The National Endowment for Fact-Checking Act

The quality of democratic governance in the United States is deteriorating. A healthy democracy requires a healthy information ecosystem. Like termites eating away at the foundations of a house, the electronic amplification of lies and misinformation is stealthily eroding the foundations of American democracy. Congress must act now to address the problem before it is too late. The National Endowment for Fact-Checking Act will help preserve the integrity of American democracy by reducing the electronic amplification of false and misleading claims related to elections and public health. The Act is entirely consistent with the First Amendment because it relies on private companies, not government sanctions, to de-amplify habitual liars.

Disinformation is the New Nuclear Threat

In my early career, I worked for the federal government on nuclear proliferation and nuclear arms control issues because I feared that nuclear weapons posed a threat to humanity and I wanted to help mitigate that threat. For the past few years, I have devoted much of my time as a scholar to the problem of disinformation. Today, I fear that traditional tools of disinformation, combined with modern technologies for electronic amplification, pose a significant threat to democracy in the United States and elsewhere. I drafted the National Endowment for Fact-Checking Act to help mitigate that threat. I hope you agree that my proposed legislation would help reduce the threat to democracy presented by the electronic amplification of misinformation.

- David Sloss

John A. & Elizabeth H. Sutro
Professor of Law
Santa Clara University
dlsloss@scu.edu

The Act delegates certain tasks to a new, non-partisan, non-governmental organization called the National Endowment for Fact-Checking (NEFC). NEFC would distribute federal funds to existing fact-checking organizations to enhance their effectiveness and efficiency. NEFC would provide quarterly reports to Congress and the Federal Communications Commission (FCC) to shine the light of truth on persistent offenders. NEFC's reports would identify individuals with large electronic megaphones who repeatedly disseminate false and misleading claims about elections and public health after receiving warnings not to do so. NEFC's reports would also identify companies that continue to amplify the voices of persistent offenders after receiving recommendations to de-amplify them. The statutory scheme nudges companies to de-amplify persistent offenders, but does not compel them to do so. It also provides incentives for habitual liars to tell the truth, or risk losing their access to large electronic megaphones.

Regulated Parties:

The statute regulates private companies that provide electronic amplification services for individuals. Under the statute, those companies are known as “electronic megaphone companies,” or “EMCs.” Empirical studies show that the interaction among different types of technologies facilitates the rapid dissemination of misinformation to large audiences. Therefore, the statutory definition of EMCs includes companies that provide electronic amplification services for messages transmitted via radio, television, social media, blogs, and podcasts.

The statute also regulates “persons with large electronic megaphones,” or PLEMs. The statutory definition of PLEMs includes numerical thresholds; individuals whose electronic reach falls below those thresholds are exempt from regulation. Empirical research demonstrates that a small number of individuals—persons with large electronic megaphones—are responsible for the vast majority of the harm caused by electronic amplification of misinformation related to elections and public health. Under the statute, independent fact-checking organizations would issue warnings to PLEMs who disseminate false or misleading claims related to elections or public health. If individual PLEMs ignore those warnings, NEFC would encourage (but not require) EMCs to de-amplify them. PLEMs who heed warnings and refrain from spreading false/misleading claims would retain unrestricted freedom of reach.

Independent Fact-Checking Organizations

Any system to reduce electronic amplification of false/misleading claims requires some entity or entities to decide, on a case-by-case basis, whether a particular claim is true or false. Empirical evidence demonstrates that individuals are not very good at making those judgments for themselves. We cannot trust private companies to discriminate reliably between true and false claims because a system entrusting that responsibility to private companies grants too much power to a small number of large, private companies. The First Amendment bars Congress from delegating to any government agency or official the primary responsibility for making case-by- case decisions about which claims are true and false. Accordingly, the statute delegates that responsibility to independent fact-checking organizations.

Under the statute, the federal government would provide funding to NEFC and NEFC would distribute funds to existing fact-checking organizations. NEFC’s grantees would be required to operate in accordance with the code of principles adopted by the International Fact- Checking Network. Grantees could use federal funds to hire staff with substantive expertise related to elections and public health. They could also use federal funds to hire IT staff to help automate some fact-checking tasks so that they can process large volumes of information more efficiently. All grantees would be required to:

Monitor the public communications of PLEMs;
Identify public communications by PLEMs that present false or misleading claims related to elections and/or public health;
Issue warnings to PLEMs who disseminate false or misleading claims, and to the EMCs that provide electronic amplification services for them, and inform NEFC whenever they issue such warnings.

The National Endowment for Fact-Checking (NEFC)

The statute acknowledges that NEFC has been incorporated as a private, nonprofit corporation under the laws of the District of Columbia. The statute states explicitly that NEFC “is not an agency or establishment of the United States Government.” Under the statute, NEFC’s primary responsibilities are to:

Provide funding to independent fact-checking organizations, and provide oversight to ensure that those organizations comply with statutory requirements;
Encourage, but not require, EMCs to de-amplify PLEMs who repeatedly disseminate false or misleading claims after receiving warnings not to do so; and
Provide detailed, quarterly reports to Congress, the FCC, and the public at large. NEFC’s reports would specifically identify both the PLEMs who continue to disseminate false and misleading claims after receiving warnings, and the EMCs that continue to amplify those PLEMs after receiving recommendations to de-amplify them.

