Case 4:12-cv-00339-HDV-TJS Document1 Filed 07/30/12 Page 20 of 27

oil,” is inconsistent with law and severely burdens HLF’s right to freedom of speech free of
government regulation.

111. Neither the underlying statute, the implementing regulations, nor any court decision has
ever determined that unidentified audio clips of public officials are “clearly identified”
references to those public officials.

112. Because the proposed Advertisement 2 does not reference or identify the speaker of the
audio in any way, it simply cannot be that this audio clip is the required “reference” to a “clearly
identified” candidate for federal office.

113. If Congress intended the statute to apply to audio clips, then the Commission or
Congress would have amended the statute or regulation to say as much.

114. The application of the statutory definition of “clearly identified” at 2 U.S.C. § 431(18)
as applied to HLF’s proposed Advertisement 2 which contains an unidentified audio clip of a
public official, if interpreted to refer to a clearly identified candidate, is inconsistent with law and
severely burdens HLF’s right to freedom of association free of government regulation.

115. As applied to HLF and other organizations that may not want to comply with the
burdensome FEC regulations and disclosure requirements in order to speak on public issues,
these provisions act as expenditure prohibitions.

116. As applied by the FEC’s Draft B, 2 U.S.C. § 431(18) combined with 2 U.S.C. § 434(f)
are the functional equivalent of a political speech ban imposed by federal statute against
individuals and organizations who do not want and are not required to comply with the burdens
of the disclaimer, disclosure and reporting requirements of the electioneering communications

rules.


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 14 of 27

71. HLF is entitled to a declaratory judgment that using the phrase “the administration” or
“this administration” is not a reference to a clearly identified candidate for federal office.

72. If the regulation at 11 C.F.R. § 100.17 is interpreted to apply to the phrase “this
administration” or “the administration,” then it goes beyond any permissible construction of
“clearly identified candidate” as defined by the Supreme Court in Buckley v. Valeo, and is void
as applied under 5 U.S.C. § 706.

COUNT 2
“Clearly Identified Candidate” at 2 U.S.C. § 431(18) and 11 C.F.R. § 100.17 — As Applied
to the Phrase “the Government”

73. Plaintiff realleges and incorporates by reference all of the allegations contained in all of
the preceding paragraphs.

74. The application of the statutory definition of “clearly identified” candidate at 2 U.S.C. §
431(18) and 11 C.F.R. § 100.17, as applied to HLF’s proposed Advertisements 2, 3, and 5 which
contain references to “the government,” is inconsistent with law and severely burdens AFF’s
right to engage in protected speech free of government regulation.

75. The government refers to the entirety of the federal government, which employs some
three million people.

76. If “the government” refers to a clearly identified candidate, then all of the electioneering
communications rules apply to HLF’s proposed Advertisements 2, 3, and 5.

77. HLF notes that applying the electioneering communications rule to Advertisements 2, 3,
and 5 inherently conflicts with the FEC’s very own conclusion by an affirmative vote in the AFF
AOR that the references to Secretary Sebelius and “the government” in AFF’s Advertisement 4

did not constitute references to a clearly identified candidate.

14


Case 4:12-cv-00339-HDV-TJS Document1 Filed 07/30/12 Page 24 of 27

136. Under 2 U.S.C. §§ 431(18) and 434(f), and the FEC’s regulations, as interpreted and
applied by the FEC in contradiction to the First Amendment and opinions of the U.S. Supreme
Court in Buckley v. Valeo and McConnell v. FEC, HLF would be subject to the electioneering
communications regime, including all of its attendant disclosure and disclaimer requirements.

137. The application of the electioneering communications rules to HLF’s proposed
communications severely burden its right to associate with its potential donors by imposing
broad and sweeping disclosure requirement that may discourage donations or require disclosure
of donors who had no prior knowledge of the application of the disclosure requirements to HLF.

138. HLF poses no threat of corruption or its appearance because it has never made and has
no plans to make contributions to candidates. See Citizens United, 130 S. Ct. at 909.

139. The application of the electioneering communications rules to this proposed
communication violates HLF’s contributors’ rights to freedom of speech and association under
the First Amendment. By requiring HLF to disclose virtually all of its donors simply because it
proposes to incorporate an unidentified audio clip of an unelected federal official into its public
communications, HLF’s rights and its contributors’ meaningful ability to associate and speak
through the act of contributing are unconstitutionally and unlawfully abridged.

140. As the Supreme Court clearly stated in Buckley v. Valeo, a “clearly identified” candidate
must be consistent with Footnote 51, see 424 U.S. at 43 n.51, in order to constitutionally apply
the statutory definition.

141. HLF is entitled to a declaratory judgment that the use of an unidentified audio clip of an
unelected public official is not a reference to a clearly indentified candidate for federal office.

142. If the regulation at 11 C.F.R. § 100.17 is interpreted to apply to an unidentified audio

clip of an unelected public official then it goes beyond any permissible construction of “clearly

24


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 5 of 27

would not be deemed to refer to “clearly identified candidates,” and therefore not be
electioneering communications.

16. HLF’s planned advertisements in Iowa, attached as Exhibit 1, are similar to the AFF
advertisements that were at issue in the advisory opinion request and are currently not being
produced due to the FEC’s failure to correctly apply the FECA and controlling precedent to
AFF’s advisory opinion request.

