Michael R. Dezsi

19390 W. Ten Mile Road

Southfield, MI 48075

P64530

Facsimile: (248) 355-1445

Telephone: (248) 355-5555

m.dezsi@fiegerlaw.com

Attorney for Plaintiff Marcus

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

JON MARCUS, )

) No. CV07-00398-PCT-EHC

Plaintiff, )

)

vs. )

)

UNITED STATES ATTORNEY )

GENERAL ALBERTO R. GONZALES, )

FEDERAL ELECTION COMMISSION )

CHAIRMAN MICHAEL E. TONER, )

In their official capacities, )

)

Defendants. )

____________________________________)

PLAINTIFF’S REPLY IN SUPPORT OF MOTION FOR DECLARATORY JUDGMENT

AND

RESPONSE IN OPPOSITION TO DEFENDANT GONZALES’S MOTION TO DISMISS

A. Defendants’ arguments are based on outdated law from the 1970s. Defendant also fails

to address how the FEC can share its ‘exclusive’ jurisdiction with the Attorney

General.

The Attorney General asserts repeatedly that the FEC has “civil” jurisdiction while the

Attorney General has “criminal” jurisdiction, but this is not remotely close to the issue before this

Court. Plaintiff does not dispute that the FEC has civil jurisdiction or that the Attorney General has

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criminal jurisdiction, but this is not the issue. The issue presented is an issue of sequence, that is,

who exercises jurisdiction in the first instance. 

Under the express terms of the Act, congress gave the FEC exclusive jurisdiction over civil

matters, and created a mechanism by which the FEC could refer certain matters to the Attorney

General but only after the FEC exercised its exclusive jurisdiction. Because neither the Attorney

General nor the FEC can explain how the FEC can share its exclusive jurisdiction with the Attorney

General, they create a red herring by tautologically repeating that the FEC has “civil” jurisdiction

over civil laws and the Attorney General has “criminal” jurisdiction over criminal laws. But this

argument is fatally flawed because there is only one set of laws at issue here and those are civil laws

contained in the Federal Election Campaign Act. 

While it is true that these civil laws carry criminal penalties, the FEC has exclusive

jurisdiction over these civil laws and the only way in which the FEC can exercise its exclusive civil

jurisdiction is to the exclusion of the Attorney General. Congress understood this problem, and so

it created a statutory scheme under which the FEC has exclusive civil jurisdiction over the civil

enforcement and provided the FEC with a mechanism to refer certain violations to the Attorney

General for criminal investigation but only after the FEC exercised its exclusive jurisdiction.

Under the Attorney General’s theory, he claims to have exclusive jurisdiction over criminal

laws (including the civil laws contained in the FECA which carry criminal penalties), and the FEC

has exclusive jurisdiction over civil laws. But here, the Attorney General and FEC both want to

exercise jurisdiction over the same exact law at the same exact time. So in reality, the Attorney

General is advancing an argument that he and the FEC share exclusive jurisdiction over the FECA.

In other words, the Attorney General is proposing that the Court interpret the Act so as to provide

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the FEC with exclusive jurisdiction but only to the extent that the Attorney General has not begun

its own investigation. 

Not only is the concept of ‘shared jurisdiction’ perplexing, but such an interpretation squarely

collides with the express mandate of congress that the FEC has exclusive jurisdiction over the

FECA, and criminal penalties may be pursued only after the FEC has referred the matter to the

Attorney General. The Attorney General can find no such express congressional mandate to support

his “shared exclusive jurisdiction” theory that he may infringe upon and stifle the exclusive

jurisdiction of the FEC. This is not what congress intended, and such an interpretation is expressly

foreclosed by the Act. Finding no such authority and running head-on into the express language of

the Act, the Attorney General simply falls back on his position that the Attorney General is

omnipotent and his authority is plenary. 

The AttorneyGeneral utterly fails to explain how the FEC can share its exclusive jurisdiction

or how the FEC and the Attorney General can simultaneously exercise co-existing exclusive

jurisdiction over the same law. The very definition of “exclusive jurisdiction” means “to the

exclusion of all others.” BLACKS LAW DICTIONARY 564 (6th ed. 1990). In this case, the Attorney

General has already thwarted the exclusive jurisdiction of the FEC by initiating its unlawful and

extra-jurisdiction investigation. The Attorney General is currently conducting a nationwide

unprecedented investigation against prominent Democrats, like Plaintiff, who were supporters of the

John Edwards 2004 presidential campaign. More than a year after the Attorney General began this

unlawful and extra-jurisdictional investigation, the FEC opened its own investigation of several of

the individuals already under investigation by the Attorney General. 

