On August 21, 2020, the US Court of Appeals for the District of Columbia Circuit affirmed a district court decision that the Commission’s independent expenditure disclosure rule at 11 CFR 109.10(e)(1)(vi) was invalid. The district court had vacated the regulation, effective September 18, 2018.
Under the Federal Election Campaign Act (FECA, or “the Act”) and Commission regulations, an independent expenditure is an expenditure by a person for a communication that expressly advocates the election or defeat of a clearly identified candidate and that is not coordinated with a federal candidate or political party.
Political committees and other persons whose independent expenditures aggregate in excess of $250 in a calendar year must report those expenditures to the FEC. For persons other than political committees (“non-political committees”), those reports must, among other things, identify each person who made a contribution in excess of $200 for the purpose of furthering an independent expenditure.
On November 14, 2012, Citizens for Responsibility and Ethics in Washington, its former executive director Melanie Sloan and Ohio resident and registered voter Jessica Markley (collectively, CREW) filed an administrative complaint alleging that Crossroads Grassroots Policy Strategies and individuals connected to the organization violated the Act by failing to disclose the contributors who funded the group's independent expenditures.
On November 17, 2015, the Commission, by a vote of 3 to 3, failed to have the requisite 4 votes to proceed to an investigation. The 3 Commissioners that voted against proceeding found no reason to believe that Crossroads GPS violated certain provisions of the Act. A month later, the Commission unanimously voted to close the file on MUR 6696, thereby dismissing CREW’s complaint.
On February 16, 2016, CREW filed suit in the U.S. District Court for the District of Columbia seeking a declaratory order stating that the FEC’s dismissal of the MUR was arbitrary, capricious, an abuse of discretion and contrary to law. CREW argued that the agency ignored undisputed evidence that Crossroads GPS violated 11 CFR 109.10(e)(1)(vi) when it failed to disclose the identities of individuals whose donations were used to fund independent expenditures. CREW also argued that the regulatory requirement to disclose contributors who gave "for the purpose of furthering the reported independent expenditure" in 11 CFR 109.10(e)(1)(vi) was inconsistent with the statutory requirement to identify those who made contributions "for the purpose of furthering an independent expenditure," in 52 U.S.C. § 30104(c)(2) (emphasis added). For that reason, CREW asked the court to declare the regulation invalid. Finally, CREW argued that the Commission’s dismissal was contrary to 52 U.S.C. § 30104(c)(1), a provision that CREW interpreted as requiring the disclosure of all contributions totaling over $200 in a calendar year that were made for any purpose.
District court decision
The district court found that 52 U.S.C. § 30104(c)(1) applies to “all contributions received” by the reporting nonpolitical committees and requires disclosure of all donors of over $200 annually making contributions intended to influence elections. The court also found that subsection (c)(2) requires supplementary reporting for a subset of donors under (c)(1)—donors of over $200 who contribute “for the purpose of furthering an independent expenditure.” (Emphasis added.) “Use of the indefinite article ‘an’ before ‘independent expenditure’ indicates a broader coverage than a particular, specified independent expenditure and instead means that disclosure must be made as to each non-trivial donor contributing to fund ‘an independent expenditure’ to a candidate, without regard to the actual reported form of the express advocacy funded by the expenditure.”
The court held that 109.10(e)(1)(vi) was invalid and vacated the regulation as it requires “significantly less” disclosure than the statute by ignoring the standalone disclosure requirement under (c)(1) and by substantially narrowing the requirements under (c)(2). However, the court stayed the vacatur for 45 days to provide time for the FEC to issue interim regulations consistent with the statute.
On August 24, 2018, Intervenor-Defendant Crossroads GPS filed a Notice of Appeal in the US Court of Appeals for the District of Columbia Circuit and requested an emergency stay pending appeal from Supreme Court Chief Justice John Roberts. On September 15, 2018, Chief Justice Roberts granted Crossroads GPS’s emergency request, but the full Court lifted the Chief Justice’s stay three days later. The district court's vacatur went into effect on September 18, 2018.
Appeals court decision
On August 21, 2020, the US Court of Appeals for the District of Columbia Circuit issued a Per Curiam Judgment affirming the District Court’s decision in CREW v. FEC (16-0259).
The essential question for the court was whether the Commission’s regulation requiring that independent expenditure makers disclose only those contributions aimed at supporting a specific independent expenditure can be squared with 52 U.S.C. § 30104(c)(1) and (c)(2)(C). While the court acknowledged that it is bound to accept an agency’s reasonable construction of an ambiguous statutory provision, it “owe[s the Commission] no deference unless, after employing traditional tools of statutory construction, we find ourselves unable to discern Congress’s meaning.”
The court found that the Commission’s requirement conflicts with the statute’s terms “twice over.” The court found that 11 CFR 109.10 “disregards (c)(1)’s requirement that IE makers disclose each donation from contributors who give more than $200 . . . .” It also found that the regulation “impermissibly narrows (c)(2)(C)’s requirement that contributors be identified if their donations are ‘made for the purpose of furthering an independent expenditure’” by requiring disclosure only of donations linked to a particular independent expenditure.
The court rejected Crossroad GPS’s argument that the court’s interpretation of (c)(1) and (c)(2)(C) is erroneous in that it renders the provisions duplicative. “While it is true that every contributor who must be identified under (c)(2)(C) must also be disclosed under (c)(1), that does not make the two subsections completely coextensive or render (c)(2)(C) superfluous. FECA (c)(2)(C) still calls for providing information that (c)(1) does not—namely, whether a disclosed ‘contribution’ was intended to support [independent expenditures] or instead aimed only at supporting the recipient’s other election-related activities. There is then no reason to refrain from giving the terms of (c)(2)(C) their natural reading. And because (c)(2)(C), on that reading, establishes a broader disclosure mandate than the [Commission’s] Rule ostensibly implementing it, the Rule is invalid.”
52 U.S.C. §30101(17)
Definition of Independent Expenditure
52 U.S.C §30104(c)
11 CFR 100.16(a)
11 CFR 109.10
How do political committees and other persons report independent expenditures?