Why Your Company’s Cyber Breach Isn’t Currently a Bad Thing

Article | 105 KY. L. J. ONLINE 1 | November 14, 2016

Devon Paige Cobb[1]

Introduction

“[T]here are only two types of companies: those that have been breached and those that don’t know they have.”[2] Despite the frequency of these hacks, the stigma associated with cybersecurity breaches of business and customer information is a harsh one. That stigma is imposed before the financial hits are measured, the average cost of which can be as much as $25 per exposed record.[3] Target alone reported a net $17 million in breach-related costs as well as $44 million in insurance payments.[4] While those numbers are substantial, these hacks can cost companies even more in intangibles, such as the decline in a company’s reputation,[5] loss of customer goodwill,[6] and liability flowing from either class action lawsuits by customers whose information has been breached or shareholders’ derivative actions.[7]Cyber breaches of consumer information have plagued the private financial and healthcare sectors for years now, but only recently, in the wake of such scandals as Ashley Madison[8] and big business let downs like Target,[9] have these leaks focused society's attention on the public sector.[10] The Securities Exchange Commission (SEC) has been slow to regulate disclosure of cybersecurity breaches for publicly traded companies. Only in 2011 did it publish guidelines that require publicly traded companies to disclose material cyber attacks, threats of loss, and actual losses.[11] And although the SEC met again in 2014 in a roundtable discussion,[12] it still has failed to mandate a specific timeline for publicly traded companies to follow in making their breach disclosures to the public.[13]So can a cyber breach ever be a good thing for the company? Because there have not been specific regulations from the SEC, companies are free to take their time and consider only their own interests in making breach disclosures to the public; companies may even spin the breach as immaterial to avoid disclosure completely.[14] Without explicit SEC regulation of the timeline for disclosure, companies will inevitably waver on the time they take to make disclosures, creating ambiguity in industry standards and uncertainty in the marketplace following a breach. Furthermore, market distortions — the types that the SEC is most focused on preventing[15]— are likely to result from undisclosed information from data breaches. This Note argues that the SEC should mandate a specific timeline for requiring companies to disclose a cyber breach to maintain its objective of ensuring freely disseminated information, maintaining market integrity, and protecting investors.

I. The Setting: How Investors’ Interests Are Taking a Back Seat

Consumers, companies, and investors have competing interests in regards to a data breach. Unfortunately, investors’ interests are ultimately ignored. Consumers, however, need to be notified of breaches so that they can take remedial and protective post-breach measures to safeguard their information, like cancelling their credit cards. These interests are currently being protected by the Federal Trade Commission (FTC), whose mission is to protect consumers from unfair or deceptive business practices.[16] The Third Circuit recently held that the FTC may bring a claim that a company’s allegedly inadequate data security practices constitute “unfair” business practices in violation of Section 5 of the Federal Trade Commission Act.[17] Furthermore, many states have recognized the need for adequate consumer protection by enacting consumer breach notification disclosure statutes, but consumers are afforded this protection in only three-fourths of states.[18]Companies often perceive that keeping a hack quiet is in their best interest. This allows the company to “save face”[19] and prevent indirect costs of “business lost”[20] from wary consumers, while, in the interim, trying to discover precisely what information was hacked and why. But companies also limit disclosures to avoid “provid[ing] a roadmap for hackers as to where they are vulnerable.”[21] For these same reasons, a company might fear that making a breach public would cause potential investors to shy away from the company.[22] Add to this list of concerns the looming fear of class action lawsuits for consumers who were harmed by the breach,[23] and it is easy to see why companies’ interests are best served when they have all the time in the world (or at least as long as they want) to disclose a breach.These concerns leave investors’ interest in being notified of a data breach ignored under current SEC regulations. Investors care about data breaches being withheld because of the impact it could have on their investment’s stock price. Announcing publicly that a database of consumer information has been hacked would intuitively cause the breached company’s stock price to decrease for a number of reasons: loss of faith in the company’s ability to safeguard sensitive materials, impending liability costs to remedy such breach, including implementing new safeguards to assure breaches become less likely to occur, and costs of future lawsuits, to name just a few. The current regulations, or lack thereof, allow companies to be guided solely by industry standards when it comes to what and when to disclose post-breach.[24]However, announcements of a data breach need not assuredly signal impending doom for a company’s stock price.[25] A few companies have successfully navigated such announcements.[26] Target and Home Depot both faced security breaches but chose to handle the situation differently.[27] Target delayed notifying customers of the breach and its stock dropped nearly 20% while Home Depot’s prompt notification to their larger affected consumer base was viewed as reassuring to the public and did not adversely affect the company’s stock price.[28]These types of positive consumer responses to a breach could in turn be just the kind of uptick that investors would want to know about most. Patrick Malcolm, a digital forensics and security expert commenting on the Ashley Madison leaks, noted the way the breach’s publicity could work in the company’s favor, explaining how a consumer told Malcolm that he was joining Ashley Madison “because it was more secure now.”[29] However, Malcolm explained, “there’s no evidence the company has actually changed its protocols.”[30] On the other hand, notifying the public that a company has been hacked could signal that the company has not been responsible with consumer information they pledged to keep safe.[31] Several companies have lost CEOs following breaches that uncovered corporate irresponsibility, poor business practices, disconcerting management, and the company’s inability to protect consumer data.[32] Regardless of whether the breach indicates a change in consumer confidence in the company or a reflection of poor management, the overall perception of a company post-breach can affect how investors view their investments and thus should fall within the SEC’s realm of regulations.The SEC does play a role, albeit a mildly passive one thus far, in regulating data breaches. The SEC only began specifically addressing cyber breaches in 2011, when it published guidance on disclosure obligations. Unfortunately these guidelines gave no timeline for making disclosures and only mandated that disclosures are required for “material” information.[33] In 2014, the SEC held a roundtable where industry leaders considered making more regulations on disclosures.[34] Political leaders, such as Senator John D. Rockefeller, in his role as Chairman of the Committee on Commerce, are even “urging” the SEC to take more extensive action, noting concerns “about inconsistencies in disclosures, investor confusion, and the fact that many corporate leaders [do] not fully recognize the relationship between their companies’ cybersecurity measures and financial success.”[35] SEC Commissioner Luis A. Aguilar gave a speech at the New York Stock Exchange urging companies to take more steps and encouraging “more public reporting of cyberattacks.”[36] But the SEC has not taken any steps since the roundtable, simply continuing to encourage companies to follow the 2011 guidance, leaving investor interests and protections back-seated when it comes to breach notification.

II. The Problem: How Companies Can Work Around the Current Regulations

The SEC’s purpose is to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation,”[37] resting on the foundation that “only through the steady flow of timely, comprehensive, and accurate information can people make sound investment decisions.”[38] Thus, the SEC is charged with regulating and monitoring disclosures made by publicly traded companies to ensure investors have equal access to information. This is done by not only imposing a duty on companies to disclose “material” events, but also by imposing strict timelines under which the disclosures must be made. Under the SEC’s definition, “material”[39] means any information that has a substantial likelihood of being considered important to a reasonable investor when making an investment decision.[40] Because a breach could be of concern to investors, these disclosure mandates would assumedly include notifications when a publicly traded company has been hacked.[41]Although the materiality test dictates an objective standard, companies still have room to deem a data breach “immaterial.”[42] If a company can twist the breach as immaterial, it can completely avoid disclosure, meaning that investors would not be notified even though the breach could influence their investment decisions.[43] SEC guidance has cautioned “a cyber-attack could be material if it causes a company to significantly increase what it spends to defend its systems or when intellectual property is stolen.”[44] This allows management to usurp the SEC’s role of deciding what investors need to know. If the breach results in only “minor intrusions” of consumer data, it likely does not need to be disclosed, whereas confirmed breaches of determinable consumer information definitely need to be disclosed.[45] For everything in between these two categories, management decides if the breach is important enough to warrant disclosing it to investors under the circumstances.[46]Because certain circumstances already require public disclosure, the SEC could address these concerns by utilizing current provisions, including rules 10b-5[47] and 14a-9,[48] which regulate fraud in connection with the purchase and sale of securities and fraud in the solicitation of proxies. Rule 10b-5 prohibits the use of any manipulative or deceptive device in the buying and selling of securities, requiring disclosure of material information or abstention from trading.[49] This includes an obligation to disclose private information when necessary under the circumstances to prevent publicly known information from being misleading by the omission.[50]Rule 10b-5 could potentially be applicable when a company has been the victim of a cyber-attack and serve to safeguard the interest of investors, but only for instances in which securities, such as the company’s stock, are being sold or purchased.>[51] Thus, this regulation does not always mandate a disclosure or require a trader to abstain from the market to ensure that the integrity of the marketplace is maintained if no securities are being exchanged. Under rule 10b-5, as long as the company itself is not buying or selling securities while withholding information regarding a data breach, no duty arises to disclose such a breach to the general public (i.e. investors).[52] Instead, the only duty the company has is to keep their insiders from trading in the market.[53]Even though companies do not have a duty to disclose a breach under rule 10b-5, they could still be required to make these types of disclosures in their annual 10-K forms.[54] However, these reports require companies to only report “the cybersecurity risks that could affect the business or its registrants materially;”[55] they do not require the company to report actual incidents or breaches. The SEC’s 2011 guidance encouraged companies to determine if “the costs or other consequences associated with one or more incidents or the risks of potential incidents [of cyber breaches] represent a material event, trend, or uncertainty that is reasonably likely to have a material effect on the registrant’s results of operations, liquidity, or financial condition or would cause reported financial information not to be necessarily indicative of future operating results or financial condition,” and report this in the Management & Discussion Analysis (MD&A) section of the company’s annual reports.[56] The decision as to whether or not to disclose is complicated by a timing issue: even if companies do disclose a breach in their annual reports, investors are only deemed to have been notified at the end of the year when those reports are filed.[57] Thus, the breach’s impact could affect investment decisions to buy, sell, or trade far sooner than when the year-end report filings roll around.In addition to annual and quarterly reports, public companies must report “certain material corporate events” in an 8-K report to announce major happenings of which shareholders should be aware.[58] Companies are given four days to file these disclosures.[59] Although cyber breaches are not specifically listed as items to be reported on an 8-K, registrants can use section 8 of the form to “report events that are not specifically called for by Form 8-K that the registrant considers to be of importance to security holders.”[60] Guidance has been given that:

… once the facts are gathered, a special filing may be warranted. . . . If the event or incident is a significant one or if it is one that a reasonable investor would expect to hear about outside the cycle of the normal disclosure of risk, it is prudent to do a special filing.[61]

This form alone, however, does not require a cyber breach disclosure to be made, and even if companies choose to disclose under this rule, there is once again an opportunity for work-around regarding the timing of the disclosure. Although the regulations governing 8-K filings mandate a four-day deadline for certain events falling under Sections 1-6 and 9 (covering standard business occurrences), filings regarding cyber breaches, which fall under Section 8’s “other events,” are not given this same four-day deadline, or even any specific deadline.[62]Due to the SEC’s slow response in regulating disclosure, the only real pressure companies feel is to ensure they stay at least somewhat within the shadows of others in their industry.[63] This is currently the best and only standard against which a company can be judged.[64] Choosing to file an 8-K could be in the company’s best interest, especially if that is how others in the industry are treating the incident. However, because these measures are not strict regulations, they allow companies to interpret and set their own standards. This can lead to unequal dissemination of information and inefficient markets, as investors in A corporation could be notified of a breach more quickly than investors in B corporation. Although industry standards could be used to set strict demands for companies, the current standards are so lax as to allow companies to consider their own interests over that of their investors.Piecing together all of this information shows that avoiding breach disclosures may be easier for companies than investors would like. If the SEC set disclosure notification timelines for publicly traded companies, it would communicate to companies that data breach disclosures are not only material and required, but would also remove the uncertainty management faces in determining a breach’s materiality.

