. f .’ 

1. ’ 

FEDERAL ELECTION COMMISSION 

Washington, DC 20463 

MEMORANDUM 

TO: Commissioners 

General Counsel Norton 

Staff Director Pehrkon \. 

FROM: Office of the Commission Secretary 

DATE: December 19,2001 

SUBJECT: Statement of Reasons for MUR 4994 

Attached is a copy of the Statement of Reasons for MUR 4994 signed 

by Commissioner Scott E. Thomas. This was received in 

the Commission Secretary’s Office on Wednesday, 

December 19.2001 at 12:40 nm. 

cc: Vincent J. Convery, Jr. 

OGC Docket 

Press Office 

Public Information 

Public Records 

Attachments 
es 

h 

CLi 

M 

FEDERAL ELECTION COMMISSION 

WASHINGTON, O.C. 20463 

In the Matter of 

Ashcroft Victory Committee and 

D. Jan McBride, as treasurer; 

Missouri Republican State Committee and 

Harvey M. Tettlebaum, as treasurer; 

Stabenow for U.S. Senate and 

Angela M. Antera, as treasurer 

Michigan Democratic State Central Committee and 

Roger Winkleman, as treasurer; 1. 

Michigan Senate 2000 and 

James P. Fox, as treasurer; 1 

Santorum Victory Committee 1 

and D. Jan McBride, as treasurer; 1 

Friends of Giuliani Exploratory Committee and 1 

John H. Gross, as treasurer; 1 

Giuliani Victory Committee and 

D. Jan McBride, as treasurer; 

New York Republican Federal Campaign 

Committee and Michael Avella, as treasurer; 

National Republican Senatorial Committee 

and Stan Huckaby, as treasurer; 

New York Senate 2000 and 

Andrew Grossman, as treasurer; 

Hillary Rodham Clinton for U.S. 

Senate Committee, Inc. and William J. 

Cunningham, 111, as treasurer; 

New York State Democratic Committee and 

David Alpert, as treasurer; ) 

New York Democratic Victory 2000 and 

Andrew Tobias, as treasurer; 1 

Democratic Senatorial Campaign Committee and 

James P. Fox, as treasurer 1 

1 

) 

1 

MUR 4994 

STATEMENT OF REASONS 

COMMISSIONER SCOTT E. THOMAS 
STATEMENT OF REASONS 

IN MUR 4994 

COMMISSIONER SCOTT E. THOMAS 

Those who believe in the campaign finance restrictions passed by Congress and in 

the rule of law should look closely at this matter. The Federal Election Commission 

(“FEC” or “Commission”) used to treat party ads like those involved in this case as 

contributions or coordinated expenditures subject to limits and ‘hard money’ sourcing. 

Beginning with 1999 decisions involving a Montana Senate race and the audits of the 

Clinton and Dole presidential campaigns, certain commissioners began to resist the 

FEC’s precedents. This was compounded when those commissioners repealed portions 

of the FEC’s regulations defining coordination and provided no new guidance for party 

ads. The result has been complete chaos. A string of split votes litters the landscape. 

. 

As a result, at the time the activity in question was occurring, the parties and 

candidates could not have had a clear picture of whether their plans would be treated as a 

violation of the coordinated expenditure limits. Nonetheless, relying on the language of 

the statute and consistent with prior cases, the Office of General Counsel laid out a 

plausible legal theory for finding reason to believe violations had occurred. 

Commissioner McDonald and I voted to approve such findings with the understanding 

that the best course of action thereafter would be to take no further action and close the 

issue- clearly designed to influence a particular election-- must count against the parties’ 

coordinated expenditure limits if coordination is proven. At the same time, it would have 

recognized the mangled state.of the law at the time the respondents acted, and would have 

avoided any unfair punishment. 

file. This would have established henceforth the legal principle that ads like those at .. 

Looking towards the 2002 election cycle of party activity, our approach would 

have sent word that there once again is a majority at this agency that will apply the law as 

it was intended. Four of our colleagues voted against this approach. With the 2002 

election less than a year away, it appears that once again the Commission may stand idly 

by while millions of dollars in soft money will be raised and spent on candidatespecific 

candidate ads. 

I. 

The Federal Election Campaign Act (“FECA” or “the Act”) limits the 

contributions that may be made by political party committees to or on behalf of 

candidates for federal office. For the most part, such contributions are limited to $5,000 

per election. See 2 U.S.C. 0 441a(a)(2)(A). For Senate races, the national party and its 

senatorial committee counterpart share an overall $17,500 limit for the election cycle. 

See 2 U.S.C. 6 441a(h). 

2 
r --. 

\. 

P 

0I 

h 

M 

E 

8 

9 

P 

M 

M 

m 

Apart fbm the contribution allowances, the Act pennits the national and state 

committees of the political parties to make so-called coordinated expenditures in 

connection with the general election campaigns of the parties’ candidates. See 2 U.S.C. 

0 kla(d); 11 C.F.R. 0 110.7. The dollar limitations on coordinated party expenditures 

are determined by a set fonnula.’ National party committees in the 2000 election cycle 

could make coordinated expenditures of up to $274,902 in Missouri, $493,391 in 

Michigan, and $929,355 in New York for a United States Senate candidate. The state 

party also could spend a like amount on party coordinated expenditures? 

