i can't think of an example. there are a lot of -- >> we can think of an example. >> during election season, it feels like everyone's opponent is a nazi and they call him that. we get a lot of that. it is not enough of an insult unless they have been compared to hitler. it absolutely is true. i think that they answer really is -- consumers have a role to play too. two sources that you think are giving you the information and a fair way. in a way that is plausible. that does not mean it is digital. i look at my news every morning. we are all in the midst of a revolution of how we deliver news.

that does not mean that you cannot do it in a thoughtful way. that is what we try to do. lots of other organizations try to do the same thing. so, you just have to decide. where are you going to expend your energy? some people spend all day long with cable news on. it palays a role. that is a great place to go on a breaking story. but, there are also a lot of talking heads. we said, toasy as tune into the people that you agree with. there are people on both sides of the spectrum. people are guilty of that. just listening to people who affirm your beliefs. i think that the more that you demand and reward more

thoughtful journalism, the more you will get. >> back to the issue of foreign policy, when you are making or your editors are making k at anns, do you loo issue through the prism of our americans interested in the ukraine story? obviously, there's a lot of interest in that now. or do you say here is a foreign policy story that is of monumental importance. there is no question that the united states is making monumental choices now about its role in the world. do you look at it with an eye towards responsibility that you had to educate americans about their stake in foreign policy? >> yes. >> good answer. organization, our audience is an investor focused audience. the way that we are covering or reporting, for example, the

latest round of sanctions -- the might be different than first take of the new york times story. we also have a more market focused. what is the ruble doing? what is the effect on gas from -- it is just more company focused. i will say that the challenge journalists has been how you write the second day and third day and pieces when you are in the firestorm of the incoming news. that is a challenge. wherepicking and choosing that analysis is. >> the wall street journal is committed to foreign coverage. we have bureaus all over the world. the ukraine is on the front page constantly.

ed.are absolutely committ we also have a business focus. we have a general audience. i do not think there is ever a question -- a lot of people care about this. there might be a third or fourth year story. do people care about the controversy people are thinking about? i think the journal views it as its mission to make people care. what is happening in brazil right now? maybe it is something people have heard about and maybe they should have. choices have to be made about that. we have a very significant commitment to global coverage. it is something that has fallen away, frankly. there used to be a time when the

major metropolitan areas had foreign bureaus. that is not the case anymore. >> i want to work in as many questions as possible. thank you. >> i wanted to ask -- we look a lot of the issues of how candidates talk about their faith on the campaign trail. we reach out to candidates and we know that people talk about their faith. that is a good thing. it is done in the right way. when we look at some issues, ghts, there is a spark and elevation of awarene ss. in terms of church separation in general, it seems that the same

questions and quandaries are still involved. even the issue of religion in general. what are your observations? this this a problem? >> i think we're getting a new round of similar questions that we dealt with when it comes to -- there have been a lot of movements toward gay marriage acceptance and in many states -- either through court cases or initiateives. the response has been to try to pass restrictions that allow people to claim religious exemptions to serving a gay wedding if it is not consistent with their beliefs. that issue has manifested itself between public duties and religion.

we see that now in the hobby lobby case. that is before the supreme court now. whether the government can compel private businesses to cover contraceptives. that is part of their health insurance plan. there are already exemptions for overtly religious organizations. what about a hobby lobby? it is owned by christians. it is against their beliefs to provide contraception coverage. those questions are still left us and they pop up in different ways. i do not see that going away. i do think it is a little different than the first thing we talked about. that tends to be more of a humanizing thing. people get to know them. it is interesting when you think about mitt romney and barack obama. they have struggled with that issue. we sell president obama having to explain about his pastor. we saw mitt romney struggling with being a mormon.

these issues are not always a positive for candidates. i think you're right that -- >> i have a question about some you said earlier about post-sandy hook political drama. michael bloomberg has announced a $50 million investment in gun safety initiatives. he is trying to go ahead with the nra. do you think that will have an impact in the midterm? do you want to touch on the? -- that? >> i will start and you can add. maybe it will. so far it has not. one of the reasons is because people who oppose gun restrictions feel a lot more strongly about that than the people who support them.

even if there are more people who support them, this is generally not a voting issue. so, that is part of what explains why we have not seen any action. i felt like if it was not going to happen after sandy hook, i was not sure what it would take in terms of the tragedy component. i do not know if that will make a difference or not. >> i would think less about making a difference and more about laying the groundwork to continue to push for gun legislation. point, if aer tragedy like sandy hook -- is is a terrible thing to go to waste -- it was not going to happen, then it will be difficult to get it done. >> i want to close by putting a leech on the spot and asking who

you think will control the senate after the next election? >> oy. [laughter] look, i think if the election were held today, there's a chance the republicans would be taking control of the senate. quite a bit of time between now and november. i mean, it could very well change. we could see a scenario where 51-49, either way. >> i think republicans have a good shot at it. that does not mean they will win. my prediction is different -- it is worth very little. i think that each of your productions is worth an equal, small amount. we can all guess. this far out, there are different races that will turn

on. it is important to remember that democrats are playing defense in a lot of places. that is what a lot of people think -- not because they are dominating every one of these races, but because we have a lot of democratic incumbents on the defencese. and very reputed republicans who are. it is probably republicans to lose. we are way too far to know. >> the way that the white house thinks about this -- in the opening remarks, you said that romney woke up on election day thinking he would be president. as he talked to president obama's advisors, they thought that barack obama would be reelected. all along, they saw the polling, state by state. advantad to democrats

ge. the fundamentals do not play to their granted for 2014. they have a weaker hand this year. >> i want to thank you both for informing our conversations. thank you for your coverage of the issues we care about. we're going to keep following both of you so that you can keep informing our strategy going forward on these issues that we care about. please join me in thanking our panel. [applause] [captioning performed by the national captioning institute] [captions copyright national cable satellite corp. 2013] >> of course, the white house press corps is here. is, i admire their commitment to cover all sides of the story. just in case one of them happens to be accurate. [laughter] >> president obama and john boehner are like a blind state between anderson cooper and rachel maddow. they understand each other's position, but deep down, you know nothing is ever going to happen. [laughter] >> some of my critics of the

international community, arrogant. i will not even honor that with a response. screm 'em. [laughter] screw 'em.ay let's hit them with some rhetorical eloquence. mountains, our purple with ramparts red glare, white with foam and justice for all, gallantly streaming from sea to shining sea with a shining city on a shining hill above the shining. . maybe some shining trees. i see a shining america. slicker was running around lost. he came across this old cowbo y. he asked how to get the nearest town. >> not that old joke.

not again. [applause] gentlemen, i have been attending these dinners for years. and just quietly sitting there. well, i have a few things i want to say. this is going to be fun because he really does not have a clue what i'm going to say next. george always says he is delighted to come to these press dinners. baloney. [laughter] he is usually in bed by now. >> i know you give me grief from time to time. we work around the time tried to help -- clock trying to help you do your job. what other administration would make thousands of internal memos available for your daily enjoyment? here's one for $10,000 --

you can have a private meeting with vice president gore to discuss reinventing government. for $20,000, you do not have to go. rosie o'donnell was the president's first choice to be here this evening. she withdrew, citing a nasty confirmation process. [laughter] i was not even the second choice. tennis miller was the second choice. he got hung out by an illegal and any technicality. isn't that what the confirmation process is all about? weeding out the truly qualified to get to the truly available. >> watch this year's white house correspondents' dinner. haleident obama and joel mc headline the event.

coverage starts at 6:00 eastern with the red carpet arrivals, followed by the dinner. later today on c-span. cbs news on their website has a story about the white house correspondents' dinner and the celebrities it attracts, also the charitable work behind the event. correspondence'association awards scholarships to aspiring high school and college journalists honored onstage. the president says it is a great moment and they really like it and are happy to help them along the way to take our jobs from us. you can watch all of the events and speeches, including the ceremonies, starting at 6:00 eastern. financeate hearing on laws, former supreme court justice john paul stevens talked

about why the u.s. agreed to a recent decision to strike down campaign-finance laws. he proposed amending the constitution to allow such rules. democrats plan to vote on a constitutional amendment later this year. this hearing is two hours. >> i am deeply worried about our democracy. we have struggled with money and politics. there is an unchecked flow of money through public officials. scandalsad periodic and corrections. we have had new laws and ways to evade those laws. we have never before seen what is happening today. as we will learn this morning, the perfect storm of new forces,

court opinions, clever political operatives -- have created a qualitatively new political landscape, where candidates are compelled to raise more and more money and have tothe same time, contend with virtually unlimited ethodees by shadowy m and shameless donors. what has occurred represents revolutionary, not evolutionary, change in the way campaigns are financed in america. these are changes i view as a threat to undermine the principles of american democracy. one person, one vote. their well-intentioned people that i respect. they believe that restrictions on who can give to campaigns and how much they can give trespass on cherished first amendment protections.

