Source: https://transition.fec.gov/law/litigation_CCA_G.shtml
Timestamp: 2019-12-12 10:49:42
Document Index: 171013495

Matched Legal Cases: ['§3005', '§432', '§441', '§3005', '§3005', '§3005', '§9033', '§9033', '§9039', '§437', '§437', '§441', '§9038', '§9038', '§9038', '§371', '§441', '§437', '§432', '§434', '§437', '§437', '§434', '§434', '§434', '§706']

GALLIANO v. UNITED STATES POSTAL SERVICE
On January 8, 1988, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion in Ralph J. Galliano v. U.S. Postal Service, which reversed a decision by the U.S. District Court for the District of Columbia dismissing the plaintiff's suit. The appeals court found that specific provisions of the Federal Election Campaign Act (FECA) control, in part, the application of 39 U.S.C. §3005 to political solicitations named in the plaintiff's suit. The appeals court therefore returned the case to the district court with instructions for the court to remand it to the U.S. Postal Service. In light of the appeals court opinion, the Postal Service must reconsider its decision concerning the political solicitations named in the case.
During 1983 and 1984 the Congressional Majority Committee (CMC), a multicandidate political committee, mailed out letters soliciting contributions to CMC's independent expenditure project, Americans for Phil Gramm in '84 (APG), supporting then-Congressman Gramm's candidacy for the U.S. Senate. The disclaimer notices in the first mailing failed to state that the solicitation was not authorized by any candidate.
In subsequent solicitation mailings, however, CMC did include such a disclaimer.
Alarmed that the APG solicitations were potentially misleading contributors and diverting funds away from his own authorized campaign committee, Congressman Gramm, a Republican from Texas, filed a complaint with the FEC against CMC, alleging that CMC had violated the election law by:
Using Gramm's name in the title of its independent expenditure project (2 U.S.C. §432(e)(4)); and
Failing to clearly state in its solicitations that CMC had not been authorized by Congressman Gramm (2 U.S.C. §441d(a)(3)).
The Commission found probable cause to believe that CMC had violated the election law by failing to include a disclaimer notice in its first solicitation mailings. The Commission was evenly divided, however, on the issue of whether CMC had violated the law by including Congressman Gramm's name in the title of its independent expenditure project. In July 1985 the Commission entered into a conciliation agreement with CMC and closed the file on the case.
After filing his complaint with the FEC, Congressman Gramm took two other steps: He filed a suit with the District Court for the Eastern District of Virginia and a complaint with the U.S. Postal Service.
In the suit he filed with the Virginia district court,1 Gramm claimed that CMC's use of his name in the title of the independent expenditure project had violated a Virginia law against unauthorized use of a person's name. Nevertheless, the district court denied Congressman Gramm's request for injunctive relief, stating that “the Federal Election [Campaign] Act arguably provides the exclusive remedy for the plaintiff's allegation.... ”
In the complaint he filed with the U.S. Postal Service, Congressman Gramm asserted that CMC's solicitations contained false representations and thus violated 39 U.S.C. §3005, a provision governing postal fraud outside the purview of the FECA.
The Postal Service found, among other things, that the committee's solicitation mailings implicitly made the false representation that Americans for Phil Gramm in '84 was authorized to collect funds for Congressman Gramm's campaign, and that the funds would be spent by Gramm's authorized committee. The Postal Service further concluded that the disclaimer notice required by the election law (Section 441d(a)(3)) did not adequately inform the recipients that the solicitation was not authorized by Congressman Gramm.
On August 7, 1985, Ralph J. Galliano, chairman of CMC, along with CMC and APG (hereafter collectively referred to as APG), contested the Postal Service's decision in the U.S. District Court for the District of Columbia. The district court affirmed the Postal Service's decision and dismissed APG's suit.
On November 13, 1986, Mr. Galliano appealed the district court decision. At the request of the U.S. Court of Appeals for the District of Columbia Circuit, the FEC filed a friend of the court brief, which addressed the issue of whether specific provisions of the FECA would displace the application of 39 U.S.C. §3005 to the political solicitations named in the suit.
