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Justice

Republican FEC Commissioners Say Keep Commission Broken

In a joint op/ed Wednesday, the three Republican members of the Federal Election Commission blasted campaign finance reformers and good-government groups for proposing changes to the impotent agency, defending themselves as “fair and impartial” regulators and administrators of campaign finance laws. But this same trio has been responsible for historic deadlock at the Commission and has openly refused to follow the campaign rules enacted by Congress.

FEC Commissioners Caroline Hunter, Donald McGahn II, and Matthew Petersen, all three of whom continue to serve though their terms have expired, wrote that “The agency’s harshest critics disregard the agency’s prime enforcement directive: Enforce the law as it is, not as some wish it to be.” They continue:

Ultimately, charges that the agency “does not enforce the law” ignore the legal parameters set by Congress that have been further limited by the courts. Failure to recognize these constraints would leave political participants at the mercy of unelected bureaucrats, an outcome both Congress and the courts have rejected.

Of course, thanks to these three, the Federal Election Commission has not followed the “legal parameters set by Congress.” Indeed in 2011, McGahn conceded “I’m not enforcing the law as Congress passed it… I plead guilty as charged.” Instead, he argued, he enforced the law based on his own interpretation of what the Supreme Court would want him to do. “In a close call, the tie goes to the speaker, not the regulator… The court has said certain [portions of McCain-Feingold] are unconstitutional.”

But rather than wait for the courts to rule on who should have to disclose the donors funding their electioneering communications, these Republicans instead simply chose to ignore the clear text of the 2002 campaign finance law and have allowed hundreds of outside group ads to be aired with no real disclosure as to who bankrolled the message.

And by waiting as much as five years to take action on obvious violations, they have ensured that campaigns can do virtually anything without fear of any meaningful penalty.

Former Common Cause President Scott Harshbarger once quipped that, ”This is probably the only agency in Washington that has done from the beginning exactly what it was intended to do, which was to do nothing.” But with an unprecedented number of deadlocked votes on even routine enforcement matters, Hunter, McGahn, and Petersen have managed to make historically weak campaign finance enforcement almost non-existent.

Justice

The Term Of Every Federal Election Commission Member Has Expired

The Federal Election Commission will reach an ignominious milestone at midnight Tuesday: every single one of its members’ terms will have expired. But thanks to a quirk in election law — and Washington gridlock — they continue to serve and deadlock on nearly every major issue.

Former Common Cause President Scott Harshbarger once quipped that, ”This is probably the only agency in Washington that has done from the beginning exactly what it was intended to do, which was to do nothing.” The Commission, by design, includes six members — no more than three from each major political party. While appointees are limited to a single, staggered six-year term, they are permitted to stay on indefinitely until they are replaced. No commissioner has been confirmed since the George W. Bush administration and one seat is currently vacant. Five of the six terms had expired by the end of April 2011 — though four of those five are still serving two years later (a fifth stayed on through February 1 of this year).

President Obama has, to date, nominated just one person to the commission. Though his nominee, SEIU Associate General Counsel John J. Sullivan, received unanimous committee support, his nomination was held up by Sen. John McCain (R-AZ) and then-Sen. Russ Feingold (D-WI) in a failed attempt to force more nominees. After a year of waiting, Sullivan withdrew his name from the process.

Last year, a “We the People” White House petition received more than 25,000 signatures demanding that the President nominate new commissioners to replace the anti-enforcement Republican incumbents before the November elections. The White House responded:

While the Administration doesn’t comment publicly about the President’s personnel decisions before he makes them, the Obama Administration is committed to nominating highly qualified individuals to lead the FEC. The agency, and the system of open and fair elections that the FEC is charged with protecting, deserve no less.

The three Republican appointees continue to block meaningful disclosure, deadlock against most enforcement, and ensure toothless enforcement — and will apparently continue to do so indefinitely.

Justice

Federal Election Commission Fines 2008 Campaign — Five Years After It Ended

Former Sen. Chris Dodd (D-CT)

Former Sen. Chris Dodd (D-CT)

Former U.S. Sen. Chris Dodd (D-CT) ended his presidential campaign in January 2008, after a weak showing in the Iowa caucuses. More than five years later, the largely-paralyzed Federal Election Commission (FEC) has fined his long-defunct campaign $42,000 for failure to properly report campaign contributions.

