FEC v. Adams

On July 6, 2007, the FEC filed a complaint in the U.S. District Court for the Central District of California against Stephen Adams, charging that he failed to report and include proper disclaimers on $1 million worth of billboard ads during the 2004 Presidential race.

Background

Under the Federal Election Campaign Act (the Act), persons who make independent expenditures at any time during the calendar year, up to and including the 20th day before an election, must disclose this activity within 48 hours each time that the expenditures aggregate $10,000 or more. 2 U.S.C. §434(g)(2)(A). This report discloses the amount of the independent expenditure and certifies that the expenditure was not coordinated with a candidate or political party. Independent expenditures are also required to carry a disclaimer clearly stating the name and permanent street address, telephone number or web address of the person who paid for the communication and that the communication was not coordinated with any candidate or candidate's committee. 2 U.S.C. §441d(a)(3).

In June 2004, Mr. Adams contracted for a $1 million ad campaign to place billboards in support of President Bush's re-election in four battleground states: Michigan, Pennsylvania, Wisconsin and South Carolina. Mr. Adams' billboard ads, which expressly advocated the election or defeat of a federal candidate, were independent expenditures under the Act and were required to be reported. The billboards first appeared on September 7, 2004, and ran through the date of the general election. Mr. Adams did not file the required independent expenditure reports until October 28, 2004—just five days before the general election. Moreover, the billboards' disclaimers initially read "Personal message paid for and sponsored by Stephen Adams," and did not contain all of the required disclaimer information.

The Commission received two administrative complaints regarding alleged violations of the Act and, on November 8, 2006, found probable cause to believe that violations had occurred. The Commission was not able to reach an acceptable conciliation agreement with Mr. Adams through informal methods and, thus, filed a complaint in federal court. See 2 U.S.C. §437(g)(4)(A)(i).

Court Case

The Commission asks the court to:

• Declare that Stephen Adams violated the Act's independent expenditure report requirements and disclaimer requirements (2 U.S.C. §§434(g)(2)(A) and 441d(a)(3));
• Permanently enjoin Mr. Adams from future violations of these provisions; and
• Assess an appropriate civil penalty.

U.S. District Court for the Central District of California. Western Division, 07-4419.