Campaign Finance Law Can't Take a Joke

For the past few months comedian Stephen Colbert has been giving his viewers an education in campaign finance laws -- how burdensome and convoluted they can be, and how they stifle political speech. The real joke, however, is that this isn’t what he set out to do.

Originally intended as an ongoing comedy skit to mock the Supreme Court's ruling in Citizens United, the Colbert SuperPAC gag has spun into something of a headache for the self-styled campaign finance "reform" community. Several media outlets have begun to report that the skit is backfiring, noting the unintended lesson being taken away by many.

The gag started when Colbert announced on his show that he intended to form a PAC. His corporate overlord, Viacom, quickly informed him that he couldn’t do that with the support of any Viacom resources, such as the staff, equipment, and facilities used to produce The Colbert Report, because that would be a corporate contribution. Corporations aren’t allowed to contribute to PACs, of course, at least not those that contribute to candidates.

So Colbert quickly moved on to what he thought was a “loophole,” opened by the Citizens United decision. If his PAC became a so-called "Super PAC," making only independent expenditures, then all would be good. He hired prominent campaign finance attorney Trevor Potter, who also heads the decidedly pro-regulation Campaign Legal Center, to help him navigate the thicket of campaign finance laws.

There was never any question of whether or not Colbert could form his independent expenditure PAC, and accept unlimited contributions from any source, including unions, corporations, or individuals. The real question before the FEC was how to report Viacom's involvement and support for Colbert SuperPAC in the required filings.

Viacom, a corporation, owns the production facilities and pays the staff of The Colbert Report, and of course distributes the show through the Comedy Central channel. So long as Colbert SuperPAC remained entirely on the show, there was no problem as far as reporting requirements because Viacom's support for the gag was well within what is known as the media exemption, which allows media entities to do pretty much anything they want to within their normal media activities, such as producing shows or publishing newspapers.

But because Colbert wants to start a PAC, and use funds from that PAC to air advertisements on other channels, Viacom once again came back to Colbert and explained why this would be a problem.

The reason for Viacom’s further opposition was clear: if he created his Super PAC, Colbert would have to file regular disclosure statements with the FEC (there is no "comedy exemption" to campaign finance laws), and would have had to include on his filing the value of Viacom’s resources used as an in-kind contribution.

And it seems Viacom really doesn't want their name attached as a contributor to an independent expenditure PAC, at least not this one. Contributing implies support for the message, and while Viacom seems happy enough to have Colbert speak out on his show, it changes when suddenly his ads are running on ESPN or NBC or elsewhere, and Viacom is listed as one of the top contributors to the PAC.

A more complex problem concerned having to determine the amount of the in-kind contribution that would have to be reported.

No doubt some sharp accountants could come up with a pretty reasonable way of assigning a dollar figure to the contribution, but the problem is that a different set of sharp accountants somewhere else might come up with a different but also pretty reasonable way of determining the value of the in-kind contribution.

That means that complaints would be filed alleging that Colbert SuperPAC filed a report that undervalued (or overvalued) the contribution and that Viacom isn't accurately disclosing their support for the PAC. This brings in more lawyers, accountants, bad press, and other things that the folks at Viacom would just as soon avoid altogether.