UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, et al., ) 

 ) 

 Plaintiffs, ) 

 ) Civ. No. 08-248 (JR) 

 v. ) 

 ) FEC Response to Plaintiffs’

FEDERAL ELECTION COMMISSION, ) Proposed Findings of Fact 

 ) 

 Defendant. ) 

____________________________________) 

DEFENDANT FEDERAL ELECTION COMMISSION’S RESPONSE 

TO PLAINTIFFS’ PROPOSED FINDINGS OF FACT 

 The Federal Election Commission (“Commission”) hereby submits the following 

response to the Proposed Findings of Fact filed by plaintiffs SpeechNow.org 

(“SpeechNow”), David Keating, Edward Crane, Fred Young, Brad Russo and Scott 

Burkhardt (collectively “plaintiffs”). The Commission incorporates by reference its 

Memorandum In Support of Response to Plaintiffs’ Proposed Findings of Fact (“FEC 

Resp. Mem.”). Set forth below are additional specific objections and responses, as well 

as references to the Memorandum in order to note the portions of the Memorandum that 

are particularly responsive to specific facts. 

“I. SpeechNow.org” 

1. Plaintiff SpeechNow.org is an independent group of citizens whose 

mission is to engage in express advocacy in favor of candidates who support the First 

Amendment and against those who do not. Declaration of David Keating in Support of 

Proposed Findings of Fact (hereinafter, “Keating Decl.”) at ¶¶ 2, 3; Keating Decl. Ex. H, 

Bylaws of SpeechNow.org (hereinafter, “Bylaws”), Art. II. Toward that end, 

SpeechNow.org planned to run television advertisements during the 2008 election cycle 

in the states and districts of political candidates whose records demonstrate that they do 

not support full protections for First Amendment rights. Keating Decl. at ¶ 15. While it 

1

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 1 of 71
appears that SpeechNow.org will not be able to run advertisements in this election, it 

would like to run advertisements in future elections, including the 2010 election, similar 

to those it intended to run during the 2008 election season. Id. at ¶¶ 15, 30. 

FEC RESPONSE: Objection to the use of “independent” as vague and objection 

to the extent it contains legal conclusions, including the notion that SpeechNow was not 

“able” to run advertisements during the 2008 election cycle. SpeechNow could have 

accepted contributions up to the legal limits, but chose not to. (See FEC Facts ¶¶ 51-52, 

395-401.) 

2. Plaintiff David Keating created SpeechNow.org because he believes that 

the issue of free speech and the threats posed to it by campaign finance laws are vital to 

the future of the nation. Keating Decl. at ¶ 3. He wants individuals who share this 

concern to be able pool their funds so they can speak out as loudly and effectively in 

favor of First Amendment rights as possible. Id. Because federal elections provide a rare 

opportunity both to impact public policy—by affecting the political futures of the 

candidates who make it—and to influence public debate, Mr. Keating believes that 

running advertisements calling for the election or defeat of candidates based on their 

support for free speech and association is the most effective way for private citizens to 

protect those rights. Id. In his view, if an individual is permitted to spend unlimited 

amounts of money advocating the election or defeat of candidates for office, there is no 

reason why groups of individuals should be prevented from doing so. He created 

SpeechNow.org to give ordinary Americans the ability to band together to achieve these 

purposes. Id. 

FEC RESPONSE: Objection, relevance, as David Keating’s political opinions 

and motivation for founding SpeechNow are not relevant to the constitutionality of the 

challenged provisions. While this paragraph may reflect David Keating’s views, 

the portion of Mr. Keating’s declaration cited by plaintiffs, Keating Decl. (Doc-39) ¶ 3, 

only supports the first sentence and part of the second and third sentences of this fact. 

The cited portion of Mr. Keating’s declaration provides no support for the fourth and fifth 

sentences of this proposed fact. Inter alia, the alleged opinion regarding “the most 

effective way” and the fourth sentence regarding individuals and groups are unsupported. 

Objection to the extent it contains legal conclusion, particularly the inaccurate contention 

2

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 2 of 71
that groups are prevented from spending unlimited amounts of money advocating the 

election or defeat of candidates. 

“A. Structure and Operations of SpeechNow.org” 

3. SpeechNow.org is an unincorporated nonprofit association organized 

under the District of Columbia Uniform Unincorporated Nonprofit Associations Act, 

D.C. Code § 29- 971.01 et seq., and registered as a “political organization” under section 

527 of the Internal Revenue Code. Keating Decl. Ex. G, SpeechNow.org Internal 

Revenue Form 8871. 

FEC RESPONSE: No additional specific response. 

4. The general powers of SpeechNow.org lie with five voting “Members.” 

Bylaws, Art. I, § 5; Art. III, §§ 1, 2. They are David Keating, Jon Coupal, Edward Crane, 

Daniel Shapiro, and Richard Marder. Id. The bylaws also designate four officers of the 

association: President, Vice President, Secretary, and Treasurer. Id., Art. V, § 1. David 

Keating is the President and Treasurer of SpeechNow.org, and he administers all of the 

association’s affairs. Keating Decl. at ¶ 2. Jon Coupal is the Vice President and 

Secretary. Keating Decl. Ex. D, Member Action by Written Consent in Lieu of an 

Organizational Meeting of SpeechNow.org. 

FEC RESPONSE: No additional specific response. 

5. SpeechNow.org will operate solely on private donations from individuals. 

Keating Decl. at ¶ 8; Bylaws, Art. II. Under its bylaws, SpeechNow.org cannot accept, 

directly or indirectly, any donations or anything of value from business corporations, 

labor organizations, national banks, federal government contractors, foreign nationals, 

political parties, or political committees. Keating Decl. at ¶ 8; Bylaws, Art. VI, § 9; Art 

X, § 1. 

FEC RESPONSE: No additional specific response. 

6. Under its bylaws, SpeechNow.org cannot engage in business activities, 

including the provision of any goods or services that results in income to SpeechNow.org 

or any advertising or promotional activity that results in income to SpeechNow.org, other 

than in the form of membership dues or donations. Keating Decl. at ¶ 12. Similarly, 

SpeechNow.org cannot offer to any donors or members any benefit that is a disincentive 

for them to disassociate themselves with SpeechNow.org on the basis of the 

organization’s position on a political issue, and it cannot offer its donors or members 

credit cards, insurance policies or savings plans, training, education, business 

information, or any other benefits other than those that are necessary to enable recipients 

to engage in promotion of SpeechNow.org’s political ideas. Id.; Bylaws, Art. VI, §§ 6, 8. 

FEC RESPONSE: No additional specific response. 

3

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 3 of 71
7. SpeechNow.org is independent of any political candidates, political 

committees, and political party committees, and its bylaws require it to operate wholly 

independently of any of these entities. Keating Decl. at ¶ 9; Bylaws, Art. VI, § 9; Art. X, 

§§ 2-10. SpeechNow.org cannot make contributions or donations of any kind directly or 

indirectly to any FEC-regulated candidate or political committee, and it cannot coordinate 

its activities, as defined in 2 U.S.C. §§ 441a(a)(7)(B) & (C) and 11 C.F.R. Part 109, with 

any candidates, national, state, district or local political party committees, or their agents. 

Id., Art. VI § 10; Art. X §§ 2-10. 

FEC RESPONSE: Objection to the use of “wholly independently” as vague and 

objection to the extent the use of “wholly independently” as it purports to contain a legal 

conclusion. 

8. SpeechNow.org’s bylaws prohibit it from using any vendors for services 

in producing or distributing its communications featuring a candidate for federal office if 

that vendor was also engaged during the same election cycle by the candidate featured in 

the communication. Bylaws, Art. X, § 2. The bylaws similarly prohibit SpeechNow.org 

from employing any individuals who were employed during the same election cycle by 

any candidate featured in any of SpeechNow.org’s communications. Id., Art. X, § 3. 

FEC RESPONSE: No additional specific response. 

9. SpeechNow.org’s bylaws also ensure the independence of the 

association’s speech by, among other things, requiring members, officers, employees, and 

agents of the association to read and understand the FEC’s rules concerning coordination, 

11 C.F.R. § 109.21, Bylaws, Art. X, § 4, and by prohibiting them from engaging in 

activities that might lead to coordination with candidates. Id., Art. X, §§ 5-10. 

FEC RESPONSE: No additional specific response. 

10. Under SpeechNow.org’s bylaws, all of the obligations in the previous two 

paragraphs must be communicated to all members, officers, employees, agents, and 

donors of SpeechNow.org and employees and agents must sign an acknowledgement of 

these obligations as a condition of participating in any association activities. Bylaws, 

Art. X, § 11. SpeechNow.org’s members and officers have each signed such an 

acknowledgment. Keating Decl. Ex. I, SpeechNow.org Affirmation. 

FEC RESPONSE: No additional specific response. 

11. SpeechNow.org will solicit donations from individuals for funds to cover 

operating expenses and to buy public, political advertising to promote the election or 

defeat of candidates based on their positions on free speech and associational rights. 

Keating Decl. at ¶ 11. Some of SpeechNow.org’s solicitations will refer to particular 

candidates for federal office by name. Id.; Declaration of Steven M. Simpson in Support 

4

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 4 of 71
of Plaintiffs’ Proposed Findings of Fact (hereinafter, “Simpson Decl.”) Ex. 1, 

Supplement to AOR 2007-32 (Sample SpeechNow.org Solicitation). 

FEC RESPONSE: No additional specific response. 

12. SpeechNow.org’s solicitations will inform potential donors that their 

donations may be used for political advertising that will advocate the election or defeat of 

candidates to federal office based on their support for First Amendment rights. Keating 

Decl. at ¶ 11. Under its bylaws, SpeechNow.org must also advise donors that their 

donations are not tax deductible and that they will be spent according to the sole 

discretion of SpeechNow.org. Id. at ¶ 13; Bylaws, Art. VI, § 11. 

FEC RESPONSE: No additional specific response. 

“B. SpeechNow.org’s Planned Political Advertisements” 

13. SpeechNow.org plans to run advertisements on television and in other 

media during the 2008 election cycle and other future election cycles. Keating Decl. at ¶¶ 

15-20, 30. SpeechNow.org has prepared television scripts for four such advertisements. 

Keating Decl. Ex. J, SpeechNow.org Television Scripts. Two of the advertisements call 

for the defeat of Dan Burton, a Republican Congressman currently running for reelection 

in the fifth district of Indiana. Both ads criticize Representative Burton for voting for a 

bill that would restrict the speech of many public interest groups. The first urges voters to 

“Say no to Burton for Congress.” The second states that “Dan Burton voted to restrict our 

rights. Don’t let him do it again.” Id.; Keating Decl. at ¶ 18. SpeechNow.org would like 

to broadcast these advertisements in the fifth district of Indiana, where Representative 

Burton is running for office. Id. at ¶¶ 20-24. 

FEC RESPONSE: No additional specific response. 

14. The other two advertisements call for the defeat of Mary Landrieu, a 

Democratic Senator currently running for reelection in Louisiana. Keating Decl. at ¶ 19. 

Both ads criticize Landrieu for voting for a law to restrict the speech of public interest 

groups. The first urges voters to “Say no to Landrieu for Senate.” The second concludes 

by saying that “Our founding fathers made free speech the First Amendment to the 

Constitution. Mary Landrieu is taking that right away. Don’t let her do it again.” Id.; 

Keating Decl. Ex. J. SpeechNow.org would like to broadcast these advertisements in 

Louisiana, where Senator Landrieu is running for office. Keating Decl. at ¶¶ 20-24. 

FEC RESPONSE: No additional specific response. 

5

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 5 of 71
15. The production costs for these advertisements would be approximately 

$12,000. Keating Decl. at ¶ 21; Simpson Decl. Ex. 2, Declaration of Ed Traz in Support 

of Plaintiffs’ Motion for Preliminary Injunction with Exhibits, dated February 8, 2008 at 

¶¶ 3-5. 

FEC RESPONSE: No additional specific response. 

16. The cost to air the advertisements depends on the number of times they are 

run and the size of the audience SpeechNow.org wants to reach. Keating Decl. at ¶¶ 21-

24; Simpson Decl. Ex. 2 at ¶¶ 3-5. 

FEC RESPONSE: No additional specific response. 

17. Ideally, Mr. Keating would like to be able to run the ads enough times so 

that the target audience could view the ads at least ten times, but that would cost roughly 

$400,000. Keating Decl. at ¶ 24. A less expensive option is simply to run the ads fewer 

times. Id. at ¶¶ 21-24. In either event, the total costs to produce and run advertisements 

in Indianapolis and either Baton Rouge or New Orleans would exceed $120,000. Id. at ¶ 

22. 

FEC RESPONSE: No additional specific response. 

18. Mr. Keating made and will in the future make the decisions about where 

and in what races to run SpeechNow.org’s advertisements, although he expects to keep 

the other members of SpeechNow.org apprised of his decisions. Keating Decl. at ¶ 25. 

Mr. Keating will base his decisions primarily on two factors: (1) the candidates’ records 

on freedom of speech and/or campaign finance laws; and (2) whether the race is close 

enough that SpeechNow.org’s ads might have an impact on the outcome. Id. at ¶ 26. 

FEC RESPONSE: No additional specific response. 

19. Thus, Mr. Keating decided that SpeechNow.org should run ads in 

Congressman Burton’s primary because the Congressman voted for H.R. 513, a bill that 

restricted the free speech rights of certain nonprofits, as did the majority of House 

Republicans, and Mr. Keating felt that he was vulnerable to defeat. Keating Decl. at ¶ 

27. Mr. Keating spoke to Congressman Burton’s opponent, John McGoff, and 

discovered that he supported freedom of speech and opposed campaign finance laws that 

infringed on freedom of speech. Id. As a result, Mr. Keating concluded that running ads 

highlighting Congressman Burton’s record on campaign finance laws would be a good 

way to convey to Republicans that they should support freedom of speech and oppose 

campaign finance laws that would infringe on rights to free speech. Id. 

FEC RESPONSE: No additional specific response. 

20. In his conversation with Mr. McGoff, Mr. Keating discussed only Mr. 

McGoff’s position on issues. Mr. Keating understands that in order to avoid any 

6

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 6 of 71
questions about coordination and to comply with the FEC’s coordination rules, he cannot 

speak to candidates, campaigns, or political party committees about their plans, projects, 

or needs. Keating Decl. at ¶ 27. 

FEC RESPONSE: Objection to the extent contains legal conclusions. Indeed, the 

relevant content standards of current coordination regulations permit involvement that is 

not “material” and discussion that is not “substantial.” 11 C.F.R. § 109.21(d)(2),(3).1

21. Mr. Keating decided that SpeechNow.org should run ads against Mary 

Landrieu because her election is a high-profile race, and she has consistently supported 

campaign finance legislation that infringed on freedom of speech. Keating Decl. at ¶ 28. 

As a result, Mr. Keating concluded that her opponent could not be worse than she is and 

that running ads in her race would increase the chances of her defeat and garner attention 

for SpeechNow.org and its message and mission. Id. 

FEC RESPONSE: Contemporaneous records show that Senator Landrieu was 

selected only after SpeechNow’s consultant took too long preparing the submission of 

SpeechNow’s advisory opinion request. Mr. Keating’s conclusion about Senator 

Landrieu is unsupported and speculative. (See FEC Facts ¶¶ 55-57, FEC Resp. Mem. at 

3.) 

22. SpeechNow.org would run ads in additional races during this election 

cycle if it were able to do so. Candidates in whose elections SpeechNow.org would 

consider broadcasting advertisements include any candidate who has voted for or against 

the Bipartisan Campaign Reform Act; any candidate who voted for or sponsored or 

opposed H.R. 513 as passed by the House of Representatives in 2006 or similar 

legislation; any candidate who supports or opposes legislation to create a Federal Election 

Administration such as that proposed by H.R. 421 in the current Congress. Keating Decl. 

at ¶ 29. More specifically, for this election cycle, SpeechNow.org would like to run 

advertisements opposing Democratic congressional candidate Paul Kanjorski in the 11th 

district of Pennsylvania. Id. 

FEC RESPONSE: Objections to the extent contains a legal conclusion and 

suggests that SpeechNow was not able to run ads in additional races. (See FEC Facts ¶¶ 

51-52, 395-401.) 

 

1

 The coordination regulation is expected to be the subject of a new rulemaking as a 

result of Shays v. FEC, 528 F.3d 914 (D.C. Cir. 2008). 

7

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 7 of 71
23. If it is able to, SpeechNow.org will run ads in future election cycles as 

well. For instance, in the 2010 election cycle, SpeechNow.org would like to run 

advertisements opposing North Dakota Democratic Senator Byron Dorgan and Colorado 

Democratic Senator Ken Salazar. Keating Decl. at ¶ 30. SpeechNow.org would consider 

running advertisements opposing Alaska Republican Senator Lisa Murkowski as well, if 

she has a credible primary opponent. Id. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow may not be able to run ads in future election cycles. (See FEC 

Facts ¶¶ 51-52, 395-401.) 

24. Assuming SpeechNow.org is able to function and run ads in future 

elections, it will make decisions about where to run such ads consistent with the general 

approach described above. Keating Decl. at ¶ 26. If SpeechNow.org is able to raise 

enough funds, it intends to use methods such as candidate research to determine the past 

statements and positions of candidates on free speech as well as public opinion polling to 

obtain more information about the viability of particular candidates in particular races. 

Id. at ¶ 32. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow may not be able to run ads in future election cycles. (See FEC 

Facts ¶¶ 51-52, 395-401.) 

25. SpeechNow.org will disclose its activities under the disclosure and 

disclaimer provisions in the Federal Election Campaign Act that apply to independent 

expenditures. Keating Decl. at ¶¶ 6, 33-36. 

FEC RESPONSE: Objection, vague, and objection to the extent contains legal 

conclusions. FECA requires disclosure for independent expenditures by political 

committees and others, but the disclosure provisions vary depending upon what kind of 

entity is making the expenditure. 2 U.S.C. § 434 (b)-(d), (g). 

8

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 8 of 71
26. Accordingly, pursuant to 2 U.S.C. § 434(c), SpeechNow.org will file 

statements with the FEC reporting the identities of those who contributed to its 

advertisements and other communications that are independent expenditures under FECA 

along with the amounts contributed and the other information required by this provision. 

Keating Decl. at ¶ 35. 

FEC RESPONSE: Objection to the extent contains legal conclusions. While 

SpeechNow and David Keating have agreed to disclose the identities of at least certain 

contributors as “required by” 2 U.S.C. § 434(c), they have created some ambiguity as to 

whether they will disclose the identities of contributors when contributions are used for 

purposes such as candidate research and polling, see SN Facts ¶ 24, rather than directly 

purchasing advertising time. David Keating’s agreement with a decision not to disclose 

some donors calls into question whether SpeechNow will disclose its donors. 

(See FEC Facts ¶ 373; “Freeing SpeechNow: Free Speech and Addociation vs. Campaign 

Finance Regulation,” Mar. 5, 2008, FEC Exh. 103 at 4.) 

27. SpeechNow.org will not accept any targeted or “earmarked” funds, and, as 

a result, it will disclose all of its contributors in its independent expenditure disclosures. 

Keating Decl. at ¶ 36. Thus, for each independent expenditure SpeechNow.org makes, 

Mr. Keating will disclose all donors whose contributions have been used to fund any 

portion of the independent expenditure at issue. Id. All donors to SpeechNow.org will 

thus be disclosed in the association’s independent expenditure disclosures. Id.

FEC RESPONSE: See supra Fact 26. Even if SpeechNow and David Keating 

were interpreted as agreeing to identify all contributors on the independent expenditure 

reports they file pursuant to 2 U.S.C. § 434(c), those reports are submitted on different 

forms than those used by political committees, on a different schedule (independent 

expenditure reports are filed only once, whereas political committees file periodic reports 

of their financial activity), and independent expenditure reports provide less information 

to the Commission and the public. (See FEC Facts ¶ 372-373, 442-443.) 

9

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 9 of 71
28. Pursuant to 2 U.S.C. § 441d(d)(2), SpeechNow.org’s advertisements will 

include a statement indicating that SpeechNow.org is responsible for the content of the 

advertisement. Keating Decl. at ¶ 34. 

FEC RESPONSE: Objection to the extent contains legal conclusions. 

29. Pursuant to 2 U.S.C. § 441d(a), all of SpeechNow.org’s advertisements 

and other communications will include its name, address, and telephone number or World 

Wide Web address, along with a statement indicating that the communication was paid 

for by SpeechNow.org and was not authorized by any candidate or candidate’s 

committee. Keating Decl. at ¶ 33. 

FEC RESPONSE: Objection to the extent contains legal conclusions. 

30. In addition, as an association organized under section 527 of the Internal 

Revenue Code, SpeechNow.org must make regular disclosures of all contributions and 

expenditures. Keating Decl. at ¶ 37, Keating Decl. Ex. L, SpeechNow.org IRS Form 

8872; Simpson Decl. Ex. 25, Deposition Transcript of Gregory Scott, taken September 

24, 2008 (hereinafter, “Scott Dep.”) at 105:2-106:3. 

FEC RESPONSE: 527 organizations may choose to pay taxes to avoid disclosure. See 

Mobile Republican Assembly v. United States, 353 F.3d 1357, 1360 (11th Cir. 2003). 

Disclosures filed by section 527 organizations are not filed on the same schedule, with 

the same frequency or in the same level of detail as disclosures by political committees 

under the Act. (Compare 2 U.S.C. §§ 433-434 with 26 U.S.C. § 527(j). See

FEC Exh. 127-128, 161-162). 

C. SpeechNow.org’s Other Activities 

31. In addition to creating advertisements for the Burton and Landrieu races, 

Mr. Keating has also set up a website, www.speechnow.org, on which he has posted 

general information about the association, news stories and editorials about 

SpeechNow.org, and information about this lawsuit. Keating Decl. at ¶ 4; Keating Decl. 

Ex. A, Web Pages from www.speechnow.org (Home Page). 

FEC RESPONSE: No additional specific response. 

10

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 10 of 71
32. The website allows individuals interested in SpeechNow.org to sign up to 

receive more information about the association and to check a box if they might in the 

future consider making a donation to SpeechNow.org if it is legally able to accept 

donations. Keating Decl. Ex. A (Sign-up Page). Since the website was created late last 

year, about 180 individuals have signed up to receive more information and about 75 of 

them have indicated that they would consider making a donation to SpeechNow.org in 

the future. Keating Decl. at ¶ 5. Mr. Keating has sent articles and other information 

concerning SpeechNow.org to the individuals on this list. Id. at ¶ 4; Keating Decl. Ex. O, 

Information Sent to Interested Visitors of www.SpeechNow.org. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow may not be able to accept donations in the future. (See FEC 

Facts ¶¶ 51-52, 395-401.) 

33. Mr. Keating has also set up a PayPal account to allow individuals to 

donate money to SpeechNow.org in the event that the association is legally able to accept 

donations. Keating Decl. at ¶ 53; Keating Decl. Ex. M, Email from PayPal.com 

confirming SpeechNow.org account. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow may not be able to accept donations in the future. (See FEC 

Facts ¶¶ 51-52, 395-401.) 

II. The Individual Plaintiffs 

34. In addition to being the President and Treasurer of SpeechNow.org, Mr. 

Keating would also like to donate money to the association to support its mission and 

activities. Keating Decl. at ¶ 39. If and when SpeechNow.org is legally able to accept 

donations, Mr. Keating will immediately donate $5,500 to the group, and he would like to 

donate more in the future. Id. at ¶¶ 39, 51-52. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow may not be able to accept donations in the future. (See FEC 

Facts ¶¶ 51-52, 395-401.) 

35. Other individuals are also ready, willing, and able to immediately donate 

funds that would allow SpeechNow.org to produce and broadcast the ads it has created, 

or other similar ads, enough times to have an impact on the audience in the relevant 

markets. Keating Decl. at ¶ 39. Edward Crane is willing to donate $6,000. Declaration of 

Edward Crane in Support of Proposed Findings of Fact (hereinafter, “Crane Decl.”) at ¶ 

11

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 11 of 71
6. Richard Marder is willing to donate $5,500. Keating Decl. at ¶ 39; Simpson Decl. Ex. 

3C, SpeechNow.org Request for Advisory Opinion and Supporting Materials, dated 

November 14, 2007 (hereinafter, “Advisory Opinion Request”) at 6-8 (Declaration of 

Richard Marder in Support of SpeechNow.org Advisory Opinion Request). Fred M. 

Young is willing to donate $110,000. Declaration of Fred M. Young, Jr. in Support of 

Proposed Findings of Fact (hereinafter, “Young Decl.”) at ¶ 6. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow is not able to accept donations. (See FEC Facts ¶¶ 51-52, 395-

401.) 

36. Plaintiff Ed Crane is the President of the Cato Institute and a long-time 

supporter of free speech and opponent of campaign finance laws. Crane Decl. at ¶¶ 3, 10. 

Mr. Crane is an acquaintance of Mr. Keating’s who agreed both to serve as a member of 

SpeechNow.org and to contribute money to the association when Mr. Keating asked him 

during the summer of 2007. Id. at ¶ 2. Mr. Crane would like to be able to make 

additional contributions to SpeechNow.org in the future. Id. at ¶ 8. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow has not been able or will not be able to accept donations. (See 

FEC Facts ¶¶ 51-52, 395-401.) 

37. Mr. Crane supports SpeechNow.org’s mission and believes that calling for 

the election or defeat of candidates based on their support for First Amendment rights is 

an ideal way both to affect policy—by affecting the political futures of those who make 

it—and to promote the importance of free speech. Crane Decl. at ¶ 3. However, Mr. 

Crane lacks the time or individual resources to do things like produce television 

advertisements about free speech and candidates that can reach a wide segment of the 

population. Id. at ¶ 4. Thus, the best way for him to speak effectively against candidates 

who support restrictions on free speech is to associate with other like-minded individuals 

and a group like SpeechNow.org. Id. 

FEC RESPONSE: To the extent that the last sentence is not phrased as an 

opinion of Mr. Crane’s, it is unsupported. Plaintiffs have not demonstrated that giving to 

a group like SpeechNow is the “best way to speak effectively against candidates.” 

Plaintiffs do not compare the effect of such a contribution with, for example, 

12

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 12 of 71
volunteering for a campaign, contributing to a candidate, contributing to a political party, 

emailing friends, or espousing views on a website. 

38. Plaintiff Fred Young is the former CEO of Young Radiator Co. in Racine, 

Wisconsin. Simpson Decl. Ex. 4, Excerpts from the Deposition Transcript of Fred M. 

Young, Jr., taken October 3, 2008 at 22:1-4. Mr. Young has supported various libertarian 

and classical liberal causes through the years, including the Cato Institute and the Club 

for Growth. Id. at 32:5-7, 87:7-9. Mr. Keating knew Mr. Young through Mr. Keating’s 

employment as the executive director of the Club for Growth. Id. at 32:14-33:1. Mr. 

Keating contacted Mr. Young and asked if he would agree to contribute money to 

SpeechNow.org during the summer of 2007. Young Decl. at ¶ 2. Mr. Young would like 

to be able to make additional contributions to SpeechNow.org in the future. Young Decl. 

at ¶ 8. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow may not be able to accept donations in the future. (See FEC 

Facts ¶¶ 51-52, 395-401.) 

39. Mr. Young supports SpeechNow.org’s mission and believes that calling 

for the election or defeat of candidates based on their support for First Amendment rights 

is an ideal way both to affect policy—by affecting the political futures of those who make 

it—and to promote the importance of free speech. Young Decl. at ¶ 3. However, Mr. 

Young is not a political activist and lacks the time and experience to do things like 

produce television advertisements that can reach a wide segment of the population. Id. at 

¶ 4. Thus, the best way for him to do speak effectively against candidates who support 

restrictions on free speech is to associate with other like-minded individuals and a group 

like SpeechNow.org. Id. 

FEC RESPONSE: To the extent that the last sentence is not phrased as an 

opinion of Mr. Young’s, it is unsupported. Plaintiffs have not demonstrated that giving 

to a group like SpeechNow is the “best way to speak effectively against candidates.” 

Plaintiffs do not compare the effect of such a contribution with, for example, 

volunteering for a campaign, contributing to a candidate, contributing to a political party, 

emailing friends, or espousing views on a website. 

Since Fred Young is willing to spend $110,000, he could easily finance his own 

independent expenditures. Mr. Young could hire someone to prepare advertisements for 

13

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 13 of 71
him, much like he hopes to “hire SpeechNow to do that sort of thing.” (Young 

Dep. at 92-32.) It is not difficult for individuals who are capable of making large 

contributions to hire consultants to create advertisements. (FEC Facts ¶ 351.) 

40. Two other individuals, Plaintiffs Brad Russo and Scott Burkhardt, would 

like to make immediate donations to SpeechNow.org of $100 each. Keating Decl. at ¶¶ 

50-51. 

FEC RESPONSE: Nothing in the Act precludes their proposed contributions to 

SpeechNow. Collectively, these $100 contributions are also less than the $1,000 

threshold for triggering political committee status under 2 U.S.C. § 431(17). 

41. Brad Russo first heard about SpeechNow.org from an acquaintance who 

works for the Institute for Justice. Declaration of Brad Russo in Support of Plaintiffs’ 

Proposed Findings of Fact (hereinafter, “Russo Decl.”) at ¶ 2. Because he believes 

strongly in free speech and opposes many campaign finance laws, Mr. Russo would like 

to be able to support SpeechNow.org and its mission. Id. at ¶ 3. 

FEC RESPONSE: No additional specific response. 

42. Scott Burkhardt first heard about SpeechNow.org in a news story and 

located the association’s website through an internet search. Declaration of Scott 

Burkhardt in Support of Plaintiffs’ Proposed Findings of Fact (hereinafter, “Burkhardt 

Decl.”) at ¶ 2; Simpson Decl. Ex. 5, Excerpts from the Deposition Transcript of Scott 

Burkhardt, taken September 16, 2008 at 9:4-6. Mr. Burkhardt has supported various 

libertarian and conservative causes through the years and wanted to donate money to 

SpeechNow.org. Burkhardt Decl. at ¶ 2; Simpson Decl. Ex. 5 at 9:10-16. He wrote an 

email to SpeechNow.org inquiring about how to donate money to the association, but Mr. 

Keating wrote back indicating that SpeechNow.org was not accepting donations. Keating 

Decl. at ¶ 50. 

FEC RESPONSE: No additional specific response. 

43. Both Mr. Russo and Mr. Burkhardt support SpeechNow.org’s mission and 

believe that calling for the election or defeat of candidates based on their support of First 

Amendment rights is an ideal way both to affect policy—by affecting who serves in 

Congress, which makes significant policy regarding those rights—and to promote the 

importance of free speech. Russo Decl. at ¶ 3; Burkhardt Decl. at ¶ 3. 

FEC RESPONSE: No additional specific response. 

14

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 14 of 71
44. Even though Plaintiffs Russo and Burkhardt could not themselves finance 

the production and broadcast of SpeechNow.org’s ads, they wish to associate with 

SpeechNow.org’s other supporters in order to amplify their voices and reach an audience 

far greater than they would be able to achieve without SpeechNow.org. Russo Decl. at ¶ 

4; Burkhardt Decl. at ¶ 4. 

FEC RESPONSE: Plaintiffs Russo and Burkhardt can finance the production and 

broadcast of advertisements. Individuals can finance advertisements for as little as $50 

without SpeechNow. (FEC Resp. Mem. § II.) 

45. All of the individual Plaintiffs have read, understood, and will abide by 

SpeechNow.org’s bylaws, in particular, sections 9 and 10 of Article X of those bylaws. 

Keating Decl. at ¶¶ 8, 9; Crane Decl. at ¶ 5; Young Decl. at ¶ 5; Russo Decl. at ¶ 5; 

Burkhardt Decl. at ¶ 5. They further understand that their donations will be used to fund 

speech, including advertisements that will advocate the election and/or defeat of 

candidates to federal office based upon their positions on freedom of speech and 

campaign finance laws, and they understand that SpeechNow.org is an independent group 

that will not make any contributions to candidates, political committees or political 

parties (or any of their agents) and will not coordinate its activities with candidates, 

candidate committees or political party committees. Keating Decl. at ¶ 9; Crane Decl. at 

¶ 5; Young Decl. at ¶ 5; Russo Decl. at ¶ 5; Burkhardt Decl. at ¶ 5. 

FEC RESPONSE: No additional specific response. 

“III. SpeechNow.org’s Advisory Opinion Request” 

46. Mr. Keating set up SpeechNow.org specifically to avoid any concerns 

about corruption under the campaign finance laws. Keating Decl. at ¶¶ 6, 38. However, 

he understood when he created the association that it would be necessary to seek approval 

from the FEC to operate without becoming a political committee and being subjected to 

the contribution limits and organizational, administrative, and continuous reporting 

obligations for political committees. Id. at ¶ 38. He also recognized that it might be 

necessary to challenge the application of these provisions to SpeechNow.org in court. Id.

FEC RESPONSE: David Keating’s views and motivation for creating 

SpeechNow are irrelevant to the determination of constitutionality of the provisions 

challenged by plaintiffs. The Commission objects to the assertion that SpeechNow was 

“set up . . . specifically to avoid any concerns about corruption under the campaign 

finance laws” to the extent that it includes a legal conclusion. Regarding Mr. Keating’s 

15

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 15 of 71
expressed desire to create an organization “specifically to avoid any concerns about 

corruption,” the FECA’s limit on contributions to political committees of $5000 per year 

lawfully furthers that goal. Mr. Keating did not just know that he “might” need to 

challenge the rules; SpeechNow was created to serve as a test case. (FEC Resp. Mem. at 

§ 1.) 

47. Accordingly, on November 19, 2007, SpeechNow.org filed a request for 

an advisory opinion (AOR) with the FEC pursuant to 2 U.S.C. § 437f. The request 

presented, in essence, three questions: (1) Must SpeechNow.org register as a political 

committee as defined in 2 U.S.C. § 431(4), and, if so, when? (2) Are donations to 

SpeechNow.org “contributions” (as defined in 2 U.S.C. § 431(8)) subject to the limits 

described in 2 U.S.C. § 441a(a)(1)(C)? (3) Must an individual donor to SpeechNow.org 

count his donations to SpeechNow.org among the contributions applicable to his biennial 

aggregate contribution limit described in 2 U.S.C. § 441a(a)(3)? See Simpson Decl. Exh. 

3A, Advisory Opinion Request, at 4-5. 

FEC RESPONSE: No additional specific response. 

48. Under FEC rules, the Commission is required to issue a written advisory 

opinion within sixty days of accepting a request. 11 C.F.R. § 112.4(a). If it is unable to 

render an advisory opinion within that time, the rules state that the FEC “shall issue a 

written response stating that the Commission was unable to approve” the request by a 

required vote of four commissioners. Id. The FEC issued its response to 

SpeechNow.org’s AOR on January 28, 2008. Because the FEC at the time was without a 

full complement of commissioners, it lacked a quorum and thus could not issue an 

advisory opinion in response to SpeechNow.org’s request. Accordingly, under FEC 

rules, SpeechNow.org’s request was not approved. See Simpson Decl. Ex. 6, Letter from 

the Federal Election Commission to Bradley A. Smith and Stephen M. Hoersting from 

the Center for Competitive Politics and William H. Mellor, Steven Simpson, and Paul 

Sherman from the Institute for Justice, dated January 28, 2008. 

FEC RESPONSE: No additional specific response. 

49. However, the general counsel’s office of the FEC issued a draft advisory 

opinion in response to SpeechNow.org’s AOR. Simpson Decl. Ex. 7, Draft Advisory 

Opinion 2007-32 from the Federal Election Commission, dated January 25, 2008. The 

draft advisory opinion concluded that, among other things, SpeechNow.org’s planned 

advertisements constitute “express advocacy,” id. at 9:9-12; the donations that Richard 

Marder and Plaintiffs Keating, Crane, and Young wish to make to SpeechNow.org would 

be “contributions” under 2 U.S.C. § 431(8), id. at 4:26-28; expenditures by 

SpeechNow.org on advertisements calling for the election or defeat of candidates for 

federal office would be “expenditures” under 2 U.S.C. § 431(9), id. at 4:26-28; 

16

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 16 of 71
SpeechNow.org has a “major purpose” of campaign activity; accepting the contributions 

noted above to fund its advertisements would make SpeechNow.org a “political 

committee” under § 431(4), id. at 12:13-20; as a political committee, SpeechNow.org 

would be subject to the contribution limits contained in 2 U.S.C. §§ 441a(a)(1)(C) and 

441a(a)(3) and the registration, administrative and reporting requirements for political 

committees contained in 2 U.S.C. §§ 432, 433, and 434, id. at 12:13-20, 13:19-14:5; and 

SpeechNow.org would be required to register as a political committee once it received 

contributions of more than $1,000 regardless of whether it had made any expenditures, id. 

at 12:13-20. In short, the draft advisory opinion concluded that the campaign finance 

laws prohibit SpeechNow.org from accepting donations that exceed the contribution 

limits in 2 U.S.C. §§ 441a(a)(1)(C) and 441a(a)(3) to fund its advertisements. Id. at 14:6-

12. 

FEC RESPONSE: The views of the General Counsel are irrelevant. It is well 

settled that “[t]he Commissioners are appointed by the President to administer the 

agency, the agency’s staff is not.” San Luis Obispo Mothers For Peace v. NRC, 751 F.2d 

1287, 1327, aff’d en banc in relevant part, 789 F.2d at 33, 34 (D.C. Cir. 1984). The D.C. 

Circuit rejected as a “rather silly suggestion” the argument than an NLRB decision 

should be found unreasonable because it conflicted with the General Counsel’s advice. 

“It is of no moment . . . what was the General Counsel’s understanding of the case law 

before the present decision issued, and the court will take no note of it.” Chelsea 

Industries, Inc. v. NLRB, 285 F.3d 1073, 1077 (D.C. Cir. 2002). 

50. The draft advisory opinion was consistent with the FEC’s position on 

other groups that make independent expenditures. The FEC has required such groups 

both to register as political committees and to abide by contribution limits. See Simpson 

Decl., Exs. 8-13, FEC Conciliation Agreements. 

FEC RESPONSE: The draft advisory opinion is irrelevant. See supra FEC Resp. 

to SN Fact ¶ 49. Objection to the vagueness of “such groups” and “groups that make 

independent expenditures.” The Act requires registration and contribution limits for 

some but not every group that makes independent expenditures, and the Commission has 

so enforced the Act. 

17

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 17 of 71
51. The FEC’s current position with respect to SpeechNow.org does not differ 

from the positions stated in the draft Advisory Opinion. Thus, according to the FEC, 

SpeechNow.org’s planned advertisements constitute “express advocacy,” Simpson Decl. 

Exs. 7 at 9:9-14, and 14, Excerpts from FEC Responses to Plaintiffs’ First Set of 

Discovery Requests, dated August 25, 2008; the donations that Richard Marder and 

Plaintiffs Keating, Crane, Young, Burkhardt and Russo wish to make to SpeechNow.org 

would be “contributions” under 2 U.S.C. § 431(8) and the expenditures by 

SpeechNow.org on its proposed advertisements “expenditures” under 2 U.S.C. § 431(9), 

id. (FEC Response to Request for Admission No. 3); SpeechNow.org has a “major 

purpose” of campaign activity; accepting the contributions noted above to fund its 

advertisements would make SpeechNow.org a “political committee” under § 431(4), id. 

(FEC Response to Request for Admission No. 1); as a political committee, 

SpeechNow.org would be subject to the contribution limits contained in 2 U.S.C. §§ 

441a(a)(1)(C) and 441a(a)(3) and the registration, administrative, and reporting 

requirements for political committees contained in 2 U.S.C. §§ 432, 433, and 434, id. 

(FEC Responses to Requests for Admission Nos. 5-12). 

FEC RESPONSE: The draft Advisory Opinion is irrelevant. (See supra FEC 

Resp. Mem ¶ 49.) No specific additional response to the statements regarding the FEC’s 

current position. 

52. The FEC’s then-chairman, David Mason, issued his own opinion in 

response to the draft advisory opinion issued by the FEC office of general counsel. 

Simpson Decl. Ex. 15, Dissenting Opinion of FEC Chairman Mason to Draft Advisory 

Opinion 2007-32. Chairman Mason concluded that SpeechNow.org ought to be 

permitted to operate without contribution limits, although he believed that 

SpeechNow.org should have to register as a political committee and comply with the

administrative, organizational, and reporting obligations for PACs. Id. at 5-6. 

FEC RESPONSE: Irrelevant. Chairman Mason was not speaking for the 

Commission. The Commission cannot exercise its duties and powers without a majority 

vote of its six Commissioners. See 2 U.S.C. § 437c(c); 2 U.S.C. § 437f(b) (“No opinion 

of an advisory nature may be issued by the Commission or any of its employees except in 

accordance with the provisions of this section.”) 

18

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 18 of 71
53. David Keating, as treasurer of SpeechNow.org, is directly responsible for 

complying with the reporting requirements that apply to SpeechNow.org and signing all 

reports. Keating Decl. at ¶ 14; Bylaws, Art. V, § 8. 

FEC RESPONSE: No additional specific response. 

54. Under 2 U.S.C. § 437g(d) and the FEC’s practices and policies, David 

Keating, as treasurer of SpeechNow.org, would be liable in his official capacity for any 

violations of the contribution limits or reporting obligations that apply to 

SpeechNow.org. Simpson Decl. Ex. 14 (FEC Responses to Requests for Admission Nos. 

10 & 11). 

FEC RESPONSE: The Commission’s policies are as follows: 

A committee “treasurer will typically be subject to Commission 

action only in his or her official capacity.” See Statement of Policy 

Regarding Treasurers Subject to Enforcement Proceedings, 

70 Fed. Reg. 1 (Jan. 3, 2005). In this regard, a “probable cause finding 

against a treasurer in his or her official capacity makes clear to the 

district court in enforcement litigation that the Commission is seeking 

relief against the committee, and would only entitle the Commission to 

obtain a civil penalty from the committee.” Id. at 4-5. 

See FEC Response to Plaintiffs’ Requests for Admission 10-11, FEC Responses to 

Plaintiffs’ First Set of Discovery Requests (Aug. 25, 2008) at 27-28, FEC Exh. 160; 

Statement of Policy Regarding Treasurers Subject to Enforcement Proceedings, 

70 Fed. Reg. 1 (Jan. 3, 2005).) 

55. Under 2 U.S.C. § 437g(d) and the FEC’s practices and policies, David 

Keating, as treasurer of SpeechNow.org, would be liable in his personal capacity for any 

knowing and willful violations of the contribution limits or reporting obligations that 

apply to SpeechNow.org. Simpson Decl. Ex. 14 (FEC Responses to Requests for 

Admission Nos. 10 & 11). 

FEC RESPONSE: As treasurer, David Keating is responsible for violations by 

the committee under the following circumstances: 

“[W]hen information indicates that a treasurer has knowingly and 

willfully violated a provision of the Act or regulations, or has recklessly 

failed to fulfill duties specifically imposed on treasurers by the Act, or 

has intentionally deprived himself or herself of the operative facts giving 

rise to the violation, the Commission will consider the treasurer to have 

acted in a personal capacity and make findings (and pursue conciliation) 

19

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 19 of 71
accordingly.” Id. at 1, 5, 6. In addition, “[i]f a past or present treasurer 

violates a prohibition that applies generally to individuals, the treasurer 

may be named as a respondent in his or her personal capacity, and 

findings may be made against the treasurer in that capacity. In this way, 

a treasurer would be treated no differently than any other individual who 

violates a provision of the Act.” Id. at 5 n.7, 6. “Should the 

Commission file suit in district court following a finding of probable 

cause against a treasurer in his or her personal capacity, judicial relief, 

including an injunction and payment of a civil penalty, could be 

obtained against the treasurer personally.” Id. at 5 (citation omitted). 

See FEC Response to Plaintiffs’ Requests for Admission 10-11, FEC Responses to 

Plaintiffs’ First Set of Discovery Requests (Aug. 25, 2008) at 27-28, FEC Exh. 190. 

56. The FEC believes that the plaintiffs in this case are aware of the 

contribution limits, registration requirements, and disclosure requirements that will apply 

to them if SpeechNow.org engages in the activities described in its AOR and its 

Amended Complaint. Id. (FEC Response to Request for Admission No. 2). 

FEC RESPONSE: No additional specific response. 

57. If David Keating, Ed Crane, Fred Young, or Richard Marder made 

contributions to SpeechNow.org in the amounts and for the purposes stated in their 

declarations, their contributions would violate the law because they exceed the 

contribution limits contained in 2 U.S.C. §§ 441a(a)(1)(C) and 441a(a)(3). Simpson 

Decl. Ex. 14 (FEC Response to Request for Admission No. 12). 

FEC RESPONSE: No additional specific response. 

58. If SpeechNow.org were able to accept the contributions of the individual 

plaintiffs and Richard Marder, SpeechNow.org would have enough money to fund 

advertisements in at least two election contests. Keating Decl. at ¶ 22; Simpson Decl. Ex. 

2 at 4; see Keating Decl. Ex. K, Traz Group Bid for Burton and Landrieu 

Advertisements. 

FEC RESPONSE: This proposed fact incorrectly suggests that SpeechNow is 

unable to accept contributions up to the legal limits. In fact, plaintiffs could accept 

contributions of up to $5,000 from each of the five individual plaintiffs and from 

Richard Marder, subject only to the possible application of the aggregate contribution 

limit on Mr. Young’s contribution. See 2 U.S.C. §§ 441a(a)(1)(C), 441a(a)(3). 

20

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 20 of 71
59. Without those contributions, however, SpeechNow.org lacks the funds to 

run such advertisements. Id. at ¶ 40. 

FEC RESPONSE: Evidence in the record suggests that had SpeechNow engaged 

in a modicum of fundraising within the contribution limits, possibly just by accepting 

donations from those who had expressed an interest, it would have had the funds to run 

advertisements comparable in scope to the ad buys for the Burton and Landrieu races that 

Mr. Keating selected. (FEC Facts ¶¶ 392-394.) 

“IV. The Effect of Contribution Limits on the Plaintiffs” 

60. The contribution limits contained in 2 U.S.C. §§ 441a(a)(1)(C) and 

441a(a)(3) prevent plaintiffs Keating, Crane, and Young and Richard Marder from 

making the donations to SpeechNow.org that they currently wish to make. Simpson 

Decl. Ex. 14 (FEC Responses to Requests for Admission Nos. 1-3, 5-13); Advisory 

Opinion Request at 6-8 (Declaration of Richard Marder in Support of SpeechNow.org 

Advisory Opinion Request); Keating Decl. at ¶ 39; Crane Decl. at ¶ 6; Young Decl. at ¶ 

6. 

FEC RESPONSE: Like other proposed facts, this proposed fact incorrectly 

suggests that SpeechNow is unable to accept contributions up to the legal limits. In fact, 

plaintiffs could accept contributions of up to $5,000 from each of the five individual 

plaintiffs and from Richard Marder, subject only to the possible application of aggregate 

contribution limit on Mr. Young’s contribution. See 2 U.S.C. §§ 441a(a)(1)(C), 

441a(a)(3). 

61. Both SpeechNow.org and David Keating as its treasurer face a credible 

threat of prosecution if SpeechNow.org accepts contributions over the limits contained in 

2 U.S.C. §§ 441a(a)(1)(C) and 441a(a)(3), and David Keating, Ed Crane, Fred Young and 

Richard Marder face a credible threat of prosecution if they make contributions to 

SpeechNow.org above those limits. Simpson Decl. Ex. 14 (FEC Responses to Requests 

for Admission Nos. 1-3, 5-13). 

FEC RESPONSE: No additional specific response. 

62. The laws and the FEC’s regulations contained in 2 U.S.C. § 441a(a)(1)(C) 

and 11 CFR § 110.1(d) prevent SpeechNow.org and/or David Keating from accepting 

21

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 21 of 71
additional donations above the contribution limits. Simpson Decl. Ex. 14 (FEC 

Responses to Requests for Admission Nos. 1-3, 5-13); Keating Decl. at ¶ 39. 

FEC RESPONSE: No additional specific response. 

63. Based on the cost estimates for SpeechNow.org’s ads targeted at the 

elections of Representative Burton and Senator Landrieu, to run ads in only two elections 

in the future would cost SpeechNow.org at least $120,000. Keating Decl. at ¶ 31. Thus, 

without the donations that David Keating, Ed Crane, Fred Young, and Richard Marder 

wish to make to SpeechNow.org, or other donations of the same amount, SpeechNow.org 

will not have sufficient funds to pay for the advertisements it wishes to produce and 

broadcast in the future. Id. at ¶ 40. 

FEC RESPONSE: Evidence in the record suggests that had SpeechNow engaged 

in a modicum of fundraising within the contribution limits, possibly just by accepting 

donations from those who had expressed an interest, it would have had the funds to run 

advertisements comparable in scope to the ad buys for the Burton and Landrieu races that 

Mr. Keating selected. (FEC Facts ¶¶ 392-394.) 

“A. Contribution Limits Increase the Cost and Burden of Raising Money.” 

64. Raising money under contribution limits is more difficult than raising 

money outside of those limits. Simpson Decl. Ex. 16, Mariani v. United States, 

212 F.3d 761 (3d Cir. 2000) at 768; Simpson Decl. Ex. 17, Excerpt of District 

Court Findings of Fact in Mariani v. United States, 80 F. Supp. 2d 352 (M.D. Pa. 

1999) at 370. 

FEC RESPONSE: It is no doubt true that for some organizations raising funds 

through unlimited contributions is easier than raising funds within contribution limits. 

The particular findings by both courts in Mariani were, however, premised in part on the 

fact that soft money could be raised from entities that could not otherwise make 

contributions, corporations and labor organizations. SpeechNow, on the other hand, 

asserts that it will not accept contributions from corporations and labor organizations. 

(SN Facts ¶ 5.) 

65. During the 1999-2000 election cycle, approximately 3.5 million 

22

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 22 of 71
Americans made a political contribution at the federal level. Declaration 

of Rodney Smith in Support of Plaintiffs’ Proposed Findings of Fact 

(hereinafter, “Smith Decl.”) at ¶ 24. This figure represents only about 

1.2% of the total voting age population. Id. Eighty percent of those 

donors, or roughly 2.7 million people, gave less than $200. Id. 

FEC RESPONSE: The Court should decline to enter this fact because it is 

outdated and contradicted by other, more reliable sources. Smith’s report contains 

information from only one election cycle, 1999-2000, regarding the number of federal 

donors. The number of donors from one election cycle, without any comparison to 

other more recent cycles, sheds little to no light on the ability of fundraising 

organizations to raise additional funds by, for example, recruiting additional donors. 

Much more probative and material are the facts which demonstrate that the national 

political parties successfully recruited new donors when they were no longer permitted to 

receive unlimited contributions (see FEC Facts ¶¶ 385-91). According to reports of 

actual donor numbers from the national party committees themselves, the parties have 

added millions of new donors this decade, and the total number of federal donors is now 

dramatically different from the estimate done by Smith from the 2000 election cycle. 

(See FEC Resp. Mem. at 7-8.) 

In addition, Smith did not disclose all the sources for this portion of his report, as 

required by Rule 26(a)(2)(B). At his deposition, Smith erroneously claimed to have 

obtained his number of total donors from FEC reports, which is impossible since 

contributors giving $200 or less in calendar year are not itemized in FEC reports. He 

later admitted that the total number of donors had been derived from a national poll. The 

footnote explaining the source was contained in an amicus brief he submitted to the 

district court in McConnell v. FEC, but not in the identical chart in his expert report. (See

23

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 23 of 71
Smith Dep. at 136-37 & Dep. Exh. 5 at 1a.) Finally, Smith altered his report to covert it 

into a declaration after the deadline for disclosing reports. (See infra FEC Response to 

Plaintiffs’ Proposed Fact ¶ 76.)

Smith’s report also failed to comply with other requirements of Rule 26. Rule 

26(a)(2)(B) provides that that expert reports must contain, among other disclosures, a list 

of all publications authored by the expert in the previous ten years, a list of all cases 

during the previous four years in which the witness testified at trial or was deposed as an 

expert, and the compensation paid to the expert for study and testimony in the case. 

Under Rule 37(c)(1), a party that fails to make these disclosures cannot use that witness’s 

testimony unless its failure was substantially justified or harmless, or if the court decides 

that other sanctions are more appropriate. Other sanctions may include reasonable 

expenses, including attorney’s fees, caused by the failure. See Pell v. E.I. Dupont De 

Nemours & Co., Inc., 231 F.R.D. 186, 193-94 (D. Del. 1986) (explaining that remedies 

for failure to make Rule 26(a)(2)(B) expert disclosures can include precluding use of 

expert’s report and re-deposition of witness); Dunkin Donuts, Inc. v. Patel, 174 F. Supp. 

2d 202, 213-14 (D.N.J. 2001) (recommending that expert report which failed to include 

Rule 26(a)(2)(B) disclosures, including compensation and previous testimony, be struck). 

SpeechNow failed to disclose a list of all publications authored by expert Rodney Smith 

in the previous 10 years, a list of all cases during the previous four years in which he 

testified at trial or was deposed as an expert, and any compensation he received. 

Furthermore, the Commission notes that Plaintiffs did not produce an earlier draft 

of Rodney Smith’s report that had been submitted by Smith to plaintiffs’ counsel 

(attached hereto as Exh. 155) until the day of his deposition. Without it, the Commission 

24

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 24 of 71
was deprived of an opportunity to pursue lines of questioning that would have tested 

Smith’s credibility. 

For example, Smith’s final report, used to cross-examine him at deposition 

(attached hereto as FEC Exh. 156), includes a statement that “the contribution limits 

mandated by campaign finance reform severely cripple [the ability of challengers and 

startup advocacy groups] to accumulate enough cash reserves to effectively finance their 

growth” (id. at 6). The early draft did not include this statement. Having not timely 

received a copy of the draft report, the Commission did not know that this statement had 

been inserted into the final report after it had been reviewed by counsel. If aware, 

counsel for the Commission could have asked about the statement’s genesis, and further 

probed its evidentiary support. 

 Similarly, Smith’s final report includes a statement, not included in the draft 

report, which asserts that due to campaign finance limits, “most non-wealthy challenger 

candidates and start-up advocacy groups are out of business before they ever get started.” 

Without the draft report, the Commission was unaware that it had been inserted late in the 

process after interactions with plaintiffs’ counsel, and was deprived of an opportunity to 

ask about the subject. 

The late production of this draft report adversely affected the Commission’s 

deposition of Smith, an opportunity to create doubt about his credibility. See Elm Grove 

Coal Co. v. Director, O.W.C.P, 480 F.3d 278 (4th Cir. 2007) (“[W]e are unable, in these 

circumstances, to agree that [defendant’s] expert witnesses could be properly and fully 

cross-examined in the absence of the draft reports . . . . [T]he disclosure to [plaintiff] of 

the pertinent draft reports . . . was potentially important to a full and fair cross25

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 25 of 71
examination and to the truth-seeking process.”); EEOC v. United Parcel Servs., Inc., 149 

F. Supp. 2d 1115, 1139-40 (N.D. Cal. 2000) (noting critical effect that late-produced 

draft reports and ensuing re-deposition had on expert’s credibility); Bowers v. Nat’l 

Collegiate Athletic Ass’n, 564 F. Supp. 2d 322, 342 (D.N.J. 2008) (imposing sanctions on 

plaintiff’s counsel where “[p]laintiff's belated disclosure of draft expert reports deprived 

Defendants of the opportunity to test the independence and reliability of [the expert’s] 

opinion”). 

66. In terms of donors who give more than $200, there is roughly one donor 

for every 350 people or one donor out of every 200 households in the average 

congressional district. Smith Decl. at ¶ 25. 

FEC RESPONSE: See FEC Response to Plaintiffs’ Proposed Fact ¶ 65. In 

addition, by relying only on donors who give more than $200, this statistic is especially 

divorced from reality due to the surge in new donors below $200 in the intervening years 

since 2000. (See FEC Resp. Mem. at 7-8.) 

67. There is an inverse functional relationship between a group’s fundraising 

costs and its average contribution. The higher the average contribution, the lower 

fundraising costs will be as a percentage of gross receipts. The reverse is also 

true. The lower the average contribution, the higher the fundraising cost will be. 

Smith Decl. at ¶ 32. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) 

68. Due to contribution limits, political fundraising has shifted from a lowvolume, high-dollar process to a low-dollar, high-volume process. Smith Decl. at 

¶ 9. 

26

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 26 of 71
FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) 

69. When the average contribution amount decreases and the number of 

contributions received increases, the cost of generating additional contributions 

increases. Smith Decl. at ¶ 32. To make up for lost revenue resulting from the 

imposition of contribution limits, the volume of smaller contributions must 

increase as the average contribution amount declines. Id. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) 

70. Thus, contribution limits result in unavoidably higher fundraising costs. 

Smith Decl. at ¶ 32. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) 

71. Every fundraising operation must spend money to acquire new donors. 

Smith Decl. at ¶ 35. The goal of this process, commonly referred to as 

“prospecting,” is to avoid losing money. Id. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) 

72. The cost of acquiring a new donor is often higher than the amount actually 

received from that donor. Smith Decl. at ¶ 37. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

27

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 27 of 71
9-10.) Moreover, Smith admits that his report contains no data that supports this specific 

proposition. (Smith Dep. at 83-84, FEC Exh. 15.) 

73. If an organization breaks even in the prospecting process, it is using the 

first contribution it receives from a new donor to finance the cost of acquiring that 

new donor. Smith Decl. at ¶ 35. But if an organization cannot break even in its 

prospecting, then its growth must be partially funded out of general operating 

funds. Id. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) 

74. There are only two ways a fundraising operation can grow. The first is by 

increasing the average contribution. Smith Decl. at ¶ 37. The other is by 

prospecting for more donors. Because contribution limits limit every group’s 

ability to increase its average contribution amount, the only alternative is to 

acquire more donors. Id. 

FEC RESPONSE: The Court should decline to enter this proposed fact, which is 

unsupported by any evidence regarding the burdens or actual cost of fundraising (see

FEC Mem. at 9-10) and contradicted by the witness’s own testimony. Smith admits that 

average contribution amounts can increase without a change in the contribution limits by 

convincing donors who have not given the legal maximum to contribute more. (Smith 

Dep. at 145-46, FEC Exh. 15.) 

75. Acquiring more donors is extremely difficult if not virtually impossible 

without adequate cash reserves or a donor-acquisition program that can be 

operated on a break-even basis. Smith Decl. at ¶ 37. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) 

28

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 28 of 71
“B. Contribution Limits Inhibit the Ability of Groups Like SpeechNow.org to get 

Started.” 

76. The data on average contributions to the top 10 non-party, federally 

focused 527 organizations in 2004 demonstrate that newly formed 527 political 

organizations tend to raise funds from a few large contributors, compared to more 

established 527 organizations. Declaration of Jeffrey Milyo, Ph.D., in Support of 

Plaintiffs’ Proposed Findings of Fact (hereinafter, “Milyo Decl.”) at ¶ 87. 

FEC RESPONSE: As discussed in detail in the Commission’s brief, the Court 

should decline to enter any findings of fact concerning Jeffery Milyo’s discussion of the 

“top non-party, federally focused 527 organization in 2004” because such groups are not 

representative of independent political committees generally, Milyo’s analysis of such 

groups is rife with misstatements and errors, and Milyo’s narrow data do not support his 

broad conclusions. (See FEC Resp. Mem. at 15-18.) 

 In submitting their proposed findings of fact, plaintiffs did not cite their 

previously disclosed expert reports from Jeffery Milyo and Rodney Smith; instead, 

plaintiffs relied on new “declarations” from both of their experts, documents the 

Commission saw for the first time when briefs were filed on October 28, 2008. Plaintiffs, 

in effect, have submitted supplemental expert reports contrary to the Federal Rules of 

Civil Procedure and the Joint Scheduling Order in this case. These new declarations 

create logistical difficulties for the parties, and in the case of Milyo’s declaration, include 

new substantive argument and deletions of required information. 

