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On June 29, 1990, the U.S. District Court for the District of Maine ruled that 11 CFR 114.4(b)(5)(i), which concerned the publication and public distribution of voter guides by corporations, was unauthorized by the Federal Election Campaign Act. In the court's view, the rule was invalid because it applied "issue advocacy" as a factor in determining whether a voter guide constituted a prohibited expenditure.
The court denied, however, a request from plaintiffs for injunctive relief to prevent the FEC and the U.S. Attorney General from taking enforcement action against plaintiffs' proposed 1990 publications.
On March 21, 1991, the U.S. Court of Appeals for the First Circuit affirmed the district court decision. On October 7, 1991, the U.S. Supreme Court denied the FEC's petition for a writ of certiorari.
The Maine Right to Life Committee, Inc. (MRLC), a nonprofit membership corporation, and Sandra Faucher, an MRLC board member, filed a similar suit in the same court in 1985, Faucher v. FEC, 708 F. Supp. 9 (D. Me. 1989). In that suit, MRLC and Ms. Faucher also challenged 11 CFR 114.4(b)(5), which permits corporations to prepare and distribute to the public nonpartisan voter guides consisting of questions posed to candidates on campaign issues and the candidates' responses. Anticipating that the proposed MRLC voter guide would not comply with the FEC's standards for nonpartisanship, plaintiffs asked the court to invalidate the regulation and issue an injunction preventing the FEC from enforcing the rule. On February 24, 1989, the court dismissed the suit on the ground that plaintiffs first needed to obtain an FEC advisory opinion on the legality of the proposed publication. Plaintiffs then sought an advisory opinion, which was issued on February 14, 1990 (AO 1989-28).
In AO 1989-28, the Commission concluded that MRLC could not use general treasury funds to distribute to the general public a newsletter containing a proposed voter guide.
First, because MRLC had a policy of accepting corporate contributions and had, in fact, accepted such contributions, it failed to qualify for the exemption granted to certain nonprofit corporations as a result of the Supreme Court's decision in Massachusetts Citizens for Life, Inc. (MCFL) v. FEC, 479 U.S. 238 (1986). In that decision, the Supreme Court ruled that the prohibition against corporate spending was unconstitutional as applied to nonprofit corporations that satisfied certain criteria.
Second, MRLC's proposed publication did not comply with the criteria for nonpartisan communications set forth at 11 CFR 114.4(b)(5). Specifically, the publication favored a pro-life position, although the rule states that a nonpartisan voter guide may not suggest or favor any position on the issues covered by the candidate survey. 11 CFR 114.4(b)(5)(i)(C) and (D). (For a more detailed summary of this opinion, see the March 1990 Record.)
On April 18, 1990, MRLC and Faucher filed a second suit, again challenging 11 CFR 114.4(b)(5) on the grounds that the regulation was beyond the authority of the FEC and was unconstitutionally vague. Plaintiffs also sought a declaratory judgment that MRLC's proposed 1990 publications were permissible under the Federal Election Campaign Act. They further sought an injunction prohibiting the FEC and the U.S. Attorney General from enforcing the voter guide regulations with regard to MRLC's proposed activity.
In its June 29 decision, the court found that 11 CFR 114.4(b)(5) was invalid because it focused on "issue advocacy." The court found that plaintiffs did not have standing to challenge other aspects of the rule and denied plaintiffs' request for declaratory and injunctive relief.
The court first cited 2 U.S.C. §441b as the statutory basis for the regulation in question. Section 441b prohibits "any corporation whatever" from making "a contribution or expenditure in connection with any [federal] election...." The court, however, found that the Supreme Court, in its MCFL decision, had limited the scope of the prohibition to expenditures that "expressly advocate" the election or defeat of a clearly identified candidate.
Under the regulation in question, 11 CFR 114.4(b)(5), a corporation may use its treasury funds to distribute a voter guide to the general public only if the guide is "nonpartisan." Included among the factors defining "nonpartisan" is that the wording does not favor any position, or express an editorial opinion, on the issues covered by the candidate survey. 11 CFR 114.4(b)(5)(i)(C) and (D). The court found that "[t]his approach ignores the clear language of FEC v. Massachusetts Citizens for Life that issue advocacy by a corporation cannot constitutionally be prohibited and that only express advocacy...is constitutionally within the statute's prohibition."
The court therefore concluded that the regulation, "with its focus on issue advocacy, is contrary to the statute as the United States Supreme Court has interpreted it and, therefore, beyond the power of the FEC."
The court ruled that MRLC did not have standing to challenge another aspect of the regulation: its failure to incorporate in explicit language the MCFL holding that the statute cannot constitutionally limit even express advocacy by a certain type of nonprofit membership corporation. MRLC lacked standing because it did not qualify as the type of corporation covered under the MCFL exemption. One of the essential factors for the exemption is that the nonprofit corporation must not receive contributions from business corporations and must have a policy against accepting such contributions. Although MRLC received "comparatively modest" amounts from corporate businesses, without an explicit policy against accepting such contributions, organizations like MRLC could serve as a conduit for corporate contributions.
