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On June 22, 1988, the U.S. District Court for the District of Columbia issued a default judgment in a suit that the FEC brought against the Taylor Congressional Committee, the principal campaign committee for Clarence Taylor's 1984 House campaign, and the Committee's treasurer, Richard L. Smith. (FEC v. Taylor Congressional Committee; Civil Action No. 88-0453 (SSH).)
In the default judgment, the district court decreed that:
- Defendants had violated the terms of a conciliation agreement that they had entered into with the FEC in February 1988. (In the agreement, the defendants had agreed to pay a $1,500 civil penalty in two equal installments.)
- Defendants had to pay the $1,500 penalty, an additional $500 penalty for violating the terms of the conciliation agreement and a small fee to cover the FEC's court costs in the case. These penalties had to be paid within 15 days from the date the court entered the default judgment against defendants.
Finally the court enjoined defendants from future similar violations of the election law.
Source: FEC Record -- January 1989, p. 10.
On September 19, 1988, the U.S. District Court for the Northern District of Illinois issued a final consent order and judgment in a suit the FEC has filed in July 1988 against the Thornton Township Regular Democratic Organization (TTRDO) and its treasurer.
In its suit, the FEC claimed that defendants violated the election law when they sponsored a direct mail solicitation to approximately 18,000 registered Democratic voters at a costs of approximately $4,371. In the consent order, the district court decreed that TTRDO violated the election law by:
- Failing to register and report with the FEC as a political committee when its costs for the direct mail solicitation exceeded $1,000 (2 U.S.C. §433(a) and 434); and
- Failing to include on the solicitation a disclaimer notice stating that TTRDO had sponsored the solicitation and that the solicitation was not authorized by any candidate's campaign committee. (2 U.S.C. §441d(a)(3)).
The district court further ordered defendants to pay a $2,000 civil penalty within 30 days of the court's order.
Source: FEC Record -- December 1989, p. 9.
On April 17, 2000, the FEC filed suit asking the U.S. District Court for the Central District of California to find that James Toledano, former Chair of the Orange County Democratic Central Committee (Orange County Party), violated 2 U.S.C. §432(b) by failing to forward two $5,000 contributions to the treasurer of the Orange County Party within 10 days after receiving them.
On May 3, 2001, the U.S. District Court for the Central District of California granted the Commission's request for summary judgment, ruling that James Toledano violated 2 U.S.C. §432(b)(2). On September 27, 2001, James Toledano appealed this case to the U.S. Court of Appeals for the Ninth Circuit.
On November 7, 2002, the U.S. Court of Appeals for the Ninth Circuit affirmed the decision of the U.S. District Court for the Central District of California granting the Commission summary judgment in this case and imposing a $7,500 fine against James Toledano. The appeals court also ordered Mr. Toledano to pay the Commission's attorney's fees on this appeal as a sanction for his "bad-faith conduct and abuse of the judicial process."
The contributions in question were made by Debra and Paul LaPrade in early 1996. At the time, Ms. LaPrade's brother, James M. Prince, was a candidate for the Democratic nomination for Congress in California's 46th congressional district.
The LaPrades, who had already given the maximum to the Prince campaign, contributed to the Orange County Party. Upon receipt of the funds, Mr. Toledano opened a new bank account in the name of the party, with only his own signature required for withdrawals, and deposited the LaPrades' $10,000 check into the account. He then spent the money to finance a slate mailer that advertised the California Democratic Party's endorsement of Mr. Prince.
Unaware of the contributions and expenditures, the Orange County Party's treasurer was unable to fulfill the Orange County Party's registration and reporting obligations under the federal election law. The treasurer learned of the LaPrades' contributions and the existence of the new bank account only one day before the primary.
The Commission learned of Mr. Toledano's actions through a letter sent by the Orange County Party itself, and a complaint filed by another individual. After finding probable cause to believe that Mr. Toledano had violated §432(b), the Commission attempted, but failed, to reach a conciliation agreement with him. Unable to resolve the matter, the Commission voted to authorize this suit.
