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FEC v. Lance


On July 2, 1981, citing a lack of appellate jurisdiction, the Supreme Court dismissed an appeal brought by T. Bertram Lance from the U.S. Court of Appeals for the Fifth Circuit, construed Lance's papers as a petition for a writ of certiorari and declined to hear the case. In FEC v. T. Bertram Lance (Civil Action No. 78-1859), the appeals court had affirmed an earlier decision by the U.S. District Court for the Northern District of Georgia, which ordered enforcement of a deposition the FEC had issued to Mr. Lance. Motions by the appellant to stay the appeals court's decision had been denied by the appeals court on February 19, 1981, and by the Supreme Court on March 11, 1981.

FEC's claim

The FEC had issued the subpoena to Mr. Lance as part of an investigation into Mr. Lance's 1974 gubernatorial campaign in Georgia, which involved possible violations of 2 U.S.C. §441b (formerly 610 of the Federal Corrupt Practices Act). This provision prohibits national banks from making or candidates from accepting contributions in connection with any election to any political office.[1] The Commission's investigation began in September 1977.

District court ruling

The district court ordered Mr. Lance to comply with the subpoena. The court reasoned that the subpoena was well within the Commission's "broad and inclusive" statutory authority to investigate violations of the Federal Election Campaign Act (the Act).

Appeals court ruling

A panel of the appeals court rejected the arguments made by Mr. Lance for quashing the subpoena and affirmed the district court order enforcing the subpoena. Specifically, Mr. Lance claimed that the FEC was investigating matters outside its jurisdiction. He contended that both the Constitution and the Act barred any FEC investigation of contributions made by national banks to his 1974 campaign. The panel responded to this claim by affirming the FEC's argument that it was "...specifically given authority over this provision." (P.L. 93-433, 88 Stat. 1281 (October 15, 1974).) "Moreover, the Supreme Court held that any party seeking enforcement of 610 (now 441b) after January 1, 1975, must seek redress with the Commission." Cort v. Ash, 422 U.S. 66 (1974).

Mr. Lance further claimed that the subpoena violated the equal protection and ex post facto provisions of the Constitution by attempting to apply §441b to campaign activities that occurred before the enactment of the FECA in 1975. The panel, on the other hand, affirmed the FEC's argument that these provisions presented no impediment to the FEC's investigation: "The prohibition against the making of campaign contributions by national banks has been in effect since 1907. Tillman Act, 34 Stat. 864. The mere recodification of 18 U.S.C. §610 as 2 U.S.C. §441b cannot absolve the respondent...from liability for substantive violations which were not changed by the incorporation of §441b into Title 2."

Appeals court: en banc

On January 16, 1981, the appeals court, sitting en banc, issued an opinion that adopted the earlier panel decision, affirmed the district court's subpoena enforcement order and rejected a claim, presented by Mr. Lance in his appeal, that §441b was unconstitutional on its face. The appeals court adopted three of the arguments given by the appeals court panel, but rejected the ex post facto argument, stating that it was not ripe for adjudication. The court concluded that the prohibition on unsound banking practices (extensions of credit to a campaign that are outside the ordinary course of business) did not violate the First Amendment because all the transactions in question involved "no speech elements at all." The bank drafts were transacted privately and were "...not the sort of public expression or support for Lance and his views that would make them even 'symbolic speech.'"

As to Mr. Lance's argument that §441b was unconstitutionally vague, the court noted, "The vagueness doctrine has been developed in the context of, and it is applicable to, penal statutes." The court concluded that the vagueness issue was not ripe for adjudication because the court was "...unwilling to assume that the present investigation of Lance will result in his criminal prosecution."

The court also rejected Mr. Lance's claim that §441b abridged Fifth Amendment rights by imposing greater restrictions on national banks in connection with elections than on other entities. The court held that since "...the Banks' contributions contain no cognizable elements of speech...we think the statute must be upheld if there is a rational relationship between the prohibition...and the purpose that prohibition serves.... Since we have no difficulty in concluding that a prohibition against banks engaging in unsound banking practices is rational, we reject Lance's equal protection claim."

As to the defendant's claim that the statute of limitations barred the investigation, the panel found that there was no statute of limitations applicable to a civil proceeding undertaken to enforce the Act. 2 U.S.C. §437g. The panel upheld the FEC's argument that the statute of limitations applied only to criminal prosecutions. "Even assuming arguendo that the three year statute of limitations was applicable to a future civil action brought by the Commission," the FEC argued, "the Commission has information suggesting that violations have occurred within the three years. Moreover, as noted, the existence of violations outside the statutory period themselves provide reason to investigate to ascertain whether further violations occurred within the three year period."

Finally, the defendant contended that, since the FEC already had information available to it from other government agencies, enforcement of the subpoena should be denied on grounds of undue burden and harassment. The panel rejected this claim, confirming the FEC's argument that "the existence of prior investigations by other agencies touching on similar issues does not preclude an agency from investigating matters within its jurisdiction." FEC v. Texaco, 555 F.2d at 878-79. The appeals court panel determined, however, that the constitutional challenges asserted by Mr. Lance should be heard by the court sitting en banc.


[1] Under the Act, a loan from a national bank becomes a prohibited contribution if it is not made according to applicable banking laws and in the ordinary course of business. 2 U.S.C. §431(8)(B)(vii).

Source:   FEC Record — September 1981. FEC v. Lance, 617 F.2d 365 (5th Cir. 1980), aff'd, 635 F.2d 1132 (5th Cir.) (en banc), appeal dism'd, cert. denied, 453 U.S. 917 (1981).