A federal court upheld
the Federal Election Commission’s dismissal of disclosure charges involving two wealthy contributors who allegedly funneled $14 million to super-political action committees through obscure companies.
The FEC’s three Republican commissioners, who voted to dismiss the charges, exercised permissible discretion in “an issue of first impression” following the Supreme Court’s 2010 decision in Citizens United v. FEC, ruled Judge Trevor McFadden of the U.S. District Court for the District of Columbia. The judge accepted the Republican commissioners’ argument that the rules for such contributions were uncertain and a new legal standard should be established going forward.
The FEC dismissal resulted from deadlocked 3-3 votes involving complaints that super-PAC contributions were hidden by Steve Lund, a Utah businessman, and Richard Stephenson, the founder of Cancer Treatment Centers of America.
The three Democratic FEC commissioners said longstanding rules barring “straw donations” applied to campaign money funneled through a company. The FEC Democrats voted to follow staff recommendations to pursue enforcement action….
The judge’s decision to uphold the Republican commissioners’ view drew praise from David Keating, president of the nonprofit Institute for Free Speech, which criticizes campaign regulation.
“It was the right decision,” Keating said in a phone interview, adding that the FEC should provide “formal guidance” going forward about the legal standard for straw donations. Such guidance would require FEC Democrats and Republicans to agree on an approach.
The judge’s decision was faulted by Paul Seamus Ryan, a lawyer with the nonprofit Common Cause, which supports strong disclosure rules. On Twitter, Ryan noted that McFadden is a judge appointed by President Donald Trump and said his ruling bent “over backwards … to let campaign finance law violators off the hook for laundering millions of dollars into our elections.”