FEC Dismisses Lawmakers’ Complaint Against Super PACs

By Kenneth P. Doyle

The Federal Election Commission has dismissed an administrative complaint filed by members of Congress against the nation’s leading super political action committees. But a court challenge will continue arguing that super PACs illegally allow unlimited contributions to influence federal elections ( Lieu v. FEC, D.D.C., No. 16-cv-2201, motion filed 6/13/17).

A court motion filed June 13 by FEC lawyers revealed that the FEC commissioners voted unanimously last month to dismiss the complaint filed by a group of six lawmakers and candidates against nearly a dozen top super PACs, including those linked to Republican and Democratic leaders in the House and Senate. FEC enforcement matters are handled in secrecy until closed, and the commission hasn’t yet released documents in the administrative matter, designated Matter Under Review (MUR) 7101.

The FEC complaint was filed last summer in an effort led by Reps. Ted Lieu (D-Calif.) and Walter Jones (R-N.C.), and Sen. Jeff Merkley (D-Ore.), to curb the rising power of super PACs in congressional campaigns. The plaintiffs claimed they were unfairly harmed because super PACs can raise millions of dollars in unlimited contributions to oppose them, while federal candidates can raise only $2,700 per individual contributor for each election.

Lawsuit to Continue

The lawmakers and candidates filed a lawsuit in November in the U.S. District Court for the District of Columbia challenging the FEC’s failure to resolve their administrative complaint. Now that the FEC complaint has been resolved, the lawsuit will continue as a challenge to the FEC’s dismissal of the complaint.

A “joint stipulation” filed on the court docket said the FEC complaint was dismissed May 25 by a 5-0 vote of the FEC commissioners. Such votes are held behind closed doors.

A previous court order said that, if the complaint was dismissed by the FEC, the plaintiffs would be able to amend their complaint to challenge the dismissal. The stipulation indicated this would be done by June 22.

The stipulation also said the FEC would move to dismiss the amended complaint once it is filed.

Aim to Overturn SpeechNow.Org Ruling

The ultimate aim of the court challenge is to reverse a 2010 federal appeals court ruling that created super PACs, according to the challengers. The target is a ruling by the U.S. Court of Appeals for the District of Columbia Circuit in a case called SpeechNow.org v. FEC. The appeals court decision created super PACs by holding that the federal law limiting all PAC contributions to $5,000 per person annually doesn’t apply to PACs that promise to make only “independent expenditures” in campaigns.

The D.C. Circuit’s decision followed closely on the heels of the Supreme Court’s decision in Citizens United v. FEC, which struck down decades-old rules barring independent corporate spending to directly influence federal elections. The SpeechNow.org ruling was based on the logic of Citizens United, which held that independent spending can’t corrupt candidates. The D.C. Circuit ruling wasn’t appealed in 2010 and has never been tested before the Supreme Court.

The current lawsuit focuses on the impact of super PAC spending in recent elections and alleges that super PACs have become vehicles for wealthy donors to evade campaign contribution limits designed to prevent corruption and the appearance of corruption of candidates. The 21-page complaint says more than 40 percent of federal super PAC contributions in the 2016 election cycle, as of April 2016, had come from just 50 funders and their families.

Super PACs Spent Over $1 Billion

Analysis of FEC disclosure reports by the nonprofit Center for Responsive Politics found that, by the end of the 2016 election cycle, federal super PACs had reported total receipts of nearly $1.8 billion and expenditures of more than $1.1 billion.

“While much of the national media coverage of super PACs focuses on presidential elections, super PACs are increasingly dominant in the funding of congressional elections,” the lawsuit said. It added that research showed top donors to super PACs and other outside spending groups simultaneously contribute directly to the candidates who benefit from the outside groups’ spending.

“In other words, large donors to super PACs also maintain direct financial relationships with candidates—a coordinated contribution strategy that enables the contributor to bridge the distance between candidate and super PAC, and circumvent federal contribution limits by amplifying direct contributions beyond the legal maximum.”

The administrative complaint filed with the FEC before the court action demanded enforcement action against nearly a dozen major super PACs that spent money opposing the plaintiffs in recent campaigns.

‘Uphill Battle.’

The super PACs referred to in the FEC complaint included organizations closely linked to the major political parties and others that raised and spent millions of dollars in the 2016 election cycle. They include the Democratic-linked House Majority PAC and Senate Majority PAC, as well as the Republican-linked Congressional Leadership Fund and Senate Leadership Fund. Other PACs named in the complaint were American Alliance PAC, Bold Agenda PAC, Defending Main Street Super PAC Inc., ESA Fund, Freedom Partners Action Fund Inc., and New York Wins PAC.

One of the lawyers representing challengers in the case, Brad Deutsch, a former FEC staffer and Sen. Bernie Sanders’s (I-Vt.) presidential campaign counsel, told Bloomberg BNA when the lawsuit was filed that winning it would be tough. The legal battle against super PACs presented “an uphill battle, no doubt about it,” said Deutsch of the firm Garvey Schubert Barer in Washington.

He added, however, that the Citizens United case itself once appeared to be a long shot, involving only the narrow issue of how FEC disclosure rules affected a 2008 video about Hillary Clinton. Deutsch noted that the Citizens United case ended up as a vehicle for the Supreme Court to strike down decades-old restrictions on corporate spending in campaigns.

“They asked for a cookie and got the whole kitchen,” he said.

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

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.