Citizens for Responsibility & Ethics in Wash. v. Fed. Election Comm'n
Decision Date | 03 August 2018 |
Docket Number | Civil Action No. 16-259 (BAH) |
Citation | 316 F.Supp.3d 349 |
Parties | CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON, et al., Plaintiffs, v. FEDERAL ELECTION COMMISSION, Defendant, and Crossroads Grassroots Policy Strategies, Defendant-Intervenor |
Court | U.S. District Court — District of Columbia |
Adam J. Rappaport, Stuart C. McPhail, Citizens for Responsibility and Ethics in Washington, Washington, DC, for Plaintiffs
Seth E. Nesin, Harry Jacobs Summers, Kevin Deeley, Federal Election Commission, Washington, DC, for Defendant
Thomas Wesley Kirby, Wiley Rein LLP, Washington, DC, for Defendant-Intervenor
Campaign finance law has long recognized the value of disclosure as a means of enabling the electorate to make informed decisions about candidates, to evaluate political messaging, to deter actual, or the appearance of, corruption, and to aid in enforcement of the ban on foreign contributions, which may result in undue influence on American politicians. See Citizens United v. FEC , 558 U.S. 310, 366–71, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010) ; Buckley v. Valeo , 424 U.S. 1, 64–68, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) ; SpeechNow.org v. Fed. Election Comm'n , 599 F.3d 686, 698 (D.C. Cir. 2010). As the protection of speech is also a fundamental value safeguarded under the First Amendment, disclosure has been upheld as "the least restrictive means of curbing the evils of campaign ignorance and corruption." Buckley , 424 U.S. at 68, 96 S.Ct. 612 ; see also Citizens United , 558 U.S. at 369, 130 S.Ct. 876 ( ).
This case concerns the requisite disclosures about contributors that organizations making independent expenditures, in support of or opposition to particular candidates for federal office, must make, when those organizations are not political committees controlled by, or operating in coordination with, candidates or national political parties. These statutorily mandated disclosures are squarely "part of Congress'[s] effort to achieve ‘total disclosure’ by reaching ‘every kind of political activity’ in order to insure that the voters are fully informed and to achieve through publicity the maximum deterrence to corruption and undue influence possible." Buckley , 424 U.S. at 76, 96 S.Ct. 612 (quoting S. REP. NO. 229, 92d Cong., 2d Sess. at 57 (1971) ). Moreover, an important aspect of this statutory disclosure regime is to further "the government's interest [ ] in preventing foreign influence over U.S. elections." Bluman v. FEC , 800 F.Supp.2d 281, 283, 288 n.3 (D.D.C. 2011) ( )("readily ... constitutional" federal statute "banning foreign nationals ... from making expenditures" on elections), aff'd , 565 U.S. 1104, 132 S.Ct. 1087, 181 L.Ed.2d 726 (2012) ; see also SpeechNow.org , 599 F.3d at 698 (D.C. Cir. 2010) ( ). Congress has heard the warning that "holes in campaign finance disclosure rules allow dark money organizations to spend on politics without revealing their donors, potentially hiding foreign sources of funds." Oversight of Federal Political Advertisement Laws and Regulations: Hearing Before the Subcomm. on Information Technology of the H. Comm. on Oversight and Gov't Reform , 115th Cong. 55 (2017) ( ); see also R. SAM GARRETT, CONG. RESEARCH SERV., RPT. NO. R42042, SUPER PACS IN FEDERAL ELECTIONS: OVERVIEW AND ISSUES FOR CONGRESS , Summary page (Sept. 16, 2016) [hereinafter 2016 CRS REPORT], available at https://fas.org/sgp/crs/misc/R42042.pdf, ("[s]uper PACs must report their donors to the FEC ... the original source of contributed funds—for super PACs and other entities—is not necessarily disclosed.") that, although .
