Compounding his earlier mistake, Judge Cacheris of the U.S. District Court of the Eastern District of Virginia today reaffirmed his May 26 decision to strike down the century-old federal restriction on corporate contributions to candidates and political parties.  The Judge clarified, however, that his order was limited only to the case before the court, U.S. v. Danielczyk, a criminal matter concerning allegations that the defendants illegally directed corporate contributions to Hillary Clinton’s 2008 Presidential campaign.

Judge Cacheris’ order in effect overrules a standing Supreme Court precedent, FEC v. Beaumont, which approved the federal corporate contribution restriction in 2003.  His earlier decision failed even to cite the Beaumont precedent.  In today’s opinion, the Judge found that Beaumont was not directly applicable to the criminal case before the court, because Beaumont considered the corporate contribution ban as applied to a non-profit advocacy corporation, whereas Danielczyk involves the contributions of a for-profit corporation. 

“Impossibly, the district court has issued an opinion that is even less justified than its first ruling,” said Legal Center Associate Counsel Tara Malloy.  “Previously, by all appearances, the court overruled the Beaumont decision in error; today, it has overruled this Supreme Court decision after deliberation.”

The Supreme Court in Beaumont reasoned that because non-profit advocacy corporations shared some of the “corrupting potential” of their for-profit counterparts, they too could be constitutionally subject to the federal restriction on corporate contributions.   The Beaumont Court’s decision to extend the corporate contribution restriction to non-profits therefore necessarily relied upon the conclusion that the contribution restriction was constitutional with respect to for-profit corporations. 

“Judge Cacheris’ decision does not even pass the laugh test,” said Malloy.  “His reasoning would exempt for-profit corporations from the federal corporate contribution restriction, while suggesting that non-profit advocacy corporations are still bound by the restriction under Beaumont.  We hope that the government appeals as quickly as possible to clean up the legal mess created by this misguided decision.”

Today, the Campaign Legal Center and Democracy 21 submitted comments to the Federal Election Commission (FEC) clearly outlining that it is illegal for federal officeholders and candidates to solicit unlimited contributions for Super PACs.  The comments address Advisory Opinion Request (AOR) 2011-12 submitted on behalf of Majority PAC and House Majority PAC asking the Commission’s opinion as to whether federal officeholders and candidates could raise unlimited contributions for Super PACs making independent expenditures to influence federal elections.

The AO request from the two Super PACs that support Democratic candidates followed an announcement by the Republican Super PAC that it planned to have Republican federal officeholders and candidates raise unlimited contributions for the Super PAC and would spend the funds to support the specific Republican candidates who raised the funds.

The Campaign Legal Center and Democracy 21 urged the Commission “to make clear that covered officials may not solicit unlimited individual contributions, nor any corporate and union contributions, on behalf of the PACs without violating 2 U.S.C. § 441i.” “Covered officials” includes federal officeholders, candidates and national political party officials.

To read the full comments, click here.

According to the Campaign Legal Center and Democracy 21 submission to the FEC:

Section 441i(a) provides that a national party committee, and any officer or agent acting on behalf of such a national party committee, may not solicit any funds “that are not subject to the limitations, prohibitions, and reporting requirements” of the Federal Election Campaign Act (FECA).  Similarly, section 441i(e)(1)(A) provides that a “a candidate or an individual holding Federal office . . . shall not . . . solicit . . . funds in connection with an election for Federal office . . . unless the funds are subject to the limitations, prohibitions, and reporting requirements” of FECA.

These solicitation restrictions, enacted as part of the Bipartisan Campaign Reform Act of 2002 (BCRA), were challenged and upheld in McConnell v. FEC, 540 U.S. 93, 142-54, 181-84 (2003), including with the vote of Justice Kennedy who otherwise dissented in the case.  See 540 U.S. at 308 (Kennedy, J. dissenting in part and concurring in part).  No court has since invalidated or even called into question these solicitation restrictions.[1]

The submission to FEC continued:

After being upheld in McConnell, the solicitation restrictions were not challenged nor discussed in either the Citizens United or SpeechNow cases, and there is not a whisper by the Supreme Court or the D.C. Circuit in either opinion that questions or undermines the applicability or constitutionality of these provisions.
 