them, areamong worried that the recent decision to put limits on campaign contributions, combined with a system that in too many cases sure of who allows dark money into the process, has a very real potential to corrode the integrity of the system iteslf. the flow of money has moved in and out of campaigns on three pillars -- regulation of sources, regulation of amounts, and disclosure. recent decisions have severely restricted our ability to control sources and amounts. but in those decisions -- i refer to citizens united and mccutchen. the court has invited congress

to utilize disclosure as a protection of the public interest in these situations. justice kennedy and justice roberts and their opinions say disclosure as the reason that the limitations do not have to be upheld. unfortunately, the disclosure requirements that they mentioned in those opinions as the bu lwork against abuse and corruption, simply do not exist. according to a new study by the center for sponsor politics, total independent expenditures reported by outside groups total $70 million. to this point in 2014. that is three times what was spent in 2010. that is the point i want to emphasize. this is not the gradual growth of a change of a few dollars. what we have is an explosion of this kind of money. not only about that

expenditures, but also of expenditures where we do not know the source. we have created a peer a little universe of campaign finance. a traditional candidate based system with clear limits on sources and amounts and strict disclosure requirements. there is an independent system with no limits and no disclosure. naturally, this troubling new world of campaign finance impact how we as elected officials interact with the fundraising process. quantitatively, the amounts of money that officials need to make -- the average u.s. senator, and all are above average -- an average senator has to raise $5,000 to $8,000 a day, 365 days a year, for six years, to a

cumulative the funds for reelection. at this rate, you quickly run out of friends and family. my concern here is the system. this is not a democratic or republican issue. the country does not benefit from an undisclosed contribution or arms race. disclosure in this context is not an infringement on the first amendment. happen are allowing to is already having an inevitable effect. the erosion of confidence in our system and in us as stewards. the challenge before us is to find the balance between competing goods, the freedom to exercise their political voice on the one hand, and the public's interest in safeguarding the political

process on the other. to restore that balance, in what system.ke an unbalanced i welcome our witnesses and look forward to their country since --contributions. >> thank you, mr. chairman. i am pleased to be here today on this important subject. i brought my own chart. there is not enough money for another display. i would ask unanimous consent to put the chart up where you have yours. >> without objection. >> the chart bears the text of the first amendment to the constitution of the united states. i believe that is what they are talking about today. the rights of citizens to express themselves and make

their views known on the issues that affects their daily lives or pocketbooks. the first amendment protects those rights and prevents the government from restricting them. the exercise of those rights does not threaten our democracy. it is the attempt to restrict these rights that we must fear. we are living today with the consequences of the fiailed attempt to restrict them. this failure was not hard to perceive. it is not the fault of the courts or the federal election committee. it is the direct result of the poor decisions congress made when it passed the mccain-feingold bill. i opposed that bill. i and others voted against it. we knew it would restrict people's rights to participate

in the political process. it would not get money out of the system, but would simply die for it to other avenues. supporters of the bill are united. they are short it would not happen in that the system would be better. it should be clear now who is right and who was wrong. rather than admit they were wrong, the proponents of speaker adulation --speech regulation have introduced new regulations. they have proposed new regulatory schemes under the guise of disclosure. no longer able to simply prohibit speech, they do not like, they seem to prevented by promoting onerous requirements on those who wish to speak. as we consider suggestions for ways to improve the system, the last people we should be asking for advice are those who helped to write the law that created the problem in the first place. errand of this fool's

speech regulation. let's stop trying to prevent people from criticizing us. let's stop demonizing citizens to exercise their first amendment rights. let's stop attending more speech somehow threatens our democracy. fear.e nothign tng to we do, however need to fear a government investigating its own citizens for exercising their rights. the revelations of the irs targeting conservative groups and others have showed this to be a real danger. we hear a lot about corruption. this issue is debated. i think for many people, the definition of corruption is the promotion of ideas with which they disagree. years,mazing how, for george has been spending

millions of dollars putting liberal and progressive policies. none of my friends on the other side of the aisle seemed to be concerned about it. now that the coke family is spending money to promote free markets and private enterprise, we are supposed to believe that our democracy is at risk. that is absurd. corporate spending is supposed to be a concern. corporations have long recognized unfettered rights to express themselves, divided they were media corporations. i am pleased to say that the citizens united case changed that. the supreme court recognized the first amendment does not allow people to choose who gets to speak and ended this nonsense. the only consequence is that more voices are heard. i know, there are some in this body who do not want those voices to be heard. they are everything they can to silence them. our majority leader,

unfortunately, who has a fixation with the koch family that can only be described as bizarre, takes to the floor on a daily basis to attack them. why? i think because he fears they pose a threat to his hold on power of the majority. he wants them to stop talking. that is why the first amendment begins congress shall make no law -- the first amendment does not allow us to silence those who oppose us. that applies to corporations, labor unions, mr. soros, and the koch family. it applies to everyone. let's stop trying to do so, mr. chairman. let's stop trying to deter and harass our opponents. let's admit the mistakes we made in the first place. let's remove those restrictions. let's allow those who want to contribute and engage in our political system --

as long as they follow the law. everyone in this country has the right to express themselves. even people who do not manage to get themselves invited to appear on television shows or testify at hearings. people, all people, individuals and groups, have every right to make their views known. instead of trying to stop them, let's reinvigorate our system. new restrictions and relations are not going to improve the system. getting rid of those we already have will. that is the course we should take. simply, let's just do it. thank you for your time. >> senator schumer? >> first, let me thank you for suggesting this hearing and for your sharing the hearing as well.

thank you for extending the invitation to justice stevens. i think mccutchen is a real turning point in our debate about money and politics. freechen seems to say that speech absolutely defines, as mccutchen does, allows anyone to spend as much money in any way in the political system. mccutchen carried to its extreme will get rid of individual limits and will get rid of limits on corporations. totallyallow money to enveloped our system. it is frightening. the reason we have this hearing is not because of some new ads. koch brothers have been doing ads for years. because of the mccutchen decision and its implications for the democracy, the bottom line is very simple.

colleagues fidelity to the first amendment. no amendment is absolute. my colleagues on the other side of the aisle -- there is pornography legislation. every limitation on the first amendment -- most everyone here believes you cannot scream fire in a crowd. that is a limitation on the first amendment. we have many, many, many different laws that post limits on the amendments. juris some odd years of prudence, the founding fathers realized that no amendment is absolute. everyone except them. -- accepts them. that justose a view when it comes to allowing one 112 ads onput the 7,

is absolute, but in so many other areas it is not, you have to ask why? then, when many on the other side of the aisle do not support the closure, which is actually an enhancement to the first amendment -- knowledge., free one wonders why. the first amendment protection of free speech is part of what makes america great. so is the concept of one person, one vote. when one small group of people is affected by mccutchen, there's so much more power to influence the political process. our democracy is at risk. that is the problem here.

there is a balancing task. there are many concepts in the constitution. the concept of having a somewhat level playing field, so that those who have overwhelming wealth and choose to spend it, whether on the left or right -- the laws we are proposing affect the koch brothers and george soros. and should. legislationnow could bring disclosure, but will not stop the path mccutchen is on -- democrats are going to vote this year on the constitutional amendment which would allow congress to make laws to deal with the balance between a quality -- equal, each person

is equal. a careful balance. not what five members of the supreme court have said. that amendment to the floor shortly. we will vote on it. i will be working with senators and harry reid and hopefully every republican who carries about elections. when the supreme court or any of my colleagues say that the koch brothers rights are being deprived, they are not being heard -- it defies common sense. it defies logic. the same would apply to some very liberal person who put out 10,000 ads. the ability to be heard is d ifferent than the ability to

drown out every other point of view using modern technology. simply because you have a lot more money than somebody else who has an equally valid view. so, i hope that senator udall report will draw to a point where we are at. that is, the first amendment is sacred. the first amendment is not absolute. by making an absolute, you actually make it less sacred to most americans. we have to bring some balance. if people lose faith in the system, which they are rapidly doing -- people with a lot of money have far more today than they do -- that is great democracy. it could falter.