FEC's Amicus Brief
In its brief the FEC noted that Congress had enacted two provisions of the election law “to ensure the public is informed of the true source of political solicitations and whether they are authorized by a candidate.” First, Section 432(e)(4) requires committees authorized by candidates to adopt a name which includes the candidate's name; it requires unauthorized committees to adopt a name which does not contain the name of any candidate. Second, Section 441d(a)(3) requires that fundraising solicitations by unauthorized committees state clearly the committee's name and “that the communication is not authorized by any candidate or candidate's committee.”
Further, the FEC argued, since Congress had granted the agency exclusive jurisdiction over provisions of the law, “matters covered by the Act must be brought before the Commission in the first instance even if another statute might otherwise arguably be applicable.”
The FEC went on to note that “the courts have long recognized that tension between a statute of general application and a statute specifically addressed to a particular subject must be resolved in favor of the specific statute.” The Commission therefore argued that, while Section 3005 may be applied generally to protect the public from “fraudulent political fundraising schemes,” this provision cannot be applied “in a manner that overrides the exclusive jurisdiction of the Commission to deal with those matters Congress has specifically resolved in the FECA.” Thus, the Commission concluded that “the Postal Service's decision should be reversed only to the extent that it interferes with the exclusive jurisdiction of the Commission and specific provisions of the FECA.”
Reversing the district court ruling, the appeals court held “that the FEC is the exclusive administrative arbiter of questions concerning the name identifications and disclaimers of organizations soliciting political contributions. As to representations not specifically regulated by FECA, however,... nothing in or about the Act limits the 39 U.S.C. §3005 enforcement authority of the Postal Service.”
The court held that the FECA's disclaimer requirements for political solicitations maintained a proper balance between protection of First Amendment rights of free speech and the public's right to be protected from fraudulent solicitations. The court said that “a fine balance of interests was deliberately struck by Congress in the name and disclaimer requirements of FECA...We believe they were meant to provide a safe haven to candidates and political organizations with respect to those organizations' names and sponsorship. If FECA requirements are met, then as we comprehend that legislation, no further constraints on names and disclaimers may be imposed by other governmental authorities.”
The court concluded, however, that solicitations for political contributions were not “entirely immune from Postal Service scrutiny under Section 3005. Apart from the name of a political organization and the presence or absence of sponsorship disclaimer, much may appear in a solicitation for political contributions that could materially deceive readers and thereby constitute a false representation under 3005.”
1 See Friends of Phil Gramm v. Americans for Phil Gramm in '84, 587 F. Supp. 767 (E.D. Va. 1986).
Source: FEC Record -- January 1988, p. 7; and March 1988, p. 9.
Galliano v. United States Postal Service, 836 F.2d 1362 (D.C. Cir. 1988).
On July 22, 1980, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion affirming the FEC's determination that Lyndon H. LaRouche had failed to reestablish his eligibility for primary matching funds in the Democratic Presidential primary held in Michigan on May 20, 1980. In its May 28, 1980, ruling, the Commission found that Mr. LaRouche had failed to receive at least 20 percent of all votes cast for Democratic contenders in the Presidential primary, the minimal amount necessary to reestablish eligibility.
Felice M. Gelman and Citizens for LaRouche, Inc. had filed a petition on June 11, 1980, contending that the Commission should have applied the definition of “candidate” provided by 26 U.S.C. §9033(2) in determining whether Mr. LaRouche had reestablished his eligibility for primary matching funds. That provision stipulates that, for purposes of establishing initial eligibility for primary matching funds, a Presidential primary candidate must be “actively conducting campaigns in more than one State.” In calculating total votes in the Michigan Democratic primary, Mr. LaRouche argued, this definition of “candidate” would have excluded votes cast for a candidate who had ceased to campaign actively in more than one state and votes cast for “uncommitted” delegates (i.e., those not pledged to any specific candidate). The FEC argued that the provisions of 26 U.S.C. §9033(c)(4)(B) required the Commission to count total votes cast for all Presidential primary candidates in a particular primary including all votes cast for inactive or write-in candidates or “uncommitted” delegates.
In upholding the FEC's method of determining Mr. LaRouche's reeligibility for primary matching funds, the court maintained “...petitioners' narrow focus on the word ‘candidate', to the exclusion of the phrase within which that word appears, results in a strained and artificial construction that is at odds with the Act's underlying concern that federal matching funds should go only to those candidates who have demonstrated at least minimal public support for their candidacies.”
Source: FEC Record -- September 1980, p. 8.