 When a party relies on an expert witness, Rule 26(a)(2) of the Federal Rules of 

Civil Procedure requires an expert report to include a complete statement of all the 

expert’s opinions, the witness’s qualifications, a list of other cases in which the witness 

was involved, and the compensation that witness will receive for his study and testimony. 

(See also supra Response to SN Facts ¶ 65.) The Joint Scheduling Report in this case 

29

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 29 of 71
required all primary expert reports to be produced by August 15, 2008. After that date, 

expert reports may only be supplemented until 30 days before trial (see Fed. R. Civ. P 

26(e)(2), 26(a)(3)), but “only when a party discovers the information it has disclosed is 

incomplete or incorrect.” Coles v. Perry, 217 F.R.D. 1, 4 (D.D.C. 2003). “Fed. R. Civ. P 

26(e) does not grant a license to supplement a previously filed expert report because a 

party wants to ... .” Id. Here, plaintiffs can offer no justification for the new 

declarations. As stated in Coles, the purpose of requiring the disclosure of expert reports 

“is to prevent unfair surprise at trial and to permit the opposing party to prepare for the 

expert’s cross examination.” 217 F.R.D. at 4. Conversely, “when the expert supplements 

her report by addressing a new matter after discovery has ended, the very purpose of the 

rule is nullified.” Id. Plaintiffs’ reliance on their experts’ new declarations is thus 

inappropriate. 

 While large portions of the new declarations merely restate the expert reports, and 

thus do not significantly prejudice the Commission, even those sections unnecessarily 

create logistical headaches for the parties and the Court. When the Commission took the 

depositions of Smith and Milyo, a significant portion of their testimony commented on 

specific sections and paragraphs of their reports. Now, to discuss deposition testimony 

referencing the reports, additional citations to the declarations may also be needed. 

 In addition to the unnecessary citation complications introduced by plaintiffs’ new 

expert declarations, Milyo’s declaration also includes new substantive argument and 

conceals important information. For example, in his new declaration, Milyo has largely 

rewritten the portion of his expert report concerning the “Equi-Marginal Principle.” 

(Compare Milyo Decl. at ¶¶ 34-39 with “Report on SpeechNow.org et al. v. FEC” by 

30

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 30 of 71
Jeffery Milyo, (“Milyo Report”) § 4.2, Milyo Dep. Exh. 1, FEC Exh. 157.) Paragraph 36 

of the new declaration contains completely new argument and paragraphs 37 through 39 

also contain substantive additions. Plaintiffs’ proposed findings of fact paragraphs 

99-101 rely directly on these new sections. Milyo’s application of the Equi-Marginal 

Principle was discussed at length during his deposition, and it appears that plaintiffs 

believe that it needs additional support. (See FEC’s Response to SN Facts 19-20; Milyo 

Dep. at 193-204, FEC Exh. 12.) Paragraph 44 of Milyo’s declaration, discussing both the 

“equi-marginal principle” and the concept of “revealed preference,” is also a new 

addition to his report. (Compare Milyo Decl. at ¶ 44 with Milyo Report § 4.3, FEC Exh. 

157.) When discussing the Equi-Marginal principle, plaintiffs should be required to rely 

on Milyo’s original report rather than his new declaration. 

 Milyo’s new declaration also omits several pieces of information required by the 

Federal Rules of Civil Procedure to appear in expert reports. For example, the 

declaration removes information about how much Milyo is being paid to be a witness in 

this case. Milyo’s declaration also removes information about export reports and 

testimony he has given in previous cases. Notably, in 2007, Milyo was hired by the 

Institute for Justice, counsel for plaintiffs in this case, to produce a different report 

concerning “a regulatory burden associated with campaign finance disclosure” in 

Sampson v. Coffman. (Milyo Dep. at 25, FEC Exh. 12; Milyo Report at 4, Milyo Dep. 

Exh. 1, FEC Exh. 157.) In addition to preparing an expert report in Sampson v. Coffman, 

Milyo was paid $30,000 by the Institute for Justice to write a report entitled “Measuring 

Campaign Finance Disclosure Costs” in 2007. (Milyo Report, Curriculum Vitae, FEC 

Exh. 157.) These are the kinds of matters that courts often examine when probing for 

31

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 31 of 71
bias. Milyo is also a “senior fellow” at, and recently received a stipend from, the Cato 

Institute, a think-tank at which Edward Crane, a plaintiff in this case, is the President. 

(Milyo Report, Curriculum Vitae, FEC Exh. 157; Milyo Dep. at 41, FEC Exh. 157.) 

Similarly, Milyo serves as an academic advisor for the Center for Competitive Politics, 

also counsel for plaintiffs in this case. (Milyo Report, Curriculum Vitae, FEC Exh. 157.) 

Given that Milyo removes information from his declaration related to his potential bias, 

the Court should enter a finding of fact detailing his relevant past work and associations. 

77. With the exception of Swift Vets and POWs for Truth, those 527s with the 

smallest average contributions (and most numerous contributors) were all either 

established prior to 2003, or are associated with a well-established organization. 

Milyo Decl. at ¶ 88. Newer groups such as America Coming Together, the Joint 

Victory Fund, the Media Fund, Progress for America, and Citizens for a Strong 

Senate all relied on relatively few large contributors. Id. 

FEC RESPONSE: As discussed in detail in the Commission’s brief, the Court 

should decline to enter any findings of fact concerning Milyo’s discussion of the “top 

non-party, federally focused 527 organization is 2004” because such groups are not 

representative of independent political committees generally, Milyo’s analysis is rife with 

misstatements and errors, and Milyo’s narrow data do not support his broad conclusions. 

(See FEC Mem. at 15-18.) 

78. America Coming Together received seed funding from four individuals, in 

the amount of $ 2.025 million, before there was a public announcement of its 

existence. It then received additional seed funding—including $ 2 million apiece 

from George Soros and Peter Lewis—that was widely reported in the media and 

served the purpose of quickly and effectively assuring political donors of the 

credibility and competence of this new organization, while at the same time 

signaling that among the many competing groups that would be working to 

support progressive ideas and candidates, this was one that political contributors 

should focus on. Milyo Decl. at ¶ 89. Swift Vets & POWs for Truth received 

nearly all of its seed funding from just three donors.1 

Id. at ¶ 90. 

32

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 32 of 71
FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact in that it relies on Milyo’s unsupported conjecture regarding the effect of large 

contributions. As discussed in the Commission’s brief, Milyo presents no evidence 

whatsoever regarding the role of “seed funding” in the formation of political 

organizations or what significance large contributions to an independent group have for 

potential donors. (See FEC Mem. at 15-16, 18.) 

79. Without large initial contributions, new political organizations, 

especially those that are issue-oriented and do not benefit from an 

association with some pre-existing trade association or labor union, are 

less effective participants in the public debate. Milyo Decl. at ¶ 92. Limits 

on contributions to political groups are likely to be particularly harmful to 

new and independent political organizations. Id. at ¶ 93. 

FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact in that it relies on Milyo’s unsupported conjecture regarding the effect of large 

contributions. As discussed in the Commission’s brief, Milyo presents no evidence 

regarding the role of “seed funding” in the formation of political organizations or what 

significance large contributions to an independent group have for potential donors. (See

FEC Mem. at 15-16.) Importantly, Milyo fails to consider or even attempt to account for 

the thousands of registered non-connected political action committees that operate 

successfully. (See FEC Facts ¶¶ 376-79, 383). 

80. Under contribution limits, unless a start-up group happens to be 

advocating or opposing a high-profile issue that is receiving tens of 

millions of dollars of free publicity via the national media, or the group 

has some special connection to a corporation or labor union, that group 

will not be able to raise enough money to have a meaningful impact on 

any election. Smith Decl. at ¶ 11. 

FEC RESPONSE: SpeechNow’s proposed facts claim that the Act’s contribution 

limits prevent it from raising the “seed money” necessary to “get started.” (See SN Facts 

33

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 33 of 71
¶¶ 83, 85, 87, 88.) SpeechNow nowhere specifies how much money is necessary to meet 

this elusive threshold, and the Commission is aware of no Court that has ever held a 

contribution limit unconstitutional simply because a would-be political actor claims it 

cannot raise enough “seed money,” or of any Court that has otherwise invoked the 

concept. (See FEC Mem. at III.C.) 

Nevertheless, SpeechNow appears indeed capable of raising whatever “seed 

money” it purports to need. SpeechNow has received a considerable amount of free 

publicity (FEC Facts at ¶¶ 403–08), and attracted a significant number of supporters and 

potential contributors (id. at ¶¶ 396–401), but has chosen not to accept any contributions 

during the pendency of this litigation, and declined any of the contributions offered to 

date (id. at ¶¶ 398-400.) (See also FEC Resp. Mem. at 15-16.) In any event, because the 

Constitution does not grant competing political actors any rights to equal publicity, equal 

resources, or equal political influence, this fact is irrelevant, and the Court should not 

enter it. (See id. at 14) 

81. Most of the big money raised via the Internet has been the direct result of 

a candidate and/or cause benefitting from a huge amount of free publicity. Smith 

Decl. at ¶ 42. This makes raising money via the Internet out of reach for the vast 

majority of non-wealthy candidates and start-up organizations. Id. 

FEC RESPONSE: See FEC Response to Plaintiffs’ Proposed Fact ¶ 80. 

82. Because the cost of acquiring new donors is often greater than the amount 

received from a new donor, small groups usually start at a loss and remain there 

until they go into debt and/or cease to exist. Smith Decl. at ¶ 10. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) In fact, Smith admits (1) that his report contains no data that supports this specific 

34

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 34 of 71
proposition (Smith Dep. at 83-84, FEC Exh. 15) and (2) that in his report he fails to 

identify a single group that went “out of business” due to contribution limits (id. at 123). 

 83. As a result, it is crucial for new organizations to have seed money that 

allows them to begin to advance their mission before a successful program of 

larger-scale fundraising can take place. Smith Decl. at ¶ 35. This is particularly 

true when an organization is working on an issue for which there is not an 

overwhelming and sustained amount of outrage throughout all quarters of the 

public and the media that generates a strong demand for the change favored by the 

organization. Id. at ¶ 11; Keating Decl. at ¶ 41; Crane Decl. at ¶ 10. 

FEC RESPONSE: See FEC Response to Plaintiffs’ Proposed Fact ¶¶ 80, 82. 

84. Right now, the issue of restrictions on free speech from campaign finance 

laws is not such an issue. Keating Decl. at ¶ 41. 

FEC RESPONSE: The Constitution does not grant competing political actors any 

rights to equal publicity, equal resources, or equal political influence. (See FEC Resp. 

Mem. at III.C.) Consequently, the publicity garnered by campaign finance issues in 

general, or by SpeechNow in particular, is irrelevant, and the Court should decline to 

enter this fact. 

85. SpeechNow.org will need to spend substantial funds on advertisements in 

order to raise the profile of this issue and thus add more donors, both large and 

small, to the cause. Keating Decl. at ¶ 41. However, without initial seed funding, 

SpeechNow.org lacks the funds necessary to convince donors that it is a viable 

going concern that has already produced advertisements consistent with its 

mission. Id.; Crane Decl. at ¶ 10. 

FEC RESPONSE: See FEC Response to Plaintiffs’ Proposed Fact ¶ 80. 

86. Convincing donors that SpeechNow.org is a viable going concern—which 

SpeechNow.org can only do by producing and running advertisements—is a 

prerequisite to the success of any larger-scale fundraising effort. Keating Decl. at 

¶ 41; Crane Decl. at ¶ 10; Smith Decl. at ¶ 22. 

FEC RESPONSE: See FEC Response to Plaintiffs’ Proposed Fact ¶ 80. 

87. Because of the contribution limits, SpeechNow.org and groups like it 

cannot receive the seed funding, in the form of large donations over the limits, 

35

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 35 of 71
that they need to get started and have an effective impact on elections. Keating 

Decl. at ¶ 41; Smith Decl. at ¶ 22. 

FEC RESPONSE: See FEC Response to Plaintiffs’ Proposed Fact ¶ 80. 

88. The longer SpeechNow.org has to go without seed funding, the more it 

will be delayed in producing and running its political advertisements and thus in 

undertaking larger-scale fundraising based on a reputation for taking actions that 

advance its mission in the real world. Keating Decl. at ¶ 43. 

FEC RESPONSE: See FEC Response to Plaintiffs’ Proposed Fact ¶ 80. 

89. Even assuming that SpeechNow.org could somehow raise enough 

money in increments of $5,000 or less per donor to pay for its advertisements, 

the contribution limits applicable to political committees would, by making it 

harder to gather funds, still greatly limit the number of times it could run those 

ads. Keating Decl. at ¶ 44. The limits would also restrict SpeechNow.org’s 

ability to run additional advertisements concerning other federal candidates in 

other races. Id. 

FEC RESPONSE: Evidence in the record suggests that more money can be 

raised by seeking out new donors. (See FEC Resp. Mem. at III.A.) SpeechNow has not 

even attempted any fundraising. The Court thus should not enter a finding of fact based 

on Mr. Keating’s speculative and conclusory testimony. 

90. Contribution limits not only deprive groups like SpeechNow.org of the 

large donations necessary to get off the ground, but they also deprive such groups 

of the signal that a large donation sends to potential donors: that the new 

organization has the potential to be effective. Milyo Decl. at ¶ 54. Large donations 

also resolve the uncertainty of potential donors who would otherwise either not 

contribute or would be forced to “play it safe” and donate to other, more 

established groups, even when those groups do not represent the donors’ most 

favored cause. Id. 

FEC RESPONSE: The Court should decline to enter Plaintiffs proposed finding 

of fact in that it relies on Milyo’s unsupported conjecture regarding the effect of large 

contributions. As discussed in the Commission’s brief, Milyo presents no evidence 

regarding the role of “seed funding” in the formation of political organizations or what 

significance large contributions to an independent group have for potential donors. (See

36

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 36 of 71
FEC Mem. at 18.) Specifically, Milyo presents no empirical nor anecdotal evidence of 

even a single donor being forced to “play it safe” or donate to “groups that do not 

represent the donors’ most favored cause.” (Milyo Decl. ¶ 54.) 

“C. Contribution Limits Make it Harder for the Individual Plaintiffs to Associate 

for the Purpose of Speaking Effectively.” 

91. The basic economic concepts of specialization and division of labor apply 

in the setting of groups that engage in any sort of advocacy, including 

independent express advocacy: some individuals have a comparative advantage 

in funding a cause, some in articulating a message for a cause, and some in 

developing a strategy for disseminating that message. For this reason, individuals 

who come together as political groups do so because such a voluntary association 

makes them more effective in their cause. Milyo Decl. at ¶ 50. 

FEC RESPONSE: The Plaintiffs’ proposed finding of fact is irrelevant because 

registering as a political committee would not prevent them from coming together to take 

advantage of any specialization or division of labor; the only constraint is on how much 

money any one individual can contribute to a political committee. (See FEC Mem. at 

19.) Additionally, Milyo’s claims about why individuals come together to form political 

groups are unsupported conjecture. (See Milyo Decl. ¶ 50.) Milyo has not conducted any 

investigations, nor does he cite any investigations concerning why individuals forms 

political groups or what makes a political group “effective.” Id. 

92. The individual plaintiffs wish to join together and associate with each 

other and with SpeechNow.org in order to take advantage of the specialization, 

division of labor, and economies of scale that association affords them. For 

example, David Keating possesses the knowledge and experience to produce and 

broadcast advertisements and to operate a group like SpeechNow.org, but, alone, 

he lacks the financial resources. Keating Decl. at ¶ 48. Ed Crane has a relatively 

large donation to offer SpeechNow.org, but he lacks the time to operate the group 

or to produce and broadcast ads. Crane Decl. at ¶ 4. Fred Young has the financial 

resources to fund some of SpeechNow.org’s advertisements, but he lacks the time, 

knowledge, and experience to produce ads or operate a group like 

SpeechNow.org. Young Decl. at ¶ 4. Brad Russo and Scott Burkhardt lack both 

the time and experience and the resources to fund or operate SpeechNow.org, but 

by donating to SpeechNow.org and associating with its supporters and members, 

37

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 37 of 71
they are able to amplify their voices beyond what they would be able to achieve 

on their own. Russo Decl. at ¶ 4; Burkhardt Decl. at ¶ 4. 

 

FEC RESPONSE: Plaintiffs are free to come together to take advantage of any 

specialization, economies of scale or advantageous division of labor in operating 

SpeechNow; they are merely limited in how much money they can each contribute to the 

group. (See FEC Resp. Mem. at § III.E). 

 93. However, contribution limits make it impossible for individuals to take 

full and effective advantage of the specialization, economies of scale, and division of 

labor that group association affords. The effect of a contribution limit on SpeechNow.org 

and groups like it is to punish individuals, such as the individual Plaintiffs in this case, 

who associate in groups for the purpose of advocating for or against political causes by 

limiting the funds they can devote to such causes. Milyo Decl. at ¶¶ 49-51. 

FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact because the contribution limits that apply to political committees in no way 

“punish” individuals who seek to associate for the purpose of making political speech. 

Plaintiffs are free to come together to take advantage of any specialization, economies of 

scale or advantageous division of labor in operating SpeechNow; they are merely limited 

in how much money they can contribute to the group. (See FEC Mem. at 19.) 

 94. This, in turn, will dissuade some individuals from participating in political 

groups at all. Instead, such individuals must “go it alone” or even abandon their desire for 

political expression, when in the absence of contribution limits they would have been 

more effective as part of a group. Milyo Decl. at ¶¶ 49-51.; Keating Decl. at ¶ 52; Young 

Decl. at ¶¶ 4, 6; Crane Decl. at ¶¶ 4, 6, 10; Russo Decl. at ¶¶ 4, 6; Burkhardt Decl. at ¶¶ 4, 6. 

FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact because, as discussed in the Commission’s brief , Milyo offers no evidence 

whatsoever that anyone has ever been dissuaded from participating in political groups or 

compelled to go it alone or abandon a desire for political expression because of 

contribution limits. (See Milyo Dep. at 240-241, 244-45, 246, FEC Exh. 12.) 

Additionally, none of the Plaintiffs claim that limiting their contribution to $5000 per 

38

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 38 of 71
year will have unduly burdensome implications for them. (See SN Facts ¶ 94; Keating 

Decl. ¶ 52; Young Decl. ¶¶ 4,6; Crane Decl. ¶¶ 4, 6, 10; Russo Decl. ¶¶ 4, 6; Burkhardt 

Decl.¶¶ 4,6.) 

 95. Contribution limits also inhibit the information that large contributions 

convey about which groups are more or less desirable from the donors’ standpoint. 

Milyo Decl. at ¶¶ 52-57. Economies of scale in political communication mean that one 

large group with a mission can be more effective than many small groups with the same 

mission. Potential donors know this and would prefer to focus their giving on one group, 

but they must determine which group is best. Id. at ¶ 55. A political patron’s large initial 

contribution to a group sends an unambiguous signal to other political contributors as to 

which group to focus their giving on. This facilitates the ability of individuals to 

associate more efficiently and to articulate their political opinion more effectively. Id. at ¶¶ 

53-56.

FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact because it is based solely on Milyo’s unsupported conjecture. He offers no 

evidence whatsoever to support his claim that “one large group with a mission can be 

more effective than many small groups with the same mission,” or that any potential 

political donors believe this to be the case. (See Milyo Decl. ¶¶ 52-57.) Indeed Milyo’s 

commentary is strictly theoretical; he presents no evidence, does no investigation, nor 

does he cite to any investigation of the role that “political patrons” play within political 

committees. Id. In his deposition, Milyo conceded that he did not present any empirical, 

analytical, or systematic evidence for his claims regarding the role or effect of large 

“political patrons.” He explained, “in terms of identifying the systematic treatment effect 

on prohibitions on contributions of a certain size on the formation of groups, I did not 

present that sort of systematic estimate of the treatment effect.” (Milyo Dep. at 256-257, 

FEC Exh. 12). He does not know how large contributions from “political patrons” 

actually affect political groups. Additionally, Milyo simply does not consider the 

thousands of independent PACs that do raise money and communicate effectively 

39

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 39 of 71
without “political patrons.” (See FEC Facts ¶¶ 376-79, 383). Finally, any proposed 

findings of fact regarding “political patrons” are irrelevant because there is no 

constitutional right to such “patronage.” 

 96. Limits on contributions to groups like SpeechNow.org prevent political 

patrons from either seeding new groups or helping to organize individuals into joining 

and supporting more effective political groups. Milyo Decl. at ¶ 57. 

FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact because, as above, Milyo presents no evidence, does no investigation, nor does he 

cite to any investigation of the role that “political patrons” play within political 

committees or what determines whether or not a political group is effective. (See Milyo 

Decl. ¶¶ 52-57.) Additionally, any proposed findings of fact regarding “political patrons” 

are irrelevant because there is no constitutional right to such “patronage.” 

 97. In sum, limits on contributions to political groups restrict the amount and 

effectiveness of political expression by these groups, as well as the amount and 

effectiveness of political expression by individuals that wish to contribute to such groups. 

Milyo Decl. at ¶ 58. 

FEC RESPONSE: The Court should decline to enter Plaintiffs’ conclusory 

proposed finding of fact because their contention is based solely on Milyo’s unsupported 

conjecture. (See SN Facts ¶¶ 91-97; Milyo Decl. ¶¶ 50-58.) Milyo presents no evidence 

or support for his contention that contribution limits reduce the effectiveness of political 

expression, or even what determines whether or not a political group is effective in the 

real world of national political discourse. Id. Additionally, neither Plaintiffs nor Milyo 

presents any evidence in this section that contribution limits actually reduce the “amount” 

of political expression that a group is able to make. Id. 

“D. Contribution Limits Restrict the Amount of Funds Available to Groups Like 

SpeechNow.org for Independent Expenditures.” 

40

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 40 of 71
98. Communicating a political message to a large group of voters is an expensive 

proposition that requires a significant amount of money for the message to be heard. 

Smith Decl. at ¶ 8; Keating Decl. at ¶¶ 22-24. 

FEC Response: The evidentiary support for this proposed fact consists of a 

conclusory, unsupported statement by SpeechNow’s expert Rodney Smith and David 

Keating’s notions of “ideal” advertising buys. Keating posits that an ideal advertising 

buy would garner at least 1,000 gross ratings points, enough to allow its “message to sink 

in.” Keating declares that in a competitive election environment, such as “in a statewide 

[Senate] race . . . it is important to reach as many people in the state as possible.” 

(Keating Decl. ¶ 23.) While it is often true that communicating to large groups of voters 

requires significant amounts of money -- with the Internet creating more exceptions than 

ever (c.f. FEC Resp. Mem. at III.B.) -- this proposed fact is premised on the notion that 

there is a threshold level of political influence that contribution limits must 

accommodate. But as the Commission has explained (See FEC Mem. at III.C), the 

Constitution does not grant competing political actors any rights to equal political 

influence and the Court should decline to enter this proposed fact. 

 99. As a result, any group that wants to speak out effectively will want to raise 

money in the most efficient way possible—that is, at the lowest cost per contributed 

dollar—in order to allow it to raise sufficient funds quickly enough to have an impact on 

the election. Smith Decl. at ¶ 26; Milyo Decl. at ¶ 37. Put another way, the more money 

that a group spends to raise its funds, the less money it will have to spend on its 

independent expenditures. Milyo Decl. at ¶¶ 37-39. 

FEC RESPONSE: Plaintiffs assert that “the more money that a group spends to 

raise its funds, the less money it will have to spend on its independent expenditures.” 

The only support for this assertion is several paragraphs of Milyo’s new declaration. (SN 

Facts ¶ 99; Milyo Decl. ¶¶ 37-39.) However, Plaintiffs’ statement is an inaccurate oversimplification of Milyo’s claims—regardless of their other flaws. Id. Milyo’s 

41

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 41 of 71
contentions speak to the point that if a group is compelled to raise money in an inefficient 

manner, it will not be able to raise the highest conceivable amount of funds. Id. This is 

not, however, what Plaintiffs’ proposed finding of fact states. Indeed, it is quite possible 

that the more money that a group spends on fundraising, the more contributions that it 

will gather, and thus, the more money it would have to spend on independent 

expenditures. 

 100. A number of basic economic principles support this conclusion. First, 

under the “equi-marginal principle,” a group will pursue contributions from that donor 

pool that involves the lower marginal cost of raising funds per donor dollar. Milyo Decl. 

at ¶ 37. Groups are limited in the amount of time, effort, and resources that they may 

devote to fundraising and are thus forced to make choices about how to allocate their 

scarce resources in order to maximize the amount of money that they have. Thus, if 

given the opportunity to pursue funds from large donors or small donors, a group seeking 

to maximize its funds available for independent expenditures will allocate its efforts to 

the group of donors that involve the lowest cost per donor dollar raised. Id. If the costs 

are higher for one group of donors—small donors, for example— the organization can 

still reallocate resources to raising money from the group of large donors in order to be 

able to raise enough funds to finance its independent expenditures. Id. at ¶ 38.

FEC RESPONSE: As discussed in detail in the Commission’s brief, the Court 

should decline to enter any of the Plaintiffs’ proposed findings of fact regarding Milyo’s 

application of the “equi-marginal principle” because his theoretical discussion is undercut 

by the factual history of “soft money” and political party fundraising. He does not 

consider any of the realities of political fundraising (including what counts as a “large” or 

“small” contribution, what the marginal costs of raising additional large and small 

contributions are, or the relative burdens of raising specific amounts of money for 

independent expenditures), and indeed, Milyo concedes that the effect of the “equimarginal principle” could be that SpeechNow raises a penny less under contribution 

limits than it would have in an “unconstrained” environment. (See FEC Mem. at 19-20.) 

 101. Under contribution limits, however, an organization is forced to raise funds 

from one group—small donors—because large donors are prohibited from contributing 

42

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 42 of 71
money to the group. Milyo Decl. at ¶ 39. According to the “law of increasing opportunity 

costs,” (also known as “the law of diminishing returns”) the cost of raising funds from two 

pools of donors—one of small donors and one of large donors—will increase with the 

amount of money already raised from either pool of donors. Id. at ¶ 37. Put another way, by 

restricting the donor pool, contribution limits make donor dollars more scarce, requiring 

groups trying to raise funds to pursue greater numbers of donors—at a greater marginal cost 

per dollar raised—for the money they need to fund their independent expenditures. Id. at ¶ 

39. Thus, the equi-marginal principle implies that any constraint on fundraising will lower a 

group’s total funds received, and therefore also lower its ability to make independent 

expenditures. Id. 

FEC RESPONSE: As discussed in detail in the Commission’s brief, the Court 

should decline to enter any of the Plaintiffs’ proposed findings of fact regarding Milyo’s 

application of the “equi-marginal principle” because his theoretical discussion is undercut 

by the factual history of “soft money” and political party fundraising. He does not 

consider any of the realities of political fundraising, and indeed, Milyo concedes that the 

effect of the “equi-marginal principle” could be that SpeechNow raises a penny less 

under contribution limits that it would have in an “unconstrained” environment. (See

FEC Mem. at 19-20.) 

 102. Second, the concept of “Revealed Preference” also implies that any 

constraint on fundraising, such as contribution limits, will restrict a group’s ability to 

make independent expenditures. Milyo Decl. at ¶ 40. In an unconstrained environment, a 

group’s mix of donations from small and large contributors represents the group’s 

maximal ability to raise funds for independent expenditures. Id. at ¶ 41. In other words, 

the mix reveals the group’s best effort at maximizing the funds it has available for 

independent expenditures. Id. Any contribution limit will cause a deviation from the mix 

of donations that would have occurred in the unconstrained environment, and will yield a 

less preferred outcome for the group and its ability to make independent expenditures. Id. 

at ¶ 43. 

FEC RESPONSE: As in the case of Milyo’s discussion of the “equi-marginal” 

concept, and as discussed in the Commission’s brief, the Court should decline to enter 

any of the Plaintiffs’ proposed findings of fact regarding Milyo’s application of the 

“revealed preference” principle because his theoretical discussion is undercut by the 

factual history of “soft money” and political party fundraising. He does not consider any 

43

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 43 of 71
of the realities of political fundraising (such as whether or not a group is able to 

determine what kinds of contributions it should pursue in order to maximize its 

fundraising, the comparative burdens of seeking large or small contributions, or the 

extent to which external circumstances could affect how a group raises political 

contributions), and he makes no claims about the actual extent to which contribution 

limits would affect a group’s fundraising in the real world. (See FEC Mem. at 20-22.) 

 103. In sum, any contribution limit that generates a deviation from the pattern 

of contributions that would be observed in an unconstrained environment must be an 

actual impediment to a group’s ability to raise and spend funds, and so must yield a less 

preferred outcome for the group—that is, lower independent expenditures. Milyo Decl. 

at ¶ 43. Consequently, if evidence shows that political groups raise money from large 

contributors when permitted to do so, “revealed preference” would indicate that 

contribution limits do in fact harm the groups and result in less spending on independent 

expenditures. Id. 

FEC RESPONSE: The Court should decline to enter any of the Plaintiffs’ 

proposed findings of fact regarding Milyo’s application of the “revealed preference” 

principle because his theoretical discussion is undercut by the factual history of “soft 

money” and political party fundraising, he does not consider any of the realities of 

political fundraising, and he makes no claims about the actual extent to which 

contribution limits would affect a group’s fundraising in the real world. (See FEC Mem. 

at 20-22.) 

 104. An analysis of data from the 2004 election cycle demonstrates that, in fact, 

groups do reveal a preference for larger over smaller contributions. Milyo Decl. at ¶ 76. 

 

FEC RESPONSE: The Court should decline to enter any of plaintiffs’ proposed 

findings of fact based on Milyo’s application of the “revealed preference” principle 

because he mistakenly claims that the fundraising habits of unregistered 527 groups in 

2004 are representative of the preferences of all independent political groups. As 

44

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 44 of 71
discussed in the Commission’s brief, Milyo’s focus on the 2004 527 groups is not 

applicable to all political committees because (i) it ignores the many unconnected 

committees that chose to register with the FEC and collect contributions within the limits, 

(ii) the amount of large donations that many of the 527s received is skewed because 

contributions within the limits were more likely to be given to their associated PACs or 

other political entities, and, (iii) as Milyo concedes, the 527s he discusses may not even 

be representative of other 527s. (See FEC Mem. at 17, 20-22.) 

105. Plaintiffs’ expert, Dr. Jeffrey Milyo, compared the pattern of individual 

contributions in the 2004 election cycle to the top (in terms of total receipts) non-party, 

federally focused 527 organizations and to their associated federal PACs. Milyo Decl. at 

¶¶ 76-79. At the time, those 527 organizations were not subject to contribution limits, 

while the PACs were. As a result, the comparison demonstrates the impact of 

contribution limits on PACs as opposed to 527s. Id. at ¶¶ 75, 79. 

FEC RESPONSE: As discussed in the Commission’s brief, Milyo’s focus on the 

2004 527 groups is not applicable to all political committees because (i) it ignores the 

many nonconnected committees that chose to register with the FEC and collect 

contributions within the limits, (ii) the amount of large donations that many of the 527s 

received is skewed because contributions within the limits were more likely to be given 

to their associated PACs or other groups, and, (iii) as Milyo concedes, the 527s he 

discusses may not even be representative of other 527s. (See FEC Mem. at 15-17.) 

Furthermore, as Milyo notes in his declaration, “only contributions totaling more than 

$200 in a given year must be itemized and reported to the IRS.” (Milyo Decl. ¶ 74.) 

Accordingly, Milyo’s data regarding the fundraising of 527s in 2004 may ignore 

numerous contributions less than $5,000. 

 106. Half of the 527 groups received average contributions that are well above 

the $5,000 limit for PACs, including several groups with average contributions of 

$100,000 to more than $500,000. Milyo Decl. at ¶ 76. 

45

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 45 of 71
FEC RESPONSE: (See Resp. to SN Fact ¶ 105.) 

 107. For several of the groups, contributions above the $5,000 limit accounted 

for the vast majority of funds they raised. Milyo Decl. at ¶ 80. For example, large 

individual contributions (those over $5,000) accounted for 98.3% of the funds from 

individual contributors to America Coming Together, 79.7% of the contributions to 

MoveOn.org, 88.6% of contributions to the New Democrat Network, and 76.5% of 

contributions to the Club for Growth. Id. In addition, between 48% and 82% of the 

individual contributions to these groups were in amounts of $100,000 or more. Id. Thus, 

most of the funds raised by these organizations were in amounts that would have 

exceeded the annual limit on individual donor contributions to political committees, as 

well as the biennial aggregate limit on individual donors. Id. 

FEC RESPONSE: (See Resp. to SN Fact ¶ 105.) 

 108. Five hundred and fifty-five persons made contributions of $5,000 to the 

PACs associated with these groups. Milyo Decl. at ¶ 82. Given the distribution of 

contributions to the associated 527 organizations—that is, many people contributed more 

than $5,000 to 527s—it is reasonable to assume that many of the donors to PACs would 

have given larger amounts to the PACs had they been allowed to do so. Id. 

FEC RESPONSE: (See Resp. to SN Fact ¶ 105.) 

109. For example, had the top 271 maximum contributions to the America 

Coming Together PAC exhibited a similar distribution across contribution amounts as did 

the large contributions to the America Coming Together 527, then the PAC would have 

raised over $22 million more dollars than it did in 2003-2004 (or about a 66% increase). 

Milyo Decl. at ¶ 79. 

FEC RESPONSE: The Court should decline to enter plaintiff’s proposed fact 

because donors to a PAC like ACT’s would be extremely unlikely to replicate the amount 

of money raised for ACT itself if they were free to give as much as they wanted to ACT 

PAC. Donors are usually directed to first give to a PAC, and then, if they are interested 

in providing additional funds, to give to the connected 527. (See Wilcox Rept. at 6, FEC 

Exh. 1; Rozen Decl. ¶ 11, FEC Exh. 3; McConnell v. FEC, 540 U.S. 93, 125 n.15.) 

Contributors to ACT PAC thus would not contribute in the same ratio to ACT PAC if its 

46

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 46 of 71
limits were lifted: if contributors, wanted to give more, they likely would already have 

done so to the connected 527. 

 110. For the top 527 political organizations without PACs (Joint Victory 

Campaign 2004, Media Fund, Progress for America, Swift Vets & POW for Truth, 

College Republican National Committee, Citizens for a Strong Senate), four of these six 

groups raised more than 99% of their funds from individual contributors in amounts 

greater than $5,000; in fact, all but one of these groups raised most of its funds from 

individual contributors in amounts of $100,000 or more. Milyo Decl. at ¶ 83. 

FEC RESPONSE: (See FEC Resp. to SN Fact ¶ 105.) 

 111. A random sample of 527 organizations outside the top ten 527s 

(Marijuana Policy Project, International Brotherhood of Electrical Workers, League 

of Conservation Voters, Young Democrats, Ocean Champions Voter Education 

Fund, Justice for America) shows that, in most cases, 80-99% of the individual 

contributions to these groups were in amounts greater than $5,000, and a majority of 

these funds were contributed in amounts of $100,000 or more. Milyo Decl. at ¶ 84. 

FEC RESPONSE: A random sample of 527 organizations outside the top ten 

527s (Marijuana Policy Project, International Brotherhood of Electrical Workers, 

League of Conservation Voters, Young Democrats, Ocean Champions Voter 

Education Fund, Justice for America) shows that, in most cases, 80-99% of the 

individual contributions to these groups were in amounts greater than $5,000, and a 

majority of these funds were contributed in amounts of $100,000 or more. Milyo 

Decl. at ¶ 84. 

 

FEC RESPONSE: The Court should decline to enter SpeechNow’s proposed 

finding of fact because Milyo’s further sample of 527 groups is not “random” or 

representative of political committees. Accordingly, his analysis does not elucidate the 

nature of independent political groups’ fundraising practices. 

Although Milyo concedes in his declaration that the top 527 groups from 2004 

may be “unrepresentative,” he attempts to shore up his claims by examining “six more 

527 political organizations [selected] in a manner that generates an essentially random 

sample.” (Milyo Decl. ¶ 84.) At his deposition, Milyo explained how he decided to 

examine these particular six groups, as follows: 

47

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 47 of 71
 [T]he way in which data on disclosure reports from the 527 organizations 

is organized by the Center for Public Integrity is that there’s a set of 

alphabetical links, And one can click on an alphabetical letter, which well 

then bring up groups which are 527 organizations. And so what I did is 

selected ... letters corresponding to my last name and first initial. You’ll 

see it’s M-I-L-Y-O-J. Originally, I was only going to do M-I-L-Y-O, but 

it left an ugly hole in the table ... [a]nd that what I did, once I selected that 

letter, was I looked for the first example of a 527 group which had some 

nontrivial individual contributions. 

(See Milyo Dep. at 318.) When questioned about the validity of his methodology, 

whether he did any “statistical analysis of any kind to determine whether the information 

about these six groups would be statistically representative or relevant about the whole 

realm of 527s,” Milyo conceded that he “did not” and added that “Here’s some other 

groups. Here’s the method by which they were selected, and I’m not really representing 

more than that about these groups.” (Milyo Dep. at 319-320.) Further admitting that he 

made no claim about whether or not these six groups were a representative sample, Milyo 

concluded that “if you don’t like it, you can feel free to throw out that.” (Milyo Dep. at 

320.) 

 Milyo’s discussion of these six additional groups purported to address a major 

concern regarding his analysis of 527s generally, namely, that they were 

“unrepresentative.” (Milyo Decl. ¶ 84.) However, Milyo’s attempt to bolster his 

conclusions fails for the same reasons and renders his analysis unreliable. Accordingly, 

all of SpeechNow’s proposed findings of fact relying on Milyo’s analysis of 527 

fundraising in 2004 should be discounted. (See SN Facts ¶¶ 104-112). 

 112. In sum, data on the size distribution of contributions to prominent 527 

organizations and PACs confirm that limits on contributions to political groups reduce 

the funds available to those groups and impose significant burdens on their ability to 

speak effectively. Milyo Decl. at ¶¶ 83, 85, 86. 

48

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 48 of 71
FEC RESPONSE: For all of the reasons stated above, the Court should decline to 

enter the plaintiffs’ conclusory proposed facts regarding the alleged burden of 

contribution limits based on the past fundraising practices of 527 groups. The 2004 527 

groups are not representative of independent political groups generally; Milyo’s analysis 

of the 527 groups is rife with errors, sloppy analysis, and mischaracterization; and 

Milyo’s theoretical discussion of economic “principle” does not contain any relevant 

factual information about how fundraising works for actual political groups. (See FEC 

Mem. at 15-22.) 

113. According to the California Fair Political Practices Commission, “If the 

top 25 independent expenditure committees in California had to adhere to the same 

contribution committee limits as candidate controlled committees, there would have been 

a reduction of $61,705,519 in special interest money from 2001 through 2006.” Simpson 

Decl. Ex. 18, Independent Expenditures: The Giant Gorilla in Campaign Finance, a 

report of the California Fair Political Practices Commission, dated June 2008 at 4; 

Simpson Decl. Ex. 19, Excerpts from the Deposition Transcript of Susan Swatt, taken 

October 1, 2008 at 41:23-42:20; Simpson Decl. Ex. 20, Excerpts from the Deposition 

Transcript of Ross Johnson, taken October 1, 2008 at 59:760:5, 71:22-73:18 (“If at some 

time, hypothetically in the past or hypothetically in the future, a limit had been placed on 

the size of their independent expenditures—I’m sorry, on the contributions that they 

could receive—these groups at least would not have been able to spend the kinds of 

money that they did.”); Milyo Decl. at ¶ 71. 

 

 FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact because it mischaracterizes the California Fair Political Practices Commission’s 

(“FPPC”) report, Independent Expenditures: The Giant Gorilla in Campaign Finance, 

and the deposition testimony of the FPPC Chairman, Ross Johnson. The report does 

contain the sentence quoted by the plaintiffs, but the import is that many millions of 

dollars were given to independent expenditure committees in amounts far greater than the 

current contribution limits to candidates, not that independent expenditure committees 

would necessarily raise tens of millions of dollars less if forced to seek money under 

49

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 49 of 71
contribution limits themselves. The following exchange from Chairman Johnson’s 

deposition makes this clear: 

 Q. Correct me if I’m misstating your prior testimony, but you 

were saying that if we limited the amount of money that an 

individual could give to independent expenditure committees, that 

that would reduce the total amount of independent expenditures in 

California. 

 A. No, I don’t think I said that. I think I said – if I did, then 

that was not what I intended. What I intended to say was that I 

think an imposition of a limit on the amount a person could 

contribute to an independent expenditure committee would be a 

significant step in the right direction. And I believe that the sum of 

these enormous independent expenditures from a handful of large 

special interest contributors would be impacted by that, and so it 

would be a positive step. 

 If a contribution limit were in place in terms of what you 

could contribute to an independent expenditure committee ... 

nothing to keep you from having hundreds of thousands of people. 

 

(See Johnson Dep. at 61-62.) The total amount of money that independent groups would 

not necessarily decrease because they could still seek contributions from “hundreds of 

thousands of people.” When asked directly about the quoted passage from the report and 

whether “there really would have been $61,705,919 less money spent in the form of 

independent expenditures from 2001 and 2006,” Chairman Johnson responded as 

follows: 

A. There’s no way that one could know what would have 

happened.What one can know with absolute certainty is that 

$61,705,919 was spent above what these contributors could have 

given directly to the candidates they supported. That is a fact. 

Now, if – 

Q. Sir – 

A. If contribution limits had been in place in terms of what 

could be given to an independent expenditure committee, other 

factors might have come into play. So obviously, I can’t say 

50

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 50 of 71
absolutely no, but that is an undeniable fact. 

(See Johnson Dep. at 66-67.) Despite Chairman Johnson’s clear answer, counsel for 

Plaintiffs continued to ask essentially the same question again and again over numerous 

objections from the Commission. (See Johnson Dep. at 67-72.) Repeatedly, Chairman 

Johnson made the point that trying to say what independent expenditure committees 

would do under contribution limits would be “speculative,” that he didn’t “have a crystal 

ball” and that “in [his] experience, predictions are very difficult, particularly when they 

talk about the future.” (See Johnson Dep. at 67, 69, 70.) The statement quoted by 

SpeechNow in their proposed finding of fact came after the following exchange: 

Q. If they had to adhere to the candidate contribution limits 

going forward, isn’t it true that they would not be able to spend as 

much money in independent expenditures as they were able to do 

from 2001 through 2006? 

Mr. Wilson: Objection. Asked and answered and answered and 

calls for speculation. 

Mr. Gall: And I will move on once I get a good answer. Any 

answer. 

 Mr. Wilson: He’s answered your question a number of times, sir. 

 Mr. Gall: He’s not answered this question. 

The Witness: I think I have. Repeatedly. You know with all 

respect, sir, I think I’ve answered the question repeatedly. 

(See Johnson Dep. at 71-72.) Accordingly, the Commission objects to the statement 

being entered as a finding of fact. Plaintiffs should not be permitted to harass a witness 

until they get an answer that they like. The passage quoted by SpeechNow simply does 

not mean that groups will raise less money if compelled to operate under contribution 

limits. 

51

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 51 of 71
114. State legislative candidates spend significantly less on their campaigns 

in states with contribution limits. Milyo Decl. at ¶ 65. 

FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact because it relies on Milyo’s mischaracterization of an academic source. Milyo 

asserts that “Recent empirical work by Stratmann (2006) confirms that state legislative 

candidates spend significantly less on their campaigns in states with contribution limits, 

all else constant.” (Milyo Decl. ¶ 65.) However, the paper (Thomas Stratmann, 

Contribution limits and the effectiveness of campaign spending, Public Choice (2006) 

129: 461-474, FEC Exh. 152) is really about a different issue. As Stratmann explains, 

“this study tests whether campaign expenditures by state House candidates are more 

productive when candidates are subject to contribution limits. The results show that 

campaign expenditures by incumbents and challengers are more productive when 

candidates run in states with campaign contribution limits, as opposed to states without 

limits. In states with contribution limits, incumbent spending and challenger spending 

are equally productive, and spending by both candidates is quantitatively important in 

increasing their vote shares.” Id. Furthermore, it is important to note that the study 

concerns candidate spending and direct contribution limits; it doesn’t have anything to do 

with independent expenditures or groups like SpeechNow. 

“V. SpeechNow.org Poses No Threat of Corruption” 

115. SpeechNow.org’s mission and purpose is to expressly advocate the 

election or defeat of candidates based on those candidates’ positions on issues affecting 

free speech; its mission and purpose is not to allow individuals to gain access to or obtain 

gratitude of any candidates. Keating Decl. at ¶¶ 2-3, 10; Bylaws, Art. II. 

FEC RESPONSE: Whether or not SpeechNow’s “mission and purpose” is to 

“allow individuals to gain access to or gratitude of any candidates” is irrelevant to the 

52

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 52 of 71
determination of the constitutionality of the statutory provisions challenged by plaintiffs. 

The Supreme Court has already recognized in Buckley v. Valeo, 424 U.S. 1 (1976), when 

it upheld the Act’s individual contribution limit to candidates and candidate committees, 

that it is the potential for corruption that is relevant, not the motives of potential 

contributors. (See FEC Resp. Mem. § IV.) 

116. The individual plaintiffs wish to donate money to SpeechNow.org to 

support its speech-related mission, not to use their contributions to obtain access to or 

gratitude of candidates or officeholders. Keating Decl. at ¶ 52; Young Decl. at ¶ 9; Crane 

Decl. at ¶ 9; Russo Decl. at ¶ 7; Burkhardt Decl. at ¶ 7. 

FEC RESPONSE: (See Resp. to SN ¶ 115.) 

117. The individual plaintiffs either do not care whether any candidates or 

officeholders know about contributions they intend to make to SpeechNow.org or they 

would prefer that candidates not know about such contributions. Keating Decl. at ¶ 52; 

Young Decl. at ¶ 9; Crane Decl. at ¶ 9; Russo Decl. at ¶ 7; Burkhardt Decl. at ¶ 7. 

FEC RESPONSE: SpeechNow.org’s bylaws would not prevent SpeechNow.org 

and its members, officers, agents, employees and donors from making candidates aware 

of their contributions to SpeechNow and expenditures by it. Not all candidates are aware 

of the identities of those who contribute funds to organizations to finance independent 

expenditures that support the candidate or oppose the candidate’s opponents, but 

candidates generally are aware of the identities of the donors. Candidates likely are more 

aware of the identity of donors who give donations in excess of the Act’s contribution 

limits than the identity of donors who give less than the contribution limits. 

118. Based on the research by Clyde Wilcox, the FEC’s expert in this case, 

most individuals who donate money to political candidates and committees do so for 

ideological reasons. Simpson Decl. Exs. 21, Excerpts from the Deposition Transcript of 

Clyde Wilcox, taken September 22, 2008 at 145:6-17, 157:10-14, 219:10-13, 226, 229, 

and 22, Excerpts from Wilcox et al., THE FINANCIERS OF CONGRESSIONAL ELECTIONS: 

INVESTORS, IDEOLOGUES AND INTIMATES (2003) at 45, 48-49, 67. 

53

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 53 of 71
FEC RESPONSE: In support of this proposed fact, SpeechNow cites to 

fragments of Professor Wilcox’s past research and his deposition testimony. But 

SpeechNow ignores parts of Wilcox’s book and testimony which suggest that 

“investors,” donors who contribute seeking tangible personal gain, account for a 

significant percentage of those who make contributions. His research showed that “a 

combined 60 percent admitted that it was always or sometimes important whether a 

candidate was friendly to their industry, and more than half said that it was at least 

sometimes important to give so that their business was treated fairly.” (Peter L. Francia, 

et al., The Financiers of Congressional Elections: Investors, Ideologues and Intimates 45 

(2003)). 

119. Individuals are legally able to make unlimited independent expenditures as 

long as they are not coordinated with candidates or political party committees. Thus, for 

instance, the FEC admits that Fred Young could spend his own money to produce and 

broadcast the advertisements that SpeechNow.org wants to run as long as he follows the 

FEC’s rules concerning coordination. FEC’s Mem. in Opp’n to Pls.’ Mot. Prelim. Inj. 34 

(Mar. 5, 2008, Docket No. 13) (“Thus Mr. Young, who allegedly is willing to contribute 

$110,000, could finance these or similar advertisements himself.”). 

FEC RESPONSE: No additional specific response. 

120. According to the FEC, Fred Young could hire consultants to produce and 

broadcast advertisements like those SpeechNow.org wants to run without having to 

register as a political committee and be subject to contribution limits. Simpson Decl. Ex. 

4, Excerpts from the Deposition Transcript of Fred M. Young, Jr., taken October 3, 2008 

at 92:11-93:4. However, Fred Young would like to associate with SpeechNow.org and 

its supporters for that purpose. Id. (“Q: Could you hire someone with the time and 

expertise? THE WITNESS: Well, I’m hoping that I can quote/unquote hire 

SpeechNow.org to do that sort of thing.”). 

54

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 54 of 71
FEC RESPONSE: No additional specific response. 

121. Individuals may make independent expenditures in aggregate amounts of 

greater than $1,000 and may coordinate their efforts with other individuals who make 

independent expenditures in aggregate amounts of greater than $1,000, without having to 

register as a political committee as long as they do not have a “major purpose” of 

nominating or electing a candidate for office. Simpson Decl. Ex. 23, Excerpts from FEC 

Responses to Plaintiffs’ Second Set of Discovery Requests, dated September 25, 2008 

(FEC Response to Request for Admission No. 24). 

FEC RESPONSE: No additional specific response. 

122. Whatever concerns about corruption may be raised by a group’s 

independent expenditures would also be raised by an individual’s independent 

expenditures. Simpson Decl. Exs. 23 (FEC Response to Request for Admission No. 26) 

and 21 (Wilcox Deposition Excerpts) at 178:7-179:2; see also Milyo Decl. at ¶¶ 26-28. 

FEC RESPONSE: Irrelevant. The Supreme Court analyzes expenditure limits, 

such as a cap on the amount of money an individual could spend on an independent 

expenditure, differently from contribution limits. See Buckley v. Valeo, 424 U.S. 1, 20-21 

(1976). An expenditure cap is not at issue in this case. 

In addition, one of the cited sources does not support plaintiffs’ proposed fact. 

The Commission actually stated: 

[I]independent expenditures by individuals raise many of the same 

concerns about corruption as individual expenditures by groups, but DENY that 

independent expenditures by groups raise the exact same concerns. For example, 

independent expenditures by individuals do not raise the concern regarding undue 

access or influence over officeholders to the same extent as independent 

expenditures by groups. 

Simpson Decl. Exs. 23 (FEC Response to Request for Admission No. 26.) Similarly, in 

the sections of Milyo’s deposition cited by plaintiffs, he does not discuss what risks of 

corruption arise from an individual making independent expenditures. 

123. If SpeechNow.org’s bylaws are followed by SpeechNow.org and its 

members, officers, agents, employees and donors, SpeechNow.org will not make 

55

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 55 of 71
coordinated communications. Simpson Decl. Ex. 23 (FEC Response to Request for 

Admission No. 32). 

FEC RESPONSE: As the Commission explained, “SpeechNow.org’s bylaws 

would not prevent SpeechNow.org and its members, officers, agents, employees and 

donors from making candidates aware of their expenditures. Id.” 

124. The FEC effectively utilizes its rules against coordination, 11 C.F.R. 

§ 109.21, to handle allegations of coordination. Simpson Decl. Ex. 23 (FEC Response to 

Request for Admission No. 31). 

FEC RESPONSE: Plaintiffs’ proposed fact is partially unsupported. The 

Commission is an agency of limited jurisdiction. The Commission responded to 

plaintiffs’ request for admission as follows: 

The Commission effectively utilizes its rules to handle 

coordination allegations when complaints are filed with the Commission 

or when information regarding coordination comes to the Commission’s 

attention “on the basis of information ascertained in the ordinary course of 

carrying out its supervisory responsibilities” pursuant to 2 U.S.C. 

§ 437g(a)(1) and (2). 

(Simpson Decl. Exh. 23 (FEC Response to Request for Admission No. 31).) The 

Commission’s response did not address other allegations of coordination. 

125. It is a well-established result in game theory and human subject 

experiments that collusive behavior is, in general, less likely to occur when the 

number of persons involved in the potentially-collusive arrangement increases. 

Milyo Decl. at ¶ 26. 

FEC RESPONSE: The Court should decline to enter any of Plaintiffs’ proposed 

findings of facts concerning Milyo’s discussion of “game theory” because Milyo’s claims 

are unsupported and irrelevant. First, Milyo claims that collusive behavior is generally 

less likely to occur when the number of persons involved in the potentially-collusive 

arrangement increases. His support for this claim is a 1980 literature review by Robyn 

Dawes entitled Social Dilemmas. The claim is unsupported, however, because a 

56

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 56 of 71
potentially cooperative relationship between the members of or donors to SpeechNow 

and an office-holder do not appear to fit the pattern of a social dilemma. According to 

Dawes, “Social dilemmas are characterized by two properties: (a) the social payoff to 

each individual for defecting behavior is higher than the payoff for cooperative behavior, 

regardless of what the other society members do, yet (b) all individuals in the society 

receive a lower payoff if all defect than if you all cooperate.” (Robyn Dawes, Social 

Dilemmas, Ann. Rev. Psychology, Volume 31:169-93 (1980), FEC Exh. 154.) After 

repeated questioning, Milyo was unable to explain how collusive behavior between an 

officeholder and SpeechNow would fit within this system of payoffs, conceded that he 

“did not endeavor to model the activities of SpeechNow,” and furthermore, stated that he 

was not aware of any modeling that has been done about independent expenditures and 

implicit relationships with officeholders.” (See Milyo Dep. at 159-170, 167, and 171.) 

Milyo’s broad conjecture, parroted by the Plaintiffs, does not consider any of the relevant 

characteristics of a group like SpeechNow and is thus inapplicable. 

126. Thus, while research has found that implicit cooperation can occur even 

without explicit contracting mechanisms in relationships involving two people, where the 

number of people involved in the relationship is increased, implicit cooperation becomes 

much less feasible. The reason is that in group settings, it is harder to know how much 

control or influence any one individual or sub-group of individuals has over the group as 

a whole. Milyo Decl. at ¶ 28. Further, any political favors directed by an office holder to 

some members of the group may not be equally valued by all members of the group, or 

even recognized by all members of the group. Id. In other words, there is less reason to 

be concerned that a political candidate and a group will establish and maintain a collusive 

relationship than there is for a political candidate and a single person. Id. at ¶ 26. 

FEC RESPONSE: In addition to the reasons stated above (Resp to SN Facts ¶ 

125), the Court should decline to enter Plaintiffs’ proposed findings of fact based on 

Milyo’s discussion of game theory because he misunderstands how corruption (or its 

appearance) can occur between an officeholder and a contributor to a group that makes 

57

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 57 of 71
independent expenditures. There does not need to be any cooperation among the group. 

If a group is spending its resources to support a candidate (or defeat her opponent), an 

individual could use a large contribution to the group to seek a favor from the candidate 

whether all of the other members of the group were cooperating or not. Similarly, where 

a single individual functionally controls all of the activities of a group, like in the case of 

SpeechNow, the cooperation and shared “values” of other donors or contributors, is 

irrelevant. Plaintiffs’ proposed finding of fact should not be entered because it wrongly 

assumes that there needs to be coordination between a candidate and every member or 

donor to a group working together for the candidate to be corrupted or appear to be 

corrupted by an independent expenditure. 

127. SpeechNow.org will spend contributions it receives according to the sole 

discretion of the association. Keating Decl. at ¶¶ 25, 36; Bylaws, Art. VI § 11. 

Accordingly, individual donors will not be able to direct their contributions to particular 

advertisements or particular candidates’ races. Keating Decl. at ¶ 36. 

FEC RESPONSE: No additional specific response. 

128. Political candidates do not necessarily approve of independent 

expenditures made in support of their campaigns or in opposition to their opponent’s 

campaigns. For instance, both presidential candidates in this year’s election, as well as 

other candidates, have asked donors to their campaigns not to contribute to independent 

groups. Simpson Decl. Exs. 14 (FEC Response to Request for Admission No. 14), 23 

(FEC Responses to Requests for Admission Nos. 28-30), and 24, News Articles 

concerning Candidate Disapproval of Independent Expenditures. 

FEC RESPONSE: Campaigns may at various times have publicly discouraged 

donors from contributing to independent groups, including the statements in the 

referenced article. However, campaigns have not consistently discouraged such activity. 

See, e.g., Marc Ambinder, Quietly Obama Campaign Calls In the Cavalry, 

TheAtlantic.com, Sept. 9, 2008; Jim Rutenberg and Michael Luo, Interest Groups Step 

Up Efforts In A Tight Race, New York Times, Sept. 16, 2008. In fact, in virtually every 

58

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 58 of 71
campaign, independent groups frequently run negative ads and allow candidate 

campaigns to disavow them and say “with a wink” that they were unaware of the ads and 

condemn them. Wilcox Rept. at 15. Candidate disavowals are consistent with this 

phenomenon. 

129. There is no scientific empirical evidence to support the contention that 

limits on contributions to groups like SpeechNow.org have any impact whatsoever on 

either corruption or the appearance of corruption. Milyo Decl. at ¶ 62. 

FEC RESPONSE: Professor Milyo is also, however, not aware of a study, one 

way or the other, that even “attempts to explore the relationship between independent 

expenditures and public policy, let alone any undue or corrupt influence on policy.” 

(Milyo Dep. at 274.) Second, with regard to the appearance of corruption, Professor 

Milyo published a study which found evidence that “public disclosure and restrictions on 

contributions from organizations improve perceived political efficacy.” (Milyo Dep. at 

283; Milyo Dep. Ex. 10; David M. Primo and Jeffery Milyo, Campaign Finance Laws 

and Political Efficacy: Evidence from the States, Elec. L. J. Vol. 5:1 (2006).) Large 

contributions to groups making independent expenditures can be conceived of as indirect 

contributions to candidates (FEC Facts ¶ 165), and plaintiffs’ own expert has found that 

contribution limitations improve individuals’ views of government. Finally, 

SpeechNow’s proposed finding of fact regarding the lack of evidence of corruption and 

the appearance of corruption should be disregarded as it is in direct conflict with such 

evidence offered by the Commission including academic studies, expert analysis, sworn 

testimony by political officeholders and insiders, and numerous actual examples of such 

corruption taking place. (See FEC Facts ¶¶ 132-344.) 

130. In the last six election cycles, numerous groups and individuals have 

reported making independent expenditures but no contributions or coordinated 

59

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 59 of 71
expenditures. Simpson Decl. Exs. 14 (FEC Response to Interrogatory No. 3), 23 (FEC 

Response to Request for Admission 33), and 33, Attachment I03 to FEC Responses to 

Plaintiffs’ First Set of Discovery Requests, dated August 25, 2008. In non-presidential 

elections during that time period, the number of groups and individuals reporting 

independent expenditures but no contributions or coordinated expenditures grew from 65 

(1997-1998 election cycle) to 93 (2001-2002 election cycle) to 128 (2005-2006 election 

cycle). Simpson Decl. Ex. 33. In presidential elections the number grew from 126 in the 

1999-2000 election cycle to 169 in the 2003-2004 election cycle. Id. Through August 

22, 2008 of the 2007-2008 election cycle, 167 groups or individuals had reported making 

independent expenditures but no contributions or coordinated expenditures. Simpson 

Decl. Exs. 14 and 33. 

FEC RESPONSE: No specific additional response. 

“VI. The Administrative, Organizational, and Continuous Reporting 

Requirements for Political Committees.”

131. A political committee must organize, register, and report according to 

FECA and BCRA and applicable Commission regulations. Scott Dep. at 78:17-79:5; 

Simpson Decl. Ex. 7 at 10:5-13. Failure to follow these regulations could result in civil 

penalties for the committee and for the treasurer in his official and even personal 

capacity. Scott Dep. at 116:15-117:19. 

FEC RESPONSE: Civil penalties are available against treasurers in their 

personal capacity in only very limited circumstances. (See supra Response to SN 

Fact 54.) 

132. If SpeechNow.org begins accepting donations that, in the aggregate, are in 

excess of $1,000, it will have to register as a political committee and be subject to the 

administrative, organizational, and continuous reporting requirements for political 

committees. Keating Decl. at 45; Simpson Decl. Ex. 14 (FEC Response to Request to 

Admit No. 1); Scott Dep. at 93:3-14. 

