Digital Politics Podcast
The Digital Politics Podcast from Frontline Strategies breaks down the top trends, headlines, and strategies shaping GOP digital. Hosted by Mike Hahn, each episode brings insider insights you won’t hear anywhere else.
Digital Politics Podcast
Campaign Finance at a Crossroads: John Pence on NRSC v. FEC
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John Pence, CEO of Frontline Gov. Relations & General Counsel at Frontline Strategies, joins us to discuss the landmark NRSC v. FEC case and its potential to transform campaign finance. Drawing on his extensive experience with election law, Pence breaks down how the case could remove long-standing limits on coordinated spending between campaigns and political parties. We explore what these changes could mean for consultants, candidates, and the future of political advertising.
Learn more: Frontlinestrategies.co
Hello and welcome to the Digital Politics Podcast. I'm your host, Mike Hahn, president of Digital at Frontline Strategies. Every month we promise to break down what matters to the GOP digital industry, talk to the people driving the change, and give you the insights you won't find anywhere else. This month's guest is a man who keeps us on the right side of the law here at Frontline, serving as our general counsel while also leading frontline government relations as the CEO. I've had the privilege of working alongside him on both the Trump 2016 and 2020 campaigns where he served as senior advisor. He then served as of counsel in Ice Miller's Washington, D.C. office, practicing political and corporate law, and then his own law firm of Pence Law Group in D.C. I'm also fortunate to call him a friend after all of these years in the trenches together. John Pence, welcome to the show. Mike Hahn, thanks for having me. Of course. Well, we wanted to have you on uh when we first started the podcast, uh, definitely on some episode, and I thought that this would be the perfect episode to do it because there's a big case in front of the Supreme Court, and I'm wondering if you could break it down for us.
SPEAKER_02Yeah, this is a huge case.
SPEAKER_00So I wanted to talk to you because the case we're talking about is, of course, NRSC versus FEC. If you've been in any consultant circles in the last month, you've heard about this case. Just a quick disclaimer here as of today on June 24th, we're recording this at 9 a.m. This case has not been decided by the Supreme Court. Um, but we want to just get ahead of it in case it does happen to come down uh at some point in the next couple weeks here. So this was a case that originated back in 2022 when I was actually at the NRSC. It was prompted by Ryan Dollar and his amazing team over there. Um he's now at the NRCC, but nonetheless, I wanted to shout out the 2022 NRSC legal team. And this basically boils down to a question about coordination, right? So I'm wondering if you could put some color on this case and how it could affect some of the consultants listening here.
SPEAKER_01Yeah, absolutely. So NRSC versus FEC, it was argued before the Supreme Court uh last December. And as you mentioned, we would expect the high court to issue their opinion any day now. Um and this, frankly, would be um probably the most significant campaign finance ruling since the Citizens United decision. Um and the issue, obviously, before the court is whether current law limits how much a political party can spend in coordination with candidates. This is, you know, examples of that include like party-created ads approved by a candidate and communications developed jointly with campaigns. So let's say Mike Collins for Senate wants to do an ad with the RNC. Right now, there are limits to how much the RNC in coordination with the Mike Collins for Senate campaign can spend on that ad. This um Supreme Court case, if the court rules in favor of the NRSC, could potentially remove those campaign uh finance restrictions and essentially allow for unlimited coordinated party spending with uh political campaigns, which would be a big win for free speech. And hopefully the high court rules in favor of the NRSC.
SPEAKER_00Yeah. I mean, there's a lot of legalese here, right? There's the term coordinated and then there's the term independent party expenditure. For listeners that aren't necessarily following this all that too closely, what's the distinction between these terms and how is the law kind of treated those things differently?
SPEAKER_01Yeah, so the FEC has in the laws that govern federal campaign finance, the federal election campaign act, have often looked at coordinated expenditures differently than an outside spend like a super PAC. And that's especially true since the Citizens United holding in which super PACs could spend unlimited monies and could do that in a way that campaign committees and party committees cannot. Um but an IE is something that allows money um to be spent in support of a particular campaign, but done independently. So let's say the RNC wants to run an IE, an independent expenditure ad in Georgia, um, and they want to go up on air and say, we're gonna run all um these ads in support of Mike Collins in the Atlanta area. It costs $100,000 to run those TV ads. We would we would have to, under current campaign finance law, um, put that money in a special IE pot and spend that hundred thousand um in a way that is independently done and not in coordination with Mike Collins. That means the RNC's ads team, their consultants will have to decide how that money gets spent, what's the content of it, and they can't coordinate. They can't communicate um publicly or privately with the campaign on what that ad should say. So they have to walk this fine line between not violating FEC coordination prohibitions and also not triggering the uh campaign contribution limits by setting up special IEs. So as you can see, it's this very delicate legal landscape that consultants and committees alike have to navigate with legal counsel.