The court also declined to address plaintiffs' challenge that 11 CFR 114.4(b)(5) does not explicitly incorporate the statutory "news story" exemption at 2 U.S.C. §431(9)(B)(i), which exempts news media costs from the definition of "expenditure." The court said it was "satisfied that the MRLC does not fit within this media exemption" and that therefore plaintiffs did not have standing to challenge the regulation on this score. (Another FEC regulation, 11 CFR 100.8(b)(2), parallels the statutory exemption.)
Finally, the court found that plaintiffs did not have standing to challenge 11 CFR 114.4(b)(5)(ii). Plaintiffs had asserted that the regulation was unconstitutionally vague in directing that certain publications "not favor one candidate or political party over another." Since that portion of the regulation affects only nonprofit, tax-exempt corporations that do not "support, endorse or oppose candidates or political parties," it does not apply to MRLC, which has established a separate segregated fund to engage in such activity. (In AO 1984-17, the Commission held that a tax-exempt corporation becomes an organization that supports, endorses or opposes candidates if it establishes a separate segregated fund that does so.)
Finding that the issue was not ripe for consideration, the district court denied plaintiffs' request for a declaratory judgment that their proposed 1990 voter guide was permissible under the Act and also denied their request for injunctive relief to prevent any enforcement action against their proposed 1990 publications. Plaintiffs said that the 1990 publications would be substantially similar to the 1988 publication, but the court was "not prepared to base declaratory and injunctive relief upon a 1988 publication, when minor changes could make that ruling wholly inapplicable to the actual 1990 publications."
The court stated: "In a context where words and nuances may be critical, I do not have the actual language and format of the publications. Given the FEC's enforcement role,...such [declaratory and injunctive] relief would unduly interfere with the overall ability of that agency to conduct investigations of alleged violations, might well delay it in gathering important information and would interfere with the congressional goal of resolving specific election disputes through conciliation....An injunction may in fact be wholly unnecessary. Finally, any hardship to the parties in finding this issue not ripe is minimal, given the plaintiffs' historical practice of publishing despite any uncertainty."
The plaintiffs did not appeal the district court's denial of the injunction or rejection of their constitutional challenges. The FEC, however, filed an appeal seeking reversal of the court's invalidation of section 114.4(b)(5)(i).
In affirming the district court's judgment invalidating the Commission's regulation, the U.S. Court of Appeals for the first circuit first examined the scope of the statutory prohibition, section 441b(a). (The provision prohibits "any corporation whatever" from making "a contribution or expenditure in connection with any [federal] election....") The court acknowledged that "the statute appears to allow for a very broad application," but stated that the Supreme Court in Buckley v. Valeo narrowed the scope of the prohibition: "The Supreme Court, recognizing that such broad language as found in section 441b(a) creates the potential for first amendment violations, sought to avoid future conflict by explicitly limiting the statute's prohibition to 'express advocacy.'" The court went on: "This express advocacy test was again embraced by the Supreme Court in the more recent case of Massachusetts Citizens for Life."
The court rejected the FEC's argument that the language in the Supreme Court's MCFL opinion which appeared to limit section 441b(a) was dictum and therefore not binding. The court also rejected the FEC's alternative argument that even if section 441b(a) were restricted to express advocacy expenditures, the FEC's voter guide rules were properly directed at advocacy of candidates and did not appreciably infringe upon a corporation's ability to advocate its position on issues. The court stated: "In our view, trying to discern when issue advocacy in a voter guide crosses the threshold and becomes express advocacy invites just the sort of constitutional questions the Court sought to avoid in adopting the bright-line express advocacy test in Buckley."
Source: FEC Record -- September 1990, p. 5;
May 1991, p. 8; and November 1991, p. 1.
Faucher v. FEC, 743 F. Supp. 64 (D.Me. 1990), aff'd, 928 F.2d 468
(1st Cir. 1991), cert. denied, 495 U.S. (October 7, 1991).
On February 26, 2010, the U.S. District Court for the Eastern District of Michigan granted the Commission’s motion for summary judgment in Fieger v. FEC and dismissed the case, finding that the court lacked subject-matter jurisdiction because Geoffrey Fieger (Plaintiff) was not the party who made the Freedom of Information Act (FOIA) requests at issue and so Plaintiff lacked standing to file suit.
In July of 2008, Michael Deszi, an attorney with the law firm Fieger, Fieger, Kenney, Johnson, and Giroux, PC, made a formal request to the Commission for records under FOIA. Mr. Deszi made a second request to the Commission in October 2008. These requests sought documents related to the Commission’s interactions with the Department of Justice and the White House.
The Commission provided responsive material, but the Plaintiff’s lawsuit asked the district court to order the Commission to do further searching and make further disclosures. The Commission filed a motion for summary judgment arguing that the Plaintiff lacked standing, that the agency had made a goodfaith effort to locate the requested items, and that the agency’s withholding of certain material was justified.
