UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

____________________________________

)

)

HERRON FOR CONGRESS, ) Civil Action No. 11-1466 (RC)

) 

Plaintiff, )

v. ) REPLY

)

FEDERAL ELECTION COMMISSION, )

)

Defendant. )

____________________________________)

FEDERAL ELECTION COMMISSION’S REPLY IN SUPPORT OF

ITS MOTION FOR SUMMARY JUDGMENT

Anthony Herman (D.C. Bar No. 424643)

General Counsel

aherman@fec.gov

David Kolker (D.C. Bar No. 394558)

Associate General Counsel

dkolker@fec.gov

/s/ Steve N. Hajjar

Steve N. Hajjar

Attorney

shajjar@fec.gov

FEDERAL ELECTION COMMISSION 

999 E Street, NW 

Washington, DC 20463

Telephone: (202) 694-1650

June 25, 2012 Fax: (202) 219-0260

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 1 of 28
i

TABLE OF CONTENTS

 Page

I. HERRON FOR CONGRESS LACKS STANDING............................................1

A. HFC’s Alleged Injury Was Not Caused by an Alleged FECA

Violation ...................................................................................................2

B. HFC Fails to Meet Its Burden of Showing a Concrete Threat of

Future Injury .............................................................................................7 

II. THE COMMISSION REASONABLY DISMISSED HFC’S 

ADMINISTRATIVE COMPLAINT....................................................................10

A. The Commission Should Receive the Full Deference Generally

Afforded Enforcement Agencies ..............................................................10

B. The Commission Reasonably Dismissed the Administrative Complaint

When It Could Not Agree on an Appropriate Civil Penalty.....................13

C. The Commission Reasonably Declined to Find Reason to 

Believe that the Fincher Committee Received an Illegal 

Corporate Contribution .............................................................................19

III. CONCLUSION.....................................................................................................22

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 2 of 28
ii

TABLE OF AUTHORITIES

Page

Cases

Advanced Mgmt. Tech., Inc. v. F.A.A., 211 F.3d 633 (D.C. Cir. 2000)......................4, 5

Alliance for Democracy v. FEC, 335 F. Supp. 2d 39 (D.D.C. 2004) .............................6

Bowen v. Georgetown Univ. Hospital, 488 U.S. 204 (1988)........................................16

Branstool v. FEC, No. 92-0284 (D.D.C. Apr. 4, 1995)................................................20

Buchanan v. FEC, 112 F. Supp. 2d 58 (D.D.C. 2000) .................................................11

Carter/Mondale Presidential Comm., Inc. v. FEC, 775 F.2d 1182 

 (D.C. Cir. 1985) ................................................................................................13

Common Cause v. FEC, Civ. No. 94-02104 (D.D.C. 1996).........................................15

Common Cause v. FEC, 108 F.3d 413 (D.C. Cir. 1997) .......................................passim

CREW v. FEC, 475 F.3d 337 (D.C. Cir. 2007).............................................................19

FEC v. Akins, 524 U.S. 11 (1998)...................................................................................6

FEC v. Democratic Senatorial Campaign Comm., 454 U.S. 27 (1981)...........11, 13, 18

FEC v. Nat’l Republican Senatorial Comm., 966 F.2d 1471 .......................................18

Foretich v. United States, 351 F.3d 1198 (D.C. Cir. 2003)............................................4

Gottlieb v. FEC, 143 F.3d 618 (D.C. Cir. 1998)...........................................................10

GSA v. FLRA, 86 F.3d 1185 (D.C. Cir. 1996) ..............................................................16

Hagelin v. FEC, 411 F.3d 237, 242 (D.C. Cir. 2005)...................................................12

Heckler v. Chaney, 470 U.S. 821 (1985)......................................................................16

International Union (UAW) v. NLRB, 459 F.2d 1329 (D.C. Cir. 1972).................21, 22

Judicial Watch v. FEC, 180 F.3d 277 (D.C. Cir. 1999)..................................................5

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 3 of 28
iii

LaRoque v. Holder, 650 F.3d 777 (D.C. Cir. 2011) .......................................................8

Los Angeles v. Lyons, 461 U.S. 95 (1983)......................................................................7

Louisiana Publ. Servs. Comm’n v. FERC, 174 F.3d 218 (D.C. Cir. 1999) ..................14

Lucile Salter Packard Children’s Hosp. at Stanford v. NLRB, 97 F.3d 583

(D.C. Cir. 1996) ................................................................................................16

Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) .................................................1, 2

Meese v. Keene, 481 U.S. 465 (1987).............................................................................4

Natural Res. Def. Council v. Pena, 147 F.3d 1012 (D.C. Cir. 1998) .........................7, 8

Niagara Mohawk Power Corp. v. Federal Power Comm., 379 F.2d 153

(D.C. Cir. 1967) ................................................................................................13

Orloski v. FEC, 795 F.2d 156 (D.C. Cir. 1986)................................................18, 19, 20

O’Shea v. Littleton, 414 U.S. 488 (1974) .......................................................................7

Shays v. FEC, 414 F.3d 76 (D.C. Cir. 2005) ..............................................................1, 6

Stark v. FEC, 683 F. Supp. 836 (D.D.C. 1988) ............................................................19

United States v. Rosen, 365 F. Supp. 2d 1126 (C.D. Cal. 2005) ..................................22

Wertheimer v. FEC, 268 F.3d 1070 (D.C. Cir. 2001).....................................................5

Winpisinger v. Watson, 628 F.2d 133 (D.C. Cir. 1980)................................................10

Young v. U.S. ex rel. Vuitton et Fils S.A., 481 U.S. 787 (1987) ...................................19

Statutes and Regulations

Federal Election Campaign Act (“FECA” or “Act”), 2 U.S.C. § 431-57...................1, 2

2 U.S.C. § 437g(a) ..........................................................................................................4

2 U.S.C. § 437g(a)(2)........................................................................................14, 15, 20

2 U.S.C. § 437g(a)(4)(A)(i) ..........................................................................................17

2 U.S.C. § 437g(a)(8)..........................................................................................2, 11, 12

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 4 of 28
iv

2 U.S.C. § 437g(a)(8)(A)................................................................................................4

18 U.S.C. § 1001...........................................................................................................22

11 C.F.R. § 100.82........................................................................................................21

Statement of Policy Regarding Commission Action in Matters at the Initial 

Stage in the Enforcement Process, 72 Fed. Reg. 12,545 (Mar. 16, 2007)........11

Miscellaneous

Guidebook for Complainant and Respondents on the FEC Enforcement 

Process, available at http://www.fec.gov/em/respondent_guide.pdf...............11

