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May 24, 2004 -- Press Release: Campaign Legal Center Joins Lawsuit Seeking to Require a 527 to Register as a Federal Political Committee Campaign Legal Center Joins Lawsuit Seeking to Require a 527 — Whose Sole Purpose Was to Influence a Federal Election— to Register as a Federal Political Committee
Contact:
Marianne Viray
202-736-2200
The Campaign Legal Center has joined a lawsuit seeking to overturn the FEC's inaction in a complaint filed in 2000 by the Kean for Congress Committee against a "stealth PAC" 527 organization known as the "Council for Responsible Government" or "CRG." The FEC's General Counsel concluded that the 527 group should have registered and reported as a federal political committee because its "major purpose" was to support and oppose federal candidates. Indeed, it stated that "there is no indication that [CRG] had engaged in any other type of activity." The FEC deadlocked 3-3 on the Counsel's recommendation so it took no action against the group. The lawsuit, in Federal District Court, seeks judicial review of the FEC's failure to act, a finding by the Court that the refusal to proceed by three FEC commissioners was "arbitrary and capricious," and a reversal of the FEC's action by the Court. The case is particularly significant in light of the Commission's recent decision to delay consideration of the draft regulations on 527 organizations because this case seeks enforcement of already existing law and FEC regulations. The spending by the stealth 527 occurred in 2000, prior to this year's onslaught of 527 groups seeking to influence federal elections with their ads, but similarly claiming they are not subject to the federal election laws.
This case began in the 2000 New Jersey Congressional Seventh Republican primary featuring, among others, Tom Kean, Jr. Less than a month before the primary election, CRG disseminated numerous advertisements advocating the defeat of Tom Kean in the District. One ad had a cover page of a photograph of Mr. Kean wearing a "Tom Kean Jr. for Congress" campaign button with the following statement superimposed:
TOM KEAN, JR.
No experience. Hasn't lived in New Jersey for 10 years.
It takes more than a name to get things done.
The back page explained in more detail why voters should reject Mr. Kean, concluding: "We can't afford on-the-job training. Tell Tom Kean Jr. . . . New Jersey needs New Jersey leaders." Another ad warned voters: "It takes more than a name to get things done. Tell Tom Kean Jr. . . . NEW JERSEY NEEDS NEW JERSEY LEADERS." None of the ads discuss any issue, other than that CRG deemed Mr. Kean unfit for office.
Moreover, a CRG Board Member stated to a local newspaper: "The very purpose of our group is to influence the outcome of elections." He also contended that "[t]he outcome we hope to bring about is the election of a congressman whose values are consistent with our philosophy," and that Mr. Kean was not that candidate. Despite CRG's advocacy of Kean's defeat, and its stated intent of influencing a federal election, CRG did not file with the FEC or otherwise comply with applicable federal laws. (Federal law in 2000 did not provide any mechanism for the disclosure of donors to 527s—such groups now are subject to tax if they fail to disclose their donors.) On May 31, 2000—about a week prior to the primary election—the Kean Committee filed a sworn administrative complaint with the FEC.
More than three years later, the FEC's Office of General Counsel finally issued its first report that concluded the communications at issue contained express advocacy. Accordingly, the General Counsel recommended, among other things, that the Commission find reason to believe that CRG violated several federal election laws and urged the Commission to instigate an investigation. Three FEC Commissioners agreed with its General Counsel's legal analysis stating: "We agree with the General Counsel's recommendations and have no doubt that the brochures satisfy the tests for express advocacy laid out at both 11 C.F.R. § 100.22(a) and 100.22(b)." Three Commissioners, however, refused to join their colleagues' and General Counsel's analysis and recommendations. Those Commissioners explicitly refused to follow a section of the Commission's own regulations defining "express advocacy," claiming it was unconstitutional (a position apparently contrary to the Supreme Court's decision in McConnell). Accordingly, because the FEC deadlocked at 3-3 and therefore did not achieve the requisite four votes, the case was dismissed.
The federal election laws permit aggrieved individuals or entities to challenge FEC actions that are arbitrary, capricious, and contrary to law . The summary judgment motion filed yesterday argues that the three Commissioners who refused to take action against CRG misapplied the "express advocacy" standard set forth in controlling Supreme Court precedent; ignored the FEC's own regulation governing "express advocacy"; took out of context and/or wholly ignored pertinent facts; and failed to address pertinent provisions of the federal election laws. This case hopes to establish that a group of FEC Commissioners will not be able to shield unlawful 527 activities from full FEC reporting and hard money rules merely through inaction. Click here to view the Kean Summary Judgment Memo. Click here to view the Exhibit List. Click here to view Exhibit 1. Click here to view Exhibit 2. Click here to view Exhibit 3. Click here to view Exhibit 4. Click here to view Exhibit 5. Click here to view Exhibit 6. Click here to view Exhibit 7. |