The district court held that it was not possible to discern from the two letters Mr. Deszi sent to the Commission that they were requests for documents by or on behalf of Mr. Fieger, since Mr. Fieger did not sign the letters, and nowhere in either letter was there a statement or suggestion that Mr. Deszi had made the requests on Fieger’s behalf.
The court held that a plaintiff cannot show injury-in-fact when he has not made a request for information on his own or explicitly through counsel. The court explained that a plaintiff who bases a FOIA lawsuit upon the request for information by another person does not satisfy the constitutional standing requirement, which requires that he must assert a violation of his own legal rights.
Although the Plaintiff argued that Mr. Deszi was acting as counsel in a representative capacity, the court held that federal FOIA jurisprudence leaves no doubt that a lawyer’s request for information must plainly spell out the representative capacity and the identity of the client before that client can bring a FOIA action in his or her own name and that when an attorney files a FOIA request on behalf of a client, the attorney is the one to whom courts have granted standing to sue.
Accordingly, the court granted the Commission’s motion for summary judgment and dismissed the case for lack of subject-matter jurisdiction.
Source: FEC Record -- April 2010 [PDF].
In October 1999, the parties in this case signed a settlement agreement, which did not constitute an admission of liability on the part of either party.
The plaintiffs, Simon C. Fireman and Aqua-Leisure Industries, Inc. (Aqua-Leisure), brought this action to recover from the government illegal campaign contributions they had made to the Dole for President Committee, which had disgorged the illegal contributions to the U.S. Treasury.
In 1996, Mr. Fireman pleaded guilty to making contributions in the names of others and making excessive contributions to two 1996 Presidential campaign committees of former Senator Bob Dole. The U.S. District Court for the District of Massachusetts ordered him to pay a $1 million fine and sentenced him to one year of probation. Upon learning that the contributions were likely impermissible, Mr. Dole's primary and compliance committees disgorged $69,000 to the U.S. Treasury.
Mr. Fireman alleged that FEC regulations mandate that a contribution that does not appear impermissible at the time it is made, but later is found to be from a prohibited source, be refunded to the contributor within 30 days. 11 CFR 103.3(b)(2). He also alleged that Commission advisory opinions concluding that a campaign committee could also refund impermissible contributions to the U.S. Treasury are beyond the Commission's authority and contrary to its regulations.
On October 26, the USA agreed to settle the matter in full by paying Mr. Fireman $69,000. The payment fully discharges the USA of all claims and demands made by Mr. Fireman. The parties entered into the agreement solely for the purpose of settling this action and all disputes between the parties involved. The agreement should not be cited or otherwise referred to, in any proceeding, whether judicial or administrative.
Source: FEC Record --
January 2000 [PDF].
On April 28, 1978, the Supreme Court issued an opinion in First National Bank of Boston v. Bellotti.1 The Court struck down a Massachusetts statute which severely restricted the participation of banks and corporations in state ballot measures.
First National Bank of Boston and four other banks and corporations (hereafter referred to collectively as First National) wanted to make expenditures for advertisements criticizing a proposed constitutional amendment which authorized the state legislature to impose a graduated income tax on individuals. The proposal was to be submitted to voters in a referendum in November 1976.
A Massachusetts law (chapter 55, 8 of the Massachusetts General Laws) prohibited contributions or expenditures by any bank or corporation for the purpose of "influencing or affecting the vote on any question submitted to the voters, other than one materially affecting any property, business or assets of the corporation." The law further specified that questions submitted to voters concerning the taxation of individuals did not materially affect the property, business or assets of the corporation.
Massachusetts Attorney General Francis X. Bellotti notified First National that the banks's expenditures would be illegal and that he intended to enforce 8 against it.
In April 1976 First National filed a suit challenging §8's constitutionality. The suit was subsequently submitted to the Supreme Judicial Court of the Commonwealth of Massachusetts . The plaintiffs claimed that the statute violated the First Amendment, the due process and equal protection clauses of the Fourteenth Amendment and similar provisions of the Massachusetts Constitution. They also claimed that §8, as it applied to their expenditures, was unconstitutional because the adoption of a graduated personal income tax would indeed materially affect their businesses in a number of specified ways.2
In September 1976 the Supreme Judicial Court of Massachusetts upheld the constitutionality of §8 and dismissed First National's claims. The decision was appealed to the United States Supreme Court.
The Federal Election Commission submitted an amicus curiae brief supporting the Massachusetts court's decision.
In ruling on First National Bank v. Bellotti, the Supreme Court first determined whether the case was moot. The suit reached the Court in November 1977, by which time the referendum of November 1976 had already resulted in the defeat of the proposed constitutional amendment. The Court denied that, since the controversy surrounding 8 was likely to occur again (because the law remained in force in Massachusetts and because the proposed constitutional amendment authorizing the tax had already been presented as a referendum four times in that state), the case was not moot.
