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FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

’ In the Matter of 4 

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The Coalition 1 

MUR 4624 

National Republican Congressional Committee, et al. ) 

STATEMENT OF REASONS 

COMMISSIONER SCOTT E. THOMAS 

CHAIRMAN DANNY LEE MCDONALD 

On May 17,2001, the Commission approved the General Counsel’s 

recommendation to take no f?urther action and close the file with respect to the above’ 

captioned matter. At issue was whether the Coalition had “coordinate”‘ certain electionrelated public coxnmunications during the 1996 election cycle when it spent millions of 

dollars in support of Republican congressional candidates. Under the Federal Election 

Campaign Act of 197 1, as amended, (“the Act’’), coxporations ‘and labor organizations 

may not make contributions (which includes coordinated expenditures) in connection 

with federal election campaigns. 2 U.S.C. 0 441b. 

The Commission dropped its case against the Coalition, in essence, because of 

new Commission regulations defining coordination. Based upon the standard for 

coordination recently created by Commissioners Mason, Sandstmm, Smith and Wold, see 

66 Fed. Reg. 23537 (May 9,2001), the Office of General Counsel concluded that the 

evidence uncovered and developed in its investigation might not establish coordination. 

By contrast, the Office of General Counsel noted that this same evidence may well have 

constituted coordination under the test for coordination in effect at the time of the 

Coalition’s 1996 election activity and employed by the Office of General Counsel during 

its ensuing investigation. Applying our colleagues’ new standard for coordination, the 

Office of General Counsel recommended that the Commission take no further action and 

close the file in this matter. 

This case illustrates the central problem with the Commission’s new definition of 

coordination. A case that, in the Office of General Counsel’s view, probably contained 

coordination under the Commission’s old regulations, suddenly does not appear to 

contain coordination under the Commission’s new regulations. By too narrowly defining 
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what constitutes coordination, these new regulations stifle rational analysis and enwurage 

fiture widescale evasion of the restrictions carefilly craf€ed by Congress.’ 

Because these new &@ations are on the books, however, we had little choice but 

to approve the Office of Gend Counsel’s recommendation to take no further action in 

this matter. With one of our colleagues recused and two of o~ other colleagues 

indicating their belief that there is no coordination under the Commission’s new 

definition, it seemed very unlikely that there would be four votes for pursuing this matter 

at the probable cause to believe stage. Accordingly, it made little sense to us to require 

the Office of General Counsel to expend any more of its limited edorkment resources ‘ 

on a matter effectively rendered moot by the Commission’s new coordination regulations. 

1. 

On March 17,1997, the Democratic National Committee filed a complaint with 

the Federal Election Commission alleging that the Coalition, “an organization of national 

trade, professional and business associations established in the spring of 1996,” 

Complaint at 2, had’violated various provisions of the Act. The complaintstatedlhat 

“[ulnder the guise of an ‘educational campaign,’ the Coalition raised and spent $4 million 

on advertising intended to support Republican candidates for the U.S. House of 

representatives in the 1996 elections.” Complaint at 2-3 citing Congressional 

QuurterlyWeeMy Report, (October 26,1996). The complaint alleged the Coalition was 

fomed at the ‘urging of Republican congressional leaders and had coordinated its 

expenditure campaign with the National Republican Congressional Committee 

(“NRCC”), the Republican National Committee (“RNC”), and 37 Republican 

congressional candidates. The complaint asserted that these coordinated expenditures 

constituted corporate contributions made and accepted in violation of 2 U.S.C. 0 441b. 

The complaint further alleged that the Coalition was a “political committee” which had 

failed to register and report as such in violation of 2 U.S.C. 00 433 and 434. 

’ 

’ 

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In April of 1998, the Office of General Counsel prepared a report for Cdssion 

consideration that contained a factual and legal analysis of the allegations presented in the 

complaint as well as responses to the complaint received from respondents. At the outset, 

the report noted that “[tlhe Codition does not deny that during 1996 it spent millions of 

.dollars on advertisements, direct mail, and what it has characterized as grassroots 

activities h numerous Congressional districts. Nor does it deny that corporate funds were 

the source of the funds used to conduct such activity.” April 2 1,1998 First General 

Counsel’s Report at 16. Against this backdrop, the Report considered (1) whether the 

Coalition’sspending was coordinated with the NRCC and the candidate committees; 

(2) the liability of the recipient committees; and (3) whether the Coalition is a “political 

committee” under the Act. 

The First General Counsel’s Report made a preliminary finding that coordination 

might well exist between the Coalition, the NRCC and the candidate committees in 

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whose districts the Coalition undertook its activities. In reaching this conclusion, the 

Report discussed a numb& of factors. First, the Report pointed out “[i]nfo~ation on 

hand suggests that the Coalition may have been formed upon the urging of and afk 

private consultations with Republican leaders.” Id. at 19. Second, the Report found that 

there “is substantial idormation that suggests, in a variety of ways, Republican leaders 

and Coalition members may have shared campaign strategy.” Id. at 20. Finally, the 

. Report found that the NRCC and the Coalition used someof the same vendors.for their 

‘efforts. In particular, the Report found that “the advice and.polls of consultant Frank 

Luntz were reportedly relied upon by both the Republican Party and the Coalition.” Id. ’at 

24. Because the Coalition’s expenditures were made hm corporate funds and apparently 

were coordinated, the First General counsel’s Report recommended that the commission 

find reason to believe that the Coalition violated 2 U.S.C. 0441b 

. 

