FEC v. Williams

On January 31, 1995, the U.S. District Court for the Central District of California granted the FEC's motion for summary judgment and denied the defendant's motion for summary judgment.[1] The court ordered Larry R. Williams to pay $10,000 in civil penalties and enjoined him for 10 years from making contributions in the name of another and exceeding the $1,000 individual contribution limit to a federal candidate.

On December 26, 1996, the U.S. Court of Appeals for the Ninth Circuit reversed a district court ruling and dismissed this case.

On December 8, 1997, the U.S. Supreme Court denied the U.S. Solicitor General's petition asking the Court to review this case.

Background

Jack Kemp's 1988 Presidential campaign had a fundraising program which enabled anyone who contributed $1,000 to purchase a Super Bowl ticket for $100 from the Philadelphia Eagles. Mr. Williams, a campaign fundraiser at the time, purchased 40 tickets from the Eagles at the $100 special price and then offered them to employees and friends in exchange for a $1,000 contribution to the campaign. He then advanced or reimbursed 22 of his employees and friends $1,000 each to make a contribution to the Kemp campaign.

Additionally, Mr. Williams contributed $1,694 on his own behalf to the Kemp campaign.

District court decision

Mr. Williams argued that the FEC v. NRA Political Victory Fund ruling [2] precluded the FEC from pursuing this case because the structure of the agency violated the separation of powers doctrine.

The court denied the defendant's motion because the court did not believe that the presence of the ex officio members on the Commission rendered the Commission's actions unconstitutional under the separation of powers doctrine. The court reasoned that this doctrine was not violated because the ex officio members did not "hold an 'Office Under the United States'" and because the ex officios merely exercised an advisory role and could not vote on Commission action. In its opinion, the court disagreed with the reasoning in the FEC v. NRA Political Victory Fund decision, and cited the decisions of the Court of Appeals for the Ninth Circuit in Lear Siegler, Inc. v. Lehman and Commodities Futures Trading Commission v. Schor in support of its conclusion. [3]

Further, the court stated that even if the presence of the ex officio members were deemed unconstitutional, the de facto officer doctrine established in Buckley v. Valeo applied and the case could continue. In Buckley v. Valeo, the Supreme Court accorded validity to the FEC's past actions even though the composition of the Commission in 1976 violated the separation of powers doctrine.

Lastly, the court rejected the defendant's arguments that the Act was unconstitutionally vague, that the FEC waived its right to impose a civil penalty by not pursuing its claims in bankruptcy court or that the defendant suffered prejudice as a result of an excessive delay in the prosecution of this action.

The court concluded that Mr. Williams committed the following violations of the Federal Election Campaign Act:

Contributions in the name of another

It is illegal to make a contribution in the name of another. Mr. Williams violated this provision of the law when he advanced or reimbursed $1,000 to 22 contributors. 2 U.S.C. §441f; and

Exceeding the $1,000 contribution limit for individuals

It is illegal for an individual to give more than $1,000 per election to any federal candidate. Mr. Williams made $28,694 in contributions to a single candidate, exceeding his legal limit (11 CFR 110.1(b)(1)).

Appeals court decision

In a split decision, the appeals court reversed the district court's order. The appeals court held that the general five-year statute of limitations at 28 U.S.C. §2462 applied to the FEC's action seeking to assess civil penalties against Mr. Williams.[4] The court ruled that the time limit started running at the time the alleged offenses occurred-not at the time they were reported. The court also found that §2462 barred the FEC from seeking injunctive relief because the "claim for injunctive relief is connected to the claim for legal relief."

The allegations involved acts that took place in 1987 and early 1988. The court found that the statute of limitations had run out in 1992 and early 1993. The FEC did not file a lawsuit against Mr. Williams until October 1993, though the Commission had begun to respond to the administrative complaint in late 1988 and had attempted to reach a conciliation agreement in 1993.

The FEC argued that the statute of limitations should be temporarily tolled (i.e., the clock stops ticking) any time before the agency receives a complaint and during mandated periods of review and conciliation attempts that generally must occur before a lawsuit can be filed. However, the court was not moved by the FEC's arguments. It said that, although the doctrine of "equitable tolling"5 applies in principle to §2462, it is not applicable to the Williams case. The Commission had ample opportunity through its normal disclosure and investigatory processes, the court stated, to learn of Mr. Williams's alleged violations of the Act.

Supreme Court action

On December 8, 1997, the U.S. Supreme Court denied the U.S. Solicitor General's petition asking the Court to review this case.

FOOTNOTES:

[1] Previously, Mr. Williams had moved to dismiss this case pursuant to the 5-year statute of limitations in 28 U.S.C. §2462. The court dismissed this motion without issuing an opinion.
[2] In the NRA case, the Court of Appeals for the District of Columbia concluded that the presence of the ex officio members on the Commission violated the separation of powers principle. The Commission has since reconstituted itself so as to exclude the ex officios from its body.
[3] Citing Lear Siegler, the court found that Congress did not usurp an executive function by placing the ex officio members on the Commission because the ex officio members did not vote. Additionally, quoting the Schor decision, the court held that the presence of the ex officio members on the Commission did not impermissibly undermine the executive branch's role.
[4] The appeals court cited several cases to back up its claim that the Act is indeed subject to 28 U.S.C. §2462: 3M Co. v. Browner, 17 F.3d 1453 (D.C. Cir. 1994); FEC v. National Republican Senatorial Comm., 877 F. Supp. 15 (D.D.C. 1995) and FEC v. National Right to Work Comm. Inc., 916 F.Supp. 10 (D.D.C. 1996). 5 Equitable tolling provides that "where a plaintiff has been injured by fraud and remains in ignorance of it without any fault or want of diligence or care on his part, the bar of the statute does not begin to run until the fraud is discovered." Holmberg v. Armbrecht, 327 U.S. 392, 397 (1946).

Source:   FEC Record — January 1998; November 1997; February 1997; April 1995; FEC v. Williams, No. CV 93-6321-ER(BX) (C.D. Cal. Jan. 31, 1995), rev'd 104 F.3d 237 (9th Cir. 1996), cert. denied 118 S. Ct. 600 (1997).