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On February 15, 1996, the U.S. District Court for the District of Maine ruled that the FEC's regulation at 11 CFR 100.22(b) exceeded the FEC's statutory authority because it broadened the definition of express advocacy beyond the Supreme Court's interpretation. Buckley v. Valeo and Massachusetts Citizens for Life v. FEC. This court case marked the first judicial review of the FEC's definition of express advocacy.
On October 18, 1996, the U.S. Court of Appeals for the First Circuit upheld the district court decision. The appeals court said it made its ruling "for substantially the reasons set forth in the district court opinion." The appeals court also cited FEC v. Christian Action Network, where a district court, in a decision summarily affirmed by the U.S. Court of Appeals for the Fourth Circuit, ruled that CAN's television and newspaper ads purchased as independent expenditures with corporate funds were not prohibited by 2 U.S.C. §441b because they contained no express advocacy.
On October 6, 1997, the Supreme Court denied the Solicitor General's request for it to hear this case.
The Maine Right to Life Committee (MRLC) is a nonprofit membership corporation established for the purpose of advocating pro-life stances. MRLC uses its funds to create and distribute a newsletter that includes discussions of federal candidates' stances on pro-life issues.
The Federal Election Campaign Act (the Act) contains a broad prohibition against using corporate and labor organization money in connection with a federal election. 2 U.S.C. §441b.
The Supreme Court, citing First Amendment concerns, explicitly limited the scope of §441b in its Buckley and MCFL decisions. The Court held that the ban on corporate and labor organization money could only be constitutionally applied in instances where the money is used to expressly advocate the election or defeat of a clearly identified candidate for federal office. The Buckley decision listed examples of specific phrases that the Court said constituted express advocacy. The FEC incorporated this list in its definition of express advocacy at 11 CFR 100.22(a).
However, subpart (b) of 11 CFR 100.22 is based, inter alia, on the decision of the U.S. Court of Appeals for the Ninth Circuit in FEC v. Furgatch. The Furgatch case involved a communication that criticized President Carter and included the phrase: "Don't let him do it." The court held that this communication contained express advocacy and supported this conclusion by noting that the timing of the message coincided with the eve of the 1980 Presidential general election. The Court of Appeals reasoned that language may be said to expressly advocate a candidate's election or defeat if, when taken in context and with limited reference to external events, it can have no other reasonable interpretation.
District Court Decision
The court held that the Supreme Court's MCFL decision and a decision of the First Circuit in Faucher v. FEC supported using Buckley's list of phrases as a bright-line test to detect express advocacy. The rigid approach of a bright-line test, noted the court, avoids the chilling of free speech that occurs when the communicator is uncertain about whether or not his or her message contains express advocacy. Further, the idea that a message's content might become express advocacy as an election nears adds to the chilling effect of 11 CFR 100.22(b) on free speech.
The court recognized the difficulty the FEC faces in crafting a regulation that effectively defines express advocacy, but noted that the Buckley, Faucher and MCFL decisions required it to safeguard First Amendment interests over the interest of keeping corporate and labor organization money out of the electoral process. Based on these precedents, therefore, the court ruled that 11 CFR 100.22(b) was invalid because it defined express advocacy in broader terms than the Buckley, MCFL and Faucher decisions.
The court dismissed MRLC's other claims for injunctive and declaratory relief.
Appeals Court Decision
The U.S. Court of Appeals for the First Circuit upheld the lower court ruling that part of the FEC's regulation defining express advocacy (11 CFR 100.22(b)) was invalid.
Supreme Court Action
On October 6, 1997, the Supreme Court denied the Solicitor General's request for it to hear this case.
Source: FEC Record -- April 1996; December 1996; and November 1997.
Maine Right to Life Committee, Inc. v. FEC, 914 F. Supp. 8 (D.Me. 1996), aff'd, 98 F.3d 1 (1st Cir. 1996), cert. denied, 118 S. Ct. 52 (1997).
During February and March 2007, Barry Bialek, Jon Marcus and Jack and Renee Beam filed separate, but substantially similar complaints with district courts in Colorado, Arizona and Northern Illinois, respectively, alleging that the Commission violated the Federal Election Campaign Act (the Act) by "tacitly cooperating and conspiring with" Attorney General Alberto Gonzales to circumvent the Act.
According to the complaint filed February 14, 2007, Plaintiff Barry Bialek made contributions towards John Edwards’ 2004 Presidential campaign. In November 2005, the U.S. Attorney General began an investigation into possible violations of the Act by the plaintiff. See April 2007 Record. The plaintiff filed a complaint with the District Court in Colorado, alleging that the Commission must refer, by a vote of the majority of the Commission, a matter to the Attorney General prior to the Attorney General investigating or prosecuting a violation of the Act.
These cases are related to the Fieger v. Gonzales case currently pending in the Eastern District of Michigan, in which Geoffrey Fieger alleges that the Act grants the Commission exclusive jurisdiction over criminal violations and bars the Department of Justice from conducting any grand jury investigations unless and until the Commission makes a referral. See March 2007 Record.
The plaintiffs made contributions to John Edwards’ 2004 presidential campaign. According to the complaints, the plaintiffs are being investigated by the Department of Justice for violations of the Act. Mr. Bialek was summoned before a grand jury in November 2006 and Mr. Marcus was summoned before a grand jury in October 2006.
The plaintiffs assert that by giving "exclusive jurisdiction" over the Act to the Commission, Congress determined that no criminal investigation can take place unless the Commission has formally referred the criminal matters to the Attorney General. The plaintiffs claim that the Attorney General’s investigations are unlawful and unconstitutional since the Commission did not refer the plaintiffs’ alleged violations to the Attorney General.
In addition to those allegations, the Beam plaintiffs allege that Attorney Gonzales intentionally interfered with the Commission’s investigation and that the Commission’s failure to conduct its own investigation violates the Act and the Administrative Procedures Act.
The Bialek and Marcus complaints seek a declaration that the defendants’ actions are unlawful and the award of costs and attorneys’ fees. In addition to this relief, the Beam complaint asks the court to declare the that the Commission has failed to uphold the Act and to issue a Writ of Mandamus requiring the Commission to conduct its own investigation into the matter prior to any investigation by the Attorney General.
