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On July 2, 1993, the Court of Appeals for the District of Columbia Circuit1 directed the Commission to certify matching funds to Lyndon LaRouche, Jr., for his 1992 Presidential primary campaign. The court held that the Commission did not have statutory authority to deny matching funds based on its conviction that Mr. LaRouche would fail to keep his promise to comply with the law.
The Supreme Court, without comment, refused to review the appeals court decision.
In February 1992, the agency determined that Mr. LaRouche's written agreement and certification to comply with the law-a requirement for receiving matching funds-were not made in good faith, based on his long record of noncompliance with the federal campaign law and his criminal indictments and convictions for fraud. The Commission therefore found he was not eligible for matching funds. Mr. LaRouche immediately challenged the decision in a suit filed with the D.C. Circuit.2
The court reversed the FEC's decision, holding that the statute did not grant the agency the authority to evaluate the reliability of a candidate agreement.
Mr. LaRouche had argued that the law's enforcement provisions, which grant the FEC the authority to take action with respect to past or ongoing violations of the law, implied a Congressional intent to withhold FEC authority to assess a candidate's future likelihood of violating the law. The court agreed, observing that the voters should be the ones to judge a candidate's integrity.
The court further noted that Congress intended public funds to be dispensed on a nondiscriminatory basis: "Any inquiry into the bona fides of candidates' promises would take the Commission into highly subjective territory that would imperil the assurance of even-handed treatment."
The FEC had argued that its position was supported by the court's decision in Committee to Elect Lyndon LaRouche v. Federal Election Commission (CTEL),3 where the court allowed the agency to consult reports filed by the candidate's past campaign when deciding whether to accept his current threshold submission for matching funds. The court, however, said that CTEL stressed the need to apply objective standards when evaluating a matching fund submission, quite different from the use of subjective criteria "to evaluate a candidate's character."
The court also rejected the FEC's claim that its position was upheld in another suit, In re, Carter-Mondale Reelection Committee, Inc.4 "We find nothing in Carter-Mondale to undermine CTEL's general view that in the absence of an explicit authorization by Congress the Commission may not deny funds on the basis of its view of a candidate's subjective intent."
The majority opinion was filed by Judge Williams; an opinion concurring in part and dissenting in part was filed by Judge Wald. She said that the Commission had exceeded its statutory authority only in its consideration of Mr. LaRouche's criminal convictions (mail fraud and conspiring to defraud the IRS), since they were not directly related to his campaign. However, she also said: "I do not believe that the statute requires that the FEC, in determining a candidate's eligibility for public monies, disregard evidence in its own files that indicates that a candidate may well intend to defraud the Commission-and the American taxpayer."
1 The three-judge panel consisted of Judges
Wald, Buckley and Williams.
2 Commission actions under the Presidential public funding law are directly reviewable by this court. 2 U.S.C. §9041.
3 613 F.2d 834 (D.C. Cir. 1979).
4 642 F.2d 538 (D.C. Cir. 1980).
Source: FEC Record -- September 1993, p. 3; and January 1994, p. 12.
LaRouche & Democrats for Economic Recovery '92 v. FEC, 996 F.2d 1263 (D.C. Cir.), cert. denied, 114 S. Ct. 550 (1993).
On July 8, 1994, the U.S. Court of Appeals for the District of Columbia Circuit 1 upheld an FEC determination ordering the 1988 LaRouche Presidential campaign to return $109,149 in federal matching funds to the U.S. Treasury.2 The court had previously denied the FEC's motion to dismiss this case. (Civil Action No. 92-1555.)
On May 26, 1988, after receiving less than 10 percent of the vote in two consecutive primaries, Lyndon LaRouche became ineligible to receive matching funds to continue his campaign but was still entitled to matching funds to help defray preexisting net campaign debts of about $330,000. On that basis, the campaign continued to receive matching fund payments through October 1988. However, an FEC audit later found that, by July 22, the campaign had sufficient matching funds and private contributions received after the date of ineligibility (DOI) to satisfy the debt. The agency therefore ordered the campaign to return $109,149 in matching fund payments made after that date. This repayment determination was based on an FEC regulation, 11 CFR 9034.1(b), which states that a candidate can receive post-DOI matching funds to the extent that, on the date of payment, the sum of matching funds and contributions "received on or after the date of ineligibility" [emphasis added] does not exceed remaining net debts.
The LaRouche campaign challenged the FEC regulation as unreasonable and contrary to the intent of the public funding statute to encourage participation in the political system. Specifically, the campaign argued that, under a fair reading of the statute and FEC regulations, the campaign was entitled to collect matching funds for contributions received after the DOI without having to credit the contributions against the net debts figure. Otherwise, the campaign said, the candidate would be limited in his ability to continue the campaign.
