Federal Election Com'n v. National Republican Senatorial Committee

• Citation: 966 F.2d 1471
• Decision Date: 12 June 1992
• Docket Number: No. 91-5176,91-5176
• Parties: FEDERAL ELECTION COMMISSION v. NATIONAL REPUBLICAN SENATORIAL COMMITTEE, et al., Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 1471

966 F.2d 1471

296 U.S.App.D.C. 190

FEDERAL ELECTION COMMISSION v. NATIONAL REPUBLICAN SENATORIAL COMMITTEE, et al., Appellants.

No. 91-5176.

United States Court of Appeals District of Columbia Circuit.

Argued April 23, 1992.

Decided June 12, 1992.

Appeal from the United States District Court for the District of Columbia (Civil Action No. 90-2055).

Jan Witold Baran, with whom Thomas W. Kirby and Carol A. Laham, Washington, D.C., were on the brief, for appellants.

Marcus C. Migliore, Federal Election Commission, with whom Lawrence M. Noble, General Counsel, and Richard B. Bader, Associate General Counsel, Washington, D.C., were on the brief, for appellee.

Roger M. Witten, W. Hardy Callcott and Carol F. Lee, Washington, D.C., were on the brief for Common Cause, as amicus curiae, urging affirmance.

Before: RUTH BADER GINSBURG, WILLIAMS and RANDOLPH, Circuit Judges.

Opinion for the court filed by Circuit Judge RANDOLPH.

RANDOLPH, Circuit Judge:

The Federal Election Campaign Act, 2 U.S.C. §§ 431-455, imposes numerous limitations on campaign contributions. Two are relevant here. For each election, no individual may give more than $1,000 to any Senate candidate. 2 U.S.C. § 441a(a)(1)(A). No national senatorial committee may give more than $17,500 to any Senate candidate. 2 U.S.C. § 441a(h). The Federal Election Commission has issued regulations interpreting and implementing these statutory commands. One such regulation, 11 C.F.R. § 110.6(d), deals with transactions of the sort before us in this case: an individual gives a contribution to a national political committee for the committee to pass on to the candidate. ¹ The regulation provides that a donor may "earmark" a contribution given to a national political committee, indicating that it is for the benefit of a certain, specified candidate. 11 C.F.R. § 110.6(a). A committee receiving such an "earmarked" contribution in the form of a check made out to a candidate simply passes the check along. 11 C.F.R. § 110.6(c)(4)(iii). When the check is payable to the committee, the check may be deposited in the committee's account, and equivalent funds forwarded to the specified candidate. 11 C.F.R. § 110.6(c)(1)(i), (c)(4)(iii). In either case, the funds must be forwarded within ten days. 11 C.F.R. § 102.8(a), (c).

Earmarked contributions generally count against the individual donor's personal limit of $1,000 per candidate, 2 U.S.C. § 441a(a)(8); 11 C.F.R. § 110.6(a), not against the committee's $17,500 per candidate limit. 11 C.F.R. § 100.6(d)(1). We say "generally" because the regulation contains an "unless": if the committee exercises "direction or control over the choice of the recipient candidate," the contribution is "double counted": it counts against both the individual's per candidate limit and the committee's per candidate limit. 11 C.F.R. § 110.6(d)(2). This case concerns the construction of the regulation's terms "direction" and "control," and presents the question whether contributions solicited, received, and passed along by the National Republican Senatorial Committee (NRSC) in a fundraising campaign fit within the appropriate construction.

I

The NRSC is a national political committee organized to support Republican candidates for election to the United States Senate. In September 1986 it sent out approximately 600,000 letters, seeking to raise funds for candidates in twelve races the Committee believed were close. The general thrust of the letters ² was that if the Republicans lost control of the Senate in the upcoming election, then-President Reagan would have a much more difficult time implementing his administration's programs. Each letter listed four states with close Senate races, and informed the recipient that if the Republican candidate in those races did not receive a certain amount of money in a certain amount of time, the vital races would be lost. The names of the candidates did not appear in the letters; each referred only to the Republican candidates in the four states. Various combinations of four states appeared in the letters; in all, twelve states were covered. The campaign committee of the individual Republican candidate in each state had entered into an agreement with the NRSC authorizing the solicitation. The letters concluded by suggesting a contribution amount, which again varied from letter to letter, and by stating that any contribution made would be divided equally among the candidates in the four states listed.