This Commission has no authority to speculate on the constitutionality of a duly enacted statute that has been squarely upheld by the Supreme Court.  Under the plain language of the statute, covered officials are prohibited from soliciting funds in connection with a federal election unless the funds are subject to the limitations, prohibitions, and reporting requirements of FECA.  It is the Commission’s job to give effect to this language, and to enforce it.  Since the funds at issue here are not subject to the limitations and prohibitions of the Act, they fall within the scope of the solicitation restriction.  

The submission from the Campaign Legal Center and Democracy 21 refutes specious arguments made in comments submitted by Republican Super PAC, stating:

An argument has been made by another commenter, the Republican Super PAC (RSPAC), that the solicitation provision applies only to “soft money,” while the funds at issue here are “hard money” since those funds can lawfully be raised by a federally registered political committee.  Whatever label one gives to the funds raised by a Super PAC does not, however, determine the application of the solicitation restriction.  That restriction instead applies to funds that are not “subject to the limitations [and] prohibitions” of the Act – and the funds raised by a Super PAC are not.  Although this language does describe what had been referred to as “soft money” when raised by the political parties prior to BCRA, it also describes the funds that Super PACs intend to raise now.  The fact that Super PACs may lawfully accept such funds does not mean that federal officeholders and candidates can lawfully solicit them.

According to the FEC submission:    

[T]he funds at issue here – contributions from individuals of unlimited size, and corporate and union contributions – pose exactly the same threat of corruption and the appearance of corruption when solicited by federal candidates and officeholders for Super PACs that solicitations for party “soft money” by federal candidates and officeholders posed prior to BCRA.  As Congress recognized in prohibiting such solicitations, and as the Supreme Court recognized in upholding the solicitation restriction, “the value of the donation to the candidate or officeholder is evident from the fact of the solicitation itself.”  McConnell, 540 U.S. at 182.
 
To be sure, the threat is even more pointed here than it was with pre-BCRA “soft money” since the funds raised by a Super PAC can be spent directly on express advocacy in federal elections, whereas pre-BCRA party “soft money” could not be.  And not only is the money at issue here likely to be spent by Super PACs to influence federal elections generally, it is likely to be spent for the benefit of the very candidate who would be soliciting the funds.  

Indeed, according to public statements by its founders, RSPAC plans to formally commit itself to spending money solicited by a federal candidate, earmarked for that candidate by the donor, for the benefit of that candidate.  Whether this is termed “hard” money or “soft” money, it surely is corrupting money, when federal candidates are licensed to solicit million dollar contributions with the knowledge that the Super PAC receiving those funds has committed itself to spend the money for express advocacy ads or other campaign purposes to directly benefit that candidate’s race.  This will, in an even more direct fashion than before, recreate the myriad problems that existed prior to BCRA when federal candidates and officeholders were free to solicit million dollar contributions to their political parties.  The record of the McConnell case, which we discuss at length below, is replete with evidence of the corruption that resulted from a system of such solicitations.  Even Justice Kennedy concluded that “[t]he making of a solicited gift is a quid both to the recipient of the money and to the one who solicits the payment (by granting his request).”  McConnell, 540 U.S. at 308 (Kennedy, J.) (emphasis added).  

Here, the plan is for federal candidates to solicit million dollar contributions to a Super PAC instead of to a party committee, but the “quid” that Justice Kennedy identified is just as toxic when the recipient is a Super PAC instead of a party committee, and it poses just as serious a threat of a return “quo” to the million-dollar donor from the grateful candidate who solicited the funds (and who will benefit from the spending of them).  

The submission explains why the SpeechNow decision, cited by proponents of the AO request as support for their position, in fact provides no basis at all for allowing federal officeholders and candidates to solicit unlimited contributions:

The heart of the argument made by requestors and those who support the request is that the D.C. Circuit opinion in SpeechNow authorized federal PACs that make only independent expenditures to accept unlimited contributions from individuals (and by extension, any contribution from prohibited corporate and union sources).  Thus, requestors reason, if these federal PACs can lawfully receive such contributions, federal candidates and officeholders must therefore be able to solicit them.