Taken together, the state party’s contribution and coordinated expenditure 

allowances, and the national party’s contribution and coordinated’expenditure allowances 

provide a healthy role for the party structure. When the combined limits are exceeded by 

a party committee, the additional amounts are treated as excessive contributions. This 

stems hm the language of 2 U.S.C. 0 441a(a)(7)(B)(i) which treats any expenditure 

made “in cooperation, consultation, or concert with, or at the request or suggestion of, a 

candidate, his authorized political committees , or their agents” as a contribution. Once 

the special (“Notwithstanding any other provision of law”) coordinated expenditure 

allowance of §441a(d) is used, the contribuion limits apply. 

The Act also requires that political party committees report all contributions or 

coordinated expenditures made under 0 441a(a), (d) and (h) to aid in monitoring 

adherence with these limits. 2 U.S.C. 0 434(b)(6)@). Candidate committees must report 

the receipt of contributions, but not allowable party coordinated expenditks. 2 U.S.C. 

0 434(b)(3)(B); see also FEC Campaign Guide for Congressional Candidates and 

Committees (1 996), p.22. 

Finally, political committees that make expenditures “in connection with both 

federal and non-federal elections” either must establish separate federal and non-federal 

accounts, or set up a single account which receives only contributions subject to the 

’ Section 44 1 a(d) provides in pertinent part: 

(1) Notwithstanding any other provision of law with respect to limitations on 

expenditures or limitations on contributions. . . (3) The national committee of a political party, or a State committee of a political 

party, including any subordinate committee of a State committee, may not make 

any expenditure in connection with the general election campaign of a candidate 

for Federal office in a State who is afliliated with such party which exceeds- 

(A) in the case of a candidate for election to the ofice of Senator, or ’ 

of Representative hm a State which is entitled to only one Representative, 

the greater of- 

(i) 2 cents multiplied by the voting age population of the State (as certified 

under subsection (e) of this section); or 

(ii) $20,000. . . . 

* FEC Record at 14-15 (March, 2000). As is often the practice of both major parties, the congressional 

campaign committee of the party could be authorized by the national and state party committees to expend 

their respective Q 44 1 a(d)(3) allowance on their behalf. See FEC v. Democratic Senatorial Campaign 

Commirtee, 454 U.S. 27 (1981)rFEC v. DSCC‘). 

3 
I 

f 

0 

E 

limitations and prohibitions of the Act. 11 C.F.R. 0 102.5. If separate federal and nonfederal accounts are established, all expenditures made in connection with federal 

elections must be made hm the federal account, and only hds subject to the limitations 

and prohibitions of the Act may be used. 11 C.F.R. 0 1025(a)(l)(i). 

On April 4,2000, Common Cause and Democracy 21 filed ajoint complaint with 

the Federal Election Commission alleging that a number of political committees had 

violated various provisions of the Act. In particular, the complaint alleged “ongoing 

violations of the federal election laws committed by both major party Senate candidates 

in New York and their political party committees.” Complaint at 1. The complaint 

further alleged “[t]hese violations are likely to continue throughout the 2000 election, and 

similar violations are likely to occur in other Democratic and Republican Senate 

campaigns as well.” Id. 

The complaint charged: 

Respondents are each engaged in a concerted scheme to raise and spend 

soft money for the purpose of influencing federal elections in violation of 

2 U.S.C. 441% which provides for limits on contributions that may be used 

for the purpose of influencing federal elections, and 2 U.S.C. 441b, which 

prohibits the use of corporate and treasury hds in connection with federal 

elections. 

Complaint at 3. The complaint explained that respondents were involved in a 

scheme [which] involves agreements or understandings among the participants 

that the Senate candidate will solicit and raise soft money to be used in his or 

her race, and that the candidate’s national party campaign committee, or the 

candidate’s state party, will spend these .federally illegal contributions on 

television advertising and other campaign activities to promote the Senate 

candidate or attack the candidate’s opponent. 

This concerted scheme amounts to an organized and systematic effort by federal 

candidates, through so-called ‘soint hdraising” committees, to inject ‘‘soft 

money”-funds that do not comply with the contribution limits and source 

prohibitions of federal law-directly into their 2000 Senate elections. Under this 

scheme, federal candidates are and will be systematically raising soft money 

directly for their own campaigns, and using their national and state party 

committees as pass-through conduits to launder the money into their federal 

campaigns. Thus, in essence, this scheme is being used, and will be used, by 

Senate candidates to raise and spend federally illegal soft money on their federal 

campaigns. 

Id. at 2. 

4 
,--.. 

!. 1 

On September 1 1,2001, the OfTice of General Counsel. submitted a report for 

Commission consideration which contained a factual and legal analysis of the allegations 

presented in MUR 4994. The report concluded that three senatorial campaigns 

coordinated certain party expenditures made on their behalf. In Missouri, the report 

stated the Missouri Republican State Committee (“MRSC”) “appears to have made 

expenditures of both federal and non-federal funds for a television advertisement that 

clearly identified both its nominee, Senator Ashcroft, and his opponent, Governor 

Callahan, and that was intended at least in part to influence the Senate election in 

Missouri.” General Counsel’s Report at 46. Finding that “[a] vendor common to both 

Ashcroft 2000 and the MRSC apparently participated in creating the advertisement,” the 

report concluded: 

This fact combines with the apparent flow of money hm [the Ashcroft Victory 

Committee] through the NRSC and the MRSC to the same vendor at roughly the 

same time as the broadcasting of the advertisement to provide reason to believe 

that Ashcrof) 2000 and the MRSC coordinated the advertisement. Thus, it appears 

that the MRSC’s expenditures for the advertisement may have constituted 

coordinated party expenditures on behalf of the Ashcroft campaign. 

