AKINS v. FEC (91-2831)

On June 9, 1992, the U.S. Court of Appeals for the District of Columbia Circuit, in a per curiam order, directed the district court to clarify its order of January 21, 1992. (Civil Action No. 92-5124.) In that order, the district court had required the FEC to "issue a final decision on the merits of the Plaintiffs' administrative complaint forthwith, and in no event later than 4 p.m. on May 29, 1992."

The court of appeals stated that it found the above language confusing: "While it could be interpreted, as the FEC has suggested, as a direction to the agency to take final action by May 29, we question this interpretation because the district court has not found that the FEC's failure to act on appellees' administrative complaint was 'contrary to law' as required by 2 U.S.C. §437g(a)(8)(C)."

The court further stated: "We would have serious doubts about the propriety of an order compelling the FEC to take final action absent a finding by the district court that the agency's failure to act was 'contrary to law.' Upon clarification, the district court should allow the FEC sufficient time for any action the clarified order may contemplate."

(The FEC had interpreted the order as a mandatory deadline for final action and had asked the district court to clarify the order by deleting that language. When the court refused, the agency filed an appeal.)

In response to the directions from the court of appeals, the district court issued a new order on June 26, 1992. Stating that its previous order "was not intended as an injunction," the district court reopened the case to decide the "contrary to law" issue. However, shortly thereafter, on July 7, 1992, the court dismissed the case as moot since the FEC had completed action on the administrative complaint (MUR 2804). Civil Action No. 91-2831 (CRR).

Source: FEC Record, August 1992, p. 11.

Akins v. FEC, No. 91-2831 (D.D.C. Jan. 20, 1992); on remand, No. 92-5124 (D.C. Cir. June 9, 1992); on remand (D.D.C. June 26, 1992).

AKINS v. FEC (92-1864)

On September 29, 1995, the U.S. Court of Appeals for the District of Columbia ruled that the FEC's use of a "major purpose test" to narrow the definition of "political committee" was valid, that its application of the "major purpose test" in this case was reasonable, and that its investigation into the matters raised by appellants was adequate. The court therefore affirmed the district court's ruling dismissing appellants' complaint that the FEC's actions were contrary to law.

On December 6, 1996, the U.S. Court of Appeals for the District of Columbia Circuit, sitting en banc, reversed the district court's decision.

On June 1, 1998, the U.S. Supreme Court ruled that Mr. James E. Akins and several other former government officials had standing to challenge in federal court the Commission's dismissal of an administrative complaint they filed in 1989 against the American Israel Public Affairs Committee (AIPAC). The Supreme Court also referred questions about the membership status of AIPAC members to the Commission.

Administrative Complaint

On January 9, 1989, Mr. Akins and his associates filed an administrative complaint with the FEC alleging that AIPAC, an organization that lobbies public officials and disseminates information about federal candidates and officeholders, failed to register and report as a political committee, after it had made contributions to and expenditures on behalf of federal candidates in excess of $1,000.

The Federal Election Campaign Act (the Act) defines a political committee as any committee, association or other group that receives contributions or makes expenditures to influence federal elections in excess of $1,000 during a calendar year. 2 U.S.C. §431(4)(A). However, a statutory exception to the definition of expenditure allows membership organizations to make disbursements of more than $1,000 for campaign-related communications to their members, without their counting as contributions or expenditures.

AIPAC claimed that its communications to its members fell within this exception and, therefore, that it did not have to register as a political committee or disclose any of its financial activities to the FEC.

The FEC did not agree. In its view, AIPAC's disbursements did qualify as expenditures because its members did not qualify as members under the Act. The Commission, nonetheless, concluded AIPAC was not subject to the registration and disclosure rules applicable to political committees. The Commission believed that, because AIPAC's major purpose was not influencing federal elections, it did not qualify as a political committee even though it had made expenditures in excess of $1,000. The Commission dismissed the complaint.

District and Appellate Courts Decisions

Mr. Akins and the other plaintiffs filed suit in U.S. District Court for the District of Columbia charging that the FEC failed to proceed on the administrative complaint and challenging the Commission's interpretation of what constitutes a political committee. The district court ruled in favor of the FEC, agreeing with the "major purpose" testthat an organization that receives contributions or makes expenditures of more than $1,000 becomes a political committee only if its major purpose is the influencing of federal elections.

The U.S. Court of Appeals for the District of Columbia Circuit affirmed the lower court ruling, but an en banc panel of the same appellate court reversed the district court decision. The en banc panel, referencing both Buckley v. Valeo and FEC v. Massachusetts Citizens for Life, Inc., found that the major purpose test can only be applied to organizations that make independent expenditures, not contributions, which is what was in question in the administrative complaint against AIPAC. The court also rejected the Commission's argument that the appellants lacked standing to bring their claim to federal court. On behalf of the FEC, the solicitor general appealed the decision to the Supreme Court.

Supreme Court Decision

The Supreme Court focused its opinion on the three-pronged test of standingwhich a plaintiff must demonstrate to show there is a "case" or "controversy" under Article III of the U.S. Constitution injury in fact, causation and redressability. The high court also found that the plaintiffs' inability to obtain information about AIPAC's campaign-related finances satisfied prudential standing because it was the kind of injury that the Act seeks to address.

Injury in Fact. The Supreme Court found that the injury in fact in this case was that the plaintiffs were prevented from obtaining information about AIPAC's donors and the organization's campaign-related contributions and expenditures. It said that there is no reason to doubt that this information would have helped the plaintiffs evaluate candidates for public office, especially those candidates who received assistance from AIPAC. Thus, the court said, the injury in this case is both "concrete" and "particular." The FEC argued that the lawsuit involved only a "generalized grievance" shared by many (a kind of grievance for which standing usually is not conferred); the Supreme Court disagreed. In such cases of "generalized grievance," the court said, the harm is usually "of an abstract and indefinite nature"not the kind of concrete harm that the court found here.

The court concluded that, "[T]he informational injury at issue here, directly related to voting, the most basic of political rights, is sufficiently concrete and specific such that the fact that it is widely shared does not deprive Congress of constitutional power to authorize its vindication in the federal courts."

Causation and Redressability. The high court also found that the harm asserted by the plaintiffs was "fairly traceable" to the FEC's decision to dismiss its administrative complaint, and that the courts have the power to redress this harm.

The Supreme Court also rejected the FEC's argument that, because the agency's decision not to undertake an enforcement action is generally an area not subject to judicial review, 2 U.S.C. §437g(a)(8) should be interpreted narrowly.

"Major Purpose" Test

With regard to the "major purpose" test, the Supreme Court referred the matter back to the FEC because of the uncertainty of the "membership" issue as applied to AIPAC.

Source: FEC Record, May 1994, p. 4; December 1995, p. 1; February 1997, p. 1; and July 1998, p. 1.

Akins v. FEC, No. 92-1864 (JLG) (D.D.C. Aug. 11, 1993) (on motion for amended complaint); (D.D.C. Dec. 8, 1993); (D.D.C. Mar. 30, 1994) (opinion); 66 F.3d 348 (D.C. Cir. 1995), rev'd, 101 F.3d 731 (D.C. Cir. 1996) (en banc), vacated and remanded, 118 S. Ct. 1777 (1998).

ALBANESE v. FEC

On March 12, 1996, the U.S. Court of Appeals for the Second Circuit affirmed the district court's decision to dismiss this case for lack of standing.

Background

This suit was brought by Sal Albanese, who chose not to challenge Representative Susan Molinari in 1994 after his unsuccessful attempt to unseat her in 1992, and on behalf of a number of his supporters.

In their original suit, plaintiffs challenged the constitutionality of the federal electoral system on the grounds that it financially handicapped campaigns to unseat an incumbent, thus discouraging potential candidacies. In an amended complaint, they specifically challenged the constitutionality of the Federal Election Campaign Act (the Act)alleging that it authorizes the use of private monies in federal electionsand the franking privileges enjoyed by incumbents.

District Court Ruling

In determining that plaintiffs lacked standing to bring this suit, the court applied the three-part test for standing; this test requires plaintiffs to identify (1) an actual injury that (2) is caused by the challenged act and (3) is likely to be redressed by the relief requested. The court found that plaintiffs in this case failed all three parts of this test.

Plaintiffs failed the first part because plaintiffs represented a potential candidate and supporters of his would-be campaign, rendering their alleged injury "abstract and conjectural." For instance, their alleged injury that large contributors diminish the influence of those who cannot give as much was "abstract and remote" in this case since the campaign that plaintiffs wished to support did not exist.

Plaintiffs failed the second part because, since their alleged injury was theoretical, they could not provide tangible evidence that the injury was caused by the Act. The court noted, "We will never know how much money might have been contributed to [Albanese's campaign] and how successful he might have been at the polls . . . ." The court further stated that, "Albanese opted not to participate in the election process; he was not prevented from doing so." The alleged injuries, therefore, were not traceable to the Act.

Lastly, plaintiffs failed the third part because their suggested remedyto declare the Act unconstitutionalwould not redress the injury. The court stated, "[If] plaintiffs' goal is to eliminate the contribution of private funds to politicians and thereby level the electoral playing field, declaring the [Act]a statute which limits such contributionsunconstitutional cannot be said to redress plaintiffs' injury."

Additionally, the court cited Buckley v. Valeo as a legal precedent upholding the constitutionality of the Act, and several other court decisions similarly upholding the constitutionality of the franking statute.

In closing, the court declared that it was outside its jurisdiction to address the plaintiffs' grievance, and that plaintiffs had to seek relief through the legislative and executive branches of government: "To the extent that the plaintiffs believe that a modification of the process would enhance its integrity, they must make the case for the validity of that belief with the political branches of our government. For just as fundamental to the political order of this democracy is the doctrine of separation of powers and the limited jurisdiction conferred upon the federal judiciary within that political order."

Source: FEC Record, July 1995, p. 8; and May 1996, p. 4.

Albanese v. FEC, 884 F. Supp. 685 (E.D.N.Y. 1995), aff'd, 78 F.3d 66 (2d Cir. 1996).

ANDERSON v. FEC (80-0272)

On April 10, 1981, the U.S. District Court for the District of Maine dismissed John B. Anderson v. FEC (Civil Action No. 80-0272P) in response to a motion to dismiss the suit filed by plaintiffs on the same day. The suit had been remanded to the district court after certification of constitutional questions to the U.S. Court of Appeals for the First Circuit. Several plaintiffsJohn B. Anderson, a candidate in the 1980 Presidential elections, the National Unity Campaign 441a(d) Committee and three individual plaintiffshad brought suit on September 8, 1980, asking the district court to certify the following constitutional questions to the appeals court:

• Does Section 441a(a)(1)(B), which entitles a national party committee to receive contributions of up to $20,000 per year from individuals, infringe on plaintiff's First and Fifth Amendment rights; and
• Does Section 441a(d), which permits a national party committee to make special "coordinated party expenditures" on behalf of its Presidential candidate, infringe on plaintiffs' First and Fifth Amendment rights?

Plaintiffs had also sought a preliminary injunction from the district court, directing the Commission to permit the application of Sections 441a(a)(1)(B) and 441a(d) to the National Unity Campaign 441a(d) Committee, which had registered as a political committee the day before plaintiffs filed suit.

District Court Ruling

On October 14, 1980, the district court certified plaintiffs' constitutional questions to the appeals court but denied plaintiffs' motion for a preliminary injunction. The court held that plaintiffs had not exhausted the administrative relief available to them under the election law. Moreover, the court noted that any injunction granted would have been permanent, rather than temporary, since the election would be held within two and one-half weeks of its ruling.

Appeals Court Ruling

On October 30, 1980, the appeals court granted the FEC's motion to remand the case to the district court for further fact finding. The court noted that, if plaintiffs had sought an advisory opinion from the FEC before filing suit, the court "...would likely have had more facts before us than we do presently and would have been better able to evaluate plaintiffs' constitutional claims."

Plaintiffs Seek Administrative Relief From FEC

On November 4, 1980, prior to seeking dismissal of their suit, plaintiffs requested an advisory opinion from the Federal Election Commission on the status of the National Unity Campaign and the National Unity Campaign 441a(d) Committee as national party committees operating on Mr. Anderson's behalf. In AO 1980-131, issued on November 20, 1980, the Commission determined that neither committee qualified as the national committee of a political party and, therefore, that neither committee was entitled to receive up to $20,000 in contributions from individuals or to make coordinated party expenditures.

Source: FEC Record, July 1981, p. 6.

Anderson v. FEC, 634 F.2d 3 (1st Cir. 1980) (en banc).

ANDERSON v. FEC (80-1911)

On September 9, 1980, the U.S. District Court for the District of Columbia dismissed the suit, John B. Anderson v. FEC (Civil Action No. 80-1911). The court determined that there was no longer a need for a decision either on the FEC's motion to dismiss the suit or on the substantive issues raised in the suit.

In the suit, plaintiffs had sought an expedited ruling by the court that John B. Anderson would be eligible as an independent candidate for the same post-election public funding as that provided Presidential candidates of "new parties," if he received five percent or more of all popular votes cast in the 1980 Presidential general election and met other requirements of the Act. Such a ruling, plaintiffs told the court, would immediately make large bank loans available to the Anderson
campaign.

The FEC had consistently argued that plaintiffs should have requested an advisory opinion from the FEC on the application of the Act and the Commission's new regulations to the Anderson campaign before seeking a court ruling. On August 13, plaintiffs did file an advisory opinion request (AOR 1980-96) with the FEC, and on September 4 the Commission issued an opinion declaring Mr. Anderson eligible for post-election public funding as the candidate of a new political party.

After issuing the Anderson opinion, the FEC filed a supplement to its motion to dismiss the suit, submitting the opinion and arguing that it fully supported its consistent position that the case should be dismissed. Plaintiffs, who had opposed the FEC's motion to dismiss, also filed their own motion to dismiss the case as moot.

Source: FEC Record, October 1980, p. 6.

ANTOSH v. FEC (84-1552 and 84-2737)

On August 30, 1984, the U.S. District Court for the District of Columbia issued an order granting the FEC's motion to dismiss Antosh v. FEC (Civil Action No. 84-1552) and denying the plaintiff's motion to file a supplemental complaint. On September 13, 1984, the court issued an opinion explaining the ruling. Following the court's order, Mr. James E. Antosh filed a second suit with the court on September 6, 1984 (Civil Action No. 84-2737). The second suit included a request by the plaintiff that the district court certify two constitutional claims to the U.S. Court of Appeals.

On January 5, 1988, the court ruled that Mr. Antosh lacked standing in his second suit to seek the court's certification of his constitutional questions to the appeals court. The court granted a motion by the FEC to dismiss the counts of his complaint which included the constitutional questions.

On March 24, 1988, the district court issued an order granting a further motion by the FEC for a summary judgment in the second suit. The court's order dismissed the remaining two counts of Mr. Antosh's complaint.

First Suit

Mr. Antosh, a registered voter in Oklahoma, is president of Shawnee Garment Manufacturing, Inc. On December 2, 1983, he filed an administrative complaint with the FEC alleging that the separate segregated funds of three international unions were affiliated with the AFL-CIO's political action committee (PAC)1 within the meaning of 2 U.S.C. §441a(a)(5). Mr. Antosh claimed that the four political committees had failed to disclose their affiliation in their respective Statements of Organization and, in making contributions to several political committees, had exceeded their single $5,000 contribution ceiling. (See 2 U.S.C. §§433(b)(2) and 441a(a)(2)(A).)

Furthermore, his complaint claimed that the election law and FEC Regulations recognized automatic affiliation between business federations and their members, on the one hand, while only a discretionary affiliation between a labor federation and its members, on the other. The plaintiff had alleged that this was discriminatory treatment in violation of the First and Fifth Amendments.

Pursuant to 2 U.S.C. §437g(a)(8), Mr. Antosh filed his first suit against the FEC in the district court on May 17, 1984. The plaintiff asked the court to declare that the FEC's failure to act on his administrative complaint within 120 days was contrary to law and to issue an order directing the FEC to proceed with an investigation into the complaint within 30 days.

On July 10, 1984, the Commission dismissed Mr. Antosh's administrative complaint, finding no reason to believe that violations of the election law had occurred. On the same day, the Commission also filed a motion with the court to dismiss Mr. Antosh's suit as moot. On July 23, 1984, Mr. Antosh requested that the court deny the FEC's motion to dismiss his case and grant his motion to file a supplemental complaint. In his proposed supplemental complaint, Mr. Antosh requested the court to declare that the FEC's dismissal of his administrative complaint was contrary to law, and to certify his constitutional questions to the appeals court. The court found, however, that Mr. Antosh's July 23 request did not constitute a supplement to his original suit because, unlike the original request, the motion did not deal with delays in processing his administrative complaint, but rather it dealt with the merits of the FEC's decision to dismiss the complaint. The court therefore decided that, under procedural rules, Mr. Antosh had to file a separate suit with the court.

Second Suit

On September 6, 1984, Mr. Antosh filed a second suit with the district court to challenge the Commission's dismissal of his complaint. On December 3, 1984, pursuant to 2 U.S.C. §437h(a), he asked the district court to certify two constitutional claims to the appeals court. Specifically, he alleged that several provisions of the Federal Election Campaign Act and FEC regulations provided preferential treatment to labor organization PACs over trade association PACs. Mr. Antosh claimed that these distinctions violated the First and Fifth Amendments. Furthermore, Mr. Antosh asked the court to declare that the FEC's dismissal of his administrative complaint was contrary to law and that both the FEC and former Commissioner Thomas E. Harris had violated his rights to due process in refusing to disqualify Commissioner Harris from the agency's consideration of his administrative complaint.2 (Prior to his appointment to the Commission in 1975, Commissioner Harris had served as counsel for the AFL-CIO. Mr. Antosh claimed that Mr. Harris had signed a factual stipulation on behalf of the AFL-CIO in a 1973 case that was germane to Mr. Antosh's suit.)

The FEC filed an opposition to Mr. Antosh's motion for certification of his constitutional claims and filed an additional motion to dismiss them. The agency argued that Mr. Antosh lacked standing to raise the constitutional questions and that federal courts had already substantially settled the questions he raised.

In January 1988, the court granted the FEC's motions and dismissed Mr. Antosh's constitutional claims. The court found that, although the plaintiff had standing to raise his questions under the election law, he lacked standing under Article III of the Constitution. The court concluded that Mr. Antosh failed to demonstrate the kind of injury required by Article III, that is, "some actual or threatened injury which is traceable to illegal conduct by the defendant" and which "is likely to be redressed by a favorable ruling." The court first rejected Mr. Antosh's claim that, as a businessman who might contribute to trade association political action committees, his voice had been diminished in the political process by the law's alleged discrimination against such committees, thereby violating his rights under the free speech provision of the First Amendment. The court then rejected Mr. Antosh's claim that he had a personal stake in the law's alleged discrimination against corporate political action committees by virtue of his position as president of a corporation that was a member of trade associations, thereby violating his rights under the First Amendment and under the due process clause of the Fifth Amendment.

In March 1988 the district court ruled on the rest of the counts in Mr. Antosh's suit. With regard to Mr. Antosh's allegation that the FEC's dismissal of his administrative complaint was contrary to law, the court held that the FEC had "reasonably interpreted" the provision of the election law governing possible affiliation between the political committees named in the complaint. Consequently, the agency's dismissal of the complaint was not contrary to law.

The FEC had argued that the legislative history of Section 441a(a)(5) demonstrated that Congress had not intended to impose a single contribution limit on the AFL-CIO's PAC and the PACs of international unions affiliated with the AFL-CIO. The agency noted that it had consistently interpreted the provision this way.

The district court supported the FEC's view, noting comments made in 1976 by Congressman Wayne Hays, then Chairman of the House Ways and Means Committee and a sponsor of the 1976 amendments to the Act, saying that the membership of international unions in the AFL-CIO did not mean that the unions and the federation were to be treated as a single entity for the purposes of the 1976 amendments.

With regard to Mr. Antosh's claim that Commissioner Harris should have recused himself from the case, the court concluded that "the intervention of significant numbers of years [nine] certainly is sufficient to remove any taint." The court added that it "refuse[d] to find that an attorney, at the very least nine years later, cannot consider cases involving a former client, especially after the Commission has made a determination that he or she is capable of impartially addressing the individual facts of a case."

Source: FEC Record, November 1984, p. 5; March 1988, p. 10; and June 1988, p. 8.

Antosh v. FEC, 2 Fed. Elec. Camp. Fin. Guide (CCH) ¶9260 (D.D.C. Jan. 5, 1988), (D.D.C. Mar. 24, 1988) (unpublished opinion).

1 The full title of the AFL-CIO's PAC is "American Federation of Labor Congress of Industrial Organizations, Committee on Political Education Political Contributions Committee (AFL-CIO COPE-PCC)."

2 Commissioner Harris's third term on the Commission expired in April 1985. He continued to serve on the Commission, however, until autumn 1986, when he was replaced on the Commission by Scott E. Thomas.

ANTOSH v. FEC (84-3048)

On December 21, 1984, the U.S. District Court for the District of Columbia issued an order granting plaintiff's motion for summary judgment in James Antosh v. FEC (Civil Action No. 84-3048). The court found that the Commission's dismissal of an administrative complaint Mr. Antosh had filed with the FEC was contrary to law. On the same day, therefore, the court issued an order requiring the Commission to vacate its determination in the administrative complaint and to "reopen [the complaint] for further proceedings consistent with the court's opinion."

On July 1, 1987, the court denied Mr. Antosh's petition for award of attorneys' fees and costs incurred by him in the same suit.

Background

In filing his complaint with the FEC in May 1984, Mr. Antosh had alleged that:

• Engineers Political Education Committee/International Union of Operating Engineers (EPEC/IUOE) and Supporters of Engineers Local 3 Federal Endorsed Candidates (SELFEC), the separate segregated funds of the International Union of Operating Engineers and Engineers Local 3, had violated 2 U.S.C §441(a)(2)(A) by making contributions in excess of $5,000 to the 1982 primary campaign of Thomas P. Lantos, a Congressional candidate, and Mr. Lantos' principal campaign committee;
• Mr. Lantos and his principal campaign committee had, in turn, violated 2 U.S.C. §441a(f) by knowingly accepting the excessive contributions (totaling $3,600); and
• Mr. Lantos, his campaign treasurer and his principal campaign committee had violated Commission regulations by failing to report the excessive contributions accurately. See 11 CFR 104.14(d).

In a report submitted to the FEC in July 1984, the General Counsel noted, however, that based on an affidavit and a letter submitted by the respondents, of the $3,600 alleged to be excess contributions to the 1982 primary, $3,100 had in fact been designated for retiring debts of Mr. Lantos' 1980 general election campaign. The General Counsel therefore concluded that the two union PACs had made excessive contributions of $500 to Mr. Lantos' 1982 primary campaign rather than $3,600. Accordingly, the General Counsel recommended that "due to the small amount in question" (i.e., excessive contributions of $500), the Commission should find reason to believe that the respondents had violated the Act, but take no further action. The Commission followed the General Counsel's recommendations and closed the file on MUR 1719.

In October 1984 Mr. Antosh petitioned the district court to take action against the FEC for dismissing his administrative complaint.

The District Court's Ruling

The court noted that in determining whether an agency's determinations were "arbitrary and capricious," the court's standard of review had to be "a highly deferential one...which presumes the agency's action to be valid." In the case of Mr. Antosh's complaint, however, the court found a "problem in the Commission's treatment of this matter." Specifically, although EPEC/IUOE had designated $3,100 for retiring the Lantos committee's 1980 general election debt, committee reports indicated the contributions had been made during May and June 1981, several weeks after the committee had apparently extinguished the 1980 debt in mid-April 1981.

The court concluded that "the Commission dismissed MUR 1719 because it only involved violations of $500.... The violations in fact appear to involve considerably more money, and are thus more egregious than the Commission realized. For these reasons, the Commission's dismissal of MUR 1719 was arbitrary and capricious and, thus, contrary to law." See 2 U.S.C. §437g(a)(8).

Attorneys' Fees and Costs

The Equal Access to Justice Act states that only those courts which have jurisdiction over the underlying civil action may consider whether to award attorney's fees and costs to a prevailing party. Upon examination of its jurisdiction over the original suit, the district court concluded that, in fact, Mr. Antosh did not have standing to bring it. Consequently, the court could not grant plaintiff's petition for award of costs and attorneys' fees.

Under Article III of the Constitution, in order to have standing to sue, an aggrieved party must "show that he personally suffered some actual or threatened injury as a result of the putatively illegal conduct of the respondent..." (i.e., the Lantos campaign). Since Mr. Antosh was an Oklahoma resident, the court concluded that he would not be injured by a California candidate's acceptance of excessive contributions. "Plaintiff's interest in the California election is no different from the interest of any citizen who wishes to ensure that candidates abide by the rules that govern elections," the court said. The court noted that this conclusion was the same as that reached by the court in July 1986 in a "virtually identical" suit brought by Mr. Antosh against the FEC. (Antosh v. FEC, Civil Action No. 86-0179.)

Source: FEC Record, February 1985, p. 4; and January 1988, p. 8.

Antosh v. FEC, 599 F. Supp. 850 (D.D.C. 1984), 664 F. Supp. 5 (D.D.C 1987) (ruling on att'y fees).

ANTOSH v. FEC (85-1410)

CITIZENS FOR PERCY '84 v. FEC (85-0763)

COMMON CAUSE v. FEC (85-0968)

GOLAR v. FEC

On October 23, 1985, the U.S. District Court for the District of Columbia ruled on Common Cause v. FEC.1 (Civil Action No. 85-968), Golar v. FEC (Civil Action No. 85-225) and Citizens for Percy v. FEC (Civil Action No. 85-763), three suits which had challenged the FEC's dismissal of administrative complaints.

Under the election law, a suit challenging the dismissal of an administrative complaint must be filed with a district court within 60 days after it is dismissed by the FEC. 2 U.S.C. §437g(a)(8)(B). The FEC had argued that the 60-day period begins at the time the Commission votes to dismiss an administrative complaint. The court, however, concluded that the 60-day period begins when a complainant actually receives the notice of dismissal.

Based on this ruling, the court dismissed Citizens for Percy v. FEC because the Committee had filed its suit more than 60 days after both the Commission's decision to dismiss the Committee's administrative complaint and its receipt of the FEC's notice of dismissal. On the other hand, the court decided not to dismiss the suits brought by Common Cause and Mr. Golar because plaintiffs had filed their respective challenges within 60 days of FEC notification.

In Antosh v. FEC (Civil Action No. 85-1410),2 another district court reached a different conclusion on June 7, 1985. In a suit to review conciliations agreements entered into by the Commission, the court concluded that the 60-day period for filing suit began on "the date the Commission approved the conciliation agreements and they became effective." Finding that the matter had been filed within 60 days of that date, the court agreed to hear the case.

Source: FEC Record, December 1985, p. 7; and Annual Report 1985, p. 15.

Antosh v. FEC, 613 F. Supp. 729 (D.D.C. 1985).

Citizens for Percy '84 v. FEC, 2 Fed. Elec. Camp. Fin. Guide (CCH) ¶9229 (D.D.C. 1985).

1 The district court decision in Common Cause v. FEC (85-0968) appears in alphabetical order, inserted with other Common Cause suits.

2 For the district court decision in Antosh v. FEC (85-1410), see Antosh v. FEC (86-0179).

ANTOSH v. FEC (85-2036)

On April 4, 1986, the U.S. District Court for the District of Columbia issued an order which granted the FEC's motion for summary judgment in Antosh v. FEC and which dismissed with prejudice plaintiff Edward Antosh's complaint. (Civil Action No. 85-2036.) The court held that, under Article III of the Constitution, Mr. Antosh lacked standing to seek judicial review of the FEC's dismissal of his administrative complaint.

Background

A resident of Oklahoma, Mr. Antosh had filed his administrative complaint with the FEC in April 1984. In the complaint, he alleged that: (1) the Engineers Political Education Committee (EPEC), the separate segregated fund of the International Union of Operating Engineers, had violated the election law by making excessive contributions to Arizona Senator Dennis DeConcini's 1982 primary campaign (the campaign); and (2) the campaign had violated the election law by accepting the excessive contributions. The Commission determined that there was reason to believe EPEC had violated the election law by making excessive contributions to Senator DeConcini's reelection campaign. However, in a tie vote, the agency failed to find reason to believe that the campaign had violated the law.

On June 21, 1985, Mr. Antosh filed suit with the district court. He claimed that the FEC's determination that the campaign had not violated the law was arbitrary and capricious. In cross motions for summary judgment, Mr. Antosh claimed that he had standing to bring suit because, under the election law, "[a]ny party aggrieved by an order of the Commission dismissing a complaint filed by such party...may file a petition with the U.S. District Court for the District of Columbia." 2 U.S.C. §437g(a)(8)(A).

District Court's Ruling

In ruling that Mr. Antosh lacked standing to seek judicial review of the FEC's determination, the court referred to the requirement that an aggrieved party must "show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant...." to establish standing under Article III.

The court held that Mr. Antosh failed to meet this requirement. As a citizen of and a registered voter in Oklahoma, Mr. Antosh had "suffered no greater injury, nor likely will he in the future, as a result of the Commission's failure to order a refund, than any other U.S. citizen who is neither a resident of nor with franchise in Arizona." The court concluded that "plaintiff has no interest save his own, which is, at the moment, only that of a public-spirited spectator of Arizona elections."

Finally, the court noted that the standard for qualifying as an "aggrieved party" (eligible to seek judicial review for an administrative agency's determination) was higher than the standard for filing an administrative complaint with an agency. "Congress can permit anyone to engage in proceedings before them [administrative agencies]. But it cannot confer upon a participant at the administrative level the right to maintain a suit to review the agency's decision in federal court, no matter how grievously he may be offended by it.... "

The court did not address issues related to the merits of the FEC's administrative determinations or its own jurisdiction to review those determinations.

Appeals Court's Ruling

On August 13, 1986, the U.S. Court of Appeals for the District of Columbia Circuit granted Mr. James E. Antosh's motion to dismiss his appeal of the April 1986 decision handed down by the U.S. District Court.

Source: FEC Record, June 1986, p. 8; and October 1986, p. 7.

Antosh v. FEC, 631 F. Supp. 596 (D.D.C. 1986).

ANTOSH v. FEC (86-0179)

On July 15, 1986, the U.S. District Court for the District of Columbia issued an order which granted the FEC's motion for summary judgment in Antosh v. FEC and which dismissed with prejudice plaintiff Edward Antosh's complaint. (Civil Action No. 86-0179.) The court held that, under Article III of the Constitution, Mr. Antosh lacked standing to seek judicial review of the FEC's dismissal of his administrative complaint.

Background

Mr. Antosh filed suit against the FEC on grounds that, in two complaints, the agency's failure to order refunds of respondents' excessive contributions was contrary to law. The administrative complaints concerned excessive contributions made respectively by two labor organizations to Senators Edward Kennedy (MUR 1637) and Paul Sarbanes (MUR 1696) in 1984. The contributing committees were the Engineers Political Education Committee (EPEC), the Sheet Metal Workers International Association Political Action League (SMWIA) and the American Federation of Government Employees' Political Action Committee (AFGE). Having found that the respondents violated the law, the Commission required the labor organizations to pay civil penalties for their violations. Refunds by the candidates, however, were not required.

