1776 K STREET NW 

WASHINGTON, DC 20006' 

PHONE 202.719.7000 

FAX 202.719.7049 

7925 JONES BRANCH DRIVE 

McLEAN, VA 22102 

PHONE 703.905.2800 

FAX 703.905.2820 

www.wUeyrein.com 

July 20,2012 

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2512.1',:'. 23 r';;i2:25 

VIA HAND DELIVERY 

Jeff S. Jordan 

Supervisory Attorney 

Complaints Examination & Legal Administration 

Office of the General Counsel 

Federal Election Commission 

999 E Street, NW 

Washington D.C^ 20463 

Re: MUR 6589 (American Action Network, Inc.) 

Dear Mr. Jordan; 

This office represents the American Action Network, Inc. ("AAN") in 

connection with the above-titled matter. Attached, please find a copy of AAN's 

response to the complaint, including (at Exhibits A-D) an analysis of the six 

electioneering communications that are cited in the complaint. 

If i can be of any additional assistance, please do not hesitate to contact me 

at 202^719.7330 or ibaran@wilevrein.com. 

Sincerely, 

Witold Baran 

Caleb P. Burns 

Andrew G. Woodson 

Attachment 
Riirir;cT 

rEH!: 

I • * ' ' A 

L. I* I > « . I '.r I i 

BEFORE THE FEDERAL ELECTION COMMISSION 

nil yi 23 Pi;i2:-25 

In the Matter of ) 

) MUR6589 orncunf rr:::i:n:;L 

American Action Network, Inc. ) Q 'J, 

RESPONSE OF THE AMERICAN ACTION NETWORK, INC. 

TO THE COMPLAINT FILED BY 

CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON 

This office represents the American Action Network, Inc. ("AAN"). On June 12, 2012, 

the Federal Election Commission ("PEC" or "Commission") notified our client of a complaint 

("Complaint") filed by Citizens for Responsibility and Ethics in Washington ("CREW" or 

"Complainant"). The Complaint alleges, with few details and in conclusory fashion, that AAN 

should have registered and reported as a federal political committee on account of the 

organization's disbursements between July 2009 and June 2011. This response is filed pursuant 

to 2 U.S.C. § 437g(a) and 11 C.F.R. § 1.11.6. AAN is not a political committee and, for the 

reasons stated below, the FEC should find no reason to believe that AAN violated the Federal 

Election Campaign Act of 1971 ("FECA" or "Act"), as amended. 

SUMMARY OF ARGUMENT 

A complaint must contain a "clear and concise recitation of the facts which describe a 

violation" of the FECA, as amended. 11 C.F.R. § 111.4(d)(3). The CREW Complaint has notdone so. The Complaint alleges that AAN is a "political committee." In order to be a political 

committee, the nomination or election of candidates must be "the major purpose" of an 

organization. The Complaint provides specifics for a half-dozen public advertisements that it 

heavily relies on to make its allegations, but those advertisements account for less than 15% of 

AAN's overall spending. Even ignoring the substantive legal errors contained in the Complaint, 

1 -
its reliance on this minimal amount of spending does not and cannot establish AAN's "major 

purpose," let alone one that is to nominate or elect candidates. 

The Complaint asserts that 66.8% of AAN's spending is to elect candidates. Tlie 

documents relied upon and. attached to the Corhplaint directly refute the allegation. AAN's tax 

filings reflect that approximately 21% of AAN's spending was for political "expenditures." The 

Complaint does not state or claim that AAN's calculations were inaccurate. In fact, the 

^ definition of political "expenditures" in the Internal Revenue Code is broader than under the 

0 4 FECA. Therefore, this 21% figure represents an exaggerated approximation of the amount spent 

% to influence candidate elections for the purpose of determining AAN's major purpose. Spending 

1 21 % of its outlays on political expenditures is not sufficient to make AAN's major purpose 

Q influencing candidate elections. The Complaint does not refute, let alone address, this evidence 

which directly contradicts the Complaint's allegation that AAN is a political committee. 

Moreover, the Complaint rests on a flawed legal understanding about the nature of 

electioneering communications. First, electioneering communications are not incorporated into 

the "major purpose" analysis, which focuses on communications containing express advocacy. 

.Second, the Complaint ignores FEG v. Wisconsin Eight to Life, /nc., .551 U.S.. 449 (2007) 

(^"WRTL //"), which ruled that electioneering communications are not necessarily the functional 

equivalent of candidate advocacy. Many electioneering communications constitute issue 

advocacy not intended to influence elections. Yet the Complaint presumes that every 

electioneering communication is evidence of an intent to influence elections. This is error as a 

matter of law. Because AAN's issue advocacy activities - even those that constitute 

electioneering communications - cannot be included in its "major purpose" calculation, CREW's 

entire complaint quickly collapses. An organization cannot be a political committee if it only 

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allocates a minor portion of its budget for political expenditures while spending multiples of that 

amount on issue advocacy aiid other activities. 

In sum, the Complaint does not allege sufficient facts to demonstra:te that there is. "reason 

to believe" that AAN violated the law by failing to register and report as a political committee. 

Furthermore, the limited facts that are relied on by the Complaint are belied by other facts 

included in its attacliments. Finally, the Complaint's understanding of the applicable law is 

fundamentally flawed and, therefore, cannot support the Complaint's legal conclusions. These 

critical deficiencies render the Complaint entirely speculative. Both the FECAand judicial 

precedent, therefore, require that the Commission find no reason to believe that a violation has 

occurred and Complaint should be. dismissed. 

FACTUAL BACKGROUND 

I. Background Information About the American Action Network 

The American Action Network is "an independent nonprofit 501(e)(4) organization," 

incorporated under Delaware law, that "is not affiliated with or controlled by any political 

group." AAN, About, available at http://americanactionnetwork.org/aan/about. Part of AAN's 

stated purpose is to "create, encourage and promote center-right policies based on the principles 

of freedom, limited government, American exceptionalism, and strong national security .... by 

engaging the hearts and minds of the American people and spurring them into active 

participation in our democracy." Id. 

As the Complaint notes, AAN has spent a modest aniount of its overall resources on 

independent expenditures for express candidate advocacy. On its 2010 Form 990, AAN 

explained that it has "[cjonducted extensive issue advocacy activities, including television and 

digital advertising focused on fiscal responsibility, healthcare reform, regulatory reform and 

other federal legislative issues considered by the United States Congress." Compl. Ex. B, 

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Schedule O. AAN also has "[h]osled educational activities, including grassroots policy events 

and [held] interactive policy briefings called 'Learn and Lead' with activists and guest speakers, 

including Senators, Congressmen, former Secretaries and Ambassadors for the US Government." 

Id. Such events "educated grassroots leaders about critical issues facing our country with 

regards.to energy, education, tax policy, immigration, national security, spending, health care 

and other center-right principles." Id. AAN's website,, which is available at 

^ httD://americanactionnetwork.org/. provides additional details about many of the organization's 

0 4 other activities. For example, in 2011, AAN "announced an advocacy initiative encouraging 

3 select Members of Congress to vote for a Balanced Budget Amendment"' and also launched "a 

^ $1.6 million advertising campaign focusing on President Obama's devastating plan to impose 

2 Medicaid-style price controls on the Medicare Prescription Drug Program."^ 

II. The Complaint 

The Complaint alleges that AAN failed to register and report as a political committee 

under the FECA. See Compl. 1,28,31. The factual basis for the allegation is that between 

July 23,2009, and June 30,2011, AAN spent approximately $18,135,535 on independent 

expenditures and electioneering communications,^ purportedly for "producing and broadcasting ^ 

Press Release, AAN, American Action Network Launches Campaign Backing Balanced 

Budget Amendment, Nov. 10,2011, available at http://ameriGanaetibnnetwork.ore/topic/bressrcleasc'-american-actioarnetwork-launches-campaien.-bacldne-balanced-feudeet-ainendment.. 

^ Press Release, AAN, New Ad Campaign Highlights Obama's Medicare Plan to Balance 

Budget on Backs of Seniors, Oct. 5, 2011, available at 

http://amfericanactionnetwork:ore/tODic/new-ad-campai.en-l-ughiiEhts-obanta%E2%80%99smedicare-plan-balance-budaet-backs-seniors. 

^ An "electioneering communication" is a television or radio communication that 

(.1) references a clearly identified candidate for federal office; (2) is run witli 30 days of a 

primary or 60 days of a general election; and (3) can. be received by more than a certain number 

of persons in the jurisdiction where the candidate is running for office. See 2 U.S.C. §.434(15. 

Importantly, the term-electioneering commimication does not include a communication that 

constitutes an independent expenditure that contains express candidate advocacy. See id. 

§434(f)(3)(B)(ii). 

-4-

•; 
television and Internet advertisements in 29 primary and general elections." Id. T| 9. According 

to the Complaint, this represented 66.8% of AAN's total spending during the same period, id 

TI18, and was thus evidence of AAN's "major purpose" and sufficient to trigger political 

committee status under FECA, id. T[ 25. 