Appeals Court Decision
The appeals court found that Mr. Toledano violated 2 U.S.C. §432(b), which requires persons who receive contributions in excess of $50 to forward these contributions to the committee's treasurer within ten days after receiving them. In 1996 Mr. Toledano, who was then the chairman of the Orange County Democratic Party (the Party), received a $10,000 contribution check made out to the Party, which he used to print and mail pamphlets supporting a Congressional candidate. Mr. Toledano did not forward the contribution to the committee treasurer within ten days or even inform him of it.
On appeal, Mr. Toledano argued, among other things, that his actions did not violate 2 U.S.C. §432(b) given that he "had de facto authority to act as treasurer" because he was convinced that the real treasurer was "incompetent and failed to discharge his duties responsibly." The court found that Mr. Toledano was not a designated agent of the treasurer and could not exercise the treasurer's authority under the statute or Commission regulations. The court further concluded that "to recognize unauthorized 'de facto agents' of the treasurer and thus open up multiple points of entry and exit through which campaign funds may flow is to create predictable confusion and unravel the whole statutory scheme." The court concluded that by failing to forward the contribution to the Party's treasurer, Mr. Toledano prevented the contribution, which turned out to be excessive, from being scrutinized by the Party's treasurer for its legality.
The court affirmed all aspects of the district court's order granting the Commission summary judgment and imposing a $7,500 fine. The court also referred the case to the Appellate Commissioner for a determination of the Commission's attorney's fees and related expenses in defending this case on appeal.
1985 Court Orders
On September 20, 1985, the U.S. District Court for the Eastern District of Michigan, Southern Division, issued an opinion which held the Kirk Walsh for Congress Committee (the Committee) and its treasurer, Kirk Walsh, in contempt for failing to comply with a default judgment entered against the Committee in April 1985. (Civil Action No. 84-9802.)
In the April 1985 default judgment, the court had ordered the Committee, Mr. Walsh's principal campaign committee for his 1980 House campaign, to take the following actions within 30 days:
- File a 30 day post-general election report for 1980 and mid-year and year-end reports for 1981, 1982 and 1983;
- Pay a $5,000 civil penalty to the U.S. Treasury; and
- Pay court costs incurred by the FEC in pursuing the action.
In its contempt order, the court ordered the Committee and Mr. Walsh to comply with the default judgment by October 11, 1985. In the event the Committee failed to meet the deadline, the court would assess a fine of $2,000 and $100 per day until the Committee fully complied with the court's orders.
The court also ordered the Committee and Mr. Walsh to pay costs and attorney fees incurred by the Commission in bringing this action.
July 1986 Court Order
On July 28, 1986, the district court issued another order after the Committee and Mr. Walsh had failed to comply with the court's September 1985 contempt order. In its order of July 1986, the court required the Kirk Walsh for Congress Committee (the Committee) and its treasurer, Kirk Walsh, to:
- Provide the FEC with accurate reports of campaign finance activity from 1980 through 1986; and
- Pay a $5,000 civil penalty to the U.S. Treasurer, in addition to the $5,000 civil penalty the court had assessed against the Committee in September 1985.
The court also ordered the Committee and Mr. Walsh to comply with its order by August 28, 1986. (Civil Action No. CA84-CV-9802) In the event that the Committee failed to meet the deadline, the court would assess a fine of $200 per day, beginning August 15, 1986, and continuing until the defendants had fully complied with the court's order.
Source: FEC Record -- November 1985, p. 5; and September 1986, p. 7.
FEC v. Kirk Walsh for Congress Committee, No. 84-CV-9802-PH (E.D. Mich. August 5, 1986) (memorandum opinion and order, supersedes July 28, 1986).
On January 2, 1991, the U.S. District Court for the Eastern District of North Carolina, Raleigh Division, granted the FEC's motion for summary judgment against William Woodward Webb, a 1986 House candidate, his principal campaign committee and the committee treasurer. (Civil Action No. 89-664-CIV-5-BO.) The court found that defendants had violated 2 U.S.C. §441a(f) by knowingly accepting an excessive contribution in the form of a $19,000 loan from the candidate's mother. Defendants argued that the loaned funds were not subject to the contribution limits because they were Mr. Webb's own funds under the definition of a candidate's "personal funds" in FEC rules: "gifts of a personal nature which had been customarily received prior to candidacy." 11 CFR 110.10(b)(2).
