December 31, 2011  ·  Lessig

So under the FACT Act, you get a free credit report each year from each of the major credit rating agencies. At AnnualCreditReport.Com you enter basic info, and then it gives you a link to each agency to get your report. 

Cool. Except…

To verify identity, the report asks you a series of questions about things supposedly only you would know. And it also asks you things you don’t even necessarily know! E.g., say you had a mortgage that got sold to some other mortgage company. It asks you whether you ever had a mortgage with a list of companies, including that other company. You, of course, are unlikely to know who owns your mortgage (you make the same payments in the same way regardless). And when you get the question wrong, you have to then apply through mail only. 

Or, of course, you could buy the report if you like… 

December 20, 2011  ·  Lessig  · Reblogged from  Huffington Post

There’s a certain terror to the life of a Member of Congress that, with all their pomp and pretense, it’s easy to miss. This terror is new. No one yet knows precisely how to tame it. And it may ultimately prove to be the single most important motivator to real campaign finance reform.

The terror runs something like this: An incumbent goes into an election, fairly confident about her prospects. Money in the bank, polling in the low sixties, an opponent with little chance to close the gap. Then 30 days out, a super-PAC drops half a million dollars in the district, funding attack ads, and ads that support the challenger. Very quickly, an easy reelection is thrown into doubt.

Incumbents are beginning to recognize this pattern. The most terrifying bit — in the short term, at least — is how they are reacting. They can’t hope to hold in reserve enough money to respond to such an attack — funders don’t contribute to million dollar surpluses; they send their money to candidates on the edge. Nor can they turn to their largest contributors after the attack begins — by definition, those contributors have maxed out. There’s nothing more they can do.

So the incumbent has but one obvious insurance policy: super-PACs on her own side. To secure the protection the incumbent needs, the incumbent cozies up to the large but independent funders on his or her side, so that if a bomb gets dropped, there’s a ready supply of bombs to support the incumbent.

And how do you cozy up to a super-PAC, to guarantee they’ll defend you — “independently,” of course — if terror raises its ugly head? By behaving in the way that super-PAC demands. “We’d love to be able to help you, Senator, but our charter requires that we only support candidates who get 80% or better on our score card.” Incumbents thus work hard for good (super-PAC) grades. And like superpowers in a cold war, allegiance is secured with a simple understanding of defense.

This dynamic was first explained to me by former Senator Evan Bayh (D-IN). Bayh was on a panel about campaign finance reform; he was responding to a skeptic’s claim that there was no real evidence that money mattered to a Senator’s decisions. I left that panel convinced that there was little an incumbent could do to maintain her independence.

Then I met Congressman John Sarbanes.

Sarbanes is a three-term Democrat from Maryland. He is the son of the former Senator, who began his career in the same district. Over a glass of water at a local restaurant, Sarbanes explained to me his idea for super-PAC insurance — an idea that required no compromise of principle, and indeed, one that would only strengthen the incumbent’s support.

The key is small dollar contributors. If Sarbanes had an army of small dollar supporters, then he’d have someone to turn to if he were attacked. Someone who has given $50 in the past is likely to be able to give $50 again, especially in an emergency, especially to protect “her congressman” against an “outsider’s attack.”

But it’s not easy to gather small dollar contributors. Indeed, for congressional races, it almost never makes sense. A single large contributor is worth 100 $50 contributors. Most incumbents thus find it easier to raise from the top down. It takes real discipline to raise from the bottom up.

So Sarbanes has done something that possibly no one else in the history of politics has ever done: He has formally and voluntarily tied himself to a funding structure that forces him to raise small dollar contributions. Sarbanes has established two “challenge funds,” both now fully funded. The first fund (worth $500,000) can be drawn upon only when Sarbanes recruits 1,000 small contributors. The second (with $250,000) can be drawn upon only when those contributors have given at least $50,000. Until he hits the 1,000 contributor, and $50,0000 in contributions mark, he can’t touch the $750,000 in the funds. But once he does, his campaign will be fully funded — with super-PAC insurance bundled in for free.

Not many in Congress are likely to follow Sarbanes’ lead. His ingenious idea takes real work. But if envy for his independence among Members grows, there is an obviously easier way to get the same protection: proposals like the Fair Elections Now Act, that would amplify the value of small contributions, or as I’ve proposed, a simple tax rebate in the form of a democracy voucher of $50 per voter, that would flood the field with small dollar contributions. Or even better, a constitutional amendment that limited the ability of super-PACs to drop bombs in the first place. Or even better still, a mix of both small dollar funding legislation and a limit on super-PAC power. Any of these reforms would give Members for free what Sarbanes is working overtime to earn: the independence necessary to be free to lead.