Because Dodd’s campaign was one of eight 2008 presidential committees to take public matching funds, it agreed to an automatic audit of campaign fundraising. That routine investigation — completed in April 2012 — found that Dodd’s campaign failed to report $764,966 in gross receipts. The matter was then referred for possible enforcement action. Nearly a year later, the Dodd 2008 campaign and the FEC signed a conciliation agreement in January. The commission accepted the agreement and make it public on Friday — more than two years after Dodd retired from public life.

Meredith McGehee, policy director at the non-partisan Campaign Legal Center, told ThinkProgress that the delayed and weak action by the FEC “shows what a joke they’ve become… They’re picking on a campaign that was incredibly unsuccessful. The candidate is no longer in office. It’s kind of like going after the mosquitoes when the room is full of lions and tigers and bears. Mosquitoes are bad, you want to get rid of them, but what does it matter if you’re being eaten by the lion, the tiger, or the bear?”

The five-year lag time, she noted, is a result of under-funding by Congress. “They just don’t have enough resources to do this is what most people would consider an effective way.” That lack of effective enforcement sends a signal to other political committees that they have little to fear if they fail to accurately report their own finances. “A lot of the effective enforcement is done when people see that there is enforcement, they self-enforce. When they don’t see enforcement, they don’t self-enforce, say ‘let’s roll the dice.’ When you win your election, the fine is just the cost of doing business.”

Audits from the 2000 campaign were mostly completed within two years. But a number of new FEC policies, instituted since, have further slowed the process. With the sequestration likely to force spending cuts at the FEC, it remains to be seen whether the three 2012 campaigns that accepted matching funds will have their audits completed by 2017.

Chris Dodd for President’s end of 2012 report showed the committee with about $18,000 in the bank. There is little forcing it to actually pay the fine and raising money for failed campaigns after the fact can be incredibly difficult — former Sen. John Glenn (D-OH) spent 23 years paying of the campaign debt from his 1984 campaign.

In addition to paying a $42,000 fine, the conciliation agreement stipulates that Dodd 2008 will “cease and desist” from violating disclosure laws going forward.

Justice

Federal Election Commission Republicans Block Enforcement Against GOP Donor

Aaron Bennett

Aaron Bennett (Credit: Ted Jackson / The Times-Picayune)

The Federal Election Commission deadlocked along party lines on whether to hold accountable a Republican contractor who blatantly circumvented campaign finance limits. While the three Democratic commissioners agreed that William A. “Aaron” Bennett had willfully violated federal election law by offering to reimburse friends if they donated to Rep. Steve Scalise (R-LA), the three FEC Republicans blocked the determination and allowed Bennett to escape with a mere $4,000 fine and a warning.

Bennett admitted that after making the legal maximum contribution to Scalise’s re-election campaign in 2007, he asked three other people to contribute $2,300 each to the campaign — and reimbursed them for the $6,900 they spent.

According to the Statement of Reasons by the three Democratic FEC appointees (Chair Ellen Weintraub, Cynthia Bauerly, and Steven Walther), there was clear evidence both that Bennett circumvented federal contribution limits and did so knowing full well that doing so was illegal:

According to one of the reimbursed individuals — an employee working for Bennett — Bennett stated “that he was at the maximum individual contribution [limit]” and that “he would reimburse each [individual] for the contribution.” … Based on these statements and the fact that Bennett was an experienced donor, there is reason to believe that Bennett knew that he was subject to a contribution limit and that he made an intentional attempt to evade that limit by making a contribution in another person’s name. Taken together, the facts are more than sufficient for the Commission to have found reason to believe that Bennett both knowingly and willfully made excessive contributions and knowingly and willfully made contributions in the names of other individuals.

Bennett’s political giving goes back at least to 2005, when he gave a $1,000 donation to then-Rep. Bobby Jindal (R-LA).

Despite this evidence, the three Republicans rejected the finding that the violation was “willful.” The Commission then voted, five to one, to accept a conciliation agreement that allowed Bennett to escape with a small fine.

Bennett and his family contracting business, Benetech LLC, also have come under fire for allegedly receiving improper contracts set-aside for disabled veterans and for bribing a sheriff. The New Orleans Times-Pacayune editorial board called Aaron Bennett a “crooked contractor.”