SPEAKER_00I'm just face it's semi-laughable, right? Because you know, if you were to just pull the average American in and tell them that the RNC is only limited on what they could spend on its own candidates, I think they'd be dumbfounded. It's kind of funny how how we create these laws for ourselves that just make no sense.
SPEAKER_01And and this is why, you know, the the Federal Election Campaign Act was first passed in 1974. It was a post-Watergate uh congressional act that was supposed to root read out, you know, anti-corruption and spending and quid pro quo politics. But as that statute remains in effect, um, there's a lot of First Amendment concerns that, especially conservatives have had with that um piece of legislation. And it's been eroded away over time in support of the First Amendment. And this, you know, latest NRSC versus FEC decision, as I mentioned, would be a huge win for free speech because um it does, to your point, Mike, it's there's a lot of nonsensical restrictions that stifle political ads, political activity, political free speech. And right now, this coordination balance and how you can't coordinate with the candidate, but you're the party, of course you're supporting that person. Uh why should they be limited? And why should that amount that a coordinated ad between the political party and the overall uh federal party or state party, why should that be um constrained? Exactly.
SPEAKER_00All right, so let's just walk through the different outcomes that can come of this case before we get into how you know this might change the everyday life for consultants and and members of the party. So we said this, the ruling can come really any day now. The Supreme Court, of course, has its surprises, but walk us through some of the different outcomes and what's likely to happen here.
SPEAKER_01So we'll start with if you know the the FEC and the um status quo remain. So what's interesting about this case and the way that it's come up through the courts is the government, as you can imagine when this litigation started, um, the government was on in favor of the FEC's position that the coordinated um limits should remain and that the NRSC should lose this argument. Well, thanks to President Trump, Republicans back uh in power in Washington, the DOJ has actually switched over in this litigation in support of the NRSC's arguments, and now they're litigating in favor of the NRSC as this has made it up to the Supreme Court. So a lot of the usual suspects on the on the FEC Democrat side, Mark Elias and others, have joined as as a friend of the court in arguing in support of what was a former government's position. So very interesting twists of events there with the change in power. But if this ruling um is is limited and the status quo remains, you'll see business as usual as um independent expenditures will be something that state parties and and national parties will continue to need to create and not coordinate with the um candidates and the candidates' uh political campaign committees. You'll see hybrid ads, you'll see joint fundraising committee advertising done, JFCs, and all that will have to be in compliance with these firewall policies. And we know very well at uh frontline strategies and and consultants should too, um, that you, you know, one side of a firewall can't coordinate with another, and those prohibitions on coordination between a committee and an outside group um need to remain in place. But if the Supreme Court overrules us and and considers the uh First Amendment um interests outweigh the federal limits on coordinating spending um and the NRSC wins, that will essentially allow um unlimited amounts in coordination with candidates. So, what that means for consultants and political advertisers and and those that often would listen to this podcast, that the coordination rules would become less restrictive because now a uh RNC can coordinate and s and work very closely with the candidates, like that example of RNC and Mike Collins for Senate. So the coordination rules are less of a concern. The firewalls between the party and the campaign operations become less important, as I mentioned. And then I think there there will be an increased demand for compliance as people are trying to understand and make sense of this opinion. What also provides uncertainty in the legal world is the FEC, even if the NRSC wins this argument, the FEC currently does not have a quorum. There aren't enough commissioners for the FEC to issue what are called advisory opinions. So we won't have guidance from the FEC on how to apply the Supreme Court ruling to the new and the current FEC commission. So I think that will also breed more litigation as we move into the future. So companies like Frontline Strategies and others will re need to remain vigilant in how the court ruling is issued, how it should be applied, and of course, what is past precedent for campaign finance principles and how should those be applied if and when the First Amendment, for lack of a better word, trumps the uh federal election campaign laws in this case.
SPEAKER_00Now let's just say the Supreme Court does rule in favor of the First Amendment here. These changes would take place immediately and ultimately could affect the midterms, right?
SPEAKER_01They would. They would. Um, you know, immediately you could see RNC saying we are going to spend in coordination with Mike Collins, we're gonna spend $10 million on ads in Georgia. And it can say, you know, uh it can have endorsed by, uh paid for by the RNC. But uh I'm Mike Collins and I support this message at the end of that. And and that could be a huge um shot in the arm for Republicans in states that maybe don't have huge funding compared to some other battleground states, but now they have access to RNC funding. And I think you'll see new support into RNC and some of the party um state and national party committees, um, and maybe less money going into super PACs because now you can directly coordinate. Um, so I think it will change the dynamic between uh national party and and super PACs and where donors ultimately are prioritizing their money.