The court ruled that, while Mrs. Webb's loan to her son "may have been intended to be... similar to those gifts she had given to him prior to his candidacy, this gift was distinct in the fact that it was given to Mr. Webb's election committee and not to Mr. Webb directly....Merely because Mr. Webb had received gifts in the past [from his mother] it does not follow that this particular loan was customary or of a personal nature as required by 11 CFR 110.10(b)(2). This gift was made at the request of Mr. Webb and as a direct result of his candidacy." The court also found that defendants had violated 2 U.S.C. §434(b) by falsely reporting Mr. Webb, rather than his mother, as the source of the $19,000 loan.
The court fined the defendants $5,000 and permanently enjoined them from future violations of the Federal Election Campaign Act.
Source: FEC Record -- February 1991, p. 10.
On September 14, 1989, the U.S. District Court for the District of Columbia issued a final order and default judgment in FEC v. Mark R. Weinberg (Civil Action No. 89-0416 RCL). The court found that Mr. Weinberg had violated the terms of a conciliation agreement he had entered into with the Commission in 1988 (Matter Under Review (MUR) 2073) and directed him to pay additional penalties.
Under the terms of the 1988 agreement, Mr. Weinberg had agreed to pay a $17,000 civil penalty for violations of sections 441a(a)(1)(A) and (3) of the election law. When the defendant failed to pay the first installment on the penalty, the Commission filed suit pursuant to 2 U.S.C. §437g(a)(5)(D).
On August 15, 1990, the court granted the FEC's petition to hold Mr. Weinberg in contempt of court after Mr. Weinberg had failed to pay the civil penalties included in the conciliation agreement and consent order.
Under the terms of the 1990 order, Mr. Weinberg had to pay:
- An additional fine of $10,000 and $500 per day until he complies with the court's prior order of September 1989;
- Post-judgment interest to the Commission (at a rate of 8.27 percent) until he complies with the September 1989 order; and
- Court costs and attorneys' fees incurred by the Commission in prosecuting the contempt proceeding.
Source: FEC Record -- November 1989, p. 5; and October 1990, p. 8.
On June 8, 1979, the U.S. District Court for the Southern District of New York issued a consent judgment in a suit which the FEC had filed against Milton Weinsten and the Winfield Manufacturing Company on March 2, 1978.
In its suit, the Commission alleged that Milton Weinsten, President of Winfield Manufacturing (a government contractor), used corporate funds to reimburse employees of Winfield Manufacturing Company for contributions they made to the 1976 Presidential primary campaign of Milton Shapp.
The consent decree stated that use of corporate funds in this manner had violated the Act's prohibitions against:
- The use of corporate funds in connection with Federal elections (2 U.S.C. §441b);
- Contributions by government contractors (2 U.S.C. §441c); and
- Contributions made in the name of another (2 U.S.C. §441f).
The court levied a civil penalty of $5,000, enjoined the defendants from future violation of the Act, and retained jurisdiction over the case for three years to ensure compliance with the provisions of the decree.
Source: FEC Record -- September 1979, p. 5.
FEC v. Weinsten, 462 F. Supp. 243 (S.D.N.Y. 1978).
On January 18, 1991, the U.S. District Court for the Southern District of West Virginia entered a judgment that was agreed to by the FEC and the defendant committee. (Civil Action No. 2:90-0898.) The parties agreed to the following points:
- In conducting a phone bank voter drive on behalf of the Presidential ticket-an exempt party activity-the committee also mentioned the names of House and Senate candidates but failed to report any part of the phone bank expenditures as contributions allocated to the House and Senate candidates, in violation of 2 U.S.C. §434(b).
- The committee incorrectly reported as "operating expenditures" certain disbursements for newspaper advertisements that advocated the defeat of a federal candidate, a second violation of 2 U.S.C. §434(b).
- The committee used its nonfederal account to make the phone bank and newspaper ad expenditures described above, a violation of 11 CFR 102.5(a).
- The committee failed to itemize certain contributions and transfers it received and failed to disclose year-to-date totals, a third violation of 2 U.S.C. §434(b).
