Monthly Archives: January 2004

“Ethics: Insincere Contributions are Tolerable”

The New York Times ethicist answers this question: “Friends and I have been contributing money to a leading Democratic presidential candidate. We are, however, Republicans. We feel that President Bush has a better chance of re-election running against this candidate. We considered donating to the president’s re-election campaign but concluded that it had enough money and that this would put our dollars to better use. This could go awfully wrong, but is it unethical?”

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The Propriety of Public Comments by FEC Commissioners

In my post here, I noted that “Certainly no judge would make such statements about a matter that is pending, or might soon be pending, before him or her. But apparently the rules for FEC commissioners’ public statements are considerably more lax.” J.J. Gass had responded here with some thoughts, and now Roy Schotland responds here, defending public comments by FEC commissioners. See also Mike Dimino’s comments.
UPDATE: FEC Commissioner Mason responds:

    Thanks to Roy Schotland for setting the record straight on FEC Commissioner comments on pending rulemakings. These are proceedings that require public comment, it would be odd if Commissioners could not also comment in public as well. For comparison purposes check the web sites of other federal administrative agencies to see commissioners’ speeches on pending rulemakings and policy issues before their commissions on prominent topics such as media ownership restrictions and the do not call list.
    Regarding documents on the FEC web site, they are actually posted quickly, though I admit you have to know where to look (we’re working on making it easier to find things). Open meeting documents are posted at http://www.fec.gov/agendas.html.
    Regarding challenging Advisory Opinions, there is support for the proposition that AOs themselves are not reviewable. For instance, US Defense Committee v. FEC, 861 F.2nd 765 (2nd Cir. 1988) held that AOs were not reviewable. NCPAC v. FEC 2 Fed. Elec. Camp. Fin. Guide (CCH) 9057 (DDC 1978), aff’d 626 F.2nd 953 (DC Cir 1980) holds likewise. Plaintiffs may, however, bring challenges to the underlying regulations or law based on interpretations thereof in advisory opinions Sierra Club v. FEC, 593 F. Supp. 166 (DDC), rev’d mem. (DC Cir 1984), on remand (DDC Nov 5, 1984)(unpublished). Courts have held that failure to request an advisory opinion can represent a failure to exhaust administrative remedies. Anderson v. FEC, 634 F.2nd 3 (1st Cir 1980) (en banc), Faucher v. FEC, 708 F.Supp. 9 (D. Me. 1989). Generally, courts have given Chevron-type
    deference to FEC interpretations of the statute and its regulations expressed in advisory opinions, Sierra Club, FEC v. Haley 852 F.2nd 1111 (9th Cir. 1988).

This last paragraph responds to these queries I sent to the Election law listserv.

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Anderson v. Spears Appeal Not Dead Yet

See Stumbo seeks review of case on election law; U.S. court rejected state’s campaign-finance limits. The article begins: “[Kentucky] Attorney General Greg Stumbo said yesterday that he’ll ask a federal appeals court to reconsider its decision striking down Kentucky laws that ban candidates from taking contributions after an election and limit loans to their campaigns. Stumbo is stepping in where state campaign regulators wouldn’t. The Kentucky Registry of Election Finance voted last weekend not to appeal the ruling of the 6th U.S. Circuit Court of Appeals, which also struck down some lesser campaign-finance laws.”
You can find links to my earlier posts on this case here.

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Prejudging the 527 issue before the FEC?

In a recent post to his website, Bob Bauer referred to a letter that Republican FEC commissioner Michael Toner sent to Roll Call and published on Tuesday. The letter is apparently not on the Roll Call‘s website, but here it is:

    Now that the Supreme Court has upheld the constitutionality of the McCain-Feingold campaign finance law, a key question remains to be decided: With the national parties strictly barred from raising and spending soft money, can tax-exempt outside groups, organized under Sections 527 and 501(c) of the tax code, legally take the parties’ place and spend unlimited soft money on election-related activities that could directly affect the 2004 presidential and Congressional elections?
    The Federal Election Commission has an obligation to decide this critical legal question as soon as possible. If the answer is yes, almost all campaign finance observers agree that the McCain-Feingold law will be severely undermined, and that at least as much soft money will be spent on electoral activities in 2004 as was spent before the new law was enacted.
    The stakes are very high. Published reports indicate thatDemocratic-oriented tax-exempt groups plan to spend hundreds of millions of dollars of corporate, union and other soft-money funds to air advertisements attacking President Bush and to conduct voter-mobilization activities in targeted states. Press accounts indicate that a group called America Coming Together is aiming to spend at least $95 million on Democratic voter identification and get-out-the-vote activities in key states. Billionaire currency trader George Soros has reportedly pledged more than $15 million to ACT and MoveOn.org to help underwrite these efforts. Moreover, an outside entity named the Media Fund, headed by Harold Ickes, a former aid to President Bill Clinton, reportedly plans to spend nearly $100 million to finance television and radio advertisements critical of President Bush.
    All told, published reports indicate that Democratic-oriented outside groups are planning to spend at least a quarter of a billion dollars on election-related activities. This year alone outside spending by Democratic groups could exceed the $245.2 million of soft money that the Democratic Party’s national committees spent during the entire 2000 election cycle.
    Although Democratic-oriented Section 527 and 501(c) groups have received more media attention to date, there is little doubt that Republican groups are poised to also spend vast amounts of soft money prior to Election Day if it is determined to be legally permissible.
    The FEC is scheduled to rule in early February on an advisory opinion sought by a Republican tax-exempt group known as Americans for a Better Country. However, in order to comprehensively address the legal ability of outside tax-exempt groups to spend soft money on election-related activities, the commission needs to issue binding regulations as soon as possible.
    The FEC issued final regulations implementing the national-party soft-money ban 90 days after McCain-Feingold became law. I believe the commission should issue rules governing outside groups with similar expedition. If the FEC issues final rules by mid-April, it would ensure, no matter what the agency decides, that the rules are effective for the 2004 presidential election.
    I do not prejudge what legal rules the FEC should issue. However, in upholding the constitutionality of the McCain-Feingold law, the Supreme Court repeatedly indicated that the government has the power to prevent circumvention of the campaign finance laws. Outside tax-exempt groups are seeking to essentially replicate, with soft-money funds, much of the issue advertising and voter-mobilization activities that the national parties financed with soft-money funds before the new law was enacted. At the very least, serious questions exist whether outside groups are circumventing the McCain-Feingold law, and these questions must be addressed.
    In the weeks ahead, it will be critical that the sponsors of the McCain-Feingold law indicate whether they believe outside tax-exempt groups can legally spend unlimited soft money on election-related activities in the place of the national political parties under the new law. I believe the FEC should decide this important question as soon as possible, before the outside groups spend the millions of dollars they are currently amassing.
    The future effectiveness of the new campaign finance law may largely hang in
    the balance.
    Michael E. Toner
    Commissioner
    Federal Election Commission

The letter is very interesting and confirms the fears I expressed in this Slate article yesterday that the 527 issue is getting enmeshed in a partisan battle between Democrats and Republicans. Though the commission is split between three Democrats and three Republicans, this Washington Post article explains where the fourth vote for regulation of 527s may come from:

    Democrats are privately worried that one of the three Democratic appointees to the FEC, Scott E. Thomas, could vote that the “independent” Democratic groups are illegal.
    Thomas is a strong supporter of hard-line regulation and has devoted much of his adult life to working for the FEC. He has been angered by the decision of Democratic congressional leaders not to appoint him to another term. He is serving until a replacement is confirmed.

I also think it is very interesting that Toner would send such a letter. Despite the statement that he has not “pre-judged” the issue, note the other things he says:
1. If 527s are not regulated as political committees, “almost all campaign finance observers agree that the McCain-Feingold law will be severely undermined.”
2. “[I]n upholding the constitutionality of the McCain-Feingold law, the Supreme Court repeatedly indicated that the government has the power to prevent circumvention of the campaign finance laws. Outside tax-exempt groups are seeking to essentially replicate, with soft-money funds, much of the issue advertising and voter-mobilization activities that the national parties financed with soft-money funds before the new law was enacted.”
3. “The future effectiveness of the new campaign finance law may largely hang in the balance.”
Certainly no judge would make such statements about a matter that is pending, or might soon be pending, before him or her. But apparently the rules for FEC commissioners’ public statements are considerably more lax.
In any event, it hardly seems “critical that the sponsors of the McCain-Feingold law indicate whether they believe outside tax-exempt groups can legally spend unlimited soft money on election-related activities in the place of the national political parties under the new law.” That statement may be important for public relations purposes, but the views of Sens. McCain or Feingold would have no bearing on resolution of the difficult constitutional question whether McConnell‘s footnote 48 reference to California Medical Association changed the apparent rule from CMA that seems to bar limits on contributions to political committees that engage solely in independent expenditures.
UPDATE: Over on the Election Law listserv, see the follow up posts by Marty Lederman and J.J. Gass.

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