FEC RESPONSE: No specific additional response. 

60

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 60 of 71
133. SpeechNow.org does not want to be identified as a PAC because the term 

would imply that the association gives to and works with candidates, political parties, or 

both. Keating Decl. at ¶ 49. Mr. Keating believes that many people, including those in 

the media, donors, and voters, have a negative view of PACs because of the reputation of 

PACs as colluding with elected officials, political parties, and candidates. Id. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

134. Mr. Keating also does not want SpeechNow.org to have to register as a 

political committee or have to refer to it as a political committee, because that will make 

it more difficult to raise funds. Keating Decl. at ¶ 49. Donors are aware of the 

contribution limits that apply to political committees and parties, and many of them will 

be reluctant to contribute more than $5,000 or they will conclude that their contributions 

will count towards their biennial aggregate limits if SpeechNow.org is subject to 

contribution limits. Id. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

135. If SpeechNow.org were deemed to be a political committee, it would be 

classified as a “non-connected” committee. Scott Dep. at 17:14-18:2. 

FEC RESPONSE: No additional specific response. 

136. When an organization becomes a political committee, it must obtain a tax 

identification number from the IRS and establish a bank account in a federally insured 

institution. Scott Dep. at 108:16-109:3, 123:18-21. 

FEC RESPONSE: This proposed fact erroneously implies that the Act requires 

political committees to obtain a tax identification number from the Internal Revenue 

Service. While the Act requires political committees to maintain depository accounts at 

federally insured financial institutions (2 U.S.C. § 432(h)), the Act or Commission 

regulations do not require a tax identification number for such accounts. However, 

Commission staff have been informed that banks require a tax identification number. 

The Commission’s Information Division therefore recommends that committees obtain a 

tax identification number. Scott Dep. at 114-116, FEC Exh. 14. 

137. Non-connected committees must register with the FEC using a “Statement 

of Organization,” or FEC Form 1. Among other things, the four-page form requires 

committees to list the committee name and address, to designate a treasurer and custodian 

61

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 61 of 71
of records, and to list all bank accounts in which committee funds are deposited. 

Simpson Decl. Ex. 26, FEC Form 1, Statement of Organization; Scott Dep. at 122:15-

123:14. Any changes to the Statement of Registration must be made within 10 days. 

Scott Dep. at 123:22-124:6. The form comes with an additional five pages of instructions. 

Simpson Decl. Ex. 27, Instructions for FEC Form 1. 

FEC RESPONSE: No additional specific response. 

138. Non-connected committees must periodically disclose all contributions 

and expenditures using a “Report of Receipts and Disbursements,” or FEC Form 3X. 

Simpson Decl. Ex. 28, FEC Form 3X, Report of Receipts and Disbursements for Other 

than an Authorized Committee, and associated schedules; Scott Dep. at 124:7-16. The 

form includes five pages for summary information concerning receipts and disbursements 

and an additional 16 pages of “schedules” on which committees are required to disclose 

detailed information on all contributors and the amounts they donate (schedule A); all 

disbursements and to whom they are made (schedule B); any loans the committee 

receives (schedule C); any loans and lines of credit the committee receives from lending 

institutions (schedule C-1); all debts and obligations of the committee (schedule D); any 

itemized independent expenditures the committee makes (schedule E); any itemized 

coordinated party expenditures the committee makes (schedule F); the committee’s 

activities relating to state or local elections (schedule H1-H6); and the committee’s 

“Levin” funds (schedules L, L-A, and L-B). Simpson Decl. Ex. 28; Scott Dep. at 125:22-

127:5. Form 3X and the various schedules are accompanied by 31 pages of instructions. 

Simpson Decl. Ex. 29, Instructions for FEC Form 3X and Related Schedules. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

139. A non-connected committee must file Form 3X and the various schedules 

that go along with it four times in an election year, and must file two semiannual reports 

in a nonelection year. It must file a 12-day pre-primary report in any state in which it 

participates. Additionally, it must file a pre-general election report and a 30-day postgeneral election report if it participates in any general election. A non-connected 

committee must also file these pre- and post-reports for any special election in which it 

participates. Alternatively, it can choose to file monthly rather than quarterly, and thus 

avoid pre- and post-election reports. It may change its filing schedule only once per year 

and only after giving the FEC written notice. After the 20th day before an election, it 

must file an independent expenditure report within 24 hours each time it spends more 

than $1,000. Before that, it must file a report within 48 hours each time it spends more 

than $10,000 on an election. See 11 CFR §§ 104.5(c) and (g); Scott Dep. at 131:3-

132:14. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

140. Mr. Keating currently operates SpeechNow.org out of his home. Keating 

Decl. at ¶ 47. 

FEC RESPONSE: No additional specific response at this time. 

62

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 62 of 71
141. If an individual administers a non-connected committee from his home 

and is being paid for his services by the committee, that individual must allocate costs for 

the use of his home to the committee, lest the expense be treated as in-kind contribution 

from the individual to the committee. Scott Dep. at 136:8-137:8. The costs are to be 

determined by assessing the usual and normal charge for, or fair market value of, that 

portion of the home. Id. at 138:7-16. The same is true for expenses associated with using 

the home computer, telephone, or personal internet connection. Id. at 139:6-20. These 

cost allocations—based on the individual’s determination of their fair market value—

have to be reported on Form 3X. Id. at 123:7-16; Simpson Decl. Ex. 29 at 10-11 

(Instructions for Schedule A, Itemized Receipts). 

FEC RESPONSE: Objection, irrelevant. SpeechNow does not pay anyone to 

work out of his or her home and has not alleged an intention to do so. 

142. All costs associated with a fundraiser for a non-connected committee, 

even in a person’s home, must be treated as expenses to be paid by the committee lest any 

costs for the event—including the costs associated with using the home, or the costs of 

food or invitations—be treated as an in-kind contribution attributable to the committee. 

Scott Dep. at 142:1-143:7. The costs are to be determined by assessing the usual and 

normal charge for, or fair market value of, that portion of the home, invitations and food. 

Id. at 143:8-14. These costs must be reported on Form 3X. Id. at 123:7-16; Simpson 

Decl. Ex. 29 at 10-11 (Instructions for Schedule A, Itemized Receipts). 

FEC RESPONSE: No additional specific response. 

143. If a non-connected committee also made independent expenditures in state 

or local elections, it would have to allocate its costs for fundraising and communications 

according to regulations at 11 CFR Part 106. Scott Dep. at 143:15-144:5. The committee 

would also report the allocations using various Schedules H, which are accompanied by 

seven pages of instructions. Scott Dep. at 146:12-148:9; Simpson Decl. Ex. 29 at 23-30. 

FEC RESPONSE: No additional specific response. 

144. The FEC has an entire division, the Information Division, a large part of 

whose resources are devoted to providing information to those who must comply with the 

laws. Scott Dep. at 11:3-21:11, 53:16-54:20. The Division answers telephone and email 

inquiries, it publishes manuals and guides, and it conducts training sessions. Id. at 11:12-

12:1, 13:10-14:13, 56:1-12. The Information Division recommends that those complying 

with the campaign finance laws always consult its guides, instructions for forms, and 

other publications. Id. at 37:11-22. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

145. However, reliance on the information provided by the FEC is not a shield 

to liability. Scott Dep. at 158:17-20. In fact, the information division “always 

caution[s]” and advises those complying with the obligations for political committees to 

63

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 63 of 71
consult the statutes and applicable regulations and not rely solely on information 

provided by the FEC. Id. at 34:19-35:7. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

146. Political committees often hire accountants and attorneys to assist them in 

complying with the federal campaign finance laws and regulations. Scott Dep. at 87:4-

20. There are also hundreds of experts, professionals, and specialists who make their 

livings by aiding organizations to comply with the requirements for political committees. 

Id. at 84:17-22, 88:15- 89:2. 

FEC RESPONSE: This proposed fact is irrelevant to the determination of the 

constitutionality of the provisions challenged by plaintiffs. Furthermore, as noted 

previously, the Act’s registration and reporting requirements are not unduly burdensome. 

While some requirements are more complicated than others, generally the requirements 

that apply to nonconnected political committees are not complicated. Scott Dep. at 156, 

FEC Exh. 54. The professionals alluded to work not just for nonconnected committees, 

but also state and national party committees, corporate and union PACs, and candidate 

committees. 

147. The FEC’s Information Division has 14 employees, ten of whom answer 

questions from the general public on matters of campaign finance law and compliance. 

Scott Dep. at 12:3-9. While the number of calls has declined since the Commission 

provided information over the Internet, the division still receives thousands of calls each 

year from the general public and political committee administrators in the regulated 

community. Id. at 29:13- 30:6. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

148. The FEC publishes several documents to explain and provide information 

concerning the laws and regulations with which political committees must comply. The 

Campaign Guide for Non-Connected Committees, which is 134 pages long, is 

periodically updated to include additional rules and interpretations by the Commission. 

Scott Dep. at 18:3- 20:3; FEC Campaign Guide: Nonconnected Committees, May 2008, 

available at http://www.fec.gov/pdf/nongui.pdf (last visited October 28, 2008). Between 

updates to the Guide, the FEC issues a series of brochures and monthly supplements 

containing any new rules, interpretations or policies of the Commission that are pertinent 

to political committees. Id. at 18:3-19:2, 22:1-23:3. Committee treasurers must keep 

64

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 64 of 71
abreast of these supplements in order to keep their knowledge of FEC rules, policies, and 

interpretations current. Id. at 34:8-18. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

149. However, reliance on this information is not a shield to liability. Id. 

at 158:17-20. Treasurers may be personally liable for violations in political committee 

reporting. 2 U.S.C. §§ 432(c), 434(a)(1); see also Statement of Policy Regarding 

Treasurers Subject to Enforcement Proceedings, 70 Fed. Reg. 3 (January 3, 2005). 

SpeechNow.org’s bylaws provide that the Treasurer is responsible for compliance with 

statutory reporting requirements. Bylaws, Art. V, § 8. 

FEC RESPONSE: Civil penalties are available against treasurers in their personal 

capacity in only very limited circumstances. (See supra Resp. to SN Fact 54.) 

150. The FEC holds training conferences for the administrators of political 

committees and other employees of or consultants to political committees three to four 

times per year. Scott Dep. at 56:13-57:1, 59:12-17. The conferences typically last two 

days and consist of approximately six hours of substance per day. Id. at 56:13-57:13. The 

FEC also provides periodic training seminars and workshops. Id. at 57:21-59:7, 62:10-

22. All of these training sessions cover topics related to the obligations of administering 

political committees. Id. at 63:1- 7. Like its publications, training sessions must 

periodically be updated to reflect new rules, interpretations, and policies. Id. at 65:19-

67:3. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

151. Non-connected committees that receive or intend to spend over $50,000 of 

contributions in a calendar year must report electronically. Scott Dep. at 38:18-39:4. 

The FEC publishes an introductory manual for its electronic filing system called “Getting 

Started with FECfile,” which is 50 pages long. See Getting Started with FECFile (For 

PAC and Party Committees), http://www.fec.gov/support/GettingStartedManual_U.doc 

(last visited Oct. 20, 2008). The primary manual for using the electronic filing system is 

351 pages long. See FECFile User Manual for PACs & Party Committees, 

http://www.fec.gov/elecfil/ unauthorized_manual/entireUNAUTHmanual.pdf (last visited 

Oct. 20, 2008). 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

152. Non-connected committees are subject to audits for cause, which exists 

when the committee’s reports demonstrate compliance, accounting, or reporting 

problems. Scott Dep. at 150:1-151:9. During an audit, the FEC must access and review 

the committee’s records. Id. at 154:13-18. Audits can trigger enforcement actions 

against a committee that can lead to civil penalties. Id. at 156:8-12. As a result, some 

65

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 65 of 71
committees employ accountants and lawyers to represent them in audits. Id. at 154:19-

155:6. 

FEC RESPONSE: Objection, relevance and vagueness as to “some committees,” 

as plaintiffs do not establish whether nonconnected committees like SpeechNow have 

employed accountants and lawyers. 

153. The Commission has a Reports Analysis Division (RAD) whose purpose is 

to analyze reports filed by committees and other entities and to determine whether they 

are in compliance with campaign finance laws and regulations. Scott Dep. at 67:7-11. 

Employees of RAD often send committee treasurers Requests for Additional Information 

(RFAI) that seek information necessary for the Commission to determine whether a 

committee is complying with the law. Scott Dep. at 71:13-72:1. A failure of a political 

committee to answer an RFAI can result in an investigation and a recommendation that 

the Commission seek a conciliation agreement with the committee that results in a civil 

penalty. Id. at 73:7-20. 

FEC RESPONSE: No additional specific response. 

154. The Commission sends out approximately 5,000 RFAIs in a calendar year, 

all of which are related to administering and reporting of political committees. Scott 

Dep. at 75:16-76:7. There are approximately 8,000 political committees registered with 

the Commission, not all of which are active. Id. at 76:8-16. 

FEC RESPONSE: Objection, relevance and vagueness. Plaintiffs do not 

establish whether any or a significant portion of the RFAIs are sent to nonconnected 

committees, which have more straightforward reporting obligations, or whether most of 

the RFAIs are sent to state and national party committees, corporate and union PACs, and 

candidate committees. 

66

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 66 of 71
155. All administrative fines issued by the Commission relate to the failure to 

properly report the activities of a political committee. Scott Dep. at 80:19-81:6. The 

Commission resolves approximately 100 administrative fine matters per year, and the 

amount of fines collected is $201,963 from the Administrative Fines Program alone. 

Simpson Decl. Ex. 30, Federal Election Commission 2006 Annual Report, at 7. This is 

an average civil penalty of at least $2,000. Still other civil penalties for failing to 

properly administer or report the activities of political committees are collected through 

the Commission’s standard enforcement process, and alternative dispute resolution 

programs. Scott Dep. at 82:3-12. 

FEC RESPONSE: No additional specific response. 

156. The FEC can investigate alleged violations of the campaign finance laws that 

are brought to its attention through administrative complaints filed under 11 CFR § 111.4 

or that its staff discovers and has “reason to believe” that a violation has occurred. 

Simpson Decl. Ex. 14 (FEC Response to Interrogatory No. 6). Alleged violations 

discovered in this manner are assigned a “Matter Under Review” number. Id. 

FEC RESPONSE: No additional specific response. 

157. Since October 1, 1999, the FEC has found reason to believe that one or more 

violations have occurred in 427 Matters Under Review and it has conducted an 

investigation in 118 of these MURs. Simpson Decl. Ex. 14 (FEC Response to 

Interrogatory No. 6). Of those 118 investigations, matters were pending an average of 

544 days from the date the MUR was opened until it was closed with respect to the last 

respondent. Id. (FEC Response to Interrogatory No. 8). 

FEC RESPONSE: No additional specific response. 

158. Complying with the administrative and continuous reporting requirements 

for political committees would be burdensome for SpeechNow.org. Keating Decl. at ¶ 

47. Mr. Keating operates SpeechNow.org alone in his spare time. He has no employees 

nor anyone else working with him, and complying with the obligations for political 

committees would be time consuming and difficult. Id. 

FEC RESPONSE: This proposed fact ignores contrary testimony. 

The Commission’s Deputy Staff Director for the Information Division Greg Scott 

testified that the Act’s registration and reporting requirements are not difficult. 

(Scott Dep. at 156, FEC Exh. 14.) Further, plaintiff David Keating testified that he had 

prior experience with reporting and could fulfill the requirement of treasurer. 

Furthermore, Mr. Keating testified that his desire to avoid registration and reporting by 

67

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 67 of 71
SpeechNow was based on his desire to spend time on family and leisure activities. 

(FEC Facts ¶¶ 451-52, 449-50.) 

159. It would be particularly burdensome for David Keating to shoulder these 

obligations before SpeechNow.org can spend money on political advertisements or other 

activities that advance its mission. Keating Decl. at ¶ 47. In such a situation, Mr. 

Keating would be spending a great deal of time ensuring that SpeechNow.org complied 

with above-mentioned obligations, but he would be unable to spend that time advancing 

SpeechNow.org’s mission. Id. at ¶ 47; Simpson Decl. Ex. 34, Excerpts from the 

Deposition Transcript of David Keating, taken September 25, 2008. 

FEC RESPONSE: Plaintiffs have provided no support, other than the self-serving 

testimony of David Keating, that it would be “burdensome” for SpeechNow to comply 

with “obligations” (presumably referring to the “administrative” and “reporting” 

requirements referred to in the preceding paragraph) prior to the date that SpeechNow 

first spends money on “advertisements or other activities that advance its mission.” 

In particular, plaintiffs have provided no support for the statement that compliance with 

the Act’s requirements would prevent David Keating from spending any significant 

amount of time “advancing SpeechNow.org’s mission.” 

160. SpeechNow.org cannot accept donations under $1,000 even though David 

Keating has been contacted through the website and other means by potential donors who 

want to make such donations. Keating Decl. at ¶ 50. This is because such donations 

would inch SpeechNow.org closer to being a “political committee,” but they would not 

give it nearly enough money to produce and run advertisements, which are a necessary 

precondition to a successful fundraising effort. Id. Accepting even small donations could 

expose SpeechNow.org to the administrative and reporting requirements for political 

committees without providing it enough money to speak out through advertisements in 

support of its mission and become a going concern. Id. Thus, SpeechNow.org cannot 

accept the $100 donations that Brad Russo and Scott Burkhardt are ready, willing, and 

able to make. Id. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow may not be able to accept donations in the future. (See FEC 

Facts ¶¶ 51-52, 395-401.) 

68

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 68 of 71
“VII. Reporting Requirements for Independent Expenditures.” 

161. SpeechNow.org will report its contributions and expenditures under the 

reporting requirements for those who make independent expenditures. Keating Decl. at ¶ 

35. Complying with these reporting requirements is less burdensome than complying 

with the obligations for political committees. Id. at ¶ 48. 

FEC RESPONSE: No additional specific response. 

162. Groups “other than political committees” that make independent 

expenditures must report their activities pursuant to the FEC regulations at 11 CFR §§ 

104.4(a), (e) and (f), and § 109.10. Scott Dep. at 95:7-98:14. 

FEC RESPONSE: No additional specific response. 

163. To report its independent expenditures, a group like SpeechNow.org that was 

not a political committee would use the “Report of Independent Expenditures Made and 

Contributions Received,” or FEC Form 5. Simpson Decl. Ex. 31, FEC Form 5, Report of 

Independent Expenditures Made and Contributions Received; Scott Dep. at 101:6-102:1. 

This form requires the filer to list the total contributions received and the total 

expenditures made during the period on a one-page form, and then to list those who 

contributed to the independent expenditure and the payees for the independent 

expenditures. It is accompanied by three pages of instructions. Simpson Decl. Ex. 32, 

Instructions for FEC Form 5 and Related Schedules. 

FEC RESPONSE: No additional specific response. 

164. The FEC requires that all costs associated with the independent expenditure 

must be disclosed. This would include costs for airtime for broadcast communications; 

production costs for broadcast communications; postage and printing costs for 

communications made by mail; research costs to determine the most optimal form of 

communication; fees for the media buyer or direct mail vendor; costs associated with 

producing newspaper ads; the costs of newspage space; and the costs associated with 

producing and distributing internet banner ads. Scott Dep. at 102:4-105:1. 

FEC RESPONSE: SpeechNow’s proposed facts repeatedly state that the group 

will disclose its contributions and expenditures under the Act’s disclosure and disclaimer 

provisions that apply to independent expenditures. See SN Facts ¶¶ 25-26, 161. 

Mr. Keating has, however, given mixed signals on this issue. Should SpeechNow 

prevail, it is not entirely clear whether such disclosure will includes all contributions it 

receives, including those whose funds were used solely for purposes such as candidate 

69

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 69 of 71
research and polling, see SN Facts ¶ 24, or only those contributions that were solicited 

for, and will be directly used to purchase air time for independent expenditures. 

At deposition Mr. Keating indicated that he personally agreed with the position of 

his employer, Club for Growth, that disclosure of contributions for candidate research and 

polling was not required. (Keating Dep. at 82-84, FEC Exh. 11). See FEC Facts ¶ 375. 

Similarly, at a public forum about the case, Mr. Keating said “(t)he only thing people 

won’t know is how much money we’re receiving or spending on administrative stuff until 

we make uh, or I guess they’ll never know until they look at the IRS how we’re spending 

on administrative stuff.” (“Freeing SpeechNow: Free Speech and Association vs. 

Campaign Finance Regulation,” Mar. 5, 2008, FEC Exh. 103 at 4.) Since Mr. Keating 

has been inconsistent, plaintiffs have provided inadequate assurance to the Court to 

permit a finding that SpeechNow’s disclosures would be exhaustive. The Court, 

therefore, should not accept SpeechNow’s assurances or make the finding plaintiffs 

suggest. 

165. If an organization like SpeechNow.org that was not a political committee 

decided to make independent expenditures against candidates for State or local office, its 

reporting obligations to the FEC would not change or increase. Scott Dep. at 107:7-108:5. 

FEC RESPONSE: No additional specific response. 

Respectfully submitted, 

Thomasenia P. Duncan 

(D.C. Bar No. 424222) 

General Counsel 

David Kolker 

(D.C. Bar No. 394558) 

Associate General Counsel 

Kevin Deeley 

Assistant General Counsel 

70

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 70 of 71
71

Robert Bonham 

(D.C. Bar No. 397859) 

Senior Attorney 

/s/ Graham M. Wilson

Steve Hajjar 

Graham M. Wilson 

Greg J. Mueller (D.C. Bar No. 462840) 

Attorneys 

FOR THE DEFENDANT 

FEDERAL ELECTION COMMISSION 

999 E Street NW 

Washington, DC 20463 

Dated: November 21, 2008 (202) 694-1650 

Case 1:08-cv-00248-JR Document 55 Filed 11/21/2008 Page 71 of 71
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, et al., ) 

 ) 

 Plaintiffs, ) 

 ) Civ. No. 08-248 (JR) 

 v. ) 

 ) FEC Response to Plaintiffs’

FEDERAL ELECTION COMMISSION, ) Proposed Findings of Fact 

 ) 

 Defendant. ) 

____________________________________) 

DEFENDANT FEDERAL ELECTION COMMISSION’S RESPONSE 

TO PLAINTIFFS’ PROPOSED FINDINGS OF FACT 

 The Federal Election Commission (“Commission”) hereby submits the following 

response to the Proposed Findings of Fact filed by plaintiffs SpeechNow.org 

(“SpeechNow”), David Keating, Edward Crane, Fred Young, Brad Russo and Scott 

Burkhardt (collectively “plaintiffs”). The Commission incorporates by reference its 

Memorandum In Support of Response to Plaintiffs’ Proposed Findings of Fact (“FEC 

Resp. Mem.”). Set forth below are additional specific objections and responses, as well 

as references to the Memorandum in order to note the portions of the Memorandum that 

are particularly responsive to specific facts. 

“I. SpeechNow.org” 

1. Plaintiff SpeechNow.org is an independent group of citizens whose 

mission is to engage in express advocacy in favor of candidates who support the First 

Amendment and against those who do not. Declaration of David Keating in Support of 

Proposed Findings of Fact (hereinafter, “Keating Decl.”) at ¶¶ 2, 3; Keating Decl. Ex. H, 

Bylaws of SpeechNow.org (hereinafter, “Bylaws”), Art. II. Toward that end, 

SpeechNow.org planned to run television advertisements during the 2008 election cycle 

in the states and districts of political candidates whose records demonstrate that they do 

not support full protections for First Amendment rights. Keating Decl. at ¶ 15. While it 

1

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 1 of 71
appears that SpeechNow.org will not be able to run advertisements in this election, it 

would like to run advertisements in future elections, including the 2010 election, similar 

to those it intended to run during the 2008 election season. Id. at ¶¶ 15, 30. 

FEC RESPONSE: Objection to the use of “independent” as vague and objection 

to the extent it contains legal conclusions, including the notion that SpeechNow was not 

“able” to run advertisements during the 2008 election cycle. SpeechNow could have 

accepted contributions up to the legal limits, but chose not to. (See FEC Facts ¶¶ 51-52, 

395-401.) 

2. Plaintiff David Keating created SpeechNow.org because he believes that 

the issue of free speech and the threats posed to it by campaign finance laws are vital to 

the future of the nation. Keating Decl. at ¶ 3. He wants individuals who share this 

concern to be able pool their funds so they can speak out as loudly and effectively in 

favor of First Amendment rights as possible. Id. Because federal elections provide a rare 

opportunity both to impact public policy—by affecting the political futures of the 

candidates who make it—and to influence public debate, Mr. Keating believes that 

running advertisements calling for the election or defeat of candidates based on their 

support for free speech and association is the most effective way for private citizens to 

protect those rights. Id. In his view, if an individual is permitted to spend unlimited 

amounts of money advocating the election or defeat of candidates for office, there is no 

reason why groups of individuals should be prevented from doing so. He created 

SpeechNow.org to give ordinary Americans the ability to band together to achieve these 

purposes. Id. 

FEC RESPONSE: Objection, relevance, as David Keating’s political opinions 

and motivation for founding SpeechNow are not relevant to the constitutionality of the 

challenged provisions. While this paragraph may reflect David Keating’s views, 

the portion of Mr. Keating’s declaration cited by plaintiffs, Keating Decl. (Doc-39) ¶ 3, 

only supports the first sentence and part of the second and third sentences of this fact. 

The cited portion of Mr. Keating’s declaration provides no support for the fourth and fifth 

sentences of this proposed fact. Inter alia, the alleged opinion regarding “the most 

effective way” and the fourth sentence regarding individuals and groups are unsupported. 

Objection to the extent it contains legal conclusion, particularly the inaccurate contention 

2

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 2 of 71
that groups are prevented from spending unlimited amounts of money advocating the 

election or defeat of candidates. 

“A. Structure and Operations of SpeechNow.org” 

3. SpeechNow.org is an unincorporated nonprofit association organized 

under the District of Columbia Uniform Unincorporated Nonprofit Associations Act, 

D.C. Code § 29- 971.01 et seq., and registered as a “political organization” under section 

527 of the Internal Revenue Code. Keating Decl. Ex. G, SpeechNow.org Internal 

Revenue Form 8871. 

FEC RESPONSE: No additional specific response. 

4. The general powers of SpeechNow.org lie with five voting “Members.” 

Bylaws, Art. I, § 5; Art. III, §§ 1, 2. They are David Keating, Jon Coupal, Edward Crane, 

Daniel Shapiro, and Richard Marder. Id. The bylaws also designate four officers of the 

association: President, Vice President, Secretary, and Treasurer. Id., Art. V, § 1. David 

Keating is the President and Treasurer of SpeechNow.org, and he administers all of the 

association’s affairs. Keating Decl. at ¶ 2. Jon Coupal is the Vice President and 

Secretary. Keating Decl. Ex. D, Member Action by Written Consent in Lieu of an 

Organizational Meeting of SpeechNow.org. 

FEC RESPONSE: No additional specific response. 

5. SpeechNow.org will operate solely on private donations from individuals. 

Keating Decl. at ¶ 8; Bylaws, Art. II. Under its bylaws, SpeechNow.org cannot accept, 

directly or indirectly, any donations or anything of value from business corporations, 

labor organizations, national banks, federal government contractors, foreign nationals, 

political parties, or political committees. Keating Decl. at ¶ 8; Bylaws, Art. VI, § 9; Art 

X, § 1. 

FEC RESPONSE: No additional specific response. 

6. Under its bylaws, SpeechNow.org cannot engage in business activities, 

including the provision of any goods or services that results in income to SpeechNow.org 

or any advertising or promotional activity that results in income to SpeechNow.org, other 

than in the form of membership dues or donations. Keating Decl. at ¶ 12. Similarly, 

SpeechNow.org cannot offer to any donors or members any benefit that is a disincentive 

for them to disassociate themselves with SpeechNow.org on the basis of the 

organization’s position on a political issue, and it cannot offer its donors or members 

credit cards, insurance policies or savings plans, training, education, business 

information, or any other benefits other than those that are necessary to enable recipients 

to engage in promotion of SpeechNow.org’s political ideas. Id.; Bylaws, Art. VI, §§ 6, 8. 

FEC RESPONSE: No additional specific response. 

3

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 3 of 71
7. SpeechNow.org is independent of any political candidates, political 

committees, and political party committees, and its bylaws require it to operate wholly 

independently of any of these entities. Keating Decl. at ¶ 9; Bylaws, Art. VI, § 9; Art. X, 

§§ 2-10. SpeechNow.org cannot make contributions or donations of any kind directly or 

indirectly to any FEC-regulated candidate or political committee, and it cannot coordinate 

its activities, as defined in 2 U.S.C. §§ 441a(a)(7)(B) & (C) and 11 C.F.R. Part 109, with 

any candidates, national, state, district or local political party committees, or their agents. 

Id., Art. VI § 10; Art. X §§ 2-10. 

FEC RESPONSE: Objection to the use of “wholly independently” as vague and 

objection to the extent the use of “wholly independently” as it purports to contain a legal 

conclusion. 

8. SpeechNow.org’s bylaws prohibit it from using any vendors for services 

in producing or distributing its communications featuring a candidate for federal office if 

that vendor was also engaged during the same election cycle by the candidate featured in 

the communication. Bylaws, Art. X, § 2. The bylaws similarly prohibit SpeechNow.org 

from employing any individuals who were employed during the same election cycle by 

any candidate featured in any of SpeechNow.org’s communications. Id., Art. X, § 3. 

FEC RESPONSE: No additional specific response. 

9. SpeechNow.org’s bylaws also ensure the independence of the 

association’s speech by, among other things, requiring members, officers, employees, and 

agents of the association to read and understand the FEC’s rules concerning coordination, 

11 C.F.R. § 109.21, Bylaws, Art. X, § 4, and by prohibiting them from engaging in 

activities that might lead to coordination with candidates. Id., Art. X, §§ 5-10. 

FEC RESPONSE: No additional specific response. 

10. Under SpeechNow.org’s bylaws, all of the obligations in the previous two 

paragraphs must be communicated to all members, officers, employees, agents, and 

donors of SpeechNow.org and employees and agents must sign an acknowledgement of 

these obligations as a condition of participating in any association activities. Bylaws, 

Art. X, § 11. SpeechNow.org’s members and officers have each signed such an 

acknowledgment. Keating Decl. Ex. I, SpeechNow.org Affirmation. 

FEC RESPONSE: No additional specific response. 

11. SpeechNow.org will solicit donations from individuals for funds to cover 

operating expenses and to buy public, political advertising to promote the election or 

defeat of candidates based on their positions on free speech and associational rights. 

Keating Decl. at ¶ 11. Some of SpeechNow.org’s solicitations will refer to particular 

candidates for federal office by name. Id.; Declaration of Steven M. Simpson in Support 

4

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 4 of 71
of Plaintiffs’ Proposed Findings of Fact (hereinafter, “Simpson Decl.”) Ex. 1, 

Supplement to AOR 2007-32 (Sample SpeechNow.org Solicitation). 

FEC RESPONSE: No additional specific response. 

12. SpeechNow.org’s solicitations will inform potential donors that their 

donations may be used for political advertising that will advocate the election or defeat of 

candidates to federal office based on their support for First Amendment rights. Keating 

Decl. at ¶ 11. Under its bylaws, SpeechNow.org must also advise donors that their 

donations are not tax deductible and that they will be spent according to the sole 

discretion of SpeechNow.org. Id. at ¶ 13; Bylaws, Art. VI, § 11. 

FEC RESPONSE: No additional specific response. 

“B. SpeechNow.org’s Planned Political Advertisements” 

13. SpeechNow.org plans to run advertisements on television and in other 

media during the 2008 election cycle and other future election cycles. Keating Decl. at ¶¶ 

15-20, 30. SpeechNow.org has prepared television scripts for four such advertisements. 

Keating Decl. Ex. J, SpeechNow.org Television Scripts. Two of the advertisements call 

for the defeat of Dan Burton, a Republican Congressman currently running for reelection 

in the fifth district of Indiana. Both ads criticize Representative Burton for voting for a 

bill that would restrict the speech of many public interest groups. The first urges voters to 

“Say no to Burton for Congress.” The second states that “Dan Burton voted to restrict our 

rights. Don’t let him do it again.” Id.; Keating Decl. at ¶ 18. SpeechNow.org would like 

to broadcast these advertisements in the fifth district of Indiana, where Representative 

Burton is running for office. Id. at ¶¶ 20-24. 

FEC RESPONSE: No additional specific response. 

14. The other two advertisements call for the defeat of Mary Landrieu, a 

Democratic Senator currently running for reelection in Louisiana. Keating Decl. at ¶ 19. 

Both ads criticize Landrieu for voting for a law to restrict the speech of public interest 

groups. The first urges voters to “Say no to Landrieu for Senate.” The second concludes 

by saying that “Our founding fathers made free speech the First Amendment to the 

Constitution. Mary Landrieu is taking that right away. Don’t let her do it again.” Id.; 

Keating Decl. Ex. J. SpeechNow.org would like to broadcast these advertisements in 

Louisiana, where Senator Landrieu is running for office. Keating Decl. at ¶¶ 20-24. 

FEC RESPONSE: No additional specific response. 

5

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 5 of 71
15. The production costs for these advertisements would be approximately 

$12,000. Keating Decl. at ¶ 21; Simpson Decl. Ex. 2, Declaration of Ed Traz in Support 

of Plaintiffs’ Motion for Preliminary Injunction with Exhibits, dated February 8, 2008 at 

¶¶ 3-5. 

FEC RESPONSE: No additional specific response. 

16. The cost to air the advertisements depends on the number of times they are 

run and the size of the audience SpeechNow.org wants to reach. Keating Decl. at ¶¶ 21-

24; Simpson Decl. Ex. 2 at ¶¶ 3-5. 

FEC RESPONSE: No additional specific response. 

17. Ideally, Mr. Keating would like to be able to run the ads enough times so 

that the target audience could view the ads at least ten times, but that would cost roughly 

$400,000. Keating Decl. at ¶ 24. A less expensive option is simply to run the ads fewer 

times. Id. at ¶¶ 21-24. In either event, the total costs to produce and run advertisements 

in Indianapolis and either Baton Rouge or New Orleans would exceed $120,000. Id. at ¶ 

22. 

FEC RESPONSE: No additional specific response. 

18. Mr. Keating made and will in the future make the decisions about where 

and in what races to run SpeechNow.org’s advertisements, although he expects to keep 

the other members of SpeechNow.org apprised of his decisions. Keating Decl. at ¶ 25. 

Mr. Keating will base his decisions primarily on two factors: (1) the candidates’ records 

on freedom of speech and/or campaign finance laws; and (2) whether the race is close 

enough that SpeechNow.org’s ads might have an impact on the outcome. Id. at ¶ 26. 

FEC RESPONSE: No additional specific response. 

19. Thus, Mr. Keating decided that SpeechNow.org should run ads in 

Congressman Burton’s primary because the Congressman voted for H.R. 513, a bill that 

restricted the free speech rights of certain nonprofits, as did the majority of House 

Republicans, and Mr. Keating felt that he was vulnerable to defeat. Keating Decl. at ¶ 

27. Mr. Keating spoke to Congressman Burton’s opponent, John McGoff, and 

discovered that he supported freedom of speech and opposed campaign finance laws that 

infringed on freedom of speech. Id. As a result, Mr. Keating concluded that running ads 

highlighting Congressman Burton’s record on campaign finance laws would be a good 

way to convey to Republicans that they should support freedom of speech and oppose 

campaign finance laws that would infringe on rights to free speech. Id. 

FEC RESPONSE: No additional specific response. 

20. In his conversation with Mr. McGoff, Mr. Keating discussed only Mr. 

McGoff’s position on issues. Mr. Keating understands that in order to avoid any 

6

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 6 of 71
questions about coordination and to comply with the FEC’s coordination rules, he cannot 

speak to candidates, campaigns, or political party committees about their plans, projects, 

or needs. Keating Decl. at ¶ 27. 

FEC RESPONSE: Objection to the extent contains legal conclusions. Indeed, the 

relevant content standards of current coordination regulations permit involvement that is 

not “material” and discussion that is not “substantial.” 11 C.F.R. § 109.21(d)(2),(3).1

21. Mr. Keating decided that SpeechNow.org should run ads against Mary 

Landrieu because her election is a high-profile race, and she has consistently supported 

campaign finance legislation that infringed on freedom of speech. Keating Decl. at ¶ 28. 

As a result, Mr. Keating concluded that her opponent could not be worse than she is and 

that running ads in her race would increase the chances of her defeat and garner attention 

for SpeechNow.org and its message and mission. Id. 

FEC RESPONSE: Contemporaneous records show that Senator Landrieu was 

selected only after SpeechNow’s consultant took too long preparing the submission of 

SpeechNow’s advisory opinion request. Mr. Keating’s conclusion about Senator 

Landrieu is unsupported and speculative. (See FEC Facts ¶¶ 55-57, FEC Resp. Mem. at 

3.) 

22. SpeechNow.org would run ads in additional races during this election 

cycle if it were able to do so. Candidates in whose elections SpeechNow.org would 

consider broadcasting advertisements include any candidate who has voted for or against 

the Bipartisan Campaign Reform Act; any candidate who voted for or sponsored or 

opposed H.R. 513 as passed by the House of Representatives in 2006 or similar 

legislation; any candidate who supports or opposes legislation to create a Federal Election 

Administration such as that proposed by H.R. 421 in the current Congress. Keating Decl. 

at ¶ 29. More specifically, for this election cycle, SpeechNow.org would like to run 

advertisements opposing Democratic congressional candidate Paul Kanjorski in the 11th 

district of Pennsylvania. Id. 

FEC RESPONSE: Objections to the extent contains a legal conclusion and 

suggests that SpeechNow was not able to run ads in additional races. (See FEC Facts ¶¶ 

51-52, 395-401.) 

 

1

 The coordination regulation is expected to be the subject of a new rulemaking as a 

result of Shays v. FEC, 528 F.3d 914 (D.C. Cir. 2008). 

7

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 7 of 71
23. If it is able to, SpeechNow.org will run ads in future election cycles as 

well. For instance, in the 2010 election cycle, SpeechNow.org would like to run 

advertisements opposing North Dakota Democratic Senator Byron Dorgan and Colorado 

Democratic Senator Ken Salazar. Keating Decl. at ¶ 30. SpeechNow.org would consider 

running advertisements opposing Alaska Republican Senator Lisa Murkowski as well, if 

she has a credible primary opponent. Id. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow may not be able to run ads in future election cycles. (See FEC 

Facts ¶¶ 51-52, 395-401.) 

24. Assuming SpeechNow.org is able to function and run ads in future 

elections, it will make decisions about where to run such ads consistent with the general 

approach described above. Keating Decl. at ¶ 26. If SpeechNow.org is able to raise 

enough funds, it intends to use methods such as candidate research to determine the past 

statements and positions of candidates on free speech as well as public opinion polling to 

obtain more information about the viability of particular candidates in particular races. 

Id. at ¶ 32. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow may not be able to run ads in future election cycles. (See FEC 

Facts ¶¶ 51-52, 395-401.) 

25. SpeechNow.org will disclose its activities under the disclosure and 

disclaimer provisions in the Federal Election Campaign Act that apply to independent 

expenditures. Keating Decl. at ¶¶ 6, 33-36. 

FEC RESPONSE: Objection, vague, and objection to the extent contains legal 

conclusions. FECA requires disclosure for independent expenditures by political 

committees and others, but the disclosure provisions vary depending upon what kind of 

entity is making the expenditure. 2 U.S.C. § 434 (b)-(d), (g). 

8

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 8 of 71
26. Accordingly, pursuant to 2 U.S.C. § 434(c), SpeechNow.org will file 

statements with the FEC reporting the identities of those who contributed to its 

advertisements and other communications that are independent expenditures under FECA 

along with the amounts contributed and the other information required by this provision. 

Keating Decl. at ¶ 35. 

FEC RESPONSE: Objection to the extent contains legal conclusions. While 

SpeechNow and David Keating have agreed to disclose the identities of at least certain 

contributors as “required by” 2 U.S.C. § 434(c), they have created some ambiguity as to 

whether they will disclose the identities of contributors when contributions are used for 

purposes such as candidate research and polling, see SN Facts ¶ 24, rather than directly 

purchasing advertising time. David Keating’s agreement with a decision not to disclose 

some donors calls into question whether SpeechNow will disclose its donors. 

(See FEC Facts ¶ 373; “Freeing SpeechNow: Free Speech and Addociation vs. Campaign 

Finance Regulation,” Mar. 5, 2008, FEC Exh. 103 at 4.) 

27. SpeechNow.org will not accept any targeted or “earmarked” funds, and, as 

a result, it will disclose all of its contributors in its independent expenditure disclosures. 

Keating Decl. at ¶ 36. Thus, for each independent expenditure SpeechNow.org makes, 

Mr. Keating will disclose all donors whose contributions have been used to fund any 

portion of the independent expenditure at issue. Id. All donors to SpeechNow.org will 

thus be disclosed in the association’s independent expenditure disclosures. Id.

FEC RESPONSE: See supra Fact 26. Even if SpeechNow and David Keating 

were interpreted as agreeing to identify all contributors on the independent expenditure 

reports they file pursuant to 2 U.S.C. § 434(c), those reports are submitted on different 

forms than those used by political committees, on a different schedule (independent 

expenditure reports are filed only once, whereas political committees file periodic reports 

of their financial activity), and independent expenditure reports provide less information 

to the Commission and the public. (See FEC Facts ¶ 372-373, 442-443.) 

9

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 9 of 71
28. Pursuant to 2 U.S.C. § 441d(d)(2), SpeechNow.org’s advertisements will 

include a statement indicating that SpeechNow.org is responsible for the content of the 

advertisement. Keating Decl. at ¶ 34. 

FEC RESPONSE: Objection to the extent contains legal conclusions. 

29. Pursuant to 2 U.S.C. § 441d(a), all of SpeechNow.org’s advertisements 

and other communications will include its name, address, and telephone number or World 

Wide Web address, along with a statement indicating that the communication was paid 

for by SpeechNow.org and was not authorized by any candidate or candidate’s 

committee. Keating Decl. at ¶ 33. 

FEC RESPONSE: Objection to the extent contains legal conclusions. 

30. In addition, as an association organized under section 527 of the Internal 

Revenue Code, SpeechNow.org must make regular disclosures of all contributions and 

expenditures. Keating Decl. at ¶ 37, Keating Decl. Ex. L, SpeechNow.org IRS Form 

8872; Simpson Decl. Ex. 25, Deposition Transcript of Gregory Scott, taken September 

24, 2008 (hereinafter, “Scott Dep.”) at 105:2-106:3. 

FEC RESPONSE: 527 organizations may choose to pay taxes to avoid disclosure. See 

Mobile Republican Assembly v. United States, 353 F.3d 1357, 1360 (11th Cir. 2003). 

Disclosures filed by section 527 organizations are not filed on the same schedule, with 

the same frequency or in the same level of detail as disclosures by political committees 

under the Act. (Compare 2 U.S.C. §§ 433-434 with 26 U.S.C. § 527(j). See

FEC Exh. 127-128, 161-162). 

C. SpeechNow.org’s Other Activities 

31. In addition to creating advertisements for the Burton and Landrieu races, 

Mr. Keating has also set up a website, www.speechnow.org, on which he has posted 

general information about the association, news stories and editorials about 

SpeechNow.org, and information about this lawsuit. Keating Decl. at ¶ 4; Keating Decl. 

Ex. A, Web Pages from www.speechnow.org (Home Page). 

FEC RESPONSE: No additional specific response. 

10

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 10 of 71
32. The website allows individuals interested in SpeechNow.org to sign up to 

receive more information about the association and to check a box if they might in the 

future consider making a donation to SpeechNow.org if it is legally able to accept 

donations. Keating Decl. Ex. A (Sign-up Page). Since the website was created late last 

year, about 180 individuals have signed up to receive more information and about 75 of 

them have indicated that they would consider making a donation to SpeechNow.org in 

the future. Keating Decl. at ¶ 5. Mr. Keating has sent articles and other information 

concerning SpeechNow.org to the individuals on this list. Id. at ¶ 4; Keating Decl. Ex. O, 

Information Sent to Interested Visitors of www.SpeechNow.org. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow may not be able to accept donations in the future. (See FEC 

Facts ¶¶ 51-52, 395-401.) 

33. Mr. Keating has also set up a PayPal account to allow individuals to 

donate money to SpeechNow.org in the event that the association is legally able to accept 

donations. Keating Decl. at ¶ 53; Keating Decl. Ex. M, Email from PayPal.com 

confirming SpeechNow.org account. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow may not be able to accept donations in the future. (See FEC 

Facts ¶¶ 51-52, 395-401.) 

II. The Individual Plaintiffs 

34. In addition to being the President and Treasurer of SpeechNow.org, Mr. 

Keating would also like to donate money to the association to support its mission and 

activities. Keating Decl. at ¶ 39. If and when SpeechNow.org is legally able to accept 

donations, Mr. Keating will immediately donate $5,500 to the group, and he would like to 

donate more in the future. Id. at ¶¶ 39, 51-52. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow may not be able to accept donations in the future. (See FEC 

Facts ¶¶ 51-52, 395-401.) 

35. Other individuals are also ready, willing, and able to immediately donate 

funds that would allow SpeechNow.org to produce and broadcast the ads it has created, 

or other similar ads, enough times to have an impact on the audience in the relevant 

markets. Keating Decl. at ¶ 39. Edward Crane is willing to donate $6,000. Declaration of 

Edward Crane in Support of Proposed Findings of Fact (hereinafter, “Crane Decl.”) at ¶ 

11

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 11 of 71
6. Richard Marder is willing to donate $5,500. Keating Decl. at ¶ 39; Simpson Decl. Ex. 

3C, SpeechNow.org Request for Advisory Opinion and Supporting Materials, dated 

November 14, 2007 (hereinafter, “Advisory Opinion Request”) at 6-8 (Declaration of 

Richard Marder in Support of SpeechNow.org Advisory Opinion Request). Fred M. 

Young is willing to donate $110,000. Declaration of Fred M. Young, Jr. in Support of 

Proposed Findings of Fact (hereinafter, “Young Decl.”) at ¶ 6. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow is not able to accept donations. (See FEC Facts ¶¶ 51-52, 395-

401.) 

36. Plaintiff Ed Crane is the President of the Cato Institute and a long-time 

supporter of free speech and opponent of campaign finance laws. Crane Decl. at ¶¶ 3, 10. 

Mr. Crane is an acquaintance of Mr. Keating’s who agreed both to serve as a member of 

SpeechNow.org and to contribute money to the association when Mr. Keating asked him 

during the summer of 2007. Id. at ¶ 2. Mr. Crane would like to be able to make 

additional contributions to SpeechNow.org in the future. Id. at ¶ 8. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow has not been able or will not be able to accept donations. (See 

FEC Facts ¶¶ 51-52, 395-401.) 

37. Mr. Crane supports SpeechNow.org’s mission and believes that calling for 

the election or defeat of candidates based on their support for First Amendment rights is 

an ideal way both to affect policy—by affecting the political futures of those who make 

it—and to promote the importance of free speech. Crane Decl. at ¶ 3. However, Mr. 

Crane lacks the time or individual resources to do things like produce television 

advertisements about free speech and candidates that can reach a wide segment of the 

population. Id. at ¶ 4. Thus, the best way for him to speak effectively against candidates 

who support restrictions on free speech is to associate with other like-minded individuals 

and a group like SpeechNow.org. Id. 

FEC RESPONSE: To the extent that the last sentence is not phrased as an 

opinion of Mr. Crane’s, it is unsupported. Plaintiffs have not demonstrated that giving to 

a group like SpeechNow is the “best way to speak effectively against candidates.” 

Plaintiffs do not compare the effect of such a contribution with, for example, 

12

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 12 of 71
volunteering for a campaign, contributing to a candidate, contributing to a political party, 

emailing friends, or espousing views on a website. 

38. Plaintiff Fred Young is the former CEO of Young Radiator Co. in Racine, 

Wisconsin. Simpson Decl. Ex. 4, Excerpts from the Deposition Transcript of Fred M. 

Young, Jr., taken October 3, 2008 at 22:1-4. Mr. Young has supported various libertarian 

and classical liberal causes through the years, including the Cato Institute and the Club 

for Growth. Id. at 32:5-7, 87:7-9. Mr. Keating knew Mr. Young through Mr. Keating’s 

employment as the executive director of the Club for Growth. Id. at 32:14-33:1. Mr. 

Keating contacted Mr. Young and asked if he would agree to contribute money to 

SpeechNow.org during the summer of 2007. Young Decl. at ¶ 2. Mr. Young would like 

to be able to make additional contributions to SpeechNow.org in the future. Young Decl. 

at ¶ 8. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow may not be able to accept donations in the future. (See FEC 

Facts ¶¶ 51-52, 395-401.) 

39. Mr. Young supports SpeechNow.org’s mission and believes that calling 

for the election or defeat of candidates based on their support for First Amendment rights 

is an ideal way both to affect policy—by affecting the political futures of those who make 

it—and to promote the importance of free speech. Young Decl. at ¶ 3. However, Mr. 

Young is not a political activist and lacks the time and experience to do things like 

produce television advertisements that can reach a wide segment of the population. Id. at 

¶ 4. Thus, the best way for him to do speak effectively against candidates who support 

restrictions on free speech is to associate with other like-minded individuals and a group 

like SpeechNow.org. Id. 

FEC RESPONSE: To the extent that the last sentence is not phrased as an 

opinion of Mr. Young’s, it is unsupported. Plaintiffs have not demonstrated that giving 

to a group like SpeechNow is the “best way to speak effectively against candidates.” 

Plaintiffs do not compare the effect of such a contribution with, for example, 

volunteering for a campaign, contributing to a candidate, contributing to a political party, 

emailing friends, or espousing views on a website. 

Since Fred Young is willing to spend $110,000, he could easily finance his own 

independent expenditures. Mr. Young could hire someone to prepare advertisements for 

13

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 13 of 71
him, much like he hopes to “hire SpeechNow to do that sort of thing.” (Young 

Dep. at 92-32.) It is not difficult for individuals who are capable of making large 

contributions to hire consultants to create advertisements. (FEC Facts ¶ 351.) 

40. Two other individuals, Plaintiffs Brad Russo and Scott Burkhardt, would 

like to make immediate donations to SpeechNow.org of $100 each. Keating Decl. at ¶¶ 

50-51. 

FEC RESPONSE: Nothing in the Act precludes their proposed contributions to 

SpeechNow. Collectively, these $100 contributions are also less than the $1,000 

threshold for triggering political committee status under 2 U.S.C. § 431(17). 

41. Brad Russo first heard about SpeechNow.org from an acquaintance who 

works for the Institute for Justice. Declaration of Brad Russo in Support of Plaintiffs’ 

Proposed Findings of Fact (hereinafter, “Russo Decl.”) at ¶ 2. Because he believes 

strongly in free speech and opposes many campaign finance laws, Mr. Russo would like 

to be able to support SpeechNow.org and its mission. Id. at ¶ 3. 

FEC RESPONSE: No additional specific response. 

42. Scott Burkhardt first heard about SpeechNow.org in a news story and 

located the association’s website through an internet search. Declaration of Scott 

Burkhardt in Support of Plaintiffs’ Proposed Findings of Fact (hereinafter, “Burkhardt 

Decl.”) at ¶ 2; Simpson Decl. Ex. 5, Excerpts from the Deposition Transcript of Scott 

Burkhardt, taken September 16, 2008 at 9:4-6. Mr. Burkhardt has supported various 

libertarian and conservative causes through the years and wanted to donate money to 

SpeechNow.org. Burkhardt Decl. at ¶ 2; Simpson Decl. Ex. 5 at 9:10-16. He wrote an 

email to SpeechNow.org inquiring about how to donate money to the association, but Mr. 

Keating wrote back indicating that SpeechNow.org was not accepting donations. Keating 

Decl. at ¶ 50. 

FEC RESPONSE: No additional specific response. 

43. Both Mr. Russo and Mr. Burkhardt support SpeechNow.org’s mission and 

believe that calling for the election or defeat of candidates based on their support of First 

Amendment rights is an ideal way both to affect policy—by affecting who serves in 

Congress, which makes significant policy regarding those rights—and to promote the 

importance of free speech. Russo Decl. at ¶ 3; Burkhardt Decl. at ¶ 3. 

FEC RESPONSE: No additional specific response. 

14

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 14 of 71
44. Even though Plaintiffs Russo and Burkhardt could not themselves finance 

the production and broadcast of SpeechNow.org’s ads, they wish to associate with 

SpeechNow.org’s other supporters in order to amplify their voices and reach an audience 

far greater than they would be able to achieve without SpeechNow.org. Russo Decl. at ¶ 

4; Burkhardt Decl. at ¶ 4. 

FEC RESPONSE: Plaintiffs Russo and Burkhardt can finance the production and 

broadcast of advertisements. Individuals can finance advertisements for as little as $50 

without SpeechNow. (FEC Resp. Mem. § II.) 

45. All of the individual Plaintiffs have read, understood, and will abide by 

SpeechNow.org’s bylaws, in particular, sections 9 and 10 of Article X of those bylaws. 

Keating Decl. at ¶¶ 8, 9; Crane Decl. at ¶ 5; Young Decl. at ¶ 5; Russo Decl. at ¶ 5; 

Burkhardt Decl. at ¶ 5. They further understand that their donations will be used to fund 

speech, including advertisements that will advocate the election and/or defeat of 

candidates to federal office based upon their positions on freedom of speech and 

campaign finance laws, and they understand that SpeechNow.org is an independent group 

that will not make any contributions to candidates, political committees or political 

parties (or any of their agents) and will not coordinate its activities with candidates, 

candidate committees or political party committees. Keating Decl. at ¶ 9; Crane Decl. at 

¶ 5; Young Decl. at ¶ 5; Russo Decl. at ¶ 5; Burkhardt Decl. at ¶ 5. 

FEC RESPONSE: No additional specific response. 

“III. SpeechNow.org’s Advisory Opinion Request” 

46. Mr. Keating set up SpeechNow.org specifically to avoid any concerns 

about corruption under the campaign finance laws. Keating Decl. at ¶¶ 6, 38. However, 

he understood when he created the association that it would be necessary to seek approval 

from the FEC to operate without becoming a political committee and being subjected to 

the contribution limits and organizational, administrative, and continuous reporting 

obligations for political committees. Id. at ¶ 38. He also recognized that it might be 

necessary to challenge the application of these provisions to SpeechNow.org in court. Id.

FEC RESPONSE: David Keating’s views and motivation for creating 

SpeechNow are irrelevant to the determination of constitutionality of the provisions 

challenged by plaintiffs. The Commission objects to the assertion that SpeechNow was 

“set up . . . specifically to avoid any concerns about corruption under the campaign 

finance laws” to the extent that it includes a legal conclusion. Regarding Mr. Keating’s 

15

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 15 of 71
expressed desire to create an organization “specifically to avoid any concerns about 

corruption,” the FECA’s limit on contributions to political committees of $5000 per year 

lawfully furthers that goal. Mr. Keating did not just know that he “might” need to 

challenge the rules; SpeechNow was created to serve as a test case. (FEC Resp. Mem. at 

§ 1.) 

47. Accordingly, on November 19, 2007, SpeechNow.org filed a request for 

an advisory opinion (AOR) with the FEC pursuant to 2 U.S.C. § 437f. The request 

presented, in essence, three questions: (1) Must SpeechNow.org register as a political 

committee as defined in 2 U.S.C. § 431(4), and, if so, when? (2) Are donations to 

SpeechNow.org “contributions” (as defined in 2 U.S.C. § 431(8)) subject to the limits 

described in 2 U.S.C. § 441a(a)(1)(C)? (3) Must an individual donor to SpeechNow.org 

count his donations to SpeechNow.org among the contributions applicable to his biennial 

aggregate contribution limit described in 2 U.S.C. § 441a(a)(3)? See Simpson Decl. Exh. 

3A, Advisory Opinion Request, at 4-5. 

FEC RESPONSE: No additional specific response. 

48. Under FEC rules, the Commission is required to issue a written advisory 

opinion within sixty days of accepting a request. 11 C.F.R. § 112.4(a). If it is unable to 

render an advisory opinion within that time, the rules state that the FEC “shall issue a 

written response stating that the Commission was unable to approve” the request by a 

required vote of four commissioners. Id. The FEC issued its response to 

SpeechNow.org’s AOR on January 28, 2008. Because the FEC at the time was without a 

full complement of commissioners, it lacked a quorum and thus could not issue an 

advisory opinion in response to SpeechNow.org’s request. Accordingly, under FEC 

rules, SpeechNow.org’s request was not approved. See Simpson Decl. Ex. 6, Letter from 

the Federal Election Commission to Bradley A. Smith and Stephen M. Hoersting from 

the Center for Competitive Politics and William H. Mellor, Steven Simpson, and Paul 

Sherman from the Institute for Justice, dated January 28, 2008. 

FEC RESPONSE: No additional specific response. 

49. However, the general counsel’s office of the FEC issued a draft advisory 

opinion in response to SpeechNow.org’s AOR. Simpson Decl. Ex. 7, Draft Advisory 

Opinion 2007-32 from the Federal Election Commission, dated January 25, 2008. The 

draft advisory opinion concluded that, among other things, SpeechNow.org’s planned 

advertisements constitute “express advocacy,” id. at 9:9-12; the donations that Richard 

Marder and Plaintiffs Keating, Crane, and Young wish to make to SpeechNow.org would 

be “contributions” under 2 U.S.C. § 431(8), id. at 4:26-28; expenditures by 

SpeechNow.org on advertisements calling for the election or defeat of candidates for 

federal office would be “expenditures” under 2 U.S.C. § 431(9), id. at 4:26-28; 

16

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 16 of 71
SpeechNow.org has a “major purpose” of campaign activity; accepting the contributions 

noted above to fund its advertisements would make SpeechNow.org a “political 

committee” under § 431(4), id. at 12:13-20; as a political committee, SpeechNow.org 

would be subject to the contribution limits contained in 2 U.S.C. §§ 441a(a)(1)(C) and 

441a(a)(3) and the registration, administrative and reporting requirements for political 

committees contained in 2 U.S.C. §§ 432, 433, and 434, id. at 12:13-20, 13:19-14:5; and 

SpeechNow.org would be required to register as a political committee once it received 

contributions of more than $1,000 regardless of whether it had made any expenditures, id. 

at 12:13-20. In short, the draft advisory opinion concluded that the campaign finance 

laws prohibit SpeechNow.org from accepting donations that exceed the contribution 

limits in 2 U.S.C. §§ 441a(a)(1)(C) and 441a(a)(3) to fund its advertisements. Id. at 14:6-

12. 

FEC RESPONSE: The views of the General Counsel are irrelevant. It is well 

settled that “[t]he Commissioners are appointed by the President to administer the 

agency, the agency’s staff is not.” San Luis Obispo Mothers For Peace v. NRC, 751 F.2d 

1287, 1327, aff’d en banc in relevant part, 789 F.2d at 33, 34 (D.C. Cir. 1984). The D.C. 

Circuit rejected as a “rather silly suggestion” the argument than an NLRB decision 

should be found unreasonable because it conflicted with the General Counsel’s advice. 

“It is of no moment . . . what was the General Counsel’s understanding of the case law 

before the present decision issued, and the court will take no note of it.” Chelsea 

Industries, Inc. v. NLRB, 285 F.3d 1073, 1077 (D.C. Cir. 2002). 

50. The draft advisory opinion was consistent with the FEC’s position on 

other groups that make independent expenditures. The FEC has required such groups 

both to register as political committees and to abide by contribution limits. See Simpson 

Decl., Exs. 8-13, FEC Conciliation Agreements. 

FEC RESPONSE: The draft advisory opinion is irrelevant. See supra FEC Resp. 

to SN Fact ¶ 49. Objection to the vagueness of “such groups” and “groups that make 

independent expenditures.” The Act requires registration and contribution limits for 

some but not every group that makes independent expenditures, and the Commission has 

so enforced the Act. 