District Court Ruling

In ruling that Mr. Antosh lacked standing to seek judicial review of the FEC's determination, the court referred to recent decisions in two "virtually identical" suits filed by Mr. Antosh (Antosh v. FEC, Civil Action Nos. 85-1410 and 85-2036). In those rulings, the court held that Mr. Antosh had failed to meet the eligibility requirement for standing under Article III of the Constitution. Under this requirement, an aggrieved party must "'show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the respondent.... '" Noting that the excessive contribution alleged in Mr. Antosh's suit had been made to Senatorial candidates in Massachusetts and Maryland, the court concluded that "plaintiff thus fails to satisfy the constitutional requisite of 'injury-in-fact.'"

Nor was the court persuaded by plaintiff's claim that he had suffered "injury-in-fact" in making contributions to nonconnected political committees which had, in turn, made expenditures in connection with the Sarbanes and Kennedy reelection campaigns "because he is not eligible to vote in either Massachusetts or Maryland."

Source: FEC Record, September l986, p. 5.

Antosh v. FEC, No. 86-179, (D.D.C. July 18, 1986).

ATHENS LUMBER CO. v. FEC

On October 24, 1983, the U.S. Court of Appeals for the Eleventh Circuit issued an en banc opinion in Athens Lumber Company v. FEC upholding the constitutionality of 2 U.S.C. §441b(a) of the Federal Election Campaign Act (the Act). (Civil Action No. 82-8102.) The court's decision also reversed an earlier order by the U.S. District Court for the Middle District of Georgia which had dismissed the case on grounds that: (1) plaintiffs lacked standing to bring suit under the Act; and (2) plaintiffs failed to present a justiciable controversy for the federal courts' consideration. The appeals court remanded the case to the district court for entry of a judgment in favor of the FEC.

Plaintiffs' Claims

The Athens Lumber Company and its President John P. Bondurant filed the suit with the Georgia district court on July 27, 1981. Pursuant to Section 437h(a) of the Act,1 plaintiffs asked the district court to certify their questions concerning the constitutionality of 2 U.S.C. §441b(a) to the en banc appeals court for the Eleventh Circuit. Plaintiffs claimed that this provision of the election law abridged First and Fifth Amendment rights by prohibiting corporations, labor organizations and national banks from making contributions and expenditures in connection with federal elections.

Plaintiffs further asked that the FEC be enjoined from initiating enforcement proceedings against them if the Athens Lumber Company participated in federal elections. At the same time, however, plaintiffs said that the company would not make expenditures or contributions in connection with federal elections until either: (1) 2 U.S.C. §441b was repealed or declared unconstitutional; or (2) the company obtained an opinion of counsel from the Commission stating that the proposed expenditures did not violate any federal or state law or regulation. Plaintiffs further argued that their uncertainty about a possible violation of the election law had deterred them from exercising their First and Fifth Amendments rights, thereby causing them irreparable harm.

District Court Decision

In an opinion issued on February 9, 1982, the Georgia district court dismissed the suit. (Civil Action No. 81-79-ATH.) The court held that, under Section 437h(a) of the election law, only the following types of plaintiffs had standing to bring suit: the national committee of a political party, individuals eligible to vote in Presidential elections and the FEC. Consequently, the court found that the Athens Lumber Company lacked standing to bring suit. While the court recognized that Mr. Bondurant was an eligible voter, he too lacked standing to bring suit since the corporation not Mr. Bondurant planned to make the expenditures.

Moreover, the district court held that plaintiffs had not presented a justiciable case or controversy ripe for the court's consideration. The court concluded that "it is obvious that the statute under attack in no way interferes with the way that the plaintiff corporation through its plaintiff president conducts its corporate affairs...." Similarly, the court found that Mr. Bondurant had not presented a justiciable claim because he was "free to independently expend his personal funds [in federal elections], including dividends from the corporate plaintiff without limitation." Moreover, the court found that Athens Lumber Company was only seeking an advisory opinion because the shareholders had not voted to spend any corporate funds in connection with federal elections as long as Section 441b remained in force.

Appeals Court Decision

On October 22, 1982, a three-judge panel of the Eleventh Circuit court of appeals reversed the judgment of the district court, finding that Mr. Bondurant did have standing to bring suit and to raise those issues pertaining to Athens Lumber Company's participation in federal elections. Moreover, the court found that the suit raised justiciable claims because, if Athens Lumber Company were to make contributions and expenditures in connection with federal elections, both Mr. Bondurant and the corporation would be subject to civil and criminal prosecution. The panel then certified to the en banc Eleventh Circuit eight constitutional questions adopted from appellants' complaint.

In upholding the constitutionality of Section 441b, the en banc Eleventh Circuit court of appeals stated: "Viewing the substantive constitutional issues as being controlled by the Court's unanimous opinion in Federal Election Commission v. National Right to Work Committee, 459 U.S. 197 (1982), and for the reasons there stated, we find the limitations and prohibitions of which appellants complain to be constitutional."

Supreme Court Action

On March 19, 1984, the Supreme Court dismissed an appeal brought by plaintiffs in Athens Lumber Company v. FEC. Citing a lack of jurisdiction over the appeal, the Court treated it as a request for discretionary review (i.e., a petition for a writ of certiorari) and declined the request. (U.S. Supreme Court No. 83-1190) The high Court's action left standing the earlier, en banc opinion of the U.S. Court of Appeals for the Eleventh Circuit.

Source: FEC Record, January 1984, p. 10; and May 1984, p. 7.

Athens Lumber Company, Inc. v. FEC, 531 F. Supp. 756 (M.D. Ga. 1982), rev'd, 689 F.2d 1006 (11th Cir. 1982), 718 F.2d 363 (11th Cir. 1983) (en banc), appeal dism'd, cert. denied, 465 U.S. 1092 (1984).

1 Section 437h, which provides for an expedited judicial review procedure, notes that certain designated parties "may institute such actions in the appropriate district court of the United States...to construe the constitutionality" of the Act. The district court is then directed to certify appropriate constitutional questions to the court of appeals sitting en banc.

AUSTIN v. MICHIGAN STATE CHAMBER OF COMMERCE

On March 27, 1990, the Supreme Court ruled that a Michigan state law prohibiting independent expenditures by corporations was constitutional. Reversing a Sixth Circuit U.S. Court of Appeals decision in Austin v. Michigan State Chamber of Commerce, the Court said that the state could prohibit corporations from using their treasury funds to make independent expenditures in connection with state elections.

Background

The suit originated in a 1985 district court complaint filed by the Michigan State Chamber of Commerce. The Chamber is a nonstock, nonprofit incorporated membership organization funded by dues. Three quarters of its members are for-profit corporations.

The Chamber sought to make an independent expenditure for a newspaper advertisement supporting a candidate for the state legislature. Although the Chamber had established a separate segregated fund for political purposes (which could lawfully have been used to make the expenditure), the organization wanted to purchase the ad with its general treasury funds. Finding that section 54(1) of the Michigan Campaign Finance Act appeared to prohibit independent expenditures made with corporate treasury funds, the Chamber filed suit against Richard Austin, Michigan's Secretary of State, challenging the constitutionality of the state law.

The law was upheld by the district court; the appeals court overturned the lower court's decision, finding the prohibition unconstitutional as applied to the Chamber.

Supreme Court Decision

First Amendment Issue

The Court held that the Michigan law, which permitted corporations to set up segregated political funds, was narrowly tailored to serve the compelling state interest of preventing the distortions in the political process that might result from allowing corporations to spend their general treasury funds to express their political views. "This potential for distortion," the Court said, "justifies §54(1)'s general applicability to all corporations"regardless of their size or earningsbecause all corporations "receive from the state the special benefits conferred by the corporate structure." Thus, the burden imposed on free speech by section 54(1) was
permissible.

The Court further held that the Chamber did not qualify for the constitutional exemption to the ban on corporate spending set forth in FEC v. Massachusetts Citizens for Life, Inc. (MCFL), 479 U.S. 238 (1986). In that decision, the Court addressed the federal election law's prohibition against corporate independent expenditures and found that the law was unconstitutional as applied to MCFL, a small, nonprofit corporation. The Court found that three characteristics of MCFL qualified the organization for an exception (based on the First Amendment) from the federal law's general ban on corporate spending because they negated the government's interest in preventing the threat or appearance of corruption.

The three features of MCFL that exempted it from the ban on corporate spending were that MCFL:

• Was a nonprofit corporation established to promote political ideas and not to engage in business activities;
• Had no shareholders or other persons with a claim on its assets or earnings; and
• Was not set up by a corporation and had an established policy not to accept donations from corporations or labor organizations.

With regard to the first characteristic, the Court observed that, unlike MCFL, the Chamber's activities were not limited to political and public educational purposes. The Chamber's bylaws set forth several purposes beyond politics, including, for example, the promotion of ethical business practices, the provision of group insurance for members and litigation on behalf of the Michigan business community.

The Chamber also failed to meet the second of the MCFL criteria. The Court concluded, "[W]e are persuaded that the Chamber's members are more similar to the shareholders of a business corporation than to the members of MCFL." Because the Chamber provided its members with several nonpolitical benefits and services, members had an economic disincentive to withdraw support from the organization even if they disagreed with its political views. In the MCFL case, the Court had stressed that the MCFL's lack of shareholders or other financially affiliated persons meant that members had no disincentive to disassociate from the group.

With respect to the third MCFL feature, the Court noted that here "the Chamber differs most greatly from the Massachusetts organization." While "MCFL was not established by, and had a policy of not accepting contributions from, business corporations," three fourths of the Chamber's members were business corporations, and the organization's treasury contained corporate funds in the form of membership dues. "Because the Chamber accepts money from for-profit corporations, it could, absent application of §54(1), serve as a conduit for corporate political spending," the Court concluded.

Finally, the Court rejected the Chamber's claim that, because the Michigan law did not include a similar ban on political expenditures by labor organizations, it was underinclusive. The Court noted that although unincorporated labor organizations had power to accumulate wealth, they did not have the special legal privileges enjoyed by incorporated organizations, such as limited liability and perpetual life. The Court further distinguished unions from corporations like the Chamber by pointing out that the Constitution precludes unions from having the power to compel members to support their political activities. "[T]he funds available for a union's political activities more accurately reflect members' support for the organization's views than does a corporation's general treasury," the Court said.

Fourteenth Amendment Issue

The Chamber claimed that section 54(1) violated the Equal Protection Clause of the Fourteenth Amendment because it did not apply the restrictions to unincorporated associations having the ability to raise large amounts of money or to corporations in the news media.

Having clarified that a compelling state interest in preventing corruption justified the restrictions on political activity by corporations, the Court rejected the Chamber's arguments with respect to the application of the prohibition to unincorporated entities. Corporate status, the Court said, was a state-granted privilege that facilitated the amassing of wealth, the source of the threat of corruption.

The Court also affirmed that the limited "media exception" in the state law for news stories and editorials disseminated by corporations operating in any of the news media did not constitute a breach of equal protection because of the unique public informational and educational role that such organizations play. "The media exception ensures that the Act does not hinder or prevent the institutional press from reporting on and publishing editorials about newsworthy events."

Source: FEC Record, May 1990, p. 5.

Austin v. Michigan State Chamber of Commerce, 856 F.2d 783 (6th Cir. 1988), rev'd, 494 U.S. 652, 110 S. Ct. 1391 (1990).

BARNSTEAD FOR CONGRESS COMMITTEE v. FEC

On June 5, 1979, the U.S. District Court for the District of Columbia granted summary judgment to the FEC and dismissed a complaint which had been filed by the Barnstead Committee (the Committee) against the FEC, WGBH Educational Foundation (Public Broadcasting TV, Channel 2), the Corporation for Public Broadcasting and the Quaker Oats Corporation. The Committee had filed suit on January 1, 1979, disputing the Commission's dismissal of a complaint which the Committee had filed with the Commission on November 2, 1978. The Committee requested that the court reverse the Commission's determination.

The Committee had alleged in its complaint, and repeated in its suit, that the corporate sponsorship of and payment for production and promotional costs of a televised film about House Speaker Tip O'Neill (Mr. Barnstead's opponent for a House seat) was in violation of 2 U.S.C. §441b. The Committee contended that, since Congressman O'Neill was officially a candidate at the time the film was broadcast, the film was "...in essence a campaign film, which enhanced the political standing of one candidate over another." Costs incurred in producing and broadcasting the film, therefore, were expenditures in connection with a federal election. The FEC, on the other hand, maintained that the costs incurred by WGBH Educational Foundation, the Corporation for Public Broadcasting and the Quaker Oats Corporation, in sponsoring the film, were exempt communication costs. Under Section 431(f)(4)(A), the Act exempts from the definition of expenditure certain communication costs, which include "any news story, commentary or editorial distributed through the facilities of any broadcasting station, newspaper, magazine, or other periodical publication, unless such facilities are owned or controlled by any political party, political committee or candidate." In dismissing the suit, the court upheld the Commission's determination that the costs involved in sponsoring the broadcast were, in fact, communication costs and not expenditures under the Act.

Source: FEC Record, January 1980, p. 5.

BOULTER v. FEC

On August 3, 1988, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the FEC's July 26 decision to certify public funds for the general election campaign of Democratic Presidential nominee Michael S. Dukakis and his Vice Presidential running mate Lloyd M. Bentsen.

The petitioners, Congressman Beau Boulter, the Republican Senatorial candidate from Texas, and the National Republican Senatorial Committee, a national committee of the Republican party, had submitted their petition to the appeals court after the FEC had dismissed their request to deny public funding to the Democratic Presidential ticket. In its expedited review of the petition, the court decided to dismiss as moot the petitioners' emergency motion for a stay of the certification because, on July 27, the U.S. Treasury had disbursed the public funds to the Democratic Presidential and Vice Presidential nominees. Nor did the court grant petitioners' request for an emergency injunction barring the Democratic ticket from expending the grant. The court held that "petitioners have failed to carry the 'burden of showing that exercise of the court's extraordinary injunctive powers is warranted.'" Cuomo v. Nuclear Regulatory Commission, 722 F.2d 972, 974 (D.C. Cir. 1985).

Finally, the court summarily affirmed the agency's certification of funds to the Democratic ticket. The appeals court noted that its standard for reviewing the FEC's decision was whether the FEC's action was "arbitrary, capricious or contrary to law." See In re Carter-Mondale, 642 F.2d at 542. Based on this standard, the court concluded that "petitioners' allegations are insufficient on their face to warrant a revocation of the certification."

Source: FEC Record, September 1988, p. 7.

Boulter v. FEC, No. 88-1541 (D.C. Cir. 1988) (unpublished order).

BRANSTOOL v. FEC

On April 4, 1995, the U.S. District Court for the District of Columbia granted defendant's motion for summary judgment. This decision sustains the Commission's dismissal of plaintiffs' administrative complaint.

Background

The origins of this case are rooted in the 1988 Presidential contest between Republican candidate George Bush and Democratic candidate Michael Dukakis. In the course of the Presidential race, the National Security Political Action Committee (NSPAC) financed the production and airing of the "Willie Horton" ad. This ad attacked the Democratic candidate by blaming then Massachusetts Governor Michael Dukakis for the violent crimes committed by a convict while on furlough from a state prison.

Plaintiffs filed an administrative complaint with the FEC in May 1990, alleging that the NSPAC coordinated the production and airing of the Willie Horton ad with the Bush campaign. Under the Federal Election Campaign Act (the Act), a candidate running in a Presidential general election who accepts public funding may not accept contributions. The Bush campaign accepted public funding. If, as plaintiffs claimed, the Horton ad had been coordinated, then it would have been an in-kind contribution, in violation of 26U.S.C. §9003(b)(2). The complaint thus hinged on the issue of whether the Horton ad was a coordinated in-kind contribution, and therefore illegal, or a permissible independent expenditure as defined under 2 U.S.C. §431(17).1

After examining the complaint, the Commission found reason to believe that the Bush campaign and the NSPAC had violated the Act, but after a limited investigation into the matter, the Commission deemed the evidence inconclusive and decided to take no further action on the matter. Plaintiffs' complaint was subsequently dismissed.

This led plaintiffs to file this suit in January 1992, claiming that the FEC had abused its discretion in not conducting a comprehensive investigation and had violated the Act by dismissing plaintiffs' complaint. Plaintiffs noted that among the FEC investigation's findings were a record of a June 1988 telephone conversation between the Bush campaign's chief media advisor and a NSPAC media consultant, and documentation showing that a media technician worked for both NSPAC and the Bush campaign. Plaintiffs contended that these findings were proof of coordination.

The Court's Decision

In addressing plaintiffs' challenge to the Commission's decision to limit the investigation into their complaint, the court saw no reason to depart from the general policy of giving broad deference to agency prosecutorial decisions.

The court held that it could set aside FEC statutory interpretations as "impermissible" only if they have no reasonable basis. The court concluded that the factual conclusions underpinning the Commission's decision were "sufficiently reasonable" to warrant the court's deference.

For instance, in dismissing the complaint, the Commission concluded that the inference of coordination created by the telephone call was rebutted by other findings. With regard to the media technician's dual employment, the Commission reasonably concluded that he performed technical tasks for the two committees and had no role in substantive or strategic decisions.

Source: FEC Record, June 1995, p. 12.

Branstool v. FEC, No. 92-0284 (D.D.C. Apr. 4, 1995).

1 An independent expenditure is an expenditure made without any coordination with a candidate's campaign for a communication which expressly advocates the election or defeat of a clearly identified candidate for federal office.

BREAD PAC v. FEC

This suit, filed by the National Lumber and Building Dealers Association and the National Restaurant Association (trade associations) and by Bread Political Action Committee, Restaurateurs Political Action Committee and Lumber Dealers Political Action Committee (separate segregated funds of trade associations), challenged the constitutionality of 2 U.S.C. §441b(b)(4)(D). (Civil Action No. 77-C-947.) This provision of the election law restricts solicitations by a trade association or its separate segregated fund to the stockholders, executive and administrative personnel (and their families) of member corporations which have given prior approval for such solicitations to occur, and limits member corporations to approval of one trade association per calendar year.

District Court Ruling

On April 5, 1977, plaintiffs asked the U.S. District Court for the Northern District of Illinois to enjoin the FEC from enforcing 441b(b)(4)(D) or, in the alternative, to certify constitutional questions to the appeals court, pursuant to 2 U.S.C. §437h. (Section 437h allows for expedited handling of constitutional challenges to the Act and a right of direct appeal to the Supreme Court.)

The district court ruled in September 1977 that plaintiffs lacked standing to bring suit under the Act's expedited review procedures. The court held that only the following types of plaintiffs had standing to bring suit under 2 U.S.C. §437h(a): the national committee of a political party, individuals eligible to vote in Presidential elections and the FEC.

Appeals Court: First Ruling

On January 12, 1979, the U.S. Court of Appeals for the Seventh Circuit, sitting en banc, overturned the district court's decision in response to an interlocutory appeal filed by plaintiffs. The appeals court ruled that plaintiffs did have standing to bring suit under the expedited review procedures. It remanded the case to the district court for further fact finding and certification of the constitutional questions. These constitutional challenges were then certified to the appeals court for its decision:

• Whether 2 U.S.C. §441b(b)(4)(D), both facially and as applied, infringes plaintiffs' right of assembly guaranteed by the First Amendment...?
• Whether 2 U.S.C. §441b(b)(4)(D), both facially and as applied, deprives plaintiffs of liberty without due process of law in violation of the Fifth Amendment...?
• Whether the failure of the Federal Election Campaign Act, as amended, 2 U.S.C. §431 et seq., to define the term 'solicitation' infringes plaintiffs' right of assembly guaranteed by the First Amendment...or deprives plaintiffs of liberty without due process of law in violation of the Fifth Amendment...?
• The failure of the Federal Election Campaign Act, as amended, 2 U.S.C. §431 et seq., to define the term 'trade association' as used in 2 U.S.C. §441b(b)(4)(D), violates the due process clause of the Fifth Amendment...?

Appeals Court: Second Ruling

As to the issue of plaintiffs' standing to bring suit under 2 U.S.C. §437h(a), the appeals court declined to overrule its earlier decision that Section 437h(a) did not limit parties who may utilize the expedited review procedures.

As to constitutional challenges brought by plaintiffs, the court rejected their claim that Section 441b (b)(4)(D) infringed on their First Amendment rights by requiring that plaintiffs obtain the prior approval of a member corporation to solicit the corporation's stockholders, executive and administrative personnel and their families. The court found that there had been no showing that this restriction on trade association solicitations "...has had or could have any prior restraining effect whatsoever on the free flow of political information and opinion by trade associations or their political action committees." The court noted that plaintiffs were "...free to solicit any individual...to join their trade association." Moreover, once he or she became a member of the association, the individual could "...be solicited for contributions without limit under §441b (b)(4)(D)." Thus, the court concluded that the challenged provision was "...a very narrowly drawn aspect of a statutory scheme carefully designed to balance a compelling governmental interest [i.e., the prevention of the appearance or actuality of corruption in federal elections caused by large contributions] and jealously guarded First Amendment freedoms."

The court also rejected plaintiffs' claim that §441b(b)(4)(D) unconstitutionally discriminated against trade associations. The court found the exact opposite to be true and concluded that plaintiffs' argument was "...largely premised...on a misreading of the statute." Specifically the court noted that, although trade associations may not solicit contributions from a member corporation's employees without the corporation's prior approval, trade associations are granted more avenues for solicitation than are corporations. "Incorporated trade associations, because they are corporations, have precisely the same solicitation rights under paragraphs (A) and (B) [of 2 U.S.C. §441b(b)(4)] as do others corporations.... Moreover, trade associations are also membership organizations or corporations without capital stock and are therefore provided precisely the same solicitation rights as they have under paragraph (C) [i.e., solicitation of their individual members].... Finally, trade associations are provided under paragraph
(D) with an additional group of potential solicitees [i.e., the stockholders, executive and administrative employees of corporate members and their families]."

The court also rejected plaintiffs' claims that in failing to define the terms "solicitation" and "trade association," §441b(b)(4)(D) abridged their First and Fifth Amendment rights. The court found that the term "solicitation" had a widely accepted meaning and that rules and statutes using the term had been uniformly upheld. The court further held that the Commission's advisory opinions, which had ruled on whether certain communications constituted solicitations under the Act, were not inconsistent. Rather, the opinions (AO's 1979-13 and 1979-66) had ruled on different types of communications by corporate and trade association separate segregated funds. Similarly, the court noted that the FEC had adhered to the "plain and ordinary meaning of trade association" as defined by Commission regulations at 11 CFR 114.8(a) and (g)(1).

Supreme Court Ruling

In an opinion issued on March 8, 1982, in Bread Political Action Committee v. FEC (Supreme Court No. 80-1481) the Supreme Court ruled that plaintiffs lacked standing to bring suit under 2 U.S.C. §437h, which allows for expedited handling of constitutional challenges to the Act and a right of direct appeal to the Supreme Court. The Court remanded the suit to the appeals court without ruling on the plaintiffs' constitutional challenges. The Court's ruling overturned a decision by the appeals court for the Seventh Circuit while upholding an earlier decision by the Northern Illinois district court.

The Court ruled that plaintiffs lacked standing to bring suit under Section 437h because they did not fall within the categories of qualified plaintiffs enumerated in the provision. The Court held that "the plain language of §437h controls its construction, at least in the absence of 'clear evidence,'...of a 'clearly expressed legislative intention to the contrary....'" The Court concluded that "the appellants, however, fall far short of providing 'clear evidence' of a 'clearly expressed legislative intention' that the unique expedited procedures of §437h be afforded to parties other than those belonging to the three listed categories."

Nor did the Court find merit to plaintiffs' argument that, since Congress had expressly extended the judicial review procedures of Section 437h to cover all constitutional questions about any provision of the Act, Congress had also intended to broaden the categories of plaintiffs eligible to file suit under §437h.

Moreover, the Court refuted plaintiffs' contention that, while Congress had specified three eligible classes of plaintiffs to remove any doubts about their standing to bring suit, it had not intended to exclude other classes of plaintiffs. To the contrary, the Court concluded that Congress "went to the trouble of specifying that only two precisely defined types of artificial entity and one class of natural persons could bring these actions." The Court noted, however, that its ruling did not affect the right of parties involved in FEC enforcement actions to challenge, under 2 U.S.C. §437g, the constitutionality of any provision of the Act and to be afforded expedited review.

Source: FEC Record, May 1981, p. 6; and May 1982, p. 6.

Bread Political Action Committee v. FEC, 591 F.2d 29 (7th Cir. 1979), 635 F.2d 621 (7th Cir. 1980) (en banc), rev'd, 455 U.S. 577, (1982), on remand, 678 F.2d 46 (7th Cir. 1982) (en banc) (remanding to District Court).

BROWN v. FEC

On November 20, 1981, the U.S. Court of Appeals for the District of Columbia Circuit issued a judgment affirming an earlier decision by the district court in Archie E. Brown v. FEC (Civil Action No. 80-2108). The district court's decision had upheld the FEC's dismissal of the complaint plaintiff had filed against the International Brotherhood of Teamsters, Chauffers, and Warehousemen and Helpers of America (the Teamsters). In his complaint, plaintiff alleged that Local 745 of the Teamsters had violated 2 U.S.C. §441b(b)(3)(A) by attempting to coerce him to contribute to DRIVE (the Democratic Republican Independent Voter Education), the separate segregated fund of the Teamsters. Plaintiff alleged that he was subsequently denied membership in Local 745 because he had refused to contribute to, or join, DRIVE. Plaintiff claimed that the FEC's dismissal of his complaint was contrary to law.

In upholding the FEC's determination, the district court said that the General Counsel's Report to the Commission indicated that "...plaintiff's membership in Local 745 was denied because his union dues were unpaid, not because he refused to contribute to DRIVE." Moreover, the district court held that the General Counsel's Report, by itself, was a sufficient record for the court's review of the Commission's determination in the complaint. In appealing the district court's decision, plaintiff contended, however, that the General Counsel's Report alone, without a separate statement of the Commission's reasons for dismissing the complaint, afforded "...an inadequate basis for informed judicial review."

In its Memorandum affirming the district court's decision, the appeals court found no merit in plaintiff's assertion. The appeals court cited the Supreme Court's decision in FEC v. Democratic Senatorial Campaign Committee, which held that the General Counsel's Report constituted sufficient grounds to dismiss an administrative complainteven if the Report were not expressly adopted by the Commission.

The appeals court concluded that the General Counsel's Report to the Commission recommending dismissal of Brown's complaint was sufficiently reasonable, "...particularly when considered in the context of the large discretion the Commission has to determine whether or not a civil violation of the Act has occurred."

Source: FEC Record, January 1982, p. 6.

Brown v. FEC (D.D.C. July 17, 1980) (unpublished opinion), aff'd mem., 672 F.2d 893 (D.C. Cir. 1981), cert. denied, 457 U.S. 1111 (1982)

BUCHANAN v. FEC

On April 18, 1996, the U.S. Court of Appeals for the District of Columbia Circuit granted a joint stipulation to dismiss this case; the parties settled this matter out of court.

Patrick J. Buchanan and his publicly-funded 1992 Presidential campaign committee had petitioned this court to review the FEC's final repayment determination. See the November 1995 Record, page 8, for a summary of the suit filed by plaintiffs. See the October 1995 Record, page 9, for the FEC's final repayment determination.

The Buchanan committee made most of the repayment immediately from an escrow fund previously established, and agreed to pay the remainder of the amount ordered by the FEC, with full interest, within 6 months.

Source: FEC Record, June 1996, p. 4.

BUCKLEY v. VALEO

On January 30, 1976, the Supreme Court issued a per curiam opinion in Buckley v. Valeo, the landmark case involving the constitutionality of the Federal Election Campaign Act of 1971 (FECA), as amended in 1974, and the Presidential Election Campaign Fund Act.

The Court upheld the constitutionality of certain provisions of the election law, including:

• The limitations on contributions to candidates for federal office (2 U.S.C. §441a);
• The disclosure and recordkeeping provisions of the FECA (2 U.S.C. §434); and
• The public financing of Presidential elections (Subtitle H of the Internal Revenue Code of 1954).

The Court declared other provisions of the FECA to be unconstitutional, in particular:

The limitations on expenditures by candidates and their committees, except for Presidential candidates who accept public funding (formerly 18 U.S.C. §608(c)(1)(C-F));

• The $1,000 limitation on independent expenditures (formerly 18 U.S.C. §608e);
• The limitations on expenditures by candidates from their personal funds (formerly 18 U.S.C. §608a); and
• The method of appointing members of the Federal Election Commission (formerly 2 U.S.C. §437c(a)(1)(A-C)).

Background

On January 2, 1975, the suit was filed in the U.S. District Court for the District of Columbia by Senator James L. Buckley of New York, Eugene McCarthy, Presidential candidate and former Senator from Minnesota, and several others.1 The defendants included Francis R. Valeo, Secretary of the Senate and Ex Officio member of the newly formed Federal Election Commission, and the Commission itself.2 The plaintiffs charged that the FECA, under which the Commission was formed, and the Presidential Election Campaign Fund Act were unconstitutional on a number of grounds.

On January 24, 1975, pursuant to Section 437h(a) of the FECA, the district court certified the constitutional questions in the case to the U.S. Court of Appeals for the District of Columbia Circuit. On August 15, 1976, the appeals court rendered a decision upholding almost all of the substantive provisions of the FECA with respect to contributions, expenditures and disclosure. The court also sustained the constitutionality of the method of appointing the Commission.

On September 19, 1975, the plaintiffs filed an appeal with the Supreme Court, which reached its decision on January 30, 1976.

Supreme Court Decision

Contribution Limitations

The appellants had argued that the FECA's limitations on the use of money for political purposes were in violation of First Amendment protections for free expression, since no significant political expression could be made without the expenditure of money. The Court concurred in part with the appellants' claim, finding that the restrictions on political contributions and expenditures "necessarily reduce[d] the quantity of expression by restricting the number of issues discussed, the depth of the exploration, and the size of the audience reached. This is because virtually every means of communicating ideas in today's mass society requires the expenditure of money." The Court then determined that such restrictions on political speech could only be justified by an overriding governmental interest.

The Court upheld the contribution limitations in the FECA,3 stating that they constituted one of the election law's "primary weapons against the reality or appearance of improper influence stemming from the dependence of candidates on large campaign contributions" (the other weapon being the disclosure requirements). Although it appeared that the contribution limitations did restrict a particular kind of political speech, the Court concluded that they "serve[d] the basic governmental interest in safeguarding the integrity of the electoral process without directly impinging upon the rights of individual citizens and candidates to engage in political debate and discussion."

The Court found no evidence to support the appellants' allegations that the contribution limitations discriminated against nonincumbent candidates. With respect to the appellants' charge that the contribution limitations discriminated against minor and third parties and their candidates, the court noted that the FECA, "on its face," treated all candidates and parties equally. Furthermore, the Court said there was a legitimate argument that the limitations, in fact, appeared to benefit minor parties, since major parties and candidates received a greater proportion of their funding from large contributions.

The appellants had additionally challenged the limitations on certain expenses incurred by volunteers working on behalf of candidates or political committees. While the FECA placed no limits on most unreimbursed volunteer activities, it did limit unreimbursed travel expenses and certain costs of organizing campaign functions. Beyond these limits the costs were considered in-kind contributions (§431(8)(B)(i, ii, and iv)). The Court upheld the provisions for limited spending by volunteers, stating that they were a "constitutionally acceptable accommodation of Congress' valid interest in encouraging citizen participation in political campaigns while continuing to guard against the corrupting potential of large financial contributions to candidates."

Expenditure Limitations

In contrast to its ruling on contribution limitations, the Court found that the expenditure ceiling in the FECA imposed "direct and substantial restraints on the quantity of political speech" and invalidated three expenditure limitations as violations of the First Amendment.

