arrowSection 3.1 - Campaign Finance

arrowSection 3.1.1 - Federal Law

This topic is monitored by Moritz Law Professor Edward B. Foley

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The FEC's Ongoing Obligation

Last week, the Federal Election Commission, by a 4-2 vote, rejected a proposal put forth by its General Counsel. Instead, the Commission adopted an alternative advanced by three of its commissioners, including its chair and vice-chair. Before the Commission's meeting on Thursday, we explained why it should have adopted the GC's proposal and why the alternative was inadequate. We will not repeat those points here, although we will continue to believe them in full.

Instead, we hope that the adopted alternative proves unexpectedly effective. It contains one feature that provides the basis for such hope: a requirement that any money received in response to a fund-raising solicitation be treated as a "contribution" if the solicitation "indicates that any portion of the funds received will be used to support or oppose the election of a clearly identified Federal candidate." This new requirement is significant because any group that receives $1000 of "contributions" in a given year is a "political committee" under federal campaign finance laws and thus subject to the requirement that no person can give it more than $5000 per year. Consequently, any group raising money for TV attack ads against a federal candidate will be subject to "political committee" status if its fund-raising appeals tell potential donors how their funds will be spent – as these potential donors presumably would like to hear.

The question is whether such groups will be able to alter their practices to avoid such fund-raising messages while still operating primarily to broadcast attack ads during an election campaign. If so, then there will be a need for the FEC to revisit the portion of the General Counsel's recommendation that it declined to adopt last week: the portion that identifies a group as a "political committee" because a majority of its annual expenditures shows its major purpose to be influencing a federal election.

But revisiting old regulatory terrain is to be expected. If we have learned anything about campaign finance regulation over the last 30 years, it is this: achieving the optimal mix of regulatory incentives and disincentives is an ongoing process, as the law responds to new practices that emerge in the field (practices that often are creative efforts to escape the constraints of previous regulations). Even if the FEC had adopted the GC's recommendation last week, it still would have needed to undertake this monitoring of developing trends, and it is possible that it would have had to revise those new rules because of new developments. Given that the FEC opted for a more modest regulatory approach than what its GC recommended, there is a good chance that the need for extra measures will come sooner rather than later.

But maybe not. Let's wait and see.