On March 10, 2008, the U.S. District Court for the District of Arizona granted the Commission’s motion to dismiss the suit filed by Jon Marcus against the U.S. Attorney General and the Chairman of the FEC, and denied the plaintiff’s motion for declaratory judgment, holding that the Attorney General has discretion over whether to investigate and prosecute criminal violations of the Federal Election Campaign Act (the Act) and is not required to wait for a referral of a case from the Commission.
In this case, the court agreed with the court decisions in Barry Bialek v. Gonzales, et al. and Geoffrey N. Fieger, et al. v. Gonzales, et al. that the plain language of the Act does not "infring[e] the Attorney General’s plenary power to enforce criminal violations of the Act." The court further found that the Act’s legislative history "demonstrates that Congress did not intend to limit or displace the Attorney General’s independent authority to pursue criminal violations of the Act, and that prior case law has held that criminal enforcement may either originate with the Attorney General or stem from a referral by the Commission to the Attorney General."1
The court denied the plaintiff’s motions for a hearing and oral arguments
and for declaratory judgment and granted the Commission’s motion
to dismiss the complaint with prejudice.
The plaintiff filed a Notice of Appeal in this case on March 18, 2008.
1 The court specifically rejected the plaintiff’s assertion that 1980 amendments to the Act had overturned United States v. International Union of Operating Engineers, Local 701, 638 F.2d 1161 (9th Cir. 1979).
- Bialek v. Mukasey [formerly Bialek v. Keisler; Bialek v. Gonzales], U.S. District Court for the District of Colorado, 07-CV-00321-WYD-PAL.
- Marcus v. US Attorney and FEC Chairman (08-15643, 9th Cir.)
[formerly Marcus v. Mukasey; Marcus v. Gonzales, U.S. District Court for the District of Arizona, CV070398-PCT-EHC] .
- Beam v. US Attorney and FEC Chairman [formerly Beam v. Gonzales], U.S. District Court for the Northern District of Illinois, 07CV1227.
On May 18, 2000, the U.S. Court of Appeals for the Third Circuit rejected constitutional challenges to the Federal Election Campaign Act's (the Act's) prohibitions on corporate contributions and contributions in the name of another. 2 U.S.C. §§441b and 441f.
Renato P. Mariani brought the challenges under 2 U.S.C. §437h, which permits individual voters to challenge the constitutionality of any provision of the Act in district court. The district court certifies the constitutional questions to the circuit court of appeals, which hears the cases sitting en banc.
Mr. Mariani is currently the subject of criminal prosecution concerning the very provisions he challenged in this case.
Mr. Mariani argued that the development of issue advocacy and the increasing role of unregulated "soft money" in the electoral process "has so eroded the theoretical distinction between hard and soft money" that §441b's prohibition against corporate contributions has become "fatally underinclusive." As such, he asserted, it should be struck down. He also challenged the ban as a violation of corporations' First Amendment rights.
In response, the court acknowledged that "[t]he practical distinctions between hard and soft money may have diminished in the past decade with the rise of issue advocacy, but not to such an extent that there is no practical distinction between the two." The court went on to note, "If hard and soft money were equivalent, it would be hard to imagine why Mariani would have gone to the lengths he allegedly went to in order to give hard money instead of soft." Noting that Congress can act incrementally-and referencing legal precedents-the court concluded that the corporate ban "is not fatally underinclusive."
The court also rejected the First Amendment challenge, citing the U.S. Supreme Court's decisions in FEC v. National Right to Work Committee, FEC v. National Conservative PAC and Austin v. Michigan Chamber of Commerce. Though the court stated that none of these cases directly addressed the constitutionality of the corporate ban, their "strong implications" led the court "to reject Mr. Mariani's facial challenge to §441b(a)."
Contributions in the Name of Another
Mr. Mariani argued that §441f's ban on contributions in the names of others violates the First Amendment by failing to advance a compelling government interest and is underinclusive because it does not apply to soft money donations.
The appeals court found the 441f challenges "patently without merit." The court noted that the Supreme Court, in Buckley v. Valeo, specifically held that the Act's disclosure requirements were constitutional absent a "reasonable probability" that disclosure would result in "threats, harassment, or reprisals" for contributors. Since contributions in the names of others undermine disclosure, the court rejected Mr. Mariani's First Amendment challenge.
The court also rejected Mr. Mariani's underinclusiveness argument. The court concluded that "Congress was free to determine that disclosure of hard money donations was the most important form of disclosure, and to limit the regulation to that area."
Source: FEC Record -- July 2000.
This suit, filed on July 7, 1978, challenged the constitutionality of Section 441b of the Act, which limits solicitations by corporations and their separate segregated funds (PACs) of voluntary contributions to the PACs.
Three corporations and their affiliated PACs, three executives and one hourly employee of one of the corporations were the plaintiffs in this suit. They sought injunctive relief and a declaratory judgment that 441b of Title 2 is an unconstitutional violation of plaintiffs' rights under the First and Fifth Amendments of the United States Constitution. Specifically, plaintiffs alleged that:
- The limitations on the corporate solicitation of hourly employees for contributions to the corporate PAC unconstitutionally impinge upon plaintiffs' rights to free speech, assembly and association and the right to hear, under the First Amendment. (Under Section 441b, corporations and their PACs may use corporate funds to solicit employees twice a year; the solicitations must be in writing and delivered to the employee's residence.)
- The limitations on the solicitation of hourly employees violate plaintiff employee's right to associate with the other plaintiffs.
- These same limitations, by arbitrarily dividing employees into two classes and restricting free flow of information between such classes, discriminate against plaintiff employee in violation of his Fifth Amendment right to due process of law.
- The term "solicitation" as used in 441b is impermissibly vague, causing plaintiffs to be uncertain as to the extent and application of the prohibitions of 2 U.S.C. §441b. When combined with the treatment of criminal sanctions, plaintiffs asserted, this vagueness restrains their activity, in violation of the First and Fifth Amendments.
Plaintiffs argued that the harm brought about by Section 441b was actual, not hypothetical, because plaintiffs have limited their solicitation activities, fearing the imposition of the civil and criminal sanctions contained in the Act.
The FEC petitioned the court to dismiss the suit, arguing first that the court lacked jurisdiction because:
- Special statutory judicial review mechanisms, such as Section 437h of the Act, are the exclusive avenues for judicial review.
