Such a scandal was bound to happen after the government started trying to rule the expression of political views.

By David B. Rivkin and Lee A. Casey

The unfolding IRS scandal is a symptom, not the disease. For decades, campaign-finance reform zealots have sought to limit core political speech through spending limits and disclosure requirements. More recently, they have claimed that it is wrong and dangerous for tax-exempt entities to engage in political speech.

The Obama administration shares these views, especially when conservative, small-government organizations are involved, and the IRS clearly got the message. While the agency must be investigated and reformed, the ultimate cure for these abuses is to unshackle political speech by all groups, including tax-exempt ones, from arbitrary and unconstitutional government regulation.

Beginning in March 2010, the IRS engaged in an unprecedented campaign of harassment against conservative groups, either through denials or delays in approving their tax-exempt-status applications, or through endless and burdensome audits.

In notable contrast, liberal and “progressive” organizations got approvals with remarkable speed. The most conspicuous example involves the Barack H. Obama Foundation, which was approved as tax exempt within a month by the then-head of the IRS tax-exempt branch, Lois Lerner. From media reports and firsthand accounts, we also know that the IRS disproportionately audited donors to conservative causes and leaked confidential tax information concerning conservative groups in violation of federal law.

This IRS politicization is not an isolated problem. It is an inevitable result of the broader efforts to regulate and, in fact, suppress political speech.

The IRS crackdown on tax-exemption approvals for conservative groups was directed at nonprofit social-welfare groups, often called 501(c)(4)s after the Internal Revenue Code section granting them tax-exempt status. Such groups do not have to disclose their donors and are exempt from most taxation, although donations to them generally aren’t tax deductible.

Social-welfare organizations are permitted to engage in a range of political activities promoting their causes or beliefs, so long as these activities aren’t their “primary purpose.” This has been generally understood to mean that they must spend less than 50% of their total resources on political activities.

The IRS had little interest in 501(c)(4) political activities until the 2002 McCain-Feingold campaign-finance reform. That law barred dedicated political-advocacy groups from soliciting and spending soft money—funds that aren’t subject to tight federal campaign-contribution limits and are used for issue advocacy and party-building.

This IRS restraint was doubtless reinforced by the fact that virtually all politically active (c)(4)s, mostly labor and environmental groups, were ideologically liberal and their activities were not attacked in the mainstream media or by the political establishment. Meanwhile, Republicans financed their political activities largely through candidate-specific campaigns and party and congressional committees.

Yet McCain-Feingold had the unintended effect of making 501(c)(4) political activities far more important than they had been, since the law’s ban on soft money doesn’t apply to such groups. Thus, it prompted the creation of conservative 501(c)(4)s—although there is little hard evidence of improper political activities by any such groups, whether liberal or conservative.

The Supreme Court’s 2010 decision in Citizens United further increased the importance of the groups by invalidating the restrictions against much political speech by corporations. This freed 501(c)(4) groups, which ordinarily are organized as corporations, to engage in the express advocacy of political causes and candidates.

The Obama administration made clear its deep dislike of Citizens United and of the various new conservative groups spawned by the “tea party” movement. The IRS bureaucrats took the hint. No express order from senior administration officials would have been necessary. Like other federal enforcement agencies, the IRS has always been well-attuned to even subtle guidance from the White House, Congress and the political establishment.

Thus, the IRS crackdown on conservative organizations was a direct and inevitable consequence of political and policy messaging by the Obama administration, and by the campaign-finance reformers who share these views. Congressional Democrats are also to blame, since many of them have publicly—as with Max Baucus, chairman of the Senate Finance Committee, which oversees the IRS—or privately urged the IRS to go after conservative tax-exempt organizations.

Ignoring their own share of responsibility, campaign-finance reformers and their allies are now pressing to broaden the IRS crackdown to apply to all tax-exempt organizations. In their view, the problem is not only with express political advocacy, but with all tax-exempt activities that might have political overtones, or be related to political issues. Indeed, many argue that such organizations should be conspicuously apolitical.

This is wrong as a matter of law and policy. Congress doesn’t have to provide tax-exempt status to social-welfare organizations, but having done so it cannot discriminate by the kind of advocacy in which such groups engage. To say that such activities can have no political implications is an insult to common sense. In a vibrant democracy, every major policy debate has political implications.

The spirited debate about policy issues should be at the core of social-welfare organizations. Politics is how we govern ourselves and political speech is essential to self-governance. The fact that 501(c)(4) group contributors aren’t subject to campaign disclosure requirements is a good thing.

There is nothing inherently evil about anonymous political speech. It is firmly anchored in our political and legal culture and was used by the Framers during the founding. Hamilton, Madison and Jay published their Federalist Papers under a pseudonym. The fact that the IRS was able to target conservative donors—similar to the way donors to the NAACP were targeted at the height of the civil-rights battles—shows how disclosure can lead to speech-suppressing government actions.