we do not want to to happen. the best way to stop it is to show the supreme court, limit supreme court. show them that their absolutist view is wrong. thank you. >> for the information of senator cruz and others who arrived after my introduction, the schedule we will follow is that i will invite just as stevens to speak. then each of you will be asked to provide a statement if you wish to do so. justice stevens, if you would join us. justice john paul stevens is a retired justice of the united states supreme court. he was appointed in 1975 by president gerald ford. third longest sitting justice of the supreme court. justice stevens, i knew that you were a distinguished purist. my eye was caught by a headline

in the paper of the weekend. move to nominate you for sainthood. i realized it was not the same john paul. in any case, we are delighted to have you here today. thank you for joining us. >> thank you, senator. chairman, ranking member roberts, and distinguished members of this committee, thank you for the opportunity to appear before you today to discuss the important issue of campaign finance. when i last appeared before this body in december 1975, my confirmation hearing stretched over 3 days. today, i shall spend only a few minutes making five brief points. first, campaign finance is not a partisan issue. four years, campaign finance

juris prudence has been incorrectly predicated on the assumption that avoiding the appearance of corruption is the only justification for regulating campaign speech and financing political campigns. that is quite wrong. we can safely assume that all of our elected representatives and candidates for office -- are law abiding citizens. bribery, laws against providing adequate pr otection against misconduct in office. it is fundamentally wrong to assume that preventing corruption is the only justification for laws limiting the first amendment rights of candidates and their supporters. elections are contests between rival candidates for public office.

lake rules that govern athletic contests or adversary litigation, those rules should create a level playing field. the interest in creating a level playing field justifies regulation of campaign speech that does not apply to speech about general issues and is not designed to affect the outcome of elections. the rules should give rival candidates their respective -- irrespective of their party or status, and equal opportunity to persuade citizens to vote for them. justice procedures in contested litigation regulate speech in order to give adversary parties a fair and equal opportunity to persuade the decision-maker to rule in their favor. rules regulating political campaigns should have the same objective. in elections, the decision-makers are voters, not

judges or jurors. that does not change the imperative of the equality of opportunity. second, all elected officials would lead happier lives and be better able to perform their public responsibilities if they did not have to spend so much time raising money. third, rules limiting campaign contributions and expenditures should recognize the distinction between money provided by their constituents and money provided by nonvoters, such as corporations and people living in other jurisdictions. opinion,ant recent written by judge brett kavanaugh of the d c circuit and confirmed by the supreme court -- constitutionality of

the federal statute that prohibits foreign citizens from spending money to support or opposed candidates for federal office. while the federal interest in preventing foreigners from taking part in elections in this country justifies the financial regulation, it places no limit on the freedom to speak about issues of general interest. during june worl -- world war ii, this would have prohibited japanese agents from spending money opposing the reelection of limited would not have their ability to broadcast propaganda to our troops. similar reasoning would have justified the state of michigan facing restrictions on campaign expenditures made by residents of wisconsin or indiana. without curtailing their speech about general issues. voters fundamental rights to

participate in electing their own political leaders is far more compelling than the rate of nonvoters, such as corporations and nonresidents, to support or oppose candidates for public office. that the illustrates interest in protecting campaign speech by nonvoters is less worthy of protection than the interest in protecting speech about general issues. fourth, while money is used to finance speech, money is not the beach. speech is only one of the activities that are financed by campaign contributions and expenditures. those financial activities ceiving the same protectionist beach itself. campaign finances were used to finance the watergate burglaries.

important, ist the central error in the campaign-finance juris prudence is buckley versus veleo. it denies the power to impose limitations on campaign expenditures. , wasiend, byron white the only one to dissent. kennedy'spated in campaign for presidency and was familiar with the rules requiring a level playing field. i did not arrive at the court in time to participate in the decision of the buckley case. i have always thought that byron got it right. after the decision was ofounced, judge wright, one the most ardent supporters of the broad interpretation of the first amendment, characterized its ruling on campaign

expenditures as "tragically misguided." because of that, which has been followed since 1976, we need an amendment to the constitution to correct that fundamental error. i favor the adoption of this simple amendment. neither the first amendment nor any provision of this constitution shall be construed to prohibit the congress or any state from imposing reasonable limits on the amount of money that candidates for public office or their supporters may spend an election campaigns." i think it wise to i think it wise to include the reasonable, the word reasonable, to ensure legislatures do not prescribe limits that are so low that incumbents have an unfair advantage or that interfere with the freedom of the press. i have confidence that my former

colleagues would not use that word to justify a continuation of the practice of treating any limitation as unreasonable. unlimited campaign expenditures ir the process of democratic self-government. they create a risk that successful candidates will pay more attention to the interests of nonvoters who provide them with money then to the interests of the voters who elected them. that risk is unacceptable. >> mr. justice, thank you very much. we appreciate your willingness to share them with us today. you are excused. in accordance with the process that we discussed at the beginning, i will now turn to senator cruz for an opening statement. >> i would like to thank justice stevens for being here and joining us. prior to being in the senate i

spent much of my professional career as an advocate for the court. it is a different position to be on the side of the dais rather than answering questions from justice stevens. and i will note that of all of the justices, justice stevens and often disagreed with the position of my clients. there was no justice his -- there was no justice whose questions were more incisive, friendly, and more dangerous than justice stevens. with a twinkle in his eye, he would you just agree with this small little thing that if you said yes what unravel the entire position in your case? it is very nice to have the justice with us.

i want to thank all our witnesses. this topic is of great import. the entire bill of rights, the first amendment is the foundational right of every other right that is protective of citizens. i will say in the issue of campaign finance reform, this is perhaps the most misunderstood issue in all of politics. because campaign-finance reform restrictions are always pitched as let's prevent corruption and hold politicians accountable. and they do exactly the opposite. every single restriction this body puts in place is designed to do one thing -- protect incumbent politicians. and it is powerfully good at that. at the end of the day, there are three speakers in a debate. politicians, the media, and the citizens. campaign finance reform is all about silencing number three. so that the politicians can speak unimpeded. i will say there are colleagues

of mine in both parties who will stand up and say these pesky citizens groups, they keep criticizing me. well, that is the nature of our democratic process. if you choose to run for office there are 300 million americans who have a right to criticize you all day long and twice on sundays. that is how our system was built. and i will tell you this. i am one who will defend the rights of our citizens to speak out, whether i agree with their speech or not. the sierra club has a right to defend their views, as does the nra. planned parenthood has a right to defend its views, as does the national right to life. that is the way our system operates. and campaign-finance reform is all about lower the limits, restrict the speech. what happens is the only people who can win elections are incumbent politicians. because incumbent politicians

have armies of lobbyists and entrenched interests that raise money and fund them. any challenger that comes across has to raise the money. if you don't have an army of thousands of funders, you cannot challenge an incumbent. that is not the unintended effect of these laws. that is the intended effect. our current system makes no sense. right now we have super pacs speaking on the sidelines. politicians who play games, since they cannot speak directly under the law, they say who will rid me of this troublesome cleric. a group speaks, and you hope what they say bears some resemblance to what you believe but you are not allowed to talk to them. a far better system would be to allow individuals unlimited contributions to candidates and

require immediate disclosure. as john stuart mill said, let more speech counter bad speech. rather than the silly game we play right now. i will note there are a series canards that get discussed. it we can restrict money because it has nothing to do with speech. that statement is categorically false. money is and has always been used as a critical tool of speech. whether publishing books or putting on events or broadcasting of the airwaves. i would suggest to everyone thinking about this issue, ask yourself one question. for every restriction that members of congress or advocates put forth, ask yourself one question, would you be willing to apply that same restriction to "the new york times."