And thus may this innovation turn out to be a story with hope. For the current system is not stable. Until the rise of super-PACs, the system favored the incumbents. Now the incumbents work for the super-PACs. It is a demeaning and demoralizing life for people who like to think highly of themselves and the institution they serve. At some point they will get that they can fix this. Soon after that point, they just might.

Meanwhile, you could support this movement for a Congress “Free to Lead” (as Buddy Roemer puts it) by joining Sarbanes’ army. Or at least by thanking him for his idea.

(Original post on HuffPo)

December 20, 2011  ·  Lessig  · Reblogged from  Huffington Post

There’s a certain terror to the life of a Member of Congress that, with all their pomp and pretense, it’s easy to miss. This terror is new. No one yet knows precisely how to tame it. And it may ultimately prove to be the single most important motivator to real campaign finance reform.

The terror runs something like this: An incumbent goes into an election, fairly confident about her prospects. Money in the bank, polling in the low sixties, an opponent with little chance to close the gap. Then 30 days out, a super-PAC drops half a million dollars in the district, funding attack ads, and ads that support the challenger. Very quickly, an easy reelection is thrown into doubt.

Incumbents are beginning to recognize this pattern. The most terrifying bit — in the short term, at least — is how they are reacting. They can’t hope to hold in reserve enough money to respond to such an attack — funders don’t contribute to million dollar surpluses; they send their money to candidates on the edge. Nor can they turn to their largest contributors after the attack begins — by definition, those contributors have maxed out. There’s nothing more they can do.

So the incumbent has but one obvious insurance policy: super-PACs on her own side. To secure the protection the incumbent needs, the incumbent cozies up to the large but independent funders on his or her side, so that if a bomb gets dropped, there’s a ready supply of bombs to support the incumbent.

And how do you cozy up to a super-PAC, to guarantee they’ll defend you — “independently,” of course — if terror raises its ugly head? By behaving in the way that super-PAC demands. “We’d love to be able to help you, Senator, but our charter requires that we only support candidates who get 80% or better on our score card.” Incumbents thus work hard for good (super-PAC) grades. And like superpowers in a cold war, allegiance is secured with a simple understanding of defense.

This dynamic was first explained to me by former Senator Evan Bayh (D-IN). Bayh was on a panel about campaign finance reform; he was responding to a skeptic’s claim that there was no real evidence that money mattered to a Senator’s decisions. I left that panel convinced that there was little an incumbent could do to maintain her independence.

Then I met Congressman John Sarbanes.

Sarbanes is a three-term Democrat from Maryland. He is the son of the former Senator, who began his career in the same district. Over a glass of water at a local restaurant, Sarbanes explained to me his idea for super-PAC insurance — an idea that required no compromise of principle, and indeed, one that would only strengthen the incumbent’s support.

The key is small dollar contributors. If Sarbanes had an army of small dollar supporters, then he’d have someone to turn to if he were attacked. Someone who has given $50 in the past is likely to be able to give $50 again, especially in an emergency, especially to protect “her congressman” against an “outsider’s attack.”

But it’s not easy to gather small dollar contributors. Indeed, for congressional races, it almost never makes sense. A single large contributor is worth 100 $50 contributors. Most incumbents thus find it easier to raise from the top down. It takes real discipline to raise from the bottom up.

So Sarbanes has done something that possibly no one else in the history of politics has ever done: He has formally and voluntarily tied himself to a funding structure that forces him to raise small dollar contributions. Sarbanes has established two “challenge funds,” both now fully funded. The first fund (worth $500,000) can be drawn upon only when Sarbanes recruits 1,000 small contributors. The second (with $250,000) can be drawn upon only when those contributors have given at least $50,000. Until he hits the 1,000 contributor, and $50,0000 in contributions mark, he can’t touch the $750,000 in the funds. But once he does, his campaign will be fully funded — with super-PAC insurance bundled in for free.