The overall limitations on expenditures by federal candidates and their committees were struck down by the Court. The appellees had argued that these limitations (formerly 18 U.S.C. §608(c)) served a public interest by equalizing the financial resources of candidates, but the Court determined that the amount of money spent in particular campaigns must necessarily vary, depending on the "size and intensity" of the support for individual candidates. Furthermore, expenditure ceilings "might serve not to equalize the opportunities of all candidates but to handicap a candidate who lacked substantial name recognition or exposure of his views before the start of the campaign." The appellees had also claimed that the expenditure limitations would reduce the overall cost of campaigning, and they cited statistics demonstrating the dramatic increases in campaign spending that had occurred nationwide in preceding years. The Court decided, however, that "[t]he First Amendment denies government the power to determine that spending to promote one's political views is wasteful, excessive or unwise." The Court ruled, therefore, that the limitations on overall expenditures were unconstitutional.

The appellants had charged that the $1,000 per candidate annual limitation on independent expendituresi.e., expenditures made by persons "relative to a clearly identified candidate...advocating the election or defeat of such candidate" (formerly 18 U.S.C. §608(e)(1))was both unconstitutionally vague and an excessive hindrance on First Amendment rights of free expression. The Court resolved the vagueness question by reading "relative to" to mean "advocating the election or defeat of such candidate" in the same subsection, and by construing the provision to apply only to "expenditures for communications that in express terms advocate[d] the election or defeat of a clearly identified candidate for Federal office." While the Court of Appeals had accepted the appellees' argument that the provision was necessary to prevent circumvention of the contribution limitations, the Supreme Court found that the "governmental interest in preventing corruption and the appearance of corruption"which justified the contribution limitationswas not sufficient to warrant the limitation on independent expenditures. If expenditure ceilings were to apply only to situations of express advocacy, the limitation would be easily circumvented by "expenditures that skirted the restriction on express advocacy of election or defeat but nevertheless benefited" a candidate. Moreover, the Court pointed out, abuses that might be generated by large independent expenditures did not appear to pose the same threat of corruption that large contributions posed since the "absence of prearrangement or coordination of the expenditure with the candidate or his agent alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidates." Thus finding that no substantial governmental interest was served by the limitation on independent expenditures, the Court concluded that such expenditures were protected as political discussion and expression under the First Amendment.

Regarding the limitations on a candidate's use of personal funds, the Court found that the provisions unconstitutionally interfered with the protected and valued right of an individual "to engage in the discussion of public issues and vigorously and tirelessly to advocate his own election." The Court continued that no governmental interest supported the limit on such personal funds. To the contrary, the Court noted that "the use of personal funds reduces a candidate's dependence on outside contributions and thereby counteracts the coercive pressures and attendant risks of abuse to which the contribution limitations are directed."

Finally, the Court added that its invalidation of the expenditure limitations was severable from Subtitle H, which provides for the public financing of Presidential elections. The limitations on expenditures by Presidential candidates who received public funds was legitimate since the acceptance of public funds was voluntary. Therefore, with regard to publicly financed elections, the consequent societal and governmental benefits weighed more heavily in favor of expenditure
limitations.

Reporting and Disclosure Requirements

The appellants had sought a blanket exemption from the public disclosure provisions for all minor parties, claiming that contributors to minor parties, unlike contributors to the Republican and Democratic Parties, were more vulnerable to threats, harassment and reprisal as a result of the public disclosure of their names. The appellants claimed the provisions constituted a violation of their rights to free association under the First Amendment and to equal protection under the Fifth Amendment. Recognizing that "compelled disclosure, in itself, can seriously infringe on privacy of association and belief guaranteed by the First Amendment," the Court nevertheless ruled that the Act's reporting and disclosure provisions were justified by governmental interest in (1) helping voters to evaluate candidates by informing them about the sources and uses of campaign funds, (2) deterring corruption and the appearance of it by making public the names of major contributors, and (3) providing information necessary to detect violations of the law.

The Court acknowledged the potential disadvantage for minor parties that could result from the public disclosure provisions of the law, but it noted that none of the minor parties that were appellants in this suit had demonstrated that their contributors had been injured by the disclosure provisions. Therefore, the Court ruled a blanket exemption unnecessary. The Court left open the possibility, however, that minor and new parties might successfully claim an exemption from FECA disclosure requirements by showing proof of injury.

Presidential Election Campaign Fund

The Court upheld the constitutionality of Subtitle H of the Internal Revenue Code, which established the public financing of Presidential campaigns through a voluntary income tax checkoff. The Court determined that the appellants' claim that Congress violated the First Amendment in not allowing taxpayers to earmark their $1.00 checkoff to any candidate or party of their choice was not sufficient to invalidate the law. In the Court's opinion the checkoff constituted an appropriation by Congress, and as such it did not require outright taxpayer approval. Furthermore, "every appropriation made by Congress uses public money in a manner to which some taxpayers object."

The appellants had also argued, by analogy, that just as Congress may not subsidize or burden religion under the freedom of religion clause of the First Amendment, the freedom of speech clause prohibits it from financing particular political campaigns. The Court ruled the analogy inapplicable, however, finding that Subtitle H furthered rather than abridged political speech because its purpose was "to facilitate and enlarge public discussion and participation in the electoral process."

The appellants further claimed that the public funding provisions violated the Fifth Amendment's due process clause, arguing that the eligibility requirements for public funds were comparable to unconstitutionally burdensome ballot access laws. The Court found no merit in the argument; the denial of public funds to candidates did "not prevent any candidate from getting on the ballot or prevent any voter from casting a vote for the candidate of his choice."

"In addition," the Court said, "the limits on contributions necessarily increase the burden of fundraising, and Congress properly regarded public financing as an appropriate means of relieving major-party Presidential candidates from the rigors of soliciting private contributions."

The Court also rejected appellants' contention that the public financing provisions discriminated against minor and new party candidates, in violation of the Fifth Amendment. Specifically, the appellants had argued that Subtitle H favored major parties and their nominees by granting them full public funding for their conventions and general election campaigns, while minor and new parties and their candidates received only partial public funding according to a formula based on percentage of votes received.

Similarly, the appellants challenged the provision that restricted the payment of primary matching funds to only Presidential candidates who met certain requirements. These requirements included a provision for payments to candidates who had raised a minimum amount of contributions in at least twenty states (26 U.S.C. §9033(b)(3-4)). The Court found that such requirements for receiving public funds were reasonable; rather than preventing small parties from receiving public financing, the law only required them to demonstrate that they had a minimum level of broad-based support in order to qualify for federal subsidies. The Court concluded, "Any risk of harm to minority interests...cannot overcome the force of the governmental interests against the use of public money to foster frivolous candidacies, create a system of splintered parties, and encourage unrestrained factionalism." Furthermore, the Court noted that the advantage of receiving public financing was balanced by the requirement to adhere to strict expenditure limitations. As mentioned above, the Court upheld the constitutionality of expenditure limits as they applied to candidates and parties receiving public funds.

Appointment of the Commissioners

The appellants had challenged the method of appointing the six members of the Commission, as specified in the FECA, which provided that the President, the Speaker of the House of Representatives and the President pro tempore of the Senate each appoint two members. Arguing that the FEC's powers were executive rather than legislative, the appellants contended that the Congressional appointment of Commissioners violated the separation of powers principle embodied in the appointments clause of Article II of the Constitution. The Supreme Court determined that the appointments clause permitted only the President, with the advice and consent of the Senate, to appoint officers to exercise such executive authority as the Commission was granted. The Court ruled that the Commission, as it was then constituted, could not exercise its authority to enforce the law, conduct civil litigation, issue advisory opinions or determine eligibility for public funds, because these functions could not properly be regarded as legislative. The Commission's informational and auditing powers, however, were found to be legislative in nature, and therefore constitutional.

The Court accorded de facto validity to all acts of the Commission prior to the ruling and granted a 30-day stay of judgmentduring which time the agency could exercise all of the authorities given to it under the FECAso that Congress could reconstitute the Commission according to the provisions of Article II of the Constitution. The initial 30-day stay expired on February 29, 1976, but was extended to March 22. On March 23 the FEC's executive powers were suspended, and they remained suspended until May 21, when the Commissioners were reappointed by the President pursuant to the FECA Amendments of 1976, Pub. L. No. 94-283 (May 5, 1976).

Buckley v. Valeo, 387 F. Supp. 135 (D.D.C. 1975) (application for three judge district court denied: constitutional questions certified to the Court of Appeals), 519 F.2d 817 (D.C. Cir. 1975) (per curiam) (motion to remand for the purpose of certifying constitutional questions granted), 519 F.2d 821 (D.C. Cir. 1975) (per curiam) (certified questions answered), 401 F. Supp. 1235 (D.D.C. 1975) (relevant portions of the opinion of the D.C. Cir. adopted), aff'd in part, rev'd in part, 424 U.S. 1 (1976), on remand, 532 F.2d 187 (1976 D.C. Cir.) (en banc), (modifying answers to constitutional questions certified by the district court).

1 Along with Buckley and McCarthy, the appellants in this suit included Congressman William A. Steiger of Wisconsin, Mr. Stewart Rawlings Mott (a major contributor to various political committees), the Committee for a Constitutional PresidencyMcCarthy '76, the Conservative Party of the State of New York, the New York Civil Liberties Union, the American Conservative Union, Human Events, Inc., Conservative Victory Fund, the Mississippi Republican Party and the Libertarian Party.

2The other appellees included the Clerk of the House of Representatives W. Pat Jennings, the Comptroller General Elmer B. Staats, and the Attorney General.

3The contribution limitations in the FECA included a $1,000 per candidate, per election, ceiling on contributions by individuals and political committees, a $5,000 per candidate, per election, ceiling on contributions by committees which qualify as multicandidate committees, a $25,000 annual ceiling for all contributions by any individual, and limitations on contributions to political party committees.

BUSH-QUAYLE '92 PRIMARY COMMITTEE v. FEC

On January 14, 1997, the U.S. Court of Appeals for the District of Columbia Circuit remanded this case to the FEC and asked it to explain why the Commission departed from precedent, or remedy that departure, when it required the Bush-Quayle '92 Primary Committee to repay $323,832 of the federal matching funds it received.

Background

As required by law, the FEC, at the end of the 1992 election cycle, audited former President George Bush's 1992 campaign. The audit included the primary committee, the Bush-Quayle '92 General Committee and the legal and accounting arm of the general election committee, the Bush-Quayle '92 Compliance Committee. The latter two committees are party to this lawsuit.

During the 1992 election, the primary committee received nearly $10.7 million in public funds through the Matching Payment Act. Once Mr. Bush and his running mate, Dan Quayle, had received the Republican nomination for President and Vice President, the general committee received $55.2 million in public funds.

The Law

The Matching Payment Act provides partial public fundingpaid for through the $3 check-off on federal tax formsto Presidential primary candidates who meet certain qualifications. Candidates who receive public funding must agree to limit expenditures to "qualified campaign expenses," i.e., those expenses that are incurred by the candidate in connection with his or her campaign for nomination and that do not violate state or federal law. 26 U.S.C. §9032(9)(A).

The Commission also must conduct an audit of every publicly funded campaign after it ends and require the committee to repay the U.S. Treasury for any nonqualified campaign expenses that were paid for with public funds. The Commission also can require a committee to repay any matching funds that it received in excess of what the law allows. 26 U.S.C. §9038(b)(1).

Final Repayment Determination

The FEC issued a final repayment determination to the primary committee on August 17, 1995, having determined that $409,123 in expenses incurred by the primary committee were not qualified primary campaign expenses because they had, in fact, been made for the benefit of the general election campaign as well.

The expenses in question included disbursements for direct mailings and political advertisements and for equipment and materials sent to the Bush campaign's national headquarters. All these disbursements took place before August 20, 1992the day Mr. Bush was nominated by his party to run for President. Concluding that expenses benefited both the primary and general campaigns, the Commission determined that half of the expenses should be assigned to the general election committee and the other half to the primary committee.

The FEC calculated the repayments as follows:

• The primary committee would pay its share of the nonqualified campaign expenses $106,979 plus an additional $216,853 that the FEC determined it had received in excess of the matching fund allowance.
• As a result of reassigning half of the expenses in question to the general committee, the FEC found that the general committee had exceeded its expenditure limit by $182,785. The FEC recommended, but did not order, that the compliance fund reimburse the general committee for this overspending. That would resolve the general committee's excess expenditure problem.

Expenses in Connection With Primary

The Bush-Quayle committees challenged the FEC's final repayment determination in court, saying the Commission should have used a "bright-line" rule and allocated expenses based solely on whether they were incurred before the August 20 Presidential nomination or after the party's Presidential contender had been named.

The Commission had rejected this approach, arguing that whether an expenditure is a primary qualified expenditure depends on both its timing and nature. To qualify, the Commission had explained, the expense must be primarily in connection with the primary. The committees had argued that any connection to the primary campaign would qualify an expense fully as a qualified primary campaign expenditure.

Finding that arguments from both the agency and the committees were defensible, the court upheld the FEC's interpretation, based on Chevron U.S.A. Inc. v. NRDC.1 That case requires that, where statutory language is ambiguous, courts must uphold the agency's interpretation so long as it is reasonable. The court added, however, that another committee objection to the Commission's decision merited further consideration.

Arbitrary and Capricious

The committees charged that the FEC had acted "arbitrarily and capriciously" because it had treated expenditures of the Bush-Quayle 1992 campaign differently than similar expenditures of the 1984 Reagan-Bush campaigns.

In the 1984 election, the committees said, the FEC had concluded that certain pre-nomination expenditures by the Reagan-Bush Primary Committee were primary expenses despite the fact that some benefited the general election campaign.

The FEC responded that the two cases were distinguishable from each other and thus were treated differently. It also said that in the Reagan audit, the FEC had not adopted a "bright line" test based on the date of the candidate's nomination.

The court found the FEC's response inadequate. Further, the court said: "An agency interpretation that would otherwise be permissible is, nevertheless, prohibited when the agency has failed to explain its departure from prior precedent."2

The court noted further that the FEC's determination was especially problematic given the fact that the agency had adopted new regulations two months before making its repayment determination concerning the Bush-Quayle campaign, but had not applied the approach embodied in those regulations to that determination. The court said that the new rules use a "bright-line" approach to determine whether expenses should be attributed to primary or general elections.

The court remanded the matter to the FEC either to justify its approach or to reconsider the repayment determination.

Source: FEC Record, March 1997, p. 5.

Bush-Quayle '92 Primary Committee v. FEC, 104 F.3d 448 (D.C. Cir. 1997).

1 Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 844 (1984).

2 See Interstate Quality Servs. Inc. v. RRB, 83 F. 3d 1463, 1465 (D.C. Cir. 1996); ANR Pipeline Co. v. FERC, 870 F. 2d 717, 723 (D.C. Cir. 1989); Greater Boston Tel. Corp. v. FCC, 444 F. 2d 841, 852 (D.C. Cir.), cert denied, 403 U.S. 923 (1971).

CALIFORNIA MEDICAL ASSOCIATION v. FEC

This suit was precipitated by an FEC enforcement proceeding in which the California Medical Association (CMA), an unincorporated professional association, and CALPAC, a political committee, were respondents. On April 19, 1979, the FEC had found "probable cause to believe" CMA had violated 2 U.S.C. §441a(a)(1)(C) by making contributions exceeding $5,000 to CALPAC, which CALPAC had accepted. When it was unable to reach a conciliation agreement with the respondents, the Commission filed suit against them on May 22, 1979, in the U.S. District Court for the Northern District of California (Civil Action No. C79-U97-WHO).1

Claims Filed Against Commission

Anticipating the FEC enforcement action, CMA filed a separate suit against the FEC on May 7, 1979, challenging the constitutionality of those provisions of the Act it had allegedly violated. (Civil Action No. 79-4426) Specifically, CMA asked the district court to certify the following constitutional questions to the U.S. Court of Appeals for the Ninth Circuit:

• Whether 2 U.S.C. §441a(a)(1)(C), which limits contributions to multicandidate committees to $5,000 per year, per contributor, abridges First Amendment rights of free speech and association. In particular, does §441a(a)(1)(C) unconstitutionally limit contributions by an unincorporated association (CMA) to a political committee (CALPAC) for the purpose of establishing, administering or soliciting contributions to the committee; and
• Whether 2 U.S.C. §441b(b)(2)(C), which permits labor organizations and corporations (but not unincorporated associations) to pay costs of establishing, administering and soliciting funds to a separate segregated fund, abridges the equal protection provisions of the Fifth Amendment.

Ruling of Appeals Court

In its opinion of May 23, the appeals court, sitting en banc, rejected all the constitutional claims asserted by CMA. Relying on the Supreme Court's decision in Buckley v. Valeo, the court found that the contribution limits imposed only inconsequential restrictions on rights of free speech. The court observed that these restrictions were minimal compared to the "potent alternative means of expression" available to unincorporated associations like CMA. It noted that CMA, CALPAC and its members could make contributions and expenditures in connection with federal elections, as long as the per-candidate and per-committee contribution limits were respected. Further, CMA, its members and CALPAC could make unlimited independent expenditures to express their political views. Moreover, the court concluded that the contribution limits were supported by a compelling governmental interest, namely preventing the circumvention of the contribution limits, which were intended to minimize both the actuality and appearance of corruption in federal political campaigns.

The court also found that the Act did not abridge Fifth Amendment rights by discriminating against political activities of unincorporated associations. To the contrary, the court concluded that unincorporated associations like CMA are regulated to a lesser degree under the Act. While corporations and labor unions are prohibited from making any contributions or expenditures in connection with federal elections, and individuals are limited to total contributions of $25,000 per year, unincorporated associations have no overall limit imposed on the total amount they may contribute or expend in connection with federal elections. Unlike corporations and labor organizations, they may solicit contributions from anyone and make partisan communications to the general public.

Appeal to Supreme Court

In its appeal to the Supreme Court, filed on June 4, 1980, CMA reiterated the arguments which the appeals court had rejected and restated its claim that the challenged provisions violated both First and Fifth Amendment rights. In challenging the constitutionality of limits on contributions to multicandidate committees, CMA argued that, in its Buckley v. Valeo decision, the Supreme Court had not equated contributions to political committees with contributions to candidates. CMA maintained that "...contributions to political committees are functionally different from contributions to candidates."

In its Supreme Court brief, the FEC challenged appellants' raising of constitutional issues under 2 U.S.C. §437h, a provision by which the Supreme Court may expedite its handling of constitutional challenges to the federal election law. The Commission argued that the provision was "...enacted by Congress in 1974 for the specific purpose of facilitating the resolution of a major constitutional challenge to the Act prior to the 1976 general election." In the Commission's view, appellants sought to "...invoke the extraordinary process of 437h for the purpose of avoiding the Commission's enforcement procedures."

As to the constitutional issues raised in the suit, the Commission supported the decision of the appeals court, reiterating its arguments that the Act violated neither the First nor Fifth Amendment rights of appellants.

Supreme Court Ruling

On June 26, 1981, the Supreme Court handed down a decision in California Medical Association v. FEC (Civil Action No. 79-1952) that affirmed the earlier decision of the U.S. Court of Appeals for the Ninth Circuit.

In its opinion, the Court upheld the constitutionality of 2 U.S.C. §441a(a)(1)(C), which limits contributions to a political committee to $5,000 per year, per contributor. The Court concluded that the challenged provision did not violate the First Amendment rights of appellants because it was an appropriate means by which Congress could seek to protect the integrity of the contribution restrictions upheld in Buckley v. Valeo (424 U.S. 1 (1976)). The Court said, "If First Amendment rights of a contributor are not infringed by limitations on the amount he may contribute to a campaign organization which advocates the views and candidacy of a particular candidate, the rights of a contributor are similarly not impaired by limits on the amount he may give to a multicandidate political committee, such as CALPAC, which advocates the views and candidacies of a number of candidates."

The Supreme Court also upheld the appeals court's ruling that Section 441a(a)(1)(C) did not violate appellants' equal protection rights under the Fifth Amendment. Appellants had unsuccessfully claimed that the provision allowed corporations and labor organizations to make unlimited contributions to their separate segregated funds while limiting to $5,000 a year the contributions an unincorporated association could make to the multicandidate committee it established. The Court held, however, that no equal protection violation existed. The Court stated, "Appellants' contention ignores the fact that the Act as a whole imposes far fewer restrictions on individuals and unincorporated associations than it does on corporations and unions. The differing restrictions placed on individuals and unincorporated associations, on the one hand, and on corporations and unions, on the other, reflect a congressional judgment that these entities have differing structures and purposes and that they therefore may require different forms of regulation in order to protect the integrity of the political process."

The Court found no merit, however, to the FEC's claim that the appellants' direct appeal to the Court (pursuant to Section 437h of the Act)2 was inappropriate because an FEC enforcement proceeding was pending against appellants (pursuant to Section 437g of the Act). The Court found that neither the legislative history nor the statutory language of Sections 437g and 437h indicated that a direct appeal should be limited to situations where no enforcement proceeding was pending.

Source: FEC Record, April 1981, p. 7; and August 1981, p. 1.

California Medical Association v. FEC, 641 F.2d 619 (9th Cir. 1980) (en banc), aff'd, 453 U.S. 182 (1981).

1 In its October 21, 1980, opinion in FEC v. California Medical Association, the district court ordered CMA and CALPAC to pay the FEC civil penalties of $5,000 each.

2 Section 437h provides for expedited handling of constitutional challenges to the Act. Section 437h(b), which granted the right of direct appeal to the Supreme Court, was repealed by Congress in 1988.

CARTER/MONDALE PRESIDENTIAL COMMITTEE v. FEC (82-1754)

On June 24, 1983, the U.S. Court of Appeals for the District of Columbia ruled that, since the Carter/Mondale Presidential Committee, Inc. (the Committee) had failed to file its petition for review of certain final FEC repayment determinations within 30 days after the FEC had made them, the court had no jurisdiction over the petition. Filed on July 6, 1982, the Committee's petition concerned certain final Commission determinations with regard to the FEC's audit of the Committee's publicly funded primary campaign in 1980.

Since it dismissed the suit on jurisdictional grounds, the court did not address the issue of whether the FEC could require the Committee to:

• Repay federal matching funds in an amount equal to total federal and private funds used for nonqualified campaign expenses; or
• Repay only the portion of nonqualified expenses that were paid with federal funds.

Source: FEC Record, August 1983, p. 8.

Carter/Mondale Presidential Committee, Inc. v. FEC, 711 F.2d 279 (D.C. Cir. 1983).

CARTER/MONDALE PRESIDENTIAL COMMITTEE v. FEC (84-1393)

On November 1, 1985, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the FEC did not abuse its discretion in declining to reconsider a final determination the agency had made with regard to the Carter/Mondale Presidential Committee, Inc.'s (the Committee's) repayment of nonqualified campaign expenses to the U.S. Treasury.1 CA No. 84-1393 and 84-1499 (The Committee was the publicly funded principal campaign committee for former President Carter's 1980 primary campaign.) The court's ruling sustained decisions made by the FEC on July 12 and September 20, 1984, not to reconsider its final repayment determination with regard to the Committee.

Background

On July 6, 1982, the Committee had filed a petition with the appeals court which sought review of an FEC final determination that the Committee must repay $104,300.78 to the U.S. Treasury, an amount equal to those nonqualified expenses incurred by the Committee during the 1980 primary campaign. (Carter/Mondale Presidential Committee v. FEC; 111 F.2d 279 (D.C. Cir. 1983)) The court dismissed the case on grounds that it had not been filed within the time frame required by the election law. See 26 U.S.C. §9041(a).

On August 7, 1984, the Committee filed a petition, asking the Court to review the decision that the FEC made on its own initiative not to reopen its final repayment determination for the Committee in light of recent decisions made by the court in two other suits concerning repayments. (In Kennedy for President Committee v. FEC and Reagan for President Committee v. FEC, the court had held that the FEC had exceeded its authority under 26 U.S.C. §9038(b)(2) when it required repayment of the entire amount of nonqualifying payments, rather than the portion attributable to the matching payment account.) The Committee also asked the FEC to reconsider its decision (taken in July 1984) not to reopen the Carter/Mondale repayment determinations. The Commission had decided to reconsider only the repayments by the Kennedy and Reagan committees, which had been required by the court. The Commission had taken this position " 'in the interest of finality in the administrative process, now and in the future.'" The Committee claimed that the FEC's decision disregarded the principle of equal treatment for all candidates, which the Committee alleged the agency had established in reconsidering a final repayment determination made with regard to John Anderson's publicly funded campaign. On September 20, 1984, the FEC once again declined to reconsider the Committee's final repayment
determination. On October 2, 1984, the Committee filed a second petition with the appeals court. On October 15, 1984, the court consolidated this case with the Committee's August 1984 case.

Appeals Court's Ruling

The court rejected the Committee's claim that the FEC's July determination was unlawful because it contradicted a precedent established by the agency's reconsideration of the Anderson Campaign's repayment requirements: "Far from establishing any general or even selective practice of reopening final determinations, the record before us [of the FEC's reconsideration of the Anderson determination] displays only an isolated situation in which the facts distinguishable from those in the case at hand tugged the Commission away from application of the finality principle."

Nor did the court find merit in the Committee's assertion that the FEC had treated the Committee unfairly. "No favoritism can be attributed to the FEC when it carries out the letter of a court's order" to reconsider repayments by the Kennedy and Reagan committees. Moreover, the Committee's tardiness in seeking court review of its own repayment determination contradicts "'Congress' strong interest in resolving federal matching fund audits expeditiously.' 111 F.2d at 289 and n.19."

Finally, the court rejected the Committee's argument that the FEC had failed to give reasons for refusing to reopen its repayment determination. "[A]bsence of an express statement does not render its action unlawful where reasons for that action may be gleaned from its [the FEC's] staff's reports."

Source: FEC Record, December 1985, pp. 6-7.

Carter/Mondale Presidential Committee, Inc. v. FEC, 775 F.2d 1182 (D.C. Cir. 1985).

1 The public funding statutes require Presidential candidates to repay the U.S. Treasury for nonqualified campaign expenses. 26 U.S.C. §§9007(b)(4) and 9038(b)(2).

CARTER/MONDALE REELECTION COMMITTEE AND DNC v. FEC

The Commission's certification of public funds to the Republican nominee was challenged in Carter-Mondale Reelection Committee, Inc. and the Democratic National Committee v. FEC, filed July 24, 1980. The Carter-Mondale Committee (the Committee) asked the U.S. Court of Appeals for the District of Columbia Circuit to prevent the Commission's certification of the Republican nominees, pending resolution of an administrative complaint filed by the plaintiffs against the nominees. In their complaint to the Commission, the Committee had said that Ronald Reagan would be ineligible for public funds since he had allegedly violated the law on several counts. The Committee had charged that several groups, purportedly making independent expenditures on Mr. Reagan's behalf, were in fact making qualified campaign expenditures with the prior consent of the candidate and his agents. In the suit, the Commission argued that the certification was proper and within the Commission's exclusive jurisdiction. On September 12, the court ruled in the Commission's favor and affirmed the Commission's "action in certifying the nominees' application for funds."

Source: FEC Annual Report 1980, p. 20.

In re Carter-Mondale Reelection Committee, Inc., 642 F.2d 538 (D.C. Cir. 1980).

CENTER FOR RESPONSIVE POLITICS v. FEC (93-2250)

This case was voluntarily dismissed as moot when the Commission took action on three complaints the Center had filed with the agency in 1990 and 1991 (MURs 3175, 3249 and 3325). The Center had filed suit to force the FEC to take action but, in March 1994, agreed to suspend the litigation for four months while the FEC worked to resolved the MURs, which concerned excessive contributions.

The U.S. District Court for the District of Columbia dismissed the case on July 11, 1994. (Civil Action No. 93-2250 (SSH).)

Source: FEC Record, September 1994, p. 8.

Center for Responsive Politics v. FEC, No. 93-2250
(D.D.C. Oct. 29, 1993).

CENTER FOR RESPONSIVE POLITICS v. FEC (95-1464)

On November 9, 1995, the U.S. Court of Appeals for the District of Columbia dismissed this case.

The Center for Responsive Politics (CRP) and its executive director, Ellen Miller, brought this suit alleging that the FEC acted contrary to law when, in a recent rulemaking (60 FR 31854, June 16, 1995), it failed to repeal regulations that permit publicly funded Presidential candidates to accept private contributions for their general election legal and compliance fund.

The court ruled that the CRP and Mrs. Miller lacked standing to bring this suit. Neither the CRP nor Mrs. Miller suffered harm that could be directly traced to the FEC's action. Additionally, neither one was qualified to bring suit since their alleged injury was outside the statute's "zone of interest" in this case.

Source: FEC Record, January 1996, p. 3.

Center for Responsive Politics v. FEC, No. 95-1464 (D.C. Cir. Nov. 9, 1995).

CHAMBER OF COMMERCE v. FEC

On November 14, 1995, the U.S. Court of Appeals for the District of Columbia reversed the district court's dismissal of this case and ordered the court to issue appellants appropriate declaratory relief.

The U.S. District Court for the District of Columbia had dismissed this case on October 28, 1994, on the grounds that the matter was not ripe for review and that the plaintiffs lacked standing to bring the action.

This case involved the FEC's regulatory definition of "member." FEC regulations allow membership organizations to use their corporate funds to send political communications and solicitations, but only to their administrative and executive personnel and to persons who qualify as "members" under federal election law.1 To qualify as a "member" under FEC regulations a person must have a significant financial interest in the organization, or pay regular dues and possess the right to vote either directly or indirectly for at least one representative in the organization's highest governing body, or possess the right to vote for all members of the organization's highest governing body. 11CFR 114.1(e)(2).

Background

In 1976, FEC regulations defined an organization's "members" as "all persons who are currently satisfying the requirements for membership" in the organization. 11CFR 114.1(e). In subsequent years, court decisions and advisory opinions established that political communications and solicitations financed with corporate monies could only be sent to persons who have a significant financial or organizational attachment to the membership organization.

In 1993, the FEC adopted new rules to reflect these precedents. These rules clarified that a person will be considered a "member" for purposes of the Act if that person:

• Has some significant financial attachment to the organization beyond the mere payment of dues, such as a significant investment or ownership stake; or
• Is obligated to make regular dues payments and has the right to vote, either directly or indirectly, for at least one representative in the membership organization's highest governing body; or
• Is entitled to vote directly for all who sit on the organization's highest governing body. 11CFR 114.1(e)(2).

When these new regulations took effect, the Chamber of Commerce of the U.S.A. and the American Medical Association (AMA ) submitted Advisory Opinion Requests (AORs) 1994-4 and 1994-12 to the Commission, asking about the "member" status of their members. The Commission responded to the AORs by stating that the six Commissioners could not reach a consensus on the status of more than 200,000 Chamber members and nearly 45,000 AMA members; these persons paid dues to their respective organizations but lacked voting rights.

Not satisfied with this result, the Chamber and the AMA challenged the FEC's revised definition of "member" in the U.S. District Court for the District of Columbia.

District Court Decision

• The district court ruled that:
• The case was not ripe for review because neither plaintiff had suffered harm by the rule;
• Plaintiffs lacked standing to bring this suit because the rule did not present a reasonable threat of prosecution to them; and
• The FEC's definition of "member" was entitled to deference because it was a permissible construction of that term by the Commission. Chevron U.S.A. v. Natural Resources Defense Council (467 U.S. 837, 1984).

Appeals Court Decision

The court of appeals found that the Chamber and the AMA did have standing to argue their case before the court: "In the last federal election, appellants, not surprisingly, felt constrained to alter their prior practicethey ceased political communications with those constituents who did not qualify as 'members' under the Commission's new rule. And counsel for the Commission agreed . . . that he would not advise the Chamber and the AMA to ignore the rule." Thus, the issue brought before the court was ripe for review because it caused both the Chamber and the AMA harm.