III. The Solution: Regulating the Regulators

The SEC should mandate stricter data breach notification requirements and set a rigid timeline to give companies direction when handling a data breach. Tighter regulations will encourage companies to create response plans so that they can act quickly in the face of a breach. Regulations will also incentivize companies to put in place adequate safeguards, such as technological safety measures to protect consumer data, helping prevent breaches in the first place. This, in turn, benefits investors, as a breach would be less likely to have a detrimental effect if handled well.[65] A definite timeline will also move publicly traded companies to uniform and clear guidelines, clarifying the current vague industry standards set by the companies that have already been breached. These standards could also help set guidelines for small and non-public companies in the future.The SEC should not set a flexible rule, such as “companies should disclose data breaches timely,”[66] because this type of rule would not solve the disclosure problem. This standard is no clearer than the current ambiguous guidance and would leave companies uncertain about how such a vague standard would be interpreted. Instead, it would only facilitate the current problems caused by industry standards, which allow companies to set their own disclosure timeframes based on what they believe is the most effective response time, focusing more on their own primary interests rather than their investors’. This type of standard would also allow for workarounds, opening the door to fraudulent practices and delay tactics for each company’s specific situation, avoiding the primary objectives of the SEC — to protect investors by keeping them equally informed and ensuring that they “are provided with material information in order to make informed investment decisions”[67] and to “maintain fair, orderly, and efficient markets.”[68] While a company may have unique circumstances that require a delayed notification timeline, the investor’s interest remains consistent in needing to be timely informed of incidents affecting their investments.The SEC’s data breach notification regulations, enacted primarily to serve investors, would also provide an ancillary benefit of protecting consumers in states that do not afford them any protection through consumer notification laws.[69] Roughly one-fourth of states do not have consumer notification laws on their books.[70] Kentucky, for example, requires only that disclosures be made “in the most expedient time possible and without unreasonable delay.”[71] This type of standard sets no more of a specific deadline than mandating no timeframe at all, but at least requires that companies must eventually disclose the breach to consumers. Even Delaware, the capital of business governance,[72] offers no more of a specific timeline than “the most expedient time possible and without unreasonable delay.”[73]In deciding precisely how long to make the notification timeline, the SEC could look to state consumer notification laws.[74] Ohio, for example, says “in the most expedient time possible but not later than forty-five days.”[75] Florida law is even stricter, saying “as expeditiously as practicable, but no later than 30 days after.”[76] By explicitly regulating notification deadlines, the SEC would integrate consumer and investor interests in building market integrity and in devising a comprehensive system that considers the competing interests of the marketplace as a whole, as SEC Commissioner Aguilar urged back in 2014.[77]Alternatively, because investor concerns can vary widely based on industry, the SEC could consider setting a sliding scale timeline across different industries. For example, investors could need to know right away that a financial services company like American Express has been hacked of consumer credit card information. Consumers may place greater trust in a financial company to protect their sensitive information, and profitability would likely decline as a result of class action litigation costs and loss of customer loyalty. Investors would thus need to know of a breach almost immediately to anticipate how these market effects would impact their investments. Contrast this with a company that has been breached of consumer loyalty information, like Kroger, whose “Kroger Plus Card” records customer’s shopping trends but not financial information.[78] In this case, consumers do not have high expectations for maintaining the integrity of this information nor a cause of action when these types of non-sensitive reports are hacked.[79] Because certain industries are targeted more frequently and seriously, and the consequences of a breach are more detrimental to the health of the company, the SEC could, in considering these fluctuating concerns, create a sliding scale for data breach notifications for different industries.

Conclusion

Data breaches are becoming more frequent and more expensive, and they can have detrimental consequences for companies.[80] Consumers need to know as quickly as possible that an unauthorized access of their sensitive financial information has occurred in order to take proper safeguarding measures. But because the current norms are set by the industry, management is free to allow company-related concerns, such as the potential damage to its reputation and the subsequent effect on stock price, to guide its decision on when to notify the public of a data breach. This leaves investors’ interests unaddressed. A data breach can have a multitude of investment-related consequences, such as fluctuating stock prices, an increase in the company’s liabilities from class action law suits or increased cyber insurance costs, or a downturn in the company’s overall health and public perception.The current state of data breach notification regulations for publicly traded companies allow companies to benefit from not having to disclose a breach to their investors. Without a specific timeline mandating when companies must disclose a breach, companies are free to follow either their state’s notification law, assuming there is one, which even then may be just as ambiguous as the current SEC guidelines, or the industry standards set by similar companies that have responded to data breaches. And if the company is in an industry that has not had many breaches, it would be free to set its own standard. None of these standards provide uniform or efficient markets, strengthen investor security, or ensure equally disseminated information, all of which the SEC is most concerned with promoting.[81] Because the SEC’s utmost objective is that of protecting investors, the regulatory body should set a specific and strict timeline under which companies are required to abide by after a data breach.

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[1] J.D. Candidate 2017. The author would like to specially thank Lisa E. Underwood, Andrew K. Woods, Rutheford B. Campbell, Jr., and Gardner Bell for their help in the brainstorming process and mentoring of this Note.

[2] Elena Kvochko & Rajiv Pant, Why Data Breaches Don’t Hurt Stock Prices, Harv. Bus. Rev. (Mar. 31, 2015), https://hbr.org/2015/03/why-data-breaches-dont-hurt-stock-prices.

[3] Nicole Perlroth, Ashley Madison Chief Steps Down After Data Breach, N.Y. Times (Aug. 28, 2015), http://www.nytimes.com/2015/08/29/technology/ashley-madison-ceo-steps-down-after-data-hack.html?_r=0 (quoting Larry Ponemon, founder of the Ponemon Institute, whose firm found that “the cost of mega-breaches now averages $23 to $25 per exposed record, which includes the costs of lawsuits.”).

[4] Andria Cheng, Two Months After Damaging Data Breach, Target Stock Has its Best Day in 5 Years, Market Watch (Feb 26, 2014, 2:11 PM), http://blogs.marketwatch.com/behindthestorefront/2014/02/26/two-months-after-damaging-data-breach-target-stock-has-its-best-day-in-5-years.

[5] CF Disclosure Guidance: Topic No. 2, Cybersecurity, U.S. SEC. & Exch. Comm’n (Oct. 13, 2011) [hereinafter SEC Disclosure Guidance], https://www.sec.gov/divisions/corpfin/guidance/cfguidance-topic2.htm.

[6] Andrew Ackerman, U.S. Chamber Warns Cyberattack Disclosures Could Hurt Corporate Profits, Wall Street J. (Oct. 29, 2014, 3:00 PM), http://www.wsj.com/articles/u-s-chamber-warns-cyberattack-discosures-could-hurt-corporate-profits-1414609209 (saying companies should disclose attacks to give customers a heads up because it’s the right thing to do in order for customers to protect themselves, even if no material adverse impact on the company itself results).

[7] Cory Bennett, SEC Weighs Cybersecurity Disclosure Rules, The Hill (Jan. 14, 2015, 6:00 AM), http://thehill.com/policy/cybersecurity/229431-sec-weighs-cybersecurity-disclosure-rules.

[8] See generally Robert Hackett, What to Know About the Ashley Madison Hack, Fortune (Aug. 26, 2015, 7:24 AM), http://fortune.com/2015/08/26/ashley-madison-hack.

[9] See generally Cheng, supra note 4.

[10] Nate Lord, The History of Data Breaches, Digital Guardian (Oct. 6, 2016), https://digitalguardian.com/blog/history-data-breaches.

[11] SEC Disclosure Guidance, supra note 5, at n. 3 (“Information is considered material if there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision or if the information would significantly alter the total mix of information made available”); See also Dave Michaels, Hacked Companies Face SEC Scrutiny Over SEC Disclosure, Bloomberg (July 7, 2014, 11:28 AM), http://www.bloomberg.com/news/articles/2014-07-02/hacked-companies-face-sec-scrutiny-over-disclosure (“In guidance issued three years ago, the SEC said a cyber-attack could be material if it causes a company to significantly increase what it spends to defend its systems or when intellectual property is stolen. . . . Materiality is very open to interpretation[.]”).

[12] See Cybersecurity Roundtable, U.S. Sec. & Exch. Comm’n (Mar. 26, 2014), http://www.sec.gov/spotlight/cybersecurity-roundtable.shtml.

[13] Id.; See SEC Disclosure Guidance, supra note 5; See also Rick M. Robinson, Stock Price May Not Tell the Whole Story About Security Breaches, Security Intelligence (Aug. 13, 2015), https://securityintelligence.com/stock-price-may-not-tell-the-whole-story-about-security-breaches (“A further complication for stockholders and their advisers is that reporting of breaches is often delayed, and existing SEC regulation leaves leeway for public companies as to when to disclose cyber incidents.”).

[14]See generally Robinson, supra note 13 (“A company may be able to time the announcement so that it is followed swiftly by corrective action.”).

[15] See What We Do, U.S. Sec. & Exch. Comm’n, https://www.sec.gov/about/whatwedo.shtml (last modified June 10, 2013) (“The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.”).

[16] See generally, About the FTC, U.S. Fed. Trade Comm’n, https://www.ftc.gov/about-ftc (last visited Oct. 11, 2016) (describing mission as “[t]o prevent business practices that are anticompetitive or deceptive or unfair to consumers”).

[17] See FTC v. Wyndham Worldwide Corp., 799 F.3d 236 (3rd Cir. 2015); See also Michael S. Dicke and Catherine Kevane, Return of the Cyborg—FTC and SEC Oversight of Cybersecurity Ramps Up, Mondaq (Sept. 21, 2015), http://www.mondaq.com/unitedstates/x/428214/Securities/Return+of+the+CyborgFTC+and+SEC+Oversight+of+Cybersecurity+Ramps+Up.

[18] See Summary of U.S. State Data Breach Notification Statutes, Davis Wright Tremaine, LLP, http://www.dwt.com/statedatabreachstatutes (last visited Oct. 11, 2016).

[19] See Robinson, supra note 13 (“Public news of a data breach can generate negative publicity, but a company may be able to time the announcement so that it is followed swiftly by corrective action.”).

[20] Bill Rigby, Cost of Data Breaches Increasing to Average of $3.8 Million, Study Says, Reuters, (May 27, 2015, 6:03 AM), http://www.reuters.com/article/2015/05/27/us-cybersecurity-ibm-idUSKBN0OC0ZE20150527.

[21] See Amy Terry Sheehan, Meeting Expectations for SEC Disclosure of Cybersecurity Risks and Incidents, Cybersecurity L. Rep., Aug. 12, 2015, at 1. http://www.davispolk.com/sites/default/files/agesser.Cybersecurity.Law_.Report.aug15.pdf.

[22] See Kvochko & Pant, supra note 2.

[23] Class action liability can flow from breach of contract liability. For example, after the Ashley Madison breach many users of the company’s service are suing for breach of contract because the company charged customers $19 to delete their actions without actually deleting the accounts. Perlroth, supra note 3.

[24] See infra, Part II; See also Ben Dipietro, The Morning Risk Report: Cybersecurity Disclosures Are Risky Business, Wall St. J.: Risk & Compliance J. (June 8, 2015, 7:25 AM), http://blogs.wsj.com/riskandcompliance/2015/06/08/the-morning-risk-report-cybersecurity-disclosures-are-risky-business-newsletter-draft (“[C]ompanies that have had breaches are in some respects setting the bar for companies that have not, as far as how to approach what to disclose. Best practices for disclosure are based on industry. . . .”).

[25] Because nearly all companies have been or are eventually breached these days, one source posits that shareholders hardly flinch at the news of data breaches anymore. See Kvochko & Pant, supra note 2 (saying that “[i]ndustry analysts have inferred that shareholders are numb to news of data breaches.”).

[26] See Sean Mason, Impact on Company Stock Following Data Breaches, InfoSec Insights (July 21, 2014), http://seanmason.com/2014/07/21/impact-on-company-stock-following-data-breaches; See also Sean Mason, Impact on Stock Following a Data Breach – Feb 2015 Edition, InfoSec Insights (Feb. 26, 2015), http://seanmason.com/2015/02/26/impact-on-stock-following-a-data-breach-feb-2015 (updating research). To see how many “incidents” versus actual breaches occur, see Verizon, 2015 Data Breach Investigations Report 3 (2015), https://www.arxan.com/wp-content/uploads/2015/05/rp_data-breach-investigation-report-2015_en_xg.pdf.

[27] Nathan Layne, In Wake of Target, Home Depot Tight with Info in Breach Response, Reuters (Sept. 8, 2014 1:28 PM), http://www.reuters.com/article/us-home-depot-dataprotection-disclosure-idUSKBN0H31UC20140908.

[28] See Catey Hill, Home Depot’s Data Breach Is Worse Than Target’s, So Where’s the Outrage? MarketWatch (Sept. 25, 2014 11:28 AM), http://www.marketwatch.com/story/yawn-who-cares-about-home-depots-data-breach-2014-09-24; Customer Data Breach Hits CVS Health Photo Site, Investopedia (July 21, 2015, 1:45 PM), http://www.investopedia.com/stock-analysis/072115/customer-data-breach-hits-cvs-health-photo-site-cvs-cost-hd-tgt-wmt.aspx (explaining that “Target is still recovering from the loss of customer trust that resulted from that breach, but much of the backlash was the result of how it had handled the affair, delaying the notification of customers that a breach had occurred. Companies seemed to have learned from that experience. Home Depot had more customers affected by a hack attack that occurred last year, but it notified consumers right away”).

[29]Paola Loriggio, Ashley Madison Hack Fails to Spur Cybersecurity Overhaul, CBC News (Dec. 25, 2015, 5:00 AM), http://www.cbc.ca/news/business/ashleymadison-hack-web-security-1.3380372 (Malcolm went on to say that “[m]aybe they’ve tightened up a few practices, but again, this is the kind of thing that receives attention only when it’s a screaming baby. After the baby’s not making any noise, everybody goes back to what they were doing.”).