Not many in Congress are likely to follow Sarbanes’ lead. His ingenious idea takes real work. But if envy for his independence among Members grows, there is an obviously easier way to get the same protection: proposals like the Fair Elections Now Act, that would amplify the value of small contributions, or as I’ve proposed, a simple tax rebate in the form of a democracy voucher of $50 per voter, that would flood the field with small dollar contributions. Or even better, a constitutional amendment that limited the ability of super-PACs to drop bombs in the first place. Or even better still, a mix of both small dollar funding legislation and a limit on super-PAC power. Any of these reforms would give Members for free what Sarbanes is working overtime to earn: the independence necessary to be free to lead.

And thus may this innovation turn out to be a story with hope. For the current system is not stable. Until the rise of super-PACs, the system favored the incumbents. Now the incumbents work for the super-PACs. It is a demeaning and demoralizing life for people who like to think highly of themselves and the institution they serve. At some point they will get that they can fix this. Soon after that point, they just might.

Meanwhile, you could support this movement for a Congress “Free to Lead” (as Buddy Roemer puts it) by joining Sarbanes’ army. Or at least by thanking him for his idea.

(Original post on HuffPo)

December 20, 2011  ·  Lessig  · Reblogged from  Huffington Post

There’s a certain terror to the life of a Member of Congress that, with all their pomp and pretense, it’s easy to miss. This terror is new. No one yet knows precisely how to tame it. And it may ultimately prove to be the single most important motivator to real campaign finance reform.

The terror runs something like this: An incumbent goes into an election, fairly confident about her prospects. Money in the bank, polling in the low sixties, an opponent with little chance to close the gap. Then 30 days out, a super-PAC drops half a million dollars in the district, funding attack ads, and ads that support the challenger. Very quickly, an easy reelection is thrown into doubt.

Incumbents are beginning to recognize this pattern. The most terrifying bit — in the short term, at least — is how they are reacting. They can’t hope to hold in reserve enough money to respond to such an attack — funders don’t contribute to million dollar surpluses; they send their money to candidates on the edge. Nor can they turn to their largest contributors after the attack begins — by definition, those contributors have maxed out. There’s nothing more they can do.

So the incumbent has but one obvious insurance policy: super-PACs on her own side. To secure the protection the incumbent needs, the incumbent cozies up to the large but independent funders on his or her side, so that if a bomb gets dropped, there’s a ready supply of bombs to support the incumbent.

And how do you cozy up to a super-PAC, to guarantee they’ll defend you — “independently,” of course — if terror raises its ugly head? By behaving in the way that super-PAC demands. “We’d love to be able to help you, Senator, but our charter requires that we only support candidates who get 80% or better on our score card.” Incumbents thus work hard for good (super-PAC) grades. And like superpowers in a cold war, allegiance is secured with a simple understanding of defense.

This dynamic was first explained to me by former Senator Evan Bayh (D-IN). Bayh was on a panel about campaign finance reform; he was responding to a skeptic’s claim that there was no real evidence that money mattered to a Senator’s decisions. I left that panel convinced that there was little an incumbent could do to maintain her independence.

Then I met Congressman John Sarbanes.

Sarbanes is a three-term Democrat from Maryland. He is the son of the former Senator, who began his career in the same district. Over a glass of water at a local restaurant, Sarbanes explained to me his idea for super-PAC insurance — an idea that required no compromise of principle, and indeed, one that would only strengthen the incumbent’s support.

The key is small dollar contributors. If Sarbanes had an army of small dollar supporters, then he’d have someone to turn to if he were attacked. Someone who has given $50 in the past is likely to be able to give $50 again, especially in an emergency, especially to protect “her congressman” against an “outsider’s attack.”

But it’s not easy to gather small dollar contributors. Indeed, for congressional races, it almost never makes sense. A single large contributor is worth 100 $50 contributors. Most incumbents thus find it easier to raise from the top down. It takes real discipline to raise from the bottom up.

So Sarbanes has done something that possibly no one else in the history of politics has ever done: He has formally and voluntarily tied himself to a funding structure that forces him to raise small dollar contributions. Sarbanes has established two “challenge funds,” both now fully funded. The first fund (worth $500,000) can be drawn upon only when Sarbanes recruits 1,000 small contributors. The second (with $250,000) can be drawn upon only when those contributors have given at least $50,000. Until he hits the 1,000 contributor, and $50,0000 in contributions mark, he can’t touch the $750,000 in the funds. But once he does, his campaign will be fully funded — with super-PAC insurance bundled in for free.

