Should There Be a Consumer Protection Law for Campaign Ads?

Back when I worked as a commercial lawyer, if I had ever argued that the laws against securities fraud infringed on my client's free speech rights, I'd be laughed out of court. And rightly so: The law recognizes that functioning markets are important enough to our society that laws protecting investors and consumers from false speech are constitutional.

Now that I work in the areas of government ethics and campaign finance, I often hear that political speech is so important that Americans shouldn't have any protection -- even from paid political ads that are flat-out false. Take the recent ad run by the Joe Coors for Congress campaign that accuses Congressman Ed Perlmutter of "working the system" because "Mrs. Perlmutter" went to Washington, D.C. when Ed Perlmutter was elected and was paid as a lobbyist for the failed solar company Solyndra, which received a federal loan guarantee in 2009 and later declared bankruptcy.

According to the Denver Post editorial board, what the ad doesn't say is that "Mrs. Perlmutter" the lobbyist was divorced from Congressman Perlmutter before the Solyndra guarantee. Not to mention, her firm didn't lobby on the Solyndra guarantee, nor did Rep. Perlmutter vote on which guarantees were given out.

The Post also said "The facts are twisted to be technically true. What's absolutely false is the ad's insinuation that Perlmutter is corrupt." I'd take it a step further: The ad makes a "materially misleading omission," leading the viewer to a false conclusion by leaving out a critical fact. In business law, that's the same thing as making an affirmatively false statement.

Colorado has a law on the books forbidding false statements about candidates in state elections, though district attorneys routinely refuse to enforce it. In any event, it doesn't apply to an election for Congress.

But why can't political ads be held to the same standard as investment prospectuses or ads for consumer products? In all of these cases, Americans are making important decisions and should be entitled to base their decisions on truthful information. If political speech is so important to our democracy, why do we tolerate false advertising?

It's a question that will only become more important as more and more money is spent in every election. Only time will tell if the diminishing voice of media "fact checks" can speak loudly enough to correct misinformation spread by well-financed interests.