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On June 27, 2005, the Commission asked the U.S. District Court for the Eastern District of New York to find that Tzvi Odzer knowingly and willfully made excessive contributions and contributions in the name of another to Friends of Weiner (Weiner Committee) in violation of the Federal Election Campaign Act (the Act). 2 U.S.C. §§441a(a)(1)(A) and 441f.
An FEC audit of the Weiner Committee found that in December 1999, Mr. Odzer gave the committee a $1,000 check for the 2000 primary and in May 2000, gave an additional $1,000 check for the general election. At the time, these contributions represented the maximum amount an individual could give to a federal candidate’s campaign. In June 2000, Odzer wrote three $2,000 checks, totaling $6,000 to the Weiner Committee drawn from his personal checking account. Each check was signed “Tzvi Odzer,” but bore the name of one of Mr. Odzer’s children in the “for” line. Upon receipt of the checks, the Weiner Committee recorded the contributions as having been made by Odzer’s children.
On June 16, 2004, the Commission entered into a conciliation agreement with the Weiner Committee, which paid a civil penalty for accepting excessive contributions and refunded the $6,000 to Odzer.
During 2004 and 2005, the Commission notified Mr. Odzer that it had found reason to believe and then probable cause to believe that he had knowingly and willfully violated the law by making excessive personal contributions in the names of his children. Mr. Odzer failed to file a written response and the Commission was unable to secure an acceptable conciliation agreement with him, prompting this suit.
Request for Relief
The Commission requests that the district court declare that Mr. Odzer knowingly and willfully violated the Act by making excessive contributions and by making contributions in the names of his three children. Additionally, the Commission asks the court to permanently enjoin Mr. Odzer from violating the Act and assess an appropriate civil penalty for each violation he is found to have committed.
Source: FEC Record -- September 2005 [PDF].
On June 29, 2004, the U.S. Court of Appeals for the District of Columbia Circuit dismissed as untimely the petitioner's request for review of the Commission's repayment determination against the National Committee of the Reform Party of the USA (RPUSA). Under that determination, the RPUSA must repay $333,558, plus interest, to the U.S. Treasury, representing public funds for the RPUSA's 2000 Presidential nominating convention that were not permissibly spent under the Presidential Election Campaign Fund Act. The court found that the petition for review of the repayment determination was filed beyond the 30-day period for filing such petitions.
On September 26, 2002, the Commission issued the Final Report of the Audit Division on the Reform Party 2000 Convention Committee, which included a determination that the RPUSA repay to the U.S. Treasury $333,558 of the federal funding it received for the RPUSA's 2000 presidential nominating convention. The Commission based its determination on audit findings that the RPUSA spent a portion of its public funds on expenditures not considered permissible under the Presidential Election Campaign Fund Act. The RPUSA was notified of the Commission's repayment determination and provided with a copy of the Final Audit Report on September 30, 2002.
On November 26, 2002, the RPUSA submitted a written request for administrative review of the repayment determination. On October 8, 2003, the Commission issued its Post-Administrative Review Repayment Determination, ordering the $333,558 repayment to the U.S. Treasury. The RPUSA was notified of this action on October 14, 2003, and provided with a copy of the Commission's Statement of Reasons.
In a letter dated November 14, 2003, the RPUSA requested that the Commission rehear its repayment determination; the request was denied on February 18, 2004.
On March 29, 2004, the National Committee of the Reform Party of the USA (RPUSA) and its Chairman, Shawn O'Hara, petitioned the U.S. Court of Appeals for the District of Columbia Circuit to review the Commission's final determination that the Committee repay $333,558, plus interest, to the United States Treasury.
On March 31, 2004, the U.S. Court of Appeals for the District of Columbia Circuit ordered on its own motion that the RPUSA show cause why its petition for review should not be dismissed for lack of jurisdiction for failure to timely file. The court found that the petition for review of the repayment determination was filed beyond the 30-day period for filing such petitions
On June 25, 1998, the U.S. District Court for the District of Columbia denied motions by the Ohio Democratic Party (ODP) and the Republican National Committee (RNC) for a preliminary injunction to prevent the FEC from enforcing its allocation regulation found at 11 CFR 106.5 and interpreted in AO 1995-25. The regulation and advisory opinion require the plaintiffs to pay a portion of their federal election-related advertisement costs with hard money, or funds that comply with the law's contribution limits and prohibitions. Both committees filed suits charging that application of the allocation regulation to issue advocacy advertisements was unconstitutional. The two suits were subsequently consolidated.
On November 6, 1998, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the lower court ruling that denied the RNC's and the ODP's motion for a preliminary injunction.
On August 27, 2002, in light of the recent enactment of the Bipartisan Campaign Reform Act of 2002 (BCRA), the plaintiffs and defendants agreed to the dismissal of this case.
The ODP and RNC charged that the FEC's allocation regulation violates the First and Fifth Amendments to the Constitution, and that the FEC lacks the authority to promulgate rules such as this. The ODP and RNC further alleged that the allocation regulation exceeds the FEC's authority because it regulates issue advocacy communications, not merely communications that expressly advocate the election or defeat of a federal candidate. The plaintiffs told the court that they would suffer irreparable harm if the injunction was not granted.