Not many in Congress are likely to follow Sarbanes’ lead. His ingenious idea takes real work. But if envy for his independence among Members grows, there is an obviously easier way to get the same protection: proposals like the Fair Elections Now Act, that would amplify the value of small contributions, or as I’ve proposed, a simple tax rebate in the form of a democracy voucher of $50 per voter, that would flood the field with small dollar contributions. Or even better, a constitutional amendment that limited the ability of super-PACs to drop bombs in the first place. Or even better still, a mix of both small dollar funding legislation and a limit on super-PAC power. Any of these reforms would give Members for free what Sarbanes is working overtime to earn: the independence necessary to be free to lead.

And thus may this innovation turn out to be a story with hope. For the current system is not stable. Until the rise of super-PACs, the system favored the incumbents. Now the incumbents work for the super-PACs. It is a demeaning and demoralizing life for people who like to think highly of themselves and the institution they serve. At some point they will get that they can fix this. Soon after that point, they just might.

Meanwhile, you could support this movement for a Congress “Free to Lead” (as Buddy Roemer puts it) by joining Sarbanes’ army. Or at least by thanking him for his idea.

December 17, 2011  ·  Lessig

In Republic, Lost and in the New York Times, I have described a version of small dollar funded elections that I have called “The Grant and Franklin Project.” Here’s a brief statement of the plan. 

Assumption: Every voter pays at least $50 to the Federal Treasury in the form of taxes of some kind (income, payroll, etc.) (see, e.g., this JTC report).

The Plan:

  1. The first $50 of revenue paid to the Treasury is rebated in the form of a Democracy Voucher.
  2. That voucher (or any portion of it) can be given to any candidate for Congress who agrees to fund his or her campaign from two sources only: (1) Democracy Vouchers and (2) contributions from United States citizens capped at $100. 
  3. If the voucher is not used, it reverts to the political party to which the voter is registered. 
  4. If the voucher is not used, and the voter is not registered to a party, it reverts to a fund to support democracy in America. 

December 14, 2011  ·  Lessig

Consistent with the brilliant call by Rootstrikers.org, I have modified Publius’ proposed 28th Amendment to assure that at least the First Amendment would not be construed to grant to any non-natural person (i.e., a corporation) any “unalienable” (as the Declaration puts it) rights. The added text in ¶2 is as follows: 

Nor shall the First Amendment be construed to vest in any non-natural person any unalienable constitutional rights. 

This version of the “corporations are not persons” movement is meant to be as narrow as possible to achieve the change we need. There’s no reason not to allow legislatures to vest corporations with “personhood” when that’s convenient and helpful — e.g., it’s useful to be able to sue Exxon as a person for damages done by an oil tanker. The key is to make sure that a corporation can’t claim a constitutional right against the judgment by a legislature. 

December 11, 2011  ·  Lessig

The Amendment that Publius proposed has some thought behind it, not all of which is apparent on the surface. Here are some notes, tied to each paragraph. 

For the purpose of securing the independence of the legislative and executive branches, Congress shall: 

Preambles haven’t had much success in our constitutional tradition (see, for example, the Court’s complete failure to pay attention to the Progress Clause perambulation), but you can’t fault a guy for trying: This aims at making it perfectly clear that the purpose of this Amendment is to protect or better secure the independence of Congress and the Executive, by which I mean the proper dependence: As Federalist 52 puts it, “upon the People alone.”

(1) fund federal elections publicly, at no less than the equivalent of the total amount spent in the election cycle when this article is ratified; 

This is one of three critical changes: Public elections must be publicly funded. Precisely how is for Congress to determine. I prefer a “small dollar funded elections,” such as the Fair Election Now Act or what I’ve called the Grant & Franklin Project. The “at no less than” clause makes sure Congress doesn’t underfund the system (and thereby entrench the incumbents). “The equivalent of” again is intended to index the amount to inflation. 

(2) limit any non-anonymized contributions to candidates for federal office to the equivalent of $100;

Some good souls want to GetMoneyOut. I want to get corrupting money out. I am with Spencer Overton: Obama taught us the importance of getting small dollars in (even if that lesson seems to have been forgotten). So this part would preserve the participatory money, while keeping out the corrupting money. “The equivalent of $100” is meant to index the $100 to inflation. 