Of this approximately $18 million purportedly disbursed for advertising, the Complaint 

alleges that AAN spent $4,096,910 on independent expenditures for express candidate advocacy 

^ and $14,038,625 on electioneering communications. Id. If 10. The Complaint, however, only 

identifies six specific AAN-sponsored electioneering communications, which account for Just 

25% (or approximately $3.6 million) of the organization's spending on electioneering 

communications. Id. IfTf 10,13-16. The descriptions from the Complaint of the six 

electioneering communications follow: 

1. Representative Ed Perlmuttcr #1; $725,000 spent on a broadcast advertisement 

against Representative Perlmutter (D-CO). The ad "express[ed] disbelief that 

'convicted rapists can get Viagra paid for by the new health care bill,"' noted that 

Rep. Perlmutter voted for the legislation, and "encouraged viewers to 'tell 

Congressman Perlmutter [to] vote for repeal in November and to 'vote yes on H.R. 

4903.'" 

2. Representative Dina Titus; $705,000 on a similar broadcast advertisement against 

Representative Dina Titus (D-NV). 

3. Representative Ed Perlmutter #2; $725,000 on a "different advertisement 

encouraging viewers to call Rep. Perlmutter 'in November' and tell him to vote to 

repeal the health care law." 

4. Representative Mark Schauer; $370,000 on a similar broadcast advertisement 

against Representative Mark Schauer (D-MI). 

5. Annie Kuster; $875,000 on aii advertisement claiming that Ann Kuster "supported 

massive tax hikes" and "asserting that Nancy Pelosi is not extreme. Compared to 

Annie Kuster." 

6. Mike Olivcrio; $225,000 on an advertisement noting that candidate Mike Oliverio 

. "supported Mrs. Pelosi and would do whatever, she told him to." 

-5-
Id. nil 13-16.^ 

The Complaint compares the approximately $18 million figure - which represents 

spending on both independent expenditures for express candidate advocacy and electioneering 

communications - to the overall spending totals included in AAN's Form 990 filings with the 

Internal Revenue Service ("IRS") that are attached to the Complaint. From July .23,2009, 

through June 30, 2010, the Complaint asserts that the IRS filings show AAN spent $1,446,675 

^ on all of its activities. Id. H 17. For the period encompassing July 1,2010, through June 30j 

® 2011, AAN's total spending is reported as $25,692,334. Id. The Complaint combines these 

S figures to conclude that total spending by AAN during the period covered by the Complaint is 

1 $27,139,009. Id. H 18. The Complaint then divides the $18,135,535 combined amount spent on 

2 ^ independent expenditures for express candidate advocacy and electioneering communications by 

the $27,139,009 amount of total spending to allege that 66. 8% of AAN's spending was intended 

to influence elections and, therefore, is indicative of AAN's major purpose. Id. If 18. 

Amounts spent by AAN for express candidate advocacy may apply to the "major 

purpose" calculation. However, the amounts spent for "electioneering communications" - which 

the Complaint identifies as approximately $14 million of the $18 million alleged to have been 

spent by AAN to influence elections - do not. Even if spending for electioneering 

communications are not per se excluded from the major purpose analysis, the Supreme Court in 

WRTLII, 551 U.S. 449, and the Commission in its implementing regulations, have held that 

electioneering communications do not necessarily constitute candidate advocacy or its 

"functional equivalent" as a matter of law. Those that do not, therefore, cannot be evidence of ah 

^ Storyboards of these six ads have been reproduced from the websites cited in the 

Complaint and are included with the attached Exhibits A-D. 

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election-influencing purpose and may not be included in the calculation of an organization's 

major purpose. 

III. Material Facts Omitted from the Complaint 

A. Information AAN Disclosed to the IRS in Its Tax Filings. 

Although the Complaint cites AAN's Form 990 for purposes of establishing the 

organization's total spending for the July 2009 through June 2011 period, it ignores other 

i relevant data reported on Schedule C of the same IRS forms. The information contained in those 

' filings shows that AAN's political "expenditures" were $185,108 and $5,535,848 for the 2009 

, and 2010 tax years, respectively. Compl. Exs. A & B, Schedule C, Part I-A, line 2. 

These figures represent AAN's spending which constitutes political advocacy for IRS 

purposes. The instructions to Form 990 require filers to disclose on this line "[a]ny expenditures ; 

made for political campaign activities." IRS, Instructions for Schedule C (Form 990 or 990-EZ) j 

at 1 (Dec. 22, 2011), available at httD://www.irs.gov/t)ub/irs-Ddf/i990sc.iDdf. The IRS defines j 

; 

"political campaign activities" to include "[a]ll activities that support or oppose candidates for j 

elective federal, state, or local public office." IRS, Instructions for Form 990; Return of 

i 

Organization Exempt From Income Tax - Additional Material; Glossary, available at i 

http://wvyw.irs.gOv/instructions/i990/ar03.html. This definitional standard has a "much broader 

scope [than the.FEC's] 'express advocacy standard.'" Judith Kindell and John Francis Reilly, 

Election Year Issues, at 349, available at http://vyvyw.irs.gov/pub/irs-tege/eotopici02.pdf. 

Compare Definition of Political Committee, 66 Fed. Reg. 13,681 (Advance Notice of Proposed 

Rulemaking, Mar. 7,2001) (explaining that the IRS's definition of a "political organization" is 

"substantially broader than the FECA definition of a 'political committee'"). The Complaint 

does not mention these figures nor allege that they are inaccurate. 

-7-
B. Legislative Developments and AAN's Issue Advertisements. 

As discussed above, the Complaint details its objections to only six of AAN's 

electioneering communications for. the relevant two-year period even though the Complaint 

heavily relies on AAN's electioneering communication spending to allege AAN's "major 

purpose," The Complaint fails to provide any information about the remaining electioneering 

communications, which amount to more than $10.1 million (or 75%) of AAN'S electioneering 

1 communication spending. Compi. $$ 10,13-16. Even for the six that are identified, the 

® Complaint does, not distinguish between electioneering communications that may be the 

f 

"functional equivalent" of express advocacy and those that are not. AAN diUgently conducts all 

of its electioneering communications to comply with all applicable laws. It has appropriately 

accounted for such spending to ensure that its "major purpose" is social welfare and not to 

influence elections. 

The Complaint attempts to dovmplay the ads' mention of a health care repeal vote "in 

November," but concedes that such ads are "ostensibly related to tiie legislation." M ^ 13. In 

fact, legislative developments that occurred in 2010 provide crucial background for AAN's issue 

advocacy and rebut any claim that they constitute express candidate advocacy or its functional 

equivalent. 

Democratic lawmakers and President Obama spent most of the summer and early fall of 

2010 "defending the law against a Republican push for repeal." Jane Norman, California Blazes 

a Trail for Exchange Implementation, CQ Healthbeat, Oct. 1, 2010; see also Joseph Weber, 

Opponents Keep Hope Alive to Kill Health Reform Law, Washington Times, July 2,2010. At the 

time, many organizations and Members of Congress were advocating for action to repeal the 

entire law or its various provisions, which included $500 billion in Medicare cuts, $400, billion in 

higher taxes, and an individual mandate to purchase, health insurance. See David Espo, 219 in 

- 8 -
1 

Favor; 212 Opposed Health Bill Passes-, Associated Press, Mar. 22,2010; Jane Norman, 

Business Outcry over 1099 Rises as Senate Returns to Washington, CQ Healthbeat, Sept. 10, 

2010; Paul Jenks, Health Overhaul Celebrations Continue, CQ Healthbeat, Sept. 22,2010 

(noting that 15 bills to repeal or revise the law had been introduced, including H.R. 4903, which 

was sponsored by Congresswomain Michelle Bachmann). 

By mid-September, there were two discharge petitions^ circulating in the House of 

Representatives that advocated repeal of either the entire law or a portion of it. Paul Jenks, 

Public Health Bills Advance in a House Committee, CQ Healthbeat, Sept. 17, 2010. On the 

opposite side of the Capitol, two Democratic Senators introduced their proposal to eliminate an 

unpopular provision of tlie health care law, see Emily Ethridge, Baucus Plans Bill to Repeal 

1099 Tax Provision in Health Care Overhaul Law, Congressional Quarterly, Nov. 12, 2010 

(citing an earlier initiative by two other senators), while Senator Jim DeMint introduced his own 

full-repeal bill in the Senate with 20 co-sponsors. Press Release, Office of Senator DeMint, 

DeMint Applauds Rep. King's Discharge Petition Effort to Repeal Obamacare, July 1, 2010.® 

"[BJuilding momentum" was important during this period, id., particularly after 

Democratic Representative Gene Taylor joined 172 Republican House Members in supporting a 

discharge petition supporting full repeal. Brian.Darling, The "Do-Nothing-Good Congress," 

Human Events, Oct. 4,2010. Congressman Steve King, the lead proponent of one of the 

® "A discharge petition [was] the one single tool that the disenfranchised majority opinion 

in this Congress can use to bring legislation to the floor over the will of the Speaker of the 

House, Nancy Pelosi." 156 Cong. Rec. H6140-11 (July 27,2010) (statement of Rep. King). 