The court issued a consent order imposing a $2,000 civil penalty against the committee and permanently enjoining it from future similar violations.
Source: FEC Record -- March 1991, p. 10.
On January 31, 1995, the U.S. District Court for the Central District of California granted the FEC's motion for summary judgment and denied the defendant's motion for summary judgment.1 The court ordered Larry R. Williams to pay $10,000 in civil penalties and enjoined him for 10 years from making contributions in the name of another and exceeding the $1,000 individual contribution limit to a federal candidate.
On December 26, 1996, the U.S. Court of Appeals for the Ninth Circuit reversed a district court ruling and dismissed this case.
On December 8, 1997, the U.S. Supreme Court denied the U.S. Solicitor General's petition asking the Court to review this case.
Jack Kemp's 1988 Presidential campaign had a fundraising program which enabled anyone who contributed $1,000 to purchase a Super Bowl ticket for $100 from the Philadelphia Eagles. Mr. Williams, a campaign fundraiser at the time, purchased 40 tickets from the Eagles at the $100 special price and then offered them to employees and friends in exchange for a $1,000 contribution to the campaign. He then advanced or reimbursed 22 of his employees and friends $1,000 each to make a contribution to the Kemp campaign.
Additionally, Mr. Williams contributed $1,694 on his own behalf to the Kemp campaign.
District Court Decision
The court denied the defendant's motion because the court did not believe that the presence of the ex officio members on the Commission rendered the Commission's actions unconstitutional under the separation of powers doctrine. The court reasoned that this doctrine was not violated because the ex officio members did not "hold an 'Office Under the United States'" and because the ex officios merely exercised an advisory role and could not vote on Commission action. In its opinion, the court disagreed with the reasoning in the FEC v. NRA Political Victory Fund decision, and cited the decisions of the Court of Appeals for the Ninth Circuit in Lear Siegler, Inc. v. Lehman and Commodities Futures Trading Commission v. Schor in support of its conclusion. 3
Further, the court stated that even if the presence of the ex officio members were deemed unconstitutional, the de facto officer doctrine established in Buckley v. Valeo applied and the case could continue. In Buckley v. Valeo, the Supreme Court accorded validity to the FEC's past actions even though the composition of the Commission in 1976 violated the separation of powers doctrine.
Lastly, the court rejected the defendant's arguments that the Act was unconstitutionally vague, that the FEC waived its right to impose a civil penalty by not pursuing its claims in bankruptcy court or that the defendant suffered prejudice as a result of an excessive delay in the prosecution of this action.
The court concluded that Mr. Williams committed the following violations of the Federal Election Campaign Act:
Contributions in the name of another
It is illegal to make a contribution in the name of another. Mr. Williams violated this provision of the law when he advanced or reimbursed $1,000 to 22 contributors. 2 U.S.C. §441f; and
Exceeding the $1,000 contribution limit for individuals
It is illegal for an individual to give more than $1,000 per election to any federal candidate. Mr. Williams made $28,694 in contributions to a single candidate, exceeding his legal limit (11 CFR 110.1(b)(1)).
Appeals Court Decision
In a split decision, the appeals court reversed the district court's order. The appeals court held that the general five-year statute of limitations at 28 U.S.C. §2462 applied to the FEC's action seeking to assess civil penalties against Mr. Williams.4 The court ruled that the time limit started running at the time the alleged offenses occurred-not at the time they were reported. The court also found that §2462 barred the FEC from seeking injunctive relief because the "claim for injunctive relief is connected to the claim for legal relief."
The allegations involved acts that took place in 1987 and early 1988. The court found that the statute of limitations had run out in 1992 and early 1993. The FEC did not file a lawsuit against Mr. Williams until October 1993, though the Commission had begun to respond to the administrative complaint in late 1988 and had attempted to reach a conciliation agreement in 1993.
The FEC argued that the statute of limitations should be temporarily tolled (i.e., the clock stops ticking) any time before the agency receives a complaint and during mandated periods of review and conciliation attempts that generally must occur before a lawsuit can be filed. However, the court was not moved by the FEC's arguments. It said that, although the doctrine of "equitable tolling"5 applies in principle to §2462, it is not applicable to the Williams case. The Commission had ample opportunity through its normal disclosure and investigatory processes, the court stated, to learn of Mr. Williams's alleged violations of the Act.
