CREW Wins Major Lawsuit Against FEC

Citizens for Responsibility and Ethics in Washington (CREW) is a non-profit legal watchdog group dedicated to holding public officials accountable for their actions.

A Federal Judge ruled yesterday that the Federal Election Commission (FEC) dismissal of CREW’s complaints against American Action Network (AAN) and Americans for Job Security (AJS) was “arbitrary and capricious” and “contrary to law” and directed the FEC to reconsider the cases using a greatly expanded standard of what counts as a political ad.

This will have a major impact on disclosure by dark money groups, as the FEC can no longer only consider ads that expressly advocate for or against candidates when deciding whether a group is a “Political Committee” that must reveal its donors to the public.

United States District Judge Christopher R. Cooper wrote, “CREW’s citations to legislative history, past FEC precedent, and court precedent certainly support the conclusion that many or even most electioneering communications indicate a campaign-related purpose. Indeed, it blinks reality to conclude that many of the ads considered by the Commissioners in this case were not designed to influence the election or defeat of a particular candidate in an ongoing race.”

This decision marks a major victory not just for CREW but for believers in an open and transparent political process. The court found that Campaign related spending is not limited to express advocacy, that the FECA’s Political Committee provisions impose only “modest” burdens that serve the same important Campaign-Transparency interests as one-time event disclosures, and that the FEC needs to accept that an organization’s major purpose can change with time, specifically that if a once non-political organization starts acting like a political organization, then it is now one.

“This is a huge victory on many important grounds,” CREW Executive Director Noah Bookbinder said. “From now on, we hope to see a major change in the way the FEC approaches investigations of non-profit organizations engaged in politics. This could be the beginning of meaningful enforcement of rules meant to ensure transparency and restrict the ability of powerful interests to influence politics without disclosure.”

CREW initially filed complaints against AJS and AAN in 2012 alleging that due to their extensive Political Advertising Campaigns, the groups’ major purposes were to impact elections, meaning they should have had to register as Political Committees under federal law and reveal their donors.

This is not the first major victory this year for CREW involving AJS and the FEC. In July, AJS was fined $43,000 by the FEC as part of a record post-Citizens United fine against Koch brothers network groups stemming from a CREW complaint.











NYC Wins When Everyone Can Vote! Michael H. Drucker

How Sanders Beat Clock and Avoided Financial Disclosure

As a Democratic Presidential hopeful, Sen. Bernie Sanders of Vermont vociferously argued for political transparency, especially when money was concerned.

Sanders insisted, for example, “on complete transparency regarding the funding of campaigns.” He decried “huge piles of undisclosed cash” benefiting candidates.

But when Federal law required Sanders to reveal, by mid-May, current details of his Personal Finances, his Campaign Lawyer asked the Federal Election Commission (FEC) for a 45-day extension.

His request was granted.

On June 30, Sanders’ Campaign requested a second 45-day extension, saying the Senator had “good cause” to delay because of his “current campaign schedule and officeholder duties.”

Again, Regulators approved Sanders’ punt.

Now that Sanders’ second extension has expired, spokesman Michael Briggs confirmed to the Center for Public Integrity that the Senator won’t file a Presidential Campaign Personal Financial Disclosure after all.











NYC Wins When Everyone Can Vote! Michael H. Drucker

FEC Made It Easier for super PAC Donors to Hide Their Identities

A divided Federal Election Commission (FEC) cannot agree to investigate whether super PAC donors used corporations to mask their identities in the 2012 campaign, effectively giving a green light to contributors writing checks through limited-liability companies (LLC) in this year's elections.

FEC Assistant General Counsel William Powers wrote in letters to the nonprofit advocacy group Campaign Legal Center last week that the six-member panel was split about whether to look into corporate donations that were made in 2011 to Restore Our Future, a super PAC backing then GOP Presidential nominee Mitt Romney. At least four commissioners must agree that there is a basis for an investigation before the agency's lawyers can proceed. Absent that consensus, the FEC closed the cases, he wrote.

At issue were three $1 million donations that Restore Our Future received from corporate entities in 2011. Among the donors was W Spann LLC, a company that had been incorporated in Delaware in March 2011 and was dissolved that July. The Campaign Legal Center and Democracy 21 filed a complaint alleging that W Spann's contribution violated a Federal ban on straw donors. Shortly afterward, former Romney business associate Edward Conard came forward and admitted he set up the LLC and made the donation through it.

