ORAL ARGUMENT NOT YET SCHEDULED 

No. 18-5239 

_______________________________________________ 

UNITED STATES COURT OF APPEALS 

FOR THE DISTRICT OF COLUMBIA CIRCUIT 

_______________________________________________ 

CAMPAIGN LEGAL CENTER, et al., 

Plaintiffs-Appellants, 

v. 

FEDERAL ELECTION COMMISSION, 

Defendant-Appellee, 

ELI PUBLISHING, L.C., et al., 

Intervenors-Appellees. 

_______________________________________________ 

On Appeal from the United States District Court 

for the District of Columbia 

_______________________________________________ 

BRIEF FOR THE FEDERAL ELECTION COMMISSION 

_______________________________________________ 

Lisa J. Stevenson 

Acting General Counsel 

lstevenson@fec.gov 

Kevin Deeley 

Associate General Counsel 

kdeeley@fec.gov 

Kevin P. Hancock 

Acting Assistant General Counsel 

khancock@fec.gov 

Haven G. Ward 

Attorney 

hward@fec.gov 

FEDERAL ELECTION 

COMMISSION 

1050 First Street NE 

Washington, DC 20463 

(202) 694-1650 

August 14, 2019 

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TABLE OF CONTENTS 

 Page 

INTRODUCTION ..................................................................................................... 1 

STATUTES AND REGULATIONS ......................................................................... 3 

COUNTERSTATEMENT OF THE CASE ............................................................... 4 

I. STATUTORY AND REGULATORY BACKGROUND .............................. 4 

A. The Administrative Enforcement Process ............................................. 4 

1. The Commission ........................................................................ 4 

2. FECA’s Enforcement and Judicial-Review Provisions ............. 4 

B. FECA’s Straw Donor Prohibition and Political Committee 

Requirements ......................................................................................... 6 

II. FACTUAL BACKGROUND .......................................................................... 7 

A. Administrative Participants and Proceedings ........................................ 7 

1. F8 and Eli Publishing .................................................................. 7 

2. Specialty Investment Group and Kingston Pike ........................ 9 

B. The Dismissals .................................................................................... 10 

III. DISTRICT COURT PROCEEDINGS .......................................................... 15 

SUMMARY OF THE ARGUMENT ...................................................................... 17 

ARGUMENT ........................................................................................................... 19 

I. COMPLAINANTS LACK STANDING ...................................................... 19 

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A. Standard of Review ............................................................................. 19 

B. Appellants Have Not Established Informational Standing ................. 19 

II. THE DISMISSAL BASED ON PROSECUTORIAL DISCRETION 

 IS NOT JUDICIALLY REVIEWABLE ...................................................... 24 

A. Standard of Review ............................................................................. 24 

B. Judicial Review Is Not Available Here ............................................... 24 

C. Commission on Hope Is Not Distinguishable ..................................... 26 

1. The Dismissal Was Based on Prosecutorial Discretion ............ 26 

2. The Reasons for Exercising Prosecutorial Discretion 

Are Not Reviewable .................................................................. 32 

3. The Dismissals Were Not Based Entirely on 

Interpretations of FECA ............................................................ 34 

4. The Political Committee Claims Were Dismissed as a 

 Matter of Prosecutorial Discretion ............................................ 38 

III. IN THE ALTERNATIVE, THE DISMISSAL WAS NOT 

CONTRARY TO LAW ................................................................................. 39 

A. Standard of Review ............................................................................. 39 

B. The Dismissal Was Not Contrary to Law ........................................... 40 

1. There Was A Rational Basis For Finding that 

Respondents May Not Have Had Adequate Notice ................ 40 

a. Citizens United Warrants a Fresh Look .......................... 41 

b. Soft Money “Contributions” Are Irrelevant ................... 43 

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2. Even If Section 30122 Was Clear in the Abstract, It 

Was Rational To Find that It May Have Been Unclear 

As Applied ................................................................................ 44 

a. It Was Rational to Distinguish Corporate LLCs 

and Closely Held Corporations ...................................... 44 

b. The Controlling Group’s Notice Concerns Were 

Grounded in the Record .................................................. 47 

c. The Dispute Regarding the Appropriate Standard 

Underscores the Lack of Pre-Existing Clarity ................ 49 

d. The Dismissal of the Political Committee Claims 

Was Not Contrary to Law ............................................... 51 

e. The Controlling Commissioners Reasonably 

Determined It Would Be Unfair to Prosecute the 

Respondents .................................................................... 52 

C. The Challenge to the Proposed Purpose-Based Approach Is 

Not Ripe and In Any Event Fails ........................................................ 53 

1. It Is Not Ripe ............................................................................. 53 

2. The Proposed Standard Is Not Contrary to Law ....................... 58 

CONCLUSION ........................................................................................................ 60 

 

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TABLE OF AUTHORITIES 

Cases Page 

Abbott Labs. v. Gardner, 387 U.S. 136 (1967) ....................................................... 54 

AFL-CIO v. FEC, 333 F.3d 168 (D.C. Cir. 2003) .................................................. 37 

Akins v. FEC, 736 F. Supp. 2d 9 (D.D.C. 2010) ..................................................... 35 

Alliance for Democracy v. FEC, 362 F. Supp. 2d 138 (D.D.C. 2005) ................... 21 

Alliance for Democracy v. FEC, 335 F. Supp. 2d 39 (D.D.C. 2004) ..................... 21 

Am. Soc’y for the Prevention of Cruelty to Animals v. Feld Entm’t, Inc., 

659 F.3d 13 (D.C. Cir. 2011) ............................................................................... 23 

Am. Trucking Assocs. v. Fed. Motor Carrier Safety Admin.,

724 F.3d 243 (D.C. Cir. 2013) ......................................................................... 19-20 

Atl. States Legal Found. v. EPA, 325 F.3d 281 (D.C. Cir. 2003) ..................... 55, 57 

Buckley v. Valeo, 424 U.S. 1 (1976) ............................................................. 6, 18, 43 

*Ctr. for Indiv. Freedom v. Van Hollen (“Van Hollen I”), 

694 F.3d 108 (D.C. Cir. 2012) ........................................................................ 41-42 

Chamber of Commerce v. FEC, 69 F.3d 600 (D.C. Cir. 1995) .............................. 25 

Chlorine Inst., Inc. v. Fed. R.R. Admin., 718 F.3d 922 (D.C. Cir. 2013) ............... 55 

*Citizens for Responsibility & Ethics in Wash. v. FEC (“Commission on Hope”), 

892 F.3d 434 (D.C. Cir. 2018) ......................................... 3, 5, 16-18, 24-27, 32-35 

*Citizens for Responsibility & Ethics in Wash. v. FEC (“Americans for Tax 

Reform”), 475 F.3d 337 (D.C. Cir. 2007) ................................................. 21-22, 37 

Citizens for Responsibility & Ethics in Wash. v. FEC, 

236 F. Supp. 3d 378 (D.D.C. 2017) ..................................................................... 33 

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Citizens for Responsibility & Ethics in Wash. v. FEC (“Murray Energy”), 

267 F. Supp. 3d 50 (D.D.C. 2017) ................................................................. 20, 22 

Citizens for Responsibility & Ethics in Wash. v. FEC, 

401 F. Supp. 2d 115 (D.D.C. 2005) ............................................................... 22-23 

Citizens United v. FEC, 558 U.S. 310 (2010)...... 2, 11, 16, 27-28, 41, 43, 45-46, 48 

Combat Veterans for Cong. Political Action Comm. v. FEC, 

795 F.3d 151 (D.C. Cir. 2015) ............................................................................. 30 

Common Cause v. FEC, 906 F.2d 705 (D.C. Cir. 1990) ........................................ 31 

Common Cause v. FEC (“Common Cause II”), 

842 F.2d 436 (D.C. Cir. 1988) .................................................................. 36-38, 57 

Common Cause v. FEC (“Common Cause I”), 

108 F.3d 413 (D.C. Cir. 1997) .................................................................. 19-20, 22 

Conference Grp. v. FCC, 720 F.3d 957 (D.C. Cir. 2013) ...................................... 55 

Democratic Cong. Campaign Comm. v. FEC (“DCCC”), 

831 F.2d 1131 (D.C. Cir. 1987) .................................................................. 5, 25-26 

Doe v. FEC, 920 F.3d 866 (D.C. Cir. 2019) ........................................................... 31 

Ethyl Corp. v. EPA, 306 F.3d 1144 (D.C. Cir. 2002) ............................................. 22

*FCC v. Fox Television Stations, Inc., 567 U.S. 239 (2012) ............... 15, 29, 51, 53 

FEC v. Akins, 524 U.S. 11 (1998) .................................................... 21, 24-25, 35, 37 

FEC v. Democratic Senatorial Campaign Comm., 454 U.S. 27 (1981) .......... 35, 39 

FEC v. John A. Dramesi for Congress Comm., 

640 F. Supp. 985 (D.N.J. 1986) ........................................................................... 60 

FEC v. Kalogianis, No. 8:06-cv-68-T-23, 

2007 WL 4247795 (M.D. Fla. Nov. 30, 2007) ............................................... 12-13 

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FEC v. Nat’l Republican Senatorial Comm., 966 F.2d 1471 (D.C. Cir. 1992) ........ 5 

FEC v. Wisc. Right to Life, Inc., 551 U.S. 449 (2007) ........................................... 41 

Fox v. Gov’t of D.C., 794 F.3d 25 (D.C. Cir. 2015) ............................................... 34 

*Friends of Animals v. Jewell, 828 F.3d 989 (D.C. Cir. 2016) .............................. 22 

Friends of Animals v. Jewell, 824 F.3d 1033 (D.C. Cir. 2016) .............................. 23 

FTC. v. Standard Oil Co. of Cal., 449 U.S. 232 (1980) ......................................... 57 

Gates & Fox Co. v. Occupational Safety & Health Review Comm’n, 

790 F.2d 154 (D.C. Cir. 1986) ........................................................................ 48-49 

Gen. Elec. Co. v. EPA, 53 F.3d 1324 (D.C. Cir. 1995) .................................... 49, 51 

Gottlieb v. FEC, 143 F.3d 618 (D.C. Cir. 1998) .................................................... 23 

Great N. Ry. Co. v. Sunburst Oil & Ref. Co., 287 U.S. 358 (1932) ....................... 31 

Hagelin v. FEC, 411 F.3d 237 (D.C. Cir. 2005) ..................................................... 24 

*Heckler v. Chaney, 470 U.S. 821 (1985) ......... 12, 15, 18, 24, 26-28, 31-32, 34, 37 

Jenkins v. Wash. Convention Ctr., 236 F.3d 6 (D.C. Cir. 2001) ............................ 24 

Judicial Watch v. FEC, 293 F. Supp. 2d 41 (D.D.C. 2003) .............................. 21-22

Lincoln v. Vigil, 508 U.S. 182 (1993) ..................................................................... 32 

Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ............................................. 19 

McConnell v. FEC, 540 U.S. 93 (2003) .................................................................. 43 

Nader v. FEC, 725 F.3d 226 (D.C. Cir. 2013) ................................................... 20-22 

Nat’l Park Hosp. Ass’n v. Dep’t of Interior, 538 U.S. 803 (2003) .................... 54-55 

Orloski v. FEC, 795 F.2d 156 (D.C. Cir. 1986) ......................................... 39, 40, 59 

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Pub. Citizen Health Research Grp. v. Comm’r, Food & Drug Admin., 

740 F.2d 21 (D.C. Cir. 1984) ............................................................................... 57 

Pub. Citizen, Inc. v. FERC, 839 F.3d 1165 (D.C. Cir. 2016) ................................. 30 

Reno v. Am.-Arab Anti-Discrimination Comm., 525 U.S. 471 (1999) ................... 29 

Sierra Club v. Jackson, 648 F.3d 848 (D.C. Cir. 2011) ......................................... 25 

Staples v. United States, 511 U.S. 600 (1994) ........................................................ 58 

Summers v. Earth Island Inst., 555 U.S. 488 (2009) .............................................. 19 

Texas v. United States, 523 U.S. 296 (1998) .......................................................... 56 

Trinity Broad. of Fla., Inc. v. FCC, 211 F.3d 618 (D.C. Cir. 2000) ...................... 47 

United States v. Danielczyk, 788 F. Supp. 2d 472 (E.D. Va.) ................................ 42 

United States v. O’Donnell, 608 F.3d 546 (9th Cir. 2010) ................................. 6, 42 

