[EL] McCutcheon

Wed Apr 2 15:39:14 PDT 2014

Interesting.  This would be illegal under federal law under the affiliation rules. Jim Bopp

-------- Original message --------
From: Joseph Birkenstock <jbirkenstock at capdale.com> 
Date: 04/02/2014  6:26 PM  (GMT-05:00) 
To: David Keating <dkeating at campaignfreedom.org>,Allen Dickerson <adickerson at campaignfreedom.org>,Trevor Potter <tpotter at capdale.com>,Doug	Spencer <dougspencer at gmail.com>,Election Law <law-election at department-lists.uci.edu> 
Subject: Re: [EL] McCutcheon 

Very interesting backstory laid out in that stipulation letter – thanks David!

From: David Keating [mailto:dkeating at campaignfreedom.org] 
Sent: Wednesday, April 02, 2014 6:17 PM
To: Joseph Birkenstock; Allen Dickerson; Trevor Potter; Doug Spencer; Election Law
Subject: RE: [EL] McCutcheon

Rory Reid to Pay $25,000 Personal Fine in Mini-PAC Funneling Scheme
By Elizabeth Crum | 5:50 pm June 3rd, 2011

As first reported and now confirmed and Flashed by Ralston a few minutes ago, Rory Reid did indeed violate campaign finance law when he authorized his gubernatorial campaign staff to form 91 shell political action committees that were then used to funnel three quarters of a million dollars into his campaign last year:
Rory Reid agrees to $25,000 fine in PAC scheme
Reid has signed a stipulation that the Secretary of State could well prove in court that he violated campaign finance laws.
SOS believes Reid the Younger broke law involving contributions in the name of another.
But to avoid litigation — and I’d guess, the chance a judge throws out case because of vague laws and Reid seeking counsel’s advice before engaging in scheme — Secretary of State Ross Miller got Reid to agree to hefty fine (largest in SOS history?) and an admission SOS could have proved violation in court.
David Cohen, his campaign manager, and Joanna Paul, his finance expert, will pay $2,500.
Here is the stipulation letter Rory Reid will sign acceding that it is viably provable his campaign was in violation of Nevada statutes and that he agrees to pay the large (personal) fine by the end of the calendar year.
The statement from the Secretary of State:
“My office has thoroughly reviewed the facts relating to this case with the full cooperation of the interested parties. This negotiated settlement ensures the public of my intention to vigorously enforce Nevada’s elections laws.”
- See more at: http://www.nevadanewsbureau.com/2011/06/03/rory-reid-to-pay-25000-personal-fine-in-mini-pac-funneling-scheme/#sthash.l7ytVjLs.dpuf

David
_________________________________________________
David Keating | President | Center for Competitive Politics
124 S. West Street, Suite 201 | Alexandria, VA 22314
703-894-6799 (direct) | 703-894-6800 | 703-894-6811 Fax
www.campaignfreedom.org

From: law-election-bounces at department-lists.uci.edu [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Joseph Birkenstock
Sent: Wednesday, April 02, 2014 5:36 PM
To: Allen Dickerson; Trevor Potter; Doug Spencer; Election Law
Subject: Re: [EL] McCutcheon

Here’s one example written up several years ago in the Las Vegas Sun’s Ralston Report: http://www.lasvegassun.com/blogs/ralstons-flash/2011/mar/04/rory-reids-gubernatorial-campaign-circumvented-con/, which ran under the headline: “Rory Reid’s gubernatorial campaign circumvented contribution limits, created 91 shell PACs to infuse $750,000 into campaign”

I don’t know how that movie ended, though – does anyone know whether Rory Reid, his campaign, or the “shell PACs” in question were ever found to have committed any violation in connection with that “different structure” of campaign financing?

