FEDERAL ELECTION COMMISSION 

WASHINCTON. D.C 20463 

1 

MEMORANDUM 

TO: The Commissioners 

Staff Director 

Deputy Staff Director 

General Counsel n 

FROM: Office of the Commission Secreta 

DATE: April 24,2002 

SUBJECT: Statement Of Reasons for MUR 4982 

Attached is a copy of the Statement Of Reasons for MUR 4 

signed by Commissioner Scott E. Thomas and Commissioner C 

McDonald. 

This was received in the Commission Secretary's Office on 

Tuesdav. A~ril23.2002 at 351 nm. 

cc: Vincent J. Convery, Jr. 

OGC Docket (5) 

Information Division 

Press Office 

Public Disclosure 

,i 

Attachment 
1 

Republicans for Clean Air 1 

Sam Wyly 1 

Charles Wyly 1 

Lydia Meuret 1 

Jeb Hensarling 1 

Bush for President, Inc. and 1 

David Herndon, as treasurer 1 

STATEMENT OF REASONS 

MUR 4982 

COMMISSIONER SCOTT E. THOMAS 

COMMISSIONER DANNY LEE MCDONALD 

The week before the “Super Tuesday” primaries, a $2 million advertising 

campaign praising presidential candidate George W. Bush and attacking his opponent, 

John McCain, ran in the important primary states of California, New York and Ohio. The 

ads stated that they were paid for by a group calling itself “Republicans for Clean Air.” . In actuality, the ads apparently were financed mostly by two brothers, both of whom were 

strong financial supporters of then Governor Bush and one of whom was an authorized 

fundraiser for the Bush presidential campaign. At issue in MUR 4982 was whether there 

should have been some disclosure’to the voting public of who really paid for the ads; 

whether the ads were coordinated with any agent of the Bush campaign and, thus, should 

be viewed as an in-kind contribution to the Bush campaign; and finally, whether the 

advertising effort should have registered with the Federal Election Commission as a 

“political committee” subject to reporting requirements and funding restraints. . 

Commissioners Mason, Smith and Wold voted not to investigate this matter. In 

their view, the advertisements did not contain “express advocacy” and were not,’required 

to cany a disclaimer disclosing the true source of hding. In addition, they relied on a 

new, narrow definition of coordination they effectuated last year with Commissioner 

Sandstrom to conclude. that there was no evidence of ;doordination between the Bush * . 

campaign and the principal financial backers of the ads. Finally, they saw no need for 

this $2 million advertising campaign focused on the 2000 presidential primaries to follow 

the disclosure and sourcing rules for political committees. 

-. 

The factual circumstances and the magnitude of the potential violations in this 

matter cry out for an investigation. Because there were not four votes to investigate this 
cm, however, the Commission and the public will never know what actually transpired. 

Most important, we will never know whether there was improper coordination in the 

running of this carellly timed advertising campaign. The Act directs that the 

Commission “seek to obtain compliance with” the Act. 2 U.S.C. 0 437c(b)( 1). By failing 

to investigate this important matter, the Commission ignores this statutory mandate. 

I. 

In early March, 2000, less than one week before the “Super Tuesday” primaries, 

advertisements began running in three of the most important primary states--California, 

New York and Ohio. Opening with a picture of presidential candidate John McCain 

superimposed over smokestacks belching dirty air, the advertisement was described in a 

script as follows: 

VISUALS/On Screen Copy AUDIO 

McCAIN PHOTO OVER POLLUTION 

McCain Voted Against Clean Energy 

Paid for by Republicans for Clean Air 

Last year, John McCain voted against solar and renewable 

pollute our air. 

energy.’ That mcuu mole w of coal-bulniag plants that 

NY SKYLINE WI STATUE LIB 

BUSH NAME W/ SKY BUSH 

New York Republicans care about clean air. 

So does Governor Bush. 

SMOKESTACKS W/ CLEAR DAWN 

Bush Clamped Down On Polluters 

He led one of the first states in America to clamp down on 

old, coal-burning electric power plants? 

BUSH PHOTO OVER GREEN FIELD 

Bush Signed Clean Air Laws 

Bush clean air laws will reduce air pllution more than a 

quarter million tons a year.’ 

YOUNG PEOPLE W/ CANOE 

That’s like taking five million can off the road. 

BUSH NAME W/ KIDS: BUSH 

Let Bush & McCain Know 

You Back Clam Energy 

Governor Bush. Leading . . . so each day dawns brighter. 

’ Vote#171. Bill #SI 186. June 16. 1999. 

Texas Senate Bill 7, sipd June 18. 1999. Texas Senate 

Bill 766. Signed June 18.1999. ’ SIate of Tars. Office of the Govcmor Web Site 

(wmv.govemor.notc.a.~~~~~Ia~~%io~. hml) 

2 
Attachment to Complaint. The ad disclosed only that it had been paid for by an 

organization calling itself “Republicans For Clean Air.” A so-called issue ad, the 

advertisement nonetheless ran only during the week before the Super Tuesday primaries, 

and apparently has not aired since the primary elections were held. 

On March 6,2000, McCain 2000 filed a complaint regarding these political 

advertisements with the Federal Election Commission. Stating that the advertisements 

were paid for by two brothers, Charles and Sam Wyly, the complaint alleged that: 

As one of the Bush campaign’s “Pioneers”-the title for senior 

campaign fundrais-les Wyly is an authorized official of the 

campaign, and the advertisement sponsored by the Wylys therefore is 

an extraordinarily large and illegal in-kind contribution to the Bush 

campaign that the Commission should investigate immediately. 

Complaint at 1. In discussing why the name “Republicans for Clean Air” was used on the 

advertisements rather than the names of the Wyly brothers, the complaint explained: 

The need for concealment becomes obvious when one considers the 

connections between the Wylys and Bush campaigns, past and present. 

The Wyly brothers gave more than $200,000 to George W. Bush’s two 

gubernatorial campaigns, and the Wylys run an investment fhd that 

manages $96 million for the University of Texas (whose board was 

appointed by Governor Bush for an annual fee, according to press 

reports, of $1 million plus 20% of profits. In the current presidential 

campaign. Charles Wyly is one of Governor Bush ‘s “Pioneers 

elite team of authorbedfindraising oficials for the Bush for President 

Committee who have each raised at least SIOO.000 for the campaign. 

Id. (emphasis added). 

The complaint further alleged that even if the ads were not cooidinated, the Wylys 

should have reported the expenditures for the political advertisements to the Federal 

Election Commission because the advertisements constituted express advocacy. Noting 

the advertisements’ use of the slogan “Governor Bush. Leading so each day dawns 

brighter” by itself constituted express advocacy, the complaint also stated that: 

[Tlhe-advertisement as a whole can be interpreted only as advocating ’ 

the election of Govemor Bush and the defeat of Senator McCain. The 

ad specifically contrasts the two candidates’ records; specifically 

mentions New York, Ohio, and California Republicans as the target 

audience; and closes with the pro-Bush slogan discussed above: What 

purpose, other than express advocacy, could there be for presenting the 

environmental records of a Texas governor and an Arizona senator to 

3 
Q 

-4: 

s 

New York, Ohio, and California Republicans in the weekend before 

the primary in each of these states? 

Id. at 3. The complaint concludes that “[blecause the Wylys engaged in express advocacy 

within 20 days prior to an election, they were required to report their expenditures to the 

Commission within 24 hours of making them. See 1 1 C.F.R. 00 104.4; 109.2(b).” Id. 

at 4. 

On December 20,200 1, the Oflice of General Counsel sent a report to the 

Commission containing an analysis of the allegations presented in the complaint. Based 

on an erroneous reading of the Commission express advocacy regulations and applying 

the Commission’s new coordination regulations, the report .found “[tlhe advertisement 

run by [Republicans for Clean Air] did not contain express advocacy, nor does the 

available information support a conclusion that [Republicans for Clean Air] coordinated 

with the Bush Committee with regard to the advertisement.” General Counsel’s Report at 

26. As a result, “it appears that neither Charles nor Sam Wyly, nor Republicans for Clean 

Air, made an excessive contribution to the Bush Committee in connection with the 

advertisement, and the Bush Committee accordingly did not accept excessive 

contributions hm Sam or Charles Wyly, or Republicans for Clean Air, or fail to report 

them.” Id. The report recommended that the Commission find no teason to believe that 

Charles and Sam Wyly violated 2 U.S.C. 0 441a(a)(l)(A) and (a)(3), that Republicans for 

Clean Air violated 2 U.S.C. 0 441a(a)(l)(A), or that Bush for President, Inc. and David 

Hemdon, as treasurer, violated 2 U.S.C. 00 434 and 441a(f). The report also 

recommended that the Commission find no reason to believe that Republicans for Clean 

Air violated 2 U.S.C. 6 434(c)( 1). 

