Opinion ID: 395170
Heading Depth: 1
Heading Rank: 3

Heading: EXPENDITURE LIMITATIONS UNDER SECTION 441a(d)(3)

Text: 25 The agency agreements executed by the Republican State committees and the NRSC purport to transfer spending authority conferred by Section 441a(d)(3). Our inquiry into the permissibility of such agreements begins with examination of the statute itself. 27 Accepted principles of construction establish the presumption that the terms of statutes are ordinarily intended to carry their plain meaning. See SEC v. Sloan, supra; Caminetti v. United States, 242 U.S. 470, 37 S.Ct. 192, 61 L.Ed. 442 (1917); March v. United States, 506 F.2d 1306 (D.C.Cir.1974). 26 The relevant language of Section 441a(d)(3) authorizes the national committee of a political party, or a State committee of a political party, including any subordinate State committee, to make any expenditure of up to 2 cents per voting-age resident on behalf of the party's senatorial candidate. The operative terms are plain and precise. There is no suggestion that Congress chose its language loosely. Section 441a(d)(3) not only designates spending limits with mathematical rigor; it also confers authority to reach those limits on two named committees, both clearly identified by statutory definitions. Section 431(14) defines the national committee as the organization which, by virtue of the by-laws of a political party, is responsible for the day-to-day operation of such political party at the national level. Section 431(15) defines a State committee as the organization which, by virtue of the by-laws of a political party, is responsible for the day-to-day operation of such political party at the State level. 27 It is obvious that the NRSC is neither the national nor a State committee of the Republican Party within the contemplation of Section 441a(d) (3). Nor do we understand either the FEC or the NRSC to contend that the NRSC qualifies as a subordinate committee of a State committee, the third kind of committee to which Section 441a(d)(3) refers. Nor, finally, does the statute make reference to any other kind of permissible arrangement by which the State party organizations might convey their spending authority to any other organization. The plain language of the statute thus seems to preclude any arrangement by which the special authority of a named entity is transferred to another. 28 28 In its brief as an intervenor in this court, NRSC urges the contrary inference. In so doing, it rehearses an argument invoked by the Commission's General Counsel in an earlier case, the same one on which the General Counsel no longer places substantial reliance. See First General Counsel's Report, supra, at 4, JA 49. According to the NRSC, this court should infer that agency agreements are permissible under Section 441a(d)(3) because the statutory text includes no express prohibition of agency relationships. The NRSC's argument depends for its plausibility on its use of agency terminology. The language of Section 441a(d)(3) presumably does not prohibit a State political committee's employment of an agent in the standard legal sense; the failure of the statute to mention agency does not, for example, mean that the State committees may not hire staff authorized to act in their behalf. Against this background of familiar usage, however, it is somewhat misleading to characterize the challenged relationships between the State committees and the NRSC as ones of agency. The State committees do not, in the role of principal, raise and transfer funds to the NRSC as agent; nor do they give any direction as to how their funds ought to be spent. Rather, the NRSC raises and spends money as it sees fit; the State committees interact with the NRSC only in the initial agreement to the arrangement. Thereafter the State committees serve as legal shells. We cannot believe that Congress intended the language of Section 441a(d)(3) to authorize artificial relationships of this kind. 29 We are buttressed in our reliance on the clear language of Section 441a(d)(3) both by the provision's statutory context and by legislative history. The NRSC and its parallel congressional campaign committees were familiar to the Congress that adopted Section 441a(d)(3). Indeed, Congress specifically provided for such committees in Section 441a(h), which permits the Republican or Democratic Senatorial Campaign Committee, or the national committee of a political party, or any combination of such committees to make direct contributions of up to $17,500 to senatorial candidates, notwithstanding any other provision of this Act. 29 If Congress had similarly intended for the NRSC to share in the spending permissions of Section 441a(d)(3), it is not unreasonable to think that Congress would have said so explicitly, or at least signalled its intention in the course of its deliberations. 30 Yet the legislative history gives no hint that Congress ever foresaw, much less intended, that delegations of spending authority under Section 441a(d)(3) might be attempted. On the contrary, during the 1974 legislative debates Senator Brock noted with concern that the Act and its proposed Amendments failed to provide more permissive treatment to the congressional campaign committees. 30 Though he was fully aware of the proposed Section 441a(d)(3) permission for expenditures by the national and State committees and in fact mentioned it during his remarks Senator Brock proposed a further amendment that would have exempted congressional campaign committees like the NRSC from the Act's expenditure limits. I offer this amendment, he said, because I do not believe that as the bill is written (the congressional campaign committees) could literally operate in support of our candidates under the existing language. 31 31 The Senate initially adopted the amendment offered by Senator Brock, but reversed itself five days later. 32 The record of the Senate debate leading to repeal of the Brock amendment is equally revealing. With the attention of the Senate again riveted on the status of the congressional campaign committees under the Federal Election Campaign Act, not a single Senator ever suggested that the NRSC or any similar committee might be able to assume the spending authority of the State committees. Moreover, the 1974 debates evidence a congressional distinction between the political parties, whose role in the political process Congress sought to strengthen, and the campaign committees of the House and Senate. Senator Clark, who led the fight to repeal the Brock amendment, spoke to this point explicitly. No one, he said, should confuse national political parties, supported as they are by thousands of people giving in $5 and $10 amounts, with the Senate and House Campaign Committees. 33 32 Thus, no more in the legislative history than in the language of Section 441a(d)(3) do we find support for the kind of transfer of statutory authority at issue in this case. 34 IV. RELEVANCE OF THE TRANSFER PROVISION 33 The FEC argues that since Section 441a(a)(4) permits the NRSC to transfer unlimited funds to the State committees, it would be placing form over substance to forbid the State committees to designate NRSC as their agent. Brief for appellee at 17. We do not address the question whether NRSC may freely transfer funds to State committees under Section 441a(a)(4), because that issue was not joined before this court. While not conceding the validity of such transfers, 35 DSCC does not now challenge transfers of funds from NRSC to the State committees, apparently because no such transfers have ever been made. 34 We are not convinced, however, that an outright transfer of funds from NRSC to a State committee would be equivalent to an agency relationship in which the agent, NRSC, controls the funds from start to finish from raising to spending. In the latter situation the State committee may have no voice in the way funds are spent. Nor is this a difference that is obviously without consequence. When the NRSC pays the piper, it will call the tune. The candidate may have little incentive to communicate with the State committee, preferring to deal with a committee of his colleagues that directs the flow of funds. 35 If funds were actually transferred to the State committees, on the other hand, the committees would be more likely to maintain an active role throughout the campaign. Even if NRSC attempted to direct how transferred funds were to be spent, the State committees would actually make the day-to-day campaign expenditures and might be able to persuade NRSC that funds should be spent differently than the congressional committee envisioned. As State committees assumed responsibility for campaign disbursements, moreover, candidates might confer more closely with those committees and remain more closely in touch with their local party constituents. Since the structure of the Act suggests that Congress intended to increase the role of State and national committees, not of congressional committees, we find these possible differences to be potentially meaningful. 36 36 It would be inappropriate for this court to speculate further about the ways in which transfers of funds might differ from agency agreements. The parties have not argued the validity of funds transfers, but only of agency agreements. Since we find that the plain language of Section 441a(d)(3) precludes the latter, 37 we must reverse the District Court, declare the Commission's failure to act contrary to law, and direct the Commission to conform with this decision forthwith. See 2 U.S.C. § 437g(a)(8)(C). 37 So ordered.