United States v. Trie, 23 F. Supp. 2d 55 (D.D.C. 1998) ......................................... 43 

United States v. U.S. Gypsum Co., 438 U.S. 422 (1978) ........................................ 58 

Util. Air Regulatory Grp. v. EPA, 320 F.3d 272 (D.C. Cir. 2003) ......................... 54 

*Van Hollen v. FEC (“Van Hollen II”), 

811 F.3d 486 (D.C. Cir. 2016) ................................................ 30, 32, 36-37, 42, 59 

Statutes and Regulations 

Federal Election Campaign Act of 1971, Pub. L. No. 92-225, § 310, 

 86 Stat. 19 (1972) ................................................................................................. 58 

52 U.S.C. § 30101(8)(A)(i) ....................................................................... 3, 6, 43, 58 

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52 U.S.C. § 30101(4)(A) ........................................................................................... 6 

52 U.S.C. § 30101(9)(A)(i) ....................................................................................... 6 

52 U.S.C. § 30101(11) ............................................................................................ 40 

52 U.S.C. § 30103 ..................................................................................................... 6 

52 U.S.C. § 30104(a) ................................................................................................ 6 

52 U.S.C. § 30104(b) ................................................................................................ 6 

52 U.S.C. § 30104(f) ............................................................................................... 41 

52 U.S.C. § 30106(b)(1) ........................................................................................... 4 

52 U.S.C. § 30107(a)(8) ............................................................................................ 4 

52 U.S.C. § 30109(a)(1) ............................................................................................ 4 

52 U.S.C. § 30109(a)(2) ......................................................................................... 4-5 

52 U.S.C. § 30109(a)(4) ............................................................................................ 5 

52 U.S.C. § 30109(a)(4)(A)(i) .................................................................................. 5 

52 U.S.C. § 30109(a)(5) .......................................................................................... 56 

52 U.S.C. § 30109(a)(6) ...................................................................................... 4, 56 

52 U.S.C. § 30109(a)(6)(A) ...................................................................................... 5 

*52 U.S.C. § 30109(a)(8)(A) .................................................................. 5, 17, 19, 31 

52 U.S.C. § 30109(a)(8)(C) ............................................................................. 5-6, 39 

52 U.S.C. § 30109(d)(1)(D) .................................................................................... 56 

52 U.S.C. § 30111(a)(8) ............................................................................................ 4 

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52 U.S.C. § 30116(a)(1) .......................................................................................... 46 

52 U.S.C. § 30116(a)(2) .......................................................................................... 46 

52 U.S.C. § 30116(a)(8) .......................................................................................... 46 

52 U.S.C. § 30118 ................................................................................................... 41 

52 U.S.C. § 30118(a) .............................................................................................. 11 

*52 U.S.C. § 30122 .................... 6, 8-12, 14, 18, 20, 35, 40, 42-48, 52, 54-56, 58-59 

11 C.F.R. § 110.1(e) ................................................................................................ 45 

11 C.F.R. § 110.1(g) ................................................................................... 13, 45, 48 

11 C.F.R. § 110.1(g)(3) ........................................................................................... 45 

11 C.F.R. § 110.1(h) ............................................................................................... 46 

11 C.F.R. § 110.6 .................................................................................................... 46 

Miscellaneous 

D.C. Cir. R. 28(a)(7) ............................................................................................... 19 

H.R. Rep. No. 94-917 (1976) .................................................................................. 58 

Robert H. Jackson, The Federal Prosecutor (Apr. 1, 1940) ................................... 30

 

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GLOSSARY 

Complainants Campaign Legal Center and Democracy 21 

Corporate LLCs Limited liability companies taxed as corporations 

CREW Citizens for Responsibility & Ethics in Washington 

FEC or Commission Federal Election Commission 

FECA or Act Federal Election Campaign Act 

J.A. Joint Appendix 

MUR Matter Under Review 

OGC FEC Office of the General Counsel 

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INTRODUCTION

Appellants Campaign Legal Center and Democracy 21 (collectively, 

“Complainants”) challenge the Federal Election Commission’s (“FEC” or 

“Commission”) dismissal of their administrative complaints alleging that various 

individuals and entities violated the Federal Election Campaign Act’s (“FECA” or 

“Act”) prohibition against contributions made in the name of another and reporting 

and registration requirements. Certain contributions to independent-expenditureonly political committees (also known as “super PACs”) by closely held 

corporations and limited liability companies taxed as corporations (“corporate 

LLCs”) purportedly were attributable to the corporate entities’ owner/member as 

their “true source,” and these entities thus had acted as “straw donors.” 

Addressing what they concluded was an issue of first impression, a group of 

three Commissioners, who voted not to pursue an investigation and ended up 

controlling the outcome, explained that they had done so as “an exercise of the 

Commission’s prosecutorial discretion.” (J.A.149.) These Commissioners agreed 

with their colleagues that closely held corporations and corporate LLCs may be 

“straw donors” in violation of FECA’s prohibition against making contributions in 

the name of another, but concluded that this interpretation of FECA should be 

applied only prospectively. All the Commissioners thus agreed that, when an 

individual is the “true source” of a contribution from such a corporate entity, 

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FECA requires disclosure of the identity of the individual, rather than the corporate 

entity, as the contributor. When determining the “true source” in similar future 

matters, the controlling Commissioners explained that, for their part, they would 

inquire into the purpose of the contribution. 

Concerned that the respondents did not have sufficient notice to justify 

retroactive application of a newly announced interpretation, and sensitive to the 

First Amendment rights at stake, however, the controlling group concluded that it 

would be unfair to proceed against the respondents. Observing that the question 

presented by the administrative complaints arose in an area where the law had 

recently underwent a sea change due to Citizens United v. FEC, 558 U.S. 310 

(2010), and in light of potentially confusing Commission precedent and 

regulations, the controlling Commissioners instead “used the present matters to 

announce a governing interpretation to put the public on notice of the conduct that 

constitutes a violation of the Act, while dismissing” the matters before them. 

(J.A.173.) 

The district court determined that it possessed jurisdiction to review several 

of the administrative matters and granted judgment for the Commission, finding 

that the controlling Commissioners’ decision to exercise their prosecutorial 

discretion “was rational[] and indeed an able attempt to balance the competing 

values that lie at the heart of campaign finance law,” and that Complainants’ 

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challenge to their announced purpose-based approach for future matters was “not 

even close to being ripe.” (J.A.40-45, 424, 426.) Thereafter, in a separate case 

similarly involving controlling FEC Commissioners exercising their prosecutorial 

discretion, this Court held that such dismissals are “not subject to judicial review.” 

CREW v. FEC, 892 F.3d 434, 441 (D.C. Cir. 2018) (“Commission on Hope”), pet. 

for reh’g en banc denied, 923 F.3d 1141 (D.C. Cir. 2019). 

Because Complainants are injured by the lack of information they seek in 

only a generalized way of seeking to have the law enforced, and not in any 

concrete and particularized way, they lack standing to pursue this appeal. And 

because the FEC’s “unreviewable prosecutorial discretion” was the basis for the 

dismissal here, this Court should affirm the district court’s judgment. Id. at 438. 

In any event, as the district court found, the decision was reasonable and thus not 

contrary to law. Moreover, Complainants’ challenge to a new standard that may 

(or may not) be applied in future cases is not ripe and that standard is nonetheless 

rational. 

STATUTES AND REGULATIONS

52 U.S.C. § 30101(8)(A)(i): “When used in this Act: . . . (8)(A) The term 

‘contribution’ includes—(i) any gift, subscription, loan, advance, or deposit of 

money or anything of value made by any person for the purpose of influencing any 

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election for Federal office . . . .” 

COUNTERSTATEMENT OF THE CASE 

I. STATUTORY AND REGULATORY BACKGROUND 

A. The Administrative Enforcement Process 

1. The Commission 

The FEC is a six-member, independent agency vested with statutory 

authority over the administration, interpretation, and civil enforcement of FECA. 

Congress authorized the Commission to “administer, seek to obtain compliance 

with, and formulate policy with respect to” FECA, 52 U.S.C. § 30106(b)(1); “to 

make, amend, and repeal such rules . . . as are necessary to carry out the provisions 

of [FECA],” id. §§ 30107(a)(8), 30111(a)(8); and to investigate possible violations 

of the Act, id. § 30109(a)(1)-(2). The FEC has “exclusive jurisdiction” to initiate 

civil enforcement actions for violations of FECA. Id. §§ 30106(b)(1), 30109(a)(6). 

2. FECA’s Enforcement and Judicial-Review Provisions 

FECA permits any person to file an administrative complaint with the 

Commission alleging a violation of the Act. Id. § 30109(a)(1). After considering 

these allegations and any response, the FEC determines whether there is “reason to 

believe” that the respondent violated FECA. Id. § 30109(a)(2). If the Commission 

so finds, then the Commission conducts “an investigation of such alleged 

violation” to determine whether there is “probable cause to believe” that a FECA 

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violation has occurred. Id. § 30109(a)(2), (4). If probable cause is found, the 

Commission is required to attempt to reach a conciliation agreement with the 

respondent. Id. § 30109(a)(4)(A)(i). If the Commission is unable to reach a 

conciliation agreement, FECA provides that the agency “may” institute a de novo

civil enforcement action. Id. § 30109(a)(6)(A). At each stage, the affirmative vote 

of at least four Commissioners is required for the agency to proceed. Id. 

§ 30109(a)(2), (a)(4)(A)(i), (a)(6)(A). 

If the Commission dismisses the complaint, FECA provides a cause of 

action for “aggrieved” administrative complainants to seek judicial review. Id. 

§ 30109(a)(8)(A); Commission on Hope, 892 F.3d at 438. In instances where a 

dismissal results from a split vote, the “Commissioners who voted to dismiss” 

“constitute a controlling group,” since “their rationale necessarily states the 

agency’s reasons for acting as it did.” FEC v. Nat’l Republican Senatorial Comm., 

966 F.2d 1471, 1476 (D.C. Cir. 1992) (discussing Democratic Cong. Campaign 

Comm. v. FEC, 831 F.2d 1131, 1133-35 (D.C. Cir. 1987) (“DCCC”)). 

If a court finds a reviewable dismissal decision to be “contrary to law,” the 

court can “direct the Commission to conform” with its ruling “within 30 days.” 52 

U.S.C. § 30109(a)(8)(C). If, and only if, the Commission fails to conform, the 

complainant may bring “a civil action to remedy the violation involved in the 

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original [administrative] complaint.” Id.

B. FECA’s Straw Donor Prohibition and Political Committee 

Requirements 

FECA provides: “No person shall make a contribution in the name of 

another person or knowingly permit his name to be used to effect such a 

contribution, and no person shall knowingly accept a contribution made by one 

person in the name of another person.” Id. § 30122. It thus prohibits the “true 

source” of a contribution from concealing its identity by making the contribution 

through a pass through, or what is commonly known as a “straw donor” — i.e., a 

concealed intermediary or conduit. United States v. O’Donnell, 608 F.3d 546, 549 

(9th Cir. 2010). A “contribution,” in turn, is “any gift, subscription, loan, advance, 

or deposit of money or anything of value made by any person for the purpose of 

influencing any election for Federal office.” 52 U.S.C. § 30101(8)(A)(i). 

FECA also imposes distinct disclosure requirements on organizations 

qualifying as “political committees.” Id. §§ 30103, 30104(a)-(b). An organization 

is a “political committee” only if (a) the group crosses the $1,000 threshold of 

contributions or expenditures, and (b) has as its “major purpose” the nomination or 

election of federal candidates. Id. §§ 30101(4)(A), 30101(8)(A)(i), (9)(A)(i); 

Buckley v. Valeo, 424 U.S. 1, 79 (1976). 

 

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II. FACTUAL BACKGROUND

A. Administrative Participants and Proceedings 

Campaign Legal Center is a nonpartisan, nonprofit organization whose 

mission includes the “proper implementation and enforcement” of “campaign 

finance reform” and “educating the public regarding the persons and entities 

funding political communications.” (J.A.12; Campaign Legal Ctr. v. FEC, No. 16-

cv-752 (D.D.C.), Dkt. 18-1 ¶¶ 4, 9 (Aug. 2, 2016).) Democracy 21 is similarly a 

nonpartisan, nonprofit organization whose work includes “efforts to help ensure 

that campaign finance laws are properly enforced and implemented” and 

publication of a “Political Money Report.” (Id. at Dkt. 18-2 ¶¶ 2-3.) 

