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Policy Solution

Fixing the FEC: An Agenda for Reform

Summary: The campaign finance system charged with safeguarding our elections has itself become a threat to democracy. This paper sets forth a new blueprint to make the FEC work again.

Published: April 30, 2019
The campaign finance system charged with safe­guard­ing our elec­tions has itself become a threat to demo­cracy. This is thanks not only to Citizens United, but also to a dysfunc­tional campaign finance agency in Wash­ing­ton, the Federal Elec­tion Commis­sion. Evenly divided and perpetu­ally grid­locked, FEC dysfunc­tion has made it more diffi­cult for candid­ates trying to follow the law, and easier for those will­ing to break it. Over the last decade the FEC has aban­doned seri­ous alleg­a­tions of lawbreak­ing without invest­ig­at­ing because its commis­sion­ers have divided along party lines. Further, the agency has often failed to provide candid­ates and other polit­ical actors with guid­ance on key issues and has neglected to update regu­la­tions to reflect major changes in the law, media, and tech­no­logy.
 
This paper sets forth a new blue­print to make the FEC work again. It proposes reforms to curtail grid­lock, foster more account­able agency lead­er­ship, and over­haul the Commis­sion’s civil enforce­ment process. A number of these changes are part of H.R. 1, the historic For the People Act of 2019 that recently passed the House of Repres­ent­at­ives. They deserve to be a bipar­tisan prior­ity.
 
The FEC was created in 1975 to admin­is­ter and enforce the system of post-Water­gate campaign finance rules designed to prevent corrup­tion. It is composed of six commis­sion­ers; no more than three can be from the same party. The Commis­sion cannot enact regu­la­tions, issue guid­ance, or even invest­ig­ate alleged viol­a­tions of the law without four votes. While the Commis­sion does have a nominal chair, the office rotates and carries no real power; even purely admin­is­trat­ive matters related to budgets, staff­ing, and other manage­ment decisions gener­ally require four commis­sion­ers to agree.
 
Today, that rarely happens on matters of signi­fic­ance. By long-stand­ing prac­tice, FEC commis­sion­ers are usually hand­picked by Demo­cratic and Repub­lican lead­ers in Congress, who increas­ingly disagree not only about the need for new reforms but also about how to inter­pret exist­ing laws. The evenly split Commis­sion often cannot agree even on person­nel and other admin­is­trat­ive matters, with crit­ical posts often sitting vacant for years.
 
Since 2010, the FEC’s partisan stale­mate has allowed more than $1 billion in dark money from undis­closed sources to flood into U.S. elec­tions. Enforce­ment of rules that limit cooper­a­tion between candid­ates and lightly regu­lated super PACs has been stymied, making it possible for super PACs to spend billions work­ing hand in glove with campaigns. Pres­id­en­tial candid­ates too often have become the equi­val­ent of race­horses backed by rival billion­aires. And grid­lock has preven­ted any mean­ing­ful FEC response to revel­a­tions that Russia sought to manip­u­late the U.S. elect­or­ate in 2016.
 
A require­ment for disclaim­ers on the sorts of online ads that Russian oper­at­ives used to influ­ence Amer­ican voters has been stalled for more than a year. Given this history, if any of the more ambi­tious reforms in H.R. 1 were to be enacted, it is doubt­ful that FEC commis­sion­ers could effect­ively carry out a new mandate.
 
FEC dysfunc­tion thwarts even Commis­sion members who oppose stronger rules. They can block enforce­ment on an evenly divided FEC, but they do not have the votes to change rules they find irra­tional or outdated. For instance, a proposal to loosen rules that govern polit­ical party fundrais­ing has languished since 2015.
 
For candid­ates and others, grid­lock at the FEC creates risk and uncer­tainty that does­n’t need to be there. “Most polit­ical oper­at­ives, whether on the right or the left, want clar­ity. What can I do and what can I not do,” says former Repub­lican commis­sioner Michael Toner. “They might not always be thrilled with the answers, but they want to know.” Instead, those seek­ing advis­ory opin­ions from the FEC on novel or contro­ver­sial issues often go away empty-handed. The result­ing gray areas can have real consequences: In recent years both Repub­lican and Demo­cratic office­hold­ers have been accused of crim­inal offenses that might have been avoided with the help of clearer FEC guid­ance.
 
FEC dysfunc­tion harms candid­ates and polit­ical parties, who are under the bright­est spot­light and who have tradi­tion­ally relied on the Commis­sion to create clear, uniform rules. The lack of clar­ity is a prob­lem even for supposed bene­fi­ciar­ies of Citizens United, like polit­ic­ally active busi­ness interests, who put a similar premium on “every­one[] play­ing by the same rules.” Polit­ical outsiders without the resources to hire expens­ive elec­tion lawyers to parse ambigu­ous or out-of-date regu­la­tions are partic­u­larly disad­vant­aged. With a para­lyzed FEC, some­thing as simple as filling out a form can be fraught, since many of the Commis­sion’s forms and accom­pa­ny­ing guid­ance are incom­plete and/or out-of-date. For example, more than nine years after Citizens United, there is still no FEC form for creat­ing a super PAC. Instead, filers must fill out the form for creat­ing a tradi­tional PAC, and then send the FEC a separ­ate letter. That process is set forth in “interim” guid­ance the Commis­sion issued more than seven years ago. It also would not be appar­ent from check­ing the Commis­sion’s offi­cial guide for non-connec­ted PACs, which was last updated in 2008.
 