® Available at 

httD://www.demint.senate.eov/pubric/index.cfm?p=^PressReleases&COntentReGord id=;f!.d529ce 

-d007-419c-8141-80d488dd69ce&CbnlehtTvpe id=a2165b4b-3970-4d37-97e5-

4832fcc68398&Group id=9ee606ce-9200-47af-90a5-

024143e9974c&MonthDisplav=7&YearDisplav=2010. 

-9-
discharge petitions, took to the airways to challenge allegedly independent-minded Democratic 

House Members who were refusing to sign his discharge petition, observing that: 

Gene Taylor's signature ... on the discharge petition says we have 

now bipartisan support to repeal Obamacare and there will be 

much pressure on many Democrats, now that the 34 that voted no, 

there are 33 out there, that are hearing from their constituents 

today... 

[E]very Democrat voted for Nancy Pelosi to start the 111 

Congress. Many of them in their campaigns implied they may not 

4 vote for her as speaker. Well, every, single one did vote for Nancy 

Q Pelosi and she left some of them off on the votes to go back home 

A and posture themselves as independent representatives of their 

4 constituents. But the truth the most important vote is the one. for 

3 the speaker of the house and that enables the San Francisco 

5 President Obama agenda. 

8 And sO this is the dividing line. The discharge petition separates 

S the women from the girls and the men from the boys, if you really 

meant your no vote on Obamacare, sign the discharge petition. If 

the speaker let you off so you can tell your constituents, you are 

independent, like say [Congressman] Jason Altmire, lets' [.vie] find 

out. If Jason doesn't sign that discharge petition he shouldn't be 

advertising that he's willing to challenge Obama and Pelosi 

because he's not. 

Transcript of Fox News Interview with Congressman Steve King of Iowa, Sept. 17, 2010, 

available at 2010 WLNR 18664302. Congressman King also pressed his petition-signing 

arguments on the House floor, asking whether Speaker Pelosi had told Democratic Members to 

"[g]o ahead and vote 'no,' and then [travel back to] your district as someone who is against 

ObamaCare and as someone who is not necessarily doing the bidding of the Speaker of the 

House from San Francisco." 156 Cong. Rec. at H6I40. Challenging his colleagues. 

Representative King then argued forcefully that if such Members "are sincere [in their 

opposition], they will sign the discharge petition." Id? 

^ In addition to a significant push to repeal or amend the new health care law in the lame 

duck session of Congress in November and December of 2010, efforts also were made to lay the 

- 10-
During its lame duck session in November, Congress did in fact consider specific 

proposals to undo or amend provisions of the health care law. See, e.g.. Press Release, Office of 

Senator Mike Joharms, Vote Scheduled for Johanns 1099 Repeal Legislation, Nov. 19, 2010;® 

Emily Ethridge, Bipartisan Bill Would Allow State Waivers from Health Law Provisions, 

Congressional Quarterly, Nov. 18, 2010. Members also considered other legislative vehicles as 

mechanisms for undoing the President's health care law. See, e.g., David Hogberg, Investor's 

^ Business Daily, GOP Might Target ObamaCare As Part of a Medicare "Doc Fix ", Nov. 23, 

5 2010 (discussing potential for using lame duck legislation as a vehicle for partial repeal of health 

care provisions). One Democratic Congressman even responded with his own November 

legislation challenging Republicans to repeal provisions of the new law that appeared to have 

popular support. Tom Brune, Rep. Calls Out GOP on Health Agenda, Newsday, Nov. 24, 2010. 

LEGAL STANDARDS 

I. There Are Minimum Standards for Making a "Reason to Believe" Finding. 

The Complaint alleges that AAN is a federal political committee required to register and 

report with.the FEC because the AAN's major purpose is to influence elections. At tliis. stage of 

the proceedings, the FEC may rely on two sources to determine whether it "has reason to believe 

that a person has committed ... a violation of [FECA]." 2 U.S.C. § 437g. First, the FEC may 

legislative groundwork for repeal in the new session of Congress convening in 2011. See, e.g., 

156 Cong. Rec. H4770 (June 23, 2010) (statement of Rep. King); Scott Atlas, Don'/ Tweak 

ObamaCare; Repeal It, Forbes, Dec. 13,2010, available at 

httD://www.f'orbes.com/2010/12/13/obamacaie-constitutional-court-ODinioriSrGontributors-scottatlas.html (noting uncertainly about whether "tliis. lame duck Congress or the new one convening 

in January" would follow through on repeal). The House of Representatives ultimately pas.sed 

repeal legislation in January of 2011. See David .Merszenhom and Robert Pear, As Vowed, House 

Votes to Repeal Health Care Law, New York Times, Jan. 20, 201.1. 

® Available at 

http://www.iohanns.senate.sov/Dublic/?D=PressReleases&CoritehtRecord jd=Tl3765648-f43.5-

4c2e-ac69-ea3 5 7e04bae0. See also Kent Hoover, Senate to Vote on 1099 Paperwork Burden, 

Business Journal, Nov. 23, 2010. 

-11 -
review the allegations in the complaint itself. See id. Second, the FEC may review "information 

ascertained in the normal course of its supervisory responsibilities." Id. This second provision is 

narrow, as the FEC has no "roving statutory functions" to "gather and compile information and 

to conduct periodic investigations." FEC v. Machinists Non-Partisan Political League, 655 F.2d 

380, 387 (D.C. Cir. 1981) (^'Machinists")-, see also Democratic Senatorial Campaign Comm. v. 

FEC, No. Civ. A. 95-0349,1996 WL 34301203, at *3 (D.D.C. Apr. 17,1996) (noting focused 

^ nature of inquiry). Instead, this statutory prong permits the FEC to review only information 

^ included in "other sworn complaints" or from evidence of actual "wrongdoing" learned in its 

5 routine review of reporting data. In re Fed. Election Campaign Act Litig, 474 F. Supp. 1044, 

1046 (D.D.C. 1979); see also FEC v. Nat 7 Republican Senatorial Comm., 877 F. Supp. 15,18 

(D.D.C. 1995) CNRSC). Compare with Jones v. Unknown Agents of FEC, 613 F.2d 864, 877 

(D.C. Cir. 1979) (the "supervisory responsibilities" prong applied to situations where an FEC 

audit uncovered "patent irregularities suggesting the possibility of fraud'^.' 

As the preceding paragraph reflects, a "reason to believe" determination must be made 

"without any investigation" by the FEC, which precludes any type of independent inquiry into 

the substance of the allegations. Stockman v. FEC, 138 F.3d 144,147 n.2 (5th Cir. 1998).'° The 

® The FEC itself acknowledges that, in voting on the "reason to believe" finding, FEC 

Commissioners may consider only "the complaint, the respondent's reply, relevant committee 

reports on the public record, and tlie General Counsel's analyses and recommendations." FEC, 

Guidebook/or Complainants and Respondents on the FEC Enforcement Process at 12, May 

2012, available at http://www.fec.gov/em/iesDondent nuide.ndf ("FEC Guidebook'). 

'° See also Common Cause v. FEC, 842 F.2d 436, 438 n.l (D.C. Cir. 1988) ("The FECA 

requires an affirmative vote of four Commissioners to undertake any agency action,... 

including a 'reason to believe' finding necessary to initiate an investigation for violation of the 

statute.") (emphasis added); U.S: Def. Comm. v. FEC, 861 F.2d 765, 770 (2d Cir. 1988) (an 

investigation occurs only after FEC makes its "reason to believe" finding); Judicial Watch, Inc. 

V. FEC, No. Civ. A. 01 -1747, 2005 WL 433344, at *5 (D.D.C. Feb. 17, 2005) (the FEC is 

"directed to conduct an investigation" "[o]nly" after making a reason to believe finding); NRSC, 

877 F. Supp. at 18 ("The FEC may not begin an enforcement investigation until after it finds 

reason to believe a violation has occurred.") (emphasis in original). 

- 12-
Supreme Court has recently reaffirmed that adjudications involving political speech must not 

entail "burdensome" inquiries, WRTLII, 551 U.S. at 469, should "resolve disputes quickly 

without chilling speech," id, and "avoid threats of criminal liability and the heavy costs of 

defending against FEC enforcement" due to the uncertain application of federal law. Citizens 

United v. FEC, 130 S. Ct. 876, 895 (2010). This is particularly true even at the earliest stages of 

the FEC enforcement process, where a "reason to believe" finding can be treated as evidence of 

^ at least some guilt and stigmatizes a respondent in the public's eye. Seie, e.g., Ry^ Reilly, Vern 

4 Buchanan 's Lawyers Also Represented Witness, TPMMuckraker, Jan. 23,2012, available at 

3 httb://tDmmuckraker..talkingpointsmemo;Com/20i2/01/vern buehanans lavwers; also represente. 

