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How FEC Democrats Hold Regulatory Reform Hostage

12:50 PM, Jun 24, 2011 • By JEFF PATCH and STEPHEN M. HOERSTING
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It has been written a million times: The Federal Election Commission is a “dysfunctional” agency. But don’t jump on that bandwagon just yet.

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The FEC is an independent, six-member agency that requires four votes to act but prohibits four members of the same political party from serving together. In practice, that means three Democrats and three Republicans; a microcosm of the doctrine of “mutually assured destruction” built on the understanding that there is no such thing as a disinterested administration of political spending.

The FEC’s loudest critics—congressional Democrats, left-leaning interest groups supportive of campaign finance regulation and liberal editorial boards—say they want strict enforcement of “the law.” In reality, they lament that the FEC’s structure prevents the most extra-legal proposals from being implemented. They envy an odd-numbered agency, such as the Federal Communications Commission, that can muscle through a “Net Neutrality” rulemaking even after a federal circuit court tells them no.

The FEC’s three-three split, however, slows good proposals, as well. The question is always, “Who’s to blame?” Most of the recent criticism fingers the Republican-appointed members of the FEC for supposedly abdicating their duty to enforce campaign finance laws.

“I’ve never seen an FEC this bad before,” Public Citizen’s Craig Holman told Bloomberg News. “They’re just giving the green light to everyone saying, ‘We’re not going to enforce the laws; you can do whatever you want.’”

At the FEC’s June 15 public meeting, GOP and Democratic commissioners clashed again over how to reconcile court cases invalidating campaign finance laws with the 559-page thicket of federal campaign finance regulations.

FEC commissioners sharply debated amending the agency’s regulations in the wake of the Supreme Court’s Jan. 2010 ruling in Citizens United v. Federal Election Commission. Republicans want to remove regulations that the Court explicitly invalidated in Citizens United. Democrats seek a wide-ranging rulemaking that would add new disclosure regulations (as well as restrictions on U.S. companies with international operations). An aborted effort by the FEC in January stalled over the same disagreements. At both meetings, the commissioners split their votes, meaning the process cannot move forward.

Ellen Weintraub, the most outspoken Democrat on the FEC, mocked Republican commissioners for not giving in to her demand for an expansive rulemaking, which would smuggle in portions of a Democrat-sponsored “DISCLOSE Act” that failed to pass Congress—twice.

“I know you don’t want to censor me,” she said. “That would be contrary to all your deeply held beliefs.”

“If it were only so easy,” shot back Republican FEC vice chair Caroline Hunter.

Hunter stressed that Republicans and Democrats agreed on roughly the first 75 pages of the rulemaking notice – perhaps 90 percent of the document. Nonetheless, Democrats remain steadfast in delaying the process by insisting on new disclosure regulations, which the Court did not sanction in Citizens United. The Court, as Hunter noted, upheld existing regulations. It did not mandate or endorse additional disclosure regulations.

Weintraub responded by taking a personal swipe at GOP commissioners, chiding them for not allowing public comment on her pet issue: “It’s arrogant to assume that all the knowledge in the world on this subject is contained at this table,” she said.

Don McGahn, the intellectual instigator on the GOP side of the dais, called for the mike: “We can wrap ourselves in the flag and have condescending language and laugh and giggle and all that, but this is serious stuff,” he said.

McGahn recounted the charged partisanship of the issue. After the DISCLOSE Act failed in 2010, word leaked that the Obama Administration was drafting an executive order to force businesses with federal contracts (but not public employee unions or liberal nonprofits with government grants) to disclose their contributions to independent groups such as the U.S. Chamber of Commerce. A liberal nonprofit petitioned the FCC seeking a backdoor way to add more disclosure regulations for broadcast advertising. The Internal Revenue Service announced an investigation into nonprofits that engage in political speech.