the new york times is a corporation. some say let's restrict political speech within 90 days of an election. would you be willing to say "the new york times" may not speak about politics within 90 days. mccutcheon said you cannot tell citizens they can only support nine candidates. if they want to support 10 or 11, they are entitled to do so. if you think mccutcheon is wrong, would you be willing to tell "the new york times" you can only speak about nine candidates or only candidates in new york. those restrictions are obviously unconstitutional. i would ask you why does a corporation like "the new york times" or any other media corporation, in congress' view,

enjoy greater first amendment rights than individual citizens? our democrat process is broken because politicians in both parties hold onto incumbency. we need to empower individual citizens. i will say this in closing. i agree with justice hugo black, who famously said with regards to the first amendment, the words congress shall make no law abridging the freedom of speech, no law means no law. we should be vigorous protecting the rights of individual citizens to be engaged in the political process. and to hold everyone of us accountable. it is the only thing that keeps our democratic process working. thank you, mr. chairman. >> senator udall? >> thank you very much, chairman

king. good morning. thank you for holding this very important hearing. i want to thank the witnesses that i know are going to be here later to discuss what i think is a very important topic. let me is saved to the chairman of the rules committee, chairman schumer, i appreciate your statement about we are going to have a vote this year on a constitutional amendment, i think it is about time. we have had several votes, one in 1997, one in 2001. these rulings by the supreme court have gone so far that we pe for having a vote and trying to coalesce around something. i know justice stevens has left but i want to say the words i have in my statement to him. i am sure it will get to him. as the author of the dissent in citizens united, you wrote that "the court's ruling threatens to undermine the integrity of elected institutions across the nation." i have found myself agreeing

with justice stevens. unfortunately, this is another of those times. four years after citizens united, the damage continues. the court's decision in mccutcheon this month was one more stop in dismantling our campaign finance system. it is crystal clear that an amendment to the constitution is necessary to allow meaningful campaign-finance rules. as i heard chairman schumer talk about the issue of being absolute, that is what we are talking about. allowing meaningful campaign-finance rules. not abridging the first amendment in any way. most americans do not have unlimited dollars to spend on elections around the country. they only get their one vote. they can support one candidate, the one who represent their district or state. for the wealthy and the super wealthy, mccutcheon says they get so much more.

that decision gave them a green light, full speed ahead to donate to an unlimited number of candidates. now a billionaire in one state gets to influence the elections 49 other states. under mccutcheon, one donor can dole out $3.6 million every two years just like that. consider this -- an american citizen working full time making minimum wage would have to work 239 years to make that kind of money. 239 years. the court has shown a willingness to strike down sensible regulations by a narrow majority and is returning our campaign-finance system to watergate era rules. the same rules that fostered corruption, outraged voters, and promoted standards in the first place. our campaign finance system was in trouble long before the

citizens united and mccutcheon decisions. they just picked up the pace. justice stevens mentioned buckley versus valeo, 1976. the court ruled that restricting independent campaign expenditures violates the first amendment right to free speech. in effect, money and speech are the same thing. this is tortured logic and ignores the reality of political campaigns. the outcome is not surprising. elections have become more about the quantity of cash and less about the quality of ideas. more about social interests and -- more about special interests and less about public service. we have a broken system based on a deeply flawed premise. that is why i introduced aj res -- that is why i introduced sj

res 19, it now has 35 cosponsors. i believe senator king and senator schumer on it. it is similar to bipartisan resolutions in previous congresses. it started with senator stevens in 1983 and has true bipartisan roots. it is consistent with the amendment justice stevens has proposed. it would restore the authority of congress, stripped by the court, to regulate the raising and spending of money for federal political campaigns. this would include independent expenditures. it would allow states to do the same at their level. it would not take any specific policies or regulations. it would not dictate any specific policies or regulations. but it would allow congress to pass sensible campaign-finance reform. reform that would withstand constitutional challenges. in the federalist paper number 49, james madison argued that the u.s. constitution should be

amended only, he used this term, only in great and extraordinary occasion should we go without amendment. -- should we go with a constitutional amendment. i agree with him. i also believe we have reached one of those occasions. free and fair elections are a founding principle of our democracy. they should not be for sale to the highest bidder. this effort started decades ago, there is a long and bipartisan history here. many of our predecessors from both parties understand the danger. they knew the corrosive effect money has had on our political system. they spent years championing the cause. in 1983, the 90th congress, ted stevens introduced an amendment to overturn buckley. in every congress, from the 99th to the 108, fritz hollings introduced amendments similar to

mine. senators schumer and conquering -- senator schumer and senator cochran continued the effort. that was before the citizens united and mccutcheon decisions, before things went from bad to worse. the out-of-control spending before citizens united has further poisoned our elections. it has also ignited a broad movement to amend the constitution. mccutcheon is the latest misguided decision, but it will not be the last. it is time for congress to take back control and pass a constitutional amendment. again, i thank you for holding this hearing. it is very timely on the heels of mccutcheon. >> thank you, if our next panel could take their seats, i will introduce you. we're going to hear from this panel in alphabetical order.

first is mr. donald f mcgahn, previously he was commissioner and chairman of the fec. he served as general counsel for the national republican congressional committee for 10 years. second is norman ornstein resident scholar at the american , enterprise institute. well-known columnist and frequent commenter on campaign-finance issues. third is trevor potter, previously he was commissioner and chair of the fec and served as general counsel to john mccain's 2008 presidential campaign. ms. ann ravel, former chair of the california fair political practices commission and currently vice chair of the fec. neil reiff, founding member of his law firm and former deputy general counsel for the democratic national committee.

thank you for joining us today and i welcome your opening statements. if you have more lengthy statements, they can be submitted for the record. we look forward to hearing from you and then we will discuss these issues. mr. mcgahn? >> chairman king, ranking member roberts, and members of the committee, thank you for the opportunity to appear before you. it is an honor and privilege. i submitted written testimony with neil reiff, we are practitioners in the area of campaign finance her and our views are shaped by experience advising real people who wish to participate in politics in a legally compliant manner. we have similar clients and are not here to represent the views of any of those clients, we differ in one way. one of us represents republicans while the other represents democrats. such a partisan difference in

the modern world would ordinarily preclude any notion of common ground, but not here. recently we co-authored an article published that explains our views on the good, the bad, and the ugly of the current law. particularly the act of 2002, mccain-feingold. in our article submitted to the committee, we explain that the current problems can be traced back to the statute itself. as we predicted back in 2002, mccain-feingold has become a warped version of itself. party committees have taken a backseat. we suggest a different approach that flows from our first amendment tradition. in order for voters to be informed, they need to hear directly from the candidates themselves. the candidate's voice ought to be the central voice. in our view the parties are the , best vehicles to assist with achieving our goals. political parties are uniquely situated to echo the candidate'' messages.

our views are not designed to transfer relevancy back to the parties for relevancy's sake. recall buckley versus valeo, james buckley was not mounted by -- nominated by either of the two parties. it was that candidate that felt the burdens of the reform the most. we care first about grassroots and local activity by ordinary citizens and believe that mccainfeingold has reached too far into state and local politics and contributed to pushing local activists outside the parties. current laws place parties at a competitive disadvantage and have federalized party programs. this brings us to the 2014 landscape, direct contribution limits remain at levels that do not match the level of inflation. the $10,000 state party limit ought to be about $48,000. in addition to regular

inflation, the cost of campaigning has skyrocketed due to the cost of television advertising. other measures imposed by the law have been struck by the courts, except those that limit the ability of political party committees to assist candidates. candidates are struggling to be heard. party committees have diminished and been replaced by super pacs and nonprofits. this seems backwards and is the opposite of the goal of reform. some claim more disclosure is the answer. apart from my work this is not the answer. campaign disclosure has survived judicial review but it has had a mixed review in the courts. sometimes upheld but often struck or limited. whether one look at thomas v. collins, buckley versus valeo, davis versus fec, disclosure has its limitations. as justice stevens said, writing

for the court's majority "it is a shield for the tyranny of the majority." it exemplifies the purpose behind the bill of rights and justice stevens also said first amendment. speaking for the court "the freedom to publish anonymously extends beyond the literary realm." continuing "on occasion, an advocate may believe her ideas would be more persuasive if the readers are unaware of her identity. provides a way for a writer who may be unpopular to ensure readers to not prejudge her message. even in the field of political rhetoric, the most effective advocates have opted for anonymity." we anticipate mccutcheon will help address unfairness to some degree but it did not strike limitations to candidates and party committees. what was struck was an number