The flaw in the argument is that the core premise of the SpeechNow court was that these “independent expenditure only” PACs were, in fact, going to operate independently of candidates and officeholders.  This was not a premise the court casually assumed – it was shot through the representations that SpeechNow repeatedly made to the court, as it stressed over and over again not just that its expenditures would be independent, but that its operations as a whole would be independent of candidates and officeholders.  Indeed, in service of its argument about how independently it would operate, one of the points SpeechNow stressed to the court was that federal candidates and officeholders would not solicit funds for it because of the solicitation restriction:  “In any event, with the solicitation ban in place, candidates cannot solicit funds for SpeechNow.org . . . .”[2]

Thus, the requestors here ask the Commission to make a fundamental re-interpretation of the SpeechNow decision by assuming that a key representation made repeatedly to the court by the plaintiff was not the least bit relevant to the court’s decision.  In other words, the gravamen of the requestor’s position is that if SpeechNow had told the court that candidates would be working hand-in-glove with it to solicit unlimited contributions for it that it would then spend independently of those candidates but for their benefit – a representation that is the exact opposite of what SpeechNow did repeatedly tell the court – the court nonetheless would have decided that SpeechNow could accept those unlimited contributions.  Simply put, nothing supports the wildly unreasonable assumption that this material change in the fundamental premise of the case would have made no difference in its outcome.

The submission states:

The fact that a Super PAC may accept unlimited contributions (because the contribution limit is unconstitutional as applied to a Super PAC) is not dispositive of the entirely separate question of whether a covered official may solicit those funds, where a separate statutory provision prohibits such solicitations and no court has ever held, or even hinted, that the solicitation restrictions are unconstitutional.

Applying section 441i(e) to solicitations by covered officials for Super PACs entails a threshold issue of statutory construction.  Section 441i(e)(1)(A) prohibits covered officials from soliciting funds “unless such funds are subject to the limitations, prohibitions, and reporting requirements of this Act.”  
 
Under SpeechNow, a Super PAC may accept contributions that are not subject to the limitations of the Act.  But this fact simply reinforces the point that Super PACs seek to receive contributions that are not subject to the limitations of the Act.  The fact that a Super PAC may accept such contributions does not mean that a covered official may solicit them.  The plain language of section 441i(e) prohibits solicitations by covered officials of any funds that are not subject to the Act’s limitations.  That plain language clearly describes the funds at issue here.  Therefore the solicitation restrictions in section 441i(e) apply here.

The submission also calls on the FEC “to make clear that covered officials will violate section 441i if they solicit contributions at fundraisers for Super PACs at which unlimited individual, corporate, and union contributions are raised.” According to the submission:

Although the provisions of 11 C.F.R. § 300.64 authorize covered officials to participate in “non-Federal fundraising events” and “publicity for non-Federal fundraising events,” 11 C.F.R. § 300.64(b)-(c), the regulation does not authorize covered officials to participate in fundraising events or publicity for fundraising events for registered federal PACs “at which unlimited individual, corporate, and union contributions are raised.”  AOR 2011-12 at 1.

There is an important substantive difference between non-federal fundraising events covered by section 300.64 and the federal fundraising events of Super PACs.  Unlike the non-federal fundraising events, where the funds raised are not spent to directly benefit federal candidates and officeholders, Super PAC fundraising events are federal fundraising events and the funds raised will benefit federal candidates and officeholders and indeed are likely to benefit the candidates who are participating in the event.  “Construed as reasonably understood” in this context, see 11 C.F.R. § 300.2(m), any request by a covered official that attendees contribute funds to the Super PAC will constitute a solicitation of funds not subject to the limitations and prohibitions of FECA in violation of section 441i.

The so-called “disclaimers” permitted by section 300.64 to limit solicitations at non-federal fundraising events to federally permissible amounts are insufficient protections in the context of Super PAC fundraising events.  Unlike non-federal fundraising events, where the purpose is to raise funds for state and local candidates and parties, the unambiguous purpose of a Super PAC fundraising event will be to raise funds to benefit federal candidates, particularly the federal candidates present at the event.  This reality cannot be “disclaimed” away.

