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      FEC Record: Litigation
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      Combat Veterans for Congress PAC v. FEC (Appeals court July 2015)

FEC Record: Litigation*Combat Veterans for Congress PAC v. FEC* (Appeals court July 2015)August 6, 2015 On July 28, 2015, the U.S. Court of Appeals for the D.C. Circuit  affirmed the district court''s dismissal of administrative fine challenges filed  by Combat Veterans for Congress PAC. **Background****** In 2010, Combat Veterans  for Congress PAC (“CVCP”) submitted three reports after the statutory filing  deadlines. As a result, the Commission began administrative enforcement  proceedings against CVCP and found reason to believe (RTB) that CVCP and its  treasurer, in his official capacity, violated 52 U.S.C. § 30104(a) by failing  to file the reports on time.[FN1] The Commission imposed fines totaling $8,690 for  the violations. CVCP challenged the Commission’s findings and argued that the  actions of its treasurer at the time made it impossible for CVCP to file its  reports on time. The Commission confirmed the penalties against CVCP and its  successor treasurer in a Final Determination dated October 27, 2011. CVCP filed a Petition  for Review with the district court on December 7, 2011 arguing, among other  things, that the Commission’s enforcement action was invalid because it lacked  the requisite four affirmative votes for a RTB finding; its former treasurer  was solely liable in his personal capacity for failing to file the reports on  time; the Commission failed to provide CVCP an in-person hearing; and the  Commission’s failure to mitigate the penalties was an abuse of discretion. **District court decision** The district court found  no evidence that the Federal Election Campaign Act (the “Act”) imposed  liability on treasurers in their personal capacity to the exclusion of  committees and treasurers in their official capacity. The court deferred to the  FEC’s decision not to prosecute the former treasurer in his personal capacity,  citing the Commission’s considerable prosecutorial discretion and no evidence  that the Commission abused its discretion. It also referenced requirements in  the Act and Commission regulations that political committees *and* treasurers file periodic reports of receipts and disbursements (see 52 U.S.C. §  30104(a)(1) and (4); 11 CFR 104.5(c)), and noted the Commission’s policy and  practice to name as respondents in enforcement matters the political committee  and its current treasurer, in his or her official capacity. The district court also rejected CVCP’s claim that it was unlawful  for the Commission to decline to grant an in-person hearing, finding that the  phrase “opportunity to be heard” can be interpreted to include not merely oral,  but written advocacy, and that a decision regarding the need for an in-person  hearing is properly left to the agency. The court also rejected CVCP’s arguments that the FEC failed to  mitigate the CVCP fines finding the fines compliant with statutory guidelines,  and similarly rejected CVCP’s various claims of Constitutional violations  finding them undeveloped and unsupported. The district court declined to  consider CVCP’s challenges to the Commission’s voting procedures because they  had not first been presented to the agency itself and were based on documents  outside the administrative records. **Appeals court decision and analysis** The court of appeals  affirmed the district court’s decision. On appeal, CVCP argued that the  district court failed to address its challenges to the FEC’s voting procedures  and, among other objections, that the Commission’s RTB determinations were void  because they lacked affirmative votes from at least four Commissioners. Under the Act, an  enforcement action can only begin after an affirmative vote of four  Commissioners that finds RTB that a person has committed a violation of the  Act. 52 U.S.C. § 30109(a)(2). Following an investigation, and upon the general  counsel’s recommendation, the Commission will determine, again by an  affirmative vote of four Commissioners, whether there is probable cause to  believe that the person violated the Act. 52 U.S.C. § 30109(a)(2), (4)(A)(i). After  a finding of probable cause, the Commission must attempt to resolve the matter  by informal methods, but may resort to filing a civil suit after another  affirmative vote by four Commissioners. 52 U.S.C. § 30901(a)(4)(A)(i), (6)(A). Congress authorized the  Commission’s Administrative Fines Program to provide a streamlined procedure to  handle reporting violations. First, the Commission conducts a 24-hour, no  objection vote on a RTB finding, then provides the respondent with notice and  an opportunity to be heard. 52 U.S.C. § 30109(4)(C)(i). Pursuant to an agency directive,  the no-objection vote requires circulation of ballots to each Commissioner. Any  ballots not marked and returned within 24 hours are counted as “yes” votes. FEC  Directive 52 (Sept. 10, 2008) [PDF]. At that point, the Commission may find a violation of the Act  and issue a civil money penalty without an additional probable cause finding.  52 U.S.C. § 30109(4)(C)(i)-(ii). However, if the respondent challenges the RTB  finding, the Commission will consider the respondent’s arguments and will  circulate ballots for a “tally vote” on its final determination, whereby votes  are marked and counted and any ballots not returned within one week are deemed  abstentions. For each of CVCP’s three  late filings, the Commission used the 24-hour, no objection procedure to find RTB.  Consistent with agency procedures, the Commission secretary certified that the  Commissioners “voted affirmatively” and decided the issue “by votes of 6-0,” though  some Commissioners did not return a ballot. The Commission unanimously found  CVCP liable for the violations in its final determination by tally vote. In its court complaint,  CVCP argued that the Commission’s RTB procedures did not meet the Act’s  requirement for an “affirmative vote” of at least four Commissioners. The appeals  court determined that the case did not require the court to decide that issue  because even if the Commission’s use of its voting procedure was in error, CVCP  failed to show that the voting procedure caused it any prejudice. In addition,  the court reasoned that “any prejudice [CVCP] might have suffered was rendered  harmless by the Commission’s subsequent ratification of its reason-to-believe  finding with a concededly valid tally vote.” With regard to the tally votes, the  appeals court referenced the rules of the agency in holding that ballots signed  by Commission staff acting on a Commissioner’s instructions were validly cast  and that “the practice is reasonable, not proscribed by statute, and rooted in  longstanding principles of agency.” Finally, the appeals  court rejected all of CVCP’s other arguments for the reasons given by the  district court. CVCP argued that its former treasurer’s negligence made it  impossible for it to file its reports on time, that the Commission should have  held the former treasurer solely liable, that the Commission should have  mitigated the penalties assessed against CVCP and that a related Commission  regulation was unlawful. The appeals court dismissed these arguments and  affirmed the lower court’s decision.  1*At  the time of the enforcement proceedings, Michael Curry was listed as CVCP’s  treasurer and custodian of records. By time the enforcement proceedings ended,  David Wiggs was named the successor treasurer and, in addition to CVCP, was  assessed the administrative fine in his official capacity.*  **Resources:** *Combat Veterans v. FEC* litigation page            Administrative fine program            Documents on enforcement and compliance practices


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This information is not intended to replace the law or to change its meaning, nor does this information create or confer any rights for or on any person or bind the Federal Election Commission or the public. The reader is encouraged also to consult the Federal Election Campaign Act of 1971, as amended (52 U.S.C. 30101 et seq.), Commission regulations (Title 11 of the Code of Federal Regulations), Commission advisory opinions and applicable court decisions.


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