Citizens for Responsibility & Ethics v. Fed. Election Comm'n

• Decision Date: 27 December 2018
• Docket Number: Civil Action No. 17-2770 (ABJ)
• Citation: 363 F.Supp.3d 33
• Parties: CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON, et al., Plaintiffs, v. FEDERAL ELECTION COMMISSION, Defendant.
• Court: U.S. District Court — District of Columbia

363 F.Supp.3d 33

CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON, et al., Plaintiffs,

v.FEDERAL ELECTION COMMISSION, Defendant.

Civil Action No. 17-2770 (ABJ)

United States District Court, District of Columbia.

Signed December 27, 2018

Stuart C. McPhail, Citizens for Responsibility and Ethics in Washington, Washington, DC, for Plaintiffs.

Charles Kitcher, Kevin Deeley, Robert William Bonham, III, Tanya D. Senanayake, Federal Election Commission, Washington, DC, for Defendant.

MEMORANDUM OPINION

AMY BERMAN JACKSON, United States District Judge

Plaintiffs Citizens for Responsibility and Ethics in Washington and Anne L. Weismann, CREW's former Interim Executive Director and current Chief FOIA Counsel (collectively "CREW"), have sued the Federal Election Commission ("FEC") in connection with the Commission's resolution of an administrative complaint that CREW filed with the agency in 2015. In the administrative complaint it filed with the FEC, CREW alleged that a non-profit organization, American Conservative Union ("ACU"); a political action committee, Now or Never PAC; the PAC's treasurer, James C. Thomas III; and an "Unknown Respondent" violated the Federal Election Campaign Act ("FECA" or "the Act"), 52 U.S.C. § 30101 et seq. , by making a $1.71 million campaign contribution from an undisclosed source. The Commission investigated the matter and found that the contribution passed through a previously undisclosed organization, Government Integrity, LLC. It ultimately negotiated a conciliation agreement with ACU, the PAC, Thomas, and Government Integrity. The Commissioners unanimously approved the conciliation agreement and closed the administrative matter.

CREW filed suit against the Commission, asserting that its handling of the matter violated FECA and the Administrative Procedure Act ("APA"). Specifically, CREW contends that the agency improperly disposed of the administrative complaint without proceeding further to ensure that its investigation encompassed the true sources of the contribution, the individuals or entities that provided the money to Government Integrity that was passed to ACU. CREW contends that the agency should have pursued leads developed during its investigation in accordance with the recommendations of the Office of General Counsel, and it questions the Commission's decision to curtail the investigation in the wake of the conciliation agreement.

The Commission has moved to dismiss the complaint arguing that the Court has no jurisdiction to hear it, and the Court agrees.

Section 30109(a)(1) of FECA authorizes any person who believes a violation of the statute has occurred to file a complaint with the agency. Significantly, under the statute, if the Commission determines that there is probable cause to believe that any person has committed a violation of the Act, it is required to attempt to correct or prevent the violation through a process of conciliation.

The judicial review provision in the statute, subsection (a)(8)(A), states that "[a]ny party aggrieved by an order of the Commission dismissing a complaint filed by such party ... or by a failure of the Commission to act on such ... may file a petition with the United States District Court for the District of Columbia."

The FEC is correct that neither of these events took place here. CREW's administrative complaint was brought against three named respondents and one unknown respondent. There was no failure to act on plaintiff's complaint, and the complaint against the four respondents – three named and one unknown – was not dismissed; it was resolved by the conciliation process called for by the statute. Since nothing in the statute gives the Court the power to review investigative decisions made along the way if an administrative complaint was neither dismissed nor ignored, the Court concludes that the challenged agency action is not reviewable under FECA. It further finds that the agency's actions in this circumstance are not reviewable under the APA, and therefore, the Court will grant defendant's motion to dismiss for lack of subject matter jurisdiction. Thus, this opinion will not address, and it should not be interpreted as expressing agreement with, or any view about, the propriety of the agency's actions.

BACKGROUND

I. Statutory Framework

The Federal Election Campaign Act is a statute that requires extensive recordkeeping and disclosure of campaign contributions in an effort "to remedy any actual or perceived corruption of the political process." Fed. Election Comm'n v. Akins , 524 U.S. 11, 14, 118 S.Ct. 1777, 141 L.Ed.2d 10 (1998). To this end, it prohibits "mak[ing] a contribution in the name of another person or knowingly permit[ting] his name to be used to effect such a contribution" or "knowingly accept[ing] a contribution made by one person in the name of another person." 52 U.S.C. § 30122.