, 

With respect to the MCC, the Fkt General Counsel’s Report suggested “the 

Coalition’s advertisement’s and other spending constituted &kind contributions to the 

NRCC, which the MRCC knowingly accepted.” Id. at 38. In support of this,. the Report 

stated: 

As discussed in detail at pages .16-3 1 of this report, the information at 

hand suggests that Mr. Boehner may have been acthg as an agent of the 

NRCC and may have been the primary person through which coordination 

betweem the Coalition and.the NRCC occurred. In addition, the NRCC 

reported retaining some of the same consultants as the Coalition 

(American Viewpoint and the Tarrance Group). 

Earlier, the Report had stated “[tlhe information on hand further suggests Representative 

John Boehner may have been one of the Republican leaders involved in the formation of . 

the Coalition. Mr. Boehner is the fourth ranking Republi& House member, the 

Republican Conference Chair, and ex onto board member of the NRCC.” Id. at 19 

(emphasis added). Because “the hds used by the Coalition appear to have been hm 

corporate sources,” id. at 38, the Office of General Counsel recommended.that the 

Commission find reason’to believe the NRCC and its treasurer violated 0 441b. The 

Report also recommended the Commission find ‘reason to believe’ under 0 441b against 

seven of the 37 candidate committees in whose districts both the NRCC and the Coalition 

engaged in spending because there was “additional evidence of specific instances of 

coordination.” Id. at 39. 

. 

. 

Finally, the First General Counsel’s Report recommended the Commission find 

reason to believe the Coalition violated 2 U.S.C. 00 433 and 434 for failing to register as 

a political’committee and report its receipts and disbursements. The Report reasoned: 

“[tlhere is no indication that the Coalition was forged for any purpose other than building . 

or maintaining public support for certain candidates.” April 2 1,1998 First General 

Counsel’s Report at 33-34. The First General Counsel’s Report recommended that an. 

deposition subpoenas, as well as informal discovery where possible. 

. investigation of this and the other findings be conducted through document and 

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On June 9,1998, the Cgnmission approved the First General Counsel’s 

recommendation to find reason to believe the Coalition violated 2 U.S.C. # 441b. 

Commissioners Elliott and McGarry joined us in the vote, while Commissioner Aikens 

recused. The Commission also approved the General Counsel’s recommendaton to find 

reason to believe the NRCC and seven candidate committees violated 2 U.S.C. # 441b 

and to conduct a thorough investigation of these matters. On the othei hand, a motion to 

approve the General Counsel’s recommendation to find reason to believe the Coalition 

violated 06 433 and 434 by failing to register and report as a political committee failed to 

secure the four mative votes needed. 2 U.S.C. 0 437g(a)(2). We voted with 

Commissioner McGq to approve the General Counsel’s recommendation. 

Commissioner Elliott opposed the recommendation and Commissioner Aikens recused. 

(There was one vacancy on the Commission at the time.) 

On November 30,2000, with four new commissioners on board, the Commission 

approved new regulations defining the term “coordinationyy by a 4-2 vote. 

Commissioners Mason, Sandstrom, Smith, and Wold voted to approve the new 

regulations while we voted against the regdations. The rules were transmitted to 

Congress on January 4,2001, for legislative review. See 2 U.S.C. 0 438(d). The 

effective date for the new coordination definition was May 9,2001. 66 Fed. Reg. 23537 

(May 9,2001). 

On April 20,2001 , the Office of General Counsel recommended that the 

Commission take no further action against the Coalition, the NRCC, and the other 

respondents in MUR 4624. The Office of General Counsel believed that the facts of the 

case might not support violations of the Act in the wake of the Commission’s new 

definition of coordination. On May 17,2001, the Commission approved a motion to take . 

no Mer action and close the file in MUR 4624. We joined Commissioners Mason, and 

Smith in support of the motion. Commissioner Sandstrom opposed the motion, and 

Commissioner Wold recused. 

‘ Absent ‘probable cause’ briefing, see 2 U.S.C. 0 437g(a)(3), we do not know 

whether we would have ultimately proceeded against the respondents in this matter. With 

two Commissioners indicating that thm was no coordination under the Commission’s 

new regulations and one Commissioner recused, however, we could see no scenario 

under which there would be four votes for the Commission to proceed at the probable 

cause to believe stage. In order not to waste limited resources on an apparently fbtile 

continuation ofthis ktter, we agreed with the ~eneral Counsel’s recommendation to 

take no .further action .and close the file. 

II. 

h our view;the stringent requirements of the Commission’s new coordination 

regulations create a large loophole in the limitations, prohibitions and reporting 

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requirements of the Act. As we explain hereafter, this approach is not sound 88.8 matter 

of law or policy. 

Am 

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

directly undercuts the Supreme Court’s guidance in this area. In BucMey v. Valeo, 424 

U.S. 1 (1976), the’supreme Court upheld limits on contributions to federal candidates but 

ruled that a similar limitation on independent expenditures was unconstitutional. The 

Court recognized, however, that. its ruling created many opportunities for wasion of the 

contribution limitations. If a would-be spender was able to pay for a television 

advertisement provided by a candidate, for example, this “coordination” would convert 

what is supposed to be an “independent” expenditure into nothing more than a disguised 

contribution. Indeed, the Buckfey Court warned that the contribution limitations would . 

become meaningless if they could be evaded “by the simple expedient of paying directly 

for media advertisements or for other portions of the candidate’s campaign activities.” Id. 

at 46. 

