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On October 19, 2001, Dennis C. Baker, the treasurer for the Committee to Elect Jim Rooker to United States Congress (the Committee), filed a complaint in the U.S. District Court for the Western District of Pennsylvania. The complaint appeals a civil money penalty the Commission imposed on the Committee and Mr. Baker for failure to file the Committee's 2000 October Quarterly Report.1 The Commission found that the Committee and Mr. Baker had violated 2 U.S.C. §434(a), which requires the timely filing of reports by political committees. Mr. Baker alleges that the Committee had been "officially dissolved" at the time the report was due. In his court complaint, Mr. Baker asks that the court review the Commission's September 21, 2001, final determination and modify or set aside that determination.
1 The Commission's assessment of the $900 civil penalty was published in the January 2002 Record.
Source: FEC Record -- April
2002.
On June 5, 1979, the U.S. District Court for the District of Columbia granted summary judgment to the FEC and dismissed a complaint which had been filed by the Barnstead Committee (the Committee) against the FEC, WGBH Educational Foundation (Public Broadcasting TV, Channel 2), the Corporation for Public Broadcasting and the Quaker Oats Corporation. The Committee had filed suit on January 1, 1979, disputing the Commission's dismissal of a complaint which the Committee had filed with the Commission on November 2, 1978. The Committee requested that the court reverse the Commission's determination.
The Committee had alleged in its complaint, and repeated in its suit, that the corporate sponsorship of and payment for production and promotional costs of a televised film about House Speaker Tip O'Neill (Mr. Barnstead's opponent for a House seat) was in violation of 2 U.S.C. §441b. The Committee contended that, since Congressman O'Neill was officially a candidate at the time the film was broadcast, the film was "...in essence a campaign film, which enhanced the political standing of one candidate over another." Costs incurred in producing and broadcasting the film, therefore, were expenditures in connection with a federal election. The FEC, on the other hand, maintained that the costs incurred by WGBH Educational Foundation, the Corporation for Public Broadcasting and the Quaker Oats Corporation, in sponsoring the film, were exempt communication costs. Under Section 431(f)(4)(A), the Act exempts from the definition of expenditure certain communication costs, which include "any news story, commentary or editorial distributed through the facilities of any broadcasting station, newspaper, magazine, or other periodical publication, unless such facilities are owned or controlled by any political party, political committee or candidate." In dismissing the suit, the court upheld the Commission's determination that the costs involved in sponsoring the broadcast were, in fact, communication costs and not expenditures under the Act.
Source: FEC Record -- January 1980, p. 5.
During February and March 2007, Barry Bialek, Jon Marcus and Jack and Renee Beam filed separate, but substantially similar complaints with district courts in Colorado, Arizona and Northern Illinois, respectively, alleging that the Commission violated the Federal Election Campaign Act (the Act) by "tacitly cooperating and conspiring with" Attorney General Alberto Gonzales to circumvent the Act.
According to the complaint filed February 14, 2007, Plaintiff Barry Bialek made contributions towards John Edwards’ 2004 Presidential campaign. In November 2005, the U.S. Attorney General began an investigation into possible violations of the Act by the plaintiff. See April 2007 Record [PDF]. The plaintiff filed a complaint with the District Court in Colorado, alleging that the Commission must refer, by a vote of the majority of the Commission, a matter to the Attorney General prior to the Attorney General investigating or prosecuting a violation of the Act.
These cases are related to the Fieger v. Gonzales case currently pending in the Eastern District of Michigan, in which Geoffrey Fieger alleges that the Act grants the Commission exclusive jurisdiction over criminal violations and bars the Department of Justice from conducting any grand jury investigations unless and until the Commission makes a referral. See March 2007 Record [PDF].
The plaintiffs made contributions to John Edwards’ 2004 presidential campaign. According to the complaints, the plaintiffs are being investigated by the Department of Justice for violations of the Act. Mr. Bialek was summoned before a grand jury in November 2006 and Mr. Marcus was summoned before a grand jury in October 2006.
The plaintiffs assert that by giving "exclusive jurisdiction" over the Act to the Commission, Congress determined that no criminal investigation can take place unless the Commission has formally referred the criminal matters to the Attorney General. The plaintiffs claim that the Attorney General’s investigations are unlawful and unconstitutional since the Commission did not refer the plaintiffs’ alleged violations to the Attorney General.
In addition to those allegations, the Beam plaintiffs allege that Attorney Gonzales intentionally interfered with the Commission’s investigation and that the Commission’s failure to conduct its own investigation violates the Act and the Administrative Procedures Act.
The Bialek and Marcus complaints seek a declaration that the defendants’ actions are unlawful and the award of costs and attorneys’ fees. In addition to this relief, the Beam complaint asks the court to declare the that the Commission has failed to uphold the Act and to issue a Writ of Mandamus requiring the Commission to conduct its own investigation into the matter prior to any investigation by the Attorney General.
On March 7, 2008, the U.S. District Court for the Northern District of Illinois granted the Commission’s motion to dismiss the First Amended Complaint filed by Jack and Renee Beam (the plaintiffs) against the U.S. Attorney General and the Chairman of the FEC. The court held that it lacked subject matter jurisdiction over plaintiffs’ claims, that plaintiffs failed to establish Article III standing, the case was not ripe for review and the FEC did not violate the Federal Election Campaign Act (the Act).
The District Court found in favor of the Commission and the Department of Justice on every issue addressed in the decision. The court held that the plaintiffs lacked standing necessary for the court to have subject matter jurisdiction over the suit. The plaintiffs did not allege in their complaint that the Department of Justice had "raided" their own home or seized their own bank records, but alleged only raids affecting other Fieger associates and employees. The plaintiffs did not show that they had suffered any harm and thus did not meet the judicial requirement of "injury in fact." The Court also found plaintiffs failed to establish standing with respect to the RFPA claim because they relied only upon "unsubstantiated speculation" that the Commission had possession of their private banking records and that the Commission had illicitly obtained those records.
The court also found that the plaintiffs’ case was not ripe for review. The court stated that because neither the Attorney General nor the FEC had made decisions about whether or how to enforce applicable laws against the plaintiffs, the court could not assess whether any agency misconduct affected the plaintiffs. Additionally, the plaintiffs identified no hardship that they would suffer if the court were to wait to decide their claims until the alleged investigations were complete.
Although the plaintiffs alleged that the Commission violated the Act in several ways, the court found that the allegations provided no basis for relief. The court agreed with the other District Court decisions in Fieger v. Gonzales and Bialek v. Gonzales. The court held that, contrary to plaintiffs’ assertions, the FEC is not required to refer a matter to the Department of Justice prior to the Attorney General initiating an investigation. The Attorney General has sole authority to investigate and prosecute criminal violations of the U.S. Code, unless Congress clearly and unambiguously restricts that authority.
The court found no evidence that Congress intended to limit the Attorney General’s authority to prosecute criminal violations of the Act. Regarding the plaintiffs’ request that the court order the FEC to conduct an investigation into the alleged illegal activities, the court found that "the judiciary has no power to dictate the timing or nature of an investigation," or require the FEC to conduct an investigation at all.
The court granted leave to plaintiffs to file a Second Amended Complaint. Plaintiffs filed their new complaint on March 24, 2008.
Source: FEC Record -- April 2007 [PDF]; August 2007 [PDF]; May 2008 [PDF]; August 2008 [PDF].
On June 16, 2003, the U.S. Supreme Court, overruling the U.S. Court of Appeals for the 4th Circuit, held that the prohibition on contributions by corporations is constitutional as applied to nonprofit MCFL-type advocacy corporations, such as North Carolina Right to Life, Inc.
On October 3, 2000, the U.S. District Court for the Eastern District of North Carolina, Northern Division, found that the prohibitions of the Federal Election Campaign Act (the Act) and Commission regulations against corporate independent expenditures and contributions on behalf of federal candidates violated the plaintiffs' First Amendment rights. The court granted the plaintiffs' motion for summary judgment and denied the FEC's motions for partial summary judgment and denied the FEC's motions for partial summary judgment and partial dismissal. The court stayed the effect of this ruling until a final order is issued.
On October 26, 2000, the court also imposed a preliminary injunction barring the FEC from enforcing the statutory and regulatory provisions against the plaintiffs.
On December 21, 2000, the Federal Election Commission appealed this case to the United States Court of Appeals for the Fourth Circuit.
North Carolina Right to Life, Inc. (NCRL), members of its board of directors and an unaffiliated individual asserted that Section 441b of the Act, which prohibits corporations from making contributions or expenditures in connection with a federal election, is unconstitutional because it makes no exception for nonprofit, ideological corporations. The lawsuit also challenged the constitutionality of two FEC regulations: one that prohibits corporations from making contributions (11 CFR 114.2(b)) and another that creates an exemption from the ban on corporate expenditures for certain nonprofit corporations, pursuant to the Supreme Court's decision in FEC v. Massachusetts Citizens for Life (MCFL), 479 U.S. 238 (1986) (11 CFR 114.10).
Commission regulations at 11 CFR 114.10 provide that certain "qualified nonprofit corporations" may be exempt from the prohibition on corporate independent expenditures. To be considered a "qualified nonprofit corporation," a corporation must meet the following criteria:
NCRL argued that it failed to meet this exemption only because it accepted a small amount of corporate contributions and participated in "minor business activities incidental and related to its advocacy of issues." NCRL further argued that, even though the FEC had conceded that a Fourth Circuit decision in an earlier case between NCRL and North Carolina over a similar provision in a North Carolina statute barred enforcement of the Act's prohibition against NCRL, its officers remained subject to criminal liability and, as a result, their First Amendment rights were censored.