Three of Complainants’ administrative matters are on appeal. See infra 

pp. 15-16. 

1. F8 and Eli Publishing 

Eli Publishing, L.C. is a limited liability company founded in 1997 by 

Steven Lund “for the purpose of publishing a range of specialty books.” (J.A.150 

(internal quotation marks omitted).) Although it had only published one book, 

publicly available information indicated it was a going concern. (J.A.110, 150.) 

F8 LLC was formed in 2008 with a self-described “commercial” purpose. 

(J.A.150.) F8 listed two managers who were reportedly connected to Lund by 

family and/or business relationships. (J.A.110-11, 150 n.19.) 

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A registered super PAC, Restore Our Future, Inc., disclosed that it received 

two $1 million contributions in March 2011 from F8 and Eli Publishing, 

respectively. (J.A.85, 150 & n.20.) A television news show later stated that 

neither company appeared to do “substantial business” (J.A.85, 179); and that 

Lund had purportedly told the reporter that he was “not trying to hide the 

donation,” and “made it through a corporation he created . . . years ago because 

donating through a corporation has accounting advantages” (J.A.112 (internal 

quotation marks and emphasis omitted)). He also purportedly said that “he made 

the contribution through Eli Publishing because he did not want to be real public 

about being a part of the campaign.” (J.A.128 (internal quotation marks and 

emphasis omitted).) 

Complainants filed two administrative complaints, alleging that F8 and Eli 

Publishing were straw donors and “the person(s) who created, operated and/or 

contributed to F8” and Lund, respectively, were the true sources of the 

contributions in violation of section 30122, and that the corporate entities violated 

FECA’s political committee requirements. (J.A.84, 90, 184.) 

The FEC’s Office of the General Counsel (“OGC”) recommended that the 

Commission find reason to believe that F8, Eli Publishing, Lund, and “Unknown 

Respondents” violated section 30122, and to take no action at that time regarding 

the political committee allegations. (J.A.122-23.) 

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2. Specialty Investment Group and Kingston Pike 

In September 2012, William Rose, Jr. formed Specialty Investment Group 

Inc. and its subsidiary, Kingston Pike Development LLC. (J.A.151.) Rose 

represented that he caused the two entities to be “‘formed for the purpose of 

engaging in the real estate business,’” and that they had “‘purchased, offered to 

purchase, and/or negotiated real estate investments valued at over $50 million.’” 

(J.A.151 & n.26 (quoting J.A.218).) The entities were administratively dissolved 

in August 2013. (J.A.253.) 

A registered super PAC, FreedomWorks for America, disclosed that it 

received contributions from these entities, totaling $10,575,000 and $1,500,000, 

respectively, during October 2012. (J.A.219, 252, 255.) 

Based on press reports, Complainants filed an administrative complaint 

alleging that Specialty Group and Kingston Pike were straw donors, and that “any 

person(s) who created, operated and made contributions” to these entities and/or 

Rose were the true source(s) of the contributions in violation of section 30122, and 

that the corporate entities violated FECA’s political committee requirements. 

(J.A.194-95.) 

After additional press, Complainants amended their complaint, stating that 

Richard Stephenson was the true source of the contributions; Rose and unnamed 

other individuals may have knowingly permitted the companies’ names to be used 

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for these alleged straw donor contributions; and that FreedomWorks and Adam 

Brandon knowingly accepted these contributions in violation of section 30122. 

(J.A.206-12, 224-29.) 

OGC recommended that the Commission find reason to believe that 

Stephenson, Rose, Specialty Group, Kingston Pike, FreedomWorks, and Brandon 

violated section 30122, and to take no action at that time with respect to the 

political committee allegations. (J.A.268.) 

B. The Dismissals 

In February 2016, the Commission, by a vote of 3-3, did not find reason to 

believe that the respondents violated section 30122. (J.A.138-39, 399-400.) 

Commissioners Petersen, Hunter, and Goodman voted against finding reason to 

believe, while Commissioners Walther, Ravel, and Weintraub voted for finding 

reason to believe. (Id.) The Commission then voted 6-0 to close its file, thereby 

dismissing the complaints. (Id.) 

In a consolidated statement of reasons, Commissioners Petersen, Hunter, and 

Goodman explained their vote, which they later supplemented. (J.A.147-61, 173-

76.) Commissioners Walther, Ravel, and Weintraub also issued a statement 

explaining their votes, which Commissioners Ravel and Weintraub later 

supplemented. (J.A.163-67, 169-71.) 

Because Commissioners Petersen, Hunter, and Goodman voted against 

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finding reason to believe, they constitute the “controlling group.” They determined 

that the matters were appropriately addressed under the straw-donor prohibition, 

not the political committee provisions. (J.A.152 n.36.) The controlling 

Commissioners explained that Citizens United and its progeny led to corporations 

being able to make unlimited contributions to a new type of entity, an independentexpenditure-only political action committee or “super PAC.” (J.A.147-49 & n.1, 

152-57.) 

Until recently, they noted, “corporations could not make any contributions.” 

J.A.153; see also 52 U.S.C. § 30118(a). Thus, while section 30122 referenced 

“person” and FECA generally defined the term to include corporations, in the preCitizens United era, “the Commission ha[d] never addressed the inverse of the 

conventional corporate straw-donor scheme” in which a closely held corporation or 

corporate LLC is alleged to be the straw donor. (J.A.153.) 

The controlling Commissioners found that “Congress likely did not 

contemplate that corporations could violate the prohibition against giving in the 

name of another by acting as straw donors for contributions.” (J.A.155.) 

Interpreting FECA in light of section 30122’s language and purpose, they 

nevertheless concluded that closely held corporations and corporate LLCs could be 

unlawful straw donors. (J.A.154, 164.) 

 The controlling group, however, decided to exercise their prosecutorial 

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discretion due to a number of considerations. (J.A.148-49, 159 n.69, 160 (citing 

Heckler v. Chaney, 470 U.S. 821 (1985), repeatedly).) First, they found that the 

agency had never before applied section 30122 when neither FECA’s contribution 

limits nor its source prohibitions came into play. (J.A.148, 155.) Prior cases 

typically involved (a) an individual serving as a straw donor for a prohibited 

source, such as a corporation or federal contractor, or (b) an individual serving as a 

straw donor for another individual whose total contributions exceeded FECA’s 

limits. (J.A.153, 155 & nn.42, 51.) 

Second, “[e]ven more significant,” the controlling Commissioners 

considered prior agency precedent where, even though a shareholder in a closely 

held corporation stated that he or she was the source of the funds at issue, the 

Commission nonetheless deemed the funds to be from the corporation. (J.A.155-

56.) They discussed FEC v. Kalogianis, for example, a case where a campaign 

committee disclosed loans from closely held corporations owned by the candidate. 

No. 8:06-cv-68-T-23EAJ, 2007 WL 4247795, at *2 (M.D. Fla. Nov. 30, 2007). In 

response to the Commission’s notification that corporate contributions were 

prohibited, the committee amended its disclosures to reflect that, although some of 

the funds for the loans may have technically come from the closely held 

corporations, the candidate was the source of the loans. Id. at *3. In agreement 

with the FEC, the court found that “‘precedent preclude[d]’” the defendants’ 

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argument that “‘a contribution of corporate money by the sole shareholder of a 

corporation and a contribution by the shareholder of the shareholder’s money 

warrant equivalent treatment because in each instance the contribution is 

necessarily the shareholder’s money.’” (J.A.155-56 & n.54 (quoting Kalogianis, 

2007 WL 4247795, at *4).) 

Third, the controlling Commissioners observed that FEC regulations provide 

that a contribution from a corporate LLC is attributed to the corporate entity, not its 

owners. (J.A.157 (discussing 11 C.F.R. § 110.1(g)).) While contributions from 

certain types of LLCs are attributed to their owners, the Commission rejected a 

proposal attributing contributions from corporate LLCs to their owners. (Id.) 

Fourth, after concluding that this was a case of first impression and that 

OGC’s proposed standard had evolved over several matters, the controlling group 

reasoned that they needed “to set standards and draw lines distinguishing 

permissible versus proscribed conduct.” (J.A.148, 152-54 & n.50.) They 

concluded that an inquiry into the purpose of a contribution was necessary. Given 

that such corporate entities ordinarily act only at the direction of their 

owner/member, they feared that otherwise any contribution by a closely held 

corporation or single-member corporate LLC could presumptively be deemed an 

unlawful conduit contribution. (J.A.152-54 & nn.46-48, 175.) 

With the understanding that such corporate entities are entitled to make 

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unlimited contributions to super PACs as a matter of constitutional law, and so to 

“avoid[]constitutional doubt,” the controlling Commissioners announced their 

view that, “when enforcing section 30122 in similar future matters, the proper 

focus will be on whether funds were intentionally funneled through a closely held 

corporation or corporate LLC for the purpose of making a contribution that evades 

the Act’s reporting requirements.” (J.A.158-59.) In the absence of direct evidence 

of this purpose, they would consider evidence that a corporate entity is a straw 

donor, such as “evidence indicating that the corporate entity did not have income 

from assets, investment earnings, business revenues, or bona fide capital 

investments, or was created and operated for the sole purpose of making political 

contributions.” (J.A.158.) The controlling Commissioners thus “used the present 

matters to announce a governing interpretation to put the public on notice of the 

conduct that constitutes a violation of the Act.” (J.A.173.) 

At the same time, they concluded that it had been unclear whether and under 

what circumstances a contribution made by a closely held corporation or corporate 

LLC to a super PAC should be attributed to the entity’s owner as the “true 

contributor” rather than the entity itself. (J.A.153-54, 157, 159.) Without 

“adequate notice of section 30122’s application to closely held corporations and 

corporate LLCs or the proper standards for its application,” the controlling group 

concluded that it would be “manifestly unfair” to pursue enforcement against 

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respondents. (J.A.154; see also J.A.158.) 

Fifth, the controlling Commissioners considered that “’[a] fundamental 

principle in our legal system is that laws which regulate persons or entities must 

give fair notice of conduct that is forbidden or required.’” (J.A.159-60 (quoting 

FCC v. Fox Television Stations, Inc., 567 U.S. 239, 253 (2012).) In cases that risk 

chilling First Amendment speech, such as the pending matters, they wrote that 

“[t]his concern is particularly acute” and worried that proceeding would “create 

due process concerns.” (J.A.160 & n.72 (collecting cases).) 

Sixth, the controlling group noted “the numerous legal and constitutional 

concerns” in the present matters, and that “the prudent and preferred course is to 

avoid such issues.” (J.A.159 n.69.) Citing and quoting Chaney extensively, as 

well as citing several other cases recognizing prosecutorial discretion, they 

explained they had the discretion to dismiss this case and were exercising it. 

(J.A.159 n.69.) 

The controlling group noted the option to find reason-to-believe while 

simultaneously dismissing the matters without imposing civil penalties, but found 

that the “Commission abandoned that procedure years ago.” (J.A.174 & n.6.) 

III. DISTRICT COURT PROCEEDINGS 

Complainants filed suit challenging the dismissal of five administrative 

complaints as contrary to law. (J.A.9-30.) F8, Eli Publishing, and Lund 

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intervened. (J.A.4.) After dismissing two of the matters for lack of standing 

(J.A.31, 38-40), the district court granted judgment for the Commission as to the 

three remaining matters shortly before this Court issued Commission on Hope

(J.A.428). 

The court determined that the controlling group’s reasoning, specifically, its 

“intertwined concerns of fair notice and due process in a post-Citizens United

context, confusing Commission precedent, and the obligation to protect First 

Amendment speech,” demonstrated a rational basis for exercising prosecutorial 

discretion, and thus concluded that the dismissals were not contrary to law. 

(J.A.417-18.) It found that “whether, and under what circumstances, a closely held 

corporation or corporate LLC may be considered a straw donor was an issue of 

first impression” (J.A.418); “[i]n the post-Citizens United context, the 

Commission’s existing regulations and precedent were less than helpful” (id.); and 

“[i]n fact, even sophisticated lawyers were confused” (J.A.419). The court 

accordingly credited the controlling group’s concerns about notice and due 

process, and agreed that such “concerns carry special weight” when 

constitutionally protected speech is at issue. (J.A.423.) Recognizing that the 

controlling group had weighed all of the various First Amendment interests 

involved, the court concluded that the group’s decision was not only rational, but 

also “an able attempt to balance the competing values that lie at the heart of 

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campaign finance law.” (J.A.424.) 