. 

In order to “prevent attempts to circumvent the Act through prearranged or 

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

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

than expenditures.” Id. at 46-47 (emphasis added). Thus, the Buckfey Court drew a 

specific distinction between expenditures made “totali) independenti) of the candidate 

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

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

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

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

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

’ 

Thus, 25 years ago the Supreme Court gave assent to a broad’dehition of ’ 

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

serving as.8 candidate’s agent, such as a party committee working closely with a 

candidate, could be the vehicle for coordinating activity. Reacting to these judicial. 

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

1976 a definition of “independent expenditure” now codified at 2 U.S.C. 8 431(17). 

Concerned that independent expenditures could be used to circumvent the contribution 

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

’ See, ag., Federal Election Campaign Act Aniendmw 8,1976: Hearings on S.2911, et al., SUMon Privileges and Elections of the Senate Committee on Rules and Adminismtim, 4M* Cong., 2dSess. 74 

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

Mondale); 89 (d of Sen. Grifk); 98 (rrmerks of Sen. Bucldey); 107-08,130 (remarks of then . Assistant Attorney General Scalia). 
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those expenditures which were “totally independent” of the candidate’s campaign and 

those which were not? 

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

independent expenditures are not turned into disguised contributions hugh 

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

expenditure made “in cooperation, consultation, or concert, with, or at the request or 

. suggestion of, a candidate, his authorized political committees, or their agents, shall be 

considered to be a contribution to such Candidate” and subject to the contribution . 

limitations. 2 U.S.C. 0 441a(a)(7)(B)(i). Moreover, section 43 l(17) of the statute defines 

“independent expenditure” as: 

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

defeat of a clearly identified candidate which is made without . 

cooperation or consultation with any candidate, or any authorized 

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

concert with, or at the request or suggestion oJ any candidate, or any 

authorized committee or agent of such candidate. 

2 U.S.C. 0 431(17)(emphasis added). 

Fomer section 109.1@)(4)(i) of the Commission’s regulations “clarifIied] this 

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

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

independent if there is “[alny mangement, coordination, or direction by the candidate or 

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

communication.” 1 1 C.F.R. 0 109.1@)(4)(i)(2000). The fomer regulations further stated 

that an expenditure was presumed not to be independent if: 

(A)Based on idomation about the candidate’s plaps, projects, or needs 

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

. agents, with a view toward having an expenditure made, or 

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

or expend funds, who is, or has been, an officer of an authofi committee, 

.or who is, or has beem, receiving any fom of compensation or reimbursement 

hm the candidate, the candidate’s committee or agent. 

Id. 

Only once has the Supreme Court actually decided whether coordination existed 

based upon a factual record. In Colorudo Republican Federul Campaign Committee v. 

FEC, 518 U.S. 604 (1996), the Court considered whether expenditures made by the 

H.R Cod. Rep. 94-1057 at 38 (1976). Specifically, the Conference Report states: “The definition of the ’ 

term ‘independent expditure’ in the conference substitute is inteded to be consit?cnt with the discussion 

of independent political expenditures which was included in Buckley v. Yrrleo.” Id. 

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

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

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

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

Colorado Party independently and not pursuant to any general or particular 

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

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

‘and Colorado Republican decisions apd the broad statutory language. Instead, these new 

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

Codition, 52 F.Supp.2d 45 (D.D.C. 1999), which effkctively created its own definition of 

coordination. This judicially created defintion of coordination bears little semblance to 

either the “totally independent” or “general understanding” standards articulated by the 

Supreme Court in Buckfey and Colorado Republican or the language of the statute. 

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

corporate treasury hds to influence federal elections in violation of the FECA. Based 

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

its staffrepeatedly &operated and consulted about campaign strategy and activities ~th 

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

senatorial Committee. (The Commission alleged these coordinated expenditures 

constituted in-kind corporate campaign contributions made in violation of 2 U.S.C. 

0 441b. The Commission also detailed, based on the record,.numerous instances where it 

believed the Christian Coalition unambiguously advocated the election or defeat of 

specific clearly identified candidates in violation of the Act’s prohibition on independent 

corporate campaign expenditures.) 

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

five of the six coordinated expenditure allegations and found that there was a contested 

issue of ht on the sixth. In the opinion of the district court, the Supreme Court in 

Buckfey did not address “the First Amendment concerns that arise with respect ‘to 

expressive coordinated expenditures.” 52 F.Supp.2d.at 85. The district court speculated: 

“It ‘can ohy be surmised that the Buckfey majority purposely left this issue for another 

case. In many respects this is that case.” Id. As a result the district court felt free to 

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

regulations. 