________________________________
Joseph M. Birkenstock, Esq.
Caplin & Drysdale, Chtd.
One Thomas Circle, NW
Washington, DC 20005
(202) 862-7836
www.capdale.com/jbirkenstock
*also admitted to practice in CA

From: law-election-bounces at department-lists.uci.edu [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Allen Dickerson
Sent: Wednesday, April 02, 2014 5:17 PM
To: Trevor Potter; Doug Spencer; Election Law
Subject: Re: [EL] McCutcheon

Trevor, also responding on the fly so I may be missing something, but what’s the relevance of your second point? The only groups at issue in McCutcheon were candidate committees, party committees, and PACs—all of which must disclose their donors regardless of earmarking.

Speaking for myself, the “possible versus plausible” reading is, well, plausible. On the question of evidence, you might look at footnote 7, where the majority notes the large number of states (30) with base contribution limits but no aggregate limits and suggests that those states have no experience of the “100 PAC” circumvention problem. (The Chief Justice also, in fairness, notes this as a place where the government offered no evidence; if there is such evidence, I’m sure we would all be interested to see it).

From: law-election-bounces at department-lists.uci.edu [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Trevor Potter
Sent: Wednesday, April 02, 2014 5:05 PM
To: Doug Spencer; Election Law
Subject: Re: [EL] McCutcheon

Short answer to question 1, on the run…

As Breyer points out, there is NO evidence that the FEC enforces the current anti-earmarking rules that Roberts relies so heavily on. Breyer says that is because proving “knowledge” of where the money will go is so difficult—Roberts responds that maybe there WAS no knowledge. But to those who follow the FEC, all of that misses the mark—the reality is that the FEC is currently gridlocked and unable to act on almost ANY major enforcement issue. They have not even been able to get the required  majority vote to put out a Notice of Proposed Rulemaking to implement Citizens United—a four year old decision!

As another example, three FEC Commissioners apparently believe that the current McCain-Feingold requirement of disclosure of donations to non-profits for election ads does not apply unless those donations are “earmarked” to candidates. Surprise—the FEC has not had a majority to find that a single dollar given to these groups over the last number of years was earmarked—even with large donations to some groups that did almost nothing but run election ads! So Justice Breyer is right to be suspicious that the solution here is vigorous FEC enforcement of earmarking rules…

Trevor Potter

From: law-election-bounces at department-lists.uci.edu [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Doug Spencer
Sent: Wednesday, April 02, 2014 4:47 PM
To: Election Law
Subject: [EL] McCutcheon

I have two questions for the list about today's "Battle of Competing Hypotheticals" also known as the McCutcheon opinion:

(1) Despite the "civility" in today's announcement, Roberts and Breyer are clearly frustrated with each other. Breyer, channeling his inner Oscar Wilde, even went so far to say that it's nearly impossible to read the majority opinion without laughing. But I don't read the majority and dissent as mutually exclusive, at least on the point of circumvention. Breyer describes what is possible and Roberts argues what is plausible. Can somebody offer some context on this point? Roberts argues that circumvention is unlikely because of the various anti-earmarking provisions that have been added over the years. But certainly these provisions have been added because of actual (or feared) circumvention. For those with a working knowledge of contribution bundling and earmarking, is it true as Roberts argues that the 100 PAC scenario (or other of Breyer's hypos) is "highly implausible"? I'm also curious how many donors have run up against the aggregate limit in the last decade. This fact is missing from the opinion and party briefs (I didn't read the amicus briefs), but it seems like a relevant piece of information, even if it could cut both ways.

(2) In footnote 7, the majority notes that just 8 of the 38 states with base limits also have an aggregate limit. What is the status of these state laws? Would state-specific evidence of circumvention be enough to preserve them? The Citizens United experience suggests that it wouldn't. But the holding in McCutcheon seems to be more fact-oriented than in Citizens United so perhaps individual state histories and campaign finance regimes will make a difference. 

Thanks for any thoughts.
Doug

-----
Douglas M. Spencer
Associate Professor of Law and Public Policy
University of Connecticut
65 Elizabeth Street
Hartford, CT 06105
(860) 570-5437
http://www.dougspencer.org

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