LaRouche v. FEC (92-1555)

On July 8, 1994, the U.S. Court of Appeals for the District of Columbia Circuit [1] upheld an FEC determination ordering the 1988 LaRouche Presidential campaign to return $109,149 in federal matching funds to the U.S. Treasury.[2] The court had previously denied the FEC's motion to dismiss this case. (Civil Action No. 92-1555.)

Background

On May 26, 1988, after receiving less than 10 percent of the vote in two consecutive primaries, Lyndon LaRouche became ineligible to receive matching funds to continue his campaign but was still entitled to matching funds to help defray preexisting net campaign debts of about $330,000. On that basis, the campaign continued to receive matching fund payments through October 1988. However, an FEC audit later found that, by July 22, the campaign had sufficient matching funds and private contributions received after the date of ineligibility (DOI) to satisfy the debt. The agency therefore ordered the campaign to return $109,149 in matching fund payments made after that date. This repayment determination was based on an FEC regulation, 11 CFR 9034.1(b), which states that a candidate can receive post-DOI matching funds to the extent that, on the date of payment, the sum of matching funds and contributions "received on or after the date of ineligibility" [emphasis added] does not exceed remaining net debts.

The LaRouche campaign challenged the FEC regulation as unreasonable and contrary to the intent of the public funding statute to encourage participation in the political system. Specifically, the campaign argued that, under a fair reading of the statute and FEC regulations, the campaign was entitled to collect matching funds for contributions received after the DOI without having to credit the contributions against the net debts figure. Otherwise, the campaign said, the candidate would be limited in his ability to continue the campaign.

Ruling on repayment determination

In its July 1994 ruling, the court upheld the contested repayment determination, finding that the FEC's interpretation of its own regulation was "compelling" and its interpretation of the statute, reasonable. The statute "make[s] clear," the court said, "that Congress wished to restrict the availability of matching payments to candidates it considered viable."

The court rejected several other arguments made by the LaRouche campaign, including the claim that the FEC's repayment determination had improperly created a new rule to address post-DOI matching fund entitlements when the candidate continues to campaign. The court said that the Commission had merely concluded that "the existing rule was not affected by Mr. LaRouche's decision, in 1988, to continue the good fight rather than to wind up his campaign...."

Ruling on motion to dismiss

In an earlier ruling on April 20, 1993, the court rejected the FEC's argument that the case should be dismissed because the LaRouche campaign was late in filing its petition for review with the court.

Under the statute, petitions for review of repayment determinations must be filed "within 30 days after the agency action by the Commission for which review is sought." 26 U.S.C. §9041(a).

The FEC made its final repayment determination with respect to the 1988 LaRouche campaign on September 17, 1992, and notified the campaign in a letter dated September 22. The petitioners filed their petition with the court on October 22, 30 days after the September 22 letter date but 35 days after the September 17 determination.

The FEC argued that the statutory "agency action" language referred to the date the agency made the repayment determination. Because the petition was filed 35 days after that date, the FEC contended, it should be dismissed. The court, however, stated that "[b]oth the [Matching Payment Account] Act and the Commission's regulations lead us to conclude that the 30-day review period...runs from the notice date...." The court noted that, under 26 U.S.C. §9038(b)(1), "a candidate's repayment obligation matures only upon notice from the Commission" and that FEC regulations "repeatedly provide that a limitation period begins after the FEC gives notice of its decision...."

Holding that the 30-day period for filing a review petition began on September 22, the court found that the petition was filed on time and therefore refused to dismiss the case.

FOOTNOTES:

[1] Petitions challenging FEC repayment determinations are filed with this court.

[2] The entire repayment was $151,260; only $109,149 was contested.

Source:   FEC Record — September 1994; June 1993. LaRouche Democratic Campaign '88 v. FEC, 990 F.2d 641 (D.C. Cir. 1993) (denying motion to dismiss); 28 F. 3d 137 (D.C. Cir. 1994) (affirming final repayment determination).