U.S. Const. art. III..................................................................................................passim

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 5 of 28
1

In its opposition to the Federal Election Commission’s (“FEC” or “Commission”) motion 

for summary judgment, plaintiff fails to rebut the Commission’s showing that Herron for 

Congress (“HFC”) lacks standing and that the Commission’s dismissal of HFC’s administrative 

complaint was well within the agency’s prosecutorial discretion. As explained below, HFC’s 

primary argument in support of standing is that Mr. Herron’s decision-making regarding his 

political future might benefit if his credibility were boosted by the Commission finding “reason 

to believe” that his past political opponent, Stephen Fincher, had violated the Federal Election 

Campaign Act (“FECA” or “Act”), 2 U.S.C. § 431-57, in 2010. But that indirect interest in the 

proper enforcement of the law does not satisfy Article III’s requirement of injury-in-fact. On the 

merits, HFC cannot show that the Commission abused its discretion when it dismissed HFC’s 

complaint regarding Fincher’s alleged reporting violation after reaching an impasse about an 

appropriate remedy, nor when it found that there was insufficient evidence that a bank loan 

received by the Fincher Committee was an unlawful corporate contribution as HFC contends. 

The Court should grant the Commission’s motion for summary judgment.

I. HERRON FOR CONGRESS LACKS STANDING

Herron for Congress’s argument that it has suffered harm from an alleged diminution in 

Mr. Herron’s credibility as an indirect result of the Commission’s dismissal of HFC’s 

administrative complaint cannot satisfy Article III’s injury-in-fact requirement. As discussed 

below, dispositive precedent holds firmly to the contrary. Moreover, as HFC correctly notes 

(Plaintiff’s Combined Memorandum (Doc. 20) (“HFC Opp.”) at 2), at summary judgment it 

cannot rest on “mere allegations, but must set forth by affidavit or other evidence specific facts 

demonstrating standing.” Shays v. FEC, 414 F.3d 76, 84 (D.C. Cir. 2005) (citing Lujan v. 

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 6 of 28
2

Defenders of Wildlife, 504 U.S. 555, 561 (1992)) (quotation marks omitted). HFC has failed to 

meet this burden.

A. HFC’s Alleged Injury Was Not Caused by an Alleged FECA Violation 

The D.C. Circuit has held that a plaintiff cannot satisfy Article III’s standing requirement 

in a case brought under 2 U.S.C. § 437g(a)(8) by relying on an injury stemming merely from the 

Commission’s failure to properly resolve an administrative complaint. Instead, HFC must

demonstrate an injury from the underlying substantive violation of the Federal Election 

Campaign Act (“FECA” or “Act”), 2 U.S.C. §§ 431-57.

As in Lujan, absent the ability to demonstrate a “discrete injury” flowing from the 

alleged violation of FECA,” Common Cause cannot establish standing merely by 

asserting that the FEC failed to process its complaint in accordance with law. To 

hold otherwise would be to recognize a justiciable interest in having the Executive 

Branch act in a lawful manner. This, the Supreme Court held in Lujan, is not a 

legally cognizable interest for purposes of standing. Lujan, 504 U.S. at 573.

Common Cause v. FEC, 108 F.3d 413, 419 (D.C. Cir. 1997) (emphasis added).

In its opposition, however, HFC repeatedly relies on an alleged injury that is two steps

removed from the alleged violation of FECA: namely, that the Commission’s allegedly improper 

dismissal of HFC’s administrative complaint has in turn led to an (unproven) reduction in Mr. 

Herron’s present reputation and credibility. But this alleged harm is even more attenuated than 

the kind of secondary harm rejected in Common Cause as a basis for standing, and is thus even 

weaker than an injury-in-fact based on a general interest in having the law properly enforced. In 

other words, HFC is arguing that because the Commission rejected its view of the law and 

dismissed its complaint, its candidate now looks bad. But this kind of bootstrapping would 

nullify Common Cause because every complainant who is displeased with the Commission’s 

dismissal of his or her complaint could allege that the dismissal itself led to such tertiary 

consequences. Common Cause recognizes an injury-in-fact under section 437g(a)(8) only if it 

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 7 of 28
3

flows from the primary wrong: a violation of FECA that harms a plaintiff.1

HFC’s opposition is replete with arguments trying to leverage an unsubstantiated 

reputational injury to Mr. Herron as a substitute for the requirement of Common Cause. HFC 

argues (Opp. at 13) that “[w]hen the Commission improperly dismissed the administrative 

complaint, [Herron’s] credibility and judgment suffered reputational harm and chances for 

election.” See also id. at 16 (“Herron’s reputation for credibility was harmed by the 

Commission’s errant decision”); at 17 (same); at 21 (“harm the Commission has done to Mr. 

Herron’s reputation”). Similarly, HFC effectively concedes (id. at 4) that its real interest is in 

using the Commission’s enforcement process to achieve political gain, not in remedying a harm 

to it caused by a violation of FECA: HFC quotes its political consultant to suggest that if the 

Commission had ruled against the Fincher Committee, that would have been a “powerful 

political tool to wield against” Fincher. 

Nothing in Common Cause remotely suggests that any alleged indirect effects of the 

Commission’s enforcement process can give rise to a cognizable injury-in-fact, let alone that 

plaintiffs can manufacture concrete injuries by attempting to use the outcome of that process for 

political gain. To the contrary, the D.C. Circuit explained:

According to Common Cause, these provisions embody “a statutory promise to 

the complainant that the FEC [will] act on a complaint in a reasonable period of 

time and [will] do so in a manner not ‘contrary to law.’” When the FEC violates 

the complainant’s right to a prompt and lawful resolution of the complaint, the 

Commission “deprives the complainant of a statutorily promised benefit that is 

personal to the complainant.” 

Appellant’s asserted injury parallels the “‘procedural injury’” the Supreme Court 

held insufficient in Lujan. . . . The Supreme Court held that this provision could 

 1 HFC also argues (Opp. at 12) that one reason Herron decided not to run for office in 2012 

was “because the Commission failed to enforce the law.” Common Cause, however, flatly 

rejected standing premised on a “justiciable interest in having the Executive Branch act in a 

lawful manner.” 108 F.3d at 419.

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 8 of 28
4

not satisfy the Article III injury in fact requirement in those cases where an 

individual was otherwise unable “to allege any discrete injury flowing from” the 

violation of the Act. 