17. Because of the FEC’s failure to faithfully apply the FECA and controlling Supreme Court
opinions, HLF intends to refrain from speech in which it had previously engaged and is halting
its communications in the future for fear of civil and criminal penalties which potentially and
realistically may be brought for failure to comply with the FECA.

18. HLF is presently stymied in its ability to speak regarding significant, important national
political policy issues of the day while this matter remains unresolved.

19. The FEC has failed to abide by the straightforward and controlling opinion in Buckley v.
Valeo with respect to interpretation of a long-standing statute.

20. The FEC’s action, or rather inaction, infringes on the constitutionally protected rights of
HLF, causing injuries by forcing it to seek judicial relief each time it wishes to engage in
political speech which plaintiff reasonably believes is and should be protected by the First
Amendment.

21. HLF seeks a declaratory judgment from this court (a) finding 2 U.S.C. § 431(18)
(definition of “clearly identified” candidate), 2 U.S.C. § 434(f) (definition of “electioneering
communication”), 11 C.F.R. § 100.17 (definition of “clearly identified” candidate), and 11
CER. § 100.29 (definition of “electioneering communication”) as applied to HLF’s proposed

communications cannot be constitutionally applied under the First Amendment based upon the


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 21 of 27

117. HLF has prepared advertisements speaking to important policy issues of the day which
exhort the public to contact the government or include various other references to it, and in one
version include audio of President Obama making a relatively generic statement.

118. But for operation of the law, HLF is prepared to run these advertisements and other
communications similar to them consistently through the year.

119. Under 2 U.S.C. §§ 431(18) and 434(f), and the FEC’s regulations, as interpreted and
applied by the FEC in contradiction to the First Amendment and opinions of the U.S. Supreme
Court in Buckley v. Valeo and McConnell v. FEC, HLF would be subject to the electioneering
communications regime, including all of its attendant disclosure and disclaimer requirements.

120. The application of the electioneering communications rules to HLF’s proposed
communications severely burden its right to associate with its potential donors by imposing
broad and sweeping disclosure requirement that may discourage donations or require disclosure
of donors who had no prior knowledge of the application of the disclosure requirements to HLF.

121. HLF poses no threat of corruption or its appearance because it has never made and has
no plans to make contributions to candidates. See Citizens United, 130 S. Ct. at 909.

122. The application of the electioneering communications rules to this proposed
communication violates HLF’s contributors’ rights to freedom of speech and association under
the First Amendment. By requiring HLF to disclose virtually all of its donors simply because it
proposes to incorporate an unidentified audio clip of a public official into its public
communications, HLF’s rights and its contributors’ meaningful ability to associate and speak

through the act of contributing are unconstitutionally and unlawfully abridged.

21


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 27 of 27

CERTIFICATE OF SERVICE

Thereby certify that on July 30-31, 2012, copies of the foregoing Verified Complaint for
Declaratory and Injunctive Relief were served by hand delivery and certified mail on the
following parties:

VIA HAND DELIVERY
Federal Election Commission
999 E Street, NW
Washington, DC 20463

And

VIA CERTIFIED MAIL

Attorney General Eric H. Holder, Jr.
U.S. Department of Justice

950 Pennsylvania Ave. NW
Washington, DC 20530

And

VIA HAND DELIVERY

Nicholas A. Klinefeldt

U.S. Attorney for the Southern District of lowa
U.S. Courthouse Annex

110 East Court Avenue, Suite #286

Des Moines, Iowa 50309-2053

/s/ Matt Dummermuth
MATT DUMMERMUTH

27


Case 4:12-cv-00339-HDV-TJS Document1 Filed 07/30/12 Page 23 of 27

129. Because the proposed Advertisement 3 does not reference or identify the speaker of the
audio in any way, it simply cannot be that this audio clip is the required “reference” to a “clearly
identified” candidate for federal office.

130. If Congress intended the statute to apply to audio clips, then the Commission or
Congress would have amended the statute or regulation to say as much.

131. The application of the statutory definition of “clearly identified” at 2 U.S.C. § 431(18)
as applied to HLF’s proposed Advertisement 3 which contains an unidentified audio clip of a
unelected public official, if interpreted to refer to a clearly identified candidate, is inconsistent
with law and severely burdens HLF’s right to freedom of association free of government
regulation.

132. As applied to HLF and other organizations that may not want to comply with the
burdensome FEC regulations and disclosure requirements in order to speak on public issues,
these provisions act as expenditure prohibitions.

133. As applied by the FEC’s Draft B, 2 U.S.C. § 431(18) combined with 2 U.S.C. § 434(f)
are the functional equivalent of a political speech ban imposed by federal statute against
individuals and organizations who do not want and are not required to comply with the burdens
of the disclaimer, disclosure and reporting requirements of the electioneering communications
tules,

134. HLF has prepared advertisements speaking to important policy issues of the day which
exhort the public to contact the government or include various other references to it, and in one
version include audio of an unelected federal official making a relatively generic statement.

135. But for operation of the law, HLF is prepared to run these advertisements and other

communications similar to them consistently through the year.

23


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 18 of 27

98. As applied to HLF and other organizations that may not want to comply with the
burdensome FEC regulations and disclosure requirements in order to speak on public issues,
these provisions act as expenditure prohibitions.