The court also rejected Complainants’ challenge to the controlling group’s 

announced purpose-based approach for future matters as “not even close to being 

ripe.” (J.A.426.) 

SUMMARY OF THE ARGUMENT 

 Complainants’ appeal fails at the outset for two reasons. First, Complainants 

lack standing. They seek to invoke this Court’s jurisdiction solely on the basis of 

informational standing. A long line of cases from the Supreme Court and this 

Court establish that, for a complainant to establish a concrete and particularized 

injury from the dismissal of an administrative complaint under FECA, 52 U.S.C. 

§ 30109(a)(8)(A), the complainant must demonstrate both that they are legally 

entitled to disclosure of the withheld information and that this information would 

be useful to the complainant or the complainant’s members when voting. 

Complainants, which are non-membership, nonpartisan nonprofit organizations 

that cannot vote have not, and cannot, establish that they have sustained such a 

concrete and particularized injury. 

Second, even if appellants had standing, this Court’s recent decision in 

Commission on Hope establishes that the controlling Commissioners’ decision, 

based expressly and repeatedly on prosecutorial discretion, is not subject to judicial 

review. In trying to evade Commission on Hope, Complainants seek to cast this 

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case as something it is not, one based entirely on constructions of FECA. But as 

Complainants themselves argued below, “the Commission’s decision did not turn 

on its interpretation of the Act’s terms.” (J.A.415.) Rather, the controlling group 

explained that, because “the question whether closely held corporations and 

corporate LLCs may be straw donors under section 30122 is one of first 

impression, and because past Commission decisions regarding funds deposited into 

corporate accounts may be confusing in light of recent legal developments, 

principles of due process, fair notice, and First Amendment clarity counsel against 

applying a standard to persons and entities that were not on notice of the governing 

norm.” (J.A.148.) These abstract concerns about notice, due process, and clarity 

of administration are general agency considerations, not attempts at interpreting 

FECA to delineate its bounds. 

Complainants’ attempts to recast Commission on Hope as making 

reviewable any decision involving any legal interpretation, even about 

considerations expressly referenced in Chaney as being discretionary, should be 

rejected. The controlling Commissioners’ approach, sensitive to the First 

Amendment area in which the FEC operates, should be sustained as an 

unreviewable exercise of prosecutorial discretion. Cf. Buckley, 424 U.S. at 40-43 

(explaining that stricter standards of notice apply to regulation of speech). 

 Should this Court nonetheless reach the merits, the district court correctly 

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held that the controlling group’s decision was reasonable. Complainants’ 

challenge to that decision’s announced standard for future matters, which was not 

applied here, is not ripe, and regardless is also reasonable. 

 Accordingly, the district court’s decision should be affirmed. 

ARGUMENT 

I. COMPLAINANTS LACK STANDING 

A. Standard of Review 

This Court “has an independent obligation to assure that standing exists[.]” 

Summers v. Earth Island Inst., 555 U.S. 488, 499 (2009). 52 U.S.C. § 

30109(a)(8)(A) “does not confer standing; it confers a right to sue upon parties 

who otherwise already have standing.” Common Cause v. FEC, 108 F.3d 413, 419 

(D.C. Cir. 1997) (“Common Cause I”). To establish standing, appellants must 

demonstrate: (1) injury in fact, i.e., “an invasion of a legally protected interest” that 

is “concrete and particularized” and “actual or imminent, not conjectural or 

hypothetical”; (2) causation; and (3) redressability. Lujan v. Defenders of Wildlife, 

504 U.S. 555, 560 (1992). 

B. Appellants Have Not Established Informational Standing 

Appellants assert only an informational injury.1

 (D.C. Cir. R. 28(a)(7); 

                                                            

1

 Appellants have abandoned organizational standing, an alternative ground 

unaddressed below. Am. Trucking Assocs. v. Fed. Motor Carrier Safety Admin., 

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Br. (Doc. 1797230) at 2.) To allege an injury that is concrete and particularized for 

informational standing under FECA, litigants must establish not only that they 

have failed to obtain information that must be publicly disclosed by statute, but 

also that “the disclosure they seek is related to their informed participation in the 

political process.” Nader v. FEC, 725 F.3d 226, 230 (D.C. Cir. 2013); see also 

Common Cause I, 108 F.3d at 418 (administrative complainant suing must show 

that the information it seeks “is both useful in voting and required by Congress to 

be disclosed” (emphasis added)). 

Section 30122 does not itself require public reporting of any information. 

CREW v. FEC, 267 F. Supp. 3d 50, 54 (D.D.C. 2017) (“Murray Energy”). Though 

much of the potential information regarding the transactions at issue that could be 

required to be disclosed is already public, there is a possibility that, if 

Complainants’ political committee allegations were investigated, it could turn out 

that additional persons had supplied funding and could be identified. (See J.A.40-

41.) Even assuming that possibility is sufficiently actual rather than conjectural, 

however, information about which additional persons may have contributed to Eli 

Publishing, F8, Specialty Group, and Kingston Pike in 2011-12 would not further 

Complainants’ participation in the political process because they do not vote or 

                                                            

724 F.3d 243, 247 (D.C. Cir. 2013) (finding that public interest group petitioners 

had “abandoned any claim to associational standing”); J.A.42. 

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otherwise involve themselves in electoral efforts. 

Nonprofits that cannot vote, have no members who vote, and cannot 

(Campaign Legal Center, a 501(c)(3)) or do not (Democracy 21, a 501(c)(4)) 

engage in partisan political activity do not suffer a particular injury. See CREW v. 

FEC, 475 F.3d 337, 339 (D.C. Cir. 2007) (“Americans for Tax Reform”). 

Complainants merely seek disclosure “to promote law enforcement,” i.e. “to force 

the [Commission] to ‘get the bad guys,’” an injury that is neither sufficiently 

concrete nor particularized to confer standing. Nader, 725 F.3d at 229-30. 

Lacking a role in voting and disclaiming any intent to be involved in electoral 

campaigns, there is “reason to doubt” Complainants’ claim that the information 

sought would help them in any way related to voting. See FEC v. Akins, 524 U.S. 

11, 20-25 (1998). This analysis derives from the concrete and particularized 

requirements of Article III injury-in-fact, not the separate “zone of interests” test, 

as the district court feared. (Id. at 20; J.A.43.) 

There is an extensive line of lower court decisions implementing this Court’s 

requirement for personal voting or political participation for plaintiffs to possess 

informational injury under FECA. Alliance for Democracy v. FEC, 335 F. Supp. 

2d 39, 48 (D.D.C. 2004) (finding that value of mailing list would have no concrete 

effect on plaintiffs’ voting); Alliance for Democracy v. FEC, 362 F. Supp. 2d 138 

(D.D.C. 2005) (same); Judicial Watch v. FEC, 293 F. Supp. 2d 41, 46 (D.D.C. 

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2003) (same); CREW v. FEC, 401 F. Supp. 2d 115, 121 (D.D.C. 2005) (noting that 

information about the value of a list could not have been useful to the plaintiff in 

voting), aff’d, Americans for Tax Reform, 475 F.3d 337; Murray Energy, 267 F. 

Supp. 3d at 54-55 (holding that information sought would not be used to evaluate 

candidates or causes and that publicizing violations constituted an insufficient 

interest in seeing the law obeyed). 

The district court here, in contrast, concluded that Circuit precedent 

interpreting other statutes indicated that plaintiffs need not demonstrate that the 

information they seek would be useful in voting. (J.A.44.) This Court already 

addressed the issue under FECA in Nader, 725 F.3d at 230, Americans for Tax 

Reform, 475 F.3d at 339-41, and Common Cause I, 108 F.3d at 418: The sought 

information must be useful in voting and related to the informed participation of 

the plaintiff in the political process. 

Moreover, Nader postdates two of the three cases on which the district court 

relies and is reinforced in the third, later case. See J.A.44; Friends of Animals v. 

Jewell, 828 F.3d 989, 992 (D.C. Cir. 2016) (comparing Nader with cases involving 

plaintiffs who suffered concrete and particular injuries). And the plaintiffs in the 

two principal cases cited by the district court participated directly in the regimes 

covered by the mandated disclosures and suffered the harm Congress sought to 

avoid. See Ethyl Corp. v. EPA, 306 F.3d 1144, 1146 (D.C. Cir. 2002) 

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(manufacturer of fuel additives unable to improve products’ emissions 

performance when new motor vehicle emissions tests not publicized); Friends of 

Animals v. Jewell, 824 F.3d 1033, 1037, 1041-42 (D.C. Cir. 2016) (membership 

group that exercised statutory right to participate in permit exception hearings for 

three endangered antelope species would be harmed if materials were no longer 

disclosed). In American Society for the Prevention of Cruelty to Animals v. Feld 

Entertainment, Inc., the third case cited, the reporting requirements were 

“secondary” in that case because the organization sued to enforce a separate 

provision that did not require disclosure even if plaintiffs prevailed. 659 F.3d 13, 

24 (D.C. Cir. 2011). 

Finally, appellants cannot rely upon a derivative harm based on their alleged 

inability to help others who are participants in the political process obtain 

information that those individuals may use in voting, as those individuals remain 

free to file their own administrative complaints. “[T]o withstand the rigors of 

Article III, an injury in fact must be suffered by the plaintiff or the plaintiff’s 

members; one cannot piggyback on the injuries of wholly unaffiliated parties.” 

CREW, 401 F. Supp. 2d at 121; see also Gottlieb v. FEC, 143 F.3d 618, 622 (D.C. 

Cir. 1998). 

Accordingly, the district court’s judgment should be affirmed because 

appellants lack standing. 

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II. THE DISMISSAL BASED ON PROSECUTORIAL DISCRETION IS 

NOT JUDICIALLY REVIEWABLE 

A. Standard of Review

 This Court reviews district court orders granting summary judgment de 

novo, and may affirm on any ground. Hagelin v. FEC, 411 F.3d 237, 242 (D.C. 

Cir. 2005); Jenkins v. Wash. Convention Ctr., 236 F.3d 6, 8 n.3 (D.C. Cir. 2001). 

B. Judicial Review Is Not Available Here 

This Court recently held: “[F]ederal administrative agencies in general and 

the Federal Election Commission in particular have unreviewable prosecutorial 

discretion to determine whether to bring an enforcement action.” Commission on 

Hope, 892 F.3d at 438 (citing Chaney, 470 U.S. at 831, and Akins, 524 U.S. at 25). 

That determination is dispositive here. 

In Commission on Hope, as here, fewer than four Commissioners voted to 

pursue enforcement, and the Commission thus dismissed the underlying matters. 

892 F.3d at 437; J.A.138-39, 399-400. The controlling group there “placed their 

judgment squarely on the ground of prosecutorial discretion.” 892 F.3d at 439. 

Any fair reading of the decision here — which expressly and repeatedly invokes 

prosecutorial discretion — demonstrates that the basis of the decision was 

prosecutorial discretion. (J.A.148-49 (“[W]e concluded that [these matters] should 

be dismissed in an exercise of . . . prosecutorial discretion[.]”); J.A.159 n.69, 160.) 

The controlling Commissioners explained that their decision was predicated on a 

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discretionary judgment about the value and risks of proceeding, not a merits 

determination regarding whether the subject conduct was prohibited by FECA. 

Complainants spend a significant portion of their brief arguing that 

Commission on Hope was incorrectly decided (e.g., Br. at 18, 26-29, 34-37), and 

the amici the entirety of their brief so arguing (Doc. 1798277), but acknowledge 

that this panel cannot overrule precedent. (Br. at 26 (quoting Sierra Club v. 

Jackson, 648 F.3d 848, 854 (D.C. Cir. 2011).) 

None of the authorities Complainants cite conflict with the Court’s opinion, 

as those cases did not review a dismissal decision based on prosecutorial 

discretion. (Br. at 27-28 (citing Akins, 524 U.S. at 18 (considering whether 

complainant had standing to challenge a “no reason to believe” dismissal based 

entirely on an interpretation of FECA); Chamber of Commerce v. FEC, 69 F.3d 

600, 603 (D.C. Cir. 1995) (reviewing a challenge to a Commission rule); DCCC, 

831 F.2d at 1131).) In DCCC, for example, this Court considered an unexplained 

dismissal from a split vote, finding that the mere fact that such a vote occurred did 

not necessarily mean that the Commission intended to invoke its prosecutorial 

discretion. 831 F.2d at 1133-35. Although DCCC “presum[ed]” that a properly 

explained decision invoking prosecutorial discretion would be reviewable, it did 

not definitively conclude that was the case. Id.; see also id. at 1135 n.5 

(“arguendo, assuming reviewability”). DCCC merely determined that Commission 

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dismissals are “reviewable” in the sense that they must be sufficiently explained so 

courts can discern the agency’s path. Id. at 1134. Commission on Hope is 

consistent with that holding. 