- Under Section 437h of the Act, the Commission, the national committee of any political party, or any individual eligible to vote may bring appropriate actions to challenge the constitutionality of the Act. The Commission argued that none of the plaintiffs were eligible to bring such an action under Section 437h.
- Challenges brought by any other person or entity must be raised during the ordinary course of enforcement procedures provided in Section 437g of the Act.
The Commission also argued that the complaint did not present a "case or controversy" because plaintiffs can make no showing of present, direct injury resulting from Section 441b. The Commission made the additional argument that plaintiffs failed to state a complaint upon which relief could be granted. In response to the plaintiffs' contention that the term "solicitation" is impermissibly vague, the FEC argued that the term has been employed in a wide variety of federal statutes without further definition and with no apparent need to "guess at its meaning."
District Court Ruling
On November 18, the U.S. District Court for the District of Columbia granted the Commission's motion to dismiss the suit. The court said that the special provision of 2 U.S.C. §437h(a), expediting judicial review of constitutional issues, is inapplicable to the plaintiffs. The individual plaintiffs sue "not in their individual capacities but rather to vindicate the rights of the corporate entities. That derivative right was not the constitutional right of an 'individual eligible to vote' which Congress considered 'appropriate' for vindication in a declaratory judgment action under this section [437h]." Moreover, the court held that the plaintiffs presented no case or controversy sufficiently ripe for decision by a federal court. Plaintiffs filed an appeal.
Appeals Court Ruling
On May 8, 1980, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the opinion of the district court (No. 78-2080).
Source: FEC Record -- February 1979, p. 3.
Martin Tractor Co. v. FEC, 460 F. Supp. 1017 (D.D.C. 1978), aff'd, 627 F.2d 375 (D.C. Cir.), cert. denied, 449 U.S. 954 (1980).
On December 10, 2003, the Supreme Court issued a ruling upholding the two principal features of the Bipartisan Campaign Reform Act of 2002 (BCRA): the control of soft money and the regulation of electioneering communications. The Court found unconstitutional the BCRA's ban on contributions from minors and the so-called "choice provision," which provides that a party committee cannot make both coordinated and independent expenditures on behalf of a candidate after that candidate's general election nomination.1 The Supreme Court's decision affirmed in part and reversed in part the U.S. District Court for the District of Columbia's decision in this matter.
Congress passed the BCRA in order to eliminate soft money donations to national parties and to ensure that electioneering communications immediately before election day are financed with regulated money and properly disclosed to the public. The BCRA, among other things:
- Bans national party committees from raising or spending money outside the limits and prohibitions of the Federal Election Campaign Act (FECA);
- Limits state and local party committees' use of such funds for activities affecting federal elections;
- Prohibits solicitations and donations by national, state and local party committees for §501(c) tax exempt organizations that make expenditures in connection with federal elections and §527 organizations that are not federal political committees or state or local party or candidates' committees;
- Prohibits federal candidates and officeholders from soliciting, receiving, directing, transferring or spending soft money in connection with federal elections and limits their ability to do so in connection with state elections;
- Bans state and local candidates and officers from raising and spending nonfederal funds for public communications that promote, attack, support or oppose a federal candidate;
- Defines and regulates "electioneering communications;"
- Implements the party "choice provision;"
- Increases the hard money contribution limits;
- Permits even higher contribution limits for candidates opposed by "millionaires" who use their own funds for campaign expenditures;
- Defines coordination with a candidate or party committee; and
- Bans minors from making contributions to federal candidates and political party committees.
Most provisions of the BCRA took effect on November 6, 2002. As soon as the BCRA was enacted in March 2002, however, a number of parties filed challenges to the constitutionality of several BCRA provisions, including those listed above. These cases were consolidated around McConnell v. FEC and heard by a three-judge panel of the U.S. District Court for the District of Columbia. On May 2, 2003, the District Court determined that certain provisions were constitutional, while a number of others were unconstitutional or nonjusticiable. The District Court issued a stay of its ruling on May 19, 2003, while the case received an expedited appellate review by the Supreme Court.
Supreme Court Decision
National party committees' use of soft money
The BCRA bans national party committees and their agents from soliciting, receiving, directing or spending any funds that are not subject to the FECA's limits, prohibitions and reporting requirements. 2 U.S.C. §§441(a)(1) and (2). The Court found that this provision did not violate the Constitution because the governmental interest in "preventing the actual or apparent corruption of federal candidates and officeholders" was sufficiently important to justify contribution limits. The Court noted that the "record is replete with examples of national party committees' peddling access to federal candidates and officeholders in exchange for large soft-money donations." The Court was also not persuaded by the plaintiffs' argument that this provision unconstitutionally interferes with national party committees' ability to associate with state and local committees. The Court found that nothing on the face of the provision "prohibits national party officers from sitting down with state and local party committees or candidates to plan and advise how to raise and spend soft money, so long as the national officers do not personally spend, receive, direct, or solicit soft money."
State and local party committees' use of soft money
The Court also upheld the BCRA's limits on state and local party committees' use of soft money for activities affecting federal elections, finding that this provision was closely drawn to match the governmental interest of preventing corruption and the appearance of corruption. 2 U.S.C. §441i(b). This provision of the BCRA provides that state and local party committees cannot use nonfederal funds to finance "federal election activity" (FEA), which is defined as:
- Voter registration activity during the 120 days before an election;
- Voter identification, get-out-the vote and generic campaign activity "conducted in connection with an election in which a [federal] candidate. . . appears on the ballot;"
- A public communication that refers to a clearly identified federal candidate and promotes, attacks, supports or opposes that candidate; and
- The services of a state committee employee who spends more than 25 percent of his or her compensated time on activities in connection with a federal election.
Instead, party committees must finance these activities with federal funds or, in some cases, they may finance them with a combination of federal and Levin funds, which are a new category of funds defined in the BCRA.2 The Court found that Congress had "concluded from the record that soft money's corrupting influence insinuates itself into the political process not only through national party committees, but also through state committees, which function as an alternate avenue for precisely the same corrupting forces." The Court concluded that preventing "corrupting activity from shifting wholesale to state committees and thereby eviscerating the FECA clearly qualifies as an important governmental interest."
