FEC Turns 40, Remembering Watergate But Lacking Consensus, Direction for Future

By Kenneth Doyle

April 10 — The Federal Election Commission turns 40 on April 14 and plans to mark the occasion with a low-key “open house.” The lack of flash may be appropriate for an agency created to shine a light on American politics but recently having trouble finding its own way.

Despite the agency's troubles in recent years, Ann Ravel, the FEC chairwoman, told Bloomberg BNA in a telephone interview that she didn't want the milestone to pass with no recognition at all.

The planned 10 a.m. start for the event, as well as its location at the FEC headquarters in Washington amid file cabinets and computer terminals in the public records room, presage a coffee-and-doughnuts pause in the workday, rather than a champagne-popping party or a scholarly symposium on campaign finance regulation. The event seems likely to reflect not so much the history of the FEC but more the agency's current condition — often mired in gridlock and recrimination.

Ravel, a Democrat who has been an outspoken supporter of transparency, believes the FEC—created in response to the Watergate scandal of the early 1970s—still has a significant role to play in providing transparency for campaign funding and enforcing disclosure rules. The chairwoman said she wants the agency's 40th anniversary to be “a celebration of the FEC and what the FEC stands for.”

Ravel acknowledged, though, that not everyone agrees with her view of the agency's role and indicated she wasn't even sure how many of her five fellow commissioners would be attending the anniversary event.

Other officials said they expected at least some of the other commissioners to participate but complained privately that planning and invitations for the anniversary had been mishandled by Ravel.

‘A Significant Agency.'

The FEC commissioners—comprising three recommended by Democrats and three by Republicans—often split along party lines on key enforcement and legal matters. The discussions surrounding how to mark the agency's anniversary indicated that the commissioners can also have trouble reaching consensus on more pedestrian matters.

Ravel said the commemoration also was an opportunity to thank the FEC's professional staff and remind them and the public that “this is a very significant agency.” She has been a relentless advocate for the importance of the FEC's role as a protector of the political process, even as outside critics and some within the agency have seen its role diminishing due to deregulatory court rulings and the pressure on modern campaigns to raise more and more money.

Ravel is a also realist, however, acknowledging the disagreements about the significance and role of the agency. For example, she said, plans for writing an updated history of the FEC—to go with three previous agency histories written in 1985, 1995 and 2005—were scrapped because of potential divisions among the commissioners about what to say.

Ravel said the FEC staff didn't write a long report for the agency's 40th anniversary because of “concerns that a document could not get agreement” from FEC commissioners for final approval and publication. Instead, she said, the FEC will unveil a new, interactive time line tracing major events it its history and avoid further commentary.

An announcement of the open house posted on the FEC website was only one paragraph long, including information on the time and location and stating that the event “will highlight the agency’s efforts to ensure disclosure of campaign finance information over the last four decades.” The notice added that the event is free and open to the public.

Protecting Democracy 

While there will be no 40th anniversary report on the FEC's history, the 2005 “Thirty Year Report”, which marked the agency's 30th anniversary, was 34 pages long and highlighted the FEC as it then presented itself: as a guardian of democracy. That report, like those published in 1985 and 1995 to mark the FEC's previous decades, carried the names of all the FEC commissioners—Democrat and Republican—then serving.

“The regulation of federal campaigns emanated from a Congressional judgment that our representative form of government needed protection from the corrosive influence of unlimited and undisclosed political contributions” the 2005 report's introduction said. “The laws were designed to ensure that candidates in federal elections were not—and did not appear to be—beholden to a narrow group of people. Taken together, it was hoped, the laws would sustain and promote citizen confidence and participation in the democratic process.”

But the FEC's role in limiting campaign money and ensuring its disclosure has been challenged repeatedly and increasingly over the last decade both in the courts and among the commissioners themselves.

The Supreme Court's 2010 ruling in Citizens United v. FEC rolled back decades-old restrictions on corporate and union contributions and led to the rise of super political action committees and nonprofit groups taking in and spending unlimited sums to influence federal elections. The high court's decision last year in McCutcheon v. FEC eliminated another long-standing pillar of campaign finance law—an aggregate limit on each donor's contributions to candidates and political committees in an election cycle.