Further, the Chamber and the AMA had standing to bring this suit because, although an FEC enforcement decision had not been issued against them, there was a credible threat of enforcement if they chose to ignore the regulation. Additionally, the possibility that appellants' First Amendment rights were chilled by the FEC's regulations conferred standing upon appellants. Virginia v. American Booksellers.

The court found that the FEC's rules presented "serious constitutional difficulties" because they precluded "appellants from communicating on political subjects with thousands of persons, heretofore regarded by the Commission as members." Thus, although the court did not disagree with the district court's conclusion that the FEC was entitled to deference under the Chevron doctrine, the court reasoned that the conflict between the rules and the First Amendment warranted judicial review.

At issue here, in the court's view, was whether the FEC's rule accorded with the Supreme Court's opinion in Federal Election Commission v. National Right to Work Committee, 459 U.S. 197 (1982). There, the Court ruled that "members of nonstock corporations were to be defined . . . by analogy to stockholders of business corporations and members of labor unions . . . [which] suggest[ed] that some relatively enduring and independently significant financial or organizational attachment is required . . . "

The appeals court concluded that the FEC's new rule did not square with the Supreme Court's opinion in NRWC: "[I]mplicit in the Commission's rule is the view that dues, no matter how high, are not by themselves a manifestation of a significant financial attachment." The court said that the FEC's position reads the disjunctive "or" between "financial" and "organizational" as if the Supreme Court had used the conjunctive "and."

Furthermore, the court held that, "It is...quite illogical to regard someone who has one share of stock in a public corporation, which can be sold in minutes, as more significantly attached to the organization than a person or entity who pays $1000 or even $100,000 (as is the case for some Chamber members) in annual dues."

The court also criticized the rule's voting requirement. It noted that the nearly 45,000 AMA members in question are subject to sanction by the organization should they violate the organization's Principles of Medical Ethics. "It might be thought, that for a professional, placing oneself in such a position is the most significant organizational attachment."

Lastly, the court noted that the rule treats some labor unions and federated rural electric cooperatives differently, exempting them from its new definition of "member." The court noted that this question had not been squarely presented on appeal, but stated that it was not satisfied with the FEC's claim that the separate treatment was consistent with the Act's legislative history. Without further elaboration, the court stated, it "would determine that these exemptions make the regulation arbitrary and capricious."

Source: FEC Record, December 1994, p. 1; and January 1996, p. 2.

Chamber of Commerce v. FEC, 1994 WL 615786 (Oct. 28, 1994); No. 94-5339 (D.C. Cir. Nov. 14, 1995).

1 This is an exception to the general ban on the use of corporate money in connection with federal elections. 2 U.S.C. §441b.

CINCINNATI v. KRUSE
BURRIS v. RUSSELL

On November 16, 1998, the U.S. Supreme Court refused to review two court cases that posed First Amendment challenges to limits on campaign contributions and expenditures in state and local elections. Both cases had been cast as potential challenges to Buckley v. Valeo, the landmark court case on the Federal Election Campaign Act (the Act). The FEC was not a party to either suit.

Background of Buckley

The appellate courts' reasoning in the two cases is based in great part on Buckley, where the high court equated campaign spending with the First Amendment's guarantee of free speech. While the Court found that a compelling government interest in preventing real or perceived corruption justified imposing restrictions on contributions, it concluded that this governmental interest was inadequate to sustain limitations on campaign expenditures.

Decision in Cincinnati

In the first case, Cincinnati v. Kruse, John Kruse, a candidate for a Cincinnati City Council seat, challenged a council ordinance that limited campaign expenditures for council elections to about $140,000. The city council argued that the rising cost of city council races had resulted in a rise in the influence of wealthy donors and the decline in the influence of small donors. The U.S. District Court for the Southern District of Ohio at Cincinnati ruled in favor of Mr. Kruse, finding that the ordinance was unconstitutional on its face.

The U.S. Court of Appeals for the Sixth Circuit affirmed that ruling on April 27, 1998. It reiterated the Supreme Court's view that restrictions that have the potential of limiting the First Amendment guarantee of political expression must be subjected to "exacting scrutiny" by the courts and that "the prevention of corruption or the appearance of corruption" is the only governmental interest that survives strict scrutiny and, as a result, justifies restrictions on campaign finance.

• Cincinnati failed to show that an expenditure limit would reduce corruption in the political process. The city had no direct evidence that imposing contribution limits alone could prevent quid pro quo corruption. The council did not adopt contribution limits until after it had passed the expenditure limits. Further, it based its views of corruption on perceived abuse of the Act on the federal level. The court found that such evidence was not enough. The three-judge panel stated that problems on the federal level are explained primarily by the exception allowing soft money contributions to party committees "and do not undermine the Supreme Court's conclusion that spending restrictions are not narrowly tailored to addressing the problem of the corrupting nature of money in politics."

The court also said the perception that the public is discouraged and cynical about the democratic process as a result of perceived corruption in campaign finance is not sufficient evidence for limiting campaign spending.

• Cincinnati failed to show that an expenditure limit would curb the rising cost of campaigns. The city, through an amicus brief filed by the Brennan Center, had argued that the Buckley Court had not considered what is now perceived to be "uncontrollable campaign spending" and the effects of such spending, such as the large amounts of time candidates must spend raising campaign funds. The court rejected this view, stating that the Supreme Court, in Buckley, concluded that "reducing the allegedly skyrocketing costs of political campaigns is not compelling or sufficient to justify restrictions on campaign spending."
  
• Cincinnati failed to prove that leveling the playing field among candidates is sufficient justification for an expenditure limit. The city had argued that the government had an interest in eliminating the advantage wealth plays in elections and the perceived disadvantage of poor and minority voters and candidates. The court found that restricting the free speech guarantees of some in order to enhance the voices of others would violate the First Amendment. It also said that the Buckley Court had rejected this argument. The Buckley Court explained that spending limits, rather than promoting financial equality among candidates, could instead protect incumbents and handicap well-known candidates.

Decision in Russell

In Burris v. Russell, Ron Russell challenged the Arkansas Ethics Commission after the state's voters approved a referendum that set contribution limits per election for district races at $100 per contributor and for statewide races (such as governor and state treasurer) at $300 per contributor. (The lowest contribution limit per contributor allowed under Buckley is $1,000.) The referendum also introduced an entity called the small-donor PAC. Individuals could contribute up to $25 to the PAC, and the PAC, in turn, could contribute up to$2,500 per candidate, per election. The initiative also created independent expenditure committees that could accept no more than $500 from any person annually. Finally, the initiative authorized local governments to set reasonable limits on the amount of campaign funds candidates for local offices could raise. Before this initiative, Arkansas voters had approved a measure that limited PAC contributions to $200 per year, down from $1,000.

This case was merged with Citizens for Clean Government v. Russell. The U.S. District Court for the Eastern District of Arkansas rendered a split decision, upholding some of the contribution limits and ruling others unconstitutional. On June 4, 1998, the U.S. Court of Appeals for the Eighth District struck down the individual and PAC contribution limits.

• Supporters of the initiative failed to prove a link between large contributions and undue influence or corruption of Arkansas officials. Proponents argued, for example, that financial contributions and support by the Tobacco Institute and other pro-tobacco sources caused a state legislator to champion a measure that would have prohibited local governments from regulating tobacco products. The court, however, showed that the pro-tobacco legislator in question had already stated his support for tobacco interests, had not changed his position on the issue as a result of the contributions and had not tried to conceal the tobacco industry contributions. The court also found that the $2,700 in tobacco money the legislator received was not enough to influence his vote on the measure. "We believe," the court stated, "that $1,000 is simply not a large enough sum of money to yield, of its own accord and without further evidence, a reasonable perception of undue influence or corruption."

This same pattern emerged with contributions to legislators from several lobbyists who represented various groups, including real estate interests. Again, none of the contributions individually exceeded $1,000.

The court found that the $100 and $300 contribution limits approved in the voter initiative were too low to allow meaningful participation in the political process. The court also held that the $200-per-year PAC contribution limit enacted before the voter initiative was "simply too low to allow for appropriately robust participation in protected political speech and association."

The court concluded that, "the limitations in question here are dramatically lower than, and different in kind from, the limits approved in Buckley, and thus are unconstitutionally low."

• Proponents of small-donor PACs with higher contribution limits failed to show that differential treatment was warranted. The supporters argued that raising funds in $25 amounts would alleviate the potential for corruption. The court found, in fact, that the potential for corruption would move from the individual contributor to the small-donor PAC itself.

"If any contribution is likely to give rise to a reasonable perception of undue influence or corruption, it would be one from an entity permitted to contribute two-and-a-half times the amount that most others are allowed to contribute," the court stated. "The small-donor PAC provision is not, then, narrowly tailored to serve the compelling government interest of combating the reality or perception of undue influence or corruption."

Severability. The court found that the contribution limits were severable from the remainder of the voter initiative. It let stand the provisions for independent expenditure committees and rendered no decision on the instructions to local governments to establish reasonable limitations on campaign contributions and expenditures.

Source: FEC Record, January 1999, p.3.

Kruse v. City of Cincinnati, 142 F.3d 907 (6^th Cir. 1998), cert. denied 1998 WL 651027 (U.S.); Russell v. Burris, 146 F.3d 563 (8^th Cir. 1998), cert. denied 1998 WL 596728 (U.S.).

CITIZENS FOR LaROUCHE v. FEC

FEC v. LaROUCHE

On January 31, 1984, the U.S. Court of Appeals for the District of Columbia Circuit issued an order dismissing a petition that Lyndon H. LaRouche, Jr., a publicly funded candidate for the Democratic Party's Presidential nomination in 1980, and Citizens for LaRouche, his principal campaign committee, had filed with the court on January 11, 1983. (Citizens for LaRouche v. FEC; Civil Action No. 83-1050.) Pursuant to 26 U.S.C. §9041, the LaRouche campaign had asked the appeals court to review a final repayment determination that the FEC had made on December 16, 1982. The court's action affirmed the FEC's determination that the LaRouche campaign had to repay $54,671.84 in primary matching funds to the U.S. Treasury.

On May 8, 1984, the Commission entered into a stipulation dismissing with prejudice FEC v. LaRouche (Civil Action No. 83-3743), a suit that the FEC had brought in the U.S. District Court for the District of Columbia against Lyndon LaRouche and Citizens for LaRouche, his principal campaign committee. In this suit, filed on December 15, 1983, the FEC had sought a court ruling that would require the LaRouche campaign to repay the $54,672 in primary matching funds. Since the LaRouche campaign subsequently made the repayment during April 1984, the Commission filed the stipulation dismissing the case as moot.

Source: FEC Record, June 1984, p. 11; and July 1984, p. 7.

Citizens for LaRouche v. FEC, 725 F.2d 125 (D.C. Cir. 1984).

Citizens for LaRouche: FEC v., 2 Fed. Elec. Camp. Fin. Guide (CCH) ¶9214 (D.D.C. 1984).

CITIZENS FOR PERCY '84 v. FEC (84-2653)1

On November 19, 1984, the U.S. District Court for the District of Columbia issued an opinion in Citizens for Percy '84 v. FEC (Civil Action No. 84-2653) stating that the FEC's delay in acting on an administrative complaint filed on April 26, 1984, by Citizens for Percy '84 (the Committee) was contrary to law. (The Committee was former Senator Charles H. Percy's principal campaign committee for his 1984 reelection campaign.) The court also ordered the FEC to conform its conduct to the decision within 30 days of the court's order. See 2 U.S.C. §437g(a)(8).

Background

On August 26, 1984, the Committee had petitioned the district court to declare that the FEC's failure to act on its administrative complaint was contrary to law. See 2 U.S.C. §437g(a)(8)(A). In the complaint, the Percy campaign had claimed that media expenditures made by Michael Goland on behalf of Rep. Thomas Corcoran, Senator Percy's opponent in the Illinois Senate primary, were coordinated with the Corcoran campaign. The Percy campaign had alleged that, since the expenditures were not independent, Mr. Goland had violated the election law by making excessive in-kind contributions to the Corcoran campaign. See 2 U.S.C. §441a(a)(1)(A). Moreover, the Corcoran campaign had violated the law by accepting the contributions. See 2 U.S.C. §441a(f).

Court's Ruling

Noting that the FEC had not found reason to believe the respondent had violated the election law until October 2, 1984, more than five months after the Committee had filed its administrative complaint, the court concluded that the FEC had acted contrary to law. The court reasoned that, since Senator Percy's reelection campaign had been the "focus...of tremendous national interest," the agency did not have the discretion to give the complaint routine treatment.

Source: FEC Record, January 1985, p. 6.

Citizens for Percy '84 v. FEC, 2 Fed. Elec. Camp. Fin. Guide (CCH) ¶9215 (D.D.C. 1984).

1Citizens for Percy '84 v. FEC (85-0763) was dismissed. See Antosh v. FEC (85-1410).

CITIZENS FOR WOFFORD v. FEC

On April 14, 1995, plaintiff withdrew the complaint it had filed against the FEC in the U.S. District Court for the District of Columbia. An FEC suit filed against plaintiff on December 20, 1994, in the U.S. District Court for the Middle District of Pennsylvania, Harrisburg Division, on December 20, 1994, is still in progress. FEC v. Citizens for Wofford (1:CV-94-2057).

Background

Both cases involve an FEC enforcement action borne out of the 1991 Pennsylvania special election. The major party contenders in the special election were Democratic nominee Mr. Harris Wofford and Republican nominee Mr. Richard Thornburgh. The Democrats nominated Mr. Wofford on June 1, 1991, but did not certify the nomination until September 5, 1994.

Citizens for Wofford, Mr. Wofford's principal campaign committee, regarded contributions received following the June 1 designation but prior to the September 5 certification as primary contributions.1

As a result, the Republican State Committee of Pennsylvania filed an administrative complaint with the FEC. Following an investigation, the Commission found probable cause to believe that Citizens for Wofford violated 2 U.S.C. §441a(f) the knowing acceptance of a contribution made in violation of the Federal Election Campaign Act's limits. This was because contributions received after June 1, the date of the nomination, should have been counted against the contributor's general election limit. Attempts to reach a conciliation agreement with Citizens for Wofford failed. This impasse lead to the filing of this case and FEC v. Citizens for Wofford.

Source: FEC Record, June 1995, p. 13.

Citizens for Wofford v. FEC, No. 94-2617 (D.D.C. Apr. 14, 1995).

1 Counting these contributions against a contributor's primary election limit instead of against the contributor's general election limit would enable contributors to give up to twice as much to the party's nominee as they would otherwise be able to; contributors would be able to give up to their per-election limit to support Senator Wofford's primary election campaign after the fact and again to support his general election campaign.

CLARK v. FEC AND THE COMMISSION ON PRESIDENTIAL DEBATES

On March 10, 1997, the U.S. Court of Appeals for the District of Columbia Circuit ruled in the FEC's favor, granting its motion for summary affirmance in this case and denying the motion of John P. Clark and the Green Party USA for emergency summary reversal. The ruling upholds the district court's denial of a motion by Mr. Clark, other individual voters and the Green Party to intervene in a suit brought by the Natural Law Party (NLP) and its presidential and vice-presidential candidates against the FEC and the Commission on Presidential Debates (CPD).

This case stemmed from an October 4, 1996, ruling from this same court that upheld a lower court ruling and dismissed lawsuits filed against the FEC and the CPD by the NLP and the presidential and vice presidential candidates running under the Reform Party banner. Both the NLP and the Reform Party candidates had sought to participate in the presidential debates being sponsored by the CPD. The CPD excluded the candidatesthe NLP's Dr. John Hagelin and Mike Tompkins and the Reform Party's H. Ross Perot and Pat Choatefrom the debates, saying that the minor party candidates did not meet the criteria for participation.

Background

On September 6, 1996, the NLP filed an administrative complaint with the FEC and, on September 13, filed suit in U.S. District Court for the District of Columbia, contending that the CPD had violated FEC rules governing nonpartisan candidate debates. 11 CFR 113.10. Specifically, the NLP suit asked the court to impose a temporary restraining order and issue preliminary and permanent injunctions to prevent the CPD from using any debate selection criteria that did not comply with FEC rules. In the alternative, it asked the court to order the FEC, prior to the debates, to take action on its administrative complaint.

The Green Party, Mr. Clark and seven other individuals, all independent voters or supporters of the Green Party USA and its 1996 presidential candidate Ralph Nader, filed a motion for intervention on September 27, 1996. The district court found that Mr. Clark and the others "show[ed] their curiosity in the case, butfail[ed] to demonstrate sufficient grounds for intervention." On September 30, the court therefore denied the motion for intervention. However, it did grant Mr. Clark leave to file a brief as a friend of the court.

On November 22, more than a month after the appeals court had ruled in this case and weeks after the debates and 1996 elections had taken placeMr. Clark filed a notice of appeal of the district court ruling. Mr. Clark had not participated as a friend of the court in the appeals process, nor in a subsequent and unsuccessful petition from Mr. Hagelin for an expedited rehearing and rehearing en banc.

FEC Arguments and Appeals Court Order

First, the FEC argued that the appellants had failed to demonstrate a common question of law, a requirement for permissive intervention under Fed. R. Civ. P. 24.1 Among other things, Mr. Clark's complaint claimed that the CPD's debate selection criteria violated unspecified sections of the U.S. Constitution. Mr. Hagelin's complaint, on the other hand, had claimed that the CPD's criteria violated FEC regulations at 11 CFR 110.13. Further, the FEC argued that there were no common "questions of fact," as required by Rule 24(b), between Mr. Clark's and Mr. Hagelin's complaints. In addition, the FEC said that the Clark appellants had not shown an independent jurisdictional basis for their claims. The would-be plaintiffs did not even include a presidential or vice-presidential candidate who might have claimed exclusion from the debates.

Timeliness was also at issue, the FEC argued. Rule 24(b) states that a court must consider "whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties." Because the debates were to begin shortly after the original complaints were filed, the district court set about adjudicating the matter on an expedited schedule, but Mr. Clark's motion was not filed until the last day of the briefing schedule.

Finally, the FEC argued that because the district court granted Mr. Clark the option of filing a brief as a friend of the court, it did not abuse its discretion in denying his initial motion to intervene. The appeals court found that the merits of the parties' positions were so clear that they warranted summary action. It held that the district court did not abuse its discretion in denying the appellants' motion to intervene.

Source: FEC Record, May 1997, p. 1.

1 Federal Rule of Civil Procedure 24(b) states that would-be intervenors must timely file their applications and demonstrate that their claim or defense and the "main action" have a question of law or fact in common. In addition, they must show an independent jurisdictional basis for their claims.

CLARK v. VALEO

In a suit filed in 1976, Ramsey Clark, former candidate in the New York State Senate primary election, asked the U.S. District Court of the District of Columbia for declaratory and injunctive relief against those provisions in the Act governing legislative review of the rules, regulations and advisory opinions of the FEC. Under these provisions, regulations proposed by the Commission may not be prescribed until they have been before Congress for 30 legislative days, during which time either house may disapprove them.

Clark argued that the "one-house veto" violated the constitutional principle of "separation of powers." Further, he asserted, regulations would be tainted by congressional influence on the Commission's decision-making process. He also claimed the procedure delayed promulgation of Commission regulations, thereby denying him, as voter and as candidate, protection of the Act.

Intervening as a plaintiff on behalf of the Executive Branch, the Attorney General also requested an injunction against the "one-house veto," arguing that it intrudes "upon those areas reserved by the Constitution of the United States to the Executive Branch.... "

The Federal Election Commission asked the court to dismiss the complaint, arguing inter alia, the case was not ripe for court action since Congress had not disapproved any regulation and the plaintiff had claimed no hardship resulting from compliance with the substance of a proposed regulation.

The district court certified a number of constitutional questions to the court of appeals. Concluding that the matter was not "ripe" for adjudication, the court of appeals, in a 6-2 decision on January 21, 1977, returned the certified questions to the district court unanswered, with instructions to dismiss. The court said that Clark's case, based on his status as a candidate, became moot when he failed to win the primary in New York. As a voter, Clark had neither protested a specific veto action by Congress nor identified any proposed regulation tainted by the threat of veto or review. With respect to the constitutional issue raised by the one-house veto, the court held the case was "unripe" because congressional disapproval of a proposed regulation had not yet occurred. "Until Congress exercises the one-house veto," the Court said, "it may be difficult to present a case with sufficient concreteness as to standing and ripeness to justify resolution of the pervasive constitutional issue which the one-house veto provision involves."

On June 6, 1977, the Supreme Court of the United States affirmed the lower court's decision.1

Source: FEC Annual Report 1977, p. 19.

Clark v. Valeo, 559 F.2d 642 (D.C. Cir.) (per curiam), aff'd mem. sub nom. Clark v. Kimmit, 431 U.S. 950 (1977).

1 The Court eventually found the one-house veto to be unconstitutional in Immigration and Naturalization Service v. Chadha, 462 U.S. 919 (1983)

CLIFTON v. FEC

On May 20, 1996, the U.S. District Court for the District of Maine invalidated the FEC's regulations on voting records and voter guides because they regulate issue advocacy and therefore go beyond the FEC's authority.

On June 6, 1997, the U.S. Court of Appeals for the First Circuit declared invalid two parts of those regulations. The court declared the voting record regulation at 11 CFR 114.4(c)(4) invalid only insofar as the FEC may purport to prohibit mere inquiries to candidates and the voter guide regulation at 11 CFR 114.4(c)(5) invalid only insofar as it limits contact with candidates to written inquiries and replies and imposes an equal space and prominence restriction.

The plaintiffs petitioned the court for a rehearing in this case, but that petition was denied on June 27, 1997. The FEC filed a petition for rehearing and suggestion for rehearing en banc on July 21, 1997.

On February 23, 1998, the Supreme Court denied Maine Right to Life Committee's petition for certiorari in this case.

On April, 30, 1998, on remand from the appeals court, the district court declared the Commission's "electioneering message" provisions of its regulations governing voting guides to be invalid because they were inseverable from those struck down by the appeals court.

Background

The Maine Right to Life Committee (MRLC) is a nonprofit membership corporation established for the purpose of advocating pro-life stances. MRLC uses its corporate funds to create and distribute to its members and the general public voter guides and voting records. Robin Clifton is a Maine voter who wishes to receive this information.

FEC regulations at 11CFR 114.4(c)(4) and (5) make it illegal for a corporation or labor organization to distribute voting records or voter guides to the general public if such materials expressly advocate the election or defeat of a clearly identified candidate or if the organization consults or coordinates with any candidates concerning the content or distribution of such materials. At 11CFR 114.4(c)(5)(ii), the FEC lists additional restrictions for voter guides, such as prohibiting a corporate or labor organization from contacting a candidate (except through written questions to which a candidate may respond in writing) and requiring the organization to give all candidates for a particular office an equal opportunity to respond.

MRLC argued that the regulations were too restrictive, exceeding the FEC's statutory power and chilling First Amendment rights. The FEC contended that it had the authority to regulate corporate expenditures for voting records and voter guides if there was coordination with a candidate about the preparation, contents and distribution of such materials.

District Court Decision

The court pointed out that the ban on direct corporate contributions had been upheld by the U.S. Supreme Court in Buckley v. Valeo on the grounds that the government's interest in preventing corruption or its appearance outweighs First Amendment concerns. On the other hand, based on the Supreme Court's opinions in Buckley and FEC v. Massachusetts Citizens for Life, Inc. (MCFL), the court said that corporate spending cannot be limited unless it expressly advocates the election or defeat of a particular candidate. "In other words," the court concluded, "spending on issue advocacy... cannot be limited." The question the court addressed was whether a corporation's contact with a candidate when preparing a voter guide or voting record would transform permissible issue-advocacy spending into a prohibited contribution.

To answer the question, the court examined two provisions of the Federal Election Campaign Act (the Act). In §441a, the Act sets dollar limits on contributions, and for this purpose "contribution" is defined to include "expenditures made by any person in cooperation, consultation, or concert, with, or at the request or suggestion of, a candidate, his authorized political committees, or their agents." 2 U.S.C. §441a(a)(7)(B)(i).

The other provision, §441b, prohibits corporate "contributions" and "expenditures," which are defined to include "any direct or indirect payment...or anything of value" provided "to any candidate...in connection with any [federal] election." 2 U.S.C. §441b(b)(2). The district court cited the MCFL Court's interpretation of Section 441b as prohibiting payments (including indirect payments) made "on behalf of candidates." The district court stated: "That is the statutory and interpretive language on which the FEC's new regulations must be based."

The court said that the FEC, in relying on Section 441a as its authority for the challenged regulations, had "misinterpreted the Supreme Court's teachings." The district court pointed out that, in Buckley, the Supreme Court upheld the dollar limitations on contributions because limits on amounts given to a candidate are not the same as limits on direct political speech. "Here," the district court said, "both the disbursements and the speech are direct political speech by the MRLC, not by the candidate. They are thus at the heart of the [Supreme] Court's First Amendment concerns." (Emphasis in original.)

The court concluded that the FEC had based the challenged regulations on too broad an interpretation of the §441b prohibition on corporate expenditures. The court said that the voter guide regulations mistakenly hinge on whether a corporation has had any contact with a candidate rather than on whether the voter guide conveys issue advocacy on behalf of a candidate (which would be an acceptable interpretation). Under the voting record regulations, MRLC would be in violation of §441b if it included an explanation solicited from a candidate concerning apparent inconsistencies in his or her voting record. The court stated: "...it is a distortion of the English language to say that [such an activity] would turn the MRLC's publication...into spending 'on behalf of' a candidate."

In concluding that the FEC had overstepped its authority in promulgating 11CFR 114.4(c)(4) and (5), the court pronounced that, "as long as the Supreme Court holds that expenditures for issue advocacy have broad First Amendment protection, the FEC cannot use the mere act of communication between a corporation and a candidate to turn a protected expenditure for issue advocacy into an unprotected contribution to the candidate."

Appeals Court Decision

The appeals court found that to avoid First Amendment concerns, it would construe 2 U.S.C. §441b narrowly. Under this construction, both the Commission's restriction on oral contact between MRLC and candidates and its insistence that voter guides provide equal space to candidates were unlawful.

The appeals court found that the FEC's requirement of equal space was a "content-based" restriction because it would affect the content of the MRLC's voting guides. The court said that "[T]here is a strong First Amendment presumption against content-affecting government regulation of private citizen speech, even where the government does not dictate the viewpoint." The court cited a case where the Supreme Court struck down Florida's "right of reply" statute, which guaranteed political candidates equal space to reply to criticism printed in the Miami Herald.1

With regard to the Commission's requirement that contact between corporations and candidates be limited to written communications when such corporations are preparing voter guides, the court said that the regulation treads "heavily upon the right of citizens, individual or corporate, to confer and discuss public matters with their legislative representatives or candidates for such office." The court said that such a ban on communications served as a "handicap" for discourse between legislatorsand would-be legislatorsand those they wish to represent.2

With respect to both regulations, the court rejected the FEC's argument that such restrictions were justified to prevent illegal corporate contributions to candidates. While the court acknowledged the Commission's legitimate concern with uncovering prohibited contributions, it said that the agency should be able to investigate such impermissible actions through its enforcement proceedings.

The court did not take up MRLC's challenge to the regulation concerning "electioneering message" and instead referred the matter back to the district court. The court concluded that at the district court level there had been inadequate briefing as to the content, purpose and severability of these regulations.

District Court Decision on Remand

The district court declared the Commission's "electioneering message" provisions of its regulations governing voting guides to be invalid because they are inseverable from those struck down by the appeals court. The sections in question11 CFR 114.4(c)(5)(ii)(D) and (E)state that voter guides prepared on the basis of written responses from candidates to questions posed by a corporation or labor organization (1) must not include an "electioneering message" and (2) may not score or rate the candidates' responses in a way that conveys an "electioneering message."

Both the Commission and Clifton agreed that the "electioneering message" provisions were not severable from the portions of the FEC's voter guide regulation that had been declared invalid.

Supreme Court Action

On February 23, 1998, the Supreme Court denied Maine Right to Life Committee's petition for certiorari in this case.

Source: FEC Record, July 1996, p. 1; August 1997, p. 1; and July 1998, p. 4.

Clifton v. FEC, 927 F. Supp. 493 (D.Me. 1996), 114 F.3d 1309 (1st Cir. 1997), cert. denied, 118 S. Ct. 1036 (1998).

1 Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241, 256 (1974).

2 In a dissenting opinion, Senior Circuit Judge Hugh H. Bownes wrote that the written-contact-only regulation does not infringe on the First Amendment. Citing Buckley v. Valeo, the judge said that the Supreme Court had acknowledged that some governmental interests outweigh the possibility of constitutional infringement. He wrote: "At this stage of American history, it should be clear to every observer that the disproportionate influence of big money is thwarting our freedom to choose those who govern us. This sad truth becomes more apparent with every election. If preventing this is not a compelling governmental interest, I do not know what is."

COMMITTEE FOR JIMMY CARTER v. FEC

On March 2, 1981, the U.S. Court of Appeals for the District of Columbia Circuit dismissed Committee for Jimmy Carter v. FEC (Civil Action No. 79-2425). The court's action came in response to an agreement for dismissal of the appeal, filed by the parties on February 20, 1981. This agreement resulted from the Commission's acceptance of the plaintiff's offer to settle the suit.

Petitioners had originally filed the suit on December 3, 1979, challenging an FEC decision to deny matching funds to the Committee for Jimmy Carter (the Committee), the principal campaign committee of former President Carter's 1976 primary campaign. In its suit, the Committee asserted that the Commission had acted arbitrarily, capriciously and contrary to law in certifying only $88,293.92 of the $185,749 in matching funds requested by the Committee in July 1979. The Commission argued that it was bound by its regulations (11 CFR 133.3 (d) and (e))1 to certify only those funds the Committee needed to retire the legitimate debts of Mr. Carter's primary campaign. The Commission therefore asserted that, if it had granted the Committee's entire request, it would have acted contrary to law by sanctioning an improper use of primary matching funds. Specifically, the Committee had stated in its request for primary matching funds that it planned to use the amount withheld by the Commission ($97,456.08) for the following expenditures. In the Commission's view, none of these constituted qualified campaign expenses.

• Approximately $78,000 would be transferred to former President Carter's 1976 general election committee (the 1976 Democratic Presidential Campaign Committee). The general election committee would, in turn, use the funds to defray legal and compliance costs of the general election campaign, including nearly $50,000 in repayments of public funds that Mr. Carter had accepted for the campaign.2 (The repayment represented approximately $22,000 the Committee had spent on nonqualified campaign expenses and approximately $27,000 in interest income it had earned on invested public funds.)
• $19,500 would be used to replace funds that the Committee had previously transferred to Mr. Carter's 1976 general election committee in 1978 and 1979, despite the fact that the Committee itself had continued to incur debts during this period.

The Committee argued that the transfers to the 1976 general election committee were part of an ongoing transfer authorization granted by the Commission in February 1977. This authorization had allowed the Committee to transfer $500,000 in private contributions to the compliance fund of the general election committee. These contributions were received after Mr. Carter's nomination to the Presidency in July 1976. Moreover, the Committee argued that the Commission's partial denial of the certification violated Section 134.3(c)(2) of FEC regulations, the provision in effect during the 1976 elections. The Committee claimed that this provision entitled it to receive matching funds up to the full amount of its outstanding debts on the date Mr. Carter was nominated for the Presidency, regardless of whether it received any private contributions after that date.3

The Commission maintained, however, that the transfer authorization had terminated in August 1977 when the Committee repaid $126,515 in matching funds to the U.S. Treasury. The Commission noted that it had requested the repayment because it had certified the funds on the understanding that the Committee planned to transfer $500,000 in private contributions to the compliance fund for the general election committee. The Committee had, however, transferred only $300,000.