In this case, Common Cause argues that § 437g(a) of FECA — a provision 

similar to the “citizen-suit” provision in Lujan — confers on “any person” who 

believes that FECA has been violated, a right to seek judicial review in federal 

court. Section 437g(a)(8)(A) does not confer standing; it confers a right to sue 

upon parties who otherwise already have standing.

Common Cause, 108 F.3d at 418-19 (citations omitted and emphases added).

HFC does not cite a single case recognizing alleged reputational harm from the 

Commission’s dismissal of an administrative complaint — or from any other law enforcement 

decision declining to prosecute — as satisfying Article III’s standing requirement. And even if 

such reputational harm were cognizable, HFC does not present any evidence of any actual 

reduction in Herron’s present or future credibility resulting from the Commission’s handling of 

HFC’s administrative complaint.2

 See Advanced Mgmt. Tech., Inc. v. F.A.A., 211 F.3d 633, 

636-37 (D.C. Cir. 2000) (rejecting standing based on allegations that agency labeled plaintiff a 

“fraud” and “liar” without evidence of the present or future consequences of such labeling). 

HFC instead cites cases (Opp. at 12) where direct government regulation of a party gave rise to 

concrete allegations of reputational injury. Meese v. Keene, 481 U.S. 465, 472-73 (1987) 

(plaintiff wishing to exhibit certain foreign films had standing to challenge a statute that required 

him to characterize those films as “political propaganda”); Foretich v. United States, 351 F.3d 

1198, 1213 (D.C. Cir. 2003) (plaintiff had standing to challenge a statute “embodying a 

congressional determination that he is a child abuser and a danger to his own daughter”). Here, 

however, the Commission has not regulated HFC at all, nor has it cast any aspersions on HFC or 

 2 Moreover, HFC is the plaintiff here, not Mr. Herron. Even if Herron’s alleged 

reputational harm were cognizable as an injury to him, it is unclear whether such harm would 

suffice to demonstrate an injury-in-fact to his campaign committee.

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 9 of 28
5

Mr. Herron. Regardless, under Common Cause, HFC’s burden is to demonstrate harm from a 

violation of FECA, not from tertiary effects of how Mr. Herron might be viewed by others in 

light of the Commission’s resolution of allegations concerning Steve Fincher.

The gist of HFC’s argument (see Opp. at 4-5) is that if the Commission had vindicated 

Herron by determining that his opponent’s actions were unlawful in 2010, then Herron might 

have run for office in 2012 and might decide to run for office in 2014. Not only did the D.C. 

Circuit in Common Cause reject the lack of such vindication as an injury-in-fact, but in 

subsequent decisions the court has also specifically denied standing based on a request that the 

Commission make a “legal determination that certain transactions constitute” unlawful behavior. 

Wertheimer v. FEC, 268 F.3d 1070, 1075 (D.C. Cir. 2001). “[T]he government’s alleged failure 

to ‘disclose’ that certain conduct is illegal by itself does not give rise to a constitutionally 

cognizable injury.” Id. at 1074 (citing Common Cause, 108 F.3d at 417). “If an organization has 

simply been deprived of the knowledge as to whether a violation of the law has occurred, that 

‘injury’ is no more than a generalized interest in enforcement of the law, and does not support 

standing.” Judicial Watch, Inc. v. FEC, 180 F.3d 277, 278 (D.C. Cir. 1999) (citation and 

quotation marks omitted). And it is irrelevant whether HFC characterizes the Commission’s 

alleged failure to label Fincher’s conduct as unlawful as the basis of an “informational” or 

“reputational” injury, or one that allegedly harms Herron’s campaign strategy. (See HFC Opp. 

at 11-14.)3

 3 Moreover, HFC’s belated attempt to argue for an alleged “informational” injury goes 

beyond its judicial complaint, which includes no allegations of informational injury. In any 

event, HFC concedes that it had all the information to which it was entitled when it filed its 

judicial complaint, and as it also concedes (Opp. at 1), standing is based on the facts as they 

existed when HFC filed suit. See Advanced Mgmt. Tech., 211 F.3d at 636. HFC couches its 

concession about its lack of informational injury as a flawed argument about mootness when it

states (Opp. at 13) that the Fincher Committee “made the first informational injury moot by 

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 10 of 28
6

In an effort to avoid the force of Common Cause and Wertheimer, HFC relies (Opp. 

at 8-10) on Shays v. FEC. 414 F.3d 76 (D.C. Cir. 2005), to argue that Herron has suffered a 

competitive injury. But Shays concerned regulations that were arguably too permissive — e.g., 

rules that allegedly allowed unlimited “soft money” to influence federal elections — not 

individual prosecutorial decisions about whether a particular person had violated the Act. As 

HFC correctly notes (Opp. at 8), Shays focused on the “procedures” established by “campaign 

finance rules,” 414 F.3d at 91, and held that a congressman could challenge rules that allegedly 

involved “illegal structuring of a competitive environment,” id. at 85. Here, however, HFC’s

purported interest in having the Commission label Herron’s former opponent an unlawful actor 

does not concern any general rule that directly regulates candidates and that may affect their 

campaign strategy.4

 Shays is thus irrelevant to what HFC calls its alleged competitive injury, 

which, as explained above, is nothing more than purported damage to Herron’s credibility 

indirectly related to how the Commission enforced the law.

Finally, HFC’s alleged injury does not satisfy the requirements for prudential standing. 

“[P]rudential standing is satisfied when the injury asserted by a plaintiff arguably falls within the 

zone of interests to be protected or regulated by the statute.” FEC v. Akins, 524 U.S. 11, 20 

 

filing an amendment to its Commission report.” But mootness is irrelevant here; what matters 

for purposes of informational injury is that the Fincher Committee’s amendment was filed with 

the Commission before HFC filed this lawsuit, so any potential informational deficit was cured 

before this action commenced. HFC thus lacks standing based on informational injury. Alliance 

for Democracy v. FEC, 335 F. Supp. 2d 39, 48 (D.D.C. 2004) (“Alliance has failed to allege an 

Article III injury because plaintiffs already possess the information they claim to lack.”). 

4 HFC confuses matters further when it suggests (Opp. at 10-11) that the Commission’s 

alleged policy of reviewing publicly available information when considering the merits of 

administrative complaints is akin to the kind of rules governing campaigns at issue in Shays. As 

discussed infra pp. 11-12, the Commission’s statement about how it may rely on publicly 

available material is neither a binding regulation nor any sort of rule governing candidates’

spending or fundraising, but simply a statement of how the Commission will assess

administrative complaints.

