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On April 21, 1981, the U.S. District Court for the District of Columbia granted the FEC's motion for summary judgment in the suit Richard B. Kay v. FEC (Civil Action No. 80-3081) and denied plaintiff's cross-motion for summary judgment.
Plaintiff filed this suit on December 2, 1980, seeking a declaratory judgment that the FEC had acted contrary to law in dismissing an administrative complaint that plaintiff had filed against The Plain Dealer Publishing Company of Cleveland and several of its officers and employees. Plaintiff, who had been a Presidential primary candidate in Ohio, alleged that a full-page chart published in The Plain Dealer before the 1980 Ohio Presidential primary was a political advertisement by the publishing company. The chart carried photographs of three major party Presidential candidates and summaries of their positions on nine campaign issues ranging from inflation to federal funds for abortions. Plaintiff alleged the ad constituted either a corporate expenditure or a corporate in-kind contribution both prohibited under the Act.
After investigating the complaint pursuant to the enforcement procedures of Section 437g(a) of the Act, the Commission, acting on a recommendation from the General Counsel to dismiss the complaint, found no reason to believe the Act had been violated. In his report to the Commission, the General Counsel observed that the "contents of this chart merely constitute an effort on the part of The Plain Dealer to report in an orderly manner for the benefit of its readers the issue stands and activities of the major candidates in the Ohio primary. In essence, The Plain Dealer was printing a news story in chart form." The General Counsel noted that the Act and Commission regulations specifically exempt such news stories from the definitions of "contribution" and "expenditure," provided the news corporation is not controlled by any political party, political committee or candidate. The General Counsel noted that there was no indication of such ownership or control of The Plain Dealer.
District Court Ruling
Holding that no material facts were in dispute and that applicable law was clear, the court found that: "The Commission's action, based on the General Counsel's recommendation that the publication be treated as a newspaper story, was plainly consistent with the law. The Plain Dealer was doing the main business of a newspaper: in its own way, it informed the public about issues which the public would decide."
As to plaintiff's claim that he did not receive reasonably equal news coverage in The Plain Dealer's circulation area, the court noted that a newspaper had no duty under the Act to give "equal time" to candidates. The court said, "To the extent that this 'equal time' concern was an element of plaintiff's complaint, the Commission quite properly ignored it." Plaintiff appealed the decision.
Appeals Court Ruling
On December 1, 1981, the U.S. Court of Appeals for the District of Columbia Circuit issued a judgment in Richard B. Kay v. FEC (Civil Action No. 80-3081), which upheld the district court's decision that the FEC's dismissal had not been contrary to law.
Source: FEC Record -- June 1981, p. 6; and February 1982, p. 9.
Kay v. FEC, No. 80-3081 (D.D.C. April 20, 1981) (unpublished opinion), aff'd mem., 672 F.2d 894 (D.C. Cir. 1981).
On December 17, 2010, the Commission filed suit in District Court for the Middle District of Florida against Sam Kazran and 11-2001 LLC d/b/a Hyundai of North Jacksonville (“HNJ”). The Commission’s complaint alleges that Kazran and HNJ (collectively, “the Defendants”) violated the Federal Election Campaign Act (“Act”) by arranging for HNJ employees and others to make $67,900 in contributions to the Vern Buchanan for Congress committee (“VBFC”) and then reimbursing them from HNJ funds. The complaint also alleges that HNJ violated the Act by making excessive contributions during the 2006 and 2008 election cycles.
At the time of the alleged violations, HNJ was a car dealership in Jacksonville, Florida, that was organized as a partnership and registered as an LLC. Buchanan owned a majority interest in HNJ until 2008, when Kazran completed the purchase of Buchanan’s remaining interest of HNJ. VBFC was Buchanan’s principal campaign committee during his 2006 and 2008 campaigns for Florida’s 13th Congressional District.
Under 2 U.S.C. §441f of the Act, “[n]o person shall make a contribution in the name of another person or knowingly permit his name to be used to effect such a contribution and no person shall knowingly accept a contribution made by one person in the name of another person.”