1 d witnesses.php#more: see also 11 C.F.R. § 111.9 (a "reason to believe" finding means that the 

2 FEC "has reason to believe that a respondent has violated a statute or regulation over which the 

Commission has jurisdiction"). 

As to the requisite evidentiary showing, a "reason to believe" finding requires "a ) 

t 

minimum evidentiary threshold [providing] at least 'some legally significant facts' to distinguish 

the circumstances from every other" situation where an entity engages in independent speech. i 

Democratic Senatorial Campaign Comm. v. FEC, 745 F. Supp. 742, 745-46 (D.D.C. 1990) 

(quoting Supporting Memorandum for the Statement of Reasons (Commissioner Josefiak)). "At 

this stage of the proceedings, complaints certainly do not have to prove violations occurred,... 

but the alleged facts must present something that is, in the broad sense, 'incriminating' and not 

satisfactorily answered by the respondents." Id. at 746 (internal brackets omitted), (emphasis in 

original), Complaints that state charges "only in the most conclusory fashion," without 

supporting evidence, are dismissed by the Commission. In re Fed. Election Campaign Act Litig., 

474 F. Supp. at 1047. And where "the record did not suggest" a violation.had occurred and 

- 13-
i 

"respondents' answers to the complaint adequately refuted the complainant's allegations as to 

any presumed," dismissal is likewise warranted. Democratic Senatorial Campaign Comm., 745 

F. Supp. at 744. See also MUR 5565, First General Counsel's Report (Feb. 4,2005) (dismissal 

where the "sole factual basis for the complaint's allegations ... has been disproved")." 

II. The Legal Test for Determining Whether an Organization is a Political Committee. 

To be a "political committee," an organization must satisfy both a statutory and a 

^ constitutional test. As to the statutory component, FECA defines "political committee," in 

0 

relevant part, 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. § 431(4)(A). 

Beyond the statutory requirements, however, the Supreme Court and lower federal courts 

consistently have "construed the words 'political committee' ... narrowly [to] only encompass 

organizations that are under the control of a candidate or the maior purpose of which is the 

nomination or election of a candidate." Buckley v. Valeo, 424 U.S. 1, 79 (1976) (emphasis 

added); see also FEC v. Mass. Citizens for Life. Inc., 479 U.S. 238, 252 n.6 (1986) ^MCFl") 

(reaffirming Buckley)-,^^ Compl. Tf 23 (citing Buckley). Buckley "explicitly recognized the 

potentially vague and overbroad character of the 'political committee' definition in the context of 

'' The FEC Guidebook (at 13) explains that "a no reason to believe finding would be 

appropriate when (I) a violation has been alleged, but the respondent's response Or other 

evidence demonstrates that no violation has occurred, (2)'a cOmiJlaiht alleges a violation but is 

either not credible or is so vague that an investigation would be uriwarraiited, :6.i; (3) a complaint 

fails to describe a violation of the Act." 

While most of the Court's MCFL opinion represents the views of a five-Justice majority, 

technically this section of the opinion only represents a four-Justice plurality. In her opinion 

concurring in part and concurring in the judgment. Justice O'Connor (the swing vote) does not 

dispute the majority's, "major purpose" analysis but has a different view on a separate legal issue 

contained within the same section. 

- 14-
FECA's disclosure requirements.'" Machinists, 655 F.2d at 391.'^ To "avoid questions of 

unconstitutionality," Buckley, 424 U.S. at 79 n.l06, and to limit the "chilling effects worked 

upon" speakers, v. Jennings, 366 F. Supp. 1041, 1056-57 (D.D.C. 1973) (three-judge 

court), vacated as moot sub nom., Staats v. ACLU, 422 U.S. 1030 (1975),'^ the Supreme Court 

incorporated the "major purpose" requirement as a sine qua non that regulators must consider in 

determining an organization's status. Otherwise, Congress would subject many organizations 

^ "to an elaborate panoply of FEC regulations requiring the filing of dozens of forms [and] the 

4 disclosing of various activities" without adequate justification or concern for "First Amendment 

I 5 values." FEC v. GOFAC, Inc., 917 F. Supp. 851, 858 (D.D.C. 1996) (quoting Machinists, 655 

I F.2d at 392), 859 (quoting Buckley, 424 U.S. at 79); see also N.C. Right to Life, Inc. v. Leake, 

I 525 F.3d 274,287 (4th Cir. 2008) C'NCRL IIF) (noting that "designation as a political 

committee often entails a significant.regulatory burden"). 

Buckley made clear that only organizations that have major purpose" of electing 

candidates may be regulated as political committees. 424 U.S. at 79 (emphasis added). MCFL 

repeats Buckley's general formulation, see 479 U.S.. at 252 n.6, and each of the three remaining 

"major purpose" references in MCFL likewise confirm that an organization has only one major 

purpose. See, e.g., id. at 253 (activity is "regulated as though the organization's maior purpose is 

Importantly, as this quotation indicates, the Court held that the "major purpose" 

narrowing construction, was necessary to save the statute not only from vagueness concerns, but 

also from overbreadth. The definition of "political committee" was "defined in this way by the 

[Buckley] Court for the pu^ose of'focusing precisely' FECA's broadlv worded provisions bh 

'the narrow aspect of political association' which could constitutional Iv be restricted." GOP AC, 

917 F. Supp. at 859 (quoting Machinists, 655 F.2d at 3.92) (alteration in original) (emphasis 

added); see also Buckley, 424 U.S. at 79 (explaining that to "fulfill the purposes of the [FECA]," 

the political committee definition need "only encompass organizations ... the major purpose of 

which is the nomination or election of a candidate"). 

Notwithstanding the fact that this opinion was vacated, the Supreme Court subsequently 

cited this decision approvingly in Buckley, 424 U.S. at 79 n.l06. 

- 15-
4 

to further the election of candidates") (emphasis added). The Supreme Coiirt's choice of words 

is significant, as it has used other similar - but clearly different - words to describe entities with 

multiple "major purposes." See. e.g., CBS. Inc. v. FCC, 453 U.S. 367, 405 n.2. (1981) ("One of 

the major puiposes of the Federal Election Campaign Act...") (emphasis added); Bowsher v. 

Merck & Co., 460 U.S. 824, 833 (1983) ("the two major purposes of the bill") (emphasis added); 

Richmond Newspapers. Inc. v. Virginia, 448 U.S. 555, 592 (1980) ("a major purpose of the First 

Amendment") (emphasis added). Other federal courts agree that the FEC does not ask "whether 

influencing campaigns is [only] 'a .major purpose' of the group," see Koerber v. FEC, 583 F. 

Supp. 2d 740, 748 (E.D.N.C.),'^ and the FEC itself has explained that an organization "must.. 

have the major purpose of engaging in Federal campaign activity" before it may be regulated as a 

political committee. Supplemental Explanation and Justification, 72 Fed. Reg. 5595, 5601 (Feb. 

7, 2007) (emphasis added); see also Br. of Def FEC in 0pp. to PI. Mot. for Preliminary 

Injunction at 27, Koerber v. FEC, Civ. A- No. 2:08-cv-00039 (filed Oct. 14,2008). 

When determining an organization's major purpose, courts have repeatedly cautioned 

that issue advocacy must be excluded from the calculation. In Buckley v. Valeo, 519 F.2d 821, 

863 (D.C. Cir. 1975) (en banc), aff'd in part and reversed in part, 424 U.S. 1 (1976), the United 

States Court of Appeals for the District of Columbia Circuit emphasized that the political 

committee definition had to be narrowly construed "since it potentially reaches ... the activities 

of nonpartisan issue groups which [are limited to] influencing the public to demand of candidates 

that they take certain stands on the issues." In citing this language approvingly, the Supreme 

Court confirmed that the political committee definition should not be stretched to apply "to reach 

See also Real Truth About Abortion. Inc. v. FEC, 681 F.3d 544, 556-57 (4th Cir. 2012) 

CReal Truth")-, N.M. Youth Organized v. Herrera, 611 F.3d 669, 679 (10th Cir. 2010); NCRL III, 

525 F.3d at 287-90. 

- 16-
groups engaged purely in issue discussion." Buckley, 424 U.S. at 79. Instead, Buckley defined a 

"political committee as including only those entities that have as [the] major purpose engaging in 

express advocacy in support of a candidate ... by using words such as 'vote for,' 'elect,' 

'support,' 'vote against,' 'defeat,' or 'reject.'" N.C. Right to Life, Inc. v. Bartlett, 168 F.3d 705, 

712(4thCir. 1999).'® 

While Buckley excluded organizations that engaged "purely" in issue advocacy, 

^ subsequent cases made clear that an organization, need not refrain from all candidate advocacy in 

0 

order to be exempted from the definition of a political committee. In MCFL, 479 U.S. at 252 

n.6, the Court emphasized that Buckley's teaching would exclude from regulation an entity 

whose "central organizational purpose is issue advocacy, although it occasionally engages in 

activities on behalf of political candidates." And Machinists similarly cautioned that "issueoriented groups, lobbying organizations,... and other groups concerned with the open discourse 

of views on prominent national issues" should be excluded from the definition of a political 

committee. 655 F.2d at 391, 394; see also N.M. Youth Organized, 611 F.3d at 678 (evaluating 

whether a "group spends a preponderance of its expenditures on express advocacv") (emphasis 

added).'' The alternative - i.e., placing political committee burdens on organizations "primarily 

engaged in speech on political issues unrelated to a.particular candidate" - would "not only 

contravene both the spirit and the letter of Buckley's 'unambiguously campaign related' test, but 

it would also subject a large quantity of ordinary political speech to regulation." NCRL 111, 525 

Although the excerpt from the opinion originally used the phrase "a major purpose," the 

Fourth Circuit later explained this was "miscommunication" made in error. NCRL III, 525 F.3d 

at 288 n.5 (emphasis added); see also id. at 287-90. 

