Category Archives: federal election commission

“Senate confirms Democratic nominee to FEC”

Roll Call:

The Senate voted 54-38 Tuesday to confirm Democratic political lawyer Dara Lindenbaum, whose clients included the gubernatorial campaign of Georgia Democrat Stacey Abrams, to serve on the Federal Election Commission.

An election lawyer with the firm Sandler Reiff Lamb Rosenstein & Birkenstock, Lindenbaum will fill the seat of Steven Walther, an independent who was picked by Democrats and had been serving on a long-expired term. The agency, which enforces federal campaign finance laws, is designed to have three Republican and three Democratic commissioners and often deadlocks 3-3 along party lines, but in recent years it had too few commissioners to conduct official business or even hold meetings.

When Lindenbaum joins the agency, five commissioners will have been confirmed since May 2020. Commissioner Ellen Weintraub has served since 2002.

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FEC Deadlocks, Again

Dave Levinthal and C. Ryan Barber at Business Insider report that the Federal Election Commission has deadlocked over a “complaint that Donald Trump’s 2020 White House campaign laundered hundreds of millions of dollars in spending through corporate entities closely tied to the ex-president and his family.” They have obtained a copy of the FEC’s letter to the Campaign Legal Center.

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“Campaign finance watchdog cracks down on untraceable super PAC donations”

Politico:

The Federal Election Commission signaled Friday that it will take steps to uncover some types of virtually untraceable donations to super PACs, a potentially significant shift in the enforcement of campaign finance law.

The move came as the FEC released documents resolving a complaint about a pair of 2018 donations to DefendArizona, a super PAC that supported then-Rep. Martha McSally’s (R-Ariz.) Senate bid.

The complaint, originally filed by the nonprofit watchdog group Campaign Legal Center, alleged that a pair of donations to the super PAC were not properly disclosed. The money came in from two limited liability companies, but there was no indication of who was actually behind the money before it went into the LLC.

Straw donations to super PACs run through anonymous LLCs have become increasingly common in recent years, as some wealthy political donors look to shield their contributions from the public by routing them through other entities first. The FEC has been frozen for years on what to do about these donations, effectively blessing them by not policing requirements that would have forced further disclosure.

That all apparently changed Friday. A statement from four of the six commissioners indicated that the agency would now start cracking down on these straw donations, requiring that the LLCs disclose who is actually behind the companies. There are still other avenues for untraceable money to flow into super PACs, but the LLC route has been a major one.

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DNC Settles Suit Over Payment for Research in “Steele Dossier”; One ELB Reader Wonders About DNC Tactics

Politico:

The Federal Election Commission has agreed to a fine of over $100,000 against the Democratic National Committee and Hillary Clinton’s 2016 campaign over an investigation into alleged misreporting of spending related to the now-infamous Steele dossier.

The FEC fined both organizations after a pair of now years-old complaints — one from the Campaign Legal Center and another from the conservative Coolidge Reagan Foundation — alleged that the party and campaign reported payments to the powerhouse Democratic law firm Perkins Coie as legal expenses, when in actuality some of the money was earmarked for “paying Fusion GPS through Perkins Coie to conduct opposition research on Donald Trump,” as the Campaign Legal Center’s original complaint read.

The DNC and the Clinton campaign collectively agreed to pay $113,000 in fines, according to separate conciliation agreements the agency made with both parties. The DNC will pay $105,000 and the Clinton campaign $8,000.

The FEC conciliation agreements were made public Wednesday after the Coolidge Reagan Foundation first shared a response letter from the agency with the Washington Examiner. POLITICO independently obtained a second, and similar, letter the agency sent to the CLC.

The Steele dossier, which was first made public when BuzzFeed News published it in January 2017, contained a variety of accurate, inaccurate, unproven and sometimes salacious allegations about ties between Russia and Donald Trump, as well as others in his orbit.

The conciliation agreements found “probable cause to believe” that both the campaign and national party “misreport[ed] the purpose of certain disbursements” when they said certain payments to Perkins Coie were for legal fees….

An ELB reader writes:

There is something off about the Fusion GPS settlement.  Why did the DNC use Perkins (or, the current ELG folks) to represent them in a matter that primarily involved Perkins?  The whole MUR is about Perkins’ conduct—why didn’t they pull in Covington or Sandler Reiff?  They even used the same lawyer who does most of the DNC work, and who must have been involved in the initial reporting issues.  I don’t have any special insight here, but I don’t think the party should have settled this matter.  Trump is 43-0 at the Commission, but the biggest DNC matter involving the 2016 elections is settled?  A settlement that can be taken by conspiracy theorists and the Fox News crowd as an admission of some sort of responsibility in this whole Fusion mess?

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“Donald Trump Is Now Miraculously 43-0 Against ‘Partisan’ FEC”

Roger Sollenberger for the Daily Beast:

Donald Trump may have been impeached twice, and he’s taken some lumps in court, but in one legal arena he is hands-down the undefeated reigning champ: campaign finance law.

It’s not even close.

According to a review of filings with the Federal Election Commission, the agency with jurisdiction over campaign finance law, Trump has over the last six years posted a 43-0 record in cases referred for possible violations.

And the single reason that the FEC has never acted is because none of the agency’s three Republican commissioners have ever voted against Trump….

Of course, anyone can bring a complaint to the FEC. You don’t have to know the ins and outs of campaign finance law, and you don’t have to have any evidence. You can claim that the Trump campaign stole money from you when it was actually a donation from someone who has the same name, or allege that a Trump campaign Google ad is actually a violation of federal law, because you had searched “donate Joe Biden.” The agency’s attorneys will actually look into it.

But setting aside the 15 Trump complaints that appear frivolous, petty or unfounded, 28 legitimate grievances remain—most of them filed by attorneys who have years of experience with campaign finance law.

Of those 28 complaints, the internal nonpartisan Office of General Counsel found reason to believe that campaign finance violations had occurred in 22 of them. In every instance, the Republican commissioners voted to block action.

Notably, the three Republican commissioners are Trump-appointed. But Trump also appointed three Supreme Court justices, and they have ruled against his interest, sometimes in surprising ways.

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“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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