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Posted by on Jun 13, 2008 in At TMV | 11 comments

Campaign Finance Reform and Unintended Consequences

Today the D.C Court of Appeals struck down a variety of FEC regulations that were too loose and vague to reflect the intentions of the Bipartisan Campaign Reform Act (BCRA). Details follow courtesy of Democracy21

While I am reassured that the intentions of the BCRA are being enforced I question whether the paradigm of trying to restrict the flow of money into politics is futile. Perhaps it would be more effective to adopt a paradigm to neutralize the influence of money in the crafting and enforcement of public policy. It seems to be that it would be a lot more effective and much easier to manage to simply use public funds to level the playing fields between candidates and parties. For Example, If Obama and supportive organizations raise and spend $400 Million then McCain and friends would get enough public money to equal their budgets.

This would preserve equal opportunity to market their candidates and issues while eliminating any interference in raising as much money as they like. And for those who think that this is welfare for candidates then consider that it is likely to be far less expense for the public than the special interest subsidies that distort pragmatic budget management.

Democracy 21 Press Release, June 13, 2008,

D.C Court of Appeals Again Strikes Down FEC Regulations on Coordination

The U.S. Court of Appeals for the D.C. Circuit today issued an opinion affirming key aspects of a lower court ruling that struck down several important regulations issued by the Federal Election Commission (FEC) to implement the Bipartisan Campaign Reform Act (BCRA), including important regulations relating to the definition of “coordinated” campaign activity.

The ruling comes in a case brought by Rep. Christopher Shays (D-CT), who challenged the FEC rules as contrary to BCRA, which was enacted by Congress in 2002 to end the soft money system.

“This is a very important victory for the Bipartisan Campaign Reform Act and for the efforts of Rep. Shays to ensure that the campaign finance laws are properly implemented and enforced,” according to Democracy 21 President Fred Wertheimer.

Wertheimer is a member of the legal team that brought the case on behalf of Rep. Shays. The team was led by Charles G. Curtis, Jr. of the law firm Heller Erhman LLP.

“Today’s ruling is yet another sharp repudiation of the FEC’s continued failure to properly implement BCRA,” according to Wertheimer. “The fact that it has taken more than six years and four court victories to make clear to the FEC that it cannot issue a coordination regulation contrary to law shows why we must have fundamental FEC reform.”

“The FEC should conduct expeditious rulemaking proceedings and promptly issue new rules that fully and effectively implement the soft money ban in BCRA,” Wertheimer said.

Rep. Shays, along with former Rep. Martin Meehan (D-MA), initially filed suit in 2002 challenging nearly two dozen of the FEC’s regulations issued under BCRA. Nearly all of the challenged regulations were struck down by the district court, and the D.C. Circuit affirmed across the board on all issues appealed by the Commission. The FEC then reissued some regulations to comply with the statute, but failed to correct problems in other rules. Rep. Shays again challenged a number of the revised rules as still falling short of the law. The district court again invalidated almost all of the challenged rules.

Today’s D.C. Circuit opinion affirms the lower court ruling which invalidated regulations relating to coordination, as well as rules relating to get-out-the-vote and voter registration activities by state parties. The D.C. Circuit also invalidated a rule that allowed soft money solicitations by federal officeholders and candidates at state party fundraising events. That rule had been upheld by the lower court.

In its unanimous opinion today authored by Judge David Tatel on behalf of himself and Judges Merrick Garland and Thomas Griffith, the D.C. Circuit took note of the years in which this case has been before the courts, and said, “We remand these regulations in the hope that, as the nation enters the thick of the fourth election cycle since BCRA’s passage, the Commission will issue regulations consistent with the Act’s text and purpose.”

The D.C. Circuit sharply criticized the FEC’s arguments in support of its rules, calling one argument “absurd,” saying that another “flies in the face of common sense,” emphasizing that another “disregards everything Congress, the Supreme Court, and this court have said about campaign finance regulation,” and concluding that another “ignores both history and human nature.”

The most important rule struck down today invalidates the FEC’s definition of “coordinated” campaign spending. The FEC rule said that the coordination test applies only to ads run within 90 days of a congressional election, or in the period starting 120 days before a presidential primary and running to the date of the general election. Any ad outside those windows would be treated as coordinated only if it contains express advocacy.

In striking down this rule, the Court said, “[M]ore than 90/120 days before an election, candidates may ask wealthy supporters to fund ads on their behalf, so long as those ads contain no magic words.”

In criticizing this rule, the Court said, “The FEC’s rule not only makes it eminently possible for soft money to be used in connection with federal elections, but it also provides a clear roadmap for doing so, directly frustrating BCRA’s purpose. Moreover, by allowing soft money a continuing role in the form of coordinated expenditures, the FEC’s proposed rule would lead to the exact perception and possibility of corruption Congress sought to stamp out in BCRA….” The Court relied on extensive evidence showing that candidates and interest groups often engage in “significant” amounts of early advertising, in some cases more than a year before the disputed election.

The Court also invalidated another FEC rule which allows a campaign vendor or former employee to share “material” campaign information with an outside spending group after only 120 days has passed. According to the Court, under this rule, “a top presidential campaign staffer could leave a campaign after an early primary, wait 120 days, and then spend the entire general election working for an outside group on behalf of his former candidate, using that candidate’s donor lists, mailing lists, and long-term strategic plan.” The Court concluded this rule was contrary to law.

The Court also struck down the FEC’s definitions of “get-out-the-vote” and “voter registration” activities. BCRA requires state parties to use federally regulated funds when they conduct such voter drive activities. The FEC’s definitions exclude any activities which are not “individualized” and which do not actually “assist” voters to register or vote, even if they encourage voters to do so.

The Court said these definitions “dramatically narrow which activities are covered” by the BCRA requirements.

According to the Court, “The FEC’s restrictive definitions of GOTV activity and voter registration activity run directly counter to BCRA’s purpose, and the Commission has provided no persuasive justification for them.” The Court concluded that these regulations “will allow the use of soft money for many efforts that influence federal elections, for as the Supreme Court observed in McConnell [v. FEC], ‘common sense dictates’ that ‘any efforts [by state or local parties] that increase the number of like-minded registered voters who actually go to the polls’ will ‘directly assist [a] party’s candidates for federal office.’”

Finally, the D.C. Circuit struck down an FEC rule which permits federal officeholders and candidates to solicit soft money at state party fundraising events, notwithstanding a broad prohibition in BCRA on soft money solicitation by such persons. BCRA allows federal candidates to attend, speak or be a featured guest at state party fundraising events, and the FEC interpreted that language to permit them to solicit soft money as well.

Although the lower court had upheld this rule, the D.C. Circuit found it contrary to law. “In our view,” according to the Court, “the regulation fails because it allows what BCRA directly prohibits.”

The D.C. Circuit did uphold one regulation at issue in the case – a rule that permits a group to establish an internal firewall if it wants to engage in both coordinated and independent activity for a candidate. The Court was troubled by the lack of guidance in the rule and found the issue “a close question,” but concluded that sufficient details and guidance could be provided in future “adjudications and advisory opinions.”

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Capital Bits and Pieces Vol. VII, No. 27 Released: Friday, June 13, 2008

Contact: Kristen Hagan
202-429-2008
[email protected]

For the latest reform news and to access previous reports, releases, and analysis from Democracy 21, visit www.democracy21.org

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