[30] Id.

[31] See generally Data Breach FAQ, Target, https://corporate.target.com/about/shopping-experience/payment-card-issue-faq (last visited Sept. 27, 2016) (stating that Target is “sorry” for the breach).

[32] Perlroth, supra note 3 (reporting that Ashley Madison’s CEO stepped down from his position after the company’s hack, just as Sony Pictures Entertainment’s co-chairwoman and the CEO of Target stepped down after similar network breaches) (“Those ousters have made security a priority among executives. According to a survey . . . which tracks data breaches, only 13 percent of senior management said their concern about a data breach was extremely high before the breach at Target. That jumped to 55 percent after the incident . . . . [The founder of company that tracks data breaches stated,] ‘[t]he board is more concerned now than it has ever been with preserving the reputation of a company after a data breach. If the C.E.O. has to leave the company as a result, that’s the cost of doing business.’”).

[33] SEC Disclosure Guidance, supra note 5.

[34] See Cybersecurity Roundtable, supra note 12.

[35] Craig Calle, Disclosing the SEC’s Cybersecurity Disclosure Guidance, Source Callé (Aug. 10, 2015), http://sourcecalle.com/blog/2015/8/10/disclosing-the-secs-cybersecurity-disclosure-requirements.

[36] See Michaels, supra note 11; Luis Aguilar, Commissioner, Sec. & Exch. Comm’n, Board of Directors, Corporate Governance and Cyber-Risks: Sharpening the Focus (June 10, 2014), https://www.sec.gov/News/Speech/Detail/Speech/1370542057946.

[37] See What We Do, supra note 15.

[38] Id.

[39] “Material” is defined by the SEC in two primary cases: Basic Inc. v. Levinson, 485 U.S. 224, 231-32 (1988) and TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 449 (1976).

[40] SEC Disclosure Guidance, supra note 5, at n. 3 (This also includes instances where “the information would significantly alter the total mix of information made available.”).

[41] See supra Part I.

[42] Michaels, supra note 11 (statement of Thomas Sporkin, a former SEC enforcement lawyer) (“Materiality is very open to interpretation.”).

[43] See Joel Schectman, When to Disclose a Data Breach: How About Never?, Wall Street J.: Risk and Compliance Report (Mar. 27, 2014 12:41 PM), http://blogs.wsj.com/riskandcompliance/2014/03/27/when-to-disclose-a-data-breach-how-about-never/ (describing different companies’ response to similar hacks).

[44] Michaels, supra note 11.

[45] See Sheehan, supra note 21, at 3.

[46] Id.

[47] See Securities Exchange Act of 1934, 17 C.F.R. § 240.10b-5 (2016).

[48] See id. § 240.14a-9.

[49] 17 C.F.R. § 240.10b-5. The scope of this note is too limited to warrant a discussion of fraud in the solicitation of proxy statements.

[50] See id.

[51] The definition of a security, as given by the Howey test, involves only “investment contracts” in which money is invested in a common enterprise with the expectation of profits derived solely from the efforts of a third party promoter. See SEC v. W.J. Howey Co., 328 U.S. 293, 298-299 (1946).

[52] See Chiarella v. United States, 445 U.S. 222, 234 (1980); Dirks v. SEC, 463 U.S. 646, 655 (1983); United States v. O’Hagan, 521 U.S. 642, 678 (1997).

[53] 17 C.F.R. 240 §§ 240.10(b), 10b-5 (describing antifraud provisions of the federal securities laws, which apply to statements and omissions both inside and outside of Commission filings).

[54] See Fast Answers for Form 10-K U.S. Sec. & Exchange Comm’n, https://www.sec.gov/answers/form10k.htm (last modified June 26, 2009).

[55] Dipietro, supra note 24 (emphasis added). See Kobi Kastiel, What’s New in 2015: Cybersecurity, Financial Reporting and Disclosure Challenges, Harv. L. Sch. F. on Corp. Governance and Fin, Reg. (Feb. 18, 2015), http://corpgov.law.harvard.edu/2015/02/18/whats-new-in-2015-cybersecurity-financial-reporting-and-disclosure-challenges.

[56] Kastiel, supra note 55.

[57] See generally Researching Public Companies Through EDGAR: A Guide for Investors U.S. Sec. & Exchange Comm’n, (July 18, 2007), https://www.sec.gov/investor/pubs/edgarguide.htm (describing information contained in the annual 10-K filing).

[58] Fast Answers for Form 8-K, supra note 54.

[59] Form 8-K, U.S. Sec. & Exchange Comm’n, https://www.sec.gov/about/forms/form8-k.pdf, §B(1).

[60] See Fast Answers for 8-K, supra note 54 at Item 8.01.

[61] Sheehan, supra note 21. Information given in the SEC’s disclosure guidance is “intended to assist registrants in preparing disclosure required in registration statements” but this does not limit registrants; instead, they should also consider “whether it is necessary to file reports on . . . Form 8-K to disclose the costs and other consequences of material cyber incidents.” SEC Disclosure Guidance, supra note 5, at n. 2.

[62] See Fast Answers for 8-K, supra note 54. See also Form 8-K, supra note 59 at §B(1), (“When considering current reporting on this form, particularly of other events of material importance pursuant to Item 7.01 (Regulation FD Disclosure) and Item 8.01 (Other Events), registrants should have due regard for the accuracy, completeness and currency of the information in registration statements filed under the Securities Act which incorporate by reference information in reports filed pursuant to the Exchange Act, including reports on this form.”).

[63] See Sheehan, supra note 21.

[64] See Dipietro, supra note 24 (quoting Jay Knight, a former SEC staffer and head of his law firm’s capital markets practice group).

[65] See generally Customer Data Breach Hits CVS Health Photo Site, Investopedia (July 21, 2015, 1:45 PM), http://www.investopedia.com/stock-analysis/072115/customer-data-breach-hits-cvs-health-photo-site-cvs-cost-hd-tgt-wmt.aspx (explaining how stores like Wal-Mart, CVS, and Costco have been upfront with their customers about breaches and how this honesty prevents a meltdown in consumer trust and protects investors).

[66] Language such as this can be found in state consumer notification laws. For example, Oregon (Or. Rev. Stat. Ann. § 646A.604(1)(a) (West, LEXIS through 2016 Sess.)) and South Carolina (S.C. Code Ann. § 39-1-90(a) (LEXIS through 2016 Sess.)) provide for the most expedient time possible and without unreasonable delay. Many states, including Pennsylvania (73 Pa. Cons. Stat. and Cons. Ann. § 2303(a) (West, Westlaw through 2016 Sess.)), Mississippi (Miss. Code Ann. § 75-24-29(3) (West, Westlaw through 2016 Sess.), and Missouri (Mo. Rev. Stat. § 407.1500(2)(1)(a)(LEXIS through 2016 Sess.)) say only “without unreasonable delay.” For more state laws, see Summary of U.S. State Data Breach Notification Statutes, supra note 18.

[67] Calle, supra note 35.

[68]What We Do, supra note 15.

[69] See Summary of U.S. State Data Breach Notification Statutes, supra note 18.

[70] See id.

[71] Ky. Rev. Stat. Ann. § 365.732 (Lexis Nexis, LEXIS through 2016 Sess.).

[72] See Why Incorporate in Delaware or Nevada?, BizFilings, http://www.bizfilings.com/learn/incorporate-delaware-nevada.aspx (Sept. 23, 2016).

[73]Del. Code Ann. tit. 6, § 12B-102(a) (LEXIS through 80 Del. Laws ch 399).

[74] See generally Summary of U.S. State Data Breach Notification Statutes, supra note 18 (showing a map of the United States and giving the online user the ability to click on each state and see their particular data breach notification statutes).

[75] Ohio Rev. Code Ann. § 1349.19(B)(2) (LexisNexis, LEXIS through file 123 (HB 483)).

[76] Fla. Stat. Ann. § 501.171(3)(a) (West, Westlaw through 2016 second regular sess.). Of the other states that have consumer notification laws, only these additional states have rigid timelines: Washington (Wash. Rev. Code Ann. § 19.255.010(16) (LexisNexis, LEXIS through 2016 1st Special Sess.) and Vermont (Vt. Stat. Ann. tit. 9, § 2435(b)(1) (LEXIS through 2015 adjourned sess. (2016))) mandate disclosure be made in the “most expedient time possible and without unreasonable delay,” no more than 45 days; Wisconsin (Wis. Stat. Ann. § 134.98(3)(a) (West, LEXIS through Acts of the 2015-2016 legislative sess.) mandates disclosures to consumers be made “within a reasonable time not greater than 45 days.”

[77] See Michaels, supra note 11 (urging firms to increase public reporting and weigh impact on consumers).

[78] Mike Lennon, Kroger Notifies Customers of Data Breach Stemming from Third-Party Email Vendor, Security Week (Apr. 1, 2011), http://www.securityweek.com/kroger-notifies-customers-data-breach-stemming-third-party-email-vendor; see Hayley Peterson & Ashley Lutz, Why Kroger is America’s Most Underrated Grocery Store, Business Insider (Mar. 6, 2015, 10:54 AM), http://www.businessinsider.com/why-people-love-kroger-2015-3 (“Nine out of 10 purchases at Kroger are made with the chain’s popular ‘Kroger Plus Card,’” [which makes] customers eligible for discounts, including fuel savings [and] gives Kroger unprecedented access into the behavior of its customers, and allows it to tailor promotions to individual shoppers.”).

[79] See generally Verizon, supra note 26 at page 3 (noting that the top three industries targeted and affected by security incidents are public, information, and financial services).

[80] Rigby, supra note 20.

[81] See What We Do, supra note 15 (“The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.”).

Meriting Consolidation: Why Criminal Pattern Jury Instructions Should Consolidate Federal Bribery Statutes

Article | 104 KY. L. J. ONLINE 75 | April 14, 2016

Kierston Eastham Rosen1

Introduction

Bribery in the federal system is notorious for its incoherence.2 Multiple bribery statutes exist with very similar elements, and a defendant can be prosecuted under any and all of these statutes.3 Because of this, the federal crime of bribery continues to confuse and perplex even the most seasoned attorneys.4 While confusion among attorneys helps illustrate the problem with federal bribery, attorneys are not the main focus of pattern jury instructions. Pattern jury instructions serve to educate lay jurors during federal trials, instructing them as to both the law and its application in a given case. It is imperative that these instructions are as clear and concise as possible, and currently, pattern instructions do not meet this standard. Therefore, federal bribery law and its corresponding pattern instructions need to be clarified.Instead of using a separate instruction for each bribery statute, these similar instructions should be consolidated into one general “Bribery” instruction, analogous to the United States Sentencing Commission’s Federal Sentencing Guidelines’ approach of placing related bribery crimes within the same section.5 This process could easily be duplicated, and should be repeated within each United States Circuit Court of Appeals’ Criminal Pattern Jury Instructions. The instruction would include the common elements from these bribery statutes – which are largely the same6 – and could be modified as necessary through Use Notes, adding or deleting an element when necessary. The existing bribery instructions and statutes are already largely cross-referencing one another, making it impractical to separate them statute-by-statute.7Section I provides background information pertaining to the development of federal bribery law, and its connection to pattern jury instructions and the United States Sentencing Guidelines. Section II details the main federal bribery statute, 18 U.S.C. § 201, which reaches federal public officials and continues to be the foundation for all other federal bribery statutes. Section III examines the Hobbs Act, 18 U.S.C. § 1951, which reaches public officials through extortion under color of official right. Section IV analyzes the development of honest services fraud, and its evolution into a federal bribery statute. Finally, Section V concludes that each circuit’s pattern jury instructions should reflect the vast similarities within federal bribery statutes by creating one “Bribery” instruction.8

I. The Development of Federal Bribery Law, Pattern Jury Instructions, and the United States Sentencing Guidelines’ Approach to Bribery

A. Federal Bribery Law

What is bribery? Courts tend to differ on an exact definition.9 The clearest articulation is that bribery is a form of public corruption, “which involves the offer and receipt of something of value for the purpose of influencing the exercise of authority.”10 Federal bribery statutes share the following common elements: (1) A public official accepted, received, or agreed to accept or receive a (2) thing of value (3) in exchange for official action (the quid pro quo).11 A quid pro quo, meaning “what for what,”12 denotes “a specific intent to give or receive something of value in exchange for an official act.”13 While this notion originated within § 201, a quid pro quo element is now contained within multiple federal bribery statutes, including the Hobbs Act and the mail fraud and wire fraud statutes.14 However, “fulfillment of the quid pro quo is not an element of the offense.”15 While the quid pro quo element provides a boundary for the crime of bribery, it has still not eliminated the uncertainty within this area of the law due to bribery’s vast “grey areas.”16

