Category Archives: federal election commission

“Scoop: Biden taps new election money regulator”

Axios:

President Biden plans to nominate election law attorney Dara Lindenbaum to the Federal Election Commission, Axios has learned.

Why it matters: The nomination gives Biden an opportunity to try to shape some U.S. election rules in the wake of Congress’ failure to advance sweeping election reform.

Lindenbaum’s pick comes on the 12th anniversary of the Supreme Court’s Citizens United decision, which struck down a ban on corporate political spending.

What’s happening: If confirmed, Lindenbaum, a Democrat, will replace FEC vice-chair Steven Walther, who has served on the commission since 2006.

Walther is an independent, but is generally seen as part of the FEC’s Democratic bloc.

As a result, Lindenbaum likely will not alter the commission’s 3-3 partisan split.

In a statement, Walther said he will continue serving until his replacement is confirmed.

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Federal District Court, Reconsidering Earlier Order, Dismisses Complaint that FEC Failed to Go After Jeb Bush for Illegally Coordinating with His Super PAC

The court has held that the Campaign Legal Center and Democracy 21 did not have standing to bring the complaint.

The court’s earlier opinion explained the stakes:

While Jeb Bush’s unsuccessful 2016 presidential campaign may seem like a footnote in political history given all that has transpired since, it continues to attract the attention of organizations dedicated to exposing violations of federal campaign finance laws. Election junkies will recall that before the former Florida governor formally launched his candidacy in the summer of 2015, the Right to Rise super PAC, which directly supported his run, had already amassed approximately $90 million in donations. The accumulation of such a large war chest, coupled with Mr. Bush’s fundraising activities and travels to early primary states in advance of his official announcement, raised the eyebrows of watchdog groups Campaign Legal Center and Democracy 21. Suspecting that the Bush campaign and Right to Rise were improperly coordinating their efforts and thereby violating applicable contribution limits and disclosure requirements, the groups filed administrative complaints with the Federal Election Commission (“FEC”). But the complaints languished without action for nearly five years. Undaunted, the groups sued the FEC in this Court to compel the agency to investigate the asserted violations

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“Ted Cruz has never recouped more than $500,000 he loaned his first campaign. He’s working to overturn the law that’s blocked him.”

Texas Tribune:

Locked in an expensive Republican primary for U.S. senator against a wealthy, better-known opponent, Ted Cruz loaned his campaign over $1 million in 2012.

The cash helped him defeat Lt. Gov. David Dewhurst in a runoff that essentially secured Cruz a seat in the Senate. But it came at a personal financial cost: Cruz has never been able to recoup $545,000 of that loan, according to a Federal Election Commission report.

A 2002 law bans victorious federal candidates from using more than $250,000 raised after an election to pay back loans they gave their own campaigns prior to Election Day. Congress passed it to help prevent the appearance of quid pro quo corruption. The idea behind the limit is that money collected after an election is no longer helping a candidate win office. Instead, the funds go to the electee’s pocket.

Cruz recouped a good chunk of that 2012 loan from money received before Election Day. But when Cruz’s campaign determined that the loans could not be fully repaid due to the regulations, it began exploring ways to challenge the law, according to a May 2020 deposition of Cabell Hobbs, Ted Cruz Victory Committee treasurer.

Next month, his campaign’s lawsuit against the FEC will reach the Supreme Court. Cruz’s campaign lawyers are expected to argue the limit is unconstitutional, arbitrarily limits political speech and deters candidates from loaning money to their campaigns.

“The federal government’s restrictions on a candidate’s ability to loan his own money to his own campaign violate the First Amendment,” a Cruz spokesperson told The Texas Tribune in an email. “Senator Cruz seeks to vindicate his rights under the First Amendment and the rights of all those who would seek election to federal office.”

It’s unclear whether Cruz will ever get his money back, even if he wins his case. In 2015, after his campaign was audited by the FEC, Cruz’s campaign converted the existing unpaid loans into a contribution, as required by law. But he still lists the loans as an asset in his most recent Senate financial disclosure, which could be a sign he hopes to eventually get the money back. Cruz’s office did not respond to questions about his plans for the loan….

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“Money, denials and stalling: How Trump, the Mercers and the GOP beat the FEC”

CNBC:

The Federal Election Commission in August started to move ahead with halting its investigation into the now defunct data harvesting company Cambridge Analytica, the firm that worked for Donald Trump’s 2016 campaignRepublican Sen. Ted Cruz’s campaign for president and other GOP run groups.

The FEC was investigating whether Cambridge Analytica embedded foreign nationals into Republican campaigns during the 2014 and 2016 U.S. election cycles, and if those people made decisions for various political organizations, which is against the law. The company was originally headquartered in London.