On the merits, the Massachusetts court had asked whether corporations had First Amendment rights. "Instead," the Supreme Court observed, the lower court should have asked "whether 8 abridge[d] expression that the First Amendment was meant to protect." The Supreme Court maintained that it did.
Referring to the proposed advertisements, the Supreme Court said, "It is the type of speech indispensable to decision-making in a democracy, and this is no less true because the speech comes from a corporation rather than an individual. The inherent worth of the speech in terms of its capacity for informing the public does not depend on the identity of its source."
The Supreme Court also faulted the lower court's ruling that corporations could only claim a right to free speech on the subject of a referendum if they demonstrated that they would be materially affected by it.
The Court said that freedom of expression for communications businesses had been protected because such protection was necessary to insure the free flow of information and ideas to the public.
The Court also struck down the law's proscription against corporate discussion of ballot questions concerning personal income taxes. The Justices held that "the legislature is constitutionally disqualified from dictating the subjects about which persons may speak and the speakers who may address a public issue." The Court then considered whether the restrictions in 8 were nonetheless justified by a compelling state interest. Bellotti claimed that the restrictions on free speech by corporations were justified by the state's interest in: (1) "sustaining the active role of the individual citizen in the electoral process and thereby preventing diminution of the citizen's confidence in government" and (2) "protecting the rights of shareholders whose views differ from those expressed by management on behalf of the corporation."
The Court acknowledged that these interests were of the "highest importance," but it found that there was no evidence to corroborate such claims in this case.
Further, the Court maintained that "the risk of corruption perceived in cases involving candidate elections...simply is not present in a popular vote on a public issue."
As for the notion that the law's restrictions protected shareholders by preventing corporate expenditures to further views with which shareholders disagreed, the Court said this alleged purpose was belied by other facts. For example, in Massachusetts a corporation could legally lobby on behalf of its interests in the legislature even though the corporate viewpoint on any legislative question might differ from that of some of its shareholders. On the other hand, the law forbade the corporation from spending money to oppose or support a referendum, "even if its shareholders unanimously authorized the contribution or expenditure."
The Court deemed §8 to infringe on protected political speech without any compelling state interest supporting the regulation.
1 The other complainants in this suit were
New England Merchants National Bank, The Gillette Company, Digital Equipment
Corporation and Wyman-Gordon Company.
2 With regard to contributions and expenditures
made to influence the election of candidates, the Court observed: "Appellants
do not challenge the constitutionality of laws prohibiting or limiting corporate
contributions to political candidates or committees, or other means of influencing
candidate elections.... The overriding concern behind the enactment of statutes
such as the Federal Corrupt Practices Act [the forerunner of the Federal Election
Campaign Act] was the problem of corruption of elected representatives through
the creation of political debts.... The importance of the governmental interest
in preventing this occurrence has never been doubted. The case before us presents
no comparable problem, and our consideration of a corporation's right to speak
on issues of general public interest implies no comparable right in the quite
different context of participation in a political campaign for election to
public office. (Footnote 26)"
Source: First National Bank of Boston v. Attorney
General, 371 Mass. 773, 359 N.E.2d 1262 ( Mass. 1977), rev'd sub nom,
First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978).
On April 7, 1992, the U.S. District Court for the District of Columbia remanded this case to the FEC, ordering the agency "with all deliberate speed...[to] begin rulemaking proceedings designed to consider the means through which the FEC will ensure compliance with Title VI of the Civil Rights Act...." Title VI bars racial discrimination in any program receiving federal funds.1
On January 18, 1994, finding that Freedom Republicans lacked standing to bring suit, the U.S. Court of Appeals for the District of Columbia vacated the judgment of the district court and remanded the case with instructions to dismiss. On October 3, 1994, the Supreme Court refused to review that decision, and on December 7, 1994, the case was dismissed by the district court. (Civil Action No. 92-0153 (CRR).)
The plaintiffs in this case-The Freedom Republicans, Inc., and its President, Lugenia Gordon-alleged that the Republican Party's delegate selection process discriminated against African Americans in violation of Title VI. (Plaintiffs had made similar allegations in an administrative complaint, which FEC staff dismissed for lack of jurisdiction.) Claiming that the FEC was responsible for ensuring that the convention funding program complied with Title VI, plaintiffs asked the court to order the agency to conduct an investigation of the Republican Party's delegate selection procedures and to adopt Title VI regulations on delegate selection.
Plaintiffs additionally claimed that Title VI prohibited the FEC from providing any public funds to the Republican Party for its 1992 national convention because of the Party's alleged discriminatory delegate process. In moving for partial summary judgment, however, plaintiffs asked the court to consider only their request for a rulemaking.
The FEC asked the court to dismiss the case, arguing, among other things, that plaintiffs lacked standing to bring suit; that they had not exhausted administrative remedies; that Title VI did not apply to the public funding programs the FEC administers; and that the FEC did not have authority to issue delegate selection regulations under Title VI.
