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. 2 U.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. 2 U.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.

FOOTNOTE:

[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."

Source:   FEC Record— October 1988; September 1987. Common Cause v. FEC, 692 F. Supp. 1391 (D.D.C. 1987); 692 F. Supp. 1397 (D.D.C. 1988).