In short, as a bipar­tisan group of members of Congress wrote to Pres­id­ent Trump in Febru­ary 2018, a dysfunc­tional FEC “hurts honest candid­ates who are trying to follow the letter of the law and robs the Amer­ican people of an elect­oral process with integ­rity.”
 
Congress needs to fix this prob­lem, but in a way that preserves safe­guards against partisan abuse of the Commis­sion’s power and bureau­cratic over­reach that could stifle polit­ical expres­sion. In craft­ing propos­als to achieve this balance, the Bren­nan Center consul­ted with more than a dozen experts who served as FEC commis­sion­ers or high-level staffers, or who have regu­larly advoc­ated before or stud­ied the agency. On the basis of their input and our own expert­ise (includ­ing that of the author, who worked at the FEC from 2011 to 2014), we recom­mend the follow­ing reforms:
 
  • Change the number of commis­sion­ers, with at least one polit­ical inde­pend­ent: To reduce grid­lock and allow for decis­ive poli­cy­mak­ing, Congress should change the Commis­sion’s struc­ture to give it an odd number of five commis­sion­ers, with no more than two from each of the major polit­ical parties. Congress should specify that at least one commis­sioner be a polit­ical inde­pend­ent who has neither been affil­i­ated with nor worked for one of the two major parties or their office­hold­ers or candid­ates in the five years preced­ing their appoint­ment.
  • Estab­lish an inclus­ive, bipar­tisan process to vet poten­tial nomin­ees. As an added safe­guard, Congress should require the pres­id­ent to convene a blue-ribbon advis­ory panel to help vet poten­tial nomin­ees. The panel should have repres­ent­a­tion from both major parties. Congress should also require reas­on­able steps consist­ent with the Consti­tu­tion to ensure that people of color and other under­rep­res­en­ted communit­ies have a voice in the selec­tion process.
  • Give the agency a real leader who is account­able to the pres­id­ent. To ensure clearer lines of account­ab­il­ity for the Commis­sion’s manage­ment, Congress should provide that the pres­id­ent will desig­nate one commis­sioner to serve as the agency’s chair during the pres­id­ent’s term. The chair would have the power to super­vise Commis­sion staff, approve its budget, and other­wise act as the agency’s chief admin­is­trator, but with suffi­cient checks to prevent partisan abuse of the office and ensure the Commis­sion’s contin­ued inde­pend­ence from the White House.
  • End the prac­tice of allow­ing commis­sion­ers to remain in office indef­in­itely as hold­overs. To ensure that the Commis­sion has regu­lar infu­sions of fresh lead­er­ship with an appro­pri­ate degree of inde­pend­ence, Congress should limit commis­sion­ers to two stat­utory terms and end the prac­tice of letting them serve indef­in­itely past the expir­a­tion of their terms until a successor arrives.
  • Over­haul the Commis­sion’s civil enforce­ment process.
 
Finally, Congress should take several steps to make the Commis­sion’s civil enforce­ment process time­lier and more effect­ive, while main­tain­ing safe­guards to protect the rights of alleged viol­at­ors. These changes should include:
 
  • Creat­ing an inde­pend­ent enforce­ment bureau within the Commis­sion, whose director would be selec­ted by a bipar­tisan major­ity of commis­sion­ers and have author­ity to initi­ate invest­ig­a­tions and issue subpoenas (subject to over­ride by a major­ity of commis­sion­ers);
  • Provid­ing an effect­ive legal remedy for both complain­ants and alleged viol­at­ors to obtain legal clar­ity if the Commis­sion fails to act on an enforce­ment complaint within one year;
  • Limit­ing the Commis­sion’s use of prosec­utorial discre­tion to avoid pursu­ing seri­ous viol­a­tions;
  • Restor­ing the Commis­sion’s author­ity to conduct random audits of polit­ical commit­tees;
  • Rein­for­cing the Commis­sion’s system of “traffic ticket” admin­is­trat­ive fines for report­ing viol­a­tions by making it perman­ent and requir­ing the Commis­sion to expand the program to cover all reports; and
  • Increas­ing the Commis­sion’s budget to allow it to hire addi­tional qual­i­fied staff to ensure timely, effect­ive resol­u­tion of enforce­ment matters.
 
These reforms will allow an import­ant federal agency to enforce the law as writ­ten and provide much-needed clar­ity on a host of issues that affect office­hold­ers and others across the polit­ical spec­trum. How much trans­par­ency does the law require for those who engage in campaign spend­ing? How closely may candid­ates work with like-minded super PACs? When are certain payments — say, those made on Pres­id­ent Trump’s behalf to the adult film star Stormy Daniels to hide an alleged affair  — considered campaign contri­bu­tions? How should decades-old stat­utory law be applied to the inter­net? A less-grid­locked FEC could provide real answers. And to the extent that those answers do not sit well with the Amer­ican people, there will be much clearer lines of account­ab­il­ity than the current stale­mate affords.
 
If there is any lesson from the FEC’s recent history, it is that while strong checks and balances are essen­tial for any entity that regu­lates the polit­ical process, efforts to insu­late the Commis­sion entirely from swings of the polit­ical pendu­lum simply have not worked. The time has come for a differ­ent approach.