FEC v. California Democratic Party '83

On June 4, 2004, the U.S. District Court for the Eastern District of California ordered the defendants to pay a $30,000 civil penalty and enjoined them from further similar violations of the Federal Election Campaign Act (the Act).

The plaintiff and defendants stipulated to the entry of the court's order, which followed the court's February 13, 2004 decision to grant the Commission's motion for summary judgment, finding that the defendants violated the Act by:

• Using nonfederal funds to pay for mass mailings and radio advertisements that constituted express advocacy of a clearly identified federal candidate;
• Failing to include the required disclaimers; and
• Failing to report the ads as independent expenditures.

The court also denied the defendants' motion for summary judgment. See the Record April 2004.

Background

Under the Act, political party committees may only spend funds that are consistent with the limits and prohibitions of the Act to influence a federal election. Among other restrictions, the Act prohibits corporations and labor unions from making any contributions in connection with a federal election, and also prohibits a political committee from receiving such contributions. 2 U.S.C. § 441b. See also 2 U.S.C. §§ 441a, 441c, 441e, 441f and 441g; 11 CFR parts 100, 110, 114 and 115. A party committee that maintains both federal and nonfederal accounts may pay for some mixed federal/nonfederal activities with a combination of federal and nonfederal funds using the allocation rules set forth in Commission regulations.[1] However, any expenditure made by a political party committee for activities that expressly advocate the election or defeat of a clearly identified federal candidate must be made with federally permissible funds.

In the 22nd Congressional District of California, a special general election was held on March 10, 1998, to fill a House seat left vacant after the death of Walter Capps. This federal office was the only office on the ballot for the special election, and Lois Capps was the only Democratic candidate on the ballot. The California Democratic Party (CDP) paid $99,097 for direct mailings and radio advertisements that contained statements such as "Continue the Walter Capps Tradition" and "Vote Democratic" in the "Special Election, Tuesday, March 10." In its FEC disclosure reports, the CDP reported the expenditures for these communications as mixed federal/nonfederal activity, and it paid for the costs of these communications with funds from both its federal and nonfederal accounts. Of the $99,097 spent on the communications, $77,281 came from the CDP's nonfederal funds. The ads included disclaimers stating that they were paid for by CDP, but did not state whether the ads were authorized by any candidate or candidate's committee. See the Record May 2003.

Court decision

The only contested issue before the court was whether Lois Capps was "clearly identified" in the defendants' ads. The court found that Ms. Capps was clearly identified in the ads under Buckley v. Valeo, 424 U.S. 1 (1976) and FEC v. Furgatch, 807 F.2d 875 (9th Cir. 1987).[2] In FEC v. Furgatch, the appeals court held that a communication is "express advocacy" under the Act if, "when read as a whole, and with limited reference to external events," it is "susceptible of no other reasonable interpretation but as an exhortation to vote for or against a specific candidate." In this case, the court found that when the language of the ads was taken as a whole, "including the fact that the March 10th special election was a single-office, federal-only election with one Democratic candidate," the ads "clearly identify a candidate under Buckley and Furgatch. The court reasoned that because the ads' directive to "vote Democratic" in the "March 10th special election" left only one action for the public to take to follow the ads' instructions, "reasonable minds could not dispute that the subject Advertisements urged readers to vote for Lois Capps in the March 10 special election."

Because these ads expressly advocated the election of a clearly identified federal candidate and were not coordinated with any candidate, the court concluded that they were independent expenditures. Thus, CDP was required to pay for them with federal funds and include a disclaimer stating who paid for the communication and that it was not authorized by any candidate. CDP was also required to report the payments as independent expenditures on its FEC disclosure reports. The court granted the FEC's request for partial summary judgment, declaring that the defendants violated the Act by paying for the ads in part with funds from CDP's nonfederal account and failing to include a complete disclaimer and properly report the ads. The court denied the defendants' motion for summary judgment.

FOOTNOTES:

[1] The defendants' activities described in this case occurred before the Bipartisan Campaign Reform Act of 2002 took effect. Thus, the court considered the statutory and regulatory provisions in effect at that time.

[2] The FEC moved for summary judgment only as to whether CDP violated the Act and not as to any civil penalty or other remedy the court may order as a result.

Source:   FEC Record — August 2004; and April 2004