The Edwards Case, and Third Party Payments “Irrespective” of Edwards’ Candidacy

In my post on Edwards yesterday, I set out my view as to why I think this case will likely come down to subjective motivations, though it is possible a court on a motion to dismiss would say that the payment alleged here objectively cannot be considered contributions.

I noted in that post that the legal question likely turns upon an interpretation of whether the payments made by Baron and Mellon were payments “irrespective” of Edwards’ candidacy.  Here’s the relevant language from the FEC regulation:

(6) Third party payments. Notwithstanding that the use of funds for a particular expense would be a personal use under this section, payment of that expense by any person other than the candidate or the campaign committee shall be a contribution under subpart B of part 100 to the candidate unless the payment would have been made irrespective of the candidacy.

An ELB reader points me to an FEC advisory opinion AO 2008-17, in which one of the questions was whether Sen. Kit Bonds’ leadership PAC could pay $25,000 to the co-author of a book with Senator Bond.  In the analysis, the FEC explained the subjective nature of the “irrespective test for third party payments:

Third parties are limited in what they may pay for on behalf of Federal candidates. Generally, “notwithstanding that use of funds for a particular expense would be a personal use . . . payment of that expense by any person other than the candidate or the campaign committee shall be a contribution under subpart B of part 100 to the candidate unless the payment would have been made irrespective of the candidacy.” 11 CFR 113.1(g)(6). Such contributions are subject to the per election limits in 2 U.S.C. 441a(a)(1)(A) and (2)(A).4
The Commission’s regulations contain three examples of payments considered to be made irrespective of a candidacy, none of which applies here. See 11 CFR 113.1(g)(6)(i)-(iii). Accordingly, the Commission must consider the individual circumstances of this case.
The “irrespective” test contained in the third-party payment provision at 11 CFR 113.1(g)(6) differs slightly from the “irrespective” test contained in the general personal-use prohibition at 11 CFR 113.1(g) discussed above in the analysis with respect to Missourians for Kit Bond. The third-party payment provision asks whether the payment would have been made by the third party irrespective of the Federal candidate’s candidacy for office. In other words, would the third party pay the expense if the candidate was not running for Federal office? If the answer is yes, then the payment does not constitute a contribution. As the Commission explained in its Explanation and Justification for 11 CFR 113.1(g)(6), “If a third party pays for the candidate’s personal expenses, but would not ordinarily have done so if that candidate were not running for office, the third party is effectively making the payment for the purpose of assisting that candidacy.” Explanation and Justification, Contribution and Expenditure Limitations and Prohibitions: Personal Use of Campaign Funds; 60 Fed. Reg. 7862, 7871 (Feb. 9, 1995).
The request asserts that Senator Bond “seeks to publish the book purely to advance the ideas and philosophies important to his campaign and leadership PAC, and not to benefit himself personally.” In subsequent comments, KITPAC has further stated that its “interest would exist even in the absence of Senator Bond’s candidacy for reelection or his campaign, and even if the campaign did not share KITPAC’s interest in the book.” Because the book would advance the leadership PAC’s goals and the leadership PAC would pay for the book and the co-author’s expenses irrespective of the campaign, the $25,000 payment to the co-author would not constitute a contribution under 11 CFR 113.1(g)(6). This conclusion is based, in part, on the Commission’s understanding that there is no personal obligation on the part of Senator Bond to compensate his co-author. The existence of a personal obligation may change the resulting answer because, where a third party pays an expense that is a personal obligation of a Federal candidate, it could raise questions as to whether that third party would do so irrespective of the candidacy.

There’s an odd artificiality about treating the leadership PAC as independent of the candidate here, but let’s put this aside. Note how the FEC defined the “irrespective” test when it comes to third party payments: it all depends upon the intent of the third party and of the candidate’s knowledge of that intent.   The language at the end, though, says that if the candidate had a personal obligation to make payments, then it is possible this turns third party payments into a contribution.  This could apply to child support payments, but not to Edwards other payments.

The more I get into this, the murkier it appears.  And murkiness definitely helps Edwards. The fact that there are emails showing Edwards knew of the payments to the mistress helps the prosecution, but it may not be enough.

Postscript:  In yesterday’s blog post, I made a point about Former FEC Commissoner Sandstrom not agreeing to work with the prosecution on this case, as reported by Politico. I surmised from the Politico report that Sandstrom did not want to work for the prosecution because of his doubts about the case.  The former commissioner has sent along the following message by email, which he has given me permission to quote: “Rick, I did not decline to assist the prosecution in the Edwards case because of my doubts about the underlying theory of the case but because our firm had represented a witness in the matter.  At the start of the interview that I had with Ben Smith, he asked if I had been approached by the prosecution I told him that I had and I had declined.  Later in the interview I was asked about the prosecution’s theory and I expressed questions about it very much along the lines of Rick Pildes”  Thanks for the clarification.



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