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 11 of 28
7

(1998) (citations and quotation marks omitted). However, to the extent that HFC’s alleged 

injury-in-fact derives from its claim that Herron suffers a competitive disadvantage because 

Fincher, not Herron, was vindicated by the Commission’s enforcement decision, that alleged 

harm is not within FECA’s zone of interests. The Act helps protect the integrity of federal 

elections and provides useful information to voters. As Shays explained, while the Act also 

creates certain spending and fundraising rules that provide a competitive campaign environment 

with protections against corruption, nothing in that decision or FECA suggests that the statute’s 

enforcement mechanism is designed as a tool to be gamed for electoral advantage. 

B. HFC Fails to Meet Its Burden of Showing a Concrete Threat of 

Future Injury 

HFC does not contest our showing (FEC Mem. at 16-17) that “[p]ast exposure to illegal 

conduct does not in itself show a present case or controversy regarding injunctive relief. . . .” 

Natural Res. Def. Council v. Pena, 147 F.3d 1012, 1022 (D.C. Cir. 1998) (citation and quotation 

marks omitted). Instead, HFC improperly attempts (Opp. at 2) to shift the burden of proof by 

arguing that the Commission’s standing argument is “actually a mootness argument because it 

applies prospectively.” See also HFC Opp. at 20 (improperly attempting to invoke the “capable 

of repetition, yet evading review” exception to mootness). In fact, Natural Resource Defense

Council and other relevant precedent all focus on whether the plaintiff has satisfied its burden of 

demonstrating the requisite injury — one of the touchstones of standing — at the time of the 

filing of the suit. See O’Shea v. Littleton, 414 U.S. 488, 494 (1974) (“Abstract injury is not 

enough. . . . The injury or threat of injury must be both ‘real and immediate,’ not ‘conjectural’ or 

‘hypothetical.’”) (citation omitted); Los Angeles v. Lyons, 461 U.S. 95, 102 (1983) (“The most 

that could be said for plaintiffs’ standing . . .”). Because HFC asks the Court to declare that the 

Commission acted contrary to law when it dismissed HFC’s administrative complaint and to 

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 12 of 28
8

remand the matter to the agency, the nature of the relief sought is inherently prospective and, in 

accordance with precedent, HFC thus bears the burden of demonstrating a “real and immediate 

. . . threat of future injury.” Natural Res. Def. Council, 147 F.3d at 1022.

 HFC’s declarations and arguments provide no evidence of such a future threat. 

Obviously, nothing that happened in the 2010 election cycle can be changed by the relief HFC 

requests here, and Herron’s decision not to run for federal office in 2012 is now in the past as 

well. See Herron Decl. ¶ 5 (“I recently announced that I would not run for the Senate again in 

2012 . . .”). Regarding the future, Herron admits that he has not yet decided whether he will run 

for office in 2014; he states that in 2013, “[n]ext year — probably in the summer or fall — I will 

make a decision whether to run for federal office in the 2014 election.” Id. ¶ 30 (emphasis 

added). As previously explained (FEC Mem. at 17-18), this kind of allegation is less concrete 

and immediate than the kind of “some day intentions” found insufficient in Lujan. 

Although HFC relies on LaRoque v. Holder, 650 F.3d 777 (D.C. Cir. 2011), that case 

actually supports the Commission’s position. Two plaintiffs in that case held a press conference 

on the same day that they filed their court complaint and announced that they intended to run for 

office in the election to be held 19 months later. Id. at 783, 788. The court relied specifically on 

these facts when it held that the “allegation that [plaintiff] intended to run in the November 2011 

election and his public announcement at the press conference sufficiently establish the 

‘substantial probability’ of imminent injury required for Article III standing.” Id. at 788; see 

also id. at 789 (“concrete plan to run in the November 2011 election suffices to establish the 

imminence of his alleged injuries”). Here, in contrast, Herron’s statement that he intends merely 

to “make a decision whether to run for federal office in the 2014 election” more than a year from 

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 13 of 28
9

now (Herron Decl. ¶ 30 (emphasis added)), does not come close to establishing the requisite 

imminence and concreteness found in LaRoque.

Herron states that his decision not to run for office in 2012 was based in part on the 

“claimed vindication” by Fincher’s representatives and by Herron’s own “tainted” “reputation 

and credibility” (Herron Decl. ¶ 13) — none of which constitutes a cognizable injury-in-fact 

under Article III. Likewise, HFC concedes that a significant factor in his future decision-making 

may be the same kind of non-cognizable injury: “I cannot stress enough how the Commission’s 

decision has affected my credibility and affects my decision whether to run for office next year 

and in the future.” Herron Decl. ¶ 31; see also id. at ¶ 15. As explained supra pp. 2-5, however, 

these unsubstantiated allegations of diminished credibility do not satisfy the standing 

requirement of Article III because they are not a direct harm caused by any alleged FECA 

violation but instead flow indirectly from HFC’s interest in the proper enforcement of the law. 

Thus, the speculative nature of whether Herron will run for office again is exacerbated, for 

Article III purposes, by his purported decision-making that may turn on a factor far too removed 

from any alleged violation of FECA.

Moreover, the declarations upon which HFC relies make no allegations that Fincher, 

HFC’s opponent, will run for office again or that Fincher is likely to repeat the actions that 

formed the basis of HFC’s administrative complaint. In response to the Commission’s argument 

(FEC Mem. at 18) that it is too speculative to suggest that the Commission’s failure to 

adequately punish Fincher will diminish Herron’s future electoral prospects, HFC again relies on 

language from Shays (HFC Opp. at 18). But as previously discussed (see supra pp. 6-7), Shays 

is inapposite as it involved a challenge to rules of broad application that, among other things, set 

the competitive structure for candidates’ campaigns. That case did not involve alleged harm 

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 14 of 28
10

created by a single act, such as the loan Fincher received. Thus, even if the harms HFC allege 

were cognizable under Article III, their speculative effect on Herron’s future candidacy is more 

akin to the facts found too conjectural in Winpisinger v. Watson, 628 F.2d 133 (D.C. Cir. 1980), 

than to the regulations of general application at issue in Shays. (See FEC Mem. at 18.) 

Similarly, in Gottlieb v. FEC, 143 F.3d 618, 621-22 (D.C. Cir. 1998), the D.C. Circuit 

held that the effects of a single act of alleged misconduct were too speculative to create a 

cognizable injury-in-fact. In particular, the court demanded evidence that additional funds 

improperly made available to a presidential campaign would have been used to influence voters. 

