D21 Urges FEC to Oppose Proposed Creation of New Campaign Spending Category Not Authorized by Law and Funded by Massive Contributions
Democracy 21 sent a letter today to the four Commissioners of the Federal Election Commission (FEC) urging them to vote against a proposed new rule that would “create an entirely new and unauthorized category of spending from political party ‘building fund’ accounts which are funded by massive contributions from individuals of up to $213,000 per donor per election cycle per account.”
The proposed rule is on the FEC calendar for consideration tomorrow.
The letter noted that, while strengthening cybersecurity is a “virtuous purpose,” the building fund provision created in the 2015 Omnibus Appropriations Act does not authorize spending on cybersecurity. The provision has a “limited and narrow” purpose, i.e. funding party headquarters buildings, and was “not intended to serve as an all-purpose slush fund.”
The letter also noted that this rule would mean that federal officeholders could solicit and donors could contribute up to $639,000 per donor per election cycle, as each political party has three national committees and a donor could contribute as much as $213,000 to each committee.
“The FEC is an administrative agency. It is not a legislative body and it cannot write new laws or ignore limits in existing laws,” according to Democracy 21 President Fred Wertheimer. “The FEC’s proposed rule has no legal basis in the statute and would authorize illegal expenditures. Congress has not given the FEC the power to do this and the FEC should not attempt to write legislation because the purpose is worthy.”
According to the letter:
Under the proposed Interpretive Rule, the national party committees would be permitted to use their headquarters building fund accounts to pay for “secure information communications technology and cybersecurity products or services for national and state party committees and federal candidate committees….” Draft Rule at 2. The Commission explains that it would promulgate this rule in fulfillment of its “obligation to curb the current threat of foreign cyberattacks and the unique challenges faced in enforcing violations regarding such cyberattacks,” id. at 6, and that this action is “necessary to carry out its obligation to prevent foreign interference in American elections….” Id. at 7.
Although the FEC does have the obligation to administer and enforce 52 U.S.C. § 30121, the existing ban on foreign national spending, no statute has authorized the FEC to permit massive individual contributions from a “building fund”—contributions of a size that plainly can corrupt officeholders and create the appearance of corruption—to be used for cybersecurity costs.
The letter continued:
As worthy a goal as cybersecurity is, it simply does not fit into the language of the statute or any of these categories of building-related expenses. The Commission has no authority to just assert, by ipse dixit, that it does. And the Commission’s two-sentence effort in the Draft Rule to make that assertion is unpersuasive. The Draft Rule states:
“Like a headquarters building, an entity’s information-technology infrastructure is an increasingly important factor in the health of an organization like a national party or campaign. Similarly, internet services are similar to utilities, which the Commission long permitted to be paid for using pre-BCRA building fund accounts.”
Draft Rule at 7. The first statement is a non-sequitur. Just because some proposed spending is for a service or product that may be an “important factor in the health of an organization” does not qualify it as a legitimate expenditure from the building fund. Many things might be an “important factor” in the “health of an organization”—effective recruitment of customers, good TV campaigns to market products, generous benefits for employees—but none of those expenses relate to the costs of its buildings. And while some types of “internet services”—such as the services provided by an ISP— may be “similar to utilities,” that cannot mean that every type of spending that is in any way related to “internet services” is the equivalent of a utility payment that can be charged to the building fund.
The letter also noted:
In distorting the building fund provision by expanding it beyond its reasonable boundaries, the proposed Rule is not harmless error. The special party accounts created by the Omnibus spending bill are meant to have limited and narrow purposes, in order to cabin the pernicious effects of the extraordinarily high contribution limits that apply to donations to the accounts. These accounts are not intended to serve as an all-purpose slush fund that the parties can be permitted to dip into, no matter how attenuated the statutory rationale, whenever some admittedly virtuous purpose can be served by the proposed spending.
The letter concluded:
The threat to our democracy posed by foreign interference in U.S. elections is real. But the statute confers no “emergency” powers on the Commission to issue the campaign finance equivalent of an edict suspending the writ of habeas corpus. Contribution limits still matter. The statutory restrictions on the use of the party building fund accounts still matter. And those restrictions cannot be written out of the law by Commission fiat.
We have repeatedly called on the Commission to do more to combat the threat posed by foreign interference in our elections. We strongly endorsed the comprehensive list of actions proposed by Chair Weintraub almost two years ago, and that list is still a good place to start. But the Interpretive Rule proposed here is the wrong response. It is a purported “interpretation” of the statute that is not permitted by the language of the statute.
The Commission plainly lacks a statutory basis to adopt the Draft Interpretive Rule, and we urge you to vote against it.
Read the full letter here.
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