Keeping Tabs on Special-Purpose Party Accounts (Campaign Legal Center and OpenSecrets v. FEC)

In December 2014, Congress amended the Federal Election Campaign Act (FECA) to allow national political party committees to create three new kinds of “separate, segregated” accounts for specific purposes — one for maintaining party headquarters, one for funding legal proceedings, and one for organizing presidential nominating conventions — and to accept contributions for these accounts of up to three times the party’s general contribution limit (which is currently set at $41,300 per year). Moreover, each national party now operates up to seven special-purpose accounts, three for the national committees and two for their congressional and senatorial committees, with each account subject to a separate, three-times-higher contribution limit. That means an individual can contribute more than $1.7 million to a single party in the 2023-24 election cycle by giving $247,800 to all seven of its special-purpose accounts.

The 2014 FECA amendments, sometimes referred to as the “Cromnibus” amendments because they were tucked into an omnibus government funding package, did not detail permissible uses of the new special-purpose accounts or contain specific reporting requirements for them. As a result, it was imperative for the FEC to issue new disclosure rules to ensure funds flowing into and out of the new party accounts would be reported accurately and in full. Instead, the FEC did nothing.

Thanks to the FEC’s inaction, political party committees have adopted a hodge-podge of deficient and inconsistent reporting practices that make it virtually impossible to track the funds flowing through their supercharged special-purpose accounts.

To rectify these transparency problems, CLC and OpenSecrets filed a rulemaking petition with the FEC in August 2019. The Petition requested that the FEC promulgate rules requiring national party committees to delineate the individual and aggregate transactions involving their special-purpose accounts, and proposed several specific regulatory changes that would help achieve such transparency. CLC and OpenSecrets submitted additional comments to the FEC in October 2019 and June 2020, reiterating the importance of the Petition and providing additional information about the transparency issues it described.

Multiple election cycles have now come and gone since Congress’ authorization of these special-purpose accounts, and still the FEC has yet to respond to the Petition or even begin a desperately-needed rulemaking process. Therefore, CLC and OpenSecrets filed a lawsuit in 2023, challenging the FEC’s unreasonable, four-year delay in responding to their Petition under the Administrative Procedure Act.

What’s At Stake?

Federal campaign finance laws protect every American’s right to participate in the political process by requiring transparency about who is funding parties, campaigns, and other political spending, so voters can properly weigh different speakers and messages and cast an informed vote. But FECA’s comprehensive transparency requirements are meaningless if the FEC doesn’t provide rules to ensure their proper implementation and enforcement.

Through its inaction, the FEC is permitting national party committees to effectively conceal statutorily required details about the funds contributed to, and expended from, their supercharged special-purpose accounts — and thereby depriving the public of the complete and accurate campaign finance information to which it has a right.

Instead of a functioning FEC that protects the trust of voters, American voters are left with a dysfunctional system that encourages a lack of transparency and allows corruption to thrive while wealthy donors wield outsized power over the political system. In the absence of FEC action, groups like CLC are stepping up to ensure that parties and other political actors are accountable to the public.