Without such evidence, the court would not assume that the extra funds would have been used,

as plaintiffs contended, to counter the plaintiffs’ “attempts to influence the electorate,” rather 

than, as an example, for “better hotel accommodations” or “more comfortable transportation.” Id. 

For these and other reasons, the court found that the plaintiffs in Gottlieb had failed to prove a 

cognizable injury-in-fact and therefore lacked standing. The same conclusion applies to HFC

here.

II. THE COMMISSION REASONABLY DISMISSED HFC’S ADMINISTRATIVE 

COMPLAINT

A. The Commission Should Receive the Full Deference Generally Afforded 

Enforcement Agencies

As the Commission explained in its opening memorandum (FEC Mem. at 22-41), HFC 

has fallen short of its burden of showing that the Commission’s dismissal of its administrative 

complaint was contrary to law. The Commission’s decision to dismiss the complaint when it 

could not agree whether to seek a civil penalty on the alleged reporting violation was a 

reasonable exercise of prosecutorial discretion. 

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 15 of 28
11

The “contrary to law” standard of review applicable under 2 U.S.C. § 437g(a)(8) is 

highly deferential, and such deference is particularly appropriate in this case because it involves 

the FEC’s interpretations of its own regulations. Buchanan v. FEC, 112 F. Supp. 2d 58, 70 

(D.D.C. 2000). As the Supreme Court has observed, the Commission “is precisely the type of 

agency to which deference should presumptively be afforded.” FEC v. Democratic Senatorial 

Campaign Comm., 454 U.S. 27, 37 (1981) (“DSCC”). 

HFC attempts to challenge FEC’s entitlement to deference on two grounds. First, HFC 

erroneously argues (Opp. at 23) that the Commission should receive no deference because the 

Commission purportedly did not follow its own “policy and practice” of reviewing publicly 

available information at the reason-to-believe stage. In support of this argument, HFC cites 

solely to the Commission’s Statement of Policy Regarding Commission Action in Matters at the 

Initial Stage in the Enforcement Process, 72 Fed. Reg. 12,545 (Mar. 16, 2007) (HFC MSJ Att. 

A), as well as a recently updated Guidebook for Complainant and Respondents on the FEC 

Enforcement Process, available at http://www.fec.gov/em/respondent_guide.pdf, which tracks 

the language in the 2007 Policy Statement. But as previously explained (FEC Mem. at 38-39), 

that Policy Statement only states that the Commission may consider publicly available 

information at the reason-to-believe stage, not that it must scour public records for relevant 

information or explain why it did not do so for each record the complainant thinks relevant — let 

alone that the Commission must consult public records that HFC did not bring to the 

Commission’s attention in either its administrative complaint or its supplement. 

The Policy Statement is not binding. In the statement itself, the Commission explained 

that the policy “does not bind the Commission or any member of the general public” and “does 

not confer any rights on any person and does not in any way limit the right of the Commission to 

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 16 of 28
12

evaluate every case individually on its own facts and circumstances.” (HFC Att. A at 2.) Thus, 

neither the Policy Statement nor the Guidebook establishes a compulsory requirement of seeking 

out publicly available information in every enforcement matter. 

Second, HFC repeats its argument (Opp. at 22-24) that the Commission merits no 

deference because this matter does not, according to HFC, involve the dynamics of party politics, 

but rather banking rules that are purportedly beyond the Commission’s competence. As 

previously explained (FEC Mem. at 24), however, the D.C. Circuit has held that the 

Commission’s bipartisan structure is “but one of several reasons the Supreme Court cited [in 

DSCC] in support of deferential review.” Hagelin v. FEC, 411 F.3d 237, 242 (D.C. Cir. 2005)

(emphasis added). HFC does not dispute that the Commission implements a statute about the 

financing of campaigns or that the Supreme Court has explained that there are many reasons to 

defer to agencies in general and to the Commission in particular.5

HFC suggests that the Commission must explain why it deserves deference in this 

particular matter. See, e.g., HFC Opp. at 23 (“[T]he Commission did not provide any other 

reason [for deferring to it]”), at 24 (arguing that “Commission offered no evidence that, in this 

matter, it has expertise in banking law”). But HFC does not cite a single case holding that the 

deference afforded the Commission under 2 U.S.C. § 437g(a)(8) varies with the nature of the 

FECA violation at issue or the subject matter of its own implementing regulations, or that the 

Commission bears any burden in demonstrating why it merits deference on a case-by-case basis. 

 5 In its Answer (¶ 42), the Commission stated that it was “without knowledge or 

information sufficient to form a belief as to the . . . usual practice of Tennessee banks beyond 

what is required by the Commission regulations.” That is hardly an admission that the 

Commission is incapable of understanding issues concerning collateral and security interests. 

Regardless, HFC does not dispute our argument (FEC Mem. at 40-41), that it never presented its

claims regarding Tennessee law to the Commission and thus cannot raise them for the first time 

before this Court.

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 17 of 28
13

Rather, the numerous cases we cited (FEC Mem. 22-25) speak generally about the great 

deference owed the Commission when reviewing its prosecutorial decisions, regardless of the 

nature of the underlying substantive violation. In DSCC, for example, the Supreme Court 

explained that “in determining whether the Commission’s action was ‘contrary to law,’ the task 

for the [Court is] not to interpret the statute as it [thinks] best but rather the narrower inquiry into 

whether the Commission’s construction [is] ‘sufficiently reasonable’ to be accepted by a 

reviewing court.” DSCC, 454 U.S. at 39 (citations omitted). 

Thus, HFC’s challenges to the deference properly afforded the FEC here must fail. The 

Commission’s interpretations of the Act and its own regulations are presumptively valid, and 

HFC can prevail only if it shows that the Commission abused the discretion by failing to meet 

“its minimal burden of showing a ‘coherent and reasonable explanation of its exercise of 

discretion.’” Carter/Mondale Presidential Comm., Inc. v. FEC, 775 F.2d 1182, 1185 (D.C. Cir. 

1985). As the Commission explained in its opening brief, it has met that minimal burden. (FEC 

Mem. at 25-41.)

