Court remands political committee status case to FEC [CREW, et al. v. FEC (16-2255)]

On March 20, 2018, the U.S. District Court for the District of Columbia concluded that the Commission’s dismissal of an administrative complaint Citizens for Responsibility and Ethics in Washington (CREW) filed against American Action Network (AAN) was contrary to law. CREW’s administrative complaint (MUR 6589) had alleged that AAN’s spending had caused it to become a “political committee” under the Federal Election Campaign Act (the Act), requiring AAN to register and file reports with the FEC. The court remanded the case to the Commission and ordered it to conform with the court’s declaration within 30 days.

Background

Under the Act, political committees must register with the Commission and file periodic disclosure reports regarding their receipts and disbursements. The Act defines a "political committee" as any committee, club, association, or other group of persons which receives contributions or makes expenditures for the purpose of influencing federal elections in excess of $1,000 in a calendar year. However, the Supreme Court has held that only organizations under the control of a federal candidate or whose "major purpose" is the election or defeat of federal candidates are required to register as political committees. See Buckley v. Valeo, 424 U.S. 1, 79-80 (1976) (per curiam). An organization's major purpose may be demonstrated by its activities, and a group that devotes a sufficiently extensive amount of its spending to federal campaign activity can be considered a political committee as a result of such spending.

In addition to the Act’s reporting requirements for political committees, any person or entity that makes “independent expenditures” above certain amounts must disclose those expenditures to the Commission. The Act defines an independent expenditure as any communication “expressly advocating the election or defeat of a clearly identified candidate.” Express advocacy generally refers to a communication that unambiguously advocates the election or defeat of a clearly identified candidate. The Supreme Court has provided examples of words of express advocacy, such as “vote for,” “elect,” “support,” “defeat,” and “reject.”

The Bipartisan Campaign Reform Act (BCRA) amended the Act to require disclosure of “electioneering communications” made by any person who spends more than $10,000 in a calendar year on such communications. Electioneering communications are generally defined as broadcast, cable, or satellite communications which air within 30 days of a primary election or within 60 days of a general election and refer to a clearly identified federal candidate, and target the relevant electorate.

AAN is a tax-exempt 501(c)(4) organization that made both independent expenditures and electioneering communications in 2010-2011. In June 2012, CREW filed a complaint with the FEC that alleged that AAN’s spending had caused it to become a political committee, and that it had violated the Act by failing to register as a political committee and file the reports required of such committees. In June 2014, the Commission voted three-to-three on whether to find reason to believe that AAN violated the Act and, lacking the requisite four votes needed to find reason to believe, then dismissed CREW’s complaint. The three Commissioners who voted against finding reason to believe issued a Statement of Reasons explaining their conclusion that AAN was not a political committee because its major purpose was not the election or defeat of a federal candidate. After an examination of AAN’s organizational documents, those Commissioners concluded that all of AAN’s communications that did not expressly advocate for a candidate (i.e., electioneering communications, rather than independent expenditures) were “genuine issue advertisements,” and accordingly found that the $13.7 million AAN spent on those communications should not be treated as election-relating spending.

In an earlier case (No. 14-1419), CREW challenged this dismissal in the district court, as well as the Commission’s dismissal of a complaint against another organization, Americans for Job Security. In September 2016, the district court held that both dismissals were contrary to law and remanded them to the Commission for reconsideration.

On remand, the Commission again voted three-to-three on the question of whether to find reason to believe that AAN was a political committee, dismissed CREW’s complaint against AAN, and issued additional Statements of Reasons. The supplemental Statement of Reasons filed by those Commissioners declining to vote to find reason to believe did not categorically exclude AAN’s electioneering communications from the spending those Commissioners found indicative of a major purpose to nominate or elect candidates, but rather considered each communication through ad-by-ad analysis. The three Commissioners concluded that four of AAN’s electioneering communications indicated an election-related purpose and that certain others were arguably so, but that, even when counting the arguable communications, the amount of AAN’s spending on these communications and express advocacy was insufficient to categorize AAN’s major purpose as the election or defeat of federal candidates. CREW then filed its current suit against the Commission (No. 16-2255), alleging that the Commission’s dismissal of the complaint was arbitrary, capricious, and contrary to law.

District court decision

The court held that the Commission had erred in disregarding the unambiguous directive of Congress that electioneering communications presumptively have an election-related purpose. According to the court, the legislative history of the Bipartisan Campaign Reform Act (BCRA) that led to the regulation of electioneering communications, “leave[s] little doubt that Congress saw electioneering communications as generally aimed at swaying voters.”

However, the court noted that while it understood Congress’s intent in BCRA to presume that electioneering communications inherently have the purpose of influencing a federal election, it was not convinced that Congress intended to categorically preclude the Commission from declining to treat a particular ad that met the statutory definition of electioneering communication as indicating an election-related major purpose. The court stated, “[i]n other words, Congress seems to have left open a small interpretive gap after BCRA: one that allows the Commission, using its case-by-case approach to deem an extraordinary ‘electioneering communication’ as lacking an election-related purpose.”

The court stated that “Congress decades ago laid down a clear, broad definition of the term ‘political committee’ in [the Act] that would obviously capture AAN; the Supreme Court in Buckley then cabined that definition in a way that requires the Commission to conduct a major purpose analysis. But Congress later clarified, through BCRA, that it viewed the vast majority of electioneering communications as corroborating a purpose of electing candidates to federal office… [The Commission is required] to presume that spending on electioneering communications contributes to a ‘major purpose’ of nominating or electing a candidate for federal office, and, in turn, to presume that such spending supports designating an entity as a ‘political committee’ under [the Act].”

In failing to apply this presumption, the court concluded that the Commission’s dismissal of CREW’s complaint was contrary to law and granted CREW’s motion for summary judgment and denied the Commission’s motion. The matter was remanded to the Commission for further consideration and the court ordered the Commission to conform to its declaration within 30 days.

Resources:

• CREW, et al. v. FEC (16-2255) litigation page
  
• MUR 6589