Finding that Title VI applies "to the FEC as well as to both major political parties and other recipients of federal funds," the court granted plaintiffs' motion for partial summary judgment and denied the FEC's motion to dismiss. The court held that the FEC was obligated to adopt rules that would ensure enforcement of Title VI in the delegate selection process.
The agency argued that plaintiffs lacked standing to bring suit. (The FEC contended that the jurisdiction of the courts can be invoked only when an individual plaintiff has suffered actual injury and that plaintiff Gordon made no such allegation. The FEC similarly argued that Freedom Republicans failed to allege injury to its members sufficient to invoke the court's jurisdiction.)
The court, however, held that Freedom Republicans had standing to sue on behalf of its members because the organization satisfied the three criteria set forth in Hunt v. Washington State Apple Advertising Commission.2 First, the individual members of the group could themselves have brought action under Title VI, which "entitles the Plaintiffs to a private right of action against the agency for dereliction of its enforcement duties." Second, the interests Freedom Republicans sought to protect were germane to its purpose, namely, "advancing the interests of African Americans through, and within, the Republican Party." and third, "the presence of individuals who have actually been denied delegate status on the basis of racial discrimination is not necessary" when an organization challenges an agency's interpretation of law, "such as the FEC's interpretation of the applicability of Title IV."
The FEC also contended that the plaintiffs had failed to pursue an administrative remedy still open to them: to petition the agency to issue a rulemaking on Title IV. The court pointed out that the administrative complaint plaintiffs had filed with the agency "put the FEC on sufficient notice of Plaintiffs' desire for a rulemaking."
The FEC contended that Title IV 3 was not applicable to the public funding of national nominating conventions because of First Amendment concerns (i.e., government control over the selection of delegates to the party conventions). The court, however, said that there were numerous cases in which First Amendment rights were overridden "by the need to prevent state-sponsored discrimination."
The court rejected the FEC's argument that convention funding does not qualify as "federal financial assistance" because Title VI applies only to programs where funding is provided to a nonfederal entity, which then provides the assistance to the ultimate beneficiaries. In the court's view, convention funding meets this test because the funds "enable the party to provide a platform for other, ultimate beneficiaries, such as Republican candidates and party members."
Responding to the FEC's argument that Congress never intended for the agency to have any control over the internal workings of the parties, the court said that there was nothing in the legislative history suggestive of Congress's desire to prevent the FEC from enforcing Title VI.
The U.S. Court of Appeals for the District of Columbia concluded that Freedom Republicans had no standing to bring suit against the Commission for the purpose of pressuring the Republican Party to change its delegate-selection rules. The court found that Freedom Republicans failed to meet two requirements for standing under Article III of the Constitution.
First, the organization failed to show that the allegedly discriminatory delegate-selection process was caused by the authorization of federal funding to the Republican convention. The court said that "the injury alleged in Freedom Republicans' complaint is not fairly traceable to any encouragement on the part of the government, but appears instead to be the result of decisions made by the Party without regard to funding implications." Second, Freedom Republicans failed to show that court action or action by the FEC would likely redress the injury. The court found no "adequate likelihood, as opposed to speculation, that the Party would choose to change its time-tested delegate-selection mechanism rather than forego the convention funding."
Accordingly, on January 18, 1994, the court vacated the judgment of the district court and remanded the case with instructions to dismiss.
On October 3, 1994, the Supreme Court denied Freedom Republicans' petition for a writ of certiorari. The district court dismissed the case on December 7, 1994.
1 In response to the FEC's motion to amend judgment,
and over the objection of plaintiffs, the court revised its order on May 4,
1992 , to make clear that the order referred to a rulemaking governing the
delegate selection process of federally funded national party conventions.
The amended order also made clear that the court did not impose a deadline
for the promulgation of the rules.
2 432 U.S. 333, 97 S.Ct. 2434 (1977).
3 Title VI states: "Each Federal agency... which
is empowered to extend Federal financial assistance to any program or activity,
by way of grant, loan, or contract...is authorized and directed to effectuate
the provisions of section 2000d of this title...by issuing rules, regulations
or orders of general applicability which shall be consistent with achievement
of the objectives of the statute authorizing the financial assistance." 42
U.S.C. §2000d-1.
Source: FEC Record -- June 1992, p. 7; March
1994, p. 3; and February 1995, p. 6.
Freedom Republicans, Inc. v. FEC, 788 F. Supp. 600 (D.D.C. 1992),
rev'd, 13 F.3d 412 (D.C. Cir.), cert. denied, 115 S. Ct. 84 (1994).
The U.S. Court for the Eastern District of Virginia, Alexandria Division, dismissed this suit on May 27, 1994, ruling that Francis E. Froelich and two other plaintiffs, all residents of Virginia, lacked standing to bring suit.
On June 14, 1995, the U.S. Court of Appeals for the Fourth Circuit affirmed the district court's decision and found the appeal to be without merit.