The most puzzling bit of this paragraph is the “non-anonymized” part. This is meant to leave it open to Congress to permit (truly) anonymous contributions. I know the intuition is that’s impossible. But as Ackerman/Ayres show, it’s quite possible. The proposal is complex, but the key is to make contributions revokable — so even if I can show you today I contributed $5,000, tomorrow I can revoke it so you can’t be sure. Read more about it here.

(3) have the power to limit, but not to ban, independent political expenditures within 90 days of an election, including, but not limited to, expenditures in support of, or in opposition to, a candidate for federal office.

This is the bit that responds to Citizens United. As I argue in Republic, Lost, there was a kernel of truth in the Court’s decision: No one or thing — corporations, dolphins, or the Chinese – should be banned (or effectively so by being so burdened) from saying anything. Especially not the non-profit filmmakers, Citizens United, Inc. But that doesn’t mean that there is no legitimate corruption-related interest in limiting “independent” expenditures. Of course there is a fundamental difference between Citizens United spending its money to promote its film about Hilary and a Exxon spending $100 million in an election. This clause recognizes that difference, by giving Congress the power to limit “independent political expenditures” — whether corporate or individual — during the time around an election, whether “issue ads” or promoting/opposing a candidate. 

2. The First Amendment shall not be construed to limit legislation enacted pursuant to this article, save to assure content and viewpoint neutrality. Neither shall the First Amendment be construed to limit the equivalent power of state or local legislation enacted to regulate elections of state or local officers.

So this is a critically important paragraph that reintroduces First Amendment values (the guarantee of government neutrality) into campaign finance regulation. The concern is that ¶1 alone might be read to completely free Congress from the duty to be neutral. So, e.g., a ban on one side vs the other. Also, ¶1 doesn’t do anything to give States and localities the freedom to secure their own independence of elected officials, or judges (as some states (very stupidly) choose to elect judges).

3. Congress shall by law establish an agency for federal elections which shall enforce the provisions of this article, and whose principal officers shall be non-partisan commissioners who have served at least 10 years as a federal judge. The agency shall have standing to enforce the provisions of this article judicially in the federal courts, and the judicial power shall be construed to extend to actions by the agency against Congress.

A big problem is who gets to enforce the rules. Existing Supreme Court doctrine makes it hard to imagine anyone with the power to force Congress to do its work. (“Force” in a weak sense of the term: nothing can really force Congress to do anything). So this first creates a new F.E.C. It fills it with effectively neutral commissioners — I stole this idea from Bruce Ackerman. And it expressly says that Courts have to let that commission sue to enforce the provisions of this Amendment, including the ability to enjoin Congress to act. That is a very dangerous power, I know. Many democracies have tried it and failed. So this might be trouble.

Nonetheless, this is a crucial part of the amendment. The current FEC is hopeless, and hopelessness is in its DNA. There must be a body with constitutional standing to hold Congress to the terms of this Amendment. 

4. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.

This is the standard clause that gives Congress “Necessary and Proper” power with respect to this Amendment. So Congress gets to pass the implementing legislation, and other “appropriate” legislation. 

December 10, 2011  ·  Lessig

I hear that Publius submitted this to Dylan Ratigan’s Great 28 Debate: (slight but important edits inspired by fantastic feedback from souls from #occupyDC) : 12/15/11) (for version history, see the protected version of this at the lessig-wiki).

  1. For the purpose of securing the independence of the legislative and executive branches, Congress shall: 
      (1) fund federal elections publicly, at no less than the equivalent of the total amount spent in the election cycle when this article is ratified; 
      (2) limit any non-anonymized contributions to candidates for federal office to the equivalent of $100;
      (3) have the power to limit, but not to ban, independent political expenditures within 90 days of an election, including, but not limited to, expenditures in support of, or in opposition to, a candidate for federal office.
  2. The First Amendment shall not be construed to limit legislation enacted pursuant to this article, save to assure content and viewpoint neutrality. Neither shall the First Amendment be construed to limit the equivalent power of state or local legislation enacted to regulate elections of state or local officers. Nor shall the First Amendment be construed to vest in any non-natural person any unalienable constitutional rights. 
  3. Congress shall by law establish an agency for federal elections which shall enforce the provisions of this article, and whose principal officers shall be non-partisan commissioners who have served at least 10 years as a federal judge. The agency shall have standing to enforce the provisions of this article judicially in the federal courts, and the judicial power shall be construed to extend to actions by the agency against Congress.
  4. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.

Thoughts?