B. The Commission Reasonably Dismissed the Administrative Complaint 

When It Could Not Agree on an Appropriate Civil Penalty

The Commission is due especially great deference concerning whether to seek a civil 

penalty, and its dismissal of the administrative complaint when it could not reach consensus on 

the appropriate penalty for the reporting violation was entirely reasonable. (See FEC Mem. 

at 25-31.) As the Supreme Court observed in Akins, the Commission retains prosecutorial 

discretion that extends to its decisions not to pursue an enforcement action. Such discretion is at 

its “zenith” regarding “policies, remedies and sanctions.” Niagara Mohawk Power Corp. v. 

Federal Power Comm’n, 379 F.2d 153, 159 (D.C. Cir. 1967).

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 18 of 28
14

HFC does not dispute that an agency’s discretion is at its peak regarding sanctions, but 

instead engages in semantics (Opp. at 29) by arguing that because “no penalty was imposed at 

all,” the Commission’s debate fell outside its deference to choose an “appropriate penalty.” In 

fact, the record is clear that the Commissioners’ debate focused on whether a letter of caution 

was a more appropriate remedy than a monetary payment. AR0719-30. Regardless of whether a 

letter of caution is viewed as a type of penalty or as “no” penalty, the dispute among the 

Commissioners was indisputably about the nature of the appropriate remedy, not whether there 

had been a reporting violation. The fact that three Commissioners believed that no monetary 

penalty was warranted does not turn the Commission’s internal debate into something other than 

a dispute about appropriate remedies or sanctions, as HFC torturously argues. In other words, an 

agency’s “considerable discretion in fashioning remedies” necessarily applies to a decision not to 

sanction. See, e.g., Louisiana Publ. Serv. Comm’n v. FERC, 174 F.3d 218, 228-30 (D.C. Cir. 

1999).6

 

HFC also incorrectly and repeatedly argues (Opp. at 28-30, 32 n.5, 33) that the 

Commission’s dismissal of the reporting violation was unreasonable because section 437g(a)(2) 

purportedly requires the Commission to find reason to believe in a single vote when all 

Commissioners individually agree that a violation has occurred. But section 437(g)(a)(2) 

requires no such thing. Rather, section 437(g)(a)(2) provides that “[i]f the Commission . . . 

determines, by an affirmative vote of 4 of its members, that it has reason to believe that a person 

has committed, or it about to commit, a violation of this Act . . . the Commission shall . . . notify 

 6 Contrary to HFC’s suggestion (Opp. at 29-30), the Commission’s dismissal and its 

determination to impose no sanction are inseparable. In both Statements of Reasons (“SORs”),

the Commissioners explained that the administrative complaint was dismissed because the 

Commission could not agree on an appropriate sanction. (AR719-29.) HFC itself previously 

admitted this fact. (Pl.’s Mem. in Support of Its Mot. for Summ. Judg. at 16.) 

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 19 of 28
15

the person of the alleged violation.” Section 437(g)(a)(2) says nothing about how the 

Commission must structure its votes, nor does it affirmatively require the Commission to vote 

formally to find reason to believe when the Commission is divided about an appropriate remedy. 

HFC’s baseless assertion (Opp. at 33) that “Congress has determined that HFC is entitled to an 

RTB finding” finds no support in the plain language of the applicable FECA provision, 

2 U.S.C. § 437g(a)(2).

Common Cause v. FEC, Civ. No. 94-02104 (D.D.C. 1996), illustrates the deference due 

the Commission’s dismissal of a complaint, even in circumstances where the Commissioners 

agree that the Act has been violated. (See FEC Mem. 27-28 & Mem. Exh. 3).7

 HFC argues 

(Opp. at 30) that Common Cause is distinguishable because there the Commissioners disagreed 

about the amount and nature of the violation rather than the penalty. But that is a distinction 

without a difference. The plaintiffs in Common Cause, like HFC, argued that the “Commission’s 

dismissal of the complaint was arbitrary and capricious because the Commissioners agreed that 

there was a violation.” FEC Mem. Exh. 3, slip op. at 8 n.3. However, because the 

Commissioners had reasonably supported their respective positions, the court deferred to the 

decision to dismiss. Common Cause rejected the argument, much like HFC’s, that the 

Commission’s failure to formally find “probable cause,” when all Commissioners agreed that the 

law had been violated in some way, was arbitrary and capricious. 

As the Commission explained in its opening memorandum (FEC Mem. at 28-29), its 

dismissal of the alleged reporting violation reasonably avoided the futile exercises of casting a 

 7 HFC erroneously disputes (Opp. at 30) the precedential value of Common Cause because 

it was dismissed on appeal based on the named appellant’s lack of standing. Common Cause

was brought by two plaintiffs in the district court, one of whom chose not to join in the appeal. 

See Common Cause, 108 F.3d at 416. The D.C. Circuit neither addressed the merits of the 

decision below, nor vacated it.

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 20 of 28
16

standalone vote to find reason to believe and authorizing the General Counsel to engage in preprobable cause conciliation with the respondents, which would have simply deferred further 

impasse. The Commission thus avoided expending resources to arrive back at the same logjam 

— deciding the nature of a penalty — after attempting conciliation. As the Supreme Court has 

explained, an agency’s determination not to proceed with an enforcement matter “involves a 

complicated balancing of a number of factors which are peculiarly within [the agency’s] 

expertise,” including how to best expend agency resources, the likelihood of success, and 

whether a particularly enforcement action best fits the agency’s overall policies. Heckler v. 

Chaney, 470 U.S. 821, 831 (1985). HFC cites nothing to support its suggestion (Opp. at 33) that 

an agency’s determination to dismiss an administrative complaint must take into account the 

self-serving interests of the complainant.8

 

HFC also imagines hypothetical scenarios (Opp. at 32) in which a standalone vote to find 

reason to believe and to authorize the General Counsel to engage in pre-probable cause 

conciliation would not be futile. But HFC’s argument rests on unrealistic and speculative 

premises: How could the Commission’s lawyers reasonably present an opening offer in 

 8 HFC erroneously accuses (Opp. at 29) the Commission of presenting post hoc arguments 

regarding Commission resources. It has not. The Commission’s decision to dismiss when it 

could not agree on the proper civil penalty necessarily involved a determination not to 

unnecessarily expend Commission resources. A more detailed explanation in a brief of the 

reasoning underpinning an agency’s decision is not impermissible post hoc rationalization. See 

Lucile Salter Packard Children’s Hosp. at Stanford v. NLRB, 97 F.3d 583, 592 n.12 (D.C. Cir. 