In their suit, plaintiffs claimed that the Federal Election Campaign Act was unconstitutional to the extent that it allowed House and Senate candidates to accept out-of-state contributions. They argued that such contributions to the announced U.S. Senate candidates from Virginia (also named in the suit) allowed non-Virginians to participate in the process of electing a Senator and diluted the value of the plaintiffs' participation. They further claimed that nonresident contributions created the appearance that an elected Senator is answerable to nonresident contributors. These alleged consequences of nonresident contributions, they argued, violated the 17th Amendment's guarantee that two Senators from each state shall be "elected by the people thereof."
The district court, however, ruled that plaintiffs' claims were too general, lacking the factual specificity necessary to establish standing for judicial review. The court said that the "abstract question of wide significance" and "general grievances" presented by the plaintiffs were more properly addressed by Congress. The court commented that if it were to uphold plaintiffs' claims, it would be "making legislative policy" and consequently "improperly interfering" with the legislative branch. The court of appeals affirmed the district court's decision.
Source: FEC Record -- August 1994, p. 9; and
August 1995, p. 5.
Froelich v. FEC, 855 F. Supp. 868 (E.D. Va. 1994); No. 94-1777 (4th
Cir. May 27, 1994).
On February 9, 1995, the U.S. Court of Appeals for the District of Columbia dismissed this case.
Dr. Fulani and her principal campaign committee for the 1994 Presidential race had asked the court to review an FEC decision to conduct an investigation into the campaign's finances pursuant to the public funding statute. 26 U.S.C. §9039(b).
The court dismissed the case because the action in question was not a final agency action and was therefore not subject to judicial review under 26 U.S.C. §9041(a), as previously construed by the court.
Source: FEC Record -- October 1994, p. 9; and
April 1995, p. 6.
Fulani v. FEC, No. 94-1593 (D.C. Cir. Feb. 9, 1995).
On April 12, 1995, the U.S. District Court for the Southern District of New York dismissed this case as moot.
Plaintiffs had sought to restrain the FEC from taking any action in an enforcement matter because the administrative complaint that originated the case included unsworn attachments.
When the complainant filed a sworn statement verifying the attachments, plaintiffs' arguments were rendered moot.
Source: FEC Record -- August 1994, p. 11; and
June 1995, p. 12.
Fulani v. FEC, No. 94-4461 (S.D.N.Y. Apr. 12, 1995).
On June 23, 1998, the U.S. Court of Appeals for the District of Columbia Circuit denied a petition from Dr. Lenora B. Fulani and the Lenora B. Fulani for President Committee to review the FEC's final repayment determination for the committee's financial transactions during the 1992 Presidential campaign. The FEC had determined that Dr. Fulani and her committee had to repay the U.S. Treasury $117,269 in public matching funds.
Dr. Fulani received about $2 million for the 1992 campaign, under the Presidential Primary Matching Payment Account Act. Under the Matching Payment Act, eligible candidates can use matching funds only for qualified campaign expenses. Committees that receive such funds are also subject to an audit by the FEC and the requirement to make repayments to the U.S. Treasury if the audit reveals that they made nonqualified campaign expenses or received payments in excess of their entitlement. Commission regulations allow a candidate to contest the initial repayment determination by submitting written materials and by requesting an oral hearing before the Commission issues a final repayment determination. The regulations further state that, if the candidate does not contest an initial repayment determination, it becomes final 30 days after a candidate is served written notice of the determination.
Dr. Fulani did not contest the Commission's initial repayment determination, which concluded that Dr. Fulani owed the Treasury $1,394. Dr. Fulani had already repaid this amount. The Commission, however, held its final determination in abeyance after a former Fulani campaign worker came forward to challenge the accuracy of some of the documentation on which the FEC had based its initial repayment determination. The FEC continued to investigate-though hampered by a lack of cooperation from committee staff and vendors-and issued a second initial repayment determination, this time, in the amount of $612,557. Dr. Fulani contested this determination, and, in its final repayment determination, the Commission reduced the amount to $117,269. Dr. Fulani asked for a rehearing, which was denied by the Commission, and then brought the matter before the appellate court. Dr. Fulani challenged the FEC's authority to issue a second repayment determination and, in the alternative, argued that the Commission's findings that she and her committee owed $18,768 in nonqualified disbursements to a vendor and $73,750 in unsubstantiated payments to individuals by check were unreasonable.
Dr. Fulani and the committee first argued that the Matching Payment Act contemplates only one repayment determination and that the FEC had no authority to make a second one in their case. Commission regulations, however, allow additional repayment determinations after a final determination has been made "where there exist facts not used as the basis for a previous final determination." 11 CFR 9038.2(f). The court agreed with the Commission that the statute is silent on this matter and the agency's regulation is a reasonable construction of the Act.
Dr. Fulani also argued that the FEC had no authority to hold its first repayment determination in abeyance because the determination became final when Dr. Fulani did not object to it within the designated 30-day period. The court agreed with the Commission that it makes no difference whether the first initial repayment determination had become final or had been suspended because the FEC's own regulation explicitly authorizes it to make additional repayment determinations on the basis of new facts.