NCRL also argued that, in this case, the Act's ban on corporate contributions to political candidates infringed on the organization's right to association. While the FEC argued that NCRL's ability to contribute through a separate segregated fund minimized this infringement, NCRL contended that the maintenance of such a fund was a burden.
The court found no compelling justification for denying NCRL (a nonprofit, ideological organization) the right to make contributions and independent expenditures solely because it was an incorporated entity. Moreover, the court was not persuaded by the FEC's argument that a ban on corporate contributions was constitutional, as applied to NCRL, while a ban on corporate expenditures might not be.1 The court found the distinction between contributions and expenditures immaterial.
The court declared that the provisions in question were unconstitutional as applied to NCRL and suggested that the court in its final order, deem these provisions facially unconstitutional.
On January 24, 2001, the court found that the prohibitions on corporate contributions and expenditures of the Act and Commission regulations were unconstitutional as applied to NCRL. The court found that the statute and regulations infringed on NCRL's First Amendment rights without a compelling state interest. The court permanently enjoined the Commission from relying on, enforcing or prosecuting violations of 2 U.S.C. §441b and 11 CFR 114.2(b) and 114.10-or any other parts of the Act whose restrictions flow from these provisions-against the plaintiffs.
The court did not find, however, that 2 U.S.C. §441(b) and its implementing regulations were unconstitutional on their face. In order to find a statute facially unconstitutional, rather than merely invalid as applied to a specific case, the court must find that its constitutional infringements are "substantial" in relation to its legitimate uses. The plaintiffs submitted a list of nonprofit, tax-exempt corporations, arguing that the statute's unconstitutional infringement was "substantial" in that it reached "hundreds, if not thousands, of constitutionally protected ideological corporations." The court, however, ruled that the plaintiffs had failed to show that the statute's constitutional infringements were substantial in relation to their "plainly legitimate sweep." The court said, "In light of these numbers [4.5 million for-profit corporations] and the importance of the statute's 'plainly legitimate' purpose of regulating for-profit corporations, its inadvertent infringement on the rights of 'hundreds if not thousands' does not appear 'substantial' . . ." The court concluded that the constitutionality of the statute should be considered on a case-by-case basis.
On March 6, 2001, the Commission appealed this case to the U.S. Court of Appeals for the Fourth Circuit. On March 15, 2001, the Fourth Circuit Court of Appeals consolidated this appeal with a previous appeal, filed on December 22, 2000, that requested relief from the district court's preliminary injunction of October 26, 2000. That injunction barred the Commission from relying on and enforcing the challenged provisions against the plaintiffs pending a final decision in the case. The plaintiffs filed a cross appeal on March 16, 2001.
On January 25, 2002, the appeals court affirmed the district court decision that found the prohibitions on corporate contributions and expenditures to be unconstitutional as applied to NCRL. The appeals court also affirmed the district court's finding that the Act's prohibition on corporate contributions and expenditures, and Commission regulations that implement the prohibition, were not facially unconstitutional.
The appeals court found that a complete ban on corporate contributions and expenditures in connection with federal elections, with an exception to the corporate expenditure ban "so narrow that NCRL does not fit into it," burdened the plaintiffs' First Amendment speech and association interests. The court explained that "Organizations that in substance pose no risk of 'unfair deployment of wealth for political purposes' may not be banned from participating in political activity simply because they have taken on the corporate form."
The FEC argued that the Act did not absolutely ban corporations from engaging in political activity. Rather, it permits corporations to establish political action committees, which can make contributions and expenditures subject to the Act's limits. The appeals court, however, found that the reporting requirements and administrative burdens associated with maintaining a political committee "stretch far beyond the more straightforward disclosure requirements of unincorporated associations." The court concluded that, as a nonprofit advocacy group, the "NCRL is more akin to an individual or an unincorporated advocacy group than a for-profit corporation."
The appeals court found that the criteria at 11 CFR 114.10, which create a test for whether a nonprofit corporation qualifies for the MCFL exemption, merely codify the list of nonprofit corporate attributes considered by the Supreme Court in MCFL. Relying upon a previous Fourth Circuit case involving NCRL, the appeals court held that these rigid criteria could not be used to determine whether an organization qualified for the constitutionally-mandated exception. The court ruled that the NCRL was constitutionally entitled to the exception and was not barred from making independent expenditures to influence federal elections.
The court also ruled that the prohibition on corporate contributions was unconstitutional as applied to NCRL. The court reasoned that same rationale the Supreme Court used to find the ban on independent expenditures unconstitutional as applied to MCFL also applied to contributions. The court found that contributions by an MCFL-type corporation carried no greater risk of political corruption than did independent expenditures by such an organization. Thus, the appeals court concluded that, as applied to the NCRL, the prohibition on corporate contributions was not closely drawn to match a sufficiently important government interest in preventing real or perceived corruption of the political system.
The appeals court, however, found that the Act's corporate prohibition was constitutional in the "overwhelming majority of applications," and, thus, was not facially unconstitutional. 2 U.S.C. §441b(a). The court rejected the plaintiffs' argument that the statute was unconstitutional because it did not contain an MCFL exception, citing a case in which the Supreme Court had rejected a similar argument concerning a state statute modeled on §441b(a). The appeals court affirmed the district court's permanent injunction barring the FEC from prosecuting the plaintiffs for violations of §441b and 11 CFR 114.2(b) and 114.10. The appeals court also affirmed the district court's finding that the statute and its implementing regulations are not facially unconstitutional.
The case was appealed to the Supreme Court solely on the issue of the constitutionality of the ban against contributions from nonprofit advocacy corporations.2 The Court agreed to hear the case because on this issue the U.S. Court of Appeals for the 4th Circuit was in conflict with the U.S. Court of Appeals for the 6th Circuit.
The Court began its decision by noting that federal law has banned corporations from contributing directly to federal candidates for nearly 100 years. Over the years the Court had reasoned this prohibition against corporations is intended to:
The Court then noted that its decision in FEC v. National Right to Work Committee (National Right to Work)4 "all but decided the issue against NCRL's position." See FEC v. National Right to Work Committee, 459 U.S. 197 (1982). The Court explained that in National Right to Work it specifically rejected NCRL's arguments that deference to Congress on the proper limits of corporate contributions depended upon the details of a corporation's form or its affluence. The Court also explained that its decision in MCFL, which NCRL and the U.S. Court of Appeals for the 4th Circuit had relied upon in their reasoning, undermined NCRL's arguments, noting that in MCFL the Court concluded that restrictions "on contributions require less compelling justification than restrictions on independent spending."
According to the Court, ruling in favor of NCRL would mean recasting its understanding of the "risks of harm" of corporate political contributions, their "expressive significance" and the deference owed to Congress on how to treat them. NCRL argued that contributions by MCFL-type corporations posed no potential threat to the political system, and the governmental interest in combating corruption was not sufficiently strong to warrant Act's broad prohibition against contributions from MCFL-type corporations. The Supreme Court, in rejecting this argument, noted that nonprofit advocacy corporations, "like their for-profit counterparts, benefit from significant 'state-created advantages' and may well be able to amass substantial 'political war chests.'" Additionally, the Court stated that nonprofit corporations are "no less susceptible than traditional business corporations to misuse as conduits for circumventing the contribution limits imposed on individuals."
NCRL also argued that the Act's ban on corporate contributions should be subject to a strict level of constitutional scrutiny because it bans corporations from making contributions rather than merely limiting them from doing so. The Court also rejected this argument noting that in reviewing political financial restrictions, "the level of scrutiny is based on the importance of the 'political activity at issue' to effective speech or political association." The Court determined that contribution restrictions "have been treated as merely 'marginal' speech restrictions" and therefore are constitutional if they are "'closely drawn' to match a 'sufficiently important interest.'" Additionally, the Court pointed out that recognizing that the "degree of scrutiny runs on the nature of the activity regulated is the only practical way to square two leading cases," National Right to Work and MCFL.
Moreover, the Court stated that NCRL's contention that the corporate prohibition is unconstitutional because it is not sufficiently closely drawn rests on a false premise in that the prohibition is not a complete ban but rather contains significant exceptions, including allowing corporations and unions to pay for the administrative expenses of their PACs. Finally, the Court noted that in National Right to Work, which was decided by a unanimous Supreme Court in 1982, it thought that the regulatory burdens placed on PACs were insufficient to make them unconstitutional as an advocacy corporation's sole avenue for making contributions. "There is no reason to think the burden on advocacy corporations is any greater today," the Court concluded, "or to reach a different conclusion here."
Having found that the prohibition on corporate contributions is constitutional as applied to NCRL, the Supreme Court ordered that the judgment of the U.S. Court of Appeals for the 4th Circuit in Beaumont v. FEC be reversed.
1 The Supreme Court's decision in FEC v. Massachusetts
Citizens for Life, permitting qualified nonprofit corporations to make
independent expenditures, extends only to corporate expenditures and not to
corporate contributions.
2 The Court noted that as a result it had no occasion
to address whether NCRL was entitled to an MCFL-type exception to
the ban on corporate independent expenditures. The Court also quoted from
its decision in MCFL noting that MCFL's formal policy against
accepting donations from corporations was "essential to our holding."