'' See also Fla. Right to Life, Inc. v. Mortham, No. 98-770CIVORL19A, 1999 WL 

33204523, at *4 (M.D. Fla. Dec. 15, \ 999), aff'd inrelevefht part on appeal sub.nom., Fla. Right 

to Life, Inc v. Lamar, 238 F.3d 128.8 (11th Cir. 2001) (political committee statute could only be 

applied "to organizations whose major purpose is eugag,ing in 'express advocacy,"' as that term 

is defined in Buckley) (emphasis in original). 

-17-
F.3d at 288; see also MUR 5541, Statement of Reasons of Vice Chairman Matthew S. Peterson 

and Commissioners Caroline C. Hunter and Donald F. McGahn, at 14 n.63 (Jan. 22,2009) 

(stating that there is "serious doubt on the validity of examining anything other than the amount 

of express advocacy in the major purpose test analysis"). 

Although Congress enacted major amendments to FECA in the Bipartisan Campaign 

Reform Act of 2002 ("BCRA"), "there is little question that Buckley's 'major purpose test' [was] 

^ left unaltered." Colo. Right to Life Comm., Inc. v. Coffman, 498 F,3d 1137, 1153 (10th Cir. 

4 2007); see also Shays v. FEC, 424 F. Supp. 2d 100, 106 (D.D.C. 2006) (noting that "[sjince the 

4 

3 1970s, Congress has not amended the definition of 'political committee'"). As the FEC itself has 

g explained, "[njeither BCRA, McConnell, nor any other legislative, regulatory,, or judicial action 

g has eliminated [the] major purpose test," which was "necessary to avoid the regulation of activity 

'encompassing both issue discussion and advocacy of a political result.'" Supplemental 

Explanation and Justification, 72 Fed. Reg. at 5597.'® Accordingly, independent expenditures 

for express candidate advocacy continue tp be the. only spending relevant to calculating an 

organization's major purpose; electioneering communications are not incorporated into the 

analysis. 

One thing that changed through the years is the FEC's definition of "express advocacy." 

Subsequent to Buckley, the FEC created a two-part test for determining whether a 

communication contains "express advocacy" and is, therefore, an "expenditure." Part (a) of the 

FEC's definition includes communications that use explicit words of express advocacy such as 

See also Political Committee Status, Definitipp of Contribution, and Allocation for 

Separate Segregated Funds andNdnconnecledCommittees, 60 Fed. Reg. 68056, 68065 (Nov. 

23,20.04;) (no. change througii regulation of Ihe defiriition of "poiitica! Committee" is mandated, 

by BCRA. or the Supreme Court's decision in. McConnell). 

-18-
1 4 

"vote for," "elect," "defeat," etc. 11 C.F.R. § 100.22(a). Part (b) is broader and incorporates a 

communication that. 

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 identified candidate(s) 

because -

(1) The electoral portion of the. communication is 

unmistakable, unambiguous, and suggestive of only one 

meaning; aind 

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

encourages actions to elect or defeat one or more clearly 

identified candidates(s) or encourages some other kind of 

action. 

Id. § 100.22(b). Subsection 100.22(b)'s definition of express advocacy has been controversial 

since its enactment because it is vague and provides little objective, bright-line guidance to 

speakers in contravention of core First Amendment principles. See, e.g., Maine Right to Life 

Comm., Inc. v. FEC, 914 F. Supp. 8 (D. Me. 1996) {"MRLCy, Right to Life of Dutchess Cnty., 

Inc. V. FEC, 6 F. Supp. 2d 248,253-54 (S.D.N.Y. 1998); MUR 5974, Statement of Reasons of 

Vice Chairman Matthew S. Peterson and Commissioners Caroline C. Hunter and Donald F. 

McGahn, at 4 n. 10 (May 29,2009) (collecting case law and FEC authority questioning and/or 

invalidating this subsection).'® 

'® Among other .authorities cited by the tlvee .Commissioners are the followihg: "MUR 5874 

(Gun Owners of America, Inc.), Statement of Reasons of Vice Chairman David Mason; MUR 

5154 (Siena Cliib, Inc.), Statement of Reasons of Vice Chairman Bradley Smith and 

Commissioners David Mason and Michael Toner; MUR 5024R (Council for Good Govermnent),. 

Statement of Reasons of Commissioner Bradley Smith; and MUR 4922 (Illinois Suburban 

0'1-lare Commission), Statement of Reasons of Commissioners David Mason and Bradley 

Smith. See also MUR 4922, First General Counsel Report at 5, n. 5 (Recognizing that '[t]wo 

appellate courts have determined that part (b) of [11 C..F.R. 100.22] is invaTid' (citing the 

decision of the First Circuit in MRLC, 98 F.3d 1, and FEC v. Christian Action Network, 110 F.3d 

1049 (4th Cir. 1997)), that "[o]n September 22, 1999, the Commission unanimously adopted a 

statement formalizing a pre-existing policy of not enforcing subsection (b) in the First and Fourth 

Circuits," and that '[i]n January 2000, a district court in Virginia issued a nationwide.injunction, 

preventing the Commissionfrom. enforcing 11 C.F.R. 10.0.22(b) anywhere in the country.'" 

- 19-
Even if electioneering communications are not per se excluded from the major purpose 

analysis, many electioneering communications still would not count against the major purpose 

threshold. The Supreme Court, "made clear in [WRTL11] that the distinction.between issue 

advocacy and express advocacy can be paramount in the context of electioneering 

communications." Colo. Right to Life Comm., 498 F.3d at 1153 n.l 1. In WRTL II, the Supreme 

Court held that an electioneering communication can advocate for issues or candidates. See 551 

^ U.S. at 470-71. The Court determined that an electioneering communication would constitute 

^ candidate advocacy only if the ad "is the functional equivalent of express advocacy," which 

occurs "only if the ad is susceptible of no reasonable interpretation other than as an appeal to 

vote for or against a specific candidate." WRTL II, 551 U.S. at 469-70. The Court explicitly 

rejected the FEC's view that "any ad" that fits within the statutory definition of an electioneering 

communication "is the 'functional equivalent' of an ad saying defeat or elect that candidate." Id. 

at 470 (emphasis in original). To hold otherwise "would effectively eliminate First Amendment 

protection for genuine issue ads." Id. at 471. 

Following the WRTL II decision, the FEC adopted a regulation providing guidance on 

when communications are not the "functional equivalent" of express advocacy. The FEC 

concluded that communications meeting the following three criteria fall within a "safe harbor" 

and are "susceptible of [a] reasonable interpretation other than as an appeal to vote for or against 

a clearly identified Federal candidate": 

Subsection 100.22(b)'s definition of express advocacy was, however, recently upheld by 

the Fourth Circuit in the Real Truth, 681 F.3d at 544. Even in that instance, however, Judge 

Niemeyer's opinion for the Real Truth panel must be read in conjunction with his opinion for the 

court in United States v. White, 670 F.3d 498 (4th Cir. 2012), decided just a few months earlier. 

Citing WRTL II, Judge Niemeyer emphasized that "First. Amendment principles distinguish 

protected speech from unprotected speech based on an objective view of the speech, not its mens 

rea.... [Ujnder well-accepted First Amendment doctrine, a speaker's motivation is entirely 

irrelevant to the question of constitutional protection." White, 670 F.3d at 511 (emphasis in 

original). 

-20-
1 

(1) Does not mention any election, candidacy, political party, 

opposing candidate, or voting by the general public; 

(2) Does not take a position on any candidate's or officeholder's 

character, qualifications, or fitness for. office; and 

(3) Either: 

(i) Focuses on a legislative, executive or judicial matter or 

issue; and 

(A) Urges a candidate to lake a particular position 

or action with respect to the matter or issue, or 

(B) Urges the public to adopt a particular position 

and to contact the candidate with respect to the 

matter or issue; or 

(ii) Proposes a commercial transaction, such as purchase of 

g a book, video, or other product or service, or such as 

jt attendance (for a fee) at a film exhibition or other event. 