The six-person Federal Election Commission — evenly divided by law — has been largely paralyzed by three Republicans who oppose campaign finance regulation. Since the vote, Democratic Commissioner Bauerly stepped down from the commission, leaving just two Democratic commissioners. Four votes are required for any Commission action.

Justice

EXCLUSIVE INTERVIEW: Rep. Chris Van Hollen On Campaign Finance, Election Reform

Rep. Chris Van Hollen (D-MD)

Rep. Chris Van Hollen (D-MD)

Rep. Chris Van Hollen (D-MD) has, in recent years, become the leading force in the U.S. House of Representatives for campaign finance reform. As chief sponsor of the DISCLOSE 2012 Act, which was blocked from even getting a hearing in the Republican-controlled House and filibustered to death by the Republican minority in the Senate, he has been the chief advocate for greater transparency for outside groups like Karl Rove’s Crossroads GPS that keep their donors secret.

In an exclusive interview with ThinkProgress, Van Hollen expressed optimism that his Republican colleagues may be more open to DISCLOSE and other reforms next year after they too faced secret-money attacks in their own campaigns. Public pressure, he said, will be key in getting the legislation and other reforms aimed at mitigating the damage caused by the Supreme Court’s 5-4 Citizens United ruling. And, he noted, he hopes Federal Election Commission and election reform will also be priorities for the Obama administration and the 113th Congress.

Here are some highlights of Van Hollen’s comments:

The DISCLOSE Act:

The best I can say is I hope after this election, we have more converts on this issue. It was very ironic to hear [defeated] House Administration Committee Chairman Dan Lungren (R-CA) complain of all the secret outside money coming into his race. He refused to even hold a hearing on the DISCLOSE Act as Chairman, which meant we had to hold a “rump” hearing, not an official Congressional hearing. I think you’re going to see greater interest from our Republican colleagues. But this will only move with outside pressure. You’ve got people like Sen. Republican Leader Mitch McConnell (R-KY), who is the sworn enemy of disclosure. He did a 180 — he used to be for full transparency and disclosure. He opposed McCain-Feingold saying we need full disclosure, not this. Then he flip-flopped, after Citizens United. What gives me hope is the public is totally on the side of disclosure and transparency – they believe the public has a right to know who’s spending gobs of secret money to influence these elections.

Other Campaign Finance Reforms:

I’m gonna continue to press on a number of fronts, including urging the IRS to determine whether or not a lot of these organizations were using the cover or their tax-exempt status in order to pursue political and electoral objectives, whether they’re meeting the tests that provide them with tax-exempt status and give them the ability to hide their donors… A number of other avenues dealing with shareholder rights with respect to corporate giving: both shareholder notice (at the very least, shareholders should be notified of corporate contributions) and shareholder approval. We saw a major development with Chevron contributing a lot of money to one of the Congressional super PACs [the company gave $2.5 million to the Congressional Leadership Fund, a super PAC that ran attack ads against Democratic candidates]. There are corporations that essentially launder their money through other organizations to hide their identities, it’s important to shine a light on that secret money. A lot of corporations prefer to do their direct expenditure contributions in the dark.

Election Reform:

This is another important area: in addition to blatant efforts of some states to limit the democratic process, you also have indirect impediments placed on participation. Requiring someone to stand in line for 3-4 hours to vote is a limit on their rights. First, you had some states trying to limit the right to early voting. On top of that, [some states] created circumstances where you have long lines. It’s a clear impediment to people’s right to vote. It’s too early to say whether it’s bipartisan, but we’re working on a number of pieces of legislation now to deal with this set of issues. Read more

Justice

Federal Appeals Court Reverses Rare Pro-Disclosure Decision Affecting Election Spending

Federal Election Commission logoAs ThinkProgress’ Josh Israel explained last January, the rush of secret money seeking to influence the 2012 election can be blamed in no small part on the Federal Elections Commission, which issued regulations weakening federal disclosure laws in 2007. Although federal law requires “all contributors who contributed an aggregate amount of $1,000 or more” to fund a certain kind of election spending by a single organization to be disclosed, the FEC interprets this law to only require disclosure when such contributions are “made for the purpose of furthering electioneering communications.” According to Israel, “[t]his huge loophole has meant that 501(c)(4) groups like Crossroads GPS are required to disclose only their donors who overtly earmark the donation for that communication. Very few donors have done so.”