In its July 1994 ruling, the court upheld the contested repayment determination, finding that the FEC's interpretation of its own regulation was "compelling" and its interpretation of the statute, reasonable. The statute "make[s] clear," the court said, "that Congress wished to restrict the availability of matching payments to candidates it considered viable."
The court rejected several other arguments made by the LaRouche campaign, including the claim that the FEC's repayment determination had improperly created a new rule to address post-DOI matching fund entitlements when the candidate continues to campaign. The court said that the Commission had merely concluded that "the existing rule was not affected by Mr. LaRouche's decision, in 1988, to continue the good fight rather than to wind up his campaign...."
In an earlier ruling on April 20, 1993, the court rejected the FEC's argument that the case should be dismissed because the LaRouche campaign was late in filing its petition for review with the court.
Under the statute, petitions for review of repayment determinations must be filed "within 30 days after the agency action by the Commission for which review is sought." 26 U.S.C. §9041(a).
The FEC made its final repayment determination with respect to the 1988 LaRouche campaign on September 17, 1992, and notified the campaign in a letter dated September 22. The petitioners filed their petition with the court on October 22, 30 days after the September 22 letter date but 35 days after the September 17 determination.
The FEC argued that the statutory "agency action" language referred to the date the agency made the repayment determination. Because the petition was filed 35 days after that date, the FEC contended, it should be dismissed. The court, however, stated that "[b]oth the [Matching Payment Account] Act and the Commission's regulations lead us to conclude that the 30-day review period...runs from the notice date...." The court noted that, under 26 U.S.C. §9038(b)(1), "a candidate's repayment obligation matures only upon notice from the Commission" and that FEC regulations "repeatedly provide that a limitation period begins after the FEC gives notice of its decision...."
Holding that the 30-day period for filing a review petition began on September 22, the court found that the petition was filed on time and therefore refused to dismiss the case.
Source: FEC Record -- June 1993, p. 8; and September 1994, p. 7.
LaRouche Democratic Campaign '88 v. FEC, 990 F.2d 641 (D.C. Cir. 1993) (denying motion to dismiss); 28 F. 3d 137 (D.C. Cir. 1994) (affirming final repayment determination).
On April 4, 1985, the U.S. Court of Appeals for the Fourth Circuit issued an opinion in LaRouche v. State Board of Elections which reversed a ruling by the U.S. District Court for the Western District of North Carolina concerning Mr. LaRouche's eligibility for the ballot. The district court had ruled that Lyndon H. LaRouche, a publicly funded Presidential primary candidate in 1984, had met the ballot access requirements for the state's 1984 Presidential primary. The appeals court found that the district court had erred in issuing a preliminary injunction to bar holding the primary election without Mr. LaRouche's name on the ballot. Finally, the appeals court noted that, although its ruling came after the 1984 Presidential primary and general elections had been held, the appeal was "not moot because it present[ed] facts which [were] 'capable of repetition, yet evading review.'" See 758 F.2d 998 (1985).
To qualify for Presidential primary ballot access under North Carolina law, an individual must meet the eligibility requirements for Presidential primary matching funds spelled out in 26 U.S.C. §9033. Under this section, among other requirements, the candidate must agree to repay any funds which, based on an FEC audit of the candidate's campaign, are owed to the U.S. Treasury. 11 CFR 9033.1 and 9033.2.
On January 26, 1984, the Commission made an initial determination that Mr. LaRouche had not established matching fund eligibility for the 1984 election because he had failed to live up to this agreement to repay funds) in his 1980 campaign.1 Pursuant to the FEC's decision, the North Carolina State Board of Elections decided that Mr. LaRouche's name could not be placed on the state's 1984 Presidential primary ballot.
In response to the elections board's decision, Mr. LaRouche filed suit with the federal district court seeking an injunction to bar the primary election, unless the elections board placed his name on the ballot.
The district court found that the state's adoption of the federal matching fund eligibility requirements as part of the requirements for access to the state's Presidential primary ballot did not violate due process of law. Nevertheless, the court found that the board had erred in denying Mr. LaRouche ballot access. The court was persuaded by Mr. LaRouche's argument that the FEC's refusal to certify his eligibility for matching funds was erroneous. The court therefore issued a preliminary injunction barring the primary election. (Subsequently, the appeals court stayed the district court's injunction, and the primary election was held without Mr. LaRouche's name on the ballot.)
The appeals court agreed with the district court's conclusion that the state could lawfully adopt the federal criteria. However, the appeals court found that "the record discloses that LaRouche had not complied with 26 U.S.C. §9033(a)(3), providing that the candidate agree to pay amounts owed based on FEC audits. Due to LaRouche's failure to honor his §9033(a)(3) agreement concerning the 1980 Presidential election, the FEC legitimately concluded that LaRouche's §9033(a)(3) agreement for the 1984 Presidential election was inadequate." Consequently, "since LaRouche did not fulfill all the federal criteria, the district court erred in enjoining the primary election from proceeding without LaRouche's name on the ballot."
