Federal Election Com'n v. Gopac, Inc., Civil A. No. 94-0828-LFO.

• Decision Date: 29 February 1996
• Docket Number: Civil A. No. 94-0828-LFO.
• Citation: 917 F. Supp. 851
• Parties: FEDERAL ELECTION COMMISSION, Plaintiff, v. GOPAC, INC., Defendant.
• Court: U.S. District Court — District of Columbia

917 F. Supp. 851

FEDERAL ELECTION COMMISSION, Plaintiff, v. GOPAC, INC., Defendant.

Civil A. No. 94-0828-LFO.

United States District Court, District of Columbia.

February 29, 1996.

Lawrence M. Noble, General Counsel, Richard B. Bader, Associate General Counsel, Stephen E. Hershkowitz, Assistant General Counsel, Robert W. Bonham, III, Senior Attorney, Washington, DC, for Plaintiff.

Peter E. Derry, Pyne & Derry, P.C., Chevy Chase, Maryland, for Defendant.

MEMORANDUM

OBERDORFER, District Judge.

I.

On April 14, 1994, the Federal Election Commission filed this civil action against GOPAC, Inc., alleging that in 1989 and 1990 GOPAC was a "political committee" which had failed to register and report as required by the Federal Election Campaign Act, 2 U.S.C. §§ 433(a) and 434(a). The allegation had its origins in an administrative complaint filed by the Democratic Congressional Campaign Committee with the Commission in September 1990 that GOPAC's receipts and expenditures for its "Campaign for Fair Elections" project made it a "political committee" as defined in the Act. Over three years later, after the Commission concluded its investigation, on December 9, 1993, it notified GOPAC that there was probable cause to believe that it was a "political committee," obligated by the Act to register and report. The Commission attempted to enter into a conciliation agreement with GOPAC. When conciliation failed, the Commission filed the complaint in this case, centered on the "Campaign for Fair Elections" project.

On June 20, 1994, GOPAC moved to dismiss the complaint for failure to state a claim, contending that in 1989 and 1990 it confined itself to supporting state and local candidates and affirmatively refrained from supporting the election or defeat of any federal candidate. A December 23, 1994 Memorandum and Order denied defendant's motion to dismiss in order to allow the Commission to establish, if it could, that in 1989 and 1990 GOPAC's major purpose was to elect a particular federal candidate or candidates. Although the complaint did not clearly allege that GOPAC supported any particular federal candidate or candidates, it was sufficiently broad to encompass proof to that effect. The Memorandum and Order made no ruling on the Commission's claim that the "Campaign for Fair Elections" mailings stated a cause of action. FEC v. GOPAC, Inc., 871 F.Supp. 1466, 1470 (D.D.C.1994). Thereafter, the parties proposed, and the Court adopted, a schedule for extended discovery, briefing, and argument. They have now filed cross-motions for summary judgment, supported by copious statements with respect to material facts, more than 6,000 pages of exhibits, and six audiotapes. During the briefing period, Common Cause filed a memorandum as amicus curiae. After oral argument, the matter is ready for decision on cross-motions for summary judgment.

II.

The parties have clearly framed the legal issue in the exchange of briefs. The Commission argues essentially that in 1989 and 1990, GOPAC was a "political committee" required by the Act to register because (1) its "major purpose was electoral activity," and (2) it made expenditures and received contributions of $1,000 or more for the purpose of influencing federal elections. See Pl.'s Mot. at 10; Pl.'s Opp'n at 3. GOPAC counters that this statement of the law — which classifies organizations on the basis of degree of "election orientation" — requires an impermissible, subjective determination by the Commission and by the courts. See Def.'s Reply at 4-5. According to GOPAC, the Act and controlling legal precedents establish more objective criteria for determining whether an organization receiving contributions of $1,000 or more is a "political committee," namely: whether its expenditures in cash or in kind evidence the organization's major purpose to be the supporting of a particular candidate or candidates for federal office. Emphasizing that, as the Commission concedes, GOPAC made no direct contributions to federal candidates in 1989 and 1990, GOPAC contends that it was not a "political committee" in those years.

III.