On January 23,2002, a motion was made to find reason to believe that (1) Charles 

Wyly and Sam Wyly violated 2 U.S.,C. 06 441a(a) and 441d; (2) Republicans for Clean 

Air violated 2 U.S.C. 00 433,434,441a(a), 44140, and 441d; and (3) Bush for President, 

Inc., and David Herndon, as treasurer, violated 2 U.S.C. 6 441a(f). The motion failed to 

secure the four affirmative votes needed to pursue the matter. 2 U.S.C. 0 437g(a)(2). 

Commissioners Thomas, McDonald and Sandstrom voted for the motion and 

Commissioners Mason, Smith and Wold voted-against. Similarly, Commissioners 

Thomas, McDonald and Sandstrom voted against the General Counsel’s 

recommendations on tally vote and Commissioners Mason, Smith and Wold voted in 

favor. The Commission agreed, however, to find no reason to believe that Lydia Meuret 

or Jeb Hensarling violated the Act. The Commission then voted to close the matter. 

We believe the Commission at least should have investigated the serious 

allegations made in this matter. In our view, there is reason to believe that (1) the 

advertisements were coordinated; (2) the advertisements contained express advocacy and 

should have disclosed to the voting public who was responsible for the advertisements; 

and (3) the Wylys should have registered their effort as a political committee with the 

Federal Election Commission. 

4 
11. 

In our view, the Commission’s new coordination regulations create a large 

loophole in the limitations, prohibitions and reporting requirements of the Act. These 

regulations are not sound as a matter of law or policy. As this matter demonstrates, these 

regulations simply provide cover for those not interested in enforcement of the Act as 

Congress intended. Because of these new regulations, the Commission did not ask a 

single question regarding the activity at issue. It is this legacy of non-enforcement which 

we fear will be repeated as long as these new regulations remain in effect. . 

Serious questions remain as to whether the advertisements were undertaken 

“totally independently” of the candidate and his agents. Buckley v. Vuleo, 424 U.S. 1,47 

(1976) (“BuckIey”). In fact, one of the independent expendm was an authorized 

hndraiser of the candidate’s campaign and actually may have been an agent of the 

candidate’s campaign. As the “independent administrative agency vested with exclusive 

jurisdiction over civil enforcement of the Act,” FEC v. Nutionul Right to Work 

Committee, 459 U.S. 197, 198 n.2 (1 982), the Federal Election Commission should have 

investigated this important matter. 

A 

The definition of “coordination” found in the Commission’s new regulations 

directly undercuts the Supreme Court’s guidance in this area. In BucHey, the Supreme 

Court upheld limits on contributions to federal candidates but ruled a similar limitation 

on independent expenditures was unconstitutional. The Court recognized, however, that 

its ruling created many opportunities for evasion of the contribution limitations. If a 

would-be spender could pay for a television advertisement provided by a candidate, for 

example, this “coordination” would convert what is supposed to be an “independent” 

expenditure into nothing more than a disguised contribution. Indeed, the BuckIey Court 

wamed the contribution limitations would become meaningless if they could be evaded 

“by the simple expedient of paying directly for media advertisements or for other portions 

of the candidate’s campaign activities.” Id. at 46. 

. 

In order to “prevent uttempts to circumvent the Act through prearranged or . 

coordinated expenditures amounting to disguised contributions,” id. at 47 (emphasis 

added) the BuckIey Court treated “coordinated expenditures. . . as contributions rather 

than expenditures.” Id. at 4647 (emphasis added). Thus, the Buckley Court drew a 

specific distinction between expenditures made “totuIIy independently of the candidate 

and his campaign” and “coordinated expenditures” which could be constitutionally 

regulated. The Court defined “contribution” to “include not only contributions made 

directly or indirectly to a candidate, political party, or campaign committee . . . but also 

all expenditures placed in cooperation with or with the consent of a candidate, his agents, 

or an authorized committee of the Candidate.” Id. at 78 (emphasis added). 

5 
Thus, 25 years ago, the Supreme Court assented to a broad definition of 

coordination - relying on mere cooperation or consent and recognizing that a person 

serving as a candidate’s agent could be the vehicle for coordinating activity. Reacting to 

these judicial concerns, Congress enacted as part of the Federal Election Campaign Act 

Amendments of 1976 a definition of “independent expenditure” now codified at 2 U.S.C. 

0 43 1( 17). Concerned that independent expenditures could be used to circumvent the’ 

contribution limitations,’ Congress preserved the distinction drawn by the Supreme Court 

between those expenditures which were “totally independent” of the candidate’s 

campaign and those which were not? 

. 

The current language of the Act reflects the judicial and legislative concern that 

independent expenditures are not turned into disguised contributions through 

coordination with the candidate or his campaign. The Act squarely states that an 

expenditure made ‘’in coopmotion, consultation, or concert, with, or at the request or 

suggestion of, a &didate, his authorized political committees, or their agents, shall be 

considered to be a contribution to such candidate” and subject to the contribution 

limitations. 2 U.S.C. 0 441a(a)(7)(B)(i). Moreover, section 431(17) of the statute defines 

“independent expenditure” as: 

. 

[A]n expenditure by a person expressly advocating the election or 

defeat of a clearly identified candidate which is made without 

cooperation or consultation with any candidate, or any authorized 

. committee or agent of such candidate, and which is not made in 

concert with. or at the request or suggestion 05 any candidate, or any 

authorized committee or agent of such candidate. 

2 U.S.C. 0 43 1( 17)(emphasis added). 

Former section 109.l(b)(4)(i) of the Commission’s regulations “clariflied] this 

language,” FEC v. National Conservative Political Action Committee, 647 F.Supp. 987, 

990 (S.D.N.Y. 1986), and explained that an expenditure will not be considered 

independent if them is “[alny arrangement, coordination, or direction by the candidate or 

his. . . agent prior to the publication, distribution, display or broadcast of the 

communication.” 1 1 C.F.R. 0 109.1 (b)(4)(i)(2OoO). The former regulations further stated 

an expenditure was presumed not to be independent if: 

’ See, e.g., Federal Election Campaign Act Amendments, 1976 Hearings on S.2911, et al., Subcommittee 

on Privileges and Elections of the Senate Committee on Rula and Administration, 94* Cong., 2d Sess. 74 

(remarks of Sen. Kennedy); 77 (remarks of Sen. Cannon); 77 (remarks of Sen. Scott); 85 (statcnmt of Sen. 

Mondale); 89 (remarks of Sen. Griffi); 98 (remarks of Sen. Buddey); 10748.130 (remarks of then 

Assistant Attorney General Scalia). ’ H.R Cod. Rep. 94-1057 at 38 (1976). Specifically, the Confmnce Report states: ‘‘“he def~tion of the 

tcxm ‘indepmdcnt expcndihue’ h the conference Substitute is intmded to be consistent With the discussion 

of independent political expenditures which was included in Bucklq v. Valeo.” Id. 

6 
(A) Based on information about the candidate’s plans, projects, or needs 

provided to the expending person by the candidate, or by the 

candidate’s agents, with a view toward having an expenditure made; or 

(B) Made by or through any person who is, or has been, authorized to raise 

or expend funds, who is, or has been, an officer of an authorized 

committee, or who is, or has been, receiving any form of compensation 

or reimbursement fbm the candidate, the candidate’s committee or 

agent. 

Id. 

Only once has the Supreme Court actually decided whether coordination existed 

based upon a factual record. In Colorado Republican Federal Campaign Committee u. 