In the wake of these court decisions, the FEC's Democratic commissioners have urged new regulations to require greater disclosure of the sources of money now pouring into campaign spending groups not formally linked to candidates or parties. The Democratic commissioners contend that these groups have become key players in the modern political game and voters should know where their money comes from.

The FEC Republicans, on the other hand, have resisted new disclosure requirements, noting congressional failure to act on the issue. Legislation known as the DISCLOSE Act to increase transparency for groups spending money on campaigns was passed in 2010 by the House, which was then under Democratic control. But, the measure was blocked by a Republican filibuster in the Senate and has faced solid Republican opposition ever since.

Legacy of Watergate 

With the disclosure issue unresolved, the Democrats and Republicans on the FEC have deadlocked repeatedly on key FEC enforcement matters, many of which involve the reporting requirements for outside groups. These entities have spent millions of dollars to influence the three federal elections conducted since Citizens United was decided.

Deadlocked, party-line votes of the commissioners have resulted in dismissal of numerous individual cases, while failing to provide a solid legal basis for the conduct of the election campaigns the FEC is supposed to regulate. Critics call the result a return to the days of largely unregulated campaigns not seen since before the Watergate scandal.

The FEC's report on its first decade of existence, written in 1985, emphasized the agency's primary mission of disclosing campaign money and said the mission couldn't be achieved without effective enforcement. The report hailed a transformation of campaign finance law in the early 1970s, which vastly increased the information available to voters about federal campaigns.

In 1968, under a previous campaign law, House and Senate candidates reported spending a total of just $8.5 million, the FEC report said. In 1972, after passage of the original Federal Election Campaign Act (FECA), spending reported by congressional candidates jumped more than tenfold to $88.9 million.

The FEC said that evasion of disclosure provisions was widespread under the campaign finance system that existed before passage of the original FECA in 1971. The law established modern campaign finance reporting requirements, which would be enforced by the FEC after the agency's establishment a few years later.

The FEC was launched with an initial commission meeting in April 1975, following its creation by amendments to FECA adopted in 1974. That law was passed by Congress with broad bipartisan support just weeks after President Richard M. Nixon's resignation due to the Watergate scandal. Nixon resigned in August 1974, after having been impeached by the House and facing removal from office in a Senate trial. He was accused of multiple offenses, including approval of the use of his campaign funds to pay off the burglars who broke into the Democratic National Committee.

Just two months after Nixon's resignation, the final version of the FECA amendments measure was signed into law in October 1974 by then-President Gerald Ford. It had been passed by a vote of 60-16 in the Senate and 365-24 in the House.

“Our greatest achievement has been to provide the most complete disclosure of campaign finance information that the nation has ever had,” the FEC declared a decade later in its 1985 report.

“Meaningful disclosure, however, depends on enforcement of the law,” the report continued. “When the Watergate bubble burst, people realized that the existing election law was not being enforced. Congress recognized that an independent election agency was needed not just to administer the law but to enforce it. Thus, the Federal Election Commission was created. Now, ten years later, the Federal Election Commission has made campaign finance disclosure and the observance of the election law a reality.”

No More Annual Reports


In addition to the reports it produced every 10 years, the FEC also used to produce annual reports summarizing the agency's mission and accomplishments. These reports haven't been published for nearly a decade, replaced instead by a more bureaucratic-sounding “Summary of Performance and Financial Information.”

The latest of these, describing the FEC's activities in 2014, acknowledged the FEC's role “to ensure that voters are fully informed of the sources of financial support for Federal candidates, political party committees, other political committees and other political actors.” The summary went on to say: “Public confidence in the political process depends not only on laws and regulations to ensure transparency, but also on the knowledge that those who disregard the campaign finance law will face consequences.”

Some of the information provided about the FEC's actual activities appeared to undercut this statement, however. 

