Watchdogs File FCC Complaints Regarding Lack of Disclosure in Most Expensive House Race in History

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Today, Campaign Legal Center (CLC) and Issue One filed six complaints with the Federal Communications Commission (FCC) against two Atlanta-based television stations in the aftermath of the special election in Georgia’s 6th Congressional District, which was the most expensive U.S. House election in American history. Much of the battle was waged on the television airwaves, with several “dark money” nonprofits and super PACs spending millions of dollars airing TV advertisements in the district. Some of the major organizations involved — including the Democratic-affiliated groups Patriot Majority USA and House Majority PAC, as well as the Republican-tied National Republican Congressional Committee (NRCC) — failed to properly disclose important information.

“Stations that air political ads have an obligation to ensure that viewers have relevant information about who is attempting to influence their vote," said Brendan Fischer, director of federal and Federal Election Commission reform at CLC. "The FCC must take action to protect the public’s right to basic information about the political ads that flooded Georgia’s airwaves during this year’s special elections.”

“Voters have a right to know who exactly is behind the advertisements that can strongly influence their vote,” said Meredith McGehee, chief of policy, programs and strategy at Issue One. “Without a firm commitment to transparency by the FCC — a principle both Democrats and Republicans agree on — we risk losing the openness and accountability that ensure a functioning democracy.”

Any ad that “communicates a message relating to any political matter of national importance” must be placed into a broadcaster’s political file, and the advertiser must disclose who is behind the ad, as well as list the executive board members, or highest-ranking officers, of the sponsoring group. The legal definition of “a political matter of national importance” includes any election to federal office, so the advertisements run during Georgia’s 6th Congressional District special election clearly qualify.

At least two separate Georgia television stations, WPCH-TV and WSB-TV, failed to require that Patriot Majority USA, House Majority PAC and the NRCC accurately and completely fill out the National Association of Broadcasters (NAB) agreement form. On their NAB agreements, the groups falsely claimed the advertisements were not “a political matter of national importance,” which meant the groups failed to disclose required information such as the office, candidate and/or issue in question. It is time to set the record straight.

The station WPCH-TV failed to disclose information in a political ad sponsored by Patriot Majority USA.

Complaints:

Issues
Campaign Finance

Use of Private Spokesperson by Bannon may Violate White House Gifts Law

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CLC calls for investigation into why Bannon Publicist Alexandra Preate ‘has not received a dime’ for professional PR services provided

WASHINGTON – Today, Campaign Legal Center (CLC) called for an investigation of White House Chief Strategist Steve Bannon for his apparently illegal arrangement with his private publicist Alexandra Preate, who is effectively functioning as an unpaid employee of the White House press team. This arrangement was uncovered by investigative reporter Christina Wilkie with the Center for Public Integrity (story).

“Once again, it appears the White House is ignoring longstanding government ethics rules, this time by outsourcing White House press office functions to an unpaid private public relations consultant,” said Larry Noble, senior director and general counsel at CLC.

“The White House and White House officials receiving secretly-funded professional services raises serious concerns about outside influence over government decision making,” said Brendan Fischer, director, federal & FEC reform program at CLC. “We expect that the new White House Chief of Staff will take remedial action to address these violations of the law.”

Preate’s work for the White House and Bannon raises two potential legal violations, as outlined in the letter sent to the White House, Attorney General’s Office and Office of Government Ethics (OGE).

First, if Bannon accepted Preate’s professional services on behalf of the White House, then Bannon is likely in violation of the Antideficiency Act, which provides that a government employee “may not accept voluntary services for [the] government or employ personal services exceeding that authorized by law.” Second, to the extent that Preate’s services were provided to Bannon in his personal capacity, Bannon may be violating executive branch ethics rules.

There is also reason to believe that a third-party has been subsidizing Preate’s work for the White House and Bannon. Preate’s top client and a major source of her firm’s income is Breitbart News, which Bannon led until recently, and Preate has also represented Trump donor Rebekah Mercer, whose family is part-owner of Breitbart, and who has a long relationship with Bannon.

CLC filed a letter with the Federal Election Commission (FEC) in April 2017 about evidence that a Mercer-backed super PAC illegally compensated Bannon’s work and participated in illegal coordination through use of a common vendor.

Issues
Ethics

Thompson v. Hebdon

At a Glance

Thompson v. Hebdon is a First Amendment challenge to Alaska’s campaign finance law, including its contribution limits for state legislative candidates and its limit on contributions from out-of-state donors. CLC filed a friend-of-the-court brief in the Ninth Circuit Court.