The probe came after multiple complaints were filed to the FEC against Cambridge Analytica, including one from campaign watchdog Common Cause. Cambridge Analytica has been accused of illegally harvesting Facebook profile data, something the company has denied. Those accusations led to multiple federal inquiries, including one by the Federal Trade Commission, and the company announced it was shutting down in 2018.

The FEC has been criticized for years for not having enough funding, manpower and time to enforce election laws and it appeared to have those same problems in this case.

“Having concluded the investigation, the record before the Commission does not sufficiently establish the extent of the potential violations to support further action, and the investigation is unlikely to uncover additional information without the expenditure of significant additional resources. Moreover, the violations appear to have expired under the five-year statute of limitations,” the FEC general counsel’s second report says, which was signed by officials in August….

The FEC general counsel’s first report in late 2018 recommended that the commission would have strong grounds to investigate Cambridge Analytica, at least two company officials, and all of the campaigns mentioned in the original complaints, including Trump’s, for campaign law violations. It is illegal for American campaigns to be run by foreigners or accept campaign contributions from non U.S. citizens, and doing so can result in fines or referrals to the Department of Justice.

The initial report specifically advised the commission to “find reason to believe” that those targeted in the first complaints may have broken the law.

Still, despite that initial recommendation by the general counsel to launch a larger probe into the alleged illegal behavior by Cambridge Analytica and the GOP campaigns, Shana Broussard and Ellen Weintraub, two Democratic FEC commissioners, said in a joint statement this month that the commission itself in 2019 voted only to move ahead with finding reason to believe that federal campaign finance laws were broken during the 2014 election cycle. That allowed the Trump campaign, a Republican super PAC that backed the former commander in chief, and Texas Republican Sen. Ted Cruz’s campaign for president virtually off the hook.

The two commissioners took aim at the FEC after the general counsel recommend stopping the inquiry, noting it was a result of the commission’s lack of urgency to stop foreigners from interfering in future elections.

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“GOP unity on FEC shattered, future uncertain”

Washington Examiner:

Long-standing Republican unity on the Federal Election Commission, especially against liberal efforts to expand rules to punish GOP candidates, appears to be in jeopardy with the arrival of a new member who has stirred controversy by voting with Democrats in a key case.

The political fissure was made public last week when the FEC closed a case involving a pro-Trump political action committee and revealed that Republican Commissioner Allen Dickerson sided with all three Democrats to open the investigation in a 4-1 vote in February.

The case involved Great America PAC, GOP political operative Jesse Benton, and a vague foreign contribution sting run in 2016 by the Telegraph, a British newspaper.

Sean Cooksey, one of three Republican commissioners, said in his statement last Friday that he immediately decided against pursuing the case because it didn’t reach even questionable legal standards for violations of election and finance laws….

On Wednesday, Dickerson, the commission’s vice chairman, responded with his own statement “to explain” his initial vote to proceed with the investigation based on a “reason-to-believe” a violation occurred, then eventually to close it over a lack of “probable cause.”

Voting to open the case, he said, was “necessary to prove or disprove” that there was a violation.

“The commission found [reason-to-believe] based on a particular theory and authorized an investigation targeted at the evidence necessary to prove or disprove that theory. Despite this mandate, OGC’s investigation failed to develop the factual record, leaving us, at the probable cause stage, with only marginally useful evidence. Faced with a failed investigation and a newly-advanced legal argument to which OGC had no answer, I voted against a probable cause finding in these matters,” he wrote.

But FEC watchers said that the statement didn’t address the fine to Great America PAC and appeared to open the door to an expanded view of what it takes for cases to begin in the “reason-to-believe” phase.

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“Pro-Trump PAC fined over foreign money offer”

Lachlan Markay for Axios:

A pro-Trump political group has agreed to pay $25,000 to settle allegations it illegally solicited $2 million from reporters posing as intermediaries for a Chinese national.

Why it matters: A key player in the scheme, a veteran Republican operative, is facing criminal charges over allegedly funneling tens of thousands of dollars in foreign cash to Trump’s re-election effort, making news of the fine the latest in an emerging pattern of conduct.

What’s new: Great America PAC, a hybrid super PAC, reached an agreement with the Federal Election Commission to resolve the more recent allegations in June, according to a copy of the conciliation agreement released this week….

Between the lines: Benton, a former senior aide to Senate Minority Leader Mitch McConnell, is also facing criminal charges over his alleged role in a scheme to funnel money from a Russian national to a Trump fundraising committee last year.

What they’re saying: “Benton’s conduct was dishonorable, unpatriotic, and clearly illegal,” three of the FEC’s six commissioners wrote in a joint statement on the Great America PAC settlement.