An accounting of FEC enforcement activities in 2014, for example, found that the agency fell far short of a self-imposed goal to resolve 75 percent of enforcement matters within 15 months. Only 28 percent of enforcement cases were closed in that time frame.

The FEC's last full-blown annual report annual report was published in 2007 and reviewed the agency's work for 2006. Most of the FEC commissioners serving at that time were replaced shortly afterward, though two commissioners holding Democratic seats still remain: Steven Walther and Ellen Weintraub.

The report said the FEC’s enforcement program reached a milestone in 2006 with the “commission’s negotiation of a record $6.2 million in civil penalties for violations involving significant legal issues.”

Among those fined that year were tax-exempt organizations, such as Swift Boat Veterans for Truth, the League of Conservation Voters and MoveOn.org, which spent millions of dollars in the 2004 presidential and congressional elections. The FEC found these groups had violated the law by failing to register as political action committees and reporting their donors—the same types of transparency issues being raised by groups active in more recent elections.

Enforcement Down Sharply 

But, 2006 turned out to be a high-water mark for FEC enforcement; the level of penalties collected has declined sharply since then. While the FEC's annual report for that year touted major accomplishments of the commission, three of the five commissioners then serving on the FEC left soon after.

By the end of 2007, recess appointments of some of the commissioners had lapsed during a partisan standoff in Congress over FEC appointments. A stalemate that lasted several months finally was resolved with the appointment of the 2008 slate of four new commissioners. They included two of the Republicans still serving on the FEC, Caroline Hunter and Matthew Petersen. The two newest commissioners—Democrat Ravel and Republican Lee Goodman—were appointed in 2013.

In addition to a decline in penalties, any legal precedents established by the commission's actions against groups involved in the 2004 campaign were reversed when a slate of new FEC commissioners arrived in 2008 and voted against enforcement action in similar cases.

In the most striking example, an organization called the November Fund—financed by the U.S. Chamber of Commerce—had its case dismissed on a deadlocked, party-line vote of the commissioners in late 2008. The vote negated a conciliation agreement that had already been negotiated by FEC staff attorneys and signed by the Chamber-backed group.

Since 2008, the level of FEC enforcement, as measured by total penalties collected, has dropped steadily. It reached a historical low last year with a total of just more than $175,000 collected for major enforcement cases, known as Matters Under Review or MURs, according to a review of cases on the FEC website.

Uptick in 2015 

Since the beginning of 2015, the level of enforcement has picked up somewhat. Less the four months into the year, the FEC has announce nearly $285,000 worth of penalties, about $100,000 more than in all of last year.

The cases announced this year have included a long-running matter involving illegal contributions made several years ago by the organization running Arizona's Fiesta Bowl, a college football game, as well as more recent inquiry into a decade's worth of illegal contributions made by the National Air Transportation Association, a Washington trade association. Both of these cases resulted in fines and other payments totalling nearly $100,000 each.

The FEC still faces a backlog of pending enforcement cases, including about 20 matters that are more than three years old and one that is more than five years old, according to information recently provided by the agency to Bloomberg BNA. Enforcement cases are handled in strict secrecy and voted on in closed FEC meetings, with information released on each case only after it has been closed

Ravel, who took over the commission's rotating chairmanship at the beginning of this year, has promised to try to resolve enforcement cases more efficiently. She said in the recent phone interview with Bloomberg BNA that those efforts appear to be having some effect but said that any FEC commissioner still can hold up a case just by asking for more time for review.

The FEC's handling of enforcement matters still is “not ideal,” Ravel said, adding that it is “hard to know” whether more significant enforcement matters will be released in the near future.

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

To see the “Thirty Year Report,” go to http://op.bna.com/der.nsf/r?Open=tbay-9vfpzh.

To see the “Summary of Performance and Financial Information Fiscal Year 2014,” go to http://op.bna.com/der.nsf/r?Open=tbay-9vfqjp.

To see the 2006 FEC annual report, go to http://op.bna.com/der.nsf/r?Open=tbay-9vfrdw.