Id. (emphasis added). 

Similarly, the report concluded that expenditures for an advertisement in 

Michigan may have constituted coordinated party expenditures on behalf of the Stabenow 

campaign. The report pointed out that the Michigan Democratic State Central Committee 

(“MDSCC“) and the Stabenow campaign ran advertisements during that same time frame 

which featured “the same family, the Lukers; the same issue, managed care; and, most 

importantly, virtually identical language.” General Counsel’s Report at 36.’ The report 

found that “[tlhese similarities raise questions as to whether the Stabenow committee and 

the Michigan Democratic State Central Committee cooperated or consulted with each 

other in the development of MDSCC’s ‘Last days’ ad.” Id. The report mer found that 

the funding relationships between the Stabenow committee, Michigan Senate 2000, the 

Democratic Senatorial Campaign Committee and the MDSCC “potentially plac[ed] 

Stabenow in the position of a ‘joint venturq’ who raises some of the’capital for the 

venture.” Id. at 37. 

Finally, the report stated the New York State Democratic Committee (“NYSDC’) 

“in 1999 and 2000 made expenditures of both federal and non-federal funds for at least 

two television advertisements that clearly identified federal candidates and that were 

intended to influence the 2000 election for the U.S. Senate in the State of New York.” 

General Counsel’s Report at 27. The report found “[tlhere is evidence that the NYSDC 

may have coordinated these advertisements with Clinton for Senate.” Id. In particular, 

the report relied upon press statements that “there was an apparent sharing of film by the 

[Clinton] campaign’s media advisor with the NYSDC, as well as possible fml script 

approval by the Clinton campaign, plus more general discussion between the state party 

5 
~ .’ .. 

1 ‘I 

,- . . 

iI 

N 

P 

h 

M 

and the campaign about the party’s planned advertising.” Gend Counsel’s Report at 

16. Additionally, the report stated: 

circumstantial evidence that NYSDC and Clinton for Senate may have 

coordinated [advertising] is to be found in the combination of the participation 

of the candidate committee’in New York Senate 2000, Senator Clinton’s active 

involvement in the raising of funds by the joint fundraising committee, and the 

timing and amounts of the transfers of funds hm the DSCC to the NYSDC 

in relationship to the latter committee’s expenditures for the November television 

advertisement featuring Senator Clinton.” 

Id., see also General Counsel’s Report at 20-2 1. 

Based upon the foregoing evidence, the report recommended the Commission find 

reason to believe that: 

(1) the New York State Democratic Committee and David Alpert, as treasurer, 

violated 2 U.S.C. 88 434(b), 441a(a), 441a(f), and 441b(a), and 11 C.F.R. 6 102.5; 

(2) Hillary Rodham Clinton for U.S. Senate Committee, Inc. and William J. 

Cunningham, III as treasurer, violated 2 U.S.C. 88 434(b), 441a(f) and 441b(a); 

(3) the Democratic Senatorial Campaign Committee and James M. Jordan, as 

treasurer, violated 2 U.S.C. 85 434(b), 441a(f), 441a(h), and 441b(a), and 

11 C.F.R. 5 102.5; 

(4) the Michigan Democratic State Central Committee/Federal Account and Roger 

Winkleman, as treasurer, violated 2 U.S.C. 88 434(b), 441a(a), and 441a(f), and 

11 C.F.R. 8102.5; 

(5) Stabenow for U.S. Senate and Angela M. Aut- as treasurer, violated 2 U.S.C. 

(6) the Missouri Republican State Corninittee and Harvey M. Tettlebaum, as 

treasurer, violated 2 U.S.C. 88 434(b), 441a(a), 441a(f), and 441b(a), and 

11 C.F.R. 102.5; 

(7) Ashcroft 2000 and Garrett M. Lott, as treasurer, violated 2 U.S.C. 08 434(b), 

441a(f) and 441b(a); and 

(8) the National Republican Senatorial Committee and Stan Huckaby, as treasurer, 

violated 2 U.S.C. 88 434(b), 441a(f), 441a(h), and 441b(a), and 11 C.F.R. 8 102.5. 

08 4340)) and 441a(f); 

A motion to adopt the Office of General Counsel’s recommendations but take no 

hrther action and close the case failed to secure the four afEmative votes needed: 

2 U.S.C. 5 437g(a)(2). Commissioners Thomas and McDonald sup orted the motion 

while Commissioners Mason, Sandstrom, Smith and Wold opposed. P The Commission 

Several Commissioners questioned whether it was appropriate for the Office of General Counsel to 

consider idomtion received or developed after the date the complaint was filed, such as evidence that 

certain ads indeed were run and paid hr, in part, with soft money. Section 437g(a)(2) of the stah~te states 

that the Commission may find “reason to believe that a person has commitad, or is abuf fo commir, a 

violation” of the Act. Id. (emphhasis added). This clearly indicates congressional intent to pennit 

6 
, -.. 

i) .. r -., 

l? 

then voted 5-1 to reject the Office of General Counsel’s ‘reason to believe’ 

recommendations! Finally, based on the preceding votes, the Commission voted 

unanimously to take no action with respect to these respondents and close the file? 