  • The commission nonetheless deadlocked on whether to investigate Benton’s conduct further.
  • “It is unfortunate, to put it mildly, that the Commission failed to follow through and hold Benton accountable for his actions,” the three commissioners wrote.
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Republican FEC Commissioners: Twitter Entitled to Press Exemption for Excluding NY Post Content on Hunter Biden

Dickerson/Trainor statement:

Moreover, the decision as to precisely which news to distribute is, in many ways, the sine qua non of “the business of producing…news stories, commentary,
and/or editorials.”27 The New York Times famously emblazons its masthead with the slogan “All The News That’s Fit To Print,” suggesting the paper’s published materials were carefully selected and contextualized to fit the Times’s subjective view of “news” that is “fit to print.” That is precisely what Twitter did here: it made the editorial judgment that links to the New York Post articles were not “fit to print”—or, restated, “fit to share.”


Under FECA, then, Twitter is likely a press entity.28 Even so, under the Act press entities only get the media exemption’s protections when they act in their “legitimate press function,” which we have historically viewed under a two-part analysis: “(1) whether the entity’s materials are available to the general public, and (2) whether they are comparable in form to those ordinarily issued by the entity.”29 Twitter’s platform is available to any American willing to access it via an app or web browser. And when Twitter chooses to limit the sharing of a news story, it does
not fundamentally change the appearance or underlying function of the platform itself. Indeed, Twitter argues that its content moderation policies are central to its users’ experience and a core part of its overall commercial product.30
Accordingly, Twitter’s activities fall within our press exemption. But this regulatory safe harbor operates as a floor, not a ceiling. As the Citizens United Court noted, the judicial branch has “consistently rejected the proposition that the institutional press has any constitutional privilege beyond that of other speakers.”31 So even if Twitter’s decision to limit distribution of the New York Post’s articles were not protected by the Act’s press exemption, it would likely be protected by the Constitution itself.

See also the Cooksey statement.

(h/t Shane Goldmacher)

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“The F.E.C. dismisses claims that Twitter illegally blocked a Hunter Biden article.”

Shane Goldmacher for the NYT:

The Federal Election Commission has dismissed Republican accusations that Twitter violated election laws in October by blocking people from posting links to an unsubstantiated New York Post article about Joseph R. Biden Jr.’s son Hunter Biden, in a decision that is likely to set a precedent for future cases involving social media sites and federal campaigns.

The F.E.C. determined that Twitter’s actions regarding the Hunter Biden article had been undertaken for a valid commercial reason, not a political purpose, and were thus allowable, according to a document outlining the decision obtained by The New York Times.

The commission’s ruling, which was made last month behind closed doors and is set to become public soon, provides further flexibility to social media giants like Twitter, Facebook and Snapchat to control what is shared on their platforms regarding federal elections.

The suppression of the article about Hunter Biden caused an avalanche of conservative criticism in October and prompted accusations that the tech company was improperly aiding the Biden presidential campaign, including a formal complaint by the Republican National Committee that said Twitter’s actions amounted to an “illegal in-kind contribution” to the campaign.

But the F.E.C. disagreed. The commission said Twitter had “credibly explained” that blocking the article’s distribution was a commercial decision and that the move followed existing policies related to hacked materials, according to the “factual and legal analysis” provided to the parties involved in the complaint.

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“F.E.C. Dismisses Case Against Democrats Over Outreach to Ukraine”

NYT:

The Federal Election Commission has dismissed a complaint by an ally of President Donald J. Trump accusing the Democratic Party and one of its former consultants of violating campaign finance laws by working with Ukraine to help Hillary Clinton’s 2016 campaign by damaging Mr. Trump’s.

An unusual bipartisan combination of members of the commission voted against pursuing a complaint filed in 2017 by Matthew G. Whitaker, a former federal prosecutor and staunch defender of Mr. Trump who was later appointed acting attorney general.

He filed the complaint after Mr. Trump and his White House began publicly calling for investigations of the matter in an effort to deflect attention from revelations that Mr. Trump’s son Donald Trump Jr. and other campaign advisers met with a Kremlin-connected Russian lawyer at Trump Tower during the 2016 campaign.

Mr. Whitaker claimed in his complaint that the Democratic National Committee and a consultant who had worked for it, Alexandra Chalupa, violated a prohibition on foreign donations by soliciting damaging information and statements from Ukrainian government officials about Paul Manafort, who was Mr. Trump’s campaign chairman at the time….

he commission — which is composed of three members selected by each party — voted 4 to 2 in April that there was not probable cause to believe that Ms. Chalupa and the Democratic National Committee broke the law, according to documents released Wednesday.

The four commissioners voted against a recommendation by the commission’s general counsel to find probable cause that Ms. Chalupa and the Democratic National Committee violated the foreign donation ban by trying to arrange an interview in which Petro O. Poroshenko, the Ukrainian president at the time, might say something critical about Mr. Manafort.

While the four commissioners issued statements disputing the general counsel’s characterization that Ms. Chalupa’s communications with the embassy prompted the ban, they also offered very different ideological concerns.