1 On April 12, 1984, after Mr. LaRouche's 1980 campaign made the required repayments, the Commission certified that Mr. LaRouche was eligible for Presidential primary matching funds. 11 CFR Parts 9033 and 9036.
Source: FEC Record -- August 1985, p. 7.
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).
FEC v. Citizens for LaRouche, 2 Fed. Elec. Camp. Fin. Guide (CCH) ¶9214 (D.D.C. 1984).
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.
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:
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.
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). FEC v. Committee to Elect Lyndon LaRouche, 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).
On March 3, 2006 the U.S. Court of Appeals found that the FEC acted appropriately when it determined that the Lyndon LaRouche’s Committee for a New Bretton Woods must repay $222,034 in federal matching funds received during Mr. LaRouche’s bid for the 2000 Democratic presidential nomination.
All presidential campaigns must submit to an audit by the FEC if they accept public matching funds during the primary campaign. The LaRouche committee received $1,448,389 in federal matching funds. The majority of these funds were paid to seven vendors that provided fundraising and advertising services for the past three nominations that LaRouche had sought; LaRouche was the vendors’ sole client. The committee received $222,034 in public funds in connection with "mark-up charges” paid to these vendors. The FEC found that the committee had not provided adequate documentation for these mark-up charges and thus they were not qualified campaign expenses.
On July 29, 2004, the U.S. Court of Appeals for the District of Columbia granted the Commission's motion to dismiss this case. On April 9, 2004, LaRouche's Committee for a New Bretton Woods (LCNBW) had asked the court to review the FEC's final determination requiring the committee to repay to the U.S. Treasury a portion of the Presidential primary matching funds it received for the 2000 Presidential election. The March 1, 2004, repayment determination resulted from LCNBW's non-qualified campaign expenses and its receipt of funds in excess of its entitlement.
On April 27, 2004, the Commission moved to dismiss this case on the ground that the court lacked jurisdiction because LCNBW is also concurrently seeking an administrative reconsideration from the Commission. The court concluded that the appeal was premature because LCNBW had filed with the Commission a timely petition for reconsideration, and the committee may not seek judicial review until the rehearing has concluded.
The court confirmed that the committee did not prove to the FEC that these charges were a qualified campaign expense; therefore, the FEC’s order that the committee must repay the charges was not “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” as the committee had alleged. Additionally, the court held that the committee had not expressly sought judicial review of LaRouche’s petition for administrative rehearing and, therefore, the court did not have jurisdiction to reconsider that issue.
The League of Women Voters of the United States (LWVUS) filed a complaint in the U.S. District Court for the District of Columbia against the FEC asking that the court declare null and void that portion of the Commission's Policy Statement on Presidential Debates issued August 30, 1976, which prohibited contributions from corporations and labor organizations to the League of Women Voters Education Fund (the Fund) for purposes of defraying expenses related to the 1976 televised Presidential debates between Jimmy Carter and Gerald Ford, sponsored by the Fund. Such corporate and union contributions, the FEC had said in its statement, would be "in connection with" a federal election and would therefore be prohibited under the Act. The Policy Statement had expressed the Commission's view, however, that the Fund could accept funds from political action committees established by corporations or labor organizations to pay for the debates.
The Commission argued that the "court has no jurisdiction over this action because the Commission's policy statement is not a final agency action." The policy statement "expresses its view of what interpretation of the law it would seek to enforce..." and "...represents an attempt by the Commission to give informal advice in an unchartered area of the law."
The court denied the Commission's motion to dismiss, after which the Commission filed its answer to the original complaint.
Source: FEC Annual Report 1977, p. 20.
On November 30, 2005, Michael G. Liffrig filed suit in the U.S. District Court of North Dakota requesting that the court relieve him from further FEC reporting requirements, set aside FEC efforts to collect civil penalties from him, order the Commission to dismiss an administrative complaint filed against his campaign and to create a procedure to dismiss complaints more quickly.
Mr. Liffrig was a candidate for Senate in North Dakota during the 2004 election cycle. Mr. Liffrig alleges in his complaint that his committee, Liffrig for Senate, has been fined by the Commission pursuant to its Administrative Fines program for failing to file reports and has had an administrative complaint filed against it.
According to the court complaint, Mr. Liffrig also alleges that the FEC should not be permitted to require the filing of further financial reports because his campaign is over and that the Court should order the administrative complaint to be dismissed because it is without merit and politically motivated.
Source: FEC Record -- February 2006 [PDF].
