"... the Federal Election Committee was too loosely enforcing a campaign finance regulation ..."

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Judge Rules Fewer Political Groups Can Keep Their Donors Secret
By Lauren Hodges, November 26, 2014

A U.S. district court judge awarded a victory to campaign finance reform advocates on Tuesday when she ruled the Federal Election Committee was too loosely enforcing a campaign finance regulation passed in 2007, allowing some big-money donors to remain anonymous.

The Bipartisan Campaign Reform Act required the identification of contributors giving $1,000 or more to fund "issue ads" near Election Day. But since it was enacted, only a few of those contributors have been revealed, because the FEC ruled those disclosures weren't required for ads supporting specific candidates. The Los Angeles Times reported the details of the ruling:

"The decision concerns a type of issue ads that became ubiquitous in recent elections. Typically, the ads suggest that voters call a senator or congressman and give an opinion about something. When those ads mention a candidate and are run close to elections, they're known as 'electioneering' communications, and the amount of spending has to be reported."

Rep. Chris Van Hollen (D-Md.), along with reform advocacy groups Campaign Legal Center, Public Citizen and Democracy 21, sued the FEC in 2011 to overturn the 2007 regulation. The Associated Press reported that Democracy 21's president, Fred Werthiemer claimed the FEC allowed loopholes in the regulation to fund federal elections with "dark money."

Van Hollen called Judge Amy Berman Jackson's Tuesday decision "a victory for democracy." His partners in the lawsuit also hailed the ruling.

"We are seeing a full-throated endorsement of disclosure by the lower courts," said Tara Malloy with the Campaign Legal Center. "We are enjoying the victory, though I am sure the fight will continue."

Conservative groups that attempted to intervene in the case have voiced their disappointment. Thomas Kirby, an attorney who represents the Center for Individual Freedom, told The Washington Post that "the ruling created an upside-down world in which greater burdens are imposed on those who merely refer to a candidate than on those who expressly advocate election or defeat of a candidate."

In Tuesday's decision, Jackson ruled that the FEC "overstepped" when it wrote the 2007 regulation into the campaign finance laws. That regulation, among other cases, led to the victory of the 2010 Citizens United case in the Supreme Court, which allowed nonprofits to hide their funding sources.

That decision essentially deleted the restrictions of the McCain-Feingold Act. The Los Angeles Times reported Tuesday that over $140 million of the so-called "dark money" was spent in the 2014 election. Bloomberg's Businessweek reports that tens of thousands of TV ads run this year by GOP fundraising operation Crossroad GPS, founded by former Bush administration adviser Karl Rove, "helped Republicans win control of the Senate."

Jackson's decision that the regulation was "arbitrary, capricious and contrary to law" recalled an original report by the Sunlight Foundation in January. The report stated that Crossroads GPS violated election laws by failing to register itself as a political group instead of a nonprofit, social-welfare operation — a distinction that came with a huge impact.

"In recent years, the group Crossroads GPS has spent tens of millions on political ads fueled by anonymous donors. Registering as a political group would have forced the nonprofit to begin naming its big-time benefactors. Crossroads has also become a model for hundreds of other committees that during the last election cycle pumped more than $300 million into the campaign — an estimate that is undoubtedly low because of the lack of disclosure required of these organizations."

It was also noted in the judge's ruling that the FEC reported their findings in 2007 at 5:05 p.m. before a weekend — what's known in the news industry as a "Friday night news dump" because people are believed to be paying the least attention to the news during that portion of the week.

The FEC now has the option of either appealing Jackson's decision or change its regulations. The six members of the committee are evenly divided between Republicans and Democrats and likely will have a difficult time agreeing on a course of action.

FEC Chairman Lee Goodman told The Washington Post, "I've always said that I'm open to judicial guidance on this issue, and now we'll have to study the court's opinion to determine exactly what obligation the FEC has in response."
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