Gelman v. FEC, 631 F.2d 939 (D.C. Cir.), cert. denied, 449 U.S. 876 (1980).
GELMAN v. FEC (80-2471)
On March 11, 1981, the U.S. District Court for the District of Columbia denied plaintiffs' motion to find the FEC in contempt of court for failing to obey the court's October 24, 1980, order in the suit, Felice M. Gelman and Citizens for LaRouche v. FEC (Civil Action No. 80-2471). In that order, the court ruled that, although the Commission had undertaken an investigation pursuant to 26 U.S.C. §9039(b), the FEC had to notify the Citizens for LaRouche Committee of any investigations conducted of contributors to Mr. LaRouche's 1980 primary campaign, pursuant to 2 U.S.C. §437g(a)(2). Pursuant to the court's order, the FEC undertook no further investigations into the Committee's affairs.
In denying plaintiffs' motion, the court noted that the investigation cited by the LaRouche Committee in its contempt of court motion referred to a separate investigation the Commission had undertaken in March 1981, pursuant to 2 U.S.C. §437g(a)(2). That investigation resulted from the Audit Division's identifying a matching fund contribution that the LaRouche Committee may have submitted with false documentation. The court observed that the FEC had afforded plaintiffs the required notice before proceeding with this investigation.
Source: FEC Record -- May 1981, p. 7.
Gelman v. FEC, 2 Fed. Elec. Camp. Fin. Guide (CCH) ¶9139 (D.D.C. 1980).
On June 23, 1987, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the FEC's final repayment determination of May 15, 1986, with respect to the John Glenn Presidential Committee, Inc. (the Committee), the principal campaign committee for Senator Glenn's publicly funded 1984 Presidential primary campaign (Civil Action No. 86-1348.)
The Committee had asked the appeals court to review the repayment determination, which found that the Committee had made nonqualified campaign expenses (amounting to $248,004.62) as a result of exceeding its spending limits for the Iowa and New Hampshire primaries, and which required the Committee to repay $74,955.62 to the U.S. Treasury.1
The Committee had asserted that the state expenditure limits in 2 U.S.C. §441a(b)(1)(A) were unconstitutional. The Committee had also contested the FEC's determination in three specific areas, involving the FEC's allocation of the Committee's expenditures for telephone calls, public opinion polls, and buttons and bumper stickers.
The court found no constitutional infirmity in the FEC's actions taken under 26 U.S.C. §9038(b)(2), the provision of the President Primary Matching Payment Account Act which authorizes the recoupment of federal funds. The court noted that 26 U.S.C. §9038(b) allows the recoupment of public monies only.
Regarding the FEC's application of its regulations concerning the allocation of expenditures in three specific areas, the court found that the FEC ruled rationally and had not abused its authority.
1 The public funding statutes require Presidential primary candidates to repay the U.S. Treasury for nonqualified campaign expenses (26 U.S.C. §9038(b)(2)). Under the statute, spending in excess of the state-by-state spending limits is considered one type of nonqualified expense. When a campaign incurs nonqualified expenses, the campaign must repay that portion of the nonqualified expenses which represents public matching funds.
Source: FEC Record -- September 1987, p. 6.
John Glenn Presidential Committee, Inc. v. FEC, 822 F.2d 1097 (D.C. Cir. 1987).
GOLAND v. UNITED STATES; UNITED STATES v. GOLAND
On May 21, 1990, the U.S. Court of Appeals for the Ninth Circuit affirmed the district court's decision to dismiss the suit and to deny appellant's motion to certify constitutional challenges to the Federal Election Campaign Act. (Civil Action No. 89-55422.) Appellant Michael R. Goland had claimed that the First Amendment guaranteed his right to make unlimited anonymous contributions to candidates.
Background (U.S. v. Goland)
On December 14, 1988, a federal grand jury in Los Angeles indicted Mr. Goland for violations of the Federal Election Campaign Act and criminal statutes stemming from his activities during the 1986 Senatorial election in California. According to the indictments, he advanced $120,000 to a media company to produce advertisements for Ed Vallen, a third-party candidate for the Senate seat. Mr. Goland actually wanted Democratic Senator Alan Cranston to win the election and financed the last-minute Vallen effort in order to divert votes from the Republican candidate, Ed Zschau. Mr. Goland tried to conceal his identity as the donor of the $120,000 contribution by funneling the money through 56 persons, who were later reimbursed by Mr. Goland. The Vallen campaign, uninformed of the true source of the contribution, reported the money as contributions from the 56 individuals.