99. As applied by the FEC’s Draft B, 2 U.S.C. § 431(18) combined with 2 U.S.C. § 434(f)
are the functional equivalent of a political speech ban imposed by federal statute against
individuals and organizations who do not want and are not required to comply with the burdens
of the disclaimer, disclosure and reporting requirements of the electioneering communications
rules.

100. HLF has prepared advertisements speaking to important policy issues of the day which
exhort the public to contact “the White House.”

101. But for operation of the law, HLF is prepared to run these advertisements and other
communications similar to them consistently through the year.

102. Under 2 U.S.C. §§ 431(18) and 434(f), and the FEC’s regulations, as interpreted and
applied by the FEC in contradiction to the First Amendment and opinions of the U.S. Supreme
Court in Buckley v. Valeo and McConnell v. FEC, HLF would be subject to the electioneering
communications regime, including all of its attendant disclosure and disclaimer requirements.

103. The application of the electioneering communications rules to HLF’s proposed
communications severely burden its right to associate with its potential donors by imposing
broad and sweeping disclosure requirements that may discourage donations or require disclosure
of donors who had no prior knowledge of the application of the disclosure requirements to HLF.

104. HLF poses no threat of corruption or its appearance because it has never made and has

no plans to make contributions to candidates. See Citizens United, 130 S. Ct. at 909.

18


Case 4:12-cv-00339-HDV-TJS Document1 Filed 07/30/12 Page 10 of 27

45. More than 40 days after the request was filed, the Commission was unable to issue an
advisory opinion on the majority of AFF’s request. Given that the FEC could not issue a
definitive statement concerning the application of the statute to AFF’s planned actions, HLF will
likely have to mute itself and curtail its own speech during the upcoming electioneering
communication period.

46. HLF planned to distribute similar advertisements to the ones proposed by AFF in their
AOR, These advertisements would call on the public to contact “the administration,” “the
government,” or “the White House” to express their views on important public policy issues.
They would also feature short audio clips of President Obama and other government officials
speaking. HLF planned to air these advertisements in Iowa and other states.

47. As soon as possible, HLF would like a determination of its legal obligations with respect
to specific communications during the upcoming electioneering communications period so that it
is able to plan and implement its constitutionally protected political speech for the next several
months,

48. If HLF chooses to engage in speech that is materially indistinguishable from the proposed
advertisements at issue in the AFF AOR, in light of the FEC’s failure to provide an advisory
opinion, HLF is potentially subject to civil and criminal penalties, as well as the cost of
government investigation and potential disclosure of its donors, for engaging in activity it does
not believe requires any donor disclosure, disclaimer, or other compliance with FEC reporting
requirements.

49. Specific examples of HLF’s intended communications are attached as Exhibit 1.

50. In the absence of a declaratory judgment, HLF would be forced to curtail its speech on

significant issues of the day.

10


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 7 of 27

27. The Hispanic Leadership Fund, Inc., has for a number of years been engaged in public
communications on a wide variety of federal and state policy issues.

28. The Hispanic Leadership Fund, Inc., has previously made an “electioneering
communication” under the FECA.

29. On March 30, 2012, the United States District Court for the District of Columbia issued
an order invalidating a regulation that significantly expands the scope and burden of compliance
with the “electioneering communications” provisions of the FECA. Van Hollen v. FEC, No. 11-
0766 (D.D.C. Mar. 30, 2012) (striking down the FEC’s 2007 regulation and reinstating the
agency’s 2003 regulation requiring disclosure of “donors who donate” more than $1,000 to the
organization from January 1 of the prior year through the date of the electioneering
communication).

30. The Supreme Court in Buckley and McConnell has held that “clearly identified
candidate” must have a bright line meaning as a tool of statutory construction to avoid vagueness
concerns with the constitutionality of the statute. McConnell, 540 U.S. at 121; Buckley, 424 U.S.
at 41-44,

31. On April 18, 2012, American Future Fund submitted an advisory opinion request
(“AOR”), attached as Exhibit 2, to the FEC pursuant to 2 U.S.C. § 437£. This request asked
whether its proposed communications would contain references to a “clearly identified
candidate” as defined at 2 U.S.C. § 431(18).

32. Pursuant to 11 C.F.R. § 112.1, the FEC accepted the AOR for review, assigned it AOR
number 2012-19, and posted it on the FEC’s website for public commentary on April 25, 2012.

The comments submitted are attached as Exhibit 8.


Case 4:12-cv-00339-HDV-TJS Document1 Filed 07/30/12 Page 6 of 27

Supreme Court’s decision in Buckley v. Valeo, 424 U.S. 1 (1976); (b) finding the regulations at
11 C.F.R. §§ 100.17 and 100.29 inapplicable to HLF’s proposed communications under the
Administrative Procedure Act (“APA”), 5 U.S.C. § 706, because the application would be
arbitrary and capricious; and (c) preliminarily and permanently enjoining the FEC from
enforcing the FECA against HLF and its intended activities based on FECA or any of the
regulations and/or policies set out herein.

JURISDICTION AND VENUE

22. This Court has jurisdiction over this case pursuant to 28 U.S.C. §§ 1331 and 2201 asa
challenge arising under the First Amendment to the Constitution of the United States, the judicial
review provisions of the APA, 5 U.S.C. §§ 702-706, and the Declaratory Judgment Act, 28
US.C. §§ 2201-02.