The Court further determined that the fact that FEA captures some activities that affect campaigns for nonfederal office is not sufficient to render the provision unconstitutionally overbroad. Activities that are considered FEA under the BCRA were also covered by the pre-BCRA allocation rules, and the Court concluded that "[a]s a practical matter, BCRA merely codifies the FEC's allocation regime principles while justifiably adjusting the applicable formulas in order to restore the efficacy of FECA's longstanding restriction on contributions to state and local committees for the purpose of influencing federal elections." The Court determined that the first two types of FEA listed above substantially benefit federal candidates by encouraging like-minded voters to go to the polls. The third type of FEA, involving public communications that support or oppose a federal candidate, directly affects the election in which the candidate is running, and the regulation of funds used for these communications is "closely drawn to the anticorruption interest it is intended to address." Similarly, the final FEA, regarding the payment of party committee staff, is justified by Congress' interest in preventing circumvention of the law.
Moreover, the Court found the Levin amendment to be constitutional insofar as the associational burdens created by its restrictions on transfers of Levin funds between party committees are far outweighed by the need to prevent the circumvention of the overall scheme. Additionally, the Court determined that evidence suggesting that the Levin fund restrictions might prevent parties from amassing the funds needed to make themselves heard was merely speculative.
Party solicitations for and donations to §501(c) and §527 organizations
The BCRA bans national, state and local party committees and their agents from soliciting funds for or making or directing donations to:
- §501(c) tax-exempt organizations that make expenditures in connection with federal elections; and
- §527 organizations, unless they are federal political committees or state or local party or candidate committees. 2 U.S.C. §441i(d).
The Court found the restriction on solicitations to be a valid anticircumvention measure: "Absent this provision, national, state, and local party committees would have significant incentives to mobilize their formidable fundraising apparatuses, including the peddling of access to federal officeholders, into the service of like-minded tax exempt organizations that conduct activities benefiting their candidates." The Court also found that the restrictions on donations were not unconstitutionally overbroad so long as the prohibition was not construed to prevent party committees from donating funds already raised in compliance with the FECA.
Federal candidates and officeholders
The BCRA additionally bars federal candidates and officeholders from soliciting, receiving, directing, transferring or spending soft money in connection with federal elections, and it limits their ability to do so for state and local elections. 2 U.S.C. §§441i(e)(1)(A) and (B). The Court found that these restrictions were closely drawn to prevent the corruption or the appearance of corruption of federal candidates and officeholders while at the same time accommodating these individuals' speech and associational rights.
State and local candidates and officeholders
The BCRA bars state and local candidates and officeholders from raising or spending nonfederal funds to pay for public communications that promote or attack federal candidates. 2 U.S.C. §442i(f). The Court found this to be a valid anticircumvention measure because, rather than limiting the amounts the state candidate/officeholder can spend, it merely places restrictions on the contributions that they can draw on to fund communications that directly affect federal elections. Moreover, by regulating only public communications, the provision "focuses narrowly on those soft-money donations with the greatest potential to corrupt or give rise to the appearance of corruption of federal candidates and officeholders."
In Buckley v. Valeo, 424 U.S. 1 (1976), the Supreme Court construed the FECA's disclosure requirements for certain entities' independent expenditures as limited to communications expressly advocating the election or defeat of a clearly identified federal candidate. However, the BCRA defines a new category of communication- "electioneering communications"- that encompasses any broadcast, cable or satellite communication that clearly identifies a federal candidate, airs within 30 days of a federal primary or 60 days of a federal general election and is targeted to the relevant electorate. 2 U.S.C. §434(f)(3)(A)(i). The BCRA requires persons who fund electioneering communications to disclose the source of the funds in certain circumstances and bars the use of corporate and union moneys to fund the communications.
The plaintiffs argued that Buckley v. Valeo drew a constitutionally mandated line between express advocacy, which contains "magic words" such as "vote for" or "vote against," and issue advocacy. The Court, however, found that the express advocacy restriction is not a constitutional command: "Both the concept of express advocacy and the class of magic words were born of an effort to avoid constitutional problems of vagueness and overbreadth in the statute before the Buckley Court." The Court found that the components of the definition of electioneering communication are objective and easily understood and, thus, "the vagueness objection that persuaded the Buckley Court to limit FECA's reach to express advocacy is inapposite here."
The Court upheld the restrictions on the use of corporate or union treasury funds to finance electioneering communications. Corporations and unions may still finance such communications through their separate segregated funds, and thus the provision does not result in an outright ban on expression. The Court rejected the plaintiffs' claims that arguments in support of the longstanding ban on express advocacy communications financed by corporations and unions cannot be applied to the larger quantity of speech captured in the definition of electioneering communication. The Court found instead that "issue ads broadcast during the 30- and 60-day periods preceding federal primary and general elections are the functional equivalent of express advocacy." The Court further explained that the "justifications for regulating express advocacy apply equally to those ads if they have an electioneering purpose, which the vast majority do."
The Court also upheld the BCRA's requirement for the disclosure of the names of persons who contributed $1,000 or more to the individual or group paying for the communication, finding that "the evidence here did not establish the requisite reasonable probability of harm to any plaintiff group or its members resulting from compelled disclosure." The Court was also not persuaded by the plaintiffs' arguments against the requirement to disclose executory contracts for communications that have not yet aired.3 The Court determined that the probability that harm might result from requiring such disclosure was outweighed by the public's interest in obtaining full disclosure prior to the election.
The Court found that the BCRA's provision requiring political parties to choose between coordinated and independent expenditures on behalf of a candidate once he or she receives the party's nomination places an unconstitutional burden on the parties' right to make unlimited independent expenditures. 2 U.S.C. §441a(d)(4). The Court explained that "[a]lthough the category of burdened speech is limited to independent expenditures for express advocacy-and therefore is relatively small-it plainly is entitled to First Amendment protection. . . . The fact that the provision is cast as a choice rather than an outright prohibition on independent expenditures does not make it constitutional."4
The BCRA extended the FECA's coordination rules governing expenditures coordinated with a candidate to those coordinated with a party committee and directed the Commission to promulgate rules that did not require "agreement or formal collaboration" in order to establish coordination. 2 U.S.C. §441a(a)(7)(B)(ii). The Court found this provision to be constitutional, noting that the absence of an agreement requirement does not render the provision unconstitutionally vague and that the plaintiffs had provided no evidence to suggest that this definition of coordination has chilled political speech.
Contributions from minors
The Court found the BCRA's ban on political contributions from individuals under 18 years old unconstitutional because it violates the First Amendment rights of minors.