Rules for Preliminary Injunction
A preliminary injunction may be granted when:
- There is a substantial likelihood that the plaintiffs will succeed on the merits of the case;
- The plaintiffs will suffer irreparable harm if an injunction is not issued;
- An injunction will not substantially injure others; and
- An injunction will serve the public interest.1
District Court Decision
In denying the motion for a preliminary injunction, the court stated that the ODP and RNC were not likely to prevail on the merits of their claims and that the plaintiffs would not suffer irreparable injury if the injunction was not issued.
First Amendment Challenge
The plaintiffs argued that no compelling interest supported the FEC's allocation regulations, but the court recognized that the regulation prevents the appearance of corruption that could result if soft money was spent to influence federal elections. As the court explained: "The FEC is not seeking a spending cap on advertisements that influence federal campaigns, but rather is attempting to ensure that political parties do not facilitate any impression that wealth can buy access to our important federal decision makers."
Fifth Amendment Challenge
The ODP argued that it and other party committees are being treated differently than other types of organizations since they must fund issue advertising with a mix of hard and soft money. Organizations that are not political committees, such as corporate and labor organizations, may fund issue advertising completely with nonfederal funds. The court recognized the party committees' "unique burden," but noted that party committees also have "special benefits" under the Act. The court concluded that the FEC should be given the opportunity to develop evidence of "special corruption problems" associated with the parties' use of soft money to finance ads that influence federal elections.
The plaintiffs also argued that the FEC lacked the authority to promulgate the allocation rules. The court, however, pointed out that Congress gave the Commission extensive rulemaking and enforcement powers. Further, the court noted that the Commission had submitted the regulation in question to Congress for review, and neither chamber had disapproved it.
The court dismissed the plaintiffs' claims that they would suffer irreparable injury if the injunction was not granted. The court stated that: "Instead, it is the public who would be harmed if the FEC was enjoined from enforcing (its allocation regulations). If the public were to conceive that each Congressperson elected in the 1998 elections were improperly influenced by large donations to their political parties which were later funneled into issue advertisements with a clear electioneering message, public confidence in our system of government is likely to be further eroded."
Appeals Court Decision
On November 6, 1998, the appeals court affirmed the lower court ruling that denied the RNC's and the ODP's motion for a preliminary injunction. In September 1998, the appellate court had denied the parties' emergency motion for an injunction pending appeal of the district court decision.
In taking up the matter on a nonemergency basis, the appellate court stated that the RNC and ODP had failed to show that they were likely to be successful on the merits of the case or that they would suffer irreparable harm if an injunction were not granted.
The court found "scant" evidence the RNC and ODP would suffer irreparable harm, citing the two parties' own affidavits filed in this case. The RNC had stated that, if forced to follow the FEC's regulation, it would have "to divert hard money from federal, candidate support." Likewise, the ODP strategized that it would be able to spend more on issue advocacy advertisements and free up federal funds to support the election of federal candidates if it did not have to follow the allocation rule. In light of such "weak evidence," the court stated that the RNC and ODP had to show an exceptional likelihood that they would succeed in this case on its merits. This they did not do. Thus, the court denied the injunction.
Agreed to Dismiss
On August 27, 2002, in light of the recent enactment of the Bipartisan Campaign Reform Act of 2002 (BCRA), the plaintiffs and defendants agreed to the dismissal of this case. The Republican National Committee (RNC) had asked the U.S. District Court for the District of Columbia to enjoin the Commission from applying its allocation regulation at 11 CFR 106.5 to the RNC's "issue ads." The RNC claimed that the regulation was unconstitutional because it required party committees to allocate expenses between their federal and nonfederal accounts for communications that did not expressly advocate the election or defeat of a clearly identified candidate.
The BCRA bars national party committees from raising and spending nonfederal funds. As a result, the Commission has promulgated a new regulation at 11 CFR 106.5, which states how national party committees may spend nonfederal funds for limited purposes during the transition period between November 6, 2002, when the BCRA took effect, and December 31, 2002, after which national party committees may no longer spend nonfederal funds.2
1 Cityfed Fin. Corp. v. Office of Thrift Supervision,
58 F. 3d 738, 746 (D.C. Cir. 1995).
2 The Commission's new regulations, "Prohibited and Excessive Contributions: Non-Federal Funds or Soft Money," were published in the July 29, 2002, Federal Register (67 FR 49064). See the September 2002 Record [PDF], for a summary.
On June 11, 1983, Mr. Orloski filed a complaint with the Commission concerning a picnic sponsored by a senior citizens group to allegedly influence the election of Mr. Orloski's general election opponent, Congressman Donald L. Ritter. Mr. Orloski claimed that the picnic was a political event and thus: (1) corporate funding of the picnic constituted prohibited contributions to Mr. Ritter's reelection campaign and (2) the senior citizens group's sponsorship of the event caused it to become a political committee subject to the Act.