Bribery has been considered a serious offense since the United States’ inception.17 According to Henning and Radek, “among the first laws adopted after the ratification of the Constitution was a provision making it a federal crime to bribe customs officers and federal judges.”18 Some have even gone so far as to describe it as a “crime akin to treason.”19 Public corruption erodes the citizenry’s faith in its government, which in turn harms the government’s legitimacy.20 Bribery also serves to exploit public power for personal gain by using public leverage to receive a personal benefit.21 For these reasons, the federal government has a substantial interest in an honest government, necessitating the battle against public corruption.22Public corruption prosecutions became a significant priority for the Department of Justice in the 1970s after the Watergate scandal.23 In 1975, President Gerald Ford directed federal prosecutors to target state and local corruption,24 and in 1976, the Public Integrity Section of the Department of Justice was formed. 25 Indeed, Watergate created a “volcano of change in the world of public corruption” and indirectly led to the development of the Public Integrity Section itself.26 Throughout the 1970s, state and local public corruption prosecutions remained a high priority due to the fear that its effects would undermine the ability of the United States government to properly function.27 This emphasis on public corruption continued through the 1980s, and its prevention was a stated DOJ policy goal for the fiscal year 1987.28 Beginning in the mid-1980s, however, federal prosecutors began to focus more on public officials at the federal level, rather than state and local public officials.29Influencing a public official remains a serious offense within the federal system; a defendant receives a four-level increase to his offense level under the federal sentencing guidelines if the payment in question was for the purpose of influencing an official act.30 The maximum statutory sentences under each of the federal bribery statutes are by no means diminutive; the statutory maximum under § 201(b) (Bribery of a public official) is fifteen years,31 and under the Hobbs Act and honest services mail fraud and/or wire fraud, the penalty is twenty years.32 The penalties under honest services mail fraud and wire fraud may even be increased to a thirty-year maximum sentence under certain circumstances.33While there is a bribery statute specifically prescribed for prosecuting federal officials,34 the prosecution of state and local officials is, at best, a patchwork approach.35 Several similar bribery statutes exist that could apply to a given public corruption case, and a public official can be charged under more than one of these statutes.36 This hodgepodge approach to bribery is the source of its surrounding confusion and is why it must be remedied via pattern jury instructions.It is unlikely that Congress will remedy the situation by amending or consolidating its existing bribery statutes. Therefore the task is left to the drafting committees of pattern jury instructions to paint a clearer picture of bribery law.

B. Pattern Jury Instructions

Jury instructions serve as each circuit’s attempted consolidation and explanation of the law to be used by juries in federal criminal trials, and they are essential in properly instructing lay-juries on complex legal issues.37 By eliminating legal jargon and simplifying the law, pattern instructions can also serve as a helpful guide for practitioners. Pattern instructions provide jurors with this knowledge by explaining the crime and its elements in terms that a layperson can understand,38 bridging the gap between the law and the layperson.39 By putting difficult legal concepts into more straightforward terms, pattern instructions can also serve as a useful tool for lawyers trying to decipher a particularly confusing area of the law, such as federal bribery.

Pattern jury instructions are generally composed of an explanation of the statute or section’s elements, Use Notes, and/or Committee Commentary.40 Use Notes are interchangeable and are employed by the court to tailor the instructions to a given case. Committee Commentary, on the other hand, provides authority and a more in-depth explanation of the circuits’ applicable law for the statute, and essentially functions as a mini-treatise.41 This structure makes pattern jury instructions the ideal tool not only for practitioners looking to learn an area of the law, but as a way of definitively stating just what the law is. If federal bribery law is a jigsaw puzzle, pattern jury instructions can serve as the means to finally put the pieces together.Most circuits’ pattern jury instructions currently use one instruction for each and every bribery statute and offense, as illustrated by the Fifth Circuit. This circuit has drafted an instruction for receiving a bribe by a public official under § 201, as well as an instruction for extortion under color of official right and for honest services fraud, which all encompass bribery.42 Although each instruction has slightly different elements, their core elements are essentially the same, which will be further illustrated below. While the Sixth Circuit does not yet have any bribery offense instructions,43 Hobbs Act extortion under color of official right and honest services fraud instructions are currently being drafted.

C. United States Sentencing Guidelines

The bribery offenses discussed within this note are all found within § 2C1.1 of the Federal Sentencing Guidelines Manual: Offering, Giving, Soliciting, or Receiving a Bribe (§ 201); Extortion Under Color of Official Right (Hobbs Act); Fraud Involving the Deprivation of the Intangible Right to Honest Services of Public Officials (§ 1346).44 The Commission consolidated its sentencing guidelines by acknowledging the similarities among bribery statutes and placed honest services fraud (§ 201) and extortion under color of official right within the same base offense level and section.45 In doing so, the United States Sentencing Guidelines have implicitly recognized that the statute-by-statute approach is, in fact, not the most logical method. If consolidation can be achieved within a scheme as complex as the sentencing guidelines, it can—and should—be done within each circuit’s pattern jury instructions.

18 U.S.C. § 201—Receiving a Bribe by a Public Official

The federal bribery statute was enacted in 1962 as a part of a set of anti-corruption statutes targeting federal public officials. Various scattered anti-corruption provisions were streamlined into one set of laws with the Necessary and Proper Clause serving as Congress’s authority to enact the statute.46 Now, the main federal bribery statute, § 201, prohibits both bribery and unlawful gratuities given to and received by federal public officials.47 For purposes of this note, § 201(b)(2) is the primary focus: a public official seeking, receiving, accepting, or agreeing to accept a thing of value in return for being influenced in the performance of an official act.48 Although the statute primarily targets federal officials, it may reach local officials who administer federal programs and have some degree of official responsibility.49The key case that details § 201 is United States v. Sun-Diamond Growers of California.50 The circumstances leading up the decision are simple: a trade association engaged in lobbying activities on behalf of its member cooperatives made illegal gifts to then-Secretary of Agriculture Michael Espy.51 The Supreme Court examined the bribery-gratuity distinction under the statute and found that “[b]ribery requires intent ‘to influence’ an official act, or ‘to be influenced’ in an official act” and there must be a quid pro quo between the payment and official government action.52 Gifts that are only given to “build a reservoir of goodwill” with a public official are not sufficient.53 Only a bribe requires proof of a quid pro quo, while the separate crime of gratuities under § 201 does not.54The elements for receiving a bribe by a public official under 18 U.S.C. § 201(b)(2) according to most criminal pattern jury instructions are: (1) a public official demanded, sought, or received a (2) thing of value (3) corruptly (4) in return for being influenced in the performance of an official act (the quid pro quo element).55 The “corruptly” element should be eliminated, however, because it adds nothing to the statute and is more confusing than helpful. The Supreme Court has concluded that the word “corruptly” is “normally associated with wrongful, immoral, depraved, or evil.”56 This wrongfulness is captured by the quid pro quo, making the corruptly element obsolete. While some argue that the corruptly element differentiates lawful influence of an official act and an unlawful influence;57 the quid pro quo captures this distinction.Courts are beginning to read “corruptly” out of § 201, defining the element in terms of the quid pro quo.58 The Model Penal Code also disfavors the use of “corruptly.” Its commentary states that the element “provides virtually no guidance as to the intended scope of the law,”59 and that in its place, “the issues with which it deals should be addressed more particularly.”60 The corruptly element was not included within later bribery statutes, undoubtedly because the quid pro quo defines the issue of bribery more particularly than corruptly. “Corruptly” should, therefore, be eliminated within the proposed bribery instruction.As the remainder of this note will show, the foundational elements of § 201 are largely shared across various federal bribery crimes. Section 201 laid the groundwork for federal bribery law, therefore these elements served as a template for the bribery statutes and instructions that followed.

18 U.S.C. § 1951—The Hobbs Act (Extortion Under Color of Official Right)

Although § 201 covered bribery at the federal level, prosecutors were left without any method of prosecuting state and local officials involved in public corruption. In order to remedy this problem, prosecutors began to utilize more general statutes such as the mail and wire fraud statutes and the Hobbs Act in order to prosecute lower-level bribery.61 Specifically, the Hobbs Act’s jurisdictional element is very broad, which also allowed expansive prosecutorial discretion in order to combat public corruption.62The Hobbs Act was not originally designed to target public officials, but criminal organizations.63 Federal prosecutors began to use the statute to target public officials during the anti-corruption era of the 1970s, and first successfully used the statute in 1972 in United States v. Kenny.64 In Kenny, defendants involved with Jersey City, New Jersey’s “Democratic political-machine” were charged with color of official right extortion under the Hobbs Act, the first time the statute had been used to prosecute public corruption.65 Beginning with Kenny, the Hobbs Act and § 201 began to merge together.66 Although extortion under color of official right is used to prosecute state and local officials, it also covers bribery, and its elements are similar to those found in instructions that cover § 201.While the Hobbs Act does not explicitly mention bribery, the Supreme Court in Evans v. United States recognized that a defendant who has committed extortion under color of official right has effectively taken a bribe.67 In Evans, the petitioner was an elected commissioner of a county in Georgia who accepted payment to vote in favor of a rezoning application.68 Although petitioner argued that passive acceptance of a payment did not constitute extortion and that some form of inducement was required on his part, the Court was not convinced.69 Under Evans, even passive acceptance of a thing of value qualifies as a bribe, so long as the official knows that the payment is in exchange for official acts.70 The Court also held that the quid pro quo element was satisfied as soon as payment was accepted, because “fulfillment of the quid pro quo is not an element of the offense.”71After Evans, the elements of bribery of a federal public official under § 201 and Hobbs Act extortion under color of official right are basically the same. According to Professor Lindgren, the “traditional ‘color of office’ language links the two offenses” of bribery and extortion under color of official right,72 because the focus is on the person’s status as a public official. Some argue that the two crimes should be distinguished due to official right extortion’s one-sided nature.73 However, these arguments are outside the scope of this note, which is focused solely on the conduct of the public official.The United States Sentencing Guidelines originally used only the term “bribe” in the original version of § 2C1.1, but this term was amended to “payment” in order to allow the applicability of extortion under color of official right.74 Even § 2C1.1’s commentary was amended to harmonize bribery and this type of extortion, deleting exclusive “bribe” language and adding “extortion.”75 The Commission’s rationale for consolidating these bribery provisions is not articulated within the amendment, but it becomes abundantly clear after examining its Report, published two years later. The Report admits that the elements of various public corruption crimes are “similar,” and that because some of these offenses are comparable, they may merit consolidation.76Perhaps most importantly, the Report states that “no substantial distinction appears to exist between extortion under color of official right and the acceptance of bribes by a public official,” citing Evans for its proposition.77 It also recognizes that both crimes require a quid pro quo and specific intent.78 For these reasons, the crimes are now within the same sentencing guideline79 and receive the same base offense level (a ranking of seriousness based on conviction under a certain statute80), because “bribery of a public official is as serious a crime as extortion under color of official right.”81This consolidation of bribery under § 201 and Hobbs Act extortion under color of official right could easily be duplicated within each circuit’s pattern jury instructions. Substantial overlap exists between the crimes’ elements, as well as existing pattern instructions for each crime. The elements for extortion under color of official right within most pattern instructions are as follows: (1) a public official obtains, accepts, or agrees to accept a (2) thing of value that the public official was not entitled to receive (3) knowing the payment was made in return for official acts (the quid pro quo) and (4) interstate commerce was affected.82Comparing these instructions to those written for § 201,83 both the instructions for bribery of a federal public official and Hobbs Act color of official right extortion include common elements of (1) a public official, (2) a thing of value, and (3) a quid pro quo. While the “corruptly” element found among § 201 instructions is missing from the Hobbs Act—and likewise the Hobbs Act’s necessary jurisdictional element of an effect on interstate commerce is missing from § 201—these instructions are, at their core, the same. A simple Use Note could modify one “Bribery” instruction to easily reflect these elements when necessary.

