FEC Deadlocks on Issuing New Contribution Disclosure Rules for Outside Spending Groups

Van Hollen Case Returns to Federal District Court for Decision About Whether Existing Regulation is Valid

Statement of Democracy 21 President Fred Wertheimer

“The FEC regulations have allowed massive evasion of the contribution disclosure requirement by allowing donors to make their contributions that fund “electioneering communications” simply without stating any purpose for the contribution”

The FEC today in a 3 to 3 vote deadlocked over issuing new contribution disclosure regulations for outside spending groups to replace the existing regulations, according to the BNA Money and Politics Report.

As a result, the FEC has left standing regulations that have gutted the statutory requirement for outside groups making “electioneering communications” to disclose their donors. This has resulted in an almost complete failure by these groups to disclose any of their contributors financing their “electioneering communications” to the public.

“Electioneering communications” are defined as broadcast ads that mention a federal candidate and are run during the period beginning 60 days before a general election or 30 days before a primary.

Once again, the three Republican FEC Commissioners have blocked the agency from properly interpreting and enforcing the campaign finance laws.

On March 30, a federal district court judge struck down the FEC regulation as contrary to law in a lawsuit brought on behalf of Representative Chris Van Hollen (D-MD) by the Democracy 21 legal team. Lawyers for the Campaign Legal Center also participated in the case.

On September 18, 2012, a three-judge panel of the D.C. Circuit Court of Appeals reversed the lower court decision, wrongly in our view, and reinstated the flawed regulations. In doing so, outside spending groups making “electioneering communications” were again allowed to hide the donors financing their campaign ads from the American people.

The Court of Appeals also said, however, that the FEC should have an opportunity to revise the regulations by rulemaking and that if the agency chose not to issue new regulations, the district court should decide whether the existing regulations are arbitrary and capricious and should be struck on those grounds.

With the FEC deadlock today on issuing new disclosure regulations, the Van Hollen lawsuit is now back in federal district court. We strongly believe that the existing regulations are arbitrary and capricious and should be struck down and we will vigorously pursue the case in federal district court. We will also seek to have this case resolved on an expedited basis, although this is not a matter that can be addressed in time to affect the 2012 election.