Dr. Fulani also argued that, even if the Commission is authorized to make a second repayment determination, it did not issue that determination within the three-year period the statute requires. Although the Commission, in fact, did issue the second initial determination just before the three-year period ended, Dr. Fulani stated that the determination figure ($612,557) was drawn up just to meet the deadline and was not the product of a thorough examination and audit. But the court found that the obstacles the Commission encountered in investigating the committee understandably led it to draw all inferences against the committee. "When a candidate seeks to frustrate and delay a government investigation, it can hardly be heard to complain that the product is insufficiently thorough," the court stated.
The court also affirmed the Commission's determination on the merits and its denial of Dr. Fulani's petition for a rehearing. In regard to the payments to the vendor, the court stated that Dr. Fulani failed to offer a timely explanation of the payments. In regard to the Fulani committee's payments by check to individuals, the court deferred to the Commission's construction of its own regulations even when it found that the "FEC's reading of its regulation admittedly is not obvious."
Source: FEC Record -- August
1998 [PDF].
Fulani v. FEC, 147 F.3d 924 (D.C. Cir. June 23, 1998).
On January 3, 2002, the U.S. District Court for the District of Columbia granted the Commission's motion to dismiss this case, finding that Dr. Fulani lacked standing to bring the lawsuit.
Dr. Fulani was a Presidential candidate in the 1988 and 1992 elections. In the summer of 1995, she planned to campaign against President Clinton in the 1996 Democratic primaries. However, in August of that year the Commission issued a repayment determination for approximately $612,000 against her 1992 Presidential campaign. Dr. Fulani alleged that as a result she lacked the financial resources to run in the 1996 elections. Dr. Fulani then filed a complaint with the Commission alleging, among other things, that President Clinton violated laws relating to primary spending limits. The Commission did not find reason to believe that the violations had occurred and closed the matter, Matter Under Review (MUR) 4713, in March 2000.
In her court complaint, Dr. Fulani alleged that the Commission's dismissal of MUR 4713 was arbitrary, capricious, an abuse of discretion and contrary to law. She argued that, based on the information developed by the Commission's General Counsel's office, there was both reason to believe and probable cause to believe that President Clinton, his primary campaign committee and the Democratic National Committee violated the Presidential Primary Payment Account Act. She asked the court to compel the Commission to act on the complaint.
In order to have standing to bring such a lawsuit, a plaintiff must demonstrate:
The plaintiff's injury must be "concrete and particularized," as well as "actual" or "imminent." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).
The court found that while Dr. Fulani did suffer a concrete injury when she was stopped from running for office, the Commission's failure to pursue her administrative complaint did not cause this injury. Dr. Fulani argued that the Commission's repayment determination caused her injury, but that determination was not before the court in this case. Moreover, the Commission's alleged failure to act on Dr. Fulani's administrative complaint occurred well after her failure to run for the Presidency in 1996. Finally, the court found that Dr. Fulani could not demonstrate how her alleged injury could be redressed by the court. The court granted the Commission's motion to dismiss the case.
Source: FEC Record -- February
2003 [PDF].
On October 19, 1983 , the U.S. District Court for the District of Columbia issued an order denying the Fund for a Conservative Majority's (FCM's) petition for further relief in a consolidated suit originally decided by the court in September 1980. (Common Cause v. Harrison Schmitt [FEC Intervenor]; FEC v. Americans for Change; 1 Civil Action Nos. 80-1609 and 80-1754.) The court also denied a motion filed by the National Congressional Club (NCC) and the National Conservative Political Action Committee (NCPAC) to intervene in FCM's petition and dismissed the petition with prejudice.
In FEC v. NCPAC and FCM 2 the U.S. District Court for the Eastern District of Pennsylvania on December 12, 1983, refused to allow the FEC to implement 26 U.S.C. §9012(f). (Civil Action No. 83-2823.) The Federal Election Commission filed an appeal with the Supreme Court on December 16.
In its September 1980 ruling, the U.S. District Court for the District of Columbia held that Section 9012(f) was unconstitutional as applied to Americans for Change, Americans for an Effective Presidency and FCM, three multicandidate political committees (not affiliated with any parent organization). They had planned to make expenditures in excess of $1,000 to support the Republican Presidential nominee's general election campaign.
On January 19, 1982 , the Supreme Court voted 4 to 4 to affirm the D.C. district court's September decision, with Justice Sandra Day O'Connor not participating. However, since the high Court's vote on the suit had been equally divided, its affirmance had no precedential value. Subsequently, the FEC issued advisory opinions to NCPAC and FCM in which the FEC stated that Section 9012(f) may be enforced.3
On June 16, 1983, FCM filed a petition with the D.C. district court. (Civil Action No. CA 80-1609) Citing the D.C. district court's 1980 ruling in the first suit, FCM asked the court to:
In dismissing FCM's petition, the D.C. district court judges found no merit to FCM's contention that the FEC could not file suit in the Pennsylvania district court because the issues raised by the suit had already been resolved by the D.C. district court's ruling in 1980.4 The D.C. district court found, to the contrary, that the FEC's second suit raised new issues. "The controversy in the original suit decided by the [D.C. district] court stemmed from FCM's planned expenditures for then-Presidential hopeful Reagan's 1980 campaign, not from planned expenditures by other parties [i.e., NCPAC], and not from FCM's planned expenditures for the 1984 presidential election." The court also cited legal precedent which permitted federal agencies "to relitigate substantially legal issues raised by different transactions or events, after adverse decisions elsewhere." Western Oil and Gas Association v. Environmental Protection Agency, 633 F.2d 803, 808.