3 The Court quoted from its decision in FEC v.
Colorado Federal Republican Campaign Committee that it understood corruption
to mean "not only quid pro quo agreements, but also undue influence on an
officeholder's judgment, and the appearance of such influence." See FEC
v. Colorado Federal Republican Campaign Committee, 533 U.S. 431.
4 National Right to Work addressed a nonstock
corporation's ability to solicit contributions from outside of its membership.
The Court concluded that a solicitation to any individual who had at one time
contributed to the PAC, regardless of whether or not he or she was a member,
went beyond the permissible solicitation of members provided for by 441b.
Source: FEC Record -- December
2000 [PDF]; February 2001
[PDF] ; March 2001 [PDF];
May 2001 [PDF]; March
2002 [PDF]; July 2003 [PDF].
278 F.3rd 261
Independent voter Heidi Becker, candidate Ralph Nader, the Green Party and others (Becker) asked the U.S. District Court for the District of Massachusetts to find that the Commission's regulations concerning debates, at 11 CFR 110.13 and 114.4(f), were unlawful.
The Commission's regulations allow a nonprofit corporation to stage a debate among federal candidates and to "use its own funds" and "accept funds donated by corporations or labor organizations" as long as certain guidelines are followed. 11 CFR 110.13 and 114.4(f).
Becker argued that these regulations exceed the Commission's statutory authority because the Federal Election Campaign Act (the Act) prohibits corporations from making contributions or expenditures "in connection with" a federal election, and the statute does not make an exception for corporate activity that helps stage federal candidate debates. 2 U.S.C. §441b(a). Becker further argued that Commission regulations allow corporations to fund debates between the major party candidates that exclude independent and ballot-qualified third party candidates. Becker alleged that the Commission's regulations deprived the plaintiffs of their right to participate in presidential elections that are free of the corrupting influence of illegal corporate contributions.
Becker asked the court to:
On September 1, 2000, the court denied Becker's motion for a preliminary injunction. The court found that these regulations are not in excess of the FEC's statutory authority under the Act. The court also dismissed the complaint for lack of standing with regard to the individual-voter plaintiffs.
By consent of the parties, the district court entered a final judgment in favor of the FEC on September 14, 2000. The plaintiffs filed an appeal of this decision on September 15, 2000, and asked for an expedited review. The appeal was argued as Nader v. FEC.
On November 1, 2000, the U.S. Court of Appeals for the First Circuit upheld the district court's denial of relief. On January 31, 2000, Mr. Nader and the other petitioners filed a writ of certiorari with the U.S. Supreme Court. The Court denied the plaintiff's petition on April 30, 2001.
Source: FEC Record --
August 2000 [PDF]; November
2000 [PDF]; April 2001
[PDF]; and June 2001 [PDF].
Nader v. FEC, 230 F.3d 381.
During February and March 2007, Barry Bialek, Jon Marcus and Jack and Renee Beam filed separate, but substantially similar complaints with district courts in Colorado, Arizona and Northern Illinois, respectively, alleging that the Commission violated the Federal Election Campaign Act (the Act) by "tacitly cooperating and conspiring with" Attorney General Alberto Gonzales to circumvent the Act.
According to the complaint filed February 14, 2007, Plaintiff Barry Bialek made contributions towards John Edwards’ 2004 Presidential campaign. In November 2005, the U.S. Attorney General began an investigation into possible violations of the Act by the plaintiff. See April 2007 Record [PDF]. The plaintiff filed a complaint with the District Court in Colorado, alleging that the Commission must refer, by a vote of the majority of the Commission, a matter to the Attorney General prior to the Attorney General investigating or prosecuting a violation of the Act.
These cases are related to the Fieger v. Gonzales case currently pending in the Eastern District of Michigan, in which Geoffrey Fieger alleges that the Act grants the Commission exclusive jurisdiction over criminal violations and bars the Department of Justice from conducting any grand jury investigations unless and until the Commission makes a referral. See March 2007 Record [PDF].
The plaintiffs made contributions to John Edwards’ 2004 presidential campaign. According to the complaints, the plaintiffs are being investigated by the Department of Justice for violations of the Act. Mr. Bialek was summoned before a grand jury in November 2006 and Mr. Marcus was summoned before a grand jury in October 2006.
The plaintiffs assert that by giving "exclusive jurisdiction" over the Act to the Commission, Congress determined that no criminal investigation can take place unless the Commission has formally referred the criminal matters to the Attorney General. The plaintiffs claim that the Attorney General’s investigations are unlawful and unconstitutional since the Commission did not refer the plaintiffs’ alleged violations to the Attorney General.
In addition to those allegations, the
Beam plaintiffs allege that Attorney
Gonzales intentionally interfered
with the Commission’s investigation
and that the Commission’s failure to
conduct its own investigation violates
the Act and the Administrative Procedures
Act.
The Bialek and Marcus complaints
seek a declaration that the defendants’
actions are unlawful and the
award of costs and attorneys’ fees.
In addition to this relief, the Beam
complaint asks the court to declare
the that the Commission has failed to
uphold the Act and to issue a Writ of
Mandamus requiring the Commission
to conduct its own investigation into
the matter prior to any investigation
by the Attorney General.
According to the complaint filed February 14, 2007, Mr. Bialek made contributions towards John Edwards’ 2004 Presidential campaign. In November 2005, the U.S. Attorney General began an investigation into possible violations of the Act by the plaintiff. See April 2007 Record [PDF].
The plaintiff filed a complaint with the District Court in Colorado, alleging that the Commission must refer, by a vote of the majority of the Commission, a matter to the Attorney General prior to the Attorney General investigating or prosecuting a violation of the Act.
In June 2007, the District Court granted the Commission’s motion to dismiss the plaintiff’s suit with prejudice, holding that the Attorney General’s discretion over whether to investigate a potential criminal violation of the Act does not require a referral from the Commission. See August 2007 Record [PDF].
On June 28, 2007, the U.S. District Court for the District of Colorado granted the Commission’s motion to dismiss the suit by Barry Bialek against the U.S. Attorney General and the FEC, holding that the Attorney General has discretion over whether to investigate and prosecute criminal violations of the Federal Election Campaign Act (the Act) and is not required to wait for a referral of a case from the Commission.
The District Court held that the Act does not limit the Attorney General’s authority to investigate and prosecute criminal violations of the Act and that the Commission’s actions are not a prerequisite to the Attorney General’s investigation.
Upon creating the Federal Election Commission, Congress gave the Commission exclusive jurisdiction to enforce the civil provisions of the Act.
2 U.S.C. 437c(b)(1). The Commission may refer a violation to the Attorney General if, by four votes of the Commissioners, the Commission determines that there is probable cause to believe that a "knowing and
willful" violation occurred. 2 U.S.C. 437g(a)(5)(C).
The plaintiff claimed that because the Act grants the Commission exclusive jurisdiction over civil violations and contains a referral provision, criminal violations must first be handled by the Commission, and the Attorney General may only become involved in the matter once the Commission has voted to refer the violation. The court rejected the plaintiff’s argument, holding that there is a presumption against any limitation on the Attorney General’s prosecutorial authority and Congress must show "clear and unambiguous" intent to restrict the Attorney General’s authority to investigate and prosecute criminal offenses. The Act does not explicitly restrict the Attorney General in any way. The court held that nothing in the plain language of the Act required a referral prior to prosecution by the Attorney General.
Additionally, the court held that the legislative history of the Act does not show Congressional intent to limit the prosecutorial authority of the Attorney General.
The district court granted the Commission’s motion to dismiss and dismissed the case with prejudice against the plaintiff.
On June 24, 2008, the U.S. Court of Appeals for the 10th Circuit affirmed
the District Court’s dismissal of plaintiff Barry Bialek’s suit against the U.S. Attorney General and the FEC, agreeing that the Attorney General has discretion over whether to investigate and prosecute criminal violations of the Federal Election Campaign Act (the Act) and is not required to wait for a referral from the Commission.
The appellate court affirmed the district court’s decision. The appellate court agreed with the district court that Congress did not expressly limit the Attorney General’s authority to investigate and prosecute criminal violations of the Act and that the Commission’s actions are not a prerequisite to the Attorney General’s investigation.
The Act provides the Commission with exclusive jurisdiction to enforce the civil provisions of the Act. 2 U.S.C. 437c(b)(1). The Commission may refer a violation to the Attorney General if, by four votes of the Commissioners, the Commission determines that there is probable cause to believe that a "knowing and willful" violation occurred. 2 U.S.C. 437g(a)(5)(C).
The plaintiff claimed that because the Act grants the Commission exclusive jurisdiction over civil violations and contains a referral provision, criminal violations must first be handled by the Commission, and the Attorney General may only become involved in the matter once the Commission has voted to refer the violation. The appellate court agreed with the district court’s rejection of the argument, holding that there is a presumption against any limitation on the Attorney General’s prosecutorial authority and Congress must show "clear and unambiguous" intent to restrict the Attorney General’s authority to investigate and prosecute criminal offenses. The Act does not explicitly limit the Attorney General in any way. The court held that nothing in the plain language of the Act nor the legislative history required a referral prior to prosecution by the Attorney General.
The appellate court found that the Commission and the Department of Justice have concurrent jurisdiction to investigate knowing and willful violations of the Act. Both agencies may initiate investigations and make referrals to each other.