In the agreement settling the Committee's claim for matching funds, the Commission agreed to certify $65,650.01 to the Committee, an amount equivalent to qualified legal expenses the Committee had incurred through February 1981. The Commission expressly conditioned this certification on the Committee's consent to:

• Use the funds solely to pay its own outstanding campaign debts;
• Request no further matching funds and terminate; and
• Execute and file the agreement for dismissal of the suit with the court of appeals.

Source: FEC Record, May 1981, p. 7.

1 The FEC prescribed revised regulations in May 1979. Section 133.3(d) is now 9034.1(a) and Section 133.3(e) is now 9034.1(b).

2 Under the Presidential Election Campaign Fund Act, major party nominees are eligible for public grants of $20 million (plus a cost-of-living adjustment) to finance their general election campaigns.

3 Under the revised regulation (11 CFR 9034) prescribed in May 1979, Presidential primary candidates are entitled to continue receiving matching funds after their date of ineligibility only if the combined total of their matching funds and private contributions does not cover outstanding debts.

COMMITTEE TO ELECT LYNDON LaROUCHE v. FEC

FEC v. COMMITTEE TO ELECT LYNDON LaROUCHE

JONES v. FEC

Committee to Elect Lyndon LaRouche v. FEC

On August 23, 1979, the U.S. Court of Appeals for the District of Columbia upheld the Commission's action in denying primary matching fund payments to Lyndon LaRouche, candidate of the U.S. Labor Party, during the 1976 Presidential primary campaign.

In October 1976, Mr. LaRouche "certified" to the Commission that he had met the eligibility requirement to receive primary matching funds by having raised at least $5,000, in contributions of $250 or less, in each of at least 20 states. Because this "certification" was in the form of a one-page notarized statement, the Commission requested further financial information to support this statement. Later that month, the candidate's principal campaign committee, the Committee to Elect Lyndon LaRouche (CTEL), submitted a computer printout listing contributions in excess of the threshold. Once again, however, the Commission received no supporting documentation of the listed contributions. A subsequent Commission audit, initiated to verify Mr. LaRouche's eligibility, raised substantial questions as to whether many contributions had been made by residents of the States to which they were attributed. After further investigation and an expanded audit, the Commission determined on February 10, 1977, that Mr. LaRouche had not met the threshold requirement in at least two States. Accordingly, the Commission ruled that Mr. LaRouche was not entitled to primary matching funds. On February 14, 1977, CTEL filed suit challenging the Commission's decision.

CTEL argued that the Commission had overstated both the candidate's burden in establishing eligibility and its own role in certifying eligibility. As a result, CTEL maintained, the Commission had violated the Act by denying matching funds to Mr. LaRouche. To establish eligibility, CTEL asserted, the candidate need only "attest authoritatively" in good faith and with knowledge that he has met the threshold. The Commission's role in the certification process is limited to ensuring that the candidate has so attested. CTEL also objected to the Commission's investigative procedures in determining Mr. LaRouche's ineligibility.

The Commission argued that the candidate must not merely attest, but demonstrate to the Commission's satisfaction that he has adequate documentation to support his contention that the threshold has been met. Furthermore, the Commission maintained it is empowered not only to review documentation supplied by the candidate, but also to audit records or campaign contributions and to verify reported contributions by interviewing individual contributors, if necessary.

To properly determine the respective roles of the candidate and the Commission in the certification process, the court focused on two relevant concerns: Congress's intent, on the one hand, to withhold public funds from frivolous candidates and its desire, on the other, to provide prompt payment to serious candidates. The best way to accommodate these two objectives, the court determined, is to construe the Act as the Commission had. Since Congress established eligibility thresholds, it could also impose reasonable procedures to ensure that those thresholds were met. The Commission's approach, the court pointed out, involves an objective standard, which ensures that eligibility criteria will be applied to all candidates in an equitable manner.

Although the Commission acted ultra vires in conducting a premature audit, the court found the Commission's actions reasonable and nonprejudicial. Therefore, since Mr. LaRouche's submissions fell far short of the documentation required to establish his eligibility, the court concluded that the Commission had acted properly in not approving matching funds.

FEC v. Committee to Elect Lyndon LaRouche and Jones v. FEC

Also on August 23, 1979, the U.S. Court of Appeals for the District of Columbia upheld three actions of the District Court for the District of Columbia in an appeal which had been filed on September 28, 1977, by the Committee to Elect Lyndon LaRouche, the National Caucus of Labor Committees, the New Solidarity International Press Service, Inc., and Campaigner Publications, Inc. This was an appeal from an order of the district court enforcing subpoenas issued by the FEC during the investigation of Lyndon LaRouche's eligibility for primary matching funds. In upholding the district court's action, the court of appeals maintained that:

1. The district court had jurisdiction to determine this case despite appellants' argument that the District of Columbia was not the place where the Commission's inquiry took place. The court maintained that the Commission was conducting a nationwide investigation from its national office in the District of Columbia and should be afforded broad discretion, "within the bounds of reasonableness," in selecting this jurisdiction as its place of inquiry.

2. The district court had personal jurisdiction over the appellants despite the fact that they were served in New York rather than in the District of Columbia. The court pointed out that the scope of the Commission's responsibilities is nationwide and its power is sufficiently broad to warrant an implied grant of authority for extraterritorial service of process under 2 U.S.C. §437(b).

3. The district court had not denied the appellants an opportunity to demonstrate that the Commission had issued the subpoenas in retaliation for two suits which the appellants had brought against the Commission. The court of appeals pointed out that the appellants could not have been denied such an opportunity since they had never requested it.

The above appeal was argued with Leroy B. Jones v. FEC. In Jones, the appellants repeated numerous constitutional, statutory and common law claims originally stated in their initial suit. The claims arose from the Commission's field interviews of LaRouche contributors, the manner in which the interviews were conducted and the scope of the questions asked. The district court had granted summary judgment to the FEC. The court of appeals upheld the district court's action with respect to all but two of the allegations. The court of appeals determined that the district court had erred in granting summary judgment with regard to the appellants' claim that the Commission had inquired during field interviews into issues bearing no relation at all to the subject matter of an otherwise legitimate investigation into a candidate's eligibility to receive primary matching funds; and appellant Jones' claim that he was subjected to a warrantless seizure of certain financial documents and bank records. These allegations were remanded to the district court for factual determinations. In all other respects, the court affirmed the decision under review.

Supreme Court Action

On February 19, 1980, the Supreme Court denied a petition for certiorari in these three cases. The Federal Election Commission had filed a brief opposing the petition.

Source: FEC Record, October 1979, p. 6; and April 1980, p. 7.

Committee to Elect Lyndon LaRouche v. FEC, 613 F.2d 834 (D.C. Cir. 1979), cert. denied, 444 U.S. 1074 (1980).

Committee to Elect Lyndon LaRouche: FEC v., 613 F.2d 849 (D.C. Cir. 1979), cert. denied, 444 U.S. 1074 (1980).

Jones v. Unknown Agents of the Federal Election Commission, 613 F.2d 864 (D.C. Cir. 1979), cert. denied, 444 U.S. 1074 (1980).

COMMON CAUSE v. FEC (78-2135)

On April 30, 1980, the U.S. District Court for the District of Columbia granted summary judgment in two cross motions filed by parties to the suit, Common Cause v. FEC (Civil Action No. 78-2135).

Common Cause had filed its motion for summary judgment in November 1978, requesting that the court rule the FEC had acted contrary to law in failing to take final action on Common Cause's administrative complaint within 90 days of its being filed. 2 U.S.C. §437g(a)(9)(B)(ii). In its complaint, Common Cause had asserted that the American Medical Political Action Committee (AMPAC), the separate segregated fund of the American Medical Association (AMA), and the state political action committees of AMA's state affiliates constituted a single political committee by virtue of their affiliation. 2 U.S.C. §441a(a)(5). Therefore, alleged Common Cause, AMPAC and its affiliated state PACs shared a single contribution limit of $5,000 per candidate, per election. Common Cause's complaint listed numerous instances in the 1976 Congressional elections where the combined contribution of AMPAC and an affiliated state PAC to a candidate had exceeded the $5,000 limit.1

At the time Common Cause filed its motion for summary judgment, the Commission had entered into conciliation agreements only with AMPAC and a few of the state PACs named in the June 1978 complaint. By fall of 1979, however, the Commission had entered into separate agreements with an additional five state PACs; between Fall 1979 and Spring 1980 the Commission entered into agreements with eleven other state PACs and was preparing to enter into 10 additional agreements. The court also noted that in February 1977 the Commission had broadened the scope of its initial investigation to include all of the AMA's state affiliates and their PACs. Moreover, the Commission had begun investigating four additional complaints which also alleged violations of the Act's contribution limits by AMPAC and its affiliated state PACs.

Common Cause nevertheless maintained that the FEC had acted contrary to law in not taking final action on its complaint within 90 days. The FEC, on the other hand, viewed the 90-day provision as jurisdictional, giving the court power to decide after the 90-day period whether or not the Commission had acted contrary to law.2

In addition to supporting the FEC's interpretation of the 90-day provision, the court noted that the determination of whether AMPAC and its state PACs were affiliated (i.e., whether they had been established, financed, maintained or controlled by the same entity) was a factual question requiring proof provided by extensive investigation. Therefore, the court did not find the FEC's efforts to collect further evidence to be an abuse of discretion. Moreover, the court found that the FEC's decision not to investigate combined contributions by state PACs affiliated with AMPAC (in addition to the combined AMPAC-State PAC contributions it had investigated) was not contrary to law since Common Cause had mentioned only one such occurrence among the 69 violations it had cited. The court did, however, order the Commission to either enter into conciliation agreements with the ten remaining respondents named in Common Cause's complaint within 30 days of the court's ruling or bring suit against them. The Commission did enter into conciliation agreements with the remaining respondents, and the court issued an order on June 13, 1980, dismissing the case.

Source: FEC Record, August 1980, p. 8.

Common Cause v. FEC, 82 F.R.D. 59 (D.D.C.), 83 F.R.D. 410 (D.D.C. 1979), 489 F. Supp. 738 (D.D.C. 1980).

1 While this decision was pending, the court issued an order on August 10, 1979, directing the Commission to release to the plaintiff certain internal FEC communications regarding the administrative enforcement action that had been triggered by Common Cause's complaint. Among other things, the court ordered the documents to be released under court seal, and access to them was to be restricted to plaintiff's counsel and to senior officers of Common Cause. Disclosures to outside parties (including the respondents in the FEC enforcement action) were prohibited until a further order of the court. 83 F.R.D. 410 (D.D.C. 1979).

2 In 1979 Congress amended §437g, expanding the period in which the Commission must act on a complaint from 90 days to 120 days.

COMMON CAUSE v. FEC (83-0720)

On June 10, 1983, the U.S. District Court for the District of Columbia approved dismissal of Common Cause's suit against the FEC (Civil Action No. 83-0720). Common Cause requested the dismissal because, on May 23, 1983, the FEC had taken final action on the administrative complaint which had precipitated the suit.

Pursuant to 26 U.S.C. §437g(a)(8)(A), Common Cause had asked the district court to issue an order directing the Commission to take final action, within 30 days, on a complaint Common Cause had filed on September 26, 1980.1 In its administrative complaint, Common Cause had alleged that five political committees had made independent expenditures on behalf of the 1980 Republican Presidential nominee which were in violation of 26 U.S.C. §9012(f).2 (This provision prohibits unauthorized committees from making expenditures exceeding $1,000 to further the election of a publicly funded Presidential nominee.)

Alleging that the committees were not, in fact, independent of the official Reagan campaign, Common Cause had claimed that the committees' activities also resulted in violations of:

• 26 U.S.C. §9012(b)(1), which makes it unlawful for a major party Presidential nominee who receives public funding to accept private contributions;
• 26 U.S.C. §9012(a)(1), which makes it unlawful for a major party Presidential nominee to incur campaign expenditures in excess of the amount of public funding he receives; and
• 2 U.S.C. §441a(a), which prohibits political committees from making contributions in excess of $5,000, per election, to a federal candidate.

Source: FEC Record, May 1983, p. 7; and August 1983, p. 8.

1 This complaint was merged with a similar one filed several months earlier by the Carter-Mondale Reelection Committee and the Democratic National
Committee.

2 On July 15, 1980, the FEC filed suit in the district court against three of the committees named in Common Cause's complaint. The FEC sought the court's declaratory judgment that the committees' proposed expenditures were in violation of 26 U.S.C. §9012(f) and that the provision was constitutional as applied to the committees' expenditures. On August 28, 1981, the court ruled that section 9012(f) was unconstitutional as applied to the defendant committees. On January 19, 1982, the Supreme Court voted 4 to 4 on the issue. While this split vote left the district court decision intact, the Court itself made no ruling on the constitutionality of the provision.

COMMON CAUSE v. FEC (83-2199)

On December 31, 1986, the United States District Court for the District of Columbia declared that the FEC's dismissal of an administrative complaint filed in 1980 by Common Cause was, in part, contrary to law. (Civil Action No. 83-2199.) The case was remanded to the FEC for action consistent with the court's opinion.

On March 15, 1988, the U.S. Court of Appeals for the District of Columbia Circuit reversed the decision by the district court. (Common Cause v. FEC, Civil Action No. 87-5036). The appeals court found "entirely permissible" the interpretation of 2 U.S.C. §432(e)(4) that the FEC had applied to allegations contained in Common Cause's complaint. The appeals court also vacated the district court's order remanding the case to the Commission for a statement of reasons concerning the FEC's tie-vote dismissal of an allegation in the complaint and instructed the district court to enter an order dismissing the suit.

Background

The original complaint alleged that five unauthorized political committees, which supported Ronald Reagan's 1980 campaign committee, had violated the Act by using Reagan's name in their respective names. Furthermore, it was alleged that the committees involved in the complaint had impermissibly coordinated their "independent expenditures" with the official Reagan committee and, by doing so, had made contributions which exceeded the committees' limits. The five committees named in the complaint were: Americans for an Effective Presidency (AEP), Americans for Change (AFC), North Carolina Congressional Club1 (NCCC), Fund for a Conservative Majority (FCM) and National Conservative Political Action Committee (NCPAC). After investigating the majority of the claims, the FEC voted to close the file regarding the administrative complaint and take no further action.

In its suit, filed August 1, 1983, Common Cause alleged that the FEC had wrongfully dismissed the complaint.

District Court Ruling

FEC Determination to Dismiss Complaint on Committees' Use of Candidate's Name

The first legal issue addressed by the court was Common Cause's allegation that AFC, FCM and NCPAC violated the Act (2 U.S.C. §432(e)(4)) by using the name of a candidate, Ronald Reagan, in their respective committee names. Under the Act, only an authorized committee may use a candidate's name in its name. In this case, the committees involved were not authorized by any candidate. Evidence revealed that each committee had used the name "Reagan" in its respective fundraising project when soliciting funds and otherwise communicating with the public. The FEC argued that, because the official registered names of the committees did not contain Reagan's name and that the use of "Reagan" was merely for the purpose of identifying a particular fundraising project, the Act had not been violated.

In its opinion, the court noted that the name of the committee which is presented to the public for identification constitutes a "name" within the meaning of the Act and, therefore, the decision by the FEC to dismiss the complaint was contrary to law. Further, the court ordered the Commission to conform with its opinion within 30 days, pursuant to 2 U.S.C. §437g(a)(8)(c).

FEC Determination Not to Investigate Coordination

In the original administrative complaint, by a vote of 3-3, the FEC reached no conclusion as to whether there was reason to believe AEP and NCCC had coordinated their expenditures with the official Reagan campaign. (With regard to the other three committees, the Commission did find "reason to believe" and did conduct an investigation. See below.) This decision, which resulted in an automatic dismissal of this portion of the complaint, was contrary to the recommendation made by the FEC's General Counsel. Moreover, the Commission submitted no explanation for its decision.

The court stated that some explanation of the FEC's reasons for dismissing the complaint was warranted to enable the court to review the original determination on the issue. As a result, the court ruled that the FEC's action was arbitrary and capricious and required the agency to provide an explanation for its action within 30 days.

FEC Determination to Dismiss Complaint on Coordination

The final issue addressed by the court concerned Common Cause's allegation that the FEC, after investigating expenditures by AFC, FCM and NCPAC, acted contrary to law by dismissing the complaint. In the original complaint, it was alleged that all of the committees had "coordinated" their expenditures with those of the official Reagan campaign and had, thereby, made contributions rather than independent expenditures. These contributions, according to Common Cause, exceeded the limitations contained in the Act, under 2 U.S.C. §441a(a). (There are no limits on independent expenditures.)

In its suit, Common Cause contended that a determination of coordination should be based on the "totality of circumstances." According to Common Cause, the FEC should have considered circumstances such as interlocking membership of persons at the policy-making level, prior alliances with the official committees and the use of common vendors by the committees. The FEC argued, however, that evidence of "direct coordination" was a necessary prerequisite to a determination of "impermissible coordination," and it found no evidence of direct coordination.

The court concluded that the FEC's interpretation of what constitutes "impermissible coordination" was not contrary to the law. Moreover, the court noted that, absent evidence of express intent or communication, "it is difficult to state exactly what combination of circumstances would prove that coordination had occurred." Therefore, in this issue, the court ruled that the FEC's action was proper.

Appeals Court Ruling

Committee Names

In reversing the district court's ruling, a three-judge panel of the appeals court affirmed the FEC's interpretation of Section 432(e)(4), that is, that a political committee's "name" refers only to the official or formal name under which the committee must register. The court held that the "sparse legislative history of Section 432(e)(4) shows nothing definitive to undercut the Commission's consistent interpretation of this provision as applying only to the official name of a political committee." The court therefore concluded that, while Common Cause's interpretation of the provision was "not totally implausible," it did not "preclude the Commission's quite plausible alternative. There is, in short, a genuine ambiguity in Section 432(e)(4)'s text."

Further, considering the structure of the statute, the appeals court agreed with the FEC's argument that "name" should be similarly defined in Sections 432(e)(4) and 433(b)(1). (Section 433(b)(1) requires unauthorized committees to register one official name with the FEC.) The court held that these two provisions, along with the Act's disclaimer provision (Section 441d(a)), allowed the Commission "to establish a coherent means by which readers and potential contributors can find out the identity and status of those who are soliciting them."

In dissenting from the majority decision on the "name" issue, Judge Ruth B. Ginsburg argued that "Congress enacted Section 432(e)(4) to avoid public confusion and to increase public awareness of the sources of campaign messages.... Sensibly and purposively construed, the Section 432(e)(4) prohibition covers not only the formal, registered name of a political committee, but also the name the committee actually uses to identify itself in communications with the public purporting to solicit contributions for, or on behalf of, a candidate."

Deadlock Vote

Finally, the appeals court reversed the district court's ruling that the FEC's deadlock vote dismissal of other allegations against two political committees must be remanded for a statement of reasons. The appeals court concluded that its recent ruling in Democratic Congressional Campaign Committee (DCCC) v. FEC (Civil Action No. 86-5661) was applicable to the circumstances of Common Cause's case. In DCCC v. FEC, the court found that the FEC's dismissal of an administrative complaint as the result of a deadlock vote was subject to judicial review. Consequently, the court could require the FEC to supply a statement of reasons for such dismissals.

Nevertheless, the court declined to "apply the precedent retroactively to this case, which arose before our DCCC decision...To do so, in this case at least, would be an exercise in futility and a waste of the Commission's resources." The court added, however, that it would "enforce the DCCC rule with respect to all Commission orders of dismissal based on deadlock votes that are contrary to General Counsel recommendations issued subsequent to our decision in that case."

Source: FEC Record, February 1987, p. 6; and May 1988, p. 7.

Common Cause v. FEC, 655 F. Supp. 619 (D.D.C. 1986) rev'd, 842 F.2d 436 (D.C. Cir. 1988).

1 NCCC has subsequently become the National Congressional Club.

COMMON CAUSE v. FEC (85-0968)1

On June 25, 1986, the U.S. District Court for the District of Columbia issued an opinion in Common Cause v. FEC, a suit in which Common Cause challenged the FEC's dismissal of an administrative complaint, which the organization had filed with the Commission in September 1984 (Civil Action No. 85-0968). In remanding the suit to the FEC, the court ordered the agency to provide: (1) an explanation of the legal standard that the agency had used in making its decision to dismiss the complaint and (2) a statement of reasons demonstrating how the FEC had applied this legal standard to the facts before it.

Background

On August 24, 1984, one day after accepting the Republican Party's Presidential nomination, President Reagan addressed a convention of the Veterans of Foreign Wars (the VFW) in Chicago. During his speech, Mr. Reagan did not expressly mention his candidacy; nor did he solicit contributions to his campaign. Since the Reagan administration viewed the Chicago trip as official business, the administration allowed the government to absorb the travel costs and did not report them to the FEC.

On September 20, 1984, Common Cause filed an administrative complaint with the FEC against the Reagan-Bush '84 General Election Committee (the Reagan campaign), President Reagan's principal campaign committee for the 1984 general election. In the complaint, Common Cause alleged that the travel costs related to President Reagan's Chicago speech constituted "qualified campaign expenses" incurred for Mr. Reagan's publicly funded general election campaign.2 Consequently, Common Cause claimed that the Reagan campaign had to: (1) pay for and report the costs of the Chicago trip as "qualified campaign expenses" and (2) reimburse the government for using a government airplane to make the trip. On December 24, 1984, the FEC's General Counsel recommended that the Commission find "reason to believe" that the Reagan campaign and its treasurer had violated provisions of the election law and public funding statutes by failing to report these expenses. On January 15, 1985, however, the Commission decided, by a four to two vote, to find "no reason to believe" the Reagan campaign and its treasurer had violated federal election laws. Consistent with past practice, the Commission did not issue a formal statement of reasons for its decision to dismiss Common Cause's administrative complaint.

On March 22, 1985, Common Cause challenged the FEC's dismissal decision by filing suit against the Commission with the district court. In its suit, Common Cause asked the court to declare that the FEC's dismissal of its administrative complaint was contrary to law and to order the agency to act on the allegations in its complaint.

In arguing that the FEC's dismissal was contrary to law, Common Cause said that, in determining whether President Reagan's Chicago trip was campaign related, the Commission should have considered the "totality of circumstances" surrounding his Chicago speech rather than using a narrower review standard, which focused solely on: (1) whether President Reagan's speech expressly advocated his reelection and (2) whether he solicited contributions in conjunction with his speech.

The Court's Ruling

Although accepting the legal standard which the parties agreed had been applied by the FEC in its dismissal of Common Cause's complaint, the court observed that it still had to "determine whether the agency has presented a rational basis for its decision." In this regard, the court noted that "the record before us prevents that threshold determination." The court therefore remanded the case to the FEC "both for an explanation of the legal standard actually applied and...a statement of reasons demonstrating how the Commission applied such legal standards to the facts before it."

Commissioners' Second Statements of Reasons

In response to the court's second remand order, Commissioners Joan D. Aikens and John W. McGarry submitted a joint statement of reasons, while Commissioner Lee Ann Elliott submitted a separate statement. The fourth dissenting Commissioner in the case, Frank P. Reiche, did not submit a statement of reasons because he left the Commission in April 1985.

On July 15, 1988, the three Commissioners submitted the statements to the court and to Common Cause. While the Commissioners all agreed that President Reagan's speech before the V.F.W.'s annual convention was not campaign related, they were not in unanimous accord concerning the standard that should have been applied to reach this determination. Commissioners Joan D. Aikens and John W. McGarry concluded that they had applied a "totality of circumstances" standard. On the other hand, Commissioner Elliott concluded that, in the case of an officeholder, the "two-pronged" test was appropriate.

Commissioners Aikens and McGarry

The Commissioners stated their views that, in determining whether an officeholder's speech was campaign related, the Commission "has consistently applied a 'totality of circumstances' test, involving examination of external factors." While they agreed that an examination of the elements of the "two-pronged" test was a necessary first step, they maintained that they had to "look further to the timing, the setting and the purpose of the event as integral components of the 'totality of circumstances' test and as necessary to the ultimate determination that certain activity is or is not campaign-related." Citing agency precedents, the Commissioners stated that their use of the "totality of circumstances" standard was "totally consistent with the approach recommended by the General Counsel in his Report...and adopted by the Commission in many advisory opinions."3

Based on these standards, the Commissioners concluded that President Reagan's speech was made in performance of his official duties, rather than to further his reelection. The speech did not expressly advocate President Reagan's election or solicit contributions to his campaign. Nor did the timing, setting or purpose of the President's speech support the complainant's allegations that the speech was campaign related.

With regard to the timing of the speech, the Commissioners noted that the V.F.W. convention was an annual event and that the invitation to attend it had been extended to President Reagan six months before the Republican National Convention. They concluded, "To argue that the timing of this appearance makes it a campaign event would mean that no incumbent President could make an official appearance to perform officeholder duties after the renomination."

Commissioner Elliott

In explaining her view that the Commission should apply only the "two-pronged" test to determine whether President Reagan's speech was campaign-related, Commissioner Elliott stated that "an officeholder's speech will be considered campaign-related if it expressly advocates the election or defeat of a clearly identified candidate or solicits contributions on behalf of a federal candidate. This 'two-pronged' test is sensible and workable Commission precedent and has repeatedly been held a permissible construction of the Act. Further, the 'two-pronged' test avoids subjective or imponderable considerations when evaluating an officeholder's speech."

Commissioner Elliott cited as precedent for the test the Supreme Court's decision in Buckley v. Valeo, as well as a series of other federal court cases and FEC actions, including Commission advisory opinions.4 The Commissioner noted that "the reasonableness of this policy is enhanced when viewed against 11 years of even-handed application."

Commissioner Elliott concluded that the totality of circumstances approach "is really not applicable for officeholders. Its objective elements are already part of the 'two-pronged' test's legal inquiry into 'express advocacy' and its subjective elements are too vaporous upon which to rest a legal conclusion."

Finally, the Commissioner stated that the "totality of circumstances" test could not be appropriately applied to the Reagan speech. In the past, the Commissioner explained, this test had been applied only to (1) nonincumbent candidates, (2) officeholders who were engaging in activities that were not normally part of their duties and (3) officeholders who were invited to make appearances as candidates, rather than in their official capacities. Commissioner Elliott therefore concluded that "following Counsel's recommendation in this case would not have been following Commission precedent."

Commissioner Elliott found that, based on the "two-pronged" test, President Reagan had not made a campaign-related speech at the convention. "I concluded that the speech [did] not advocate the re-election of the President or the defeat of his opponent...His appearance was that of a head-of-state and his remarks were on issues of importance to America's veterans."

Joint Stipulation of Dismissal

On September 27, 1988, the U.S. District Court for the District of Columbia issued a joint stipulation of dismissal in which Common Cause and the FEC agreed to the dismissal, with prejudice, of the suit.

In the joint stipulation of dismissal, Common Cause did not abandon its position that the FEC's action on the administrative complaint was contrary to law. Nor did the FEC abandon its position that its dismissal of the complaint was reasonable.

Source: FEC Record, August 1986, p. 6; and October 1988, p. 7.

1 See also Antosh v. FEC (85-1410).

2 FEC regulations define "qualified campaign expenses" as those expenditures made during the reporting period to further the general election campaign of a publicly funded Presidential candidate. See 11 CFR 9002.11.

3 For example, the Commissioners cited as precedent Advisory Opinions 1977-42, 1977-54, 1978-4, 1978-15, 1980-16, 1980-22, 1981-37, 1982-15, 1982-56 and 1984-13.

4 For example, the Commissioner cited as precedent Buckley v. Valeo, 424 U.S. 1, 84 n. 112 (1976) and Advisory Opinions 1977-42, 1977-54, 1978-4, 1979-25, 1980-16, 1980-22, 1980-89 and 1981-37.

COMMON CAUSE v. FEC (85-1130)

On June 19, 1990, the U.S. Court of Appeals for the District of Columbia Circuit reversed a district court decision by ruling that the FEC did not adequately analyze an affiliation issue in its dismissal of an administrative complaint filed by Common Cause. (Civil Action No. 89-5231.) The court remanded the case to the district court with instructions to return the matter to the FEC for reconsideration consistent with the appeals court ruling.

Background

Common Cause filed an administrative complaint with the FEC alleging that the Republican National Independent Expenditure Committee (RNIEC) and the National Republican Senatorial Committee (NRSC) were affiliated committees and that RNIEC's expenditures on behalf of then-Senator Dan Evans' 1984 reelection campaign were coordinated with NRSC. As a result, Common Cause contended, contributions made by the two committees on behalf of Mr. Evans exceeded the contribution limits of 2 U.S.C. §441a. The Commission found no probable cause to believe that a violation of the Federal Election Campaign Act had occurred.

After the Commission dismissed the administrative complaint, Common Cause filed suit in 1985 with the U.S. District Court for the District of Columbia. (Civil Action No. 85-1130). Common Cause asked the court to find that RNIEC and NRSC were affiliated committees, or that they had coordinated their expenditures on behalf of Senator Evans. (Either finding would have resulted in excessive contributions by NRSC.)

District Court Decision

In its decision of May 30, 1989, the court found that the Commission's dismissal of Common Cause's principal allegationsaffiliation and coordination between RNIEC and NRSCwas reasonable. The court did remand one issue from the original complaintthat of affiliation between RNIEC and the Republican National Committeeback to the FEC for further consideration, finding that the Commission had not addressed that allegation in dismissing the administrative complaint.

Appeals Court Decision

In its per curiam opinion, the appeals court noted the deference accorded by the courts to FEC decisions. However, in considering the General Counsel's brief recommending the "no probable cause to believe" finding adopted by the Commission, the court found that "the brief lacks any discussion of the affiliation issue that is independent of the analysis of the separate coordination issue."

Common Cause's affiliation claim was based on three facts: (1) Mr. Rodney Smith served as the financial director and treasurer of NRSC until two months before he co-founded and became treasurer of RNIEC; (2) Senator John Heinz continued to be a member of NRSC a short time after he co-founded and joined the advisory panel of RNIEC; and (3) there was a substantial overlap in contributors to the two committees, the result of RNIEC's use of NRSC's mailing list.

Section 441a(a)(5) of the Act defines affiliated committees as those that are "established or financed or maintained or controlled" by the same person or group. Commission regulations then in effect listed several indicia of affiliation at 11 CFR 100.5(g)(2)(ii)(A)-(E). (Current FEC rules provide revised indicia at 11 CFR 100.5(g)(4)(ii)(A)-(J).) The court stated that the General Counsel's brief made no attempt to tie the relevant indicia of affiliation to the facts of the case. As a result, there was no indication that the agency had considered one pertinent indicium of affiliation: whether Mr. Smith or Senator Heinz had the ability to influence the decisions of both committees. 11 CFR 100.5(g)(2)(ii)(C) (since revised at 100.5(g)(4)(ii)(B)).

Another indicium set out in the rules is whether two committees show a similar pattern of contributions. 11 CFR 100.5(g)(2)(ii)(D) (since revised at 100.5(g)(4)(ii)(J)). The General Counsel's brief did not specifically refer to this indicium. The appeals court found this issue "less troubling" since the brief considered possible affiliation resulting from RNIEC's use of RNSC's contributor list but went on to explain that this implication was rebutted by the committees' dispute over the ownership of the list.