Last April, a federal district court closed this loophole, at least for certain kinds of election spending. Today, a three judge panel of the United States Court of Appeals for the District of Columbia Circuit reversed that decision, claiming that federal law is “anything but clear” that the FEC’s loophole should not exist.

Today’s decision is not the end of the road for this issue. The panel essentially sent the case back to the FEC to either “explain the meaning and scope of [its regulation] or, if the agency deems it appropriate, to engage in further rulemaking to better clarify the regulatory regime.” After the FEC takes this action, it is still possible that a court could hand down a subsequent decision closing the loophole even if the FEC does not do so itself.

Nevertheless, courts generally apply a high degree of deference to agency decisions, so the most likely outcome is that whatever the FEC says will continue to be the law. Moreover, it is also unlikely that the FEC will adopt a more pro-disclosure regulation. By design, each major party controls half of the seats on the FEC, which means that the commission generally stalemates on major votes where one party or the other wishes to block certain regulation. Last time the FEC was asked to review a similar disclosure regulation, it split 3-3.

Justice

Conservative Group Ignores Court Order Requiring It To Disclose Donors Behind TV Ad

Freedom Path ad

Freedom Path ad

The U.S. Court of Appeals for the District of Columbia District heard arguments Friday on an appeal in the Van Hollen v. Federal Election Commission case. A district judge ruled in March that outside groups engaging in signficant “electioneering communications” — ads run near federal elections that mention candidates but do not explicitly tell viewers to elect or defeat them — must disclose the donors funding their efforts. The impact of this ruling is limited, because most groups have exploited a loophole allowing them to circumvent the rules. Nevertheless, one group impacted by this decision has thus far failed to identify its big-money donors.

After years of failing to enforce disclosure rules mandated by the Bipartisan Campaign Reform Act (commonly known as McCain-Feingold), Rep. Chris Van Hollen (D-MD) successfully sued the Federal Election Commission, demanding that it do so. The FEC said in July that it would enforce the ruling, retroactive to the date it was issued. Until such time as a court overturns the ruling, the Commission ordered, all reports of electioneering communications made from March 30, 2012-onward would need to include disclosure of all donors to the group who contributed $1,000 or more. As ThinkProgress reported, that meant just one group would have to amend its earlier filings to name its donors: Freedom Path. An officer for that Utah-based 501(c)(4) committee, which spent thousands of dollars on ads praising Sen. Orrin Hatch (R-UT) and Mitt Romney, told ThinkProgress at the time that his group would have to consult with their legal counsel before making a statement on whether it intends to comply with the new rule.

Six weeks later, Freedom Path has not yet amended its reports. The Federal Election Commission’s report analysis division has not contacted the group to ask for additional information. The Commission has taken no enforcement action against Freedom Path to date, though it does not make ongoing enforcement investigations public. As a result, voters cannot determine who was truly speaking in the group’s advertising, even though this disclosure is currently required by law. Freedom Path did not respond to multiple emails and phone messages asking for comment.

Just one group — Mayors Against Illegal Guns Action Fund — has reported a new electioneering communication expenditure since the FEC’s July order. It did identify its donors in its filings.

Paul S. Ryan, senior counsel at the Campaign Legal Center, told ThinkProgress that any group that’s making significant electioneering communications is “required by law to disclose their donors. All groups should be doing so… It’s important [and] the FEC needs to enforce that law.”

But, he added, “Equally as troubling, or perhaps even more troubling, is the fact that many [501](c)(4)s are now playing a game of inserting very brief mention of express candidate advocacy at the end of their ads seemingly for the purpose of avoiding donor disclosure… They game the system and maintain the anonymity our deep pocketed donors by simply inserting a few words at the end of the ad, where they’re barely noticeable.”

The DISCLOSE Act — which would have required donor disclosure for those more overt “independent expenditures” allowed by the controversial Citizens United ruling — was blocked by Senate Republicans in July, on two party-line votes.

Election

GOP Federal Election Commissioners: Corporations Can Compel Employees To Campaign For Political Candidates

Three Republican Federal Election Commissioners have found that unions or corporations can compel employees to campaign for political candidates in the aftermath of the Supreme Court’s Citizens United ruling.