23. Venue is proper in this Court under 28 U.S.C. § 1391(e) because Defendant is an entity
of the United States Government, and the injury to Plaintiffs constitutional rights is occurring in
the state of lowa, where Plaintiff wishes to distribute its proposed advertisements.

PARTIES

24. The Hispanic Leadership Fund, Inc., is a 501(c)(4) non-profit organization incorporated
in 2008 as a Virginia non-profit corporation.

25. The FEC is the federal agency charged with enforcement of the Federal Election
Campaign Act and is located in Washington, D.C.

STATEMENT OF FACTS
26. The Hispanic Leadership Fund, Inc., was founded in 2008 to advance free enterprise,

limited government, and individual freedom.


Case 4:12-cv-00339-HDV-TJS Document1 Filed 07/30/12 Page 19 of 27

105. The application of the electioneering communications rules to this proposed
communication violates its contributors’ rights to freedom of speech and association under the
First Amendment. By requiring HLF to disclose virtually all of its donors simply because it
proposes to petition “the White House” to act on matters of national importance, HLF’s rights
and its contributors’ meaningful ability to associate and speak through the act of contributing are
unconstitutionally and unlawfully abridged.

106. As the Supreme Court clearly stated in Buckley v. Valeo, a “clearly identified” candidate
must be consistent with Footnote 51, see 424 U.S. at 43 n.51, in order to constitutionally apply
the statutory definition.

107. HLF is entitled to a declaratory judgment that “the White House” is not a reference to a
clearly identified candidate for federal office.

108. If the regulation at 11 C.F.R. § 100.17 is interpreted to apply to the phrase “the White
House” or photographs of the White House then it goes beyond any permissible construction of
“clearly identified candidate” as defined by the Supreme Court in Buckley v. Valeo, and is void

as applied under 5 U.S.C. § 706.

COUNT 4
“Clearly Identified Candidate” at 2 U.S.C. § 431(18) and 11 C.F.R. § 100.17 — As Applied
to an Unidentified Audio Clip of a Public Official
109. Plaintiff realleges and incorporates by reference all of the allegations contained in all of
the preceding paragraphs.
110. The application of the statutory definition of “clearly identified” candidate at 2 U.S.C. §

431(18) and 11 C.F.R. § 100.17, as applied to HLF’s proposed Advertisement 2 which contains

an unidentified audio clip of President Obama saying “we must end our dependence on foreign


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 9 of 27

separate statement on June 29, 2012. The FEC’s response and additional Commissioner
statements are attached as Exhibit 7.

40. The FEC’s failure to affirmatively provide a four-vote, binding advisory opinion in
response to the bulk of AFF’s request carries the equivalent legal effect of taking no action, and
leaves AFF and all similarly situated organizations, including plaintiff HLF, subject to civil or
criminal penalties under 2 U.S.C. § 437g for engaging in constitutionally protected speech.

41. The Commission’s refusal to issue the requested advisory opinion to AFF deprives
Plaintiff of the ability to rely on a legal defense available pursuant to 2 U.S.C. § 437f(c)(1)(B).
Under that provision, Plaintiff HLF could have relied upon AFF’s advisory opinion as a “person
involved in any specific transaction or activity which is indistinguishable in all its material
aspects from the transaction or activity with respect to which such advisory opinion is rendered.”

42. The advisory opinion process in this matter is complete and deprives plaintiff of a legal
right — to engage freely in constitutionally protected speech and association. See Unity08 v.
FEC, 596 F.3d 861, 865 (D.C. Cir. 2010) (“parties are commonly not required fo violate an
agency’s legal position and risk an enforcement proceeding before they may seek judicial
review”); see also Democratic Senatorial Campaign Comm. v. FEC, 918 F. Supp. 1 (D.D.C.
1994).

43. At the time of filing the advisory opinion request, the opening of the “electioneering
communication” period with respect to the presidential primary conventions was approximately
4 months away.

44, The “electioneering communication” time period with respect to President Obama and
the Democratic National Convention begins on August 4, 2012, and runs continuously through

the general election.


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 25 of 27

identified candidate” as defined by the Supreme Court in Buckley v. Valeo, and is void as applied

under 5 U.S.C. § 706.

PRAYER FOR RELIEF
Wherefore, Plaintiff prays for the following relief:

1. A declaratory judgment that the application of 2 U.S.C. § 431(18), 2 U.S.C. § 434(8), 11
C.F.R. § 100.17, and 11 C.F.R. § 100.29 to HLF’s proposed advertisements is unconstitutional
and void as applied under 5 U.S.C. § 706;

2. A preliminary and permanent injunction enjoining Defendant FEC from enforcing 2
U.S.C. §§ 431(18) and 434(f), as well as any applicable rules and regulations regarding those
provisions, against The Hispanic Leadership Fund, Inc., and its intended activities;

3. An award of nominal damages of $1 for the violation of Plaintiff's constitutional rights;

4. Costs and attorney’s fees pursuant to any applicable statute or authority;

5. Any other relief that the Court deems just and appropriate.

Dated: July 30, 2012
Respectfully submitted,

By: __/S/Matt Dummermuth.