In conclusion the court stated: "Based upon the General Counsel's brief to the Commission, it is impossible to discern whether the FEC applied the applicable statute and regulation to the claim that the NRSC and the RNIEC were affiliated." The court therefore reversed the judgment of the district court on the affiliation issue and remanded the case with instructions for the FEC to reconsider the issue based on the court's decision.

Source: FEC Record, August 1990, p. 11.

Common Cause v. FEC, 715 F. Supp. 398 (D.D.C. 1989) rev'd, 906 F.2d 705 (D.C. Cir. 1990).

COMMON CAUSE v. FEC (86-1838)

On August 3, 1987, the U.S. District Court for the District of Columbia issued an order which granted the FEC's motion for summary judgment on all issues in this case except one: the allocation, between the federal and nonfederal accounts of state party committees, of expenses of certain specified activities (e.g., voter registration, "get out the vote" efforts, and campaign materials used in connection with volunteer activities). (Common Cause v. FEC, Civil Action No. 86-1838.) For reconsideration of that issue, the court remanded to the FEC Common Cause's petition for rulemaking concerning the use of "soft money" in federal elections.1

On August 25, 1988, the U.S. District Court for the District of Columbia decided to hold in abeyance Common Cause's motion to enforce the district court's previous order that the FEC promulgate rules on "soft money." Instead, the court retained jurisdiction in the case and ordered the FEC to submit, at 90-day intervals, concise reports on the agency's progress toward promulgating the rules.

Background

Common Cause filed its petition for rulemaking on November 7, 1984. The FEC published a notice of availability in the Federal Register, sent copies of the petition to a number of organizations and received five comments. On December 5, 1985, the FEC's General Counsel recommended that the Commission seek information and comments on "soft money" issues. The FEC then scheduled two days of public hearings, published a notice of inquiry on the matter in the Federal Register, sent the notice to 77 organizations and considered the 15 comments it received in response. The Commission also received testimony from Common Cause, the Center for Responsive Politics and the Republican National Committee. On April 29, 1986, the FEC denied Common Cause's petition for rulemaking (see 51 Fed. Reg. 15915).

On June 30, 1986, Common Cause filed this court action pursuant to the Administrative Protection Act, 5 U.S.C. §706, which provides that agency action that is "not in accordance with the law" must be set aside by the reviewing court.

In its motion for summary judgment, Common Cause argued that the FEC:

• Improperly construed the Federal Election Campaign Act (the Act) by (a) improperly considering "intent" as a requisite factor when it concluded that nonfederal funds had not been transferred to the state and local level with the intent to influence federal elections and (b) allowing the allocation of expenditures made in connection with federal and nonfederal elections;
• Inadequately regulated the allocation of federal and nonfederal funds, thereby creating a loophole through which "soft money" could be used in connection with federal elections; and
• Acted arbitrarily and capriciously in denying the petition for rulemaking, given ample evidence to justify a rulemaking.

District Court Ruling

The court noted that, in 1979, Congress amended the Act to permit state and local party committees to spend money in federal elections for voter registration, "get out the vote" activities, and campaign materials used in connection with volunteer activities. 2U.S.C.§§431(8)(B)(x), 431(8)(B)(xii), 431(9)(B)(viii) and 431(9)(B)(ix). Under the Act, only monies that are subject to the provisions of the Act may be used for these activities. 2U.S.C.§§431(8)(B)(x)(2), 431(8)(B)(xii)(2), 431(9)(B)(viii)(2) and 431(9)(B)(ix)(2). Under the Commission's regulations at 11 CFR 102.5 and 106.1, when financing these political activities in connection with both federal and nonfederal elections, state and local party committees may spend money from both their federal and nonfederal accounts, allocating "on a reasonable basis."

In reviewing the FEC's denial of the rulemaking petition, the court rejected plaintiffs' argument that the FEC improperly considered intent as a requisite element. The court found that the question of intent was not crucial or even relevant in the FEC's denial of the rulemaking. Instead, the court said, the FEC had found that there was inadequate evidence to conclude that any "soft money" had been used in the ways Common Cause alleged in its petition.

The court also rejected Common Cause's contention that no allocation method is permissible under the Act, noting that "the FECA regulates federal elections only," and that "Congress would have had to have spoken much more clearly in the amendments at issue to contradict" this limit on the FECA's reach. The court further noted that "the plain meaning of the Act is that any improper allocation of nonfederal funds by a state committee would be a violation of the FECA."

The court maintained, however, that the Commission's regulations provide "no guidance whatsoever on what allocation methods a state or local party committee may use," and thus found that a revision of the Commission's regulations was warranted with respect to this one issue and remanded the matter to the Commission.

Finally, the court found that it was not arbitrary and capricious for the Commission to decline to initiate a rulemaking based on the evidence before it, except with respect to the allocation issue discussed above. The court observed, "The Commission opened its doors to comments from each of the fifty state election finance agencies, as well as both major parties and various other groups interested in the issue of campaign financing. Only fifteen responses were received, some of which adamantly stated that there were no abuses of the type alleged by Common Cause. Indeed, there was testimony that some of the anecdotes submitted by Common Cause were factually erroneous." In conclusion, the court granted the FEC's motion for summary judgment affirming its decision to deny the rulemaking petition with respect to all issues except that of allocation.

District Court Ruling: August 1988

In petitioning the district court to enforce its order of August 1987, Common Cause asked the court to impose a timetable on the FEC which would require the agency to:

• Propose allocation rules within 30 days of the court's order; and
• Make the proposed rules final as soon as possible.

The FEC argued that it had begun to respond to the court's 1987 order by publishing a Notice of Inquiry in the Federal Register that sought comments on its proposed rulemaking. The FEC pointed out that the election law had established no timetable for rulemakings. Furthermore, under the law, Common Cause could file a documented administrative complaint to remedy any alleged abuses of the allocation rules. Additionally, the FEC argued that its delay (of seven months) did not approach the three-and five-year agency delays that courts have found to be reasonable. Finally, the agency cited demands on the FEC's resources during a Presidential election year.

The court concluded that "Common Cause ha[d] not shown that the Commission's delay thus far warrant[ed] the intrusive relief sought by the plaintiffs." Nevertheless, the court ruled that the FEC should submit a report to the court every 90 days on its progress toward promulgating the rules.

Source: FEC Record, September 1987, p. 6; and October 1988, p. 6.

Common Cause v. FEC, 692 F. Supp. 1391 (D.D.C. 1987); 692 F. Supp. 1397 (D.D.C. 1988).

1 In its complaint, Common Cause defined the term "soft money" as "funds from sources prohibited under the FECA that are given to political committees and party organizations ostensibly for use at the state and local level, but which are actually used in connection with and to influence federal elections in violation of the FECA."

COMMON CAUSE v. FEC (87-2224)

The U.S. District Court for the District of Columbia granted the FEC's motion to dismiss Common Cause's suit and to dissolve a protective order that had placed court documents under seal. In its order of January 11, 1989, the court noted that Common Cause did not oppose the FEC's motion.

Background

In its suit, filed August 12, 1987, Common Cause asked the court to declare that the FEC failed to take action within the required 120-day period on an administrative complaint Common Cause had filed with the Commission on October 28, 1986. Common Cause further asked the court to direct the FEC to take action within 30 days, pursuant to 2 U.S.C. §437g(a)(8). Civil Action No. 87-2224. Common Cause had alleged in its administrative complaint that the National Republican Senatorial Committee had made excessive contributions to several candidates, a violation of 2 U.S.C. §441a(h).

FEC's Motion to Dismiss Suit and Lift Seal

The Commission asked the court to dismiss Common Cause's suit because the agency had taken final action on the administrative complaint, thus rendering the litigation moot. On December 23, 1988, the Commission had voted to enter into a conciliation agreement with the National Republican Senatorial Committee and had then closed the file. Citing other "failure to act" cases filed against the agency pursuant to 2 U.S.C. §437g(a)(8), the FEC pointed out that the courts have granted similar dismissals once the agency has taken final action.

The FEC had originally requested that the court impose a seal on documents filed in the case that related to the administrative complaint, which was pending at the time and therefore subject to the confidentiality provision of 2 U.S.C. §437g(a)(12). That provision prohibits the agency from making public any information on administrative complaints until the case is resolved. The court imposed a protective seal on October 2, 1987.

Under another provision, however, the Commission must release to the public the results of its inquiries once an enforcement matter is resolved. 2 U.S.C. §437g(a)(4)(B)(i). In its motion to lift the protective seal, the FEC stated that the confidentiality requirements of 437g(a)(12) no longer applied since the agency had since closed the file on the case.

Source: FEC Record, March 1989, p. 3.

Common Cause v. FEC, No. 87-2224 (D.D.C. Feb. 8, 1988) (memorandum and order), dismissed as moot, (D.D.C. 1989) (unpublished order).

COMMON CAUSE v. FEC (89-0524)

FEC v. NRSC (90-2055)

On June 12, 1992, the U.S. Court of Appeals for the District of Columbia Circuit reversed the district court's judgment. The district court had ruled that the National Republican Senatorial Committee (NRSC) had exceeded the contribution limits through its exercise of "direction or control" over earmarked contributions. The court of appeals, however, found that the district court had erred in a previous decision. In that case, Common Cause v. FEC, the district court had ordered the FEC to conform to the court's own interpretation of "direction or control."

Background

If a committee, in soliciting earmarked contributions to be passed on to a candidate, exercises "direction or control" over the contributor's choice of the recipient candidate, the contribution counts against both the contributor's limit and the committee's limit. 11 CFR 110.6(d)(2).

In an administrative complaint filed with the Commission (MUR 2282), Common Cause alleged that NRSC had exercised direction or control over the earmarked contributions it had solicited for twelve Senate candidates. As a result, Common Cause claimed, the contributions counted against NRSC's limits for the candidates and caused NRSC to exceed the contribution limits.

NRSC's October 1986 solicitation letter asked readers to support Republican Senate candidates running in four states, without mentioning the names of the candidates. The letter noted that contributions would be divided equally among the four candidates. Various combinations of the four states appeared in different versions of the letter; twelve states were covered in all. Checks were payable to NRSC or an NRSC-controlled fund. The mailing resulted in $2.3 million in contributions. The NRSC deposited the checks in its own accounts, aggregated the contributions to the specified candidates and forwarded the contributions to the candidates in checks drawn on its accounts.

The FEC's General Counsel recommended, inter alia, that the agency find probable cause to believe that NRSC had exceeded the contribution limits by exercising direction or control over the choice of recipient candidates. The Commission, in a 3-3 vote, deadlocked with respect to this allegation and therefore took no action. Commissioner Thomas J. Josefiak (who has since left the Commission), joined by Commissioners Aikens and Elliott, issued a statement of reasons supporting their votes against a probable cause finding.

The Commission did find probable cause to believe that NRSC had committed other violations, and the MUR was resolved through a December 1988 conciliation agreement in which NRSC agreed to pay a $20,000 civil penalty. The MUR was then closed.

Common Cause v. FEC

Common Cause asked the court to compel the FEC to act on the "direction or control" allegation. On January 24, 1990, the district court found that the FEC's dismissal of the allegation was contrary to law. Ruling that NRSC had exercised direction or control, the court ordered the agency to proceed on that basis. In compliance with the order, the Commission reopened MUR 2282 and found probable cause. When it failed to reach a conciliation agreement with NRSC on the matter of direction or control, the agency filed suit.

FEC v. NRSC

The new suit was assigned by lot to the same district judge. On April 9, 1991, the district court granted the FEC's motion for summary judgment, ruling that the NRSC had exceeded the contribution limits by exercising direction or control over earmarked contributions. The court imposed a $24,000 penalty.

Court of Appeals Ruling

In addressing the central issuethe interpretation of direction or controlthe court cited its decision in Democratic Congressional Campaign Committee (DCCC) v. FEC. In that opinion, the court held that, when the FEC dismisses a complaint due to a 3-3 deadlock, the action is subject to judicial review, and the three Commissioners who voted to dismiss must provide a statement of reasons for their vote. The NRSC court noted the purpose of this requirement: "Since those Commissioners constitute a controlling group for purposes of the decision, their rationale necessarily states the agency's reasons for acting as it did." A footnote to the DCCC opinion "strongly suggests that, if the meaning of the statute is not clear, a reviewing court should accord deference to the Commission's rationale."

In the present case, the court pointed out that the three Commissioners who had voted against probable cause in MUR 2282 voted in favor of reopening the enforcement proceedings only because they felt they "were obligated to follow the [district] court's order."1

The court of appeals found that Commissioner Josefiak's Statement of Reasons in MUR 2282, joined by two other Commissioners, should have been sustained in Common Cause v. FEC.2 The court observed that Commissioner Josefiak's statement "identified the two main factors the Commission's General Counsel, and later the district court, invoked to support a finding of direction or control, and pointed out the present inadequacy of each."

The first factor was that NRSC deposited the earmarked contributions in its accounts before forwarding them to the candidates. Noting that FEC regulations permit a conduit committee to deposit earmarked contributions, the court stated: "Nothing has been offered to reveal why engaging in a Commission-approved practice should cause one to run afoul of other Commission rules."

The second factor was that NRSC "controlled" the choice of candidates by selecting the candidates for whom contributions were solicited and by further selecting the four states mentioned in each fundraising letter. The court, however, observed: "Every solicitation 'pre-selects' candidates to some degree. It is fanciful to suppose that national political committees of any party would expend their resources merely to urge individuals to contribute to the candidate of their choice."

To find "direction or control" on the basis of these two factors, the court said, "would throw into doubt whether any solicitation of any earmarked contribution would be exempt from the 'double-counting' requirements of §110.6(d)(2)." However, the court concluded that it was not required to decide if that would be a permissible construction: "It is enough to say that the Commission has not affirmatively adopted such a construction and that it has provided, through the statement of Commissioner Josefiak, joined by two others, a reasoned justification for not doing so." Ruling that "[i]t was an error for the district court to force a different construction upon the Commission," the court reversed the district court judgment.

Source: FEC Record, August 1992, p. 11.

1 Statement of Reasons of Commissioners Aikens, Elliott and Josefiak, MUR 2282, December 10, 1990.

2 Statement of Reasons of Commissioner Josefiak, MUR 2282, January 30, 1989; Concurrence, February 24, 1989.

Common Cause v. FEC, 729 F. Supp. 148 (D.D.C. 1990).

FEC v. National Republican Senatorial Committee, 2 Fed. Elec. Camp. Fin. Guide (CCH) ¶9302 (D.D.C. 1991), ¶9316 (D.C. Cir. 1992).

COMMON CAUSE v. FEC (91-2914)

As stipulated by both parties, the U.S. District Court for the District of Columbia dismissed this case with prejudice on July 31, 1992, without ruling on the issues. The FEC and Common Cause stipulated the dismissal in light of the recent court of appeals decision in FEC v. National Republican Senatorial Committee (NRSC). (See Common Cause v. FEC (89-0524) on page 36.)

Common Cause had challenged the FEC's dismissal of a complaint alleging that the NRSC had exceeded the contribution limits by exercising "direction or control" over earmarked contributions raised in a 1990 fundraising program. See 11 CFR 110.6(d)(2). However, in the NRSC case, decided on June 12, 1992, the U.S. Court of Appeals for the District of Columbia Circuit held that the NRSC had not exercised direction or control in a somewhat similar fundraising program that took place in 1986.

Source: FEC Record, October 1992, p. 11.

COMMON CAUSE v. FEC (92-0249)

On March 3, 1993, the U.S. District Court for the District of Columbia dismissed this suit by agreement of both parties. Common Cause had asked the court to order the FEC to take action on an administrative complaint but agreed to drop its claim because the agency had completed the investigation and entered into conciliation agreements with the respondents. In its administrative complaint, Common Cause had alleged that seven individuals had each exceeded the $25,000 annual limit on aggregate federal contributions.

Source: FEC Record, April 1993, p. 10.

COMMON CAUSE v. FEC (92-2538)

On March 30, 1993, the U.S. District Court for the District of Columbia approved an agreement between Common Cause and the FEC to suspend this litigation. In light of that agreement, the court dismissed the suit.

In its suit, Common Cause claimed that the FEC had failed to take required action on its administrative complaint filed in December 1990. The complaint alleged that the National Republican Senatorial Committee (NRSC) had made excessive contributions and expenditures in connection with the 1988 Montana Senate race and had failed to report them accurately. The complaint also alleged that the Montana Republican Party had violated the law by participating in the NRSC's alleged violations.

Common Cause and the FEC agreed to suspend litigation for six months, at the end of which time the FEC was to report on its efforts to resolve the complaint. Under the court's dismissal order, if Common Cause was not satisfied with the Commission's actions on the complaint, the parties would have until October 30 to reopen the litigation.1

Source: FEC Record, August 1993, p. 5.

1 The October 30 date was extended.

COMMON CAUSE v. FEC (94-02104)

On March 29, 1996, the U.S. District Court for the District of Columbia ordered the Commission to reconsider portions of two administrative complaints that had been dismissed. Both had been filed in 1990 by Common Cause and John K. Addy.

On March 21, 1997, the U.S. Court of Appeals for the District of Columbia Circuit found that Common Cause lacked standing to litigate certain claims against the Commission, and the court therefore dismissed those claims.

Background

The administrative complaints, designated MURs 3087 and 3204, alleged that the National Republican Senatorial Committee (NRSC) and the Montana Republican Party (MRP) had exceeded their contribution and expenditure limits with respect to Conrad Burns's 1988 U.S. Senate campaign and had failed to disclose all the contributions and expenditures that they had made on behalf of the candidate.

Under the Act: the MRP's contribution limit for the Burns campaign was $5,000 (2 U.S.C. §441a(a)(2)(A)); the NRSC's contribution limit for the Burns campaign was $17,500 (2 U.S.C. §441a(h)); and the NRSC's 1988 coordinated-party-expenditure limit for the Burns campaign was $92,200 (2 U.S.C. §441a(d)).

The FEC's Office of General Counsel investigated the matters alleged in the complaints and found evidence that both committees had erroneously reported certain transactions as transfers, administrative costs or exempt volunteer activities when in fact they were contributions and expenditures made in excess of the Act's limits. Based on this evidence, the General Counsel recommended that the six-member Commission find probable cause to believe that:

• The NRSC and the MRP knowingly and willfully violated the Act when the NRSC transferred funds to the MRP to pay for direct mail materials promoting the Burns campaign;
• The MRP violated the Act when it paid the salary of an MRP employee who worked on the Burns campaign;
• The NRSC violated the Act when it paid for daily polls tracking the progress of the Burns campaign;
• The NRSC violated the Act when it did not charge the Burns campaign for the development of a list of registered voters; and
• The NRSC violated the Act by exercising direction and control over contributions it received in response to a solicitation letter that asked contributors to support Mr. Burns and other Republican candidates, and by not reporting a portion of the solicitation costs as a contribution to the Burns campaign.

At least four of the six FEC Commissioners must approve of an action before the FEC can execute it. Fewer than four FEC Commissioners voted to accept the General Counsel's recommendations. After further deliberations failed to yield a compromise, five of the Commissioners voted to close this case without taking any action. Subsequent to having their administrative complaints dismissed, Common Cause and Mr. Addy filed suit.

District Court Ruling

The court stated that it could only order the FEC to reconsider its dismissal of these MURs if it found that the dismissal was arbitrary or capricious or an abuse of discretion. The court reviewed the reasons for the Commissioners' actions, as articulated in their "statement of reasons." The court found that Commissioners on both sides of most of the issues involved in these MURs presented well reasoned explanations for their differing interpretations of federal election law; the court let the Commission's dismissal of these issues stand. The court, however, did not accept the Commission's reasons for dismissing the following issues.

MRP payments to mailing vendor. Both the NRSC and the MRP had argued that payments for a direct mailing that promoted Mr. Burns's candidacy were not contributions or expenditures on the candidate's behalf. The MRP had argued that these payments fell under the volunteer activities exemption at 2 U.S.C. §431(8)(B)(x) and were therefore not contributions. The court noted that this exemption only applied when the purchased materials were distributed by volunteers and not by commercial vendors. 11CFR 100.7(b)(15)(iv) and 100.8(b)(16)(iv). The Commissioners who voted against finding probable cause assumed that the MRP used volunteers to distribute these materials, but the MRP never produced any documentation that showed that volunteers were used. The court therefore ordered the FEC to reconsider its dismissal of this charge.

MRP salary payments to Burns campaign worker. MRP employee Ken Knudson was paid a salary by the MRP while he was extensively involved in managing and staffing the Burns campaign. The FEC's General Counsel had determined that the MRP's salary payments to Mr. Knudson constituted contributions to the Burns campaign. The Commissioners who disagreed with this determination reasoned that payments made to field staff who perform a variety of functions for a variety of persons need not be attributed to any one candidate. They based this reasoning on MUR 3218. The court noted, however, that MUR 3218 states that such salary payments would not constitute a contribution to a candidate's campaign "absent evidence that [a committee's] field staff [were] extensively involved in managing or staffing [a] particular campaign on an ongoing basis . . . ." Since this was precisely what Mr. Knudson had been doing for the Burns campaign, the court found the dismissal of this charge to be arbitrary and capricious and ordered the FEC to reconsider this issue.

Solicitation costs for earmarked contributions. All of the Commissioners agreed that the NRSC had made a contribution to the Burns campaign when it incurred costs associated with the mailing of a letter that encouraged contributors to earmark their contributions to the Burns campaign, among other Republican campaigns. 11CFR 106.1(c)(1). However, despite this consensus, the Commission failed to take action on this issue because the Commissioners who originally accepted the General Counsel's probable-cause-to-believe finding refused to separate this issue from the less-clear-cut issue of whether the NRSC had exercised direction and control over these earmarked contributions. In their statement of reasons, these Commissioners explained that they were reluctant to separate these issues because doing so would imply that they rejected the General Counsel's direction-and-control analysis. The court noted that the General Counsel's report made separate recommendations with regard to the direction-and-control issue and the solicitation-costs issue. Therefore, the court reasoned, approving one recommendation did not imply rejecting the other. Based on this reasoning, the court found the Commission's dismissal of the solicitation-costs issue to be arbitrary and capricious. The court ordered the FEC to reconsider its dismissal of this issue.

Appeals Court Ruling

The appeals court rejected all three of Common Cause's theories as to why it had standing to litigate the remaining claims.

In order to show standing, a plaintiff must have suffered an injury in fact, or an actual wrong against a legally protected interest, that is traceable to the challenged act and is likely to be redressed by a favorable decision from a court. Organizations may have standing to sue in order to vindicate the rights and immunities it enjoys or, under certain conditions, on behalf of its members. When an organization sues on its own behalf, it must show a concrete injury to its activities with a resulting drain on its resources in order to attain standing. In the case of an organization suing on behalf of its members, the organization must show that its members would otherwise have standing to sue in their own right, that the interests it seeks to protect are germane to the organization's purpose and that neither the claim asserted nor the relief requested requires individual members to participate in the lawsuit.

• Member Standing. The court found that Common Cause was unclear on exactly what "political information" was denied its members. However, in the court's view, the nature of the information was crucial to the injury-in-fact analysis. If the information allegedly withheld was simply that a violation of the Act had occurred, then Common Cause's members did not suffer the type of injury that the court had previously held to be sufficient for standing. To allow a plaintiff to establish the required injury in fact in those circumstances, the court concluded, would be "tantamount to recognizing a justiciable interest in the enforcement of the law. This we cannot do."
• Organizational Standing. The court also said Common Cause itself did not have standing in this case. It found that the organization was asserting an interest in knowing whether the NRSC and MRP had violated the Act's contribution and expenditure limits. Just as this was an inadequate interest to establish standing when Common Cause asserted it on behalf of its members, it was inadequate to establish Common Cause's own standing. The court stated that, in contrast, if Common Cause had asserted "an interest in knowing how much money a candidate spent in an election, infringement of such an interest mayconstitute a legally cognizable injury." While Common Cause also alleged that the NRSC and MRP had violated the Act's reporting requirements, this was a small part of its complaint. Further, Common Cause asked only for an investigation and, if its allegations were proven, monetary penalties against the two Republican committees. The court specifically noted that Common Cause did not ask for any kind of disclosure of the allegedly undisclosed financial information.
• Dismissal of Complaint. The court also rejected Common Cause's final argumentthat it had standing because the FEC had dismissed its complaint in a manner contrary to law. The organization relied on a section of the law that grants any person who has filed an administrative complaint with the FEC the right to seek review in the U.S. District Court for the District of Columbia if the Commission dismisses that complaint. 2 U.S.C. §437g(a)(8)(A). Based on the U.S. Supreme Court's ruling in Lujan v. Defenders of Wildlife,1 the court said that "absent the ability to demonstrate a 'discrete injury' flowing from the alleged violation of FECA, Common Cause cannot establish standing merely by asserting that the FEC failed to process its complaint in accordance with law." Section 437g(a)(8)(A), the court explained, "does not confer standing; it confers a right to sue upon parties who otherwise already have standing." Because Common Cause did not demonstrate an injury as a result of the alleged violations of the Act, it could not assert standing under this provision.

Source: FEC Record, May 1996, p. 5; May 1997, p. 4.

Common Cause v. FEC, 108 F.3d 413 (D.C. Cir. 1997).

1 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992).

COMMON CAUSE v. SCHMITT

FEC v. AMERICANS FOR CHANGE1

On July 1, 1980, Common Cause filed suit against Americans for Change and several of its officers in the U.S. District Court for the District of Columbia. Common Cause alleged that defendants had made (or were about to make) independent and coordinated expenditures in violation of 26 U.S.C. §9012(f), which prohibits unauthorized political committees from making expenditures of more than $1,000 on behalf of a publicly funded Presidential candidate. Common Cause asked the court to uphold the constitutionality of Section 9012(f) as applied to defendants' alleged expenditures.

On July 11, the Commission was allowed to intervene in the Common Cause suit and moved to dismiss the action on the grounds that the Commission had exclusive jurisdiction over civil enforcement of the alleged violations and that Common Cause lacked standing to bring suit. Four days later, the Commission filed suit, alleging that the defendant political committees (which claimed to be independent of candidate Reagan's campaign) planned to spend large sums in support of the Republican Presidential candidate's general election campaign. The FEC also asked the court to uphold the constitutionality of 9012(f) as applied to defendants' expenditures. On September 24, 1980, the district court consolidated the two suits for argument before the court.

FEC's Argument

In the motion it filed for summary judgment, the FEC rejected the defendants' argument that the Supreme Court's decision in Buckley v. Valeo invalidated Section 9012(f). The FEC pointed out that the constitutional protection accorded political communications is not the same in every context. Citing the Supreme Court's rulings on the public funding program in Buckley v. Valeo (424 U.S. 1, 96, 99 and 101 (1976)) and in Republican National Committee v. FEC, the FEC maintained that the Court had confirmed the governmental interest served by the contribution and expenditure limits contained in the Presidential public funding program. The FEC argued that, in a similar vein, Section 9012(f) closed off "...the only major avenue by which enormous amounts of aggregate wealth and private financing could be interjected into a scheme designed to encompass only public funding, while avoiding any direct and substantial infringement of protected rights by permitting individuals independent expenditures and by limiting its [Section 9012(f)'s] reach to only those campaigns where candidates have chosen public financing as an alternative to private funding." The FEC maintained that if the defendant committees' "...stated intentions [came] to fruition, namely to raise and expend on behalf of the general election campaign an amount approximately double that which Mr. Reagan and Mr. Bush have accepted in public financing, the Congressional purpose in enacting this legislation would clearly be subverted, with the taxpayer left footing the bill."

The FEC noted that the legislative history demonstrates that Congress was principally concerned with ensuring the effectiveness of the overall limitations imposed upon those candidates accepting public funding. As stated by Senator Taft in support of his amendment to limit committee expenditures, Section 9012(f)'s purpose was "...to prevent any political committees from being formed as a subterfuge so that they can go beyond the authorization of the committees and make expenditures that were not within the limitations of the expenditures which are in the bill."

The FEC further argued that the limited restrictions of Section 9012(f) were constitutional as applied to defendants "...because public funding of a general election presidential campaign is an option which is chosen by candidates in place of unlimited private funding." Additionally, the provision did not abridge free speech rights because "...the transformation of [political committee member] contributions into political debate involves speech by someone other than the contributor (Buckley v. Valeo , 424, U.S. at 21), thereby removing political committee expenditures from the core of individual political expression." (See California Medical Association v. FEC, Opinion at 9 n. 5, 10, 15; Mott v. FEC, Opinion at 7.)

Defendant Committees' Argument

In their motion for summary judgment in the suit, defendants argued that the independent expenditures in question were a form of free speech and, as such, were protected by the First Amendment. They contended that, in its Buckley v. Valeo decision (424 U.S. 1 (1976)), the Supreme Court had held that statutory limits on the amounts which individual citizens or groups could spend on independent communications in political campaigns were an impermissible restraint on First Amendment freedoms. Defendants argued, therefore, that Section 9012(f) could be interpreted as prohibiting only coordinated expenditures authorized or requested by a candidate.

District Court Decision

In its opinion of August 28, 1980, the court ruled on the claims made by the FEC and Common Cause in the consolidated suits. In its rulings on the FEC's claims, the three-judge court determined that Section 9012(f) did apply to defendants' activities. The court concluded, however, that the defendants' proposed expenditures constituted "independent expenditures" which, under Buckley v. Valeo , could not be limited. The court said, "The compelling governmental interest to fight electoral corruption is insufficient, here, as in Buckley, to justify what amounts to a direct limitation on political speech.... Whereas a Presidential candidate, by accepting public funds, may choose...to do without unlimited contributions and expenditures, the candidate's public supporters have a separate, protected right to express themselves, individually or jointly. This preserves free access and full participation in the public debate."

Since it had ruled on the constitutionality of Section 9012(f) in the FEC's suit, the court dismissed that portion of Common Cause's suit (Count I) as moot. The court also dismissed Count II of the Common Cause suit, which had sought enforcement of provisions of the Act allegedly violated by defendants. The court stated that the Commission had been vested by Congress with exclusive jurisdiction over enforcement of the Act. The court did not, however, rule on Common Cause's standing to bring suit.

Supreme Court Hearing

On February 23, 1981, the Supreme Court agreed to consolidate the cases of FEC v. Americans for Change, Americans for an Effective Presidency and Fund for a Conservative Majority (Civil Action No. 80-1754) and Common Cause v. Harrison Schmitt (Civil Action No. 80-1609).

On January 19, 1982, the Supreme Court, in a 4 to 4 split vote, left standing the earlier decision by the district court. (U.S. Supreme Court Nos. 80-1067 and 80-847)

Source: FEC Record, April 1981, p. 8; and March 1982, p. 1.

Common Cause v. Schmitt, 512 F. Supp. 489 (D.D.C. 1980) (three-judge court), aff'd by an equally divided court, 455 U.S. 129 (1982), petition for further relief denied, (D.D.C. Oct. 19, 1983) (three-judge court) (unpublished opinion).

1 See also Fund for a Conservative Majority v. FEC and FEC v. National Conservative Political Action Committee (83-2823).

CONDON v. USA

On March 26, 1996, the parties in this case agreed to a voluntary dismissal by the U.S. Court of Appeals for the Fourth Circuit. The plaintiff in the case, South Carolina Attorney General Charles Condon, had asked the court to declare that the National Voter Registration Act (NVRA) was an unfunded federal mandate that was unconstitutional. The FEC was named in this suit as one of the defendants.

Mr. Condon had alleged that the NVRA violated the Tenth Amendment, which states that powers not delegated to the federal government and not prohibited to the state by the Constitution are reserved to the states.

Source: FEC Record, December 1997, p. 7.

