Last Week at the FEC: Deadlock regarding Crossroads GPS’s Major Purpose Inquiry

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Last week the Federal Election Commission did not meet, but released opposing statements related to a deadlocked vote on MUR 6396, Crossroads GPS, in December. The Commission also released its factual and legal analysis in regards to MUR 6654, related to Roraback for Congress and Obsitnik for Congress, as well the results of several Administrative Fine and Alternative Dispute Resolution (ADR) cases.

Crossroads GPS

On December 3 of last year, the Commission deadlocked on a 3-3 vote, failing to find reason to believe that Crossroads GPS, a 501(c)(4) social welfare organization, had violated 2 U.S.C §§432, 433, and 434(b) by failing to register and report as a political committee. This vote split on partisan lines and the Commissioners issued associated statements of reason on January 10. 

Since the Supreme Court's perennial finding in Buckley v. Valeo1 the Commission has imposed a two-part test on a case-by-case basis to determine whether a Committee is a "political committee" for the purposes of Federal Elections Campaign Act, as Amended ("the Act"). That test requires: 1) that the committee spends or receives over $1,000.00 in the aggregate during a calendar year; and 2) that the committee operate under the control of a candidate for federal office, or who which its "major purposes" is the nomination or election of such a candidate.  The Commissioners' disagreement regarding this enforcement action stems directly from their interpretation of the second prong of this test, which stems from the Court's decision in Buckley.

In their Statement of Reasons, Vice-Chair Anne Ravel and Commissioners Steven Walther and Ellen Weintraub argued that under the Commission's 2007 Explanation and Justification ("2007 E&J") regarding the case-by-case analysis for assigning political committee status, it should take a broad view of what constituted Crossroads GPS's "major purpose."  They argued that the Commission should focus on group's spending during the 2010 calendar year and that it should aggregate expenditures on direct advocacy and issue advocacy to find that 53% (a "majority") of the group's spending constituted electoral activity, thereby finding by extension that this "majority" of spending should indicate that the "major purpose" of Crossroads GPS was the election of federal candidates.

In contrast, Chairman Lee Goodman and Commissioners Caroline Hunter and Matthew Petersen would have found that Crossroads GPS's major purpose was focused on issue advocacy and grassroots organization, not the election of particular candidates for federal office.  In doing so, they argued that the group had spent less than 50% of its 2010 fiscal year budget on independent expenditures or electioneering communications ($16.5 million of $39.1 million spent) and that the group continues to operate as a social welfare organization, with limited direct expenditures or electoral communications during non-election years.  

The Commission's failure to reach a conclusion regarding this issue represents an ongoing disagreement regarding the application of the Major Purpose test, which know remains a source of discomfort for non-profit groups that engage in the varying forms of federal and state political advocacy and education.

Roraback for Congress and Obsitnik for Congress

The Commission also released its documents related to MUR 6654, in which it voted 6-0 to dismiss allegations that Roraback for Congress and Obsitnik for Congress violated 11 C.F.R. §102.17 by participating in a joint fundraising event without complying with associated Commission regulations.  Specifically, the Connecticut Democratic Party had alleged that they failed to establish a joint fundraising committee or provide joint fundraising notices to donors.  In reply, the Committees both argued that any appearance of joint fundraising was due to administrative errors by an event planner. 

In its findings regarding this case, the Commission made a point of reiterating the applicable rules set forth in 11 C.F.R. §102.17, including the need for a written joint fundraising agreement, appointment of a fundraising representative or separate joint committee, and establishment of a separate depository account for such efforts.  However, it chose to exercise its prosecutorial discretion and dismiss the complaint due to the "minimal expense" and "small amount in contributions" associated with the event.

Meeting Schedule

The Commission is scheduled to meet in open session at 10:00 a.m. on Thursday, January 16, 2014, with executive session to follow.  The meeting agenda indicates that the Commission will take up its discussion of draft advisory opinions regarding AO 2013-18, Revolution Messaging which this blog discussed back on December 2 and 9, 2013. It will also discuss an Interpretive Rule re: Nationwide Independent Expenditures and four audit division recommendations regarding state and county party committees in Texas, Iowa, Vermont, and South Carolina.