FEC, 5 18 U.S. 604 (1 996), the Court considered whether expenditures made by the 

Colorado Republican Party were actually “independent.” The Court concluded that the 

state party’s “expenditure, for constitutional purposes, [was] an ‘independent’ 

expenditure, not an indirect campaign contribution.” 518 U.S. at 614. In reaching this 

conclusion, the Court found that the “advertising campaign was developed by the 

Colorado Party independently and not pursuant to any general or particular 

understanding with [any candidates or their agents].” Id. (emphasis added). 

The Commission’s new regulations, however, cast a blind eye toward the Buckley 

and colorudo Republican decisions and the broad statutory language. Instead, these new 

regulations are based upon the decision of a single district court in FEC u. Christian 

coalition, 52 F.Supp.2d 45 (D.D.C. 1999)’ which effectively created its own definition of 

coordination. This definition of coordination bears little semblance to either the “totally 

independent” or “general understanding” standards articulated by the Supreme Court in 

Buckley and Colorado Republican or the language of the statute. 

In its lawsuit, the Commission charged the Christian Coalition repeatedly spent its 

corporate treasury funcis to inflkence federal elections in violation ofthe FECA. ~ased 

on the record evidence, the Commission alleged the Christian Coalition’s leadership and 

its staff repeatedly cooperated and consulted about campaign strategy and activities with 

several different Republican candidates, their campaigns, and the National Republican 

Senatorial Committee. 

With respect to coordination, the district court ruled against the Commission on 

five of the six coordinated expenditure allegations and found a contested issue of fact on 

the sixth. In the opinion of the district court, the Supreme Court in BucUey did not 

address “the First Amendment concerns that arise with respect ‘to expressive coordinated 

expenditures.”’ 52 F.Supp.2d at 85. The district court speculated: “It can only be 

surmised that the Buckley majority purposely left this issue for another case. In many 

respects this is that case.” Id. As a result, the district court felt ke to ignore the 

0 441a(a)(7)(B)(i) standard of coordination as well as the Commission’s regulations. 

7 
Instead, the district court created its own standard of coordination and applied it to 

a new concept, which it also developed, known as “expressive coordinated expenditures.” 

The district court concluded “the First Amendment requires diffkent treatment for 

‘expressive,’ ‘communicative’ or ‘speech-laden’ coordinated expenditures, which feature 

the speech of the spender, hm coordinated expenditures on non-communicative 

materials, such as hamburgers or travel expenses for campaign staff? Id. at 85 n.45. The 

district court then defined an “expressive coordinated expenditure” as an expenditure “for 

a communication made for the purpose of influencing a federal election in which the ’ 

spender is responsible for a substantial portion of the speech and for which the spender’s 

choice of speech has been arrived at after coord*ation with the campaign.” Id. The court 

then developed its own test for coordination: 

In the absence of a request or suggestion hm the campaign, an 

expressive expenditure becomes “coordinated[ 1’ where the candidate 

or her agents can exercise control over, or where there has been 

substantial discussion or negotiation between the campaign and the 

spender over, a communication’s: (1) contents; (2) timing; 

(3) location, mode, or intended’ audience (e.g., choice between 

newspaper or radio advertisement); or (4) ‘volume’ (e.g., number of 

copies of printed materials or kquency of media spots). Substantial 

discussion or negotiation is such that the candidate and spender emerge 

as partners or joint venturers in the expressive expenditure, but the 

candidate and the spender need not be equal partners. This standard 

limits $441 b’s contribution prohibition on expressive coordinated 

expenditures to those in which the candidate has taken a sufficient 

interest to demonstrate that the expenditure is perceived as valuable for 

meeting the campaign’s needs or wants. 

Id. at 92. Based upon this analysis, and neither the statute nor the Commission’s 

regulations, the district court found no improper coordination between the Christian 

Coalition and Bush-Quayle ’92, Helms for Senate, Inglis for Congress, Hayworth for 

Congress, or the National Republican Senatorial Committee. 

The district court’s view that the Supreme Court did not address the First 

Amendment concerns involving “expressive” communications is odd at best. The whole 

analysis in Buckley was about expressive communications! Indeed, given the Court’s 

reference to independent express advocacy and the dangers of evasion through payment 

for “media advertisements,” 424 U.S. at 46, the district court’s premise is wholly 

unfounded. 

The new Commission definition of “coordination” draws heavily fiom the badly 

flawed Christiun Coalition decision. The new rule provides: 

8 
I 

.. 

-4: 

Coordination with candidates and DW committees. A general public 

political communication is considered to be coordinated with a candidate or 

party committee if the communication- 

(1) Is paid for by any person other than the candidate, the candidate’s 

(2) Is created, produced or distributedauthorized committee, or a party committee, and 

(i) At the request or suggestion of the candidate, the candidate’s 

authorized committee, a party committee, or the agent of any of the 

foregoing; 

(ii) After the candidate or the candidate’s agent, or a party committee or its 

agent, has exercised control or decision-making authority over the 

content, timing, location, mode, intended audience, volume of . 

distribution, or fiequency of placement of that communication; or 

(iii)After substantial discussion or negotiation between the creator, 

producer or distributor of the communication, or the person paying for 

the communication, and the candidate, the candidate’s authorized 

committee, a party committee, or the agent of such candidate or 

committee, regarding the content, timing, location, mode, intended 

audience, volume of distribution or kquency of placement of that 

communication, the result of which is collaboration or agreement. 

Substantial discussion or negotiation may be evidenced by one or more 

meetings, conversations or conferences regarding the value or 

importance of the communication for a particular election. 

1 1 C.F.R. 0 100.23(c). Importantly, the new revisions also deleted the presumptions of 

coordination regarding idonnation provided by a campaign ”with a view toward having 

an expenditure made” and regarding spending by someone authorized to raise or expend 

money for the campaign. Supru, p.7. 

. 

The Commission’s new test for coordination weakens important provisions of the 

Act. For example, suppose that Candidate Smith is slightly behind in the polls, low on 

money, and needs help. It is the week before the election and he knows a corporation is 

planning to run an “issue” advertisement to assist the Smith campaign. Smith contacts 

the president of the corporation and complains that nobody has focused on an important 

matter in the campaign: various problems in the persdnal life of his opponent, 

Congressman Jones. Because of this oversight, candidate Smith explains, Congressman 

Jones is viewed in a better light by the electorate. - .- 

During his meeting with candidate Smith, the wealthy supporter says, “Thanks for. . 

the infoxmation.” After the meeting, the wealthy supporter changes the advertisement to 

say: “Congressman Jones is a liar, tax cheat and a wife-beater-keep that in mind on 

Tuesday.” The advertisement runs on the weekend before the election. Is this a 

coordinated expenditure? As we understand the Commission’s new regulations, there 

arguably would be no coordination between the candidate and the spender since there was 

no ”request or suggestion” for a communication to be made, no “control or decision9 
i 

making authority,” and no “substantial discussion or negotiation” resulting in 

“collaboration or agreement.” 1 1 C.F.R. 0 100.23(~)(2). 

’ Obviously, it is almost impossible to secure such evidence or meet such a high 

standard to establish coordination. Moreover, if a finding of coordination under the 

“substantial discussion or negotiation” test requires some sort of “collaboration or 

agreement” between a candidate and a spender regadng some particular aspect of a 

communication, a candidate could set up a meeting with an organization known to be 

planning campaign ads, and could discuss campaign strategy and the development of 

issues crucial to the campaign. The organization then could make “independent” 

expenditures based on this crucial knowledge and information. The only apparent 

restriction would be that a campaign could not “collaborate” or “agree” on the details of 

campaign ads. Such a limited approach renders the coordination standard-and thus, the 

contribution limits-meaningless. 

The Commission’s earlier definition of coordination, however, would have 

produced a much different result. Under the Commission’s fonnqr regulations, this 

hypothethical expenditure would be treated as a disguised contribution and coordinated 

activity because it was “based on information about the candidate’s plans, projects, or 

needs provided to the expending person by the candidate’s agents, with a view toward 

having an expenditure made.” 1 1 C.F.R. 0 109.1 (b)(4)(i) (2000): This would appear to 

be the more appropriate result especially given the ease with which “coordination,” and 

thus, the contribution limits, can be evaded so easily under the Commission’s new 

definition of coordination. 