-- umbrella limit that prevented citizens from giving to more than a few candidates. the impact of mccutcheon, more candidates including challengers will have access to support. hopefully direct contributions will not be the province of a select few. the upstart challenger candidates, the political party, will no longer have to compete with each other to the degree caused by mccainfeingold. this is not enough to fix our system. mccainfeingold must be revisited. thank you for the opportunity to present these views. >> thank you. mr. ornstein? >> thank you, it is a pleasure to be here. i want to start by commending senator cruz for his full throated support of disclosure. i look forward to his vote for

the disclose act when it comes up in the senate. >> i wrote that down myself. >> i also want to thank senator roberts for putting up the text of the first amendment, which i have read and reread so many times. i am still looking for the word "money." i just have to say that if money is defined as speech, then the rights of citizens as equals in this process to participate simply gets blown away. those who have lots of money have lots of speech. those who have little money have little or no speech. having said that, i want to talk about to larger concerns that are generated by the multiple recent moves that i believe have knocked the pins out from under the regulatory regime that has long operated in american politics. i wrote my testimony going back

to the tillman act in 1907. it really does take us back to the 1830's. the two things i want to talk about are the corrosive corruption caused when you remove the modest limits on money. the second is the real focus of the hearing is the efforts to limit disclosure and allow dark money without accountability. as i look through history, what we know is that the focus on corruption, the concerns about corruption and money are not new at all. they go back at least to an attempt in 1837 to prohibit the parties from shaking down government employees and giving contributions. as historian john lawrence noted, abraham lincoln, a republican, warned that concentrated capital had become

"enthroned in the political system." he worried about an era of "corruption in high places until the republic is destroyed." he would be reinforced in that particular judgment today. as we went through the corruption in the grant administration that led to the pendleton act in 1883, the corruption involving corporate influence on president roosevelt that led to the tillman act in 1907, the teapot dome scandal that resulted in the federal corrupt practices act of 1925, the abuse of federal employees that led in 1938 to the passage of the hatch act. the taft-hartley act in 1947, the watergate scandal, spurring the federal election campaign act of 1974, that was revised by buckley. and on through the abuses of soft money and other ways that brought about the federal election campaign reform, the bipartisan campaign reform act of 2002. it was scandals that led to

corruption that led to change. all of the focus was turned on its head by citizens united. brought as a very narrow as applied decision and then broadened out to basically take away all of those protections, at least going back to 1907. and then to mccutcheon. i want to make a couple broad points. particularly about mccutcheon. despite some of the other focal points, what has alarmed me the most about the mccutcheon decision was justice roberts basically now taking corruption out of the equation. the appearance of corruption entirely out of the equation. defining corruption in the narrowest way as a quid pro quo that would only be an "american hustle" variety, videotape exchange.

it is so far from the real world. with mccutcheon, where elected officials can solicit large contributions, something that we would try to restrain deeply in mccain-feingold, it takes me back to an era i remember well where we had presidents clubs and speakers clubs and -- an era i remember well. where we had presidents clubs and speakers clubs and we had a menu of access, get $10,000 for a one-on-one with the speaker. this is a trade of access for money and it leads down a dangerous path that becomes even more dangerous when we do not have disclosure of who is involved with a lot of contributions. and frankly the notion that mccutcheon will enhance disclosure was blown out of the water by justice breyer's compelling dissent. and what we have already seen happening within a day after mccutcheon being passed, high-priced lawyers, some of

whom are in this room, working feverishly to make sure these contributions get channeled through multiple committees in different ways so we will not have any effective disclosure. let me end with a few recommendations for the committee or for what congress could do. first, congress should make every effort to pass the disclose act. let's get some reasonable disclosure. second, the senate should hold public hearings and this committee on the dysfunctional federal election commission and look to reform it to make it a reasonably functional body that acts to enforce the law, not for thwart it.not third, for every hearing that we see on the purported scandal at the irs scandal which is trying to apply the law that says organizations called 501(c) four's should be social welfare organizations, we should have a hearing on the real meaning of

social welfare organizations and the need to clarify this. fourth, the senate should pass a rule amending the ethics code to make it a violation for senators or senior staffers to solicit the large contributions for party committees now allowed under mccutcheon. next, you should consider the broader reform of the campaign finance system, and i'm delighted there will be a vote on senator udall's constitutional amendment. we have a lot of work and heavy lifting to do. the next huge scandal is going to bring about a new drive for reform, but before that i fear things will get worse. thank you. >> thank you, sir. mr. potter? >> mr. chairman, thank you for the opportunity to testify today. senator roberts, senator udall, i appreciate the opportunity to be here to talk about these important issues. i know, mr. chairman, that you have said that you'd like the

focus to be on the mccutcheon case and issue of disclosure and lack of disclosure. i would make two brief points in response to testimony and comments today about the mccain feingold law. first, i was pleased to see the endorsement by my colleagues on this panel, mr. mcgahn and mr. reiff, in their written testimony today of the mccain-feingold coal of prohibiting "six and seven figure contributions" to national party committees, " in exchange for access to executive branch personnel as well as members of congress. i agree such huge contributions were and are potentially corrupting and give rise to the appearance of corruption. and thus are bad for our democracy. i worry that they will resurface after the mccutcheon decision through the device of contributions to party committees participating in joint fundraising committees. i also worry that the supreme court's majority in citizens united and mccutcheon does not

share the same concern about a corruption inherent in congress where the executive branch -- or the executive branch selling access that mr. mcgahn, mr. reiff, mr. ornstein and i do. my second point about party committees under mccain-feingold is that they have actually done quite well financially. look at the picture of two elections, 2000, the last presidential campaign before mccain-feingold, and 2012, our most recent. in 2000 the two political parties and their presidential candidates raised and spent a combined total of $1.1 billion in that election. a huge sum. today adjusted for inflation that would be $1.45 billion. compare that to the amount spent in the most recent election by the parties and their

candidates, 2012, the total was $2.5 billion. double the actual amount, up 80% in inflation adjusted dollars. it is true that outside groups also spent significant sums in 2012, but the national party committees and their candidates clearly were well resourced, better than before mccain-feingold. in terms of disclosure or the lack of disclosure, my written testimony describes how we have ended up in a situation where the supreme court stated in citizens united that the importance to our democracy of full disclosure of the sources of campaign funding, but we have less and less of it. my written testimony says that the f.e.c. has deadlocked repeatedly on whether to issue a notice of proposed rule making to deal with the question of disclosure after citizens united. that is correct, the commission appears to still be deadlocked on this issue.

however, i would like to note for the record that the commission in late 2011 managed to issue a citizens united rule making notice that did not mention disclosure. the commission even had a hearing, but that is the end of the story. no new regulation, no action on disclosure. mr. ornstein's written testimony demonstrates how dramatically disclosure of the sources of funding of public advertising has fallen. in 2004, the first election under mccain-feingold, 98% of outside groups running campaign ads disclosed their donors. a few years later that number was down to 34%. in absolute dollars, the amount spent on advertising only 40% was disclosed as the course in -- as to source in 2012 by these outside groups. why is this a problem? let me turn to justice kennedy's explanation in citizens united.

he said, with the advent of the internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. shareholders can determine whether their corporations' political speech advances the corporation's interest in making profits and citizens can see whether elected officials are, quote in the pocket of so-called moneyed interests. the first amendment protects political speech and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. this transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages. so justice kennedy said the deal was, unlimited independent expenditures, but full disclosure of funders. today we have only half the deal.

and as justice kennedy says, speaking for eight justices, that is a problem for our democracy. how can shareholders hold their corporations accountable for the shareholder money spent in political campaigns if they have no idea what is being spent and for and against which candidates? how can voters hold elected officials accountable if they do not know which moneyed interests are financing those officials' elections. finally, how can the electorate, voters, make informed decisions and give proper weight to different speakers and messages, as justice kennedy says, something that the court says is important to the functioning of our democracy, if voters do not know who is financing the constant barrage of advertising run by these groups. thank you, mr. chairman. >> thank you, mr. potter.

