FEC Chairman Talks 'Dark Money' and the Fine Line Between Free Speech and Censorship

FEC Chairman Lee Goodman says the dark money debate is nothing more than an effort to regulate speech using government power.


"I'm from the Federal Election Commission, and I'm here to help," said Lee E. Goodman upon taking the stage at the 2014 Liberty Political Action Conference (LPAC). It was a joke, but Goodman may actually be a rare libertarian ally in the federal government. Since taking office in 2013, he's taken a strict stance in favor of free speech. 

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"It's good for people to hear more points of view," said Goodman, a former private-practice election lawyer. "It's good for democratic discourse. And it leads to more competitive policies." Yet all over the place, Goodman sees free speech under attack. 

"Look at college campues today, where political correctness has run amok," said Goodman. Banishing speech "is far easier than meeting the merits of a concept or a speaker." And it's also a prevalent pursuit from federal agencies, including the Federal Election Commission (FEC). 

Goodman is one of three Republican members of the agency; the other three are Democrats. This even split is required by law, though with four votes required for any official action it regularly leads to deadlock. Since Goodman took office about a year ago, a number of issues have divided the members down party lines. ("A 3-to-3 split comes close to official commission policy," noted The New York Times in August.)

"Many of the cases we get are fairly close calls on subtle legal principles," Goodman told the crowd at LPAC. His "biggest insight" since taking office is that "the line between free speech and censorship is a very fine and fragile and delicate line."

The most divisive issue so far has been related to so-called "dark money" in elections. Tax-exempt organizations that donate to political campaigns and causes don't have to disclose their donor or membership lists to the FEC if the group's major or "primary purpose" is not to influence election results. But now some on the left want to include issue advocacy among the purposes for which donor disclosure is required. FEC members have been deadlocked down partisan lines on making the regulatory change. 

"The courts have told us we have no jurisdiction over issue advocacy, so you cannot count it toward an organization's major purpose to bootstrap regulatory jurisdiction," said Goodman. "An issue advocacy organization does not have to surrender its associational freedoms, including the confidentiality of its members and donors, just because it spends $1,000 to exercise its free-speech rights." 

In 2012, the FEC found 3 to 4 percent of that year's election expenditures came from groups that weren't required to disclose their donors—including about $7 million spent by Planned Parenthood. "I daresay that the membership and donors of Planned Parenthood would be highly sensitive to disclosure," said Goodman, "and it happens on the right on social issues too."

"When you hear the dark money debate, I want you to understand it in context," Goodman continued. "It is an effort by those who want to regulate speech more to alter the playing field of speech and ban speech using govenment power, and nothing more."

Another divisive issue at the FEC has been Bitcoin. The FEC has endorsed various sorts of in kind contributions, including art, computers, and securities, and "there's nothing fundamentally or inherently different about Bitcoin," said Goodman. Yet the Democratic FEC members don't see it that way. They endorsed Bitcoin donations, but only up to $100. A 3-3 vote has resulted in a deadlock that effectively allows groups to receive Bitcoin donations up to the full $2,600 per-election donation limit.