FEC Deadlocks on Appeal of PAC Name Ruling

By Kenneth P. Doyle

Sept. 20 — The Federal Election Commission deadlocked on whether to appeal a recent federal court ruling that struck down as unconstitutional FEC restrictions against a super political action committee using a candidate's name to promote itself ( Pursuing America's Greatness v. FEC, D.C. Cir., No. 15-5264, 8/2/16 ).

The FEC impasse means there will be no en banc appeal of the rule to the full U.S. Court of Appeals for the District of Columbia Circuit; however, the Justice Department could decide to file a petition for Supreme Court review. DOJ has declined to comment on the case so far.

The August ruling by a three-judge panel of the D.C. Circuit overturned rules that the FEC commissioners previously had supported unanimously and that agency lawyers fought in court to preserve. The agency said that rules are needed in this area to prevent public confusion and possible fraud (See previous story, 08/03/16).

The current election cycle has seen more attention paid to PACs that purport to raise money to support specific candidates but have been disavowed by those candidates—widely known as “scam PACs.”

The FEC faced a Sept. 16 deadline to file a further appeal of the appellate panel ruling. FEC officials told Bloomberg BNA after that deadline passed that the six FEC commissioners deadlocked along party lines in a vote whether to appeal to the full D.C. Circuit federal appeals court, sitting en banc. The three commissioners holding Democratic seats on the FEC voted in favor of an en banc appeal, while the three Republican commissioners opposed a further appeal.

Commissioner Had Doubts About Rule

There was no statement from the FEC as a whole about the deadlocked vote. One of the Republican commissioners, Lee Goodman, said in a statement e-mailed to Bloomberg BNA that his vote against an appeal reflected his “serious reservations” about the FEC rule restricting a PAC's use of a candidate's name.

“Despite my concerns, I felt bound to adhere to the Commission's rule and voted to affirm it,” Goodman said. “The Commission gave the rule a zealous defense in the district court and the court of appeals.”

While a unanimous commission previously defended the rule, Goodman said he believed the FEC should accept the ruling of the appeals court panel.

“I did not see a strong ground for en banc review and that would take another year,” Goodman added. “The Department of Justice may consider appeal to the Supreme Court and we will see if the Solicitor General agrees it is time to accept the court of appeals ruling or believes a further appeal would be meritorious.”

The court challenge to the FEC rules on a PAC's use of a candidate's name was launched last year by a super PAC supporting a 2016 Republican presidential primary candidate, former Arkansas Gov. Mike Huckabee. The pro-Huckabee super PAC, called Pursuing America's Greatness, said it wanted to set up websites and social media platforms using Huckabee's name.

After Huckabee dropped out of the presidential race, the super PAC said it wanted to promote itself by using the names of other candidates that it supported.

Restriction on Speech

The D.C. Circuit panel ruling, handed down Aug. 2, rejected arguments by FEC lawyers that rules regarding PAC names should be upheld as a disclosure requirement, rather than a restriction on speech.

The rules “banned more speech than that covered by [the Federal Election Campaign Act’s] provisions requiring disclosure,” said the panel's 18-page opinion written by U.S. Circuit Judge Thomas Griffith and joined by Judges Brett Kavanaugh and A. Raymond Randolph.

Political action committees that appear to be misleading the public in their contribution solicitations have proliferated in the current election cycle, with some capitalizing on support for populist presidential candidates Donald Trump and Bernie Sanders.

Trump's campaign filed letters with the FEC disavowing more than a half-dozen PACs it said used the Republican nominee's “name, image, likeness or slogans in connection with soliciting contributions.” Such solicitations are likely to cause confusion and lead contributors to believe they are giving money to Trump's campaign when they aren't, said the letters to the FEC.

Meanwhile, a super PAC that collected large contributions supposedly to support Sanders was accused by Sanders's campaign lawyer of scamming the public. The PAC, called Americans Socially United, took thousands of dollars in contributions but apparently spent little or nothing to support the Sanders campaign.

Sanders campaign attorney Brad Deutsch of the law firm Garvey Schubert Barer, told Bloomberg BNA in a phone interview earlier this month that activities like those carried out by the PAC were damaging not just to the contributors whose money is taken but to the larger political process. Deutsch said that, if contributors intending to support a candidate like Sanders later realize their money has been stolen by someone pretending to support the candidate, the contributors are likely to become “even more cynical than they were before” and further alienated from the political process.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

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