The submission further states:

To be clear, section 441i does not prohibit covered officials from merely attending or speaking at a Super PAC fundraising event.  But it does prohibit covered individuals from soliciting funds at such events.  No “disclaimer” cure is available.[3]

[1]   See also RNC v. FEC, 698 F. Supp. 2d 150, 156-60 (D.D.C. 2010) (rejecting RNC’s as-applied challenge to the restrictions of 2 U.S.C. § 441i(a)), aff’d 130 S. Ct. 3544 (2010).

[2]   SpeechNow, Reply Brief of Appellants 13-14, Case No. 08-5223, Doc. No. 1222740 (Dec. 29, 2009) (D.C. Cir.)

[3]   For the same reasons, federal officials should not be permitted to make any solicitation in a letter or other written communication on behalf of a Super PAC if a solicitation for contributions not subject to federal limits and prohibitions is made as part of the same written communication.

Today a coalition of reform groups hailed Reps. Anna Eshoo (D-Calif.), Michael Capuano (D-Mass.), and 23 other Members, who wrote a letter to President Obama expressing their strong support for the April 13 draft executive order to require full disclosure of campaign spending and contributions by business entities that seek federal government contracts. 

The letter states, “This executive order, if finalized and implemented, would represent a big step forward. Political contributions should not affect the awarding of federal contracts. The best way to guard against this is through disclosure of contributions and any possible conflicts of interest. President Obama is right to address this current gray area and he deserves to know that there is backing for such disclosure on Capitol Hill.”

“Support for the Executive Order from Capitol Hill is important as opponents have completely mischaracterized the order,” said Campaign Legal Center Policy Director Meredith McGehee.  “The claims that the order would politicize the government contracting process are laughable.  The order would actually bring transparency to what is already a highly politicized process.  Only the American people are currently left in the dark in the pay-to-play world that is the status quo in Washington.”

The Campaign Legal Center, Common Cause, Democracy 21, Public Citizen, U.S. PIRG and the Brennan Center strongly support this important anti-secrecy effort and join in urging President Obama to sign the Executive Order promptly.

To read the letter from Members to President Obama, click here.

The allegations unveiled in the indictment against former Senator John Edwards regarding the conduct of his Presidential campaign are deeply disturbing. The alleged payments of “hush money” raise the specter of political influence-peddling in the form of “gifts” to candidates in high-stakes campaigns.

To let these actions pass without bringing them to a court of law would be to set a dangerous precedent, allowing candidates and public officials to put themselves on the auction block and accept, under the guise of gifts, financial favors given with the intention of furthering their political careers. Such actions would seriously undermine public confidence in our public officials and our democracy. Given that the case concerns a campaign for the highest office in the land, it is important for the case to be presented in a court of law with an opportunity for a judge and jury to assess the alleged criminal violations and for the public to gain a clearer understanding of what actually occurred. We will be watching with special interest the prosecution’s case on the illegal contribution counts.

Hopefully this indictment is an indication that the long hibernation is over for the Department of Justice’s (DOJ) Public Integrity Section. The section certainly should be taking another and more in-depth look at the similar issues raised in the case of former Senator John Ensign by the Senate Ethics Committee after DOJ had dropped its own investigation.

Also, the Federal Election Commission (FEC) should make publicly clear whether it has investigated the serious allegations of campaign finance violations brought to light in the Edwards indictment. Unfortunately the agency’s recent track record for enforcing the law is shameful. The fact that these scandals first emerged years ago and that no public action has been taken to date by the FEC does not signal that the agency will start to vigorously enforce the laws on the books.

The Campaign Legal Center[1], together with Democracy 21, today urged the Federal Election Commission (FEC) to deny a request by comedian Stephen Colbert to significantly expand the so-called “press-exemption” to a number of federal election laws.  The two organizations filed comments with the FEC in response to an advisory opinion request by Mr. Colbert seeking the FEC’s opinion as to whether the Viacom corporation, which owns, produces and distributes his television show, The Colbert Report, may pay for a variety of expenses of his Colbert Super PAC without disclosing any of the expenses as in-kind contributions to the PAC under the “press exemption.”