The weight of the Obama administration, congressional Democrats and the professional left has been leveraged to crack down on political speech in advance of the President’s reelection campaign. Republicans on the FEC counter that in a series of appellate and Supreme Court decisions, the judiciary has bench-slapped the agency and curtailed its authority to dictate the rules of political debate in America.

“The reality is Citizens United is a game-changer,” McGahn said. “But it’s not just Citizens United. It’s EMILY’s List [v. FEC]. It’s SpeechNow[.org v. FEC]. It’s Unity08 [v. FEC]—case after case after case. We have a lot of things on the books that shouldn’t be on the books.”

“What I don’t understand is why we still haven’t begun the process of taking [regulations] off that books that have already been declared unconstitutional so people can exercise their rights,” he continued. “EMILY’s List came out in Sept. 2009. Holy cow! Holy cow!”

EMILY’s List sued the FEC over a similar issue. The agency prohibited the liberal interest group from raising state-limited funds for state-level activities because it was established as a federal entity. Bob Bauer, who would later become President Obama’s White House and campaign counsel, represented the group and successfully demolished the FEC’s arguments. Nearly two years after the decision, the FEC has still not rewritten its regulations to account for its loss in EMILY’s List.

Nonetheless, Weintraub maintained that the GOP position was not “intellectually defensible.”

“Okay, one more time, why are we holding hostage removing [regulations] from the books?” McGahn asked Weintraub. “It’s maddening. You were enjoined last night from some of your theories. This is ridiculous!”

McGahn was referring to Carey v. FEC, a June 14 ruling by a federal court preventing the FEC from enforcing unconstitutional campaign finance regulations in defiance of the EMILY’s List opinion.

Retired Rear Adm. James J. Carey, the founder and treasurer of the National Defense Political Action Committee (NDPAC), sought to raise unlimited funds to advocate for or against candidates – after SpeechNow.org legalized independent expenditure committees, colloquially known as “Super PACs” – while at the same time using contribution-limited funds held in a separate bank account to donate directly to candidates as a traditional PAC. NDPAC supports the rights of American veterans and supports federal candidates with military experience who share the group’s limited government values.

But, contrary to Holman’s nonsense about the FEC approving everything, FEC Democrats blocked Carey’s request for an opinion green-lighting his group, in effect issuing a prior restraint against the group’s speech. Democrats insisted that Carey go through the trouble of creating two separate organizations. Carey, represented by a legal team including Stephen M. Hoersting and Benjamin T. Barr, sued the FEC to enable NDPAC to fully engage in political advocacy under the law.

“Whichever candidates Plaintiffs wish to support and issues they wish to espouse must be freed immediately from the chill of possible FEC enforcement,” wrote federal judge Rosemary Collyer, in granting the plaintiffs’ preliminary injunction. Collyer referred to the FEC’s legal arguments as “unpersuasive,” “erroneous,” “crabbed,” “heavy-handed,” and “fundamental[ly] flaw[ed].”

NDPAC initially asked the FEC for its opinion on the issue in Aug. 2010. It took almost a year for the group to vindicate its legal right to engage in political speech—and the FEC shows no signs of dropping the case. Such is the state of political freedom in America, despite the advance of Citizens United.

Back at the FEC hearing room, McGahn again challenged Weintraub, highlighting the fact that she actually voted for the existing disclosure regulations, which were passed in 2007 and upheld by the Supreme Court in Citizens United, because she wanted to limit the disclosure of donors to labor unions. Now, with corporate America and conservative donors moonlighting as the bogeymen of the left, Weintraub sings a different song. To Americans who want to speak out about political issues, it sounds like nails on a chalkboard.

The FEC isn’t dysfunctional; campaign finance laws are. Speech restrictions are so pregnant with the potential for partisanship that even-numbered commissions are our best option while restrictions exist. It’s just that the left howls loudly and drags its feet when it can’t enact its vision of a utopian regulatory state.

Jeff Patch is a writer and political consultant. Stephen M. Hoersting, an attorney for NDPAC, is co-founder of the Center for Competitive Politics.

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