1 The Court additionally ruled on a number of other
challenges from the plaintiffs, including finding their challenge to the so-called
Millionaire's Amendment to be nonjusticiable.
2 The limitations, restrictions and reporting requirements for raising Levin funds differ from those for raising federal funds. See 11 CFR 300.31 and 300.32(a)(4). Each state, district and local party committee has a separate Levin fund donation limit, and such committees are not considered to be affiliated for the purposes of determining Levin fund donation limits. Levin funds spent by a given state or local party committee must be raised solely by that particular committee, and these committees cannot raise Levin funds through joint fundraising efforts or accept transfers of Levin funds from other committees. Additionally, these committees cannot accept or use as Levin funds any funds that come from, or in the name of, a national party committee, federal candidate or federal officeholder. 11 CFR 300.31 and 300.34(b). For more information, see the April 2003 Record, and the September 2003 Record.
3 The Court made a similar determination in response to the plaintiffs' challenge of the BCRA's requirement for the disclosure of certain executory contracts for independent expenditures. 2 U.S.C. §434.
4 The Court also voiced concerns about the fact that for the purposes of the choice provision all political committees established and maintained by a national party and all committees established and maintained by a state party are considered a single committee. 2 U.S.C. §441a(d)(4)(B). The Court determined that as a result "it simply is not the case that each party committee can make a voluntary and independent choice between exercising its right to engage in independent advocacy and taking advantage of the increased limits on coordinated spending under §§315(d)(1)-(3). Instead, the decision resides solely in the hands of the first mover, such that a local party committee can bind both state and national parties to its chosen spending option."
District Court (DC)
Mr. George T. McDonald, a 1984 candidate for a House seat representing New York's 15th Congressional district, filed suit in the U.S. District Court for the District of Columbia seeking review of the FEC's dismissal of an administrative complaint (Civil Action No. 84-2710). In his complaint, filed with the FEC on May 9, 1984, Mr. McDonald claimed that Andrew Stein, a state official opposing him for the House seat, had used funds from his 1981 campaign committee for state office (Stein '81) to finance his 1984 Congressional campaign (Stein for Congress '84). Specifically, Mr. McDonald alleged that Mr. Stein had illegally used state campaign funds (consisting of corporate contributions and unrepaid loans) to make media expenditures for his Congressional candidacy.
On May 4, 1984, the respondent had submitted a request to the FEC for an investigation into specific expenditures made by the 1981 state campaign on behalf of Mr. Stein. The FEC then merged the respondent's request (i.e., a pre-Matter Under Review (MUR)) with Mr. McDonald's administrative complaint.
Mr. McDonald asked the court to declare that:
- The FEC's dismissal of his administrative complaint was contrary to law;
- The FEC's merger of his administrative complaint with the respondent's request limited the scope of the FEC's investigation, resulting in an arbitrary dismissal of Mr. McDonald's complaint; and
- The FEC must comply with these declarations within 30 days.
District Court Ruling
On October 5, 1984, the U.S. District Court for the District of Columbia granted the FEC's motion to dismiss George T. McDonald v. FEC on grounds that Mr. McDonald had failed to pursue his legal claims and to meet the statutory deadline for filing his suit. See 2 U.S.C. §437g(a)(8)(B).
Source: FEC Record -- October 1984, p. 9; and December 1984, p. 4.
McDonald v. FEC, No. 84-2710, (D.D.C. October 5, 1984).
On April 19, 1995, the U.S. Supreme Court ruled that an Ohio regulation prohibiting anonymous political literature violated the First Amendment. This decision reversed the judgment of the Ohio Supreme Court.
[Although the FEC was not a party to this case, which involves state election law, the opinion is summarized here because the Court's holdings and rationale may have future relevance to aspects of federal election law.]
In April 1988, Margaret McIntyre distributed leaflets she produced to persons attending a public meeting to discuss a referendum on a proposed school tax levy. These leaflets expressed Mrs. McIntyre's opposition to the levy. Ohio Code, §3599.09(A), requires political literature to include the name and address of the issuer. Some of Mrs. McIntyre's leaflets were anonymous, yet she continued to distribute them even after she was made aware of §3599.09(A).
The Ohio Elections Commission fined Mrs. McIntyre $100 for violating §3599.09(A). On review, the case climbed to the Ohio Supreme Court, which upheld the $100 fine.
The First Amendment and Overriding State Interests
In arriving at its decision to overturn the Ohio court's ruling, the U.S. Supreme Court first determined that anonymous political speech is protected under the First Amendment. In support of this notion, the Court stated that:
" . . . anonymous pamphleteering . . . [has] an honorable tradition of advocacy and of dissent. Anonymity is a shield from the tyranny of the majority. . . . It thus exemplifies the purpose behind the Bill of Rights, and of the First Amendment in particular: to protect unpopular individuals from retaliation and their ideas from suppression at the hand of an intolerant society."
The Court recalled, for example, that the Federalist Papers, which favored the ratification of the Constitution, were published under fictitious names.
The Court's analysis focused on evaluating the state's interest in curbing anonymous speech. The Court cited First National Bank of Boston v. Bellotti as a precedent for applying the following test: A government-imposed infringement on the First Amendment is tolerable if the infringement serves an overriding public interest. Additionally, Talley v. California requires that laws must be narrowly tailored so as to impact only on speech that threatens the public interest.
In the case at hand, Ohio maintained that §3599.09(A) served the state's interest in preventing the dissemination of fraudulent and libelous statements.
The Court, however, found that Ohio has a number of other regulations aimed at preventing fraud and libel. While acknowledging that §3599.09(A) may help to enforce the other prohibitions against the dissemination of false political information, the Court did not believe this justified the broad prohibition at §3599.09(A).
Ohio also argued that the regulation, by requiring political messages to include the issuer's name and address, provided voters with information on which to evaluate the message's worth. The Court dismissed this argument by noting that in the case of a leaflet written by a private citizen who is not known by the recipient, the name has no significance.
The Court thus reasoned that Ohio's interests were not sufficient to justify an infringement upon the First Amendment.
Reconciling McIntyre with Buckley v. Valeo
In closing, the Court distinguished this case from its 1976 landmark decision in Buckley v. Valeo, which dealt with the constitutionality of the Federal Election Campaign Act. The Court explained that Buckley addressed the issue of mandatory disclosure of campaign-finance expenditures; it did not involve a prohibition of anonymous campaign literature.