1242 U.S. 1 (1976)(per curiam) - See more at: http://www.hklaw.com/PoliticalLawBlog/Last-Week-at-the-FEC-Deadlock-regarding-Crossroads-GPSs-Major-Purpose-Inquiry-01-13-2014/#sthash.27I470uJ.dpuf

Last week the Federal Election Commission did not meet, but released opposing statements related to a deadlocked vote on MUR 6396, Crossroads GPS, in December. The Commission also released its factual and legal analysis in regards to MUR 6654, related to Roraback for Congress and Obsitnik for Congress, as well the results of several Administrative Fine and Alternative Dispute Resolution (ADR) cases.

Crossroads GPS

On December 3 of last year, the Commission deadlocked on a 3-3 vote, failing to find reason to believe that Crossroads GPS, a 501(c)(4) social welfare organization, had violated 2 U.S.C §§432, 433, and 434(b) by failing to register and report as a political committee. This vote split on partisan lines and the Commissioners issued associated statements of reason on January 10.

Since the Supreme Court's perennial finding in Buckley v. Valeo1 the Commission has imposed a two-part test on a case-by-case basis to determine whether a Committee is a "political committee" for the purposes of Federal Elections Campaign Act, as Amended ("the Act"). That test requires: 1) that the committee spends or receives over $1,000.00 in the aggregate during a calendar year; and 2) that the committee operate under the control of a candidate for federal office, or who which its "major purposes" is the nomination or election of such a candidate. The Commissioners' disagreement regarding this enforcement action stems directly from their interpretation of the second prong of this test, which stems from the Court's decision in Buckley.

In their Statement of Reasons, Vice-Chair Anne Ravel and Commissioners Steven Walther and Ellen Weintraub argued that under the Commission's 2007 Explanation and Justification ("2007 E&J") regarding the case-by-case analysis for assigning political committee status, it should take a broad view of what constituted Crossroads GPS's "major purpose." They argued that the Commission should focus on group's spending during the 2010 calendar year and that it should aggregate expenditures on direct advocacy and issue advocacy to find that 53% (a "majority") of the group's spending constituted electoral activity, thereby finding by extension that this "majority" of spending should indicate that the "major purpose" of Crossroads GPS was the election of federal candidates.

In contrast, Chairman Lee Goodman and Commissioners Caroline Hunter and Matthew Petersen would have found that Crossroads GPS's major purpose was focused on issue advocacy and grassroots organization, not the election of particular candidates for federal office. In doing so, they argued that the group had spent less than 50% of its 2010 fiscal year budget on independent expenditures or electioneering communications ($16.5 million of $39.1 million spent) and that the group continues to operate as a social welfare organization, with limited direct expenditures or electoral communications during non-election years.

The Commission's failure to reach a conclusion regarding this issue represents an ongoing disagreement regarding the application of the Major Purpose test, which know remains a source of discomfort for non-profit groups that engage in the varying forms of federal and state political advocacy and education.

Roraback for Congress and Obsitnik for Congress

The Commission also released its documents related to MUR 6654, in which it voted 6-0 to dismiss allegations that Roraback for Congress and Obsitnik for Congress violated 11 C.F.R. §102.17 by participating in a joint fundraising event without complying with associated Commission regulations. Specifically, the Connecticut Democratic Party had alleged that they failed to establish a joint fundraising committee or provide joint fundraising notices to donors. In reply, the Committees both argued that any appearance of joint fundraising was due to administrative errors by an event planner.

In its findings regarding this case, the Commission made a point of reiterating the applicable rules set forth in 11 C.F.R. §102.17, including the need for a written joint fundraising agreement, appointment of a fundraising representative or separate joint committee, and establishment of a separate depository account for such efforts. However, it chose to exercise its prosecutorial discretion and dismiss the complaint due to the "minimal expense" and "small amount in contributions" associated with the event.

Meeting Schedule

The Commission is scheduled to meet in open session at 10:00 a.m. on Thursday, January 16, 2014, with executive session to follow. The meeting agenda indicates that the Commission will take up its discussion of draft advisory opinions regarding AO 2013-18, Revolution Messaging which this blog discussed back on December 2 and 9, 2013. It will also discuss an Interpretive Rule re: Nationwide Independent Expenditures and four audit division recommendations regarding state and county party committees in Texas, Iowa, Vermont, and South Carolina.

1242 U.S. 1 (1976)(per curiam)

Topics:  Election Laws, FEC, Political Campaigns

Published In: Elections & Politics Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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