our next panel member is ann ravel, former chair of the california fair political practices commission and currently vice chair of the federal election commission. thank you for joining us. >> thank you, mr. chairman. ranking member roberts, and senator udall. thank you for inviting me to testify today. as indicated i am the vice chair of the federal election commission, but i am not testifying in that capacity today. nor am i speaking for the commission. instead, my testimony concerns a case pursued during my tenure as chair of the california fair political practices commission, fppc, to expose dark money in a california election. fppc versus americans for responsible leadership and i'm going to use the word of the day, is a byzantine story of campaign contributions being funneled all over the country in

an apparent effort to avoid revealing to the public who is behind political campaigns. we discovered that networks of nonprofits, anonymously injected millions of dollars into our election by using shell corporate entities, wire transfers, and fund swapping. this allowed donors to skirt disclosure laws and cloak their identities from the public view. just a few weeks before the 2012 election, a california political action committee, which was focused on supporting one and defeating another ballot measure, received an $11 million contribution. this was the largest anonymous contribution ever made in the history of california elections. the contribution came from an

arizona nonprofit, americans for responsible leadership, or arl, which had never before spent a dime in california. after a complaint was filed with the fppc, we attempted to determine whether a.r.l. abided by the requirements of california law to disclose the source of the contribution. we eventually had to seek relief in court. the california supreme court ruled unanimously on an emergency sunday session that a.r.l. had to hand over its records. because of this the day before the election a.r.l. revealed that the sources of the $11 million were two other nonprofits, one based in virginia, and other in arizona called cppr. a.r.l. admitted that its it

functioned solely as an intermediary to receive the money from the two nonprofits and funnel it to the california political action committee. this is a clear violation of the law that prohibits making contributions in the name of another. after the election, a full investigation found that approximately $25 million raised from california donors who wished to remain anonymous went to the virginia nonprofit and then was transferred to the other nonprofit, cppr. there was a tacit understanding that cppr would direct other funds back to california in the same amount or more through an intricate web of groups. after passing through multiple nonprofits around the country, $15 million was then returned to

california to the original political committees to spend on the ballot measures. $11 million of that money was funneled through a.r.l. and $4 million through an iowa nonprofit. because of the fppc litigation that was pending, the remaining $10 million of the original $25 million raised from the california donors was not anonymously pumped back into the california election. the fppc, which is a bipartisan commission, unanimously leveed a record setting fine of $1 million, and also sought discoveragement from the recipient committees of the $15 million in improperly disclosed funds. the fppc's investigation and litigation demonstrates clearly

that public officials from both parties can work together to uphold disclosure laws. but the story of fppc vs. a.r.l. also shows that dark money is a national problem that is best solved on the federal level. i would be glad to answer your questions about this case. thank you again for the opportunity to speak. >> thank you for joining us today. finally, neal reiff, as i mentioned, lawyer here in washington, and former deputy general counsel for the democratic national committee. >> mr. chairman, thank you for the opportunity to testify today. i'm here today as practitioner in the field of campaign finance law and i represent over 40 democratic state party committees. as a recent article explains, mccain-feingold has had a profound effect on state and local party committees. i would like to provide examples that illustrate how the law is federalized, most of the state party activities in connection with state and local elections. as mr. mcgahn said, it ought to be revisited.

in our article, we agree national party soft money ban and limitation on solicitations, federal candidates and office holders achieve the goals to address soft money practices at the national level at the time of its passage. however, congress could have and should have stopped there. instead, with little forethought to its consequences, mccain-feingold extended its reach to state and local party committees, who unlike national party committees, were thoroughly invested and active in state and local elections. under mccain-feingold state parties have been subject to a labyrinth of investigations to seek to intercept all their activities and force them into the federal system, regardless whether those activities have any relation to federal elections or candidates. mccain-feingold federalized all elections through introduction of a new term, federal election activity. which subjected local activities such as voter registration to federal regulation. the implementation of this concept has proven rocky. when passed, it was claimed to be a narrowly targeted measure.

defense of the law followed suit and minimize the reach of the new law. after the law was upheld, in mcconnell versus fec, supporters changed their tune and argued that the federal election commission, the agency charged with enforcing the law, was not reading the new mandates broadly enough. additional litigation ensued and courts instructed the f.e.c. to rewrite and broaden the rules. for example, under recent f.e.c. redefined definition of get out the vote, essentially all public communications undertaken by a state party committee, even those made totally independent of any federal candidate involvement, are subject to federal law. merely by extorting the voter -- to vote for state or local candidate. therefore, if a party committee wishes to air a television or radio ad to vote for smith for governor, federal law may mandate this advertisement be paid for entirely or in part with federally regulated funds. prior to mccain-feingold, state law governed state and local candidates prompt today parties are governed by federal law,

whereas a nonparty group could run the same advertisement free of such federal limitations. in addition, under the f.e.c. get out the vote definition, if a party sends out a mailing on behalf a candidate and merely informs the voter on when the polls are opened, the location of the polling place, or how to obtain an absentee ballot, federal law limits the funding of the mailed piece based upon provision in the mailer. even when it makes no reference to any federal candidate. it is common practice for state parties to avoid including such information in mailings in order to avoid federalizing those communications. simply put, party committees have been muzzled when it comes to their ability to inform voters of the most basic voting information if they want to avoid being subject to federal regulation. we cannot conceive of any policy justification that would support this. particularly when other groups who engage in the exact same sort of activity do so without such regulation. mccain-feingold has had other detrimental effects. its federalization of state

parties has created disincentives for state parties that feature the entire party ticket. prior to mccain-feingold, it was commonplace for state parties to pay for candidates from the top of the ticket to the bottom. in addition, state and local candidates have bypassed party committees when engaging in advocacy and get out the vote activities to the incapability of federal and state law. the current structure of the law has caused a demise in state and local party relevancy as funding sources seek out other organizations such as federal, state, and local super p.a.c.s who may spend money without any restriction on how communications are funded and how much information they can provide. the demise of parties have had serious implications. party committees have played a vital role in grassroots campaigning. historically, parties have been instrumental in delivering positive party messaging and increasing turnout in american elections through grassroots voter contact methods. what some may characterize as a single issue, outside groups

have filled a void. although the activities are legal, it seems to be the opposite of what was envisioned by proponents of the reform. recently the association of state democratic chairs passed unanimous resolution at its meeting in november of last year that calls on congress and the f.e.c. to re-evaluate how state and local party committees are regulated. we have provided a copy of this legislation and recommendations made for your review. none of the proposals made advocate for any repeal of any contribution limit. rather, the asdc seeks commonsense regulation that balances the need to have vital party organizations along with the need to provide safeguards against political corruption. although mr. mcgahn and i have a number of ideas and suggestions regarding changes to the law, we both believe any commonsense steps to help revitalize state and party committees would be helpful. i have a few example. refine and simplify the existing volunteer exemptions for grass root activities to make it easier to use and consider expanding them to other modes of

grass root activities. repeal the mccain-feingold provisions that have needlessly federalized joint and nonfederal campaign activities undertaken by state party committees. modify the f.e.c.'s current interpretation of the existing rules to scale back the expansive scope that essentially federalizes all party campaigning on behalf of state candidates. finally, in-depth contribution limits to party committees. these were excluded from the provisions provided for by mccain-feingold. similarly to the extent that the required,parties are update those two reflect current modern reality. we can only touch upon the byzantine regulation parties are subject to. thank you for the opportunity to present our views. >> thank you. we'll have seven-minute question rounds. and i'd like to begin first the term byzantine has been used a couple of times.