NEFC will be governed by a Board of Directors. The Board must at all times be comprised of an even number of Directors. Board members may be independents, Democrats, or Republicans, but the Board must have an equal number of Democratic and Republican Directors. The Board will make all decisions by majority vote. All Board members and all NEFC employees must swear an oath to carry out their responsibilities in a non-partisan manner, prioritizing a principled commitment to truth over any partisan political agenda.

The Federal Communications Commission (FCC)

The statute creates two types of binding obligations for EMCs. They must prepare quarterly reports to identify all persons who use their electronic amplification services who qualify as PLEMs under the statutory definition. They must also pay fees assessed by the FCC to fund implementation of the statute. The statute authorizes the FCC to impose penalties on EMCs who fail to pay the statutory fees or fail to file the mandatory reports. The statute does not grant the FCC authority to impose penalties on EMCs that continue to amplify PLEMs after receiving recommendations to de-amplify them (although the FCC may have such authority under existing law). The statute grants the FCC authority to promulgate regulations to promote effective implementation of the law.

What Would the Statute Accomplish?

By providing federal funding, the statute would enable existing fact-checking organizations to perform their missions more effectively and efficiently. The overall statutory scheme—including warnings to PLEMs who disseminate false/misleading claims, recommendations to EMCs to de-amplify PLEMs who ignore such warnings, and regular reports to Congress and the FCC to “name and shame” EMCs who refuse to follow such recommendations—will reduce the electronic amplification of misinformation related to elections and public health. The statute provides incentives for PLEMs to tell the truth, or risk losing their ability to reach large audiences via electronic megaphones. It also encourages EMCs to de-amplify PLEMs who ignore repeated warnings, or risk reputational harm that could affect their profitability.

The statute does not impose civil or criminal penalties on PLEMs who persistently disseminate false or misleading claims, nor does it impose penalties (other than reputational harm) on EMCs who continue to amplify those PLEMs. Hence, skeptics may wonder whether the statute would actually reduce electronic amplification of misinformation. In fact, the absence of civil or criminal sanctions is a feature, not a bug. The lack of such penalties is a key feature that will help the statute survive constitutional scrutiny under the First Amendment.

NEFC’s reports to Congress will provide a factual basis for Congress to determine—after the law has been implemented for a few years—whether a statutory scheme that relies primarily on “nudging” provides a sufficiently strong remedy to protect American democracy. Congress might ultimately decide, based on NEFC’s reporting, that civil and/or criminal penalties are necessary to protect our democracy from the danger posed by electronic amplification of misinformation. In that case, an amended statute including such penalties would be much more likely to survive a First Amendment challenge because the government could argue that it tried less restrictive means (i.e., nudging), but those less restrictive means did not achieve a sufficiently large reduction in the electronic amplification of lies and misinformation related to elections and public health.

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The text of the draft statute A constitutional analysis of the proposed statute Answers to frequently asked questions

Text of Proposed Legislation

This Act may be cited as the “National Endowment for Fact-Checking Act.”

The purpose of this Act is to protect American democracy from the electronic amplification of dangerous lies and misinformation related to elections and public health. Since it would pose unacceptable risks to free speech to empower any executive branch agency or official to decide on a case-by-case basis whether a particular claim is true or false, the Act delegates that responsibility to independent, non-governmental fact-checking organizations.

Complete text of proposed legislation in PDF Format Complete text of proposed legislation in word Format

Constitutional Analysis of Proposed Legislation

The attached paper analyzes three potential claims that could be raised to challenge the constitutional validity of the proposed National Endowment for Fact-Checking Act. The first one involves claims by “electronic megaphone companies” (EMCs). The next two involve claims by “persons with large electronic megaphones” (PLEMs). For the reasons explained in the attached paper, I conclude that the potential claims by PLEMs would almost certainly fail. The outcome of a First Amendment claim by EMCs is more difficult to predict, but the proposed statute, if enacted, would likely survive constitutional scrutiny.

Constitutional analysis of the proposed legislation in PDF format Constitutional analysis of the proposed legislation in Word format

Individuals who Endorse the Proposed Legislation

The individuals identified below have endorsed the proposed legislation. In this context, "endorsement" does not mean that they agree with every clause in the draft legislation. It means they agree that legislation similar to the draft statute:

It would help protect American democracy from the threat posed by electronic amplification of lies and misinformation
And that courts should find that such legislation is constitutionally valid.

#	Title	Name	Institutional affiliation
1	Professor	Mark Otto xnahuk	Santa Clara University
2	Doctor	Jacob Thornton	San Jose State University
3	Doctor	Patric the Bird	San Jose State University

Frequently Asked Questions

To Be Added

Resources on Disinformation

To Be Added