The courts have long held that the IRS cannot use subjective, “value-laden” tests in administering nonprofit status. As the Court of Appeals for the D.C. Circuit stated in one leading case, Big Mama Rag, Inc. v. United States (1980): “although First Amendment activities need not be subsidized by the state, the discriminatory denial of tax exemptions can impermissibly infringe free speech.”

The proper lessons of the unfolding IRS scandal are twofold. First, any effort to have the IRS police advocacy activities of social-welfare organizations is bound to be clumsy and prone to degenerate into either selective or broad witch hunts. Second, the remedy is not to further limit political speech by nonprofit entities—which would certainly raise significant constitutional issues—but to encourage such speech by imposing fewer restrictions.

Messrs. Rivkin and Casey served in the Justice Department during the Reagan and George H.W. Bush administrations. They are partners in the Washington, D.C., office of Baker & Hostetler LLP.

Source: http://online.wsj.com/article/SB10001424127887323582904578489690187015294.html

News must often be gathered by confidential sources, or not at all. That confidentiality must be uniformly protected.

By David B. Rivkin Jr. and Lee A. Casey

A Colorado judge’s threatened contempt sanctions against Fox News investigative reporter Jana Winter—who refuses to reveal a confidential news source—has refocused public attention on how journalists operate.

News must often be gathered from confidential sources, or not at all. Given how vital is the freedom of the press in a democracy, that confidentiality must be maintained. It is time that Congress recognize this and enact legislation that enables journalists to protect their confidential sources and newsgathering materials.

Ms. Winter covered the July 20, 2012 mass shooting that killed 12 people and injured 58 others in an Aurora, Colo., movie theater. Based on confidential law-enforcement sources, she reported that James E. Holmes, who is charged with the murders, had previously sent a notebook to his psychiatrist describing his intent to kill.

Now that Mr. Holmes is facing trial, his defense attorneys want to know the identities of Ms. Winter’s sources to aid in their client’s defense. The judge has yet to decide whether the notebook, which is potentially covered by a patient-psychiatrist privilege, is admissible. He has postponed until August a decision on whether he will force Ms. Winter to reveal her sources. But if he ultimately sides with the defendant, Ms. Winter will have to choose between violating her sources’ trust and going to jail.

Such pressures on reporters are not uncommon, with prosecutors, defense counsel and judges demanding disclosure of their confidential sources and newsgathering materials. In 2005, for instance, New York Times reporter Judith Miller was jailed for refusing to reveal a confidential source, who leaked to her the identity of CIA employee Valerie Plame, to a grand jury.

Although most states provide some protection for journalists in the form of a reporter’s “privilege,” or “shield law,” the extent of these provisions varies. Fewer than half of the states (including such key media markets as New York, California and Washington, D.C.) have a robust privilege that protects journalists’ confidential sources, with a few narrow exceptions. Other states have recognized only a “qualified” privilege, where consideration is given to how difficult it might be to otherwise obtain the desired information.

David S. Tatel, a highly respected judge of the U.S. Court of Appeals for the D.C. Circuit, suggested in Ms. Miller’s case—where contempt sanctions were upheld because of the gravity of the national security issues involved—that “reason and experience,” as manifested by the laws in “forty-nine states and the District of Columbia,” support “recognition of a privilege for reporters’ confidential source.” Unfortunately, today federal law recognizes only a modest reporter’s privilege, grounded in the rules of evidence and applied by courts on a case-by-case basis, without detailed congressional guidance. Congress can and should do more, defining such a privilege by statute.

A national privilege should include a presumption that journalists may protect the confidentiality of their sources and that this privilege can be overridden only when there would otherwise be an imminent danger to public safety or national security (such as the actual threat of violence or attack). Confidentiality would not be overridden merely because it might jeopardize a prosecution or civil lawsuit.

A national law would not violate the Constitution’s fundamental federalism principles. States are guaranteed wide latitude in addressing their own needs and concerns. But where a national market has developed—as is the case with news and newsgathering—a uniform federal approach to regulation is justifiable.

Federal pre-emption of state law in this area will be a step further than Congress has considered in the past, but Congress has wrestled with this problem before. A bill that would have applied to all federal proceedings, establishing a robust privilege subject to a few exceptions, came close to passage in 2009. It foundered because of the “WikiLeaks” controversy, where a trove of the most sensitive U.S. diplomatic and military documents was released en masse. The bill’s defeat may well have been Julian Assange’s ultimate revenge against the freedom of the press that he disingenuously claimed to venerate.

A reporter’s privilege is not cost-free—sometimes it will impede the ability of the government and private plaintiffs to win in court. However, the cause of justice is not the only worthwhile goal in America’s system of ordered liberty. Civil and criminal prosecutions are already hampered by a set of well-recognized privileges—accorded to psychiatrists, priests, lawyers and spouses—that reflect a societal recognition that they are worth the costs.

Similarly, prosecutors are often unable to introduce important evidence if it was improperly obtained, reflecting the belief that inculcating proper behavior by law-enforcement personnel is worth the costs. A strong federal shield law for reporters would be consistent with how we balance the cause of justice and other key constitutional and societal values.