1996) (“Although it is true that some of the explanations offered by the [agency] in its brief go 

into somewhat more detail than in its actual ruling, their essence can clearly be found in the 

[agency’s] rationale”); cf. GSA v. FLRA, 86 F.3d 1185, 1188 (D.C. Cir. 1996) (“We have even 

deferred to ‘agency counsel’s litigative positions’ where we were certain that they did not differ 

from the agency’s”) (citations omitted). Because the Commission’s briefing does not present an 

“agency litigating position[] that [is] wholly unsupported by” the reasoning explained in the 

General Counsel’s Report, Bowen v. Georgetown Univ. Hospital, 488 U.S. 204, 212 (1988), it is 

not post hoc argumentation. 

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 21 of 28
17

conciliation when the Commission had not approved one and was divided on an appropriate 

penalty, and how could they negotiate in good faith — e.g., by demanding a significant monetary 

penalty — knowing that half of its client believed that such a remedy was inappropriate?

Even though it is possible that some Commissioners might have changed their minds 

during the conciliation process, it was hardly unreasonable for the Commission itself to assume 

that their own positions would not change during the brief period of 30 to 90 days the statute 

provides for conciliation. See 2 U.S.C. § 437g(a)(4)(A)(i). The twin SORs (AR719-30) reflect 

the basis and depth of the Commission’s differing views on the necessity of a civil penalty —

views that the Commission could more than reasonably expect to endure for 90 days. In any 

event, the decision not to authorize the General Counsel to engage in conciliation efforts is 

precisely the type of judgment regarding the management of the Commission’s enforcement 

docket that falls within an agency’s expertise and discretion. 

Even if the Court were to find that the FEC should have taken a standalone reason-tobelieve vote, such an omission was at worst harmless error, a showing the HFC fails to rebut 

(Opp. at 34). As discussed above, a remand requiring the Commission to take such a vote would 

be a superfluous formality that would not change the ultimate disposition of HFC’s 

administrative complaint, and the views expressed in the SORs are unlikely to vary after remand. 

And as explained supra p. 5, HFC’s purported harm in not having the Commission label the 

Fincher Committee’s actions unlawful is not a cognizable injury. In sum, HFC has not cited any 

facts or law that suggests that a remand ordering the Commission to take a standalone reason-tobelieve vote on the reporting violation would serve any cognizable purpose.

Finally, the Commission also did not act contrary to law when it declined to find reason 

to believe that the Fincher Committee acted knowingly and willingly when it violated the Act’s 

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 22 of 28
18

reporting requirements. In their SOR, Commissioners Hunter, Petersen, and McGahn described

the Committee as having committed a “technical” violation of a “counterintuitive” regulation 

that “trips up many candidates. . . . .” and thus clearly lacked the requisite state of mind that 

would support a knowing and willful determination.9 (See FEC Mem. at 30; AR0728-29.) For 

purposes of judicial review in this case, the Court may rely on both the reasoning outlined in this 

SOR and the reasoning set forth in the General Counsel’s report to support the Commission’s 

decision.10 HFC has presented no evidence contradicting either the General Counsel’s 

explanation that there was no information suggesting that the Fincher Committee acted 

intentionally when it delayed submitting amendments to its reports or the SOR’s conclusion that 

the reporting violation was inadvertent. 

 9 HFC dismisses this conclusion as speculative (Opp. at 27), but it is precisely the type of 

subjective determination the Commission is entitled to make before committing to an 

investigation or attempting to conciliate with the respondents. See Orloski v. FEC, 795 F.2d 156, 

168 (D.C. Cir. 1986) (“[R]eason to believe standard also itself suggests that the FEC is entitled, 

and indeed required, to make subjective evaluation of claims.”).

10 The Court may rely on both the reasoning provided in the General Counsel’s 

recommendation and the additional reasoning set forth in the SOR which addressed the knowing 

and willful state of mind. Generally, when the Commission follows the General Counsel’s 

recommendation, dismisses an administrative complaint, and does not articulate separate 

reasoning, the General Counsel’s report provides the basis for judicial review. DSCC, 

454 U.S. at 38 & n.19. However, when the Commission deadlocks and dismisses a complaint, 

the reasoning of the three Commissioners who voted to dismiss the complaint, sometimes 

described as the “declining-to-go-ahead” commissioners or the “controlling group,” provides the 

basis for judicial review. Common Cause, 108 F.3d at 415-16. Here, there were two sets of 

three Commissioners who voted to dismiss the administrative complaint, so both sets are 

“controlling groups” for purposes of judicial review. See FEC v. Nat’l Republican Senatorial 

Comm., 966 F.2d 1471, 1476 (D.C. Cir. 1992) (“Since those Commissioners constitute a 

controlling group for purposes of the decision, their rationale necessarily states the agency’s 

reasons for acting as it did.”). One controlling group’s SOR explained its view that the reporting 

violation was inadvertent; the other group’s SOR did not address the knowing and willful 

allegation, so the General Counsel’s reasoning on that issue is reviewed for the latter group. 

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 23 of 28
19

C. The Commission Reasonably Declined to Find Reason to Believe that the 

Fincher Committee Received an Illegal Corporate Contribution

As previously demonstrated (FEC Mem. at 32-42), the Commission was clearly within its 

prosecutorial discretion not to find reason to believe that the Fincher Committee received an 

illegal contribution. The Commission’s assessment of the representations of Gates Bank and the 

Fincher Committee and the documentation provided by them was not contrary to law, but rather 

“preliminary investigative decisions” of the type the Commission is authorized to make in the 

opening phases of the enforcement process. Orloski, 795 F.2d at 168. As the D.C. Circuit has 

explained, at the reason-to-believe stage, the “FEC is entitled, and indeed required, to make 

subjective evaluation of claims.” Id. HFC’s challenges to the sufficiency of the Commission’s 

research and deliberations, prior to its votes, fall squarely within the Commission’s discretionary 

authority and are without merit.

In making investigative decisions, such as deciding which evidence to credit or 

disbelieve, rely on or pursue, “the Commission . . . retains prosecutorial discretion.” CREW v. 

FEC, 475 F.3d 337, 340 (D.C. Cir. 2007); see also Young v. U.S. ex rel. Vuitton et Fils S.A., 481 

U.S. 787, 807 (1987) (“[P]rosecutor exercises considerable discretion in matters such as . . . what 

information will be sought as evidence . . . .”); Stark v. FEC, 683 F. Supp. 836, 840 (D.D.C. 

1988) (“It is . . . surely committed to the Commission’s discretion to determine where and when 

to commit its investigative resources.”).

