D21 and CLC Lawsuit Calling for FEC Enforcement Moves Forward

| |    by

Federal Court Rejects FEC’s Attempt to Dismiss Lawsuit Calling for FEC Investigation into Anonymous Contributions

A federal district court today refused to throw out a lawsuit Democracy 21 had joined the Campaign Legal Center in filing against the Federal Election Commission (FEC). CLC and D21 filed the suit in the United States District Court for the District of Columbia after the FEC failed to act on five complaints calling on the agency to investigate donors who broke disclosure laws by hiding behind opaque corporate entities like Limited Liability Companies (LLCs) to anonymously make contributions to super PACs.

In response to the lawsuit, the FEC called on the court to dismiss the case, on the ground that CLC and D21 failed to show standing, or the right to sue. The court disagreed as to the majority of the FEC complaints and now the case will be heard on the merits.

“The Federal Election Commission is out of control and this court has made clear that the agency will not be able to easily avoid being held accountable for failing to do its job in enforcing campaign finance laws,” said Larry Noble, senior director of regulatory reform programs and general counsel for CLC. “The U.S. Supreme Court has made it clear that disclosure laws play a vital role in providing the electorate with critical information to make informed choices. Each time the FEC fails to pursue a serious violation of the law, it weakens our democracy and the ability of Americans to know who is truly influencing our elections. It also sends a loud and clear message that those who violate campaign finance laws will face no penalties. We can’t sit idly by and let the FEC destroy the integrity of our democracy.”

“We have reached the point where the only way it seems possible to get the dysfunctional FEC to do its job is by suing them,” said Democracy 21 President Fred Wertheimer. “The FEC’s failure to adopt regulations that properly interpret the campaign finance laws is a major reason why so much dark money is pouring into federal elections. We are very pleased that the district court judge has refused to go along at this stage of our lawsuit with the FEC’s stonewalling opposition to our efforts to obtain campaign finance disclosures that the America people have a right to know.”

CLC and D21, over the course of several years, filed complaints with the FEC against several newly formed corporate entities and their undisclosed donors for violating the “straw donor” provision of Federal Election Campaign Act (FECA). These donors’ anonymous contributions ranged from $857,000 to over $12 million, and some of the donors openly admitted in the media that they had used or even created personal companies to hide their identities from the public. Still, the FEC dismissed all five complaints, after the three Republican commissioners voted not to investigate and sanction these donors.

The lawsuit states that in dismissing these complaints, the FEC has “undermined FECA’s purposes, including its goal of promoting transparency in elections and providing the electorate with information about who is speaking to it during elections.” CLC and D21, along with the public, “were deprived of timely information about the sources of the contributions made to the super PACs – information to which they are legally entitled to under FECA.”

The lawsuit calls for the court to find that the FEC’s dismissal of the complaints was “arbitrary, capricious, and an abuse of discretion, and otherwise contrary to the law,” and seeks a judicial order demanding the FEC enforce the law within 30 days.