The federal grand jury indicted Mr. Goland on criminal violations, charging that he had knowingly and willfully caused the treasurer of the Vallen campaign to make false statements to the FEC for the purpose of concealing his $120,000 contribution. 18 U.S.C. §§371 and 1001. Additionally, Mr. Goland was charged with violating the Federal Election Campaign Act (the Act) by exceeding the $1,000 contribution limit and by making a contribution in the name of another. 2 U.S.C. §§441a and 441f.1
On March 13, 1989, after the December 1988 criminal indictment, Mr. Goland filed civil suit in the U.S. District Court for the Central District of California. (Civil Action No. 89-1480.) Pursuant to 2 U.S.C. §437h, he sought immediate certification by the district judge of three constitutional challenges to the Act, as applied. He claimed that the Act's contribution limits and disclosure provisions violated his constitutional rights. He further claimed that the First Amendment protected his right to make unlimited anonymous contributions to a third-party candidate. Mr. Goland also sought a stay of the pending criminal proceeding. On May 1, 1989, the court dismissed the suit with prejudice, finding that the Supreme Court had already addressed appellant's constitutional questions in Buckley v. Valeo. Concluding that the constitutional claims were frivolous under Buckley, the court denied plaintiff's motion for certification and stay. Mr. Goland immediately filed an appeal.
On May 11, 1989, the appeals court denied his motion for a stay of the criminal trial but agreed to review the district court's dismissal of the constitutional questions. In its opinion of May 21, 1990, the court affirmed the district court's judgment, denying appellant's constitutional challenges and dismissing the suit.
The appeals court first considered whether Mr. Goland had standing to bring a constitutional challenge. The court found that “Goland satisfies the traditional standing criteria: he has alleged an actual or threatened injury; that injury was caused by the challenged act; and that injury is apt to be redressed by a favorable decision.” The court observed that “[a] successful constitutional challenge to FECA provisions would give at least partial redress to Goland.”
The appeals court ruled that the district court was acting within its discretion by dismissing the suit once it found the constitutional issues were frivolous. A complaint is frivolous when none of the legal points are arguable on their merits. In this case, the issues raised by Mr. Goland had already been resolved by the Supreme Court in Buckley v. Valeo, 424 U.S. 1 (1976).
Appellant argued that Buckley did not resolve the issues he raised. He claimed that the reasoning the Supreme Court applied in upholding the contribution limits—to prevent quid pro quo corruption or the appearance of corruption—did not apply to his claim. There was no opportunity for exacting a quid pro quo deal since he sought to keep his identity secret. Further, because the candidate (Vallen) had no chance of winning the election, he would not be in a position to exchange official favors for money.
The court rejected this argument, pointing out that there is no assurance that a donor's identity will remain secret forever and, even if there were, the Act's disclosure provisions prohibit anonymous contributions exceeding $50. (See 2 U.S.C. §432(c)(2).) Moreover, Buckley upheld the application of contribution limits to minor party candidates as well as to candidates likely to win. Id. at 30-31.
Appellant Goland also argued that the Act's disclosure requirements as they relate to anonymous contributions to a third-party candidate were unconstitutional on their face and as applied to him. He based his claim on the historic constitutional protection given to anonymous political speech, citing several Supreme Court cases.
The court found that Mr. Goland could not avail himself of this protection. The Supreme Court in Buckley carefully considered the danger posed by compelled disclosure but held that state interests justified the indirect burden imposed by the Act's disclosure requirements on First Amendment interests. The appeals court concluded: “the [Supreme] Court carved out a narrow exception to the line of cases Goland relies on, and that exception encompasses Goland's activities.”
In response to appellant's emphasis on the minor party status of the recipient candidate, the court stated that the Buckley Court provided an exception to the disclosure provisions for those parties that could show a “reasonable probability” that disclosure would subject their contributors to “threats, harassment, or reprisals.” Id. at 74. The appeals court noted that appellant Goland “[did] not even attempt to make such a showing.” The court also observed that Mr. Goland “was not promoting a reviled cause or candidate.”
Finally, Mr. Goland argued that the substantial state interests that the Buckley Court found to justify the disclosure requirements did not apply to anonymous contributions made to a candidate with whom the donor disagrees.
