Political Advertisers Campaign to Avoid Transparency and Disclosures

Originally Posted on D&G Law

The marketing communications industry has seen significant change over the past few years, and to help navigate the changing industry, lawyers from Davis & Gilbert LLP produced their third annual 2015 Lessons Learned / 2016 Practical Advice. The publication highlights major developments in the marketing communications industry, and offer tips and best practices for marketers and their agencies in the coming year.

Political candidates and their supporters have been projected to spend a record $11.4 billion on advertising during the election cycle ending on Tuesday, November 8, 2016. As a result of legal and media developments that occurred in 2015, much of this advertising will withhold from voters the identity of the people paying for it. 2015 should be remembered as the year that political advertisers rejected transparency and disclosure in their campaign communications, and received support in that effort from the government and the press.

Reformist politicians and public interest groups pushed the Federal Election Commission (FEC) to require advertisements placed by political action committees (PACs) to more clearly identify the individuals paying the bills, but the FEC did not act. As a result, ads nominally sponsored by PACs with indistinguishable patriotic names continue to proliferate, and voters continue to have little knowledge of who actually is funding those ads.

PACs and other political advertisers also welcomed the emergence of another path to minimize their disclosures to voters, as BuzzFeed launched a service to create and host native political advertisements for candidates and causes. Because BuzzFeed native advertising typically has been only lightly labeled “sponsored,” media watchdogs anticipate that BuzzFeed native political advertising similarly will only inconspicuously identify to voters that it is paid content and who sponsored that content. As a result, voters who encounter BuzzFeed native political advertising alongside editorial listicles and through their social media feeds may have no idea that a political article they are reading is biased spin and not nonpartisan news.

The savviest political candidates, however, succeeded in dodging FEC disclosure rules altogether by exploiting two legal loopholes. First, they placed their campaign advertisements on their own websites and social media pages and disseminated them through sympathetic bloggers and other unpaid Internet media opportunities, thereby bypassing the paid online media placements that trigger FEC disclosure requirements. Second, they coordinated their advertising efforts with the monied PACs supporting their election runs before they formally announced their candidacies, thereby enabling the pro-candidate advertising that the PACs release later in the election cycle to avoid being deemed by the FEC a “coordinated communication” which requires disclosure that the ad has been approved by the candidate. As a result, “Swift Boat”-style attack ads created by a candidate and a PAC under this pre-candidacy FEC exception can carry a disclaimer stating that the ad was not authorized by the candidate, and the candidate can distance himself or herself from any deceptive claims in the ad.

Looking Ahead:

  • The chair of the FEC, Ann Ravel, has deemed the FEC “worse than dysfunctional,” so voters should not expect the agency to compel political advertisers to make additional disclosures or provide greater transparency to voters in 2016.
  • Interesting developments in the law governing political advertising more likely will emerge on the media side, especially in connection with the growing trend of transit agencies around the country refusing to carry advertising regarding political issues, to avoid offending riders and, arguably, to avoid inciting violence.
  • Courts have been divided on whether these bans violate the First Amendment, and in light of inconsistent rulings in 2015 on advertisements with such messages as “Killing Jews is Worship that draws us close to Allah” (permitted, in New York) and “Israeli War Crimes: Your Tax Dollars At Work” (prohibited, in Seattle) and the public importance of political speech, a case on public transit advertising bans likely will appear on the U.S. Supreme Court docket in the near future.

Author Contact:

Ashima A. Dayal
Dayal, Ashima_300

Ashima A. Dayal is a partner in the Entertainment, Media & Sports Practice Group of Davis & Gilbert. She has a wide range of experience in the entertainment and journalism fields, and deep expertise in intellectual property litigation and media law. She advises the firm’s media, advertising and entertainment clients on all aspects of copyright, trademark, right of publicity and defamation law. She also has considerable experience resolving complex issues and disputes raising false advertising, unfair competition, misappropriation of idea, e-commerce and contract concerns. Ms. Dayal has been repeatedly ranked in Media Law International’s annual guide, and she speaks and writes regularly about media law issues. She can be reached at 212.468.4912 or at adayal@dglaw.com.