The Court stated that: "Though . . . mandatory reporting undeniably impedes protected First Amendment activity, the intrusion is a far cry from compelled self-identification on all election-related writings."
The Court pointed out that the law addressed in the Buckley decision is narrowly tailored to serve the public interest of campaign finance disclosure. The law regulates only candidate elections, and not referenda and other issue-based ballots. The Court stated, "In candidate elections, the government can identify a compelling state interest in avoiding the corruption that might result from campaign expenditures."
Source: FEC Record -- June 1995, p. 12.
McIntyre v. Ohio, No. 93-986 (U.S. Supreme Court, Apr. 19, 1995).
On January 17, 2001, the Miles for Senate Committee, Steven H. Miles and Barbara Steinberg (the plaintiffs) filed suit against the Commission, appealing a civil money penalty the Commission assessed under the administrative fine regulations against Miles for Senate (the Committee) and its treasurer, Barbara Steinberg, LTD. The U.S. District Court for the District of Minnesota granted judgment in favor of the Commission on January 9, 2002.
The plaintiffs had argued, among other things, that Commission regulations that distinguish between certified or registered mail and regular mail for the purpose of determining when a report is filed are arbitrary and capricious and in excess of the Commission's rulemaking authority. 11 CFR 104.5(e). The court found that Mr. Miles and Ms. Steinberg lacked standing to request judicial review, and that the plaintiffs' arguments were untimely because they did not raise them during the Commission's administrative process. Moreover, the court found that, even if the plaintiffs had raised their arguments in a timely manner, the arguments were unpersuasive and failed as a matter of law.
The Commission found reason to believe (RTB) that the Committee and its treasurer failed to file a July 15, 2000, Quarterly Report by the deadline, and proposed a $2,700 civil penalty against the Committee and its treasurer under the Administrative Fine regulations. 2 U.S.C. §437g(a)(4)(C) and subpart B of 11 CFR 111. Ms. Steinberg had sent the Committee's report via first class mail on the due date, and the Commission did not receive it until six days later. Under Commission regulations, if a report is sent registered or certified mail, it is considered filed on the date of the U.S. postmark. However, if a report is sent by first class mail, it is considered filed on the date it is received by the FEC or the Secretary of the Senate. 11 CFR 104.5(e). As a result, the Committee's filing was considered six days late.
Commission regulations provide for an administrative process through which respondents can challenge the RTB finding and the proposed civil money penalty. The plaintiffs responded to the Commission's RTB determination to assess the civil money penalty, but failed to respond to the Commission's reviewing officer's recommendations within the 10-day response period. 11 CFR 111.36(f). On December 14, 2000, the Commission made a final determination that the plaintiffs violated the Federal Election Campaign Act (the Act) by filing the report late and assessed the civil money penalty. The plaintiffs petitioned the court for review of this determination.
The court found that Mr. Miles and Ms. Steinberg lacked standing to request judicial review of the matter because they were not respondents in the Commission's determination. The Commission assessed the penalty against the Committee and the incorporated entity Barbara Steinberg, LTD, which was on record as the Committee's treasurer. Under the Act, only a "person against whom an adverse determination is made" may ask for judicial review of an FEC determination. 2 U.S.C. §437g(a)(4)(C)(iii).
Timeliness of Arguments
Under Commission regulations, if respondents fail to raise an argument with the Commission during the administrative process, they waive their right to make that argument in a petition to the court. 11 CFR 111.38. The court found that the plaintiffs had waived the arguments made in their petition by not first making the arguments to the Commission.
In their motion to the court, the plaintiffs argued that the Commission regulation that distinguishes between first class mail and registered or certified mail exceeds the Commission's rulemaking authority and draws an arbitrary distinction. 11 CFR 104.5(e). The court, however, did not find that the regulation exceeded the Commission's authority to make regulations to implement the Act: "Because the regulation merely incorporates the same distinction as that made by the statute, it is impossible to find that the regulation is inconsistent with the statute." 2 U.S.C. §434(a)(5). The court also concluded that it could not respond to the plaintiffs' arguments concerning whether distinguishing among postmarks was a "bad policy." Such arguments, the court explained, should be addressed to legislators and administrators rather than to the courts.
The court dismissed Mr. Miles's and Ms. Steinberg's claims and granted summary judgment to the FEC on the Committee's claims.
Source: FEC Record -- March 2002.
On June 29, 1989, the U.S. District Court for the District of Columbia denied the plaintiff's motion for summary judgment in Harry P. Miller, Jr. v. FEC (Civil Action No. 89-0094).
Mr. Miller filed suit in January 1989 claiming that the Commission had acted contrary to law in dismissing an administrative complaint that he had filed the previous October against Bush-Quayle 88, the 1988 Republican Presidential general election campaign committee. The complaint had alleged that several Texas state officials had conducted fraudulent activities on behalf of the Bush-Quayle campaign. Informed of the charges by the Commission, the respondents denied any knowledge of the alleged violations. The Commission subsequently voted to find "no reason to believe" that the violations alleged by Mr. Miller had occurred and dismissed the matter.
Finding that the Commission's dismissal of Mr. Miller's complaint was reasonable, the court said that the plaintiff failed to show that the FEC had before it any evidence of illegal activity. The court concluded, "Considering the unfocused allegations...and respondents' reply [indicating no knowledge of criminal activity], the FEC's decision to dismiss Mr. Miller's complaint was clearly not 'contrary to law.'"
On April 25, 1990, the U.S. Court of Appeals for the District of Columbia Circuit granted the FEC's motion for summary affirmance of the district court's decision in favor of the FEC. (Civil Action No. 89-5394.)
For the reasons stated in the district court opinion, the appeals court granted the FEC's motion for summary affirmance of the lower court decision, stating: "The merits of the parties' positions are so clear as to justify summary action."
Source: FEC Record -- September 1989, p. 8; and October 1990, p. 7.
Miller v. FEC, No. 89-0094. (D.D.C. 1989) (memorandum opinion), aff'd mem., 923 F.2d 201 (Table) (D.C. Cir. 1990) (unpublished disposition).
On April 19, 1996, the U.S. District Court for the District of Minnesota ruled that the FEC's regulations defining and governing qualified nonprofit corporations (11 CFR 114.10) were unconstitutional on First Amendment grounds.
