Fairley v. Hattiesburg

Today, as the Campaign Legal Center and others urged, the Federal Communications Commission (FCC) passed by a 5-to-0 vote new rules to extend the online public filing requirements for the public and political files to cover cable operators, satellite television (DBS) providers, and broadcast and satellite radio licensees.  Among other things, the rule will make the files containing information about political advertisers easily available to the public through the FCC’s public database.

The action came after the Campaign Legal Center, along with the Sunlight Foundation and Common Cause, petitioned the FCC to make the move in July 2014.  The groups were represented by the Institute for Representation at Georgetown Law Center.  The requirements for media outlets covered by the Communications Act to keep public and political files have been part of the law for decades.

“We commend the Commission for moving forward on our petition,” said Meredith McGehee, Policy Director of the Campaign Legal Center.  “This new rule drags FCC regulations governing the public file into the 21^st Century and ensures that all media outlets covered by the Communications Act will make the information required in the public file more readily available to the public.  For too long the public files for these media outlets have been anything but public despite technology that makes the process cheap and easy through means already being utilized by the outlets.”

“The logical next step is for the Commission to ensure that the public file information uploaded to the FCC database is in machine-readable format, instead of PDFs,” McGehee said.

The rules adopted by the FCC continues the exemption for cable systems with fewer than 1,000 subscribers from the online file requirements and delays for two years the requirements for cable systems with between 1,000 and 5,000 subscribers.  The new regulations require commercial stations in the top 50 Nielson Audio markets with 5 or more full-time employees to begin filing online while providing a two-year phase-in for smaller radio stations.

Television broadcasters were required to use the online file beginning in July 2014.  A similar phase-in program was used for smaller television stations.

Today in Wolfson v. Concannon, the en banc U.S. Court of Appeals for the Ninth Circuit upheld Arizona rules involving campaigns for judicial office. Prior to the en banc proceedings, a three-judge Ninth Circuit panel had invalidated the challenged rules—which include provisions restricting judicial candidates from personally soliciting political contributions or endorsing, speaking in favor of or campaigning for non-judicial candidates—as they applied to non-incumbent judicial candidates. Invoking the U.S. Supreme Court’s recent decision in Williams-Yulee v. Florida Bar, the en banc court held that Arizona’s rules are narrowly tailored to its compelling interest in upholding public confidence in the judiciary.

“Today’s decision confirms the vital importance of preserving public faith in judicial independence and impartiality,” said Megan P. McAllen, Associate Counsel for The Campaign Legal Center. “The modest limits on judicial campaign activity upheld today play an indispensable role in Arizona’s efforts to ensure a fair and impartial judiciary. As the U.S. Supreme Court made clear just last term in its Williams-Yulee decision, states have a compelling interest in protecting judicial integrity no matter how they choose to select their judges, by election or otherwise.”

In June 2015, the Campaign Legal Center joined with other nonprofit groups concerned with the integrity of the courts in filing an amici curiae brief urging the en banc court to uphold Arizona’s rules. The brief also emphasized that Arizona’s judicial campaign restrictions must be understood as part of a larger regulatory and policy framework that, as a whole, ensures an independent and impartial judiciary. CLC and other groups had previously filed an amici brief supporting a petition for en banc review before the full Ninth Circuit, which the court granted in 2014.

The other amici groups included the Arizona Judges’ Association, Brennan Center for Justice, Justice at Stake, and Lambda Legal Defense and Education Fund. Richard F. Ziegler and Justin O. Spiegel of Jenner & Block LLP are serving as attorneys for amici curiae.

To read the opinion, click here.

To read the brief, click here.

Today the Campaign Legal Center called on the House Ethics Committee to issue a public report or statement on the findings, recommendations and conclusions of a “working group” established in 2013 to review House conflict of interest rules and guidance.  The Campaign Legal Center urged the Committee to publicly release the group’s recommendations and the changes made in the guidance, as well as disclose the “ethics experts” with whom the working group met.

The conflict of interest “working group” was established in response to a recommendation by an investigative subcommittee that was looking into possible violations of House conflict of interest rules of then-Rep. Shelley Berkley (D-NV), after a New York Times investigation raised questions about official acts she undertook that benefitted her husband’s medical practice.  The investigative subcommittee urged the formation of a task force to review existing rules and noted the need to issue “clear, thorough and comprehensive rules pertaining to conflicts of interest that the House community can readily understand and abide by.”