11 C.F.R.§ 114.15(b). 

Even if a communication does not. satisfy the safe harbor, it may still constitute issue 

advocacy, not express advocacy or its equivalent. The FEC "consider[s] whether the. 

communication includes any indicia of express advocacy and whether the communication has an 

interpretation other than as an appeal to vote for or against a clearly identified Federal candidate 

in order to. determine whether, on balance, the communication is susceptible of no reasonable 

interpretation other than as an appeal to vote for or against a clearly identified Federal 

candidate." Id. § 114.15(c). According to the regulation: 

(1) A eommunication includes indicia of express advocacy if it: 

(i) Mentions any election, candidacy, political party, 

opposing candidate, or voting by the general public; or 

(ii) Takes a position on any candidate's or officeholder's 

character, qualifications, or fitness for office. 

(2) Content that would support a determination that a 

communication has an interpretation other than as an appeal to 

-21 -
vote for or against a clearly identified Federal candidate includes 

content that: 

(i) Focuses on a public policy issue and either urges a 

candidate to take a position on the issue or urges the public 

to contact the candidate about the issue; or 

(ii) Proposes a commercial transaction, such as purchase of 

a book, video or other product or service, or such as 

attendance (for a fee) at a film exhibition or other event; or 

(iii) Includes a call to action or other appeal that interpreted 

1 in conjunction with the rest of the communication urges an 

4 action other than voting for or against or contributing to a 

Q clearly identified Federal candidate or political party. i Id. 

Citing Citizens United, 130 S. Ct. at 889-90, the Complaint claims that "an[y] 

advertisement that qualifies as an electioneering communication is the functional equivalent of 

express advocacy." Compl. 24. That is inaccurate; Citizens United says just the opposite. In 

Citizens United, the named plaintiff argued that its film, Hillary, was exempt from regulation as 

an electioneering communication because it was "just - a documentary film that examines certain 

historical events.'" Citizens United, 130 S. Ct. at 890. But after reaffirming the continuing 

validity of WRTL IPs "functional equivalence" test, id. at 889-90, the Court concluded that the 

movie was the functional equivalent of express advocacy because there was "no reasonable 

interpretation of Hillary other than as an appeal to vote against Senator Clinton," id. at 890. It 

was precisely because the film was the "functional equivalent" of express advocacy that it was 

subject to the then-existing prohibition on electioneering communications. Id. Nothing in 

Citizens United undercuts the now well-established distinction from WRTL II between 

electioneering communications that are the functional equivalent of express advocacy and those 

that are not. 

-22-
DISCUSSION 

I. This Case Should Be Dismissed At the Threshold. 

A "reason to believe" finding must be based on the complaint, information included in 

"other sworn complaints," or evidence from actual "wrongdoing" learned in the FEC's routine 

review of the reporting data. Complaints may not be "conclusory" and must contain "legally 

significant facts" to support the charges alleged in the complaint. See supra at 11-14. 

The Complaint fails to meet even this most basic of tests. Despite its vast budget, 

resources, and self-proclaimed capabilities for "in-depth research and investigation,"^" CREW 

has cobbled together a document devoid of critical facts. The Complaint reaches its conclusion 

that 66.8% of AAN's total spending was for candidate advocacy by adding the total amounts 

4 spent by AAN for independent expenditures for express candidate advocacy and electioneering 

communications - approximately $4 million and $14 million, respectively - and compares that 

amount to AAN's total spending. Notwithstanding the heavy weight of electioneering 

communications in this calculation, the Complaint cites only six electioneering communications 

that account for $3,625,000, or approximately 25%, of the $14 million in electioneering 

communication spending critical to the Complaint's calculation. This very limited and 

incomplete data set - even when it is coupled with the approximately $4 million in express 

candidate advocacy alleged in the Complaint - simply caimot meaningfully support a claim 

As its own website notes, CREW is a sophisticated entity whose stated mission combines 

"in-depth research and investigation with hard-charging legal action and an aggressive 

communications strategy." CREW, Mission, available at 

littp://www.Gitizen.sforethics.org/pa.Ees/m'tssio:n. CREW devotes sigiiifiearit respuices tbmonitoring arid tracking spending-on politics and policy- its annual budget ri'yajs that pf the 

Pennsylvania and Maryland State Ethics Commissions combined. Compare tee CREW, 2011 

Annual Report, at 29, available at http://www.citizehsforcllTics.ore/pa&es/crew-2011 -annualleporC/ with Dennis Owens, Pa. Ethics Chief Says Budget Cuts Hurting Investigations, Apr. 19, 

2012, available at http://www.abc27.eom/storv/l 75.88228/pa-:ethics-chief-says-budeet-cutshurliim-investiaations: Md. State Ethics Comm'n, Budget, available at 

http://www.msa.md.£Ov/msa/nidi.na.nual/25ind/html/35ethicb.html. 

-23-
about AAN's major purpose when the amount is compared to AAN's overall spending of 

$27,139,009. Therefore, the Complaint's allegation that AAN's major purpose is to influence, 

elections is conclusory and cannot justify further inquiry by the Commission. 

Furthermore, CREW's factual allegations are directly refuted by the Form 990 IRS 

filings attached to its own Complaint. The Complaiiit's conclusions rest entirely on the fact that 

AAN spent $18,135,535 on both independent expenditures for express candidate advocacy and 

^ electioneering communications, but ignores the tax documents that state that AAN's total 

0 

4 political "expenditures" were only $5,720,956 (or 21% of itis total spending). The Complaint 

3 does not cite, much less distinguish or refute, these figures. As previously explained, the IRS 

g definition of political "expenditure" is broader than the FEC's express advocacy standard and, 

4 2 therefore, can and does include spending for electioneering communications that are candidate 

advocacy. 

AAN's limited spending on political "expenditures" - identified in the attachments to the 

Complaint as 21% of AAN's total spending - did not make AAN's "major purpose" to nominate 

or elect candidates which would have subjected it to the FECA definition of "political 

committee." It was CREW's burden to demonstrate in its Complaint that AAN's tax disclosures 

were inaccurate, inapplicable, or did not otlierwise belie the allegation that AAN spent 66.8% of 

its funds on candidate advocacy. The Complaint fails to explain, let alone address, this direct 

evidence that refutes the allegations in the Complaint. This failure underscores the factual and 

evidentiary deficiencies of the Complaint that necessitate dismissal. 

II. AAN Is Not a Political Committee. 

Even if the F.EC were to determine that the Complaint has alleged sufficient, noncontradictory facts to support its allegations, there is no reason to believe that AAN is a "political 

committee." As explained above, see supra at 14-15, "political committee" status must satisfy 

-24-
both a statutory and a constitutional test. AAN does not have the type of "major purpose" that 

Buckley and other cases require before political committee burdens may be imposed on an 

organization.^' 

Although the Fourth Circuit recently stated that the PEC may determine a political 

committee's status on a "case-by-case" basis, see Real Truth About Abortion, Inc. v. FEC, 681 

F.3d 544, 556 (2012), Buckley nevertheless held that the definition of a "political committee" 

^ only encompasses "organizations . . . the maior nurnose of which is the nomination or election of 

0 

1 a candidate." 424 U.S. at 79 (emphasis added). Courts have repeatedly warned that issue 

advocacy is excluded from this calculation. See supra at 16-18. Buckley itself defined a 

While the FEC may theoretically take into account factors other than expenditure ratios 

in determining AAN's status (e-g., the organization's public statements), see Real Truth, 681 

F.3d .at 5'57, the. Complaint has not cited to or alleged that" such materials would support its 

position here-. To the conti:ary, AAN's public sfatemenls, as quoted in this response, demonstrate 

that ii is"^ social: welfare prganizatton and not a political committee. 

22 See note 16, supra. 

g "political committee as including only those entities that have as [the] major purpose engaging in 

4 5 express advocacy in support of a candidate ... by using words such as 'vote for,' 'elect,' 

'support,' 'vote against,' 'defeat,' or 'reject,'" N.C. Right to Life, Inc. v. Bartlett, 168 F.3d 705, I 

712 (4th Cir. 1999),^^ and other federal courts subsequently confirmed this limited scope of the 

major purpose analysis. While the FEC may have promulgated a controversial and legally • 

t 

suspect definition of express advocacy in the years since Buckley, see 11 C.F.R. § 100.22(b)i the 

agency and others have repeatedly explained that the essential framework of the major purpose 

test has not changed. See supra at 18-19 & nn. 18, 19. 

Accordingly, only $4,096,910 in independent expenditures by AAN count toward the 

"major purpose" calculation. As detailed in the attached Exhibits A-D, none of the six 

electioneering communications cited by CREW qualify as express advocacy because they do not 

-25-
use explicit words of express candidate advocacy as required by Buckley, 424 U.S. at 44 n.52, 

and 11 C.F.R. § 100.22(a). Even under subpart (b) of 11 C.F.R. § 100.22, the legitimacy of 

which is in serious doubt, the ads do not qualify as express advocacy. 