To its credit, the district court in Christian Coalition recognized the difficulty as 

well as the importance of its task and virtually invited the Commission to file an 

interlocutory appeal on the matter to the United States Court of Appeals for the District of 

Columbia Circuit: “This Court is of the opinion that this Order in relation to Counts I, II, 

and Dl involves controlling questions of law as to which there is substantial ground for 

direrenee of opinion and that an intermediate applfiom the order may materially 

advance the ultimate termination of the litigation.”52 F.Supp.2d at 98 (emphasis added). 

Commissioners Elliott, Mason, Sandstrom, and Wold, however, voted to end the 

Commission’s enforcement litigation against the Christian Coalition and not appeal the 

matter. 

’ It has been suggested that the Commission’s previous coordination regulations were drafted too broadly 

and that the Commission somehow has been too aggressive in applying these regulations to the regulated . .. .... . . community. Yet, the record pints a far diffirmt picture. If any conclusion can be reached, it is that the 

Commission has been reluctant to proceed on a coordination theory in cvcn the most obvious cases. See. 

e.g., MUR 2272 (American Medical Association Political Action Committee and William for Congrcss 

Committee); MUR 2766 (Auto Dealers and Drivers for Free Trade PAC and Friends of Connie Mack); 

MUR 3069 (National Security Political Action Committee and Bush-Quayle ’88); MUR 4204 (A 

for Tax Reform and Lewis for Congress); MUR 4282 (Archdiocese of Philadelphia and Santonm ‘94); and 

MUR 4378 (NRX and Montanans fm Rchbcrg). Having Zailed to go forward in so many matters based 

upon the “broadly drafted” regulations of old, it is diflicult to imagine the Commission gamcring four votes 

to proceed upon its new coordination regulations. 

‘ 

I 

10 
Our colleagues should not have dropped a significant enforcement action such as 

the Christiun Coalition case and wrested resolution of these important issues away bm 

the Article III courts? As the recent decision of the Supreme Court in FEC u. Colorudo 

Republican Federul Cumpaign Committee, 53 1 U.S. 923 (2001), illustrates, it is not 

unusual for erroneous lower court decisions to be overturned on appeal? Would the 

Commission similarly have prevailed on appeal in the Christian Cmlition case? Would 

the appellate courts have upheld the commission's original regulations defining 

coordination? By refusing to follow normal litigation practice and appeal this important 

matter, it appears that our colleagues did not want to take that chance. . 

On April 2,2001, the United States Senate passed S. 27, the Bipartisan Campaign 

Reform Act of 2001, also known as the "McCain-Feingold bill." During debate, Senator 

Feingold voiced his opposition to the Commission's new coordination regulations and 

pointed out that "many observers of campaigns who arc concerned about evasions of the 

law think [it] is far too narrow to cover what really goes on in campaigns." 147 Cong. 

Rec. S3184 (daily ed. March 30,2OOl)(remarks of Sen. Feingold). Reflecting this 

concem, section 2 14 of the bill as passed by the Senate repealed the Commission's new 

coordination regulations and directed the Commission to promulgate new coordination 

rules within 90 days to take their place. 

. 

Despite the plain rejection of its coordination regulations by the United States 

Senate, the Commission nevertheless went ahead and approved final promulgation of the 

new coordination regulations. On May 3,2001, Commissioners Mason, Sandstrom, 

Smith, and Wold voted to make the new coordination regulations immediately effective 

upon publication in the Federal Register. The undersigned opposed. We agreed with 

Senator Feingold that the new regulations are far too narrowly draf€ed and will make 

evasion of the Act commonplace. At the very least, we believe our colleagues should 

' Tbc decision of a single district court certainly cannot resolve these important issues. Indeed, the decision 

of the district court in Christian Coalition is not binding precedent on any other federal court, even in the 

sam district. See, e.g., In re Korean Air Line Disaster, 829 F.2d 1171, 1176 (D.C.Cir. 1987x'ginding 

precedent for all [circuits] is set only by the Supram Court, and for the district courts within a circuit, only 

by the court of appeals for that circuit"), urd, 490 US. 122 (1989). 

Through the years, there have been a number of important cases the connnission has lost in the lower 

courts, but has won on appeal See, e.g.. Bread Political Action Committee v. FEC, 635 F.2d 62 1 (7" Cir. 

1980)(en banc), nv'd, 455 U.S. 577 (1982)(wming lower court's decision allowing expedited 

consideration of an action under 2 U.S.C. # 43%); FEC v. National Right to Work Committee, 665 F.2d 

371 (D.C.Cir. 1981), m'd 459 US. 197.(1982)(rejecting lover court constnuxion of the tmn"nqnbcr" --. . to . include certain individuals described by the NRWC as active mrmkrs); Dcmocmtic Senatorial Gmpaign 

Committee v. F€C, 660 F.2d 773 (D.C.Cir. 1980), rev'd 454 U.S. 27 (198l)(overturning decision that FEC 

acted contrary to law in dismissing complaint); FEC v. Ted Haley Congressional Committee, 654 F.Supp. 

1120 (W.D. Wash. 1987), rev'd 852 F.2d 1 1 1 1 (9* Cir. 1988)(njecting lower court decision holding loon 

guarantees were not contributions under FECA); FEC v. Furgatch, No. 83-0596-GT-MXS.D. Cal. Nov. 20, 

1984), rev 'd, 807 F.2d 857 (9* Cir.), cert. denied, 484 US. 850 (1987)(mhg lower court's grant of a 

motion for dismissal); see also UnitedSfates v. Kanchanalak, 41 F.Supp. 2d 1 (D.D.C. 1999), rev'd, 192 

F.3d 1037 (D.C.Cir. 1999Xreversing the district court and concluding that 2 U.S.C. 4 441e prohibits foreign 

contributions for non-federal as well as federal elections). 

5 

8. 

i 

i 

11 
have waited until the conclusion of the legislative proCess and not rushed to promulgate 

new rules that are in such obvious c6nflict with the will of the United States Senate. 

Subsequently, on February 14,2002, the House of Representatives also approved 

legislation which specifically repealed our colleagues’ new coordination regulations. See 

section 214(b) of H.R. 2356. Eventually, such a repeal was included in section 214(b) of 

the Bipartisan Campaign Reform Act of 2002, but it takes effect 270 days fiom the 

enactment date of March 27,2002. Thus, our colleagues’ coordination regulations are in 

effect today and were applied in the Commission deliberations on MUR 4982. 

B. 

Under the Commission regulations in effect at the time of the activity at issue, 

there certainly was reason to believe that coordination existed in this matter such that an 

investigation would have been warranted. The Commission’s regulations stated that an 

expenditure would be presumed to be coordinated if it was “[mlade by or through any 

person who is . . . authorized to raise or expend fimds.” 1 1 C.F.R. 0 109.l(b)(4)(i)(B) 

(2000). The Bush for President Committee acknowledged that “Mr. Charles Wyly is a 

‘Pioneer’ for BFP [Bush for President] and, as such, is a contributor and an authorized 

fundraiser for the campaign.” Bush for President Response at 3 (May 4,2000). 

Accordingly, under the prior regulations, there would have been a presumption that 

Charles W ly coordinatd the Republicans for Clean Air advertisements with the Bush campaign. P 

Commissioners Mason, Sandstrom, Smith and Wold, however, eliminated the 

“authorized fundraiser” language fiom the Commission’s regulations. In its place, as we 

detailed above, they incorporated much of the analysis from the district court judge in 

Christian Coalition, supra. The Christian Coalition decision and the Commissionapproved regulation require that there be something akin to a joint venturei with respect 

to “the expressive expenditure” or “general public political communication.” Christian 

Coalition, 52 F.Supp. at 92; 11 C.F.R. 0 100.23(c). This requires substantial discussion 

or negotiation over an expressive communication’s content, timing, location, volume etc. 

Applying these new regulations, the General Counsel’s Report concluded, ”under the 

reasoning of the Christian Coalition court, there is insufficient evidence that Charles 

Wyly played any role in coordinating the broadcast of the advertisement in question with 

the Bush Committee.” Report at 25. 

