CREW v. FEC (CHGO)

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At a Glance

This case presents an opportunity to reassert the important role of federal judges in holding the FEC accountable to its mandate when the commissioners are evenly divided on an enforcement question.

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About this Case

About the caseThe Center for Responsibility and Ethics in Washington (CREW) filed an administrative complaint with the Federal Election Commission (FEC) in 2011, alleging that a group called the Commission on Hope, Growth and Opportunity (CHGO)—which spent millions of dollars on political advertising ahead of the 2010 elections—violated federal campaign finance law by failing to make required disclosures about its spending.More than four years later, the FEC deadlocked three-three on whether to take action on CREW’s complaint, and the administrative case was closed as a result. This lawsuit challenges the decision of the three commissioners who voted against taking action.What’s at stake?This case presents an opportunity to reassert the important role of federal judges in holding the FEC accountable to its mandate when the commissioners are evenly divided on an enforcement question.The integrity of federal elections depends on an FEC that enforces the law, including its crucial transparency rules. However, three commissioners on the six-member FEC—which requires four affirmative votes to take most actions—have repeatedly voted together to prevent enforcement action in recent years, allowing violations like the ones CHGO allegedly committed to go unchecked.When the FEC deadlocks on an enforcement decision and dismisses a private party’s complaint, that party can seek review in the federal district court in Washington, D.C. But parties challenging the FEC in these lawsuits sometimes face an unwarranted obstacle: the courts, relying on outdated precedent, give extreme deference to the commissioners who voted against enforcement, tilting the playing field toward inaction. Now, the federal appeals court in D.C. has a chance to clarify that judges should closely scrutinize the reasoning of the no-action bloc in a tied FEC vote.Case DetailsCHGO formed in 2010 and told the Internal Revenue Service that it was a “social welfare” organization with no plans to spend money to influence elections. This allowed it to avoid disclosing its donors. In reality, however, CHGO spent millions of dollars on television ads about candidates in the 2010 elections. In 2012, after CREW pointed this out to the FEC, CHGO dissolved itself to avoid legal jeopardy.After reviewing the evidence, the FEC’s Office of General Counsel (OGC) recommended that the FEC find “reason to believe” that CHGO violated reporting and disclaimer requirements for its political ads and illegally failed to register as a “political committee.” The FEC deadlocked in October 2015 on whether to follow OGC’s advice.CREW filed this lawsuit in November 2015, seeking to set aside the no-action commissioners’ decision.The district court ruled for the FEC in February 2017. The court did not decide whether the no-action commissioners’ arguments were ultimately correct, but applied a “highly deferential standard” and held that the reasons offered by the no-action commissioners to justify their votes met that standard. CREW has appealed the district court’s ruling to the D.C. Circuit Court of Appeals.The Importance of FEC ActionCLC and Dēmos filed a friend-of-the-court brief in the D.C. Circuit on July 5, 2017.The brief argues that the court should reject the no-action commissioners’ claim that the statute of limitations on CHGO’s disclosure violations had run out. This claim is not entitled to deference because the FEC has no particular authority or expertise related to the statute of limitations, and because the claim was made in the context of a three-three deadlock.In a 2000 decision, In re Sealed Case, the D.C. Circuit held that no-action commissioners in a tied FEC vote could receive deference under Chevron USA v. NRDC, the U.S. Supreme Court’s landmark 1984 decision on judicial review of agencies’ statutory interpretations. However, as CLC’s brief explains, Sealed Case is inconsistent with the Supreme Court’s more recent decision in U.S. v. Mead Corp. (2001), which limited Chevron deference to situations where the agency’s interpretation carries the “force of law.” Deadlocked votes do not meet this standard. A tie doesn’t decide anything at the FEC, and the D.C. Circuit should clarify that neither side of the tie receives deference.The brief also argues that the no-action commissioners’ remaining arguments fail to justify the dismissal of the complaint. The law clearly requires CHGO to register as a political committee, and CHGO’s defunct status would not prevent the FEC from mandating disclosure from the group’s former agents. 

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