On March 10, 2008, the U.S. District Court for the District of Arizona granted the Commission’s motion to dismiss the suit filed by Jon Marcus against the U.S. Attorney General and the Chairman of the FEC, and denied the plaintiff’s motion for declaratory judgment, holding that the Attorney General has discretion over whether to investigate and prosecute criminal violations of the Federal Election Campaign Act (the Act) and is not required to wait for a referral of a case from the Commission.
In this case, the court agreed with the court decisions in Barry Bialek v. Gonzales, et al. and Geoffrey N. Fieger, et al. v. Gonzales, et al. that the plain language of the Act does not "infring[e] the Attorney General’s plenary power to enforce criminal violations of the Act." The court further found that the Act’s legislative history "demonstrates that Congress did not intend to limit or displace the Attorney General’s independent authority to pursue criminal violations of the Act, and that prior case law has held that criminal enforcement may either originate with the Attorney General or stem from a referral by the Commission to the Attorney General."1
The court denied the plaintiff’s motions for a hearing and oral arguments
and for declaratory judgment and granted the Commission’s motion
to dismiss the complaint with prejudice.
The plaintiff filed a Notice of Appeal
in this case on March 18, 2008.
On March 7, 2008, the U.S. District Court for the Northern District of Illinois granted the Commission’s motion to dismiss the First Amended Complaint filed by Jack and Renee Beam (the plaintiffs) against the U.S. Attorney General and the Chairman of the FEC. The court held that it lacked subject matter jurisdiction over plaintiffs’ claims, that plaintiffs failed to establish Article III standing, the case was not ripe for review and the FEC did not violate the Federal Election Campaign Act (the Act).
The District Court found in favor of the Commission and the Department of Justice on every issue
addressed in the decision. The court held that the plaintiffs lacked standing necessary for the court to have subject matter jurisdiction over the suit. The plaintiffs did not allege in their complaint that the Department of Justice had "raided" their own home or seized their own bank records, but alleged only raids affecting other Fieger associates
and employees. The plaintiffs did not show that they had suffered any harm and thus did not meet the judicial requirement of "injury in fact." The Court also found plaintiffs
failed to establish standing with respect to the RFPA claim because they relied only upon "unsubstantiated
speculation" that the Commission had possession of their private banking
records and that the Commission had illicitly obtained those records.
The court also found that the plaintiffs’ case was not ripe for review. The court stated that because neither the Attorney General nor the FEC had made decisions about whether or how to enforce applicable laws against the plaintiffs, the court could not assess whether any agency misconduct affected the plaintiffs. Additionally, the plaintiffs identified no hardship that they would suffer if the court were to wait to decide their claims until the alleged investigations were complete.
Although the plaintiffs alleged that the Commission violated the Act in several ways, the court found that the allegations provided no basis for relief. The court agreed with the other District Court decisions in Fieger v. Gonzales and Bialek v. Gonzales. The court held that, contrary to plaintiffs’ assertions, the FEC is not required to refer a matter to the Department of Justice prior to the Attorney General initiating an investigation. The Attorney General has sole authority to investigate and prosecute criminal violations of the U.S. Code, unless Congress clearly and unambiguously restricts that authority.
The court found no evidence that Congress intended to limit the Attorney General’s authority to prosecute criminal violations of the Act. Regarding the plaintiffs’ request that the court order the FEC to conduct an investigation into the alleged illegal activities, the court found that "the judiciary has no power to dictate the timing or nature of an investigation," or require the FEC to conduct an investigation at all.
The court granted leave to plaintiffs to file a Second Amended Complaint. Plaintiffs filed their new complaint on March 24, 2008.
1 The court specifically rejected the plaintiff’s assertion that 1980 amendments to the Act had overturned United States v. International Union of Operating Engineers, Local 701, 638 F.2d 1161 (9th Cir. 1979).
Source: FEC Record -- April 2007 [PDF]; August 2007 [PDF]; May 2008 [PDF]; August 2008 [PDF].
On October 19, 2010, two foreign nationals filed suit in the U.S. District Court for the District of Columbia challenging the constitutionality of 2 U.S.C. §441e and its implementing regulations at 11 CFR 110.20, which prohibit contributions and expenditures by foreign nationals. The Plaintiffs asked the court to declare §441e and 11 CFR 110.20 unconstitutional as applied to foreign nationals lawfully residing and working in the United States, and to enjoin the Commission from enforcing the statute or the regulations against such persons.
On August 8, 2011, the court dismissed the Plaintiff's challenge to the constitutionality of the prohibition on foreign nationals making contributions or expenditures in connection with U.S. elections. The court denied the plaintiffs’ motion for summary judgment and granted the FEC’s motion to dismiss the case.
On January 9, the U.S. Supreme Court summarily affirmed the three-judge court’s decision to grant the Commission's motion to dismiss and to deny plaintiffs' motion for summary judgment.
Benjamin Bluman and Dr. Asenath Steiman (Plaintiffs) are both foreign nationals who lawfully live and work in the United States. Both Plaintiffs wish to express their political views by making contributions to candidates for office in the United States, including federal candidates . Current federal law and Commission regulations prohibit foreign nationals (other than those who have been admitted to the United States for permanent residence) from “directly or indirectly” making “a contribution or donation of money or other thing of value…in connection with a federal, state or local election;” making “a contribution or donation to a committee of a political party;” or making an “expenditure,” “independent expenditure,” or “disbursement for an electioneering communication” in connection with any federal, state or local election in the United States. 11 CFR 110.20. A knowing and willful violation of the foreign national ban is punishable by a civil penalty not exceeding the greater of $10,000 or 200 percent of any contribution or expenditure involved in the violation. It is also punishable criminally by up to five years’ imprisonment. 2 U.S.C. §§437g(a)(5) and (d).
The Plaintiffs claim that the foreign national ban violates the First Amendment and that since the Plaintiffs lawfully reside and work in the United States, they are fully protected by the First Amendment. Plaintiffs also claim that the forms of expression that are criminalized by the foreign national prohibition are core political speech entitled to the strongest protection under the First Amendment.
The Plaintiffs request that the court declare 2 U.S.C. §441e and 11 CFR 110.20 unconstitutional as applied to foreign nationals who lawfully live and work in the United States, enjoin the FEC from enforcing those provisions against the Plaintiffs or other similarly situated foreign nationals, grant costs and attorneys’ fees and award any other relief that the court deems just and proper.
The court granted the FEC’s Motion to Dismiss and denied the plaintiffs’ Motion for Summary Judgment. In its Memorandum Opinion, the court cited a long history of Supreme Court case law holding that foreign citizens may be excluded from certain activities that are an integral part of democratic self-government in the United States. The opinion listed several examples of activities that foreign citizens may be barred from: voting, serving as jurors, working as police or probation officers and teaching at public schools. See, e.g., Cabell v. Chavez-Salido, 454 U.S. 432 (1982); Ambach v. Norwick, 441 U.S. 68 (1979); Foley v. Connelie, 435 U.S. 291 (1978). “Under those precedents, the federal ban at issue here readily passes constitutional muster,” the court stated.
The court said these cases provide a straightforward precedent: “It is fundamental to the definition of our national political community that foreign citizens do not have a constitutional right to participate in, and thus may be excluded from, activities of democratic self-government.” For purposes of First Amendment analysis, the court stated the United States has a compelling interest in limiting the participation of foreign citizens in such activities, and “thereby preventing foreign influence over the U.S. political process.” The court found that political contributions and expenditures are a vital aspect of the process of American democratic self-government. The court said the ban on foreign election spending was also in line with the 2010 Supreme Court decision in Citizens United v. FEC, 130 S. Ct. 876 (2010).
On January 9, the U.S. Supreme Court summarily affirmed the three-judge court’s decision to grant the Commission's motion to dismiss and to deny plaintiffs' motion for summary judgment.
Source: FEC Record -- December 2010 [PDF]; September 2011 [PDF].
On August 3, 1988, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the FEC's July 26 decision to certify public funds for the general election campaign of Democratic Presidential nominee Michael S. Dukakis and his Vice Presidential running mate Lloyd M. Bentsen.
The petitioners, Congressman Beau Boulter, the Republican Senatorial candidate from Texas, and the National Republican Senatorial Committee, a national committee of the Republican party, had submitted their petition to the appeals court after the FEC had dismissed their request to deny public funding to the Democratic Presidential ticket. In its expedited review of the petition, the court decided to dismiss as moot the petitioners' emergency motion for a stay of the certification because, on July 27, the U.S. Treasury had disbursed the public funds to the Democratic Presidential and Vice Presidential nominees. Nor did the court grant petitioners' request for an emergency injunction barring the Democratic ticket from expending the grant. The court held that "petitioners have failed to carry the 'burden of showing that exercise of the court's extraordinary injunctive powers is warranted.'" Cuomo v. Nuclear Regulatory Commission, 722 F.2d 972, 974 (D.C. Cir. 1985).
Finally, the court summarily affirmed the agency's certification of funds to the Democratic ticket. The appeals court noted that its standard for reviewing the FEC's decision was whether the FEC's action was "arbitrary, capricious or contrary to law." See In re Carter-Mondale, 642 F.2d at 542. Based on this standard, the court concluded that "petitioners' allegations are insufficient on their face to warrant a revocation of the certification."
Source: FEC Record -- September 1988, p. 7.
Boulter v. FEC, No. 88-1541 (D.C. Cir. 1988) (unpublished order).
On April 4, 1995, the U.S. District Court for the District of Columbia granted defendant's motion for summary judgment. This decision sustains the Commission's dismissal of plaintiffs' administrative complaint.