this is a chart prepared by the center for responsive politics that is a chart of money in 2012. i think we are insulting the byzantines, frankly, by likening this to their conduct. this chart will be available in larger form, but it's illustrative of what's going on. i did a rough calculation, there is $3 million or $4 million -- $300 million or flowing $400 million through these various organizations. they have come up with a name, a disregarded entity. that's kind of -- i don't know -- it's an oxymoron i would think. mr. ornstein, in preparing for this hearing, to coin a phrase, my conclusion was, it's worse than i thought. we got a report just yesterday from the wesleyan media project, which is a very interesting project that doesn't try to

track contributions because a lot of them aren't disclosed but tracks ads on television all over the country and attributes a value to them based upon -- estimated value based upon the air time in the media market. of course it's only air time. it's not production or other costs. but the startling thing, this is spending by nondisclosure groups cycle to date. in other words, to april 29. yesterday. and what struck me is the gigantic growth in these independent expenditures. that's what i meant in my opening statement. this isn't a little incremental change, this is a revolutionary change. and the same thing goes this is nondisclosure money cycle to

date, this is outside spending cycle to date, and the -- these are the off-year elections. you can see between 2010 and 2014 an enormous growth, almost 10 times more. would you say that this is an accelerated problem and that's one of the reasons we should have to address it? >> it's an exploding problem, mr. chairman. i think what we have seen is a set of very often explicit efforts to try to hide where the money is coming from. it's not only through these -- i won't call them byzantine, bizarre sets of arrangements. and ann i think described very well how this can play out across many state lines. i only briefly alluded to the role of the i.r.s. in all of this. one thing that we know is that moving towards 2012 there was another explosion which was applications for 501-c-4 status

from groups that in many cases, and we knew leading up to this, were moving into influence elections and were using that i.r.s. status simply to hide the names of donors. we know that american crossroads created another entity, crossroads g.p.s., and basically the head of it said very clearly, this is for people who don't want to disclose. lots of groups moved into there. the i.r.s. in a pretty ham-handed way tried to deal with this explosion by using code words. of course the reality is if you have a group that has the name party in it, and they say in their application that they want to influence elections, they should be registering under are section 527 of the code. and now the i.r.s. is moving to try and come up with commonsense regulations that keeps these sham groups that are not social welfare organizations in any way, shape, and form from doing what the law intended. they are being attacked. >> we all remember the swift boat veterans for truth in 2004. that was a 527. but that required disclosure of donors. that as i understand it, that

vehicle has atrophied and very rarely used. now it's the 501-c-4's which don't require disclosure of donors and that's where the money seems to go, is that correct? >> that's correct. some of the other 501-c's may be used as well. we know before mccain-feingold congress did move to try to require disclosure -- more disclosure from 527's. it's also important to emphasize what trevor potter put very eloquently into his testimony, which is so much of the problem here is not based on either the law or the court, which is very much in favor of disclosure. it's a federal election commission which has tried to redefine, take a pat moynihan's term of defining deviancy down. they tried to define disclosure down to make it even more difficult. that's a root of some of the problems. >> mr. potter, as i went back and looked at citizens united and mccutcheon, it was clear the whole holding was based upon a premise of vigorous disclosure.

that's how the two courts justified eliminating the limits, but they posited a disclosure regimen that doesn't exist. is that right? >> yes, i think as an outsider one of the mysteries to the supreme court's decision in citizens united is the very is strong language by justice kennedy where he says, until today we have not had a system with unlimited corporate spending but full disclosure. and now that we have corporate spending allowed in federal elections, and the full disclosure, he goes on, as i quoted, citizens will be able to figure out who is spending the money. shareholders will know what the corporations are up to. the question is why did justice kennedy say that? i think the answer is pretty clear because he's looking at the law. he's looking at mccain-feingold, the bipartisan campaign act,

which requires disclosure of the sources of spending of advertising if somebody gives more than $1,000 to the groups that are doing it, or if it's done through a separate group they set up for that purpose. >> before my time expires, the issue about disclosure is -- as i have heard it articulated, if people -- donors' names are disclosed they'll be subject to intimidation and threats, and those finds of things. -- those kinds of things. my old colleague from virginia's law school, who i know as scalia says requiring people to stand up fosters courage without which democracy is doomed. in maine, we have town meetings every spring. no one is allowed to go to a town meeting with a bag over their head. if they are going to make a speech, they have to acknowledge who they are.

that is part of the information the voters need. what do you make of the argument disclosure will lead to reactions, intimidation, and threats? >> i agree with justice scalia. as i have been watching the pictures from ukraine, you see these people with masks over it made me think about this. there are societies where they try to hide identities. that is not what america is about. some discussion that goes back to a case involving the naacp is not a good parallel. it is one thing if you have threat of death and the like. in a democracy where there is rough and tumble, something both talked about, the nature of democracy. if you are going to be involved in the process and someone is going to criticize you for it, there's nothing wrong with it. you have to have reasonable

limits. if you have direct intimidation. but there are laws that guard against that already on the books. >> thank you. senator roberts? >> i would like to observe no one spending money exercising their first amendment rights to fireowledge is endorsing in theaters, pornography, or noise pollution. i suspect many on both sides of the aisle have characterized their opponents as stating noise pollution or conducting themselves with regards to noise pollution. disagreeing is not pornography, although we all know it when we

see it when we put on partisan glasses. there is no need to repeatedly characterize those with whom you disagree as un-american. the irs is not moving to promulgate the placetions that were in that some of us believe caused the problem with the irs trampling on the first amendment rights of some conservative groups, primarily the tea party. they received over 200,000 comments. by law, you have to go through them. they also stopped because we suggested to the new commissioner of the irs that it might be a good thing to withhold writing the regulations until the finance committee of the senate and the inspector

general get done with the investigations. we are having problems like every other investigation with reduction and other things. but we are persevering and trying to do it in a bipartisan manner with the finance committee. they have held off. i think that is a good idea. i think once we finish the investigations, we can determine what happened. i have some feeling about where that came from. from more than a number of senators writing basically to the i.r.s. stating that they felt the activities of various groups were not in keeping with what they envisioned the provision to call for. but that aside i just wanted to mention that you reference the hatch act. yesterday it was announced that

an f.e.c. attorney resigned for admitted violations of the act. according to relief from the office of special counsel, the employee posted dozens of partisan political tweets, including many soliciting campaign contribution to the president's 2012 election campaign and other political campaigns despite the hatch act restrictions that prohibit the f.e.c. and other further restricted employees from such activity. the employee also participated in a hufferington post live -- huffington post live internet broadcast via webcam at an f.e.c. facility criticizing the republican party and the presidential candidate of the republicans at that time, mitt romney. i think you can understand why reports of this nature make republicans somewhat wary of the f.e.c. and their ability to regulate their behavior. are we to believe there are not others at the commission who shared these views but haven't been caught expressing them?

and i mentioned you, norm, but that question is directed to ms. ravel, who i think could give - -- could give a better answer. >> as i indicated, i can't speak on behalf of the f.e.c. but i will tell you that the f.e.c. responded very quickly to that when it came to the attention of people within the agency. and understood that it was totally inappropriate behavior on behalf of an employee. and further there's been an investigation internally and there is no reason to believe that this is extensive or goes beyond anybody except this one individual who has since been terminated. >> that was my next question, you have already answered it. my question was in your experience at the commission are any negative views of the republican party widespread among the employees there or

members of the f.e.c.? even sitting around and having coffee saying my god what are those crazy republicans doing now? >> senator, i -- or what robert's doing. >> i have never heard your name mentioned. >> thank you. >> at the f.e.c. >> at least i'm not part of that dark money scandal. >> no. >> no. as i indicated i was speaking on behalf of relating to an i.n.s. he dent at the -- case at the fppc, but in my six months at the f.e.c. have never heard any partisan communications by either employees or commissioners. while we all are appointed based on our party -- >> that must be one agency that's an island in the sun.

mr. mcgahn what do you think about this? what was your experience in this regard? should we view this as an isolated incident or evidence of a broader problem? >> i saw the news and i was very troubled by it. when the f.e.c. has had issue, i think it's very serious. i think it certainly calls into question what many of the reform lobbyists have said for years, there is this idea of nonpartisan staff that can exist divorced from politics and provide advice and that sort of thing. that being said, what i can say is most of the folks at the f.e.c. played it straight. they show up on time. do their job well. they are committed to their job. they don't have an agenda. but there are some folks who seem to get a little carried away with themselves from time to time. i think that's troubling. the cure for this is one, hatch act. two, keep in mind what the f.e.c. is and what it isn't. it's not an independent agency composed of career staff.

it is actually six persons appointed by the president and confirmed by the senate. it's not a nonpartisan agency. it's a bipartisan agency. under the statute in order for the commission to take action t. takes four of six commissioners to confirm that. so staff get a little carried away, that's not good. but in my view the commission is then -- this is a reason why commissioners need to remain vigilant and exercise the power of the congress has given them under the statute to run the agency. the idea that commissioners want to delegate to staff and that thing i have never been a big fan of that. i think the unfortunate release that came out yesterday is evidence that my view of the law is found and that really it shows the wisdom of the original system of the f.e.c. where the commissioners have to act in a bipartisan manner to avoid one party essentially targeting the other party. >> my time has expired.