DCCC v. FEC (84-3352)

On November 2, 1984, the U.S. District Court for the District of Columbia issued an order denying plaintiff's motion for a preliminary injunction in Democratic Congressional Campaign Committee v. FEC (Civil Action No. 84-3352).

Background

In its suit, filed on November 2, 1984, the Democratic Congressional Campaign Committee (the Committee) had sought action against the FEC for the agency's failure to expedite action on an administrative complaint the Committee had filed on October 22, 1984. In light of the November 6 general election, the Committee's administrative complaint had asked the FEC to initiate expedited enforcement proceedings against the Republican National Committee and the National Republican Congressional Committee for their alleged violations of the election law. In its civil complaint, the Committee asked the court to enter a permanent injunction directing the Commission to institute expedited enforcement proceedings concerning the violations of the election law alleged in the Committee's complaint. The Committee also asked the court to establish and announce the compliance standards no later than 5:00 p.m. on November 2, 1984.

In addition, the Committee sought a preliminary injunction ordering the Commission to give expedited consideration to the Committee's administrative complaint and to announce its determination on that complaint no later than 5:00 p.m. on November 2, 1984.

District Court Ruling

On November 2, 1984, the district court denied the Committee's motion for a preliminary injunction. The court concluded that it lacked jurisdiction to require the Commission to make an expedited decision on the Committee's administrative complaint because 120 days had not yet elapsed since the Committee had filed the complaint with the FEC. See 2 U.S.C. §437g(a)(8)(A). In addition, the court stated that it clearly lacked authority to direct the Commission to shorten the time period set forth in the Act's enforcement provisions because Congress had given that authority to the Commission's discretion.

Appeal

The Committee filed an appeal with the U.S. Court of Appeals for the District of Columbia Circuit but later asked the court to dismiss it. On December 14, 1984, the court granted the Committee's motion and dismissed the appeal.

Source: FEC Record, December 1984, p. 3; and February 1985, p. 6.

DCCC v. FEC (86-2075)

On October 3, 1986, the U.S. District Court for the District of Columbia declared that the FEC's dismissal of an administrative complaint filed with the agency by the Democratic Congressional Campaign Committee was contrary to law. (Democratic Congressional Campaign Committee v. FEC; Civil Action No. 86-2075.) Pursuant to 2 U.S.C. Section 437g(a)(8)(C), the court directed the FEC to conform with its declaration within 30 days.

On October 23, 1987, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion which partially affirmed the district court decision. The appeals court affirmed the ruling that the FEC's dismissal of an administrative complaint resulting from a deadlock vote was subject to judicial review. However, since the appeals court lacked a Commission explanation for the dismissal, it rejected the district court's finding that the dismissal was contrary to law. Instead, the court remanded the suit to the district court with instructions that the district court, in turn, remand the suit to the Commissioners for an explanation of why they voted to dismiss the complaint.

Background

The Democratic Congressional Campaign Committee (DCCC), a national committee of the Democratic Party, filed its administrative complaint with the FEC on December 20, 1985. DCCC alleged that its Republican counterpart, the National Republican Congressional Committee (NRCC), violated the election law by failing to allocate $10,000 to NRCC's coordinated party spending limits for the reelection of Congressman Fernand St Germain in Rhode Island.1 NRCC made the expenditures for mailings during 1985, which allegedly benefited the Republican House candidate in Rhode Island's First Congressional District. (Although the mailings were officially sponsored by the Rhode Island Citizens Group, NRCC did not deny that it had actually prepared and paid for the mailings.)

The mailings encouraged recipients to petition the House Ethics Committee to investigate newspaper charges that "Cong. St Germain had amassed a multimillion dollar personal fortune by using his public position to help wealthy investors." (Congressman St Germain was the Republican candidate's opponent for the Rhode Island House seat.)

The General Counsel recommended the Commission find reason to believe that the NRCC had violated the election law by failing to allocate and report the mailing expenses as coordinated party expenditures. However, on June 5, 1986, a majority of the Commissioners failed to find "reason to believe" the NRCC had violated the election law. Subsequently, by a unanimous vote, the Commissioners closed the file on the complaint.

Court Ruling

Initially the court noted that, even though the Commissioners' dismissal of the complaint had resulted from their failure to obtain the votes required to find reason to believe the election law had been violated, the DCCC still had "the right [under the statute] to seek review of an adverse outcome."

On reviewing the DCCC's administrative complaint, the court found that the mailing addressed in FEC Advisory Opinion 1985-14 and those conducted by the NRCC in Rhode Island were similar. They both: "(1) were prepared by a national committee of a political party, (2) identified by name a specific Congressman of the opposing party, (3) criticized the record of the Congressman, and (4) were distributed to the constituents of the Congressman in question."

Furthermore, the court noted that "...[T]he Counsel found that the mailer's statement about ridding the government of corruption 'is a reference to an election in that one way to remove Congressman St Germain would be to vote him out of office.'"

The court therefore concluded that the "NRCC mailer conveys an 'electioneering message' as defined by the FEC's own advisory opinions and as interpreted by its General Counsel. Thus the FEC's dismissal of the plaintiff's complaint was 'contrary to law.'"

FEC Appeal

On July 16, 1987, the FEC filed an appeal of the district court's decision with the U.S. Court of Appeals for the District of Columbia Circuit (No. 86-5661). The FEC argued that "authoritative legislative history... demonstrate[d] that Section 437g(a)(8) [of the election law] was not intended to authorize judicial review" of the agency's dismissal of an administrative complaint which results from a deadlock vote on the merits of the complaint.2 Moreover, the FEC contended that "...even apart from the controlling legislative history of Section 437g(a)(8), the courts have traditionally found agency deadlocks that do not resolve substantive issues to be inappropriate for judicial review." The FEC further argued that the district court should not have ruled on the merits of DCCC's administrative complaint but should have limited its role to determining whether the FEC's dismissal of the complaint "could be rationally justified." The FEC claimed that "the district court's failure to limit its review to this narrow question [ran] afoul of Congress' expressed intent not to 'work a transfer of prosecutorial discretion from the Commission to the courts...' and was therefore erroneous."

Appeals Court Ruling

The appeals court concurred with the district court's finding that the FEC's dismissal of the complaint in this case was subject to judicial review, but it rejected the lower court's ruling that the FEC's dismissal of the complaint was contrary to law.

The court found that "because Section 437g(a)(8)(A) provides broadly for court review of an FEC order dismissing a complaint...we resist confining the judicial check to cases in which... the Commission 'act[s] on the merits.'" The court further noted that the explanation of the provision in the legislative history occurred three years after Congress originally enacted the provision. However, the court limited its decision to the narrow circumstances presented in the case, "specifically a general counsel recommendation to pursue the complaint in fidelity to FEC precedent in point."

Furthermore, the appeals court did not agree with the district court's resolution of the merits of DCCC's administrative complaint. "Because we have no explanation why three Commissioners rejected or failed to follow the General Counsel's recommendation, we are unable to say whether reason or caprice determined the dismissal of DCCC's complaint," the court said. The court therefore held that "the Commission or the individual Commissioners should first be afforded an opportunity to say why DCCC's complaint was dismissed in spite of the FEC's General Counsel's recommendation." The case was remanded to the district court.

Source: FEC Record, July 1985, p. 6; November 1986, p. 4; and December 1987, p. 5.

Democratic Congressional Campaign Committee v. FEC, 645 F. Supp. 169 (D.D.C. 1986), aff'd in part and remanded, 831 F.2d 1131 (D.C. Cir. 1987).

1 Coordinated party expenditures are limited expenditures which may be made by party committees on behalf of federal candidates in general election campaigns. During 1986, based on the cost of living adjustment, a national party committee could spend up to $21,810 for each of its House candidates in Rhode Island. 2 U.S.C. §441a(d).

2 "[I]f the Commission considers a case and is evenly divided as to whether to proceed, that division...is not subject to review anymore than a similar prosecutoral decision by a U.S attorney." See legislative history of 2 U.S.C. §437g(a)(8)(A) at 125 Cong. Rec. 36,754 (1979) (emphasis added), reprinted in FEC, Legislative History of the FECA Amendments of 1979, at 549.

DCCC v. FEC (96-0764)

On November 18, 1996, the U.S. District Court for the District of Columbia dismissed this case. The Democratic Congressional Campaign Committee (DCCC) had voluntarily requested such action.

Originally, the DCCC had asked the court to require the FEC to take action on an administrative complaint it filed with the agency on November 4, 1994, alleging violations of the Federal Election Campaign Act (the Act) by Grant Lally, a Congressional candidate from New York.

The Act allows a complainant to file a lawsuit against the FEC if the agency fails to take action on his or her administrative complaint within 120 days after it is filed. 2 U.S.C. §437g(a)(8)(A). The DCCC filed suit on April 23, 1996, after more than 120 days had elapsed.

In its original complaint, the DCCC alleged that Mr. Lally, who was vying to represent the fifth district, received substantial, undisclosed contributions in violation of the limits of the Act. 2 U.S.C. §441a. The DCCC alleged that the money was in excess of $300,000. Mr. Lally said the money was "personal funds" lent to the campaign. The DCCC filed a supplemental complaint in 1995 alleging that Mr. Lally had continued to violate the Act.

Source: FEC Record, January 1997, p. 4.

DNC v. FEC (96-2506)

On February 20, 1997, with the agreement of both parties, the U.S. District Court for the District of Columbia dismissed this case without prejudice and ordered the FEC to periodically update the Democratic National Committee (DNC) on the status of an administrative complaint it filed against Bob Dole's 1996 presidential campaign.

In June 1996, the DNC filed an administrative complaint with the Commission alleging that Mr. Dole's presidential committee, Dole for President, Inc., disregarded the limit on expenditures during the pre-primary season. The administrative complaint was designated MUR 4382. Under the Presidential Primary Matching Payment Account Act, presidential candidates may receive matching payments for their primary campaigns if they agree to limit their expenditures to a set amountin this case, a little more than $37 million. 2 U.S.C. §441a(b)(1)(A).

After no apparent action had taken place on the complaint, the DNC, on October 31, 1996, filed suit asking the court to order the FEC to move forward on its allegations against the Dole campaign. The DNC said that in failing to act on its complaint within 120 days after it was filedthe original administrative complaint was filed June 12 and a supplemental complaint was filed on July 22the FEC was acting contrary to law. 2 U.S.C. §437g(a)(8)(A).

The court said that the FEC should give lawyers for the DNC confidential, updated chronologies on the Commission's actions in MUR 4382. The first was to be delivered at the end of March 1997 with subsequent chronologies presented at 12-month intervals until the matter was resolved or there was further court action.

The contents of the chronologies may not be disclosed to anyone not involved in the administrative complaint. Additionally, DNC counsel may use the information only in preparation for litigation that may result from the MUR. To ensure that there is no unauthorized dissemination of the chronologies, DNC counsel must inform in writing each person who sees the information that it may not be shared with others. The DNC must maintain a list of those people, what information they have seen and a written statement from each person acknowledging that he or she understands the confidentiality provisions that are part of this court action.

Source: FEC Record, May 1997, p. 5.

DNC v. FEC (97-676)

On July 2, 1998, at the request of the FEC, and with the consent of the Democratic National Committee (DNC), the U.S. District Court for the District of Columbia dismissed this case without prejudice and remanded the matter back to the FEC to review the impact of the appellate and U.S. Supreme Court decisions in Akins v. FEC on issues presented in this case.

The suit concerned the Commission's dismissal of the DNC complaint alleging that the Christian Coalition is a political committee.

Source: FEC Record, December 1995, p. 1, February 1997, p. 1; June 1997, p. 7; July 1998, p. 1; and September 1998, p. 3.

DOLAN v. FEC

By agreement of both parties, the U.S. District Court for the District of Columbia dismissed this case on August 17, 1990. (Civil Action No. 90-0542.) Robert E. Dolan had asked the court to declare that 2 U.S.C. §438(a)(4), referred to as the "sale and use restriction," was unconstitutional as applied to his efforts to solicit individuals identified as contributors in FEC reports.

On July 13, 1990, the Commission had filed suit in the same court, asking the court to declare that Mr. Dolan knowingly and willfully violated the sale and use restriction.

On September 5, 1990, the Commission filed a motion to amend its complaint by requesting a court declaration that the sale and use restriction is constitutional insofar as it curtails the sale or use of contributor data for commercial purposes. The Commission also asked the court to certify the constitutional issue to the U.S. Court of Appeals for the District of Columbia Circuit under 2 U.S.C. §437h.

Source: FEC Record, October 1990, p. 8.

DOLBEARE v. FEC

On March 11, 1982, the U.S. District Court for the Southern District of New York issued a ruling granting a preliminary injunction to the plaintiffs in Dolbeare v. FEC (No. 81 Civ. 4468-CLB).

Plaintiffs' suit challenged pending FEC investigations of various activities with respect to the Citizens for LaRouche Committee (the LaRouche campaign), Lyndon H. LaRouche's principal campaign committee for the 1980 Presidential primaries. The LaRouche campaign claimed that the statutory provision authorizing the investigations (2 U.S.C. §437g(a)(2)) was unconstitutional as applied to the LaRouche campaign because it placed no limits on the time for completing the investigations. Moreover, the LaRouche campaign alleged that the FEC had undertaken the investigations to harass the campaign. Furthermore, the investigations had a chilling effect on the free association rights of the campaign's contributors. The LaRouche campaign also claimed that, in conducting its investigations, the FEC had gone beyond the prescribed scope for FEC investigations.

The FEC sought dismissal of the suit on jurisdictional grounds. Primarily, the FEC claimed that the suit was not justiciable because, under 2 U.S.C. §437g(a), an agency has the discretion to decide whether there is "reason to believe" the Act has been violated and whether an alleged violation should be investigated. The FEC also argued that, pursuant to the Supreme Court's decision in Federal Trade Commission v. Standard Oil of California, such initial agency determinations are not final and thus not ripe for judicial review in a federal court. Moreover, the FEC said that §437h provides jurisdiction only for claims of statutory unconstitutionality, not for claims that a statute is unconstitutional as applied. Furthermore, the FEC argued that the LaRouche campaign's claim that the FEC's investigations would have a long-term chilling effect on their political activities did not meet the test for immediate injunctive reliefevidence of "specific present objective harm or a threat of specific future harm..." (Laird v. Tatum, 408 U.S. 1, 13-14 (1971)). The FEC further argued that the LaRouche campaign had failed to present sufficient evidence to demonstrate a likelihood of succeeding with its case on the merits.

In granting a preliminary injunction, the court found that it did have jurisdiction over the claims raised in the suit and that §437h could be used to challenge the constitutionality of the Act, as applied. The court also held that it did not have to certify the campaign's constitutional questions to the appeals court, pursuant to §437h, but could itself take primary jurisdiction over them. The court reasoned that the campaign would be caused "irreparable harm" as a result of substantial legal fees and the depletion of volunteer staff resources required to defend the campaign against the FEC's ongoing investigations. The court therefore barred the FEC from:

• Initiating any more investigations into the LaRouche campaign's 1980 Presidential primary activities until the pending enforcement actions were concluded; and
• Auditing, or issuing depositions to, LaRouche campaign contributors unless the FEC simultaneously notified the LaRouche campaign of such actions.

Moreover, the court ordered the FEC to complete its enforcement actions promptly and to treat the LaRouche campaign as a respondent to all pending investigations involving the campaign's 1980 Presidential primary activities. The court also ordered the FEC to furnish copies of depositions taken with regard to any of the pending investigations, if requested by the LaRouche campaign. The court, however, conditioned its enforcement of the injunction on:

• Plaintiffs' agreement to waive certain legal claims with respect to time limits for the FEC enforcement actions; and
• Plaintiffs' full cooperation with the FEC in completing the pending enforcement matters.

Source: FEC Record, May 1982, p. 6.

Dolbeare v. FEC, No. 81 Civ. 4468-CLB (S.D. N.Y. March 9, 1982) (unpublished opinion).

DOLE v. INTERNATIONAL ASSOCIATION MANAGERS

On February 14, 1991,1 the U.S. District Court for the District of Arizona granted the FEC's motion for leave to intervene in the case. (Civil Action No. CIV 90-0129 PHX RCB.)

The suit was filed by the Department of Labor and its Secretary, Elizabeth Dole. They alleged that defendants failed to pay overtime wages in violation of the Fair Labor Standards Act. International Association Managers, Inc. (IAM) and two of its officers were named as defendants. Counsel for the defense took depositions from two former IAM employees who defendants believe are involved in the Department of Labor investigation and in an ongoing investigation by the FEC. When questioned about their communications with the two agencies, the employees refused to answer, citing the "government informant's privilege." Defendants then filed a motion to compel the employees to respond to these questions.

In response to the defendants' motion, the FEC filed a motion to intervene in the case or to file an amicus response to defendants' motion to compel. The court granted the motion, stating: "The interest of the FEC in protecting against disclosure of the identity of informants and the nature of informants' communications with the FEC is similar to the interest the Department of Labor seeks to protect....The interest of the two agencies may not be identical, however, and the court can see no reason for requiring the FEC to rely on another agency to protect its interest."

The court also denied defendants' motion to compel the testimony of the two employees. Further, it granted the FEC's motion for a protective order to prohibit defendants from questioning any witness to learn the identity of persons communicating with the FEC and the nature of those communications. The court granted a motion for a similar order requested by the Department of Labor to protect that agency's communications.

Source: FEC Record, June 1991, p. 9.

1 The order was amended on April 1, 1991, to correct a typographical error.

DSCC v. FEC (80-2074)

NRSC v. DSCC

In an administrative complaint, filed May 9, 1980, DSCC alleged that NRSC had violated the Act by making special "coordinated" expenditures (2 U.S.C. §441a(d)(3)) as an agent for certain state Republican Party committees. Based on written agreements with the state party committees, the NRSC had made the expenditures to support the general election campaigns of various Senatorial candidates in 1978. NRSC's expenditures were within the limits prescribed by §441a(d)(3) for special party expenditures that a state party committee may make on behalf of its Senate candidate (i.e., $20,000 or 2 cents multiplied by the voting age population of the state). On July 11, 1980, the Commission unanimously determined that there was "no reason to believe" that NRSC had violated the Act. This action was consistent with Commission determinations in prior enforcement actions.

District Court Ruling

In a petition filed with the U.S. District Court for the District of Columbia on July 30, 1980 (Democratic Senatorial Campaign Committee v. FEC, Civil Action No. 80-1903), DSCC sought a declaration from the court that the FEC's determination was contrary to law and an order directing the Commission to comply with the declaration within 30 days. On August 28, 1980, the district court, ruling on cross-motions for summary judgment, denied the DSCC's petition and affirmed the Commission's determination and interpretation of §441a(d)(3), concluding that the dismissal of DSCC's complaint was not arbitrary, capricious, an abuse of discretion or otherwise contrary to law.

Appeals Court Ruling

DSCC appealed the district court's order on September 3, 1980 (No. 80-2074). On October 9, 1980, in a per curiam opinion, the appeals court reversed the district court's judgment and declared the Commission's determination contrary to law. Finding that the Commission had presented no reasoned explanation for its determination on the administrative complaint, the court decided the issue de novo. The court determined that neither the language of the statute nor its legislative history could support the Commission's interpretation of §441a(d)(3), i.e., that Congress had not intended to prohibit intraparty agency agreements, such as those used by the Republican Party committees. Accordingly, the appeals court held that, in the absence of an explicit statutory authorization, the agreements between NRSC and the state Republican Party committees violated Section 441a(d)(3). It issued a mandate directing the Commission to conform with its decision.

On October 10, 1980, while the Commission was attempting to comply with the court's decision, intervenor NRSC filed an application to recall the mandate and a petition for an en banc rehearing of the case. The appeals court denied both motions on October 11, 1980. Then, in response to a request from NRSC, the Chief Justice of the Supreme Court issued a stay of the appeals court's judgment, pending the Court's decision on NRSC's petition for a writ of certiorari.

Supreme Court Ruling

On March 2, 1981, the Supreme Court granted the Commission's petition for a writ of certiorari in FEC v. Democratic Senatorial Campaign Committee (Civil Action No. 80-939). The Court also granted a petition for a writ of certiorari filed by the National Republican Senatorial Committee (National Republican Senatorial Committee v. Democratic Senatorial Campaign Committee, Civil Action No. 80-1129) and consolidated the cases for oral argument.

In a brief filed with the Supreme Court on April 16, 1981, the Commission argued that its decision to dismiss DSCC's administrative complaint was based on a reasonable interpretation of the Act and should be affirmed. The Commission contended that, by substituting its judgment for that of the FEC, the appeals court had interfered with the Commission's exclusive role as the expert body established by Congress to administer, enforce and interpret the Act. Moreover, in reversing the FEC's consistent construction of Section 441a(d)(3), the appeals court had ignored precedent in the District of Columbia circuit, which gave judicial deference to the Commission's interpretations of the Act. The Commission also asserted that the appeals court's decision required it to develop a new rule of law or statutory interpretation in the context of an enforcement proceeding. This requirement was contrary to the statutory mandate that such rules and interpretations be made through advisory opinions and rulemaking.

Furthermore, the Commission argued that its interpretation of 2 U.S.C. §441a(d)(3) was not contrary to law. Rather, the Commission's interpretation was consistent with statutory language, Commission regulations and advisory opinions and legislative history. A contrary interpretation would conflict with the clear Congressional intent to encourage a close working relationship among the various party committees. For example, under the Act, funds may be transferred without limit between political committees of the same party. 2 U.S.C. §441a(a)(4). The Commission asserted that Congress recognized the Act did not prohibit such intraparty arrangements when it rejected an amendment to the Act that would have prohibited NRSC from transferring funds to the state party committees for the purpose of making §441a(d) expenditures. The Commission therefore argued that its interpretation of §441a(d)(3) was entitled to deference by the appeals court.

On November 10, 1981, the Supreme Court issued an opinion reversing the appeals court decision. The Supreme Court's opinion affirmed the Commission's construction of §441a(d)(3) as a "sufficiently reasonable" one. The Court found that the district court had been "correct" in according deference to the Commission's interpretation.1 The Court held that "Section 441a(d)(3) does not expressly or by necessary implication foreclose the use of agency arrangements, such as are at issue here, and the FEC thus acted within the authority invested in it by Congress when it determined to permit such agreements.... While §441a(d)(3) does not authorize the NRSC to make expenditures in its own right, it does not follow that it may not act as agent of a Committee that is expressly authorized to make expenditures." The Court further held that "the FEC's view that the agency agreements were logically consistent with §441a(4)which authorizes the transfer of funds among national, state, and local committees of the same partyis acceptable."

Source: FEC Record, August 1981, p. 2; and January 1982, p. 6.

Democratic Senatorial Campaign Committee v. FEC, 660 F.2d 773 (1980 D.C. Cir.), rev'd 454 U.S. 27 (1981), on remand, 673 F.2d 551 (1982).

1 Moreover, the Court did not take issue with the fact that the FEC's dismissal of the complaint was based solely on the General Counsel's Report.

DSCC v. FEC (90-1504)

On August 27, 1990, the U.S. District Court for the District of Columbia granted the FEC's motion for summary judgment, ruling that the agency did not act contrary to law when it dismissed a portion of an administrative complaint filed by the Democratic Senatorial Campaign Committee (DSCC). (Civil Action No. 90-1504.)

Background

In its administrative complaint (MUR 2766), DSCC alleged that $325,000 in media expenditures made by the Auto Dealers and Drivers for Free Trade Political Action Committee (Auto Dealers PAC) in support of 1988 Florida Senate candidate Connie Mack were not independent and thus violated the PAC's $5,000 contribution limit for a candidate under 2 U.S.C. §441a(a)(2)(A). DSCC contended that, because the Auto Dealers PAC and the Mack campaign (Friends of Connie Mack) both used the services of two key campaign consultants, the independence of the PAC's expenditures was compromised, resulting in excessive contributions by the PAC. The consultants, two media firms, provided services to the Mack campaign in Florida and to the Auto Dealers PAC for expenditures in other states.

The PAC denied using either media firm in connection with the Florida Senate race, identifying a third firm as its media consultant for Florida. The PAC's director explained in an affidavit that, when the presidents of the two media firms disclosed that they were retained by the Mack campaign, he told them "not to say anything at all" about the Florida race to anyone associated with the PAC. The PAC submitted affidavits by the two presidents consistent with the PAC director's affidavit. The Mack campaign also denied any consultation or coordination with the PAC and provided supporting affidavits.

The FEC's General Counsel recommended that the Commission authorize an investigation of the matter because of "unanswered questions." However, the Commission, by a vote of 3-2 (and one abstention), failed to find "reason to believe" that a violation had occurred with respect to the independent expenditure portion of the complaint, thereby dismissing that portion.1 (The Commission did find reason to believe that the Mack campaign had failed to comply with the 48-hour notice requirement for last-minute contributions and later entered into a conciliation agreement with the campaign with respect to that violation.)

On June 26, 1990, DSCC filed suit seeking summary judgment that the FEC had acted contrary to law in dismissing DSCC's allegation of coordination between the Auto Dealers PAC and the Mack campaign with respect to the PAC's independent expenditures.

Court Decision

The court found that the Commission's decision to dismiss the independent expenditure allegation was not contrary to law, given the "totality of the circumstances" of the case.

DSCC had argued that the "totality of the circumstances" compelled an investigation to determine whether the PAC's expenditures were independent. These circumstances included: (1) the two common consultants used by the Auto Dealers PAC and the Mack campaign; (2) the General Counsel's recommendation to find "reason to believe" and authorize an investigation; and (3) the affidavits submitted by the PAC and the Mack campaign, which DSCC claimed raised substantial questions. The court, however, was not persuaded by DSCC's arguments.

With respect to the common consultants, the court found that "there was no reason to presume 'coordination' as the consultants were retained by the PAC to work on elections only outside the state of Florida."

The court also found that the Commission's decision not to follow the General Counsel's recommendation was not unreasonable. Citing Commissioner Josefiak's Supporting Memorandum for the Statement of Reasons, the court stated: "In refusing to order an investigation, the Commission applied a minimum evidentiary threshold that required at least 'some legally significant facts' to distinguish the circumstances from every other independent expenditure....[O]therwise every 'independent expenditure' complaint would demand investigation." The court said that "the only record of fact offered in support of DSCC's allegations was the use of 'common consultants.'" In the court's view, however, the affidavits suggested that "the Florida Auto Dealers PAC built a 'Chinese Wall' between itself and the two Mack consultants."

With regard to the affidavits, the court found it "entirely reasonable to read [them] as precluding, rather than raising, an inference of coordination."

Accordingly, the court entered summary judgment in favor of the FEC and against DSCC.

Source: FEC Record, October 1990, p. 8.

Democratic Senatorial Campaign Committee v. FEC, 745 F. Supp. 742 (D.D.C. 1990).

1 Four affirmative votes are necessary to find "reason to believe."

DSCC v. FEC (93-1321)

On November 14, 1994, the U.S. District Court for the District of Columbia ordered the FEC to vacate its dismissal of the Democratic Senatorial Campaign Committee's (DSCC's) complaint against the National Republican Senatorial Committee (NRSC) with respect to excessive contributions made in the 1992 Georgia U.S. Senate race. The court based this judgment on FEC regulations defining general and runoff elections. 11 CFR 100.2(b) and (d).

Background

A general election was held in Georgia on November 3, 1992, in which none of the candidates for U.S. Senate won a majority. Under Georgia law, when an election for U.S. Senator fails to produce a majority winner, a second election must be held between the top two vote getters. Such an election was held on November 24, 1992.

Under the federal election law, the DSCC and the NRSC were each permitted to spend up to $535,608 on behalf of their party nominee in the 1992 Georgia general election for U.S. Senate. 2 U.S.C. §441a(d). The NRSC had exhausted this spending authority by November 3, while the DSCC had not. Subsequently, the NRSC requested an advisory opinion from the FEC as to whether to classify the November 24 election as a second general election or as a runoff. The NRSC would be legally entitled to a new $535,608 spending authority if the election were deemed a general election, but not if it were deemed a runoff election. Since the Commission split 3-3 1 on how to classify the November 24 election, no advisory opinion was issued. The NRSC then proceeded to spend nearly the full amount permitted for a general election in support of its candidate for the November 24 election. The DSCC, on the other hand, limited its expenditures to the balance which remained from the original §441a(d) allowance.

The DSCC filed a complaint with the FEC on November 19, alleging that the NRSC had violated federal election law by exceeding its §441a(d) spending limit in this race. The Commission split 3-3 on whether or not to initiate an investigation and then dismissed the DSCC's complaint. The DSCC then brought this case before the court.

Court's Ruling

Based on its interpretation of FEC regulations, the court concluded that the November 24 election was not a general election. It reasoned that the election could not qualify as a general election because it was not held on the Tuesday following the first Monday in November in an even numbered year, nor was it designed to fill a vacancy, thus failing to meet either of the criteria for a general election. 11 CFR 100.2(b).

The court further reasoned that the November 24 election fit the definition of a runoff election because it was held after a general election and it was prescribed by applicable state law as the means for deciding which candidate was the winner. 11 CFR 100.2(d).

The court disagreed with the argument that the November 24 election could be both a general and a runoff election. The court observed that the regulations do not state that a runoff election can also be a general election, whereas, in defining other types of elections, the regulations clearly state where overlap is possible.

The court ordered the FEC to initiate appropriate enforcement proceedings against the NRSC.

Source: FEC Record, January 1995, p. 10.

Democratic Senatorial Campaign Committee v. FEC, No. 93-1321 (HHG) (D.D.C. Nov. 14, 1994).

1 Four votes (out of six) are required to adopt advisory opinions and to take action in compliance matters. 11 CFR 112.4(a).

DSCC v. FEC (95-0349)

On April 17, 1996, the U.S. District Court for the District of Columbia ruled that the FEC acted contrary to law when it allowed nearly 600 days to pass without taking any meaningful action on an administrative complaint filed by the Democratic Senatorial Campaign Committee (DSCC). Under 2 U.S.C. §437g(a)(8)(A), anyone who files a complaint with the FEC may seek court intervention if the FEC fails to complete action on the complaint within 120 days.

The DSCC filed the complaint on May 14, 1993. In the complaint, the DSCC alleged, among other things, that the National Republican Senatorial Committee had violated the law by making illegal "soft money" contributions to influence the 1992 Senate electionsparticularly the runoff in Georgia.

On February 22, 1995, the DSCC filed this suit claiming that the FEC's failure to complete action was arbitrary and capricious.

The court reasoned that while FEC decisions concerning whether to conduct an investigation were entitled to judicial deference, the agency's failure to consider a complaint for nearly 600 days was subject to judicial review. The court examined whether the FEC had acted reasonably in allowing nearly 600 days to pass before taking action on the DSCC's complaint.

The criteria the court used to review the FEC's inaction are outlined in Rose v. FEC (1984) and Telecommunications Research & Action Center v. FCC (1984); they are:

• The credibility of the allegation;
• The nature of the threat posed;
• The resources and information available to the agency;
• The novelty of the issues involved;
• The time it takes for the agency to make decisions;
• Whether Congress mandated a timetable for the agency to take action on such matters as the one at hand;
• The nature of the matter (for instance, delayed agency action on matters affecting human health and welfare are less tolerable than those in the sphere of economic regulation);
• The effect that court-ordered expedited action on the matter would have on agency activities of a higher or competing priority;
• The nature and extent of the interest prejudiced by the agency's delay in acting on the matter; and
• The fact that the court need not "find any impropriety lurking behind agency lassitude in order to hold that agency action is 'unreasonably delayed.'"