The origins of this case are rooted in the 1988 Presidential contest between Republican candidate George Bush and Democratic candidate Michael Dukakis. In the course of the Presidential race, the National Security Political Action Committee (NSPAC) financed the production and airing of the "Willie Horton" ad. This ad attacked the Democratic candidate by blaming then Massachusetts Governor Michael Dukakis for the violent crimes committed by a convict while on furlough from a state prison.
Plaintiffs filed an administrative complaint with the FEC in May 1990, alleging that the NSPAC coordinated the production and airing of the Willie Horton ad with the Bush campaign. Under the Federal Election Campaign Act (the Act), a candidate running in a Presidential general election who accepts public funding may not accept contributions. The Bush campaign accepted public funding. If, as plaintiffs claimed, the Horton ad had been coordinated, then it would have been an in-kind contribution, in violation of 26 U.S.C. §9003(b)(2). The complaint thus hinged on the issue of whether the Horton ad was a coordinated in-kind contribution, and therefore illegal, or a permissible independent expenditure as defined under 2 U.S.C. §431(17).1
After examining the complaint, the Commission found reason to believe that the Bush campaign and the NSPAC had violated the Act, but after a limited investigation into the matter, the Commission deemed the evidence inconclusive and decided to take no further action on the matter. Plaintiffs' complaint was subsequently dismissed.
This led plaintiffs to file this suit in January 1992, claiming that the FEC had abused its discretion in not conducting a comprehensive investigation and had violated the Act by dismissing plaintiffs' complaint. Plaintiffs noted that among the FEC investigation's findings were a record of a June 1988 telephone conversation between the Bush campaign's chief media advisor and a NSPAC media consultant, and documentation showing that a media technician worked for both NSPAC and the Bush campaign. Plaintiffs contended that these findings were proof of coordination.
In addressing plaintiffs' challenge to the Commission's decision to limit the investigation into their complaint, the court saw no reason to depart from the general policy of giving broad deference to agency prosecutorial decisions.
The court held that it could set aside FEC statutory interpretations as "impermissible" only if they have no reasonable basis. The court concluded that the factual conclusions underpinning the Commission's decision were "sufficiently reasonable" to warrant the court's deference.
For instance, in dismissing the complaint, the Commission concluded that the inference of coordination created by the telephone call was rebutted by other findings. With regard to the media technician's dual employment, the Commission reasonably concluded that he performed technical tasks for the two committees and had no role in substantive or strategic decisions.
1 An independent expenditure is an expenditure made without any coordination with a candidate's campaign for a communication which expressly advocates the election or defeat of a clearly identified candidate for federal office
Source: FEC Record -- June 1995, p. 12.
Branstool v. FEC, No. 92-0284 (D.D.C. Apr. 4, 1995).
This suit, filed by the National Lumber and Building Dealers Association and the National Restaurant Association (trade associations) and by Bread Political Action Committee, Restaurateurs Political Action Committee and Lumber Dealers Political Action Committee (separate segregated funds of trade associations), challenged the constitutionality of 2 U.S.C. §441b(b)(4)(D). (Civil Action No. 77-C-947.) This provision of the election law restricts solicitations by a trade association or its separate segregated fund to the stockholders, executive and administrative personnel (and their families) of member corporations which have given prior approval for such solicitations to occur, and limits member corporations to approval of one trade association per calendar year.
On April 5, 1977, plaintiffs asked the U.S. District Court for the Northern District of Illinois to enjoin the FEC from enforcing 441b(b)(4)(D) or, in the alternative, to certify constitutional questions to the appeals court, pursuant to 2 U.S.C. §437h. (Section 437h allows for expedited handling of constitutional challenges to the Act and a right of direct appeal to the Supreme Court.)
The district court ruled in September 1977 that plaintiffs lacked standing to bring suit under the Act's expedited review procedures. The court held that only the following types of plaintiffs had standing to bring suit under 2 U.S.C. §437h(a): the national committee of a political party, individuals eligible to vote in Presidential elections and the FEC.
On January 12, 1979, the U.S. Court of Appeals for the Seventh Circuit, sitting en banc, overturned the district court's decision in response to an interlocutory appeal filed by plaintiffs. The appeals court ruled that plaintiffs did have standing to bring suit under the expedited review procedures. It remanded the case to the district court for further fact finding and certification of the constitutional questions. These constitutional challenges were then certified to the appeals court for its decision:
As to the issue of plaintiffs' standing to bring suit under 2 U.S.C. §437h(a), the appeals court declined to overrule its earlier decision that Section 437h(a) did not limit parties who may utilize the expedited review procedures.
As to constitutional challenges brought by plaintiffs, the court rejected their claim that Section 441b (b)(4)(D) infringed on their First Amendment rights by requiring that plaintiffs obtain the prior approval of a member corporation to solicit the corporation's stockholders, executive and administrative personnel and their families. The court found that there had been no showing that this restriction on trade association solicitations "...has had or could have any prior restraining effect whatsoever on the free flow of political information and opinion by trade associations or their political action committees." The court noted that plaintiffs were "...free to solicit any individual...to join their trade association." Moreover, once he or she became a member of the association, the individual could "...be solicited for contributions without limit under §441b (b)(4)(D)." Thus, the court concluded that the challenged provision was "...a very narrowly drawn aspect of a statutory scheme carefully designed to balance a compelling governmental interest [i.e., the prevention of the appearance or actuality of corruption in federal elections caused by large contributions] and jealously guarded First Amendment freedoms."
The court also rejected plaintiffs' claim that §441b(b)(4)(D) unconstitutionally discriminated against trade associations. The court found the exact opposite to be true and concluded that plaintiffs' argument was "...largely premised...on a misreading of the statute." Specifically the court noted that, although trade associations may not solicit contributions from a member corporation's employees without the corporation's prior approval, trade associations are granted more avenues for solicitation than are corporations. "Incorporated trade associations, because they are corporations, have precisely the same solicitation rights under paragraphs (A) and (B) [of 2 U.S.C. §441b(b)(4)] as do others corporations.... Moreover, trade associations are also membership organizations or corporations without capital stock and are therefore provided precisely the same solicitation rights as they have under paragraph (C) [i.e., solicitation of their individual members].... Finally, trade associations are provided under paragraph (D) with an additional group of potential solicitees [i.e., the stockholders, executive and administrative employees of corporate members and their families]."
The court also rejected plaintiffs' claims that in failing to define the terms "solicitation" and "trade association," §441b(b)(4)(D) abridged their First and Fifth Amendment rights. The court found that the term "solicitation" had a widely accepted meaning and that rules and statutes using the term had been uniformly upheld. The court further held that the Commission's advisory opinions, which had ruled on whether certain communications constituted solicitations under the Act, were not inconsistent. Rather, the opinions (AO's 1979-13 and 1979-66) had ruled on different types of communications by corporate and trade association separate segregated funds. Similarly, the court noted that the FEC had adhered to the "plain and ordinary meaning of trade association" as defined by Commission regulations at 11 CFR 114.8(a) and (g)(1).
In an opinion issued on March 8, 1982, in Bread Political Action Committee v. FEC (Supreme Court No. 80-1481) the Supreme Court ruled that plaintiffs lacked standing to bring suit under 2 U.S.C. §437h, which allows for expedited handling of constitutional challenges to the Act and a right of direct appeal to the Supreme Court. The Court remanded the suit to the appeals court without ruling on the plaintiffs' constitutional challenges. The Court's ruling overturned a decision by the appeals court for the Seventh Circuit while upholding an earlier decision by the Northern Illinois district court.
The Court ruled that plaintiffs lacked standing to bring suit under Section 437h because they did not fall within the categories of qualified plaintiffs enumerated in the provision. The Court held that "the plain language of §437h controls its construction, at least in the absence of 'clear evidence,'...of a 'clearly expressed legislative intention to the contrary....'" The Court concluded that "the appellants, however, fall far short of providing 'clear evidence' of a 'clearly expressed legislative intention' that the unique expedited procedures of §437h be afforded to parties other than those belonging to the three listed categories."
Nor did the Court find merit to plaintiffs' argument that, since Congress had expressly extended the judicial review procedures of Section 437h to cover all constitutional questions about any provision of the Act, Congress had also intended to broaden the categories of plaintiffs eligible to file suit under §437h.
Moreover, the Court refuted plaintiffs' contention that, while Congress had specified three eligible classes of plaintiffs to remove any doubts about their standing to bring suit, it had not intended to exclude other classes of plaintiffs. To the contrary, the Court concluded that Congress "went to the trouble of specifying that only two precisely defined types of artificial entity and one class of natural persons could bring these actions." The Court noted, however, that its ruling did not affect the right of parties involved in FEC enforcement actions to challenge, under 2 U.S.C. §437g, the constitutionality of any provision of the Act and to be afforded expedited review.
Source: FEC Record -- May 1981, p. 6; and May
1982, p. 6.