C. Commission on Hope Is Not Distinguishable 

1. The Dismissal Was Based on Prosecutorial Discretion 

As the district court correctly found, the entire basis of the controlling 

group’s decision was prosecutorial discretion. (J.A.148-49, 159 n.69, 160, 416.) 

Repeatedly citing Chaney, the controlling Commissioners explained that their 

decision arose from their discretionary judgment weighing the clarity of the notice 

given and the fairness of proceeding in a First Amendment-sensitive area with a 

heightened requirement for advance clarity. (J.A.149 n.4, 159 n.69, 160 n. 74.) 

They also considered “the numerous legal and constitutional concerns” that this 

case presented and that their “preferred course” was to avoid “provok[ing] legal 

and constitutional controversies,” and were cognizant of the public interest in 

disclosure. (J.A.148, 158, 159 n.70.) 

Complainants nonetheless assert that the controlling Commissioners did not 

actually exercise prosecutorial discretion because they did not use certain words.2

 

                                                            

2

 Complainants misrepresent the record when stating that the FEC has not 

argued that the decision “rest[ed] on any actual discretionary considerations.” 

(Compare Br. at 23, with, e.g., Campaign Legal Ctr. v. FEC, No. 16-cv-752 

(D.D.C.), Dkt. 41 at 3-6 (Nov. 9, 2017).) 

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(E.g., Br. at 14, 23-26.) When explaining why agency exercises of prosecutorial 

discretion are unreviewable, some of the reasons the Supreme Court cited were that 

“the agency must not only assess whether a violation has occurred, but whether 

agency resources are best spent on this violation or another, whether the agency is 

likely to succeed if it acts, [and] whether the particular enforcement action 

requested best fits the agency’s overall policies.” Chaney, 470 U.S. at 831. But 

neither Chaney nor Commission on Hope require the FEC to use any particular 

words to invoke prosecutorial discretion. To the contrary, Chaney stated: “We of 

course only list the above concerns to facilitate understanding of our conclusion 

that an agency’s decision not to take enforcement action should be presumed 

immune from judicial review.” Id. at 832; see also id. at 831-32 (holding that 

“[t]he agency is far better equipped than the courts to deal with the many variables 

involved in the proper ordering of its priorities” (emphasis added)). 

Moreover, as the district court found, the controlling Commissioners did 

consider the Chaney factors, even if their statement did not recite all the precise 

buzzwords Complainants would demand. (J.A.416.) Complainants incorrectly 

assert that the controlling group “did not address the significance or severity of the 

alleged violations,” or “consider the potential effects of letting the violations go 

unchecked.” (Br. at 25.) The controlling group explained that, “[o]f the many 

issues resulting from [Citizens United],” determining how to apply FECA and 

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Commission regulations to the types of contributions here was “amongst the most 

difficult,” and it thus “was necessary to examine a sufficient number of factual 

scenarios to ensure a sound application of the Act and to provide clear public 

guidance on the appropriate standard that we will apply in future matters.” 

(J.A.147, 148; see also J.A.174.) 

They found the nature of the alleged violations significant for several 

reasons, including that, unlike in pre-Citizens United matters, unlimited 

contributions from corporations to super PACs were constitutionally protected. 

(J.A.155, 158 n.68, 160.) Explaining the need “to set standards and draw lines 

between permissible versus proscribed conduct,” and that “discussions within the 

Commission . . . indicated notice and comment rulemaking would not be 

constructive,” the controlling Commissioners prioritized using these enforcement 

matters arising out of the first presidential cycle following Citizens United to 

provide notice to guide future conduct. (J.A.147 n.1, 148, 154-55 n.50, 173, 174.) 

They prioritized acting cautiously when regulating in this area of important 

fundamental rights, noting that enforcement could entail “numerous legal and 

constitutional concerns,” and quoting Chaney’s admonition that agencies must 

assess “‘not only whether a violation has occurred,’” but also “‘whether the agency 

is likely to succeed if it acts.’” (J.A.148, 159 n.69, 160 & n.72 (quoting Chaney, 

470 U.S. at 831).) The cited “legal and constitutional concerns” of due process, 

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notice, and lack of clarity in a First Amendment setting are relevant to likelihood 

of success because they can prevent a finding of a violation as Fox, 567 U.S. 239, 

on which they repeatedly relied, demonstrates. Id. at 256-58; J.A.148-49 n.3, 159-

60 & nn.71-72. 

Complainants note that the dismissals were not under the FEC’s 

Enforcement Priority System (Br. at 25 n.2), but that system does not limit the 

Commission’s dismissal authority. Regardless, the controlling group conducted a 

similar analysis, examining “the gravity of the alleged violation” (J.A.155, 158 

n.68, 160), “the complexity of the legal issues raised” (J.A.155-60), and “recent 

trends in potential violations and other developments of the law” (e.g., J.A.155). 

While Complainants belabor the controlling group’s purported failure to 

state that it considered the agency’s limited resources when making its decision 

(e.g., Br. at 14, 23, 25), they fail to explain why even unlimited resources would 

require Commissioners to pursue a case that they determined was otherwise unfair 

or unjust case in an area of protected fundamental rights. 

Importantly, declining to pursue an enforcement action so as “[t]o ameliorate 

a harsh and unjust outcome” is itself an “exercise in administrative discretion.” 

Reno v. Am.-Arab Anti-Discrimination Comm., 525 U.S. 471, 484 (1999) (internal 

quotation marks omitted); J.A.148, 154, 158, 160. Of course, the fundamental 

fairness of pursuing charges is a proper, discretionary consideration for any official 

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charged with enforcing the law. As then-Attorney General, later Supreme Court 

Justice Robert Jackson said: “Your positions [as prosecutors] are of such 

independence and importance that while you are being diligent, strict, and vigorous 

in law enforcement you can also afford to be just.” Robert H. Jackson, The 

Federal Prosecutor (Apr. 1, 1940).3

 And taking constitutional interests into 

account fulfills the FEC’s “unique mandate” that comes with having the purpose of 

regulating “core constitutionally protected activity.” Van Hollen, Jr. v. FEC, 811 

F.3d 486, 499 (D.C. Cir. 2016) (“Van Hollen II”). 

Pursuing an enforcement matter that three Commissioners believe to be 

unfair, as Complainants seek, would be contrary to how Congress designed the 

FEC to work. With the four-vote requirement, Congress was generally guarding 

against the risk of partisan or ill-considered use of enforcement powers. Combat 

Veterans for Cong. Political Action Comm. v. FEC, 795 F.3d 151, 153 (D.C. Cir. 

2015); Pub. Citizen, Inc. v. FERC, 839 F.3d 1165, 1171 (D.C. Cir. 2016) 

(explaining that “unlike other agencies — where deadlocks are rather atypical — 

[the Commission] will regularly deadlock as part of its modus operandi”). 

Congress did not seek to have split votes routinely serve as springboards to the 

very limited private rights of action potentially available, as Complainants contend. 

                                                            

3

 Available at https://www.roberthjackson.org/speech-and-writing/the-federalprosecutor/. 

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(Compare Br. at 35-36, with 52 U.S.C. § 30109(a)(8)(A) (limiting private right to 

only when the Commission does not conform).) 

Finally, the controlling group exercised its prosecutorial discretion by 

limiting its reasoning to matters involving conduct that arose before the instant 

statement provided notice to the public. (J.A.148, 154 n.50, 155, 158, 173.) 

Announcing a new legal principle prospectively only is a well-established practice. 

See, e.g., Great N. Ry. Co. v. Sunburst Oil & Ref. Co., 287 U.S. 358, 364 (1932) 

(Cardozo, J.) (discussing court discretion to choose between “forward operation” 

and “relation backward”). The Commission has since continued to pursue 

disclosure and liability in similar matters. E.g., Doe v. FEC, 920 F.3d 866, 868 

(D.C. Cir. 2019); Matter Under Review (“MUR”) 6920, 

https://www.fec.gov/files/legal/murs/6920/17044434756.pdf; MUR 7247, 

https://www.fec.gov/files/legal/murs/7247/17044430333.pdf; MURs 7005 & 7056, 

https://www.fec.gov/files/legal/murs/7005/17044424178.pdf. And the dismissal of 

some similar matters involving conduct prior to the decision here is consistent with 

the controlling Commissioners’ rationale. (Br. at 44 n.7) By considering each 

case individually and pursuing similar straw donor claims where appropriate, the 

Commission operates as Chaney intended. 

Even where, unlike here, an FEC decision is “of less than ideal clarity,” 

Common Cause v. FEC, 906 F.2d 705, 706 (D.C. Cir. 1990), “[i]t is enough that a 

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reviewing court can reasonably discern the agency’s analytical path,” Van Hollen 

II, 811 F.3d at 496-97. The controlling Commissioners’ exercise of prosecutorial 

discretion can be readily discerned, so Commission on Hope applies. 

2. The Reasons for Exercising Prosecutorial Discretion Are 

Not Reviewable 

Complainants assert that they can nonetheless challenge the reasons 

underpinning the decision to exercise prosecutorial discretion. Commission on 

Hope, however, expressly considered and rejected this argument. 

Since neither FECA nor the Administrative Procedure Act provide a 

meaningful standard to judge the Commission’s exercise of prosecutorial 

discretion, a complaint dismissed on this basis cannot be “contrary to law” or “not 

in accordance with the law” because there simply is no “law to apply.” 

Commission on Hope, 892 F.3d at 440, 446. Rather, “[i]n such a case, the statute 

(‘law’) can be taken to have ‘committed’ the decisionmaking to the agency’s 

judgment absolutely.” Lincoln v. Vigil, 508 U.S. 182, 191 (1993) (quoting Chaney, 

470 U.S. at 830) (emphasis added). 

As this Court reasoned, “’if no judicially manageable standards are available 

for judging how and when an agency should exercise its discretion, then it is 

impossible to evaluate agency action for ‘abuse of discretion.’’” Commission on 

Hope, 892 F.3d at 441 (quoting Chaney, 470 U.S. at 830). Accordingly, regarding 

prosecutorial discretion, the complainant “is not entitled to have the court evaluate 

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for abuse of discretion the individual considerations the controlling Commissioners 

gave in support of their vote not to initiate enforcement proceedings.” Id. 

As Commission on Hope demonstrates, this principle extends to legal 

determinations underpinning the controlling group’s decision to exercise 

prosecutorial discretion. For example, one of the primary bases for the controlling 

Commissioners’ decision to exercise prosecutorial discretion there was that certain 

violations were, or shortly would be, time barred. CREW v. FEC, 236 F. Supp. 3d 

378, 389, 392 (D.D.C. 2017). Whether those violations would actually be time 

barred due to an exception to the statute of limitations, such as whether the statute 

of limitations bars equitable relief or is tolled for a purported ongoing FECA 

violation, presented legal questions that courts were capable of resolving. See id.

at 392. Similarly, this Court could have resolved whether the political-committee 

issues raised, such as how to treat vendor commissions or other general payments 

to officers and directors when determining an organization’s major purpose, were 

“novel legal issues.” Id. at 393-94. Yet this Court held that such questions were 

not subject to judicial review for abuse of discretion or otherwise. Commission on 

Hope, 892 F.2d at 440-42. 

Like appellants here, the dissent “read the Commissioners as having 

dismissed the case based on a legally erroneous view of the law.” Id. at 444 

(Pillard, J., dissenting). Specifically, Judge Pillard “believe[d] that it is evident 

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from the Controlling Commissioners’ finding and reasoning that their dismissal of 

[this] case depended materially on an erroneous legal view of the organization’s 

political-committee status,” so she argued that judicial review was available. 

Id. at 443. 

The Commission on Hope majority, however, found that “[t]he law of this 

circuit rejects the notion of carving reviewable legal rulings out from the middle of 

non-reviewable actions.” Id. at 442. This Court thus concluded that, “even if 

some statutory interpretation could be teased out of the controlling 

Commissioners’ statement of reasons,” judicial review was still unavailable. 

Id. at 441-42. 

3. The Dismissals Were Not Based Entirely on Interpretations 

of FECA 

While Commission on Hope recognized that an FEC dismissal “based 

entirely on its interpretation of the statute” would be judicially reviewable,4

 id. at 

441 n.11 (emphasis added), Complainants’ attempt to cram the controlling 

Commissioners’ rationale into this category fails. 