“Although we recognize that Mr. Colbert submitted his advisory opinion in the spirit of political comedy, an opinion by the FEC permitting all that Mr. Colbert requests would have a sweeping and damaging impact on disclosure laws and the public’s right to know about campaign finance activities,” said Paul S. Ryan, FEC Program Director at the Campaign Legal Center.  “Many television show hosts who are serious politicians have PACs that could reap great financial benefit from the expansion of the scope of the ‘press exemption’ to cover the costs of independent expenditure ads made for their federal PACs and the payment of such PACs’ administrative expenses.”

For example, Sarah Palin has Sarah PAC, Mike Huckabee has Huck PAC, Newt Gingrich has American Solutions PAC, Rick Santorum has America’s Foundations PAC—and all are or recently were, television hosts or commentators.  An opinion from the FEC granting all that Mr. Colbert requests would permit the corporate media employer of these individuals to make unlimited, undisclosed contributions to their PACs under the guise of the “press exemption.”  There is no legal justification for such a radical evisceration of our disclosure laws.

“The ‘press exemption’ in the campaign finance laws simply does not apply to allow a corporation like Viacom to secretly finance independent ads for Mr. Colbert’s Super PAC, nor does it allow Viacom to secretly pay for the administrative costs of the Colbert Super PAC,” said Democracy 21 President Fred Wertheimer. “For the FEC to rule otherwise on the Colbert advisory opinion request, would result in the Commission opening up a gaping loophole in the disclosure laws.”

While some of Mr. Colbert’s proposed activities would fall within the scope of the “press exemption,” some clearly do not.  The Campaign Legal Center and Democracy 21 urged the FEC to make clear that neither (1) Viacom’s costs associated with producing political ads for Colbert Super PAC to be “air[ed] as paid advertisements on other shows and networks,” nor (2) Viacom’s payment of the PAC’s administrative costs (e.g., preparing and filing campaign finance reports with the FEC) would fall within the “press exemption.”

Federal campaign finance law defines “contribution” to include “anything of value” given to a PAC and makes clear that “the provision of any goods or services without charge . . . is a contribution.”  Federal PACs are required to disclose all contributions received.

However, federal law exempts from the definition of “contribution” and, therefore, from disclosure requirements, “[a]ny cost incurred in covering or carrying any news story, commentary, or editorial.”  Part of the FEC’s test for applying this so-called “press exemption” requires that the press entity be acting in its “legitimate press function”.

The production of political ads for a federal PAC and the payment of a PAC’s administrative expenses do not constitute legitimate press functions and, consequently, are beyond the scope of the “press exemption.”  These expenses should not be exempt from campaign finance disclosure.

To read the comments, click here.

[1] Campaign Legal Center President Trevor Potter recused himself in this matter and thus took no part in the Campaign Legal Center’s consideration of this matter.

In a clearly erroneous ruling, a federal district court in Virginia yesterday declared unconstitutional the federal restriction on direct corporate contributions to candidates and political parties.  This decision in effect attempts to overrule a standing Supreme Court precedent, FEC v. Beaumont, which upheld the same federal corporate contribution ban eight years ago.

The case, U.S. v. Danielczyk, is a criminal matter concerning a number of alleged campaign finance violations, including that the defendants illegally directed corporate contributions to Hillary Clinton’s 2008 Presidential campaign.  The district court found that the reasoning of Supreme Court’s 2010 decision inCitizens United v. FEC implicitly undercut the constitutional basis of the federal restriction on corporate contributions, and on these grounds, struck down the corporate contribution ban.  The district court failed to cite FEC v. Beaumont, the governing Supreme Court precedent on the challenged law.

“This decision is way out of line,” Legal Center Associate Legal Counsel Tara Malloy stated, “To attempt to overrule a standing Supreme Court decision without even mentioning that decision is a ridiculous overreach.  A district court has no authority to ignore a controlling Supreme Court precedent.”

The Supreme Court decision in Citizens United reviewed the federal restriction on corporate independent expenditures.  The Court did not consider the century-old restriction on corporate contributions, noting explicitly that “Citizens United has not made direct contributions to candidates, and it is not suggested that the Court should reconsider whether contribution limits should be subjected to rigorous First Amendment scrutiny.”  Furthermore, the Supreme Court did not discuss its earlierBeaumont decision in any detail in Citizens United, much less criticize or overrule the decision.