The Federal Election Commission is an independent federal agency with exclusive jurisdiction over civil enforcement of FECA. 52 U.S.C. §§ 30106(b)(1), 30107(a), 30109. FECA authorizes the Commission to investigate violations of the Act. Id. § 30107(a). It also provides that "[a]ny person who believes a violation of th[e] Act ... has occurred, may file a complaint with the Commission." 52 U.S.C. § 30109(a)(1). If, upon receiving an administrative complaint, the Commission determines "by an affirmative vote of 4 of its members, that it has reason to believe" the Act has been violated, the Commission must investigate the allegation. Id. § 30109(a)(2). The general counsel of the agency recommends whether the Commission should proceed to a vote "on probable cause," and the respondent may submit information and briefs to the Commission as part of the investigation. Id. § 30109(a)(3).

If the Commission finds "by an affirmative vote of 4 of its members, that there is probable cause to believe that any person" has violated FECA, the statute requires the Commission to

attempt, for a period of at least 30 days, to correct or prevent such violation by informal methods of conference, conciliation, and persuasion, and to enter into a conciliation agreement with any person involved. Such attempt by the Commission to correct or prevent such violation may continue for a period of not more than 90 days. The Commission may not enter into a conciliation agreement under this clause except pursuant to an affirmative vote of 4 of its members. A conciliation agreement, unless violated, is a complete bar to any further action by the Commission, including the bringing of a civil proceeding under paragraph (6)(A).

Id. § 30109(a)(4)(A)(i).

FECA authorizes an administrative complainant, such as CREW, to seek judicial review of the Commission's handling of its complaint in only two circumstances:

Any party aggrieved by an order of the Commission dismissing a complaint filed by such party under paragraph (1), or by a failure of the Commission to act on such complaint during the 120-day period beginning on the date the complaint is filed, may file a petition with the United States District Court for the District of Columbia.

Id. § 30109(a)(8)(A). CREW does not allege here that the Commission failed to act on its complaint; it complains that it was aggrieved by "the dismissal" of its administrative complaint. Compl. [Dkt. # 1] ¶ 1.

II. Factual Background

On February 27, 2015, the FEC received an administrative complaint from plaintiffs alleging that ACU, Now or Never PAC, its treasurer Thomas, and an unknown respondent violated the Federal Election Campaign Act when ACU contributed $1.71 million it had received from the unknown respondent to Now or Never PAC. Compl. ¶¶ 24–25; Administrative Compl., Ex. A to Pls.' Opp. to Def.'s Mot. to Dismiss [Dkt. # 29-3] ("Admin. Compl.") ¶ 27 (asserting that "[t]he Unknown Respondent provided to ACU the $1.71 million it in turn transferred to Now or Never PAC"); see also First General Counsel's Report, Ex. B. to Pls.' Opp. to Def.'s Mot. to Dismiss [Dkt. # 29-4] at 1–2.

The agency initiated an investigation based on the complaint, Matter Under Review ("MUR") 6920, and in the course of the investigation, it identified Government Integrity as the unknown respondent that had contributed to ACU. Compl. ¶¶ 2, 26; see also Second General Counsel's Report, Ex. C. to Pls.' Opp. to Mot. Dismiss. [Dkt. # 29-5] at 1–2; Third General Counsel's Report, Ex. 2 to Compl. [Dkt. # 1-2] at 1–2.

The FEC's Office of General Counsel ("OGC") learned through discovery that a trust that had a relationship with Government Integrity transmitted funds to Government Integrity; that Government Integrity wired $1.8 million to ACU; and that on the day it received the wire, ACU sent the $1.7 million contribution at issue in the investigation to the Now or Never PAC. Compl. ¶¶ 2, 26–27; Third General Counsel's Report at 2–5; Circulation of Discovery Documents, Ex. E. to Pls.' Opp. to Def.'s Mot. to Dismiss [Dkt. # 29-7] at 2.

On July 11, 2017, the Commission voted 5 to 0 to "[s]ubstitute the name Government Integrity LLC in the place of ‘Unknown Respondent’ in the Commission's previous findings that Unknown Respondent violated 52 U.S.C. § 30122 by making a contribution in the name of another." Certification (July 12, 2017), Ex. 6 to Compl. [Dkt. # 1-6] ("July 12 Certif.") (declining by a vote of 2 to 2 to make a finding that it did so "knowingly and willfully"). The Commission also voted unanimously to find reason to believe that the ultimate recipients, Thomas and the PAC, had violated the Act. See id.

On August 10, 2017, the Office of General Counsel served a subpoena seeking information from the trust that had the relationship with Government Integrity, John Doe 2, and one of its trustees, John Doe 1.¹ Third General Counsel's Report at 5. Both refused to respond to the subpoena. Id. at 5–6.

On September 15, 2017, the OGC recommended that the Commission find reason to believe that John Doe 1 and John Doe 2 violated 52 U.S.C. § 30122 and authorize the filing of a civil action to...