The three Republican commissioners said in a statement accompanying the decision that they had “grave constitutional and prudential concerns” about the general counsel’s reading of the law, which they cast as an overreach. Ms. Chalupa’s communication with the embassy, they wrote, “did not ask that Ukrainian officials convey a thing of value within the meaning of a ‘contribution’ to the D.N.C.”

The Republicans were joined in voting against probable cause by Ellen L. Weintraub, a Democratic commissioner since 2002, who cited concerns about Russian disinformation as a basis for her vote.

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“Democrats’ Improbable New F.E.C. Strategy: More Deadlock Than Ever”

NYT:

For more than a decade, Democrats seeking more robust enforcement of election laws and transparency measures have been routinely routed at the F.E.C., the nation’s top campaign watchdog agency. They have complained bitterly that Republicans have weaponized the commission’s bipartisan structure — there are three commissioners allied with both parties — to turn it into a toothless, do-nothing bureau.

Now, the Democratic commissioners have stealthily begun to strike back by leveraging some of the same arcane rules that have stymied enforcement efforts for years — namely, that a bipartisan vote is necessary to do almost anything — to make the agency do even less. The goal appears to be to take a commission widely seen as dysfunctional and create further deadlock, compelling federal courts to fill the breach when it comes to policing federal election law.

“I think of it as a desperate cry for help,” said Adav Noti, a former lawyer at the F.E.C. who is now a senior director at the Campaign Legal Centera nonpartisan watchdog group that is among those that have sued the F.E.C.

If successful, the gambit could have far-reaching implications for future campaigns and for pending F.E.C. complaints from the 2020 election, like one that accused former President Donald J. Trump’s campaign of laundering hundreds of millions of dollars through limited liability companies to conceal whom his campaign was ultimately paying.

The chief architect behind the strategy is Ellen L. Weintraub, a Democratic F.E.C. commissioner since 2002, who described it as something of a last-ditch effort after years of watching enforcement actions become sidelined in 3-3 split decisions. “I’m using the small amount of leverage that I have,” she said. “It’s not a lot.”

Here is what has been happening behind closed doors, according to people familiar with the commission’s private executive sessions: First, the Democrats are declining to formally close some cases after the Republicans vote against enforcement. That leaves investigations officially sealed in secrecy and legal limbo. Then the Democrats are blocking the F.E.C. from defending itself in court when advocates sue the commission for failing to do its job….

The combination of moves takes advantage of existing provisions in campaign law to essentially open the door for outside advocacy groups to directly sue campaigns in federal court. In fact, it is already happening, including in one case involving a group that spent money supporting Senator Joni Ernst of Iowa and that is accused of improperly existing as a nonprofit to shield its donors from public disclosure.

“If I don’t believe the case ought to be dismissed, why would I vote to dismiss?” Ms. Weintraub said of leaving cases pending. “I’m just trying to get the law enforced.”

The Republican commissioners are livid. Commissioner Sean J. Cooksey has warned his Democratic colleagues that they are going down “a very, very dark road” and revealed in a recent memo that there are now 13 such unclosed cases, calling them “zombie matters — dead but unable to be laid to rest.” Commissioner Trey Trainor said in an interview that the Democrats were “poisoning the well” at the agency with a tactic that he said was “an abuse of the process.”

“They are on the losing end of the 3-3 votes, and they think that by concealing the information from the courts, they’ll get a different ruling,” Mr. Trainor said.

Ms. Weintraub said: “I didn’t bust the norms of the agency. The other side did.”

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“Opinion: Close this FEC loophole that killed the case over Trump’s payment to Stormy Daniels”

FEC Commissioner Ellen Weintraub’s WaPo oped:

But when the FEC’s professional legal staff recommended the commission investigate, two Republican commissioners instead tanked the case without a word about its merits. Since Cohen had already been prosecuted, they said, “pursuing these matters further was not the best use of agency resources.”

Now, we’re pretty busy at the FEC, digging out from all the matters that piled up for more than a year while we were short on commissioners — and therefore unable to decide cases.

But are we too busy to enforce the law against the former president of the United States for his brazen violation of federal campaign finance laws on the eve of a presidential election? No.

Would pursuing this matter have been an unwise use of resources? Of course not. Taxpayers entrust us with resources exactly so that we can pursue enforcement in important cases and ensure that no one is above the law. This dismissal of the allegations against Trump is arbitrary, capricious, outrageous and contrary to the law that Congress created the FEC to enforce.

It gets worse. The Republican commissioners’ grossly inadequate justification for dismissal is effectively insulated from review because of the last 13 words of their statement: “We voted to dismiss these matters as an exercise of our prosecutorial discretion.” The courts have turned “prosecutorial discretion” into magic words that render any administrative decision invulnerable to appeal.

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