18 U.S.C. § 1346—Honest Services Fraud (Bribery Theory)

A. The Development of the Honest Services Theory and Skilling v. United States

The honest services theory was officially codified in 1988 within 18 U.S.C. § 1346, providing another avenue of mail fraud and wire fraud prosecution under 18 U.S.C. § 1341 and § 1343.84 While the intangible right to honest services theory is found within § 1346, it is an alternate theory of a “scheme or artifice to defraud” under the federal mail and wire fraud statutes. Section 1346 does not create a new crime, but adds to the breadth of the mail and wire fraud.85 Now, prosecutors may choose to prosecute under one of two theories of a “scheme or artifice to defraud”: the deprivation of honest services, or the deprivation of money and/or property.86

At first glance, § 1346 does not appear to cover bribery. But in Skilling v. United States, the Supreme Court explicitly limited the scope of honest services fraud to those cases involving bribery or kickbacks.87 In Skilling, the Court considered whether an Enron executive had been improperly convicted of conspiracy to commit wire fraud under the honest services theory.88 Skilling’s alleged conduct included artificially inflating Enron’s stock prices by misrepresenting the corporation’s fiscal health in order to sell his stock and obtain a net profit of $89 million.89 Although Skilling was not a public official, he had previously served as Enron’s Chief Executive Officer before he resigned.90Skilling challenged § 1346 on the basis that the statute was void for vagueness, requiring the majority to limit its construction.91 The Court determined that the majority of honest services precedent applied to bribery and kickback schemes92 and concluded that Congress must have intended the statute to at least reach these two types of schemes.93 Thus, the Court held that § 1346 was limited to cover only bribery and kickbacks, not undisclosed self-dealing.94 Skilling’s conduct only amounted to the latter, making it impossible for him to have committed honest services fraud.95According to the Skilling majority, “the honest-services doctrine had its genesis in prosecutions involving bribery allegations.”96 In order to define this particular type of bribery, the Court referenced “federal statutes proscribing—and defining—similar crimes,” including § 201.97 By limiting conduct under § 1346 to only bribes and kickbacks, bribery was once again recriminalized, providing prosecutors with another method of punishing public officials involved in bribery.98Interestingly, the sentencing guidelines recognized the similarities between honest services fraud under § 1356, the Hobbs Act, and § 201 even before the Supreme Court’s decision in Skilling. Six years before the Court decided Skilling, the separate sentencing guideline dealing with honest services fraud was deleted and consolidated with § 2C1.1, which includes receiving a bribe under § 201 and extortion under color of official right.99 Originally several guidelines covered bribery and extortion offenses, but they were consolidated as of November 2004.100 Now, each of these offenses are found together, which is the approach that drafting committees of pattern jury instructions should adopt.Comparing § 201, the Hobbs Act, and honest services fraud, common elements exist among the three statutes. The elements for honest services fraud found within pattern jury instructions are: (1) a public official (2) in a scheme or plan to defraud (3) accepts a bribe or kickback (thing of value) (4) in exchange for official action (the quid pro quo) and (5) violated his duty of honest services to the public by using the United States Postal Service or an interstate carrier in order to carry out the scheme.101 Again, the three common core bribery elements—a public official, thing of value, and the quid pro quo—are all present. In order to define bribery, pattern instructions for honest services fraud generally refer the reader to its instructions for § 201.102 If these instructions are already referring the reader to § 201, it seems that it would be much simpler to merge the instructions, and have all pertinent information readily accessible within one instruction. It also reflects the similarity between the crimes; one of the purposes of § 1356 is to punish the type of bribery already covered under § 201. “While they do not explicitly contain the word ‘corruptly,’ the Hobbs Act [and] honest services fraud . . . have swallowed 201 . . . .”103 If the statutes are already merging into one another, so too should their pattern instructions.

B. Offered Solution

The proposed Bribery instruction would include the following elements: (1) A public official accepted, received, or agreed to accept or receive a (2) thing of value (3) in exchange for official action (the quid pro quo). Although multiple forms of bribery exist via different statutes such as the Hobbs Act, § 201, and § 1346, each statute essentially punishes the same conduct. Through Use Notes, the instructions could be modified for each crime, adding an element when necessary. Committee Commentary would also explain the controlling law, each relevant statute, and the statutes’ intersection with one another. This unified Bribery instruction would not only be easier to understand, but would render federal bribery more coherent. A consolidated Bribery instruction would serve as a backdoor method to achieve the goal of the failed Revised Federal Criminal Code, which intended to remedy federal criminal law’s piecemeal approach. Thus, pattern jury instructions could serve as the glue to piece the puzzle that is federal bribery law back together.

This consolidation would be similar to the United States Sentencing Commission’s Federal Sentencing Guidelines’ approach of placing similar bribery crimes within the same section.104 The Commission has acknowledged federal bribery statutes’ similarities, as should drafters of pattern jury instructions. The Guidelines’ approach demonstrates the feasibility of consolidation, and should be repeated within each United States Circuit Courts of Appeals’ Criminal Pattern Jury Instructions.

Bribery is currently a deeply confusing area with unnecessary overlap between statutes, which is why drafting committees of pattern jury instructions should lead the charge to effectively consolidate these statutes through pattern jury instructions. Not only will a consolidated, more streamlined instruction help to avoid jury confusion, but it will aid both practitioners in understanding and applying federal bribery law to the facts of a given case, and judges in conducting the trial. Because the elements for the aforementioned statutes are largely the same, there is simply no rationale for separate pattern jury instructions. Instead, bribery crimes should be consolidated into one cohesive “Bribery” instruction.

---

1 J.D. Candidate, 2016.

2 See Charles N. Whitaker, Federal Prosecution of State and Local Bribery: Inappropriate Tools and the Need for a Structured Approach, 78 Va. L. Rev. 1617, 1619-21 (1992) (discussing the variation in interpretation of federal bribery laws and lack of consensus on the definition of bribery).

3Peter J. Henning & Lee J. Radek, The Prosecution and Defense of Public Corruption: The Law and Legal Strategies 3 (2011).

4 See Vince Ventimiglia, et. al., Report of the Public Corruption Working Group 20-21 (1993), http://www.src-project.org/wp-content/uploads/2009/08/ussc_report_publiccorruption_19930908.pdf.

5 U.S. Sentencing Guidelines Manual § 2C1.1 (U.S. Sentencing Comm'n 2015).

6 See 18 U.S.C. § 201 (2011); 18 U.S.C. § 1951 (2010); 18 U.S.C. § 1346 (2010).

7 See, e.g., District Judges Association, Fifth Circuit Pattern Jury Instructions (Criminal Cases) (2015) (hereinafter Fifth Circuit) (referring the reader to 18 U.S.C. § 201(b) in order to define bribery within the context of honest services fraud).

8 The decision not to include 18 U.S.C. § 666 (theft or bribery concerning programs receiving federal funds) was due to its unique jurisdictional bases, but the proposed general bribery statute could apply to § 666 as well.

9 Daniel Hays Lowenstein, Political Bribery and the Intermediate Theory of Politics, 32 UCLA L. Rev. 784, 785-87 (1985).

10 Peter J. Henning, Federalism and the Federal Prosecution of State and Local Corruption, 92 Ky. L.J. 75, 94 (2003).

11 See, e.g., Fifth Circuit, supra note 7, §§ 2.09B, 2.56, 2.57, 2.73B.

12 Henning & Radek, supra note 3, at 15.

13 United States v. Sun-Diamond Growers of Cal., 526 U.S. 398, 404-05 (1999).

14 See Evans v. United States, 504 U.S. 255, 256 (1992); see also Skilling v. United States, 561 U.S. 358, 412-13 (2010).

15 Evans, 504 U.S. at 268.

16 Lowenstein, supra note 9, at 786.

17 U.S. Const. art. II, § 4 (describing only two crimes as specific bases for impeachment, one of which is bribery).

18 Henning & Radek, supra note 3.

19 State ex rel. Brady v. Bates, 102 Minn. 104, 110 (1907) (Start, C.J., concurring).

20 Adam H. Kurland, The Guarantee Clause as a Basis for Federal Prosecutions of State and Local Officials, 62 S. Cal. L. Rev. 367, 377 (1989).

21 James Lindgren, The Theory, History, and Practice of the Bribery-Extortion Distinction, 141 U. Pa. L. Rev. 1695, 1705 (1993).

22 Kurland, supra note 20, at 376-77.

23 Geraldine Szott Moohr, Mail Fraud and the Intangible Rights Doctrine: Someone to Watch over Us, 31 Harv. J. on Legis. 153, 164 n.40 (1993).

24 Id.

25 Kurland, supra note 20, at n.26.

26 Reid Weingarten, Volcano of Change, 51 Hastings L.J. 693, 693-94 (2000).

27 Kurland, supra note 20, at n.26.

28 Id.

29 Moohr, supra note 23.

30 U. S. Sentencing Guidelines Manual § 2C1.1(b)(3) (U.S. Sentencing Comm’n 2015).

31 18 U.S.C. § 201(b) (4) (2011).

32 18 U.S.C. §§ 1341, 1951(a) (2010).

33 18 U.S.C. § 1341 (2010), 18 U.S.C. § 1343 (2011).

34 18 U.S.C. § 201 (2011).

35 John S. Gawey, The Hobbs Leviathan: The Dangerous Breadth of the Hobbs Act and Other Corruption Statutes, 87 Notre Dame L. Rev. 383, 418 (2011).

36 Henning & Radek, supra note 3.

37 See Luther C. Hames, Jr., Pattern Jury Instructions, 27 Mercer L. Rev. 291, 291-92 (1975).

38 See generally Fifth Circuit, supra note 7 (providing examples of jury instructions).

39 See Bethany K. Dumas, Jury Trials: Lay Jurors, Pattern Jury Instructions, and Comprehension Issues, 67 Tenn. L. Rev. 701, 708 (2000).

40 There is some variation among the judicial circuits, but each circuit has at least Use Notes or Committee Commentary, and some include both.

41 See, e.g., The Sixth Circuit Committee on Criminal Pattern Jury Instructions, Pattern Criminal Jury Instructions § 10.01 Committee Comment. (2015) [hereinafter Sixth Circuit].

42 Fifth Circuit, supra note 7, §§ 2.09B, 2.56, 2.57, 2.73B.

43 See Sixth Circuit, supra note 41, at Table of Contents.

44 U.S. Sentencing Guidelines Manual § 2C1.1 (U.S. Sentencing Comm’n 2015).

45 See id.

46 Henning, supra note 10, at 95-96.

47 18 U.S.C. § 201 (2011).

48 Id.

49 Dixson v. United States, 465 U.S. 482, 499-500 (1984).

50 526 U.S. 398 (1999).

51 Id. at 401-02.

52 Id. at 404-05.

53 Id. at 405.

54 Id.

55 See, e.g., Fifth Circuit, supra note 7, § 2.09B.

56 Arthur Andersen LLP v. United States, 544 U.S. 696, 705 (2005).

57 Eric J. Tamashasky, The Lewis Carroll Offense: The Ever-Changing Meaning of “Corruptly” within the Federal Criminal Law, 31 J. Legis. 129, 136 n.55 (2004).

58 See, e.g., United States v. Alfisi, 308 F.3d 144 (2d. Cir. 2002) (finding that evidence of a quid pro quo satisfied the corruptly element).

59 Model Penal Code § 240.1 cmt. 2 (Am. Law Inst., Official Draft and Revised Comments 1980).

60 Id. § 240.1 cmt. 1.

61 Henning, supra note 10, at 136-37.

62 Id. at 133.

63 Henning & Radek, supra note 3, at 107.

64 Id. at 108; United States v. Kenny, 462 F.2d 1205 (3d Cir. 1972).

65 See Gawey, supra note 35, at 397-99.

66 Id. at 398.

67 See Evans v. United States, 504 U.S. 255, 268 (1992) (“We hold today that the Government need only show that a public official has obtained a payment to which he was not entitled, knowing that the payment was made in return for official acts.”). But see Steven J. Mulroy, Official Explanation: Defining Official Capacity and Related Color of Office Phrases in Bribery and Extortion Law, 38 U. Mem. L. Rev. 587, 598 (2008) (arguing that bribery and extortion remain distinct crimes).

68 Evans, 504 U.S. at 257.

69 Id. at 268.

70 Id.; Judicial Committee On Model Jury Instructions for the Eighth Circuit, Eighth Circuit Model Jury Instructions (2014) § 6.18.1951 cmt. (2014) (“Because threats or coercion are not required, the facts of some cases will be fairly similar to the facts of a bribery case . . . .”).

71 Evans, 504 U.S. at 268.

72 Lindgren, supra note 21, at 1728.

73 Gawey, supra note 35, at 394-95 (“The difference between bribery of a public official and official right extortion is that bribery covers both sides of a reciprocity. Whereas official right extortion reaches only the public official who receives a bribe, bribery reaches both the public official and the briber.”).

74 U. S. Sentencing Guidelines Manual § 2C1.1 app. C, vol. I (U.S. Sentencing Comm’n 2015).

75 Id.

76 Ventimiglia, et. al., supra note 4, at v.

77 Id. at 13.

78 Id. at 11, 13.

79 See id. at 2.

80 See Frank O. Bowman, III, Beyond Band-Aids: A Proposal for Reconfiguring Federal Sentencing After Booker, 2005 Chi. Legal F. 149, 156 (2005).

81 Ventimiglia, et. al., supra note 4, at 2.

82 See, e.g., Fifth Circuit, supra note 7, § 2.73B.

83 Id. §§2.12–13.

84 18 U.S.C. § 1346 (2010).

85 Henning & Radek, supra note 3, at 155-56.

86 See 18 U.S.C. § 1341 (2010); 18 U.S.C. § 1343 (2011); 18 U.S.C § 1346. Mail fraud involves fraudulently obtaining money or property through use of the Postal Service or any private or commercial interstate carrier; wire fraud involves the same conduct, but instead utilizes wire, radio, or television communication.