On March 9, 2004, the U.S. District Court for the District of Massachusetts, having denied both the defendant's and the plaintiffs' motions for summary judgment, vacated this case and remanded it to the FEC for further proceedings in accordance with the court's order. The court found that the FEC erred in not interpreting the Federal Election Campaign Act's (the Act) "best efforts" provision to apply to the submission of reports and that the Commission should have issued a statement of reasons with it's final determination, under the administrative fines regulations, that the plaintiffs filed their 2001 Year-End report late.
The Committee to Elect Bill Sinnott (the Committee) and its treasurer, William A. Lovely, III, filed a complaint in the district court on December 31, 2002, challenging the Commission's final determination that the Committee filed its 2001 Year-End report late and its assessment of a $1,800 civil money penalty under the administrative fines regulations. 11 CFR 111.30-111.45.
According to that complaint, the plaintiffs were unable to file the report over the internet on the January 31, 2002, deadline because of computer problems. At FEC staff's suggestion, they filed the report by sending the Commission a diskette postmarked on January 31. The Commission informed the plaintiffs on February 13, the day the disk was received, that this disk was not in an acceptable electronic format and did not pass the Commission's validation program.1 On February 26, the plaintiffs sent the report on diskette in an acceptable electronic format via courier. The Commission received the diskette the following day.
On June 14, 2002, the Commission found reason to believe that the plaintiffs violated 2 U.S.C. §434(a) by failing to file the report on time and made an initial determination to assess a $3,100 civil penalty. An FEC Reviewing Officer, after considering objections filed by the plaintiffs, determined that, because the disk mailed January 31 was incorrectly formatted and did not pass the Commission's validation program, the report was not considered to have been filed until February 27, when the Commission received a properly formatted report. On November 25, 2002, the Commission made a final determination that the plaintiffs had failed to file timely. However, the Commission lowered the civil penalty assessed to $1,800 "based on the filing, which was postmarked on the filing date, being fourteen days late, after counting for the irradiation process which resulted in mail delays."
The plaintiffs alleged that they made "best efforts" to file their report on time. The Act provides that a committee's report is in compliance with the statute "when the treasurer of a political committee shows that best efforts have been used to obtain, maintain, and submit the information required by this Act." 2 U.S.C. §432(i). See also 11 CFR 104.7 and 102.9(d). The FEC argued that it has long interpreted the "best efforts" provision as only creating a limited safe harbor regarding a committee's failure to provide substantive information that may be beyond its ability to obtain, such as a contributor's occupation and employer, and that the "best efforts" provision does not therefore apply to a committee's obligation to file its reports on time. Under the administrative fines regulations, challenges to civil money penalties may only be based on three grounds set out in the regulations, and they may not be based on a committee's computer failure. 11 CFR 111.35.
The court found that the FEC's interpretation that the "best efforts" provision does not apply to the submission of reports "conflicts with the plain statutory language."2 According to the court, "While the Commission can refine by regulation what best efforts means in the context of submitting a report, it cannot define it away by providing that submission of reports is governed by a 'strict liability' standard."
The court also noted that in its final determination the Commission "did not make findings of fact, make a statement of reasons, incorporate the reviewing officer's recommendation by reference, or issue any opinion at all." As a result, the court found that it is not clear "how the Commission evaluated the plaintiffs' 'best efforts' arguments, or whether it applied the correct legal standard." In addition, the court noted that neither the Commission nor the Reviewing Officer investigated the alleged unavailability of technical support from the FEC or whether the formatting error on the disk resulted despite Mr. Lovely's best efforts to follow advice from FEC staff, or from his own negligence or last minute compliance efforts.
The court vacated this case and remanded it to the FEC, finding that "the lack of clarity in the administrative decisions and a possible error of law compel a reversal and remand."
1 Under the Commission's electronic filing regulations,
electronic filers who instead file on paper or submit a report that does not
pass the validation program are considered not to have filed that report.
11 CFR 104.18.
2 In Chevron U.S.A. , Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984), the Supreme Court found that courts must give effect to the unambiguously expressed intent of Congress if it has spoken "to the precise question at issue." If the statute is silent or ambiguous with respect to the precise question at issue, the court should defer to an agency's interpretation if it is reasonable.
On December 13, 1994, the U.S. District Court for the Middle District of Tennessee dismissed this case without prejudice due to plaintiff's failure to attend the December 9 initial case management conference. (Civil Action No. 3-94-0946.)
Terry L. Lytle, an independent U.S. Senate candidate, had asked the court to find it unconstitutional for U.S. Senate candidates in Tennessee to accept contributions from out-of-state sources.
The plaintiff argued that:
The plaintiff also had asked the court to remove the defendant candidates from the Senate race or postpone the Senate election and order them to refund all out-of-state contributions.
Source: FEC Record -- January 1995, p. 10; and February 1995, p. 7.
Lytle v. FEC, No. 3-94-0946 (M.D. Tenn. Oct. 25, 1994).