Dismissals are generally explained as occurring either for: (1) a 

                                                            

4

 Commission on Hope noted that Chaney “left open the possibility that an 

agency nonenforcement decision may be reviewed if the agency has consciously 

and expressly adopted a general policy that is so extreme as to amount to an 

abdication of its statutory responsibilities,” 892 F.3d at 440 n.9 (internal quotation 

marks omitted), but Complainants have forfeited this argument on appeal, Fox v. 

Gov’t of D.C., 794 F.3d 25, 29 (D.C. Cir. 2015). 

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determination that there is no reason or no probable cause to believe that FECA 

was violated; or (2) even if FECA was potentially violated, as an exercise of 

prosecutorial discretion. Id. Commission on Hope recognized that the first 

category may be reviewed for whether the dismissal was “contrary to law.” Id.

(citing FEC v. Democratic Senatorial Campaign Comm., 454 U.S. 27, 31 (1981) 

(reviewing an FEC decision finding “no reason to believe”)); see also Hagelin v. 

FEC, 411 F.3d 237, 240 (D.C. Cir. 2005) (same). This Court found that Akins

illustrated this distinction. 892 F.3d at 438 n.6, 441 n.11. In Akins, the 

Commission found no probable cause to believe regarding the complainant’s first 

claim for violation of political committee requirements, but exercised its 

prosecutorial discretion for the second claim for prohibited corporate contributions. 

Id. at 438 n.6 (citing Akins, 524 U.S. at 25; Akins v. FEC, 736 F. Supp. 2d 9, 13-15 

(D.D.C. 2010)). This Court noted that the first claim — which was the only one 

considered by the Supreme Court — was agency action “based entirely on its 

interpretation of the statute” and thus judicially reviewable. Id. at 441 n.11. 

Here, the dismissals were not based on a finding that there was “no reason to 

believe” that respondents violated FECA. (J.A.148-49, 159 n.70; Br. at 13.) To 

the contrary, the controlling Commissioners recognized that the respondents’ 

“conduct could potentially violate section 30122.” (J.A.157.) And they declined 

to determine — one way or the other — whether there was reason to believe 

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respondents violated the law. (J.A.417.) As the district court found, and 

Complainants admitted below, “the Commission’s decision did not turn on its 

interpretation of the Act’s terms.” (J.A.415-16.) 

Complainants misleadingly characterize certain of the controlling 

Commissioners’ statements to argue otherwise. (Br. at 22-23.) For example, the 

controlling group noted that its prospective standard “was ‘dictated by the plain 

text of the Act, court decisions, forty years of Commission practice, and common 

sense,’” not the dismissal decision. (Br. at 23 (quoting J.A.174).) And the same is 

true for the other statement Complainants quote. (Br. at 22 (quoting J.A.158).) 

Further, the controlling Commissioners explained that they dismissed due to a lack 

of any clear prior standard for assessing respondents’ liability — not their 

particular standard. (Compare Br. at 30, with J.A.154-57.) 

While the dismissals were animated by the controlling group’s concerns 

about “principles of due process, fair notice, and First Amendment clarity” 

(J.A.148; see also J.A.159-60), even under a conventional Chevron analysis, courts 

give deference to FEC decisions interpreting FECA in light of constitutional 

considerations and implementing judicial precedent. E.g., Common Cause v. FEC, 

842 F.2d 436, 448 (D.C. Cir. 1988) (“Common Cause II”). In Van Hollen II, for 

example, this Court applied Chevron deference to the FEC’s new regulation which 

“implement[ed]” a recent Supreme Court case and where the Commission’s 

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rationale took into consideration constitutional concerns. 811 F.3d at 491; cf. AFLCIO v. FEC, 333 F.3d 168, 179 (D.C. Cir. 2003) (“[T]he Commission must 

attempt to avoid unnecessarily infringing on First Amendment interests . . . .”). 

Indeed, rather than undercutting deference, this Court held that the FEC was under 

a “mandate” to tailor the regulation to satisfy constitutional interests. Van Hollen 

II, 811 F.3d at 491. Because “every action the FEC takes implicates fundamental 

rights,” and it, like other agencies, is frequently tasked with implementing court 

decisions, the FEC would regularly be denied deference under Complainants’ 

view. Id. This is not the case. E.g., id.; Common Cause II, 842 F.2d at 448. 

More fundamentally, Complainants’ argument misconceives the relative 

domains of expertise of the FEC and the courts. FECA does not compel the 

Commission to pursue all potentially meritorious allegations of campaign finance 

violations. Akins, 524 U.S. at 25; Americans for Tax Reform, 475 F.3d at 340. 

Accordingly, while courts may have expertise in determining whether the FEC 

may proceed with an enforcement claim, the FEC determines whether the agency 

should pursue a particular enforcement claim. That latter determination is in the 

heartland of the FEC’s expertise and regulatory authority. Chaney, 470 U.S. 

at 831-32. 

The controlling Commissioners’ acknowledgment that respondents may 

have violated FECA and determination that prudential factors weighed in favor of 

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dismissing these matters were a classic application of prosecutorial discretion. 

4. The Political Committee Claims Were Dismissed as a 

Matter of Prosecutorial Discretion 

Similarly unpersuasive is Complainants’ argument that the controlling 

Commissioners did not dismiss as a matter of prosecutorial discretion 

Complainants’ political committee claim. (Br. at 29-30; see also id. at 52-54.) All 

of the Commissioners, as well as OGC, recognized that the allegations required the 

Commission to first address the straw donor claim before reaching Complainants’ 

alternative political committee claim. (J.A.120-21, 152 n.36, 163-67, 252, 267.) 

To any extent that the controlling group’s handling of the political 

committee allegations requires further explanation, they accepted OGC’s 

recommendation, so it provides the agency’s rationale. J.A.152 n.36; Common 

Cause II, 842 F.2d at 440-48. As OGC explained, “an entity can be a conduit or a 

political committee, but not both.” (J.A.120.) Because a contribution is attributed 

to its “true source” and not the straw donor, a straw donor that has made no other 

contributions cannot constitute a political committee. (J.A.120-21.) 

Indeed, it appears Complainants recognize that resolving their political 

committee claim would necessarily require first resolving their straw donor claim. 

By arguing that, “if respondent corporations were not conduits, then they may 

indeed have qualified as political committees,” Complainants acknowledge that the 

Commission would have to first resolve whether the respondent corporations were 

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(or were not) mere conduits, i.e., straw donors. (Br. at 54 (first and third emphases 

added).) Since the controlling Commissioners chose not to resolve the antecedent 

question for non-merits, discretionary reasons, Complainants’ political committee 

claims were effectively also dismissed as a matter of prosecutorial discretion. (See

J.A.152 n.36, 160.) 

Accordingly, Commission on Hope applies and bars judicial review. 

III. IN THE ALTERNATIVE, THE DISMISSAL WAS NOT CONTRARY 

TO LAW 

A. Standard of Review 

Dismissal of an administrative complaint cannot be disturbed unless it was 

“contrary to law,” 52 U.S.C. § 30109(a)(8)(C), i.e., based on an “impermissible 

interpretation of” FECA or was otherwise “arbitrary or capricious, or an abuse of 

discretion.” Orloski v. FEC, 795 F.2d 156, 161 (D.C. Cir. 1986). 

This standard simply requires that the Commission’s decision was 

“sufficiently reasonable to be accepted.” Democratic Senatorial Campaign 

Comm., 454 U.S. at 37, 39. The decision need not be “the only reasonable one or 

even the” decision “the [C]ourt would have reached” on its own “if the question 

initially had arisen in a judicial proceeding.” Id. Instead, the contrary-to-law 

standard is “extremely deferential” to the agency’s decision and “requires 

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affirmance if a rational basis . . . is shown.” Orloski, 795 F.2d at 167. 

B. The Dismissal Was Not Contrary to Law 

In exercising prosecutorial discretion, the controlling Commissioners 

considered and weighed many different factors, supra pp. 10-15. No single factor 

was dispositive; rather, their decision was borne of them finding layers of potential 

uncertainty in an area of the law with a premium on certainty. (J.A.148.) 

Complainants’ challenge to some of those factors does not demonstrate that, on the 

whole, the controlling Commissioners unreasonably exercised their prosecutorial 

discretion. As the district court held, the controlling Commissioners acted 

reasonably when taking due process and other constitutional and legal concerns 

into account. (J.A.424-25.)

1. There Was a Rational Basis for Finding that Respondents 

May Not Have Had Adequate Notice 

Complainants’ position turns upon a single, reductive proposition: Because 

section 30122 prohibits any “person” from making a straw donor contribution, and 

section 30101(11) defines “person” to include corporations, the straw-donor 

provision so clearly applied here that it was impermissible for the controlling 

Commissioners to elect not to prosecute respondents. This proposition of course 

ignores the previous prohibition on any corporate contributions. 

Contrary to Complainants’ representation, the controlling Commissioners 

did not find that the straw-donor provision is “clear and unambiguous.” (Br. at 

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39.) Their finding that the language and purpose of FECA’s straw-donor provision 

should make it applicable to closely held corporations and LLCs contributions to 

super PACs post-Citizens United does not make the concession Complainants 

suggest. (J.A.154, 164) The controlling group’s conclusion was reasonable. 

a. Citizens United Warrants a Fresh Look 

The D.C. Circuit recently rejected an argument strikingly similar to 

Complainants’ here. Ctr. for Indiv. Freedom v. Van Hollen, 694 F.3d 108 (D.C. 

Cir. 2012) (“Van Hollen I”). An FEC regulation required every “person” who 

funds “electioneering communications” to disclose “all contributors,” and banned 

one class of “persons,” corporations, from funding electioneering communications. 

52 U.S.C. §§ 30104(f), 30118. In FEC v. Wisconsin Right to Life, Inc., the Court 

struck down the financing prohibition. 551 U.S. 449, 465 (2007). The FEC thus 

was “left to decide how [the statute’s] disclosure requirements should apply to a 

class of speakers Congress never expected would have anything to disclose.” Van 

Hollen II, 811 F.3d at 490-91. The FEC construed the disclosure provision to apply 

to corporations differently than other “persons,” and enacted a regulation requiring 

corporations to disclose contributions under a different standard. Van Hollen I, 

694 F.3d at 111. This Court held that Congress did not have “an intention on the 

precise question at issue” because “it is doubtful that, in enacting [the statute], 

Congress even anticipated the circumstances that the FEC faced when it 

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promulgated [the regulation].” Id. (internal quotation marks omitted). In other 

words, this Court held that the same statutory definition of “person” to include 

corporations that Complainants rely on here was not dispositive with respect to 

how newly permitted corporate conduct would fit within the existing regulatory 

regime. Id. at 112; see also Van Hollen II, 811 F.3d at 491-92. 

The same analysis applies here. It is reasonable to conclude that, regardless 

of the general statutory definition of “person,” Congress may not have “an 

intention on the precise question at issue” because it is doubtful that, when 

enacting the straw donor provision, Congress anticipated corporations lawfully 

making contributions. Van Hollen I, 694 F.3d at 111; J.A.155, 418. 

The unconstitutional vagueness cases Complainants cite do not demonstrate 

otherwise. (Br. at 39-40.) Those cases considered whether section 30122 

encompassed straw donor violations at all and were distinguished by the 

controlling group as involving intermediaries who were individuals. United States 

v. O’Donnell, 608 F.3d 546, 548-49 (9th Cir. 2010); United States v. Danielczyk, 

788 F. Supp. 2d 472, 478-79 (E.D. Va. 2011), rev’d on other grounds, 683 F.3d 

611 (4th Cir. 2012); J.A.153 & nn.42, 43. 

The controlling Commissioners also did not dispute the importance of 

disclosure requirements or the value of information required to be disclosed. (Br. 

at 40-42.) But the importance of the government’s disclosure interest is not the 

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only interest to consider when determining to prosecute in a matter believed to be 

of first impression. Cf. Buckley, 424 U.S. at 40-43 (explaining that stricter 

standards of notice apply to regulation of speech). The FEC is not required to 

pursue every matter potentially vindicating a disclosure interest; the agency’s 

prosecutorial discretion would be a nullity if that were the case. 

b. Soft Money “Contributions” Are Irrelevant 

Complainants’ contention that corporations made contributions before 

Citizens United is incorrect. (Br. at 42 n.6.) As McConnell v. FEC explained, 

“soft money,” which corporations could donate “to political parties for activities 

intended to influence state or location elections,” does not include “hard money,” 

i.e., “‘contributions,’” which are “‘made by any person for the purpose of 

influencing any election for Federal office.’” 540 U.S. 93, 122 (2003), overruled 

in part by Citizens United, 558 U.S. 310 (quoting 52 U.S.C. § 30101(8)(A)(i)). 