The Commission’s complaint alleges that the defendants violated 2 U.S.C. §441f by using HNJ funds to reimburse HNJ employees, Kazran’s business partners, their family members and Kazran’s relatives for $67,900 in contributions to Buchanan’s 2006 and 2008 congressional campaigns. The complaint also alleges that HNJ violated 2 U.S.C. §441a(a) by contributing $49,500 to VBFC during the 2006 election cycle, in excess of the $2,100 per election limit in effect for that cycle, and $18,400 to VBFC during the 2008 election cycle, in excess of the $2,300 per election limit for that cycle.
On September 21, 2010, the Commission found probable cause to believe that HNJ and Kazran violated 2 U.S.C. §441f by using HNJ funds to make contributions to VBFC in the names of others.
The Commission also found probable cause to believe that HNJ violated 2 U.S.C. §441a(a) by making contributions to VBFC in excess of the per election limits for the 2006 and 2008 election cycles. The Commission attempted but failed to reach a conciliation agreement with the defendants and voted to authorize this civil suit.
Source: FEC Record -- February 2011 [PDF].
On September 18, 2001, the Kean for Congress Committee (the Committee) asked the U.S. District Court for the District of Columbia to find that the Commission's failure to act on the Committee's administrative complaint was contrary to law.
The Committee's administrative complaint, filed on June 1, 2000, alleged that the Council for Responsible Government (CRG), a Virginia corporation, had secretly funded campaign mailings in an attempt to influence the New Jersey Congressional Seventh District Republican primary. The Committee contended that the campaign mailings violated the Federal Election Campaign Act's prohibition on corporate contributions and also lacked the disclaimer required on public communications. 2 U.S.C. §§ 441b and 441d. The Committee also asked the Commission for injunctive relief to prevent the CRG from continuing to engage in the alleged prohibited activity.
In the court complaint, the Committee contended that, as of September 18, 2001, the FEC had not taken any action on its complaint, and asked that the court:
- Declare the FEC's failure to act within 120 days of the filing of the complaint contrary to law;
- Order the FEC to bring itself into compliance with the law within 30 days; and
- Grant any further relief as the court deems just and proper.
Source: FEC Record -- December 2001 [PDF].
In separate rulings issued on January 13 and January 20, the U.S. District Court for the District of Columbia ordered the Commission to pay attorney’s fees totaling over $31,000 to the Kean for Congress Committee. The fees stem from the Committee’s lawsuit challenging the Commission’s dismissal of an administrative complaint it had filed — a decision the Commission ultimately reversed on remand from the district court. See also Kean v. FEC above.
On January 5, 2004, Kean for Congress Committee (the Committee) asked the court to find that the Commission acted contrary to law when it dismissed the plaintiff’s administrative complaint, designated MUR 5024. The administrative complaint alleged that a Virginia corporation known as the Council for Responsible Government and its so-called “Accountability Project” (collectively, CRG) funded mailings which attempted to influence a New Jersey Congressional Seventh District Republican primary, in violation of federal law. On November 4, 2003, the Commission unanimously dismissed the administrative complaint after splitting 3-3 on whether to find reason to believe the CRG violated the Federal Election Campaign Act.
On February 15, 2005, the U.S. District Court for the District of Columbia granted the FEC’s motion for this case to be voluntarily remanded to the Commission so that it can apply the Supreme Court decision in McConnell v. FEC to the facts of the plaintiff’s administrative complaint.
At the FEC’s request and over the committee’s opposition, the court remanded the case to the FEC for 60 days so it could reconsider the committee’s administrative complaint in light of McConnell v. FEC, 540 U.S. 93 (2003), which the Supreme Court had issued after the FEC had dismissed the committee’s administrative complaint but before the Commissioners had issued their Statements of Reasons for that dismissal. The court’s order did not direct the FEC to take any particular position on remand or compel the agency to reverse its dismissal. On remand, the FEC found “reason to believe” and subsequently entered into a conciliation agreement with the Council for Responsible Government.
The court remanded MUR 5024 to the Commission until April 15, 2005, to permit the FEC to reconsider its dismissal of the administrative complaint in light of the McConnell decision. The court also granted the FEC’s motion to hold summary judgment in abeyance.