SPEAKER_00Another key point here, I think it's important to mention the the effects that this could have on the midterms, especially when the DNC's, I believe, $18 million in debt, and the RNC, the NRCC, and the NRSC are all beating their uh counterparts in both raise and cash on hand. So it could really shift the focus of the midterms. But before we get into all of the uh partisanship of this issue, um I want to talk to you about the two sides of this, right? Um the Republican committees are arguing against the limits, they're saying that they're unconstitutional. The Democrat committees are of course defending the limits, like you said. Would it the Democrats also benefit from this too, though? I I don't necessarily understand why they're taking the opposition point here. I don't know if it's just a political point that they're trying to make or, you know, if they're just operating differently than Republicans right now.
SPEAKER_01Well, I mean, the Democrats, the party who have, you know, cried out against Citizens United and the First Amendment uh win that that was for uh political speech. Um there is a a great amount of hypocrisy here that they're now defending the status quo and not supporting um the NRSC's position. And and I think that hypocrisy to your point stems from um they they they essentially want super PACs to be the funnel of where campaign spending's going. And they would rather have that because I believe that you know, as the DCCC and the DNC are so undercapitalized this cycle that if the Supreme Court rules in favor of the NRSC, that unleashes the NRSC, the NRCC, the RNC to use the money that they've, you know, been building up and immediately deploy it in coordination with candidates. And that would be a great political advantage to the better capitalized party infrastructures, which the Democrats currently don't have. So that's more of, in my opinion, why they're trying to defend the status quo and not unleash those new funds and political speech um to to try to keep the level feel even and move money into super PACs where they can move it.
SPEAKER_00So we keep talking about probably one of the most consequential Supreme Court decisions in history, but certainly uh i in this last century here. Um Citizens United. Does this case have the potential to be more consequential than Citizens United? I feel like I have my opinion on this. I feel like Citizens United was just such an important watershed moment for the case for the court. Um is this an insider baseball issue, or can you see people actually making a fuss about a case like this in front of the court?
SPEAKER_01No, I think this I think this is the way that Citizens United impacted Super PACs and other outside groups like 501 C4s and allowed for unlimited giving and corporations, unions to give to those outside groups. Um that that had such a um you know tectonic shift in campaign finance um for outside groups. I'd say the same could happen here for the political parties, for the RNC, for the DNC, if coordinated contributions are seen and the restrictions therein are seen as unconstitutional. I actually think it could be a shot in the arm for the RNC and the DNC in terms of donor funding and interests, um, because if um if those contribution restrictions remain, um the money will will remain to stay on the outside. And why give when you can't be as effective because you can't coordinate? And um, if you have the opportunity now for unlimited coordination if you give to the RNC DNC, I actually think it supports those um party, national party infrastructures.
SPEAKER_00It's a good point. I mean, uh I'd imagine a lot of the folks listening here are actively running super PACs right now in the races that they're they're a part of. Could this decision ultimately put an end to super PACs in some races when you know that national party committees are going to get involved? What do you think?
SPEAKER_01Well, if you don't want to coordinate with the candidate and you want to be on the outside and truly on the outside, pushing a message that isn't endorsed or coordinated by the candidate and have the autonomy uh and freedom to do so, a super PAC, I think, will still be a great fit um for that political operative. Um, however, if you are on the campaign committee consulting them, um, you know, this now adds a new dimension where you can go to that state party or you can go to the federal party of the RNC and say, hey, we want to do this, but we're gonna need your support in coordination to uh really like blow up this ad across, you know, the state. And um, we think it would be worth um your time and resources. So I I can imagine almost like a bidding process amongst the different Republican Senate candidates if the NRSC wins this ruling, and that they'll be asking for a pot of money of the coordinated um political um ads of the RNC can now um unlimited spend with them. And they'll say, hey, I know you guys have a pot of, let's say, a hundred million dollars. We think you should spend 20% of that in this race. And that will be kind of a jump ball where campaign managers and the campaign committee are going to be running up to the RNC um and the NRSC or NRCC uh making their case as to why that pot of money should be coordinated with them for the spends.
SPEAKER_00It will be interesting, that's for sure. Um I want to move into a couple quick rapid fire questions. All right. If you could have just because we're staking on the Supreme Court theme here, if you could have dinner with any Supreme Court justice, past or present, who would it be?
SPEAKER_02Um That's a really good question. Um you know I think uh I think it would be um I think it would be the current justice, Clarence Thomas.