In a Statement of Reasons memorandum signed on August 21, 2012, the commissioners contend that the United Public Workers union (UPW) was within its legal right to require employees to “provide support for Hawaii Fist Congressional District candidate Colleen Hanabusa’s candidacy in a special congressional election on May 22, 2010.” The case stemmed from a complaint in wich two employees alleged that they were fired after refusing “to comply with a UPW request to sign-wave, phone bank, canvass, and contribute to Hanabusa’s campaign.” The GOP commissioners found that current law and regulations do not prohibit employers from requiring participation:

UPW’s independent use of its paid workforce to campaign for a federal candidate post-Citizen’s United was not contemplated by Congress and, consequently, is not prohibited by either the Act or Commission regulations…. Requiring employees to work on independent expenditures for either the union or a non-connected political committee is not a violation of the Act or Commission regulations.

The Commission ultimately found that UPW “failed to report independent expenditures” which resulted from the employee participation in Hanabusa’s campaign, but concluded that the union did not coerce employees to make contributions. UPW has agreed to pay a civil penalty of $5,500 for “failing to report independent expenditures in support of a federal candidate.”

In a separate Statement of Reasons memorandum, the three Democratic FEC commissioners argued that UPW did in fact coerce “employees to participate in the union’s political activities” in violation of the Federal Election Campaign Act of 1971. “After Citizens United, UPW had every right to expressly advocate for its chosen candidate and against her opponent,” they wrote. “Nothing in Citizens United suggests, however, that the Court intended to expand the rights of corporations and unions at the expense of their employees’ longstanding rights to be free from coercion and to express or to decline to express their own political views.”

Justice

Karl Rove Group May Take Advantage Of FEC Typo To Avoid Donor Disclosure

Crossroads GPS ad on websiteLast week, the Federal Election Commission announced retroactively that effective March 30, 2002 all outside groups running “electioneering communications” — independent ads run within 30 days of federal primaries or nominating conventions or within 60 days of federal general elections that mention candidates but do not expressly advocate for or against them — must identify all donors contributing over $1,000 bankrolling their efforts. But Karl Rove’s Crossroads GPS is taking advantage of a mistake on the FEC’s website to avoid disclosure of its donors.

The Los Angeles Times reported today that the secret-money 501(c)(4) group will be running $25 million worth of attack ads against President Obama through August 6, but still does not plan to identify who is bankrolling its ads:

According to the FEC, the electioneering communications window before the Democratic National Convention begins According to the FEC, the electioneering communications window before the Democratic National Convention begins Aug. 4. However, the commission has offered confusing guidance on the topic: Last week, its website identified the start the period as Aug. 7, which the FEC then said was a mistake, noting the correct date was Aug. 4.

“The commission regrets the error,” the FEC said in a statement posted on its website Friday. “The commission will exercise its prosecutorial discretion and will not take enforcement action with respect to communications disbursements made in reasonable reliance on the erroneous information on the website in connection with EC reporting.”

Crossroads GPS spokesman Jonathan Collegio told the paper that the group has no plans to disclose donors as it does not plan to “air ads that will trigger reporting in the [electioneering communications] window.” It is hard to imagine that Rove — who regularly appears on Fox News Channel as a political analyst — and the other operatives at Crossroads GPS were really unaware of when the Democratic National Convention begins.

Still, while the FEC might be willing to let Crossroads GPS avoid disclosure, they might want to consider pulling their August 4 through 7 advertisements. Rep. Chris Van Hollen (D-MD) says he may file a lawsuit to force the group to comply, noting “I think they would have a really difficult time claiming that because of a technical FEC error, they get to violate the law.”

Update

Campaign finance reform advocate Fred Wertheimer called on the U.S. Department of Justice to investigate any non-disclosed electioneering communications in this period as “knowing and willful” violations of campaign finance law.

NEWS FLASH

FEC Considering An Appeal Of Pro-Disclosure Court Ruling | Federal Election Commission Chair Caroline Hunter, a former deputy counsel for the Republican National Committee, told Bloomberg BNA yesterday that the Commission is considering an appeal of a federal court ruling requiring greater disclosure of outside campaign spending. On March 30, a federal judge ruled that the FEC had ignored the explicit requirements of the Bipartisan Campaign Reform Act of 2002 (commonly known as McCain-Feingold) in promulgating regulations for “electioneering communications” by outside groups that shielded them from having to disclose the large donors who funded the efforts.

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