. Instead, the district court created its own standard of coordination and appl.ied it to 

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

The district court concluded ‘‘the First Amendment requires different treatment for 

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

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

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

district court then defined an “expressive coordinated expenditure” as an expenditure ‘%r 

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

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

choice of speech has been arrived at af€er coordination with the campaign.’’ Id. The court 

then developed its own test for coordination: 

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

. . expressive expenditure becomes “coordinated[]” where the canadate 

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

substantial’discussion or negotiation between the campaign and the 

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

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

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

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

divussion or negotiation is such that the candidate and spender emerge 

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

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

limits 8441b’s contribution prohibition on expressive coordinated 

expenditures to those in which the candidate has taken a sufEcient 

interest to demonstrate that the expenditure is perceived as valuable for ’ 

. meeting the campaign’s needs.or wants. 

Id. at 92. Based upon this analysis, and not the statute or the Commission’s regulations, 

the district court fbund that there was no improper coordination between the Christian 

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

Congress, or the National Republican Senatorial Committee. 

It Scarcely need be said, the district court’s view that the Supreme Court did not 

address the First Amendment concerns involving “expressive” communications is odd at 

best. The whole analysis in Buckley was about expressive communications! Indeed, 

given the Court’s refehce to independent express advocacy and dangers of evasion 

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

is wholly.unfounded. 

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

flawed Christian Coalition decision. The new rule provides: 

~ committee . A general public political 

communication is considered to be coordinated with a candidate or party committee 

if ,the communication- . 

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

committee, or a party committee, and 

(2) Is created, produced or distributed- 

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

committee, a party committee, or the agent of any of the’foregoing; 

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

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

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timing, location, mode, intended audience, volume of distribution, or 

hquency of placergent of that coxmnunicationj or 

(iii) Mer substantial discussion or negotiation between the creator, producer 

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

. communication, ‘and the candidate, the candidate’s authorized bmmittee, 

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

the content, timhg, location, mode, intended audience, volunie of 

distribution or fiequency of placement of that communication, the result of 

which is collaboration or agreement. Substantial discussion or negotiation 

may be evidenced by one or more meetings, conversations or conferences 

regarding the value or importance ofthe communication for a particular 

election. . 

1 1 C.F.R. 0 ‘100.23(c). 

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

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

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

is planning to run an “issue” advertisement to assist the Smith campaign. Smith con@cts 

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

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

Congressman Jones. Because of this oversight, candidate Smith believes that 

Congressman, Jones is viewed in a better light by the electorate. Candidate Smith, 

however, does not want to run such an advertisement himself for fear of being accused of 

negative advertising. 

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During his meeting With Candidate Smith,’ the wealthy supporter says, “That’s a , 

great idea! Thanks for the information.” After the meeting, the wealthy supporter 

changes the advertisement to say “Congressman Jones is a liar, tax cheat and a wifebeater4eep that in mind on Tuesday.” The advertisement runs on the weekend before’ 

the election. Is this a coordinated expenditure? As we understand theCommission’s new 

regulations, there would be no coordination between the &didate and the spenderbince ’ 

there was no “substantial discussion or negotiation” and no. “request or suggestion” 

indicating “that a communication with a specified content would be valuable. to a’ 

candidate or committee.” 11 C.F.R. 0 100.23(~)(2)(iii); 65 Fed. Reg. 76138,76143 @ec. 

.6,2000)($lmphasis added). 

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

standard to establish coordination. Moreover, if a finding of coordination requires some 

sort of “collaboration or agreement” between a candidate and a spender, a candidate could 

set up a meeting with an organization known to be planning campaign ads, and could 

discuss campaign strategy and the development of issues crucial to the campaign. The 

organization could then make “independent” expenditures based on this detailed 

knowledge and idormation. The only apparent &striction would be that a campaign 

could not “agree on” the final finished ad or actually authorize a buy for the timing and 

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placement of the ad. Such a limited approach renders the coordination standard-and 

thus, the contribution limits+neaningless. 

. The Commission’s earlier defkition of coordination, however, would have 

produced a’much dif’t result. Under the Commission’s former regulations, this 

expenditure would be treated’as a disguised contribution and coordinated activity because 

. it was “based on infiation about the candidate’s plans, projects, or needs provided to 

expenditure made.” 1 1 C.F.R. 0 109.1@)(4)(i) (2000): This would appear to be the ’ 

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

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

coordination. 

. the expending person by the candidate’s agents, with a view toward having an 

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

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

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

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

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

diference of opinion and that an intermediate appealfiom the order nury materially 

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

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

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

matter. 

. 

Our colleagues should not have dropped a significant edorcement action such as 

the Christian Coalition case and wrested resolution of these important issues away hm 

the Article 111 courts! As the recent decision of the Supreme Court in FEC v. Colorado 

Republican Federal Campaign Committee, 531 U.S. 923 (2001), illustrates, it is not 

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

3 It has been suggested that the connnission’s previous coordination re-tions were too broad~y draftad 

and that the Commission has somehow been too aggressive in applying these regulations to the regulated 

community. Yet, the record paints a far different picture. If any conclusion can be reached, it is that the 

Commission has been reluctant to proceed on a coordination theory in even the most ob+ious cases. See, 

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

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

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

for Tax Refom and Lewis for Congress); MUR 4282 (Archdiocese of Philadelphia and Santorum ‘94); and ’ MUR 4378 (NRSC). Having failed to go forward in mak based upon the “broadly drafted” regulations 

of old, it is difficult to imagine the Commission garnering four votes to proceed upan its new coodination 

regulations. ‘ The decision of a single district court certainly cannot resolve these impartant issues. Indeed, the decision 

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

same district. See, e.g., In re Korean Air Line Disater, 829 F.2d 1171,1176 @.C.Cir. 1987)(”Binding 

precedent for all [circuits] is set onlyby the Supreme Court, and forthe district courts withha circuit, only 

by the court of appeals for that ciriuit”), urd, 490 U.S. 122 (1989). ’ ~hrough the years, tfim have been a number of important cases the connnission be^ lost in the lower 

courts but has won on appeal See, e.g., Bread Political Action Committee v. FEC, 635 F.2d 621 (p Cir. 