“We hope that the Judge James Cacheris reconsiders this decision,” Ms. Malloy said.  “If not, the government should appeal this decision to the Fourth Circuit Court of Appeals.”

In a letter sent today to members of Congress, Campaign Legal Center President Trevor Potter and Democracy 21 President Fred Wertheimer informed Senators and Representatives that it would be a violation of law for a Member to solicit unlimited contributions for a Super PAC.

Noting that Members may be approached to make such solicitations for a Super PAC, the letter stated:

Democracy 21 and the Campaign Legal Center are writing to inform you that in our view any federal officeholder or candidate who solicits unlimited contributions for an independent-spending Super PAC is violating the federal law that prohibits federal officeholders and candidates from soliciting unlimited contributions in connection with a federal election.  

The ban on soft money enacted in 2002 prohibits federal officeholders and candidates from soliciting or directing any funds in connection with a federal election “unless the funds are subject to the limitations, prohibitions and reporting requirements” of the law. This solicitation prohibition has been upheld by the Supreme Court.

Soliciting unlimited contributions for a Super PAC would violate this prohibition.

According to the letter:

This issue arose recently when three members of the RNC formed “Republican Super PAC” (RSPAC) to make independent expenditures in federal elections. RSPAC announced plans to have federal officeholders and candidates solicit unlimited contributions for the PAC.

A RSPAC founder, furthermore, said that the federal officeholders and candidates who solicit such unlimited contributions for RSPAC will be able to earmark those funds to be spent by the PAC to support the election of the federal officeholder or candidate soliciting the funds.

This scheme for federal candidates and officeholders to solicit unlimited contributions is plainly illegal under federal campaign finance law, regardless of whether the funds are earmarked to be spent for the election of the officeholder or candidate soliciting the money.

The letter continued:

The argument that officeholders and candidates can solicit unlimited contributions for Super PACs is in direct conflict with the language and purpose of the federal statutory prohibition on officeholders and candidates soliciting unlimited contributions.

This argument would lead to an absurd and obviously corrupting result that a President or member of Congress could solicit a $5 million donation for a Super PAC with the understanding that the PAC will spend the money on “independent” expenditures to benefit that particular federal officeholder or candidate.

As a practical matter, this kind of solicitation is just as corrupting and creates just as much an appearance of corruption as if the officeholder or candidate was soliciting and receiving a $5 million donation for his or her own campaign committee.

Federal law prohibits candidates from accepting any corporate or labor union contributions for their campaigns and limits individual contributions to $2,500 per donor per election.

The letter also pointed out:

One of the founders of RSPAC has misleadingly argued that officeholders and candidates can solicit unlimited contributions for a Super PAC because the federal ban on coordination between candidates and independent groups applies only to spending, not to fundraising.  

But, in fact, the coordination provision is not the provision that is applicable here. It is the ban on solicitation of unlimited contributions, not the coordination restriction, which prohibits you and every other federal officeholder from raising unlimited contributions for a Super PAC.

The letter stated:

On May 19, 2009, Majority PAC and House Majority PAC, two Super PACs established to make independent expenditures in support of Senate and House Democratic candidates, submitted an Advisory Opinion request to the FEC.  

In the request the pro-Democratic PACs asked the FEC for an advisory opinion on whether it would in fact be legal for federal officeholders and candidates to raise unlimited contributions for their Super PACS.  The Advisory Opinion request also states that “if the Commission does not find that such solicitations violate 2 U.S.C. Section 441i, the PACs plan to ask covered officials to make such solicitations on their behalf.”

According to the letter:

Supporters of the Super PAC solicitation scheme argue that the scheme is allowed by the decision of the D.C. Circuit Court of Appeals in Speech Now v. FEC, which permits PACs making only independent expenditures to raise funds not subject to contribution limits.

However, even though it is permissible under the SpeechNow ruling for a Super PAC to raise unlimited funds, it is not permissible for federal officeholders and candidates to solicit such funds.