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To date, however, the FEC has sat out on the sideline because it is unable to exercise its

congressionally mandated exclusive jurisdiction. And why has the FEC done this? Because the

Attorney General has effectively stripped the FEC of its exclusive jurisdiction and forced it to wait

to exercise its jurisdiction until after the Attorney General concludes his illegal and extrajurisdictional investigation. This is simply not how it works. Congress gave the FEC the exclusive

jurisdiction over civil enforcement of the Act in the first instance. The Attorney General is

circumventing the law and trying to reverse the order of the statute so that he may investigate first

without a referral and the FEC may investigate second. Recognizing that this is contrary to the

statute, the Attorney General attempts to recast the issue by repeating that the FEC has ‘civil’

jurisdiction and the AG has ‘criminal’ jurisdiction. 

Defendants attempt to add a further twist to their position by overlooking the Act’s use of

‘exclusive’ jurisdiction and focusing on civil versus criminal enforcement. This is a distinction

without a difference. The FEC’s congressionally mandated exclusive jurisdiction extends to both

investigating and enforcing the Act without the interference of the Attorney General. This is why

congress created a referral mechanism so that the FEC could exercise its exclusive jurisdiction and

refer matters to the Attorney General for criminal enforcement after exercising its exclusive

jurisdiction. 

The issue is not about civil versus criminal “enforcement.” The issue is about the sequence

of jurisdiction. Exclusive jurisdiction does not mean ‘sometimes.’ The Attorney General is asking

the Court to interpret the Act to mean that the FEC has exclusive jurisdiction, but only if the

Attorney General is not exercising his own exclusive jurisdiction. This does not work, and the

Attorney General cannot qualify the FEC’s exclusive jurisdiction by focusing on ‘enforcement.’ 

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The FEC and the Attorney General have parted ways on this point. In its motion to dismiss,

the FEC openly acknowledges that it is now seeking an interpretation of the Act that includes shared

jurisdiction. On page 15 of its motion to dismiss, the FEC explains that “the Commission has

successfully investigated thousands of cases during the 30 years that the Department of Justice has

been exercising concurrent criminal authority . . . .” (FEC Motion to Dismiss, pg. 15). The problem

with the FEC’s position, however, is that the Act makes no mention of ‘concurrent’ jurisdiction with

the Attorney General. The congressional mandate contained in the statute is that the FEC has

exclusive jurisdiction (which means to the exclusion of all others, including the Attorney General),

and the Act provides the mechanism by which the FEC may refer matters to the Attorney General

only after it has exercised its exclusive jurisdiction.

Defendants misguided arguments stem from provisions of the Act that existed more than 30

years ago. For example, on pages 7-8 of his memorandum, the Attorney General relies on a

conference report from the 1974 amendments to support its argument that the FEC has jurisdiction

over civil laws while the Attorney General has jurisdiction over criminal laws. In 1974, defendants’

arguments would have made sense because back then the substantive restrictions on campaign

finance were contained in the federal penal code (Title 18 U.S.C.). Thus, in 1974, the Attorney

General would have been correct to argue that he had jurisdiction over certain campaign finance laws

because those laws were criminal laws contained in the federal criminal penal code. But this is no

longer the case.

In 1976, congress moved most of the substantive restrictions on campaign finance from the

federal penal code and placed them into the Federal Election Campaign Act subject to the exclusive

civil jurisdiction of the FEC. Therefore, prior to 1976, there were two sets of laws – one set subject

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to the jurisdiction of the FEC and another subject to the jurisdiction of the Attorney General. In

1976, congress changed that scheme so that the FEC would have the first opportunity to resolve

alleged violations of the Act. At the same time, congress also limited the Attorney General’s

jurisdiction to independently prosecute violations of the Act without a referral by the FEC. These

facts support Plaintiff’s argument and further expose the anachronistic nature of the Attorney

General’s position.

B. Contrary to Defendants’ assertions, there is not a single case interpreting the current

statutory scheme as amended in 1980. 

 Defendants assert that there are several cases which address the issue presented herein. This

is simply incorrect. Defendants rely on cases from the 1970s which were superceded by the 1980

amendmentsto the Act. On pages 9-11 of its response brief, the Attorney General cites Int’l Union,

Jackson, and Tonry to support its position. Each of these cases, however, were decided prior to the

1980 amendments which substantially and significantly altered the referral provision of the Act.

Given the statutory amendments to the Act in 1980, the decisions and discussions in Int’l Union,

Jackson, and Tonry were limited to the pre-1980 amendments and should not be relied on in

interpreting the current statutory scheme. 

In short, there are no cases that are helpful in addressing the issue before this Court because

it is a pure question of statutory construction. In United States v. LaSalle Nat’l Bank, 437 U.S. 298,

307 (1978), the Court held that a question similar to that presented here was not predicated on

analysis of precedent but rather a review of the statutory scheme. Since the statutory scheme relative

to the referral provision of the FECA changed in 1980, this Court is not bound by the Ninth Circuit’s

decision in Int’l Union which was decided in 1979.