HFC does not appear to dispute that the Commission generally retains prosecutorial 

discretion, and its opposition brief does not mention CREW, Young, or Stark. Instead, HFC 

repeatedly argues (Opp. at 10, 23, 37-40) that the Commission’s determination regarding the 

bank loan was contrary to law because the Commission “failed to follow its procedures and 

practices” to seek out publicly available facts — procedures and practices purportedly set forth in 

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 24 of 28
20

a 2007 Policy Statement. But as explained supra pp. 11-12, that Policy Statement explicitly did 

not bind the Commission and only explains what the Commission may consider at the reason-tobelieve stage on a case-by-case basis. 

HFC’s criticism (Opp. at 38-39) of the Commission’s citation (FEC Mem. at 37-38) to

Branstool v. FEC, No. 92-0284 (D.D.C. Apr. 4, 1995) (FEC Mem. Exh. 4) also falls wide of the 

mark. In Branstool, the Court held that the Commission’s failure to depose a witness fell 

“safely within the ambit of those matters committed to the discretion of the Commission,” id. 

at 7, exemplifying the prosecutorial discretion retained by the Commission to determine the 

scope of its investigations. Contrary to HFC’s argument, it is of no moment that Branstool was 

decided before the Commission’s 2007 policy was issued because the policy was not binding. 

HFC has thus cited no authority holding that the Commission was required to seek out publicly 

available information, nor that its practice of deciding whether to do so on a case-by-case basis is 

contrary to law.

Nonetheless, HFC suggests (Opp. at 39) that the Commission’s failure to seek out 

publicly available information was contrary to law because the General Counsel noted the 

absence of certain pieces of information in its report. While the report acknowledged that it 

lacked a complete picture of the loan transaction, threshold investigative decisions at the reasonto-believe stage must necessarily be made on less than complete factual records, relying 

primarily on the information submitted by HFC and the responding parties. See 2 U.S.C. 

§ 437g(a)(2) (providing that Commission shall not “make an investigation” until after finding 

reason to believe). In any event, the General Counsel’s simple observation is beside the point 

since the Commission’s decision not to find reason to believe was expressly and reasonably 

based on the information that was actually before it at the time. See Orloski, 795 F.2d at 168

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 25 of 28
21

(“Congress determined that the FEC should make preliminary investigative decisions on the 

basis of all the information submitted to it by the charging and responding parties.”). As 

previously explained (FEC Mem. at 8-9, 34-35; AR0693-96), the General Counsel considered 

each relevant regulatory requirement under 11 C.F.R. § 100.82 and noted that each was met and, 

where appropriate, supported by relevant documentation. The respondents represented that 

interest rate of the loan was 6.50%; the loan was memorialized by a written note which indicated 

a due date; the note provided that the loan was cross-collateralized with other bank debt and 

accounts held by Fincher; the deed of trust indicated that the Bank had a perfected security 

interest in Fincher’s personal residence; and a UCC statement indicated that the Bank also had a 

lien on Fincher’s 2010 crops. 

HFC has also failed to cite any authority that supports its argument that the Commission 

abused its discretion by not invoking the adverse inference rule. As previously explained (FEC 

Mem. at 39), an agency has discretion whether to invoke the rule, and International Union 

(UAW) v. NLRB, 459 F.2d 1329, 1339 (D.C. Cir. 1972), upon which HFC relies, is not to the 

contrary. In that case, the D.C. Circuit concluded that the National Labor Relations Board 

should have applied the adverse inference rule regarding the contents of vital records that were 

willfully withheld in the face of a Board subpoena. Id. at 1339-42. The defiance of a Board 

subpoena, even after the Board denied a motion to revoke the subpoena, was central to the 

court’s determination that the Board should have drawn an adverse inference in that case. Id. at 

1338-40. As the Court noted, in invoking the adverse inference rule, “[i]f a party insists on 

withholding evidence even in the face of a subpoena requiring its production, it can hardly be 

doubted he has some good reason for his insistence on suppression” and “the most likely reason 

for this insistence is that the evidence will be unfavorable to the cause of the suppressing party.” 

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 26 of 28
22

Id. at 1338. But here, the Commission never subpoenaed documents from the Fincher 

Committee or Gates Bank and they did not refuse to submit any requested information, so the 

factual premise underlying the holding in International Union is utterly missing.

Instead, as previously explained (FEC Mem. at 34-36), the Commission reasonably 

accepted the Bank’s representation and supporting documentation that the loan was made in the 

ordinary course of business. HFC’s assertion (Opp. at 42-43) that the representations of Gates 

Bank were merely arguments of counsel that the Commission could not reasonably credit has no 

basis in fact or law. To the contrary, the bank made numerous factual representations regarding 

the interest rate, maturity date, and collateral interests of the loan, all of which were evidenced 

by written documentation submitted to the Commission. Finally, HFC fails to muster any 

authority holding that an agency cannot treat representations of counsel as representations of the 

client, or that suggests that deeming counsel’s representations of fact to be credible is an abuse of 

an agency’s prosecutorial discretion.11 

In sum, the Commission reasonably determined that there was insufficient evidence to 

warrant an investigation into HFC’s allegations that the bank loan to the Fincher Committee 

constituted an illegal corporate contribution.

III. CONCLUSION

For the foregoing reasons, Herron for Congress lacks standing and its substantive 

arguments lack merit. The Court should grant the Commission’s motion for summary judgment 

and deny plaintiff’s motion.

 11 HFC’s suggestion (Opp. at 42 & n.8) that 18 U.S.C. § 1001 may not apply to the 

representations of the Bank’s counsel ignores that this criminal provision would apply to the 

Bank itself if it caused counsel to make a false statement on its behalf. See United States v. 

Rosen, 365 F. Supp. 2d 1126 (C.D. Cal. 2005) (denying motion to dismiss of defendant charged 

under section 1001 with causing other to make false statements to the FEC).

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 27 of 28
23

Respectfully submitted,

Anthony Herman (D.C. Bar No. 424643)

General Counsel

aherman@fec.gov

David Kolker (D.C. Bar No. 394558)

Associate General Counsel

dkolker@fec.gov

/s/ Steve N. Hajjar

Steve N. Hajjar

Attorney

shajjar@fec.gov

FEDERAL ELECTION COMMISSION 

999 E Street, NW 

Washington, DC 20463

Telephone: (202) 694-1650

June 25, 2012 Fax: (202) 219-0260

Case 1:11-cv-01466-RC Document 22 Filed 06/25/12 Page 28 of 28