Bread Political Action Committee v. FEC, 591 F.2d 29 (7th Cir. 1979),
635 F.2d 621 (7th Cir. 1980) (en banc), rev'd, 455 U.S. 577, (1982), on remand,
678 F.2d 46 (7th Cir. 1982) (en banc) (remanding to District Court).
On November 20, 1981, the U.S. Court of Appeals for the District of Columbia Circuit issued a judgment affirming an earlier decision by the district court in Archie E. Brown v. FEC (Civil Action No. 80-2108). The district court's decision had upheld the FEC's dismissal of the complaint plaintiff had filed against the International Brotherhood of Teamsters, Chauffers, and Warehousemen and Helpers of America (the Teamsters). In his complaint, plaintiff alleged that Local 745 of the Teamsters had violated 2 U.S.C. §441b(b)(3)(A) by attempting to coerce him to contribute to DRIVE (the Democratic Republican Independent Voter Education), the separate segregated fund of the Teamsters. Plaintiff alleged that he was subsequently denied membership in Local 745 because he had refused to contribute to, or join, DRIVE. Plaintiff claimed that the FEC's dismissal of his complaint was contrary to law.
In upholding the FEC's determination, the district court said that the General Counsel's Report to the Commission indicated that "...plaintiff's membership in Local 745 was denied because his union dues were unpaid, not because he refused to contribute to DRIVE." Moreover, the district court held that the General Counsel's Report, by itself, was a sufficient record for the court's review of the Commission's determination in the complaint. In appealing the district court's decision, plaintiff contended, however, that the General Counsel's Report alone, without a separate statement of the Commission's reasons for dismissing the complaint, afforded "...an inadequate basis for informed judicial review."
In its Memorandum affirming the district court's decision, the appeals court found no merit in plaintiff's assertion. The appeals court cited the Supreme Court's decision in FEC v. Democratic Senatorial Campaign Committee, which held that the General Counsel's Report constituted sufficient grounds to dismiss an administrative complaint-even if the Report were not expressly adopted by the Commission.
The appeals court concluded that the General Counsel's Report to the Commission recommending dismissal of Brown's complaint was sufficiently reasonable, "...particularly when considered in the context of the large discretion the Commission has to determine whether or not a civil violation of the Act has occurred."
Source: FEC Record -- January 1982, p. 6.
Brown v. FEC (D.D.C. July 17, 1980) (unpublished opinion), aff'd
mem., 672 F.2d 893 (D.C. Cir. 1981), cert. denied, 457 U.S. 1111 (1982).
On April 18, 1996, the U.S. Court of Appeals for the District of Columbia Circuit granted a joint stipulation to dismiss this case; the parties settled this matter out of court.
Patrick J. Buchanan and his publicly-funded 1992 Presidential campaign committee had petitioned this court to review the FEC's final repayment determination. See the November 1995 Record, page 8, for a summary of the suit filed by plaintiffs. See the October 1995 Record, page 9, for the FEC's final repayment determination.
The Buchanan committee made most of the repayment immediately from an escrow fund previously established, and agreed to pay the remainder of the amount ordered by the FEC, with full interest, within 6 months.
Source: FEC Record -- June
1996 [PDF].
On September 14, 2000, the U.S. District Court for the District of Columbia granted the FEC's motion for summary judgment and denied the plaintiffs' motion for summary judgment in this case. The district court ruled that, although the plaintiffs had standing to challenge the FEC's dismissal of their administrative complaint against the Commission on Presidential Debates, they failed to show that the FEC's interpretation of the debate regulations at 11 CFR 110.13 was arbitrary and capricious.
The plaintiffs appealed, and were granted an expedited appeal concerning the single issue of whether a debate must include all nominees who have qualified for public funding in order to comply with the "objective criteria" standard set out in the Commission's debate regulations. The U.S. Court of Appeals for the District of Columbia Circuit affirmed the district court's order on this issue on September 29, 2000.
On November 30, 2000, the U.S. Court of Appeals for the District of Columbia Circuit granted the motion by Buchanan et al. to dismiss their appeal. The FEC did not oppose the motion.
Source: FEC Record -- November
2000 [PDF]; and January
2001 [PDF].
On January 30, 1976, the Supreme Court issued a per curiam opinion in Buckley v. Valeo, the landmark case involving the constitutionality of the Federal Election Campaign Act of 1971 (FECA), as amended in 1974, and the Presidential Election Campaign Fund Act.
The Court upheld the constitutionality of certain provisions of the election law, including:
The Court declared other provisions of the FECA to be unconstitutional, in particular:
On January 2, 1975, the suit was filed in the U.S. District Court for the District of Columbia by Senator James L. Buckley of New York, Eugene McCarthy, Presidential candidate and former Senator from Minnesota, and several others.1 The defendants included Francis R. Valeo, Secretary of the Senate and Ex officio member of the newly formed Federal Election Commission, and the Commission itself.2 The plaintiffs charged that the FECA, under which the Commission was formed, and the Presidential Election Campaign Fund Act were unconstitutional on a number of grounds.
On January 24, 1975, pursuant to Section 437h(a) of the FECA, the district court certified the constitutional questions in the case to the U.S. Court of Appeals for the District of Columbia Circuit. On August 15, 1976, the appeals court rendered a decision upholding almost all of the substantive provisions of the FECA with respect to contributions, expenditures and disclosure. The court also sustained the constitutionality of the method of appointing the Commission.
On September 19, 1975, the plaintiffs filed an appeal with the Supreme Court, which reached its decision on January 30, 1976.
The appellants had argued that the FECA's limitations on the use of money for political purposes were in violation of First Amendment protections for free expression, since no significant political expression could be made without the expenditure of money. The Court concurred in part with the appellants' claim, finding that the restrictions on political contributions and expenditures "necessarily reduce[d] the quantity of expression by restricting the number of issues discussed, the depth of the exploration, and the size of the audience reached. This is because virtually every means of communicating ideas in today's mass society requires the expenditure of money." The Court then determined that such restrictions on political speech could only be justified by an overriding governmental interest.
The Court upheld the contribution limitations in the FECA,3 stating that they constituted one of the election law's "primary weapons against the reality or appearance of improper influence stemming from the dependence of candidates on large campaign contributions" (the other weapon being the disclosure requirements). Although it appeared that the contribution limitations did restrict a particular kind of political speech, the Court concluded that they "serve[d] the basic governmental interest in safeguarding the integrity of the electoral process without directly impinging upon the rights of individual citizens and candidates to engage in political debate and discussion."
The Court found no evidence to support the appellants' allegations that the contribution limitations discriminated against non incumbent candidates. With respect to the appellants' charge that the contribution limitations discriminated against minor and third parties and their candidates, the court noted that the FECA, "on its face," treated all candidates and parties equally. Furthermore, the Court said there was a legitimate argument that the limitations, in fact, appeared to benefit minor parties, since major parties and candidates received a greater proportion of their funding from large contributions.
The appellants had additionally challenged the limitations on certain expenses incurred by volunteers working on behalf of candidates or political committees. While the FECA placed no limits on most unreimbursed volunteer activities, it did limit unreimbursed travel expenses and certain costs of organizing campaign functions. Beyond these limits the costs were considered in-kind contributions (§431(8)(B)(i, ii, and iv)). The Court upheld the provisions for limited spending by volunteers, stating that they were a "constitutionally acceptable accommodation of Congress' valid interest in encouraging citizen participation in political campaigns while continuing to guard against the corrupting potential of large financial contributions to candidates."
In contrast to its ruling on contribution limitations, the Court found that the expenditure ceiling in the FECA imposed "direct and substantial restraints on the quantity of political speech" and invalidated three expenditure limitations as violations of the First Amendment.
The overall limitations on expenditures by federal candidates and their committees were struck down by the Court. The appellees had argued that these limitations (formerly 18 U.S.C. §608(c)) served a public interest by equalizing the financial resources of candidates, but the Court determined that the amount of money spent in particular campaigns must necessarily vary, depending on the "size and intensity" of the support for individual candidates. Furthermore, expenditure ceilings "might serve not to equalize the opportunities of all candidates but to handicap a candidate who lacked substantial name recognition or exposure of his views before the start of the campaign." The appellees had also claimed that the expenditure limitations would reduce the overall cost of campaigning, and they cited statistics demonstrating the dramatic increases in campaign spending that had occurred nationwide in preceding years. The Court decided, however, that "[t]he First Amendment denies government the power to determine that spending to promote one's political views is wasteful, excessive or unwise." The Court ruled, therefore, that the limitations on overall expenditures were unconstitutional.
The appellants had charged that the $1,000 per candidate annual limitation on independent expenditures-i.e., expenditures made by persons "relative to a clearly identified candidate...advocating the election or defeat of such candidate" (formerly 18 U.S.C. §608(e)(1))-was both unconstitutionally vague and an excessive hindrance on First Amendment rights of free expression. The Court resolved the vagueness question by reading "relative to" to mean "advocating the election or defeat of such candidate" in the same subsection, and by construing the provision to apply only to "expenditures for communications that in express terms advocate[d] the election or defeat of a clearly identified candidate for Federal office." While the Court of Appeals had accepted the appellees' argument that the provision was necessary to prevent circumvention of the contribution limitations, the Supreme Court found that the "governmental interest in preventing corruption and the appearance of corruption"-which justified the contribution limitations-was not sufficient to warrant the limitation on independent expenditures. If expenditure ceilings were to apply only to situations of express advocacy, the limitation would be easily circumvented by "expenditures that skirted the restriction on express advocacy of election or defeat but nevertheless benefited" a candidate. Moreover, the Court pointed out, abuses that might be generated by large independent expenditures did not appear to pose the same threat of corruption that large contributions posed since the "absence of prearrangement or coordination of the expenditure with the candidate or his agent alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidates." Thus finding that no substantial governmental interest was served by the limitation on independent expenditures, the Court concluded that such expenditures were protected as political discussion and expression under the First Amendment.