Furthermore, the D.C. district court found that, in filing its second suit with the Pennsylvania district court, the FEC had not intended to undermine the D.C. district court's ruling in the first suit. The court conceded that the "constitutional issues remained unsettled" as a result of the high Court's evenly divided decision.
Since the high Court has not yet resolved the constitutionality of Section 9012(f), the D.C. district court asserted that, as the federal agency charged with enforcing the provision, the "FEC must legitimately be permitted to retry the legal issue of section 9012(f)'s constitutionality" until "it is finally settled by the Supreme Court." The district court maintained that Congress had placed a special importance "on FEC participation in actions construing the Fund Act, and on quick Supreme Court review."
The D.C. district court also found that FCM had provided no evidence to indicate that the FEC's second suit had caused it "unwarranted inconvenience or harm." Moreover, the D.C. district court held that in attempting to enjoin the FEC from seeking a resolution of Section 9012(f)'s constitutionality in the Pennsylvania district court, FCM should directly petition the Pennsylvania district court.
1 See FEC
v. Americans for Change.
2 See FEC
v. National Conservative Political Action Committee and Fund for a Conservative
Majority.
3 For a summary of AO's 1983-10
and 1983-11, see p.
2 of the July 1983 Record.
4 Under the doctrine of collateral estoppel, when an
issue of ultimate fact has been determined by a valid judgment, that issue
cannot be relitigated between the same parties.
Source: FEC Record -- January 1984, p. 8.
On February 26, 1985, the U.S. District Court for the District of Columbia granted summary judgment to the FEC in Fund for a Conservative Majority v. FEC. (Civil Action No. 84-1342.) The court held that the Commission was justified in refusing to disclose documents pertaining to the agency's audit and review procedures, which FCM sought under the Freedom of Information Act (FOIA). (FCM is a nonconnected political committee, which the FEC had proposed to audit based on the Commission's review of FCM's reports and its determination that FCM had not met the agency's requirements for substantial compliance with the law's reporting provisions.)
In its suit, FCM challenged the FEC's refusal to disclose documents setting forth the agency's threshold requirements for auditing committees, as well as FEC staff recommendations detailing FCM's failure to meet them. In upholding the FEC's action, the court noted that the agency had justifiably withheld information exempt under section 552(b)(2) of the FOIA. Under this provision, "matters that are...related solely to internal personnel rules and practices" may be exempted from disclosure. The FEC's action met the standards for applying this exemption, which were set forth in Crooker v. Bureau of Alcohol, Tobacco and Firearms, (670 F.2d 1051, D.C. Cir. 1981). First, the undisclosed information was "predominantly internal," and did not constitute "secret law." In this regard, the court noted "the Commission's threshold requirements are not secret law because they made 'no attempt to modify or regulate public behavior-only to observe it for illegal activity.'" Id. at 1075. "The information at issue here is simply used to review Commission reports for substantial compliance with [the reporting] rules" published in the U.S. Code and accompanying regulations. "The plaintiff's argument that it is 'in the dark' as to how to pass that review is especially weak in light of the many letters it has received from the Commission, advising and pointing out apparent reporting inconsistencies and irregularities."
Under the second standard for applying the exemption for internal practices, the disclosed information must "significantly risk circumvention of agency regulations and statutes." (See Crooker at 1074.) In this instance, the court agreed with the Commission that disclosure of the threshold requirements "would enable unscrupulous political committees to tailor their reports to avoid being audited, and ignore statutory reporting requirements that are not central to the internal review procedures."
The FEC had also invoked section 552(b)(7)(E) of the FOIA to justify withholding portions of agency documents pertaining to the compliance thresholds FCM had failed to meet. This provision exempts " 'investigatory records compiled for law enforcement purposes, but only to the extent that the production of such records would...disclose investigative techniques.'" The court found that the information withheld by the FEC met the requirements of this exemption, specifically, the information: (1) constituted an " 'investigative record'" and (2) had been " 'compiled for law enforcement purposes.'" Pratt v. Webster, 673 F.2d 408, 413 (D.C. Cir. 1982). The court pointed out that the federal election law specifically requires the Commission to review Committee reports.
Source: FEC Record -- June 1985, p. 3.
Fund for a Conservative Majority v. FEC, No. 84-1342 (D.D.C. February
26, 1985).