On May 7, 1997, the U.S. Court of Appeals for the Eighth Circuit affirmed the district court's decision.
The Federal Election Campaign Act (the Act) contains a broad prohibition against using corporate and labor organization money in connection with a federal election. 2 U.S.C. §441b.
In FEC v. Massachusetts Citizens for Life (MCFL), 479 U.S. 238 (1986), the Supreme Court, citing First Amendment concerns, concluded that §441b could not constitutionally prohibit certain nonprofit corporations from making independent expenditures.1 In that case, the Supreme Court ruled that independent expenditures made by MCFL were exempt from the ban at §441b because MCFL had the following essential features:
- It was formed to promote political ideas and did not engage in business activities;
- It did not have shareholders or other persons who had a claim on its assets or earnings, or who had other disincentives to disassociate themselves from the organization; and
- It was not established by a business corporation or labor union and had a policy of not accepting donations from such entities.
The FEC promulgated the regulations at 11 CFR 114.10 to incorporate the MCFL decision into its regulatory framework. These regulations established a test to determine whether a corporation qualified for exemption from the Act's prohibition against corporate independent expenditures.
Minnesota Citizens Concerned for Life (MCCL), a nonprofit corporation, brought suit to challenge the constitutionality of the FEC's new regulations. MCCL alleged that it does not qualify to make independent expenditures under the FEC's regulations because:
- It engages in business activities (sells advertising space in its newsletter, rents its membership list and engages in fundraisers that are not expressly described as requests for donations to be used for political purposes);
- It issues affinity credit cards to its members (impermissible under 11 CFR 114.10(c)(3)(ii) because it creates a disincentive for members to disassociate themselves from MCCL); and
- It accepts corporate contributions.
District Court Ruling
The court noted that the U.S. Court of Appeals for the Eighth Circuit, in addressing a similar Minnesota state law, rejected the argument that MCFL had created a bright-line test for exemption from the Act's prohibition against corporate independent expenditures. Day v. Holohan (34 F.3d 1356 (8th Cir., 1994). Since the judicial district of Minnesota is in the eighth circuit, Day constituted controlling law in this district court. The court also noted the decision of the U.S. Court of Appeals for the Second Circuit in FEC v. Survival Education Fund, 65 F.3d 285 (2nd Cir., 1995).
The Day decision concluded that, by disqualifying from the independent-expenditure exemption those nonprofit, membership corporations that engaged in some business activities and/or accepted corporate donations, Minnesota 's regulations were too restrictive and not narrowly tailored to serve a compelling governmental interest. Relying on Day, the district court ruled that these aspects of the FEC's regulations at 11 CFR 114.10(c) were unconstitutional.
The Day decision, however, did not address other aspects of the FEC's regulations, which plaintiffs had challenged in this suit, including: the imposition of reporting requirements on those corporations that make independent expenditures under the MCFL exemption (11 CFR 114.10(e)); and the requirement that exempt corporations disclose to their contributors that their donations may be used for political purposes (11 CFR 114.10(f)).
Instead of deciding whether these parts of the regulation were independently unconstitutional, the district court found that the unconstitutional provision was not severable under the severability doctrine: A regulation that contains unconstitutional provisions must be stricken in its entirety unless that which remains after the unconstitutional provisions are excised is fully operative as law and the body enacting the regulation would have enacted the constitutional provisions even in the absence of those which are unconstitutional. Because the court found that the FEC's definition of a qualified nonprofit corporation at 114.10(c) was flawed and that that provision was not severable from the rest of 114.10, the court concluded that the entire provision at 114.10 was void.2
Appeals Court Ruling
The appeals court found that, contrary to the FEC's arguments, MCCL had standing to bring this case to court. It also found that MCCL's challenge to the regulations was "ripe" for judicial resolution, and, on the authority of the Day decision, the court then affirmed the district court's declaratory judgment voiding the Commission's regulations.
Article III standing requires that a party show actual injury, a casual relationship between that injury and the challenged conduct and the likelihood that a favorable decision by the court will redress the alleged injury.3 The FEC argued that MCCL lacked standing because voiding the statute would not redress its alleged injury. The FEC maintained that, even without the regulation, MCCL would have to prove that it was entitled to make independent expenditures under MCFL and Day. The appeals court found that MCCL had either to make significant changes to its operations or risk sanctions for violating FEC regulations and concluded that MCCL did not need to show that a favorable decision would relieve "every" injury. According to the appellate court, the district court redressed an injury for MCCL by declaring that it could continue to make independent expenditures if it met the exemptions defined in Day.
While the courts have been wary of pre-enforcement challenges-such as MCCL's challenge to the Commission's regulations before the organization has actually been alleged to have violated them-this stance is not always applicable. The Supreme Court has held that "the Administrative Procedure Act authorizes a pre-enforcement challenge to agency regulations if the issue is 'fit' for prompt judicial decision and if failure to review would cause significant hardship to the parties." In this case, the appeals court said that the legal issue-whether the Eighth Circuit's interpretation of MCFL in Day invalidates portions of the Commission's regulations-was "fit for prompt determination." Moreover, the court said, court action in this case would also relieve MCCL of a hardship because its representatives would now know that MCCL's methods of operation would be tested under Day, rather than under the Commission's regulations.
On the merits, the appellate court agreed with the district court that Day required voiding 11 CFR 114.10 (c)(2) and (c)(4). Only the court of appeals sitting en banc, the court noted, could overturn Day's interpretation of the Supreme Court's MCFL decision. Furthermore, because the district court found the remainder of 11 CFR 114.10 not to be severable from the invalid portions-a ruling the Commission had not appealed-11 CFR 114.10 as a whole was properly declared void.
1 An independent expenditure is an expenditure made
without any coordination with a candidate's campaign for a communication which
expressly advocates the election or defeat of a clearly identified candidate
for federal office.
2 Although the court voided 11 CFR 114.10 in its entirety, the court noted that the FEC had the authority to impose certification and reporting requirements and to require qualified nonprofits to inform potential donors that their donations could be used for political purposes. These provisions, had they not been inextricably linked to the unconstitutional provisions, would have been entitled to deference.
3 Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).