The plaintiffs, Citizens for Responsibility and Ethics in Washington ("CREW") and Nicholas Mezlak, a registered voter in Ohio, initiated this action under the Federal Election Campaign Act of 1971 ("FECA"), 52 U.S.C. § 30109(a)(8)(C), and the Administrative Procedure Act ("APA"), 5 U.S.C. § 706, against the Federal Election Commission ("FEC"), challenging: (1) the FEC's regulation, codified at 11 C.F.R. § 109.10(e)(1)(vi), as "inconsistent with" FECA's statutory disclosure requirements in 52 U.S.C. § 30104(c) ; and (2) the FEC's allegedly improper dismissal of the plaintiffs' administrative complaint alleging that Crossroads Grassroots Policy Strategies ("Crossroads GPS" or "CGPS"), and its agents, failed "to comply with the FECA's disclosure requirements" when making independent expenditures ("IEs") in multiple 2012 U.S. Senate races. Compl. ¶¶ 1, 2, 4, 17, ECF No. 1.1 The plaintiffs seek both injunctive and declaratory relief against the defendant FEC in three counts, one of which survived in full and two of which survived in part, prior motions to dismiss by the FEC and the defendant-intervenor Crossroads GPS. See Citizens for Responsibility & Ethics in Wash. v. FEC ("CREW "), 243 F.Supp.3d 91, 105 (D.D.C. 2017).
Now pending before the Court are the parties' cross-motions for summary judgment. See generally Pls.' Mot. Summ. J. () , ECF No. 27; CGPS's Cross-Mot. Summ. J. ("CGPS's Cross-Mot."), ECF No. 28; FEC's Cross-Mot. Summ. J. ("FEC's Cross-Mot."), ECF No. 30. For the reasons set forth below, the plaintiffs' motion is granted, and the FEC's and Crossroads GPS's cross-motions are denied. Accordingly, subsection (vi) of 11 C.F.R. § 109.10(e)(1) is declared invalid and therefore vacated, with the vacatur stayed for 45 days to provide time for the FEC to issue interim regulations that comport with the statutory disclosure requirements of 52 U.S.C. § 30104(c), and the FEC's dismissal decision is declared "contrary to law," with the matter remanded to the FEC, which must conform with this Court's ruling within 30 days, pursuant to 52 U.S.C. § 30109(a)(8)(C).2
Much of the factual and procedural background for this case is set out in this Court's prior Memorandum Opinion resolving the FEC's Partial Motion to Dismiss and Crossroads GPS's Supplemental Motion to Dismiss, CREW , 243 F.Supp.3d at 93–97, and has been supplemented below with information provided in the Administrative Record ("AR"), ECF Nos. 38, 38-1.3
CREW is a non-profit watchdog organization "committed to protecting the rights of citizens to be informed about the activities of government officials, ensuring the integrity of government officials, protecting our political system against corruption, and reducing the influence of money in politics." Compl. ¶¶ 7–8. In furtherance of this mission, "CREW monitors the activities of those who run for federal office as well as those groups financially supporting candidates for office or advocating for or against their election." Id. ¶ 10. Nicholas Mezlak is a U.S. citizen registered to vote in Ohio. Id. ¶ 17.
On November 14, 2012, CREW and two individual plaintiffs, other than Mezlak, filed an administrative complaint with the FEC, claiming that Crossroads GPS and its agents failed properly to report contributions for independent expenditures. Id. ¶ 55; AR 1–17 (Admin. Compl. 1–17).4 This claim was triggered by press reports that, on August 30, 2012, American Crossroads, a "super PAC" affiliated with Crossroads GPS, hosted an event in Tampa, Florida, with approximately 70 attendees. AR 122–25 (Am. Admin. Compl., Ex. B, Sheelah Kolhatkar, Exclusive: Inside Karl Rove's Billionaire Fundraiser , BLOOMBERG BUSINESSWEEK, Aug. 31, 2012 ("Kolhatkar, Rove's Fundraiser "); AR 103 (Am. Admin. Compl. ¶ 20) . 5 The plaintiffs call the event a "fundraiser," AR 103 (Am. Admin. Compl. ¶ 20), while Crossroads GPS says the event was a "meeting," AR 79 (CGPS's Admin. Resp. at 7); see also CGPS's Mem. Supp. Cross-Mot. Summ. J. & Opp'n Pls.' Mot. ("CGPS's Opp'n") at 15, ECF No. 28 ( ). No matter the characterization, the parties do not dispute that, at the Tampa event, a multimillion-dollar "matching challenge" contribution was revealed and donations to Crossroads GPS were solicited, as detailed below.
Karl Rove, an unpaid advisor to Crossroads GPS and...
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