87 Skilling v. United States, 561 U.S. 358, 409 (2010).

88 Id. at 367.

89 Id. at 413.

90 Id. at 368.

91 See id. at 402.

92 Id. at 405, 407.

93 Id. at 408.

94 Id. at 409-410.

95 Id. at 413.

96 Id. at 408.

97 Id. at 412.

98 See Sarah Kelly & Megan Jeans, Honest Services Fraud: The Trial Courts’ Turn, 46 New Eng. L. Rev. on Remand 79, 83 (2012).

99 U.S. Sentencing Guidelines Manual app. C, vol. 111, amend. 666 (U.S. Sentencing Comm'n 2015); id. § 2C1.1.

100 Id. at app. C, vol. 111, amend. 666.

101 See, e.g., Fifth Circuit, supra note 7, §§ 2.56, 2.57.

102 See, e.g., id. § 257 (referring the reader to 18 U.S.C. § 201(b) in order to define bribery within the context of honest services fraud).

103 Gawey, supra note 35, at 419.

104 See U.S. Sentencing Guidelines Manual § 2C1.1 (U.S. Sentencing Comm'n 2015).

Money for Nothing and Your Facts for Free: An Exploration of Political Spending and a Proposal for Combatting Big Money Interests

Article | 104 KY. L. J. ONLINE 54 | January 11, 2016

Chris K. Stewart[1]

Introduction

Each election since 1998 has cost more than the one before it.[2] Total spending for the 2014 midterm was $3.77 billion.[3] Some estimates project spending on the 2016 presidential election alone may exceed six billion dollars.[4] While this consistent uptick in spending is a powerful testament to the ever-increasing role of money in politics, two other statistics are even more disturbing. First, in 2014 House races, the candidate who outspent the opposition claimed victory 94.2% of the time.[5] Second, in the 2014 midterm election, nationwide voter turnout dropped to its lowest level since 1942.[6] The dramatic uptick in spending coupled with historically low voter turnout paint a grim picture of the future of American elections.Since Citizens United v. Federal Election Commission,[7] scholars have offered numerous legal arguments hoping to convince the Supreme Court to reconsider its position on the Bipartisan Campaign Reform Act (BCRA). However, in the wake of American Tradition Partnership v. Bullock[8] and, most recently, McCutcheon v. Federal Election Commission,[9] the genie is decidedly out of the bottle, and the current Court is unlikely to reverse the trend. Thus, attempting to litigate the matter head-on is fruitless.This note will explore the political history that has brought us to this point. It will then propose two solutions, one of them legal and the other non-legal. The focus will be on the Commonwealth of Kentucky, though many arguments apply to other states as well.The first proposal is to parry the increase in spending with an increase in voter access via early voting. Early voting allows registered voters to cast an in-person vote during a defined period before Election Day. Kentucky does not currently have an early voting scheme, and this note argues that early voting facilitates increased voter access across a broad spectrum of potential voters. When casting a ballot is as easy as possible for all eligible voters, the influence of money in politics can be minimized. Moreover, the Sixth Circuit Court of Appeals outlined the constitutional importance of early voting by applying heightened scrutiny to Ohio's early voting law in Obama for America v. Husted.[10]The second proposal involves the increased presence of nonpartisan, fact-checking services. For younger voters, these organizations should step up their social media presence. Platforms such as Facebook, Twitter, and Instagram should offer free ad space to permit easy-to-understand explanations of misleading campaign ads. For older voters, local television stations should adopt, as part of their campaign coverage, a weekly segment that offers a non-partisan, fact-based assessment of the most recent ads for local elections of interest.Ultimately, the goal of election reform should be to allow as many eligible voters as possible to exercise the franchise, armed with reliable information that enables them to cast a vote reflective of their personal beliefs. As Louis Brandeis famously noted, "Sunlight is said to be the best of disinfectants; electric light the most efficient policeman."[11]

I. Corruption and Concealment: A Historical Overview of Campaign Finance Law

A. The Early Years

American politics has always carried the stigma of corruption. Originally, officials feared that candidates might corrupt voters or the voting process through bribes or other means. George Washington may have been unable to tell a lie, but when he ran for the Virginia House of Burgesses in 1758, that didn't stop him from spending thirty-nine pounds, six shillings on purchasing for voters "‘a hogshead and a barrel of punch, thirty-five gallons of wine, forty-three gallons of strong beer, cider, and dinner for his friends.’"[12] Washington's election agent provided about a half-gallon of booze for each voter.[13] This process was affectionately known as "swilling the planters with bumbo."[14]At the end of the nineteenth century, America saw the rise of the career politician.[15] These politicians often were not independently wealthy and therefore relied heavily on contributions from others to run a campaign.[16] With this trend came modern, more expensive campaigns, and the script was flipped: new fears emerged that contributors would exercise undue influence on governance, rather than the original concern, maintaining the integrity of the electorate.[17]Early campaign finance legislation enjoyed bipartisan support, with Republican president Theodore Roosevelt giving fervent speeches to Congress calling for limitations on the influence of special interests and increases in disclosure requirements.[18] This led to the passage of the first federal campaign finance disclosure law, the Publicity of Political Contributions Act of 1910 (Publicity Act).[19] The Publicity Act required congressional candidates to submit disclosure statements regarding the identity of their donors before the general election.[20] The Act did not, however, apply to candidates for the presidency, a weakness that would become fully apparent during the Teapot Dome Scandal where Interior Department Officials were bribed in exchange for oil drilling rights.[21] The scandal prompted Congress to amend the Publicity Act with the Federal Corrupt Practices Act in 1925,[22] which would serve as the principal campaign finance law for nearly five decades.[23]

B. Calls for Reform as Spending Ramps Up

By the late 1960's, an explosion in campaign spending coupled with a nearly universal evasion of the prohibition against corporate expenditures and disclosures, "which was ‘honored more in the breach than in the observance,’" provided the impetus for reform.[24] Congress passed and President Nixon signed the Federal Election Campaign Act of 1971 (FECA).[25] FECA limited the total amount candidates could spend on advertising.[26] It also limited the amounts candidates and their families could spend on their own campaigns and provided for the reporting of sources and uses of campaign funds.[27] According to a statement released upon signing the bill, President Nixon hoped that "this legislation will guard against campaign abuses and will work to build public confidence in the integrity of the electoral process.[28] The irony of this statement cannot be ignored, given the laundry list of Nixon's FECA violations that would come to light over the next two years.[29] These would include, among many others, a $2 million donation from American Milk Producers, Inc. divided into $2500 contributions from hundreds of shell committees given in exchange for federal price supports.[30]Outrage over Watergate led Congress to amend FECA in 1974. Challenges to the amendments appeared almost immediately. In 1976, the Supreme Court issued its first ruling on FECA in Buckley v. Valeo.[31] The Court upheld as constitutional the right of Congress to limit individual contributions, finding that corruption or the appearance of corruption was sufficient justification to limit these donations.[32] On the other hand, the Court struck down FECA's limitations on individual expenditures, meaning moneys spent in support of an individual candidate but not given directly to the campaign.[33] Buckley thus left some room for campaign finance regulation, but future legislation and subsequent First Amendment challenges would erode such laws far beyond the Buckley Court's wildest dreams.

C. Soft Money, the Bipartisan Campaign Reform Act, and the Maelstrom That Followed

The Buckley Court narrowly construed FECA's disclosure requirements to only apply to acts of express advocacy. "Magic Words" such as "vote for" or "reject" had to be present before candidates were required to disclose sponsors of the ads.[34] Not surprisingly, candidates, donors, and any number of interest groups, corporations, and unions began to circumvent the disclosure through soft money advertising.[35] These groups were not subject to disclosure requirements and could therefore spend unlimited amounts on what came to be known as sham issue ads.[36] Typically, these ads would feature an issue of the day followed by a description of the candidate’s position on that issue.[37] Viewers would then hear a message such as "call up this candidate and say thank you for her commitment to this issue."[38] Because there was no express call for anyone to vote for the candidate in question, no one need report the sources or costs of these advertisements.[39]Eventually, Congress amended FECA with the Bipartisan Campaign Reform Act of 2002 (BCRA). This placed a ban on soft money and addressed the problem of express versus issue advocacy by creating a category of speech it termed electioneering communication.[40] Congress defined electioneering communications to include "any broadcast, cable, or satellite communication" that "refers to a clearly identified candidate for federal office," is made within 60 days of a general election or 30 days of a primary or convention, and "is targeted to the relevant electorate."[41]BCRA even included what appears to be a backup definition of electioneering communication. In the event the original is found constitutionally deficient, BCRA provides that an electioneering communication is:

any broadcast, cable, or satellite communication which promotes or supports a candidate for that office, or attacks or opposes a candidate for that office (regardless of whether the communication expressly advocates a vote for or against a candidate) and which also is suggestive of no plausible meaning other than an exhortation to vote for or against a specific candidate.[42]

Within days of the passage of BCRA, eleven lawsuits emerged challenging the new law.[43] Eighty-four plaintiffs, later reduced to seventy-seven, spanned the political gamut from the National Rifle Association and Republican National Committee to the California Democratic Party and the AFL-CIO.[44] But the lead plaintiff was Senator Mitch McConnell of Kentucky.[45] After an exhaustive fact-finding process, followed by nine hours of oral arguments featuring twenty-three lawyers, the district court issued its opinion, which upheld much of BCRA.[46] The Supreme Court granted certiorari, and the oral argument was an unusually long four hours with eight attorneys.[47] On December 10, 2003, eight of nine justices voted to uphold the electioneering communications portion of BCRA.[48] Perhaps more importantly given the subsequent history in Citizens United, the Court voted to uphold the prohibition of the use of corporate and labor treasury funds in electioneering communications.[49] The Court reasoned that corporations and labor unions could adequately influence the political process through their political action committees, and the restrictions on the use of general funds acted as a regulation, not a restriction.[50] Moreover, the Court killed the magic words test from Buckley, recognizing that using it as the measure of express advocacy "is functionally meaningless."[51]The McConnell Court left open the possibility for as-applied challenges to the electioneering communications disclosure requirements, and it was only a matter of time before new litigation cropped up to test the limits of BCRA.[52] In 2007, Wisconsin Right to Life challenged the FEC, arguing that the prohibition against corporate and union funds for ads that are not express advocacy or their functional equivalent was unconstitutional.[53] The Supreme Court agreed, and corporations and unions were suddenly free to open their coffers for independent expenditures on issue advertisements.This sudden shift in campaign finance jurisprudence in just four short years seems baffling on its face but makes much more sense in the light of one other important change. Justice O'Connor, author of the 5-4 opinion in McConnell, retired in 2005[54] and was replaced by the conservative Justice Alito.[55]Finally, in 2010, the Court held by a 5-4 margin in Citizens United v. FEC that the government's previous justification for regulating corporate expenditures, preventing corruption or the appearance of corruption, no longer passed constitutional muster.[56] Justice Kennedy narrowed the definition of corruption to encompass only situations where there is clear evidence of a quid pro quo exchange between candidate and donor, not merely signs of ingratiation or access.[57] This ruling signaled the removal of a final obstacle, and corporations and unions could subsequently spend directly from their treasuries on express advertisements on behalf of candidates.The response to Citizens United was immediate and overwhelming. The Brennan Center for Justice has compiled data from U.S. Senate races since 2010.[58] Senate races are a particularly effective measure of outside influence on elections because the balance of power in the Senate has been a genuine issue in all three elections since 2010.[59] Outside spending on candidates has more than doubled since Citizens United. This is a conservative estimate, which does not include the innumerable sham issue ads, which still carry no disclosure requirements.[60] While some hoped that state laws might be able to combat the effect of Citizens United, the Supreme Court made it clear that its decision was not simply made on the facts of that case, but was controlling precedent until otherwise stated.[61]

II. Moving Forward

Given the clear trend in campaign finance jurisprudence toward allowing greater contributions with minimal disclosure, attempting to combat big money influence in politics through the FEC and federal judiciary seems, at least for the time being, a fool's errand. Another approach is needed, and it should happen at the state and local level through a combination of insuring access to the polls through early voting as well as providing citizens with nonpartisan perspectives on the frequently misleading advertisements promulgated by both parties.