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Closed
Updated
Issues
Campaign Finance
About This Case/Action

Summary

Thompson v. Hebdon is a First Amendment challenge to Alaska’s campaign finance law, including its contribution limits for state legislative candidates and its limit on contributions from out-of-state donors. For decades, the Supreme Court has acknowledged that the contribution limits serve the important goal of preventing corruption and the appearance of corruption, while not significantly burdening First Amendment rights.

What’s at Stake?

Thirty-nine states and countless local governments limit the amount of money donors can contribute to candidates. Courts have long recognized that these laws are effective tools at preventing corruption and its appearance. If the Ninth Circuit Court of Appeals adopts Thompson’s proposed rigorous standard of review, contribution limits across the country will be opened up to new scrutiny and decades of settled law will be called into question. This would hamstring the ability of state and local governments to fight corruption.

Background

Alaska has had a long history of exploitation by out-of-state energy extraction companies. It relies on those companies and their out-of-state workers for approximately 90% of the state’s budget. Alaska has also experienced its fair share of corruption scandals involving campaign contributions.

In 1996, the Alaska legislature enacted a campaign finance reform law based on a proposed initiative that likely would have passed that November. Among other things, the law set a $500 annual contribution limit to candidates for state office ($1,000 over a two-year election cycle), and set aggregate caps on how much each candidate could take from out-of-state donors. In 2003, the state legislature increased the base contribution limits from $500 to $1,000 per year. But in 2006, out of concern for the corrupting potential of larger donations, 73% of Alaskans voted to move the limits back to their earlier $500 level.

Several plaintiffs brought a First Amendment case against Alaska’s base contribution limit, its aggregate out-of-state donor limit, and two other types of contribution limits. David Thompson, a Wisconsin resident, wished to donate to his brother-in-law’s campaign for the Alaska State House of Representatives despite the fact that his brother-in-law had already met the $3,000 cap on donations he could take from nonresidents. Aaron Downing and Jim Crawford, meanwhile, wanted to donate more than $500 a year to their favored candidates. The district court upheld the base limits and the nonresident contribution cap, along with the other challenged limits.

The plaintiffs appealed the case to the Ninth Circuit. On appeal, the plaintiffs ask the court to reject longstanding precedent upholding contribution limits as constitutional. Instead, they ask the court to adopt a rigorous standard of review, which would eliminate decades of deference courts have granted to legislatures in determining whether to adopt contribution limits and which dollar level to choose.

CLC filed a friend-of-the-court brief on July 26, 2017, arguing that Alaska’s contribution limits should be upheld. CLC’s brief points to how the Supreme Court resolved this issue long ago—that Alaska has the right to employ contribution limits as a means of preventing corruption and its appearance and that the court should defer to its judgment in setting the right amount for those limits. It also explains that Alaska’s unique vulnerability to quid pro quo corruption involving nonresidents gives the state a compelling reason to adopt aggregate contribution limits for out-of-state donors.

Plaintiffs

David Thompson, et al.

Defendant

Heather Hebdon (Executive Director of Alaska Public Offices Commission)

White House is Playing Politics with Interim Ethics Director

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WASHINGTON – Walter Shaub, senior director, ethics at Campaign Legal Center (CLC), and former director of the Office of Government Ethics (OGE), released the following statement about President Trump’s appointment of David J. Apol as Acting Director of OGE:

“It’s unfortunate that the White House decided to play politics with the interim director role. If they have someone they like, they should formally nominate that person to be permanent director. This sort of political interference creates the appearance that the White House may be hoping to engineer looser oversight by reaching down and leapfrogging a career employee over his own supervisor temporarily.

Under the Vacancies Reform Act, the role of OGE’s acting director automatically goes to OGE’s highest ranking career official, the Chief of Staff, unless the president overrides that designation. OGE announced today that the White House has replaced the acting director with a lower level OGE employee, the General Counsel. This way, the White House gets to install its preferred candidate without having a Senate confirmation hearing in which it would have to face tough questions about how the nominee would address the administration’s ethics problems.”

Issues
Ethics

CREW v. FEC (CHGO)

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.

Status
Closed
Updated
Issues
Campaign Finance
About This Case/Action

About the case

The 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 Details

CHGO 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 Action

CLC 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, 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. 

Plaintiffs

Center for Responsibility and Ethics in Washington (CREW)

Defendant

Federal Election Commission (FEC)

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