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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.”

# # #

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

Contact: Kristen Hagan
[email protected]

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

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Copyright 2008 The Moderate Voice
  • Neocon

    Im not sure that there will ever be campaign finance reform ever again if we allow politicians to solicit funds via the internet. People in Somalia can effect the outcomes of local elections in Montana with the simple push of a button.

    While ingenious and clever the fact is that Obama’s has become a world wide campaign in which people are actually beginning to feel as if they can influence the outcome of our elections and that they can drive the dynamics of how our country works to the potential detriment of the USA and her own special interests.

    One only has to look at a recent article here at TMV to see what Im talking about.

    America’s Image Revives; 84 Percent of French Favor Obama

    • TheFrequentPoster

      I don’t see why soliciting money via computer-to-computer transmissions is any different than doing so via person-to-person transmissions. Both are done over the same telecommunications network. The first is called “the Internet,” and the second is called “a phone call.” Someone can just as easily call in a contribution from Somalia as transmit the information from one computer to another.

  • runasim

    It looks like no laws can stop the flow of special interest money to lawmakers.
    We are truly in a dark place. Business was as much in bed with government, at taxpayers’ expense, during the Gilded Age, but then, the people were unted in voicing complaints.

    Now, beginning with Reagan, the government has succeeded in selling, and a compliant public has bougnt, the notion that this kind of moral corruption is just fine, as long as ‘my’ Party is winning. People are no longer united in their complaints and demands for reforms.

    It warms my heart to see that even some Dem. lawmakers are complaining about Obama’s anti-lobbyist position. His opponents are becoming absolutely paranoid with their TPM’s (Somalia will elect out president, etc.). Despite the loopholes in his own campaign fundraising, I take the criticisms to be a good sign. At least he is focusing everyone’s attention in the right direction, Maybe competitive shaming will do a little of what no law can do. Even though revelations come heavily wrapped in scurrilous,false accusations, if lawmakers and candidates are nervous, some effect could seep to the right places. Let them be nervous and feel they are being watched.

  • Neocon

    When you solicit money via the telephone most likely you are not calling people in France, Belgium, Indonesia, or China to ask them for their support.

    The internet allows people to simply look up a website and press a couple buttons and they have as effectively as you and I cast a vote. There is a huge difference. HUGE. Russian Mafia figures can give a candidate millions.

    The worst thing that ever happened for campaign finance reform is Barak Obama and his internet campaign. The can of worms opened has been immense. The consequences profound and the impact obvious. Without the internet Barak Obama would never have gained the funds to make a decent run for the presidency. Things most definetely would be different today without the internet.

    After having said the above they will come to the conclusion that the internet giving is a great thing because in fact we now have a black politician running for the presidency so it must be a GOOD thing.

    Of course because Barak Obama is your candidate (generic you…….not intended to point out anyone in particular) then of course the concept of soliciting donations from the internet is a great idea. However in the future it will be available to all candidates as well. Now we can see the funding of KKK members or I hate Jews members or whatever members gaining immense support from a world wide audience that does not always share our points of views about things nor do they necessarily have the interests of America in mind.

    Internet funding is a special interest nightmare or watershed. Depending on how you look at it. If people can steal your credit information online, hack into your computer they can make it look like they are a little ole lady from Milwaukee donating to Senator X or President Candidate Y very easily.

  • aba23

    Neocon may have a point that the Internet could allow for easier skirting of contribution regulation, but that ignores the upside–it also facilitates more broadbased, legitimate, individualized–dare I say “grassroots”–contributions as well. If the latter positive (more democratic campaign financing) outweighs the negative (more efficient regulatory evasion), well at least that’s progress.

  • JSpencer

    My response would be similar to that of aba23. The internet has really encouraged many more Americans to participate and feel they are part of the process, not only with regard to raising funds to support their candidate of choice, but also when it comes to giving them a voice- in venues like this for instance. I suppose there is the danger of too much democracy, but somehow I’m not worried about that.

    As for the amount of influence on the elections outside the USA – this has always been a factor one way or another. Remember a certain speech released by Bin Laden immediately prior to a certain election? Elections can be tipped as much by that sort of thing as they can by big bux. That said, the idea of a level playing field moneywise has a certain appeal, that way the message becomes the important factor, rather than the frequency of the message.

    By the way, I don’t recall having seen expressions of concern among rightward leaning folks over the disparities of campaign funding back when GWB was accumulating his war chest. Funny no?

  • Jim_Satterfield

    Actually, when someone makes a contribution the IP address they are doing it from can easily be traced so that contributions from out of the U.S. can be regulated. While there are technical ways around it your average contributor isn’t going to do it.

  • Neocon

    Actually your wrong. When a donation is made to it is made via paypal or some other contribution and as such the ip address that refers the cash to is paypal and not your IP address in Somalia.

    Foreign nationals can contribue to pacs but they just cannot have any influence or say in what or how the pac spends its money or on what they spend their money. Thus as we are going to see PACS are going to gain more and more overseas money as the pacs turn increasingly to internet contributions.

    Look at the mindboggling amounts of money that have been raised so far.

    Also if memory serves me that democrats ended up spending almost identical amounts in the 2004 election campaign even though Bush garnered his war chest much earlier then did Kerry.

    That being said I do not care who is grabbing the cash. Funding campaigns that open up to worldwide web donations is a BAD Idea. The only reason either side is not moaning about it right now is because they dont give a sheet about you and me. They just want the money.

    The more………..the merrier. Its a bad idea.

  • runasim



    There is no absolutely fool proof system for campaign contributions and never has been.

    What’s to prevent Martians from contributing cash through intermediaries?
    The origin of PayPal payments can be traced, btw, as PayPal payments are NOT

    How is anyone to know that, you, yourself aren’t acting as an intermediary for a foreign or alien power? It’s certainly POSSIBLE. Should we worry? Should you have to prove that it’s not true?

    This is an age-old method of political attack, character assasintio. and creating conspiracy theories. First, create doubt and suspicion by raising unfounded possiblities. Then, demand that the accused prove that the possible is not true.
    In the meantime, some mud has been flung, and there is always the chance that some will stick.

    NO, neocon, It’s up to you to prove that foreigners have actually conttributed to Obama’s campaign, Only then, should this be taken seriously.

    This is so NOT subtle.

  • Neocon


    This is an age-old method of political attack, character assasintio. and creating conspiracy theories.

    And so you turn right around and use it on me. Essentially in your own words assassinating my character.


  • Neocon

    And Runasim aside…… point is that while Barak Obama has opened the eyes of the world to the potential to the internet and the amounts of money it can generate, my true angst is not with presidential campagins so much as it is with PAC’s and the mind boggling influence they potentially could generate with huge and I do mean huge donations that could come in from the world over.

    Regulations read…………… my above post. Ive actually researched this issue and the can of worms waiting to be realized from it is immense.

    Live in France. Hate John Kerry? Want to assassinate his character…….contribute to the Swift Boat PAC. Thats certainly what they needed more of was more money so they could spend more money on assassinating a fine Senators character to win an election. I only use this for illustraions purposes…………Im not advocating the French hate John Kerry or Democrats.

    So I am opposed to this type of funding for all candidates and all PAC’s. period.

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