The central issue in MUR 4994 was whether party-paid television advertisements 

like those at issue, clearly intended to influence elections to the United States Senate and 

apparently coordinated with the parties’ nominees for United States Senator, constituted 

contributions or coordinated party expenditures subject to the limitations of 2 U.S.C. 

$0 441a(a), (d) and (h), and payable only with federally permissible firnds. 1 1 C.F.R. 

$ 102.5. 

The Office of Geneial Counsel concluded that state party andor national party 

committee expenditures may have constituted contributions or coordinated party 

expenditures in three states. In reaching this conclusion, the General Counsel’s Report 

presented considerable evidence regarding apparent coordination between party 

committees and candidate committees in Missouri, General Counsel’s Report at 42-48, 

Michigan, id. at 32-40, and New York, id. at 11-30. Based upon its findings, the Office 

of General Counsel recommended that the Commission find reason to believe 

respondents violated various provisions of the Act and that the Commission conduct an 

investigation of this matter primarily directed at proving coordination. 

I agreed with the Ofice of General Counsel’s ‘reason to believe’ 

recommendations regarding activity in the states of Missouri, Michigan and Nw York. 

In my view, the General Counsel’s Report presented facts indicating that the so-called 

“issue ads” in these states were intended to influence federal elections and may have been 

coordinated between political party committees and candidate committees. Findings in 

these matters would have provided political party committees and candidate committees 

in the regulated community with much-needed Commission guidance as to what 

constitutes party contributions or coordinated expenditures. 

complainants and the Commission to act based on the likelihood of a future violation, not just apparent past 

violations. Information received after a complaint was filed would certainly seem probative of whether a 

respondent was “about to commit” a violation of the Act when the complaint was filed. Id. Indeed, it 

would be most unusual for an enforcement entity to so tie its hands and ignore such informatioI+ 

particularly where tim has passed and shows, in fact, that what was alleged did take place. ‘ Commissioner McDonald apparently was willing to join in this vote because it corresponds to his votes in 

the various party spending cases that followed the calamitous actions of four of his colleagues in MUR 

4378 and the audits of the Clinton and Dole campaigns. See discussion infm. Having tried here to work a 

better solution for future enforcement, but failed, he apparently wanted to reflect that he is not willing to 

treat similarly situated respondents differently. 

The Commission unanimously accepted the Ofice of General Counsel’s recommendation to make no 

reason to believe findings against a number of other respondents. They included Rudolph Giuliani, the 

Friends of Giuliani Exploratory Committee and John H. Gross, as treasurer; the Giuliani Victory Committee 

and D. Jan McBride, as treasurer; the Santorurn Victory Committee and D. Jan McBride, as treasurer; and 

the New York Democratic Victory 2000 and Andrew Tobias, as treasurer. 

7 
..-. 

‘I 

0 

h 

M 

m 

8 

Although I supported the Office of General Counsel’s conclusions regarding 

‘reason to believe’ findings, I did not support the recommendation that the Commission 

conduct an investigation and possibly pursue penalties. Under the circumstances, I did 

not think it was fair to place such burdens on the respondents in this matter. As I discuss 

below, the elimination of prior Commission guidance and inconsistent Commission votes 

over what constitutes wordination in a party committee context make it wholly. 

inappropriate to punish this set of respondents. 

A. 

Not too long ago, the Commission had functional approaches in place for 

determining whether a particular communication constituted a party contribution or 

coordinated expenditure. These guideposts helped define the terms “expenditure” and 

“coordination” in this context. In so doing, they provided important guidance to the 

regulated community as to whether certain activity would be considered subject to the 

limitations and sourcing requirements of the Act. 

Under the Act, the term “expenditure,” as used regarding contributions 

(0 441a(a)(7)(B)(i)) or coordinated expenditures (0 441a(d)), is a payment, advance or 

gift of anything of value made “for the purpose of influencing any election for Federal 

office. 2 U.S.C. 0 43 l(9). For coordinated expenditures, the statute also requires the 

expense to be “in connection with the general election campaign” of a candidate for 

Federal office.” 2 U.S.C. 0 441a(d). Since 1985, the Commission had interpreted this 

stattitory language to apply whenever a communication both “( 1) depicted a clearly 

identified candidate and (2) conveyed an electioneering message.” Advisory Opinion 

1985- 14, Fed. Elec. Camp. Fin. Guide (CCH) fi 58 19 (“Electioneering messages include 

statements ‘designed to urge the public to elect a certain candidate or party,”’ quoting 

United States v. United Auto Works, 352 U.S. 567,587 (1957)). 