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

the appellate courts have upheld the Commission’s origmal regulations defining 

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

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

B. 

In its summary of the investigation in MUR 4624, the April 20,2001 General 

Counsel’s Report stated “the facts make for a compelling coordination case under the 

approach in place at the time of the activity at issue. See 11 C.F.R. 0 109.1.’’ The 

General Counsel’s Report reached this coliclusion because: 

l%e facts gathered through this investigation show thatjkom the inception 

of the Coalition through Nmember of 1996, there was a pattern of 

communications and interactions between the Coalition’s leaders and 

Rep. Boehner, the Republican Conference, Congressional candidates, and 

the RNC. Apparently under pressure hm Republican lead& and 

candidates to respond to the AFLCIO’s 35 million dollar ad campaign, , 

the business wmmunity pooled their resources and formed the Coalition. 

April 20,2001 General Counsel’s Report at 36 (emphasis added). The General Counsel’s 

Report concluded that “[tlhe pattern of communications suggests that there was a ‘general 

or specific understanding’ between the parties about the Coalition’s activities. Colorado 

Republican Campaign Committee v. FEC, 116 S.Ct. 2309 (1996).” Id. at 36-37. The 

Report went on to fmd that: 

. 

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

there might well be coordination in this matter, due to bo’th the information 

provided by the Republican leaders to the Coalition and its leaders ‘kith a 

view towards having an expenditure made” and due to the overiapping consultant . 

relationships. See 11 C.F.R. 0 lOS.l(b)(i)(A) and (B). 

. 

1980)(en banc), rev’d, 455 U.S. 577 (1982)(reversing lower court’s decision allowing expedited 

considemtion of an action under 2 U.S.C. Q 43713); FEC v. National Right to Work Committee, 665 F.2d 

371 (D.C.Cir. 1981), rev’d 459 U.S. 197 (1982)(rejectiag lower court construction of the tcrm‘bxnbcf’ to 

include certain individuals descriied by the NRWC as active members); Democratic Senatorial Gzmpuign 

Commiffee v.. FEC, 660 F.2d 773 (D.C.Cir. 1980), rev’d 454 US. 27 (1981)(overhuning decision that FEC 

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

1120 (W.D. Wash. 1987), rev’d 852 F.2d 11 11 (9* Cir. 1988)(rejecting lower court decision holdiq loan 

guarantees were not contributions under FEU); FEC v. Furgakh, No. 83-0596-GT-M)(S.D. Cal. Nov. 20, 

1984), rev’d, 807 F.2d 857 (9* Cir.), cert. denied, 484 U.S. 850 (1987)(reversing lower court’s grant of a 

motion fbr dismissal); see also United htes v. KanchanaZa&, 41 F.Supp. 2d 1 (D.D.C. 1999), rev’d, 192 

F.3d 1037 (D.C.Cir. 1999)(reversing the district court and concluding that 2 U.S.C. Q 441e prohibits fareign 

contriiutions for non-kid as well as federel elections). 

I 

11 
., 

Id. at 37.6 

Although there might well be coordinarion under the previous regulatory 

definition of coordination, the General Counsel’s Report found that “under the present 

state of thelaw the result is different.” Id. After a review of the evidence at haud, the 

General Counsel’s Report explained: 

The foregoing fkts provide circumstantial evidence that the Coalition was 

in some ways a “joint venture” between the trade association members and ’ 

Rep. Boehner and Republican party leaders. But the Christian Coalition 

decision and the Commission-approved regulation require that there be 

coordination, or a joint venture, with respect to “the expressive 

expenditure” or ‘‘general public political communication.” Christian 

Coalition, 52 F.Supp. at 92; 11 C.F.R. 5 100.23(c). This requires 

substantial discussion or negotiation over an expressive communication’s 

content, timing, location, volume etc. The deponents denied such 

. discussions. 

. Id. at 42-43. The Report further explained that: 

Id. at 43. 

[Wlhile some documents are missing, Le., fbx cover sheets, and much of 

the testimony is lesg than credible, the documents produced do not disclose 

evidence of coordination that meets the test. Given our prior deposition 

experience in this matter, it is highly unlikely that obtaining further 

testimony at this time from other key players, e.g., Rep. Boehner, or his 

fomer staff Joyce Gates and Barry Jackson, will yield anything further. 

As a result, the General Counsel’s Report stated, “this Office does not 

recommend further investigation on these issues.” Id? 

The G&l Counsel’s Report also concludes “h Coalition’s communications were undertalren for the 

purpose of influencing federal elections.” fd. at 35. Far example, the Report points out that: 

?he Coalition’s requests fir proposal and responses center on hw to aid candidates, they 

aired ads in the weeks just prim to elcction that lllllllcd clearly identified candidates, they 

dropped direct mail ‘’ten days before the election, just .when many undecided voters were in . 

