On April 22, 2016, Campaign Legal Center and Democracy 21 (plaintiffs) filed suit against the Commission in the U.S. District Court for the District of Columbia. The plaintiffs are challenging the Commission''s dismissal of five administrative complaints as arbitrary, capricious and contrary to law. The complaints alleged that several entities and individuals violated 52 U.S.C. § 30122, which prohibits making contributions in the name of another, and thereby evaded certain disclosure provisions of the Federal Election Campaign Act (the Act).
The Act expressly prohibits any person from making a "contribution in the name of another" or knowingly permitting his or her name to be used to effect such a contribution, and that no person shall knowingly accept a contribution made by one person in the name of another person. 52 U.S.C. § 30122. The Commission''s regulations state that examples of a contribution in the name of another include "giving money, or anything of value, all or part of which was provided to the contributor by another person (the true contributor) without disclosing the source of the money..." and "making a contribution of money or anything of value and attributing as the source of the money or thing of value another person when in fact the contributor is the source." 11 CFR 110.4(b)(2).
Challenge to dismissal of administrative complaints
The plaintiffs had filed five sworn administrative complaints with the Commission against various entities and individuals alleging that they had violated the Act by using so-called "straw donors," including limited liability companies (LLCs), to make contributions in the name of another, thereby evading the Act''s disclosure requirements.
The first complaint, which was designated Matter Under Review (MUR) 6485 by the Commission, was against W Spann LLC. The plaintiffs allege that the LLC was used as a conduit to hide the true source of a $1 million dollar contribution to a political action committee called Restore Our Future, which was supporting a then-presidential candidate in 2011. The plaintiffs allege that a single individual formed W Spann LLC for the sole purpose of concealing his contribution to the Super PAC supporting that candidate.
The second and third complaints, MURs 6487 and 6488, involved two LLCs that the plaintiffs allege were used as conduits to "hide the true source of two $1 million contributions to Restore Our Future" in 2011. The plaintiffs contend that a single individual made the contributions through the LLCs, which were dormant.
The fourth complaint, MUR 6711, alleged that an individual contributed more than $12 million to a Super PAC named FreedomWorks for America using the names of a corporation and an LLC established solely to make such contributions.
The final complaint, designated as MUR 6930, also involved allegations that contributions were made to a Super PAC from an LLC and others in order to hide the true source of the donors.
On February 26, 2016, the Commission considered and voted on whether to find "reason to believe" that a violation of the Act had occurred with respect to each of the plaintiffs'' administrative complaints. In each case, the Commission did not find reason to believe by the required four votes. As a result, the Commission dismissed all five complaints.
The plaintiffs allege that the Commission''s failure to find "reason to believe" and its dismissal of the five administrative complaints was arbitrary, capricious and contrary to law. Accordingly, the plaintiffs are asking the district court to make a declaration to that effect that and order the Commission to conform to such declaration within 30 days. The plaintiffs are also asking the court to award legal fees and costs of the suit incurred by the plaintiffs and grant any other relief that the court deems appropriate.
- Campaign Legal Center, et al. v. FEC litigation page