FEC v. National Republican Senatorial Committee (93-1612)

On June 12, 1995, the U.S. District Court for the District of Columbia found that, as stipulated by both parties in a Stipulation to Final Judgment, the National Republican Senatorial Committee (NRSC) violated 2 U.S.C. §§441a(h) and 434(b) by directing the re-designation of contributions it received and by failing to properly report this activity.

The FEC was precluded from collecting civil penalties in this case because in a February 24, 1995, decision, the court ruled that the 5-year statute of limitations had expired.

This case had been dismissed in November 1993, but was reopened in 1994, as explained below.

Dismissal and re-opening of case

The court had dismissed the suit on November 24, 1993, based on an October 1993 appellate court holding that the FEC's composition was unconstitutional and that the agency therefore lacked authority to bring an enforcement action. FEC v. NRA Political Victory Fund (NRA). In that case, the appeals court held that the presence of two Congressionally-appointed ex officio members on the Commission violated the Constitution's separation of powers.

On December 2, 1993, the Commission moved for reconsideration of the dismissal based on FEC actions immediately following the NRA ruling: The agency reconstituted itself as a six-member body entirely composed of Commissioners appointed by the President; ratified its earlier findings in enforcement cases; and authorized ongoing litigation, including FEC v. NRSC.

Due to the FEC's remedial actions, the district court reversed its earlier decision that NRA was a basis for dismissal, and the case was reopened on February 8, 1994.

Statute of Limitations

In a second stage of the case, on February 24, 1995, the court ruled that the FEC was precluded from recovering monetary penalties in the action because the 5-year statute of limitations expired before the suit was filed. (The statute of limitations, however, does not apply to injunctive and declaratory relief.)

The statute of limitations at 28 U.S.C. §2462 [1] applies in all instances except those involving other statutes in which Congress specifically included another time limitation. The court ruled that the Federal Election Campaign Act does not contain such an alternative statute of limitations. Accordingly, the court applied the 5-year limit to this case.[2]

In applying §2462, the court determined that the statute of limitations started running from the date of the alleged violations the period between November 1985 and November 1986. Since the time between the dates of the violations and the date the FEC filed this case with the court exceeded the 5-year statute of limitations, the FEC could not pursue the imposition of civil penalties.

The case then proceeded to a final stage.

Stipulation to Final Judgment

In its original suit, the FEC had alleged that during the 1986 election cycle the NRSC, having exhausted its contribution and coordinated party expenditure limits on behalf of Republican Senate candidate Jim Santini, contacted its contributors and asked them to redesignate a portion of their NRSC contributions to Mr. Santini. The NRSC then forwarded these newly earmarked contributions to the Santini committee.

Under 11 CFR 110.6(d)(2), the full amount of a contribution earmarked by a contributor at the direction of an intermediary counts against both that contributor's and that intermediary's contribution limit for the recipient. In the matter at hand, this rule caused the NRSC to exceed its contribution limit for Mr. Santini by $183,500, $104,200 of which was the total value of the earmarked contributions and $79,300 of which was the cost of securing the re-designations (an in-kind contribution).

In the Stipulation to Final Judgment, the NRSC admitted to engaging in the alleged conduct, but stated that it offered this admission only to bring this case to a close. In addition, the NRSC agreed to accept, in all future matters, the FEC's position that this conduct constitutes violations of 2 U.S.C. §§441a(h) and 434(b), and 11 CFR 110.6(d)(2). Furthermore, the NRSC agreed that through December 31, 1998, it would report all contributions that it asks contributors to re-designate to candidates as contributions from both itself and the contributor.

FOOTNOTES:

[1] That provision reads: Except as otherwise provided by Act of Congress, an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five years from the date when the claim first accrued.

[2] This conclusion is inconsistent with the U.S. District Court for the Central District of California's denial of defendant's motion to dismiss in FEC v. Williams. In that case, Larry Williams argued that because the 5-year statute of limitations in §2462 had expired, the court should dismiss the case. The court rejected this motion without issuing an opinion. FEC v. Williams, No. CV 93-6231 ER.

Source:   FEC Record — August 1995; April 1995; April 1994; January 1994;. FEC v. National Republican Senatorial Committee, No. 93-1612 (TFH) (D.D.C. June 24, 1994); (D.D.C. Feb. 24, 1995)(opinion); (D.D.C. June 12, 1995).