The Commission had dismissed a similar complaint from Mr. Orloski a year earlier. While challenging the FEC's dismissal of his first complaint in the district court (Civil Action No. 83-0026), Mr. Orloski made factual allegations that were not contained in the original complaint. Accordingly, in May 1983, the district court issued an order and stipulation which dismissed the case but which allowed Mr. Orloski to file a second complaint with the FEC. The FEC considered Mr. Orloski's second complaint and, on October 4, 1983, once again found no reason to believe that the respondents named in the complaint had violated the election law. As a result of the FEC's action, Mr. Orloski decided to file a second suit against the Commission (Civil Action No. 83-3513).
Second Suit, District Court's Ruling
On December 6, 1984 , the U.S. District Court for the District of Columbia granted the FEC's motion for summary judgment in Orloski v. FEC. The court found that the Commission's decision to dismiss Mr. Orloski's second administrative complaint was not arbitrary or capricious.
The district court concluded that the FEC had not acted contrary to law in finding "no reason to believe" that the respondents named in Mr. Orloski's second administrative complaint had violated the election law. The court held that the FEC had properly concluded that the picnic sponsored by the senior citizens was not a political event and therefore not subject to the prohibitions and requirements of the election law. Specifically, the court confirmed the FEC's determination that: (1) there were no communications at the picnic that expressly advocated Congressman Ritter's election or Mr. Orloski's defeat (e.g., name tags worn by Congressman Ritter's staff); and (2) there was no evidence to indicate that contributions to Congressman Ritter's campaign were either solicited or accepted at the picnic. The court concluded, "Orloski does not offer any compelling reason to believe the FEC was arbitrary in applying the two part test discussed above. Instead, Orloski attempts to convince the Court to apply a new test of holding any event not funded from funds appropriated to a congressional office to be a political event....There is simply no support in the statute, legislative history, or judicial decisions construing the Act to support this broad test of political events."
Nor did the court find merit in Mr. Orloski's contention that the election law requires the FEC to investigate a complaint unless the complaint fails to allege violations of the election law. The court found that "rather than requiring the Commission to investigate all facially valid complaints...the Commission may consider all the information before it and exercise its own informed discretion.... Thus the task of a court reviewing a Commission determination not to investigate a facially valid complaint is to determine whether on the basis of all the information available to the Commission, the decision not to investigate was arbitrary or capricious. Here it is clear....that the Commission's decision met this standard."
On January 9, 1985, Mr. Orloski appealed the district court's ruling.
Appeals Court's Ruling
On July 11, 1986, the U.S. Court of Appeals for the District of Columbia Circuit affirmed a district court decision that the Commission's dismissal of an administrative complaint filed by Mr. Richard Orloski in June 1983 was not arbitrary or capricious. (Civil Action No. 85-5012)
To determine whether the picnic sponsored by the senior citizens group was a political event, subject to the prohibitions and requirements of the election law, the FEC had applied a two-part test, i.e., (1) whether any communications at the picnic expressly advocated Representative Ritter's election and (2) whether contributions to Representative Ritter's campaign were either solicited or accepted at the picnic.
In deferring to the FEC's use of this two-part test for determining whether such events are political, the appeals court held that:
- "The FEC's interpretation represents a 'reasonable accommodation' between the Act's objectives and administrative exigencies."
- "The FEC has consistently adhered to this interpretation without Congressional objection, for at least eight years."
- "The recent history of the Act leads us to believe that Congress would approve of the line drawn by the FEC" between political and nonpolitical events. In particular, in amending the election law in 1979, Congress did not modify the FEC's interpretation of a campaign-related event.
The court then affirmed as reasonable the FEC's use of this two-part test to dismiss Mr. Orloski's administrative complaint. While noting that one part of the test (i.e., whether contributions were solicited) was not relevant to the picnic, the court held that the respondents had "strictly adhered to the FEC's narrow guidelines" for the second part of the test. None of the communications made in conjunction with the picnic expressly advocated Congressman Ritter's reelection. Accordingly, since the FEC properly determined that the picnic was not a political event, the court also confirmed the FEC's determination that corporate funding of the picnic did not constitute prohibited contributions to Mr. Ritter's reelection effort.
Finally, the court rejected Mr. Orloski's procedural challenges to the FEC's dismissal of his complaint. Specifically, Mr. Orloski claimed that, after giving the respondents an opportunity to reply to the allegation in his administrative complaint, the FEC should either have: (1) allowed Mr. Orloski to answer the respondents' replies or (2) made its "reason to believe" determination solely on the basis of Mr. Orloski's allegations.
The court rejected these procedural challenges on grounds that:
- "Section 437g(a)(1) requires the FEC to notify parties charged in a complaint and to give them the opportunity to respond";
- Since none of the facts of the case were in dispute, the FEC's conclusion would not have been affected by Mr. Orloski's replies; and
- Finally, before filing his first district court suit, Mr. Orloski did, in fact, have an opportunity to respond to the respondent's replies concerning the allegations in his administrative complaint.
Source: FEC Record -- February 1984, p. 8; February 1985, p. 5; and September 1986, p. 5.
Orloski v. FEC, No. 83-3513 (D.D.C. Dec. 6, 1984) (mem. opinion), aff'd, 795 F.2d 156 (D.C. Cir. 1986).