Through the years, the courts deferred to the approach established by the 

Commission in Advisory Opinion 1985-14. For example, in Democratic Congressional 

Campaign Committee v. FEC, 645 F.Supp. 169,175 (D.D.C. 1986), afd in part and 

remanded, 831 F.2d 113 1 @.C. Cir. 1987), Judge Sporkin stated: “I find that the NRCC 

mailer conveys an ‘electioneering message’ as defined by the FEC’s own advisory 

opinions and as interpreted by its General Counsel. Thus, the FEC’s dismissal of the 

plaintiffs complaint was contrary to law.” Similarly, in FEC v. Colorado Republican 

Federal Campaign Committee, 59 F.3d 1015, 1022 (10“ Cir. 1995), vacated on other 

grounds, 5 18 U.S. 604 (1 996), the Tenth Circuit exprkssly deferred to the Commission’s 

long-standing “construction of 0 441 a(d) as regulating political committee expenditures 

depicting a clearly identified candidate and conveying an electioneering message . . . .” 

The court stated: “Giving deference to the FEC’s interpretation, we hold that 9 441a(d)(3) 

applies to coordinated spending that involves a clearly identified candidate and an 

electioneering message, without regard to whether that message constitutes express 

advocacy.” Id. (emphasis added). Citing Advisory Opinion 1985-14, and quoting hm 

the Supreme Court’s decision in United States v. United Auto Workers, supra, the Tenth 

. 

8 
I-. 

1 .! i 

. .. 

!J 

a 

P 

h 

M 

b 

Circuit concluded that the Colorado Republican Party’s 1986 advertisements in 

opposition to then Senator Timothy Wirth‘s record “unquestionably contained an 

electioneering messuge.” 59 F.3d at 1023 (emphasis added). 

On June 24,1999, however, Commissioners Elliott, Mason, Sandstrom and Wold 

issued a statement rejecting the use of the “electioneering message” approach in the 

enforcement of party spending limits. In their opinion, the electioneering message 

concept was “both too vague and too broad to have a sufficiently definite meaning.” 

Statement of Reasons of Vice Chairman Wold and Commissioners Elliott, Mason, and 

Sandstrom on the Audits of “Dole for President Committee, Inc.” (Primary), 

“ClintodGore ’96 Primary Committee, hc.,” “DoltdKemp ’96, Inc.” (General), 

DoleKemp ‘96 Compliance Committee, Inc.” (General), “Clinton/Gore ’96 General 

Election Legal and Compliance Fund” at 2 (June 24,1999). In reaching this conclusion, 

my colleagues did not address those cases where the courts expressly relied upon the 

“electioneering message” analysis. Having applied it, the courts obviously did not 

conclude it was constitutionally flawed with vagueness problems. Substituting their 

constitutional judgment for that of the Article III courts, however, my colleagues 

concluded that “the phrase ‘electioneering message’ should not be used to describe the 

content of communications which the Commission would determine to be ‘for the 

purpose of influencing’ an election to Federal office.” Id. 

Having undermined the FEC’s approach for analyzing whether particular partypaid ads should be treated as “for the purpose of influencing” or “in connection. with” a 

federal election, my colleagues’ votes in particular cases were fixe to wander. In MUR 

4378, involving NRSC ads costing over $300,000, Commissioners Mason and Wold 

rationalized that the communications were “expressly lobbying.” See MUR 4378 

Statement of Reasons of Commissioners Wold, Elliott and Mason at 12 (Oct. 28, 1999). 

Yet the ads in question were typical campaign attack pieces. They accused Sen. Baucus 

of staying in Washington “for twenty-one long years,” accused him of raising taxes “by 

more than $2,600 per family,” and said, “Tell him it’s time to vote for term limits.” See 

MUR 4378 Statement of Reasons of Commissioners Thomas and McDonald (Aug. 10, .- 

1999), www.fec.szov/members/thomas. Related NRSC press releases and statements 

made abundantly clear the ads were to influence the Senate race. Id.‘ 

. A candidly-wordcd press release issued by the NRSC bluntly slated that it intended to target certain 

Democratic Senators with these negative campaign ads in connection with the 1996 Senate elections. 

Under the heading, “GOP SENATE CAMPAIGN COMMllTEE PREPARING TO USE CLINTON 

‘TAXED TOO MUC” COMMENT IN I996 SENATE RACES,“ John Heubusch, Executive Director of the 

NRSC, stated “[wle plan on letting wters know their Senator supported the Clinton tax increase and, that 

’ now, the President said the tax increase was too big.” September 2, 1997, Response of Dennis Rchbcrg to 

Documnt Request (eqhasis added). The NRSC Press Release expressly indicated that “[plossible ad 

targets include Senator Max Baucus/MT. . . .” Id. Mr. Heubusch promised that: 

We will ensure that wren know their Democratic Senator and Democratic Senate 

candidares ‘raised taxes too much.’ This is a gnat issue for the GOP because wren 

always suspected it was true-and now the President has.himself wnf-i-id it. 

9 
/--. .-. I 

!! 0 

.h 

P 

h 

M 

3 

Itl 

M 

Subsequently, Commissioners Mason and Wold were willing to find ads paid for 

by the DNC and RNC on behalf of the Clinton and Dole campaigns to be excessive 

contributions or coordinated expenditures. Yet the content of the ads in question and the 

surrounding evidence of an election influencing purpose was no more suggestive than 

was the case in MUR 4378. See MUR 4553 et al. Statement of Reasons of Commissioner 

Thomas (May 25,2000), www.fec.Pov/memberdthomas. 