Supreme Court Action
On December 8, 1997, the U.S. Supreme Court denied the U.S. Solicitor General's petition asking the Court to review this case.
1 Previously, Mr. Williams had moved to dismiss
this case pursuant to the 5-year statute of limitations in 28 U.S.C. §2462.
The court dismissed this motion without issuing an opinion.
2 In the NRA case, the Court of Appeals for the District of Columbia concluded that the presence of the ex officio members on the Commission violated the separation of powers principle. The Commission has since reconstituted itself so as to exclude the ex officios from its body.
3 Citing Lear Siegler, the court found that Congress did not usurp an executive function by placing the ex officio members on the Commission because the ex officio members did not vote. Additionally, quoting the Schor decision, the court held that the presence of the ex officio members on the Commission did not impermissibly undermine the executive branch's role.
4 The appeals court cited several cases to back up its claim that the Act is indeed subject to 28 U.S.C. §2462: 3M Co. v. Browner, 17 F.3d 1453 (D.C. Cir. 1994); FEC v. National Republican Senatorial Comm., 877 F. Supp. 15 (D.D.C. 1995) and FEC v. National Right to Work Comm. Inc., 916 F.Supp. 10 (D.D.C. 1996).
5 Equitable tolling provides that "where a plaintiff has been injured by fraud and remains in ignorance of it without any fault or want of diligence or care on his part, the bar of the statute does not begin to run until the fraud is discovered." Holmberg v. Armbrecht, 327 U.S. 392, 397 (1946).
Source: FEC Record -- April 1995, p. 5; February 1997 [PDF]; November 1997 [PDF]; and January 1998 [PDF].
FEC v. Williams, No. CV 93-6321-ER(BX) (C.D. Cal. Jan. 31, 1995), rev'd 104 F.3d 237 (9th Cir. 1996), cert. denied 118 S. Ct. 600 (1997).
On March 27, 1996, the U.S. District Court for the Middle District of Pennsylvania accepted the January 1, 1996, recommendation of the magistrate judge in this case; a $15,000 civil penalty was imposed on the Citizens for Wofford committee and its treasurer for accepting contributions in excess of the per-election limits. 2 U.S.C. §441a(f).
This case involved an FEC enforcement action born out of the 1991 Pennsylvania special election to fill a U.S. Senate seat. The Democratic party nominated Harris Wofford on June 1, 1991. The party chose not to certify him to the state as the Democratic nominee until September 5, however, because the Republican party did not nominate his opponent, Richard Thornburgh, until then.
Mr. Wofford's principal campaign committee, Citizens for Wofford, regarded contributions received after June 1 but before September 5 as primary election contributions. In doing so, contributors were able to give twice as much to Mr. Wofford's general election effort; contributors gave up to their per-election limit for his primary election effort after the fact and again to his general election effort.
The court determined that contributions received after June 1 should have been treated as general election contributions. 11 CFR 110.1(b)(2) and (3).
Although the amount of unlawful contributions received by the defendants was stipulated to have been $198,075, the court did not issue a higher civil penalty because "there is not a basis presented upon which one may reasonably infer that the defendants acted in bad faith" and because the committee had less than $15,000 in assets and was $70,000 in debt. The court concluded: "A fine in the amount of $15,000 would be adequate to vindicate all of the interests of the Commission and of the public in this case."
Source: FEC Record -- June 1996 [PDF].
On February 6, 1986, the U.S. District Court for the Middle District of Florida, Tampa Division, issued an order granting the FEC's motion for summary judgment in a suit which the FEC had brought against Allen Wolfson on October 7, 1985. (FEC v. Allen Z. Wolfson; Civil Action No. 85-1617-CIV-T-13.)
As requested by the FEC, the court found that Mr. Wolfson had violated the election law by making contributions to authorized candidate committees which exceeded the law's monetary limits (2 U.S.C. §441a(a)(1)(A)) and which were made in the names of other persons (2 U.S.C. §441f).
The court permanently enjoined Mr. Wolfson from further violations of the election law and imposed a $52,000 civil penalty on him.