Undisputed material facts distilled from the exchange between the parties establish the following: GOPAC was founded in 1979 by then-Governor Pierre S. DuPont IV to fund Republican candidates for state legislatures. Since 1983, GOPAC has been incorporated as a non-profit corporation under the laws of the District of Columbia. Pl.'s Statement ¶ 1. During the relevant time period, its Articles of Incorporation stated its purpose to be "to influence or attempt to influence the nomination for election of candidates for state legislative office; but in no event shall contributions be made to, or for the benefit of, candidates for federal office." Def.'s Ex. 1. By 1989, GOPAC had spent more than $4 million in direct contributions and political programs on behalf of state and local Republican candidates. Pl.'s Statement ¶ 39; Pl.'s Ex. 66 at 5926; Def.'s Response ¶ 39. Its state and local candidate contributions declined thereafter. On May 1, 1991, GOPAC registered with the Commission as a "political committee" and, on July 31, 1991, filed its first report of receipts and expenditures. Since February 1992, GOPAC "has filed monthly reports of its receipts and disbursements with the Commission" and has "reported its shared federal/non-federal activity as ten per cent federal and ninety per cent non-federal." Pl.'s Ex. 7 (Decl. of Kent C. Cooper, Commission Custodian of Records).

Beginning in 1984, GOPAC undertook to help the Republican Party "to become competitive in more congressional districts" and "to win a majority in the U.S. House of Representatives." Pl.'s Ex. 66 at 2991. Toward this end, GOPAC targeted its support for Republican candidates for state legislatures "with an eye to 1991," when reapportionment of congressional districts to reflect the results of the 1990 census would begin. In addition, GOPAC began to recruit and support candidates for state legislatures who could become a "farm team" of "promising future congressional candidates in congressional districts where there may not be a possibility of winning a seat right away, but where voting demographics show there is Republican voting strength and that with the right candidate and sufficient Party support, a win can be ours." Id.

In 1986, Congressman Newt Gingrich succeeded Governor DuPont as GOPAC General Chairman. Congressman Gingrich was also an individual candidate for reelection in 1986, 1988, and 1990. As GOPAC's General Chairman, the Congressman proposed its reorientation to reflect his belief that "the primary problem with the Republican Party was ideas, not money." Pl.'s Ex. 23 at 15 (Newt Gingrich Dep., Sept. 26, 1995). He saw GOPAC's "niche as a very unique research and development and training kind of institution for candidates." Id. at 23. Other Republican leaders "were pretty amenable to the idea of making GOPAC an idea-oriented institution." Id. at 15. As GOPAC's General Chairman, the Congressman tried to "think through the general direction for where we were going and to try to do the teaching and then to engage in those specific fundraising activities." Id. at 11. After he became General Chairman, GOPAC shifted away from making large contributions to Republican state candidates and parties, and by 1987, began providing candidate training, communications, and focus group research results to Republican candidates, party organizations, and activists. See Pl.'s Ex. 19 at 42 (GOPAC Political Director Tom Morgan Dep., June 21, 1995).

During 1989, GOPAC adopted a formal "mission statement" which reiterated its ultimate objective "to create and disseminate the doctrine which defines a caring, humanitarian, reform Republican Party in such a way as to elect candidates, capture the U.S. House of Representatives and become a governing majority at every level of government." Pl.'s Ex. 66 at 281; Def.'s Ex. 73. Congressman Gingrich stated that "there was no question that the ultimate goal of GOPAC was to create a state and local farm team of sufficient depth that, as a result of that level of recruitment and energy, the party would be large enough to win control of the House." Def.'s Ex. 75. This focus on state and local elections reflected GOPAC's view that "capturing the U.S. House of Representatives, as envisioned by GOPAC, could only be accomplished by building a farm team and changing the balance of grass roots political power." Def.'s Statement ¶ 50; Pl.'s Response ¶ 12.

In 1989, as part of its "farm team" program, GOPAC mailed a questionnaire to every Republican state legislator inquiring whether he or she would "consider a campaign for Congress in your future." Id. ¶ 178; Pl.'s Ex. 66 at 5688; Def.'s Response ¶ 178. From this mailing, GOPAC compiled a list of more than 500 prospective candidates. Seventeen of the GOPAC farm team members who expressed an interest in running for Congress in response to the questionnaire actually ran for Congress in 1990. Pl.'s Statement ¶ 181; Def.'s Response ¶ 181. When farm team members running for Congress in 1990 asked for contributions from GOPAC, their requests were conspicuously turned down. See Tr. at 19.

GOPAC's direct mail fundraising efforts reinforced and reiterated GOPAC's statement of its "mission." In 1989 and 1990, GOPAC conducted a "Campaign for Fair Elections," a "project that directly attacked two of the most blatant ways the franking privilege and gerrymandering the Democrats in Congress keep themselves in power." Pl.'s Ex. 1 at 2. Then-Speaker Jim Wright was a prominent target in the "Campaign." In a May 30, 1989 letter, Congressman Gingrich described Speaker Wright as a "corrupt Democrat"; Speaker Wright and his fellow Democratic Congressmen have "entrenched themselves into a permanent majority in Congress. It's now practically impossible to defeat a sitting member of the House." Pl.'s Ex. 30 at 2709. Congressman Gingrich further...