Even operahg under the.strictures dthe.Commission’s new regulatioos,. . . . . .. 

however, there is a strong legal predicate for investigating whether there was coordination 

in this matter. Under the Act, if you coordinate with a candidate’s agent, that makes it a 

coordinated expenditure-an in-kind contribution. The statute provides that 

’ Oddly, the General Counsel’s Report stated the ”presumption could be overcome by evidence to the 

contrary, which is here provided by the Wylys’ afiidavits.” Report at 23. As we discuss in*, however, 

there are serious problems with these afIidavits and they certainly do not rebut a presumption of 

coordination. 

12 
. . .. 

I. 

E 

c- 

“expenditures made by any person in cooperation, consultation, or concert, with, or at the 

request or suggestion of, a candidate, his authorized political committees, or their agents, 

shall be considered to be a contribution to such candidate.” 2 U.S.C. 0 441a(a)(7)(B)(i) 

(emphasis added). The Commission’s new coordination regulations use the team “agent” 

as well, and define it as: 

[Alny person who has actual oral or written authority, either express or 

implied, to make or authorize the making of expenditures on behalf of 

a candidate, or any person who has been placed in a position within the 

campaign organization where it would reasonably appear that in the 

ordinary course of campaign-related activities he or she may authorize 

expenditures. 

. 

11 C.F.R. 0 109.l(b)(S). 

It is clear there was cooperation with Charles Wyly in this endeavor. He paid for 

the ads in part after discussion with other participants. The question then becomes 

whether Charles Wyly was an agent of the Bush campaign. We know that Charles Wyly 

was an “authorized fundraiser“ for the Bush campaign. Bush Campaign Response at 3, 

supra. We also know that Charles Wyly is a “Pioneer.” Id. According to the complaint, 

The Bush campaign proudly lists the Pioneers on its website as a Bush 

fundraising group and works closely with the Pioneers in their 

fundraising efforts. The Wahington Post reports that the Pioneers 

“have been extensively briefed on the campaign’s spending plans.” 

According to the St. Petersburgh Times, these fundraisers attend 

“special Bush campaign m&gs,” and the New York Times reports 

that Pioneers attended a two-day meeting in Austin in November 1999 

where they were to be “instnrcted“ to raise funds both for the Bush 

campaign id state party candidates. 

Complaint at 2. Thus, the complaint alleges “Charles Wyly is more than a mere Bush 

campaign contributor-he is an authorized fundraiser whose ongoing knowledge and 

involvement make him an official of the campaign.” Id. 

The responses filed by the Bush campaign and the Wyly brothers do not refute the 

allegitions made in the complaint. Indeed, the responses provide more questions than 

answers. For example, the Bush campaign response states “Mr. Charles Wyly is a 

‘Pioneer’ for BFP and, as such, is a contributor and an authorized hhser for the 

campaign.” Bush Campaign Response at 3. But what is a Pioneer? Are there any 

restrictions or constraints on the fundraising authority? Is a Pioneer authorized to spend 

money on behalf of the campaign? Were there any reimbursements to Charles Wyly hm 

the campaign for canying out his fundraising duties or conducting fundraising services? 

Did Mr. Wyly have any other titles in the campaign? 

.. 

. 

13 
I 

The campaign’s response also provided a general assertion that “in this capacity, 

Mr. Wyly did not and does not exercise any decisionmaking authority over any of BFP’s 

. political, strategic or spending decisions.” Zd. This simply raises the question of whether 

Mr. Wyly nonetheless was placed in a position where it would appear that he had such 

authority, and whether there is some special meaning for the terms “decisionmaking 

authority” and “BFP. . .spending decisions.” The response goes on to state “there is no 

evidence that any person with any involvement in BFP’s political, strategic, or spending 

decisions was privy to or had any involvement with the RCA [Republicans for Clean Air] 

issue advertisements.” Id. Once again, the response is subject to interpretation. It does 

not flatly deny BFP involvement-it only states that “there is no evidence” of BFP 

involvement. Moreover, it could be read to simply claim that persons other than 

Mr. Wyly, who had more formalized authority in the campaign, were not involved with 

the ads at issue. 

Similarly, the response of the Wylys is uninformative on some crucial points. 

Was Sam Wyly a Pioneer? Was Sam Wyly authorized to raise money for the Bush 

campaign? Did the designer of the advertisements or the media buyer have any prior (as 

opposed to current) connection to the Bush campaign? While a Mr. Hensarling broadly 

denied any coordination, why were the vendors used not asked to provide similar 

statements? 

The responses in this important matter leave factual holes which should have been 

investigated to determine whether there was coordination. We would not ask these 

questions simply because the Wylys made huge outlays for ads comparing opposing 

presidential candidates. A truly independent expenditure involves “core First 

Amendment expression.” Bucklqr, 424 U.S. at 48. We would have asked these questions 

because this matter involves an authorized fundraiser for a campaign who made an 

expenditure in support of that campaign and there are partly unrefuted allegations as to 

whether those expenditures were truly independent. We believe the Commission should 

have found reason to believe and investigated this matter, as our colleagues have insisted 

upon in other matters with far less evidence. 

111. 

The Act and Commission regulations provide that whenever any person makes an 

expenditure to finance communications expressly advocating the election or defeat of a 

broadcasting station) or through “any other type of general public political advertising,” 

the communication is required to include a statement of sponsorship or disclaimer. 

2 U.S.C. 6 441d, 1 1 C.F.R. 0 1 10.1 1. The disclaimer must state clearly whether the 

communication has been paid for by a candidate, or the candidate’s authorized political 

committee. If the communication is paid for by other persons but authorized by a 

candidate (including the candidate’s committee or its agents), the disclaimer shall clearly 

state that the communication is paid for by those other persons and authorized by the 

clearly identified candidate, .and does so through various. types of mass media (e.g., a . .. 

14 
.. -- 

candidate or the candidate’s committee. On the other hand, if the communication is not 

authorized by a candidate (including the candidate’s committee or its agents), the 

disclaimer shall clearly state the name of the person who paid for the communication and 

state that it is not authorized by any candidate or candidate’s committee. 2 U.S.C. 

0 441d; see 11 C.F.R. 05 110.1 l(a)(l) and 110.1 l(a)(5). 

After reviewing the applicable case law, the Commission’s regulations, the text of 

the advertisement, and the circumstances surrounding its broadcast, we believe the 

advertisement asks the general public to support and vote for a specific federal candidate. 

As a result, the advertisement should have informed the voting public who paid for the ad 

and whether it was authorized by any federal candidate. By not including such a 

disclaimer on the advertisement, we believe there is reason to believe respondents 

violated 6 441d. 

A. 

In creating the express advocacy standard in the context of independent 

communications, the Supreme Court in BucMey sought to draw a distinction between 

issue advocacy and partisan advocacy focused on a clearly identified candidate. The 

Buckley Court upheld as constitutional certain reporting requirements on expenditures 

made by individuals and groups that were ‘hot candidates or political committees,” 424 

U.S. at 80, but expressed concern these reporting provisions might be applied broadly to 

communications discussing public issues which also happened to be campaign issues. To 

ensure expenditures made for pure issue discussion would not be reportable under the 

Act, the Buckley Court construed these reporting requirements “to reach only hds used 

for communications that expressly admute the election or defeat of a clearly identified 

candidate.” Id. (emphasis added). 

As a result, the Buckley Court explained the purpose of the express advocacy 

standard was to limit application of the pertinent reporting provision to “spending that is 

unumbiguously related to the campaign of a particular federal candidate.” 424 U.S. at 80 

(emphasis added); see ulso 424 U.S. at 81 ( Under an express advocacy standard, the 

reporting requirements would “shed the light of publicity on spending that is 

unumbiguously cumpuign reluted. . . .”)(emphasis added). The Court, however, provided 

no definition of what constituted “spending that is unambiguously related to the campaign 

of a particular federal candidate” or ‘’unambiguously campaign related.” The Buckley 

Court only indicated that express advocacy would include communications containing 

such obvious campaign-related words or phrases as “‘vote for,’ ‘elect,’ ‘support,’ ‘cast 

your ballot for,’ ‘Smith for Congress,’ ‘vote against,’ ‘defw’ ‘reject.”’ 424 U.S. at 44 

n.52 and at 80 n. 108. 