Source: FEC Record -- April 1986, p. 8.
On January 16, 1998, the U.S. District Court for the District of Nevada ordered Charles Woods, two of his corporations, and Charles Woods for U.S. Senate (the Committee) to pay the FEC $50,000 for violating the Federal Election Campaign Act's (the Act's) ban on corporate contributions, and for failing to file 48-hour notices for $28,000 in contributions that came in during the waning days of the 1992 primary campaign. The court also issued a permanent injunction against future violations.
The court granted the FEC's motion for summary judgment and imposed the civil penalty because of the extent of the violations and the unambiguous nature of the sections of the Act in question in this case.
The Committee served as the principal campaign committee for Mr. Woods, who was seeking the 1992 Democratic nomination for the Senate in Nevada . During the election cycle, Quinn River Ranch, which was wholly owned by Mr. Woods, contributed $290,000 to the Committee. A subsidiary of another corporation that Mr. Woods owned, WTVY-FM, also made an impermissible contribution when it used its American Express credit card to charge $1,426.23 in expenses for the Committee.
The Act at §441b(a) prohibits corporations from making contributions in connection with a federal election, and prohibits political committees from accepting such contributions. Both Quinn River Ranch and WTVY were wholly owned by Mr. Woods. Nonetheless, the Act makes no distinction for closely-held corporations when applying the 441b(a) prohibition. The statute makes it unlawful for "any corporation whatever" to make contributions in connection with a federal election.
The law also provides for the timely filing of disclosure reports with the Commission for contributions received after the 20th day but more than 48 hours before an election. 2 U.S.C. §434(a)(6)(A).
Source: FEC Record -- March 1998 [PDF].
On May 19, 1988, the U.S. District Court for the District of Columbia granted the FEC's motion for a default judgment against Working Names, Inc., a corporation that provides mailing list services, and the corporation's president, Meyer T. Cohen.
The FEC had filed a motion for the default judgment in April 1988, after the defendants had violated the terms of a conciliation agreement entered into with the FEC in September 1986. Under the terms of the conciliation agreement, the defendants had agreed to pay a $2,000 civil penalty for violating 438(a)(4) of the election law and section 104.15 of FEC regulations. Specifically, the defendants had rented to two organizations a mailing list containing a name obtained from a listing of contributors disclosed on an FEC report. Under the election laws names of contributors (other than political committees) that are disclosed on FEC reports may not be copied and used for commercial or solicitation purposes.
The court ordered the defendants to comply with the terms of the conciliation agreement within 15 days of the court's judgment. The court further decreed that the defendants pay $2,000 for violating the terms of the conciliation agreement and awarded the Commission its costs for the litigation. The court also permanently enjoined the defendants from future violations of the election law.
FEC's Contempt Petition
On May 10, 1990, after defendants had paid only $100 toward the $4,000 in assessed penalties, the court granted the FEC's petition to hold the defendants in contempt of court for failing to pay the civil penalties assessed in the previous year's default judgment. The court ordered defendants to pay the prior penalties plus $75 per day for each day the assessments remain unpaId. The late charge was to increase to $150 per day after June 17, 1990. Additionally, defendants had to pay interest on the unpaid civil penalties and court costs.
On February 28, 1991, the court issued a consent order in which defendants agreed to pay $15,000 to settle the dispute. The order declared that defendants had violated the sale and use restrictions and permanently enjoined them from further violations of the law. The Commission agreed to waive the accumulated contempt penalties and additional costs awarded in May 1990.
Source: FEC Record -- July 1988, p. 6, July 1990, p. 4, and May 1991, p. 7.
On November 12, 1991, a U.S. district court ordered James C. Wright, Jr., former Speaker of the U.S. House of Representatives, to answer the FEC's questions in connection with an administrative complaint filed against him. The court also ordered Mr. Wright to pay the FEC's court costs.
The former Speaker appealed the judgment on January 9, 1992. However, he later filed a motion to dismiss the appeal as moot since he and the FEC had reached a settlement with respect to the administrative complaint (Matter Under Review (MUR) 2649). The FEC did not object to the motion, and on May 1, 1992, the U.S. Court of Appeals for the Fifth Circuit dismissed the appeal. (Civil Action No. 92-1033.)