17

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 17 of 71
51. The FEC’s current position with respect to SpeechNow.org does not differ 

from the positions stated in the draft Advisory Opinion. Thus, according to the FEC, 

SpeechNow.org’s planned advertisements constitute “express advocacy,” Simpson Decl. 

Exs. 7 at 9:9-14, and 14, Excerpts from FEC Responses to Plaintiffs’ First Set of 

Discovery Requests, dated August 25, 2008; the donations that Richard Marder and 

Plaintiffs Keating, Crane, Young, Burkhardt and Russo wish to make to SpeechNow.org 

would be “contributions” under 2 U.S.C. § 431(8) and the expenditures by 

SpeechNow.org on its proposed advertisements “expenditures” under 2 U.S.C. § 431(9), 

id. (FEC Response to Request for Admission No. 3); SpeechNow.org has a “major 

purpose” of campaign activity; accepting the contributions noted above to fund its 

advertisements would make SpeechNow.org a “political committee” under § 431(4), id. 

(FEC Response to Request for Admission No. 1); as a political committee, 

SpeechNow.org would be subject to the contribution limits contained in 2 U.S.C. §§ 

441a(a)(1)(C) and 441a(a)(3) and the registration, administrative, and reporting 

requirements for political committees contained in 2 U.S.C. §§ 432, 433, and 434, id. 

(FEC Responses to Requests for Admission Nos. 5-12). 

FEC RESPONSE: The draft Advisory Opinion is irrelevant. (See supra FEC 

Resp. Mem ¶ 49.) No specific additional response to the statements regarding the FEC’s 

current position. 

52. The FEC’s then-chairman, David Mason, issued his own opinion in 

response to the draft advisory opinion issued by the FEC office of general counsel. 

Simpson Decl. Ex. 15, Dissenting Opinion of FEC Chairman Mason to Draft Advisory 

Opinion 2007-32. Chairman Mason concluded that SpeechNow.org ought to be 

permitted to operate without contribution limits, although he believed that 

SpeechNow.org should have to register as a political committee and comply with the

administrative, organizational, and reporting obligations for PACs. Id. at 5-6. 

FEC RESPONSE: Irrelevant. Chairman Mason was not speaking for the 

Commission. The Commission cannot exercise its duties and powers without a majority 

vote of its six Commissioners. See 2 U.S.C. § 437c(c); 2 U.S.C. § 437f(b) (“No opinion 

of an advisory nature may be issued by the Commission or any of its employees except in 

accordance with the provisions of this section.”) 

18

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 18 of 71
53. David Keating, as treasurer of SpeechNow.org, is directly responsible for 

complying with the reporting requirements that apply to SpeechNow.org and signing all 

reports. Keating Decl. at ¶ 14; Bylaws, Art. V, § 8. 

FEC RESPONSE: No additional specific response. 

54. Under 2 U.S.C. § 437g(d) and the FEC’s practices and policies, David 

Keating, as treasurer of SpeechNow.org, would be liable in his official capacity for any 

violations of the contribution limits or reporting obligations that apply to 

SpeechNow.org. Simpson Decl. Ex. 14 (FEC Responses to Requests for Admission Nos. 

10 & 11). 

FEC RESPONSE: The Commission’s policies are as follows: 

A committee “treasurer will typically be subject to Commission 

action only in his or her official capacity.” See Statement of Policy 

Regarding Treasurers Subject to Enforcement Proceedings, 

70 Fed. Reg. 1 (Jan. 3, 2005). In this regard, a “probable cause finding 

against a treasurer in his or her official capacity makes clear to the 

district court in enforcement litigation that the Commission is seeking 

relief against the committee, and would only entitle the Commission to 

obtain a civil penalty from the committee.” Id. at 4-5. 

See FEC Response to Plaintiffs’ Requests for Admission 10-11, FEC Responses to 

Plaintiffs’ First Set of Discovery Requests (Aug. 25, 2008) at 27-28, FEC Exh. 160; 

Statement of Policy Regarding Treasurers Subject to Enforcement Proceedings, 

70 Fed. Reg. 1 (Jan. 3, 2005).) 

55. Under 2 U.S.C. § 437g(d) and the FEC’s practices and policies, David 

Keating, as treasurer of SpeechNow.org, would be liable in his personal capacity for any 

knowing and willful violations of the contribution limits or reporting obligations that 

apply to SpeechNow.org. Simpson Decl. Ex. 14 (FEC Responses to Requests for 

Admission Nos. 10 & 11). 

FEC RESPONSE: As treasurer, David Keating is responsible for violations by 

the committee under the following circumstances: 

“[W]hen information indicates that a treasurer has knowingly and 

willfully violated a provision of the Act or regulations, or has recklessly 

failed to fulfill duties specifically imposed on treasurers by the Act, or 

has intentionally deprived himself or herself of the operative facts giving 

rise to the violation, the Commission will consider the treasurer to have 

acted in a personal capacity and make findings (and pursue conciliation) 

19

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 19 of 71
accordingly.” Id. at 1, 5, 6. In addition, “[i]f a past or present treasurer 

violates a prohibition that applies generally to individuals, the treasurer 

may be named as a respondent in his or her personal capacity, and 

findings may be made against the treasurer in that capacity. In this way, 

a treasurer would be treated no differently than any other individual who 

violates a provision of the Act.” Id. at 5 n.7, 6. “Should the 

Commission file suit in district court following a finding of probable 

cause against a treasurer in his or her personal capacity, judicial relief, 

including an injunction and payment of a civil penalty, could be 

obtained against the treasurer personally.” Id. at 5 (citation omitted). 

See FEC Response to Plaintiffs’ Requests for Admission 10-11, FEC Responses to 

Plaintiffs’ First Set of Discovery Requests (Aug. 25, 2008) at 27-28, FEC Exh. 190. 

56. The FEC believes that the plaintiffs in this case are aware of the 

contribution limits, registration requirements, and disclosure requirements that will apply 

to them if SpeechNow.org engages in the activities described in its AOR and its 

Amended Complaint. Id. (FEC Response to Request for Admission No. 2). 

FEC RESPONSE: No additional specific response. 

57. If David Keating, Ed Crane, Fred Young, or Richard Marder made 

contributions to SpeechNow.org in the amounts and for the purposes stated in their 

declarations, their contributions would violate the law because they exceed the 

contribution limits contained in 2 U.S.C. §§ 441a(a)(1)(C) and 441a(a)(3). Simpson 

Decl. Ex. 14 (FEC Response to Request for Admission No. 12). 

FEC RESPONSE: No additional specific response. 

58. If SpeechNow.org were able to accept the contributions of the individual 

plaintiffs and Richard Marder, SpeechNow.org would have enough money to fund 

advertisements in at least two election contests. Keating Decl. at ¶ 22; Simpson Decl. Ex. 

2 at 4; see Keating Decl. Ex. K, Traz Group Bid for Burton and Landrieu 

Advertisements. 

FEC RESPONSE: This proposed fact incorrectly suggests that SpeechNow is 

unable to accept contributions up to the legal limits. In fact, plaintiffs could accept 

contributions of up to $5,000 from each of the five individual plaintiffs and from 

Richard Marder, subject only to the possible application of the aggregate contribution 

limit on Mr. Young’s contribution. See 2 U.S.C. §§ 441a(a)(1)(C), 441a(a)(3). 

20

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 20 of 71
59. Without those contributions, however, SpeechNow.org lacks the funds to 

run such advertisements. Id. at ¶ 40. 

FEC RESPONSE: Evidence in the record suggests that had SpeechNow engaged 

in a modicum of fundraising within the contribution limits, possibly just by accepting 

donations from those who had expressed an interest, it would have had the funds to run 

advertisements comparable in scope to the ad buys for the Burton and Landrieu races that 

Mr. Keating selected. (FEC Facts ¶¶ 392-394.) 

“IV. The Effect of Contribution Limits on the Plaintiffs” 

60. The contribution limits contained in 2 U.S.C. §§ 441a(a)(1)(C) and 

441a(a)(3) prevent plaintiffs Keating, Crane, and Young and Richard Marder from 

making the donations to SpeechNow.org that they currently wish to make. Simpson 

Decl. Ex. 14 (FEC Responses to Requests for Admission Nos. 1-3, 5-13); Advisory 

Opinion Request at 6-8 (Declaration of Richard Marder in Support of SpeechNow.org 

Advisory Opinion Request); Keating Decl. at ¶ 39; Crane Decl. at ¶ 6; Young Decl. at ¶ 

6. 

FEC RESPONSE: Like other proposed facts, this proposed fact incorrectly 

suggests that SpeechNow is unable to accept contributions up to the legal limits. In fact, 

plaintiffs could accept contributions of up to $5,000 from each of the five individual 

plaintiffs and from Richard Marder, subject only to the possible application of aggregate 

contribution limit on Mr. Young’s contribution. See 2 U.S.C. §§ 441a(a)(1)(C), 

441a(a)(3). 

61. Both SpeechNow.org and David Keating as its treasurer face a credible 

threat of prosecution if SpeechNow.org accepts contributions over the limits contained in 

2 U.S.C. §§ 441a(a)(1)(C) and 441a(a)(3), and David Keating, Ed Crane, Fred Young and 

Richard Marder face a credible threat of prosecution if they make contributions to 

SpeechNow.org above those limits. Simpson Decl. Ex. 14 (FEC Responses to Requests 

for Admission Nos. 1-3, 5-13). 

FEC RESPONSE: No additional specific response. 

62. The laws and the FEC’s regulations contained in 2 U.S.C. § 441a(a)(1)(C) 

and 11 CFR § 110.1(d) prevent SpeechNow.org and/or David Keating from accepting 

21

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 21 of 71
additional donations above the contribution limits. Simpson Decl. Ex. 14 (FEC 

Responses to Requests for Admission Nos. 1-3, 5-13); Keating Decl. at ¶ 39. 

FEC RESPONSE: No additional specific response. 

63. Based on the cost estimates for SpeechNow.org’s ads targeted at the 

elections of Representative Burton and Senator Landrieu, to run ads in only two elections 

in the future would cost SpeechNow.org at least $120,000. Keating Decl. at ¶ 31. Thus, 

without the donations that David Keating, Ed Crane, Fred Young, and Richard Marder 

wish to make to SpeechNow.org, or other donations of the same amount, SpeechNow.org 

will not have sufficient funds to pay for the advertisements it wishes to produce and 

broadcast in the future. Id. at ¶ 40. 

FEC RESPONSE: Evidence in the record suggests that had SpeechNow engaged 

in a modicum of fundraising within the contribution limits, possibly just by accepting 

donations from those who had expressed an interest, it would have had the funds to run 

advertisements comparable in scope to the ad buys for the Burton and Landrieu races that 

Mr. Keating selected. (FEC Facts ¶¶ 392-394.) 

“A. Contribution Limits Increase the Cost and Burden of Raising Money.” 

64. Raising money under contribution limits is more difficult than raising 

money outside of those limits. Simpson Decl. Ex. 16, Mariani v. United States, 

212 F.3d 761 (3d Cir. 2000) at 768; Simpson Decl. Ex. 17, Excerpt of District 

Court Findings of Fact in Mariani v. United States, 80 F. Supp. 2d 352 (M.D. Pa. 

1999) at 370. 

FEC RESPONSE: It is no doubt true that for some organizations raising funds 

through unlimited contributions is easier than raising funds within contribution limits. 

The particular findings by both courts in Mariani were, however, premised in part on the 

fact that soft money could be raised from entities that could not otherwise make 

contributions, corporations and labor organizations. SpeechNow, on the other hand, 

asserts that it will not accept contributions from corporations and labor organizations. 

(SN Facts ¶ 5.) 

65. During the 1999-2000 election cycle, approximately 3.5 million 

22

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 22 of 71
Americans made a political contribution at the federal level. Declaration 

of Rodney Smith in Support of Plaintiffs’ Proposed Findings of Fact 

(hereinafter, “Smith Decl.”) at ¶ 24. This figure represents only about 

1.2% of the total voting age population. Id. Eighty percent of those 

donors, or roughly 2.7 million people, gave less than $200. Id. 

FEC RESPONSE: The Court should decline to enter this fact because it is 

outdated and contradicted by other, more reliable sources. Smith’s report contains 

information from only one election cycle, 1999-2000, regarding the number of federal 

donors. The number of donors from one election cycle, without any comparison to 

other more recent cycles, sheds little to no light on the ability of fundraising 

organizations to raise additional funds by, for example, recruiting additional donors. 

Much more probative and material are the facts which demonstrate that the national 

political parties successfully recruited new donors when they were no longer permitted to 

receive unlimited contributions (see FEC Facts ¶¶ 385-91). According to reports of 

actual donor numbers from the national party committees themselves, the parties have 

added millions of new donors this decade, and the total number of federal donors is now 

dramatically different from the estimate done by Smith from the 2000 election cycle. 

(See FEC Resp. Mem. at 7-8.) 

In addition, Smith did not disclose all the sources for this portion of his report, as 

required by Rule 26(a)(2)(B). At his deposition, Smith erroneously claimed to have 

obtained his number of total donors from FEC reports, which is impossible since 

contributors giving $200 or less in calendar year are not itemized in FEC reports. He 

later admitted that the total number of donors had been derived from a national poll. The 

footnote explaining the source was contained in an amicus brief he submitted to the 

district court in McConnell v. FEC, but not in the identical chart in his expert report. (See

23

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 23 of 71
Smith Dep. at 136-37 & Dep. Exh. 5 at 1a.) Finally, Smith altered his report to covert it 

into a declaration after the deadline for disclosing reports. (See infra FEC Response to 

Plaintiffs’ Proposed Fact ¶ 76.)

Smith’s report also failed to comply with other requirements of Rule 26. Rule 

26(a)(2)(B) provides that that expert reports must contain, among other disclosures, a list 

of all publications authored by the expert in the previous ten years, a list of all cases 

during the previous four years in which the witness testified at trial or was deposed as an 

expert, and the compensation paid to the expert for study and testimony in the case. 

Under Rule 37(c)(1), a party that fails to make these disclosures cannot use that witness’s 

testimony unless its failure was substantially justified or harmless, or if the court decides 

that other sanctions are more appropriate. Other sanctions may include reasonable 

expenses, including attorney’s fees, caused by the failure. See Pell v. E.I. Dupont De 

Nemours & Co., Inc., 231 F.R.D. 186, 193-94 (D. Del. 1986) (explaining that remedies 

for failure to make Rule 26(a)(2)(B) expert disclosures can include precluding use of 

expert’s report and re-deposition of witness); Dunkin Donuts, Inc. v. Patel, 174 F. Supp. 

2d 202, 213-14 (D.N.J. 2001) (recommending that expert report which failed to include 

Rule 26(a)(2)(B) disclosures, including compensation and previous testimony, be struck). 

SpeechNow failed to disclose a list of all publications authored by expert Rodney Smith 

in the previous 10 years, a list of all cases during the previous four years in which he 

testified at trial or was deposed as an expert, and any compensation he received. 

Furthermore, the Commission notes that Plaintiffs did not produce an earlier draft 

of Rodney Smith’s report that had been submitted by Smith to plaintiffs’ counsel 

(attached hereto as Exh. 155) until the day of his deposition. Without it, the Commission 

24

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 24 of 71
was deprived of an opportunity to pursue lines of questioning that would have tested 

Smith’s credibility. 

For example, Smith’s final report, used to cross-examine him at deposition 

(attached hereto as FEC Exh. 156), includes a statement that “the contribution limits 

mandated by campaign finance reform severely cripple [the ability of challengers and 

startup advocacy groups] to accumulate enough cash reserves to effectively finance their 

growth” (id. at 6). The early draft did not include this statement. Having not timely 

received a copy of the draft report, the Commission did not know that this statement had 

been inserted into the final report after it had been reviewed by counsel. If aware, 

counsel for the Commission could have asked about the statement’s genesis, and further 

probed its evidentiary support. 

 Similarly, Smith’s final report includes a statement, not included in the draft 

report, which asserts that due to campaign finance limits, “most non-wealthy challenger 

candidates and start-up advocacy groups are out of business before they ever get started.” 

Without the draft report, the Commission was unaware that it had been inserted late in the 

process after interactions with plaintiffs’ counsel, and was deprived of an opportunity to 

ask about the subject. 

The late production of this draft report adversely affected the Commission’s 

deposition of Smith, an opportunity to create doubt about his credibility. See Elm Grove 

Coal Co. v. Director, O.W.C.P, 480 F.3d 278 (4th Cir. 2007) (“[W]e are unable, in these 

circumstances, to agree that [defendant’s] expert witnesses could be properly and fully 

cross-examined in the absence of the draft reports . . . . [T]he disclosure to [plaintiff] of 

the pertinent draft reports . . . was potentially important to a full and fair cross25

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 25 of 71
examination and to the truth-seeking process.”); EEOC v. United Parcel Servs., Inc., 149 

F. Supp. 2d 1115, 1139-40 (N.D. Cal. 2000) (noting critical effect that late-produced 

draft reports and ensuing re-deposition had on expert’s credibility); Bowers v. Nat’l 

Collegiate Athletic Ass’n, 564 F. Supp. 2d 322, 342 (D.N.J. 2008) (imposing sanctions on 

plaintiff’s counsel where “[p]laintiff's belated disclosure of draft expert reports deprived 

Defendants of the opportunity to test the independence and reliability of [the expert’s] 

opinion”). 

66. In terms of donors who give more than $200, there is roughly one donor 

for every 350 people or one donor out of every 200 households in the average 

congressional district. Smith Decl. at ¶ 25. 

FEC RESPONSE: See FEC Response to Plaintiffs’ Proposed Fact ¶ 65. In 

addition, by relying only on donors who give more than $200, this statistic is especially 

divorced from reality due to the surge in new donors below $200 in the intervening years 

since 2000. (See FEC Resp. Mem. at 7-8.) 

67. There is an inverse functional relationship between a group’s fundraising 

costs and its average contribution. The higher the average contribution, the lower 

fundraising costs will be as a percentage of gross receipts. The reverse is also 

true. The lower the average contribution, the higher the fundraising cost will be. 

Smith Decl. at ¶ 32. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) 

68. Due to contribution limits, political fundraising has shifted from a lowvolume, high-dollar process to a low-dollar, high-volume process. Smith Decl. at 

¶ 9. 

26

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 26 of 71
FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) 

69. When the average contribution amount decreases and the number of 

contributions received increases, the cost of generating additional contributions 

increases. Smith Decl. at ¶ 32. To make up for lost revenue resulting from the 

imposition of contribution limits, the volume of smaller contributions must 

increase as the average contribution amount declines. Id. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) 

70. Thus, contribution limits result in unavoidably higher fundraising costs. 

Smith Decl. at ¶ 32. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) 

71. Every fundraising operation must spend money to acquire new donors. 

Smith Decl. at ¶ 35. The goal of this process, commonly referred to as 

“prospecting,” is to avoid losing money. Id. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) 

72. The cost of acquiring a new donor is often higher than the amount actually 

received from that donor. Smith Decl. at ¶ 37. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

27

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 27 of 71
9-10.) Moreover, Smith admits that his report contains no data that supports this specific 

proposition. (Smith Dep. at 83-84, FEC Exh. 15.) 

73. If an organization breaks even in the prospecting process, it is using the 

first contribution it receives from a new donor to finance the cost of acquiring that 

new donor. Smith Decl. at ¶ 35. But if an organization cannot break even in its 

prospecting, then its growth must be partially funded out of general operating 

funds. Id. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) 

74. There are only two ways a fundraising operation can grow. The first is by 

increasing the average contribution. Smith Decl. at ¶ 37. The other is by 

prospecting for more donors. Because contribution limits limit every group’s 

ability to increase its average contribution amount, the only alternative is to 

acquire more donors. Id. 

FEC RESPONSE: The Court should decline to enter this proposed fact, which is 

unsupported by any evidence regarding the burdens or actual cost of fundraising (see

FEC Mem. at 9-10) and contradicted by the witness’s own testimony. Smith admits that 

average contribution amounts can increase without a change in the contribution limits by 

convincing donors who have not given the legal maximum to contribute more. (Smith 

Dep. at 145-46, FEC Exh. 15.) 

75. Acquiring more donors is extremely difficult if not virtually impossible 

without adequate cash reserves or a donor-acquisition program that can be 

operated on a break-even basis. Smith Decl. at ¶ 37. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) 

28

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 28 of 71
“B. Contribution Limits Inhibit the Ability of Groups Like SpeechNow.org to get 

Started.” 

76. The data on average contributions to the top 10 non-party, federally 

focused 527 organizations in 2004 demonstrate that newly formed 527 political 

organizations tend to raise funds from a few large contributors, compared to more 

established 527 organizations. Declaration of Jeffrey Milyo, Ph.D., in Support of 

Plaintiffs’ Proposed Findings of Fact (hereinafter, “Milyo Decl.”) at ¶ 87. 

FEC RESPONSE: As discussed in detail in the Commission’s brief, the Court 

should decline to enter any findings of fact concerning Jeffery Milyo’s discussion of the 

“top non-party, federally focused 527 organization in 2004” because such groups are not 

representative of independent political committees generally, Milyo’s analysis of such 

groups is rife with misstatements and errors, and Milyo’s narrow data do not support his 

broad conclusions. (See FEC Resp. Mem. at 15-18.) 

 In submitting their proposed findings of fact, plaintiffs did not cite their 

previously disclosed expert reports from Jeffery Milyo and Rodney Smith; instead, 

plaintiffs relied on new “declarations” from both of their experts, documents the 

Commission saw for the first time when briefs were filed on October 28, 2008. Plaintiffs, 

in effect, have submitted supplemental expert reports contrary to the Federal Rules of 

Civil Procedure and the Joint Scheduling Order in this case. These new declarations 

create logistical difficulties for the parties, and in the case of Milyo’s declaration, include 

new substantive argument and deletions of required information. 

 When a party relies on an expert witness, Rule 26(a)(2) of the Federal Rules of 

Civil Procedure requires an expert report to include a complete statement of all the 

expert’s opinions, the witness’s qualifications, a list of other cases in which the witness 

was involved, and the compensation that witness will receive for his study and testimony. 

(See also supra Response to SN Facts ¶ 65.) The Joint Scheduling Report in this case 

29

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 29 of 71
required all primary expert reports to be produced by August 15, 2008. After that date, 

expert reports may only be supplemented until 30 days before trial (see Fed. R. Civ. P 

26(e)(2), 26(a)(3)), but “only when a party discovers the information it has disclosed is 

incomplete or incorrect.” Coles v. Perry, 217 F.R.D. 1, 4 (D.D.C. 2003). “Fed. R. Civ. P 

26(e) does not grant a license to supplement a previously filed expert report because a 

party wants to ... .” Id. Here, plaintiffs can offer no justification for the new 

declarations. As stated in Coles, the purpose of requiring the disclosure of expert reports 

“is to prevent unfair surprise at trial and to permit the opposing party to prepare for the 

expert’s cross examination.” 217 F.R.D. at 4. Conversely, “when the expert supplements 

her report by addressing a new matter after discovery has ended, the very purpose of the 

rule is nullified.” Id. Plaintiffs’ reliance on their experts’ new declarations is thus 

inappropriate. 

 While large portions of the new declarations merely restate the expert reports, and 

thus do not significantly prejudice the Commission, even those sections unnecessarily 

create logistical headaches for the parties and the Court. When the Commission took the 

depositions of Smith and Milyo, a significant portion of their testimony commented on 

specific sections and paragraphs of their reports. Now, to discuss deposition testimony 

referencing the reports, additional citations to the declarations may also be needed. 

 In addition to the unnecessary citation complications introduced by plaintiffs’ new 

expert declarations, Milyo’s declaration also includes new substantive argument and 

conceals important information. For example, in his new declaration, Milyo has largely 

rewritten the portion of his expert report concerning the “Equi-Marginal Principle.” 

(Compare Milyo Decl. at ¶¶ 34-39 with “Report on SpeechNow.org et al. v. FEC” by 

30

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 30 of 71
Jeffery Milyo, (“Milyo Report”) § 4.2, Milyo Dep. Exh. 1, FEC Exh. 157.) Paragraph 36 

of the new declaration contains completely new argument and paragraphs 37 through 39 

also contain substantive additions. Plaintiffs’ proposed findings of fact paragraphs 

99-101 rely directly on these new sections. Milyo’s application of the Equi-Marginal 

Principle was discussed at length during his deposition, and it appears that plaintiffs 

believe that it needs additional support. (See FEC’s Response to SN Facts 19-20; Milyo 

Dep. at 193-204, FEC Exh. 12.) Paragraph 44 of Milyo’s declaration, discussing both the 

“equi-marginal principle” and the concept of “revealed preference,” is also a new 

addition to his report. (Compare Milyo Decl. at ¶ 44 with Milyo Report § 4.3, FEC Exh. 

157.) When discussing the Equi-Marginal principle, plaintiffs should be required to rely 

on Milyo’s original report rather than his new declaration. 

 Milyo’s new declaration also omits several pieces of information required by the 

Federal Rules of Civil Procedure to appear in expert reports. For example, the 

declaration removes information about how much Milyo is being paid to be a witness in 

this case. Milyo’s declaration also removes information about export reports and 

testimony he has given in previous cases. Notably, in 2007, Milyo was hired by the 

Institute for Justice, counsel for plaintiffs in this case, to produce a different report 

concerning “a regulatory burden associated with campaign finance disclosure” in 

Sampson v. Coffman. (Milyo Dep. at 25, FEC Exh. 12; Milyo Report at 4, Milyo Dep. 

Exh. 1, FEC Exh. 157.) In addition to preparing an expert report in Sampson v. Coffman, 

Milyo was paid $30,000 by the Institute for Justice to write a report entitled “Measuring 

Campaign Finance Disclosure Costs” in 2007. (Milyo Report, Curriculum Vitae, FEC 

Exh. 157.) These are the kinds of matters that courts often examine when probing for 

31

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 31 of 71
bias. Milyo is also a “senior fellow” at, and recently received a stipend from, the Cato 

Institute, a think-tank at which Edward Crane, a plaintiff in this case, is the President. 

(Milyo Report, Curriculum Vitae, FEC Exh. 157; Milyo Dep. at 41, FEC Exh. 157.) 

Similarly, Milyo serves as an academic advisor for the Center for Competitive Politics, 

also counsel for plaintiffs in this case. (Milyo Report, Curriculum Vitae, FEC Exh. 157.) 

Given that Milyo removes information from his declaration related to his potential bias, 

the Court should enter a finding of fact detailing his relevant past work and associations. 

77. With the exception of Swift Vets and POWs for Truth, those 527s with the 

smallest average contributions (and most numerous contributors) were all either 

established prior to 2003, or are associated with a well-established organization. 

Milyo Decl. at ¶ 88. Newer groups such as America Coming Together, the Joint 

Victory Fund, the Media Fund, Progress for America, and Citizens for a Strong 

Senate all relied on relatively few large contributors. Id. 

FEC RESPONSE: As discussed in detail in the Commission’s brief, the Court 

should decline to enter any findings of fact concerning Milyo’s discussion of the “top 

non-party, federally focused 527 organization is 2004” because such groups are not 

representative of independent political committees generally, Milyo’s analysis is rife with 

misstatements and errors, and Milyo’s narrow data do not support his broad conclusions. 

(See FEC Mem. at 15-18.) 

78. America Coming Together received seed funding from four individuals, in 

the amount of $ 2.025 million, before there was a public announcement of its 

existence. It then received additional seed funding—including $ 2 million apiece 

from George Soros and Peter Lewis—that was widely reported in the media and 

served the purpose of quickly and effectively assuring political donors of the 

credibility and competence of this new organization, while at the same time 

signaling that among the many competing groups that would be working to 

support progressive ideas and candidates, this was one that political contributors 

should focus on. Milyo Decl. at ¶ 89. Swift Vets & POWs for Truth received 

nearly all of its seed funding from just three donors.1 

Id. at ¶ 90. 

32

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 32 of 71
FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact in that it relies on Milyo’s unsupported conjecture regarding the effect of large 

contributions. As discussed in the Commission’s brief, Milyo presents no evidence 

whatsoever regarding the role of “seed funding” in the formation of political 

organizations or what significance large contributions to an independent group have for 

potential donors. (See FEC Mem. at 15-16, 18.) 

79. Without large initial contributions, new political organizations, 

especially those that are issue-oriented and do not benefit from an 

association with some pre-existing trade association or labor union, are 

less effective participants in the public debate. Milyo Decl. at ¶ 92. Limits 

on contributions to political groups are likely to be particularly harmful to 

new and independent political organizations. Id. at ¶ 93. 

FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact in that it relies on Milyo’s unsupported conjecture regarding the effect of large 

contributions. As discussed in the Commission’s brief, Milyo presents no evidence 

regarding the role of “seed funding” in the formation of political organizations or what 

significance large contributions to an independent group have for potential donors. (See

FEC Mem. at 15-16.) Importantly, Milyo fails to consider or even attempt to account for 

the thousands of registered non-connected political action committees that operate 

successfully. (See FEC Facts ¶¶ 376-79, 383). 

80. Under contribution limits, unless a start-up group happens to be 

advocating or opposing a high-profile issue that is receiving tens of 

millions of dollars of free publicity via the national media, or the group 

has some special connection to a corporation or labor union, that group 

will not be able to raise enough money to have a meaningful impact on 

any election. Smith Decl. at ¶ 11. 

FEC RESPONSE: SpeechNow’s proposed facts claim that the Act’s contribution 

limits prevent it from raising the “seed money” necessary to “get started.” (See SN Facts 

33

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 33 of 71
¶¶ 83, 85, 87, 88.) SpeechNow nowhere specifies how much money is necessary to meet 

this elusive threshold, and the Commission is aware of no Court that has ever held a 

contribution limit unconstitutional simply because a would-be political actor claims it 

cannot raise enough “seed money,” or of any Court that has otherwise invoked the 

concept. (See FEC Mem. at III.C.) 

Nevertheless, SpeechNow appears indeed capable of raising whatever “seed 

money” it purports to need. SpeechNow has received a considerable amount of free 

publicity (FEC Facts at ¶¶ 403–08), and attracted a significant number of supporters and 

potential contributors (id. at ¶¶ 396–401), but has chosen not to accept any contributions 

during the pendency of this litigation, and declined any of the contributions offered to 

date (id. at ¶¶ 398-400.) (See also FEC Resp. Mem. at 15-16.) In any event, because the 

Constitution does not grant competing political actors any rights to equal publicity, equal 

resources, or equal political influence, this fact is irrelevant, and the Court should not 

enter it. (See id. at 14) 

81. Most of the big money raised via the Internet has been the direct result of 

a candidate and/or cause benefitting from a huge amount of free publicity. Smith 

Decl. at ¶ 42. This makes raising money via the Internet out of reach for the vast 

majority of non-wealthy candidates and start-up organizations. Id. 

FEC RESPONSE: See FEC Response to Plaintiffs’ Proposed Fact ¶ 80. 

82. Because the cost of acquiring new donors is often greater than the amount 

received from a new donor, small groups usually start at a loss and remain there 

until they go into debt and/or cease to exist. Smith Decl. at ¶ 10. 

FEC RESPONSE: This proposed fact is unsupported by any evidence regarding 

the actual cost of fundraising, and the Court should decline to enter it. (See FEC Mem. at 

9-10.) In fact, Smith admits (1) that his report contains no data that supports this specific 

34

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 34 of 71
proposition (Smith Dep. at 83-84, FEC Exh. 15) and (2) that in his report he fails to 

identify a single group that went “out of business” due to contribution limits (id. at 123). 

 83. As a result, it is crucial for new organizations to have seed money that 

allows them to begin to advance their mission before a successful program of 

larger-scale fundraising can take place. Smith Decl. at ¶ 35. This is particularly 

true when an organization is working on an issue for which there is not an 

overwhelming and sustained amount of outrage throughout all quarters of the 

public and the media that generates a strong demand for the change favored by the 

organization. Id. at ¶ 11; Keating Decl. at ¶ 41; Crane Decl. at ¶ 10. 

FEC RESPONSE: See FEC Response to Plaintiffs’ Proposed Fact ¶¶ 80, 82. 

84. Right now, the issue of restrictions on free speech from campaign finance 

laws is not such an issue. Keating Decl. at ¶ 41. 

FEC RESPONSE: The Constitution does not grant competing political actors any 

rights to equal publicity, equal resources, or equal political influence. (See FEC Resp. 

Mem. at III.C.) Consequently, the publicity garnered by campaign finance issues in 

general, or by SpeechNow in particular, is irrelevant, and the Court should decline to 

enter this fact. 

85. SpeechNow.org will need to spend substantial funds on advertisements in 

order to raise the profile of this issue and thus add more donors, both large and 

small, to the cause. Keating Decl. at ¶ 41. However, without initial seed funding, 

SpeechNow.org lacks the funds necessary to convince donors that it is a viable 

going concern that has already produced advertisements consistent with its 

mission. Id.; Crane Decl. at ¶ 10. 

FEC RESPONSE: See FEC Response to Plaintiffs’ Proposed Fact ¶ 80. 

86. Convincing donors that SpeechNow.org is a viable going concern—which 

SpeechNow.org can only do by producing and running advertisements—is a 

prerequisite to the success of any larger-scale fundraising effort. Keating Decl. at 

¶ 41; Crane Decl. at ¶ 10; Smith Decl. at ¶ 22. 

FEC RESPONSE: See FEC Response to Plaintiffs’ Proposed Fact ¶ 80. 

87. Because of the contribution limits, SpeechNow.org and groups like it 

cannot receive the seed funding, in the form of large donations over the limits, 

35

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 35 of 71
that they need to get started and have an effective impact on elections. Keating 

Decl. at ¶ 41; Smith Decl. at ¶ 22. 

FEC RESPONSE: See FEC Response to Plaintiffs’ Proposed Fact ¶ 80. 

88. The longer SpeechNow.org has to go without seed funding, the more it 

will be delayed in producing and running its political advertisements and thus in 

undertaking larger-scale fundraising based on a reputation for taking actions that 

advance its mission in the real world. Keating Decl. at ¶ 43. 

FEC RESPONSE: See FEC Response to Plaintiffs’ Proposed Fact ¶ 80. 

89. Even assuming that SpeechNow.org could somehow raise enough 

money in increments of $5,000 or less per donor to pay for its advertisements, 

the contribution limits applicable to political committees would, by making it 

harder to gather funds, still greatly limit the number of times it could run those 

ads. Keating Decl. at ¶ 44. The limits would also restrict SpeechNow.org’s 

ability to run additional advertisements concerning other federal candidates in 

other races. Id. 

FEC RESPONSE: Evidence in the record suggests that more money can be 

raised by seeking out new donors. (See FEC Resp. Mem. at III.A.) SpeechNow has not 

even attempted any fundraising. The Court thus should not enter a finding of fact based 

on Mr. Keating’s speculative and conclusory testimony. 

90. Contribution limits not only deprive groups like SpeechNow.org of the 

large donations necessary to get off the ground, but they also deprive such groups 

of the signal that a large donation sends to potential donors: that the new 

organization has the potential to be effective. Milyo Decl. at ¶ 54. Large donations 

also resolve the uncertainty of potential donors who would otherwise either not 

contribute or would be forced to “play it safe” and donate to other, more 

established groups, even when those groups do not represent the donors’ most 

favored cause. Id. 

FEC RESPONSE: The Court should decline to enter Plaintiffs proposed finding 

of fact in that it relies on Milyo’s unsupported conjecture regarding the effect of large 

contributions. As discussed in the Commission’s brief, Milyo presents no evidence 

regarding the role of “seed funding” in the formation of political organizations or what 

significance large contributions to an independent group have for potential donors. (See

36

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 36 of 71
FEC Mem. at 18.) Specifically, Milyo presents no empirical nor anecdotal evidence of 

even a single donor being forced to “play it safe” or donate to “groups that do not 

represent the donors’ most favored cause.” (Milyo Decl. ¶ 54.) 

“C. Contribution Limits Make it Harder for the Individual Plaintiffs to Associate 

for the Purpose of Speaking Effectively.” 

91. The basic economic concepts of specialization and division of labor apply 

in the setting of groups that engage in any sort of advocacy, including 

independent express advocacy: some individuals have a comparative advantage 

in funding a cause, some in articulating a message for a cause, and some in 

developing a strategy for disseminating that message. For this reason, individuals 

who come together as political groups do so because such a voluntary association 

makes them more effective in their cause. Milyo Decl. at ¶ 50. 

FEC RESPONSE: The Plaintiffs’ proposed finding of fact is irrelevant because 

registering as a political committee would not prevent them from coming together to take 

advantage of any specialization or division of labor; the only constraint is on how much 

money any one individual can contribute to a political committee. (See FEC Mem. at 

19.) Additionally, Milyo’s claims about why individuals come together to form political 

groups are unsupported conjecture. (See Milyo Decl. ¶ 50.) Milyo has not conducted any 

investigations, nor does he cite any investigations concerning why individuals forms 

political groups or what makes a political group “effective.” Id. 

92. The individual plaintiffs wish to join together and associate with each 

other and with SpeechNow.org in order to take advantage of the specialization, 

division of labor, and economies of scale that association affords them. For 

example, David Keating possesses the knowledge and experience to produce and 

broadcast advertisements and to operate a group like SpeechNow.org, but, alone, 

he lacks the financial resources. Keating Decl. at ¶ 48. Ed Crane has a relatively 

large donation to offer SpeechNow.org, but he lacks the time to operate the group 

or to produce and broadcast ads. Crane Decl. at ¶ 4. Fred Young has the financial 

resources to fund some of SpeechNow.org’s advertisements, but he lacks the time, 

knowledge, and experience to produce ads or operate a group like 

SpeechNow.org. Young Decl. at ¶ 4. Brad Russo and Scott Burkhardt lack both 

the time and experience and the resources to fund or operate SpeechNow.org, but 

by donating to SpeechNow.org and associating with its supporters and members, 

37

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 37 of 71
they are able to amplify their voices beyond what they would be able to achieve 

on their own. Russo Decl. at ¶ 4; Burkhardt Decl. at ¶ 4. 

 

FEC RESPONSE: Plaintiffs are free to come together to take advantage of any 

specialization, economies of scale or advantageous division of labor in operating 

SpeechNow; they are merely limited in how much money they can each contribute to the 

group. (See FEC Resp. Mem. at § III.E). 

 93. However, contribution limits make it impossible for individuals to take 

full and effective advantage of the specialization, economies of scale, and division of 

labor that group association affords. The effect of a contribution limit on SpeechNow.org 

and groups like it is to punish individuals, such as the individual Plaintiffs in this case, 

who associate in groups for the purpose of advocating for or against political causes by 

limiting the funds they can devote to such causes. Milyo Decl. at ¶¶ 49-51. 

FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact because the contribution limits that apply to political committees in no way 

“punish” individuals who seek to associate for the purpose of making political speech. 

Plaintiffs are free to come together to take advantage of any specialization, economies of 

scale or advantageous division of labor in operating SpeechNow; they are merely limited 

in how much money they can contribute to the group. (See FEC Mem. at 19.) 

 94. This, in turn, will dissuade some individuals from participating in political 

groups at all. Instead, such individuals must “go it alone” or even abandon their desire for 

political expression, when in the absence of contribution limits they would have been 

more effective as part of a group. Milyo Decl. at ¶¶ 49-51.; Keating Decl. at ¶ 52; Young 

Decl. at ¶¶ 4, 6; Crane Decl. at ¶¶ 4, 6, 10; Russo Decl. at ¶¶ 4, 6; Burkhardt Decl. at ¶¶ 4, 6. 

FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact because, as discussed in the Commission’s brief , Milyo offers no evidence 

whatsoever that anyone has ever been dissuaded from participating in political groups or 

compelled to go it alone or abandon a desire for political expression because of 

contribution limits. (See Milyo Dep. at 240-241, 244-45, 246, FEC Exh. 12.) 

Additionally, none of the Plaintiffs claim that limiting their contribution to $5000 per 

38

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 38 of 71
year will have unduly burdensome implications for them. (See SN Facts ¶ 94; Keating 

Decl. ¶ 52; Young Decl. ¶¶ 4,6; Crane Decl. ¶¶ 4, 6, 10; Russo Decl. ¶¶ 4, 6; Burkhardt 

Decl.¶¶ 4,6.) 

 95. Contribution limits also inhibit the information that large contributions 

convey about which groups are more or less desirable from the donors’ standpoint. 

Milyo Decl. at ¶¶ 52-57. Economies of scale in political communication mean that one 

large group with a mission can be more effective than many small groups with the same 

mission. Potential donors know this and would prefer to focus their giving on one group, 

but they must determine which group is best. Id. at ¶ 55. A political patron’s large initial 

contribution to a group sends an unambiguous signal to other political contributors as to 

which group to focus their giving on. This facilitates the ability of individuals to 

associate more efficiently and to articulate their political opinion more effectively. Id. at ¶¶ 

53-56.

FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact because it is based solely on Milyo’s unsupported conjecture. He offers no 

evidence whatsoever to support his claim that “one large group with a mission can be 

more effective than many small groups with the same mission,” or that any potential 

political donors believe this to be the case. (See Milyo Decl. ¶¶ 52-57.) Indeed Milyo’s 

commentary is strictly theoretical; he presents no evidence, does no investigation, nor 

does he cite to any investigation of the role that “political patrons” play within political 

committees. Id. In his deposition, Milyo conceded that he did not present any empirical, 

analytical, or systematic evidence for his claims regarding the role or effect of large 

“political patrons.” He explained, “in terms of identifying the systematic treatment effect 

on prohibitions on contributions of a certain size on the formation of groups, I did not 

present that sort of systematic estimate of the treatment effect.” (Milyo Dep. at 256-257, 

FEC Exh. 12). He does not know how large contributions from “political patrons” 

actually affect political groups. Additionally, Milyo simply does not consider the 

thousands of independent PACs that do raise money and communicate effectively 

39

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 39 of 71
without “political patrons.” (See FEC Facts ¶¶ 376-79, 383). Finally, any proposed 

findings of fact regarding “political patrons” are irrelevant because there is no 

constitutional right to such “patronage.” 

 96. Limits on contributions to groups like SpeechNow.org prevent political 

patrons from either seeding new groups or helping to organize individuals into joining 

and supporting more effective political groups. Milyo Decl. at ¶ 57. 

FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact because, as above, Milyo presents no evidence, does no investigation, nor does he 

cite to any investigation of the role that “political patrons” play within political 

committees or what determines whether or not a political group is effective. (See Milyo 

Decl. ¶¶ 52-57.) Additionally, any proposed findings of fact regarding “political patrons” 

are irrelevant because there is no constitutional right to such “patronage.” 

 97. In sum, limits on contributions to political groups restrict the amount and 

effectiveness of political expression by these groups, as well as the amount and 

effectiveness of political expression by individuals that wish to contribute to such groups. 

Milyo Decl. at ¶ 58. 

FEC RESPONSE: The Court should decline to enter Plaintiffs’ conclusory 

proposed finding of fact because their contention is based solely on Milyo’s unsupported 

conjecture. (See SN Facts ¶¶ 91-97; Milyo Decl. ¶¶ 50-58.) Milyo presents no evidence 

or support for his contention that contribution limits reduce the effectiveness of political 

expression, or even what determines whether or not a political group is effective in the 

real world of national political discourse. Id. Additionally, neither Plaintiffs nor Milyo 

presents any evidence in this section that contribution limits actually reduce the “amount” 

of political expression that a group is able to make. Id. 

“D. Contribution Limits Restrict the Amount of Funds Available to Groups Like 

SpeechNow.org for Independent Expenditures.” 

40

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 40 of 71
98. Communicating a political message to a large group of voters is an expensive 

proposition that requires a significant amount of money for the message to be heard. 

Smith Decl. at ¶ 8; Keating Decl. at ¶¶ 22-24. 

FEC Response: The evidentiary support for this proposed fact consists of a 

conclusory, unsupported statement by SpeechNow’s expert Rodney Smith and David 

Keating’s notions of “ideal” advertising buys. Keating posits that an ideal advertising 

buy would garner at least 1,000 gross ratings points, enough to allow its “message to sink 

in.” Keating declares that in a competitive election environment, such as “in a statewide 

[Senate] race . . . it is important to reach as many people in the state as possible.” 

(Keating Decl. ¶ 23.) While it is often true that communicating to large groups of voters 

requires significant amounts of money -- with the Internet creating more exceptions than 

ever (c.f. FEC Resp. Mem. at III.B.) -- this proposed fact is premised on the notion that 

there is a threshold level of political influence that contribution limits must 

accommodate. But as the Commission has explained (See FEC Mem. at III.C), the 

Constitution does not grant competing political actors any rights to equal political 

influence and the Court should decline to enter this proposed fact. 

 99. As a result, any group that wants to speak out effectively will want to raise 

money in the most efficient way possible—that is, at the lowest cost per contributed 

dollar—in order to allow it to raise sufficient funds quickly enough to have an impact on 

the election. Smith Decl. at ¶ 26; Milyo Decl. at ¶ 37. Put another way, the more money 

that a group spends to raise its funds, the less money it will have to spend on its 

independent expenditures. Milyo Decl. at ¶¶ 37-39. 

FEC RESPONSE: Plaintiffs assert that “the more money that a group spends to 

raise its funds, the less money it will have to spend on its independent expenditures.” 

The only support for this assertion is several paragraphs of Milyo’s new declaration. (SN 

Facts ¶ 99; Milyo Decl. ¶¶ 37-39.) However, Plaintiffs’ statement is an inaccurate oversimplification of Milyo’s claims—regardless of their other flaws. Id. Milyo’s 

41

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 41 of 71
contentions speak to the point that if a group is compelled to raise money in an inefficient 

manner, it will not be able to raise the highest conceivable amount of funds. Id. This is 

not, however, what Plaintiffs’ proposed finding of fact states. Indeed, it is quite possible 

that the more money that a group spends on fundraising, the more contributions that it 

will gather, and thus, the more money it would have to spend on independent 

expenditures. 

 100. A number of basic economic principles support this conclusion. First, 

under the “equi-marginal principle,” a group will pursue contributions from that donor 

pool that involves the lower marginal cost of raising funds per donor dollar. Milyo Decl. 

at ¶ 37. Groups are limited in the amount of time, effort, and resources that they may 

devote to fundraising and are thus forced to make choices about how to allocate their 

scarce resources in order to maximize the amount of money that they have. Thus, if 

given the opportunity to pursue funds from large donors or small donors, a group seeking 

to maximize its funds available for independent expenditures will allocate its efforts to 

the group of donors that involve the lowest cost per donor dollar raised. Id. If the costs 

are higher for one group of donors—small donors, for example— the organization can 

still reallocate resources to raising money from the group of large donors in order to be 

able to raise enough funds to finance its independent expenditures. Id. at ¶ 38.

FEC RESPONSE: As discussed in detail in the Commission’s brief, the Court 

should decline to enter any of the Plaintiffs’ proposed findings of fact regarding Milyo’s 

application of the “equi-marginal principle” because his theoretical discussion is undercut 

by the factual history of “soft money” and political party fundraising. He does not 

consider any of the realities of political fundraising (including what counts as a “large” or 

“small” contribution, what the marginal costs of raising additional large and small 

contributions are, or the relative burdens of raising specific amounts of money for 

independent expenditures), and indeed, Milyo concedes that the effect of the “equimarginal principle” could be that SpeechNow raises a penny less under contribution 

limits than it would have in an “unconstrained” environment. (See FEC Mem. at 19-20.) 

 101. Under contribution limits, however, an organization is forced to raise funds 

from one group—small donors—because large donors are prohibited from contributing 

42

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 42 of 71
money to the group. Milyo Decl. at ¶ 39. According to the “law of increasing opportunity 

costs,” (also known as “the law of diminishing returns”) the cost of raising funds from two 

pools of donors—one of small donors and one of large donors—will increase with the 

amount of money already raised from either pool of donors. Id. at ¶ 37. Put another way, by 

restricting the donor pool, contribution limits make donor dollars more scarce, requiring 

groups trying to raise funds to pursue greater numbers of donors—at a greater marginal cost 

per dollar raised—for the money they need to fund their independent expenditures. Id. at ¶ 

39. Thus, the equi-marginal principle implies that any constraint on fundraising will lower a 

group’s total funds received, and therefore also lower its ability to make independent 

expenditures. Id. 

FEC RESPONSE: As discussed in detail in the Commission’s brief, the Court 

should decline to enter any of the Plaintiffs’ proposed findings of fact regarding Milyo’s 

application of the “equi-marginal principle” because his theoretical discussion is undercut 

by the factual history of “soft money” and political party fundraising. He does not 

consider any of the realities of political fundraising, and indeed, Milyo concedes that the 

effect of the “equi-marginal principle” could be that SpeechNow raises a penny less 

under contribution limits that it would have in an “unconstrained” environment. (See

FEC Mem. at 19-20.) 

 102. Second, the concept of “Revealed Preference” also implies that any 

constraint on fundraising, such as contribution limits, will restrict a group’s ability to 

make independent expenditures. Milyo Decl. at ¶ 40. In an unconstrained environment, a 

group’s mix of donations from small and large contributors represents the group’s 

maximal ability to raise funds for independent expenditures. Id. at ¶ 41. In other words, 

the mix reveals the group’s best effort at maximizing the funds it has available for 

independent expenditures. Id. Any contribution limit will cause a deviation from the mix 

of donations that would have occurred in the unconstrained environment, and will yield a 

less preferred outcome for the group and its ability to make independent expenditures. Id. 

at ¶ 43. 

FEC RESPONSE: As in the case of Milyo’s discussion of the “equi-marginal” 

concept, and as discussed in the Commission’s brief, the Court should decline to enter 

any of the Plaintiffs’ proposed findings of fact regarding Milyo’s application of the 

“revealed preference” principle because his theoretical discussion is undercut by the 

factual history of “soft money” and political party fundraising. He does not consider any 

43

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 43 of 71
of the realities of political fundraising (such as whether or not a group is able to 

determine what kinds of contributions it should pursue in order to maximize its 

fundraising, the comparative burdens of seeking large or small contributions, or the 

extent to which external circumstances could affect how a group raises political 

contributions), and he makes no claims about the actual extent to which contribution 

limits would affect a group’s fundraising in the real world. (See FEC Mem. at 20-22.) 

 103. In sum, any contribution limit that generates a deviation from the pattern 

of contributions that would be observed in an unconstrained environment must be an 

actual impediment to a group’s ability to raise and spend funds, and so must yield a less 

preferred outcome for the group—that is, lower independent expenditures. Milyo Decl. 

at ¶ 43. Consequently, if evidence shows that political groups raise money from large 

contributors when permitted to do so, “revealed preference” would indicate that 

contribution limits do in fact harm the groups and result in less spending on independent 

expenditures. Id. 

FEC RESPONSE: The Court should decline to enter any of the Plaintiffs’ 

proposed findings of fact regarding Milyo’s application of the “revealed preference” 

principle because his theoretical discussion is undercut by the factual history of “soft 

money” and political party fundraising, he does not consider any of the realities of 

political fundraising, and he makes no claims about the actual extent to which 

contribution limits would affect a group’s fundraising in the real world. (See FEC Mem. 

at 20-22.) 

 104. An analysis of data from the 2004 election cycle demonstrates that, in fact, 

groups do reveal a preference for larger over smaller contributions. Milyo Decl. at ¶ 76. 

 

FEC RESPONSE: The Court should decline to enter any of plaintiffs’ proposed 

findings of fact based on Milyo’s application of the “revealed preference” principle 

because he mistakenly claims that the fundraising habits of unregistered 527 groups in 

2004 are representative of the preferences of all independent political groups. As 

44

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 44 of 71
discussed in the Commission’s brief, Milyo’s focus on the 2004 527 groups is not 

applicable to all political committees because (i) it ignores the many unconnected 

committees that chose to register with the FEC and collect contributions within the limits, 

(ii) the amount of large donations that many of the 527s received is skewed because 

contributions within the limits were more likely to be given to their associated PACs or 

other political entities, and, (iii) as Milyo concedes, the 527s he discusses may not even 

be representative of other 527s. (See FEC Mem. at 17, 20-22.) 

105. Plaintiffs’ expert, Dr. Jeffrey Milyo, compared the pattern of individual 

contributions in the 2004 election cycle to the top (in terms of total receipts) non-party, 

federally focused 527 organizations and to their associated federal PACs. Milyo Decl. at 

¶¶ 76-79. At the time, those 527 organizations were not subject to contribution limits, 

while the PACs were. As a result, the comparison demonstrates the impact of 

contribution limits on PACs as opposed to 527s. Id. at ¶¶ 75, 79. 

FEC RESPONSE: As discussed in the Commission’s brief, Milyo’s focus on the 

2004 527 groups is not applicable to all political committees because (i) it ignores the 

many nonconnected committees that chose to register with the FEC and collect 

contributions within the limits, (ii) the amount of large donations that many of the 527s 

received is skewed because contributions within the limits were more likely to be given 

to their associated PACs or other groups, and, (iii) as Milyo concedes, the 527s he 

discusses may not even be representative of other 527s. (See FEC Mem. at 15-17.) 

Furthermore, as Milyo notes in his declaration, “only contributions totaling more than 

$200 in a given year must be itemized and reported to the IRS.” (Milyo Decl. ¶ 74.) 

Accordingly, Milyo’s data regarding the fundraising of 527s in 2004 may ignore 

numerous contributions less than $5,000. 

 106. Half of the 527 groups received average contributions that are well above 

the $5,000 limit for PACs, including several groups with average contributions of 

$100,000 to more than $500,000. Milyo Decl. at ¶ 76. 

45

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 45 of 71
FEC RESPONSE: (See Resp. to SN Fact ¶ 105.) 

 107. For several of the groups, contributions above the $5,000 limit accounted 

for the vast majority of funds they raised. Milyo Decl. at ¶ 80. For example, large 

individual contributions (those over $5,000) accounted for 98.3% of the funds from 

individual contributors to America Coming Together, 79.7% of the contributions to 

MoveOn.org, 88.6% of contributions to the New Democrat Network, and 76.5% of 

contributions to the Club for Growth. Id. In addition, between 48% and 82% of the 

individual contributions to these groups were in amounts of $100,000 or more. Id. Thus, 

most of the funds raised by these organizations were in amounts that would have 

exceeded the annual limit on individual donor contributions to political committees, as 

well as the biennial aggregate limit on individual donors. Id. 

FEC RESPONSE: (See Resp. to SN Fact ¶ 105.) 

 108. Five hundred and fifty-five persons made contributions of $5,000 to the 

PACs associated with these groups. Milyo Decl. at ¶ 82. Given the distribution of 

contributions to the associated 527 organizations—that is, many people contributed more 

than $5,000 to 527s—it is reasonable to assume that many of the donors to PACs would 

have given larger amounts to the PACs had they been allowed to do so. Id. 

FEC RESPONSE: (See Resp. to SN Fact ¶ 105.) 

109. For example, had the top 271 maximum contributions to the America 

Coming Together PAC exhibited a similar distribution across contribution amounts as did 

the large contributions to the America Coming Together 527, then the PAC would have 

raised over $22 million more dollars than it did in 2003-2004 (or about a 66% increase). 

Milyo Decl. at ¶ 79. 

FEC RESPONSE: The Court should decline to enter plaintiff’s proposed fact 

because donors to a PAC like ACT’s would be extremely unlikely to replicate the amount 

of money raised for ACT itself if they were free to give as much as they wanted to ACT 

PAC. Donors are usually directed to first give to a PAC, and then, if they are interested 

in providing additional funds, to give to the connected 527. (See Wilcox Rept. at 6, FEC 

Exh. 1; Rozen Decl. ¶ 11, FEC Exh. 3; McConnell v. FEC, 540 U.S. 93, 125 n.15.) 

Contributors to ACT PAC thus would not contribute in the same ratio to ACT PAC if its 

46

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 46 of 71
limits were lifted: if contributors, wanted to give more, they likely would already have 

done so to the connected 527. 

 110. For the top 527 political organizations without PACs (Joint Victory 

Campaign 2004, Media Fund, Progress for America, Swift Vets & POW for Truth, 

College Republican National Committee, Citizens for a Strong Senate), four of these six 

groups raised more than 99% of their funds from individual contributors in amounts 

greater than $5,000; in fact, all but one of these groups raised most of its funds from 

individual contributors in amounts of $100,000 or more. Milyo Decl. at ¶ 83. 

FEC RESPONSE: (See FEC Resp. to SN Fact ¶ 105.) 

 111. A random sample of 527 organizations outside the top ten 527s 

(Marijuana Policy Project, International Brotherhood of Electrical Workers, League 

of Conservation Voters, Young Democrats, Ocean Champions Voter Education 

Fund, Justice for America) shows that, in most cases, 80-99% of the individual 

contributions to these groups were in amounts greater than $5,000, and a majority of 

these funds were contributed in amounts of $100,000 or more. Milyo Decl. at ¶ 84. 

FEC RESPONSE: A random sample of 527 organizations outside the top ten 

527s (Marijuana Policy Project, International Brotherhood of Electrical Workers, 

League of Conservation Voters, Young Democrats, Ocean Champions Voter 

Education Fund, Justice for America) shows that, in most cases, 80-99% of the 

individual contributions to these groups were in amounts greater than $5,000, and a 

majority of these funds were contributed in amounts of $100,000 or more. Milyo 

Decl. at ¶ 84. 

 

FEC RESPONSE: The Court should decline to enter SpeechNow’s proposed 

finding of fact because Milyo’s further sample of 527 groups is not “random” or 

representative of political committees. Accordingly, his analysis does not elucidate the 

nature of independent political groups’ fundraising practices. 

Although Milyo concedes in his declaration that the top 527 groups from 2004 

may be “unrepresentative,” he attempts to shore up his claims by examining “six more 

527 political organizations [selected] in a manner that generates an essentially random 

sample.” (Milyo Decl. ¶ 84.) At his deposition, Milyo explained how he decided to 

examine these particular six groups, as follows: 

47

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 47 of 71
 [T]he way in which data on disclosure reports from the 527 organizations 

is organized by the Center for Public Integrity is that there’s a set of 

alphabetical links, And one can click on an alphabetical letter, which well 

then bring up groups which are 527 organizations. And so what I did is 

selected ... letters corresponding to my last name and first initial. You’ll 

see it’s M-I-L-Y-O-J. Originally, I was only going to do M-I-L-Y-O, but 

it left an ugly hole in the table ... [a]nd that what I did, once I selected that 

letter, was I looked for the first example of a 527 group which had some 

nontrivial individual contributions. 

(See Milyo Dep. at 318.) When questioned about the validity of his methodology, 

whether he did any “statistical analysis of any kind to determine whether the information 

about these six groups would be statistically representative or relevant about the whole 

realm of 527s,” Milyo conceded that he “did not” and added that “Here’s some other 

groups. Here’s the method by which they were selected, and I’m not really representing 

more than that about these groups.” (Milyo Dep. at 319-320.) Further admitting that he 

made no claim about whether or not these six groups were a representative sample, Milyo 

concluded that “if you don’t like it, you can feel free to throw out that.” (Milyo Dep. at 

320.) 

 Milyo’s discussion of these six additional groups purported to address a major 

concern regarding his analysis of 527s generally, namely, that they were 

“unrepresentative.” (Milyo Decl. ¶ 84.) However, Milyo’s attempt to bolster his 

conclusions fails for the same reasons and renders his analysis unreliable. Accordingly, 

all of SpeechNow’s proposed findings of fact relying on Milyo’s analysis of 527 

fundraising in 2004 should be discounted. (See SN Facts ¶¶ 104-112). 

 112. In sum, data on the size distribution of contributions to prominent 527 

organizations and PACs confirm that limits on contributions to political groups reduce 

the funds available to those groups and impose significant burdens on their ability to 

speak effectively. Milyo Decl. at ¶¶ 83, 85, 86. 

48

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 48 of 71
FEC RESPONSE: For all of the reasons stated above, the Court should decline to 

enter the plaintiffs’ conclusory proposed facts regarding the alleged burden of 

contribution limits based on the past fundraising practices of 527 groups. The 2004 527 

groups are not representative of independent political groups generally; Milyo’s analysis 

of the 527 groups is rife with errors, sloppy analysis, and mischaracterization; and 

Milyo’s theoretical discussion of economic “principle” does not contain any relevant 

factual information about how fundraising works for actual political groups. (See FEC 

Mem. at 15-22.) 

