Letter to FEC Expresses Deep Concerns about the Agency

February 12, 2009

For Immediate Release:

Contact: Susan Lehman, (212) 998-6318
Jeanine Plant-Chirlin, (212) 998-6289 or (646) 265-7721

Washington, D.C. – In a letter sent today by seven reform organizations to the six Commissioners who serve on the Federal Election Commission (FEC), the groups strongly criticized the agency for its misguided rulemaking priorities.

The groups also strongly criticized three of the six Commissioners—Vice Chairman Matthew Petersen, Commissioner Donald McGahn, and Commissioner Caroline Hunter—for their demonstrated "distinct lack of interest in enforcing" the campaign finance laws.

The votes of four of the six FEC Commissioners are required to take any enforcement action.

The letter was sent by Democracy 21, the Campaign Legal Center, the Brennan Center for Justice at the NYU School of Law, Common Cause, the League of Women Voters of the United States, Public Citizen and U.S. PIRG.

The groups called for fundamental changes in the approach used by the President to nominate Commissioners to the FEC and in the structure and authority of the agency.

The letter urges that President Obama:

establish a system by which an advisory group made up of distinguished Democrats, Republicans and independents or members of other political parties, would provide him (and future Presidents) with a list of potential nominees for each FEC appointment, from which he would select a nominee. This would change the longstanding practice of having FEC nominees chosen by congressional leaders and party officials.

The groups' letter was sent to the FEC is in the midst of its fast-track rulemaking on changes to its "agency procedures," mostly relating to enforcement practices as they affect the interests of respondents in enforcement proceedings.

The letter expresses deep concern about the FEC giving priority treatment to its current rulemaking on "agency procedures," while the agency still has failed to adopted a lawful regulation on  "coordination," almost seven years after the requirement to do so was enacted in the Bipartisan Campaign Reform Act of 2002 (BCRA).

The coordination provisions are essential elements of the contribution limits and prohibitions contained in BCRA and earlier campaign finance laws.

According to the letter:

In September 2007 the federal district court in Washington, D.C. invalidated as contrary to law the Commission's deeply flawed rules on coordination issued to implement BCRA—rules which are essential to the proper functioning of the law. 

This district court action in 2007 followed the court's invalidation in 2004, as contrary to law, of the first version of the FEC coordination regulation.

In its 2007 decision, as it had in its 2004 decision, the district court remanded back to the Commission, the coordination regulation, as well as other important regulations promulgated to implement BCRA that were struck down by the court, "for further action consistent with this opinion." Shays v. FEC, 508 F. Supp. 2d 10, 71 (D.D.C. 2007) (Shays III). The court said that "it assumes that, on remand, the Commission will act promptly, in light of the impending 2008 election."  Id

That was seventeen months ago.

The letter continues:

Instead of fixing the regulations, however, the Commission appealed the district court decision. The FEC lost its appeal in the D.C. Circuit Court of Appeals, as it had when it appealed the district court ruling in 2004 striking down the first FEC coordination regulation. 

That was eight months ago.

The letter points out that the FEC still has failed to issue coordination regulations that comply with the law. According to the letter:

One might reasonably have thought that fixing the coordination regulation, and the other BCRA regulations invalidated by the courts in Shays III, would have commanded the Commission's urgent attention, especially since BCRA was enacted in 2002. 

Yet, as far as we are aware, the Commission has done nothing to replace the defective coordination regulation and the other BCRA regulations invalidated in Shays III, and instead has chosen to consider this "agency procedures" rulemaking on a fast-track basis and moved it to the head of the line. 

The effort to obtain an FEC coordination regulation that complies with the campaign finance laws has been going on for more than six years, over three federal election cycles, and has involved two district court decisions and two court of appeals decisions, each of which rejected as contrary to law the FEC's coordination regulations. Yet the FEC still has failed to adopt a lawful coordination regulation to govern federal elections.

The letter also notes another rulemaking that has been sitting for more than a year and a half without resolution stating:

In another matter, the pending FEC rulemaking on "hybrid" ads has languished on the Commission's docket since a public hearing was held in July 2007, leaving unaddressed by the FEC an area of significant abuse where clarification of the rules is plainly required.

The letter states that the current rulemaking deals largely with due process rights for respondents in agency enforcement proceedings. According to the letter:

This is more than a little ironic since recent actions by three of the six FEC Commissioners—Vice Chairman Petersen, Commissioner McGahn, and Commissioner Hunter—indicate not only sharp ideological disagreements with the campaign finance laws, but also a distinct lack of interest in enforcing them.

To illustrate the point, one need look no further than the outcome in MUR 5541 (The November Fund), in which the three Commissioners cited above voted to reject a conciliation agreement that was negotiated by the professional staff of the agency, based on past precedents of the agency, and that was agreed to and signed by the respondent in the case. 

