Appeals Court Panel Overturns Van Hollen v. FEC, Reopening Massive Disclosure Loophole for 2016 Cycle

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.