113. According to the California Fair Political Practices Commission, “If the 

top 25 independent expenditure committees in California had to adhere to the same 

contribution committee limits as candidate controlled committees, there would have been 

a reduction of $61,705,519 in special interest money from 2001 through 2006.” Simpson 

Decl. Ex. 18, Independent Expenditures: The Giant Gorilla in Campaign Finance, a 

report of the California Fair Political Practices Commission, dated June 2008 at 4; 

Simpson Decl. Ex. 19, Excerpts from the Deposition Transcript of Susan Swatt, taken 

October 1, 2008 at 41:23-42:20; Simpson Decl. Ex. 20, Excerpts from the Deposition 

Transcript of Ross Johnson, taken October 1, 2008 at 59:760:5, 71:22-73:18 (“If at some 

time, hypothetically in the past or hypothetically in the future, a limit had been placed on 

the size of their independent expenditures—I’m sorry, on the contributions that they 

could receive—these groups at least would not have been able to spend the kinds of 

money that they did.”); Milyo Decl. at ¶ 71. 

 

 FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact because it mischaracterizes the California Fair Political Practices Commission’s 

(“FPPC”) report, Independent Expenditures: The Giant Gorilla in Campaign Finance, 

and the deposition testimony of the FPPC Chairman, Ross Johnson. The report does 

contain the sentence quoted by the plaintiffs, but the import is that many millions of 

dollars were given to independent expenditure committees in amounts far greater than the 

current contribution limits to candidates, not that independent expenditure committees 

would necessarily raise tens of millions of dollars less if forced to seek money under 

49

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 49 of 71
contribution limits themselves. The following exchange from Chairman Johnson’s 

deposition makes this clear: 

 Q. Correct me if I’m misstating your prior testimony, but you 

were saying that if we limited the amount of money that an 

individual could give to independent expenditure committees, that 

that would reduce the total amount of independent expenditures in 

California. 

 A. No, I don’t think I said that. I think I said – if I did, then 

that was not what I intended. What I intended to say was that I 

think an imposition of a limit on the amount a person could 

contribute to an independent expenditure committee would be a 

significant step in the right direction. And I believe that the sum of 

these enormous independent expenditures from a handful of large 

special interest contributors would be impacted by that, and so it 

would be a positive step. 

 If a contribution limit were in place in terms of what you 

could contribute to an independent expenditure committee ... 

nothing to keep you from having hundreds of thousands of people. 

 

(See Johnson Dep. at 61-62.) The total amount of money that independent groups would 

not necessarily decrease because they could still seek contributions from “hundreds of 

thousands of people.” When asked directly about the quoted passage from the report and 

whether “there really would have been $61,705,919 less money spent in the form of 

independent expenditures from 2001 and 2006,” Chairman Johnson responded as 

follows: 

A. There’s no way that one could know what would have 

happened.What one can know with absolute certainty is that 

$61,705,919 was spent above what these contributors could have 

given directly to the candidates they supported. That is a fact. 

Now, if – 

Q. Sir – 

A. If contribution limits had been in place in terms of what 

could be given to an independent expenditure committee, other 

factors might have come into play. So obviously, I can’t say 

50

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 50 of 71
absolutely no, but that is an undeniable fact. 

(See Johnson Dep. at 66-67.) Despite Chairman Johnson’s clear answer, counsel for 

Plaintiffs continued to ask essentially the same question again and again over numerous 

objections from the Commission. (See Johnson Dep. at 67-72.) Repeatedly, Chairman 

Johnson made the point that trying to say what independent expenditure committees 

would do under contribution limits would be “speculative,” that he didn’t “have a crystal 

ball” and that “in [his] experience, predictions are very difficult, particularly when they 

talk about the future.” (See Johnson Dep. at 67, 69, 70.) The statement quoted by 

SpeechNow in their proposed finding of fact came after the following exchange: 

Q. If they had to adhere to the candidate contribution limits 

going forward, isn’t it true that they would not be able to spend as 

much money in independent expenditures as they were able to do 

from 2001 through 2006? 

Mr. Wilson: Objection. Asked and answered and answered and 

calls for speculation. 

Mr. Gall: And I will move on once I get a good answer. Any 

answer. 

 Mr. Wilson: He’s answered your question a number of times, sir. 

 Mr. Gall: He’s not answered this question. 

The Witness: I think I have. Repeatedly. You know with all 

respect, sir, I think I’ve answered the question repeatedly. 

(See Johnson Dep. at 71-72.) Accordingly, the Commission objects to the statement 

being entered as a finding of fact. Plaintiffs should not be permitted to harass a witness 

until they get an answer that they like. The passage quoted by SpeechNow simply does 

not mean that groups will raise less money if compelled to operate under contribution 

limits. 

51

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 51 of 71
114. State legislative candidates spend significantly less on their campaigns 

in states with contribution limits. Milyo Decl. at ¶ 65. 

FEC RESPONSE: The Court should decline to enter Plaintiffs’ proposed finding 

of fact because it relies on Milyo’s mischaracterization of an academic source. Milyo 

asserts that “Recent empirical work by Stratmann (2006) confirms that state legislative 

candidates spend significantly less on their campaigns in states with contribution limits, 

all else constant.” (Milyo Decl. ¶ 65.) However, the paper (Thomas Stratmann, 

Contribution limits and the effectiveness of campaign spending, Public Choice (2006) 

129: 461-474, FEC Exh. 152) is really about a different issue. As Stratmann explains, 

“this study tests whether campaign expenditures by state House candidates are more 

productive when candidates are subject to contribution limits. The results show that 

campaign expenditures by incumbents and challengers are more productive when 

candidates run in states with campaign contribution limits, as opposed to states without 

limits. In states with contribution limits, incumbent spending and challenger spending 

are equally productive, and spending by both candidates is quantitatively important in 

increasing their vote shares.” Id. Furthermore, it is important to note that the study 

concerns candidate spending and direct contribution limits; it doesn’t have anything to do 

with independent expenditures or groups like SpeechNow. 

“V. SpeechNow.org Poses No Threat of Corruption” 

115. SpeechNow.org’s mission and purpose is to expressly advocate the 

election or defeat of candidates based on those candidates’ positions on issues affecting 

free speech; its mission and purpose is not to allow individuals to gain access to or obtain 

gratitude of any candidates. Keating Decl. at ¶¶ 2-3, 10; Bylaws, Art. II. 

FEC RESPONSE: Whether or not SpeechNow’s “mission and purpose” is to 

“allow individuals to gain access to or gratitude of any candidates” is irrelevant to the 

52

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 52 of 71
determination of the constitutionality of the statutory provisions challenged by plaintiffs. 

The Supreme Court has already recognized in Buckley v. Valeo, 424 U.S. 1 (1976), when 

it upheld the Act’s individual contribution limit to candidates and candidate committees, 

that it is the potential for corruption that is relevant, not the motives of potential 

contributors. (See FEC Resp. Mem. § IV.) 

116. The individual plaintiffs wish to donate money to SpeechNow.org to 

support its speech-related mission, not to use their contributions to obtain access to or 

gratitude of candidates or officeholders. Keating Decl. at ¶ 52; Young Decl. at ¶ 9; Crane 

Decl. at ¶ 9; Russo Decl. at ¶ 7; Burkhardt Decl. at ¶ 7. 

FEC RESPONSE: (See Resp. to SN ¶ 115.) 

117. The individual plaintiffs either do not care whether any candidates or 

officeholders know about contributions they intend to make to SpeechNow.org or they 

would prefer that candidates not know about such contributions. Keating Decl. at ¶ 52; 

Young Decl. at ¶ 9; Crane Decl. at ¶ 9; Russo Decl. at ¶ 7; Burkhardt Decl. at ¶ 7. 

FEC RESPONSE: SpeechNow.org’s bylaws would not prevent SpeechNow.org 

and its members, officers, agents, employees and donors from making candidates aware 

of their contributions to SpeechNow and expenditures by it. Not all candidates are aware 

of the identities of those who contribute funds to organizations to finance independent 

expenditures that support the candidate or oppose the candidate’s opponents, but 

candidates generally are aware of the identities of the donors. Candidates likely are more 

aware of the identity of donors who give donations in excess of the Act’s contribution 

limits than the identity of donors who give less than the contribution limits. 

118. Based on the research by Clyde Wilcox, the FEC’s expert in this case, 

most individuals who donate money to political candidates and committees do so for 

ideological reasons. Simpson Decl. Exs. 21, Excerpts from the Deposition Transcript of 

Clyde Wilcox, taken September 22, 2008 at 145:6-17, 157:10-14, 219:10-13, 226, 229, 

and 22, Excerpts from Wilcox et al., THE FINANCIERS OF CONGRESSIONAL ELECTIONS: 

INVESTORS, IDEOLOGUES AND INTIMATES (2003) at 45, 48-49, 67. 

53

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 53 of 71
FEC RESPONSE: In support of this proposed fact, SpeechNow cites to 

fragments of Professor Wilcox’s past research and his deposition testimony. But 

SpeechNow ignores parts of Wilcox’s book and testimony which suggest that 

“investors,” donors who contribute seeking tangible personal gain, account for a 

significant percentage of those who make contributions. His research showed that “a 

combined 60 percent admitted that it was always or sometimes important whether a 

candidate was friendly to their industry, and more than half said that it was at least 

sometimes important to give so that their business was treated fairly.” (Peter L. Francia, 

et al., The Financiers of Congressional Elections: Investors, Ideologues and Intimates 45 

(2003)). 

119. Individuals are legally able to make unlimited independent expenditures as 

long as they are not coordinated with candidates or political party committees. Thus, for 

instance, the FEC admits that Fred Young could spend his own money to produce and 

broadcast the advertisements that SpeechNow.org wants to run as long as he follows the 

FEC’s rules concerning coordination. FEC’s Mem. in Opp’n to Pls.’ Mot. Prelim. Inj. 34 

(Mar. 5, 2008, Docket No. 13) (“Thus Mr. Young, who allegedly is willing to contribute 

$110,000, could finance these or similar advertisements himself.”). 

FEC RESPONSE: No additional specific response. 

120. According to the FEC, Fred Young could hire consultants to produce and 

broadcast advertisements like those SpeechNow.org wants to run without having to 

register as a political committee and be subject to contribution limits. Simpson Decl. Ex. 

4, Excerpts from the Deposition Transcript of Fred M. Young, Jr., taken October 3, 2008 

at 92:11-93:4. However, Fred Young would like to associate with SpeechNow.org and 

its supporters for that purpose. Id. (“Q: Could you hire someone with the time and 

expertise? THE WITNESS: Well, I’m hoping that I can quote/unquote hire 

SpeechNow.org to do that sort of thing.”). 

54

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 54 of 71
FEC RESPONSE: No additional specific response. 

121. Individuals may make independent expenditures in aggregate amounts of 

greater than $1,000 and may coordinate their efforts with other individuals who make 

independent expenditures in aggregate amounts of greater than $1,000, without having to 

register as a political committee as long as they do not have a “major purpose” of 

nominating or electing a candidate for office. Simpson Decl. Ex. 23, Excerpts from FEC 

Responses to Plaintiffs’ Second Set of Discovery Requests, dated September 25, 2008 

(FEC Response to Request for Admission No. 24). 

FEC RESPONSE: No additional specific response. 

122. Whatever concerns about corruption may be raised by a group’s 

independent expenditures would also be raised by an individual’s independent 

expenditures. Simpson Decl. Exs. 23 (FEC Response to Request for Admission No. 26) 

and 21 (Wilcox Deposition Excerpts) at 178:7-179:2; see also Milyo Decl. at ¶¶ 26-28. 

FEC RESPONSE: Irrelevant. The Supreme Court analyzes expenditure limits, 

such as a cap on the amount of money an individual could spend on an independent 

expenditure, differently from contribution limits. See Buckley v. Valeo, 424 U.S. 1, 20-21 

(1976). An expenditure cap is not at issue in this case. 

In addition, one of the cited sources does not support plaintiffs’ proposed fact. 

The Commission actually stated: 

[I]independent expenditures by individuals raise many of the same 

concerns about corruption as individual expenditures by groups, but DENY that 

independent expenditures by groups raise the exact same concerns. For example, 

independent expenditures by individuals do not raise the concern regarding undue 

access or influence over officeholders to the same extent as independent 

expenditures by groups. 

Simpson Decl. Exs. 23 (FEC Response to Request for Admission No. 26.) Similarly, in 

the sections of Milyo’s deposition cited by plaintiffs, he does not discuss what risks of 

corruption arise from an individual making independent expenditures. 

123. If SpeechNow.org’s bylaws are followed by SpeechNow.org and its 

members, officers, agents, employees and donors, SpeechNow.org will not make 

55

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 55 of 71
coordinated communications. Simpson Decl. Ex. 23 (FEC Response to Request for 

Admission No. 32). 

FEC RESPONSE: As the Commission explained, “SpeechNow.org’s bylaws 

would not prevent SpeechNow.org and its members, officers, agents, employees and 

donors from making candidates aware of their expenditures. Id.” 

124. The FEC effectively utilizes its rules against coordination, 11 C.F.R. 

§ 109.21, to handle allegations of coordination. Simpson Decl. Ex. 23 (FEC Response to 

Request for Admission No. 31). 

FEC RESPONSE: Plaintiffs’ proposed fact is partially unsupported. The 

Commission is an agency of limited jurisdiction. The Commission responded to 

plaintiffs’ request for admission as follows: 

The Commission effectively utilizes its rules to handle 

coordination allegations when complaints are filed with the Commission 

or when information regarding coordination comes to the Commission’s 

attention “on the basis of information ascertained in the ordinary course of 

carrying out its supervisory responsibilities” pursuant to 2 U.S.C. 

§ 437g(a)(1) and (2). 

(Simpson Decl. Exh. 23 (FEC Response to Request for Admission No. 31).) The 

Commission’s response did not address other allegations of coordination. 

125. It is a well-established result in game theory and human subject 

experiments that collusive behavior is, in general, less likely to occur when the 

number of persons involved in the potentially-collusive arrangement increases. 

Milyo Decl. at ¶ 26. 

FEC RESPONSE: The Court should decline to enter any of Plaintiffs’ proposed 

findings of facts concerning Milyo’s discussion of “game theory” because Milyo’s claims 

are unsupported and irrelevant. First, Milyo claims that collusive behavior is generally 

less likely to occur when the number of persons involved in the potentially-collusive 

arrangement increases. His support for this claim is a 1980 literature review by Robyn 

Dawes entitled Social Dilemmas. The claim is unsupported, however, because a 

56

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 56 of 71
potentially cooperative relationship between the members of or donors to SpeechNow 

and an office-holder do not appear to fit the pattern of a social dilemma. According to 

Dawes, “Social dilemmas are characterized by two properties: (a) the social payoff to 

each individual for defecting behavior is higher than the payoff for cooperative behavior, 

regardless of what the other society members do, yet (b) all individuals in the society 

receive a lower payoff if all defect than if you all cooperate.” (Robyn Dawes, Social 

Dilemmas, Ann. Rev. Psychology, Volume 31:169-93 (1980), FEC Exh. 154.) After 

repeated questioning, Milyo was unable to explain how collusive behavior between an 

officeholder and SpeechNow would fit within this system of payoffs, conceded that he 

“did not endeavor to model the activities of SpeechNow,” and furthermore, stated that he 

was not aware of any modeling that has been done about independent expenditures and 

implicit relationships with officeholders.” (See Milyo Dep. at 159-170, 167, and 171.) 

Milyo’s broad conjecture, parroted by the Plaintiffs, does not consider any of the relevant 

characteristics of a group like SpeechNow and is thus inapplicable. 

126. Thus, while research has found that implicit cooperation can occur even 

without explicit contracting mechanisms in relationships involving two people, where the 

number of people involved in the relationship is increased, implicit cooperation becomes 

much less feasible. The reason is that in group settings, it is harder to know how much 

control or influence any one individual or sub-group of individuals has over the group as 

a whole. Milyo Decl. at ¶ 28. Further, any political favors directed by an office holder to 

some members of the group may not be equally valued by all members of the group, or 

even recognized by all members of the group. Id. In other words, there is less reason to 

be concerned that a political candidate and a group will establish and maintain a collusive 

relationship than there is for a political candidate and a single person. Id. at ¶ 26. 

FEC RESPONSE: In addition to the reasons stated above (Resp to SN Facts ¶ 

125), the Court should decline to enter Plaintiffs’ proposed findings of fact based on 

Milyo’s discussion of game theory because he misunderstands how corruption (or its 

appearance) can occur between an officeholder and a contributor to a group that makes 

57

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 57 of 71
independent expenditures. There does not need to be any cooperation among the group. 

If a group is spending its resources to support a candidate (or defeat her opponent), an 

individual could use a large contribution to the group to seek a favor from the candidate 

whether all of the other members of the group were cooperating or not. Similarly, where 

a single individual functionally controls all of the activities of a group, like in the case of 

SpeechNow, the cooperation and shared “values” of other donors or contributors, is 

irrelevant. Plaintiffs’ proposed finding of fact should not be entered because it wrongly 

assumes that there needs to be coordination between a candidate and every member or 

donor to a group working together for the candidate to be corrupted or appear to be 

corrupted by an independent expenditure. 

127. SpeechNow.org will spend contributions it receives according to the sole 

discretion of the association. Keating Decl. at ¶¶ 25, 36; Bylaws, Art. VI § 11. 

Accordingly, individual donors will not be able to direct their contributions to particular 

advertisements or particular candidates’ races. Keating Decl. at ¶ 36. 

FEC RESPONSE: No additional specific response. 

128. Political candidates do not necessarily approve of independent 

expenditures made in support of their campaigns or in opposition to their opponent’s 

campaigns. For instance, both presidential candidates in this year’s election, as well as 

other candidates, have asked donors to their campaigns not to contribute to independent 

groups. Simpson Decl. Exs. 14 (FEC Response to Request for Admission No. 14), 23 

(FEC Responses to Requests for Admission Nos. 28-30), and 24, News Articles 

concerning Candidate Disapproval of Independent Expenditures. 

FEC RESPONSE: Campaigns may at various times have publicly discouraged 

donors from contributing to independent groups, including the statements in the 

referenced article. However, campaigns have not consistently discouraged such activity. 

See, e.g., Marc Ambinder, Quietly Obama Campaign Calls In the Cavalry, 

TheAtlantic.com, Sept. 9, 2008; Jim Rutenberg and Michael Luo, Interest Groups Step 

Up Efforts In A Tight Race, New York Times, Sept. 16, 2008. In fact, in virtually every 

58

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 58 of 71
campaign, independent groups frequently run negative ads and allow candidate 

campaigns to disavow them and say “with a wink” that they were unaware of the ads and 

condemn them. Wilcox Rept. at 15. Candidate disavowals are consistent with this 

phenomenon. 

129. There is no scientific empirical evidence to support the contention that 

limits on contributions to groups like SpeechNow.org have any impact whatsoever on 

either corruption or the appearance of corruption. Milyo Decl. at ¶ 62. 

FEC RESPONSE: Professor Milyo is also, however, not aware of a study, one 

way or the other, that even “attempts to explore the relationship between independent 

expenditures and public policy, let alone any undue or corrupt influence on policy.” 

(Milyo Dep. at 274.) Second, with regard to the appearance of corruption, Professor 

Milyo published a study which found evidence that “public disclosure and restrictions on 

contributions from organizations improve perceived political efficacy.” (Milyo Dep. at 

283; Milyo Dep. Ex. 10; David M. Primo and Jeffery Milyo, Campaign Finance Laws 

and Political Efficacy: Evidence from the States, Elec. L. J. Vol. 5:1 (2006).) Large 

contributions to groups making independent expenditures can be conceived of as indirect 

contributions to candidates (FEC Facts ¶ 165), and plaintiffs’ own expert has found that 

contribution limitations improve individuals’ views of government. Finally, 

SpeechNow’s proposed finding of fact regarding the lack of evidence of corruption and 

the appearance of corruption should be disregarded as it is in direct conflict with such 

evidence offered by the Commission including academic studies, expert analysis, sworn 

testimony by political officeholders and insiders, and numerous actual examples of such 

corruption taking place. (See FEC Facts ¶¶ 132-344.) 

130. In the last six election cycles, numerous groups and individuals have 

reported making independent expenditures but no contributions or coordinated 

59

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 59 of 71
expenditures. Simpson Decl. Exs. 14 (FEC Response to Interrogatory No. 3), 23 (FEC 

Response to Request for Admission 33), and 33, Attachment I03 to FEC Responses to 

Plaintiffs’ First Set of Discovery Requests, dated August 25, 2008. In non-presidential 

elections during that time period, the number of groups and individuals reporting 

independent expenditures but no contributions or coordinated expenditures grew from 65 

(1997-1998 election cycle) to 93 (2001-2002 election cycle) to 128 (2005-2006 election 

cycle). Simpson Decl. Ex. 33. In presidential elections the number grew from 126 in the 

1999-2000 election cycle to 169 in the 2003-2004 election cycle. Id. Through August 

22, 2008 of the 2007-2008 election cycle, 167 groups or individuals had reported making 

independent expenditures but no contributions or coordinated expenditures. Simpson 

Decl. Exs. 14 and 33. 

FEC RESPONSE: No specific additional response. 

“VI. The Administrative, Organizational, and Continuous Reporting 

Requirements for Political Committees.”

131. A political committee must organize, register, and report according to 

FECA and BCRA and applicable Commission regulations. Scott Dep. at 78:17-79:5; 

Simpson Decl. Ex. 7 at 10:5-13. Failure to follow these regulations could result in civil 

penalties for the committee and for the treasurer in his official and even personal 

capacity. Scott Dep. at 116:15-117:19. 

FEC RESPONSE: Civil penalties are available against treasurers in their 

personal capacity in only very limited circumstances. (See supra Response to SN 

Fact 54.) 

132. If SpeechNow.org begins accepting donations that, in the aggregate, are in 

excess of $1,000, it will have to register as a political committee and be subject to the 

administrative, organizational, and continuous reporting requirements for political 

committees. Keating Decl. at 45; Simpson Decl. Ex. 14 (FEC Response to Request to 

Admit No. 1); Scott Dep. at 93:3-14. 

FEC RESPONSE: No specific additional response. 

60

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 60 of 71
133. SpeechNow.org does not want to be identified as a PAC because the term 

would imply that the association gives to and works with candidates, political parties, or 

both. Keating Decl. at ¶ 49. Mr. Keating believes that many people, including those in 

the media, donors, and voters, have a negative view of PACs because of the reputation of 

PACs as colluding with elected officials, political parties, and candidates. Id. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

134. Mr. Keating also does not want SpeechNow.org to have to register as a 

political committee or have to refer to it as a political committee, because that will make 

it more difficult to raise funds. Keating Decl. at ¶ 49. Donors are aware of the 

contribution limits that apply to political committees and parties, and many of them will 

be reluctant to contribute more than $5,000 or they will conclude that their contributions 

will count towards their biennial aggregate limits if SpeechNow.org is subject to 

contribution limits. Id. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

135. If SpeechNow.org were deemed to be a political committee, it would be 

classified as a “non-connected” committee. Scott Dep. at 17:14-18:2. 

FEC RESPONSE: No additional specific response. 

136. When an organization becomes a political committee, it must obtain a tax 

identification number from the IRS and establish a bank account in a federally insured 

institution. Scott Dep. at 108:16-109:3, 123:18-21. 

FEC RESPONSE: This proposed fact erroneously implies that the Act requires 

political committees to obtain a tax identification number from the Internal Revenue 

Service. While the Act requires political committees to maintain depository accounts at 

federally insured financial institutions (2 U.S.C. § 432(h)), the Act or Commission 

regulations do not require a tax identification number for such accounts. However, 

Commission staff have been informed that banks require a tax identification number. 

The Commission’s Information Division therefore recommends that committees obtain a 

tax identification number. Scott Dep. at 114-116, FEC Exh. 14. 

137. Non-connected committees must register with the FEC using a “Statement 

of Organization,” or FEC Form 1. Among other things, the four-page form requires 

committees to list the committee name and address, to designate a treasurer and custodian 

61

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 61 of 71
of records, and to list all bank accounts in which committee funds are deposited. 

Simpson Decl. Ex. 26, FEC Form 1, Statement of Organization; Scott Dep. at 122:15-

123:14. Any changes to the Statement of Registration must be made within 10 days. 

Scott Dep. at 123:22-124:6. The form comes with an additional five pages of instructions. 

Simpson Decl. Ex. 27, Instructions for FEC Form 1. 

FEC RESPONSE: No additional specific response. 

138. Non-connected committees must periodically disclose all contributions 

and expenditures using a “Report of Receipts and Disbursements,” or FEC Form 3X. 

Simpson Decl. Ex. 28, FEC Form 3X, Report of Receipts and Disbursements for Other 

than an Authorized Committee, and associated schedules; Scott Dep. at 124:7-16. The 

form includes five pages for summary information concerning receipts and disbursements 

and an additional 16 pages of “schedules” on which committees are required to disclose 

detailed information on all contributors and the amounts they donate (schedule A); all 

disbursements and to whom they are made (schedule B); any loans the committee 

receives (schedule C); any loans and lines of credit the committee receives from lending 

institutions (schedule C-1); all debts and obligations of the committee (schedule D); any 

itemized independent expenditures the committee makes (schedule E); any itemized 

coordinated party expenditures the committee makes (schedule F); the committee’s 

activities relating to state or local elections (schedule H1-H6); and the committee’s 

“Levin” funds (schedules L, L-A, and L-B). Simpson Decl. Ex. 28; Scott Dep. at 125:22-

127:5. Form 3X and the various schedules are accompanied by 31 pages of instructions. 

Simpson Decl. Ex. 29, Instructions for FEC Form 3X and Related Schedules. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

139. A non-connected committee must file Form 3X and the various schedules 

that go along with it four times in an election year, and must file two semiannual reports 

in a nonelection year. It must file a 12-day pre-primary report in any state in which it 

participates. Additionally, it must file a pre-general election report and a 30-day postgeneral election report if it participates in any general election. A non-connected 

committee must also file these pre- and post-reports for any special election in which it 

participates. Alternatively, it can choose to file monthly rather than quarterly, and thus 

avoid pre- and post-election reports. It may change its filing schedule only once per year 

and only after giving the FEC written notice. After the 20th day before an election, it 

must file an independent expenditure report within 24 hours each time it spends more 

than $1,000. Before that, it must file a report within 48 hours each time it spends more 

than $10,000 on an election. See 11 CFR §§ 104.5(c) and (g); Scott Dep. at 131:3-

132:14. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

140. Mr. Keating currently operates SpeechNow.org out of his home. Keating 

Decl. at ¶ 47. 

FEC RESPONSE: No additional specific response at this time. 

62

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 62 of 71
141. If an individual administers a non-connected committee from his home 

and is being paid for his services by the committee, that individual must allocate costs for 

the use of his home to the committee, lest the expense be treated as in-kind contribution 

from the individual to the committee. Scott Dep. at 136:8-137:8. The costs are to be 

determined by assessing the usual and normal charge for, or fair market value of, that 

portion of the home. Id. at 138:7-16. The same is true for expenses associated with using 

the home computer, telephone, or personal internet connection. Id. at 139:6-20. These 

cost allocations—based on the individual’s determination of their fair market value—

have to be reported on Form 3X. Id. at 123:7-16; Simpson Decl. Ex. 29 at 10-11 

(Instructions for Schedule A, Itemized Receipts). 

FEC RESPONSE: Objection, irrelevant. SpeechNow does not pay anyone to 

work out of his or her home and has not alleged an intention to do so. 

142. All costs associated with a fundraiser for a non-connected committee, 

even in a person’s home, must be treated as expenses to be paid by the committee lest any 

costs for the event—including the costs associated with using the home, or the costs of 

food or invitations—be treated as an in-kind contribution attributable to the committee. 

Scott Dep. at 142:1-143:7. The costs are to be determined by assessing the usual and 

normal charge for, or fair market value of, that portion of the home, invitations and food. 

Id. at 143:8-14. These costs must be reported on Form 3X. Id. at 123:7-16; Simpson 

Decl. Ex. 29 at 10-11 (Instructions for Schedule A, Itemized Receipts). 

FEC RESPONSE: No additional specific response. 

143. If a non-connected committee also made independent expenditures in state 

or local elections, it would have to allocate its costs for fundraising and communications 

according to regulations at 11 CFR Part 106. Scott Dep. at 143:15-144:5. The committee 

would also report the allocations using various Schedules H, which are accompanied by 

seven pages of instructions. Scott Dep. at 146:12-148:9; Simpson Decl. Ex. 29 at 23-30. 

FEC RESPONSE: No additional specific response. 

144. The FEC has an entire division, the Information Division, a large part of 

whose resources are devoted to providing information to those who must comply with the 

laws. Scott Dep. at 11:3-21:11, 53:16-54:20. The Division answers telephone and email 

inquiries, it publishes manuals and guides, and it conducts training sessions. Id. at 11:12-

12:1, 13:10-14:13, 56:1-12. The Information Division recommends that those complying 

with the campaign finance laws always consult its guides, instructions for forms, and 

other publications. Id. at 37:11-22. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

145. However, reliance on the information provided by the FEC is not a shield 

to liability. Scott Dep. at 158:17-20. In fact, the information division “always 

caution[s]” and advises those complying with the obligations for political committees to 

63

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 63 of 71
consult the statutes and applicable regulations and not rely solely on information 

provided by the FEC. Id. at 34:19-35:7. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

146. Political committees often hire accountants and attorneys to assist them in 

complying with the federal campaign finance laws and regulations. Scott Dep. at 87:4-

20. There are also hundreds of experts, professionals, and specialists who make their 

livings by aiding organizations to comply with the requirements for political committees. 

Id. at 84:17-22, 88:15- 89:2. 

FEC RESPONSE: This proposed fact is irrelevant to the determination of the 

constitutionality of the provisions challenged by plaintiffs. Furthermore, as noted 

previously, the Act’s registration and reporting requirements are not unduly burdensome. 

While some requirements are more complicated than others, generally the requirements 

that apply to nonconnected political committees are not complicated. Scott Dep. at 156, 

FEC Exh. 54. The professionals alluded to work not just for nonconnected committees, 

but also state and national party committees, corporate and union PACs, and candidate 

committees. 

147. The FEC’s Information Division has 14 employees, ten of whom answer 

questions from the general public on matters of campaign finance law and compliance. 

Scott Dep. at 12:3-9. While the number of calls has declined since the Commission 

provided information over the Internet, the division still receives thousands of calls each 

year from the general public and political committee administrators in the regulated 

community. Id. at 29:13- 30:6. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

148. The FEC publishes several documents to explain and provide information 

concerning the laws and regulations with which political committees must comply. The 

Campaign Guide for Non-Connected Committees, which is 134 pages long, is 

periodically updated to include additional rules and interpretations by the Commission. 

Scott Dep. at 18:3- 20:3; FEC Campaign Guide: Nonconnected Committees, May 2008, 

available at http://www.fec.gov/pdf/nongui.pdf (last visited October 28, 2008). Between 

updates to the Guide, the FEC issues a series of brochures and monthly supplements 

containing any new rules, interpretations or policies of the Commission that are pertinent 

to political committees. Id. at 18:3-19:2, 22:1-23:3. Committee treasurers must keep 

64

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 64 of 71
abreast of these supplements in order to keep their knowledge of FEC rules, policies, and 

interpretations current. Id. at 34:8-18. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

149. However, reliance on this information is not a shield to liability. Id. 

at 158:17-20. Treasurers may be personally liable for violations in political committee 

reporting. 2 U.S.C. §§ 432(c), 434(a)(1); see also Statement of Policy Regarding 

Treasurers Subject to Enforcement Proceedings, 70 Fed. Reg. 3 (January 3, 2005). 

SpeechNow.org’s bylaws provide that the Treasurer is responsible for compliance with 

statutory reporting requirements. Bylaws, Art. V, § 8. 

FEC RESPONSE: Civil penalties are available against treasurers in their personal 

capacity in only very limited circumstances. (See supra Resp. to SN Fact 54.) 

150. The FEC holds training conferences for the administrators of political 

committees and other employees of or consultants to political committees three to four 

times per year. Scott Dep. at 56:13-57:1, 59:12-17. The conferences typically last two 

days and consist of approximately six hours of substance per day. Id. at 56:13-57:13. The 

FEC also provides periodic training seminars and workshops. Id. at 57:21-59:7, 62:10-

22. All of these training sessions cover topics related to the obligations of administering 

political committees. Id. at 63:1- 7. Like its publications, training sessions must 

periodically be updated to reflect new rules, interpretations, and policies. Id. at 65:19-

67:3. 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

151. Non-connected committees that receive or intend to spend over $50,000 of 

contributions in a calendar year must report electronically. Scott Dep. at 38:18-39:4. 

The FEC publishes an introductory manual for its electronic filing system called “Getting 

Started with FECfile,” which is 50 pages long. See Getting Started with FECFile (For 

PAC and Party Committees), http://www.fec.gov/support/GettingStartedManual_U.doc 

(last visited Oct. 20, 2008). The primary manual for using the electronic filing system is 

351 pages long. See FECFile User Manual for PACs & Party Committees, 

http://www.fec.gov/elecfil/ unauthorized_manual/entireUNAUTHmanual.pdf (last visited 

Oct. 20, 2008). 

FEC RESPONSE: (See FEC Resp. Mem. § V.) 

152. Non-connected committees are subject to audits for cause, which exists 

when the committee’s reports demonstrate compliance, accounting, or reporting 

problems. Scott Dep. at 150:1-151:9. During an audit, the FEC must access and review 

the committee’s records. Id. at 154:13-18. Audits can trigger enforcement actions 

against a committee that can lead to civil penalties. Id. at 156:8-12. As a result, some 

65

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 65 of 71
committees employ accountants and lawyers to represent them in audits. Id. at 154:19-

155:6. 

FEC RESPONSE: Objection, relevance and vagueness as to “some committees,” 

as plaintiffs do not establish whether nonconnected committees like SpeechNow have 

employed accountants and lawyers. 

153. The Commission has a Reports Analysis Division (RAD) whose purpose is 

to analyze reports filed by committees and other entities and to determine whether they 

are in compliance with campaign finance laws and regulations. Scott Dep. at 67:7-11. 

Employees of RAD often send committee treasurers Requests for Additional Information 

(RFAI) that seek information necessary for the Commission to determine whether a 

committee is complying with the law. Scott Dep. at 71:13-72:1. A failure of a political 

committee to answer an RFAI can result in an investigation and a recommendation that 

the Commission seek a conciliation agreement with the committee that results in a civil 

penalty. Id. at 73:7-20. 

FEC RESPONSE: No additional specific response. 

154. The Commission sends out approximately 5,000 RFAIs in a calendar year, 

all of which are related to administering and reporting of political committees. Scott 

Dep. at 75:16-76:7. There are approximately 8,000 political committees registered with 

the Commission, not all of which are active. Id. at 76:8-16. 

FEC RESPONSE: Objection, relevance and vagueness. Plaintiffs do not 

establish whether any or a significant portion of the RFAIs are sent to nonconnected 

committees, which have more straightforward reporting obligations, or whether most of 

the RFAIs are sent to state and national party committees, corporate and union PACs, and 

candidate committees. 

66

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 66 of 71
155. All administrative fines issued by the Commission relate to the failure to 

properly report the activities of a political committee. Scott Dep. at 80:19-81:6. The 

Commission resolves approximately 100 administrative fine matters per year, and the 

amount of fines collected is $201,963 from the Administrative Fines Program alone. 

Simpson Decl. Ex. 30, Federal Election Commission 2006 Annual Report, at 7. This is 

an average civil penalty of at least $2,000. Still other civil penalties for failing to 

properly administer or report the activities of political committees are collected through 

the Commission’s standard enforcement process, and alternative dispute resolution 

programs. Scott Dep. at 82:3-12. 

FEC RESPONSE: No additional specific response. 

156. The FEC can investigate alleged violations of the campaign finance laws that 

are brought to its attention through administrative complaints filed under 11 CFR § 111.4 

or that its staff discovers and has “reason to believe” that a violation has occurred. 

Simpson Decl. Ex. 14 (FEC Response to Interrogatory No. 6). Alleged violations 

discovered in this manner are assigned a “Matter Under Review” number. Id. 

FEC RESPONSE: No additional specific response. 

157. Since October 1, 1999, the FEC has found reason to believe that one or more 

violations have occurred in 427 Matters Under Review and it has conducted an 

investigation in 118 of these MURs. Simpson Decl. Ex. 14 (FEC Response to 

Interrogatory No. 6). Of those 118 investigations, matters were pending an average of 

544 days from the date the MUR was opened until it was closed with respect to the last 

respondent. Id. (FEC Response to Interrogatory No. 8). 

FEC RESPONSE: No additional specific response. 

158. Complying with the administrative and continuous reporting requirements 

for political committees would be burdensome for SpeechNow.org. Keating Decl. at ¶ 

47. Mr. Keating operates SpeechNow.org alone in his spare time. He has no employees 

nor anyone else working with him, and complying with the obligations for political 

committees would be time consuming and difficult. Id. 

FEC RESPONSE: This proposed fact ignores contrary testimony. 

The Commission’s Deputy Staff Director for the Information Division Greg Scott 

testified that the Act’s registration and reporting requirements are not difficult. 

(Scott Dep. at 156, FEC Exh. 14.) Further, plaintiff David Keating testified that he had 

prior experience with reporting and could fulfill the requirement of treasurer. 

Furthermore, Mr. Keating testified that his desire to avoid registration and reporting by 

67

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 67 of 71
SpeechNow was based on his desire to spend time on family and leisure activities. 

(FEC Facts ¶¶ 451-52, 449-50.) 

159. It would be particularly burdensome for David Keating to shoulder these 

obligations before SpeechNow.org can spend money on political advertisements or other 

activities that advance its mission. Keating Decl. at ¶ 47. In such a situation, Mr. 

Keating would be spending a great deal of time ensuring that SpeechNow.org complied 

with above-mentioned obligations, but he would be unable to spend that time advancing 

SpeechNow.org’s mission. Id. at ¶ 47; Simpson Decl. Ex. 34, Excerpts from the 

Deposition Transcript of David Keating, taken September 25, 2008. 

FEC RESPONSE: Plaintiffs have provided no support, other than the self-serving 

testimony of David Keating, that it would be “burdensome” for SpeechNow to comply 

with “obligations” (presumably referring to the “administrative” and “reporting” 

requirements referred to in the preceding paragraph) prior to the date that SpeechNow 

first spends money on “advertisements or other activities that advance its mission.” 

In particular, plaintiffs have provided no support for the statement that compliance with 

the Act’s requirements would prevent David Keating from spending any significant 

amount of time “advancing SpeechNow.org’s mission.” 

160. SpeechNow.org cannot accept donations under $1,000 even though David 

Keating has been contacted through the website and other means by potential donors who 

want to make such donations. Keating Decl. at ¶ 50. This is because such donations 

would inch SpeechNow.org closer to being a “political committee,” but they would not 

give it nearly enough money to produce and run advertisements, which are a necessary 

precondition to a successful fundraising effort. Id. Accepting even small donations could 

expose SpeechNow.org to the administrative and reporting requirements for political 

committees without providing it enough money to speak out through advertisements in 

support of its mission and become a going concern. Id. Thus, SpeechNow.org cannot 

accept the $100 donations that Brad Russo and Scott Burkhardt are ready, willing, and 

able to make. Id. 

FEC RESPONSE: Objection to the extent contains a legal conclusion and 

suggests that SpeechNow may not be able to accept donations in the future. (See FEC 

Facts ¶¶ 51-52, 395-401.) 

68

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 68 of 71
“VII. Reporting Requirements for Independent Expenditures.” 

161. SpeechNow.org will report its contributions and expenditures under the 

reporting requirements for those who make independent expenditures. Keating Decl. at ¶ 

35. Complying with these reporting requirements is less burdensome than complying 

with the obligations for political committees. Id. at ¶ 48. 

FEC RESPONSE: No additional specific response. 

162. Groups “other than political committees” that make independent 

expenditures must report their activities pursuant to the FEC regulations at 11 CFR §§ 

104.4(a), (e) and (f), and § 109.10. Scott Dep. at 95:7-98:14. 

FEC RESPONSE: No additional specific response. 

163. To report its independent expenditures, a group like SpeechNow.org that was 

not a political committee would use the “Report of Independent Expenditures Made and 

Contributions Received,” or FEC Form 5. Simpson Decl. Ex. 31, FEC Form 5, Report of 

Independent Expenditures Made and Contributions Received; Scott Dep. at 101:6-102:1. 

This form requires the filer to list the total contributions received and the total 

expenditures made during the period on a one-page form, and then to list those who 

contributed to the independent expenditure and the payees for the independent 

expenditures. It is accompanied by three pages of instructions. Simpson Decl. Ex. 32, 

Instructions for FEC Form 5 and Related Schedules. 

FEC RESPONSE: No additional specific response. 

164. The FEC requires that all costs associated with the independent expenditure 

must be disclosed. This would include costs for airtime for broadcast communications; 

production costs for broadcast communications; postage and printing costs for 

communications made by mail; research costs to determine the most optimal form of 

communication; fees for the media buyer or direct mail vendor; costs associated with 

producing newspaper ads; the costs of newspage space; and the costs associated with 

producing and distributing internet banner ads. Scott Dep. at 102:4-105:1. 

FEC RESPONSE: SpeechNow’s proposed facts repeatedly state that the group 

will disclose its contributions and expenditures under the Act’s disclosure and disclaimer 

provisions that apply to independent expenditures. See SN Facts ¶¶ 25-26, 161. 

Mr. Keating has, however, given mixed signals on this issue. Should SpeechNow 

prevail, it is not entirely clear whether such disclosure will includes all contributions it 

receives, including those whose funds were used solely for purposes such as candidate 

69

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 69 of 71
research and polling, see SN Facts ¶ 24, or only those contributions that were solicited 

for, and will be directly used to purchase air time for independent expenditures. 

At deposition Mr. Keating indicated that he personally agreed with the position of 

his employer, Club for Growth, that disclosure of contributions for candidate research and 

polling was not required. (Keating Dep. at 82-84, FEC Exh. 11). See FEC Facts ¶ 375. 

Similarly, at a public forum about the case, Mr. Keating said “(t)he only thing people 

won’t know is how much money we’re receiving or spending on administrative stuff until 

we make uh, or I guess they’ll never know until they look at the IRS how we’re spending 

on administrative stuff.” (“Freeing SpeechNow: Free Speech and Association vs. 

Campaign Finance Regulation,” Mar. 5, 2008, FEC Exh. 103 at 4.) Since Mr. Keating 

has been inconsistent, plaintiffs have provided inadequate assurance to the Court to 

permit a finding that SpeechNow’s disclosures would be exhaustive. The Court, 

therefore, should not accept SpeechNow’s assurances or make the finding plaintiffs 

suggest. 

165. If an organization like SpeechNow.org that was not a political committee 

decided to make independent expenditures against candidates for State or local office, its 

reporting obligations to the FEC would not change or increase. Scott Dep. at 107:7-108:5. 

FEC RESPONSE: No additional specific response. 

Respectfully submitted, 

Thomasenia P. Duncan 

(D.C. Bar No. 424222) 

General Counsel 

David Kolker 

(D.C. Bar No. 394558) 

Associate General Counsel 

Kevin Deeley 

Assistant General Counsel 

70

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 70 of 71
71

Robert Bonham 

(D.C. Bar No. 397859) 

Senior Attorney 

/s/ Graham M. Wilson

Steve Hajjar 

Graham M. Wilson 

Greg J. Mueller (D.C. Bar No. 462840) 

Attorneys 

FOR THE DEFENDANT 

FEDERAL ELECTION COMMISSION 

999 E Street NW 

Washington, DC 20463 

Dated: November 21, 2008 (202) 694-1650 

Case 1:08-cv-00248-JR Document 55-2 Filed 11/21/2008 Page 71 of 71
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 146 

Case 1:08-cv-00248-JR Document 55-3 Filed 11/21/2008 Page 1 of 12
Case 1:08-cv-00248-JR Document 55-3 Filed 11/21/2008 Page 2 of 12
Case 1:08-cv-00248-JR Document 55-3 Filed 11/21/2008 Page 3 of 12
Case 1:08-cv-00248-JR Document 55-3 Filed 11/21/2008 Page 4 of 12
Case 1:08-cv-00248-JR Document 55-3 Filed 11/21/2008 Page 5 of 12
Case 1:08-cv-00248-JR Document 55-3 Filed 11/21/2008 Page 6 of 12
Case 1:08-cv-00248-JR Document 55-3 Filed 11/21/2008 Page 7 of 12
Case 1:08-cv-00248-JR Document 55-3 Filed 11/21/2008 Page 8 of 12
Case 1:08-cv-00248-JR Document 55-3 Filed 11/21/2008 Page 9 of 12
Case 1:08-cv-00248-JR Document 55-3 Filed 11/21/2008 Page 10 of 12
Case 1:08-cv-00248-JR Document 55-3 Filed 11/21/2008 Page 11 of 12
;,';'

INSTITUTE FOR JUSTICE & CENTER FOR COMPETITIVE POLITICS 4 *:

IJ

INSTITUTE FOR JUSTICE

FOR IMMEDIATE RELEASE:

January 22, 2008

CONTACTS: Mike Schrimpf, CCP, (703) 682-9359

Lisa Knepper, II, (703) 682-9320

FEe Draft Opinion Would Silence SpeechNow.org,

Independent Speech Groups

Arlington, Va.-The Federal Election Commission today released a draft "advisory opinion" that would,

if adopted, effectively silence SpeechNow.org, a new independent speech group that wishes to advocate

for or against federal candidates on the basis oftheir support for free political speech.

The draft opinion asserts that SpeechNow.org and any similar groups must organize and register

as "political committees" and may not accept contributions larger than $5,000 per person per calendar

year. The opinion would for the fIrst time explicitly extend the full array offederal campaign fmance

regulations to groups ofindividual citizens acting independently of candidates and parties without

corporate or union support.

"This opinion would leave practically no room for Americans to exercise our First Amendment

rights to join together and speak freely to other Americans about who to elect to office," said David

Keating, president of SpeechNow.org.

The opinion would make it impossible for SpeechNow.org to raise enough money quickly

enough to air TV ads during the 2008 election cycle. Supporters have pledged enough money for

SpeechNow.org to begin its advocacy now, but each contribution is over the government limit.

"The FEC is now saying that any time two or more people pool their resources to support or

oppose a federal candidate, they become a political committee subject to government regulations and

limits," said Bradley Smith, chairman ofthe Center for Competitive Politics. "But it should be common

sense that ifindividuals can speak without limit, so too can groups ofindividuals."

The FEC is scheduled to consider the draft opinion in an open meeting next Thursday, January

24, at 10 a.m. Because the commission currently lacks a quorum, it cannot offIcially adopt the opinion or

approve SpeechNow.org's operational plan by the legal deadline ofJanuary 28. Without approval,

SpeechNow.org could later face penalties such as fmes and jail time for its speech, and today's opinion

strongly suggests that the commission would rule against the group in an enforcement action.

"This opinion is a serious blow to the First Amendment rights offree speech and association, and

it is a tragedy that a federal agency failed to take SpeechNow.org's constitutional rights seriously," said

Steve Simpson, Institute for Justice senior attorney. "Now facing the specter offmes and jail time,

SpeechNow.org's only recourse is the courts."

SpeechNow.org is a nonpartisan independent speech group with a new form of organizational

charter designed to magnify the voices ofindividual citizens opposed to the erosion of political speech

rights. Under that charter, SpeechNow.org will accept only individual, not corporate or union,

contributions. The charter also bans donations to candidates and political parties and requires the

disclosure of all donations and expenditures to the FEC within 48 hours ofspeech urging election or

defeat of a federal candidate. The Institute for Justice and the Center for Competitive Politics represent

SpeechNow.org.

# # #

SNK0522

Case 1:08-cv-00248-JR Document 55-3 Filed 11/21/2008 Page 12 of 12
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 147 

Case 1:08-cv-00248-JR Document 55-4 Filed 11/21/2008 Page 1 of 7
Log In | Register | FAQ | Take a QuickTour

 

FAQ

Company

Candidate Submission

User Submission

Local Producer Sign Up

Contact Us

Press

FAQ

FAQ - SaysME TV

http://www.saysme.tv/static/faq (1 of 6) [11/21/2008 3:19:36 PM]

Case 1:08-cv-00248-JR Document 55-4 Filed 11/21/2008 Page 2 of 7
FAQ - SaysME TV

General

1. WHAT IS SAYSME.TV?

2. WILL I BE ABLE TO SEE IT ON MY TV?

3. IS IT REALLY ON TV? WHEN WILL I SEE MY AD?

4. WHAT CHANNEL IS IT ON?

5. CAN I LET OTHER PEOPLE KNOW THAT I WILL HAVE AN AD ON THE AIR?

6. CAN I BUY AN AD TO RUN IN ANOTHER STATE?

7. IS IT REALLY MY NAME ON THE AD?

8. DOES IT HAVE TO BE IN MY NAME?

9. CAN I SUBMIT MY OWN AD?

10. DOES SAYSME.TV SUPPORT THE POLITICAL BELIEFS OF THE CAMPAIGNS, POLITICAL 

ACTION COMMITTEES AND THE ORGANIZATIONS REPRESENTED ON THIS SITE?

11. WHAT IF I HAVE OTHER QUESTIONS?

Technical Support

1. WHAT BROWSERS SHOULD I BE USING?

2. MY FLASH PLAYER DOESN'T WORK FOR YOUR VIDEOS

3. WHAT ELSE CAN I DO?

4. WHAT IF I HAVE OTHER QUESTIONS?

General Questions

WHAT IS SAYSME.TV?

SaysMe.tv is a website that gives individuals the opportunity to use TV to make an enormous difference in 

their politics, in their local community... and beyond. The 2008 election is just around the corner and the 

http://www.saysme.tv/static/faq (2 of 6) [11/21/2008 3:19:36 PM]

Case 1:08-cv-00248-JR Document 55-4 Filed 11/21/2008 Page 3 of 7
FAQ - SaysME TV

Internet has enabled bloggers of every affiliation to become as powerful in political circles as candidates, 

journalists and pundits. SaysMe.tv wants to further empower citizens by letting them make their voices 

heard on TV as well as the Internet. Sign up for SaysMe.tv, choose an ad featuring your candidate or 

issue of choice, select a network, and personalize your ad. With just a few simple clicks, you can put an 

ad on TV! Then you can distribute or embed your personalized ads anywhere on the Internet. 

WILL I BE ABLE TO SEE IT ON MY TV?

If you have access to the cable channel and zipcode you've selected, then sit back and see your ad with 

your name on your TV. Make sure you have cable! 

IS IT REALLY ON TV? WHEN WILL I SEE MY AD?

Yes! After you purchase your ad and choose the market(s) in which you want your ad or ad campaign to 

run, you will receive a confirmation of your purchase immediately. Then, at least 24 hours prior to air time, 

you will also receive a confirmation of the time and date that it will run so you can record it or watch it live 

with friends. Ads purchased may take 5-7 business days to run on the air. It is possible that local markets 

may have to push your ad to run at a later date than originally stated - SaysMe has no control over this 

and in the event this occurs we will make every effort to let you know the revised date prior to your ad 

airing. Please be advised this is not common and under most situations your air date should remain intact. 

WHAT CHANNEL IS IT ON?

When you visit the SaysMe.tv website, we'll show you a list of available channels and prices in your area. 

You choose the channel and we do the rest. 

CAN I LET OTHER PEOPLE KNOW THAT I WILL HAVE AN AD ON THE AIR?

Yes! You can choose to have SaysMe.tv blast your address book to let all your friends and family know 

that your ad will be on TV. 

CAN I BUY AN AD TO RUN IN ANOTHER STATE?

Yes, you can choose to run an ad in any of our available markets. Very soon we will have 92 from which 

http://www.saysme.tv/static/faq (3 of 6) [11/21/2008 3:19:36 PM]

Case 1:08-cv-00248-JR Document 55-4 Filed 11/21/2008 Page 4 of 7
FAQ - SaysME TV

to choose around the country. For a complete list of our available markets, please use the drop-down box 

to browse cities as the first step on our application found on www.saysme.tv/front. 

IS IT REALLY MY NAME ON THE AD?

YES! That's one of the unique features of SaysMe.tv. All of our ads end with a 5 second clip that says 

'Paid for by (YOUR NAME)'! Put your personal stamp on the ad of your choice. In just a few months, you'll 

be able to add more personalization features to your ad like your own graphics and voice-over. 

DOES IT HAVE TO BE IN MY NAME?

Yes. It's television, so you need to use your own name to stand behind your own cause. Everyone must 

represent themselves. 

CAN I SUBMIT MY OWN AD?

Yes! Visit our upload page at http://www.saysme.tv/static/submission. We expect to see all kinds of 

content from general issues, politics, advertisements for local musicians and entertainers, personal/

classifieds to OpEds, PSA's, and ads for local businesses and events. SaysMe.tv plans to be the Voice of 

the People. We want to let your voice be as powerful as that of an advertiser or big corporation. Put your 

mouth where your money is and SAY SOMETHING! 

DO YOU SUPPORT THE POLITICAL BELIEFS OF THE CAMPAIGNS, POLITICAL 

ACTION COMMITTEES AND ORGNANIZATIONS REPRESENTED ON THIS SITE?

As a platform for the distribution of individual ideas, SaysMe.tv is agnostic. Like you, the people who work 

at SaysMe.tv have strong beliefs and like to debate them vigorously with each other. We are a diverse 

organization made up of individuals on both sides of the aisle, but as a company we strongly agree that a 

non-partisan stance facilitates the greatest flow of opinions and the largest number of voices to be heard. 

We have only one constraint - broadcast standards. 

WHAT IF I HAVE OTHER QUESTIONS?

http://www.saysme.tv/static/faq (4 of 6) [11/21/2008 3:19:36 PM]

Case 1:08-cv-00248-JR Document 55-4 Filed 11/21/2008 Page 5 of 7
FAQ - SaysME TV

Please email our customer service at cs@saysme.tv and we will get back to you within 24-48 hours. 

TECHNICAL SUPPORT 

QUESTIONS

WHAT BROWSER SHOULD I BE USING?

Windows Users

Internet Explorer is the best viewing option for Windows users. The Firefox browser is a good browser, but has problems 

playing files back at times. You should download the latest version of the Internet Explorer browser here or via the link 

below: 

http://www.microsoft.com/windows/downloads/ie/getitnow.mspx

AOL browsers also have problems playing back video files. If you are an AOL user we suggest that you use the Internet 

Explorer browser that comes with your computer. The stock Microsoft Internet Explorer browser seems to perform better 

than the customized IE that AOL has developed. To use the stock browser go to the start menu and select "Internet 

Explorer" from the program menu. 

Mac/Apple Users

All Mac/Apple web browsers can play back the Flash videos on our files under most situation except with Firefox 3, which 

has been known to have issues. We recommend updating the browser to the latest version of Firefox or using Safari. 

To download the latest version of Safari please visit the site below:

http://www.apple.com/safari/

To download the latest version of Firefox please visit the site below:

http://www.mozilla.com/en-US/firefox/

MY FLASH PLAYER DOESN'T WORK FOR YOUR VIDEOS?

Make sure you have the most up to date flash player installed on your computer. You should download 

the newest version of the flash player (FREE) here or via this link: 

http://www.saysme.tv/static/faq (5 of 6) [11/21/2008 3:19:36 PM]

Case 1:08-cv-00248-JR Document 55-4 Filed 11/21/2008 Page 6 of 7
FAQ - SaysME TV

http://www.adobe.com/products/flashplayer/

WHAT ELSE CAN I DO?

We recommend you follow these steps in order for the best viewing experience of our videos: 

A) Download the latest flash player

http://www.adobe.com/products/flashplayer/

B) Upgrade to the most recent browser version 

Internet Explorer: http://www.microsoft.com/windows/downloads/ie/getitnow.mspx

Safari: http://www.apple.com/safari/

Firefox: http://www.mozilla.com/en-US/firefox/

C) Clear your cache! Cleaning up your browser often helps performance issues. Here are instructions on 

clearing your cache in each of the following browsers: 

1. Internet Explorer -

http://www.microsoft.com/windows/ie/ie6/using/howto/customizing/clearcache.mspx

2. Safari -

http://www.ehow.com/how_2033308_delete-memory-cache.html

3. Firefox -

http://www.ehow.com/video_2320708_clear-cache-mozilla-firefox.html

D) Restart your computer 

WHAT IF I HAVE OTHER QUESTIONS?

Please email our customer service at cs@saysme.tv and we will get back to you within 24-48 hours. 

Please make sure to include your computer/operating system information and browser type. 

Home | FAQ | Support | About | Political Candidates | Make Your Own Ads | Terms | Contact Us | 

Press

© 2008 SaysMe, Inc. All Rights 

Reserved 

http://www.saysme.tv/static/faq (6 of 6) [11/21/2008 3:19:36 PM]

Case 1:08-cv-00248-JR Document 55-4 Filed 11/21/2008 Page 7 of 7
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 148 

Case 1:08-cv-00248-JR Document 55-5 Filed 11/21/2008 Page 1 of 3
VoterVoter com - Sponsor 

● Home

● Browse Ads

● Create

● Sponsor

● FAQ

● Press

● About Us

HOW TO SPONSOR AN AD

Choose an ad by clicking on the Browse 

button. You'll find ads organized by 

Candidate, Cause, and Initiative. Once 

you've found an ad you want to sponsor, 

you'll be guided through the three step 

process below.

http://www votervoter com/wot-tvad/page/sponsor (1 of 2) [11/21/2008 3:41:42 PM] Search for an ad Submit Query

Case 1:08-cv-00248-JR Document 55-5 Filed 11/21/2008 Page 2 of 3
VoterVoter com - Sponsor 

© 2008 WideOrbit Inc ● Home

● Browse Ads

● Create

● Sponsor

● FAQ

● Press

● 

● Privacy & Terms

http://www votervoter com/wot-tvad/page/sponsor (2 of 2) [11/21/2008 3:41:42 PM]

Case 1:08-cv-00248-JR Document 55-5 Filed 11/21/2008 Page 3 of 3
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 149 

Case 1:08-cv-00248-JR Document 55-6 Filed 11/21/2008 Page 1 of 10
VoterVoter com - Press Release 

● Home

● Browse Ads

● Create

● Sponsor

● FAQ

● Press

● About Us

Article Index

● WideOrbit Launches Populist Political Ad Site (Broadcasting & Cable)

● Web-Based Ad Buying Systems Serve Candidates' Penchant for TV (ClickZ)

● New Site Airs Homemade Political Ads on TV (The Nation)

● VoterVoter Launches: Could This Be the ActBlue of Political Ads? (Personal 

Democracy Forum)

● Get ready to see some homemade ads on TV (Politico)

● MediaBytes: YouTube Insight - Comcast - BitTorrent - CBA - VoterVoter 

(ShellyPalmer.com/ MediaBytes)

● Your Own Campaign Ads (ABC News Channel 36)

WideOrbit Launches Populist Political Ad Site

Broadcasting & Cable

John Eggerton

March 27, 2008

WideOrbit Launches Populist Political Ad Site

Reposted by: Broadcast Newsroom, Business Finance & Economy

The run-up to the last big primary push for the presidential candidates has brought 

another political ad-targeted online site into the mix and created something of a minicampaign for clients among online ad companies.

Press release

Click here to view our press 

release

FOX

Click here to watch video

NBC

Click here to watch video

http://www votervoter com/wot-tvad/page/press (1 of 9) [11/21/2008 3:24:41 PM] Search for an ad Submit Query

Case 1:08-cv-00248-JR Document 55-6 Filed 11/21/2008 Page 2 of 10
VoterVoter com - Press Release 

San Francisco Software online media company WideOrbit is launching VoterVoter.com 

Thursday, looking to grab some election ad business by targeting "passionate citizens" 

and letting them sponsor TV campaign ads themselves, either ready-made, 

customizable, or their own submissions.