In FEC v. MCFL, 479 U.S. 238 (1986)’ the Supreme Court clarified the scope of 

the express advocacy standard. The Court indicated a communication could be 

considered express advocacy even though it lacked the specific buzzwords or catch 

phrases listed as examples in Buckley. The Court explained that express advocacy could 
be “less direct” than the examples listed in BucMey so long as the “essential nature” of the 

communication “goes beyond issue discussion to express electoral advocacy.” 479 U.S. 

at 249. 

Similarly, in FEC v. Furgutch, 807’F.2d 857,863 (9th Cir.), cerf. denied, 484 

U.S. 850 (1987)(‘%i“gatch’’), the Ninth Circuit concluded a communication could 

constitute express advocacy even though it did not contain any of the catch phrases listed 

in Buckfey. The court noted the list in Buckley “does not exhaust the capacity of the 

English language to expressly advocate the election or defeat of a candidate.” 807 F.2d at 

863. The court found that “speech need not include any of the words listed in Buckfey to 

be express advocacy under the Act,” 807 F.2d at 864, and that “‘express advocacy’ is not 

strictly limited to communications using certain key phrases.” 807 F.2d at 862. The 

court indicated such a wooden and mechanical construction would invite and allow easy 

circumvention of the Act. Id. 

Rather than rely on the inclusion or exclusion of certain ”magic words” to 

determine whether a particular communication contained express advocacy, the Furgutch 

court concluded that for a communication ‘Yo be express advocacy under the Act . . . it 

must, when read us a whole, and with limited reference to external events, be susceptible 

of no other reasonable interpretation but as an exhortation to vote for or against a specific 

candidate.” 807 F.2d at 864 (emphasis added). In defining “express advocacy” under this 

standard, the court considered the following factors: 

First, even if it is not presented in the clearest, most explicit language, 

speech is “express” for present purposes if its message is unmistakable 

and unambiguous, suggestive of only one plausible meaning. Second, 

speech may only be termed “advocacy” if it presents a clear plea for 

action, and thus speech that is merely informative is not covered by the 

Act. Finally, it must be clear what action is advocated. Speech cannot 

be “express advocacy”. . . when reasonable minds could differ as to 

whether it encourages a vote for or against a candidate or encourages 

the reader to take some other kind of action. 

Id. . 

On October 5,1995, the Federal Election Commission promulgated a regulation 

designed ‘Yo provide mer guidance on what types of communications constitute 

express advocacy of clearly identified candidates.”’ The Commission promulgated this . . , . . . 

regulation only after a lengthy rulemaking proceeding in which the Commission received 

literally thousands of comments.* The new regulation, which has been codified at 

11 C.F.R. 8 100.22, provides: 

. ’ 60 Fed. Reg. 52,069 (1995). ’ 60 Fed. Reg. 35,292 (1995). I 

.I 

16 
Expressly advocating means any communication that- 

(a) Uses phrases such as “vote for the President,” “re-elect your 

Congressman,” “support the Democratic nominee,” “cast your ballot 

for the Republican challenger for U.S. Senate in Georgia,” “Smith for 

Congress,” “Bill McKay in ‘94,” “vote Pro-Life’’ or “vote Pro-choice” 

accompanied by a listing of clearly identified candidates described as 

Pro-Life or Pro-choice, “vote against Old Hickory,” “defeat” accompanied 

by a picture of one or more candidate(@, “reject the incumbent,” or 

communications of campaign slogan(,) or individual word($ which in 

context can have no other reasonable meaning than to urge the election or 

defeat of one or more clearly identified candidate(s), such as posters, 

bumper stickers, advertisements, etc. which say “Nixon’s the One,” 

“Carter ’76,” “Reagan/Bush” or “Mondale!”; or 

(b) When taken as a whole and with limited reference to external events, 

such as the proximity to the election, could only be interpreted by a 

reasonable person as containing advocacy of the election or defeat of 

one or more clearly identifed candidate(s) because- 

. (1) The electoral portion’of the communication is unmistakable, 

unambiguous, and suggestive of only one meaning; and 

(2) Reasonable minds could not differ as to whether it encourages 

actions to elect or defeat one or more clearly identified candidate@) 

or encourages some other kind of action. 

1 1 C.F.R. 6 100.22 (emphasis added). In the Explanation and Justification to the 

regulation, the Commission stated that subsection (b) of the regulation reflected the 

analysis of Buckley ’s express advocacy requirement articulated by the Ninth Circuit in 

FEC v. Furgatch? The Commission transmitted these regulations to Congress,” and 

afier thirty days passed without any resolution disapproving the express advocacy rules, 

the Commission implemented the regulation. 

B. 

We have no doubt the advertisements at issue here satis@ the tests for express 

advocacy laid out at both 11 C.F.R. 0 100.22(a) arid 100.22(b). With respect to 

6 100.22(a), the advertikments quite clearly state a campaign slogan: “Governor Bush. 

Leading . . . so each day dawns brighter.” Obviously, this constitutes the “communication 

of campaign slogan(s) . . .which in context can have no other reasonable meaning than to 

urge the election or defeat of one or more clearly identified candidates.” 1 1 C.F.R. 

6 100.22(a). We ck see little difference between this slogan and other slogans described 

as express advocacy in the regulation such as “Nixon’s the One,” “Carter’76,” 

See 60 Fed. Reg. 35,292,35,295 (1995) discussing 807 F.2d 857, cerr. denied, 484 U.S. 850 (1987). 

lo See 2 U.S.C. §438(d). ,I .. 17 
“Reagan/Bush” or “Mondale!”. Id. Because the advertisements contain a campaign 

slogan, we believe they constitute express advocacy. 

The Office of General Counsel Report disagrees and maintains that “[tlhe 

Commission’s references to ‘Nixon’s the One’ and ‘Mondale!’ are examples of slogans 

that may appear on ‘posters, bumper stickers, advertisements, etc.’ -situations where the 

phrase stands alone.” General Counsel’s Report at 2 1. Significantly, the Report does not 

dispute that the slogan “Governor Bush. Leading. . . so each day dawns brighter.” would 

constitute express advocacy if it were on “posters, bumper stickers, advertisements, etc.” 

Rather, the Report only contends that because the slogan was part of a larger message, 

and not on “posters, bumper stickers, advertisements, etc.,” it cannot constitute express 

advocacy. 

We do not think a finding of express advocacy should be changed simply because 

it is part of a larger advertisement that does contain some issue discussion. In FEC u. 

MCFL, supra, the Supreme Court recognized a communication might well contain both 

issue discussion and express advocacy. The Court found, however, the MCFL newsletter 

“cannot be regarded a mere discussion of public issues that by their nature raise the 

names of certain politicians” and that it went “beyond issue discussion to express 

advocacy.” 479 U.S. at 249. Similarly, even though the BushlMcCain advertisements 

contained both issue discussion and express advocacy, the advertisements went “beyond 

issue discussion to express advocacy.” Id. 

In light of FEC v. MCFL, supra, we think the Report reads the regulation far too 

nmwly. In our view, the regulation does not say that express advocacy language on a 

poster becomes issue discussion if found in a television advertisement. Indeed, the 

regulation itself broadly contemplates the use of a slogan “which in context could have no 

other meaning than to urge the election or defeat of one or more clearly identified 

candidate(s)” using “posters, bumper stickers, advertisements, etc.” 1 1 C.F.R. 

0 lOO.Z2(a)(emphasis added). This language envisions the use of a slogan in “the 

context” of a larger communication. In fact, the regulation specifically refers to 

“advertisements” which would include the television advertisements at issue here. 

This reading of the regulation is consistent with the Act which does not draw the 

poster/media advertisement distinction claimed by the Report. Indeed, the 6 441 d 

disclaimer provision itself speaks broadly in terms of: 

financing communications expressly advocating the election or defeat 

of a cle&lyidentified candidate, or solicits any contribution through 

any broadcasting station, newspaper, magazine, outdoor advertising 

facility, direct mailing, or any other type of general public political 

advertising.. . . 