>> thank you. senator udall. senator klobuchar, welcome to the hearing. >> thank you very much, mr. chairman. two previous hearings including the joint economic committee. so i apologize for getting here now. i think this is an incredibly important topic. i thank you for holding this hearing. i thank justice stevens for his testimony and his support for constitutional amendment. i also thank my colleague here, senator udall, for his work in leading the constitutional amendment which i'm a co-sponsor. i'm very troubled by the recent supreme court decisions, mccutcheon decision extending the damage citizens united caused in my mind. i looked back, i was cleaning out a backroom in my house in minnesota last week, and found a bunch of things from my campaign for county attorney where, mr. chairman, we had $100 limit on contributions in the off

election years, and $500 in the election year. i found letters where we returned $10 if people had gone over the $100 limit. i then thought of my first days, i found a bunch of stuff from the 2006 senate campaign where i knew no one to ask money from nationally. i literally went through my entire rolodex and i remember setting the all time senate record of raising $17,000 from ex-boyfriends. those days are behind us as we head into this new era after the supreme court decisions and i'm incredibly troubled by these decisions when you can have a few thousand people be able to give hundreds of thousands of dollars. i just think it destroys our campaign finance system. i guess i'll start with you, mr. potter. there's been a lot of discussion about what the real world impact of citizens united has been and how mccutcheon will affect it going forward. can you describe what trends or

major shifts you see in campaign finance since the citizens united ruling and how mccutcheon will impact those trends in the future? >> yes, thank you, senator. i think the first trend which was noted in the chairman's question a moment ago is that contrary to what the supreme court said in citizens united, we are seeing secret spending. the court's assumption was that although we would have new sources of spending, corporations, and then unions, that it would be disclosed and that shareholders and citizens would know who was speaking, could evaluate that speech. and that's what's not happening now. because of the f.e.c.'s position on what has to be disclosed, because of this proliferation of tax exempt groups that do not disclose their donors, we have ended up with a parallel avenue of spending in elections so that essentially if someone wants to

influence an election, if they are being solicited for money, the first question is, am i willing to have my spending disclosed, or not? and if not, then you look at all these vehicles that are available to spend the same money to run the same ads, but not have it being a matter of public record so that -- >> i remember the $99 contributions in my $100 race for county attorney. i know that. but this is taking it to a whole different level as you point out when there is no disclosure. and the effect that will have. i guess the other question, you took this even a step further mr. ornstein when you talked about how the definition of corruption is so narrow in the supreme court case. it says, that we can only regulate donations to prevent actual quid pro quo bribery. i do think this is problematic and should we be able to regulate this?

>> first of all let me say you were a great county attorney. beyond that i -- anybody i think who has been around the political process at all knows what happens when you have money intersect with power. and the many ways, indirect and otherwise, that you get corrupting influences. i have had some your colleagues tell me in the aftermath, not just of citizens united but what i think was an equally corrosive decision speech now that followed that created the explosion of the super p.a.c.s and other ways, say they are visit bide somebody who says i'm representing americans for a better america. and they've got more money than god. pouring in $10 million in the final two weeks of the campaign to destroy somebody, that's easy. they really want this amendment. and i don't know what will happen if somebody opposes them, but that's the reality. they leave. and human beings are going to

think it's one little amendment. or we'll think, i better raise $10 million not just what i need for my campaign, but as an insurance fund just in case because i can't do that in the final two weeks of the campaign. that's just one set of examples. now in the aftermath of mccutcheon i can imagine a bunch of people coming in and waving checkbooks and sending each one of us has checks that can total $3.75 million now that we'll give to the hundreds of committees, joint fundraising committees, spread it around, and of course we'll have candidates we prefer. the motion that this will actually keep the individual limit is out the window. we will all write these checks, but there's one little thing here in the legislative arena that we want in return. you don't have to say it directly, it won't be on videotape. this is corrupting. we saw it in the guided age, and i think what justice kennedy and roberts have done in these decisions is open up a new gilded age.

>> you ask a political scientist, not just a campaign expert here, understand one of the problems we have had people so polarized, whatever special interest is to the left or right, one of the things i'm worried about as i looked at this mccutcheon decision, even more than the independent expenditures, is that it will just play to the polls t will make it even harder for people to do things in the middle where they have to compromise and be able to kind of go in the face of some of the people from their own base, from their own party if they are just going to be punished in a big way by major donors. do you think there's any truth to that? >> i think you get when it comes to big donors, maybe four categories of people. two that represents the polls, and they are trying to use their money as electoral magnets. >> that's a good analogy. >> a third type they have peculiar interest. they use money to make money.

i'm frankly surprised we don't have more spending by big corporate interests in washington because it's the best investment you can make. put in $20 million that goes into funding of campaigns, maybe you'll get $1 billion contract out of it. we'll see more of that now. i think we are heading down a slippery slope of direct contributions by corporations to candidates. and then maybe you have a category of those who are just looking out for the broader public interest. i think that's a much smaller category than the other three. >> the last thing i'd raise, no question, maybe we can go back after you're done, this issue even when you're making a decision as on elected official to do what you consider to be the right thing for your state. maybe you have a lot of employees in a certain area and you think it's important or the right thing for the country, i think with the lack of trust with all these big contributions people still will look at it, even though you know in the heart you made the decision for the right reason, and they think you got money from these interests.

i think even when you're doing it for the right reason, it completely breaks down trust from the public about why you're doing things. that's one of the major problems and i support this constitutional amendment. >> thank you. a couple of follow-up questions. in listening to this and thinking about these organizations that essentially are designed to disguise identity, the term identity laundering comes to mind. that's what's going on here. it's a reverse on the old idea of money laundering. ms. ravel, that was what was going on in your case. mr. were donors in california who the money went to virginia to arizona back to california. it was all about laundering the identity out of that contribution. isn't that correct? >> yes, mr. chair. the initial request for the money in california was, if you

want your identity to be known, you can give directly to a p.a.c. if you do not want your identity to be known, and you want to remain anonymous, it can go to this virginia nonprofit. and so the money that went to the virginia nonprofit was specifically for the purpose of not revealing identity, and it was then moved circuitously through all the other nonprofits for the same reason. >> mr. ornstein, thank you. that's the way it appeared. mr. ornstein, one of the situations is whenever you try to do something about an issue like this -- by wait i enjoyed this morning sitting literally in the center between senator roberts and senator schumer, but when you try to do something, everybody thinks of it in partisan terms. does this advantage my party versus the other party, my candidate versus the other.

this data i referred to that came out yesterday indicates that the gap, the red more conservative leaning groups, the blue are more liberal groups, and the gap between them is diminishing significantly. it's 85% or 90% conservative back in 2010, as you see here, still a dig disproportion in 2012. the gap is now 60-40. hopefully both sides are going to realize this is a danger. this isn't a partisan issue to me. this nondisclosed money is a danger to the republic no matter who it favors one year to the next. as the old testament says if you sow wind you'll reap the whirlwind. i'm afraid people are saying right now today this benefits my party. but next year or year after that it could benefit the other party and that's why i think we need to make a change like this.

>> it's interesting, mr. chairman, that before mccain-feingold you did have a bipartisan consensus on the need for more disclosure. indeed when congress was considering in 2000 requiring more disclosure of 527 groups, we had overwhelming bipartisan majority support it. one who didn't was the senate republican leader, mitch mcconnell. but what senator mcconnell said at the time was, he didn't support it because it didn't require enough disclosure. including what he said was a requirement for disclosure from these nonprofit groups. now what we think of as the 501-c-4's. we have a very different attitude now. it has become more polarized. i don't see why disclosure should be a partisan issue at this point. i don't see why we can't cut through that. i do think that this is something where now that there are more avenues for money,

people who have interests, and that includes the polar opposites as well on both sides, are going to start to pour more and more money into it. and in many cases they are going to try and hide where that money's coming from. one of the things we have seen is they will often use inappropriate vehicles, 501-c-3's, the pure nonprofits, to give grants of money to other groups that can go to other groups that can go to other groups that finally end up in a 501-c-4 that doesn't get disclosed. there are so many opportunities here to hide identities and hide money, how can voters figure out when a message is coming who is providing that message which is a requirement of context to know whether to believe it. >> one of the interesting data points in this study is that votes tend to put more credit to ads that come from these groups than they do from the candidates. even though they don't know who the groups are. the groups may be americans for greener grass, and voters tend to think it's not candidate ad.