Jason Torchinsky* (Lead Counsel) Matt Dummermuth (AT0002215)
jtorchinsky@hvjlaw.com mdummermuth@whgllp.com

Shawn Sheehy* WHITAKER HAGENOW & GUSTOFF, LLP
ssheehy@hvjlaw.com 305 Second Avenue SE, Suite 202

Lisa Dixon* Cedar Rapids, [A 52401

Idixon@hvjlaw.com Phone: 319-730-7702

HOLTZMAN VOGEL JOSEFIAK PLLC Fax: 319-730-7575
45 North Hill Drive, Suite 100

Warrenton, VA 20186 Counsel for The Hispanic Leadership Fund, Inc.
Phone: 540-341-8808
Fax: 540-341-8809 *Motion for pro hac vice admission pending

25


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 1 of 27

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF IOWA

CENTRAL DIVISION
)
THE HISPANIC LEADERSHIP FUND, INC. )
P.O. Box 23162 )
Alexandria, VA 22304, ) Civil Case No.
)
Plaintiff, ) PLAINTLFF’S VERIFIED
) COMPLAINT FOR
v. ) DECLATORY AND
) INJUNCTIVE RELIEF
FEDERAL ELECTION COMMISSION )
999 E Street, NW )
Washington, DC 20463, )
)
Defendant. )
)

Plaintiff The Hispanic Leadership Fund, Inc. (“HLF”) brings this action for declaratory
and injunctive relief, and complains as follows:
INTRODUCTION

1. This is a pre-enforcement, as-applied challenge to a Federal Election Campaign Act
definitional statute at 2 U.S.C. §§ 431(18) and 434(f) and the Federal Election Commission’s
parallel implementing regulations at 11 C.F.R. §§ 100.17 and 100.29 that impact HLF’s ability to
engage in constitutionally protected “issue advocacy” as set forth in FEC v. Wisconsin Right to
Life, 551 U.S. 449 (2007) (“WRIL II”).

2. This case challenges a law that, as interpreted and applied by the Federal Election
Commission (“FEC”), abridges the freedom of speech and association guaranteed under the First
Amendment to the Constitution. These challenges are brought as applied against 2 U.S.C. §§

431(18) and 434(f) and their implementing regulations.


Case 4:12-cv-00339-HDV-TJS Document1 Filed 07/30/12 Page 12 of 27

57. The application of the statutory definition of “clearly identified” candidate at 2 U.S.C. §
431(18) and 11 C.F.R. § 100.17, to HLF’s proposed Advertisements 1 and 4 which contain
references to “the administration” or “this administration,” is inconsistent with law and severely
burdens HLF’s right to freedom of speech free of government regulation.

58. “The administration” refers to the Executive Branch of the federal government, which
employs some 2.7 million people.

59. If “the administration” refers to a clearly identified candidate, then all of the
electioneering communications rules apply to HLF’s proposed Advertisements 1 and 4.

60. “The administration” does not refer to any clearly identified candidate for federal office.

61. The application of the statutory definition of “clearly identified” at 2 U.S.C. § 431(18) to
HLP’s proposed Advertisement 1, which contains references to “the Administration” or “this
Administration,” if interpreted to refer to a clearly identified candidate, is inconsistent with
Supreme Court precedent and severely burdens HLF’s right to freedom of association free of
government regulation.

62. As applied to HLF and other organizations that may not want to comply with the
burdensome FEC regulations and disclosure requirements in order to speak on public issues,
these provisions act as expenditure prohibitions.

63. As applied by the FEC’s Draft B, 2 U.S.C. § 431(18) combined with 2 U.S.C. § 434(f)
are the functional equivalent of a political speech ban imposed by federal statute against
individuals and organizations who do not want and are not required to comply with the burdens
of the disclaimer, disclosure and reporting requirements of the electioncering communications

rules,

12


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 11 of 27

51. Without an immediate ruling from this court, HLF will not have the necessary time to
plan its activities, and each day after the electioneering communications period begins in August
will be forced to curtail its speech for fear of government enforcement action.

52. HLF will face a credible threat of prosecution if it engages in speech it does not believe
constitutes an electioneering communication, particularly when the FEC — the agency charged
with enforcement of the FECA ~ was unable to reach a determination on AFF’s request for
guidance on materially indistinguishable communications.

53. HLF is chilled from proceeding with its planned activities because it reasonably believes
that it will be subject to an FEC (and potentially a U.S. Department of Justice) investigation and
possible enforcement action which could result in civil and criminal penalties based on the fact
that the FEC has declined to issue an advisory opinion clarifying the current interpretation of the
law.

54. HLF is also chilled from proceeding because, if Defendant subsequently determines that
HLF engaged in electioneering communications, HLF would be in violation of disclosure,
disclaimer and reporting requirements associated with the proposed communications.

55. The chilled speech of HLF constitutes irreparable harm because it is the loss of First

Amendment rights. There is no adequate remedy at law.