The Ethics Committee instead named a “working group” consisting of just two members, Representatives Susan Brooks (R-IN) and Ted Deutsch (D-FL).  According to the Committee’s Summary of Activities issued in January 2015, the working group met formally 25 times and reached out to “ethics experts.”  The Summary noted that the group’s efforts “resulted in changes to the Committee’s guidance on financial disclosure of modern complex investment vehicles.”  An earlier Committee report stated that the working group spent 2014 focusing “on a review of the Committee’s guidance on the various requirements of conflicts of interest for Members.”

“While it is commendable that the House Ethics Committee undertook a review of conflict of interest standards, it is strange that the Committee would choose to keep the result of that review under wraps,” said Meredith McGehee, Policy Director of the Campaign Legal Center.  “The public deserves to know the process of the working group’s review, its findings and the changes it claims to have implemented.  The whole point of conflict of interest rules is to protect public confidence in the institution and in the motivations of Members of Congress.  As we stated in our letter today, it is indeed ironic that the Committee should keep hidden recommendations and changes made to conflict of interest guidance meant to assure transparency and to bolster public confidence.”                                                          

To read the letter, click here.  

Today in Van Hollen v. FEC, the Court of Appeals for the D.C. Circuit once again upheld an FEC rule that severely limits federal disclosure requirements connected to “electioneering communications.” The appellate panel overturned a district court decision holding the rule “arbitrary, capricious, and contrary to law” for improperly narrowing the scope of the McCain-Feingold law’s disclosure requirements and allowing nonprofit 501(c)(4) advocacy groups, 501(c)(6) business associations, and others to spend millions on “electioneering communications” without disclosing their donors.

“Today’s decision is deeply disappointing,” said Tara Malloy, Campaign Legal Center Deputy Executive Director, “and all but guarantees that there will be no disclosure of the donors funding the vast sums already being spent on political advertising by 501(c)(4) and other groups in the 2016 election cycle. Once again, the Court of Appeals has effectively sanctioned the wholesale evasion of federal disclosure laws. Neither Supreme Court precedent nor the underlying statute provided any justification for the FEC to adopt a rule narrowing disclosure.”

The Van Hollen case is a long-running challenge to a 2007 FEC regulation providing that only donors that specifically earmark their contributions for election ads are subject to disclosure. The district court first ruled in favor of Rep. Van Hollen in 2012, holding that the FEC regulation was contrary to the clear language of the federal campaign finance statue it purported to implement. The D.C. Circuit Court of Appeals also overturned the first lower court decision, disagreeing that the federal statute was unambiguous and holding that the district court should have instead analyzed whether the rule was a reasonable interpretation of the statute under a more deferential mode of judicial review. The case was remanded back to the district court, which found that the rule promulgated by the FEC was “arbitrary, capricious, and contrary to law” and an “unreasonable interpretation” of the McCain-Feingold law.

The Campaign Legal Center is part of the legal team representing Rep. Van Hollen in this case, which is led by Catherine Carroll of WilmerHale. The legal team also includes lawyers from WilmerHale, Democracy 21 and Public Citizen. 

To read the opinion, click here.

To read the brief filed by Rep. Van Hollen’s legal team, click here.

Today, the Campaign Legal Center, with Democracy 21, filed a complaint with the Federal Election Commission (FEC) urging the FEC to investigate apparent violations of campaign finance laws by Senator Ted Cruz and the 2012 Cruz for Senate Campaign relating to loans he obtained from Goldman Sachs and Citibank for use in his 2012 Senate campaign. According to the complaint, Senator Cruz failed to report the loans to the FEC, as required by law, and may have used a portion of his wife’s assets to secure the loan resulting in the campaign accepting excessive contributions.

The complaint asks the FEC to formally investigate the apparent violations and seek appropriate sanctions.

According to published reports, Senator Cruz used loans from Citibank and Goldman Sachs to help finance his 2012 election to the U.S. Senate, but his campaign committee failed to include the loans on the reports his campaign filed with the FEC. While it has been reported that Senator Cruz claimed that he and his wife had liquidated their “entire net worth, liquid net worth, and put it into the campaign,” it instead appears that he used both personal and joint assets to secure loans from the two banks, a fact he failed to disclose.   

A review of Senator Cruz’s Senate Financial Disclosure Reports for 2011 and 2012 also raise the question of whether he used his wife’s share of their joint assets as security for the loans, which would likely result in the campaign accepting an illegal contribution. 