On May 31, 2005, Kean for Congress filed a motion for attorney’s fees and expenses, arguing that under the Equal Access to Justice Act it was a “prevailing party.” In order to be a prevailing party, the party must prove that:
• There has been a court-ordered change in the legal relationship between the parties;
• Judgment was entered in the party’s favor; and
• The judicial pronouncement confers some judicial relief.
The court found that the remand order was a court-ordered change in the legal relationship, by forcing the FEC to reconsider the administrative complaint within 60 days. Additionally, it was favorable to the committee, even though it originally had opposed the remand, and offered relief in the form of time constraints, which addressed the grievances of the committee.
After concluding that the committee was a prevailing party, the court considered whether the FEC’s position was "substantially justified.” The court found that the FEC’s position was not substantially justified because, among other reasons, the three Commissioners who initially voted against pursuing the administrative complaint did not address the McConnell decision in their Statement of Reasons. The court found the committee’s request for attorney’s fees to be reasonable and ordered the FEC to pay over $31,000.
On December 21, 1981, the U.S. District Court for the District of Columbia issued a consent order resolving claims brought by the Kennedy campaign against the Commission in Kennedy for President Committee v. FEC (Civil Action No. 81-2552). The court dismissed with prejudice all other pending judicial claims between the Kennedy Committee and the Federal Election Commission.
In the suit, filed on October 21, 1981, the Kennedy Committee claimed that the FEC had violated the Government in the Sunshine Act (5 U.S.C. §552b) by:
- Considering the final audit report on Senator Edward Kennedy's Presidential primary campaign in executive sessions, which are closed to the public; and
- Failing to indicate in public notices announcing these executive sessions that the FEC would consider the Kennedy audit report. The Kennedy Committee had asked the district court to order the FEC to make available to the Kennedy campaign and the public a tape recording or written transcript (as well as any other documents) pertaining to the FEC's discussion of the audit report.
Resolution of Claims
In the consent order, the FEC agreed to make available to plaintiff and the public portions of the transcript involving the FEC's consideration of the final Kennedy audit report at Commission meetings held on August 25 and 26 and September 15 and 16, 1981. The Commission also agreed to make available documents pertaining to those meetings. Both parties agreed, however, that the Commission could delete from these transcripts discussions related solely to FEC personnel matters, enforcement actions, litigation strategy and matters exempted from public disclosure by the Freedom of Information Act (FOIA). Similarly, the parties agreed that portions of the documents pertaining to those meetings could be withheld pursuant to various exemptions under the Freedom of Information Act.
The consent order expressly conditioned release of the transcripts on the parties' compliance with the following requirements:
- Within 15 days of the order, the FEC would make available an index of deletions in the transcripts and documents to be released. The Kennedy Committee could then object to any deletions in the transcript within 10 days of the index's release. Disputed deletions could not, however, delay release of the transcripts or documents.
- Fifteen days after the Committee received the index, the FEC would make available copies of those portions of the transcripts and documents which the FEC determined were not exempt from disclosure.
- Within 20 days of receiving the transcripts and documents, the Kennedy Committee would present to the Commission any objections to deletions in writing. The FEC, in turn, would notify the Committee of its final determination on any disputed deletions within 20 days.
- The Kennedy Committee could ask the court to review any deletions still in dispute within 15 days of receiving the FEC's final determination on them. In reviewing such claims, the court would limit its consideration to whether the FEC had improperly withheld material from the transcripts.
Source: FEC Record -- February 1982, p. 8.
On May 15, 1984, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion in Kennedy for President Committee v. FEC (Civil Action No. 83-1521), which reversed a repayment determination that the FEC had made with regard to the Kennedy for President Committee. The committee was established by Senator Edward M. Kennedy (D-Mass.) as his principal campaign committee for the 1980 Presidential primaries. On the same day, for reasons set forth in the Kennedy opinion, the court also vacated an FEC repayment determination with regard to the Reagan for President Committee, President Reagan's principal campaign committee for his 1980 Presidential primary campaign. The Reagan campaign had challenged an $87,708 repayment determination made by the FEC in June 1983. (Reagan for President Committee v. FEC; Civil Action No. 83-1666.)1 The appeals court then remanded both cases to the Commission for further proceedings consistent with its opinion in the Kennedy case.