A. An Overview of Early Voting

There will likely continue to be attempts by some state legislatures to rein in political spending. However, as these laws will undoubtedly face lengthy, expensive, and almost certainly successful First Amendment challenges, opponents of big money spending should take a more pragmatic, grassroots approach. By turning their attention away from litigation and toward efforts to expand access to the polls, opponents of political spending will encounter a new path to their goal while simultaneously swelling support for voter access. Early voting is one obvious way to expand the franchise, thus insuring that voting is as easy as possible for as many citizens regardless of the flood of political spending.While in person early voting is a relatively new phenomenon, researchers are beginning to collect enough empirical data to answer some questions. In assessing the efficacy of electoral reforms, researchers typically weigh at least two considerations.[62] First, researchers ask whether the reform increases the level of participation.[63] Second, the researchers ask whether, and to what extent, the reform affects the quality of voter participation.[64]Enough empirical evidence has accumulated to answer the first question. In general, early voting schemes do not serve to bring new voters into the system. However, the data suggest that early voting does encourage voters to participate in lower-intensity contests that they would otherwise skip.[65] As for the second question, the data are as of yet too sparse to assess whether early voting impacts the quality of democratic decision making.[66] However, regardless of what future analysis reveals as election cycles pass and more data are gathered, the impact of early voting on the quality of the electorate is secondary to its objective ability to increase voter access.A second effect of early voting schemes is how they may impact the political calculus that candidates use to structure their campaigns. In American presidential elections, recent history reveals a clear pattern. Campaigns become extremely active around Labor Day, followed by candidate debates in September and October, and a final push near November and Election Day.[67] Early voting can impact this cycle. In districts with early voting, candidates could hypothetically find themselves flooding the market with expensive advertising, unintentionally targeting citizens who have already voted.[68] Of course, this could simply cause campaigns to pull back at an earlier point in the campaign and flood the market during the early voting window. However, this strategy could potentially create marketing overkill and lessen the impact of the advertisements, thereby depriving money interests of some measure of influence.

B. The Equitable Case for Early Voting

Not everyone can manage to make it to the polls on Election Day. Consider the following hypothetical. A registered nurse lives in the East end of Jefferson County, Kentucky, and works on the far west end of Jefferson County. This nurse works twelve-hour shifts. He must clock in at 7:00 AM, and he clocks out at 7:00 PM. His commute is, on average, forty-five minutes. In order to clock in on time, he leaves his home each morning at 6:00 AM.Kentucky polls open at 6:00 AM.[69] The Kentucky Constitution provides that the legislature should fashion a law requiring employers to give employees leave to vote during the work day.[70] While this law is on the books,[71] the reality of our hypothetical nurse is that he works in an underserved area, performing emergency services. Leaving work for him could cause him to choose between a person's physical wellbeing and his right to exercise the franchise. Moreover, because polls require all voters to be in line at 6:00 PM,[72] our nurse cannot vote after his shift, which ends at 7:00 PM.This hypothetical paints a picture of an able-bodied, educated person for whom voting could be nearly impossible during the statutorily-defined polling hours. However, it is worth noting that voting on Election Day can create substantial burdens for many other groups. It goes without saying that physically accessing the polls creates additional barriers for the physically disabled. Additionally, single working parents, the poor, and African Americans have been shown to take advantage of early voting at a rate disproportional to others.[73] For these early voters, the democratic calculus extends beyond simply weighing issues, candidate qualifications, or special interests. Rather, these voters face a host of systemic barriers and must further ask how they will get to the polls, whether they can spare the time and potential lost income, and in many cases, who will watch the kids.[74] Because of scenarios such as these, thirty-three states and the District of Columbia have adopted some form of early voting.[75]

C. The Constitutional Significance of Early Voting

It is clear from the previous section that early voting is a useful tool to facilitate voter access. However, there is an additional compelling reason for Kentucky to adopt early voting as well. The Sixth Circuit Court of Appeals has underscored the importance of early voting by applying heightened scrutiny to Ohio's early voting scheme in Obama for America v. Husted.[76]On July 17, 2012, Obama for America, the Democratic National Committee, and the Ohio Democratic Party filed suit in district court against John Husted in his official capacity as the Attorney General of Ohio.[77] At issue in the case was an Ohio statute that imposed a deadline of 6:00 PM for in person early voting, while allowing military and overseas voters to cast votes through the weekend.[78] The plaintiffs alleged that the statute imposed an undue burden on the fundamental right to vote, and that this burden was not supported by a sufficiently weighty state interest.[79] The state argued that the need for providing military voters with extra time, coupled with the burden on local election boards of facilitating the additional time for non-military voters was a sufficient need to allow for the disparate cutoff times.[80]The district court held a hearing and considered a wealth of demographic information, legislative history, and depositions of military officers and voting experts.[81] After considering the evidence, the district court granted the plaintiff's motion for a preliminary injunction and ordered that early voting in Ohio be available to all voters regardless of military status.[82] The State and various interveners appealed.[83]Ohio originally implemented its early voting scheme after the 2004 election, when long lines kept polls open—in some cases, into the early hours of the morning after Election Day.[84] Many Ohio residents took advantage of the new opportunity, and in 2008, 20.7% of registered voters cast early ballots, which represented 29.7% of total votes cast.[85]Before drawing its legal conclusions, the court considered several demographic factors in the evidentiary process.[86] Expert testimony revealed a number of truths concerning the demographics of citizens who chose to vote early.[87] Those who took advantage of the option were “more likely than election-day voters to be women, older, and of lower income and educational attainment."[88] Moreover, statistics from Cuyahoga and Franklin County, the homes of Cleveland and Columbus respectively, suggested that early voters were disproportionately African American.[89] Regardless of the overall impact on turnout, these statistics confirm what people on the ground know intuitively: making it to the polls on Election Day is much more difficult for the poor, elderly, and disabled.The legal analysis follows the demographic assessment.[90] The court recognized that voting is one of our most precious fundamental rights, and that equal protection applies not only to the granting of the franchise, but also in the manner of its exercise.[91] Moreover, the court added that heightened scrutiny under the Equal Protection clause is invoked when different groups of voters are treated differently.[92] This distinction was an important signal of which way the subsequent analysis would go given that the Ohio law clearly created different groups of military and non-military voters.The court then went on to determine which level of scrutiny to apply to the Ohio early voting law.[93] A general grievance by a plaintiff that she is being treated differently from another person in a similarly-situated class will not receive more than a rational basis review unless she can identify a corresponding burden to the franchise.[94] The level of scrutiny will depend on the severity of the burden.[95] Where the burden is severe, strict scrutiny will apply, but most cases fall under the flexible balancing test outlined in Anderson v. Celebrezze and Burdick v. Takushi.[96] The court outlined the standard as follows:

A court considering a challenge to a state election law must weigh “the character and magnitude of the asserted injury to the rights protected by the First and Fourteenth Amendments that the plaintiff seeks to vindicate” against “the precise interests put forward by the State as justifications for the burden imposed by its rule,” taking into consideration “the extent to which those interests make it necessary to burden the plaintiffs’ rights.”[97]

The State and interveners urged the court in Obama for America to apply a rational basis standard, arguing that a straight-forward equal protection claim required a straight-forward equal protection analysis.[98] But the court wrote, "However, when a state regulation is found to treat voters differently in a way that burdens the fundamental right to vote, the Anderson-Burdick standard applies."[99] Notably, this language clearly indicates that the court was affording early voting the same constitutional weight as an in-person vote cast on Election Day.The State further based its claim on McDonald v. Board of Election Commissioners, where the Supreme Court applied rational basis review to an Illinois law denying un-sentenced inmates absentee ballots.[100] The McDonald court found no fundamental right to receive an absentee ballot, particularly where the regulation did not discriminate on the basis of race or wealth, and there were no other signs that the state had otherwise restricted the inmate’s right to vote.[101] However, the court in Obama for America disagreed and created an important distinction. Opponents to early voting may argue that, because in-person voting is still available regardless of early voting, any changes to the early voting laws do not fundamentally affect a citizen's right to vote.The Obama for America court held that the plaintiffs need not be legally prohibited from voting, only that they present a showing that their right to vote was burdened, and they had few other alternatives to access the ballot.[102] The court pointed to statistical sampling that suggested that some one hundred thousand Ohio voters planned to vote in the three days in dispute, and these voters were disproportionately female, older, and of lower education levels.[103] By shortening the early voting window after initiating the system, the state of Ohio created enough of a burden on the right to vote to require justification under the Anderson-Burdick standard.[104]Ohio needed to offer justifications both for why it was restricting voting rights as well as why it treated non-military voters differently from military voters.[105] As for the first, Ohio claimed that local election boards were too busy in the days leading up to Election Day to accommodate early voters.[106] The State justified disparate treatment of voters with the need to accommodate military voters and their families.[107] Ohio argued that, because military voters can be called away at a moment's notice, the State was justified in extending early voting privileges to these voters while denying it to others.[108]The court weighed the magnitude of the plaintiff's injury against Ohio's proffered justifications.[109] As for the contention that election boards needed the window to prepare for Election Day, the court cited evidence that, in fact, early voting may alleviate Election Day problems by eliminating long lines and the need for extended polling hours.[110] Moreover, the court noted that "Ohio’s statutory scheme is not generally applicable to all voters, nor is the State’s justification sufficiently 'important' to excuse the discriminatory burden it has placed on some but not all Ohio voters."[111]The court similarly rejected Ohio's second justification, that military voters require special accommodations because of the risk of being suddenly called away. Here, the court points out that the Equal Protection Clause does not forbid classifications, it merely prohibits treating groups of individuals differently who are otherwise similarly situated.[112] In this case, while military voters are distinct for certain aspects of the voting process, like the need for more liberal rules for obtaining and submitting absentee ballots,[113] the court does not accept Ohio's justification for the purposes of early voting.[114] The court reasons, "[A]ny voter could be suddenly called away and prevented from voting on Election Day. At any time, personal contingencies like medical emergencies or sudden business trips could arise, and police officers, firefighters and other first responders could be suddenly called to serve at a moment’s notice."[115] Therefore, while Ohio has a justification for offering military voters more time to vote, there is not a corresponding justification for offering other voters less time, and shortening the window of early voting for some, and not all voters, represents an unconstitutional burden on the right to vote.[116]In this case, the level of scrutiny and the reliance on equal protection are clear indications that the court intentionally analyzed early voting in Ohio as a fundamental right on par with in-person voting on Election Day.[117] This suggests that, barring further clarification from additional litigation resulting in a resolution of the issue by the Supreme Court, early voting will from now on receive heightened scrutiny in the Sixth Circuit. The implications for Kentucky are two-fold. First, given the reasons outlined in part A) of this section, Kentucky should adopt a system of early voting to expand access to the polls. And, second, in order to implement a constitutional early voting scheme, the system should be comprehensive and should not make any efforts to classify similarly situated voters.[118]

D. Nonpartisan Fact-Checking

There is a second solution, which exists independent of any courtroom or legislative chamber. This solution involves increasing the quality of voter participation by insuring that voters arrive at the polls on Election Day having chosen their candidates based on good information, not corrupted by misleading advertising. The neatest way to accomplish this is through the promotion of fact-checking services. If fact-checkers occupy a more visible platform and broadcast as widely as possible, opponents of the explosion in political spending may eventually feel satisfied that, at the very least, voters of all demographics possess the requisite tools for making an informed decision on Election Day.As previously stated, much of the money in political campaigns is dedicated to advertising, and much of these advertisements are, at best, variations on the truth, and at worst, misleading, false, and potentially defamatory statements.[119] For example, when Mitt Romney kicked off his campaign, one of his first ads featured a sound bite of President Obama saying, "if we keep talking about the economy, we're going to lose."[120] This commercial stands as a prime example of a misleading ad because, while President Obama did utter those words, the Romney camp truncated the quotation so badly that it ignored one crucial fact, when President Obama made the statement, he was directly quoting Senator John McCain, his Republican opponent in the previous election.[121] The reductio ad absurdum of this technique would be a commercial with President Obama saying "Vote for Romney," while leaving off the first half of the statement, "Republicans contend you should . . ."The website PolitiFact.com rated this advertisement "Pants on Fire," its most excoriating rebuke of the truthfulness of a statement.[122] However, given the relatively limited scope of PolitiFact when compared with the Romney campaign, the effect of the "Pants on Fire" rating did less than one might think to impact the efficacy of the advertisement. In reality, the die was cast. Potential voters heard the message and turned their attention toward the economy, focusing on Obama's policies in the process.[123]In 2009, PolitiFact won a Pulitzer Prize for journalism for their coverage of the 2008 presidential election.[124] The website sifted through over 750 political claims made during the 2008 campaign.[125] Since then, PolitiFact has increased the breadth of its coverage, regularly fact-checking the Sunday news shows in a series called PunditFact,[126] and even live-tweeting the primary debates in the run up to the 2016 presidential election.[127] PolitiFact used Twitter to solicit questions from debate viewers, and relied on its extensive body of work to provide up-to-the-minute assessments of candidate's veracity.[128] This information can combat misleading political advertisement, but the average voter needs greater access to this information.One method to increase the influence of fact-checking websites is to amplify their broadcast power. The reach of misleading political ads is enormous. Justice Brandeis famously noted, "If there be time to expose through discussion the falsehood and fallacies, to avert the evil by the processes of education, the remedy to be applied is more speech, not enforced silence."[129] If this is so, then perhaps it would benefit voters to hear the messages of fact-checkers as frequently as they hear misleading radio and television ads. Concerned citizens should consider, rather than donating to a super PAC, using their political capital to support non-partisan fact-checking. Presently, effective advertisement would expansively target social media platforms. Social media is an effective means of reaching millennial voters, but television and radio advertising still garners the bulk of political spending.[130] Given this, local news broadcasts should adopt a nonpartisan, fact-checking segment in the period approaching the election. The news, traditionally a source of objective reporting, will make a strong ally in the effort to create an informed electorate.To clarify, all of these efforts must be accomplished without governmental involvement. The state is a poor arbiter of truth. The government cannot, therefore, serve as the fact-checker. At least one state supreme court has held truth in advertisement laws to be unconstitutional because they placed the burden on the government of proving truth or falsity.[131] However, some claims, as PolitiFact has proven, are simply false, and as many of these should be brought to light by non-partisan, not for profit fact-checkers as possible.