“The failure to report these loans is a clear cut violation of the law and kept voters in the dark about the money behind the Cruz campaign,” said Paul S. Ryan, Deputy Executive Director of the Campaign Legal Center, which took the lead in drafting the FEC complaint. “If he also used his wife’s assets to obtain these unreported loans, he caused his committee to accept illegal excessive contributions from his wife.” 
 

To read the FEC complaint, click here. 

On Monday, January 11, the U.S. House of Representatives passed by voice vote H.R. 1069, the Presidential Library Donation Reform Act, to reveal the identities of donors to presidential libraries, prompted by reports raising concerns about sitting Presidents fundraising for such institutions.  H.R. 1069 was introduced by Rep. John Duncan (R-TN).  A companion bill, S. 558, introduced by Sen. Thomas Carper (D-DE), has been reported out of the Homeland Security and Governmental Affairs Committee and is awaiting final action on the Senate floor.

Currently, donations to presidential libraries are not required by law to be disclosed.  There are no limits on the amount someone may contribute nor are there any limits on who may contribute.  Foreign individuals and even foreign governments may make a donation.  There are also no limits on sitting Presidents’ ability to solicit donors for their libraries.  President Obama has set a goal of raising $1 billion for his library. 

Concerns related to presidential libraries have arisen during the last three administrations.  A donation to the Clinton presidential library created the appearance of a link between the contribution and a presidential pardon for Marc Rich, an international financier who was indicted on federal charges for tax evasion and illegal oil deals with Iran.  President George H.W. Bush’s pardon of Edwin Cox, Jr., convicted of bank fraud, raised similar issues when Cox’s father made a generous contribution to President Bush’s library in College Station, Texas.  In 2008, longtime George W. Bush fundraisers were secretly videotaped by the London Times offering a foreign dignitary access to the White House in exchange for a $250,000 contribution to the Bush library.   

H.R. 1069 requires quarterly disclosure to the National Archives and Records Administration of every contributor who gives a presidential library a contribution (whether monetary or in-kind) of $200 or more.  It also requires the U.S. Archivist to publish the information on a website within 30 days after each quarterly filing.  The bill also prescribes criminal penalties for filing false information or for omitting information.

“It is troubling that sitting Presidents and their fundraisers are raising private funds for their presidential libraries,” said Meredith McGehee, Campaign Legal Center Policy Director.  “It is a situation ripe for conflicts and for creating the appearance of influence-peddling.  While it might be preferable for Presidents to put their presidential library fundraising efforts on hold until they leave office, passage of H.R 1069 would be an important step in bringing needed transparency to a process that has remained opaque.”

“We urge Senate Majority Leader Mitch McConnell (R-KY) to schedule H.R. 1069 or its Senate counterpart, S. 558, to the floor for final action expeditiously,” McGehee said.

To read H.R. 1069, click here. 

The Campaign Legal Center yesterday joined in a lawsuit alleging widespread corruption in the awarding of contracts by the Houston Independent School District (HISD).  The Legal Center joins the legal team representing a Houston construction contractor who was locked out of the school district’s construction contracts after refusing to participate in the Board of Trustees’ widespread “pay-to-play” scheme.

This case brings into the daylight the pervasive and egregious corruption within HISD. Trustee and former HISD Board President Larry Marshall was an elected public official who, along with others at HISD, regularly abused his position of trust by placing his own interests above those of the students and employees of the school district. As a member of the Board of Education, he was charged with a duty of loyalty in overseeing the expenditures of local tax dollars, bond money and federal funds for the benefit of the students and employees of the Houston Independent School District. But since at least 1999, the lawsuit alleges, Mr. Marshall used his position of influence to extract bribes from companies seeking to do business and contract with the district in exchange for preferable treatment and contracts. Persons or companies who dared to interfere with HISD's pay-to-play system were terminated, forced to resign or no longer awarded contracts at HISD. CLC’s client, Gil Ramirez Group, was just one such victim of this pervasive public corruption scheme. 

            “As the suit alleges, Board President Marshall apparently required contractors to pay  monthly bribes only nominally hidden behind consultancy ’fees’ to Marshall’s associate for services never performed,” said Campaign Legal Center Executive Director J. Gerald Hebert.  “These actions deserve public scrutiny and their day in court. “The public has a right to know how their public officials have abdicated their duties of loyalty and corrupted their public positions. This lawsuit, by bringing HISD’s longstanding pay-to-play corruption into the light, will be a major step towards eliminating corruption throughout HISD and rebuilding the public trust in that governmental institution.” 

            To read the Campaign Legal Center’s response to Defendant’s second motion for summary judgment, filed yesterday, click here.