COUNT 1
“Clearly Identified Candidate” at 2 U.S.C. § 431(18) and 11 C.F.R. § 100.17 — As Applied
to the Phrase “the Administration” and “this Administration”

56. Plaintiff realleges and incorporates by reference all of the allegations contained in all of

the preceding paragraphs.

ll


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 8 of 27

33. On May 31, 2012, the FEC’s general counsel issued a draft advisory opinion in response
to AFF’s AOR. The draft advisory opinion, Draft A, concluded that none of AFF’s proposed
communications contained references to clearly identified candidates that would be subject to the
“electioneering communications” disclosure, disclaimer and reporting requirements. This “Draft
A” advisory opinion is attached as Exhibit 3.

34. An alternate draft, Draft B, was also issued on May 31, 2012, and concluded that all but
one of AFF’s proposed communications contained references to clearly identified candidates.
The alternative “Draft B” advisory opinion is attached in Exhibit 4.

35. On June 7, 2012, at an open meeting of the FEC, the Commission failed by a vote of 2-4
to approve Draft A. The Commission also failed by a vote of 3-3 to approve Draft B. The
transcript of this hearing is attached as Exhibit 6.

36. The Commission did vote 4-2 to conclude that the proposed advertisements containing
references to “Obamacare” and “Romneycare” did constitute references to clearly identified
candidates. HLF does not challenge that determination of the Commission in this case.

37. The Commission also voted 6-0 that proposed Advertisement 4 containing references to
Secretary of Health and Human Services Kathleen Sebelius and to “the government” did not
contain references to any clearly identified candidate. HLF agrees with this determination of the
Commission and it is not at issue in this case.

38. Pursuant to 11 C.F.R. § 112.4(a), the FEC certified on June 8, 2012, that it was unable to
reach a conclusion with respect to AFF’s other proposed communications because it lacked the
necessary four votes. This certification is included as Exhibit 5.

39. The FEC provided a response to AFF on June 13, 2012. Commissioners Bauerly and

Weintraub issued a concurring statement on June 14, 2012. Commissioner McGahmn issued a


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 22 of 27

123. As the Supreme Court clearly stated in Buckley v. Valeo, a “clearly identified” candidate
must be consistent with Footnote 51, see 424 U.S. at 43 n.51, in order to constitutionally apply
the statutory definition.

124. HLF is entitled to a declaratory judgment that the use of an unidentified audio clip of a
public official is not a reference to a clearly indentified candidate for federal office.

125. If the regulation at 11 C.F.R. § 100.17 is interpreted to apply to an unidentified audio
clip of a public official then it goes beyond any permissible construction of “clearly identified
candidate” as defined by the Supreme Court in Buckley v. Valeo, and is void as applied under 5

US.C. § 706.

COUNT 5
“Clearly Identified Candidate” at 2 U.S.C. § 431(18) and 11 C.F.R. § 100.17 — As Applied
to an Unidentified Audio Clip of an Unelected Public Official

126. Plaintiff realleges and incorporates by reference all of the allegations contained in all of
the preceding paragraphs.

127. The application of the statutory definition of “clearly identified” candidate at 2 U.S.C. §
431(18) and 11 C.F.R. § 100.17, as applied to HLF’s proposed Advertisement 3 which contains
an unidentified audio clip of the White House press secretary saying “we must end our
dependence on foreign oil,” is inconsistent with law and severely burdens HLF’s right to
freedom of speech free of government regulation.

128. Neither the underlying statute, the implementing regulations, nor any court decision has

ever determined that unidentified audio clips of unelected public officials are “clearly identified”

references to candidates for federal office.

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Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 4 of 27

for the office sought by the candidate; or (bb) 30 days before a
primary or preference election, or a convention or caucus of a
political party that has authority to nominate a candidate, for the
office sought by the candidate; and (IID) in the case of a
communication which refers to a candidate for an office other than
President or Vice President, is targeted to the relevant electorate.

2 US.C. § 434((3)(A)@ (emphasis added).
12. Under the FECA, any person who makes an electioneering communication is subject to a
number of disclosure, disclaimer, and reporting obligations with the Federal Election
Commission.
13. The Supreme Court in McConnell v. FEC, 540 U.S. 93 (2003), upheld these disclosure
and disclaimer rules against a facial challenge because, as the Court explained, they were “both
easily understood and objectively determinable”:
[W]e observe that new FECA § 304(f)(3)’s definition of
“electioneering communication” raises none of the vagueness
concems that drove our analysis in Buckley. The term
“electioneering communication” applies only (1) to a broadcast (2)
clearly identifying a candidate for federal office, (3) aired within a
specific time period, and (4) targeted to an identified audience of at
least 50,000 viewers or listeners. These components are both easily
understood and objectively determinable.

McConnell, 540 U.S. at 194.

14. To date, the Federal Election Commission has declined to apply the Supreme Court’s
rulings in Buckley v. Valeo and McConnell v. FEC as those rulings pertain to the FECA and
plaintiff.

15. This occurred most recently in the FEC’s failure to grant an affirmative response to 5 of

the 8 advertisements presented in an advisory opinion request by the organization American

Future Fund (“AFF”). The request sought a declaration that the proposed communications


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 15 of 27

78. “The government” does not refer to any clearly identified candidate for federal office.

79. The application of the statutory definition of “clearly identified” at 2 U.S.C. § 431(18) as
applied to HLF’s proposed Advertisements 2, 3, and 5 which contain references to “the
government,” if interpreted to refer to a clearly identified candidate, is inconsistent with law and
severely burdens HLF’s right to freedom of association free of government regulation.