Background to the Court's Ruling on the Kennedy Case
On April 14, 1983, based on findings of statutorily mandated audits of the Kennedy campaign, the Commission determined that the campaign had exceeded the 1980 state-by-state spending limits for publicly funded candidates by $14,889 in New Hampshire and by $40,611 in Iowa. 2 FEC regulations require publicly funded Presidential primary candidates to repay to the U.S. Treasury nonqualified expenditures that are made with primary matching funds or private contributions. 3 11 CFR 9038.2(b)(2)(i). Consequently, the Commission determined that the Kennedy campaign had to repay the full amount of nonqualified campaign expenditures incurred by the campaign (i.e., $55,500).
In its December 21, 1983, petition to have the court review the FEC's repayment determination, the Kennedy campaign had not challenged the FEC's determination with regard to the amount of nonqualified expenditures the campaign had incurred. Rather, the Kennedy campaign contended that the repayment formula spelled out in the FEC's regulations exceeded the Commission's statutory authority because it required the repayment of the entire amount of nonqualified expenditures. The Kennedy campaign argued that the election law required publicly funded campaigns to repay only the portion of their nonqualified expenditures made with primary matching funds. As an alternative to the FEC's repayment formula, the Kennedy campaign proposed that its repayment be calculated by "multiplying the total amount of [non]qualified expenditures by the proportion of matching funds to total campaign funds."
Appeals Court Ruling
The appeals court noted that Section 9038(b)(2) of the Presidential Primary Matching Payment Account Act did not provide a specific formula for determining repayments resulting from nonqualified campaign expenditures. Nevertheless, the court held that "the statute gives rise to a repayment obligation only when the FEC determines that federal matching funds were used for nonqualified purposes." The court reasoned that "if Congress had intended the total amount of every unqualified expenditure to be repaid, the statute would not have expressly limited the repayment obligation to unqualified expenditures paid out of matching fund sources." The court maintained, however, that the FEC should not be bound by the Kennedy campaign's proposed repayment formula but should have discretion "in formulating a proper method for calculating the amount of unqualified campaign expenditures attributable to matching fund sources."
The court noted that, in promulgating the repayment regulation that implements the statutory provision, the FEC had reasoned that "if a candidate spends private campaign contributions...on nonqualified campaign expenditures, those private funds would obviously not be available to defray the candidate's qualified campaign expenditures. The net result would be that the candidate would subsequently require more public funding to meet his or her qualified expenses. In essence, this additional public funding would restore private campaign funds diverted by the candidate to nonqualified campaign purposes." The court maintained, however, that the "Commission's regulation ...indulges the unreasonable presumption that all unqualified expenditures are paid out of federal matching funds." The court concluded that "the true 'net result' of the depletion of the overall campaign fund will be either an increase in the campaign's final deficit or a decrease in the campaign's final surplus. In the case of a deficit, the total federal funds would have been spent regardless of the unqualified expenditures. In the case of a surplus, the government is entitled to recover only its pro rata share of the final campaign surplus."
1 Reagan For President Committee v. FEC,
734 F.2d 1569 (D.C. Cir. 1984).
2 Presidential primary campaigns that receive public funds must agree to limit spending to both a national limit and a separate limit for each state.
3 Nonqualified campaign expenditures include non campaign-related expenses, certain expenditures made before or after candidacy and expenditures exceeding the limits for publicly funded Presidential primary campaigns.
Source: FEC Record -- July 1984, p. 6.
Kennedy For President Committee v. FEC, 734 F.2d 1558 (D.C. Cir. 1984).
On May 17, 1993, the U.S. District Court for the Eastern District of Louisiana dismissed this case, ruling that Jon Khachaturian failed to raise a substantial constitutional challenge to the $1,000 contribution limit as applied to his independent candidacy. The district court had previously certified the constitutional questions to the U.S. Court of Appeals for the Fifth Circuit. The appeals court, however, concluded that the certification was premature and remanded the case to the district court with instructions to determine whether certification was merited. The district court found that it was not.
Mr. Khachaturian appealed that decision but, on October 13, 1993, the U.S. Court of Appeals for the Fifth Circuit dismissed his appeal at his own request.
