FEC v. Democratic Senatorial Campaign Committee (95-2881)

On January 16, 1997, the U.S. District Court for the Northern District of Georgia, Atlanta Division, ruled that the Democratic Senatorial Campaign Committee (DSCC) violated the Federal Election Campaign Act (the Act) when it contributed $17,500 to a Senatorial candidate's runoff election after having already contributed the same amount during the primary and general elections.

The second contribution violated the Act at §441a(h), which sets a $17,500 limit for national committees-such as the DSCC and the National Republican Senatorial Committee (NRSC)-when giving to a candidate for the U.S. Senate.

On July 7, 1997, the court ordered the DSCC to pay a $175 penalty for violating the Act during the 1992 Senatorial race. The sum amounts to 1 percent of the DSCC's violation of $17,500.

Background

The excessive contribution was made during the unusual circumstances surrounding the 1992 Senatorial campaign in Georgia. A state law, which has since been changed, required that the winner of the Senate seat receive a majority of the vote.

Former Senator Wyche Fowler Jr., a Democrat, had a plurality in the general election in 1992, receiving 49 percent of the ballots cast. Republican Senator Paul Coverdell, who challenged Mr. Fowler in the race, came in second with 48 percent of the vote. Because no candidate received a majority of votes, a runoff election was held between the two men. Mr. Coverdell won that race with 51 percent of the vote.

During the primary and general elections, the DSCC contributed $17,500 to Mr. Fowler's campaign, and then contributed another $17,500 to his runoff election.

District court finds for FEC

The court ruled in the FEC's favor. The court held that the language and legislative history of the Act, coupled with accepted principles of statutory construction, support the view that §441a(h) precluded the DSCC from making a second contribution of $17,500.

The court pointed out that, unlike individuals and other committees, national committees have a higher contribution limit under §441a(h) and greater discretion in allocating the sum during the length of a campaign. For example, individuals have a $1,000 contribution limit per election (primary, general and runoff), per candidate. Multicandidate PACs have a $5,000 contribution limit per election, per candidate. The court held that national committees, such as the DSCC, may allocate part or all of their $17,500 contribution limit to a Senatorial candidate at any stage of the election campaign.

The DSCC had argued that the FEC had erroneously interpreted the $17,500 limit with respect to post-general election runoffs and that Congress had intended the statute to be part of an effort to expand the role of national committees. However, the court said that the language of §441a(h) was unambiguous and that, even if it were not, the FEC's interpretation of it would be entitled to deference. In AO 1978-25, the court pointed out, the Commission had confirmed that §441a(h) did indeed establish a single contribution limit without regard to whether there were primary, general or runoff elections.

The DSCC had also argued unsuccessfully that the unusual nature of the Georgia majority-winner rule was not taken into account when Congress adopted the statute, and that, had its members known of such a scenario, it would have drafted the law differently. The court said that such speculation would not cause the court to disregard the language of the law.

The court rejected the DSCC's claim that its First and Fifth Amendment rights of freedom of association and equal protection were violated. The DSCC said the law denied them the freedom to associate with Mr. Fowler's campaign because "no committee would ever reserve funds for the uncertain prospect of a runoff." It also pointed out that other types of committees and individuals were able to contribute to Mr. Fowler's runoff election.

The court said that, while a difficult allocation issue confronted the DSCC, the law does not infringe on its right to associate with whomever it wishes. The DSCC lawfully made more than $200,000 in coordinated expenditures under 2 U.S.C. §441a(d)[1] in support of Mr. Fowler's runoff campaign. Further, the DSCC does not have to be treated the same as other types of committees in respect to contribution limits. "Party committees, individuals, and other organizations and corporations are not similarly situated entities for election regulation purposes," the court said.

Pursuant to a prior agreement of the parties, the court ordered briefing on the appropriate sanctions for DSCC's violation of §441a(h).

Penalty

In determining an appropriate penalty, the court considered these four factors:

• Good or bad faith actions by the defendant,
• Injury to the public resulting from the defendant's conduct,
• Ability of the defendant to pay the penalty, and
• Vindication of the FEC's authority.

The court found that the DSCC did act in good faith because it had believed that it was acting lawfully when it made the second $17,500 contribution. The court also determined that the second contribution did no harm to the public. While the FEC had argued that "any violation of the [Act's] limits undermines a public perception of integrity of the election process," the court disagreed with such a blanket assertion. It also found that the FEC did not require vindication in this case and noted that the DSCC's ability to pay did not justify assessing it with a large penalty, which is what the FEC had requested.

In its deliberations, the court also considered the penalty negotiated with the NRSC in a conciliation agreement for a violation of a different provision of the Act-2 U.S.C. §441d-in connection with the same election. That penalty amounted to 1 percent of the approximately $500,000 violation, or $5,000.

FOOTNOTES:

[1] Under 2 U.S.C. §441a(d), the national party is entitled to make limited expenditures for the general election in cooperation with the candidate (in addition to the contributions it is otherwise entitled to make).

Source:   FEC Record— August 1997; March 1997