Given the growing importance of nontraditional media sources, the privilege should apply to professional reporters and citizen-bloggers. It should not, however, be extended to cases where the reporter himself is the target of a criminal investigation unrelated to his receiving of confidential information, such as securities trading on inside information.

Enacting a robust federal shield law for reporters has obvious merits and no partisan impediments. It is thus necessary and doable.

Messrs. Rivkin and Casey served in the U.S. Justice Department during the Reagan and George H.W. Bush administrations. They are partners practicing in the Washington, D.C., office of Baker & Hostetler LLP.

Source: http://online.wsj.com/article/SB10001424127887324030704578424930938783180.html

By David B. Rivkin Jr. and Andrew M. Grossman

Those who support stricter gun control fear that the passage of time since the Dec. 14 shootings at Sandy Hook Elementary School will result in further watering-down of measures. They should not, however, discount the risk that attempts to shave a few weeks or months off the usual legislative process will result in bad laws, with unintended and lasting consequences.

While pro-gun forces may overstate the case against expanded background checks — they are not, for example, a prelude to disarming the citizenry — President Obama and his allies have understated the difficult legal questions posed by extending the background-check system to cover more sales and transfers.

Under current law, gun dealers hold a Federal Firearms License (FFL) and are required to conduct instant background checks before handing a firearm to a buyer. But transfers between people who are not regularly engaged in the business of dealing firearms fall outside this requirement. This includes most transfers among family members and friends as well as some sales at gun shows — the “gun show loophole.” (Whether or not a background check has been conducted, it is illegal to transfer a firearm to a person known to be ineligible or likely to use it in a crime.)

The bill by Senate Majority Leader Harry Reid (D) — which is still the baseline proposal in the Senate — would close the “loophole” by channeling nearly all transfers through an FFL holder. At the heart of the bill is a 1½-page-long definition of “transfer,” meant to exclude from coverage such exchanges as a parent giving a gun to a son or daughter or lending a rifle for a hunting trip. But the dense language creates a trap for the unwary, who could face substantial criminal penalties for mistakes such as shooting a deer one day out of season or going one over a hunting limit — either of which would transform a lawful transfer into an illegal one.

The Reid bill would give the attorney general the power to set the price that FFL holders would charge to oversee private transfers. Opponents rightly noted that nothing would stop the attorney general from ratcheting up the fee to discourage or even halt transfers. After all, being a political appointee, the attorney general could take the heat and simply opt to set a new baseline status quo for gun rights, without further involvement by Congress.

Rather than attempt to work out such issues through hearings and mark-ups, the idea of universal background checks was ditched in the “compromise” proposal by Sens. Pat Toomey (R-Pa.) and Joe Manchin (D-W.Va.), who more modestly extend background checks to reach gun-show sales and advertised private sales.

But here, too, the devil is in the details. Toomey-Manchin requires a background check for transfers “pursuant to an advertisement.” What does that mean? Would a listing on a church bulletin board or hunting club’s e-mail list qualify? Does it matter whether the buyer saw the advertisement? The answers to these questions matter because a mistake would render the transfer illegal and could lead to jail time.

Toomey-Manchin also tasks the attorney general with enacting regulations that define its specifics, which means potential sellers would probably consult the final legislation as well as the Code of Federal Regulations to steer clear of risks. At that point, of course, most people would do the transfer through a licensed dealer. The bill hints at this likely result by including a carve-out for transfers among certain family members — an exception that would be superfluous if the bill were expected to work as drafted.

Like the Reid bill, Toomey-Manchin imposes what amounts to a tax on many private transfers of firearms by requiring them to go through a dealer, who presumably would expect to be paid. It allows the market to set the price, but the rush to legislate has precluded attempts to evaluate this burden, whether it would vary by region or whether alternatives might prove less onerous.

There are also privacy concerns. Currently, background-check records must be destroyed within 24 hours, preventing that data from being used for other purposes. But the Reid bill and Toomey-Manchin make exceptions for private transfers, and the latter also eliminates standard privacy protections for mental-health records used in the background check system; the attorney general would be allowed to use them for any purpose.

Congress routinely includes sunset provisions when legislating in ways that may impact First Amendment or privacy rights, so lawmakers can recalibrate based on experience. Unfortunately, neither the Reid bill nor Toomey-Manchin include such provisions. So regulations that are too restrictive or ineffective will remain so — at least until there are 60 votes in the Senate and a president willing to reconsider.

Given the time and attention that they deserve, these issues could be addressed. But artificial deadlines and an undue sense of urgency guarantee worse results and continued mistrust on both sides of this debate.

David B. Rivkin Jr. and Andrew M. Grossman practice law in the Washington office of BakerHostetler. Rivkin served in the Justice Department and the White House Counsel’s Office in the Reagan and George H.W. Bush administrations.

Source: http://www.washingtonpost.com/opinions/the-rush-to-a-bad-gun-control-law/2013/04/15/af89abb4-a5ff-11e2-a8e2-5b98cb59187f_story.html