Having seen my colleagues eliminate fifteen years of FEC precedent and 

guidance, the regulated community has patiently waited for them to issue a new content 

standard. As of this writing, the regulated community is still waiting. Indeed, in the two 

and a half years since my colleagues eliminated the clearly identified candidate/ 

electioneering message approach as too vague, they still have not issued a new standard 

in its place. It is dificult to understand how no standard is somehow less vague than the 

standard applied by the FEC for fifteen years and endorsed by the federal courts. 

Obviously, the failure of my colleagues to replace the clearly identified 

candidatelelectioneering message analysis has created tremendous uncertainty and 

confusion for political party committees. I do not believe it is fair to penalize the players 

when the referee has abandoned the field. Under these circumstances, I voted not to 

pursue the respondents with an investigation and potential penalties even though I 

consider the communications at issue to be made “for the purpose of influencing an 

election” and “in connection with a federal election.” 

B. 

Through a number of irreconcilable decisions over the years, the Commission also 

has managed to create considerable conhion as to what sort of activity constitutes 

coordination. Initially, these decisions primarily involved alleged coordinated activity 

between candidates and non-party committee entities. In the aftermath of Colorado 

Republican Federal Campaign Committee v. FEC (“Colorado I”), 5 18 U.S. 604 (1 996) 

(FEC could not presume conclusively that party committees coordinate ads with 

candidates), the Commission began to consider more hquently the issue of coordination 

between candidates and their political parties. The inconsistencies found in these 

decisions--both in the non-party and party committee context--undoubtedly has conhed 

the regulated community. 

Id. (emphasis added). Elaborating for the Washington Times, Mr. Heubusch enthusiastically explained: 

“We ‘re going to hammer the Democrats who voted for this and ask them if they arc going to apologize too. 

He’s [President Clinton] created (I great 1996 election issue.” Washington Times, October 20, 1995 

(emphasis added). Despite this evidence, Commissioners Mason and Wold insisted that the 1996 NRSC 

advertisements were simply lobbying efforts and not communications made in connection with a federal 

election. 

10 
*. .. 

:I 

.-. 

#I 

.. 

i. 

In a matter involving a Senate candidate from the 1994 election cycle, the 

Commission failed to make even a preliminary ‘reason to believe’ finding regarding 

activity that, according to the Office of General Counsel, appeared to constitute 

coordination. More specifically, in MUR 4282 the Santorum for Senate Committee 

contacted the Archdiocese of Philadelphia about a printed brochure about to be 

distributed by the Archdiocese. The Santorum Committee reviewed, commented on, and 

critiqued the brochure, and ultimately expressed to the Archdiocese its disagreement with 

the proposed brochure because it portrayed Senator Wofford (MI. Santorum’s 1994 

opponent), according to the Santorum Committee, “in a better light than thenCongressman Santorum.” MUR 4282, December 14,1995 Response of Sanbrum 

Committee. After its discussion with the Santorum Committee, the Archdiocese 

destroyed 150,000 printed copies of the draft brochure and printed a new version which 

removed any reference to Santorum. In the new version, the Archdiocese also eliminated 

one issue on which Senator Wofford had supported the Archdiocese position--reducing 

Senator Wofford’s agreement with the Archdiocese to 2 out of 5 issues, rather than the 3 

out of 5 votes which was in the original version. After these changes, it was clear Senator 

Wofford no longer was portrayed “in a better light.” The General Counsel’s 

recommendations to ursue this matter failed by a vote of 3-2 with my Republican 

colleagues opposing. Without four votes to pursue the matter, the Commission voted on 

September 10, 1996, to close the file in this matter without taking any action. 

P 

Three weeks later, on October 1, 1996, the General Counsel’s recommendations 

to pursue apparent coordinated activity in MUR 4204 also failed by a vote of 3-2 with my 

Republican colleagues once again opposing. MUR 4204 involved Americans for Tax 

Reform (“ATR”), the National Republican Congressional Committee (‘“RCC”), and 

Republican Congressional candidate Ron Lewis. There was evidence ATR used the same 

vendor for a radio advertisement it ran the weekend before the election as the NRCC used 

when it ran advertisements on behalf of Mr. Lewis, who was the Republican Party 

nominee at the time. The NRCC reported the expenditures for its pro-Lewis ads, totaling 

$58,590, as coordinated party expenditures made on behalf of Lewis. It appears that in 

making such expenditures the NRCC was acting as Mr. Lewis’ agent. The Commission’s 

regulations and precedent presumed coordination if an expenditure is made by or through 

a person that is being compensated by the candidate or the candidate’s agent. 1 1 C.F.R. 