80. As applied to HLF and other organizations that may not want to comply with the
burdensome FEC regulations and disclosure requirements in order to speak on public issues,
these provisions act as expenditure prohibitions.

81. As applied by the FEC’s Draft B, 2 U.S.C. § 431(18) combined with 2 U.S.C. § 434(f)
are the functional equivalent of a political speech ban imposed by federal statute against
individuals and organizations who do not want and are not required to comply with the burdens
of the disclaimer, disclosure and reporting requirements of the electioneering communications
rules.

82. HLF has prepared advertisements speaking to important policy issues of the day which
exhort the public to contact the government.

83. But for operation of the law, HLF is prepared to run these advertisements and other
communications similar to them consistently through the year.

84. Under 2 U.S.C. §§ 431(18) and 434(f) and the FEC’s regulations, as interpreted and
applied by the FEC in contradiction to the First Amendment and opinions of the U.S. Supreme
Court in Buckley v. Valeo and McConnell v. FEC, HLF would be subject to the electioneering
communications regime, including all of its attendant disclosure and disclaimer requirements.

85. The application of the electioneering communications rules to HLF’s proposed

communications severely burdens its right to associate with its potential donors by imposing


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 17 of 27

92. The application of the statutory definition of “clearly identified” candidate at 2 U.S.C. §
431(18) and 11 C.F.R. § 100.17, as applied to HLF’s proposed Advertisements 1, 3, 4, and 5
which contain references to “the White House” or images of “the White House,” is inconsistent
with law and severely burdens HLF’s right to freedom of speech free of government regulation.

93. “The White House” refers to the government building located at 1600 Pennsylvania
Avenue, the approximately 500 federal employees who work there, or the entirety of the
executive branch. The “White House” is involved in and has a responsibility for a wide range of
important activities, from military action and foreign affairs, to federal legislation and judicial
nominations, and to the administration of federal programs and the enforcement of federal laws
It is frequently the case that citizens have opinions on what the “White House” should do in each
of these areas and they often seek to publicly comment upon and urge particular actions they
want the “White House” to take,

94. Because of these varied uses, the phrase is not a “clearly identified” reference to
President Obama as asserted in Draft B.

95. If “the White House” refers to a clearly identified candidate, then all of the electioneering
communications rules apply to AFF’s proposed Advertisements 1, 3, 4, and 5.

96. “The White House” does not refer to any clearly identified candidate for federal office.

97. The application of the statutory definition of “clearly identified” at 2 U.S.C. § 431(18) as
applied to HLF’s proposed Advertisements 1, 3, 4, and 5 which contain references to “the White
House,” if interpreted to refer to a clearly identified candidate, is inconsistent with law and

severely burdens HLF’s right to freedom of association free of government regulation.

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a “strict test” requiring more than “a mere showing of some legitimate governmental interest”’);
Elrod y. Burns, 427 U.S. 347, 363 (1976) (noting the “[s]tate may not choose means that
unnecessarily restrict constitutionally protected liberty” nor choose a regulatory scheme broadly
stifling speech if the state has available a “less drastic way of satisfying its legitimate interests”)
(quoting Kusper v. Pontikes, 414 U.S. 51, 59 (1973) (internal quotation marks omitted)). Laws
that are “no more than tenuously related to the substantial interests disclosure serves .. . fail
exacting scrutiny.” Buckley v. Am. Const. Law Found., 525 U.S. 182, 204 (1999) (internal marks
omitted).
9. In 1976, the U.S. Supreme Court explained in Buckley v. Valeo that a “clearly identified
candidate” under the FECA has a very specific meaning:
Section 608 (e) (2) defines “clearly identified” to require that the
candidate’s name, photograph or drawing, or other unambiguous
reference to his identity appear as part of the communication. Such
other unambiguous reference would include use of the candidate's
initials (e. g., FDR), the candidate’s nickname (e. g., Ike), his
office (e. g., the President or the Governor of Iowa), or his status as
a candidate (e. g., the Democratic Presidential nominee, the
senatorial candidate of the Republican Party of Georgia).
Buckley, 424 U.S. at 43 n.51; see also FEC v. Nat'l Org. for Women, 713 F. Supp. 428, 433
(D.D.C. 1989) (“An explicit and unambiguous reference to the candidate must be mentioned in
the communication... .”).
10. This language has since been incorporated into federal regulation, 11 C.F.R. § 100.17,
and federal statute, 2 U.S.C. § 431(18).
11. In 2002, Congress enacted The Bipartisan Campaign Reform Act of 2002 (“BCRA”),
defining the term “electioneering communication” as:
any broadcast, cable, or satellite communication which — (1) refers

to a clearly identified candidate for Federal office; (I) is made
within — (aa) 60 days before a general, special, or runoff election


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 26 of 27

THE HISPANIC LEADERSHIP FUND, INC. VERIFICATION
1, Mario H. Lopez, declare as follows:

1. lam the president of the Hispanic Leadership Pund, Inc.

2. {have personal knowledge of the Hispanic Leadership Fund, Inc., and its operations,
including those set out in this Complaint, and if called upon to testify, | would testify
competently as to the matters stated herein.