Mr. Khachaturian was an independent candidate for the U.S. Senate in Louisiana's 1992 open primary. His suit, filed shortly before the election, contended that the $1,000 limit on contributions from individuals (2 U.S.C. §441a(a)(1)(A)) discriminated against his candidacy because it prevented him from raising sufficient funds to compete effectively against the incumbent major-party candidate.1 He said that he had contribution pledges of $200,000 but could only accept $75,000 under the limit.
The district court certified his constitutional questions to the court of appeals in accordance with 2 U.S.C. §437h.2
(Mr. Khachaturian also asked the court to prohibit the FEC from enforcing the $1,000 limit against him and to order Louisiana 's Secretary of State to place his name on the general election ballot even if he lost the primary. The court denied the motion.)
Remand by Court of Appeals
The court of appeals remanded the case to the lower court with instructions to determine whether Mr. Khachaturian's challenge was frivolous in light of Buckley v. Valeo. In that decision, the Supreme Court upheld the $1,000 contribution limit as constitutional on its face and rejected claims that it discriminated against independent and minor-party candidates. In order for Mr. Khachaturian to present a plausible challenge to the $1,000 limit as applied to his candidacy, the court of appeals said that he would at least have to provide factual support for his argument that "the $1,000 limit had a serious adverse effect on the initiation and scope of his candidacy."
Dismissal by District Court
The district court said that Mr. Khachaturian "fail[ed] to come even close" to alleging facts suggesting that amounts in excess of the $1,000 limit would have affected the outcome of the election. The court concluded: "The law is clear...that the $1,000 campaign contribution limit applies to minor party candidates....As a matter of law, the plaintiff fails to raise a colorable constitutional claim." The court therefore granted the FEC's motion to dismiss. (Civil Action No. 92-3232, Section F.)
1 Mr. Khachaturian had made similar claims in
an advisory opinion request in which he asked for an exemption from the $1,000
limit on constitutional grounds. In its response, AO 1992-35,
the Commission said that it did not have jurisdiction to rule on the constitutionality
of the limit but noted that the Supreme Court had upheld the limit in Buckley
2 Section 437h states: "The district court immediately shall certify all questions of constitutionality of this [Federal Election Campaign] Act to the United States court of appeals for the circuit involved, which shall hear the matter sitting en banc."
Source: FEC Record -- August 1993, p. 5; and December 1993, p. 3.
Khachaturian v. FEC, 980 F.2d 330 (5th Cir. 1992) (en banc); No. 92-3232 (E.D. La. May 10, 1993), on remand.
On April 23, 2001, the plaintiffs filed a complaint in the U.S. District Court for the Central District of Illinois. The complaint appeals a civil money penalty the Commission imposed on Bayne for Congress (the Committee) and Ms. Kieffer, as treasurer, for failure to file the Committee's 2000 October Quarterly Report. The Committee attempted to file a termination report in June of 2000.
In December 2000, the Commission found reason to believe that the Committee and Ms. Kieffer had violated 2 U.S.C. §434(a), which requires the timely filing of reports by political committees, by not filing the Committee's October 2000 Quarterly Report. The Commission assessed a civil money penalty in the amount of $4,500 in accordance with 11 CFR 111.43.
Source: FEC Record -- July 2001 [PDF].
On February 14, 1984, the U.S. Court of Appeals for the District of Columbia Circuit denied Mr. Stephen A. Koczak's petition for a writ of mandamus compelling certain FEC actions. (Stephen A. Koczak v. FEC, No. 84-5086, February 9, 1984.) In his suit, Mr. Koczak had asked the appeals court to order the FEC to:
- Complete, by February 17, 1984, its investigation of a complaint Mr. Koczak had filed with the FEC on January 17, 1984;
- Report findings of the investigation to the court by February 21, 1984; and
- Assess for each Democratic primary candidate who participated in the Dartmouth College debate the amount of expenditures permissible in New Hampshire, once services and facilities provided by various groups had been counted against the candidate's New Hampshire spending limit.1
Source: FEC Record -- April 1984, p. 10.