0 109.1 (b)(4)(i)(B) (2000). Accordingly, there was a presumption that ATR coordinated 

with the Lewis campaign through the use of a common vendor compensated by the 

’ It is important to note that in a case where there has been a split vote, the Commission has not exercised, 

by a majority vote of four members, any of its duties or powers and taken a substantive position on the 

contested issues. See 2 U.S.C. 8 437c(c). Thus, as a matter of law, an enforcement action where there has 

been a split vote does not create an official agency position. See also Common Cawe v. Federal Election 

Commission, 842 F.2d 436,449 n.32 (D.C.Cir. 1988XAn opinion of less than four Commissioners is “not 

binding legal precedent or authority for future cases. The statute clearly requires’that for any oficiul 

Commission decision there must be at least a 4-2 majority.”Xe.nphasis in the original). As a practical 

matter, however, the Commission’s split votes undoubtedly send a very confusing message to the regulated 

community on whether an advertisemnt should be considered a contribution or coordinated expdtuc. 

11 
candidate’s agent, thus making a prohibited corporate contribution to that campaign. 

Once again, without hur votes to pursue the matter, the Commission voted to close the 

file without taking any action. 

There were, however, four votes to pursue a coordination matter involving the 

United States Senate campaign of Democratic candidate Joel Hyatt and Hyatt Legal 

Services (“the Finn”). In MUR 39 18, the Commission hund certain radio 

advertisements run by the Finn constituted excessive contributions to the Hyatt for Senate 

Committee. The basis for the Commission’s unanimous finding was that the Finn’s 

advertisements were coordinated with the candidate and referred to issues raised in the 

campaign. More specifically, a consultant for the campaign had reviewed the law firm 

ads to insure the ads would not be considered campaign related. The consultant’s review 

of the ads was virtually indistinguishable hm the review undertaken by the Santorum 

Committee in MUR 4282. Yet, there were votes to pursue the Hyatt Committee and not 

the Santorum Committee. On June 17,1997, the Commission unanimously accepted a 

conciliation agreement with respondents which called for the payment of a civil penalty 

and the admission of a violation. 

Similarly, on December 9,1997, there were four votes to find probable cause to 

believe that coordination existed between the Senate campaign of Democratic candidate 

Charles Robb and the National Council of Senior Citizens (“NCSC”) in MUR 4116. 

Indeed, the Commission’s coordination finding was unanimous despite the fact there was 

no concrete evidence the Robb campaign authorized or approved either the specific text 

of the NCSC ads or their timing and placement. In fact, the campaign broadly denied any 

coordination with NCSC regarding the advertisements. The caxipaign’s request for an 

endorsement from NCSC, coupled with discussion of message content at a joint press 

conference, provided the only evidence that the candidate’s campaign had discussed the 

general content of the ads and that it would like to see the ads run. Yet, this slender 

evidence was certainly no more compelling than the evidence of coordination found with 

regard to the Santorum Senate Committee in MUR 4282 and the Republican 

congressional candidate in MUR 4204. 

I can find no principled distinction explaining why there was coordination in some 

cases but not others. If there was sufficient evidence of coordination in MURs 3918 and 

41 16, there certainly was sufficient evidence of coordination in MURs 4282 and 4204. 

At best, this lack of consistency confused the regulated community; at worst, these 

inconsistent decisions created a lack of confidence in the impartiality of Commission 

decisionmaking. 

ii. 

In the aftermath of Colorado I, supra, the Commission began to consider the issue 

of coordination between candidates and their political parties. In Colorado I, the 

Supreme Court held that political parties were capable of making independent 

expenditures and that such expenditures were not subject to the coordinated expenditure 

.12 
. .. 

!J 

r. 

IJ 

\ 

s 

ill 

t 

0 

I 

fu 

M 

limitations of 2 U.S.C. 0 441a(d). Id. at 614-616. In the case before it, the Court hund 

the “advertising campaign was developed by the Colorado Party independently and not 

pursuant to any general or particular understanding with [the candidate and their 

agents].’’ Id. at 614 (emphasis added). In so holding, the Court rejected a Federal 

Election Commission regulation that presumed coordination between political parties and 

their candidates. Based upon this presumption, the regulation stated that party 

committees shall “not make independent expenditures. . . in connection with the general 

election campaign of a candidate” for federal office? Because of “the lack of 

coordination between the candidate and the source of the expenditure” or “other 

convincing evidence,” the Court held that party independent expenditures, as with 

independent expenditures by other committees, could not constitutionally be limited.” 

518 U.S. at 617. 

The first real test for my colleagues came in MUR 4378, discussed supra, which 

involved the Republican Senate campaign of Montanans for Rehberg and advertisements 

run by the NRSC attacking Democratic Senate candidate Max Baucus. After a full 

investigation of the matter, the Gkeral Counsel recommended that the Commission find 

probable cause to believe the NRSC violated 0 441a(h) by making a total of $309,292 in 

coordinated expenditures on behalf of the Rehberg campaign. Despite evidence that 

representatives of the NRSC and the Rehberg campaign met to discuss “specifics” of the 

1996 NRSC media campaign, MUR 4378 General Counsel’s Probable Cause Report at 

37 (November 13,1998), Commissioners Mason and Wold rejected the General 

Counsel’s factual conclusion that coordination existed (id. at 52-55) and, instead, found a 

“lack of evidence of coordination” between the NRSC and the Rehberg campaign. MUR 

4378 Statement of Reasons of Commissioners Wold, Elliott and Mason at 12 (October 

28,1999); compare MUR 4378 Statement of Reasons of Commissioners Thomas and 

McDonald (Aug. 10,1999), www. fec.gov/members/thomas. Commissioner Sandstrom 

abstained. 

