Fixing the FEC: An Agenda for Reform

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:
 
  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.