The appeals court found no merit in this argument, observing that one purpose behind the disclosure provisions is “to keep the electorate fully informed of the sources of campaign funding....There is valuable information to be gained by knowing that Vallen took $120,000 from a Cranston supporter.” Another purpose behind the Act's disclosure provisions is “to gather the data necessary to detect violations of the contribution limits.” The court said that if Goland's position were adopted, one could avoid the contribution limits simply by making an anonymous contribution.
1 The first criminal trial, which concluded on July 10, 1989, resulted in a mistrial because of a hung jury. On September 19, 1989, a federal grand jury returned a superseding indictment charging additional violations of the Act's contribution limits and of criminal statutes. The second trial ended on May 3, 1990. Mr. Goland was convicted on one misdemeanor count of making an excessive contribution. He was acquitted on four other counts of conspiracy and making false statements. The jury deadlocked on one felony count of making false statements. On July 16, 1990, Mr. Goland received a federal prison sentence of 90 days on the one conviction (excessive contribution).
Source: FEC Record -- August 1990, p. 9.
Goland v. United States, 903 F.2d 1247 (9th Cir. 1990).
On May 8, 1997, the U.S. District Court for the District of Columbia granted the FEC's motion to dismiss this case in which Alan Gottlieb and others had asked the court to order the FEC to take action on an administrative complaint that the Commission had voted to dismiss.
On May 22, 1998, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the lower court ruling that dismissed this case for lack of standing. The appeals court rejected the arguments the appellants had presented in an effort to bring suit against the FEC after the agency had dismissed their administrative complaint.
Alan Gottlieb, together with several other voters and organizations, had filed an administrative complaint with the FEC in March 1995 alleging that President Clinton's 1992 campaign received $1.4 million in excess entitlement allowed under the Presidential Primary Matching Payment Account Act. According to the complaint, the excess entitlement occurred because, following President Clinton's nomination, his campaign transferred $1.4 million in private primary contributions to his General Election Legal and Accounting Compliance Fund (GELAC Fund) instead of using the funds to pay his primary debts. According to appellants, the transfer violated 11 CFR 9003.3(a)(1), as it was written at the time of the alleged violation, because the regulation permitted transfers of funds only in excess of amounts needed to pay primary debts.
The Commission dismissed the administrative complaint after deadlocking in a 3-3 vote. Mr. Gottlieb then filed suit, asking the district court to find that the FEC's actions had been contrary to law.
The district court found that the appellants did not have standing (under Article III of the U.S. Constitution) to pursue their claims in court because they had not been harmed by the Commission's decision.
In affirming the lower court, the appellate court called Mr. Gottlieb's claims of injury “speculative” and “amorphous.”
Source: FEC Record -- July 1997 [PDF]; July 1998 [PDF].
Gottlieb v. FEC, 143 F.3d 618 (D.C. Cir. May 22, 1998).
GRAHAM v. FEC (01-CV-00635)
On April 25, 2002, the U.S. Court for the District for the Eastern District of Arkansas, Western Division, granted the plaintiffs' motion to dismiss this complaint with prejudice.
On September 14, 2001, Plaintiffs filed a complaint in the U.S. District Court for the Eastern District of Arkansas, Western Division. The complaint appeals a civil money penalty the Commission imposed on the Dewayne Graham for Congress Committee (the Committee) and Everett Martindale, as the Committee's treasurer, for failure to file the Committee's 2000 October Quarterly Report. According to the allegations of the complaint, the Committee attempted to file a termination report in July of 2000, but the Commission did not act on the termination report until November 2000.
In August 2001, the Commission found reason to believe that the Committee and Mr. Martindale had violated 2 U.S.C. §434(a), which requires the timely filing of reports by political committees, by not filing an October 2000 Quarterly Report. The Commission assessed a civil penalty in the amount of $900 in accordance with 11 CFR 111.43. Plaintiffs claim that the Commission failed to act on the Committee's termination request in a timely fashion and has taken an “arbitrary and unconscionable position” in assessing the civil penalty, thus violating the plaintiffs' constitutional rights.
Plaintiffs ask the court to exempt them from the Commission's rulings and fines based upon the plaintiffs' extenuating circumstances.