& 

their decisimm&& process,” aad the Coalition tuok dit for the successfbl reelection of 

of Congress “defended by Coalition advertising.” See GCR, dated December 23,1999, 

Attachmnt 1 atpp.4-8,31, 104-111, 120-132. 

. 

fd. at 35. ’ We note that counsel far the respondents in this matter have submitted lettffs strongly criticizing the 

office of&neral Counsel far its characterizations ofthe evidence in this case and the &me of 

cooperation by respondents or witnesses during the investigation. Letter of June 13,2001 fixm Jan Witold . Baran and Thomas W. Kirby and letter of July 5,2001 fiom Benjamin L. Ginsberg, Mitchell R. Berger and 

Michael T. Wood, refming the General couasel’s Report of April 23,2001. First, by the nature of their 

comments, we are confident they would have written the report with no less apparent skepticism. Second, 

they know well that this case, along with the case involving allegations of coordinatian between the AFL 

CIO and Democratic candidates, presented the potential for massive violations of the campaign 6nance 

laws. No government attomy should be faulted for zealously hying to do the public’s business under these 

12 ’ 
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‘.J 

while we appreciate the dilemma faced by the General Counsel’s Office, we are 

more optimistic that coordination could be pmven even under the strictures of the 

Commission’s new regulations. For example, there is strong circumstantial evidence that 

the communications paid for by the Coalition with corporate funds were requested or 

suggested by the Republican Party. It appears that the Coalition was brought into 

existence at the behest of the Republican Party leadership. Republican Party operatives 

were fully apprised of the operation as it was functioning. Additionally, the Coalition 

hired many of the same vendors-such as media buyers and pollsters-as those hired by 

the Republican Party. And With respect to some candidates, it is clear that people 

working for particula’r Republican congressional candidates were involved in requesting 

several of the Coalition advertisements. Even under the current regulations, theire may 

well be enough to meet the “request or suggestion” standard? 

To uhdmtand the various connections between the Coalition and Republican 

candidates or the Republican Party, one need only look at several specific races. In 

Iowa’s Fourth Congressional District, for example, Brian Trikgli worked for both the 

Coalition and the congressional campaign of Represenktive Greg Ganske. The 

investigation done by the Office of General Counsel revealed “the Coalition’s pollster, 

Brian Tringali, acknowledged that his survey in connection with work paid fbr by Rep. 

Gde’s campaign, hafluenced his decision the next day to recommend that the Coalition 

conduct surueys and air test ads in that district.” April 20,2001, General Counsel’s 

Report at 2 (emphasis added). It would appear likely that the Coalition made a prohibited 

circumstances. Third, to the extent they believe the discovery requests started out too broadly, the criticism 

should be directed to the commissioners who approved those requests, not the FEC lawyers who were 

willing to reach accollllllodatioll time and time again. Finally, as experienced practitionem, they know that 

evaluating an extensive factual record is not a science, and reasonable minds can differ on the value of 

particular pieces of testimony, documentation or circwiwtantial evidence. 

One particular comment deserves additional response. Counsel for tfie cdalition rely on the D.C. 

Circuit’s opinion in In re Seuled be, 237 F3d 657 (D.C. Cir. 2001), apparently fbr the proposition that 

the Oilice of General Couasel is bent on publicizing allegations that are unfouaded because of same 

political motivation. First, the panel opinion in that case badly mischmctend - theFEC’sacticwsinthis 

investigation. Any carell observer of the FEC’s practice over the last 25 years would note that the FEC 

consistently has fled its subpena dbmmmt actions in open court regdlms of lepoliriccrl strip of 

theperson indued. The panel was simply wrong in hinting the FEC’s subpoena enfcwcemwt effbrts in this 

case were “politically motivated” or “externally motivated.” Second, given that it takes faur connnissianers 

for approval of any finding or subpoena, given that the FEC collductcd a parallel iuvestigation of the AFIr 

(30’s ties with Demomtic candidates (lasting 36 mollths versus 35 months for MUR 4624), and given that 

every objective analysis of the FEC’s operations fimds a lack of partisan tilt (see Themes and Bowman, 

“Obstaclep to Eflkctive Enfoorcenrent of the Fedeml Election Campaign Act, ” 52 ADMIN. LAW REVIEW 

No. 2 at 606 (A. U. 2000)), we don’t see a case for prosemtorial misconduct or political vendem. 

In MUR 4291 et ul., where there were indi~+ons the AFL-CIO was a partner in the Democratic Party’s 

‘coordiuated campaign,’ there was scant evidence tying AFL-CIO public mmmnicatiws to the AFLcIo’s 

involvement with the ‘coordinated campaign.’ The -0 certainty was participating with the 

Democratic Party and indicating that it would do its part througb internal communications to its 

membershi-cations permissible under 2 U.S.C. 8 441b@)(2XA)-to bolster candidates 

supported by the -0. In terms of public communications, however, evidence of wordination was 

lack&. 

. 

. 

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i! 

I 

in-kind contribution to the Ganske campaign as a result of the “suggestion” hm an agent 

of the Ganske campaign that an expenditure be made on its behalf. 

Likewise, there appeared to be coordination, albeit less directly, between the 

Coalition and the Republican congressional candidate in Washington’s Fifth . 