Regarding the limitations on a candidate's use of personal funds, the Court found that the provisions unconstitutionally interfered with the protected and valued right of an individual "to engage in the discussion of public issues and vigorously and tirelessly to advocate his own election." The Court continued that no governmental interest supported the limit on such personal funds. To the contrary, the Court noted that "the use of personal funds reduces a candidate's dependence on outside contributions and thereby counteracts the coercive pressures and attendant risks of abuse to which the contribution limitations are directed."
Finally, the Court added that its invalidation of the expenditure limitations was severable from Subtitle H, which provides for the public financing of Presidential elections. The limitations on expenditures by Presidential candidates who received public funds was legitimate since the acceptance of public funds was voluntary. Therefore, with regard to publicly financed elections, the consequent societal and governmental benefits weighed more heavily in favor of expenditure limitations.
The appellants had sought a blanket exemption from the public disclosure provisions for all minor parties, claiming that contributors to minor parties, unlike contributors to the Republican and Democratic Parties, were more vulnerable to threats, harassment and reprisal as a result of the public disclosure of their names. The appellants claimed the provisions constituted a violation of their rights to free association under the First Amendment and to equal protection under the Fifth Amendment. Recognizing that "compelled disclosure, in itself, can seriously infringe on privacy of association and belief guaranteed by the First Amendment," the Court nevertheless ruled that the Act's reporting and disclosure provisions were justified by governmental interest in (1) helping voters to evaluate candidates by informing them about the sources and uses of campaign funds, (2) deterring corruption and the appearance of it by making public the names of major contributors, and (3) providing information necessary to detect violations of the law.
The Court acknowledged the potential disadvantage for minor parties that could result from the public disclosure provisions of the law, but it noted that none of the minor parties that were appellants in this suit had demonstrated that their contributors had been injured by the disclosure provisions. Therefore, the Court ruled a blanket exemption unnecessary. The Court left open the possibility, however, that minor and new parties might successfully claim an exemption from FECA disclosure requirements by showing proof of injury.
The Court upheld the constitutionality of Subtitle H of the Internal Revenue Code, which established the public financing of Presidential campaigns through a voluntary income tax checkoff. The Court determined that the appellants' claim that Congress violated the First Amendment in not allowing taxpayers to earmark their $1.00 checkoff to any candidate or party of their choice was not sufficient to invalidate the law. In the Court's opinion the checkoff constituted an appropriation by Congress, and as such it did not require outright taxpayer approval. Furthermore, "every appropriation made by Congress uses public money in a manner to which some taxpayers object."
The appellants had also argued, by analogy, that just as Congress may not subsidize or burden religion under the freedom of religion clause of the First Amendment, the freedom of speech clause prohibits it from financing particular political campaigns. The Court ruled the analogy inapplicable, however, finding that Subtitle H furthered rather than abridged political speech because its purpose was "to facilitate and enlarge public discussion and participation in the electoral process."
The appellants further claimed that the public funding provisions violated the Fifth Amendment's due process clause, arguing that the eligibility requirements for public funds were comparable to unconstitutionally burdensome ballot access laws. The Court found no merit in the argument; the denial of public funds to candidates did "not prevent any candidate from getting on the ballot or prevent any voter from casting a vote for the candidate of his choice."
"In addition,"" the Court said, "the limits on contributions necessarily increase the burden of fundraising, and Congress properly regarded public financing as an appropriate means of relieving major-party Presidential candidates from the rigors of soliciting private contributions."
The Court also rejected appellants' contention that the public financing provisions discriminated against minor and new party candidates, in violation of the Fifth Amendment. Specifically, the appellants had argued that Subtitle H favored major parties and their nominees by granting them full public funding for their conventions and general election campaigns, while minor and new parties and their candidates received only partial public funding according to a formula based on percentage of votes received.
Similarly, the appellants challenged the provision that restricted the payment of primary matching funds to only Presidential candidates who met certain requirements. These requirements included a provision for payments to candidates who had raised a minimum amount of contributions in at least twenty states (26 U.S.C. §9033(b)(3-4)). The Court found that such requirements for receiving public funds were reasonable; rather than preventing small parties from receiving public financing, the law only required them to demonstrate that they had a minimum level of broad-based support in order to qualify for federal subsidies. The Court concluded, "Any risk of harm to minority interests...cannot overcome the force of the governmental interests against the use of public money to foster frivolous candidacies, create a system of splintered parties, and encourage unrestrained factionalism." Furthermore, the Court noted that the advantage of receiving public financing was balanced by the requirement to adhere to strict expenditure limitations. As mentioned above, the Court upheld the constitutionality of expenditure limits as they applied to candidates and parties receiving public funds.
The appellants had challenged the method of appointing the six members of the Commission, as specified in the FECA, which provided that the President, the Speaker of the House of Representatives and the President pro tempore of the Senate each appoint two members. Arguing that the FEC's powers were executive rather than legislative, the appellants contended that the Congressional appointment of Commissioners violated the separation of powers principle embodied in the appointments clause of Article II of the Constitution. The Supreme Court determined that the appointments clause permitted only the President, with the advice and consent of the Senate, to appoint officers to exercise such executive authority as the Commission was granted. The Court ruled that the Commission, as it was then constituted, could not exercise its authority to enforce the law, conduct civil litigation, issue advisory opinions or determine eligibility for public funds, because these functions could not properly be regarded as legislative. The Commission's informational and auditing powers, however, were found to be legislative in nature, and therefore constitutional.
The Court accorded de facto validity to all acts of the Commission prior to the ruling and granted a 30-day stay of judgment-during which time the agency could exercise all of the authorities given to it under the FECA-so that Congress could reconstitute the Commission according to the provisions of Article II of the Constitution. The initial 30-day stay expired on February 29, 1976, but was extended to March 22. On March 23 the FEC's executive powers were suspended, and they remained suspended until May 21, when the Commissioners were reappointed by the President pursuant to the FECA Amendments of 1976, Pub. L. No. 94-283 (May 5, 1976).
1 Along with Buckley and McCarthy, the appellants
in this suit included Congressman William A. Steiger of Wisconsin, Mr. Stewart
Rawlings Mott (a major contributor to various political committees), the Committee
for a Constitutional Presidency-McCarthy '76, the Conservative Party of the
State of New York, the New York Civil Liberties Union, the American Conservative
Union, Human Events, Inc., Conservative Victory Fund, the Mississippi Republican
Party and the Libertarian Party.
2 The other appellees included the Clerk of the House
of Representatives W. Pat Jennings, the Comptroller General Elmer B. Staats,
and the Attorney General.
3 The contribution limitations in the FECA included
a $1,000 per candidate, per election, ceiling on contributions by individuals
and political committees, a $5,000 per candidate, per election, ceiling on
contributions by committees which qualify as multicandidate committees, a
$25,000 annual ceiling for all contributions by any individual, and limitations
on contributions to political party committees.
Source: Buckley v. Valeo, 387 F. Supp. 135 (D.D.C.
1975) (application for three judge district court denied: constitutional questions
certified to the Court of Appeals), 519 F.2d 817 (D.C. Cir. 1975) (per curiam)
(motion to remand for the purpose of certifying constitutional questions granted),
519 F.2d 821 (D.C. Cir. 1975) (per curiam) (certified questions answered),
401 F. Supp. 1235 (D.D.C. 1975) (relevant portions of the opinion of the D.C.
Cir. adopted), aff'd in part, rev'd in part, 424 U.S. 1 (1976), on remand,
532 F.2d 187 (1976 D.C. Cir.) (en banc), (modifying answers to constitutional
questions certified by the district court).
On September 1, 2004, Bush-Cheney '04, Inc. (BC'04) asked the U.S. District Court for the District of Columbia to find that the Commission acted contrary to law when it failed to act on the plaintiff's administrative complaints dated March 10, 2004, and March 31, 2004. The administrative complaints alleged that America Coming Together (ACT), The Media Fund, America Votes and other organizations created under 26 U.S.C. §527 were raising and spending money to influence the 2004 Presidential election in violation of the Federal Election Campaign Act (the Act).
The Act sets forth enforcement procedures governing the manner in which complaints must be handled. Among other provisions in 2 U.S.C. §437g, a complainant may file suit in federal district court seeking judicial review of "a failure of the Commission to act on such complaint during the 120-day period beginning on the date the complaint is filed[.]" 2 U.S.C. §437g(a)(8)(A). While enforcement investigations conducted by the FEC are confidential, the plaintiff asserts that no public action has been taken in response to the administrative complaints.
On March 10, 2004, BC '04 filed an administrative complaint with the FEC alleging that an organization created under 26 U.S.C. §527 called "The Media Fund" was illegally raising and spending money outside the prohibitions, limitations and disclosure requirements of the Act with the purpose of influencing the 2004 Presidential election. On March 31, 2004, BC '04 filed a second complaint alleging that ACT, The Media Fund, America Votes and other organizations were engaging in ongoing violations of the Act by raising and spending money outside of the prohibitions, limitations and disclosure requirements of the Act and illegally coordinating their activities with the Democratic Party and the presidential campaign of John Kerry.
According to the court complaint, the FEC did not act on the plaintiff's administrative complaints for more than 120 days from filing. BC '04 also filed a motion for a preliminary injunction, declaring that the FEC's failure to act on the aforementioned complaints is contrary to law. The plaintiff requested an expedited hearing on the motion, and asked the court to issue an injunction ordering the Commission to take action regarding the complaints within 30 days.