Each ad references the health care law and, in one of two ways, is designed to encourage 

each individual identified to change his or her opinion and support repeal legislation. The 

Complaint acknowledges that many of the ads are "ostensibly related to ... legislation." Compl. 

^ TI13. None of these ads refer to an election, defeat, voting or candidacy for election. Since 

0 4 (1) such ads can be interpreted by a reasonable person as something other than "advocacy of the. 

4 

election or defeat of one or more clearly identified candidates," (2) there is no "unmistakable" 

electoral message, and (3) "reasonable minds" could very well differ as to whether the ads 

"encourage[] actions to elect or defeat one or more clearly identified candidates(s) or 

encourage[] some other kind of action," the amount spent on these ads cannot be used to support 

a finding that AAN's major purpose is candidate advocacy. See supra at 20-22. Because the 

independent expenditures for express candidate advocacy only amount to approximately 15% of 

AAN's spending and are greatly exceeded by AAN's other spending, AAN does not have "the 

major purpose" necessary to be a political committee. 

If, on the other hand, electioneering communications that are the "functional equivalent" 

of express advocacy can be included along with independent expenditures for express candidate 

advocacy in the "major purpose" calculation, CREW's inclusion of all electioneering 

commvmications goes too far. WRTL //held that not all electioneering communications are "the 

'functional equivalent' of an ad saying defeat or elect that candidate," 551 U.S. at 470, and that 

decision has not been overruled. In fact, the Complaint's concession that the electioneering 

communications were "ostensibly related to the: legislation" acknowledges that all electioneering 

-26-
communications are not the same. Again, Exhibits A-D, attached to this Complaint, illustrate in 

greater detail why the six'electioneering communications cited in the Complaint are not the 

functional equivalent of express advocacy and may not be included in the "major purpose" 

calculation. With these six advertisements excluded, the Complaint is left to allege that IS^o of 

AAN's total spending, i.e., spending on independent expenditures for express candidate 

advocacy, was for the purpose of influencing elections. This amount of spending does not 

i represent AAN's major purpose. Therefore, AAN is not a political committee. 

§ CONCLUSION 

^ The Complaint does not allege sufficient facts to find reason to believe that AAN is a 

1 political committee. Furthermore, the facts that are-alleged in the Complaint ^are contradicted by 

8 

the IRS filings attached to the Complmnt. The allegations in the Complaint are fundamentally 

flawed as a matter of law and fact. Finally, the FEC should find no reason to believe that AAN 

is a political committee and dismiss the Complaint. 

Respectfully submitted. 

s 

Jan Witold Baran 

Caleb P. Bums 

Andrew G. Woodson 

WILEY REIN LLP 

1776 K St., NW 

Washington, P.C.. 20006 

202.719.7000 

Counsel for the American Action Network 

-27-
4 

§ 

4 

5 

EXHIBIT A - Advertisements 1 (Perliriuttgr Ad #1V & 2 (Titus Ad) 

According to the Complaint, the. first two advertisements were similar and "express[ed] 

disbelief that 'convicted rapists can get Viagra paid for by the new health care bill,'" noted that 

Representatives Perlmutler and Titus voted for the legislation, and "encouraged viewers to 'tell 

[Representatives Perlmutter and Titus to] vote for repeal in November and to 'vote yes on H.R. 

4903."' The following are audio/video storyboards of the advertisements taken from the ads as 

they appear on the website identified in the Complaint. 

Perlmutter Ad #1 

Audio Video 

Woman #1: "Hey, whafs up?" 

Woman #2: "Hey, you have to check out the 

article I just sent you. Apparently convicted rapists 

can get Viagra paid for by the hew health care 

bill." 

We are viewing the desktop of a computer. Woman #1 

clicks to open window/file to reveal chat 

Woman #1: "Are you serious?" 

Woman #2: "Yup. I mean, Viagra for rapists? 

With my tax dollars? 

Woman #1 clicks to open article and Perlmutter.gov 

website while Woman. #2 continues talking. 

"And Congressman .Perlmutter voted for it." 

Woman tfl: "Perlmutter voted for it?" 

Woman M2: "Yup. I mean, what is going on in 

Washington?" 

Woman #1: "We need to tell Perlmutter to repeal 

it in November." 

Tell Congressman Perlmutter to vote for repeal in 

November. 

Vote yes on H.R. 4903 

(202:) 225-6276 

Legal: [the on-line version of the ad ends before 

the oral disclaimer is complete] 

On-screen disclaimer [not legible on website version of 

advertisement] 

28-
Titus Ad 

i 

§ 

i 

4 

7 

Audio Video 

Woman #1: "Hey, what's up?" 

Woman if2: "Hey, you have to check out the 

article I just sent you. Apparently convicted rapists 

can get Viagra paid for by the new health care 

bill." 

We are vievying the desktop of a eomputer. Woman # I 

clicks to open window/file to reveal chat 

Woman #1: "Are you serious?" 

Woman #2: "Vup. I mean, Viagra for rapists? 

With my tax dollars? 

Woman #1 clicks to open article and Titus.gov website 

while Woman #2 continues talking. 

"And Congresswoman Titus voted for it." 

Woman #1: "Titus voted for it?" 

Woman #2: "Yup. I mean, what is going on in 

Washington?" 

Woman #l: "In November, we need to tell Titus to 

repeal it." 

Tell Congresswoman Titus to vote for repeal in 

November. 

Vote yes on H.R. 4903 

(202)225-3252 

Legal: [the on-line version of the ad ends before 

the oral disclaimer is complete] 

Qn-screen disclaimer [not legible on website version of 

advertisement] 

Functional Equivalent Analysis. These ads clearly and unmistakably qualify as issue 

advertisements under both WRTL //and 11 C.F.R. § 11.4.15(b) and are not the functional 

equivalent of express advocacy. First, the advertisements do not mention an "election, 

candidacy, political party, opposing candidate, or voting by the general public." Second, the 

advertisements do not take a position on either Representative's "character, qualifications, or 

.fitness for office." The focus is on one of the effects of the recently enacted health care 

legislation and the fact that the two Representatives voted for the law. Third, the advertisements 

-29-
focus "on a legislative ... issue [and urge] the public: to adopt a particular position and to contact 

the candidate with respect to the matter or issue." As discussed above, see supra at 8-11, 

throughout the summer and fall of 2010, numerous proposals to. repeal all or a portion of the 

health care legislation were pending in Congress, with the primary sponsors and their supporters 

working hard to get additional Members to sign-on or vote for their bills. One of these proposals 

was H.R. 4903, which was explicitly identified in the advertisement. Repeal efforts continued 

into the lame duck session in November, when Congress considered bills to address the issue. 

Since the advertisement meets each of the "safe harbor" elements contained in the regulation, it 

is not the functional equivalent of express advocacy. 

Express Advocacy Analysis. These ads do not meet the definition of express advocacy 

under subsection (a) because they do not use explicit words of advocacy (e.g., "vote for," 

"support," etc.). These ads also do not fall under subsection (b) as they can be interpreted by a 

reasonable person as something other than "advocacy of the election or defeat of one or more 

clearly identified candidates." As discussed in the preceding paragriaph, these, ads. discuss a. 

legislative effort pending in Congress and ask the representatives to support that effort. The 

Complaint itself acknowledges that the ads are "ostensibly related to ... legislation." Thus, 

there is no "unmistakable" electoral message, and reasonable minds could very well differ as to 

whether the ads "encourage[] actions to elect or defeat one or more clearly identified 

candidates(s) or encourage[] some other kind of action." 

-30-
1 

i 

4 

9 

EXHIBIT B - Advertisements 3 YPerimutter Ad #2> & 4 (l§chauer Ad> 

The Complaint explains that the second pair of advertisements encouraged, viewers "to 

call [Representatives Perlmutter and Schauer] 'in November' and tell [them] to vote to repeal the 

health care law." The following are audio/video storybpards of the advertisements taken from 

the ads as they appear on the website identified in the Complaint. 

Perlmutter Ad #2 

Audio Video 

AVO: "Remember this?" 

.Pelosi Video: "We have to pass the bill so that you 

can find out what is in it." 

In an office, looking at TV/monitor 

Pelosi Video Clip: • 

AVO: "Now we know what Pelosi and Perlnriutter 

were hiding. 

In an office, looking at folder oh desk labeled. "Health 

Care Legislation; Pelosi Perlmutter; Top Secret." 

"A trillion dollar health care debacle. Graphic: Cost Si Trillion 

"Billions in new job-killing taxes. $500 billion: Job-killing Taxes 

"They cut SSOO billion from Medicare for seniors Cut Medicare by $500 billion 

"then spent our money on health insurance for 

illegal immigrants. 

Health insurance for illegal immigrants. 

"In November, tell Congressman Ed Perlmutter to 

vote for repeal." 

Super: In November Tell Perlmutter To Vote For Repeal. 

H.R. 4903. 

(202) 225-2645-

Legal: "American Action Network is responsible 

for tlie content of this advertising." 

Paid for by the American Action Network. 