2 U.S.C. 0 441d (emphasis added). There is no distinction in 0 441d between express 

advocacy on a poster as opposed to express ‘advocacy through a broadcast station. Nor 
. ..

 

LL 

should there be. It makes no sense to say, for example, that a television advertisement 

praising Richard Nixon the wtek ofthe election and concluding with the words “Nixon’s 

the One” is not express advocacy. If express advocacy is present in a communication, it 

cannot somehow be magically diluted and lose its express advocacy identity simply 

because it is part of a larger message shown on a television station. Accordingly, we 

would find that the advertisements constituted express advocacy under 0 100.22(a). 

Not only do the advertisements at issue satis@ 9100.22(a), but we also believe 

that the advertisements, “[wlhen taken as a whole and with limited reference to external 

events, such as the proximity to the election, could only be interpreted by a reasonable 

person as containing advocacy of the election or defeat of one or more clearly identified 

candidate@).” 1 1 C.F.R. 6 100.22(b). In particular, “[tlhe electoral portion of the 

communication is unmistakable, unambiguous, and suggestive of only one meaning.” Id. 

First, the advertisements are addressed only to “Republicans” who were about to vote in 

three primary states, e.g., ‘New York Republicans care about clean air.” Attachment to 

Complaint. The ads were not addressed to the general public, e.g., ‘New Yorkers care 

about clean air.” Nor were the ads run in states that were not about to have a party 

primary; rather, they were run only in the Republican primary states of California, New 

York, and Ohio. In addition, the only two individuals mentioned in the advertisements 

just so happened to be the two leading candidates for President in the Republican 

primary-senator John McCain and Governor George W. Bush. No other oficeholders 

or political leaders were mentioned. 

Against this election related backdrop, the advertisements provided a head-tohead comparison of the opposing candidates and clearly indicated which candidate was 

favored and which candidate was not. For example, the picture of Senator McCain 

superimposed over smokestacks belching dirty air with the words “McCain voted against 

clean energf‘ stands in stark contrast to the picture of Governor Bush superimposed over 

verdant, green fields with the words “Bush signed clean air laws.” AM having bashed 

Senator McCain and praised Governor Bush, the advertisements urged “New York 

Republicans” to “[llet Bush & McCain know you back clean energy.” Just as the 

Fuqutch court found that the phrase “Don’t let him do it” in a newspaF ad criticizing 

President Carter referred to action at the ballot box, so too it’s clear that “New York 

Republicans” were being urged to let Governor Bush and Senator McCain “know you 

back clean energy” in the voting booth. Interestingly, the advertisements did not provide 

an address and urge, for example, that viewers ‘’write Senator McCain and Governor 

Bush Wax” nor did the advertisements provide a phone number and say ”please call 

Senator McCain and Govexnor Bush today;” nor, for that matter, did the advertisements 

urge the passage or defeat of any specific piece of legislation at either the state or federal 

level. In view of these considerations, we believe “reasonable minds could not differ as 

to whether it encourages actions to elect or defeat one or more clearly identified 

candidate(s) or encourages some other kind of action.” 1 1 C.F.R. 5 100.22@)(2); 

cf: United Stutes v. Lewis Food Co., 366 F.2d 710,712 (9” Cir. 1966) (“The ‘Notice to 

Voters’ was not intended to give an objective report on the voting record of public office 

19 
holders . . . [but] makes it plain that, infthe spender’s] opinion, those ofice holders who 

are given low ratings on their votes . . . should not be reelected.”) 

As in Furgatch, “our conclusion is reinforced by consideration of the timing” of 

the advertisement. 807 F.2d at 865. In Furgatch, the court noted the newspaper ad 

criticizing President Carter failed “to state expressly the precise action called for, leaving 

an obvious blank that the reader is compelled to fill in.” Id. The court went on to find, 

however, the advertisement constituted express advocacy partly because “[tliming the 

appearance of the advertisement less than a week 6efore the election left no doubt of the 

action proposed.” Id. (emphasis added). 

As in Furgatch, the Wyly brothers started running their advertisement less than 

one week before the election. Moreover, apparently as soon as the election was over, they 

stopped running the advertisements. We believe that here, as in Furgatch, the timing of 

the advertisements leaves “no doubt ofthe action proposed.” Id. (emphasis added). In 

view of their “proximity to the election” 11 C.F.R. Q 100.22(b) and content, the 

advertisements conveyed a message to the voting public that unmistakably urged the 

election or defeat of clearly identified candidates. Accordingly, we concluded. that the 

advertisement constituted express advocacy and that the Wyly brothers hiled to include a 

disclaimer disclosing who paid for the ad and whether it was authorized by any candidate. 

. 

When Congress enacted the Q 441d disclaimer provision only months after 

Buckley was decided, Congress explained that Q 441d was “designed to provide 

additional infbnnation to the voting pubfic.” H. R. Rep. No. 94-91 7, at 5 (1 976). 

Similarly, Representative Brademas summarized Q 441d this way: “I believe these ‘truth 

in advertising’ requirements for independent expenditures will help both prevent sharp 

practices and further reduce the compting influences of big money in federal elections.” 

122 Cong. Rec. H3782 (daily ed. May 3,1976)(statement of Rep. Brademas). In MUR 

4982, however, our colleagues tossed aside these compelling governmental interests 

thereby encouraging the anonymity of those pushing sham issue ads on the voting public 

the week before an important election. We disagree and believe Congress intended 

6 44ld to prevent exactly the sort of “sharp practices” apparently at issue in this matter. 

Our concerns with the result here, however, lie not only with this matter, but also 

with future cases. For example, under the Act,.corporations and labor organizations may. 

not make contributions or expenditures from their treasury funds in connection with 

federal campaigns. 2 U.S.C. 6 441 b. In FEC v. MCFL, supra, the Supreme Court 

interpreted Q 441b to meanexpenditures for communications nnt coordinated with a . , . ., . . 

candidate’s campaign must constitute “express advocacy” to be subject to the Q 44lb 

prohibition. As a result of FEC v. MCFL, independent corporate or labor union 

communications that do not contain express advocacy are allowed under the Act. 

To find there is no express advocacy in ads such as those at issue here would 

create a huge loophole in the Act. Corporations, labor organizations, even outside foreign 

national interests, would be allowed to spend unlimited sums of soft money on 

20 
.. 

advertisements that unambiguously advocate the election or defeat of federal candidates. 

By finding these ads did not constitute express advocacy, our colleagues would have to 

conclude the Wylys could have used corporate or foreign money to pay for ads the week 

before Super Tuesday. We cannot believe Congress ever intended to allow such an 

unusual result. 

1 

Unfortunately, the current matter is not the first time our colleagues have voted 

against finding express advocacy in even the most obvious advocacy communications. 

For example, in MUR 4922, the Suburban O’Hare Commission ("Sot"') put out a 

communication urging voters to vote on election day, argued it was essential to have an 

oflicial who supported SOC’s position on the issue of airport expansion, and then 

identified that ofIicia1 as Henry Hyde. In FEC v. MCFL, the United States Supreme 

Court made clear that a communication urging voters to support candidates who agreed 

with a certain position, and then identifjrlng those candidates by name, constituted 

express advocacy. This is exactly what happened in MUR 4922. 

Indeed, our colleagues apparently have concluded that so long as an advertisement 

avoids certain “magic words” such as “vote against” or “defeat,” the advertisement 

should be considered mere “issue discussion.” Yet, as a recent study by the Brennan 

Center concluded: “The magic words standard that some use to distinguish express 

advocacy hm issue advocacy has no relation to the reality of political advertising.” 

Buying time 2000: Television Advertising in the 2000 Federal Elections, Executive 

Summary at 13 (Brennan Center 2001). After an exhaustive review of political 

advertising during the 2000 election, the study found: 

None of the players in political advertisinvandid, parties, or 

groups-employ magic words such as “vote for,” “vote against,” 

“elect” or anything comparable with much frequency in their ads. 

Only 100! of candidates ads ever used magic words, and as few as 2% 

of party and groups ads used magic words. 

Id. Obviously, the “magic words” test places the vast majority of canipaign advertising 

outside the reporting provisions and prohibitions of the Act. 