On April 25, 2002, the U.S. District Court for the Eastern District of Arkansas, Western Division, granted the plaintiffs' motion to dismiss this complaint with prejudice. The complaint, filed September 14, 2001, had appealed a civil money penalty the Commission imposed on the Dewayne Graham for Congress Committee (the Committee) and Everett Martindale, as the Committee's treasurer, for failure to file the Committee's 2000 October Quarterly Report.
Source: FEC Record -- December 2001 [PDF]; July 2002 [PDF].
GRAMM v. FEC
During October 1985, the U.S. District Court for the Northern District of Texas, Dallas Division, issued two rulings concerning an FEC audit of the Friends of Phil Gramm, the principal campaign committee for Texas Senator Phil Gramm's 1984 Senate campaign. On October 18, the court granted the FEC's motion to dismiss Friends of Phil Gramm v. FEC, a suit filed by the Gramm Committee challenging the audit. (Civil Action No. CA3-85-1164-7.) On October 31, the court determined that the Committee must comply with the FEC's audit. (FEC v. Friends of Phil Gramm; Civil Action No. CA3-1507-7.)
In papers filed with the court, Friends of Phil Gramm (the Committee) alleged that, based on a complaint filed against the Committee and on information gathered through internal procedures, in March 1985 the Commission found “reason to believe” that the Committee had violated several provisions of the Federal Election Campaign Act (the Act). The agency then authorized an audit of the Committee to investigate whether the alleged violations had occurred. (The “reason to believe” finding is a statutory prerequisite to an investigation into possible violations.)
On June 19, 1985, the Gramm Committee filed a suit in the Northern District of Texas to enjoin the FEC from auditing the Committee. The Committee claimed that the Commission had to begin the audit within the time frame established under Section 438(b) of the Act. The Commission argued that Section 438(b) (including its time limits) was not applicable to the Gramm audit, which had been authorized under Section 437g(a)(2). The Gramm Committee also contended that the Commission was required to attempt conciliation before conducting the audit.
Subsequently, the Commission subpoenaed certain materials necessary for the audit. When the Committee refused to comply, the Commission filed a suit which asked the Texas district court to enforce the subpoena.
In its memorandum opinion of October 18, dismissing the Committee's suit, the court noted that the time limit of Section 438(b) “is inapplicable to an audit scheduled under §437” and found the audit “well within its [§437's] parameters.” Rejecting the Committee's claim concerning conciliation, the court stated that “the FEC is entitled to conduct its audit and gather the necessary information...before it attempts to conciliate with the violator.” In its October 31 ruling, the court determined that the Gramm Committee must comply with the FEC's subpoena.
Source: FEC Record -- January 1986, p. 10.
GREENWOOD FOR CONGRESS v. FEC (03-0307)
On August 18, 2003, the U.S. District Court for the Eastern District of Pennsylvania granted summary judgment in favor of Greenwood for Congress, Inc. (the Committee) in this case. Greenwood for Congress filed suit against the Commission on January 22, 2003, appealing a civil money penalty assessed against it by the Commission under its administrative fines regulations for the Committee's failure to timely file its 2001 Year-End Report. 11 CFR 111.30-111.45. The Committee argued that the Commission's determination that the Committee and its treasurer violated 2 U.S.C. §434(a) and its assessment of a $3,100 civil money penalty were arbitrary, capricious, an abuse of discretion and otherwise not in accordance with law.
The Committee alleged that it sent an electronic version of its 2001 Year-End Report on a high-capacity ZIP disk, along with a paper copy version, to the Commission via overnight delivery on January 29, 2002. The Year-End Report was due on January 31. The Committee was required to file its report electronically under the Commission's mandatory electronic filing regulations. 11 CFR 104.18(a)(1). Reports that are required to be filed electronically but are instead submitted on paper do not satisfy a committee's filing requirement. 11 CFR 104.18(a)(2).
While the Commission received a package containing the paper version of the report on January 30 (Initial Package), it subsequently informed the Committee that it had not received an electronic version of the report. The Committee then sent an electronic version of the report on a ZIP disk, which the Commission received on February 7. On that same day, a staff member in the Commission's Electronic Filing Office informed Eric Clare, the Committee's campaign manager, by telephone that the Committee's filing was rejected because it had not been submitted on a 3.5 inch floppy disk and because it was not accompanied by the required summary page signed by the treasurer. Mr. Clare then sent another copy of the report, on a 3.5 inch floppy disk along with a signed summary page, which the Commission received and validated on February 8, 2002.