Based on its analysis of the factors listed above, the court ruled that the FEC's failure to consider the DSCC's complaint for nearly 600 days was contrary to law. The court noted, however, that while this litigation was pending, the FEC had moved forward with respect to the DSCC's complaint. The court warned that should the FEC stall on this matter again, "the need for additional judicial intervention may well be compelling."

Source: FEC Record, July 1996, p. 5.

DSCC v. FEC (96-2109)

On October 9, 1996, the U.S. District Court for the District of Columbia dismissed this case in an expedited decision prompted by the nearness of the November general election. The court said that it could not rule on how party committees may make expenditures that are "independent" because the FEC has not yet addressed the issue in a rulemaking or an advisory opinion.

The Democratic Senatorial Campaign Committee (DSCC) and the Democratic Congressional Campaign Committee (DCCC) wanted the court to rule that their proposed expenditures qualified as "independent expenditures" and therefore were outside any spending limits. But the court said that the FEC "has been granted primary jurisdiction and therefore should be given an adequate opportunity to address the issues raised by Plaintiffs."

Background

In a June 26, 1996, decision, the Supreme Court held that political parties were capable of making "independent expenditures," thus reversing the FEC's long-held presumption that party expenditures on behalf of candidates were "coordinated" with candidates and thus subject to contribution or expenditure limits. Colorado Republican Federal Campaign Committee v. FEC, 116 S. Ct. 2309 (1996).

In July, the DSCC and the DCCC asked the FEC to revise agency regulations in time for the November election to explain how party committees, with their traditionally close contacts with candidates, could make independent expenditures. The Commission agreed to conduct the rulemaking but said it could not revise the rules in time for the 1996 election cycle.

That same month the committees also formally requested an FEC advisory opinion (AOR 1996-30) to answer questions on their proposed independent expenditures, such as whether past contacts between party staff and candidates' campaign staff would compromise the independence of the expenditures, or whether the party committees could erect a "Chinese Wall" to segregate staff chosen to work on independent expenditure campaigns.

An advisory opinion drafted by the FEC's Office of General Counsel and voted on in late August failed to win approval by the required four-vote majority of Commissioners.

In September, the plaintiffs filed suit asking the court to find that their proposed expenditures would qualify as independent expenditures. The committees claimed that they were forced to file suit because the FEC's failure to issue formal guidance would expose them to possible
penalties under the Federal Election Campaign Act should they pursue their independent expenditure program.

Court Decision

The court ruled that the plaintiffs had standing to file suit because they suffered injury: "the chilling of First Amendment rights" and "a creditable threat of prosecution."

However, the court said, it was unable to rule on the substance of the case because the FEC had not yet taken any final agency action that could be reviewed by a court. The court said that the plaintiffs "are asking the Court to 'step into the Commission's shoes' and issue the advisory opinion and final rules which it was unable to provide." The court noted that Congress intended the FEC to interpret the statute first, before the courts.

The court therefore granted the FEC's motion to dismiss the case.

The DSCC and DCCC subsequently asked the U.S. Court of Appeals for the District of Columbia to review the lower court's judgment on an expedited basis so the case could be resolved before the election. That court, however, on October 11, 1996, denied the request to expedite the appeal.

Source: FEC Record, November 1996, p. 7.

DSCC v. FEC (96-2184, 97-5160 and 97-5161)

On November 25, 1996, the U.S. District Court for the District of Columbia denied a request from the Democratic Senatorial Campaign Committee (DSCC) to find that the FEC violated the Federal Election Campaign Act when it failed to take action on an administrative complaint the DSCC had filed with the Commission.

The DSCC filed the lawsuit against the FEC after the agency had failed to act on its administrative complaint against the National Republican Senatorial Committee (NRSC) within 120 days. 2 U.S.C. §437g(a)(8)(A).

On April 10, 1998, the U.S. Court of Appeals for the District of Columbia Circuit remanded these two cases to the district court after finding that the question of standing had not been resolved.

Background

The DSCC filed its administrative complaint in 1993 and followed it with a supplemental complaint in 1995. The complaints alleged that the NRSC had made at least $187,000 in illegal "soft money" expenditures to influence the Senate election of a Republican candidate in Georgia. The NRSC did this, the DSCC alleged, by funneling the money through four nonprofit organizations that were allegedly closely aligned with the Republican Party.

In April 1996, the DSCC asked the court to order the FEC to act on its administrative complaints. The court found the FEC's delay was contrary to law and told the agency to move forward with the case. It also told the DSCC to file another lawsuit if the FEC did not take action.

The DSCC did just that. In September it filed this case, asking the court again to order the FEC to complete the consideration of its complaint within 30 days or give the DSCC the authority to file a civil action against the NRSC. In denying the DSCC's request, the court said the FEC's conduct did not yet constitute a failure to act that was contrary to law. Further, the FEC provided the court and the DSCC with a chronology of its actions taken over the last 15 months.

The court also based its ruling, in part, on the FEC's considerable work load, lack of resources and competing priorities. In particular, it noted the U.S. Supreme Court ruling in the Colorado Republican Federal Campaign Committee case, which was handed down in June 1996 and which invalidated part of the FEC's regulation governing expenditures by national and state party committees. That ruling, the court said, added an "additional layer of complexity" to the DSCC's allegations against the NRSC.

The court noted that the statute of limitations period was coming to a close with regard to the DSCC's administrative complaint. Therefore, the court ordered the FEC to file status reports on its progress on the administrative complaint every 30 days (the first report was due December 10, 1996) and scheduled a March status conference for the FEC and the DSCC in the event that the matter was not resolved by then.

After waiting an additional four months and nearing the five-year statute of limitations for this case, the DSCC filed a motion for summary judgment, citing the FEC's "near glacial pace" in the investigation and arguing again that the agency's actions were contrary to law.

On May 30, 1997, the court granted the DSCC's motion and ordered the FEC to take action, within 30 days, on the committee's administrative complaint. The court also stated that if the FEC failed to take action within 30 days, then the DSCC could initiate its own lawsuit against the NRSC pursuant to 2 U.S.C. §437g(a)(8)(C).

Arguments from the Commission

The FEC contended that it was moving forward with the investigation of the DSCC's complaint and that it was "conducting a careful and deliberate investigation of constitutionally sensitive and factually complex issues arising from a national party's payments to independent issue advocacy groups." The FEC also argued that, without sufficient time to conduct a thorough investigation, its five commissioners would not be able to make an informed decision as to whether there was probable cause to believe that a violation of the Act had occurred. The FEC added that certain witnesses were challenging the Commission's discovery requests.

District Court Decision

The standard for evaluating administrative delay is whether an agency has acted reasonably and in a manner that is not arbitrary or capricious.1 To measure this, the courts use several criteria described in Rose v. FEC and Telecommunications Research & Action Center v. FCC.

Using those criteria, the court concluded that the FEC's delaytaking more than four years from when the administrative complaint was filed and nearly two years from the Commission's "reason to believe" determination to decide whether there was probable cause to believe a violation of the Act had occurredwas unreasonable.

The court said that the FEC could no longer claim that the Supreme Court's decision in the Colorado case complicated its investigation. The court also cited the impending five-year mark for the case, and said that litigation delays resulting from motions to quash FEC subpoenas were foreseeable and provided no acceptable excuse for the delay.

The court concluded that the FEC's failure to investigate and make a "probable cause" determination in a reasonable time frame was contrary to law under 2 U.S.C. §437g(a)(8)(C). It ordered the Commission to conform its conduct with the court's declaration within 30 days. Subsequently, on June 20, 1997, the Commission appealed this decision to the U.S. Court of Appeals for the District of Columbia Circuit.

Appeals Court Decision

The appeals court remanded both cases to the district court to determine whether the DSCC had standing to sue the Commission under §437g(a)(8). In citing the issue of standing, the appeals court acknowledged that the question had come up only on appeal and mainly through an amicus curiae, or friend of the court, brief. The appeals court based its ruling on a 1998 U.S. Supreme Court decision in Steel Co. v. Citizens for a Better Environment, which "seems to hold that before deciding the merits (of a case), federal courts must always decide Article III (of the U.S. Constitution) standing whenever it is in doubt." Because some doubt has now been raised, the appeals court remanded the cases to the district court to address the standing question. The DSCC must present evidence that it satisfied the three-pronged test of standinginjury in fact, causation and redressability. With regard to redressability, the court said that the standing analysis may well have to depend on the Supreme Court's decision in Akins v. FEC.2

Source: FEC Record, January 1997, p. 2; August 1997, p. 3; and June 1998, p. 4.

DSCC v. FEC, 139 F.3d 951 (D.C. Cir. April 10, 1998).

1 Common Cause v. FEC, 489 F. Supp. 738, 744 (D.D.C. 1980).

2 In the Akins case, several former government officials filed a lawsuit against the FEC after it dismissed an administrative complaint they had filed. Among the issues discussed at the Supreme Court was whether these former officials had standing to initiate this lawsuit.

DSCC v. NRSC

On August 15, 1997, in response to a court order, the FEC filed an amicus brief about the confidentiality of its documents in the Democratic Senatorial Campaign Committee (DSCC) suit against the National Republican Senatorial Committee (NRSC).

The DSCC's suit was the first contested case in which a private party has sued another private party for violations of the Federal Election Campaign Act (the Act), pursuant to 2 U.S.C. §437g(a)(8)(C). That section of the Act states that if the FEC fails to take action on a complaint within 30 days after it has been ordered to do so by the U.S. District Court for the District of Columbia, then the complainant may file suit in his or her own name against the alleged offender of the Act.

The DSCC had filed two previous lawsuitsin April and November 1996against the FEC charging that it had failed to take action within 120 days on an administrative complaint filed by the DSCC, alleging that the NRSC had made illegal "soft money" expenditures to influence a Senate election in Georgia. 2 U.S.C. §437g(a)(8)(A). In the resolution of the second delay suit, which occurred on May 30, 1997, the court ordered the FEC to take action on the administrative complaint within 30 days. When that did not happen, the DSCC filed suit on its own against the NRSC.

The Commission's brief was in response to an order from the court seeking the FEC's views on keeping under seal certain documents it filed during proceedings in the two DSCC delay cases and to which the NRSC has requested access. The Commission argued that providing such information to the NRSC would compromise its investigation into the DSCC's original administrative complaint, which continues despite the DSCC's most recent lawsuit against the NRSC. The documents being sought by the NRSC included information about potential witnesses and FEC actions and procedures in the investigation. The FEC contended that the information in the sealed files contained no evidence about the NRSC's alleged violations, and thus would be of little relevance to the NRSC's court battle with the DSCC. And, although the DSCC had seen some of the information under seal, it was barred by the court's protective order from using that information in its own lawsuit against the NRSC.

The Commission also noted the precedent the court would set if it were to allow the NRSC to view the confidential information covered by the protective order, stating that the Commission would have to take such actions into consideration in deciding what information to provide the court in future delay cases.

On August 27, 1997, the court granted a stay requested by the NRSC without deciding whether to maintain the confidentiality of the documents.

Source: FEC Record, October 1997, p. 1.

DUKAKIS v. FEC

SIMON v. FEC

On May 5, 1995, the U.S. Court of Appeals for the District of Columbia Circuit ruled that in both these cases the FEC was time barred from imposing repayment obligations on the plaintiffs. Both plaintiffs did not receive an initial repayment determination within the 3-year statute of limitations. 26U.S.C. §9038(c). The FEC's actions in these matters were therefore reversed.

Background

Both Governor Michael Dukakis and Senator Paul Simon made bids for the 1988 Democratic Presidential nomination. Both of them received public funding for their campaigns. Pursuant to 26 U.S.C. §9038(a), the FEC conducted audits of both campaigns. The 3-year statute of limitations was triggered on July 20, 1988, the day the Democratic National Convention nominated Governor Dukakis for President. Final audit reports containing initial repayment determinations were issued on December 9, 1991, for Dukakis and on October 22, 1991, for Simon. These initial determinations were not finalized until February 25, 1993, for Dukakis and March 4, 1993, for Simon; the Commission determined that the Dukakis and Simon campaigns owed the U.S. Treasury $491,282 and $412,162, respectively.

The 3-Year Statute of Limitations

26 U.S.C. §9038(c) states: "No notification [of repayment] shall be made by the Commission . . . with respect to a matching payment period more than 3 years after the end of such period." The FEC contended that the interim audit report, issued in both cases within 3 years of the date of the nomination, was sufficient notice to obligate plaintiffs to make the repayments. To bolster this argument, the FEC reminded the court that, in accordance with the decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., the court must defer to an agency's reasonable interpretation of the statute it administers.

The court concluded that deference was not required in this case because Chevron requires a court to defer to an agency only in cases where the statute at hand is ambiguous on the issue in dispute. The court found no ambiguity in either of these cases: "Subsection §9038(b) requires that the Commission notify the candidate of the amount which he is to pay to the Secretary. The interim audit report does not even purport to notify the candidate of any such amount."

The court cited 11 CFR 9038.2, which states that the inclusion of a preliminary repayment calculation in an interim audit report is optional, as grounds on which to dismiss the notion that the interim report fulfilled the FEC's obligation under the statute of limitations. Further, the court noted that when the Commission issued rules making the interim audit report a mandatory part of the audit process, it included in its Explanation and Justification language stating that: "[Preliminary] calculations will not .. . be considered as the Commission's initial repayment determination . . . ."

The court also dismissed the FEC's reliance on a 1991 amendment to its regulations, 11 CFR 9038.2(a)(2), that explicitly states that the interim audit report constitutes notification for purposes of the 3-year statute of limitations. "[No] such administrative action by the Commission can override the plain mandate of the legislation," said the court.

Additionally, the court held that, although the statute does not explicitly say so, the 3-year notification period implicitly applies to the repayment of surplus campaign funds when the candidate disputes that a surplus exists, as well as to the repayment of nonqualified campaign expenses and excessive payments. 26 U.S.C. §9038(b)(1), (2) and (3). Thus, in the case of Governor Dukakis, who disputed the audit's finding that he had a surplus, the Commission was required to notify him of the amount due within the 3-year period.

Source: FEC Record, July 1995, p. 9.

Dukakis v. FEC, No. 93-1219 (D.C. Cir. May 5, 1995). Simon v. FEC, No. 93-1252 (D.C. Cir. May 5, 1995).

DURKIN FOR U.S. SENATE v. FEC

Plaintiff initially sought a declaratory judgment from the court that certain individuals associated with a "Defeat Durkin" effort constituted a "political committee" under the Act, which had failed to register and report with the FEC, and that one of the individuals had made excessive contributions to the "Defeat Durkin" effort. Plaintiff also sought a preliminary injunction to enjoin the "Defeat Durkin" effort from: spending any additional funds until it registers with the FEC or spending any funds which consist of contributions in excess of the limits. Finally, plaintiff asked the court to order the FEC to expedite review of a complaint plaintiff had filed three days earlier, on October 24, against the same individuals and the "Defeat Durkin" effort.

On October 31, 1980, the district court denied plaintiff's request for declaratory and injunctive relief and dismissed the suit. The court maintained that it had no jurisdiction over the suit because the Act stipulates the time frame in which the Commission must resolve complaints. The court said, "The FECA explicitly requires...that the party accused of a violation be given 15 days to 'demonstrate, in writing...that no action should be taken against such person on the basis of the complaint.' .... By the terms of the statute, the Commission cannot act until they [the accused parties] have responded or until 15 days have passed."

(U.S. District Court for the District of New Hampshire, Docket No. C80-503D, October 27, 1980)

Source: FEC Record, December 1980, p. 7.

Durkin for U.S. Senate Committee v. FEC, 2 Fed. Elec. Camp. Fin. Guide (CCH) 9147 (D.N.H. 1980).

EPSTEIN v. FEC

On September 23, 1981, the U.S. District Court for the District of Columbia issued an order in Jon Epstein v. FEC (Civil Action No. 81-0336) upholding the Commission's determination in an administrative complaint that plaintiff had brought against the Reader's Digest Assoc., Inc. in March 1981. Plaintiff's suit sought review of the FEC's dismissal of his complaint (Matter Under Review [MUR] 1283), pursuant to 2 U.S.C. §437g. In the complaint, he alleged that an ad Reader's Digest had placed in the August 27, 1980, edition of the Washington Post constituted illegal corporate contributions to the campaigns of the Democratic and Republican Congressmen whose excerpted articles had appeared in the ad (in violation of 2 U.S.C. §441b). Introductory and concluding copy in the ad had also promoted Reader's Digest as a "forum for ideas." Plaintiff claimed the FEC's dismissal of his complaint was contrary to law.

The court found that the standard used by the FEC in dismissing the complaint was not arbitrary or otherwise contrary to law. The court held that the "...Commission may reasonably determine that expenditures on publicity that have a purpose other than assistance of political candidates...were not intended by Congress to be" regulated by the Act. This is particularly true, the court said, when the "major purpose" of the publicity is "not to advocate the election of candidates, but to promote the organization paying for the publicity." The court further noted that, in making this determination, the FEC had "relied upon a growing body of decisions...that remove advertisements and other forms of publicity from the Act's prohibition" on corporate expenditures, even though the advertisements" may have political aspects."

Moreover, the court found no merit in plaintiff's argument that the General Counsel's Report did not explain the Commission's decision to dismiss the complaint. "The General Counsel's Memorandum alone, if it is complete enough to have provided a basis for the Commission decision to accept the General Counsel's recommendation, will be adequate for judicial review under section 437g(a)(8)." Nor did the court find merit in plaintiff's contention that the ad was partisan because it offered commentary only by representatives of the two major parties. The court held that the issue was not "the narrowness, or diversity, of the political views" represented in the ad but rather whether the ad served a "partisan purpose."

Source: FEC Record, November 1981, p. 4.

Epstein v. FEC, 2 Fed. Elec. Camp. Fin. Guide (CCH) 9161 (D.D.C. 1981), aff'd mem., 684 F.2d 1032 (D.C. Cir. 1982).

FAUCHER v. FEC

On June 29, 1990, the U.S. District Court for the District of Maine ruled that 11 CFR 114.4(b)(5)(i), which concerned the publication and public distribution of voter guides by corporations, was unauthorized by the Federal Election Campaign Act. In the court's view, the rule was invalid because it applied "issue advocacy" as a factor in determining whether a voter guide constituted a prohibited expenditure.

The court denied, however, a request from plaintiffs for injunctive relief to prevent the FEC and the U.S. Attorney General from taking enforcement action against plaintiffs' proposed 1990 publications.

On March 21, 1991, the U.S. Court of Appeals for the First Circuit affirmed the district court decision. On October 7, 1991, the U.S. Supreme Court denied the FEC's petition for a writ of certiorari.

Background

Previous Suit

The Maine Right to Life Committee, Inc. (MRLC), a nonprofit membership corporation, and Sandra Faucher, an MRLC board member, filed a similar suit in the same court in 1985, Faucher v. FEC, 708 F. Supp. 9 (D. Me. 1989). In that suit, MRLC and Ms. Faucher also challenged 11 CFR 114.4(b)(5), which permits corporations to prepare and distribute to the public nonpartisan voter guides consisting of questions posed to candidates on campaign issues and the candidates' responses. Anticipating that the proposed MRLC voter guide would not comply with the FEC's standards for nonpartisanship, plaintiffs asked the court to invalidate the regulation and issue an injunction preventing the FEC from enforcing the rule. On February 24, 1989, the court dismissed the suit on the ground that plaintiffs first needed to obtain an FEC advisory opinion on the legality of the proposed publication. Plaintiffs then sought an advisory opinion, which was issued on February 14, 1990 (AO 1989-28).

AO 1989-28

In AO 1989-28, the Commission concluded that MRLC could not use general treasury funds to distribute to the general public a newsletter containing a proposed voter guide.

First, because MRLC had a policy of accepting corporate contributions and had, in fact, accepted such contributions, it failed to qualify for the exemption granted to certain nonprofit corporations as a result of the Supreme Court's decision in Massachusetts Citizens for Life, Inc. (MCFL) v. FEC, 479 U.S. 238 (1986). In that decision, the Supreme Court ruled that the prohibition against corporate spending was unconstitutional as applied to nonprofit corporations that satisfied certain criteria.

Second, MRLC's proposed publication did not comply with the criteria for nonpartisan communications set forth at 11 CFR 114.4(b)(5). Specifically, the publication favored a pro-life position, although the rule states that a nonpartisan voter guide may not suggest or favor any position on the issues covered by the candidate survey. 11 CFR 114.4(b)(5)(i)(C) and (D). (For a more detailed summary of this opinion, see the March 1990 Record.)

Second Suit

On April 18, 1990, MRLC and Faucher filed a second suit, again challenging 11 CFR 114.4(b)(5) on the grounds that the regulation was beyond the authority of the FEC and was unconstitutionally vague. Plaintiffs also sought a declaratory judgment that MRLC's proposed 1990 publications were permissible under the Federal Election Campaign Act. They further sought an injunction prohibiting the FEC and the U.S. Attorney General from enforcing the voter guide regulations with regard to MRLC's proposed activity.

District Court

In its June 29 decision, the court found that 11 CFR 114.4(b)(5) was invalid because it focused on "issue advocacy." The court found that plaintiffs did not have standing to challenge other aspects of the rule and denied plaintiffs' request for declaratory and
injunctive relief.

Invalidity of 11 CFR 114.4(b)(5)

The court first cited 2 U.S.C. §441b as the statutory basis for the regulation in question. Section 441b prohibits "any corporation whatever" from making "a contribution or expenditure in connection with any [federal] election...." The court, however, found that the Supreme Court, in its MCFL decision, had limited the scope of the prohibition to expenditures that "expressly advocate" the election or defeat of a clearly identified candidate.

Under the regulation in question, 11 CFR 114.4(b)(5), a corporation may use its treasury funds to distribute a voter guide to the general public only if the guide is "nonpartisan." Included among the factors defining "nonpartisan" is that the wording does not favor any position, or express an editorial opinion, on the issues covered by the candidate survey. 11 CFR 114.4(b)(5)(i)(C) and (D). The court found that "[t]his approach ignores the clear language of FEC v. Massachusetts Citizens for Life that issue advocacy by a corporation cannot constitutionally be prohibited and that only express advocacy...is constitutionally within the statute's prohibition."

The court therefore concluded that the regulation, "with its focus on issue advocacy, is contrary to the statute as the United States Supreme Court has interpreted it and, therefore, beyond the power of the FEC."

Other Challenges

The court ruled that MRLC did not have standing to challenge another aspect of the regulation: its failure to incorporate in explicit language the MCFL holding that the statute cannot constitutionally limit even express advocacy by a certain type of nonprofit membership corporation. MRLC lacked standing because it did not qualify as the type of corporation covered under the MCFL exemption. One of the essential factors for the exemption is that the nonprofit corporation must not receive contributions from business corporations and must have a policy against accepting such contributions. Although MRLC received "comparatively modest" amounts from corporate businesses, without an explicit policy against accepting such contributions, organizations like MRLC could serve as a conduit for corporate contributions.

The court also declined to address plaintiffs' challenge that 11 CFR 114.4(b)(5) does not explicitly incorporate the statutory "news story" exemption at 2 U.S.C. §431(9)(B)(i), which exempts news media costs from the definition of "expenditure." The court said it was "satisfied that the MRLC does not fit within this media exemption" and that therefore plaintiffs did not have standing to challenge the regulation on this score. (Another FEC regulation, 11 CFR 100.8(b)(2), parallels the statutory exemption.)

Finally, the court found that plaintiffs did not have standing to challenge 11 CFR 114.4(b)(5)(ii). Plaintiffs had asserted that the regulation was unconstitutionally vague in directing that certain publications "not favor one candidate or political party over another." Since that portion of the regulation affects only nonprofit, tax-exempt corporations that do not "support, endorse or oppose candidates or political parties," it does not apply to MRLC, which has established a separate segregated fund to engage in such activity. (In AO 1984-17, the Commission held that a tax-exempt corporation becomes an organization that supports, endorses or opposes candidates if it establishes a separate segregated fund that does so.)

Denial of Declaratory and Injunctive Relief

Finding that the issue was not ripe for consideration, the district court denied plaintiffs' request for a declaratory judgment that their proposed 1990 voter guide was permissible under the Act and also denied their request for injunctive relief to prevent any enforcement action against their proposed 1990 publications. Plaintiffs said that the 1990 publications would be substantially similar to the 1988 publication, but the court was "not prepared to base declaratory and injunctive relief upon a 1988 publication, when minor changes could make that ruling wholly inapplicable to the actual 1990 publications."

The court stated: "In a context where words and nuances may be critical, I do not have the actual language and format of the publications. Given the FEC's enforcement role,...such [declaratory and injunctive] relief would unduly interfere with the overall ability of that agency to conduct investigations of alleged violations, might well delay it in gathering important information and would interfere with the congressional goal of resolving specific election disputes through conciliation....An injunction may in fact be wholly unnecessary. Finally, any hardship to the parties in finding this issue not ripe is minimal, given the plaintiffs' historical practice of publishing despite any uncertainty."

The plaintiffs did not appeal the district court's denial of the injunction or rejection of their constitutional challenges. The FEC, however, filed an appeal seeking reversal of the court's invalidation of section 114.4(b)(5)(i).

Court of Appeals

In affirming the district court's judgment invalidating the Commission's regulation, the U.S. Court of Appeals for the first circuit first examined the scope of the statutory prohibition, section 441b(a). (The provision prohibits "any corporation whatever" from making "a contribution or expenditure in connection with any [federal] election....") The court acknowledged that "the statute appears to allow for a very broad application," but stated that the Supreme Court in Buckley v. Valeo narrowed the scope of the prohibition: "The Supreme Court, recognizing that such broad language as found in section 441b(a) creates the potential for first amendment violations, sought to avoid future conflict by explicitly limiting the statute's prohibition to 'express advocacy.'" The court went on: "This express advocacy test was again embraced by the Supreme Court in the more recent case of Massachusetts Citizens for Life."

The court rejected the FEC's argument that the language in the Supreme Court's MCFL opinion which appeared to limit section 441b(a) was dictum and therefore not binding. The court also rejected the FEC's alternative argument that even if section 441b(a) were restricted to express advocacy expenditures, the FEC's voter guide rules were properly directed at advocacy of candidates and did not appreciably infringe upon a corporation's ability to advocate its position on issues. The court stated: "In our view, trying to discern when issue advocacy in a voter guide crosses the threshold and becomes express advocacy invites just the sort of constitutional questions the Court sought to avoid in adopting the bright-line express advocacy test in Buckley."

Source: FEC Record, September 1990, p. 5; May 1991, p. 8; and November 1991, p. 1.

Faucher v. FEC, 743 F. Supp. 64 (D.Me. 1990), aff'd, 928 F.2d 468 (1st Cir. 1991), cert. denied, 495 U.S. (October 7, 1991).

FEC v. AFL-CIO

On November 13, 1980, the U.S. Supreme Court denied the Commission's petition for a writ of certiorari in the suit, FEC v. American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) (Supreme Court Docket No. 80-368). The Commission sought review of a judgment of the U.S. Court of Appeals for the District of Columbia Circuit, which had reversed an earlier decision by the U.S. District Court for the District of Columbia, imposing a $10,000 civil penalty against the AFL-CIO.

In filing the suit against the AFL-CIO on December 16, 1977, the Commission had sought to enjoin the organization from transferring funds from its COPE Education Fund (which contained general treasury funds) to COPE-PCC, its separate segregated fund (which contained only voluntary political contributions from individuals). The Commission had argued that the transfers violated provisions of the Act prohibiting labor organizations from using their general treasury funds to make contributions or expenditures in connection with federal elections. Between 1970 and 1977, COPE-PCC had transferred funds to the COPE Education Fund several times because COPE-PCC's funds were idle between elections. On demand of COPE-PCC, the funds were subsequently transferred from the COPE Education Fund back to COPE-PCC for its use. The COPE-PCC transfers were designated as loans to the COPE Education Fund but were interest free. Complete records were kept, and the transactions were reported to the Office of Federal Elections of the General Accounting Office (GAO) and later to the FEC.

In 1977, after the FEC had succeeded to the GAO's authority, it notified the AFL-CIO that section 441b of the Act permits transfers of funds from COPE-PCC to the COPE Education Fund but not transfers from the COPE Education Fund back to COPE-PCC. In an FEC enforcement action brought against the AFL-CIO, the AFL-CIO attempted to negotiate with the FEC a transfer of $321,000 from the Education Fund to COPE-PCC for the purpose of clearing the balance between the two funds. No agreement was reached and the FEC brought a civil action against the AFL-CIO in the district court. On June 16, 1978, the district court granted the Commission's motion for summary judgment in the case. It ruled that past transfers from the COPE Education Fund to COPE-PCC were illegal, enjoined the AFL-CIO from making any such transfers in the future (except for a single transfer of the $321,000 previously transferred) and assessed a $10,000 civil penalty against the AFL-CIO. The AFL-CIO appealed the assessment of the civil penalty.

The appeals court, on April 1, 1980, reversed the imposition of the $10,000 civil penalty. The appeals court found that the lower court had imposed the statutory penalty for a "knowing and willful" violation of the election law, although the facts in this case did not support a finding that the defendant's violation were "knowing and willful." (See 2 U.S.C. §437g(a)(5)(B).) The court held that the AFL-CIO's belief in the legitimacy of the transfers had been reasonable; during the GAO audit no comment had been made about the routinely reported transfers, and neither the Act nor any court decision had addressed the immediate issue. (The appeals court rejected the FEC's argument that Pipefitters Local No. 562 v. United States, 407 U.S. 385 (1972) provided specific notice that interfund transfers were prohibited by the Act.)

On November 10, 1980, the Supreme Court refused a request by the FEC for a writ of certiorari to review the appeals court ruling on the imposition of the civil penalty.

Source: FEC Record, January 1981, p. 6.

FEC v. AFL-CIO, 628 F.2d 97 (D.C. Cir.), cert. denied, 449 U.S. 982 (1980).

FEC v. AFSCME

On May 14, 1979, the U.S. District Court for the District of Columbia dismissed a suit which the FEC had filed against the American Federation of State, County and Municipal Employees (AFSCME). In that action, it was alleged that AFSCME had violated the disclosure requirements of 2 U.S.C. §431(f)(4)(C) by failing to report $983.73 it had spent to publish and circulate a political poster to its members immediately prior to the 1976 general election. The poster in question depicted, in caricature, President Gerald Ford, wearing a lapel button with the words "Pardon Me," and embracing former President Richard Nixon. The poster contained a quote taken from a speech given by Ford as Vice President: "I can say from the bottom of my heart the President of the United States is innocent and he is right."

The Act specifically excludes from the definition of the term "expenditure" any communication made by a membership organization or a corporation to its members or stockholders, but requires that the costs directly attributable to communications expressly advocating the election or defeat of a clearly identified candidate must be reported to the Commission if they exceed $2,000 per election (2 U.S.C. §431(9)(b)(iii)).1 AFSCME had reported "communications costs" of approximately $40,000 in connection with the 1976 general election, including approximately $23,000 directly attributable to expressly advocating the election of Jimmy Carter.

The court found that, although the Nixon-Ford poster did pertain to a clearly identified candidate and may have tended to influence voting, it did not contain an "express advocacy" of election or defeat within the narrow definition given to that term in Buckley v. Valeo . Additionally, the court held that, as a communication concerning a public issue widely debated during the 1976 campaign, the poster is typical of the political speech which is protected from regulation. Accordingly, the court dismissed the action for failure to allege a violation.

Source: FEC Record, July 1979, p. 8.

American Federation of State, County and Municipal Employees: FEC v., 471 F. Supp. 315 (D.D.C. 1979).

1 Prior to the 1979 amendments to the FECA, this statute was §431(f)(4)(C).