Congressional District, Representative George Nethercutt. Based upon evidence 

uncovered in its investigation, the Office of General Counsel found that “shortly after one 

Conference containing a script for an AFGCIO ad airing in Rep. Nethercutt’s district, the 

Coalition prepared and aired a test ad responding to the AFLCIO ad in Rep. Nethercutt’s 

district.” Id. In fact, the interaction between the House Republican Conference was such 

that: 

. of the Coalition’s founding members received a fax from Rep. Boehner’s Republican 

[AIS each wave of Coalition ads was aired, full sets of tapes of each of 

the ads were sent to Representative Boeher’s assistant at the House 

Republican Conference, Joyce Gates, with the understanding that she 

would disseminate them to the 37 candidates in whose districts the 

Coalition &red its ads. 

Id. Representative Nethercutt was a member of the House Republican Conference and, as 

such, the Conference was acting in his interest id on his behalf. As with the Ganske 

campaign,.it appears likely that the Coalition made a prohibited contribution to the 

Nethercutt campaign as a result of a “suggestion” made fiom an agent of the candidate 

that an expenditure be made on his behalf. 

Of course, it is procedurally premature to suggest what analysis the Commission, 

oreven the General Counsel, might have settled on and eyentually appmved. For 

example, the General Counsel had not yet prepared or sent a General Counsel’s Brief 

setting forth a “position on the factual and legal issues of the case and containing a 

recommendation on whether or not the Commission should find probable cause to believe 

that a violation has occurred.” 1 1 C.F.R 0 11 1.lqa). Nor had the respondents filed a 

brief “setting forth respondent[s’] position on the factual and legal issues of the case.” 

11 C.F.R. 0 11 1 ..l6(c). Nor had the General Counsel, after reviewing the respondents’ 

brief, advised the Commission on whether “to proceed with the recommendation or to 

withdraw the recommendation hm Commission consideration.” 11 C.F.R. 6 11 1.16(d). 

’ 

As a practical matter, however, the Commission’s new regulations eff’ectively shut 

down this matter. In light of those regulations,.there certainly were not four votes (as 

thk’were at the ‘reason to believe’ stage under the Commission’.s old coordination 

regulations) for proceeding against the Coalition. .Moreov&, the Commission was ‘facing 

an expiring statute of limitations. As a result, a vote against the General Counsel’s 

recommendation to close these matters would have been pointless. 

‘ 

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I 

III.’ . 

AS a historical footnote, this case also presented the very important issue of 

whether the Coalition should be deemed a “political committee” under the Act. As a 

s’political committee,” the Coalition itself would have been prohibited hm accepting 

corporate contributions. I 

.. 

The Act defines a “political committee” as “any committee, club, association, or 

other group of persons which receives contributions aggregating in excess of $1,000 

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

during a calendar year.” 2 U.S.C. 0 43 l(4). In construing this statutory term, the 

Supreme Court has held that an organization is not a political committee unless, in 

addition to crossing the $1,000 statutory threshold of federal contributions or 

expenditures, the organization is under the control of a candidate or its majorpurpose is 

the nomination or election of candidates to any public office? Thus, once an organization 

has received more than $1,000 in contributions or made more them $1,000 in expendik 

and has met the major purpose test, it becomes a political codttee pursuant to 0 431. 

Any organization that qualifies as a political committee must register with the 

Commission and file periodic reports of all its federal election receipts and disbursements 

for disclosure to the public. 2 U.S.C. 00 433 and 434. A political committee is subject to 

limits when making expenditures in coordination with a candidate, but may make 

unlimited wpenditures on behalf of a candidate if no coordination is involved. 2 U.S.C. 

’ 60 441a(a)(l)(A), (2)(A) and @)a 

”he First General Counsel’s Report recommended in 1998 that the Commission 

find reason to believe the Coalition violated 2 U.S.C. $9 433 and 434 for failing to 

register as a political committee and report its receipts and disbursements. The Report 

reasoned: 

There is no indication that the Coalition was formed fbr any purpose other 

than building or maintaining public support for certain chdidates. For 

instance, there is nothing suggesting that the Coalition engaged in ’. 

lobbying members of Congress or issue discussions outside the context of 

elections. Given that the Coalition spent most of the millions of dollars it 

received in 1996 on’ads and direct mailings designed to influence the 

. 

In Buckley v. Valeo, 424 U.S. 1,79 (1976)(rmphaSiS added), the Court stated ‘To Mfill the purposes of 

the Act [the term ‘political wnnnittee’] need only encompass organizations that am under the control of a 

candidate or the major purpose of which is the nomination or election of a candidate.” The court 

reahd this approach h Fedeml Elation Conrnrission v. A4msachusett.s CitriensfbrLife. Inc., 479 U.S. 

238,252, n.6 (1986): “[A]n entity subject to rkgulation as a ‘political committee’ under the Act is one that 

is either ‘under the control of a candidate or the major purpose of which is the nomination or election of a 

candidate.’” The Court observed that “&ould.[an arganization’s] independent spending become so 

extensive that the organhation’s majorpurpose may be regarded as campaign activity, the [organbation] 

would be classified as a political COIIIIIZ~#CC.” 479 U.S. at 262 (emphasis added). 

15 
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iJ i. i 

outcome of federal elections by returning the majority in Congress and 

that, after apparently lying dormant since the 1996 elections, it now 

appears to be gearing up for the 1998 Congressional elections, there is 

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

the election and defeat of clearly identified federal candidates. [BucRley v. 