3. I verify under penalty of perjury under the laws of the United States of America that the
factual statements in this Complaint concerning the Hispanic Leadership Fund, Inc., are

true and correct,

Executed this 2th day of July, 2012

Mario H. Lopez


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 2 of 27

3. The First Amendment to the United States Consti‘tion protects HLF’s right to speak on
matters of public policy without unwarranted governmental intrusion and restrictions. Wishing
to exercise that right, HLF would like to engage in certain speech and know in advance its
compliance obligations under the Federal Election Campaign Act (“FECA”).

4. Disclosure and disclaimer requirements are subject to “exacting scrutiny.” See, e.g.,
Citizens United y. FEC, 558 U.S. 50, 130 S. Ct. 876, 914 (2010) (“The Court has subjected
[disclosure] requirements to ‘exacting scrutiny’”); Buckley v. Valeo, 424 U.S. 1, 64 (1976) (per
curiam); accord Doe v. Reed, 561 U.S.__, 130 S. Ct. 2811, 2814 (2010). Asa result, there
must be a “’substantial relation’ between the disclosure requirement and a ‘sufficiently
important’ governmental interest.” Citizens United, 130 S. Ct. at 914 (quoting Buckley, 424 U.S.
at 64, 66).

5. To survive exacting scrutiny, “the strength of the governmental interest must reflect the
seriousness of the actual burden on First Amendment rights.” Davis v. FEC, 554 U.S. 724, 744
(2008) (citing Buckley, 424 U.S. at 68).

6. One governmental interest cited in Citizens United is “*[P]rovid[ing] the electorate with
information’ about the sources of election-related spending.” 130 S. Ct. at 914 (quoting Buckley,
424 US. at 66).

7. In this case, HLF submits that its proposed advertisements are not election-related because
they do not constitute “electioneering communications” involving “clearly identified
candidates.” Instead, they address substantive policy issues facing the federal government on a
daily and regular basis.

8. Exacting scrutiny is not simply a way to force judicial approval of government regulations

regarding the First Amendment. See Buckley, 424 U.S. at 64, 66 (describing exacting scrutiny as


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 13 of 27

64. HLF has prepared advertisements speaking to important policy issues of the day which
exhort the public to contact the government or include various other references to it.

65. But for operation of the law, HLF is prepared to run these advertisements and other
communications similar to them consistently through the year.

66. Under 2 U.S.C. §§ 431(18) and 434(f) and the FEC’s regulations, as interpreted and
applied by the FEC in contradiction to the First Amendment and opinions of the U.S. Supreme
Court in Buckley v. Valeo and McConnell v. FEC, HLF would be subject to the electioneering
communications regime, including all of its attendant disclosure and disclaimer requirements.

67. The application of the electioneering communications rules to HLF’s proposed
communications severely burdens its right to associate with its potential donors by imposing
broad and sweeping disclosure requirement that may discourage donations or require disclosure
of donors who had no prior knowledge of the application of the disclosure requirements to HLF.

68. HLF poses no threat of corruption or its appearance because it has never made and has no
plans to make contributions to candidates. See Citizens United, 130 S. Ct. at 909.

69. The application of the electioneering communications rules to this proposed
communication violates its contributors’ rights to freedom of speech and association under the
First Amendment. By requiring HLF to disclose virtually all of its donors simply because it
proposes to petition “the administration” to act on matters of national importance, HLF’s rights
and its contributors’ meaningful ability to associate and speak through the act of contributing are
unconstitutionally and unlawfully abridged.

70. As the Supreme Court clearly stated in Buckley v. Valeo, a “clearly identified” candidate
must be consistent with Footnote 51, see 424 U.S. at 43 n.51, in order to constitutionally apply

the statutory definition.

13


Case 4:12-cv-00339-HDV-TJS Document 1 Filed 07/30/12 Page 16 of 27

broad and sweeping disclosure requirements that may discourage donations or require disclosure
of donors who had no prior knowledge of the application of the disclosure requirements to HLF.

86. HLF poses no threat of corruption or its appearance because it has never made and has no
plans to make contributions to candidates. See Citizens United, 130 S. Ct. at 909.

87. The application of the electioneering communications rules to this proposed
communication violates HLF’s contributors’ rights to freedom of speech and association under
the First Amendment. By requiring HLF to disclose virtually all of its donors simply because it
proposes to petition “the government” to act on matters of national importance, HLF’s rights and
its contributors’ meaningful ability to associate and speak through the act of contributing are
unconstitutionally and unlawfully abridged.

88. As the Supreme Court clearly stated in Buckley v. Valeo, a “clearly identified” candidate
must be consistent with Footnote 51, see 424 U.S. at 43 n.51, in order to constitutionally apply
the statutory definition.

89. HLF is entitled to a declaratory judgment that using the phrase “the government” in a
communication is not a reference to a clearly identified candidate for federal office.

90. If the regulation at 11 CFR. § 100.17 is interpreted to apply to the phrase “the
government” then it goes beyond any permissible construction of “clearly identified candidate”
as defined by the Supreme Court in Buckley v. Valeo, and is void as applied under 5 U.S.C. §
706.

COUNT 3
“Clearly Identified Candidate” at 2 U.S.C. § 431(18) and 11 C.F.R. § 100.17 — As
Applied to the Phrase “the White House” or an Image of “the White House”

91. Plaintiff realleges and incorporates by reference all of the allegations contained in all of

the preceding paragraphs.

16