FEC v. Reform Party

On November 22, 2005, the US District Court for the Northern District of Florida ordered the Reform Party of the United States of America (“Reform Party”) to repay $333,558 with calculated interest to the United States Treasury and enjoined the party from diverting any of its assets to any other expenditures other than repayment of federal taxes until it completes its repayment obligation.

Background

The Reform Party received $2,522,690 in public funds for its 2000 presidential nomination convention. Based on the results of a mandatory post-convention audit, the Commission determined that the Reform Party must repay $333,558 for impermissible presidential nominating convention expenditures. By law, public funding recipients may—among other things—ask the Commission to reconsider its repayment determinations, and seek additional review by the US Court of Appeals for the DC Circuit. The Reform Party repeatedly asked both the Commission and the courts to review its repayment obligation, but most of its requests were not filed within statutory and regulatory deadlines, and all were denied. The FEC brought this action to recover the repayment amount.

Court decision

The district held that the US Court of Appeals for the DC Circuit is the only venue in which repayment determinations made by the FEC may be challenged. Accordingly, the district court ruled that the Reform Party could not now raise defenses that it failed to properly bring to the DC Circuit. Finding that this case was simply an effort by the FEC to recover funds it had already determined the party owed, the court granted the FEC’s motion for summary judgment and ordered the defendants to repay $333,558 plus interest calculated in accordance with 11 CFR 9007.2(d)(3). In addition, the court found that the Reform Party to date has failed to repay the funds and thus enjoined the Reform Party from diverting any of its assets to any expenditures other than repayment of federal taxes until it completes its repayment obligation.

For more information on this case, please refer to the June, August and September 2004 issues of the Record.