The announcement comes a day after another online ad production and media buying 

company Spot Runner, backed by CBS and some big ad agencies, announced it was 

ramping up its online political advertising business, though it was targeting campaign 

coffers. WideOrbit backers include Hearst--it got a new infustion from Hearst Ventures 

just last month--and its media buying client list includes the New York Times, NBC, 

Hearst-Argyle, Gannett and Meredith.

Unlike Spot Runner, which is providing TV, radio and online political advertising 

services, VoterVoter is focusing on TV advertising for now, though a source said it has 

plans to expand. VoterVoter is also targeting individuals who want to place ads directly 

on TV rather than the campaigns, saying it allows those individuals to avoid the $4,600 

limit on campaign contributions to a candidate.

"Some individuals sponsor cocktail parties to meet their favorite candidates," said 

VoterVote.com founder Eric Mathewson in announcing the new service. "Now, with 

VoterVoter.com, passionate citizens can influence literally millions of their fellow voters 

by purchasing TV time.

Votervoter is an equal opportunity advertiser, planning ready-made ads in support of 

Senators Clinton, McCain and Obama, as well as congressional and gubernatorial 

candidates and issues. But like Spot Runner, VoterVoter.com will provide end-to-end 

services for those looking to produce and place ads, including providing demographic 

targeting and even filings with the Federal Election Commission.

WideOrbit says it has already generated "several hundred thousand dollars" worth of 

passion in the form of insertion orders in its "pre-launch" phase.

Elsewhere on the online ad placement front, Internet radio ad company TargetSpot 

was looking to get campaigns to jump on its online bandwagon by offering them 

matching funds, pledging to match up to the first $500 any money a "valid electoral 

committee" applies toward its online platform for purchasing radio campaign spots.

TargetSpot was pitching its new site as ideal for local campaigns.

Return To Top

Web-Based Ad Buying Systems Serve Candidates' Penchant for TV

ClickZ

Kate Kaye

March 27, 2008

Web-Based Ad Buying Systems Serve Candidates' Penchant for TV

Reposted by: Marketing Vox

http://www votervoter com/wot-tvad/page/press (2 of 9) [11/21/2008 3:24:41 PM]

Case 1:08-cv-00248-JR Document 55-6 Filed 11/21/2008 Page 3 of 10
VoterVoter com - Press Release 

Thousands of dollars' worth of TV spots in support of one unnamed presidential 

candidate are set to go on-air through a new Web service from ad management service 

WideOrbit.

The company's VoterVoter.com system was created to allow individuals to place preexisting or custom TV spots across local and even national stations and cable 

networks. The service and another from Spot Runner that's aimed at political 

advertisers could mean ad spending through Web-based tools for buying TV ads will 

exceed the tiny amount candidates and their supporters are expected to invest directly 

in online ads this election season.

According to Eric Mathewson, founder and CEO of WideOrbit and VoterVoter.com, 

"several hundred thousand dollars" of TV ad insertions, all for one presidential hopeful, 

have been submitted through the system, expected to launch today. "But that's not by 

design; that's just the way it turned out," he continued. The company provides 

software to manage sales, trafficking and billing of ads running on hundreds of TV and 

radio stations, cable networks, and in mobile and out-of-home environments.

The VoterVoter site has a handful of TV spots created by independent TV producers 

available for anyone to choose and target based on a city, state or national level, daypart, and other demographic data. But the company is hoping many more will be 

added to its library by amateur producers or Hollywood types.

"I think there are people out there, particularly in the creative and advertising world... 

that would like to create better messaging for the candidates," said Mathewson.

Spot Runner, a Web system used to design ready-made locally-targeted television 

spots, is working with "a few dozen" political advertisers, including Erik Fleming, 

Mississippi's Democratic nominee for U.S. Senate, according to the firm's VP 

Communications Rosabel Tao. Many of its customizable ads are based on issues like 

the environment, or border security, such as one that indicates the candidate "knows 

how to keep our communities safe, secure... and American."

Spot Runner's Political Advertising Program enables targeting by political district in 

conjunction with other data such as age or household income. As with the VoterVoter 

service, it lets advertisers vary ad creative depending on the audience or region ads 

are targeted to.

Spot Runner and similar online services "can give the campaigns an advantage," said 

Jaime Bowers, new media director at National Media, a full service media agency for 

Republican campaigns. She doesn't think they pose a threat to agencies like National 

Media. "I think it's a completely different service," she said. "They don't substitute for 

the experience and wisdom of an agency."

Both ad buying systems are open to anyone, not just candidate campaigns or advocacy 

groups. That prospect may frighten some candidate campaigns. While the Web has 

been flooded with blog commentary, homemade viral videos, e-mails and other 

http://www votervoter com/wot-tvad/page/press (3 of 9) [11/21/2008 3:24:41 PM]

Case 1:08-cv-00248-JR Document 55-6 Filed 11/21/2008 Page 4 of 10
VoterVoter com - Press Release 

content created by individuals to influence elections, the ability for lone supporters or 

relatively small groups of people to easily place ads on TV takes the lack of control 

inherent in the Web to a new level.

To Spot Runner and VoterVoter, it's all about "democratization" of the political process. 

"There's always been very broad discourse on the candidates... with blogs, multiple 

news sources, Web sites, etc.," said Mathewson. "We're simply enabling freedom of 

speech rights." Still, the fact that such systems could facilitate TV ad buys by 

operations such as 527 groups, known for negative and influential campaigns, could 

create controversy.

Although he plans to promote the service to individuals at first, Mathewson didn't rule 

out going after organizations such as 527s. "We do have designs on a much broader 

swath of the political populace," he told ClickZ News.

TV spots delivered through these systems must be disclosed in the manner required of 

all political ads. For instance, the anti-Barack Obama ad from VoterVoter that declares, 

"He's change we can't believe in," also must indicate who paid for its placement. In 

addition to disclosure requirements, VoterVoter takes care of Federal Election 

Commission filings required of political advertisers. Because individuals must disclose 

their involvement with a candidate campaign, the firm doesn't seem too concerned 

about rogue political staffers placing ads through its system.

Costs vary to use both platforms, though Mathewson said VoterVoter will take the 

traditional 15 percent cut from TV stations running its ads, and will require a minimum 

expenditure of about $1,000 by advertisers. Spot Runner ad creative rates start at 

$499 and go beyond $15,000.

Although Spot Runner enables digital advertising, it hasn't seen much interest in Web 

ads from its political advertisers since introducing its system in beta last year. 

VoterVoter expects to roll out other media options, too, but decided TV was the logical 

place to start. That conclusion comes as no surprise considering the dearth of online 

political ad spending, and the fact that donations raised on the Web are often used to 

advertise on television. Reports indicate online political ad spending in the 2008 

election could be as low as $20 million.

According to Tao, many political advertisers don't even buy Spot Runner ads through 

the Web site. "A lot of our candidates actually call us," she said.

Return To Top

New Site Airs Homemade Political Ads on TV

The Nation

Ari Melber

March 27, 2008

New Site Airs Homemade Political Ads on TV

Reposted by: Free Republic, HowieinSeattle, MugDave, Yahoo! Tech

http://www votervoter com/wot-tvad/page/press (4 of 9) [11/21/2008 3:24:41 PM]

Case 1:08-cv-00248-JR Document 55-6 Filed 11/21/2008 Page 5 of 10
VoterVoter com - Press Release 

Forget the YouTube election. For the first time, Americans can now run their own 

political advertising campaigns on television, thanks to VoterVoter.com, a new 

business unit of a major advertising firm.

Starting around $1,000, the site lets people purchase broadcast time in any market 

across the country, target specific demographics, and choose an ad for their candidate 

or cause -- or even make their own. Then the company, WideOrbit, which currently 

manages about $10 billion in advertising across 900 television stations, places the ads 

and takes a standard 15 percent cut of sales. "This is the first focused political site that 

enables the purchase of air time," CEO Eric Mathewson told me. WideOrbit's current 

clients include NBC Universal, Hearst and Gannett. Operating as a nonpartisan 

business, it will run political ads from across the political spectrum. Mathewson says he 

already has early orders for "hundreds of thousands of dollars" in ads for one of the 

presidential candidates, and he expects a full range of buyers once the site goes live 

on Thursday. Current users kept their names private, for now, but FEC law requires 

that buyers' names are listed at the end of the ads when they air.

VoterVoter.com is launching with mock-ups of positive and negative ads for the three 

presidential candidates, and it plans to roll out ads for congressional, state and local 

races. The site also welcomes open source input from donors and activists. If a 

homemade ad is popular on YouTube, for example, Mathewson said VoterVoter can 

help buyers produce a similar message in the high resolution video required for 

television broadcasts.

In an era when hundreds of thousands of people donate to candidates and millions 

more debate politics online, VoterVoter could find a receptive market in donors and 

activists willing to pool their resources for a greater impact on campaign messaging. 

And when buying ads directly, donors are not restricted by the FEC's $4,600 limit on 

donations to individual presidential candidates. Political advertising often captivates 

activists -- netroots groups and the John Edwards Campaign have previously run 

contests to broadcast grassroots ads. Just this week, MoveOn.org launched an "Obama 

in 30 Seconds Ad" competition, promising the winner's ad would "air on national TV." If 

VoterVoter catches on, volunteers, bloggers and donors could skip the contest and air 

their ads directly. (Screenshot included)

Return To Top

VoterVoter Launches: Could This Be the ActBlue of Political Ads?

Personal Democracy Forum

Micah L. Sifry

March 27, 2008

VoterVoter Launches: Could This Be the ActBlue of Political Ads?

When we launched Personal Democracy Forum back in 2004, we posted a modest 

manifesto. It starts:

http://www votervoter com/wot-tvad/page/press (5 of 9) [11/21/2008 3:24:41 PM]

Case 1:08-cv-00248-JR Document 55-6 Filed 11/21/2008 Page 6 of 10
VoterVoter com - Press Release 

Democracy in America is changing.

A new force, rooted in new tools and practices built on and around the 

Internet, is rising alongside the old system of capital-intensive broadcast 

politics. 

Today, for almost no money, anyone can be a reporter, a community 

organizer, an ad-maker, a publisher, a money-raiser, or a leader.

If what they have to say is compelling, it will spread.

Well, one more piece of that vision has come to fruition. Now, thanks to a new 

nonpartisan service called VoterVoter, you can not only be an ad-maker who spreads 

your ideas on the net. You can get your ad on television, without having to learn how 

to navigate the complicated world of TV ad-buying, targeting and placement.

Historically this was too difficult for an individual to do, says Eric Mathewson, the 

founder and CEO of VoterVoter, who spoke with techPresident yesterday. He's right. 

But that's changing. VoterVoter will take a user-generated ad, or work with the maker 

to get it into high-resolution video required for TV. It is also going to post all the ads 

that people are making, and enable anyone to sponsor an ad, choose where they want 

to place it, and help sponsors target by geography or viewer demographics. Any 

assertions made in an ad has to be documented, but other than that VoterVoter will 

impose no restrictions on what users can upload or sponsor.

The minimum required to sponsor an ad is $1,000, and the price increments rise 

rapidly from there, with VoterVoter taking a standard 15% fee. The company is a 

subsidiary of WideOrbit, an advertising firm that manages $10 billion in advertising., 

and this new service is built on top of its existing relationships with about 1,000 TV 

stations in the U.S. Mathewson clearly has his eye on a wealthier clientele, noting that 

individuals in California alone spent $40 million on political ads in the last cycle. 

Observing that such people are limited in what they directly give to campaigns, he 

expects that many users of VoterVoter will be independent players or institutions 

looking for a new efficient way to get their messages on TV.

That may well be, but I suspect VoterVoter's real potential for growth will be in 

supporting the myriad of self-organizing political groups populating the blogosphere 

and videosphere. With a few tweaks to its platform, VoterVoter could become the 

ActBlue of political advertising. It would have to make it easier for individuals to visibly 

pool their money thru the site (rather than requiring one entity to pay upfront), and it 

would have to make visible usage statistics, so everyone could see which ads were 

popular and where they were being placed. But with those functionalities, it could help 

foster a lot more participation in one of the last preserves of the professional political 

consulting class. Imagine a group of bloggers who were trying to make a difference in 

a Congressional race, frustrated with their candidate's official advertising, or wanting 

to hit her opponent with an independent attack ad. VoterVoter will make it a lot easier 

for online political activists to play the old media game, or perhaps introduce a whole 

new vernacular to political advertising on TV.

http://www votervoter com/wot-tvad/page/press (6 of 9) [11/21/2008 3:24:41 PM]

Case 1:08-cv-00248-JR Document 55-6 Filed 11/21/2008 Page 7 of 10
VoterVoter com - Press Release 

In our conversation yesterday, Mathewson admitted that he had not even heard of 

ActBlue, but quickly understood its significance. We've talked about making this 

service accessibly to groups, in the future. And over time we will show more data 

about the ads themselves, he told me.

This could get very interesting.

Return To Top

Get ready to see some homemade ads on TV

Politico

Anne Schroeder Mullins

March 27, 2008

Get ready to see some homemade ads on TV

Reposted by: Wonkette

As of today, VoterVoter.com is helping you get more airtime for your chosen candidate. 

Basically, VoterVoter is going to air homemade ads on TV. Huh? Homemade political 

ads? On TV? But how? And why? Here's why: "In an era when hundreds of thousands 

of people donate to candidates and millions more debate politics online, VoterVoter 

could find a receptive market in donors and activists willing to pool their resources for 

a greater impact on campaign messaging. And when buying ads directly, donors are 

not restricted by the FEC's $4,600 limit on donations to individual presidential 

candidates," writes The Nation. Ah, the loophole. Or, in VoterVoter's words:

Q: Why use VoterVoter instead of contributing the money directly to a cause or 

candidate?

A: VoterVoter allows you to select the specific advertisement you want to support and 

the amount that you want to spend. Because you are not contributing to a campaign 

but are making your own choice on how to spend your money, your independent 

expenditure is not limited. If you were to contribute your money to a candidate, you 

would be limited by Federal Election Commission guidelines, which currently limit 

contributions to $2,300 per election cycle.

As they say, stay tuned.

Return To Top

2008 03-27 MediaBytes: YouTube Insight - Comcast - BitTorrent - CBA - VoterVoter

ShellyPalmer.com/ MediaBytes

Shelly Palmer

March 27, 2008

2008 03-27 MediaBytes: YouTube Insight - Comcast - BitTorrent - CBA - VoterVoter

YOUTUBE has added Insight, a new feature that tracks when and where videos are 

http://www votervoter com/wot-tvad/page/press (7 of 9) [11/21/2008 3:24:41 PM]

Case 1:08-cv-00248-JR Document 55-6 Filed 11/21/2008 Page 8 of 10
VoterVoter com - Press Release 

being watched. Insight breaks down views by both geography and time, giving video 

publishers some powerful new performance data. The tool has a number of practical 

applications, including market-testing TV ads to determine locations with high 

receptivity. Most importantly, it will provide more data on what makes a video popular 

on the top video-sharing site.

COMCAST and BITTORRENT will collaborate to make the P2P software run more 

smoothly on the Comcast network. Comcast will stop throttling traffic for all users of 

any specific application (such as BitTorrent) and focus only on users that consume a 

large amount of bandwidth. BitTorrent will also tweak its code to work more effectively 

on Comcast's network. Comcast plans to have its new policies in place before the end 

of the year.

THE COMMUNITY BROADCASTERS ASSOCIATION has filed a court action to prevent 

the marketing of DTV converter boxes that block analog signals. The federal coupon 

program currently only supports boxes that are all-digital, which means that 

consumers who make the switch will be unable to access local low-power stations that 

are still broadcasting in analog. The CBA claims this violates the FCC's 1962 all-channel 

receiver act and creates a major threat to its stations. The group asked the FCC to rule 

on the matter last year but has not received a response. The issue will now head to 

court.

WIDEORBIT has launched VoterVoter.com, a powerful new tool that allows ordinary 

citizens to purchase political advertising on television. Users can create their own video 

ads, use ones that others have uploaded or choose standard spots offered by 

VoterVoter. WideOrbit will place the ad based on the desired demographics and 

locations, taking the standard 15% cut. Purchases are not subject to FEC donation 

limits. The site launches today with a focus on the presidential election. However, 

WideOrbit plans to add support for congressional, state and local races.

VERIZON has asked the FCC to force cable operators to accept disconnect orders 

directly from a customer's new video provider, just like they require for phone 

companies. Currently, cable operators will only accept disconnect orders directly from 

the customer, which Verizon says slows the process and hinders their ability to gain 

new customers for its FiOS TV service. The NCTA's VP of communications called the 

request a fairy tale complaint and a lame attempt at seeking a regulatory handout.

MOTOROLA has officially decided to spin off its troubled mobile pone unit, creating a 

separate publicly traded company.

Return To Top

Broadcast Coverage:

Your Own Campaign Ads (VIDEO)

ABC News Channel 36

Ted Fioraliso

http://www votervoter com/wot-tvad/page/press (8 of 9) [11/21/2008 3:24:41 PM]

Case 1:08-cv-00248-JR Document 55-6 Filed 11/21/2008 Page 9 of 10
VoterVoter.com - Press Release 

March 27, 2008

Your Own Campaign Ads (VIDEO)

Do you think you can make a better political ad than the ones the presidential 

candidates are running? Well, now you can - if you've got the money. 

It's called votervoter.com 

Founder Eric Mathewson knows the media business. He invented advertising software 

used at almost a thousand media outlets nationwide, and he's a stockholder in our 

parent company.

"Votervoter.com allows an average person to purchase TV time directly to benefit a 

cause or a candidate they're really passionate about," said Mathewson. 

On votervoter.com you can sponsor or create your own political ads. If you like an 

existing political commercial, votervoter can recreate it with a similar message and get 

it on the air.

"I think this is a good effort. It's taking YouTube and Myspace video to the next level of 

trying to get these personally-produced activist-originated videos airtime," said Elmira 

College political science professor Jim Twombly.

He says he has a few concerns.

"The access that private individuals now have to larger media is significant and further 

de-democratizes the whole process," said Twombly. 

Media outlets set the ad prices, and votervoter.com charges a 15% commission.

"Is it really a question of because you have more money than I do, you get to have 

more of an influence in the political process. Some people would argue that's not fair," 

said Twombly. 

So, what do you think? Is this an unfair advantage for the rich, or a chance to give 

ordinary citizens more of a say in the political process?

Return To Top Site design Rylander Design

© 2008 WideOrbit Inc ● Home

● Browse Ads

● Create

● Sponsor

● FAQ

● Press

● 

● Privacy & Terms

http://www.votervoter.com/wot-tvad/page/press (9 of 9) [11/21/2008 3:24:41 PM]

Case 1:08-cv-00248-JR Document 55-6 Filed 11/21/2008 Page 10 of 10
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 150 

Case 1:08-cv-00248-JR Document 55-7 Filed 11/21/2008 Page 1 of 5
VoterVoter com - FAQ 

● Home

● Browse Ads

● Create

● Sponsor

● FAQ

● Press

● About Us

FAQ

● What is VoterVoter?

● Why use VoterVoter instead of contributing the money directly to a cause or 

candidate?

● How does VoterVoter work?

● Where will my advertisement run?

● How do I sponsor an ad?

● How do I create an ad?

● Can others use the ad I create?

● What are my payment options?

● What if the media advertising purchased costs less than my budget?

● Does my sponsorship comply with FEC guidelines?

● How is VoterVoter.com paid?

● Can my contribution be made anonymously?

What is VoterVoter?

VoterVoter is a non-partisan political advertising service. We make it easy for you, as 

an individual, to run your own political advertisement on TV. VoterVoter.com enables 

you to directly help your candidate or cause through broadcast TV. With VoterVoter, 

you can select or create the advertising message of your choice and have that 

message play on TV stations throughout the country.

Return To Top

Trying to reach ...

For questions or to contact a 

VoterVoter staff person, please 

email support@votervoter.com

or call

415-675-6765

VoterVoter Support is available MonFri, 9:00am-8:00pm EDT

Browse

See the TV ads that really can 

change the world

Create

Upload an ad of your own and 

http://www votervoter com/wot-tvad/page/faq (1 of 4) [11/21/2008 3:54:16 PM] Search for an ad Submit Query

Case 1:08-cv-00248-JR Document 55-7 Filed 11/21/2008 Page 2 of 5
VoterVoter com - FAQ 

Why use VoterVoter instead of contributing the money directly to a cause or 

candidate?

VoterVoter allows you to select the specific advertisement you want to support and the 

amount that you want to spend. Because you are not contributing to a campaign, but 

are making your own choice on how to spend your money, your independent 

expenditure is not limited. If you were to contribute your money to a candidate, you 

would be limited by Federal Election Commission guidelines, which currently limit 

contributions to $2,300 per election cycle.

Return To Top

How does VoterVoter work?

The process is simple.

1. Decide on your advertisement: Browse the existing selection of political 

advertisements in the VoterVoter library and select the one you want to use, or upload 

your own advertisement.

2. Select Your Target Audience and Market: You decide who you want to reach - 

geography, age, sex and ethnicity. Once you select the target audience, and tell us 

your budget, VoterVoter media buyers will determine the advertising placement 

schedule that meets your objectives.

3. Payment: Pay by credit card (MasterCard, VISA, American Express and Discover) or 

wire funds directly to VoterVoter. Due to broadcast TV station policy, payment needs to 

be made in advance of buying the media time requested for a political advertisement. 

Contact VoterVoter at 415-675-6765 or email support@votervoter.com if you decide to 

wire the funds to us.

Return To Top

Where will my advertisement run?

You decide who you want to reach - city, state, or throughout the country - as well as 

age, gender and ethnicity. Once you select the target audience and tell us your budget, 

VoterVoter media buyers will determine the advertising placement schedule that meets 

your objectives.

Return To Top

How do I sponsor an ad?

Simply browse through our commercial video library and choose the ad or ads that 

best express your opinion, let us know your budget and where you want to air the ad, 

share it with others

Sponsor

Pay for a political ad to run on 

television

http://www votervoter com/wot-tvad/page/faq (2 of 4) [11/21/2008 3:54:16 PM]

Case 1:08-cv-00248-JR Document 55-7 Filed 11/21/2008 Page 3 of 5
VoterVoter com - FAQ 

and we'll take care of the rest. Then sit back as your message reaches millions of 

voters.

Return To Top

How do I create an ad?

Either upload your finished ad through VoterVoter.com or submit your ad to us. Click 

here to Find Out How to Upload Your Own Ad

Return To Top

Can others use the ad I create?

Absolutely! Contribute your own advertisements and you can post them for others to 

use.

Return To Top

What are my payment options?

All TV stations require that new advertisers must pay in advance. We accept credit 

cards (MasterCard, VISA, American Express and Discover), and you can also choose to 

wire funds directly to us (call us at 415-675-6765 for details).

Return To Top

What if the media advertising purchased costs less than my budget?

We will refund any balance left over from your original budget if not used to book and 

run your ad.

Return To Top

Does my sponsorship comply with FEC guidelines?

Advertising paid for by an individual through VoterVoter is not subject to any FEC 

limitations. As part of the VoterVoter registration process, we ask all the questions 

required to comply with FEC guidelines and filing requirements.

Return To Top

How is VoterVoter.com paid?

VoterVoter is paid the same 15% commission that is paid by the TV stations and to all 

advertising agencies.

http://www votervoter com/wot-tvad/page/faq (3 of 4) [11/21/2008 3:54:16 PM]

Case 1:08-cv-00248-JR Document 55-7 Filed 11/21/2008 Page 4 of 5
VoterVoter com - FAQ 

Return To Top

Can my contribution be made anonymously?

No. Federal Election campaign rules require that your name and address must be 

disclosed on the ad.

Return To Top

© 2008 WideOrbit Inc Home

 Browse Ads

 Create

 Sponsor

 FAQ

 Press

 

 Privacy & Terms

http://www votervoter com/wot-tvad/page/faq (4 of 4) [11/21/2008 3:54:16 PM]

Case 1:08-cv-00248-JR Document 55-7 Filed 11/21/2008 Page 5 of 5
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 151 

Case 1:08-cv-00248-JR Document 55-8 Filed 11/21/2008 Page 1 of 12
Case 1:08-cv-00248-JR Document 55-8 Filed 11/21/2008 Page 2 of 12
Case 1:08-cv-00248-JR Document 55-8 Filed 11/21/2008 Page 3 of 12
Case 1:08-cv-00248-JR Document 55-8 Filed 11/21/2008 Page 4 of 12
Case 1:08-cv-00248-JR Document 55-8 Filed 11/21/2008 Page 5 of 12
Case 1:08-cv-00248-JR Document 55-8 Filed 11/21/2008 Page 6 of 12
Case 1:08-cv-00248-JR Document 55-8 Filed 11/21/2008 Page 7 of 12
Case 1:08-cv-00248-JR Document 55-8 Filed 11/21/2008 Page 8 of 12
Case 1:08-cv-00248-JR Document 55-8 Filed 11/21/2008 Page 9 of 12
Case 1:08-cv-00248-JR Document 55-8 Filed 11/21/2008 Page 10 of 12
Case 1:08-cv-00248-JR Document 55-8 Filed 11/21/2008 Page 11 of 12
Case 1:08-cv-00248-JR Document 55-8 Filed 11/21/2008 Page 12 of 12
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 152 

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 1 of 19
The Forum

Volume 6, Issue 1 2008 Article 6

HAS THE U.S. CAMPAIGN FINANCE SYSTEM COLLAPSED?

Internet Fundraising in 2008: A New Model?

Clyde Wilcox∗

∗Georgetown University, wilcoxc@georgetown.edu

Copyright 
c 2008 The Berkeley Electronic Press. All rights reserved.

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 2 of 19
Internet Fundraising in 2008: A New Model?∗

Clyde Wilcox

Abstract

The surge in internet fundraising in 2004 and especially in 2008 suggests that campaigns may

have found a way to involve a new group of citizens in giving. Using data from an earlier 2000

survey of large and small donors, I show that internet donors are different from other small donors

in interesting ways.

KEYWORDS: campaign finance, money and politics, contributions, internet

∗Clyde Wilcox is a professor in the Government Department at Georgetown. His latest books

include The Politics of Same-Sex Marriage, co-edited with Craig Rimmerman, from the University

of Chicago Press, and The Values Campaign: The Christian Right in the 2004 Elections, co-edited

with John Green and Mark Rozell. The data for this paper were collected in collaboration with

Clifford Brown, Jr., Lynda Powell, John C. Green, Michael Munger, and Mark J. Rozell. As

always, Bob Biersack provided useful data. Michael Malbin provided helpful comments.

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 3 of 19
 Three startling figures signal a new dynamic in presidential fundraising in 

2008. In January, 2007, Senator Barack Obama raised more than $35 million 

dollars from individuals for his primary election campaign against Senator Hillary 

Clinton, including $16 million in contributions of $200 or less. More than 90% of 

his donors in January gave $100 or less, and more than 40% gave $25 or less. 

Obama’s total was higher than all combined Republican presidential candidates.1

Just a few days later, Obama’s campaign announced that it had raised more than 

$7.5 million over the internet in just 36 hours.2

Perhaps more surprisingly, on November 5, 2007 GOP presidential candidate 

Ron Paul raised $4.07 million in individual contributions in 24 hours, primarily 

through the internet. A Gallup poll conducted of national Republicans completed 

the previous day showed that Paul had the support of less than 1% of Republicans 

nationwide. 

To put these figures in perspective, consider the following. In January, 2004, 

George W. Bush raised $12 million from individual donors. During that same 

month, John Kerry raised $4 million and Howard Dean raised $6 million. At the 

time, these were seen as large sums – indeed Bush and Dean both set new 

campaign fundraising records for their respective parties. But Obama raised more 

in 36 hours than Dean had in the entire month, and his January total was 

approximately three times greater than what Bush had raised just four years 

before. And Ron Paul – a footnote in the GOP polls – raised more money in a 

single day than John Kerry did in the entire month of January, 2004. 

The explosion of internet fundraising has practical implications for 

campaigns. It may well transform the dynamics of nomination campaigns. Hillary 

Clinton’s fundraising strategy of courting large donors has been very successful – 

in January she raised 25% more than George Bush’s record total in 2004, and her 

total was more than twice what Dean had raised. But Obama’s record haul gave 

him a huge advantage in advertising in several key states. Moreover, the vast 

majority of Obama’s donors have not made maximum contributions, and so they 

can give again, and again, and again. Meanwhile a majority of Clinton’s money 

has come from donors who have given the maximum legal contribution. 

But it is possible that internet fundraising will have a more profound impact 

on who contributes, and how they become involved in politics (Wilcox, 2001). It 

might enable candidates to reach a new set of potential donors, and therefore 

broaden the demographic and political range of the pool of people who finance 

American elections. The internet has provided a new technology to reach smaller 

donors – one that is cheaper, allows for a wider range of ideology, and provides a 

 

1

 Campaign Finance Institute. “Newly Released January 2008 Reports Highlight Obama’s 

Dominance in Presidential Fundraising,” Press release, Feb 21, 2008. 

2

 Patrick Healy and Jeff Zeleny, “Obama Outshines Clinton at Raising Funds,” The New York 

Times, Feb 8, 2008. 

Wilcox: Internet Fundraising in 2008 1

Published by The Berkeley Electronic Press, 2008

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 4 of 19
wider range of incentives than existing techniques such as direct mail. If the 

internet ultimately involves a group of donors who have different backgrounds 

and political views than the existing donor pool, then it might have positive 

democratic effects. 

Broadening the pool of donors, and especially broadening the base among less 

affluent citizens, could have a number of positive consequences for democracy. 

First, it might lessen the participatory distortion of contributing. Compared to all 

other forms of participation, contributing is most heavily concentrated among the 

affluent (Verba, Schlozman, & Brady, 1995). Candidates who spend their time 

raising money from the traditional pool of larger donors hear the voices of a 

distinctive choir – composed of a narrow elite whose priorities and policy views 

differ substantially from the general population. 

Moreover, there is some evidence that once citizens make even a small 

contribution to a candidate, they may pay more attention to campaigns, and might 

become involved in other ways. In 2004, the Bush campaign very successfully 

recruited small donors to do other forms of campaign activity. The Bush and 

Kerry campaigns made a major effort to find new small donors in the spring and 

summer months, and the Clinton and Obama campaigns have sought to involve 

small donors in broader participation as well. 

There is of course no data on Obama’s and Ron Paul’s internet donors, and 

there may never be. Most candidates in 2008 have opted out of the federal 

matching fund program, and thus are not required to disclose the name and 

address of their small donors. Unless the campaigns voluntarily release the names 

and addresses of their small donors, we will be able to learn little about them. 

In this paper I draw some inferences about internet donors, using data from 

earlier donor surveys in 1972, 1988, and 2000. The 1972 and 1988 surveys are of 

donors of $200 or more – a level that federal law deems sufficiently large to 

mandate disclosure.3

 The 2000 survey includes separate samples of donors of 

$200 or more, and also donors of smaller amounts. And the 2000 survey includes 

questions that allow us to separate out those who gave through the internet, and 

those who gave using traditional means. These data may allow us to make 

educated guesses about how the donor pool may be changing as a result of 

internet solicitation 

The 2000 survey is a rare opportunity to look at smaller donors. The law 

requires campaigns to disclose the names and addresses of contributors of more 

than $200, but not of donors of smaller amounts. Yet candidates who seek 

matching funds must provide to the Federal Election Commission (FEC) the 

names and addresses of small donors as part of their submission for funds. In the 

 

3

 The data in 1972 were collected by Clifford Brown and Lynda Powell. The 1988 data were 

collected by Brown, Powell, and Clyde Wilcox. The 2000 data were collected by Alexandra 

Cooper, John Green, Michael Munger, Mark Rozell, and Clyde Wilcox. 

2 The Forum Vol. 6 [2008], No. 1, Article 6

http://www.bepress.com/forum/vol6/iss1/art6

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 5 of 19
1980s and early 1990s the Commission did not release matching fund records to 

the general public, so there could be no surveys of small donors during this 

period. More recently, in 2004 and again in 2008 the biggest campaigns did not 

seek matching funds, so they did not submit lists of names and addresses of small 

donors. But in 2000 all but two candidates received matching funds, and the FEC 

disclosed their names and addresses. And George Bush refused matching funds 

but did disclose the identities of his donors on the internet. Thus only the 

relatively small number of small donors to Steve Forbes brief campaign could not 

be included in the survey. 

Contributing and the Donor Pool: Motives, Means, and Opportunity 

Campaigns seek to identify citizens with the motives and means to give, and then 

provide them with the opportunity to do so. The vast majority of citizens can 

think of many more gratifying things to do with their money than to give it to 

presidential candidates. Thus the highest estimates suggest that fewer than 2% of 

citizens gave to a presidential candidate in 2004 – the previous record year for 

presidential fundraising. 

Potential donors may be motivated to seek a mixture of three benefits – 

material benefits for their business or their families, social or solidary benefits 

that come from the pleasure of interacting with politicians and other donors, and 

purposive or ideological benefits that come from supporting candidates who share 

their views on narrow issues like abortion or global warming, or broader 

ideological orientations. Fundraising is the art and science of approaching 

potential donors with the right appeals at the right time. 

Prior to the adoption of the FECA amendments in 1974, candidates often 

depended primarily on a few donors who could write very large checks. In 1968, 

Eugene McCarthy financed his campaign largely by large checks from fewer than 

50 donors, and Robert Kennedy raised $13 million in 13 weeks primarily by 

approaching very wealthy donors. Fundraisers knew the small number of 

individuals who were motivated enough to write large checks, and generally 

arranged for the candidates to ask for the money in person. The motives of these 

large donors were generally known by fundraisers, or could be ascertained easily 

when the candidate met the potential donor in person. 

FECA changed the dynamic of fundraising by limiting contributions to $1000. 

In an era of rapidly escalating campaign costs, the maximum contribution 

remained constant through the 2000 election, and has since increased to $2300 in 

2008. In 1972 Clement Stone gave the Nixon campaign more than $2 million 

dollars, but in 1976 the maximum contribution he could make was $1000. 

Suddenly campaigns needed to identify many more donors. 

Wilcox: Internet Fundraising in 2008 3

Published by The Berkeley Electronic Press, 2008

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 6 of 19
Finding Large Donors, 1974-present 

Campaigns after FECA scrambled to find many new donors. Instead of a few 

donors with fat checkbooks, they sought instead a few solicitors with fat 

Rolodexes. Suddenly campaigns had to far beyond the “usual suspects” and 

identify a far larger group of potential donors. They did this by building 

pyramidal networks of solicitors. 

At the top were those who pledged to raise large sums, such as the 500 

Rangers and Pioneers in the 2004 Bush campaign who pledged to raise hundreds 

of thousands of dollars each. These top solicitors would then recruit others to 

solicit smaller amounts, and these individuals would in turn ask for contributions 

directly from friends, business associates, and neighbors. 

Large contributions continue to be raised primarily by personal appeals from 

someone the donor knows. Fundraising professionals recommend starting with a 

list of those who “cannot say no to you.” This might be an employee, or a 

contractor to your company. It might be someone who regularly does business 

with government. It might be someone with a social obligation, who perhaps 

asked the solicitor to give to the opera and now is asked in return to give to a 

presidential candidate. At one fundraising dinner for Jack Kemp in 1988, the 

candidate asked to make only a short speech, because the donors were all there 

because of their obligation to the solicitor, and were not necessarily supporters of 

the candidate (Brown, Powell, & Wilcox, 1995). 

Large contributions are usually made at splashy social events, which donors 

may also value. These provide an opportunity to see and be seen by others who 

can afford $1000 a ticket. For some, the solidary benefit is tinged with ideology – 

it is a chance to mingle with Democratic or Republican businessmen and women, 

for example. Surveys show that large donors frequently care about ideology, but 

these networks of solicitors are especially skilled at raising money from those 

with material motives, and those who value the social atmosphere at fundraising 

events where maximum dollar donors gather (Brown et al., 1995; Francia, 2003). 

By 2000 the pool of large donors had grown remarkably. George W. Bush 

received maximum contributions of $1000 from more than 94,000 individuals that 

year, and other GOP candidates and the two Democratic candidates also attracted 

many large donors. Yet my analysis of data from surveys of donors in 1972, 1988, 

and 2000 suggests that the donor pool in 2000 looked very much like the pool in 

1972. These surveys were of individuals who gave at least $200 in each year, but 

it is important to note that inflation had greatly eroded the value of a $200 

contribution. 

Table 1 shows some of the key demographic comparisons. In each year, large 

donors were overwhelmingly older, well educated white men. They were 

primarily concentrated in business and the professions, and were quite affluent. 

4 The Forum Vol. 6 [2008], No. 1, Article 6

http://www.bepress.com/forum/vol6/iss1/art6

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 7 of 19
Over this time, the donor pool became somewhat older, and involved slightly 

more new donors as solicitors broadened their efforts. There were predictably 

more women donors in 2000 than in 1972, although large donors were still 

overwhelmingly male. 

Table 1: Demographic Characteristics of Significant Donors 

 1972 1988 2000 

Have given in most previous 

 Presidential elections 51% 50% 44% 

Education: 

 High school or less 9% 6% 2% 

 Some graduate plus 52% 56% 56% 

White 99% 95% 96% 

Male 83% 73% 70% 

Age 

 18-30 7% 5% 1% 

 61+ 21% 30% 40% 

 

Source: Donor survey 1972 by Clifford Brown and Lynda Powell, Donor survey in 1988 by 

Brown, Powell, and Wilcox, and Donor survey in 2000 by Alexandra Cooper, John Green, 

Michael Munger, Mark Rozell, and Clyde Wilcox. 

Comparing income across these years is more difficult, because the value of 

the disclosed contribution of $200 changed dramatically with inflation. A 

contribution of $200 in 1972 would be worth $850 in 2000. Moreover, the income 

categories of the surveys do not quite match up with inflation during this period. 

But comparing donors of $200 to donors of $850 and up in 2000 suggests that 

donors in the two years are roughly equal in income. What is absolutely clear is 

that donors in all years are affluent. Only 2% of donors of $200 or more in 2000 

had incomes below $50,000, and approximately half had incomes of $250,000 or 

more.4

 

Large donors in 2000 look like donors in 1972 for obvious reasons. As 

campaigns turned their top donors into solicitors, these solicitors naturally turned 

first to their friends and neighbors – the people they knew best. They picked those 

who would be likely to have the motives and means to contribute. Large 

contributions are generally raised by personal solicitations by those who know the 

potential contributors, and so the donor pool reproduces itself as it expands 

 

4

 Donors in 1972 appear to have been comparatively wealthier than those in 2000, but remember 

that the donor threshold was in constant dollars much higher than in 1972 than in 2000, and that 

there was no contribution limit in effect in 1972. This means that the campaigns did not work to 

broaden the donor pool as much as they did in later elections. 

Wilcox: Internet Fundraising in 2008 5

Published by The Berkeley Electronic Press, 2008

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 8 of 19
(Brady, Schlozman, & Verba, 1999). Some candidates brought slightly different 

demographics to the donor pool – Jesse Jackson and Pat Robertson in 1988 both 

had more women donors than George H.W. Bush and Michael Dukakis. But these 

differences have generally been small. 

Finding Small Donors, 1974-1999 

Campaigns that wish to raise money from less affluent donors have traditionally 

faced the problem of identifying those with sufficiently strong motives to give. 

The Barry Goldwater campaign assembled a list of those who had written letters 

to the campaign, and in some cases to newspapers, and successfully mailed 

solicitations, but before the FECA campaigns had little incentive to seek out 

smaller donors. FECA not only limited the amount that a campaign’s strongest 

supporters could give, but it also increased the value of smaller contributions by 

matching the first $250 of all contributions. Thus a contribution of $50 became 

$100. 

Between 1974 and 1999, campaigns primarily reached potential small donors 

through direct mail. In the 1970s, advances in computer technology made it easier 

for candidates to mail solicitations to pre-screened lists of potential donors. By 

renting lists of members of interest groups, subscribers to certain magazines, and 

donors to previous campaigns, candidates could be assured of reaching those who 

had in the past been sufficiently motivated to give. As technology advanced it was 

possible to create distinctive letters for members of different lists, and to match 

across lists to find those whose name appeared on more than one. 

Direct mail costs money, and campaigns typically lose money when they 

“prospect” a list. But anyone who responds can be solicited again and again, and 

some donors pledge to give monthly. In 1988 Pat Robertson created the “1988 

Club” of those who promised to give his campaign $19.88 per month. FEC 

records show that many of his donors gave every week (Brown et al., 1995). 

Robertson’s campaign was especially successful in direct mail fundraising 

because he built the list from those who responded to his television appeal to 

petition him to run for president. The vast majority of his donors had been regular 

donors to his television program. 

It stands to reason that direct mail solicitations cannot offer a solidary benefit, 

since writing a check is not a social activity. And those who seek material benefits 

do not write small checks to be delivered by mail. Rather, direct mail works with 

those with purposive motives. Generally, it takes a strong purposive motive to 

induce someone with an average income to give to a presidential candidate. 

Throughout this period, fundraisers reported that mail worked best only for 

ideologically extreme candidates. Direct mail solicitations typically warned of 

dire threats to the political system, which only a contribution of $25 could prevent 

6 The Forum Vol. 6 [2008], No. 1, Article 6

http://www.bepress.com/forum/vol6/iss1/art6

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 9 of 19
(Godwin, 1988). The market for direct mail was primarily older Americans – a 

cohort that grew up reading and writing letters, who were at the stage of their life 

cycle when they looked forward to the mail as a highlight of their day. Younger 

citizens did not respond to direct mail, and were only slightly more likely to 

respond to telemarketing requests. 

Thus in 1988, moderate candidates such as Dukakis, Bush, and Dole relied 

primarily on networks of larger donors with material and solidary motives, and 

ideological candidates such as Pat Robertson, Paul Simon, and Jesse Jackson 

relied more on small contributions raised from older, ideologues through direct 

mail. There were no financially viable ways to solicit contributions from more 

moderate or younger citizens. 

Could the Internet Change Campaign Fundraising? 

The internet provides a vehicle to reach less affluent citizens with a different mix 

of appeals. Compared with direct mail, e-mail and internet fundraising is very 

cheap, and thus the break-even point is far lower. Campaigns can therefore e-mail 

far more broadly than to carefully honed ideological lists. On a single day in late 

February I received three separate e-mails from the Clinton campaign asking for 

contributions, and two from the Obama campaign. One of Clinton’s solicitations 

asked for a contribution of just $5. Such repeated solicitations, with such a low 

target contribution, would be financially difficult through the mail. 

With a lower threshold to break even, campaigns can seek to build much 

larger networks of donors. If prospecting is not expensive, then campaigns can 

spend time to develop complex networks of potential donors, and target them with 

a mixture of incentives. They can vary the message, and the packaging without 

incurring huge expenses. 

Indeed, the internet provides the possibility that a citizen might give for the 

first time without being asked. Candidate web pages are designed to draw in those 

who browse them, and many links lead to a page that asks for contributions. Thus 

the internet can reach individuals whose names do not appear on lists, and need 

not focus exclusively on high-percentage ideological appeals. 

In the 2000 campaign, several candidates launched major internet fundraising 

efforts. The most notable was John McCain, whose internet fundraising totals 

seem quaint just eight years later but which sent ripples through the Washington 

fundraising community. Al Gore and George W. Bush also mounted internet 

efforts late, and Ralph Nader used the internet for fundraising for his Green Party 

candidacy. 

The data in Table 2 shows three sets of donors to presidential candidates in 

2000: small internet donors, other small donors (almost entirely direct mail), and 

Wilcox: Internet Fundraising in 2008 7

Published by The Berkeley Electronic Press, 2008

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 10 of 19
large donors of over $200.5

 The data show that internet small donors were far 

more likely than other donors to be making their first contribution, although a 

majority had given previously in at least some elections. 

Table 2: Big v Small Donors, 2000 

 Small Internet Other Small Large 

Have Given in Past Elections 

 Most 23% 42% 44% 

 Some 40% 39% 42% 

 One or fewer 37% 20% 14% 

Education: 

 High school or less 3% 8% 2% 

 Some graduate plus 52% 39% 57% 

Income 

 Under $50,000 18% 31% 3% 

 Over $250,000 4% 5% 68% 

White 95% 96% 96% 

Male 80% 68% 69% 

Age 

 18-30 8% 2% 1% 

 61+ 22% 57% 39% 

Large donors were not surprisingly wealthier, than both sets of small donors. 

But small donors who gave through the internet were less likely to have incomes 

below $50,000, and were almost as likely as big donors to have at least some 

post-graduate education. 

Internet donors were just as likely as all other donors to be white, and were 

actually more likely than other donors to be male, a finding which might reflect 

gender difference in computer usage in 2000. They were much younger than other 

donors (and especially direct mail donors) but few were under 30. 

Although the demographics of the internet donors are interesting, any possible 

differences in ideology, motives, and social group membership is more important. 

Whereas direct mail works primarily through strong ideology and fear, internet 

fundraising has the capacity to appeal beyond the narrow ideological wings of the 

political parties. Candidate web pages are deep with information on policy 

positions, in contrast to short fundraising letters. Moreover, the web pages are 

 

5

 All large donors are combined, because although a few gave through the internet, the data 

suggest that this was merely the way they delivered the check. Most were solicited either in person 

or by phone by someone they knew. 

8 The Forum Vol. 6 [2008], No. 1, Article 6

http://www.bepress.com/forum/vol6/iss1/art6

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 11 of 19
open for all to read and therefore are more carefully moderated than narrowly 

targeted letters. Thus the internet has the potential to raise money from donors 

with more moderate policy views, and to avoid some of the negative emotion 

inherent in direct mail solicitations. 

The internet may also be able to deliver solidary benefit as well as purposive 

benefits. The e-mail solicitations I received in late February differed in a variety 

of ways – some were from the candidates, some from the candidate’s families, 

and some from leaders who endorsed the candidate. All had short attached videos, 

and links to various parts of the candidate’s web pages. In one solicitation, the 

video element was designed to make the viewer appear to be onstage with Senator 

Clinton, in an Obama solicitation I was invited to join in a network of citizens in 

my state who were working for the Senator. These solicitations clearly are 

designed to create the feeling of an online community. In the 2004 campaign, 

some candidates did internet meet-ups where they chatted with online donors. By 

2008, college students were circulating their own videos with appeals to 

contribute to candidates, and candidates had their own pages on several of the 

social hosting sites like Facebook. 

The data in Table 3 shows the ideology, motivations, and group memberships 

of small internet donors, other small donors, and larger donors who gave over 

$200. Because the patterns differ in interesting ways by party, I show the data 

separately for those who identify with each party (including those who lean 

toward, but do not identify with, either party). Pure independents are excluded 

from this table. 

Among Republicans, direct mail donors are the most likely to identify as 

extremely conservative on a seven point ideology scale like that of the NES. They 

also have more extreme views on social and economic issues, measured here by 

factor scores of a set of policy items from the survey. Internet donors are far more 

moderate, and have policy views that are closer to large GOP donors rather than 

small direct mail contributors. 

In the Democratic party, however, it is direct mail small donors who are least 

likely to identify as extreme liberals, and who have more moderate scores on the 

issue scales. Small internet donors resemble large donors among Republicans 

also, but here it is in their ideological intensity, not moderation. This is a 

surprising result, and may reflect the efforts by the Clinton White House to build 

internet lists of party regulars, which the Gore campaign may have successfully 

tapped. It is also possible that the Democratic candidates built their internet lists 

from e-mail lists of interest groups, a topic I return to below. 

The differences are muddier on motives. The values here are factor scores that 

combined several items that have been used in past studies to measure motives for 

contributing. These factor scores are assessed relative to the mean of all donors, 

so negative scores do not necessarily mean an absence of a motive – merely that 

Wilcox: Internet Fundraising in 2008 9

Published by The Berkeley Electronic Press, 2008

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 12 of 19
the particular group is less motivated by this goal than the average donors. The 

questions measuring solidary benefits may not be optimal for tapping into social 

benefits in virtual communities; these questions focused on fundraising events and 

the importance of meeting candidates and solicitors. 

Table 3: Large and Small Donors in Both Parties 

Republicans Democrats 

 Small Other Big Small Other Big 

 Internet Small Internet Small 

Ideologically Extreme 12% 21% 12% 16% 7% 14% 

Social Issues Scale .32 .85 .21 -.79 -.69 -.96 

Economic Issues Scale .48 .73 .46 -1.09 -1.00 -1.07 

Solidary Motives -.16 -.20 .16 -.15 -.06 .28 

Purposive Motives .08 .20 -.02 -.04 .09 -.03 

Business Motives -.12 -.05 .48 -.32 -.39 -.16 

 

Member: 

Business Group 25% 32% 68% 44% 28% 47% 

Professional 53% 36% 55% 55% 51% 61% 

Union 9% 1% 1% 14% 16% 5% 

Party 44% 39% 57% 49% 48% 50% 

Civic Association 10% 17% 37% 17% 30% 38% 

Pro-Gun 39% 40% 31% 12% 10% 6% 

Christian Conserv. 14% 26% 13% 0% 1% 2% 

Pro-Family 18% 30% 21% 7% 7% 7% 

Environmental 13% 7% 16% 47% 37% 46% 

Pro-Choice 7% 4% 11% 25% 30% 33% 

In both parties, large donors were more likely to be motivated by material and 

solidary benefits than small donors. Republican large donors stand out on 

business motives, Democratic large donors on solidary motives. Among 

Republicans, small internet donors have far lower purposive motives than small 

direct mail donors, and are slightly higher on solidary motives. Among 

Democrats, however, small internet donors have negative scores on all three 

motives, meaning that they have somewhat lower scores than the average donor in 

all areas. Of course, these donors were sufficiently motivated to give, but it may 

be that internet giving is in some ways easier for some donors, and thus it may 

take a less powerful appeal to tip them into making a contribution. 

10 The Forum Vol. 6 [2008], No. 1, Article 6

http://www.bepress.com/forum/vol6/iss1/art6

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 13 of 19
The bottom portion of the table shows membership in various political and 

social groups. Membership in business and professional groups is common among 

all groups of donors, and membership in unions is relatively rare. Large donors in 

both parties are more likely to be members of business, professional, and civic 

associations than smaller donors. 

Once again Republican small internet givers resemble large donors more than 

they resemble small direct mail donors. Both are far less likely to be members of 

Christian conservative and pro-family groups, and (not shown) pro-life groups as 

well. Both are equally likely to be members of professional groups, and they are 

more likely than small internet donors to belong to party organizations. And small 

internet donors and large GOP donors are both more likely than small direct mail 

donors to belong to cross-cutting organizations such as environmental, prochoice, and (not shown) civil rights groups. The one exception is pro-gun groups, 

where small internet donors are closer to small direct mail donors than are large 

donors. But the widespread membership in these organizations among all 

Republican donors is strikingly high. 

Again Democrats present a contrast. Small Democratic internet donors look 

much like large donors here also, but it is in their higher rates of membership in 

Democratic leaning groups such as environmental and civil rights groups, and 

their low rates of membership in cross-cutting groups. The exception here is in 

pro-choice groups and (not shown) feminist groups. The lower rate of 

membership in these latter two types of groups is entirely explained by the gender 

gap in internet giving. Democratic men and women who gave through the internet 

were both more likely to belong to feminist and pro-choice groups than their 

same-sex counterparts among small direct mail giving. 

In 2000, it appears that the internet mobilized different bases for the two 

parties. Among Republicans, the internet created a way to appeal for contributions 

among younger professionals who are more moderate, especially on social issues. 

These differences are stark in some survey questions. Fully 60% of GOP small 

internet donors would allow most abortions, compared with 30% of small direct 

mail donors. “Only” 12% of internet small donors believed that known 

homosexuals should be arrested, compared with 36% of direct mail donors. And 

more than 2/3 of internet small donors would allow feminists to teach in public 

schools – compared with only 41% of direct mail donors. Indeed, a relatively 

sizable minority of GOP internet donors might be described as libertarian, 

favoring free market economic policies such as tax cuts and opposing new 

government programs, but opposing regulations on abortion and criminalization 

of same-sex relationships. 

Among Democrats, the internet in 2000 appears to have opened a path to 

collect contributions from younger and less affluent members of the liberal wing 

of the party, especially those who are members of liberal cause groups. Anecdotal 

Wilcox: Internet Fundraising in 2008 11

Published by The Berkeley Electronic Press, 2008

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 14 of 19
accounts suggest that this was true in 2004 as well, and certainly fits the pattern of 

mobilization by groups such as MoveOn.Org. 

Of course, these results are from a very early stage in the development of 

internet fundraising, and may reflect idiosyncratic candidate strategies. John 

McCain positioned himself as a social moderate in 2000, and built the biggest 

direct mail network. And Al Gore may have used existing networks that interest 

groups and the Clinton White House had developed for other purposes. 

Flash Forward to 2008 

These survey data have the advantage of covering all presidential candidates, but 

internet fundraising has matured greatly in the past eight years. The 2008 

campaign is far from over, but already we know that internet fundraising has 

reached an unprecedented level of new donors. Estimates of the number of all 

small donors in the record-breaking 2004 presidential campaign range from 2 to 

2.5 million (Graf, Reeher, Malban, & Panagopoloulos, 2006). The Obama 

campaign alone could conceivably end up with more small donors in 2008 than 

all campaigns did in 2004. Obama will contact more donors moving forward, and 

Clinton has recently beefed up her internet efforts and apparently is doing far 

better than earlier in the campaign. She claimed to have raised $3 million on the 

internet in 24 hours after her victories in Ohio and Texas. Moreover, the 

Republican nominee John McCain has already demonstrated the ability to attract 

new donors through the internet, and will certainly incorporate that strategy in 

2008. 

To show the impact of these efforts, Figure 1 shows total receipts through 

January 31 of the election year for select past campaigns. The data are in millions 

of dollars, and are adjusted to 2008 dollars. In the 1980s, the FEC only itemized 

contributions of over $500, so the figure shows both total contributions of under 

$500, and contributions of under $200. 

Prior to 2004 the record holder for small contributions was Pat Robertson, 

whose first FEC report was delivered in a flatbed truck. The vast majority of 

Robertson’s small donors gave less than $200, so if we could show that figure it 

would be nearly equal to his total under $500. Gary Bauer, who did not come 

close to winning any primaries or caucuses, had almost as much money in 2000 

from small donors as George Bush, who raised vastly more total funds. And 

Dennis Kucinich’s quixotic quest also raised significant amounts in small 

contributions. 

But Howard Dean in 2004 shattered Robertson’s earlier record, in a campaign 

whose receipts were primarily from small donors, including both direct mail and 

internet. What is striking about 2008 is that several mainstream candidates have 

12 The Forum Vol. 6 [2008], No. 1, Article 6

http://www.bepress.com/forum/vol6/iss1/art6

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 15 of 19
been able to combine substantial contributions from large donors with substantial 

small donor mobilization. 

In 2008, Ron Paul fit the earlier pattern of a candidate with an ideological 

constituency who relied primarily on small donors. Dean and Paul both raised 

more than 70% of their total funds in contributions of less than $500. For 

Robertson in 1988, nearly 90% of his money came in contributions of less than 

$500, and most of that was in small contributions of less than $200. 

But in 2008, with internet fundraising in full use, moderate candidates are able 

to raise substantial sums from small donors, reaching many individuals who might 

give again or participate in their campaign, but still appeal to large donors as well. 

John McCain raised almost as much money in small contributions as Paul, but this 

constituted only 23% of his total funds. Hillary Clinton’s total haul from small 

donors put her nearly even with Ron Paul in 2008, even though she was clearly 

the candidate of the party establishment. But Clinton also raised almost $90 

million in contributions of $1000 or more, compared with just $6 million for Paul. 

Barack Obama’s remarkable fundraising among small donors did not mean that 

he did not also attract large donors. Indeed, 2/3 of his money came in 

contributions of $500 or more. 

Wilcox: Internet Fundraising in 2008 13

Published by The Berkeley Electronic Press, 2008

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 16 of 19
In February, 2008, data just released shows that Clinton’s revitalized internet 

fundraising campaign paid off. Clinton’s campaign raised more than $17 million 

in contributions of $200 or less in February – more than any previous candidate in 

the early primary months. But Barack Obama raised a staggering $30.5 million in 

small contributions in the same period. The Campaign Finance Institute reports 

that Obama’s small donors have been making repeated small contributions. In 

February, Obama received more than 112,000 small contributions from 

individuals whose aggregate contributions crossed the $200 threshold – in other 

words, donors whose repeated small contributions now require disclosure. This 

suggests that Obama (and probably Clinton) has developed a network of small 

repeat donors who over the course of a campaign may end up as large donors in 

the aggregate. 

We cannot separate out direct mail money from internet money in these totals, 

but anecdotal evidence suggests that the vast majority of the surge in small 

contributions is through the internet. And although the internet can work well for 

the candidates who traditionally have used direct mail, like Ron Paul, it can also 

work to involve hundreds of thousands of small donors on behalf of more 

moderate candidates, as part of a balanced fundraising strategy. 

We can only hope the major campaigns will disclose the identity of their small 

donors so that we can study this more closely. Several questions seem especially 

important. First, to what extent does the internet now provide a type of “virtual 

solidary benefit” to donors? The 2000 survey did not have questions uniquely 

suited to tapping this type of benefit. The viral transmission of video, text, and 

other campaign messages and their incorporation into individual’s social 

networking pages is a topic worth further exploration. Campaigns frequently have 

arranged internet interactive events to try to create a virtual community among 

donors, something that seems especially attractive to younger Americans who text 

message while at dinner with friends. 

The possibility that these new internet donors may enhance their democratic 

capacities as a result of their contributions is even more important. After giving, 

they may well follow the campaigns more closely, and become more informed 

about issues. They may become more sophisticated in their political thinking. 

They may even begin to participate in other ways. 

Earlier I noted that the Bush campaign in 2004 successfully mobilized small 

donors into voluntarism. Both the Clinton and Obama campaigns have tried to 

move their campaign donors beyond merely giving and into other forms of 

activism. During the past few weeks, the e-mail solicitations that I have received 

from campaigns have invited me to do more than contribute. One Clinton 

solicitation provided a link to a site that would sign me up to call voters in Ohio 

and Pennsylvania from my home. A different Obama solicitation invited me to 

click a link to call super-delegates to persuade them to support Obama. Whether 

14 The Forum Vol. 6 [2008], No. 1, Article 6

http://www.bepress.com/forum/vol6/iss1/art6

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 17 of 19
the internet can turn donors into more active citizens remains to be seen, of 

course. But campaigns in 2008 appear to believe that it is possible. 

It is likely that internet donors in 2008 will be more demographically diverse 

than in 2000. Anecdotal evidence suggests that many are under 30, which was not 

true in 2000 or 2004. Obama and especially Clinton are pushing for more women 

donors, so the gender gap in internet giving will probably be reversed in 2008. 

Obama’s campaign may well have changed the ethnic composition of the donor 

pool. The most persistent finding in donor surveys is that donors are 

overwhelmingly white. In 1988, the year that Jesse Jackson made a widely 

publicized statement calling New York “Hymietown,” our survey of his donors of 

$200 and more found more Jews than African Americans. Obama will likely have 

attracted African American donors, and Clinton may well have more Latino 

donors. 

Whether the new donors will have distinctive political views remains to be 

seen. Some other studies have found that internet donors are more moderate, and 

perhaps slightly more likely to have a general libertarian approach to politics 

(Powell, Powell, Thomas, & Wilcox, 2005). Yet clearly the internet can also 

mobilize ideologues and strong partisans. I think it is likely that the internet 

carries no inherent ideological bias as a fundraising tool, which makes it very 

different from direct mail. Ideologically quirky and extreme candidates like Ron 

Paul can still raise large sums on the internet, but so can moderate candidates. If 

so, then the internet may well prove a transformative technology in campaign 

fundraising. 

References 

 

Brady, H. E., Schlozman, K. L., & Verba, S. (1999). Prospecting for Participants: 

Rational Expectations and the Recruitment of Political Activists. The 

American Political Science Review, 93(1), 153-168. 

Brown, C. W., Powell, L. W., & Wilcox, C. (1995). Serious money: Fundraising 

and Contributing in Presidential Nomination Campaigns. New York: 

Cambridge University Press. 