We believe the only possible correct result in the FEC Advisory Opinion Request is for the Commission to hold that the solicitation of unlimited contributions by federal officeholders and candidates is prohibited by law.

The letter further stated:

The statute prohibiting federal officeholders and candidates from soliciting unlimited funds was upheld by the Supreme Court in McConnell v. FEC (2003) and there is nothing in subsequent court decisions, including the Citizens Uniteddecision, which undermines the McConnell decision on this issue.

...

The court in SpeechNow did not consider and certainly did not authorize federal candidates and officeholders to solicit unlimited contributions for a PAC making independent expenditures in federal elections. There is nothing in the court’s opinion to suggest that such solicitations are legal.

The letter concluded:

In summary, any federal officeholder or candidate who solicits unlimited contributions for the Republican Super PAC, Majority PAC, House Majority PAC or any other Super PAC would be violating the law.

We expect that our organizations, and others, will take all steps available to ensure the law is enforced.

The full text of the letter follows below.

May 25, 2011

Dear Senator (Representative),

Given recent press reports, you as a Member of Congress may be approached to solicit contributions for a so-called Super PAC, which is an entity that may receive unlimited contributions (including corporate and labor union contributions) and makes only independent expenditures in federal elections. Both Republican and Democratic organizations have expressed an interest in having members of Congress make such solicitations.

Democracy 21 and the Campaign Legal Center are writing to inform you that in our view any federal officeholder or candidate who solicits unlimited contributions for an independent-spending Super PAC is violating the federal law that prohibits federal officeholders and candidates from soliciting unlimited contributions in connection with a federal election.  

The ban on soft money enacted in 2002 prohibits federal officeholders and candidates from soliciting or directing any funds in connection with a federal election “unless the funds are subject to the limitations, prohibitions and reporting requirements” of the law. This solicitation prohibition has been upheld by the Supreme Court.

Soliciting unlimited contributions for a Super PAC would violate this prohibition.

This issue arose recently when three members of the RNC formed “Republican Super PAC” (RSPAC) to make independent expenditures in federal elections. RSPAC announced plans to have federal officeholders and candidates solicit unlimited contributions for the PAC.

A RSPAC founder, furthermore, said that the federal officeholders and candidates who solicit such unlimited contributions for RSPAC will be able to earmark those funds to be spent by the PAC to support the election of the federal officeholder or candidate soliciting the funds.

This scheme for federal candidates and officeholders to solicit unlimited contributions is plainly illegal under federal campaign finance law, regardless of whether the funds are earmarked to be spent for the election of the officeholder or candidate soliciting the money.

The argument that officeholders and candidates can solicit unlimited contributions for Super PACs is in direct conflict with the language and purpose of the federal statutory prohibition on officeholders and candidates soliciting unlimited contributions.

This argument would lead to an absurd and obviously corrupting result that a President or member of Congress could solicit a $5 million donation for a Super PAC with the understanding that the PAC will spend the money on “independent” expenditures to benefit that particular federal officeholder or candidate.

As a practical matter, this kind of solicitation is just as corrupting and creates just as much an appearance of corruption as if the officeholder or candidate was soliciting and receiving a $5 million donation for his or her own campaign committee.

Federal law prohibits candidates from accepting any corporate or labor union contributions for their campaigns and limits individual contributions to $2,500 per donor per election.

One of the founders of RSPAC has misleadingly argued that officeholders and candidates can solicit unlimited contributions for a Super PAC because the federal ban on coordination between candidates and independent groups applies only to spending, not to fundraising.  

But, in fact, the coordination provision is not the provision that is applicable here. It is the ban on solicitation of unlimited contributions, not the coordination restriction, which prohibits you and every other federal officeholder from raising unlimited contributions for a Super PAC.

On May 19, 2009, Majority PAC and House Majority PAC, two Super PACs established to make independent expenditures in support of Senate and House Democratic candidates, submitted an Advisory Opinion request to the FEC.  

In the request the pro-Democratic PACs asked the FEC for an advisory opinion on whether it would in fact be legal for federal officeholders and candidates to raise unlimited contributions for their Super PACS.  The Advisory Opinion request also states that “if the Commission does not find that such solicitations violate 2 U.S.C. Section 441i, the PACs plan to ask covered officials to make such solicitations on their behalf.”