The Statement of Reasons issued by the three Commissioners goes so far as to reject the construction of "electioneering communication" set forth in Chief Justice Roberts' controlling Supreme Court opinion in FEC v. Wisconsin Right to Life, 127 S. Ct. 2652 (2007). See Statement of Reasons of Vice Chairman Matthew S. Petersen and Commissioners Carolyn C. Hunter and Donald F. McGahn in MUR 5541 (Jan. 23, 2008) at 6 n. 22 ("[W]hat Justice Alito anticipated could happen—that the standard set forth in the Chief Justice's opinion may not prove to be sufficiently clear and could, without the reversal of the holding in McConnell, impermissibly chill political speech—apparently has happened.").

When there are three Commissioners who have little apparent interest in enforcing the laws—indeed, who support reversal of the Supreme Court's opinion in the McConnell case—and who also are able to block enforcement of the laws by the FEC, there seems to be little point to a rulemaking about how to improve the rights of respondents in enforcement cases.

The letter states that while due process rights for respondents in enforcement proceedings are "essential," the Commission "should be extremely wary of taking unnecessary new steps that would make an already slow and cumbersome enforcement process even more so. Many of the proposals discussed in the current rulemaking would tend to make the status quo worse by slowing the current enforcement process even further."

"Under current procedures, for example, it is not uncommon for the FEC to take three or four years to resolve complaints. Creating unnecessary new procedures that would slow the disposition of enforcement matters even further would not serve the public interest," according to the letter.

The letter further notes that the call for additional procedural protections "does serve to highlight one of the key structural problems with the agency—the fact that the FEC was not given the powers to make its own adjudicatory decisions about violations of law and impose its own penalties—powers that many other agencies have."

The letter states, "The types of due process rights that the defense bar advocates for respondents may be appropriate for an agency that can exercise its own adjudicatory authority. But there is little reason to provide respondents with such rights where the FEC has no such adjudicatory power."

The reform groups state in the letter that they have not participated in the rulemaking on agency procedures because:

it cannot and does not address the fundamental problems that plague the FEC—problems that require changes to be made by Congress in the structure and powers of the agency, and changes to be made by the President in the appointment process for nominating FEC Commissioners.

These problems have often left the FEC largely dysfunctional.

This does not mean, however, that the FEC cannot and should not be doing a better job of enforcing the campaign finance laws under existing circumstances.  Operating within the framework of the agency's powers, Commissioners are obligated to faithfully administer and enforce the laws as enacted by Congress and construed by the courts—regardless of whether you agree or disagree with the laws or the court decisions construing them.

The letter from the reform groups states that "the structural flaws in the Commission's enforcement authority are a statutory problem that must be fixed by legislation."  The groups state that they will support legislation, like H.R. 421 introduced in the last Congress, "to replace the FEC with a new agency to administer and enforce the campaign finance laws, one that will have its own power to adjudicate violations of law and impose appropriate sanctions, subject to judicial review."

The letter also challenges the way FEC Commissioners are currently named. According to the letter:

A central cause of the agency's problems over the years has been its process for appointing Commissioners, which in practical application allows the congressional leadership of both parties, in conjunction with the national party committees, to name the FEC Commissioners, and thereby to choose their own regulators.

In reality, the President has become little more than a pass-through, receiving the names provided by congressional leaders and party officials, and passing them on to the Senate as nominees for confirmation as FEC Commissioners.

The result of this process has too often been the appointment of Commissioners who adhere to a very truncated view of the law, either as a matter of ideology or personal constitutional interpretation, or who are responsive to partisan interests in the administration and enforcement of the law.

The letter calls for a change in the approach by which the President selects Commissioners to nominate to the FEC:

That is why we will urge President Obama to establish a system by which an advisory group made up of distinguished Democrats, Republicans and independents or members of other political parties, would provide him (and future Presidents) with a list of potential nominees for each FEC appointment, from which he would select a nominee. This would change the longstanding practice of having FEC nominees chosen by congressional leaders and party officials. 

And that is why we will urge President Obama to exercise his appointment authority, at the earliest opportunity, to nominate FEC Commissioners under this new process that  have a demonstrated commitment to effective, non-partisan administration and enforcement of the campaign finance laws.

The letter concludes:

The path to solving the larger problems with the FEC does not lie in a rulemaking about how to craft procedural protections for respondents in enforcement matters. It requires fundamental changes in the structure and powers of the FEC, and in the process for selecting Commissioners to serve on the agency.

It is essential for the nation to have an enforcement agency committed to properly interpreting and effectively enforcing the nation's campaign finance laws, as written by Congress and as interpreted by the courts. In order to accomplish this goal, we will work with the Obama Administration and Congress to establish a new approach for nominating Commissioners to the agency and to achieve fundamental statutory reforms of the FEC.

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