Paul S. Ryan, Deputy Executive Director of the Campaign Legal Center, said Conard appeared to have violated a Federal law that prohibits an individual or entity from making a donation in the name of another entity. "The FEC was not able to muster four votes to even open an investigation," he said. "It took them almost five years to get to it, and then they deadlocked."

The Campaign Legal Center is now considering suing the FEC over the case, Ryan said, noting that the Supreme Court endorsed the robust disclosure of donors in its 2010 Citizens United decision, which allowed corporations to spend unlimited sums on independent political activities.

Charlie Spies, the Attorney for Restore Our Future, said in a statement that the super PAC "fully complied with all FEC rules and regulations here, and the FEC’s resolution of these matters is consistent with Constitutional free speech protections articulated in Citizens United."

While donations from limited-liability companies were still novel in 2012, super PACs now routinely report receiving money from hard-to-trace or recently formed corporations.

"We’ve seen an increase in contributions from LLCs and other business entities to super PACs, with no disclosure of the human or humans behind these contributions," Ryan said. "Unless the FEC is reconstituted with commissioners willing to do their job, straw donors will continue to get away with laundering their money into federal elections."











NYC Wins When Everyone Can Vote! Michael H. Drucker

Federal Election Administration Act to Replace the FEC

Reform groups urged Senators to cosponsor the Federal Election Administration Act FEAA) being introduced by Senator Tom Udall (D-NM).

The Act provides a framework and the basis for developing a new legislative approach for properly enforcing and interpreting the campaign finance laws and creates a new independent agency to replace the Federal Election Commission (FEC).

From the letter:

The Federal Election Commission is a failed, dysfunctional agency that does not
enforce or properly interpret the nation’s campaign finance laws.

As a result, campaigns, political operatives, parties and independent spenders know they can operate with impunity and without consequences for campaign finance violations. This has created the modern political equivalent of the Wild West without a sheriff. It also means that any new campaign finance laws that are enacted will face the same problem of being undermined by the FEC’s failure to enforce the laws as the current laws.

The groups included Campaign Legal Center, Common Cause, Democracy 21, Issue One, People for the American Way, Public Citizen, Rootstrikers and U.S. PIRG.

CLICK HERE to read the twp page (PDF) letter.











NYC Wins When Everyone Can Vote! Michael H. Drucker

Pro-Romney Super PAC Fined $50K for 2012 Activities

The Campaign Legal Center (CLC) received notification that the Federal Election Commission (FEC) has fined pro-Mitt Romney Super PAC Restore Our Future (ROF) $50,000 for illegally spending millions of dollars airing an advertisement in 2012 that was originally produced and aired by the 2008 Romney Presidential campaign.

ROF Treasurer Charles S. Spies signed a conciliation agreement on behalf of ROF, agreeing to pay a civil penalty of $50,000.

Under FEC regulations, financing the republication of campaign materials prepared by a candidate or candidate committee constitutes a “contribution for the purposes of contribution limitations” of the person or group making the expenditure. Super PACs like ROF are prohibited from contributing to candidates. Consequently, every dollar ROF spent airing this ad constitutes an illegal contribution.

Beginning in February 2012, ROF made major ad buys to air the 2008 Romney campaign ad, initially in advance of primaries in Arizona and Michigan and continuing through the November 2012 General Election. CLC filed a complaint with the FEC on February 27, 2012, after ROF’s initial ad buy in Arizona and Michigan, alleging illegal in-kind contributions by Restore Our Future, Inc. to Presidential candidate Mitt Romney.

According to the Wall Street Journal, ROF spent $4.3 million to air the ad in nine battleground states in May, the Super PAC’s first General Election ad buy. Other press accounts indicate millions more were spent by ROF to air the ad. According to the book The 2012 Presidential Campaign: A Communication Perspective, this ad (“Saved”) was the Super PAC’s “most-aired political spot.”

CLICK HERE to read the eight page (PDF) complaint filed by the Legal Center on February 27, 2012.











NYC Wins When Everyone Can Vote! Michael H. Drucker