Colbert's 'SuperPAC' Pushes the Limits of Election Law

Viacom can fund his new group without reporting anything to federal regulators -- as long as campaign ads air within his time slot

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Comedian Stephen Colbert now has a "SuperPAC" -- a political group that can legally accept unlimited contributions from people, corporations, and unions to campaign for candidates and causes.

"Mr. Colbert, you may form your PAC and proceed as the commission has advised in this opinion," the Federal Election Commission's Democratic chair, Cynthia Bauerly, announced at the end of a hearing Thursday morning where Colbert sought approval for his new group, which now exists at the vanguard of soft-money election spending.

Smiling, Colbert shook the hand of his lawyer, Trevor Potter, a former FEC chairman himself who now serves as president of the Campaign Legal Center in Washington, D.C. Potter had counseled Colbert about the meeting during Wednesday's showing of The Colbert Report on Comedy Central:

With the FEC's approval, Colbert will now:

  • Take in unlimited donations from nearly any source, other than foreign nationals and government contractors
  • Air TV and radio ads expressly telling viewers and listeners to vote for certain candidates -- but his group cannot give money directly to those candidates
  • Report contributions to the Federal Election Commission
  • Report spending on campaign ads

The trend in recent years among soft-money groups has been to file with the IRS under section 527 or 501(c)4 of the U.S. tax code, and not with the FEC, thereby evading reporting requirements under the guise of "issue advocacy." Colbert, meanwhile, has chosen to register with the FEC and be subject to greater disclosure requirements. Today's development, hinted at by previous FEC rulings, is that an FEC-registered group, not a 527, can take in unlimited money from individuals, corporations, and unions as long as it does not donate any of that money directly to candidates. It can air ads telling people to vote for candidates, but it cannot give its money directly to their campaigns.

Despite the recent trend, most independent political groups operate under far greater restrictions than Colbert's new organization. Most register with the FEC as PACs, like Colbert's new group. But, unlike his group, most donate money directly to candidates. Because they do, most independent political groups cannot receive more than $5,000 from an individual each election cycle, and they cannot take donations from corporations or unions.

Because Colbert's group will not give any money directly to candidates -- instead airing independent ads to support them -- Colbert can take donations of any size.

He forced the FEC to make this decision by planning to operate as a real political group, not a parody.

"If we'd viewed this as a funny request, that would have been a lot easier," Commissioner Ellen Weintraub, a George W. Bush nominee, told Colbert at today's hearing.

In the end, the commission voted 5-1 to approve Colbert's PAC according to guidelines under consideration at today's hearing.

Colbert had sought guidance from the FEC on how to handle air-time and help from Viacom, Comedy Central's parent company -- and this is the area in which his SuperPAC has forced precedents with implications for other media companies, like Fox News.

The FEC ruled today that Viacom can fund Colbert's group, without limit, as long as it only helps out with ads that air during his show:

  • Discussion of Colbert's SuperPAC during his show is not considered a contribution to the PAC from Viacom -- an application of the standard "media exemption," which allows media outlets to offer commentary on political groups and candidates without that commentary being deemed a contribution. Under this rule Jon Stewart can comment on Colbert's SuperPAC, too.
  • If Colbert uses his air-time to run PAC-produced independent expenditures -- i.e., a SuperPAC commercial that tells people to vote for a particular candidate -- Viacom can pay for everything. It can produce the ad. Viacom does not have to report to the FEC how much it spent in doing so; the production and air-time are not considered a contribution to the PAC.
  • Viacom cannot fund ads to run outside of Colbert's own show, or on any other network.

Colbert had considered, according to FEC documents, having the staff of his show produce campaign ads, airing them during his own show, and then paying other media companies to air those same ads on other networks -- a prospect with potentially vast implications for Fox News, which employs political figures like Mike Huckabee and Sarah Palin, both of whom have PACs of their own.

Colbert told the commissioners he didn't really know "what we're going to do with the ads, where we're going to place them, because we don't have the PAC yet." But had it allowed Colbert to air Viacom-funded ads outside his show, Fox, for instance, could conceivably have funded the production of political ads for Huckabee's HuckPAC to air outside his own weekend show on Fox.

The FEC told Colbert he can't do that. But, for the purposes of Colbert's allotted time on Comedy Central, Viacom and Colbert's TV staff can spend unlimited time and resources making PAC-related commercials, without reporting any of that to the FEC.

The lone dissenting vote came from Commissioner Donald McGahn, a Bush nominee, who pointed out that Viacom may be able to produce more material for Colbert than the considered guidelines permit.

It's questionable how many groups will follow in Colbert's footsteps. Right now, it's far easier to form a 527, produce "issue ads" that mention a candidate, and shield one's donors from public disclosure.

But for PACs that already exist, and aren't bashful about disclosing who their donors are, Colbert has just mainstreamed the idea of shunning donations to candidates in favor of unrestricted independent election advertising.

Image credit: Yuri Gupas/Reuters