Yaleo, 424 U.S. 1,79 (1976)l. As noted, the Coalition spent well in 

excess of $1,000 on expenditures and contributions. 

. 

April 21,1998 General Counsel’s Report at 33-34. The General Counsel’s Report further 

recommended that an investigation of this issue be conducted through document and 

deposition subpoenas, as well as informal discovery where possible. 

We agreed with the General Counsel’s recommendation to fmd reason to believe 

that the Coalition filed to registera a political committee. It appeared that the major 

purpose of the Coalition was the nomination or election of candidates for public office. 

Indeed, according to Bruce Josten, Senior Vice President of the U.S. Chamber of 

Commerce and an organizer of the Coalition, ‘’this is the ht pro-business Congress since 

1928 and bm a pure business perspective, getting them [relelected is important. Our 

ultimate objective is to return a pro-business, fucali’y respnsible majority for the I 

Congress.” Wmhington Post, August 8,1996 (emphasis added). 

There were not, however, four votes to find reason to believe the Coalition 

violated 2 U.S.C. 00 433 and 434. See 2 U.S.C. 6 437g(a)(2). On June 8,1998, a motion 

to approve that reconkendation failed by a vote of 3-1. Supra, p.4.” 

lo Despite several reqwts6-om the Office of General Chumel, the declining conm3issioner never provided 

a statemnt of masons explaining the rationale iiw her opposition to the General Counsel’s recodtion. 

Corxnnissioner Elliott was replaced on June 25,2000. 

Odinarily, when a conrmissioner blocks a mmnmedation to proceed, the “declining-to-godead” 

commissioner must file such a statmmt of reasons. Cbmmon Caw v. FIC, 842 F.2d 436,439 @.C.Cir. 

1988). Moreover, the Connnission’s Regulations explicitly require that these opinions “will be made 

available no later than 30 days from the date on which a respondent is notified that the Conmission has 

voted to take no fiuther action and to close such an enforcement Ne.” 11 CF.R 0 S.qaX4). Thc 

Commission unanimously rcdkmed this principle by adopting internal guide- which state: ‘The 

deadline for completion of the statemnt will be the 3Oday time period fbllowing notification to the 

respundent at which time the entire file of the closed MUR will be released to the public.” FEC Open 

Meeting Minutes at 7 (February 5,1987). In MUR 4624, these letters wem sent out on June 6,2001. 

Failure to file a statemnt places complainants, who may wish to exercise their statutory rights under 

2 U.S.C. Q 437g(ax8), in the untenable position of not knowing the reasoning of the “declining-*goahead” cornmissioner and thus, whether the failure to proceed is contrary to law. By itsew Commissioner 

Elliott’s failure to file a stamt of reasons, despite a clear judicial and regulatory mandate to do so, 

would appear to justify a default finding that her inaction in MUR 4624 was contrary to law. 

, 

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s” 

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We understand Commissioner Sandstrom voted against closing the file in this 

matter because he believed the Coalition should be viewed as a political dttee and 

its receipts should be considered violations of 2 U.S.C. 6 441b. We agree with this legal 

theory as evidenced by the 3-1 vote over three years ago. Since this legal issue already 

had been dealt with by the Commission and since two of the other commissioners now 

sitting indicated they would not support a new ‘reason to believe’ finding on this theory, 

in our view it made little &e to vote against closing this matter. The real issue before 

the .current Commission was whether the Coalition’s ads should be deemed coordinated 

with any candidates, and the answer to this was preordained by the Commission’s new 

regulation. 

Iv. 

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

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

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

pointed out that ‘hany obs&ers of campaigns who are concerned about evasions of the 

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

Rec. S3 184 (daily ed. Match 30,20Ol)(remarks of Sen. Feingold). Reflecting this 

concern, section 214 of the bill ai passed by the Senate would repeal the Commission’s 

new coordination regulations and would direct the Commission to pnrmulgate new. 

coordination rules within 90 days to take their place. These new rules would almost 

certainly differ significantly hm the Commission’s regulations based on the Christian 

Carlition decision. 

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

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

new coordination regulations. On May 3,2001, CommissionerSMason, Sandstrom, 

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

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

Senator Feingold that the new regulations are far too narrowly drafted and will make 

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

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

new rules that, at the present time, are in such obvious conflict with the will of the United 

States Sete. 

. 

. 

As MUR 4624 demonstrates, these regulations seriously weaken enforcement of 

the limi@tions, prohibitions and reporting requirements of the Act. Millions of dollars in 

corporate funds were received, spent and never reported by the Coalition. This activity 

did not appear to be undertaken “totally independently” of candidates and their agents. 

Buckley, 424 U.S. at 47. To the contrary, this activity appeared to be undertaken pursuant 

to a “general understanding“, Colorado, 518 US. at 614, with the candidates and their 

agents and may well have been covered by the Commission’s prior definition of 

coordination. Yet, under the Commission’s new coordination regulations, this activity 
.... .. 

i,l 

. -. #. 

r; 

.. 

was never subjected to proper legal scrutiny. In MUR 4624;likely violations under the 

original regulation turned into unlikely violations under the new regulation. It is this 

legacy of non-enforcement we fear will be repeated as long as these new kgulations 

remain in effect. 

Commissioner 

18