On June 14, 2002, the Commission found reason to believe (RTB) that the Committee and its treasurer had violated 2 U.S.C. §434(a), which requires the timely filing of reports by political committees like Greenwood for Congress. The Commission assessed a civil money penalty in the amount of $3,100 in accordance with 11 CFR 111.43. After reviewing the Committee's response to the Commission's RTB finding, the Commission's reviewing officer recommended that the Commission make a final determination that the Committee had violated 2 U.S.C. §434(a) by filing its 2001 Year-End report eight days late and that the $3,100 civil penalty assessed was appropriate. After reviewing the Committee's submissions and the recommendations of the reviewing officer, on December 20, 2002, the Commission voted unanimously to make the final determination recommended by the reviewing officer. The Committee filed its petition for review of the Commission's final determination on January 22, 2003.
The granting of summary judgment by a court is appropriate where there is “no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). Under the Administrative Procedure Act, a court can set aside an agency action it finds “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.” 5 U.S.C. §706(2)(A); Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 414 (1971).
The court found that the FEC ignored relevant, although circumstantial, evidence presented by the plaintiffs during the administrative challenge. In his affidavit submitted to the Commission's reviewing officer, Mr. Clare claimed to have sent the Committee's report on a ZIP disk in the Initial Package. He indicated that he weighed the different items that the Committee alleged it sent to the Commission. He reported that a ZIP disk, a hard-copy version of the report with a binder clip, a copy of the cover letter and a manila envelope weighed 2 1/8 pounds. The same package weighed without the ZIP disk weighed 1 7/8 pounds, according to Mr. Clare. The Federal Express airbill for the Initial Package, as filled out by Mr. Clare, indicated a weight of 2.20 pounds, and Federal Express listed the weight of the package as three pounds. Because Federal Express will round up to the next whole number in calculating a package's weight, the Committee argued that this was evidence that the Initial Package contained a ZIP disk.
The Commission argued that its determination that the Committee filed its report late was reasonable because:
The Commission relied on statements by staff that the procedures followed indicated that no disk was contained in the Initial Package; and
Later searches of FEC files revealed no record of the Commission having received the disk in that package.
Nevertheless, the court held that the Commission failed "to exercise independent judgment in arriving at its decision" in this matter and "arbitrarily and capriciously determined that the Committee had erred in failing to include a disk in the January 30, 2002 package."
Additionally, the Commission argued that it was immaterial whether the Initial Package contained a ZIP disk, because a ZIP disk is an improper medium and the report would have been rejected in any case. The court found, however, that it is not clear that a ZIP disk is an improper medium -- the language of the applicable regulation requires only the submission of the reports on “computerized magnetic media.” 11 CFR 104.18(a) and (d).
Thus, the court denied the Commission's motion for summary judgment and granted summary judgment in favor of the Committee.
Source: FEC Record -- April 2003 [PDF]; and October 2003 [PDF].
GROVER v. FEC
On May 21, 1996, the U.S. District Court for the Southern District of Texas granted the FEC's motion to dismiss this suit.
Henry C. Grover had filed the suit on January 16, 1996, claiming that the $1,000 limit on contributions from individuals and Congress's failure to pass laws to prevent “soft money”1 from influencing federal elections were unconstitutional impediments to his primary campaign efforts. (Mr. Grover eventually lost the March 12 Texas Republican Senatorial primary.) He asserted that the $1,000 contribution limit and alleged “soft money laundering” (i.e., the redistribution of soft money raised by party committees to favored federal candidates) gave incumbent office holders such an overwhelming advantage that only independently wealthy challengers could run competitive campaigns against them.
The court, however, dismissed the case based on the FEC's arguments that: (1) Mr. Grover's claim was moot since the primary was over and relief no longer available; (2) the contribution limits had already been upheld by the Supreme Court in Buckley v. Valeo; and (3) the “soft money” issues were political and therefore outside judicial authority. The court said: “It is Congress that passed the laws and it is Congress that must engage in any necessary repairs.”
1 “Soft money” refers to funds raised and spent outside the limits and prohibitions of federal election law, including money that exceeds federal limits and money from corporate and labor treasury funds. Soft money may not be used in connection with federal elections but may be used for other purposes, such as nonfederal elections (subject to state law).