Francia, P. L. (2003). The financiers of congressional elections: investors, 

ideologues, and intimates. New York: Columbia University Press. 

Godwin, R. K. (1988). One Billion Dollars of Influence: The Direct Marketing of 

Politics. Chatham, NJ: Chatham House Publishers. 

Graf, J., Reeher, G., Malban, M. J., & Panagopoloulos, C. (2006). Small Donors 

and Online Giving: A Study of Donors to the 2004 Presidential Campaign: 

Institute for Politics, Democracy and the Internet. 

Wilcox: Internet Fundraising in 2008 15

Published by The Berkeley Electronic Press, 2008

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 18 of 19
Powell, E. N., Powell, L. W., Thomas, R. K., & Wilcox, C. (2005). Online and 

Offline Political Contributions: A Preliminary Analysis, American 

Political Science Association. Washington, D.C. 

Verba, S., Schlozman, K. L., & Brady, H. E. (1995). Voice and equality: civic 

voluntarism in American politics. Cambridge, Mass.: Harvard University 

Press. 

Wilcox, C. (2001). Contributing as Political Participation. In G. C. Lubenow 

(Ed.), A User's Guide to Campaign Finance Reform (pp. 109-126). 

Lanham, MD: Rowman & Littlefield. 

16 The Forum Vol. 6 [2008], No. 1, Article 6

http://www.bepress.com/forum/vol6/iss1/art6

Case 1:08-cv-00248-JR Document 55-9 Filed 11/21/2008 Page 19 of 19
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 153 

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 1 of 15
Public Choice (2006) 129:461–474

DOI 10.1007/s11127-006-9066-4

ORIGINAL ARTICLE

Contribution limits and the effectiveness of campaign

spending

Thomas Stratmann

Received: 2 August 2005 / Accepted: 20 June 2006

!C Springer Science + Business Media B.V. 2006

Abstract Much work on the apparent ineffectiveness on incumbent spending in congressional elections has hypothesized that the productivity of incumbent spending is low because

incumbents operate on the “flat part” of their election returns function. Differences in campaign spending associated with state campaign finance laws allowsfor a test ofthis hypothesis

because restrictions on campaign contributionstend to reduce campaign spending. Exploiting

cross-state variation in campaign finance laws, thisstudy testswhether campaign expenditures

by state House candidates are more productive when candidates are subject to contribution

limits. The results show that campaign expenditures by incumbents and challengers are more

productive when candidates run in states with campaign contribution limits, as opposed to in

states without limits. In states with contribution limits, incumbent spending and challenger

spending are equally productive, and spending by both candidates is quantitatively important

in increasing their vote shares.

1. Introduction

The ineffectiveness of incumbent campaign spending in House congressional elections has

been one ofthe major puzzlesin the campaign finance literature (Jacobson, 1978; Grier, 1989;

Levitt, 1994; Coates, 1998; Palda & Palda, 1998). Even when studies find that incumbent

spending is of small importance in House elections, they still find that incumbent spending

is less productive than challenger spending (see, for example, Abramowitz, 1991; Green &

Krasno, 1988).1 One prominent explanation of this finding is the hypothesis, that incumbents

are spending at the “flat part” of the election returns function so that the marginal product of

spending is very small (Jacobson, 1978; Mueller, 2003). Studiesthat examine races at the federal level have difficulties testing this hypothesis across incumbents, because all incumbents

face the same federal contribution limit and are thus equally constrained or unconstrained in

T. Stratmann

Department of Economics, George Mason University

e-mail: tstratma@gmu.edu

1 One exception Gerber (1998), who finds that in Senate races the productivity of challenger spending equals

that of incumbent spending.

Springer

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 2 of 15
462 Public Choice (2006) 129:461–474

campaign spending. However, contribution limits differ among states and spending levels in

states vary significantly with whether or not a state has a contribution limit. Thus, examining

spending by state candidates may be a promising avenue to analyze incumbents’ election production function, since incumbents who are constrained in spending, due to strict campaign

finance limits, are expected to operate on a steeper part of the production reelection function

than those who face no contribution limits. The hypothesis that incumbents operate on the

flat part of the election returns function when they are relatively unconstrained in spending

implies a larger marginal product of spending in states with contribution limits than without

limits. This study tests this hypothesis.

An emerging literature on campaigns finance also generates the prediction that the productivity of spending is smaller when candidates face no contribution limits. Assuming that

contribution limits induce candidates to make fewer promises to contributors, these models

predict that voters do not switch their vote to the advertising candidate when they believe that

this candidates hastraded policy favorsfor contributions(Ashworth, 2003; Coate, 2004; Prat,

2002).2,3 This leads to a lower productivity of spending when candidates face contribution

limits, because, by assumption, fewer favors are traded when limits are in place. (I will use

the terms campaign contributions and campaign expendituresinterchangeably, assuming that

all contributions are spent.)

This results from this research design can be informative for the discussion of campaign

finance restrictions. If incumbents’ productivity of the campaign is small simply because

they are spending large amounts, then limiting expenditures or contributions may level the

playing field of incumbents and challengers. Whether spending is productive in election

campaigns is also of relevance for the discussion as to whether candidates promise policy

favors for contributors.4 If incumbent spending has no effect of the likelihood of their reelection, regardless of the level of spending, then campaign contributions are less likely to

influence their legislative behavior, because incumbents have no or little reason to promise

favors in exchange for contributions. However, if spending is productive, then candidates

may be more likely to promise policy favors in exchange for contributions, because in this

case contributions are valuable.

To test whether incumbents who are constrained in spending have a larger marginal

product of spending than those who are less constrained, federal U.S. data are not useful,

as contribution limits to federal candidates are uniform for all candidates and have remain

unchanged in nominal terms from 1976 until the recent 2002 campaign finance reform

legislation. This, however, is not the case with state campaign finance laws, which vary

across states. State-level regulations provide the variation that allows one the hypothesis that

campaign expenditures’ effectiveness depends on whether or not contributions are limited.

This study therefore analyzes the vote shares of candidates for state lower House races in

states with and without contribution limits.

While states provide an interesting testing ground for the effectiveness of campaign spending by candidates running for the state assembly, depending on whether contribution limits are in place or not, an analysis of campaign spending by state assembly candidates is

2 Houser and Stratmann (2006) provide evidence to support the prediction that voters switch to the opposition

candidate when they believe that their own party’s candidate promised many favors to special interests.

3 Stratmann and Aparicio-Castillo (2006) provide support for some of the predictions of these theoretical

models in that they find that contribution limits result in more competitive electoral races. They find this by

examining data from races to state assemblies from 1980 to 2001.

4 Greene (2000) also describes the use of the rank is a proper instrument.

Springer

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 3 of 15
Public Choice (2006) 129:461–474 463

quantitatively important in its own right. To my knowledge there is only very little empirical

work that analyzes the effects of state assembly candidate spending on election outcomes.

While OLS estimates for races with an incumbent can give a glimpse with respect to

differences in campaign spending productivity, unbiased estimates are obtained when controlling for the endogeneity of incumbent and challenger spending, as done in the previous

literature. In this study, I will control for the endogeneity of both spending variables, as

explained below.

The results in this paper indicate that the marginal product of advertising expenditures is

higher for incumbents and challengers when they run in states with campaign finance limits.

The findings is consistent with the view that candidates who are relatively unconstraint in

spending because they face no contribution limits operate on a flatter part of their election

production function than those who face limits. This findingssuggest that campaign spending

is productive, but that the productivity is sometimes masked by the diminishing marginal

returns of spending.

The empirical research design is described in Section 2, and the data in Section 3. I report

results in Section 4, and 5 contains conclusions.

2. Research design and methods

The empirical model for races with an incumbent and challengers is

V Sijt = β0 + β1 Ispendijt ∗Nolimitit + β2 Ispendijt ∗Limitit

+β3 Cspendijt ∗Nolimitit + β4 Cspendijt ∗Limitit + β5 Limitit + β6 Partyijt

+β7PevVSijt + β8 Seniorityijt + γ Xit + vt + λk + εijt. (1)

where V Sijt isthe incumbent’s vote share in state i, district j, and election year t. The variables

Ispend and Cspend are incumbent and challenger campaign expenditures.

To be consistent with the previous literature on the effects of expenditures on vote shares,

I include the variable PevVSijt which measures the historical electoral strength of the incumbent (sometimes referred to as the normal vote). This variable serves as a measure of a

district’s partisanship. I also include the Part yijt variable, which indicates the incumbent’s

party affiliation (Jacobson, 1978; Green & Krasno, 1988), and a variable that measures the

incumbent’s seniority (Abramowitz, 1991).

To control for the possibility that states with limits have a different political culture than

those without limits, I include an indicator variable which measures whether a state has

a limit on individual campaign contributions. Limit is an indicator variable which equals

one when the campaign finance law restricts individual contributions to candidates running

in state House elections and zero otherwise. Nolimit equals one if there are no restrictions

on individual contributions and zero otherwise. I control for changes in national laws and

national events that effect local elections via year fixed effects vt .

Equation (1) differsfromthe campaign spendingmodelsin the earlierliterature, because of

the interactions of campaign expenditures with a contribution limit indicator. The theoretical

model in Section 2 predicts that β2 is positive and larger than β1 and that β4 is negative and

larger in absolute value than β3.

Since this study is examining vote shares at the state level, the vector Xit includes state

characteristics which previous studies have found to be of importance in explaining incumbents’ vote shares in state elections. The vector includes state per capita income, because

Springer

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 4 of 15
464 Public Choice (2006) 129:461–474

voters tend to reward incumbents when they believe that incumbents have helped in improving their financial will being (Lowry, Alt & Ferree, 1998). The vector of controls includes

‘legislators’ salary, which is a measure of the professionalism of the legislature (Fiorina,

1994; Moncrief, 1999; Berry et al., 2000). The vector of state controls also includes an indicator for those states that implemented term limits for state House legislators, since term

limits reduce the duration an individual can be a legislator, making public office less valuable

(Grofman, 1996). Another reason for including term limits is that the same political culture

that leads to the adoption of term limits may also lead to the adoption of contribution limits.

Thus, controlling for term limits is an additional control for variables that may simultaneously determine campaign contributions and election outcomes. Another control variable is

an indicator variable measuring whether the state has an open primary election or not. I also

include in the regression equation two additional variables, namely the share of the state popular vote received by the gubernatorial candidate and the presidential candidate who has the

same party affiliation as the incumbent. These variables capture the political leanings of the

constituency and also capture political tides (Berry et al., 2000). Previous studies have also

included measures for redistricting but this is not required here as no redistricting occurred

between the elections (1996, 1998, and 2000) analyzed in this paper.

For races with incumbents and challengers, ordinary least square estimates from Equation

(1) may be biased without good measures of district partisanship and of incumbent and

challenger quality. Much of district partisanship as well as candidate quality are unobserved.

This omitted variable bias may lead biased estimates for incumbent and challenger spending

(see, for example,Jacobson, 1978; Levitt, 1994).5 The two-stage leastsquare (2SLS) method

provides unbiased estimates if the instruments used are exogenous. A valid instrument has

to be correlated with the endogenous variable and uncorrelated with the error term in the

second stage.

Ourinstrumentforincumbentspending isthe cost ofmedia advertisement, and in particular

the cost of radio advertisement. Candidatesforstate Houses use radio as one means of getting

out their campaign message and thusthe cost of this advertisement is one determinant of how

much money candidates have to raise in order go to get out their campaign message. Since the

cost of radio advertising is also highly correlated with advertisementsin other media, this cost

measure may be viewed as the cost of advertising to voters. Our measure of advertising cost

is the advertising cost per rating point. This information was obtained from Spot Quotations

and Data, Inc. (SQAD), who collects radio advertising cost data for each of the Arbitron

radio markets in the Untied States. The advertising cost data is “cost per point,” which is

an estimate of the dollar amount required to deliver one rating point (or one percent of the

audience) of any designated population within a spot market area. The radio advertising cost

per point is from the 3rd quarter and measures the costs for 60 second units, for population

aged 18 and above. In 2000, there were 267 Arbitron radio markets. The Arbitron markets are

generally composed of metropolitan areas as defined by the federal government. I mapped

state House congressional districts into these radio markets. The number of radio markets

per state vary from one in the state of Alaska to twenty-one in the state of California. In 2000,

the highest average cost is New York with a cost of $578 per rating point, while the lowest

is in Montana with an average cost of $7.64 per rating point. With respect to single markets,

5Many unobserved variables determine vote shares. For examine, vote shares are influenced by whether

political parties recruit more challengers, by independent expenditures, by party soft money, by leadership

funds, and by incumbents’ war chests (Gierzynski & Breaux, 1991; Epstein & Zemsky, 1995; Milyo, 1997;

Milyo & Groseclose, 1999; Hogan, 2000; Gross, Goidel & Shields, 2002). Unfortunately, much of this activity

is not reported for candidates to state lower houses.

Springer

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 5 of 15
Public Choice (2006) 129:461–474 465

in the year 2000 the highest cost of radio advertisement is in Los Angeles, California with

$767 per rating point, while the lowest cost markets are in Billings, Montana, and Bismarck,

North Dakota, with $5 per rating point.

For advertising cost to be a valid instrument, the cost measure has to be correlated with

campaign expenditures. Some anecdotal and some systematic evidence suggeststhat political

TV and advertising is a significant component of all campaign expenditures. At the federal

level, for example, a headline the Washington Post claims that “In Presidential Race TV Ads

were biggest ’96 Cost By Far” (March 31, 1997, page A19). Systematic evidence is provided

in Herrnson (2000) showing that TV and radio advertisements are a significant component

of total campaign spending. Finally, Ansolabehere and Gerber (1994) report that the average

House incumbent spent forty-two percent of total campaign spending on communications.6

One concern with the advertising instrument is that high cost advertising districts are

located in high income districts and that therefore incumbent quality differs systematically

between high and low advertising districts. Similarly, if, for example, incumbents in high

advertising cost areas would systematically attract high (or low) quality challengers the point

estimates would be biased. However, this concern is less important than it may initially

seem, since, for example Los Angeles, CA, and Chicago are covered by one television media

market, but both high and low income districts are located in this market. In these examples,

advertising cost are a measure of how expensive media advertising is, but do not reflect the

economic conditions in a district. To assess whether these potential quality differences of

candidates in high and low cost advertising areas are biasing our results, I will test for the

robustness of the results using only high and low cost advertising districts in the analysis.

In the absence of a measure for challenger quality, the challenger campaign spending

estimates may be biased and therefore I develop an instrumental variable for challenger

spending. Classical work on measurement error by Wald (1940) has shown that the creation

of an artificial instrument can lead to unbiased estimates. More recently the correctness

of this measure has been shown by Koenker and Bassett (1978). To identify challenger

advertising, I therefore create an indicator variable that equals one for challengers with more

advertising than the median challenger advertising and that equals zero otherwise. Given that

the instrumentfor challenger advertising is defined by whether challenger advertising is above

or below the median challenger expenditure, it is correlated with challenger advertising, and

thusfulfills one ofthe conditionsforthe validity ofinstruments. Wald (1940) and Koenker and

Bassett (1978) showed that this instrument (the rank) is also independent of the disturbance

term in the second stage, thus fulfilling the second condition for a valid instrument.7

3. Data

Data on vote sharesin general electionsforstate House single member districtsin 1996, 1998

and 2000 come from each state’s Elections Division, or its State Board of Elections. I focus

on single member districts since over 80 percent of all state legislators are elected to these

districts, and because the theoretical models apply to these district types. Since at the federal

level all House districts are single member districts, the focus on single member districts also

6 Facing higher media advertising cost, candidates have incentives to reduce media advertising but increase

spending on other types of advertising. Whether fewer purchases of media advertisement lead to lower advertising expenditures depend on the elasticity of demand. However, candidates in high media cost districts

have an incentive to switch to other types of advertising and this will have the tendency to increase campaign

spending.

7 Greene (2000) also describes the use of the rank is a proper instrument.

Springer

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 6 of 15
466 Public Choice (2006) 129:461–474

makes it easier to transfer knowledge from the state to the federal level. Since no systematic

data are available on campaign expenditure at the state level,Imeasure campaign expenditures

by campaign contributions. Data at the federal level’show that campaign contributions closely

track campaign expenditures (http://www.fec.gov/press/canye98.htm).8 Data on campaign

contributions to candidates in the 1996, 1998 and 2000 elections to state lower Houses come

from the National Institute on Money in State Politics. Data on state characteristics were

obtained from various issues of the Statistical Abstract of the United States.

The source for the campaign finance laws is the biannual publication, Campaign Finance

Laws. States vary greatly in whether they have legal limits on campaign contributions by

individuals, PACs, corporations, unions, and parties. In this study I focus on individual

limits, as they provide the largest source of contributions to state candidates (Malbin & Gais,

1998). Another reason not to examine union or corporate contribution limits is that in some

states union and corporate contributions are prohibited, and therefore prohibitions allow one

to examine the effects of banning contributions, but not to study the effect of limiting but

still allowing contributions, as is the goal of this paper.

9

This data set includes thirty-seven of the fifty states. Since the empirical analysis focuses

on single member districts, Arizona, New Jersey, and North Dakota are omitted from this

data set. State legislatorsfrom these statesrun in multi-member districts. Similarly, Maryland

and Vermont are excluded because their legislators run primarily in multi-member districts.

Nebraska is omitted because its elections are staggered. Louisiana is omitted as its relevant

competition occurs in primaries, and sometimes there is no general election depending on

the outcome of the primary. No data or limited data were available for Alabama, Delaware,

Iowa and South Dakota. Mississippi and Virginia are excluded because I focus on elections

in 1996, 1998, and 2000 while the races in these states were in off election years.

If campaign spending in states with limits and without limits were equal, one would

be unable to test the hypothesis that the productivity of spending differs by the level of

campaign expenditures in electoral races. Table Al in the appendix shows the effects of

contribution limits on contributions raised. Those data show that individual contribution

limits are associated with a significant reduction in campaign contributions. Therefore, the

data are suitable for examining whether differences in campaign finance regimes lead to

differences in the productivity of campaign spending.10

4. Results

Table 1 reports means and standard deviations of variables used in the regressions involving

contested races with incumbent. Table 1 showsthat approximately seventy percent of allraces

8That campaign expenditures closely track campaign contributions is also suggested by the statistic that only

one percent of total campaign expenditures are self financed (Herrnson, 2000).

9 All categories of contribution limits tend to move together. That is, states that have strict contribution limits

for individuals tend to also have strict limits for unions and corporations.

10To examine overall spending and vote share patterns when there are limits on corporations, unions, PACs,

and parties, I compute an index of limits on parties, PACs, corporations, unions, and individuals (this similar

as the index developed by Stratmann and Aparicio-Castillo, 2006). This index takes the value of zero when

there is no limit on any of those contribution sources and the value of five when there is a limit on all sources.

I compared spending in states with an index of zero to those with an index of five, and found that incumbent

and challenger spending is significantly lower when states have restrictions on all five sources of contributions

($22,600 vs. $4,700 for incumbents and $4,200 vs. $1,800 for challengers). In this data set of contested races,

the vote share for incumbent is also significantly lower (66% vs 63%) when states have restrictions on all five

sources of contributions.

Springer

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 7 of 15
Public Choice (2006) 129:461–474 467

Table 1 Summary statistics for races with incumbents mean (standard deviation)

Percent of popular vote obtained by the incumbent 65.60

(11.19)

Incumbent spending 8.785

(30.72)

Challenger spending 2.231

(6.480)

Incumbent is Democrat = 1, 0 ow. 0.515

(0.500)

Incumbent seniority, in years 3.347

(2.799)

Percent of popular vote in previous election 69.72

(16.67)

Contribution limit for individuals = l, 0 otherwise 0.714

(0.452)

Professionalism in legislature (Legislator salary per days in session), 2.926

in hundreds of dollars (2.082)

Open primary = l, 0 otherwise 0.547

(0.498)

Percent of popular vote of presidential candidate with the same party 47.11

affiliation as the incumbent – if presidential election (8.169)

Percent of popular vote of gubernatorial candidate with the same 45.42

party affiliation as the incumbent – if gubernatorial election (14.71)

State per capita income, in thousands of dollars 16.063

(2.288)

Term limit = 1, 0 otherwise 0.438

(0.496)

Cost of radio advertising, in real 2000 dollars 83.46

(116.6)

N 3,962

Notes: Campaign expenditures measured in 10,000 of dollars in real 2000 dollars. Data are for races to

state lower Houses, 1996–2000

take place in states that have individual contribution limits. Incumbents win contested races

by obtaining on average sixty-six percent of the vote share. As noted previously, spending

by incumbents and challengers in states without limits is significantly higher than in states

without limits.

To examinewhetherthe rawdata suggest any differencesin the competitiveness of election,

I compared the mean vote share by incumbents in states with individual contribution limits

to the mean in states that do not have such limits. The average vote share for incumbents

in states with individual contribution limits is 67.2 percent and it is 65.0 percent instates

without limits. The difference is statistically significant at the one percent level. Further in

states without an individual contribution limits incumbents’ reelection rate is 96.2 percent

and it is 94.7 percent in states with limits on individual contributions. This difference is

statistically significant at the five percent level.11

The OLS results in the first three columns of Table 2 show that the coefficients on incumbent and challenger spending are quantitatively and qualitatively similar to those in

11 I determined whether the incumbent was the winner by whether he or she had a larger vote share than the

challenger with the largest vote share among all challengers.

Springer

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 8 of 15
468 Public Choice (2006) 129:461–474

Table 2 Explaining vote percentages of incumbents and challengers ordinary leastsquare estimatesrobust

standard errors in parentheses below coefficient estimates

Dependent ln(Vote Vote In(Vote

variable Vote pct. pct.) Vote pct. pct. pct.) Vote pct.

(iii) (iv) (v) (vi)

(i) (ii) Square Linear Log Square

Linear Log root spendin spendin root

spending spending spending g g spending

Spending by incumbent −0.004 0.010 0.009

(0.004) (0.006) (0.146)

Spending by challenger −0.437 −0.107 −4.778

(0.125) (0.010) (0.786)

Spending by incumbent −0.007 −0.009 −0.251

– no limits (β1) (0.006) (0.005) (0.137)

Spending by incumbent 0.073 0.026 1.072

– limits (β2) (0.040) (0.007) (0.361)

p-value that β2 $= β1 0.048 0.001 0.001

Spending by challenger −0.317 −0.088 −3.548

– no limits (β3) (0.078) (0.011) (0.602)

Spending by challenger −1.205 −0.125 −7.525

– limits (β4) (0.160) (0.005) (0.645)

p-value that |β4| $= |β3| 0.001 0.005 0.001

Incumbent is 1.920 0.026 1.939 1.951 0.026 1.949

Democrat = 1, 0 ow. (0.504) (0.007) (0.473) (0.517) (0.007) (0.498)

Vote pct. in previous 0.269 0.003 0.234 0.257 0.003 0.226

election (0.026) (0.0003) (0.024) (0.025) (0.0003) (0.023)

Indicators for election

cycles YES YES YES YES YES YES

R-squared 0.36 0.49 0.42 0.39 0.49 0.44

Notes: N = 3, 962. Allstandard errors are adjusted to allow for non-independence of observations within a

state. The unit of observation is a race to a state lower House in the 1996, 1998, and 2000 general elections.

Expenditures are measured in 10,000 of (real 2000) dollars. All regressions include whether the state has

an individual campaign contribution limit, a term limit, state per capita income, the vote percentage of

presidential candidate, the vote percentage of gubernatorial election, whether the state has an open primary,

the professionalism of the legislature, and whether the state has a contribution limit for individuals, and

the incumbent’s party affiliation and seniority

previous literature: the effect of incumbent spending is negative and not different from

zero, and challenger spending is productive in reducing the incumbents’ vote shares. For

challengers, a 10,000 increase in spending increases vote shares by 0.4 percentage points

(Table 2, column 1). The log-spending and the square root of spending specifications also

show that incumbent spending is ineffective in increasing incumbents’ vote shares but that

challenger spending is effective to increase challengers’ vote shares. For example, the square

root specification indicates that a challenger’s vote share rises by 1.6 percentage points when

he or she spends an extra $10,000.

Among the control variables in Table 2, the vote share in the previous elections is statistically significant in all regressions, suggesting that partisan leanings are important in

explaining election outcomes. All specifications indicate that Democrat incumbents, on average, receive about two percentage points more at the polls than Republican incumbents. To

save space, the point estimates ofthe remaining control variables are notreported in the tables.

Springer

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 9 of 15
Public Choice (2006) 129:461–474 469

Among these point estimates the coefficient on the variable measuring professionalization of

a legislature is positive and statistically significant, showing support for the hypothesis that

a more professional legislature helps incumbents receive a larger vote share. Further, lower

incumbents’ vote shares are associated with campaign contribution limits. This finding is consistent the findings by Stratmann and Aparicio-Castillo (2006) on the effect of contribution

limits on electoral competition. However, term limits have no statistically significant effect on

incumbents’ vote shares. The coefficients on state per capita income are always positive and

statistically significant, indicating that incumbents are doing better at the polls when voters

are doing well in terms of per capita income. Whether incumbents run for reelection in states

with or without open primaries does not affect their vote shares. Finally, the results show that

coattail effects exist with respect to votes cast in presidential races, but not with respect to

votes cast in gubernatorial races. An increase in the presidential candidate’s popular vote by

one percentage point results in a 0.2 percentage point increase in the incumbent’s vote share

when he or she belongs to the same party as the presidential candidate.

The last three columns of Table 2 show the OLS estimation results when one allows the

productivity ofincumbent and challengerspending to differ according to whether contribution

limits curtail their fundraising ability or not. In all three specifications, incumbent spending

is ineffective in increasing their vote shares when they run for reelection in states without

contribution limits; the coefficients are negative and statistically insignificant. However,

incumbent spending is productive in helping them get reelected when they run in states

with contribution limits. The difference in the productivity of incumbent spending in states

with and without limits is statistically significant in all three specifications. The result from

the linear specification shows that a $10,000 increase in incumbent spending leads to an

almost 0.1 percentage point increase in the popular vote, while the square root specifications

indicates an increase by 0.17 percentage points, when evaluated at the mean incumbent

spending.

Challengerspending remains more productive than incumbentspending (Table 2, columns

4 to 6). Similar as incumbent spending, challenger spending is more productive in states with

contribution limits. The difference in the productivity of spending is statistically significant

regardless of whether the campaign expenditure variable is measured in linear form, as the

log, or as the square root. While the magnitude of the point estimates on incumbent spending

in states with contribution limits remains small, the result for challenger spending in states

with limits implies that a $10,000 increase in spending increases vote shares between 1.2

percentage points (Table 2, column 4) and 2.5 percentage points (Table 2, column 6). The

log-log specification results show that a one percent increase in challenger spending in

contribution limit states increases their vote shares by 0.13 percent. Challengers’ vote shares

increase by 0.09 percent in states without contribution limits.

In summary, the results are consistent with the hypothesis that incumbent contributions

and challenger contributions are more effective in increasing vote shares when they face

contribution limits. Similar as some of the findings in the previous literature, these regression

results suggest that the marginal effect of incumbent spending is significantly lower than that

of the challenger. To further investigate this issue I estimate the regressions using 2SLS.

Table 3 reports the 2SLS estimates, controlling for the endogeneity of incumbent and

challenger campaign spending. The corresponding first stage estimates for the incumbent

expenditure regressions are reported in the Appendix Table A2. Those estimates show that

advertising costs are a statistically significant determinant of campaign spending. A onehundred dollar rise in the cost per rating point increases incumbent spending by eleven

percent (Table A2, column 2). Thus, the instrument is valid with respect to being able to

explain variation in the endogenous incumbent campaign spending variable. The estimates

Springer

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 10 of 15
470 Public Choice (2006) 129:461–474

Table 3 Explaining vote percentages of incumbents and challengers two stage least squares estimates

robust standard errors in parentheses below coefficient estimates

Dependent ln(vote In(vote

variable Vote pct. pct.) Vote pct. Vot pct. pct.) Vote pct.

(iii) (iv) (v) (vi)

(i) (ii) Square Linear Log Square

Linear Log root spendin spendin root

spending spending spending g g spending

Spending by incumbent 0.154 0.041 1.900 0.203 0.109 3.662

– no limits (β1) (0.093) (0.022) (0.938) (0.167) (0.084) (2.409)

Spending by incumbent 3.205 0.160 13.800 3.710 0.250 18.871

– limits (β2) (1.018) (0.047) (3.758) (2.297) (0.170) (10.437)

p-value that β2 $= β1 0.001 0.001 0.002 0.103 0.125 0.066

Spending by challenger −1.673 −0.135 −9.246 −1.653 −0.151 −9.708

– no limits (β3) (0.464) (0.019) (1.785) (0.482) (0.029) (2.008)

Spending by challenger −5.730 −0.193 −18.719 −5.505 −0.196 −18.556

– limits (β4) (0.695) (0.017) (1.730) (1.159) (0.034) (3.317)

p-value that |β4| $= |β3| 0.001 0.011 0.001 0.005 0.136 0.014

Vote pct. in previous 0.160 0.003 0.172 0.181 0.003 0.197

election (0.039) (0.0003) (0.030) (0.059) (0.0006) (0.046)

State regional NO NO NO YES YES YES

indicators

Indicators for election YES YES YES YES YES YES

cycles

Notes: N = 3, 962. Allstandard errors are adjusted to allow for non-independence of observations within a

state. The unit of observation is a race to a state lower House in the 1996, 1998, and 2000 general elections.

Expenditures are measured in 10,000 of (real 2000) dollars. All regressions include whether the state has

an individual campaign contribution limit, a term limit, state per capita income, the vote percentage of

presidential candidate, the vote percentage of gubernatorial election, whether the state has an open primary,

the professionalism of the legislature, and whether the state has a contribution limit for individuals, and

the incumbent’s party affiliation and seniority

on advertising costsremain statistically significant when I include state regional indicators.12

First stages for the challenger spending regressions are not reported because by construction

the rank of challenger spending is correlated with challenger spending.

The first three columns of Table 3 report the 2SLS results when one allowsthe productivity

of spending to differ depending on whether candidates run in states with or without contribution limits. This set of regressions includes no regional indicators. Columns four to six

include regional indicators. The results now show that spending is productive for incumbents

in both types of states, although incumbents’ productivity of spending is significantly higher

when they run in states that limit contributions. A $10,000 increase in spending increases

incumbents’ vote share by 0.2 percentage pointsin states without limits and by 3.2 percentage

points in states with limits (Table 3, column 1). The corresponding estimates for the square

root specification are 0.4 and 2.5 percentage points. In all specifications the difference in

12 In come specification I am including regional indicatorsinstead ofstate indicator in the incumbent regression

because over forty percent of the variation in advertising costs is due to differences in cost per state. State

indicators would absorb much ofthis difference, making the instrument unable to identify the effect ofspending

on vote shares.

Springer

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 11 of 15
Public Choice (2006) 129:461–474 471

incumbent spending productivity in states with and without contribution limits is statistically

significant.

The results show that challenger spending is more productive in states with limits than

without limits. Relative to the OLS estimates, all point estimates on challenger spending

are larger when estimating the regression equation with 2SLS. In the linear specification the

estimates show that challenger spending is approximately three times more productive in

garnering votes in states with limits than in states without limits.

The magnitudes of the 2SLS coefficients in the log-log specification show that increasing

expenditures by one percent leads to a 0.17 percent increase in the vote share for incumbents

and a 0.19 percent increase for challengers when they run in states without contribution limits

(Table 3, column 2).

The 2SLS results show that challenger spending is approximately as productive as incumbent spending when both candidates run in states with contribution limits. The coefficients

on spending by both candidates instates with contribution limits are not statistically different

from each other, and thus I cannot reject the hypothesis that their spending productivity is

equal in absolute value.13 Interestingly, in states without contribution limits challengerspending is almost twice as productive as incumbent spending, and this difference is statistically

significant (Table 3, columns 1 to 3).

The regressions show that the advertising instrument works in the way that was anticipated: OLS underestimates the effect of incumbent campaign spending. A Republican

incumbent running for reelection in a district with unobserved preferences for a Republican

representative, for example, will receive a high vote share even if he or she has few campaign

expenditures. This unobserved and thus unmeasured preferences lead to a downward bias

on the coefficient on incumbent spending. The results in Table 3 are consistent with the

hypothesis that OLS introduces a downward bias in incumbent spending productivity.

The inclusion of regional indicators (Table 3, columns 4 to 6) leads to an increase in the

standard errors. Howeverthe point estimatesremain statistically significant.The effectiveness

of challengersspending in states with limitsremainssignificantly larger than in states without

limits. Also the point estimates for incumbent spending are larger in states with limits than in

states without limits, although the difference in productivity is statistically significant only

in the square root specification.

To test for the robustness of the results and address the concern that the pool of incumbent

and challengers may differ between high and low cost advertising districts, I examine high

advertising cost districts separately. I defined high advertising cost districts as those districts

which have larger advertising costs than the median cost of the entire sample. I chose this

sample because most of the variation in costs comes from the high cost sample, while there

is only a little variation in costs in the low cost sample. When testing the hypothesis using

only the high cost advertising sample, the results are very similar to those in Table 3.

5. Conclusions

This paper shows that campaign advertising is more productive when candidates’ spending

ability is curtailed by contribution limits. In races with incumbents and challengers, both

candidates have the same marginal product of spending when they run in states with contribution limits. In these states, campaign spending is effective for increasing vote shares.

13Related to this finding is the study by Gerber (1998) who found that challenger and incumbent spending in

U.S. Senate races is equally productive.

Springer

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 12 of 15
472 Public Choice (2006) 129:461–474

Productivity of spending is significantly smaller in states without contribution limits for both

incumbents and challengers.

The results are consistent with the view that incumbents tend to operate on a flatter part

of the “election production function’ when they are relatively uninhibited in spending. These

findings help explain why previous research has found little effect of incumbent campaign

spending on their vote shares. While incumbents outspend challengersin states without limits

by four to one, incumbents outspend challengers by a factor of 2.5 in states with individual

contribution limits. The difference in these ratios is consistent with the finding that the gap

in the productivity of spending between incumbents and challengers is lower in states with

limits than in states without limits.

Appendix

Table A1 Differences in means:

Races with incumbents Spending by Spending by

incumbents challengers

States without 18.879 3.916

contribution limits (1.632) (0.326)

States with 4.735 1.555

contribution limits (0.135) (0.056) Expenditures are measured in

10,000 (real 2000) dollars

Table A2 First stage estimates for incumbent expenditures standard errors in parentheses below

coefficient estimates

(iii) (vi)

(i) (ii) Square (iv) (v) Square

Linear Log root Linear Log root

Media advertising 0.036 0.0011 0.002 0.036 0.0005 0.002

cost (in 2000 $) (0.005) (0.0001) (0.0002) (0.005) (0.0001) (0.0002)

Controls as in Table 4 YES YES YES YES YES YES

(also see footnote to

Table 4) and

instrument for

challenger spending?

State regional NO NO NO YES YES YES

indicators

Indicators for election YES YES YES YES YES YES

cycles

R-squared 0.13 0.44 0.35 0.17 0.60 0.44

Notes: N = 3, 962. The dependent variable is the incumbent expenditure in a race to a state lower

House in the 1996, 1998, and 2000 general elections. Expenditures are measured in 10,000 of (real

2000) dollars

References

Abramowitz, A.I. (1991). Incumbency, campaign spending, and the decline of competition in U.S. House

elections. Journal of Politics, 53, 34–56.

Ansolabehere, S., & Gerber, A. (1994). The mismeasure of campaign spending: evidence from the 1990 U.S.

House elections. Journal of Politics, 56(4), 1106–1118.

Springer

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 13 of 15
Public Choice (2006) 129:461–474 473

Ashworth, S. (2002). Campaign finance and voter welfare with entrenched incumbents. mimeo, Harvard

University.

Berry, W.D., Berkman, M.B., & Schneiderman, S. (2000). Legislative professionalism and incumbent reelection: the development of institutional boundaries. American Political Science Review, 94(4), 859–

874.

Coate, S. Pareto-improving campaign finance policy. American Economic Review, 94(3), 628–655.

Coates, D. (1998). Additional incumbent spending really can harm (at least some) incumbents: an analysis of

vote share maximization. Public Choice, 95(2), 63–87.

Epstein, D., & Zemsky, P. (1995). Money talks: deterring quality challengers in congressional elections.

American Political Science Review, 89, 295–308.

Feigenbaum, E.D., & Palmer, J.A. (1980–2000). Campaign Finance Law, Federal Election Commission,

bi-annual issues.

Fiorina, M. (1994). Divided government in the American states: a byproduct of legislative professionalism.

American Journal of Political Science, 88, 304–316.

Gerber, A. (1998). Estimating the effect of campaign spending on senate election outcomes using instrumental

variables. American Political Science Review, 92, 401–411.

Gierzynski, A., & Breaux, D. (1991). Money and votes in state legislative election. Legislative Studies Quarterly, 16, 203–217.

Green, D., & Krasno, J. (1988). Salvation of the spendthrift incumbent: reestimating the effects of campaign

spending in House elections. American Journal of Political Science, 32, 884–907.

Greene, W. (2000). Econometric analysis. Prentice Hall. 4th Edition.

Grier, K.B. (1989). Campaign spending and senate elections, 1978–1984. Public Choice, 63(3), 201–

220.

Gross, D.A., Goidel, R.K., & Shields, T.G. (2002). State campaign finance regulations and electoral competition. American Politics Research, 30(2), 143–165.

Herrnson, P. (2000) Congressional elections: campaigning at home and in Washington. Washington, D.C.:

CQ Press, 3rd ed.

Hogan, R. (2000). The costs of representation in state legislatures: explaining variationsin campaign spending.

Social Science Quarterly.

Houser, D. & Stratmann, T. (2006) Selling favorsin the lab: Experiments on campaign finance reform. Working

paper. George Mason University.

Jacobson, G.C. (1978). The effects of campaign spending on congressional elections. American Political

Science Review, 72, 469–491.

Jacobson, G.C. (1987). The marginals never vanished: incumbency and competition in elections to the U.S.

House of Representatives, 1952–1982. American Journal of Political Science, 31, 126–141.

Jacobson, G.C. (1997). The Politics of Congressional Elections, 4th Edition, New York: Longman.

Koenker, R., & Basset, G. (1978). Regression quantiles. Econometrica, 46, 107–112.

Levitt, S. (1994). Using repeat challengers to estimate the effect of campaign spending on election outcomes

in the U.S. House. Journal of Political Economy, 103, 777–798.

Lowry, R.C., Alt, J.E., & Ferree, K.E. (1999). Fiscal policy outcomes and electoral accountability in the

American states. American Political Science Review, 92, 759–774.

Malbin, M.J., & Gais, T.L. (1998). The day afterreform:sobering campaign finance lessonsfrom the American

states, Rockefeller Institute Press.

Milyo,J.(1997).The economics of campaign finance: FECA and the puzzle ofthe not very greedy grandfathers.

Public Choice, 93, 245–270.

Milyo, J., & Groseclose, T. (1999). The electoral effects of incumbent wealth. Journal of Law and Economics,

42(2), 699–722.

Moncrief, G.F. (1999). Recruitment and retention in U.S. legislatures. Legislative Studies Quarterly, 24,

173–208.

Mueller, D. (2003). Public Choice III, Cambridge University Press.

Palda F., & Palda, K. (1998). The impact of campaign expenditures on political competition in the French

legislative elections of 1993. Public Choice, 94, 157–174.

Prat, A. (2002). Campaign spending with office-seeking politicians, rational voters, and multiple lobbies.

Journal of Economic Theory, 103(1), 162–189.

SQAD Media Market Guide, Spring 1996, 1998, and 2000.

Stratmann, T. (1991). What do campaign contributions buy? Deciphering causal effects of money and votes.

Southern Economic Journal, 57(3), 606–620.

Stratmann, T. (1995). Campaign contributions and congressional voting: Does the timing of contributions

matter? Review of Economics and Statistics, 77(1), 127–136.

Springer

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 14 of 15
474 Public Choice (2006) 129:461–474

Stratmann, T. (2002). Can special interests buy congressional votes? Evidence from financial services legislation. Journal of Law and Economics, 45(2), 345–364.

Statmann, T. & Aparicio-Castillo, F.J. (2006) Competition policy for elections: Do campaign contribution

limits matter? Public Choice, 127(1–2), 177–206.

Wald, A. (1940). The fitting of straight lines if both variables are subject to error. Annals of Mathematical

Statistics, 11, 284–300.

Springer

Case 1:08-cv-00248-JR Document 55-10 Filed 11/21/2008 Page 15 of 15
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 154 

Case 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 1 of 28
Case 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 2 of 28
Case 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 3 of 28
Case 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 4 of 28
Case 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 5 of 28
Case 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 6 of 28
Case 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 7 of 28
Case 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 8 of 28
Case 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 9 of 28
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 10 of 2
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 11 of 2
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 12 of 2
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 13 of 2
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 14 of 2
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 15 of 2
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 16 of 2
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 17 of 2
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 18 of 2
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 19 of 2
Case 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 20 of 28
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 21 of 2
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 22 of 2
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 23 of 2
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 24 of 2
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 25 of 2
ase 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 26 of 2
Case 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 27 of 28
Case 1:08-cv-00248-JR Document 55-11 Filed 11/21/2008 Page 28 of 28
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 155 

Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 1 of 17
"Paul Sherman" 

<psherman@ij.org>

09/18/2008 10:03 AM

To <shajjar@fec.gov>, <RBonham@fec.gov>, 

<GWilson@fec.gov>, <gmueller@fec.gov>, 

<kdeeley@fec.gov>

cc "Bert Gall" <bgall@ij.org>, "Steve Simpson" 

<SSimpson@ij.org>, "Robert Frommer" <rfrommer@ij.org>

bcc

Subject Rodney Smith Subpoena Responses

Gentlemen:

Attached is an additional file that is responsive to the FEC's subpoena duces tecum of Rodney Smith. 

Please let me know if you have any questions.

Best,

Paul Sherman

Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 2 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 3 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 4 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 5 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 6 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 7 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 8 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 9 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 10 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 11 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 12 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 13 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 14 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 15 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 16 of 17
Case 1:08-cv-00248-JR Document 55-12 Filed 11/21/2008 Page 17 of 17
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 156 

Case 1:08-cv-00248-JR Document 55-13 Filed 11/21/2008 Page 1 of 14
Case 1:08-cv-00248-JR Document 55-13 Filed 11/21/2008 Page 2 of 14
Case 1:08-cv-00248-JR Document 55-13 Filed 11/21/2008 Page 3 of 14
Case 1:08-cv-00248-JR Document 55-13 Filed 11/21/2008 Page 4 of 14
Case 1:08-cv-00248-JR Document 55-13 Filed 11/21/2008 Page 5 of 14
Case 1:08-cv-00248-JR Document 55-13 Filed 11/21/2008 Page 6 of 14
Case 1:08-cv-00248-JR Document 55-13 Filed 11/21/2008 Page 7 of 14
Case 1:08-cv-00248-JR Document 55-13 Filed 11/21/2008 Page 8 of 14
Case 1:08-cv-00248-JR Document 55-13 Filed 11/21/2008 Page 9 of 14
Case 1:08-cv-00248-JR Document 55-13 Filed 11/21/2008 Page 10 of 14
Case 1:08-cv-00248-JR Document 55-13 Filed 11/21/2008 Page 11 of 14
Case 1:08-cv-00248-JR Document 55-13 Filed 11/21/2008 Page 12 of 14
Case 1:08-cv-00248-JR Document 55-13 Filed 11/21/2008 Page 13 of 14
Case 1:08-cv-00248-JR Document 55-13 Filed 11/21/2008 Page 14 of 14
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 157 

Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 1 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 2 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 3 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 4 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 5 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 6 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 7 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 8 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 9 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 10 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 11 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 12 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 13 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 14 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 15 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 16 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 17 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 18 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 19 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 20 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 21 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 22 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 23 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 24 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 25 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 26 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 27 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 28 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 29 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 30 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 31 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 32 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 33 of 34
Case 1:08-cv-00248-JR Document 55-14 Filed 11/21/2008 Page 34 of 34
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 158 

Case 1:08-cv-00248-JR Document 55-15 Filed 11/21/2008 Page 1 of 6
Case 1:08-cv-00248-JR Document 55-15 Filed 11/21/2008 Page 2 of 6
Case 1:08-cv-00248-JR Document 55-15 Filed 11/21/2008 Page 3 of 6
Case 1:08-cv-00248-JR Document 55-15 Filed 11/21/2008 Page 4 of 6
Case 1:08-cv-00248-JR Document 55-15 Filed 11/21/2008 Page 5 of 6
Case 1:08-cv-00248-JR Document 55-15 Filed 11/21/2008 Page 6 of 6
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 159 

Case 1:08-cv-00248-JR Document 55-16 Filed 11/21/2008 Page 1 of 4
Case 1:08-cv-00248-JR Document 55-16 Filed 11/21/2008 Page 2 of 4
Case 1:08-cv-00248-JR Document 55-16 Filed 11/21/2008 Page 3 of 4
Case 1:08-cv-00248-JR Document 55-16 Filed 11/21/2008 Page 4 of 4
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 160 

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 1 of 37
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, et. al., ) 

 ) 

 Plaintiffs, ) 

 ) Civ. No. 08-248 (JR) 

 v. ) 

 ) 

FEDERAL ELECTION COMMISSION, ) 

 ) 

 Defendant. ) 

____________________________________) 

DEFENDANT FEDERAL ELECTION COMMISSION'S 

RESPONSE TO PLAINTIFFS’ FIRST SET OF DISCOVERY REQUESTS 

Pursuant to Rules 33, 34, and 36 of the Federal Rules of Civil Procedure, defendant 

Federal Election Commission (“FEC” or “Commission”) hereby provides the following 

Objections and Responses to the Interrogatories, Request for Production of Documents, and 

Requests for Admissions by Plaintiffs served on July 22, 2008. Pursuant to agreement of the 

parties, this response is due on August 25, 2008. 

GENERAL OBJECTIONS 

 1. The Commission objects to plaintiffs’ Interrogatories, Document Requests, and 

Requests for Admissions to the extent that they are unreasonably broad, unduly burdensome, 

oppressive, unreasonably cumulative, not limited in scope, or otherwise beyond the permissible 

scope of discovery. 

 2. The Commission objects to plaintiffs’ Interrogatories, Document Requests, and 

Requests for Admissions to the extent that they call for the disclosure of information that 

contains privileged attorney-client communications, constitutes attorney work product, discloses 

the mental impressions, conclusions, opinions or legal theories of any attorneys or other 

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 2 of 37
representatives of the Commission, was prepared in anticipation of litigation, or is otherwise 

protected from disclosure under applicable legal privileges, immunities, laws or rules. 

 3. The Commission objects to plaintiffs’ Interrogatories, Document Requests, and 

Requests for Admissions to the extent that they request production of information protected from 

disclosure by the deliberative process executive privilege, see In re Sealed Case, 121 F.3d 729, 

736-38 (D.C. Cir. 1997); the law enforcement investigative privilege, see Black v. Sheraton 

Corp. of America, 564 F.2d 531, 541 (D.C. Cir. 1977); or governmental information that is 

otherwise confidential under law. 

 4. The Commission objects to plaintiffs’ Interrogatories, Document Requests, and 

Requests for Admissions to the extent that they request production of information from open 

enforcement matters protected from disclosure under the Federal Election Campaign Act 

(“FECA”). 2 U.S.C. 437g(a)(12). The Commission also objects to plaintiffs’ Interrogatories, 

Document Requests, and Requests for Admissions to the extent that they request production of 

information from closed enforcement matters regarding First Amendment protected activities. 

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

 5. Any response to an Interrogatory or Document Request that inadvertently 

discloses privileged or otherwise protected information is not intended to and shall not be 

deemed or construed to be a waiver of any privilege or right of the Commission. Insofar as a 

response to an Interrogatory or the production of any information by the Commission may be 

deemed to be a waiver of any privilege or right, such waiver shall be deemed to be a waiver 

limited to that particular response only. 

 6. The Commission objects to the plaintiffs’ Interrogatories, Document Requests, or 

Requests for Admissions to the extent they seek information that is not relevant to the subject 

2

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 3 of 37
matter of this action, not relevant to the parties’ claims or defenses, or not reasonably calculated 

to lead to the discovery of admissible evidence. Fed. R. Civ. P. 26(B)(1). 

 7. The Commission reserves any and all objections as to competency, relevance, 

materiality, privilege, admissibility, or any other grounds on which an objection may be made. 

The Commission reserves the right to object to further discovery into the subject matter of these 

Interrogatories, Document Requests, or Requests for Admissions. 

 8. All of the Commission’s responses to these Interrogatories, Document Requests, 

and Requests for Admissions are based upon information currently and reasonably available. 

Some are based on records maintained by the Commission in the ordinary course of its 

operations that represent the best information reasonably available to the Commission at this 

time. The Commission reserves the right to supplement and amend its responses and objections 

pursuant to Fed. R. Civ. P. 26(e). 

 9. The Commission also objects to plaintiffs’ Interrogatories, Document Requests, 

and Requests for Admission to the extent they are not limited by date or time period. The 

Commission notes that it has been in existence for more than thirty years. Where a time period 

is not specified, the Commission interprets plaintiffs’ discovery requests to seek documents or 

information as of the date of the Commission’s response. 

10. To the extent the Interrogatories, Document Requests, and Requests for 

Admission request MUR-related information, the Commission objects that the requests are not 

only overly burdensome, but that the information requested, including but not limited to the 

names of MUR respondents and final dispositions, is readily obtainable from publicly available 

documents and sources, including both the Commission’s web site and public records room. 

Such publicly available documents include, but are not limited to, documents in the 

3

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 4 of 37
Commission’s public records office, such as Commission publications, regulatory history, closed 

investigatory files, and closed litigation files. Accordingly, the burden of deriving or 

ascertaining the answers the plaintiffs seek from publicly available documents and sources is 

substantially the same for the plaintiffs as it is for the Commission. See Fed. R. Civ. P. 33(d). 

Notwithstanding these objections, the Commission responds as follows in order to provide 

sufficient detail so that the plaintiffs can locate, identify, examine, or audit the documents and 

records from which they may derive the answers they seek: 

 Many of the non-privileged documents from closed MURs are available on 

Commission’s publicly available Enforcement Query System (EQS), which allows individuals to 

search all documents in the Commission’s public records from MURs closed in 1999 or later by 

keyword, case number, case name, respondent, respondent’s counsel, election year, final 

Commission disposition, statutory citation, regulatory citation, complainant, civil penalty 

amount, document type, and the date a case was opened or closed. EQS is available both in the 

Commission’s Public Records Room and on the internet at http://eqs.sdrdc.com/eqs/searcheqs. 

 Documents from these and prior MURs also are available on microfilm in the 

Commission’s Public Records Office on the Commission’s first floor at 999 E Street, NW, 

Washington DC 20463. Indices to these closed MUR files are arranged by MUR in the Public 

Records Office and indicate therein the dates a MUR was opened and closed, the microfilm 

location of the MUR related documents, the complainants, the respondents, and a list of citations 

to the United States Code and federal regulations that correspond to the Commission’s findings 

in each MUR. 

 Other information regarding the Commission’s application of campaign finance law to 

committees making independent expenditure – apart from enforcement related documents – is 

4

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 5 of 37
also available to the plaintiffs and the general public both on the Commission’s web site and in 

the Commission’s public records room. This includes the Commission’s regulations, including 

11 C.F.R. § 104.4, as well as the instructions for FEC Form 3X, Schedule E, utilized by political 

committees other than authorized committees to report independent expenditures, and the 

Campaign Guide for Nonconnected Committees (May 2008 and August 2008 Supplement), and 

the Commission’s brochure on Coordinated Communications and Independent Expenditures 

(updated October 2007) are all available at the Commission and on-line. See, e.g.

http://www fec.gov/info/publications.shtml; http://www fec.gov/pages/brochures/ie brochure.pdf; 

http://www fec.gov/pdf/forms/fecfrm3xi.pdf. 

 Similarly, the statements issued by FEC Commissioner Ellen Weintraub and thenCommissioner David Mason in response to SpeechNow.org’s advisory opinion request, which 

were previously provided to SpeechNow.org, are available at the Commission and on the 

web site. Furthermore, prior FEC advisory opinions and policy statements are also publicly 

available. 

Subject to and without waiving any of the foregoing General Objections, which are 

hereby incorporated into each response given below, the Commission responds to plaintiffs’ 

Interrogatories, Document Requests, and Requests for Admissions as follows: 

 

REQUESTS FOR PRODUCTION 

1. Any and all documents, other than those already provided by plaintiffs, 

concerning SpeechNow.org, the individual named plaintiffs, SpeechNow.org’s members, 

organizers, or potential contributors, or Ed Traz and/or the Traz Group. 

 Response: The Commission OBJECTS on the grounds that this request is overbroad and 

seeks documents that are not relevant to the subject matter of this litigation. The request is also 

vague to the extent that SpeechNow.org’s members, organizers and potential contributors are not 

5

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 6 of 37
fully disclosed or identified, or otherwise currently known to the Commission. The Commission 

further OBJECTS on the grounds that searching for responsive documents throughout the entire 

agency, locating and producing such documents would be unduly burdensome, noting that the 

burden far outweighs the probative value of such documents. Indeed, this request would include 

any document in the files accumulated by the Commission over the past three decades 

mentioning the named individuals or members of the categories listed, including routine 

campaign finance disclosure reports filed with the Commission, no matter how tangential the 

reference. Moreover, any documents maintained in the Commission’s files of open enforcement 

matters where such persons are referenced also would be privileged or confidential by statute. 

2 U.S.C. § 437g(a)(12). Some documents in the Commission’s files from closed enforcement 

matters also remain privileged or confidential. Plaintiffs and defendant have equal access to 

many of the non-privileged documents from closed enforcement matters, which are available on 

the Commission’s web site. Documents created by or for counsel for the Commission in 

connection with this litigation are protected by the attorney work-product privilege. 

Subject to and without waiving these or the Commission’s general objections, the 

Commission identifies the following publicly-available documents, which the Commission may 

rely on in this litigation. 

Susan Crabtree, New 527 Group Takes Aim at Campaign Contribution Limits, 

The Hill, Dec. 3, 2007. http://thehill.com/leading-the-news/new-527-group-takesaim-at-campaign-contribution-limits-2007-12-03.html 

Jeanne Cummings, Conservatives Plot on Campaign Finance, Politico, Aug. 11, 

2008, http://dyn.politico.com/printstory.cfm?uuid=B3BE1B03-18FE-70B2-

A8A6309C143867E9

The Commission also identified the following additional publicly-available web pages: 

http://www.cato.org/people/edward-crane/; http://www.hjta.org/aboutus; 

http://www.bizjournals.com/milwaukee/stories/1999/01/04/focus2.html; 

6

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 7 of 37
http://www.cato.org/people/directors.html; http://www.wisdc.org/pr032306.php, 

http://www.wisdc.org/pr082504.php; 

http://www.ij.org/first amendment/speech now/backgrounder.html; 

http://online.wsj.com/article/SB120494323497621511.html; 

http://washingtontimes.com/apps/pbcs.dll/article?AID=/20080309/NATION/398660662/1002; 

http://www.newsweek.com/id/117839/page/1; 

http://online.wsj.com/article/SB120372754692987363-

search.html?KEYWORDS=speak+easier&COLLECTION=wsjie/6month; 

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/15/AR2008021502963.html; 

http://www.latimes.com/news/printedition/opinion/la-edspeechnow15feb15,1,6451632.story?ctrack=1&cset=true; 

http://www2.nysun.com/editorials/free-speechnow/; http://www2.nysun.com/national/newgroup-seeks-changes-for-political-fund-raising.

In addition, the Commission identifies the audio and video of the Policy Forum held on 

March 5, 2008, available at http://www.cato.org/event.php?eventid=4498. 

2. Any and all documents concerning the application of campaign finance law 

to independent-expenditure committees. This includes, without limitation, (1) documents 

concerning any actual or contemplated investigations or enforcement actions by Defendant 

against independent-expenditure committees or (2) any complaints received by Defendants 

about independent-expenditure committees. 

 Response: The Commission OBJECTS on burdensomeness and privilege grounds. 

As noted supra, documents and information regarding policy interpretations and decisions in 

advisory opinions, closed administrative enforcement matters and administrative fine cases are 

available in the Commission’s public records room and on the Commission’s web site. These 

records include closed enforcement matters which involved administrative complaints filed with 

the Commission about committees making independent expenditures. As already discussed, the 

7

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 8 of 37
Commission’s closed enforcement files are indexed, and bibliographical information regarding 

those files may be searched by plaintiffs. Any contemplated or pending enforcement actions 

remain privileged and confidential by statute. 

Subject to and without waiving any of these or the Commission’s general objections, the 

Commission notes that the Commission’s General Counsel prepared a draft advisory opinion in 

response to SpeechNow.org’s request, and non-privileged documents regarding the advisory 

opinion request are publicly available. 

3. Any and all documents concerning whether independent expenditures cause 

or pose a risk of corruption. 

 Response: The Commission OBJECTS to this request on burdensomeness grounds to the 

extent that it seeks documents regarding independent expenditures by political committees which 

receive no contributions in excess of the Act’s individual and aggregate contribution limits, and 

fully disclose their financial activity to the Commission as required by the Act. The Commission 

also OBJECTS to this request to the extent it seeks privileged documents in the Commission’s 

possession. 

Subject to and without waiving these or the Commission general objections, the 

Commission identifies the following publicly-available documents which the Commission may 

rely on in this litigation: 

John O'Brien, West Virginia Supreme Court Lets Massey off $50 Million Hook, 

Starcher Furious, Legal News Online, November 21, 2007. 

http://www.legalnewsline.com/news/contentview.asp?c=204393. 

Doborah Goldberg, et al., The New Politics of Judicial Elections 2004, Justice at 

Stake Campaign. http://www.justiceatstake.org/files/NewPoliticsReport2004.pdf. 

Peter Lattman, West Virginia Supremes to Rehear Massey Case, The Wall Street 

Journal, January 24, 2008, http://blogs.wsj.com/law/2008/01/24/west-virginiasupremes-to-rehear-massey-case. 

8

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 9 of 37
Paul J. Nyden, Starcher Recuses Himself from Massey Case, The Charleston 

Gazette, February 16, 2008, http://www.wvgazette.com/News/200802150839. 

Lawrence Messina, West Virginia Court Overturns $76 Million Award Against 

Massey, International Business Times, April 3, 2008, 

http://www.ibtimes.com/articles/20080403/3-2-ruling-favors-massey-energy.htm. 

Adam Liptak, Judicial Races in Several States Become Partisan Battlegrounds, 

New York Times, October 24, 2004, 

http://www.nytimes.com/2004/10/24/politics/campaign/24judicial.html. 

Jane Mayer, “The Money Man: Can George Soros’s Millions Insure the Defeat of 

President Bush,” The New Yorker, October 22, 2004. 

John Fund, “Energy Independent: Maverick Oilman Boone Pickens talks about 

fuel pries and his love for philanthropy,” The Wall Street Journal, 6/2/2007, 

available at http://www.opinionjournal.com/editorial/feature.html?id=110010157. 

The Commission also identifies the following additional publicly-available web pages: 

http://www.washingtonpost.com/wp-dyn/content/article/2007/04/04/AR2007040402405.html; 

http://www.whitehouse.gov/news/releases/2006/12/20061204-9.html; 

http://blog.washingtonpost.com/sleuth/2007/04/biden_slams_sam_fox_recess_app.html; 

http://www.foxnews.com/story/0,2933,264090,00.html; 

http://www.senate.gov/~foreign/hearings/2007/hrg070227p.html; 

http://www.usatoday.com/news/washington/2007-04-04-bush-sam-fox_N.htm; 

http://wcco.com/politics/President.Bush.nomination.2.282380.html; 

http://blog.washingtonpost.com/sleuth/2007/02/staring_adversity_in_the_face.html; 

http://gao.gov/decisions/appro/309301.htm. 

 The Commission also relies on the record in McConnell v. FEC, 540 U.S. 93 (2003). 