Section 30122 is thus more clearly applicable to corporate contributions to federal 

super PACs after Citizens United. Indeed, one court held during the soft money 

era that section 30122 “applies only to hard money contributions.” United States v. 

Trie, 23 F. Supp. 2d 55, 59 (D.D.C. 1998). 

 

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2. Even if Section 30122 Was Clear in the Abstract, It Was 

Rational to Find that It May Have Been Unclear as Applied 

a. It Was Rational to Distinguish Corporate LLCs and 

Closely Held Corporations 

The controlling Commissioners did not, as Complainants contend, find that 

due process would be violated any time FECA is applied to a new class of persons. 

(Br. at 44.) Rather, as the district court summarized, “the Commission’s point was 

not that prior regulations and precedent established the point in favor of the alleged 

violators, but that they might have reasonably been confused.” (J.A.421.) 

In MUR 4313, for example, an individual wanted to buy television political 

advertisements. (J.A.156.) Rather than pay directly, he established a closely held 

corporation using solely his own personal funds. (MUR 4313 at 20, 32-34, 

https://www.fec.gov/files/legal/murs/4313/0000018F.pdf.) The individual had 

been advised that this “alter ego” arrangement was advantageous because the 

corporate form would offer “limited liability from suit by vendors and others.” (Id.

at 20.) The Commission held: “It has been the policy of the Commission that once 

a decision is made and carried out to conduct business using the corporate form, 

any funds taken from the corporation’s accounts are to be deemed corporate in 

nature, whether or not they originated as, or could be converted into, the personal 

funds of a shareholder.” (Id. at 34.) 

This treatment in matters presenting analogous factual scenarios supports the 

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controlling group’s view that respondents may previously have concluded that they 

were appropriately attributing the contributions at issue to the corporate 

respondents. (J.A.157.) 

Further, FEC regulations distinguish entities based on corporate status. 

Even prior to Citizens United, regulations permitted partnerships and noncorporate LLCs to make contributions, which were attributed to both the 

partnership or non-corporate LLC and its individual partners/owners. 11 C.F.R. 

§ 110.1(e), (g); J.A.157 & n.64. But the Commission rejected a similar proposal 

for corporate LLCs. (J.A.157 & n.63.) Instead, regulations require corporate 

LLCs, including single-member corporate LLCs, to be treated as corporations. 11 

C.F.R. § 110.1(g)(3). 

Given section 110.1(g)’s command that even contributions from a singlemember corporate LLC should be attributed to the entity, not the member, the 

controlling Commissioners concluded it was less likely — particularly in light of 

all the other factors the Commission discussed — that respondents were on notice 

that section 30122 nonetheless required the contribution to be attributed to the 

member as its “true source.” (See J.A.158.) 

Complainants seek to write off this distinction as a mere “default” rule of 

attribution (Br. at 48), but the FEC has refused to attribute a contribution or 

expenditure from a closely held corporation to that corporation’s individual owner 

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despite the owner’s attempts to argue that he was the true source of the donation. 

(J.A.155-56 (collecting examples).) Thus, the controlling Commissioners 

concluded that respondents could have reasonably believed that these attribution 

regulations were not the “default” rules, but rather just “the rules.” 

Finally, the political committee matters Complainants rely upon are inapt. 

(Br. at 45 n.8; J.A.421.) Not only do those matters involve potential excessive 

contributions, but also political committees can be formed for the purpose of 

making contributions. See 52 U.S.C. § 30116(a)(1)-(2). So of course Congress 

would have contemplated section 30122 reaching political committees as straw 

donors. Indeed, FECA and FEC regulations already provide specific guidance on 

appropriate attribution in certain cases like those Complainants cite, where an 

individual makes a contribution to a political committee that is earmarked or 

otherwise directed to a candidate through an intermediary or conduit. 52 U.S.C. 

§ 30116(a)(8); 11 C.F.R. § 110.6; see also 11 C.F.R. § 110.1(h). 

In contrast, the controlling Commissioners reasonably found that application 

of the straw donor prohibition here post-Citizens United to be novel. A corporate 

contribution or expenditure was not just “typically” attributed to the corporation 

under Commission authorities, but rather it was attributed to the corporation even 

when an individual was its true source. Regulated entities may reasonably have 

relied on rules of corporate attribution even if they arose in a slightly different 

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context. See, e.g., Trinity Broad. of Fla., Inc. v. FCC, 211 F.3d 618, 629 (D.C. 

Cir. 2000). 

Commission precedent and regulations thus provided the controlling 

Commissioners with a rational basis for distinguishing the longstanding 

applicability of section 30122 to contributions by individuals and political 

committees from the provision’s potential applicability to contributions by the 

corporate respondents after Citizens United. (J.A.155, 421.) 

b. The Controlling Group’s Notice Concerns Were 

Grounded in the Record 

Complainants argue that the controlling group’s rationale was not grounded 

in the administrative record. (Br. at 50.) They are mistaken. As the district court 

observed, “[i]n fact, even sophisticated lawyers were confused.” (J.A.419.) 

As Complainants recognize (Br. at 9), when considering the instant matters, 

the controlling Commissioners simultaneously considered two other matters, 

including MUR 6485. An individual had hired a national law firm to advise him 

about “whether he could ‘create an entity for the sole purpose of making a 

[contribution] . . . [which] would not require full public disclosure of his name in 

connection with the contribution.’” (J.A.149 & n.8 (quoting MUR 6485 at 3, 

https://www.fec.gov/files/legal/murs/6485/17044423850.pdf (“Resp.”)).) “For 

several weeks, Ropes [& Gray LLP] conducted legal research concerning the 

Federal Election Campaign Act, this Commission’s regulations and advisory 

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opinions, and secondary sources, to determine whether current campaign finance 

laws would require disclosure of [Edward] Conard’s identity if he formed and 

funded a new entity for the purpose of making a [contribution].” (Resp. at 3; see 

also id. at Exh. B (“Decl.”) ¶ 6.) Although it did not find the law “entirely clear,” 

Ropes & Gray advised Conard that he could lawfully make a contribution through 

a corporate LLC without disclosing his identity based on its understanding of 11 

C.F.R. § 110.1(g). (Resp. at 1-2; Decl. ¶¶ 8, 10.) 

Any dispute about the quality of this advice aside, it belies Complainants’ 

claim that the controlling Commissioners’ notice concerns “lack[] any foundation 

in the facts of this case.” (Compare Br. at 52, with Br. at 9; J.A.410 n.2 (holding 

that “the facts underlying all five complaints informed the Commission’s 

decision”).) 

Further, as discussed infra Section III.B.2.c, OGC’s proposed standard for 

whether section 30122 was violated changed as a result of different matters. 

(J.A.153-54.) “[T]hat these attorneys [also] found the law difficult to apply 

supports the conclusion that the public lacked notice.” (J.A.420.) 

The above evidence is pertinent even though it does not involve the 

subjective understanding of the respondents still at issue. Gates & Fox Co. v. 

Occupational Safety & Health Review Commission held that inadequate regulatory 

language and the absence of an authoritative interpretation are relevant even where 

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there was informal, actual notice. 790 F.2d 154, 156-57 (D.C. Cir. 1986). 

c. The Dispute Regarding the Appropriate Standard 

Underscores the Lack of Pre-Existing Clarity 

Closely held corporations and single-member corporate LLCs are also 

unique because such corporate entities typically act only at the direction of their 

owner/member. (J.A.154 & n.46, 163 n.2, 166.) As the district court noted, “[b]y 

their nature, these small corporations blur the lines between the individual and 

corporation, and thus blur the line between a ‘true’ donor and a ‘straw’ donor.” 

(J.A.421 n.6.) All of the Commissioners and OGC thus recognized that there must 

be a standard guiding when a contribution should be properly attributed to the 

corporate entity or its owner/member. (J.A.154, 158, 166 & n.15.) The dispute 

over that standard supports the controlling group’s finding that there was not 

adequate notice. Gen. Elec. Co. v. EPA, 53 F.3d 1324, 1332 (D.C. Cir. 1995) (“[I]t 

is unlikely that regulations provide adequate notice when different divisions of the 

enforcing agency disagree about their meaning.”). 

OGC proposed one standard, but revised it in light of subsequent matters. 

(J.A.153-54.) Initially, OGC focused on who exercised “direction and control” 

over the funds. (J.A.154.) It later clarified that “direction and control” alone was 

not dispositive, and liability required also establishing “whether a source 

transmitted property to another with the purpose that it be used to make or 

reimburse a contribution” by “looking to the structure of the transaction itself and 

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the arrangement between the parties.” (J.A.154 (quoting MUR 6930 at 10, 

https://www.fec.gov/files/legal/murs/6930/16044386985.pdf; MUR 6485 at 21 

(Supp.), https://www.fec.gov/files/legal/murs/6485/16044390492.pdf.) 

The controlling group stated that, in the future, its “focus will be on whether 

funds were intentionally funneled through a closely held corporation or corporate 

LLC for the purpose of making a contribution that evades the Act’s reporting 

requirements.” (J.A.158.) Although phrased differently, this proposed standard 

includes many of the same considerations as the final approach OGC took in 

another of the consolidated matters not at issue here. (MUR 6930 at 8-10, 

https://www.fec.gov/files/legal/murs/6930/16044386985.pdf (considering, inter 

alia, the purpose(s) of the corporate entity and whether the individual sought to 

circumvent disclosure requirements by contributing through that entity).) 

The other group of Commissioners stated that “direction and control over the 

funds is a critical consideration,” “as well as whether or not the source transmitted 

the money with the purpose that it be used to make or reimburse a contribution.” 

(J.A.166 n.15.) While two of those three Commissioners criticized the controlling 

group’s standard as improperly “plac[ing] the focus on the contributor’s intent to 

violate the Act” (J.A.170), the controlling group responded that their respective 

purpose-driven standards may not be as different as those Commissioners believed. 

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(J.A.174.) 

The evolution of OGC’s standard, as well as the Commissioners’ internal 

disagreement as to the correct standard, further supports the controlling group’s 

finding that respondents did not have adequate notice. Fox, 567 U.S. at 253 

(holding that fair notice is lacking “[when] it is unclear as to what fact must be 

proved”); Gen. Elec., 53 F.3d at 1332. 

d. The Dismissal of the Political Committee Claims Was 

Not Contrary to Law 

Complainants’ argument that the Court should find the dismissals contrary 

to law because the controlling Commissioners did not resolve their political 

committee claim (Br. at 52-54) should be rejected for the reasons discussed above 

in Section II.C.4. In addition, the OGC explanation on which the controlling group 

relied found, in light of FEC precedent and the slim evidence regarding the majorpurpose prong of the inquiry, that there was no basis “to conclude at this point that 

F8 or Eli Publishing is a political committee” and recommended not acting on 

those allegations. (J.A.109, 119-21.) OGC also identified an aspect of the political 

committee analysis that was not established with respect to Specialty Group and 

Kingston Pike, finding that the record did not make clear whether these entities 

even passed the statutory threshold for political committee status by “in fact 

accept[ing] or mak[ing] more than $1,000 in contributions.” (J.A.267) 

As OGC further explained, “an entity can be a conduit or a political 

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committee, but not both.” (J.A.120.) Thus, “[b]ecause OGC did not recommend 

that we find reason to believe with respect to [the political committee] allegations, 

and because we conclude the applicable statutory provisions addressing these 

circumstances is section 30122, we do not discuss those allegations here.” 

(J.A.152 n.36 (emphasis added).) The record lacked a basis to find reason to 

believe that the corporate respondents were political committees and further 

addressing the question was unnecessary given the conclusion that the relevant 

analysis was under section 30122. 

e. The Controlling Commissioners Reasonably Determined 

It Would Be Unfair to Prosecute the Respondents 

After concluding that the issue was one of first impression and that the 

governing law lacked clarity, the controlling Commissioners reasonably 

determined that “principles of due process, fair notice, and First Amendment 

clarity counsel against applying a standard to persons and entities that were not on 

notice of the governing norm” and dismissed Complainants’ administrative 

complaints. (J.A.148.) 