Conclusion

While the recent explosion in political spending is unlikely to slow down any time soon, implementing an early voting program and promoting robust fact-checking will insure that, on Election Day, the roar of political spending does not drown out the voice of the most important political speakers, the voters. Additionally, these steps can insure that the voice with which the electorate speaks is informed and reflective of the people's will. By allowing early voting, the Kentucky legislature would signal that, no matter how partisan political issues may be, voters can trust that, during election season, their representatives and hopeful representatives are as concerned with providing a government that reflects the will of the constituency as they are with electoral success. The heightened scrutiny applied to early voting laws in the Sixth Circuit underscores the constitutional significance of early voting programs.Second, the tidal wave of political advertisements can be met with truth and nonpartisan fact-checking on a national, state, and local level. Increasing the visibility of these important organizations will serve to offer a populist response to the shifting control of political spending from individual contributors to a few donors with outsized financial resources.As more people realize the futility of further litigation against the money interests in light of the current Supreme Court's ideological composition, there is no doubt that additional grassroots ideas will crop up to combat the influence of money in politics. Some will be more successful than others, but advocates for voting rights and campaign finance reform should openly welcome new ideas, allowing each to succeed or fail on its own merits. At the end of the day, the goal for everyone should be an open, honest, and fair political process.

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[1] I want to extend my sincerest thanks to the Kentucky Law Journal, Professor Josh Douglas of the UK College of Law, my wife Emily, and my guide dog Baron for their immeasurable contributions to my achievements in law school.

[2] Russ Choma, Money Won on Tuesday, but Rules of the Game Changed, OpenSecrets: Blog (Nov. 5, 2014), http://www.opensecrets.org/news/2014/11/money-won-on-tuesday-but-rules-of-the-game-changed/.

[3] Russ Choma, Final Tally: 2014’s Midterm Was Most Expensive, with Fewer Donors, OpenSecrets: Blog (Feb. 18, 2015), http://www.opensecrets.org/news/2015/02/final-tally-2014s-midterm-was-most-expensive-with-fewer-donors/.

[4] See e.g. Meg James, Political Ad Spending Estimated at $6 Billion in 2016, L.A. Times (Nov. 18, 2015), http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-political-ad-spending-6-billion-dollars-in-2016-20151117-story.html.

[5] Id.

[6] Doug Mataconis, Voter Turnout in 2014 Midterms Hit Lowest Point Since 1942, Outside the Beltway (Nov. 15, 2014), http://www.outsidethebeltway.com/voter-turnout-in-2014-midterms-hit-lowest-point-since-1942/.

[7] 558 U.S. 310 (2009).

[8] 132 S. Ct. 2490 (2012).

[9] 134 S. Ct. 1434 (2014).

[10] 697 F.3d 423, 430 (6th Cir. 2012).

[11] Louis D. Brandeis, Other People’s Money – Chapter V, Louis D. Brandeis School of Law Library, https://louisville.edu/law/library/special-collections/the-louis-d.-brandeis-collection/other-peoples-money-chapter-v (last visited Dec. 28, 2015).

[12] Mary V. Thompson, Beer. George Washington's Mount Vernon, Mount Vernon Estate & Gardens, available at http://www.mountvernon.org/research-collections/digital-encyclopedia/article/beer/ (last visited Jan. 3, 2016).

[13] Lisa Bramen, Swilling the Planters with Bumbo: When Booze Bought Elections, Smithsonian.com (Oct. 20, 2010), http://www.smithsonianmag.com/arts-culture/swilling-the-planters-with-bumbo-when-booze-bought-elections-102758236/?no-ist.

[14] Id.

[15] Trevor Potter & Bryson B. Morgan, The History of Undisclosed Spending in U.S. Elections & How 2012 Became the “Dark Money” Election, 27 Notre Dame J.L. Ethics & Pub. Pol'y 383, 400 (2013).

[16] Id.

[17] Id.

[18] Id. at 385-86.

[19] Id. at 386.

[20] Id.

[21] See generally M. R. Werner & John Starr, Teapot Dome (1959).

[22] Potter & Morgan, supra note 15, at 404-05.

[23] Id. at 405.

[24] Id. at 411-12 (noting that campaign spending nearly doubled between 1956 and 1968 from $155 million to nearly $300 million).

[25] Id. at 412.

[26] See id.

[27] Id. at 412-13.

[28] Leon Friedman & William F. Levantrosser, Richard M. Nixon: Politician, President, Administrator 301 (1991).

[29] See id. at 414.

[30] Id.

[31] Buckley v. Valeo, 424 U.S. 1 (1976)

[32] Id. at 27.

[33] Id. at 143.

[34] Id. at 44 n.52.

[35] Potter & Morgan, supra note 15, at 428.

[36] Commentary: The Campaign Finance Page, The Free Expression Policy Project, http://www.fepproject.org/commentaries/campaignfinance.html#three (last updated Jan. 22,2010).

[37] Id.

[38] Id.

[39] See Buckley v. Valeo, 424 U.S. 1, 44 (1976).

[40] 52 U.S.C. § 30104(f)(1)-(2) (West, Westlaw current through P.L. 114-93 (excluding P.L. 114-74 and 114-92) approved Nov. 25, 2015).

[41] 52 U.S.C. § 30104(f)(A)(i)(I)-(III) (West, Westlaw current through P.L. 114-93 (excluding P.L. 114-74 and 114-92) approved Nov. 25, 2015).

[42] 52 U.S.C. § 30104(f)(3)(A)(ii) (West, Westlaw current through P.L. 114-93 (excluding P.L. 114-74 and 114-92) approved Nov. 25, 2015).

[43] Commentary: The Campaign Finance Page, supra note 36.

[44] Id.

[45] Id.

[46] Id.

[47] Id.

[48] McConnell v. FEC, 540 U.S. 93, 110, 196 (2003) (upholding BCRA § 201); see also id. at 321 (Kennedy, J., joined by Rehnquist, C.J. and Scalia, J.) (voting to uphold § 201).

[49] Id. at 104.

[50] Id.

[51] Id. at 193.

[52] See James Bopp, Jr. & Richard E. Coleson, The First Amendment is Still Not a Loophole Examining McConnell's Exception to Buckley's General Rule Protecting Issue Advocacy, 31 N. Ky. L. Rev. 289, 325 (2004).

[53] See FEC v. Wis. Right to Life, Inc. 551 U.S. 449, 449-50 (2007).

[54] William Branigin, Fred Barbash & Daniela Deane, Supreme Court Justice O'Connor Resigns, Wash. Post (July 1, 2005, 7:11 PM) http://www.washingtonpost.com/wp-dyn/content/article/2005/07/01/AR2005070100653.html.

[55] David Stout, Alito Is Sworn in After 58-42 Vote to Confirm Him, N.Y. Times (Jan. 31, 2006) http://www.nytimes.com/2006/01/31/politics/politicsspecial1/31cnd-alito.html?_r=0.

[56] Citizens United v. FEC, 558 U.S. 310, 312, 317 (2010).

[57] Id. at 909-10.

[58] Ian Vandewalker & Eric Petry, Election Spending 2014: Outside Spending in Senate Races Since Citizens United, Brennan Ctr. For Justice (Jan. 13, 2015), http://www.brennancenter.org/publication/election-spending-2014-outside-spending-senate-races-citizens-united.

[59] Id.

[60] Id.

[61] Am. Tradition P'ship, Inc. v. Bullock, 132 S. Ct. 2490, 2491 (2012).

[62] Paul Gronke, Early Voting Reforms and American Elections, 17 Wm. & Mary Bill Rts. J. 423, 432 (2008).

[63] Id.

[64] Id.

[65] Id.

[66] Id.

[67] Id. at 434.

[68] See id.

[69] Ky. Const. § 148.

[70] Id.

[71] Ky. Rev. Stat. Ann. § 118.035(2) (West, Westlaw current through the end of the 2015 regular session).

[72] Ky. Rev. Stat. Ann. § 118.035(1) (West, Westlaw current through the end of the 2015 regular session).

[73] Badger, Emily, Why Early Voting Is About So Much More Than Convenience, Wash. Post (Sept. 30, 2014), http://www.washingtonpost.com/blogs/wonkblog/wp/2014/09/30/why-early-voting-is-about-so-much-more-than-convenience/.

[74] Id.

[75] Nat'l Conference of State Legislatures, Absentee and Early Voting, (Feb. 11, 2015), http://www.ncsl.org/research/elections-and-campaigns/absentee-and-early-voting.aspx.

[76] Obama for America v. Husted, 697 F.3d 423, 429-30 (2012).

[77] Id. at 425.

[78] Id.

[79] Id.

[80] Id. at 427.

[81] Id. at 426.

[82] Id. at 423.

[83] Id. at 425.

[84] Id. at 426.

[85] Id.

[86] Id. at 426-27.

[87] Id.

[88] Id.

[89] Id. at 427.

[90] See id. at 428-37.

[91] Id. at 428 (quoting Harper v. Va. State Bd. of Elections, 383 U.S. 663, 670 (1966); League of Women Voters v. Brunner, 548 F.3d 463, 477 (6th Cir. 2008)).

[92] Id. at 429 (citing McDonald v. Bd. of Election Comm’rs, 394 U.S. 802, 807-09 (1969); quoting Burdick v. Takushi, 504 U.S. 428, 434 (1992)).

[93] Id.at 429-30.

[94] Id. at 429 (citing McDonald, 394 U.S. at 807-09).

[95] Id. (quoting Burdick, 504 U.S. at 434).

[96] Id.; Anderson v. Celebrezze, 460 U.S. 780 (1983); Burdick, 504 U.S. at 428-50.

[97] Obama for America, 697 F.3d at 429 (quoting Burdick, 504 U.S. at 434).

[98] Id. at 430.

[99] Id. (citing Hunter v. Hamilton Cnty. Bd. of Elections, 635 F.3d 219, (6th Cir. 2011)).

[100] Id.; McDonald, 394 U.S. at 803.

[101] Obama for America, 697 F.3d at 431 (citing McDonald, 394 U.S. at 807).

[102] Id. at 431 (quoting Citizens for Legislative Choice v. Miller, 144 F.3d 916, 921 (6th Cir. 1998)).

[103] Id.

[104] Id.

[105] Id. at 431-32.

[106] Id. at 432.

[107] Id.

[108] Id. at 434.

[109] Id. at 433.

[110] See id. at 433.

[111] Id. at 434.

[112] Id. at 435.

[113] Id. at 434.

[114] Id.

[115] Id. at 435.

[116] Id.

[117] See id.

[118] The Kentucky legislature has already attempted to create separate classes of voters. Ky. Rev. Stat. Ann. § 117.088 (West, Westlaw current through 2015 regular session). This statute allows cities of a certain size to authorize in-person early voting for blind and visually impaired voters. While the existence of this statute likely does not create an affirmative duty for the legislature to enact early voting for everyone, it is likely that the statute is unconstitutional under Obama for America.

[119] See Michael Cooper, Fact-Checkers Howl, but Campaigns Seem Attached to Dishonest Ads, N.Y. Times, Sept. 1, 2012, at A14, http://www.nytimes.com/2012/09/01/us/politics/fact-checkers-howl-but-both-sides-cling-to-false-ads.html?_r=0.

[120] Id.

[121] Id.

[122] Id.

[123] Id.

[124] Bill Adaire, PolitiFact Wins Pulitzer, PolitiFact.com (Apr. 20, 2009, 6:29 PM), http://www.politifact.com/truth-o-meter/article/2009/apr/20/politifact-wins-pulitzer/.

[125] Id.

[126] PunditFact, PolitiFact.com, http://www.politifact.com/punditfact/article/ (last updated Nov. 15, 2015).

[127] Amy Gahran, Debates, Facts and Live Tweeting: How Politifact and NPR Do It, Poynter (Oct. 8, 2008, 2:10 PM) http://www.poynter.org/news/91955/debates-facts-and-live-tweeting-how-politifact-and-npr-do-it/.

[128] Id.

[129] Whitney v. California, 274 U.S. 357, 377 (1927) (Brandeis, J., concurring).

[130] E. Ill. Univ., Presidential Campaigns: Packaging the Presidents, http://www.eiu.edu/eiutps/campaigns.php (last visited Mar. 22, 2015).

[131] Rickert v. State Pub. Disclosure Comm'n, 168 P.3d 826, 831-32 (Wash. 2007).