1. As for Bob's hypo, I did not mean to suggest that the $4 million
donation would be "illegal." It would be illegal only if both (i) the
501(c) in question is a "political committee," and (ii) FECA's $5000 cap on
contributions to such a committee is constitutional -- neither of which is
at all certain. But I don't quite see how the donation is not a
"contribution" under FECA, in light of the donor's express purpose.
2. I agree with Bob that neither Congress nor the Court has condemned all
allocation schemes. Nor have I.
3. I also agree that an allocation scheme might be permissible, and even
desirable, in some cases of mixed, or undisclosed, donor motive.
4. I further agree that, with the exception of BCRA, Congress has not seen
fit in over a quarter-century to amend FECA so as to correct any improper
FEC interpretations of the statute. That silence -- particularly when
contrasted with the enactment of BCRA -- may well create a plausible
argument that Congress has de facto ratified the FEC scheme, even if the FEC
allocation systems were mistaken when first adopted in the late 1970s. I
look forward to seeing more attention devoted to the ratification question
by the parties before the FEC.
5. But I hope Bob will see why the particular allocation schemes that the
FEC has adopted seem so unreasonable to many. The necessary predicate for
permitting huge corporate and union treasury donations to parties
pre-BCRA -- and then "allocating" that money to the "nonfederal" accounts of
the recipients -- must have been the assumption that none of that money was
intended to influence, or in connection with, federal elections, i.e., that
it was all donated for the purpose of influencing only legislative debates
and state and local elections. A similar predicate is at work with respect
to political committees now -- the FEC draft AO in essence presumes that
corporations and unions give those committees donations solely for
objectives other than to affect federal elections. Quite simply, no one
believes this, because it wasn't, and isn't, true. Everyone knows that a
major purpose of those donations -- even if not the only purpose -- is to
affect federal elections. And, if so, the donors are violating 441b. The
FECA allocation scheme does not account for this -- even in cases where the
federal-election objective is expressed in no uncertain terms!; and that is
why it smells fishy to so many.
Similarly with respect to individual donations to political committees.
Yes, of course George Soros's multi-million-dollar donations have a "mixed"
motive, and he wishes to influence not only federal elections, but state
elections, and legislative debates, as well. But can anyone sincerely argue
that only $5000 of those donations are for the purpose of influencing
federal elections? I'll emphasize once again: I think it is very
questionable whether the $5000 limit is constitutional as applied in this
case. I must concede, however, that I do not quite understand the theory
according to which Soros can be said not to have given more than $5000 in
contributions to political committees (assuming, of course, that the
organizations in question are "political committees"). Can Bob, or anyone
else, please explain how the statute can be read otherwise?
----- Original Message -----
From: "Bauer, Bob-WDC" <RBauer@perkinscoie.com>
To: "'Marty Lederman '" <marty.lederman@comcast.net>; "'Rick Hasen '"
<Rick.Hasen@lls.edu>; "'election-law '" <election-law@majordomo.lls.edu>
Sent: Saturday, January 31, 2004 8:32 PM
Subject: RE: Some thoughts on the GC's Draft Opinion in the ABC 527
Proceeding
I will not make the same points again, as I believe that Marty has defined
clearly some of the differences between our positions. He may have
misread
my hypothetical, which concerned a $4 million contribution to a 501 (c)
which, I continue to believe, cannot be an illegal campaign
"contributiion"
solely on the basis of the donor's expressed purpose, so long as the (c)
organization spends the monies in accordance with its tax exemption and
the
requirements of the FECA (such as not coordinating a public communication
with a candidate.)
But I do wish to make two general points about how the McConnell case is
being read, specifically with reference to the allocation regime and the
authority of the FEC.
And then on the question of the purpose test, I would like to note a
recent
example that illustrates how it is inadequate to the task that some would
claim for it--but I will have to send a separate message because of some
webmail space constraints I am dealing with.
First, it is not correct to say that the Congress disapproved allocation
schemes, and the Court joined the Congress in condemning them as an
intolerable end-run around the campaign finance law. BCRA specifies the
use
of a wholly new allocation scheme, applicable to the use of Levin monies
for
state and local party Federal election activities. Moreover, the Court
was
aware that the allocation rules in place prior to BCRA remain applicable
to
voter registration and get-out-the-vote activities before the Federal
election activity period is triggered (that is, prior to the time that
there
is" an election in which a candidate for Federal office on the ballot "(
which the Commission in its rules defined to be either the earlier date of
qualification for a federal office ballot position, or January 1 in the
event that the state did not hold a primary.)
The Court states at 673-674, in fact:
"As a practical matter, BCRA merely codifies the principles of the FEC
allocation scheme while at the same time justifiably adjusting the
formulas
applicable to these activities in order to restore the efficacy of FECA's
longtime statutory restriction--approved by the Court and eroded by the
FEC's allocation regime--on contributions to state and local party
committees for the purpose of influencing federal elections."
Congress in short retained an allocation process for some types of
expenditures, disallowing a variant that had proved particularly noxious
from its point of view, and created a wholly new one for Levin-funded
Federal election activities by state and local parties. So I don't share
Marty's view that the use of an allocation procedure for a "mixed purpose"
presents a hard question, nor do I believe that the "literal reading"
comment of the Supreme Court has any major significance in light of
Congress' rejection of such a reading.
2. Which brings me a related point: the question of how the Court
rebuked,
rejected, or otherwise denounced the FEC for its adoption of the
allocation
scheme. As noted, the Court found that the Congress could
constitutionally
overturn by legislation the FEC's allocation regime as it permitted issue
advertising, or any other allocated activities by national and state
parties. But I cannot agree that the Court's "literal reading" language
stands an authoritative or boundary-setting construction of the FECA, or
that the meaning of the FECA, such as the meaning of the "purpose"
standard,
can be considered apart from the FEC's interpretations. The Court is not
empowered to interpret the statute in the fashion appropriate to an
executive branch agency. In a case like McConnell, it interprets the
statute as required to clarify the constitutional task it is assigned to
perform. The FEC has been empowered to provide these constructions, and
the Courts--including the Supreme Court--have repeatedly stated that the
FEC's choices in this matter are entitled to great weight. The Courts
have
said in particular that they will uphold FEC constructions, even ones that
they would not necessarily adopt as their own, if they represent a
rational
choice among others. (And the McConnell Court had nice things to say about
the FEC' s implementing rules, such as the rules defining the word
"solicit"
--to mean "to ask"-- and the limiting period for Federal election
activities
by state parties payable with hard money alone.) No court has held that
allocation procedures are irrational as a construction of the FECA.
Last point on "purpose" test to follow.,..