Supporters of the Super PAC solicitation scheme argue that the scheme is allowed by the decision of the D.C. Circuit Court of Appeals in Speech Now v. FEC, which permits PACs making only independent expenditures to raise funds not subject to contribution limits.

However, even though it is permissible under the SpeechNow ruling for a Super PAC to raise unlimited funds, it is not permissible for federal officeholders and candidates to solicit such funds.

We believe the only possible correct result in the FEC Advisory Opinion Request is for the Commission to hold that the solicitation of unlimited contributions by federal officeholders and candidates is prohibited by law.

The statute prohibiting federal officeholders and candidates from soliciting unlimited funds was upheld by the Supreme Court in McConnell v. FEC (2003) and there is nothing in subsequent court decisions, including the Citizens Uniteddecision, which undermines the McConnell decision on this issue.  

The solicitation prohibition was not challenged or litigated in SpeechNow. Indeed, the group SpeechNow made clear in litigating the question of whether it could raise unlimited contributions that it would operate wholly independently of federal candidates, officeholders and political party committees.  

The court in SpeechNow did not consider and certainly did not authorize federal candidates and officeholders to solicit unlimited contributions for a PAC making independent expenditures in federal elections. There is nothing in the court’s opinion to suggest that such solicitations are legal.

In the McConnell case, Justice Anthony Kennedy, who otherwise dissented inMcConnell, said in defending the solicitation ban that it was the one provision that “satisfies Buckley’s anticorruption rationale and the First Amendment guarantee.”  Justice Kennedy explained:

The making of a solicited gift is a quid both to the recipient of the money and to the one who solicits the payment (by granting his request).  Rules governing candidates’ or officeholders’ solicitation of contributions are, therefore, regulations governing their receipt of quids. This regulation fits under Buckley’s anticorruption rationale.”

In summary, any federal officeholder or candidate who solicits unlimited contributions for the Republican Super PAC, Majority PAC, House Majority PAC or any other Super PAC would be violating the law.

We expect that our organizations, and others, will take all steps available to ensure the law is enforced.

Trevor Potter                                         Fred Wertheimer

/s/ Trevor Potter                                     /s/ Fred Wertheimer

President, Campaign Legal Center          President, Democracy 21

Coming on the heels of an announcement by James Bopp, a member of the Republican National Committee, that he is establishing a new Republican Super Pac and will be asking party officials and candidates to solicit for it, comes the news that two Democratic Super PACs have filed an Advisory Opinion Request with the FEC seeking confirmation that such solicitations are permissible.  The FEC should do its duty and make very clear that candidate and party solicitations of unlimited amounts of individual funds, and solicitations of corporate and labor funds in any amount, constitute a violation of federal law (specifically of the Bipartisan Campaign Reform Act) .

While some credit should be given to the Democratic groups for seeking an advisory opinion from the FEC, the request itself is every bit as outrageous as the plan that came to light earlier this week from Bopp’s group that publicly stated that an advisory opinion was neither needed nor wanted.  However, now that the FEC has formally been asked for its opinion, it has no legal option but to clearly and forcefully advise that the proposed solicitations by federal candidates and party officials of unlimited individual funds and corporate and union contributions would be completely illegal.

There has been some speculation that the two political parties expect a three-three tie on this issue at the FEC, thereby resulting in a deadlock and a statutory inability to render any formal opinion.  Relying on an FEC deadlock would be a fatal mistake for federal officeholders and parties: such a tie means the FEC has been unable to render advice, and ONLY an FEC Advisory opinion approved by a majority of the Commission can be used as a legal “shield” against charges of violations of federal election law. Accordingly, covered officials violating the law by soliciting soft money would find than an FEC deadlock provided no cover at all; in the past, the FEC has been required by court order to proceed with enforcement action after a 3-3 tie in an Advisory Opinion.

To see a point-by-point breakdown of the myriad violations of the law proposed by both the Democratic and Republican Super PACs, see the statement of May 17, 2011 concerning the formation of the “Republican Super PAC” by members of the Republican National Committee, click here.