Federal District Court Strikes FEC Regulation that Gutted Contribution Disclosure By Outside Spending Groups as Contrary to Law in Lawsuit by Representative Van Hollen
A federal district court in Washington, DC today struck down a regulation issued by the Federal Election Commission in 2007 that gutted the contribution reporting requirements that apply to groups which make electioneering communications.
“Electioneering communications” are defined in the law as broadcast ads that mention a candidate 60 days before the general election and 30 days before a primary.
The ruling by Judge Amy Berman Jackson came in a case brought against the FEC by Representative Chris Van Hollen (D-MD).
Representative Van Hollen challenged a rule promulgated by the FEC that requires groups making electioneering communications to disclose the names only of their donors who gave “for the purpose of furthering electioneering communications.”
This regulation had resulted in widespread evasion of the contribution disclosure requirements for groups making electioneering communications.
The lawsuit alleged that this restriction on the scope of the disclosure was in direct conflict with the statutory requirement that a group making electioneering communications is required to report all donors of $1,000 or more. The disclosure requirement was enacted by Congress in 2002 as part of the Bipartisan Campaign Reform Act (BCRA), known as the McCain-Feingold law.
The FEC contended that its regulation was required by a Supreme Court decision in 2007 in Wisconsin Right to Life that permitted corporations and labor unions to make certain electioneering communications. The FEC contended that the disclosure requirement adopted by Congress had to be modified and narrowed in light of that ruling.
The Court rejected the FEC’s position. Judge Jackson said, “There is no question that the BCRA provides that every ‘person’ who funds ‘electioneering communications’ must disclose ‘all contributors,’ and that Congress explicitly defined ‘person’ to include corporations and labor organizations.” The Court further noted that “there are no terms limiting that requirement to call only for the names of those who transmitted funds accompanied by an express statement that the contribution was intended for the purpose of funding electioneering communications.”
Judge Jackson said that “there is no question that the regulation promulgated by the FEC directly contravenes the Congressional goal of increasing transparency and disclosure in electioneering communications. . . .[T]he general legislative purpose here is clearly expressed and it favors plaintiff’s interpretation of the statute: that Congress intended to shine light on whoever was behind the communications bombarding voters immediately prior to elections.”
Further, Judge Jackson said:
In sum, the Court finds that Congress spoke plainly, that Congress did not delegate authority to the FEC to narrow the disclosure requirement through agency rulemaking, and that a change in the reach of the statute brought about by a Supreme Court ruling did not render plain language, which is broad enough to cover the new circumstances, to be ambiguous. The agency cannot unilaterally decide to take on a quintessentially legislative function; if sound policy suggests that the statute needs tailoring in the wake of WRTL or Citizens United, it is up to Congress to do it. Because the statutory text is unambiguous, the “judicial inquiry is complete,” and the Court need not reach step two of theChevron framework. Teva Pharm. Indus. Ltd. v. Crawford, 410 F.3d 51, 53 (2005).
Representative Van Hollen was represented in the case by the Democracy 21 legal team led by Roger Witten and lawyers from his law firm of WilmerHale. Lawyers from Democracy 21 and the Campaign Legal Center also served under the legal team.
According to Democracy 21 President Fred Wertheimer, one of the lawyers in the case:
The federal district court has spoken clearly and decisively today and found that FEC regulations have in essence gutted the statutory requirement for groups making electioneering communications to disclose their donors.
Now it is the FEC’s turn to act.
Democracy 21 calls on the FEC to conduct an immediate rulemaking procedure.
The FEC must get new rules in place promptly to ensure that outside spenders making electioneering communications disclose the donors funding these campaign related expenditures.
Our legal team will now consult with Representative Van Hollen about a potential second lawsuit challenging the FEC disclosure regulations that have gutted the contribution disclosure requirements for outside groups making independent expenditures.
“Independent” expenditures are defined in the law as expenditures for communications that contain express advocacy or the functional equivalent of express advocacy.