In addition, the Commission identifies the following additional documents, previously provided 

to plaintiffs: 

Clyde Wilcox, Report of Expert Witness (Aug. 15, 2008). 

9

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 10 of 37
Steven Walters and Patrick Marley, Chvala Reaches Plea Deal: Ex-Lawmaker 

Could Admit Guilt in at Least 2 Felonies, MILWAUKEE JOURNAL 

SENTINEL, Oct. 24, 2005, 

http://www.jsonline.com/story/index.aspx?id=365362. 

Beth Barrett, Billboard Bonanza Lobbyist Stands to Make Millions if L.A. Lifts 

Freeway Ban, DAILY NEWS OF LOS ANGELES, Jan. 11, 2002. 

State’s Sentencing Memorandum, Wisconsin v. Chvala, No. 02CF2451, 

Cir. Ct. for the State of Wis., Dane County (Dec. 2005). 

Motion of Respondent Corporations for Disqualification of Justice Benjamin, 

Caperton v. Massey Coal Company, Inc., No. 98-C-192, Supreme Court of 

Appeals of West Virginia (Oct. 19, 2005). 

Brian Ross and Maddy Sauer, Another Legal Victory for Tough Coal Boss, ABC 

NEWS, April 7, 2008. 

Rick Alm and Jim Sullinger, Congressman Calls Lobbyist’s Tactics Illegal, 

KANSAS CITY STAR, Oct. 6, 1998 at B1. 

Tim Carpenter, Kansas Lawmaker Alleges Bribery Try on Gaming Issues, 

LAWRENCE KANSAS JOURNAL-WORLD, Oct. 8, 1998. 

Chris Dickerson, Company Asks Benjamin to Recuse Himself Again, this Time 

with Poll Numbers, LEGALNEWSLINE.COM, Mar. 28,2008 

http://www.legalnewsline.com/news/209989-company-asks-benjamin-to-recusehimself-again-this-time-with-poll-numbers). 

Second Renewed Motion for Disqualification of Justice Benjamin, Massey Coal 

Company, Inc. v. Caperton, Appeal No. 33350, Supreme Court of Appeals of West 

Virginia (Mar. 28, 2008). 

4. Any and all documents concerning whether unincorporated associations pose 

a risk of corporate-form corruption, including, without limitation, documents concerning 

whether (1) unincorporated associations enjoy state-created benefits, (2) unincorporated 

associations can influence the outcome of elections, or (3) unincorporated associations can 

amass funds comparable to those amassed by corporations. 

Response: The Commission OBJECTS to this request to the extent that it seeks 

privileged documents. See General Objections. Subject to and without waiving these or any of 

the Commission’s general objections, the Commission identifies state and local laws regarding 

unincorporated associations, to which plaintiffs and defendant have the same access. 

10

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 11 of 37
In addition, the Commission identifies the following publicly-available documents which 

the Commission may rely on in this litigation. 

Uniform Unincorporated Nonprofit Association Act (1996), Comments, available 

at http://www.law.upenn.edu/bll/archives/ulc/unincorx/unincorx.pdf. 

Mohr v. Kelley, 8 P.3d 543 (Colo. Ct. App. 2000). 

Izen v. Sjostrom 2007 WL 968841, 5 (Tex.App.-Hous. (14 Dist.) 2007). 

Elizabeth Kingsley and John Pomeranz, “A Crash at the Crossroads: Tax and 

Campaign Finance Laws Collide in Regulation of Political Activities of TaxExempt Organizations,” 31 Wm. Mitchell L. Rev. 55 (2004). 

5. Any and all documents concerning the effect of contribution limits on the 

outcome of elections or the ability of candidates or political committees to raise money or 

make expenditures. 

 Response: The Commission OBJECTS to this request on the grounds that this request, 

which is not limited to the facts of this case, is vague and extremely burdensome. Indeed, nearly 

any document relating to federal campaign finance matters, including, for example, the 

Commission’s entire library of campaign finance related materials, could be responsive to this 

request. Information from the Commission’s library, public records room and the Commission’s 

web site is equally available to plaintiffs and defendant. The Commission also OBJECTS to this 

request to the extent that it seeks privileged documents. See General Objections. 

Subject to and without waiving these objections, the Commission notes that many court 

decisions, including Buckley v. Valeo, 424 U.S. 1 (1976), and other decisions cited in the parties’ 

filings in this litigation, address this issue. Plaintiffs and defendant have equal access to these 

decisions. 

In addition, the Commission notes that it previously produced documents discussing 

amounts raised and spent in recent federal election cycles. See Summary of PAC Activity 1990-

2006 (Sadio Decl. Exh. B); 2005-2006 Summary of PAC Independent Expenditures (Sadio Decl. 

11

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 12 of 37
Exh. C); National Party Financial Activity Through the End of the Election Cycle (Sadio Decl. 

Exh. D); and National Party Federal Financial Activity Through The End of the Election Cycle 

(Sadio Decl. Exh. E). 

6. Any and all documents containing any legislative facts. 

 Response: The Commission also OBJECTS to this request on the grounds that the 

request is unduly burdensome because nearly any document relating to federal campaign finance 

matters, including, for example, the Commission’s entire library of campaign finance related 

materials, could be responsive to this request. The Commission also OBJECTS to this request to 

the extent that it seeks privileged documents. See General Objections. 

Subject to and without waiving these objections, the Commission identifies the following 

publicly-available documents which the Commission may rely on in this litigation. 

Stephen Weissman and Ruth Hassan, “BCRA and the 527 Groups” The Election 

after Reform: Money, Politics and the Bipartisan Campaign Reform Act, Ed. 

Michael J. Malbin (New York: Rowman and Littlefield Publishers, Inc. 2006). 

Stephen Weissman and Kara D. Ryan, “Soft Money in the 2006 Election and the 

Outlook for 2008: The Changing Nonprofits Landscape,” A CFI Report, 2007, 

available at http://www.cfinst.org/books_reports/pdf/NP_SoftMoney_0608.pdf. 

In addition, the Commission identifies the Expert Report of Clyde Wilcox (Aug. 15, 

2008) previously provided to plaintiffs, and documents relied upon therein. In addition, the 

Commission also identifies the following additional documents, previously provided to 

plaintiffs: 

Steven Walters and Patrick Marley, Chvala Reaches Plea Deal: Ex-Lawmaker 

Could Admit Guilt in at Least 2 Felonies, MILWAUKEE JOURNAL 

SENTINEL, Oct. 24, 2005, 

http://www.jsonline.com/story/index.aspx?id=365362. 

Steve Weismann, Fast Start for Soft Money Groups in 2008 Election: 527s Adapt 

to New Rules, 501(c)(4)s On the Upswing, Press Release, CAMPAIGN 

FINANCE INSTITUTE, April 3, 2008, 

http://www.cfinst.org/pr/prRelease.aspx?ReleaseID=188. 

12

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 13 of 37
Glen Justice and Eric Lichtblau, Bush’s Backers Donate Heavily to Veteran Ads, 

THE NEW YORK TIMES, September 11, 2004. 

Kate Zernike and Jim Rutenberg, The 2004 Campaign: Advertising; Friendly 

Fire: The Birth of an Attack on Kerry, THE NEW YORK TIMES, Aug. 20, 2004. 

Beth Barrett, Billboard Bonanza Lobbyist Stands to Make Millions if L.A. Lifts 

Freeway Ban, DAILY NEWS OF LOS ANGELES, Jan. 11, 2002. 

Jim Rutenberg, Democrats’ Ads in Tandem Provoke G.O.P., THE NEW YORK 

TIMES, Mar. 27, 2004. 

Deborah Goldberg, Commentary, Nebraska Should Stand Up for Integrity,

LINCOLN STAR JOURNAL, July 3, 2001. 

In the Matter of Drew Miller, No. 00-34, (Neb. Accountability and Disclosure 

Comm’n Sept. 28, 2001) (Order of Comm’n). 

In the Matter of Drew Miller, No. 00-34 (Neb. Accountability and Disclosure 

Comm’n Sept, 28, 2001) (Settlement Agreement). 

Richard Engstrom and Christopher Kenny, The Effects of Independent 

Expenditures in Senate Election, POL. RESEARCH Q., Vol. 55, No. 44 

(Dec. 2002) at 885-905. 

State’s Sentencing Memorandum, Wisconsin v. Chvala, No. 02CF2451, 

Cir. Ct. for the State of Wis., Dane County (Dec. 2005). 

Motion of Respondent Corporations for Disqualification of Justice Benjamin, 

Caperton v. Massey Coal Company, Inc., No. 98-C-192, Supreme Court of 

Appeals of West Virginia (Oct. 19, 2005). 

Brian Ross and Maddy Sauer, Another Legal Victory for Tough Coal Boss, ABC 

NEWS, April 7, 2008. 

Christopher Borick, Up the River: An Empirical Analysis of the Effectiveness of 

the Swift Boat Commercials, Presentation at the Annual Meeting of the American 

Political Science Association, (Sept. 1, 2005) (available at 

http://www.allacademic.com/meta/p_mla_apa_research_citation/0/4/1/6/2/p41627

index.html). 

Rick Alm and Jim Sullinger, Congressman Calls Lobbyist’s Tactics Illegal, 

KANSAS CITY STAR, Oct. 6, 1998 at B1. 

13

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 14 of 37
Tim Carpenter, Kansas Lawmaker Alleges Bribery Try on Gaming Issues, 

LAWRENCE KANSAS JOURNAL-WORLD, Oct. 8, 1998. 

California Fair Political Practices Commission, Independent Expenditures: The 

Giant Gorilla in Campaign Finance, June, 2008, 

http://www.fppc.ca.gov/ie/IEReport2.pdf. 

Jules Witcover, The Buying of the President 2008: Interviews: Paul Manafort, 

THE CENTER FOR PUBLIC INTEGRITY, Mar. 20, 2007, 

http://www.buyingofthepresident.org/index.php/interviews/paul manafort. 

Chris Dickerson, Company Asks Benjamin to Recuse Himself Again, this Time 

with Poll Numbers, LEGALNEWSLINE.COM, Mar. 28,2008 

http://www.legalnewsline.com/news/209989-company-asks-benjamin-to-recusehimself-again-this-time-with-poll-numbers). 

Second Renewed Motion for Disqualification of Justice Benjamin, Massey Coal 

Company, Inc. v. Caperton, Appeal No. 33350, Supreme Court of Appeals of West 

Virginia (Mar. 28, 2008). 

The Commission also relies on the record in McConnell v. FEC, 540 U.S. 93 (2003). 

7. Any and all documents related to MURs 5511 & 5525 (Swift Boat Veterans 

for Truth); MUR 5753 (League of Conservation Voters); MUR 5754 (MoveOn.org Voter 

Fund); MUR 5487 (Progress for America Voter Fund); MURs 5403 & 5466 (America 

Coming Together); or MUR 5440 (The Media Fund). 

 Response: The Commission OBJECTS to this request as unduly burdensome to the 

extent that it seeks privileged documents or documents from the administrative enforcement 

actions listed which are publicly available on the Commission’s web site and in the 

Commission’s public records room for copying and inspection by plaintiffs. See General 

Objections. Many of the non-privileged documents from these MURs are accessible on the 

Commission’s web site, and are accessible to plaintiffs for inspection and copying. 

The Commission also notes that the non-public portions of the Commission’s files on the MURs 

listed by plaintiffs are large, and contain First Amendment protected documents, as well as 

personal identification information that has the potential to harm the interests of the respondents 

recognized in AFL-CIO. Substantial time and effort to review the documents and redact 

14

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 15 of 37
privileged or sensitive information would be required before documents could be produced. 

While more targeted discovery requests might identify documents relevant to the issues in this 

litigation, the steps which would be necessary to review and redact the non-public portions of the 

Commission’s files on the listed MURs would be extremely burdensome. 

8. Any and all documents relating to the process, difficulty, or burden of 

complying with the political committee registration requirements or reporting 

requirements contained in 2 U.S.C. §§ 432, 433, and 434. 

 Response: The Commission OBJECTS to this request on burdensomeness grounds to the 

extent that it seeks documents already available in the Commission’s public records room or on 

the Commission’s web site for copying and inspection by plaintiffs. See General Objections. 

The Commission also OBJECTS on the grounds that this request seeks documents that are 

privileged or confidential by statute. 

Subject to and without waiving these or any of the Commission’s general objections, 

the Commission notes that many court decisions address this issue. Plaintiffs and defendant 

have equal access to these decisions. 

 The Commission also notes that publicly available documents include the record in the 

Commission’s 2004 Political Committee Status rulemaking, and the public filings in 

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

9. Any and all documents concerning communications from political 

committees, their officers, or their agents made in response to communications from the 

Defendant, including Requests for Additional Information, regarding compliance with 

political committee registration or reporting requirements contained in 2 U.S.C. §§ 432, 

433, and 434. 

 Response: The Commission OBJECTS on the grounds that this request is overly broad 

and unduly burdensome because all responses to Requests for Additional Information, including 

new or amended reports or statements, are available in the Commission’s public records room 

and on the Commission’s web site, where they are available to plaintiffs for copying and 

15

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 16 of 37
inspection. The Commission OBJECTS to the extent that this request seeks additional or other 

documents referring to Requests for Additional Information that are maintained as part of the 

files of Commission enforcement actions, and not on the public record at the Commission. 

Not only would locating such documents be unduly burdensome, but such documents are also 

privileged or protected by statute, 2 U.S.C. § 437g(a)(12). See General Objections. In addition, 

the Commission also objects to the extent that this request seeks documents recording or 

referring to oral communications between the Commission and persons who were recipients of 

RFAIs, or persons communicating with the Commission on their behalf because locating and 

producing such documents would be unduly burdensome. 

10. Any and all documents identifying any burdens associated with complying 

with political committee registration and reporting requirements contained in 2 U.S.C. 

§§ 432, 433, and 434. 

 Response: The Commission OBJECTS to this request on burdensomeness grounds to the 

extent that it seeks documents already available in the Commission’s public records room or on 

the Commission’s web site for inspection and copying by plaintiffs. See General Objections. 

The Commission also OBJECTS on the grounds that this request seeks documents that are 

privileged or confidential by statute. 

Subject to and without waiving these or any of the Commission’s general objections, 

the Commission notes that many court decisions address this issue. Plaintiffs and defendant 

have equal access to these decisions. 

 The Commission also notes that the publicly available documents responsive to this 

request include the record in the Commission’s 2004 Political Committee Status rulemaking, and 

the public filings in McConnell v. FEC, 540 U.S. 93 (2003). 

11. Any and all documents concerning communications from the public to the 

FEC’s Help Line for information concerning the regulation of political committees, 

including reporting compliance. 

16

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 17 of 37
 Response: The Commission OBJECTS to this request on relevance and burdensomeness 

grounds. See General Objections. Statistics regarding the number of telephone calls received 

are available on the Commission’s web site, and are available for inspection and copying by 

plaintiffs. See FEC Annual Reports, available at http://www.fec.gov/pages/anreport.shtml. 

12. All Requests for Additional Information sent by the FEC Reports Analysis 

Division to political committees from January 1, 1998 to the present. 

 Response: The Commission objects to this Request on burdensomeness grounds. 

Subject to and without waiving these or any of the Commission’s general objections, the 

Commission responds that Requests for Additional Information sent by the Commission to 

political committees are made public by the Commission, and are available in the Commission’s 

public records room and on the Commission’s web site for inspection and copying by plaintiffs. 

13. Any and all documents concerning administrative fines levied against 

political committees, treasurers of political committees, or other individuals for registration 

or reporting violations from January 1, 1998 to the present. 

 Response: The Commission OBJECTS to this Request on burdensomeness grounds. 

Documents regarding administrative fines previously levied by the Commission are publicly 

available at the Commission and on the Commission’s web site for inspection and copying by 

plaintiffs. The Commission also OBJECTS on the grounds that reviewing the non-public 

portions of the Commission’s files on closed administrative fine matters would be unduly 

burdensome, and that the files in pending administrative fine matters are privileged and 

confidential by statute. 

14. Any and all disclosure documents filed by organizations other than political 

party committees that, between January 1, 1998 and the present, reported independent 

expenditures to the FEC but did not report any political contributions or coordinated 

expenditures. 

 Response: The Commission OBJECTS to this Request as unduly burdensome. Subject 

to and without waiving this or any of the Commission’s general objections, the Commission 

17

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 18 of 37
responds that all disclosure documents filed with the Commission are publicly available at the 

Commission and on the Commission’s web site for inspection and copying by plaintiffs. 

Subject to and without waiving these or any of the Commission’s general objections, the 

Commission provides the attached lists of persons and entities (other than political party 

committees) that reported to the Commission making independent expenditures during the 1997-

1998 and subsequent election cycles, but did not report to the Commission making any 

contributions or coordinated expenditures during the same election cycle. FEC Attachment I03. 

Data for the 2007-2008 election cycle data contains all independent expenditures reported to and 

processed by the Commission as of August 22, 2008. 

15. Any and all documents used in the training of (1) Commission employees in 

the Reports and Analysis Division, or (2) Commission Help Line personnel. 

 Response: The Commission OBJECTS to this request on relevance grounds. 

The Commission OBJECTS to this request to the extent it seeks documents used to train 

employees in the Commission’s Reports Analysis Division which are protected by the law 

enforcement privilege. See General Objections. Subject to and without waiving this or any of 

the Commission’s general objections, the Commission produces the following public documents 

used to train employees in the Commission’s Reports Analysis Division. 

Fed. Election Comm’n., Federal Election Campaign Laws (2008), 

http://www.fec.gov/law/feca/feca.pdf. 

Code of Federal Regulations, Title 11, Federal Elections, 11 C.F.R. §§ 1-9039 

(2008), http://www.access.gpo.gov/nara/cfr/waisidx_08/11cfrv1_08.html. 

Fed. Election Comm’n., Campaign Guide for Congressional Candidates and 

Committees (Apr. 2008), http://www.fec.gov/pdf/candgui.pdf, and Supplement 

(Aug. 2008), http://www.fec.gov/pdf/cand guide supp.pdf. 

Fed. Election Comm’n., Campaign Guide for Nonconnected Committees (Oct. 

2005) (copy attached as FEC Attachment DR15a), and Supplement (Aug. 2008), 

http://www.fec.gov/pdf/nongui_supp.pdf. 

18

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 19 of 37
Fed. Election Comm’n., Campaign Guide for Political Party Committees (Aug. 

2007), http://www.fec.gov/pdf/partygui.pdf, and Supplement (Aug. 2008), 

http://www.fec.gov/pdf/party_guide_supp.pdf. 

Fed. Election Comm’n., Campaign Guide for Corporations and Labor 

Organizations (Jan. 2007), http://www.fec.gov/pdf/colagui.pdf, and Supplement 

(Aug. 2008), http://www.fec.gov/pdf/corp_supp.pdf. 

Reports and Analysis Division, Fed. Election Comm’n., Getting Started with 

FECfile User Manual, http://www.fec.gov/support/GettingStartedManual_U.doc. 

FEC Form 1 (Dec. 2007), http://www.fec.gov/pdf/forms/fecfrm1.pdf, and 

Instructions, http://www.fec.gov/pdf/forms/fecfrm1i.pdf. 

FEC Form 3X (Dec. 2004), http://www.fec.gov/pdf/forms/fecfrm3x_06.pdf, and 

Instructions (Feb. 2006) (copy attached). 

FEC Form 1M (Jan. 2001), http://www.fec.gov/pdf/forms/fecfrm1m.pdf, and 

Instructions (Jan. 2004), http://www.fec.gov/pdf/forms/fecfrm1mi.pdf. 

List of Federal Records Offices, 

http://www.fec.gov/pubrec/StateRecordsOffices.pdf. 

Fed. Election Comm’n., Thirty Year Report (2005), 

http://www.fec.gov/info/publications/30year.pdf. 

The Commission also produces the accompanying documents used to train the Commission’s 

Help Line staff: 

Fundraising for Candidates, Part 1 – Individual Volunteer Activity, Scenario 

(July 9, 2008). 

Use Of Campaign Funds, Scenario #2 (July 9, 2008). 

Corporate SSF Fundraising – PAC Solicitation Meeting, Scenario #1 (July 9, 

2008). 

E-Mail Newsletter Articles, Scenario #3 (July 21, 2008). 

Fundraising for Candidates, Part 1 – Fundraising for House and Senate 

Campaigns, Part 1 (July 9, 2008). 

Fundraising for Candidates, Part 2 – Fundraising for House and Senate 

Campaigns, Part 2 (July 9, 2008). 

Candidate Reporting – House and Senate Campaign Reporting (July 9, 2008). 

19

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 20 of 37
Candidate Reporting – House and Senate Campaign Reporting, Scenario Answer 

Key (July 21, 2008). 

Communications Scenario (July 21, 2008). 

Election-Related Communications (July 21, 2008). 

Fundraising For Corporate PACS (July 9, 2008). 

Corporate SSF Fundraising – PAC Solicitation Meeting, Scenario #1 (July 9, 

2008). 

SSF Fundraising, Part 1 – Fundraising for Separate Segregated Funds, Part 1 

(2008). 

SSF Fundraising, Part 2 – Fundraising for Separate Segregated Funds, Part 2 

(2008). 

Communications, Tab 7, All – Examples of Communications under the WRTL 

Exemption in 11 CFR 114.15 (2008). 

Introduction to FECA – Introduction To Federal Campaign Finance Law (July 9, 

2008). 

FEC Rules for Leadership PACs, Objectives and Outline, Tab 3 – FEC Rules for 

Leadership PACs (July 21, 2008). 

Fundraising for the PACs of Membership Associations, Trade Associations and 

Labor Unions (July 21, 2008). 

E-Mail Newsletter Articles, Scenario #1 (July 21, 2008). 

FEC Rules for Nonconnected Committees (July 21, 2008). 

Introduction to Office Procedures – Information Division Office Procedures And 

The Duties Of Communications Specialists (July 9, 2008). 

Party Fundraising Scenarios – Scenario – Candidate Support (July 21, 2008). 

Party Reporting (July 9, 2008). 

Party Reporting, Scenarios/Answer Key (July 21, 2008). 

Presidential Training List and Table of Contents – For Internal Use Only. 

Questions Frequently Handled By Information Division – For Internal Use Only. 

Presidential Training (2008). 

20

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 21 of 37
Party Fundraising, Part 1 – Political Party Committees Fundraising, Part 1 

(July 9, 2008). 

Party Fundraising, Pt. 2 – Political Party Committees Fundraising, Part 2 (July 9, 

2008). 

Using Corp/Union/Assn. Resources: Activity Chart [Slide] (July 21, 2008). 

Using Membership/Labor/Association Resources and Facilities on Behalf of 

Candidates and Parties (July 21, 2008). 

Copies of these documents are provided as FEC Attachments DR15b. 

Fundraising for House and Senate Campaigns Part 1 – PowerPoint 

(Feb. 12, 2008) 

Fundraising for House and Senate Campaigns Part 2 – PowerPoint 

(Feb. 12, 2008) 

House and Senate Campaign Reporting – PowerPoint (2008). 

Election-related Communications -- PowerPoint 

Using Corporate Resources for Candidates or Parties – PowerPoint (2008) 

Copies of these latter documents are provided as FEC Attachments DR15c through DR15g. 

16. Any and all Statements of Organization filed by PACs connected to a 

corporation, trade association, or labor organization between January 1, 1998 and the 

present. 

 Response: The Commission OBJECTS to this Request on relevance and 

burdensomeness grounds. Subject to and without waiving these or any of the Commission’s 

general objections, the Commission responds that disclosure documents filed with the 

Commission, including statements of organization filed by political action committees, are 

publicly available at the Commission and on the Commission’s web site, where they are 

available to plaintiffs for inspection and copying. 

17. Any and all Statements of Organization filed by non-connected PACs 

between January 1, 1998 and the present. 

 Response: The Commission OBJECTS to this Request on relevance and 

21

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 22 of 37
burdensomeness grounds. Subject to and without waiving these or any of the Commission’s 

general objections, the Commission responds that disclosure documents filed with the 

Commission, including statements of organization filed by political action committees, are 

publicly available at the Commission and on the Commission’s web site for inspection and 

copying. 

18. Any and all documents concerning whether candidates are, might be, or are 

not grateful for independent expenditures in support of their candidacy or in opposition to 

their opponent. 

Response: The Commission OBJECTS to this request to the extent that it seeks 

privileged documents or documents already available in the Commission’s public records room 

or on the Commission’s web site for inspection and copying. See General Objections. Subject 

to and without waiving these or any of the Commission’s general objections, the Commission 

identifies the Expert Report of Clyde Wilcox (Aug. 15, 2008) previously provided to plaintiffs, 

and documents relied upon therein. In addition, the Commission identifies the following 

documents: 

John O'Brien, West Virginia Supreme Court Lets Massey off $50 Million Hook, 

Starcher Furious, Legal News Online, November 21, 2007. 

http://www.legalnewsline.com/news/contentview.asp?c=204393. 

Doborah Goldberg, et al., The New Politics of Judicial Elections 2004, Justice at 

Stake Campaign. http://www.justiceatstake.org/files/NewPoliticsReport2004.pdf. 

Peter Lattman, West Virginia Supremes to Rehear Massey Case, The Wall Street 

Journal, January 24, 2008, http://blogs.wsj.com/law/2008/01/24/west-virginiasupremes-to-rehear-massey-case. 

Paul J. Nyden, Starcher Recuses Himself from Massey Case, The Charleston 

Gazette, February 16, 2008, http://www.wvgazette.com/News/200802150839. 

Lawrence Messina, West Virginia Court Overturns $76 Million Award Against 

Massey, International Business Times, April 3, 2008, 

http://www.ibtimes.com/articles/20080403/3-2-ruling-favors-massey-energy.htm. 

22

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 23 of 37
Adam Liptak, Judicial Races in Several States Become Partisan Battlegrounds, 

New York Times, October 24, 2004, 

http://www.nytimes.com/2004/10/24/politics/campaign/24judicial.html. 

In addition, the Commission notes that the publicly available documents responsive to 

this request include the record in the Commission’s 2004 Political Committee rulemaking, and 

the public filings in McConnell v. FEC, 540 U.S. 93 (2003). 

19. Any and all documents concerning whether candidates are or are not aware 

of the identities of individuals who made contributions to entities that ran independent 

expenditures that affected those candidates’ elections. 

Response: The Commission OBJECTS to this request to the extent that it seeks 

privileged documents or documents already available in the Commission’s public records room 

or on the Commission’s web site for inspection and copying. See General Objections. The 

publicly available documents include the record in the Commission’s 2004 Political Committee 

rulemaking, and the public filings in McConnell v. FEC, 540 U.S. 93 (2003). 

Subject to and without waiving these objections, the Commission identifies the Expert 

Report of Clyde Wilcox (Aug. 15, 2008) previously provided to plaintiffs, and documents relied 

upon therein. In addition, the Commission identifies the following documents: 

John O'Brien, West Virginia Supreme Court Lets Massey off $50 Million Hook, 

Starcher Furious, Legal News Online, November 21, 2007. 

http://www.legalnewsline.com/news/contentview.asp?c=204393. 

Doborah Goldberg, et al., The New Politics of Judicial Elections 2004, Justice at 

Stake Campaign. http://www.justiceatstake.org/files/NewPoliticsReport2004.pdf. 

Peter Lattman, West Virginia Supremes to Rehear Massey Case, The Wall Street 

Journal, January 24, 2008, http://blogs.wsj.com/law/2008/01/24/west-virginiasupremes-to-rehear-massey-case. 

Paul J. Nyden, Starcher Recuses Himself from Massey Case, The Charleston 

Gazette, February 16, 2008, http://www.wvgazette.com/News/200802150839. 

Lawrence Messina, West Virginia Court Overturns $76 Million Award Against 

Massey, International Business Times, April 3, 2008, 

http://www.ibtimes.com/articles/20080403/3-2-ruling-favors-massey-energy.htm. 

23

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 24 of 37
Adam Liptak, Judicial Races in Several States Become Partisan Battlegrounds, 

New York Times, October 24, 2004, 

http://www.nytimes.com/2004/10/24/politics/campaign/24judicial.html. 

In addition, the Commission produces audio files from a February 14, 2008 hearing 

conducted by the California Fair Political Practices Commission. FEC Attachments DR19-

01.MP3 through DR19-20MP3. 

20. Any and all documents concerning any communications with Dan Burton or 

Mary Landrieu or their agents, employees, or staff-members concerning this lawsuit or any 

of the plaintiffs in this lawsuit, or concerning the effect of independent expenditures on 

elections or the potential for corruption. 

 Response: The Commission OBJECTS to this request on relevance grounds to the extent 

it seeks information regarding communications “concerning this lawsuit or any of the plaintiffs 

in this lawsuit” unrelated to the factual or legal issues in this case. The Commission also 

OBJECTS on the grounds that the request is unduly burdensome. The Commission’s search for 

responsive documents was limited to personnel most likely to have responsive documents. 

Subject to and without waiving this or any of the Commission’s general objections, the 

Commission produces the accompanying documents. 

Legislative Contact Report (Feb. 25, 2008). 

Communication Result Report (Feb. 28, 2008). 

Email chain (Feb. 25-28, 2008). 

Copies of these documents are provided as FEC Attachment DR20. 

21. Any and all documents concerning any communications with any political 

candidate or officeholder or their agents, employees, or staff-members concerning this 

lawsuit or any of the plaintiffs in this lawsuit. 

 Response: The Commission OBJECTS to this Request insofar as the terms 

“political candidate” and “officeholders” are not defined and vague. In this respect, those terms 

could refer to candidates for elective office at the state or local level, or the incumbents in state 

24

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 25 of 37
or local elective offices. The Commission also OBJECTS to this request on relevance grounds to 

the extent it seeks information regarding communications unrelated to the factual or legal issues 

of this case. 

 Subject to and without waiving this or any of the Commission’s general objections, and 

construing this request as referring to federal candidates and officeholders, the Commission 

incorporates herein by reference its response to Document Request 20, above. 

22. Any and all documents concerning whether candidates approve or 

disapprove of independent expenditures made to support their election or to oppose their 

opponent’s election. 

Response: The Commission OBJECTS to this request on burdensomeness grounds. 

Indeed, this request could be interpreted to require a search of most of the agency’s files, which 

would be excessively burdensome. The Commission also OBJECTS to this request to the extent 

that it seeks privileged documents. See General Objections. The Commission also OBJECTS to 

this request to the extent that it seeks documents already available in the Commission’s public 

records room or on the Commission’s web site for inspection and copying by plaintiffs. See 

General Objections. Subject to and without waiving these or any of the Commission’s general 

objections, the Commission notes that the publicly available documents responsive to this 

request include the record in the Commission’s 2004 Political Committee rulemaking, and the 

public filings in McConnell v. FEC, 540 U.S. 93 (2003). 

23. Any and all filings by individuals or organizations other than party 

committees disclosing their independent expenditures since January 1, 1998. 

 Response: The Commission OBJECTS to this Request on relevance and 

burdensomeness grounds. Subject to and without waiving these objections, the Commission 

responds that disclosure documents filed with the Commission, including independent 

expenditure reports, are publicly available at the Commission and on the Commission’s web site 

25

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 26 of 37
for inspection and copying by plaintiffs. 

24. For any Request for Admission that the FEC denies, provide any documents 

supporting the FEC’s denial. 

 Response: See FEC responses to plaintiffs’ requests for admission. 

REQUESTS FOR ADMISSION 

1. Admit that if SpeechNow.org engaged in the proposed activities it would 

meet the statutory definition of “political committee.” 

 Response: ADMIT. 

2. Admit that the FEC believes that the plaintiffs in this lawsuit are aware of 

the contribution limits, registration requirements, and disclosure requirements that will 

apply to them under the campaign finance law if SpeechNow.org engages in the proposed 

activities. 

 Response: ADMIT. 

3. Admit that if SpeechNow.org engages in the proposed activities, the funds it 

receives and the amounts it disburses would be “contributions” and “expenditures” under 

2 U.S.C. §§ 431(8) and 431(9). 

 Response: ADMIT. 

4. Admit that SpeechNow.org is not required to register as a political committee 

before receiving contributions or making expenditures of more than $1,000 despite having 

a major purpose of federal campaign activity. 

 Response: ADMIT. 

5. Admit that if SpeechNow.org accepts more than $1,000 in contributions or 

makes more than $1,000 in expenditures and fails to register as a political committee, 

SpeechNow.org would be in violation of the campaign finance laws. 

 Response: ADMIT. 

6. Admit that if SpeechNow.org engages in the proposed activities but does not 

fulfill the organizational requirements of 2 U.S.C. § 432, SpeechNow.org would be in 

violation of the campaign finance laws. 

 Response: ADMIT. 

7. Admit that if SpeechNow.org engages in the proposed activities but does not 

register as a political committee with the Federal Election Commission under 2 U.S.C. 

§ 433, SpeechNow.org would be in violation of the campaign finance laws. 

26

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 27 of 37
 Response: ADMIT. 

8. Admit that if SpeechNow.org engages in the proposed activities and accepts 

contributions in excess of applicable contribution limits, SpeechNow.org would be in 

violation of the campaign finance laws. 

 Response: ADMIT. 

9. Admit that if SpeechNow.org accepted contributions or made expenditures 

for the purpose of funding its advertisements as described in the Amended Complaint and 

the documents filed in connection with the motion for preliminary injunction, and it did 

not report those contributions and expenditures in accordance with the political committee 

reporting requirements in 2 U.S.C. § 434(a), SpeechNow.org would be in violation of the 

campaign finance laws. 

 Response: ADMIT. 

10. Admit that David Keating, as president and treasurer of SpeechNow.org, 

would be liable for violations of the campaign finance laws if he allowed SpeechNow.org to 

accept donations in excess of applicable contribution limits for the purpose of carrying out 

its proposed activities. 

 Response: ADMIT that plaintiff David Keating would be liable, in his official capacity 

as treasurer of SpeechNow.org, for the violations of the Act by SpeechNow.org if it accepts 

contributions in excess of the Act’s contribution limits. The Commission notes, however, that a 

committee “treasurer will typically be subject to Commission action only in his or her official 

capacity.” See Statement of Policy Regarding Treasurers Subject to Enforcement Proceedings, 

70 Fed. Reg. 1 (Jan. 3, 2005). In this regard, a “probable cause finding against a treasurer in his 

or her official capacity makes clear to the district court in enforcement litigation that the 

Commission is seeking relief against the committee, and would only entitle the Commission to 

obtain a civil penalty from the committee.” Id. at 4-5. 

However, “when information indicates that a treasurer has knowingly and willfully 

violated a provision of the Act or regulations, or has recklessly failed to fulfill duties specifically 

imposed on treasurers by the Act, or has intentionally deprived himself or herself of the operative 

facts giving rise to the violation, the Commission will consider the treasurer to have acted in a 

27

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 28 of 37
personal capacity and make findings (and pursue conciliation) accordingly.” Id. at 1, 5, 6. 

In addition, “[i]f a past or present treasurer violates a prohibition that applies generally to 

individuals, the treasurer may be named as a respondent in his or her personal capacity, and 

findings may be made against the treasurer in that capacity. In this way, a treasurer would be 

treated no differently than any other individual who violates a provision of the Act.” 

Id. at 5 n.7, 6. “Should the Commission file suit in district court following a finding of probable 

cause against a treasurer in his or her personal capacity, judicial relief, including an injunction 

and payment of a civil penalty, could be obtained against the treasurer personally.” Id. at 5 

(citation omitted). 

11. Admit that David Keating, as president and treasure of SpeechNow.org, 

would be liable for violations of the campaign finance laws if SpeechNow.org engaged in 

the proposed activities without registering as a political committee and complying with 

political committee reporting requirements. 

 Response: The Commission incorporates herein by reference its response to 

Interrogatory 10. 

12. Admit that if Fred Young, Ed Crane, or David Keating make donations to 

SpeechNow.org in the amounts indicated in the Amended Complaint for the purpose of 

funding SpeechNow.org’s proposed activities, their contributions would violate the 

contribution limits. 

 Response: ADMIT. 

13. Admit that if the contribution limits apply to Fred Young’s proposed 

donation to SpeechNow.org, Brad Russo and Scott Burkhardt may legally pool their funds 

with only $5000 or less of Fred Young’s funds per year for the purpose of carrying out 

SpeechNow.org’s proposed activities. 

 Response: ADMIT. 

14. Admit that some candidates do not approve of independent expenditures in 

support of their election to office or in opposition to their opponent. 

 Response: The Commission ADMITS that candidates do not approve of 100% of 

independent expenditures in support of their election to office or in opposition to their opponent, 

28

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 29 of 37
but note the available evidence suggests that candidates generally do approve of such 

independent expenditures. In support of its denial, the Commission relies on the record in 

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

15. Admit that some candidates are not aware of the identities of those who 

contribute funds to organizations in order to finance independent expenditures that 

support such candidates or oppose such candidates’ opponents. 

 Response: The Commission ADMITS that not all candidates are aware of the identities 

of those who contribute funds to organizations to finance independent expenditures that support 

the candidate or oppose the candidate’s opponents, but note that the available evidence suggests 

that candidates generally are aware of the identities of such donors. 

The Commission also notes that candidates likely are more aware of the identity of 

donors who give donations in excess of the Act’s contribution limits than the identity of donors 

who give less that the contribution limits. Knowledge of the identity of the donor generally 

increases as the size of the donation increases. 

16. Admit that the Supreme Court of the United States has never recognized 

mere gratitude by candidates in response to independent expenditures as corruption. 

 Response: DENY that gratitude is irrelevant to the issue of corruption. In McConnell v. 

FEC, 540 U.S. 93 (2003), the Supreme Court recognized, in the context of soft money donations 

to political party committees, that “[i]t is not only plausible, but likely, that candidates would feel 

grateful for such donations and that donors would seek to exploit that gratitude.” 540 U.S. at 

145. The Supreme Court stated that “[t]he evidence in the record shows that candidates and 

donors alike have in fact exploited the soft-money loophole, the former to increase their 

prospects of election and the latter to create debt on the part of officeholders, with the national 

parties serving as willing intermediaries.” 540 U.S. at 146 (citations omitted). Furthermore, 

“[e]ven when not participating directly in the fundraising, federal officeholders were well aware 

29

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 30 of 37
of the identities of the donors; National party committees would distribute lists of potential or 

actual donors, or donors themselves would report their generosity to officeholders.” 540 U.S. 

at 147. 

17. Admit that political candidates often feel gratitude toward celebrities or 

other prominent individuals who endorse their candidacies. 

 Response: ADMIT. 

18. Admit that political candidates and officeholders often feel gratitude toward 

newspapers that endorse their candidacies or support legislation sponsored by the 

candidate or officeholder. 

 Response: ADMIT. 

19. Admit that political candidates and officeholders often feel gratitude toward 

nonprofit organizations that support causes or legislation of importance to the candidate or 

officeholder. 

 Response: ADMIT. 

20. Admit that political candidates ask citizens for their votes and show 

gratitude for the support of those citizens. 

 Response: ADMIT. 

21. Admit that contribution limits reduce the overall amount of money that 

organizations to which they apply have to spend on election-related communications. 

 Response: DENY. In Buckley v. Valeo, 424 U.S. 1 (1976), the Supreme Court explained 

that the “overall effect of the Act’s contribution ceilings is merely to require candidates and 

political committees to raise funds from a greater number of persons and to compel people who 

would [have] otherwise contribute[d] amounts greater than the statutory limits to expend such 

funds on direct political expression.” 424 U.S. at 21-22. 

INTERROGATORIES 

1. Identify all persons with knowledge of legislative facts pertaining to the 

issues in this case and the legislative facts known to each. 

 Response: The Commission OBJECTS to this Interrogatory on the grounds that it is 

30

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 31 of 37
unduly burdensome, and seeks information protected by the attorney work product privilege. 

The Commission also OBJECTS that this interrogatory would require the identification of a vast 

array of people involved with independent candidate spending, as well as fundraising for such 

spending, and the legislative process. Subject to and without waiving these or any of the 

Commission’s general objections, the Commission responds by identifying Professor Clyde 

Wilcox. 

2. Identify all persons at the FEC responsible for responding to 

communications from the public seeking assistance in complying with political committee 

registration or reporting requirements, and describe the nature of their responsibilities. 

 Response: FEC Chief Communications Officer Arthur Forster, and managers and staff in 

the Commission’s Office of Communications, Information Division: 

Gregory Scott, Assistant Staff Director 

Amy Kort, Deputy Assistant Staff Director – Publications 

Kevin R. Salley, Deputy Assistant Staff Director – Outreach 

Marie Dixon, Special Assistant to the Assistant Staff Director 

Latonya L. Prescott, Management Assistant 

LeJuan M. Dean, Administrative Clerk 

Elizabeth S. Kurland, Senior Communications Specialist 

Dorothy H. Yeager, Senior Communications Specialist 

 Isaac Baker, Communications Specialist 

Katherine Carothers, Communications Specialist 

Myles G. Martin, Communications Specialist 

Amy E. Pike, Communications Specialist 

 Michelle Ryan, Communications Specialist 

 In addition, staff in the E-Filing Division also respond to communications and staff in the 

Reports Analysis Division not only review reports for compliance, but also assist political 

committees with reporting questions. 

3. Identify all organizations other than political party committees that, between 

January 1, 1998 and the present, have reported independent expenditures to the FEC but 

have not reported any political contributions or coordinated expenditures. 

 Response: The Commission OBJECTS to this request as unduly burdensome. 

Disclosure reports filed with the Commission are publicly available in the Commission’s public 

31

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 32 of 37
records room and on the Commission’s web site. The web site also allows users to create lists of 

independent expenditures reported to the Commission since June 1, 2001 during user-specified 

time frames. http://www.fec.gov/finance/disclosure/ie reports.shtml. 

Subject to and without waiving these or the Commission’s general objections, the 

Commission responds by providing the attached lists of persons and entities (other than political 

party committees) that reported to the Commission making independent expenditures during the 

1997-1998 and subsequent election cycles, but did not report to the Commission making any 

contributions or coordinated expenditures during the same election cycle. FEC Attachment I03. 

Data for the 2007-2008 election cycle data contains all independent expenditures reported to and 

processed by the Commission as of August 22, 2008. 

4. Of the organizations identified under Interrogatory No. 3, identify which, if 

any, were qualified nonprofit corporations under 11 C.F.R. § 114.10 at the time they 

reported independent expenditures. 

 Response: The Commission does not have knowledge of the qualified nonprofit 

corporate status of the entities identified in the Commission’s response to Interrogatory 3, except 

to the extent that this information is provided on the reports and statements they file with the 

Commission. Those reports and statements are equally accessible to plaintiffs and defendant. 

5. Identify all individuals who have reached or exceeded the applicable 

aggregate limit on contributions to political committees under 2 U.S.C. § 441a(a)(3), along 

with the date on which the aggregate limit was met or exceeded. 

 Response: The Commission OBJECTS on the grounds that this request is unduly 

burdensome. Subject to and without waiving these or the Commission’s general objections, the 

Commission responds that information regarding amounts contributed by individuals to political 

committees, including the identity of individuals who have donated amounts equaling or in 

excess of their applicable aggregate limit for the relevant time period, is available in the reports 

available on the Commission’s web site and in the Commission’s public records room, and that 

32

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 33 of 37
information is equally available to plaintiffs and the Commission. Similarly, enforcement and 

administrative fine matters involving excessive contributions may be identified from information 

available on the Commission’s web site, including the Enforcement Query System, which also is 

equally available to plaintiffs and the Commission. 

6. Identify the total number of investigations into alleged violations of 

campaign finance law opened, total numbers of those investigations in which the FEC 

concluded there was a violation, and, of those, the total numbers of knowing and willful 

violations found by the FEC between January 1, 1998 and the present, including the 

disposition of those investigations or cases. 

 Response: The Commission OBJECTS on relevance and burdensomeness grounds. 

Subject to and without waiving these objections, the Commission notes that information is 

available on the Commission’s web site, including the following documents: 

Fed. Election Comm’n., Budget Request for FY2001, available at

http://www.fec.gov/pages/fc2001just.html. 

Fed. Election Comm’n., Congressional Justification Budget Request for 

FY2002 (Mar. 27, 2001), available at

http://www.fec.gov/pages/fy2002budget/budgetrequest2002.pdf. 

Fed. Election Comm’n., Budget Request Justification for FY 2004 (Mar. 20, 

2003), available at

http://www.fec.gov/pages/budget/fy2004/brj2004/brj2004.pdf. 

Fed. Election Comm’n., Budget Request Justification for FY 2005 (Nov. 24, 

2003), available at http://www.fec.gov/pages/budget/fy2005/brj2005/brj.pdf. 

Fed. Election Comm’n., Enforcement Profile (Sept. 30, 2004), available at

http://www.fec.gov/pages/budget/fy2006/cbr2006/cbr_app_d.pdf. 

Fed. Election Comm’n., Congressional Justification Budget Request for FY 

2006 (Apr. 11, 2005), available at

http://www.fec.gov/pages/budget/fy2006/cbr2006/cbr justification.pdf. 

Fed. Election Comm’n., Enforcement Profile (Sept. 30, 2005), available at

http://www.fec.gov/pages/budget/fy2007/fy2005_enf_prof.pdf. 

Fed. Election Comm’n., Budget Request Congressional Justification for FY 

2007 (Mar. 17, 2006), available at 

http://www.fec.gov/pages/budget/fy2007/fy2007 final budg just 0315.pdf. 

33

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 34 of 37
Fed. Election Comm’n., Performance and Accountability Report Fiscal Year 

2006 (Nov. 15, 2006), available at

http://www.fec.gov/pages/budget/fy2006/par_2006.pdf. 

Fed. Election Comm’n., Fiscal Year 2008 Performance Budget for the Fed. 

Election Comm’n. (FEC) (Feb. 5, 2007), available at 

http://www.fec.gov/pages/budget/fy2008/fy2008cbj_final.pdf. 

Fed. Election Comm’n., Fiscal Year 2009 Congressional Budget Justification 

(Feb. 4, 2008), available at

http://www.fec.gov/pages/budget/fy2009/CJ final 1 31 08.pdf. 

The Commission further responds that the Commission’s staff assigns a Matter Under Review 

(“MUR”) number to each administrative complaint received by the Commission which appears 

to meet the requirements of the Act and Commission regulations. The Commission notes that 

MUR numbers are assigned to administrative complaints received by the Commission prior to 

review or action by the Commission. In some complaint-generated matters, the Commission 

subsequently finds that no violations occurred or closes the matter without making any findings. 

In addition, the Commission’s staff also assigns MUR numbers to internally-generated 

enforcement actions when the Commission finds “reason to believe” a violation has occurred and 

decides to open a Matter Under Review. As of August 22, 2008, the highest MUR number 

assigned by the Commission in these matters is MUR 6057. 

 Detailed statistical information is not readily available for FEC enforcement actions prior 

to October 1999. However, since October 1, 1999, the Commission found reason-to-believe that 

one or more violations of the Act or other statutes within the Commission’s jurisdiction occurred 

in 427 Matters Under Review. In 118 of these MURs, the Commission conducted an 

investigation. (In other instances, the Commission closed the MUR without conducting an 

investigation. This includes cases where the Commission conciliated the violation(s) or moved 

to the “probable-cause-to-believe” stage without conducting an investigation.) 

Of the 427 MURs, six MURs involved findings of knowing and willful violations by the 

34

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 35 of 37
Commission at the probable-cause-to-believe stage. 

7. Provide the MUR or ADR numbers for all FEC enforcement cases between 

January 1, 1998 and the present in which unlawful coordination was alleged against a 

political committee, treasurer of a political committee, or other individual, and identify the 

cases in which unlawful coordination was found. 

 Response: The Commission OBJECTS on relevance and burdensomeness grounds. 

Subject to and without waiving these objections, the Commission responds that enforcement and 

administrative fine matters may be identified from information on the public record at the 

Commission and available on the Commission’s web site, which is equally available to plaintiffs 

and the Commission. 

8. Identify the average amount of time between the commencement of an 

investigation by the FEC into alleged violations of campaign finance law by a political 

committee and the resolution of that investigation. 

 Response: The Commission incorporates its objections and response to Interrogatory 6. 

Subject to and without waiving those objections, the Commission states that of the 118 Matters 

in which the Commission found “reason to believe” a violation occurred and conducted an 

investigation, the matter was pending an average of 544 days from the date the MUR was opened 

until it was closed with respect to the last respondent. 

9. Identify all attendees of FEC conferences since January 1, 1998. 

 Response: The Commission OBJECTS to this interrogatory on relevance grounds. 

Without waiving this or any of the Commission’s general objections, the Commission provides 

lists of attendees at FEC Conferences from 1999 to the present as FEC Attachment I09. Should 

the Commission locate the list of attendees at the 1998 FEC Conferences, the Commission will 

produce it. 

10. For any Request for Admission that the FEC denies, identify the facts 

supporting the FEC’s denial. 

 Response: See the Commission’s responses to plaintiffs’ requests for admission, 

incorporated herein by reference. 

35

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 36 of 37
36

Respectfully submitted, 

Thomasenia P. Duncan 

(D.C. Bar No. 424222) 

General Counsel 

David Kolker 

(D.C. Bar No. 394558) 

Associate General Counsel 

Kevin Deeley 

Assistant General Counsel 

/s/ Robert W. Bonham III 

Robert W. Bonham III 

(D.C. Bar No. 397859) 

Senior Attorney 

Steve N. Hajjar 

Graham Wilson 

Attorneys 

FOR THE DEFENDANT 

FEDERAL ELECTION COMMISSION 

999 E Street NW 

Washington, DC 20463 

Dated: August 25, 2008 (202) 694-1650 

Case 1:08-cv-00248-JR Document 55-17 Filed 11/21/2008 Page 37 of 37
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 161 

Case 1:08-cv-00248-JR Document 55-18 Filed 11/21/2008 Page 1 of 4
OMB No. 1545-1696

Political Organization

Report of Contributions and Expenditures

Department of the Treasury

Internal Revenue Service

For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 30406G Form 8872 (11-2002)

Employer identification number

(November 2002)

Form

1 Name of organization

8872

2 Mailing address (P.O. Box or number, street, and room or suite number)

City or town, state, and ZIP code

3 E-mail address of organization

5b Custodian’s address

6b Contact person’s address

7 Business address of organization (if different from mailing address shown above). Number, street, and room or suite number

City or town, state, and ZIP code

5a Name of custodian of records

6a Name of contact person

8 Type of report (check only one box)

4 Date organization was formed

a First quarterly report (due by April 15)

b Second quarterly report (due by July 15)

c Third quarterly report (due by October 15)

d Year-end report (due by January 31)

e Mid-year report (Non-election

year only-due by July 31)

f Monthly report for the month of:

(due by the 20th day following the month shown above, except the

December report, which is due by January 31)

g Pre-election report (due by the 12th or 15th day before the election)

h Post-general election report (due by the 30th day after general election)

(1) Type of election:

(2) Date of election:

(3) For the state of:

(1) Date of election:

(2) For the state of:

9 Total amount of reported contributions (total from all attached Schedules A)

10 Total amount of reported expenditures (total from all attached Schedules B)

9

10

Under penalties of perjury, I declare that I have examined this report, including accompanying schedules and statements, and to the best of my knowledge

and belief, it is true, correct, and complete.

Signature of authorized official Date

Sign

Here  

B Check applicable boxes: Intial report Change of address Amended report Final report

A For the period beginning ,20 and ending , 20

 See Seperate instructions.

Case 1:08-cv-00248-JR Document 55-18 Filed 11/21/2008 Page 2 of 4
Form 8872 (11-2002)

Form 8872 (11-2002)

Itemized Contributions

Name of organization

Schedule A

Employer identification number

Contributor’s name, mailing address and ZIP code Name of contributor’s employer Amount of contribution

Contributor’s occupation

Aggregate contributions

year-to-date  $

$

Contributor’s name, mailing address and ZIP code Name of contributor’s employer Amount of contribution

Contributor’s occupation

Aggregate contributions

year-to-date  $

$

Contributor’s name, mailing address and ZIP code Name of contributor’s employer Amount of contribution

Contributor’s occupation

Aggregate contributions

year-to-date  $

$

Contributor’s name, mailing address and ZIP code Name of contributor’s employer Amount of contribution

Contributor’s occupation

Aggregate contributions

year-to-date  $

$

Contributor’s name, mailing address and ZIP code Name of contributor’s employer Amount of contribution

Contributor’s occupation

Aggregate contributions

year-to-date  $

$

Contributor’s name, mailing address and ZIP code Name of contributor’s employer Amount of contribution

Contributor’s occupation

Aggregate contributions

year-to-date  $

$

Contributor’s name, mailing address and ZIP code Name of contributor’s employer Amount of contribution

Contributor’s occupation

Aggregate contributions

year-to-date  $

$

Subtotal of contributions reported on this page only. Enter here and also include this amount in the total on line 9

of Form 8872 

Schedule A page of 

$

Contributor’s name, mailing address and ZIP code Name of contributor’s employer Amount of contribution

Contributor’s occupation

Aggregate contributions

year-to-date  $

$

Contributor’s name, mailing address and ZIP code Name of contributor’s employer Amount of contribution

Contributor’s occupation

Date of contribution

Date of contribution

Date of contribution

Date of contribution

$

Date of contribution

Date of contribution

Date of contribution

Date of contribution

Date of contribution Aggregate contributions

year-to-date  $

Case 1:08-cv-00248-JR Document 55-18 Filed 11/21/2008 Page 3 of 4
Form 8872 (11-2002)

Form 8872 (11-2002)

Schedule B Itemized Expenditures

Name of organization

Schedule B page of 

Employer identification number

Subtotal of expenditures reported on this page only. Enter here and also include this amount in the total on

line 10 of Form 8872 

Recipient’s name, mailing address and ZIP code Name of recipient’s employer Amount of expenditure

Recipient’s occupation

$

Recipient’s name, mailing address and ZIP code Name of recipient’s employer Amount of expenditure

Recipient’s occupation

$

Recipient’s name, mailing address and ZIP code Name of recipient’s employer Amount of expenditure

Recipient’s occupation

$

Recipient’s name, mailing address and ZIP code Name of recipient’s employer Amount of expenditure

Recipient’s occupation

$

Recipient’s name, mailing address and ZIP code Name of recipient’s employer Amount of expenditure

Recipient’s occupation

$

Recipient’s name, mailing address and ZIP code Name of recipient’s employer Amount of expenditure

Recipient’s occupation

$

$

Purpose of expenditure

Purpose of expenditure

Purpose of expenditure

Purpose of expenditure

Purpose of expenditure

Purpose of expenditure

Date of expenditure

Date of expenditure

Date of expenditure

Date of expenditure

Date of expenditure

Date of expenditure

Case 1:08-cv-00248-JR Document 55-18 Filed 11/21/2008 Page 4 of 4
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 162 

Case 1:08-cv-00248-JR Document 55-19 Filed 11/21/2008 Page 1 of 5
Case 1:08-cv-00248-JR Document 55-19 Filed 11/21/2008 Page 2 of 5
Case 1:08-cv-00248-JR Document 55-19 Filed 11/21/2008 Page 3 of 5
Case 1:08-cv-00248-JR Document 55-19 Filed 11/21/2008 Page 4 of 5
Non-Disclosed Amounts

As the last entry on Schedule A, list the aggregate

amount of contributions that are required to be reported

on this schedule for which the organization does not

disclose all of the information required under section

5270). Enter "Withheld" as the contributor's name. If filing

electronically, enter the organization's address, the date

of the report, and "NA" for occupation and employer. This

amount is subject to the penalty for the failure to provide

all the information required. See Penalty on page 2 for

details.

Schedule B-Itemized Expenditures

Note. Multiple Schedules B can be filed with any report.

Number each schedule in the box in the top right corner

of the schedule. Be sure to include both the number of

the specific page and the total number of Schedules B

(for example, "Schedule B, page 2 of 10").

The organization must list on Schedule Beach

recipient to whom it made expenditures during the

calendar year if:

• The aggregate amount of expenditures made to that

person during the calendar year as of the end of this

reporting period was at least $500 and

• Any of those expenditures were made during this

reporting period.

Treat expenditures as made if the organization has

contracted or is otherwise obligated to make the

expenditure.

In-kind expenditures must be included. These

expenditures may be identified by including "(In-kind)" in

the purpose field.

As an entry on the last page of Schedule B, enter the

total amount of all expenditures paid to recipients whose

aggregate receipts were less than $500 and are not

reported elsewhere. Enter "Aggregate below Threshold"

instead of the recipient's name. If filing electronically, also

enter the organization's address and the last day of the

reporting period (for example, Jan. 31); and enter "NA"

for employer, occupation, and date.

moo not include any independent expenditures. An ! independent expenditure means an expenditure

. . by a person for a communication expressly

advocating the election or defeat of a clearly identified

candidate that is not made with the cooperation or prior

consent of, in consultation with, or at the request or

suggestion of a candidate or agent or authorized

committee of a candidate.

Name of Recipient's Employer

If the recipient is an individual, enter the name of the

organization or person by whom the recipient is

employed (and not the name of his or her supervisor). If

the individual is self-employed, enter "Self-employed." If

the individual is not employed, enter "Not employed." If

filing electronically and the recipient is not an individual,

enter "NA."

Recipient's Occupation

If the recipient is an individual, enter the principal job title

or position of that recipient. If the individual is

-4-

self-employed, enter the principal job title or position of

that recipient. If the individual is not employed, enter a

descriptive title to explain the individual's status such as

"Volunteer." If filing electronically and the recipient is not

an individual, enter "NA."

Amount of Each Expenditure Reported for

This Period

Report each separate expenditure made to any person

during the calendar year that was not reported in a prior

reporting period. If the expenditure is an in-kind

expenditure, report the fair market value of the

expenditure.

Purpose

Describe the purpose of each separate expenditure.

Non-Disclosed Amounts

As the last entry on Schedule B, list the aggregate

amount of expenditures that are required to be reported

on this schedule for which the organization does not

disclose all of the information required under section

5270). Enter "Withheld" as the recipient's name and as

the purpose. If filing electronically, enter the

organization's address, the date of the report, and "NA"

for occupation and employer. This amount is subject to

the penalty for the failure to provide all the information

required. See Penalty on page 2 for details.

Paperwork Reduction Act Notice. We ask for the

information on this form to carry out the Internal Revenue

laws of the United States. If the organization is required

to report contributions accepted and expenditures made

as required by section 527(j), you are required to give us

the information. We need it to ensure that you are

complying with these laws.

You are not required to provide the information

requested on a form that is subject to the Paperwork

Reduction Act unless the form displays a valid OMB

control number. Books or records relating to a form or its

instructions must be retained as long as their contents

may become material in the administration of any Internal

Revenue law. The rules governing the confidentiality of

Form 8872 are covered in section 6104.

The time needed to complete and file the form will vary

depending on individual circumstances. The estimated

average time is:

Recordkeeping . . . . . . . . . . . . . . . . . . . . . .. 9 hr., 48 min.

Learning about the law or the form. . . . . . . . 24 min.

Preparing and sending the form to the IRS. . 34 min.

If you have comments concerning the accuracy of

these time estimates or suggestions for making this form

simpler, we would be happy to hear from you. You can

write to the Internal Revenue Service, Tax Products

Coordinating Committee, SE:W:CAR:MP:T:T:SP, 1111

Constitution Ave. NW, IR-6406, Washington, DC 20224.

Do not send Form 8872 to this address. Instead, see

Where and How To File on page 2.

Case 1:08-cv-00248-JR Document 55-19 Filed 11/21/2008 Page 5 of 5
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

 

 ) 

SPEECHNOW.ORG, ET AL., ) 

 ) 

 Plaintiffs, ) 

 ) 

 v. ) Civ. No. 08-248 (JR) 

 ) 

FEDERAL ELECTION COMMISSION ) FEC Exhibits 

999 E St. NW ) 

Washington, DC 20463, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEC EXHIBIT 163 

Case 1:08-cv-00248-JR Document 55-20 Filed 11/21/2008 Page 1 of 3
Case 1:08-cv-00248-JR Document 55-20 Filed 11/21/2008 Page 2 of 3
Case 1:08-cv-00248-JR Document 55-20 Filed 11/21/2008 Page 3 of 3