On September 11, 2000, the U.S. Court of Appeals for the Eighth Circuit reversed the district court's judgment and ruled that Missouri 's limitations on political party contributions to candidates were unconstitutional. The court concluded that this case differed from the Buckley v. Valeo and Nixon v. Shrink Missouri Government PAC cases because it involved limits on contributions from a political party whereas the other two involved contributions from individuals.
In Buckley, the Supreme Court ruled that individual contribution limits were constitutional because they imposed "only a marginal restriction upon the contributor's ability to engage in free communication." The circumstances are different in this case, however, because the contributor is a political party, the court said. The court noted that the relationship between candidates and individuals is not nearly as close as that between candidates and parties. The identities of candidates and parties are often "virtually indistinguishable from each other." Whereas an individual can potentially corrupt a candidate with a contribution, parties and candidates have such "a unity of purpose" that the threat of corruption is "not a very realistic one." In addition, the court said that "a party's contribution provides an ideological endorsement and carries a philosophical imprimatur that an individual's contribution does not, and thus it cannot properly be called a 'contribution' in the same sense that the individual contributions in Buckley were."
The court also maintained that, in this case, there was no evidence that limiting parties' contributions would reduce corruption or measurably decrease the number and instances when individuals circumvented their own contribution limits. Finally, the court held that its ruling also applied to Missouri 's limits on party in-kind contributions.
Source: FEC Record -- November 2000.
227 F. 3d 1070 C.A., 8 (Mo.) 2000.
District Court Ruling
On June 30, 1980, the U.S. District Court for the District of Columbia dismissed a suit in which Stewart R. Mott, Rhonda K. Stahlman and the National Conservative Political Action Committee (NCPAC) had sought declaratory and injunctive relief against the FEC. In its motion to dismiss the suit (Mott v. FEC, Civil Action No. 79-3375), the FEC argued that some of the claims presented in the suit were not ripe for consideration by the court while others failed to state a claim on which relief could be granted. In its role as amicus curiae, Common Cause had also filed a brief arguing dismissal of the suit.
Plaintiffs had challenged the constitutionality of provisions of the Act, FEC regulations, advisory opinions and other written interpretations which regulate independent political activity by prescribing limits on contributions from individuals, groups and political committees to other individuals, groups and political committees which make independent expenditures. Plaintiffs claimed that these provisions define the terms "contribution" and "expenditure" in overly broad and vague language.
Mr. Mott proposed that, together with other "like-minded individuals," he would purchase advertising space in The New York Times to express his views on political issues and expressly advocate the election or defeat of several clearly identified federal candidates. Specifically, he claimed that the First Amendment rights of those purchasing the ad would be restricted by provisions of the Act illegally requiring that:
- This group of individuals register with the FEC as a political committee when their expenditures for the advertising exceed $1,000; and
- The amount spent in the joint advertising purchase count against the limits imposed on individual contributions to political committees.
The district court determined that the constitutional issues raised by Mr. Mott were not ripe for judicial decision in the absence of a more fully developed factual record. The claim that Mr. Mott wished to "join with others" in purchasing the advertising was broad enough to encompass a single purchase of advertising space as well as a series of advertisements and solicitations by a full-fledged political committee. Further, the court noted that Mr. Mott should have requested an advisory opinion from the FEC on the application of the Act to this proposed activity before seeking a review by the court. Both NCPAC and Ms. Stahlman challenged the constitutionality of limits on contributions by individuals to political committees which make independent expenditures. Ms. Stahlman's and NCPAC's claims raised three constitutional issues:
- Whether the definition of "contribution" in 2 U.S.C. §431(8) abridges First Amendment rights since it limits contributions which individuals may make to political committees undertaking independent expenditures;
- Whether 2 U.S.C. §441a(a)(3), which limits total contributions by an individual within any calendar year to $25,000, is unconstitutional under the First and Fifth Amendments; and
- Whether 2 U.S.C. §441a(a)(1)(C), which limits contributions by a person to a political committee to $5,000 in any calendar year, is unconstitutional under the First and Fifth Amendments.
The district court pointed out that, in the Buckley v. Valeo decision, the Supreme Court had upheld the constitutionality of the contribution limits. (Buckley v. Valeo, 424 U.S. 1 at 38 (1976).) The district court said that, although the Supreme Court had not specifically addressed the $5,000 limit on individual contributions to political committees, its "reasoning...clearly indicated that the restriction is constitutional." The Supreme Court had reasoned that a limit on contributions infringed far less on First Amendment rights than did a limit on expenditures, because the contribution limits involved restrictions on indirect, rather than direct, political expression. Further, whatever infringement did occur was justified by the need to curb the "actuality and appearance of corruption" flowing from large individual contributions. (Buckley v. Valeo, 424 U.S. 1 at 26 (1976).)
In appealing the district court's decision, NCPAC and Ms. Stahlman reasserted their constitutional challenges. They also asked the appeals court to find "erroneous" the district court's refusal to certify their challenges to the appeals court.
Appeals Court Ruling
On December 8, 1981, the U.S. Court of Appeals for the District of Columbia Circuit issued a memorandum decision in National Conservative Political Action Committee (NCPAC) and Rhonda K. Stahlman v. FEC (Civil Action No. 80-1949). Citing as precedent the Supreme Court's June 1981 decision in California Medical Assoc. (CMA) v. FEC, the appeals court rejected plaintiffs' constitutional challenges and affirmed the district court's disposition of the case.
The appeals court rejected plaintiffs' assertion that NCPAC was not subject to the CMA decision because it not only made contributions but made independent expenditures as well. The court said the CMA decision did apply because NCPAC's activity was not limited to independent expenditures. Moreover, the court held that limits on NCPAC contributors did not impermissibly infringe on their free speech rights because the contributions constituted "speech by proxy" since contributors had no voice in NCPAC's decisions concerning independent expenditures. 101 S.Ct. at 2721-22.
The appeals court also followed precedent set by the CMA decision in rejecting plaintiffs' assertion that unlimited contributions earmarked for NCPAC's independent expenditures would not "risk corrupting or appearing to corrupt the political process in the manner Congress sought to prohibit." 101 S.Ct. at 2723 n. 19; 494 F. Supp. at 137.
Source: FEC Record -- September 1980, p. 7; and February 1982, p. 8.
Mott v. FEC, 494 F. Supp. 131 (D.D.C. 1980), aff'd mem. sub. nom. NCPAC v. FEC, 672 F.2d 896 (D.C. Cir. 1981).