like a game of whack-a-mole. they're always going to find new ways to do things, but i keep coming back -- i'm sorry i sound like a broken record. nobody actually knows what a record is these days. i'm sorry i keep repeating myself, but i think elements of supplier qualification, knowing with whom you're doing business up and down the supply chain and billing that into a comprehensive self-regulatory program will go, and is we have proof that it goes a long way to reducing the bot traffic. >> under some sort of self-regulatory program, you're going to have to have the ability of a social media platform or web site operator, whomever, to reject something. where, where do you draw the line that they're being treated fairly? let's say i start whatever the

new search engine is, and i'm going to turn down all ads from liberals because i'm a conservative. how do we address that? >> well, first of all, it's your right. you can do anything you want and prevent anybody you want from coming on. if you want to grow and you want to create a larger business, you want to be as open as possible. so you have to find a balance. i know that may come off as a little mealy mouthed, but there is a balance between using technology systems is and human oversight to determine the quality of your supply chain participant -- >> but how does somebody know, for instance, say my algorithm to determine what's in a user's news feed, i could suddenly weight that to conservative messages, and it might be years before somebody figures that out. >> it's true. the same has long existed in every other medium as well. there's been political bias. sometimes it's subtle and sometimes it's not so is the. [laughter]

>> you find that on cable news, i'm sure. you choose your channel -- >> and you choose your technology. >> thank you very much. i see my time has expired. >> now recognize the distinguished gentleman from jan, mr. raskin, for five minutes. >> mr. chairman, thank you very much. mr. rothenberg, you've spoken about building integrity into the supply chain which then leaves the obvious question, what went wrong in 2016? why are we in the situation we're in? why didn't that happen? >> well, to quote a former secretary of defend, you can't plan for the unknown unknowns. we did very explicitly and beginning back over the 11, 12 years i've been in this job working with our partner associations, the association of national advertisers, the aaa as built very effective self-regulatory programs for known knowns, consumer privacy controls for bot fraud.

but nobody had anticipated illicit russian actors. you think you're ready next time or you're getting ready for next time? >> well, you know, i was -- intelligence agencies say they're coming back. >> oh, they will be. they will be. but i'll give you kind of a warning borne of my older profession. back, way back in my dark past history i covered politics in political media for "the new york times." and i developed a principle back in the late '80s that we're always covering the last election. the media and the way communications happen are always outrunning our thoughts about what's going to happen. i don't think anybody anticipated the degree to which twitter was going to be a massive social influence, let alone bots. so, yes, i think it's -- we can very much be prepared for the bot traffic problem, but we don't know what mole is going to

pop up in that game. >> gotcha. thank you. you've made what seems like an intuitively obvious point that the internet is properly analogized to tv and radio in terms of its, in terms of the medium, in terms of its impact, in terms of how it works and, therefore, the rules that apply in the tv context and broadcast context should also apply in the internet. and all of us that are familiar with that, we have to say that, you know, we paid for this ad and we stand by this ad and all that kind of stuff. but what about the problem which is kind of floating around from the beginning of the hearing that it seems as if of the hundreds and hundreds of facebook pages and twitter messages and bots that were put out by the russians, many of them were just meant to sow chaos and to inject poison into the american body politic. they would not fall within the communications definition that we've got under the mccain-feingold legislation. what -- can anything be done

about that, or is it as mr. rothenberg is suggesting, well, we've learned our lesson from now 2016, and now the public is going to be much more wary or should be, and media and internet companies themselves should try to be on top of this problem? >> right. i mean, i think as you noted we should close the doors that we know we can close. i don't think that's all that can be done. for example, the political ad database encompassed in the honest ads act actually goes beyond electioneering and communications because it involves issues of legislative importance so would create a publicly-available record that researchers could use to try to piece together what's coming from where, who's being targeted and what are the messages. that could be, i think, extremely valuable in understanding what the sort of next attacks are and how to respond. and then i think there are more things to be d