To make matters worse, on May 3,2001, Commissioners Mason, Sandstrom, 

Smith and Wold voted to approve new coordination regulations that eliminated the 

Commission’s previous coordination regulations and expressly did not apply to 

coordinated expenditures by party committees. See 65 Fed. Reg. 76138,76142 ‘(Dec. 6, 

2000): As a result of their action, there are currently no Commission regulations 

defining coordination for political party committees. Nor is there any chance that new 

regulations will be in place for the 2002 elections. Indeed, is it possible’that no 

regulations will even be in place for the 2004 elections. As they did with the content . 

standard, my colleagues simply abolished the previous regulatory scheme and left nothing 

in its place. I fail to see how no regulations-and the resulting uncertainty in the 

__ 

* 11 C.F.R 4 110.7(a)(5)(1996); cf FEC v. DSCC, 454 U.S. at 28 n.1 (“Party committees are coonsidered 

incapable of making ‘independent’ expenditures in connection with the campaigns of their party’s 

candidates.”). 

coordination regulations arc seriously flawed. See, e.g., MUR 4624 Statement of Reasons of Commissioners 

Thomas and McDonald (September 7,2001). www.fec.govlmmbers/bma.s. 

Commissioner McDonald and I opposed this approach because, as we have written elsewhere, the new 

13 
,- -. :. . 

.: J .- .. 

regulated community-- are somehow better than the previous regulations which had 

served the Commission and the courts for so many years. See, e.g., FEC v. National 

Conservative Political Action Committee, 647 F.Supp. 987,990 (S.D.N.Y. 1986)(Citing 

the 2 U.S.C. 8 431(17) definition of “independent expenditure,” the court stated the 

Commission’s regulations ‘‘clarifL this language.”). In my view, the Commission would 

have been fsrr better off if it simply applied those regulations already on the books in a fair 

and consistent manner. 

This brings us to the instant matter. In order to provide some guidance as to what 

constitutes coordinated activity for party committees, Commissioner McDonald and I 

voted to approve the General Counsel’s recommendations and find “reason to believe” 

violations were committed by both Democratic and Republican respondents in this case. 

In view of the inconsistent history in such matters, though, we would not have approved a 

lengthly coordination investigation or pursued a civil penalty against respondent 

committees in the enforcement process. Our effort‘ failed, however, when our colleagues 

indicated they were not willing to make ‘reason to believe’ findings against any of the 

respondents in this matter. Interestingly, one of our colleagues initially indicated that a 

‘reason to believe’ finding was appropriate only for the Hillary Rodham Clinton for U.S. 

Senate Committee and the New York State Democratic Committee and for no other 

respondents. He took this position even though in the Ashcroft firctual situation, for 

example, the very same media ad consultant who crafted the candidate’s ads and was paid 

by the Ashcroft campaign was also working on the party ads at issue. See General 

Counsel’s Report at 46. 

Through its inconsistent decisions, the Federal Election Commission has sent 

confusing signals and given the impression that the law has not been applied evenhandedly. In addition, four members of the Commission have chosen to abolish the very 

regulations which provide guidance on what activity constitutes coordination. In view of 

the inconsistent decisionmaking and the absence of regulations, it would have been 

inappropriate to investigate and pursue a civil penalty against any of the respondents in 

this matter. 

111. . 

In Federal Election Commission v. Colorado Republican Federal Campaign 

Committee, 121 Sup.Ct. 2351 (June 25,2001) (Tolorado II’Y, the Supreme Court 

upheld the coordinated expenditure limitation for party committees. The Court held that 

“a party’s coordinated expenditures, unlike expenditures truly independent, may be 

restricted to minimize circumvention of contribution limits.” Id. at 2371. As a result, 

party committees cannot spend unlimited amounts on political advertisements 

coordinated with candidates. 

Unless the Commission takes action, however, the Colorado I. decision soon may 

become meaningless. Through its inconsistent handling of enforcement cases and its 

failure to provide a workable definition of coordination, the Commission has allowed 

14 
.- ., 

Ii 

party-paid ads that are not "truly independent," id., to escape the coordinated expenditure 

limitations just upheld by the Supreme Court in Colorado II. 'Obviously, such a cramped 

approach would render the coordinated expenditure limitation useless. 

It was my hope that the Commission could have used this MUR to provide notice 

that advertisements like those at issue here, if coordinated, are subject to the coordinated 

expenditure limits and must be paid infill with hard money. Having provided 

inconsistent enforcement decisions and eliminated clarifjlng regulations, this would seem 

to be the least the Commission could do. 

The FEC is supposed to enforce the law passed by Congress. The agency's record 

in the area of party-paid ads is troubling at best. Aside hm neglecting the overall limits 

on coordinated expenditures, the FEC's record of inaction since 19.99 has allowed huge 

sums of soft money to be used to pay the lion's share of candidatespecific political ads. 

The irony is that both sides of the aisle would have found ways to live with effkctive 

enforcement of the coordinated expenditure limits. Now, hundreds of millions of soft 

dollars later, the FEC is no closer to doing its job than it was in 1999 when this slide 

began. 

. ... 

Scott E. Thomas 

Commissioner 

15