AihericanActionNetwork.org and not authorized by any 

candidate or candidates committee. The American 

Action Network is responsible for the content of this 

advertising. 

-31 -
Schauer Ad 

i 

Audio Video 

AVO: "Remember this?" 

Pelosi Video: "We have to pass the bill so that you 

can find out what is in it." 

In an office, looking at TV/monitor. 

Pelosi Video Clip: 

AVO: "Now we know what Pelosi and Mark 

Schauer were hiding. 

In ah office, looking at folder on desk labeled "Health 

Care Legislation; Pelosi Schauer; Top Secret." 

"A trillion dollar health care debacle. Graphic: Cost$l Trillion 

"Billions in new job-killing taxes. $500 billion: Job-killing Taxes. 

"They cut $500 billion from Medicare for seniors Cut Medicare by $500 billion 

"then spent our money on health insurance for 

illegal immigrants. 

Health insurance for illegal immigrants. 

"In November, tell Congressman Mark Schauer to 

vote for repeal." 

Super: In November Tell Schauer To Vote For Repeal. 

H.R. 4903. 

(202) 225-6276 

Legal: "American Action Network is responsible 

for the content of this advertising." 

Paid for by the American Action Network. 

AmericanActionNetwork.org and not authorized by any 

candidate or candidates committee. The American 

Action. Network is responsible for the content of this 

advertising. 

Functional Equivalent Analysis. Like the.ads discussed in Exhibit A, these 

advertisements also clearly and unmistakably qualify as issue advertisements under both 

WRTLII and 11 C.F.R. § 114.15(b) and are not the functional equivalent of express advocacy. 

First, the advertisements do not mention an "election, candidacy, political party, opposing 

candidate, or voting by the general public." Second, the advertisements do not take a position on 

either Representative's "character, qualifications, or fitness for office." The focus is on the 

-32-
4 

recently enacted health care legislation and that the two Representatives voted for the new law. 

Third, the advertisements focus "on a legislative ... issue [and urge] the public to adopt a 

particular position and to contact the candidate with respect to the matter or issue." As discussed 

above, see supra at 8-11, throughout the summer and fall of 2010, numerous proposals to repeal 

all or a portion of the health care legislation were pending in. Congress, with the primary 

sponsors and their supporters working hard to get additional Members to sign on or vote for their 

J bills. One of the proposals was H.R. 4903, which was explicitly identified in the advertisement. 

0 

4 Repeal efforts continued into the lame duck session in November, when Congress considered 

bills to address the issue. Since the advertisement meets each of the "safe harbor" elements 

contained in the regulation, it is not the functional equivalent of express advocacy. 

Express Advocacy Analysis. These ads do not meet the definition of express advocacy 

under subsection (a) because they do not use explicit words of advocacy (e.g., "vote for," 

"support," etc.). These ads also do not fall under subsection (b) as they can be interpreted by a 

reasonable person as something other than "advocacy of the election or defeat of one or more 

clearly identified candidates." As discussed in the preceding paragraph, these ads concern a 

legislative effort pending in Congress and ask the representatives to support that effort. The 

Complaint itself even acknowledges that ads of this type are "ostensibly related to ... 

legislation." Thus, there is no "unmistakable" electoral message, and reasonable minds could 

very well differ as to whether the ads "encourage[] actions to elect or defeat one or more clearly 

identified, candidates(s) or encourage[] some other kind of action." 

-33-
i 

EXHIBIT C - Advertisement 5 fKuster Ad) 

The Complaint, states that the fifth advertisement described how Ann Kuster "supported 

massive tax hikes" and "that Nancy Pelosi is nofextreme. Compared to Annie Kuster." The 

following is an audio/video sloryboard of the advertisement tiakeh from the ad as it appears on 

the website identified in the complaint. 

Kuster Ad 23 

Audio .. Video 

Text; "Nancy Pelosi is not extreme. Compared.to Annie Kuster: 

Kuster supported the trillion dollar government Healthcare 

takeover. 

"But says it didn't go far enough. 

"$525 billion in new taxes for government Healthcare. 

"Now, Kuster wants $700 billion in higher taxes on families and 

business. 

"And $846 billion in job killing taxes for cap and trade. 

"Nancy Pelosi is not extreme. Compared to Annie Kuster." 

Legal: [the on-line version of 

the ad ends before the oral 

disclaimer is complete] 

Functional Equivalent Analysis. This advertisement fits within the boundaries of the 

general WRTL //test articulated by the FEC. See 11 C.F.R. § .114.15. It does not mention an. 

election or candidacy. Instead, it focuses on Ms. Kuster's relationship to Speaker Pelosi on 

The ad also includes citations to various sources for the factual positions, stated therein, 

although these are not easily discernible on the website CREW cites. 

-34-
legislative policy matters. An advertisernent like this is consistent with the legislative approach 

taken by Members of Congress on the House floor and elsevyhere to obtain support for their 

health care repeal efforts. As Congressman King noted, see supra at 9-10, many Democratic. 

Members were trying to position themselves as independent, initially voting against the health 

care bill, but refusing to sign onto the discharge petition in lock-step with Speaker Pelosi. This 

advertisement echoed those themes by comparing Ms. Kuster to Speaker Peilbsi with the aim of 

^ shaping her views if she voted on repeal of the health care law and other matters of importance to 

4 AAN. 

3 Express Advocacy Analysis. This ad does not meet the definition of express advocacy 

g under subsection (a) because they do not use explicit words of advocacy (e.g., "vote for," 

3 "support," etc.). This ad also does not fall under subsection (b) because it can be interpreted by a 

reasonable person as something other than "advocacy of the election or defeat of one or more 

clearly identified candidates." As discussed, in the preceding paragraph, this ad concerns a 

legislative effort pending in Congress and other matters of policy. It challenges Ms. Kuster to 

break from Speaker Pelosi and her fellow Democrats on substantive legislative issues like health 

care repeal. Thus, there is nO "unmistakable" electoral message, and feasohable rtiinds could 

very well differ as to whether the ad "encourages actions to elect or defeat one or more clearly 

identified candidates(s) or encourages some other kind of action." 

-35-
i 

! 

EXHIBIT D - Advertisement 6 (Oliverio Ad) 

The Complaint states that the sixth advertisement described how Mike Oliverio 

"supported Mrs. Pelosi and would do whatever she told him to." The following is an audio/video 

storyboard of the advertisement taken from the ad as it appears on the website identified in the 

Complaint. 

Oliverio Ad 

Audio Graphics 

Text: "if Nancy Pelosi gave an order... would you follow it? 

Mike Oliverio would. Oliverio says he would support Pelosi in 

Washington. If he was told to. (Politico, 5/27/10) 

"After all, Oliverio voted himself a 33% pay raise. (H.B. 4076, 

2/29/08) 

"Oliverio voted for higher taxes. Even on gas. (H.B. 2303, 

3/26/93; S.B. 1004, 1/29/05.) 

"And Oliverio won't repeal Obama's $500 billion Medicare 

cuts. (Times West Virginian, 4/4/10) 

"So what will.Mike Oliverio do in Washington? Whatever 

Nancy Pelosi tells him to." 

VQ: "The American Action 

Network is responsible for the 

content of this advertising." 

Paid for by the American Action Network. 

AmericanActionNetwork.org. Not authorized by any candidate 

or candidate's committee. American Action Network is 

responsible for the content of this advertising. 

Functional Equivalent Analysis. This advertisement fits within the boundaries of the 

general WRTL //test articulated by the FEC. See 11 C.F.R. § 114.15. It does not mention an 

election or candidacy. Instead, it focuses on Mr. Oliverio's relationship to Speaker Pelosi on 

legislative policy matters. An advertisement like this is consistent with the legislative approach 

taken by Members of Congress on the House floor,and elsewhere to obtain support for their 

-36-
health care repeal efforts. As Congressman King noted, see supra at 9-10, many Democratic 

Members were trying to position themselves as independent, initially voting against the health 

care bill, but refusing to sign onto the discharge, petition in lock-step with Speaker Pelosi. Tliis 

advertisement echoed those themes by comparing Mr. Oliverio to Speaker Pelosi with the aim of 

shaping his views if he voted on repeal of the health care law and other matters of importance to 

AAN. 

Express Advocacy Analysis. This ad does not meet the definition of express advocacy 

under subsection (a) because it does not use explicit words of advocacy (e.g.,. "vote for," 

"support," etc.). This ad also does not fall under subsection (b) because.it can be interpreted, by a 

reasonable person as something other, than "advocacy of the election or defeat of one or more 

clearly identified candidates." As. discussed in the preceding paragraph, this ad concerns a 

legislative effort pending in Congress and other matters of policy. It challenges Mr. Oliverio to 

break from Speaker Pelosi and fellow Democrats on substantive legislative issues like health 

care repeal. Thus, there is no "unmistakable" electoral message, and reasonable minds could 

very well differ as to whether the ad "encourages actioris to elect or defeat one or more clearly 

identified candidates(s) or encourages some other kind of action." 

-37-