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Also misplaced is Defendants’ reliance on dicta from Galliano v. U.S. Postal Serv., 836 F.2d

1362, 1368 n.6 (D.C. Cir. 1988). There, the court considered whether the FEC’s exclusive

jurisdiction displaced pro tanto the application of certain fraud proscriptions contained in the United

States Postal Service’s regulations. In a footnote unrelated to the issue presented in the case, the

court noted that criminal enforcement of the FEC may originate either with the FEC or the

Department of Justice. 836 F.2d 1362 n.6. In support of this footnote, the court cited the Int’l

Union case from 1979. Defendants’ reliance on the Galliano decision is hardly a smoking gun. The

footnote was pure dicta unrelated to the issues presented therein, and based on the 1979 decision of

Int’l Union which has been superceded by the 1980 amendments to the statute. In short, since the

1980 amendments to the Act, there has not been one case which squarely addresses the issue now

before this Court. 

Also without merit is the Attorney General’s reliance on United States v. Hsia, 24 F. Supp.

2d 33 (Dist. D.C. 1998), rev’d on other grounds, 176 F.3d 517 (D.C. Cir. 1999). There, the

defendant challenged her indictment on the grounds that the more specific provisions of the FEC

impliedly repealed the more general provisions of the criminal code and thus she could not be

charged under both. The court rejected Hsia’s argument and stated that the “Attorney General . . .

is in no way limited by the FEC.” Like the language lifted from Galliano, the language cited by the

Attorney General from Hsia is dicta and does nothing to answer the question before this Court. 

The Attorney General’s reliance on United States v. Palumbo Brothers, Inc., 145 F.3d 850

(7th Cir. 1998), is also misplaced. There, the defendants were charged in a multiple count

indictment with violating the criminal RICO statutes. Defendants argued that, if at all, their conduct

violated the National Labor Relations Act and the Labor Management Act and that those labor

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statutes preempted any criminal prosecution under the criminal RICO statutes. Unlike the instant

case, Palumbo dealt with two sets of laws, the criminal laws under RICO and civil laws under the

NLRA. Palumbo is not even remotely relevant to the question before this Court.

Defendants also attempt to discredit Plaintiff’s argument by recasting the issue of

conciliation. Specifically, Defendants assert that conciliation is not required under the Act, and thus

Plaintiff’s argument must fail. Defendants miss the mark by wide margin on this point. Plaintiff

agrees that the Act allows the FEC to skip conciliation efforts and refer a matter to the Attorney

General. The issue here is not whether conciliation is required under the Act. The issue is whether

the Act sets forth a sequence in which the FEC exercises its jurisdiction in the first instance, and the

Attorney General only after receiving a referral from the FEC. The conciliation provision merely

demonstrates that a criminal defendant may use a conciliation agreement, if at all, only after the FEC

has exercised its exclusive jurisdiction and referred the matter to the Attorney General. 

Specifically, the conciliation statute allows a defendant in a criminal action to introduce as

evidence “a conciliation agreement entered into between the defendant and the Commission.” 2

U.S.C. § 437g(d)(2). By using the word “entered” in the past tense, congress reinforces the statutory

sequence that the FEC exercise its exclusive jurisdiction first and the Attorney General second and

only after receiving the statutorily mandated referral.

In the end, the Attorney General utterly fails to address the most obvious problem with his

interpretation of the statute. Under his interpretation of the Act, if the FEC votes 5 to 1 against

referral, the lone disgruntled FEC member can just simply walk across the street and say to the

Attorney General, “the FEC won’t vote to refer this matter to you, so I’m bringing it to you myself.

This way, you can still prosecute the case.” Congress outlawed such a practice by giving the FEC

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exclusive jurisdiction in the first instance, and allowing the Attorney General to proceed only after

the FEC has opened its jurisdictional door by an affirmative bipartisan vote of 4 of its members. The

Attorney General should not be allowed to simply circumvent this procedure to carry out its own

political agenda.

Accordingly, Plaintiff respectfully requests that this Honorable Court grant his motion for

declaratory judgment and deny the Attorney General’s motion to dismiss.

Respectfully submitted,

FIEGER, FIEGER, KENNEY, JOHNSON

 & GIROUX, P.C.

s/ Michael R. Dezsi 

Michael R. Dezsi (P64530)

 Attorney for Plaintiff

 19390 W. Ten Mile Road

 Southfield, Michigan 48075

 (248) 355-5555

m.dezsi@fiegerlaw.com

Dated: May 24, 2007

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on May 24, 2007 he electronically filed the foregoing

pleading with the Clerk of the Court using the ECF system, which will send notification to the

following: Eric J. Beane (eric.beane@usdoj.gov) and Gregory J. Mueller (gmueller@fec.gov).

/s/ Michael R. Dezsi 

MICHAEL R. DEZSI (P64530)

Attorney for Plaintiff

19390 W. Ten Mile Road

Southfield, MI 48075

(248) 355-5555

m.dezsi@fiegerlaw.com

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