To make matters worse, some now argue that even with the most clear-cut 

evidence of coordination (for example, a “smoking gun” memorandum establishing the 

Bush campaign prepared the Wyly brothers ads and asked the brothers to run the ads the 

week before “Super Tuesday”), a contribution does not exist unless the ad contains 

express advocacy. See Statement for the Record of Commissioner Bradley A. Smith, 

MUR 4624 at 5 (November 6,2001)(“1 believe that the Act, the Constitution, judicial 

precedent, and sound public policy require us to limit our enforcement to cases in which 

communications, whether or not coordinated with a candidate, expressly advocate the 

21 
election or defeat of candidates for federal office.")" Under this approach, the Wylys 

could have blly coordinated the ads with the Bush campaign and paid for them with 

corporate or even foreign national money because they did not contain express advocacy. 

Such a far-fetched view of coordinated expenditures would foster the very worst abuses 

Congress has tried to prevent. 

Iv. 

This matter also raises the issue of whether the Republicans for Clean Air failed to 

register and report as a ''political committee." The Act defines a "political committee" as 

"any committee, club, association, or other group of persons which receives contributions 

aggregating in excess of $1,000 during a calendar year or which makes expenditures 

aggregating in excess of $1,000 during a calendar year." 2 U.S.C. 0 431(4). In 

construing this statutory tm, the Supreme Court has held that an organization is not a 

political committee unless, in addition to crossing the $1,000 statutory threshold of 

federal contributions orexpenditures, the organization is under the control of a candidate 

or its majorpurpose is the nomination or election of candidates or campaign activity.'* 

Thus, once an organization has received more than $1,000 in contributions or made more 

then $1,000 in expenditures and has met the major purpose test, it becomes a political 

committee pursuant to 6 43 1. Any organization that qualifies as B political committee 

must register with the Commission and file periodic reports of all its federal election 

I' This approach is wrong. The Supreme Court in Buckley could not have been any cleam that its "express 

advocacy" test did not apply to coordinated aqknditures. When analyzing fonncr 18 U.S.C. 5 608(e), the 

independent expenditure limit struck down in Buckley, the Court plainly stat& 

The parties defding 5 608(e)( 1) contend that it is necusary to pmmt would-be 

contributors &om avoiding the contribution limitations by the simple mpcdient ofpuying 

directly for media advertirements or for other portions of the candidate's campaign 

activitits. They argue that expenditures controlled by or coordinated with the candidate and 

his campaign might well have virtually the sa= value to the candidate as a contribution and 

would pose similar dangers of abuse. Yet such conhvlled or coordinated expenditures are 

treated os contributions rather than expenditures undcr the Act. [fwmote omitted]. Section 

608@)'s conbibution ceilings . . . prevent attempts to circumvent the Act through 

prearranged or coordinated expendinues amounting to disguised contributions. By conat, 

J 6oS(e)(l) limits irrpenditures for express advocacy of candidates made totally 

independently of the candidate and his campaign. 

424 US. at 46,47 (emphasis added). See also Buckley at 78-80 (defming coordinated expenditures as 

"contributions" and defining noncoordinated "expenditures" covered by former 2 U.S.C. 5434(e) to reach 

only codcations conmhhg express advocacy.). '* In BucUqy v. Valw, 424 U.S. 1,79 (1976)(~mphasis added), the Court statd "To hlfill the purposes of 

the Act [the term 'political conrmirtee'] nced.anly encompass organizations that are undcr the control of a 

candidate or the major purpose of which is the nomination or election of a candidate." The Court 

rcaffi this approach in FEC v. MCFL, 479 U.S. at 252, n.6 "[Aln entity subject to regulation as a 

'political committee' under the Act is om that is either 'under the control of a candidate or the major 

plupose of which is the nomination or election of a candidate."' The Court observed that "should [an 

organization's] independent spending become so extensive that the orgpnization's major purpose may be 

regarded as campaign activity, the [organization] would be classified as a political committee." 479 U.S. at 

262 (emphasis added). 

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receipts and disbursements for disclosure to the public. 2 U.S.C. 96 433 and 434. A 

political committee is subject to limits when making expenditures in coordination with a 

candidate, but may make unlimited expenditures on behalf of a candidate if no 

coordination is involved. 2 U.S.C. 00 441a(a)(l)(A), (2)(A) and (7)(B). Persons 

contributing to a political committee are subject to the limits and prohibitions of the Act. 

2 U.S.C. 00 441a(a)(l)(C), (2)(C); 441b. 

i ’ 

a+- * 

. . .- 

We voted to find reason to believe that Republicans for Clean Air violated 

2 U.S.C. 00 433 and 434 by failing to register as a political committee. There is no 

indication that Republicans for Clean Air was formed for any purpose other than to 

support or oppose certain candidates. For example, there is nothing to suggest that 

Republicans for Clean Air engaged in lobbying members of Congress or issue discussion 

outside the context of the Republican “Super Tuesday primaries. Since Republicans for 

Clean Air apparently spent all of its money on advertisements designed to influence 

elections, there is evidence that the organization’s sole purpose, let alone ”major 

purpose,” was the election or defeat of candidates or campaign activity. As noted, 

Republicans for Clean Air spent well in excess of S1,OOO on expenditures that may have 

constituted contributions. 

On the basis of the available facts, the Commission at leut should have been 

willing to investigate this aspect of the case. If Republicans for Clean Air was a 

“political committee,” it should have been playing by the applicable rules. Our 

colleagues’ vote will leave this wholly unresolved. 

V. 

We believe Congress intended the Federal Election Commission to act as an 

enforcement-minded agency, ready to investigate serious allegations of statutory 

violations. In its final report, the Senate Watergate Committee recommended that “the 

Congress enact legislation to establish an independent, nonpartisan Federal Election 

Commission.” S. Rep. No. 981,93d Cong., 2d Sess. 564 (1974). As the Committee 

explained: 

Probably the most significant dorm that could emerge hm the 

Watergate scandal is the creation of an independent nonpartisan 

agency to supervise the enforcement of the laws relating to the conduct 

of elections. Such a body-given substantial investigatory and 

enforcement pow-ould not only help insure that misconduct 

would be prevented in the future, but the investigations of alleged 

wrongdoing would be vigorous and conducted with the confidence of 

the public. 

Id. (emphasis added). In response, Congress in 1974 amended the Federal Election 

Campaign Act and created the Federal Election Commission. 

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House comments on the conference bill creating the Commission revealed a 

consensus that the legislation provided for a “strong independent commission to dorce 

provisions of this act.” 120 Cong. Rec. 35,135 (1 974)(remarla of Rep. Armstrong). As 

summarized by Representative Frenzel, “[tlhe establishment of an independent 

Commission is the key provision in the bill. It will assure judicious, expeditious 

enfbrcement of the law, while reversing the long history of nonenforcement.” Zd. 

(remarks of Rep. Frenzel). Similarly, the Senate sought to create a Commission which 

would vigorously enforce federal election laws. In the words of Senate Minority Leader 

Hugh Scott, “[wle urge the committee to resist efforts that would reconstitute the 

Commission but would strip it of some or all of its investigative and enforcement powers. 

The restoration ofpublic confidence in the election process requires an active watchdog 

in this area, not a toothless lapdog.” Federal Election Campaign Act Amendments, 

1976: Hearings on S. 291 1, et al., Subcommittee on Privileges and Elections of the 

Senate Committee on Rules and Administration, 94& Cong., 2d Sess. 69 (Statement of 

Sen. Scott)(emphasis added). 

The Commission ignores its congressional mandate when it fails to investigate 

serious allegations such as those presented in MUR 4982. Because there were not four 

votes to proceed with an investigation, there remain a number of unanswered questions 

and allegations regarding the expenditures made by the Wyly brothers just prior to the 

Super Tuesday primaries. While some of the allegations, such as coordination with the 

Bush campaign, might not have proven to be violations, the potential for a serious breach 

was evident. It is important for FEC commissioners to enforce the law and not 

undermine it. We believe our colleagues should have investigated and not summarily 

dismissed this important matter. 

Date S&tt E. Thomas 

Commissioner 

Commissioner 

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