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Federal Election Commission | United States of America

GRAMM v. FEC

During October 1985, the U.S. District Court for the Northern District of Texas, Dallas Division, issued two rulings concerning an FEC audit of the Friends of Phil Gramm, the principal campaign committee for Texas Senator Phil Gramm's 1984 Senate campaign. On October 18, the court granted the FEC's motion to dismiss Friends of Phil Gramm v. FEC, a suit filed by the Gramm Committee challenging the audit. (Civil Action No. CA3-85-1164-7.) On October 31, the court determined that the Committee must comply with the FEC's audit. (FEC v. Friends of Phil Gramm; Civil Action No. CA3-1507-7.)

Background

In papers filed with the court, Friends of Phil Gramm (the Committee) alleged that, based on a complaint filed against the Committee and on information gathered through internal procedures, in March 1985 the Commission found �reason to believe� that the Committee had violated several provisions of the Federal Election Campaign Act (the Act). The agency then authorized an audit of the Committee to investigate whether the alleged violations had occurred. (The �reason to believe� finding is a statutory prerequisite to an investigation into possible violations.)

On June 19, 1985, the Gramm Committee filed a suit in the Northern District of Texas to enjoin the FEC from auditing the Committee. The Committee claimed that the Commission had to begin the audit within the time frame established under Section 438(b) of the Act. The Commission argued that Section 438(b) (including its time limits) was not applicable to the Gramm audit, which had been authorized under Section 437g(a)(2). The Gramm Committee also contended that the Commission was required to attempt conciliation before conducting the audit.

Subsequently, the Commission subpoenaed certain materials necessary for the audit. When the Committee refused to comply, the Commission filed a suit which asked the Texas district court to enforce the subpoena.

District Court's Ruling

In its memorandum opinion of October 18, dismissing the Committee's suit, the court noted that the time limit of Section 438(b) �is inapplicable to an audit scheduled under §437� and found the audit �well within its [§437's] parameters.� Rejecting the Committee's claim concerning conciliation, the court stated that �the FEC is entitled to conduct its audit and gather the necessary information...before it attempts to conciliate with the violator.� In its October 31 ruling, the court determined that the Gramm Committee must comply with the FEC's subpoena.

Source:   FEC Record -- January 1986, p. 10.

This information is not intended to replace the law or to change its meaning, nor does this information create or confer any rights for or on any person or bind the Federal Election Commission or the public.

The reader is encouraged also to consult the Federal Election Campaign Act of 1971, as amended (52 U.S.C. 30101 et seq.), Commission regulations (Title 11 of the Code of Federal Regulations), Commission advisory opinions and applicable court decisions.