SPEAKER_01Um you know, he's had a very consequential career for conservative jurisprudence. Um he also swore in my uncle as vice president, so we've always just admired his his view on the Constitution. And um I think he would be a very interesting person to get together with.
SPEAKER_00That would be my answer. So maybe we'll make a dinner reservation for three sometime. Let's do it. Um in terms of this case that we just talked about NRSC vs. FEC, do you think this is gonna be a party line ruling here?
SPEAKER_01Um I think this could be majority in favor of the NRSC and not just party line. Um uh, you know, uh we we only need we only need five justices, and I think Gorsuch during the oral argument hearings, him and Thomas seemed very skeptical of continuing these restrictions on party coordinated spending. Um, so you know, it's good to hear Gorsuch in that argument, you know, showing that he's skeptical of the FEC and Mark Ellis, uh, Mark Elias. But um I think we could peel off um I think we could peel off, you know, maybe, maybe six votes here. Um I mean, or even seven, just because the jurisprudence of uh the First Amendment, and like I said, you know, a 1974 law that was very focused on quid pro quo corruption, since Citizens United and the First Amendment decisions that have been passed since, these concerns um from you know the 1970s are kind of a moot point as it applies to campaign finance and spending. Um, so I think you know, the court has an opportunity to sort of acknowledge that reality and like use that. I mean, it's just this kind of nonsensical the IE landmines and hybrid ads and JFCs. Um it's sort of this, you know, uh nonsensical game that. That um has to be played, but I think it could be streamlined and people could actually get to political advocacy, um, supporting their candidates, and um do so in a way that actually promotes democratic values and participation. So I think there's a really strong First Amendment argument here that could could win the day and hopefully win not just uh majority of conservatives, but hopefully more of the court as well.
SPEAKER_00Just a fun little fast fact here for the people listening Citizens United was decided on a five-four majority, and three of the five are still currently on the Supreme Court in 2026. That would be John Roberts, Clarence Thomas, and Samuel Alito. So it'll be interesting to see if uh how they vote. Uh last question here. Um I talked about our extensive uh career together going back to Trump Tower in 2016 when I was uh sitting next to your desk at a bookshelf that I didn't even have room for with my legs. Um you've had a long career since then. What is the coolest moment in your career uh dating back to to when you first got out of school at uh at William and Mary and then Indiana?
SPEAKER_01I think um I think we had a lot of fun together at all the Trump rallies that we put together, right? I mean, whether it was like, you know, being in Montana at a hangar or um, you know, in the middle of Pennsylvania and Amish country, getting to see uh, you know, every corner of the country and doing so at such a young age and you know, seeing the passion that people have for America and you know the the patriotism that exists um all across all across our country, I think, was a really unique experience as a as a young person and professional. And that um, you know, like now you see a lot of our colleagues that were at rallies, you know, like putting up uh rally signs and putting up, you know, bike racks. They're now, you know, uh chiefs of staff of the vice president, or they're members of Congress, or, you know, um they're all over the country doing really cool things. And I think kind of having that um camaraderie, but also that shared experience is really special. It's sort of like being, I'd imagine, on like a winning team and um being on a winning team that you know goes through uh the trenches and and you know, we won a Super Bowl in 2016. We shocked the world, and uh that was a that was a great experience to be part of. And I'm excited to see too, the president back in the White House, uh things he's doing for our country, and that you know, he had a second chance, right? Um to continue the agenda to make America great again. So it's it's been really neat to see that. But I I'd say being around the country and seeing that firsthand was was um the most memorable for me.
SPEAKER_00You know, John and I may not be chief of staff to the vice president or a member of Congress, but we can tell you where the best mermaid bar in Montana is. It is very cool. If you're ever out there, hit us up and and we'll let you know.
SPEAKER_02We got screwed, we got screwed.
SPEAKER_01And you know, if you need like a last minute uh step and repeat done, um we can we can get that done as well.
SPEAKER_00Ironing skills on point.
SPEAKER_01For sure.
SPEAKER_00John, thank you for coming on and and talking to the people about this important case that we're we're eagerly waiting to hear from the Supreme Court on. Um, I want to let the people know where can they follow you on social media? I imagine you're gonna be tweeting about this when it comes out.
SPEAKER_01Yeah, for sure. Looking forward to amplifying this. Um, you can check uh my social media out at JEPence uh and you know, tag uh frontline strategies and we'll uh keep winning hopefully into November. And uh as soon as this opinion comes out, we'll try to talk more about it. Thanks for having me on.
SPEAKER_00Thanks, John, and thank you guys for listening to the Digital Politics Podcast. If you liked what you heard, share with your friends and be sure to like, follow, or subscribe to the show. That's going to do it for us, and we will be back in July for episode nine.