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      FEC v. California Democratic Party '99

FEC v. California Democratic Party '99 
 Summary
 Summary

  
  
    On October 14, 1999, the U.S. District Court for the Eastern District of California ruled that the California Democratic Party, the Democratic State Central Committee of California-federal, and the Democratic State Central Committee of California-nonfederal (collectively, the CDP) violated the Federal Election Campaign Act (the Act) when it paid for a voter registration drive that was "targeted" at potential Democratic registrants entirely with nonfederal funds. On November 2, 1999, the court issued a consent order and judgment in which the CDP agreed to pay a civil penalty to the FEC in the amount of $70,000 and to transfer $354,500 from its federal account to its nonfederal account.BackgroundThe CDP is the state party committee responsible for the operations of the Democratic Party in California. In 1992 and early 1993, the CDP contributed $709,000 to Taxpayers Against Deception-No on 165 (No on 165), a California political committee that opposed a state ballot initiative, Proposition 165. The money, paid from the party's nonfederal account, was given with the knowledge that it would be used for voter registration drives for the 1992 general election.The Commission had argued that the CDP had violated the Act when it failed to allocate the costs of its voter registration drive between its federal and nonfederal accounts. Under Commission regulations, political committees must allocate expenses for generic voter drives between their federal and nonfederal accounts, must pay for the expenses directly from their federal account or a special allocation account, and must disclose the allocation in their reports to the FEC. 11 CFR 102.5(a)(1)(i), 104.10(b)(4) and 106.5(d) and (g). In this case, the CDP failed to allocate any of the voter drive costs to its federal account, paid for all of the costs directly from a nonfederal account and failed to report any of the costs to the FEC.Court's findingsApplicability of the ActThe CDP asserted that the "FECA cannot be stretched beyond its literal terms to include any activity which could conceivably have an influence on a federal election." The court stated that the CDP's argument was unavailing because it disregarded the nature of the violations claimed by the FEC-that the CDP financed a partisan voter registration drive with nonfederal funds-and overlooked the allocation rules, which allow apportionment of the costs of fundraising activities not associated with a federal election, including generic voter drives, to a party's nonfederal account.Nonpartisan voter registration drive exemptionThe CDP argued that No on 165's voter registration drive was, to its knowledge, nonpartisan and that its funding of the drive was therefore exempt from the Act under the Act's definition of "expenditure," which excludes "nonpartisan activity designed to encourage individuals to vote or to register to vote." 2 U.S.C. §431(9)(B)(ii). The court rejected the CDP's argument, and ruled that the definition of "expenditure" was not at issue in the case. The court also pointed out that there is no similar exception in the allocation rules. Further, the court determined that, in any event, the activities undertaken by No on 165 clearly were not nonpartisan and, therefore, could not fall under the exemption.Whether the voter registration drive was partisanThe CDP further claimed that there was a genuine issue of fact as to the partisan nature of the voter drives, pointing out that there was no evidence that Democratic literature was distributed at the drive sites, that any worker expressly advocated registering as a Democrat, or that a worker refused to accept a non-Democratic registration card for filing. The court disagreed, asserting that the undisputed evidence demonstrated that No on 165's voter registration drive was "a targeted effort to register Democrats to vote in a general election."Whether CDP knew the drive was partisanThe court further concluded that the executive director undisputedly knew that No on 165 would target areas in which the majority of potential registrants would probably register as Democrats, and that whether she had "knowledge of all aspects" of the partisan conduct of the drive was not material.Attributing the driveFinally, the CDP had contended that, in light of the fact that No on 165 devised its voter drive strategy independently of the CDP, that it raised approximately $4 million in 1994, and that No on 165 and the CDP were "separate entities with separate interests," the voter registration drive could not be attributed to the CDP. The court, however, concluded that it was unnecessary to "attribute" the drive to the CDP in order to find that the CDP had contributed only nonfederal funds to No on 165's voter registration drive and that its failure to allocate an appropriate portion of the costs to its federal account violated the Act and the allocation rules.Conclusion and remedyBecause the FEC showed that the CDP violated the Act and allocation regulations by funding a generic voter drive that targeted Democrats[1], the court granted the FEC's motion for summary judgment, ruling that the CDP violated the Commission's allocation and reporting rules at 2 U.S.C. §441b and 11 CFR 102.5(a)(1)(i), 104.10(b)(4) and 106.5.Through a consent order and judgment, issued November 2, 1999, the CDP agreed to pay a civil penalty of $70,000 and to transfer $354,500 from its federal account to its nonfederal account.FOOTNOTE:[1] The court, however, did not rule on one of the voter drives funded by the CDP. No on 165 had contributed $59,000 of the CDP's money to another California political committee called The Committee to Protect the Political Rights of Minorities (which in turn engaged the Black American Political Association of California (BAPAC)) for use in a separate voter registration drive. The court concluded that there was insufficient evidence that BAPAC's drive was conducted in a partisan manner and this matter, therefore, was to go to trial. In the consent order and judgment, however, the parties resolved all the issues. Consequently, a trial was not held.Source:   FEC Record— December 1999


This information is not intended to replace the law or to change its meaning, nor does this information create or confer any rights for or on any person or bind the Federal Election Commission or the public. The reader is encouraged also to consult the Federal Election Campaign Act of 1971, as amended (52 U.S.C. 30101 et seq.), Commission regulations (Title 11 of the Code of Federal Regulations), Commission advisory opinions and applicable court decisions.


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