In July 1988, Citizens for Reagan filed an administrative complaint alleging that Speaker Wright violated 2 U.S.C. §441i. That provision, now repealed, prohibited a federal officeholder from accepting more than a $2,000 honorarium for a speech, appearance or article. The complaint specifically alleged that Speaker Wright, during 1985 and 1986, accepted excessive honoraria disguised as proceeds from the sale of his book, Reflections of a Public Man. In January 1990, the Commission found reason to believe Mr. Wright had violated §441i and opened an investigation into the matter. When he refused to comply with an FEC order seeking answers to questions about his appearances and the sale of his book, the agency asked the district court to enforce the order.
District Court Decision
In its November 12, 1991, judgment, the court concluded that the FEC's order complied with a three-pronged test for validity: the investigation was for a lawful purpose; the information sought was relevant; and the agency's demand was reasonable. The court therefore ordered Mr. Wright to answer the FEC's questions. In reaching its decision, the court considered but rejected Mr. Wright's arguments, which challenged the FEC's authority to investigate his activities.
(Mr. Wright also filed a motion asking the court to dismiss the lawsuit, arguing that, with the repeal of §441i in August 1991, the FEC lost jurisdiction to bring the action. On October 16, 1991, for the reasons discussed below, the court denied Mr. Wright's motion.)
Speech or Debate Clause
Former Speaker Wright relied on the speech or debate clause in the Constitution for several of his arguments. The clause states that "for any Speech or Debate in either House, they [Senators or Representatives] shall not be questioned in any other Place." Article I, Section 6.
Mr. Wright contended that the clause nullified the FEC's authority to seek answers to questions on activities that took place when he was a House Member. The court, however, found that the clause did not apply to the FEC's questions, which concerned activities that occurred "outside, and away from, the House" and which were "totally unrelated to anything done in the course of the legislative process...."
Mr. Wright also argued that the FEC violated the clause because, in deciding to pursue an investigation, the agency relied on "speech or debate" material, namely, a report prepared by an outside counsel at the request of the House Committee on Standards of Official Conduct when that body was investigating the sale of the Speaker's book. The court rejected the argument, pointing out that the report lacked any "speech or debate" content but merely contained findings related to the Speaker's financial affairs. Moreover, the court said that the relevant findings in the report (i.e., his alleged circumvention of the honoraria limit) were "independent of anything that occurred in any kind of House proceeding."
The former Speaker again invoked the speech or debate clause with respect to his testimony before the House Committee, arguing that the clause immunized him from having to answer the FEC's questions on the same matters. However, because he testified before the Committee "in his capacity as a witness and not in his legislative capacity," the court found no merit to this argument
Finally, he argued that the Constitution's self-discipline clause, when read with the speech or debate clause, effectively allocated to the House the sole authority to enforce violations of the honorarium limit by Members. The self-discipline clause states, in part: "Each House may determine the Rules of its Proceedings [and] punish its Members for disorderly Behavior...." Article I, Section 5. The court rejected this argument for two reasons. First, it "is tantamount to a contention that the relevant provisions of the Act are unconstitutional." Second, it "fails to recognize that the standards of conduct and rules of enforcement found in the Act are, indeed, self-disciplinary rules-the combined votes of the two Houses created the statutory provisions in question."
Repeal of §441i
In another line of argument, Mr. Wright claimed that the FEC no longer had authority to investigate or enforce §441i because of recent legislation: The Ethics Reform Act of 1989 (effective January 1, 1991), which prohibited House Members from accepting honoraria and amended §441i to remove House Members from its scope; and the repeal of §441i later that year, on August 14.
The court first noted that the Ethics Reform Act effectively repealed §441i insofar as it applied to House Members. The court went on to point out that, if Congress had intended to eliminate the FEC's authority to enforce §441i violations occurring before the repeal, the legislation would have expressed that intent. "Thus, to this day," the court stated, "§441i is deemed to be in full force and effect as to any conduct of Wright occurring before the date of its repeal."
Source: FEC Record -- July 1992, p. 8.
FEC v. Wright, 777 F. Supp. 525 (D.C.N.D. Tex. 1991).