Complainants acknowledge that due process requires that regulated parties 

have prior notice about what is required of them. (Br. at 39.) They nevertheless 

argue that the respondents had “sufficient notice as a matter of due process” 

because section 30122 was “clear and unambiguous.” (Id.) But this merely reasserts their argument that respondents had adequate notice, and should be rejected 

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for the same reasons. Supra Section III.B. 

The controlling Commissioners also relied on the heightened notice 

concerns when determining whether to pursue enforcement in a First Amendment 

context. J.A.148-49 & n.3, 159 & n.69, 160 & n.72, 423-24; Fox, 567 U.S. at 253-

54 (“When speech is involved, rigorous adherence to [notice] requirements is 

necessary to ensure that ambiguity does not chill protected speech.”). 

Complainants do not dispute this well-established law. (Br. at 39.) Instead, 

Complainants brush it aside because the controlling Commissioners never found 

the statute unconstitutionally vague. (Br. at 59-60.) But a law does not need to be 

found unconstitutionally vague before an official can consider the sufficiency of 

notice and potential unfairness. 

Because the controlling Commissioners’ decision to exercise prosecutorial 

discretion is adequately explained and reasonable, the Court should affirm the 

district court. 

C. The Challenge to the Proposed Purpose-Based Approach Is Not 

Ripe and In Any Event Fails 

3. It Is Not Ripe 

As the district court held, Complainants’ challenge to the controlling 

Commissioners’ announced purpose-based standard that they intend to apply in 

future cases — but that they concededly did not apply here and which has not been 

formally adopted by the Commission — “is not even close to being ripe.” 

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(J.A.426.) 

Under the ripeness doctrine, “[c]ourts are obliged to . . . ‘to protect the 

agencies from judicial interference until an administrative decision has been 

formalized and its effects felt in a concrete way by the challenging parties.’” Util. 

Air Regulatory Grp. v. EPA, 320 F.3d 272, 278 (D.C. Cir. 2003) (quoting Abbott 

Labs. v. Gardner, 387 U.S. 136, 148-49 (1967)). When determining ripeness, 

courts consider “(1) the fitness of the issues for judicial decision and (2) the 

hardship to the parties of withholding court consideration.” Nat’l Park Hosp. 

Ass’n v. Dep’t of Interior, 538 U.S. 803, 808 (2003). 

Complainants attempt to elide the district court’s holding — not by pointing 

to future harm that they might suffer if and when the announced standard is applied 

(as they did below) — but by arguing that they “have been denied the disclosure to 

which they are entitled under FECA” from respondents. (Br. at 32.) 

Even assuming section 30122 contains a disclosure requirement, however, it 

was not the announced future standard itself that caused the purported harm 

because it was never applied. Further, the controlling Commissioners were 

concerned about the lack of notice of any previously announced clear standard, not 

their particular standard. (J.A.148, 153-55 & n.50, 175.) Regardless lack of 

notice, rather than the standard itself, was but one among many reasons that they 

exercised prosecutorial discretion. Thus, Complainants have not demonstrated that 

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they will suffer any legally cognizable harm from postponing review. 

Additionally, Complainants’ claim of harm ignores that section 30122, 

though it furthers informational interests as a general matter, does not itself require 

public reporting of any information. See supra pp. 6, 20. Complainants thus are 

not entitled to any disclosure on their principal claim which, if proven, forecloses 

their back-up claim for political committee disclosure. Supra pp. 38-39. 

“[E]ven purely legal issues may be unfit for review,” Atl. States Legal 

Found. v. EPA, 325 F.3d 281, 284 (D.C. Cir. 2003), particularly under such 

circumstances, Nat’l Park Hosp., 538 U.S. at 811-12 (finding challenge not ripe 

where the party “failed to demonstrate that deferring judicial review will result in 

real hardship”); Chlorine Inst., Inc. v. Fed. R.R. Admin., 718 F.3d 922, 927 (D.C. 

Cir. 2013) (same). While Complainants state that declining review would result in 

“de facto rulemaking without judicial oversight” (Br. at 33), this is incorrect. See 

Conference Grp. v. FCC, 720 F.3d 957, 966 (D.C. Cir. 2013) (“The fact that an 

order rendered in an adjudication may affect agency policy and have general 

prospective application does not make it rulemaking subject to . . .notice and 

comment.”). More importantly, if a majority or a controlling group found “no 

reason to believe” under the proposed standard in a future matter, the resultant 

dismissal decision would be reviewable. Supra Section II.C.3. 

 While true that this case mentions several fact patterns (Br. at 31), the 

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proposed standard was not applied to these facts, so it remains unclear if and how 

it will be applied and/or modified. Texas v. United States, 523 U.S. 296, 300 

(1998) (“A claim is not ripe for adjudication if it rests upon contingent future 

events that may not occur as anticipated, or indeed may not occur at all.” (internal 

quotation marks omitted)). For example, Complainants assert that “any noncampaign activity, however artificial or minimal” could avert application of section 

30122” under the standard. (Br. at 56.) However, it is not readily apparent that the 

controlling group would draw that conclusion. (J.A.158; MUR 6930, 

https://www.fec.gov/files/legal/murs/6930/16044386985.pdf.) Complainants also 

assert that the standard “provides an easy escape hatch for donors to claim that 

they contributed through an LLC for any reason other than avoiding disclosure.” 

(Br. at 56.) Future matters will permit the FEC to assess whether donors do, in 

fact, make such claims and to adjust the proposed standard, if necessary. In 

addition, Complainants assert that there is no distinction between the announced 

standard and a “knowing and willful” violation. Br. at 55; see also 52 U.S.C. 

§ 30109(a)(5), (a)(6), (d)(1)(D). The controlling Commissioners, however, have 

not yet considered a “knowing and willful” section 30122 violation in a similar 

matter. 

Complainants’ assertions therefore demonstrate that “we have the classic 

institutional reason to postpone review: we need to wait for a rule to be applied [to 

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see what its effect will be.” Atl. States Legal Found., 325 F.3d at 285 (internal 

quotation marks omitted); J.A.426. Though the decision provides guidance on 

how two currently sitting Commissioners intend to approach future matters, 

judicial review should await actual, concrete application in future cases. See 

Common Cause II, 842 F.2d at 449 n.32 (“[A] statement of reasons [by decliningto-go-ahead Commissioners]” is not “binding legal precedent or authority for 

future cases.”); J.A.426. Judicial intervention now denies the FEC “an opportunity 

to correct its own mistakes [(if any)] and to apply its expertise” to future facts. 

F.T.C. v. Standard Oil Co. of Cal., 449 U.S. 232, 242 (1980); see also Pub. Citizen 

Health Research Grp. v. Comm’r, Food & Drug Admin., 740 F.2d 21, 31 (D.C. 

Cir. 1984) (“Review of tentative agency positions on substantive questions 

severely compromises the interests that ripeness and finality notions protect.”). 

Indeed, given multiple Commissioner vacancies, future applications are 

particularly uncertain. 

 Accordingly, “[i]n contrast to the [announced standard’s] lack of legal or 

practical effect upon [Complainants], the effect of the judicial review sought by 

[Complainants] is likely to be interference with the proper functioning of the 

agency and a burden for the courts.” Standard Oil, 449 U.S. at 242. And 

Complainants’ challenge to the standard is not ripe. 

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4. The Proposed Standard Is Not Contrary to Law 

If reviewable, the controlling Commissioners’ purpose-based standard 

constitutes a permissible construction of section 30122 and passes Chevron review. 

The statute is not clear as to what (if any) scienter is required to establish 

that someone has made a contribution in the name of another. The omission of an 

express intent requirement is not necessarily dispositive. Compare Br. at 55, with

Staples v. United States, 511 U.S. 600, 605 (1994). 

When originally enacted, section 30122 was enforced solely through 

criminal law — which presumptively contains a mens rea requirement. Federal 

Election Campaign Act of 1971, Pub. L. No. 92-225, §§ 310, 311, 86 Stat. 19 

(1972); United States v. U.S. Gypsum Co., 438 U.S. 422, 438 (1978). 

When civil enforcement was later added, the relevant language of the 

provision did not change. The legislative history does not indicate that Congress 

intended to have no purpose or scienter requirement for civil violations. Rather, 

Congress merely “distinguishe[d] between violations of the law as to which there 

is not a specific wrongful intent” and “violations as to which the Commission has 

clear and convincing proof that the acts were committed with a knowledge of all 

the relevant facts and a recognition that the action is prohibited by law.” H.R. Rep. 

No. 94-917, at 4 (1976). In addition, the definition of “contribution” is purposebased. 52 U.S.C. § 30101(8)(A)(i). 

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Here, the controlling Commissioners worried about dissuading 

constitutionally protected contributions by closely held corporations and corporate 

LLCs. (J.A.158.) Regardless of the lawfulness of the transaction, an 

owner/member will almost always exercise direction and control over their closely 

held corporation or corporate LLC to make a contribution because in many cases 

this is the only way these corporate entities can make contributions. (Id.) Thus, 

unless the standard requires more, they reasoned, these corporate entities could 

potentially be subject to a potential investigation every time they make a 

contribution. (Id.) The controlling Commissioners concluded that examining the 

purpose behind the transfers struck the appropriate balance between disclosure 

interests and First Amendment rights. (Id.) Interpreting section 30122 in a way 

that reduced impingements upon First Amendment rights was reasonable. E.g., 

Van Hollen II, 811 F.3d at 501 (“By affixing a purpose requirement to [the 

Bipartisan Campaign Reform Act]’s disclosure provisions, the FEC exercised its 

unique prerogative to safeguard the First Amendment when implementing its 

congressional directives.”). 

Their purpose-based standard need only be rational to be upheld, Orloski, 

795 F.2d at 167, and this is a rational approach for resolving a delicate linedrawing problem. Complainants attack the controlling Commissioners’ approach 

on the ground that FECA already provides for “knowing and willful” violations. 

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(Br. at 55.) But a defendant must have an understanding that her actions are 

unlawful to commit a knowing and willful violation. See, e.g., FEC v. John A. 

Dramesi for Congress Comm., 640 F. Supp. 985 (D.N.J. 1986). If the news reports 

and attorney statements were accurate, there were several individuals in the matters 

examined by the Commissioners who broadly speaking would appear to have 

intended to avoid FECA disclosures without understanding their course of action to 

have been unlawful. See supra pp. 8, 47-48. Such conduct in the record would 

meet the controlling group’s standard without constituting a knowing and willful 

violation. Even if the proposed purpose-based standard is ripe, it is not contrary to 

law. 

CONCLUSION 

For the foregoing reasons, the Commission respectfully requests that the 

district court’s judgment be affirmed. 

 

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Respectfully submitted, 

Lisa J. Stevenson 

Acting General Counsel 

lstevenson@fec.gov 

Kevin Deeley 

Associate General Counsel 

kdeeley@fec.gov 

August 14, 2019 

Kevin P. Hancock 

Acting Assistant General Counsel 

khancock@fec.gov 

/s/ Haven G. Ward 

Haven G. Ward 

Attorney 

hward@fec.gov 

FEDERAL ELECTION 

COMMISSION 

1050 First Street NE 

Washington, DC 20463 

(202) 694-1650 

USCA Case #18-5239 Document #1802258 Filed: 08/14/2019 Page 72 of 74
CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMIT, 

TYPEFACE REQUIREMENTS, AND TYPE-STYLE REQUIREMENTS

I hereby certify, on this 14th day of August, 2019, that: 

1. This document complies with the word limit of Fed. R. App. P. 32(a)(7) 

because, excluding the parts of the document exempted by Fed. R. App. 

32(f) and Circuit Rule 32(e), this document contains 12,977 words. 

2. This document complies with the typeface requirements of Fed. R. App. P. 

32(a)(5) and the type-style requirements of Fed. R. App. 32(a)(6) because 

this document has been prepared in a proportionally spaced typeface using 

Microsoft Word 2013 in a 14-point Times New Roman font. 

 /s/ Haven G. Ward

 Haven G. Ward 

USCA Case #18-5239 Document #1802258 Filed: 08/14/2019 Page 73 of 74
CERTIFICATE OF SERVICE 

 I hereby certify that on this 14th day of August, 2019, I electronically filed 

the foregoing document with the Clerk of the United States Court of Appeals for 

the D.C. Circuit by using the Court’s CM/ECF system. All participants are 

registered CM/ECF users and will be served by the appellate CM/ECF system. 

 /s/ Haven G. Ward

 Haven G. Ward 

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