On October 2, 2008, Committee for Truth in Politics, Inc. (CTP) and Holly
Lynn Koerber (collectively the Plaintiffs) filed suit against the FEC in the
U.S. District Court for the Eastern District of North Carolina. The suit
challenges the constitutionality of the FEC’s disclaimer and reporting
requirements for electioneering communications (ECs) that "may reasonably be
interpreted as something other than as an appeal to vote for or against a
specific candidate," as described by the Supreme Court in FEC v. Wisconsin Right to
Life (WRTL). The Plaintiffs also challenge the constitutionality of the
Commission’s "enforcement policy" 1 on political
committee status. The CTP asks the court to declare that the ads described in
their complaint are neither express advocacy nor electioneering communications
subject to the prohibition on corporate treasury funding under WRTL, that the
Federal Election Campaign Act’s disclosure requirements for such ECs are
unconstitutional and that the FEC’s "PAC enforcement policy" is unconstitutional
and beyond FEC authority under the Administrative Procedure Act.
An electioneering communication (EC) is defined by the Federal Election Campaign Act (the Act) and FEC regulations as any broadcast, cable or satellite communication that refers to a clearly identified federal candidate and is publicly distributed within 30 days of a primary election or 60 days of a general election for the office sought by the candidate, and is targeted to the relevant electorate. 11 CFR 100.29(a). The Act and FEC regulations require disclosure of ECs that aggregate more than $10,000 in a calendar year. 2 U.S.C.§434(f)(1). In WRTL, the Supreme Court held that corporations and labor organizations cannot be prohibited from using treasury funds to make an EC unless the EC is "susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate." 127 S.Ct. at 2667.
CTP is a nonstock, nonprofit North Carolina corporation that incorporated in
September 2008. CTP states that it is presently engaging in "issue advocacy"
advertising and that it has broadcast one ad that mentions Senator Barack Obama
within 60 days of the November 2008 general election and that it intends to
broadcast another ad before the election. CTP states that it is currently
including disclaimers on the ads, but is not disclosing them under the Act’s
disclosure requirements for ECs. The complaint states that Holly Lynn Koerber is
a resident of Elizabeth City, NC, one of the places where CTP is broadcasting
its ads, who wishes to exercise her "First Amendment right to continue hearing
CTP’s issue-advocacy speech."
The Plaintiffs seek a declaration from the court that the ads that CTP has run do not constitute express advocacy, as defined in Commission regulations at 11 CFR 100.22. CTP also maintains that the ads are ECs that are not subject to financing restrictions under the WRTL rule because they do not constitute an appeal to vote for or against a particular candidate.
The Plaintiffs also seek a declaration from the court that the electioneering communication disclosure requirements are unconstitutionally overbroad as applied to ads that WRTL held are not subject to the EC financing restrictions.
CTP maintains that is not a political committee under the relevant law
because it is neither controlled by a candidate nor does it have the "major
purpose" of primarily engaging in regulable, election-related speech. CTP
maintains that its activities will be nonpolitical intervention, including
social welfare activities and lobbying. CTP seeks a declaration from the court
that the FEC’s PAC status enforcement policy is unconstitutional on its face and
as applied and void for being beyond statutory authority.
1 The complaint references the FEC’s Supplemental Explanation and Justification of its Political Committee Status rules, 72 FR 5595 (February 7, 2007).
Source: FEC Record -- November 2008 [PDF].
On October 26, 1990, the U.S. District Court for the District of Columbia granted the FEC's motion for summary judgment, thereby dismissing Dr. Daniel F. Kripke's suit against the agency. Dr. Kripke alleged that the FEC had acted contrary to law by failing to act on his administrative complaint within 120 days. See 2 U.S.C. §437g(a)(8)(A). The court stated that "[t]here is no statutory requirement that the Commission act within 120 days." The court went on to say that, in ruling on an action such as Dr. Kripke's, the court "must presume valid action, act deferentially and withhold its hand unless it appears that the Commission has been arbitrary and capricious. [citations deleted.]"
In this case, the court found that there had been no unreasonable delay and that the agency had not acted arbitrarily or capriciously in its handling of the matter. Accordingly, the court granted summary judgment to the FEC.
Source: FEC Record -- December 1990, p. 4.
Kripke v. FEC, No. 90-1597 (D.D.C. Oct. 26, 1990) (memorandum).