On September 15, 2004, the district court held a hearing on the plaintiff's motion for a preliminary injunction, and denied the motion.
Source: FEC Record -- October
2004 [PDF].
On March 29, 2006, the U.S. District Court for the District of Columbia issued a ruling in Shays and Meehan (04-1597)/Bush–Cheney ’04, Inc. v. FEC that granted in part and denied in part the plaintiffs’ motion for summary judgment.
The Federal Election Campaign Act (the Act) defines a "political committee" as "any club, committee, association or other group of persons" that receives contributions or makes expenditures aggregating in excess of $1,000 during a calendar year. 2 U.S.C. §431(4); see also 11 CFR 100.5(a). Under the Act, political committees must register and report with the FEC and are limited in the sources and amounts of contributions they may make and receive. 2 U.S.C. §§433, 434, 441a(a)(1)-(2), 441b(a) and 441f. The Act defines "contribution" and "expenditure" in terms of funds raised or spent "for the purpose of influencing any election for federal office." 11 CFR 100.52(a) and 100.111(a).
On March 11, 2004, the Commission issued a Notice of Proposed Rulemaking asking for comments regarding possible changes to the definition of “political committee” that would require certain groups not currently registered with the FEC to do so. In November 2004, the Commission issued final rules that require organizations to treat more of their receipts as contributions and to use a greater percentage of federal funds for certain allocable expenses. While these rules could trigger registration for some groups, the Commission did not directly modify its definition of “political committee.” Instead the Commission decided that it would continue to construe the definition of “political committee” on a case-by-case basis.
The plaintiffs, Christopher Shays, Martin Meehan and Bush-Cheney ’04, Inc., argued that the Commission’s 2004 decision to continue deciding case-by-case whether a group is a “political committee,” as defined in the Federal Election Campaign Act, was arbitrary and capricious. They also argued that the Commission should be compelled to issue a new rule.
On September 17, 2004, Bush-Cheney '04 filed a complaint in the U.S. District Court for the District of Columbia. The complaint challenges the FEC's alleged failure to issue regulations interpreting the phrase "for the purpose of influencing a federal election" which appears in the statutory definitions of "contribution" and "expenditure." 2 U.S.C. §431(8)(A)(i) and §431(9)(A)(i). The plaintiff asked the court to require the Commission to commence proceedings to promulgate such regulations and, by extension, to address whether certain so-called 527 organizations are "political committees" under the Act.
The plaintiff alleged that in McConnell v FEC the Supreme Court expanded the Act's "for the purpose of influencing" standard reach beyond "express advocacy." According to the plaintiff, the Commission failed to respond to the Court's decision by adopting any regulations or taking any other action in advisory opinions or enforcement matters setting forth clear standards for when entities organized under section 527 of the tax code are required to register as political committees.1
The plaintiff alleged that the Commission failed to address this issue through the rulemaking process. On March 11, 2004, the Commission published a Notice of Proposed Rulemaking suggesting revisions to the definition of political committee and other changes to the regulations, including proposals to address when 527 organizations become political committees under the Act. The plaintiff contended that the Commission subsequently concluded this rulemaking, on August 19, by "promulgating rules on two collateral matters" while it "refused to issue any rule addressing the central question that had prompted the rulemaking in the first place: the definition of a political committee and the requirement for Section 527 groups to register as political committees."
The plaintiff alleged that the Commission's failure to issue rules addressing the activities of 527 organizations is arbitrary and capricious, an abuse of discretion and not in accordance with law. The plaintiff asked the court to:
The district court rejected plaintiffs’ contention that selecting adjudication rather than rulemaking was an abuse of discretion. Nevertheless, the court ruled that the Commission had failed to articulate a reasoned basis for its decision to continue case-by-case determinations of political committee status. Although the Commission had explained that a rulemaking would be complex and potentially over-inclusive, the court noted that the Commission did not explain why case-by-case adjudication would solve these problems. Additionally, the Commission did not address how unregistered groups’ due process or First Amendment rights would be protected without a clear rule to rely upon. Lastly, the Commission did not address how the enforcement process would be timely enough to prove effective.
The court denied the plaintiffs motion to compel the FEC to promulgate a new rule. It remanded the case to the FEC, however, ruling that it must either provide further explanation and justification for its decision to review the political committee status of unregistered organizations on a case-by-case basis or issue a new rule.
1 Entities organized under 26 U.S.C. §527 are considered "political organizations," defined generally as a party, committee or association that is organized and operated primarily for the purpose of influencing the selection, nomination or appointment of any individual to any federal, state or local public office, or office in a political organization. 26 U.S.C. §527(e)(1) and (e)(2).
Source: FEC Record -- September 2004 [PDF]; November
2004 [PDF]; June 2006 [PDF].
On January 14, 1997, the U.S. Court of Appeals for the District of Columbia Circuit remanded this case to the FEC and asked it to explain why the Commission departed from precedent, or remedy that departure, when it required the Bush-Quayle '92 Primary Committee to repay $323,832 of the federal matching funds it received.
As required by law, the FEC, at the end of the 1992 election cycle, audited former President George Bush's 1992 campaign. The audit included the primary committee, the Bush-Quayle '92 General Committee and the legal and accounting arm of the general election committee, the Bush-Quayle '92 Compliance Committee. The latter two committees are party to this lawsuit.
During the 1992 election, the primary committee received nearly $10.7 million in public funds through the Matching Payment Act. Once Mr. Bush and his running mate, Dan Quayle, had received the Republican nomination for President and Vice President, the general committee received $55.2 million in public funds.
The Matching Payment Act provides partial public funding-paid for through the $3 check-off on federal tax forms-to Presidential primary candidates who meet certain qualifications. Candidates who receive public funding must agree to limit expenditures to "qualified campaign expenses," i.e., those expenses that are incurred by the candidate in connection with his or her campaign for nomination and that do not violate state or federal law. 26 U.S.C. §9032(9)(A).
The Commission also must conduct an audit of every publicly funded campaign after it ends and require the committee to repay the U.S. Treasury for any nonqualified campaign expenses that were paid for with public funds. The Commission also can require a committee to repay any matching funds that it received in excess of what the law allows. 26 U.S.C. §9038(b)(1).
The FEC issued a final repayment determination to the primary committee on August 17, 1995, having determined that $409,123 in expenses incurred by the primary committee were not qualified primary campaign expenses because they had, in fact, been made for the benefit of the general election campaign as well.
The expenses in question included disbursements for direct mailings and political advertisements and for equipment and materials sent to the Bush campaign's national headquarters. All these disbursements took place before August 20, 1992 -the day Mr. Bush was nominated by his party to run for President. Concluding that expenses benefited both the primary and general campaigns, the Commission determined that half of the expenses should be assigned to the general election committee and the other half to the primary committee.
The FEC calculated the repayments as follows:
The Bush-Quayle committees challenged the FEC's final repayment determination in court, saying the Commission should have used a "bright-line" rule and allocated expenses based solely on whether they were incurred before the August 20 Presidential nomination or after the party's Presidential contender had been named.
The Commission had rejected this approach, arguing that whether an expenditure is a primary qualified expenditure depends on both its timing and nature. To qualify, the Commission had explained, the expense must be primarily in connection with the primary. The committees had argued that any connection to the primary campaign would qualify an expense fully as a qualified primary campaign expenditure.
Finding that arguments from both the agency and the committees were defensible, the court upheld the FEC's interpretation, based on Chevron U.S.A. Inc. v. NRDC.1 That case requires that, where statutory language is ambiguous, courts must uphold the agency's interpretation so long as it is reasonable. The court added, however, that another committee objection to the Commission's decision merited further consideration.
The committees charged that the FEC had acted "arbitrarily and capriciously" because it had treated expenditures of the Bush-Quayle 1992 campaign differently than similar expenditures of the 1984 Reagan-Bush campaigns.
In the 1984 election, the committees said, the FEC had concluded that certain pre-nomination expenditures by the Reagan-Bush Primary Committee were primary expenses despite the fact that some benefited the general election campaign.
The FEC responded that the two cases were distinguishable from each other and thus were treated differently. It also said that in the Reagan audit, the FEC had not adopted a "bright line" test based on the date of the candidate's nomination.
The court found the FEC's response inadequate. Further, the court said: "An agency interpretation that would otherwise be permissible is, nevertheless, prohibited when the agency has failed to explain its departure from prior precedent."2
The court noted further that the FEC's determination was especially problematic given the fact that the agency had adopted new regulations two months before making its repayment determination concerning the Bush-Quayle campaign, but had not applied the approach embodied in those regulations to that determination. The court said that the new rules use a "bright-line" approach to determine whether expenses should be attributed to primary or general elections.
The court remanded the matter to the FEC either to justify its approach or to reconsider the repayment determination.
1 Chevron U.S.A. Inc. v. NRDC, 467 U.S.
837, 844 (1984).
2 See Interstate Quality Servs. Inc. v. RRB,
83 F. 3d 1463, 1465 (D.C. Cir. 1996); ANR Pipeline Co. v. FERC, 870
F. 2d 717, 723 (D.C. Cir. 1989); Greater Boston Tel. Corp. v. FCC,
444 F. 2d 841, 852 (D.C. Cir.), cert denied, 403 U.S. 923 (1971).
Source: FEC Record -- March
1997 [PDF].
Bush-Quayle '92 Primary Committee v. FEC, 104 F.3d 448 (D.C. Cir.
1997).