Each mailing enclosed a donation card on which a donor could mark one of three spaces, indicating that he was giving (a) the suggested amount, (b) a pre-specified higher amount, or (c) an amount he himself specified and wrote in. The donation card reiterated that any money would be divided equally among candidates in the four listed states. ³ Checks were to be made out either to the NRSC directly, or to one of various funds controlled by the NRSC.

Approximately 92 percent of the people solicited did not send money. 761 F.Supp. at 814. Those who did--43,371 persons--contributed a total of approximately $2.3 million, on average $54 per contributor. Id. The NRSC deposited all checks in its accounts, divided the amount of each check equally in conformity with the accompanying donation card, and passed the money on to the respective campaigns.

Common Cause filed a complaint with the Commission in October 1986, alleging that the NRSC had violated 2 U.S.C. § 441a(h) by exceeding its contribution limits, in light of the fact that under 11 C.F.R. § 110.6(d)(2) it had exercised "direction or control" over the contributions. The Commission's General Counsel notified the NRSC's attorney that a complaint had been filed. The NRSC responded, opposing the complaint's allegations. In April 1987, the Commission determined that there was "reason to believe" that the NRSC had violated not only those provisions, but also 2 U.S.C. § 434(b), by improperly reporting the "directed and controlled" contributions, and § 441d(a), by failing to note on the letters that they were authorized by the candidates. The Commission also believed that NRSC had allocated improperly certain costs of the solicitation. That determination led to a Commission investigation. Approximately two years after the filing of the complaint, during which time the General Counsel and the NRSC exchanged letters and additional briefs, the Commission determined that there was "probable cause" to believe three violations had occurred.

Regarding a fourth charge, alleging "direction or control" under § 110.6(d), the Commission deadlocked 3-3. The Commission has six voting members; no more than three may be of the same political party. 2 U.S.C. § 437c(a)(1). Four votes are needed for the Commission to find probable cause. A tie results in no such finding being entered, and no action being taken against the target of the complaint. 2 U.S.C. §§ 437c(c), 437g(a)(4). In this case, the three Commissioners who voted against probable cause issued a statement of reasons supporting their decision.

In December 1988, the three charges the Commission had voted to pursue were settled in a conciliation agreement, with the NRSC agreeing to pay a $20,000 civil penalty. ⁴ As far as the Federal Election Commission was concerned, that concluded the matter. The proceedings then became part of the public record (11 C.F.R. § 5.4(a)(4)) and the Commission notified Common Cause of the outcome.

Invoking 2 U.S.C. § 437g(a)(8), a provision entitling a complainant to judicial review of a Commission decision not to pursue a complaint, Common Cause filed suit in federal district court to compel the Commission to act on the fourth charge. The district court held that the "plain language" of 11 C.F.R. § 110.6(d)(2) covered NRSC's activities and that the Commission's order dismissing the complaint, insofar as it alleged that the NRSC violated its contribution limits and reporting requirements, was arbitrary and capricious. Common Cause v. Federal Election Comm'n, 729 F.Supp. 148, 152-53 (D.D.C.1990). The court therefore ordered the Commission, on remand, to proceed on the basis that the NRSC exercised "direction or control" over the contributions. Id. at 153. When the parties thereafter failed to reach a conciliation agreement, the Commission filed an enforcement action. The district court granted summary judgment for the Commission and imposed a $24,000 penalty on the NRSC. Federal Election Comm'n v. National Republican Senatorial Comm., 761 F.Supp. 813 (D.D.C.1991).

II

We pause briefly to address NRSC's argument, rejected by the district court, that because some language in its conciliation agreement with the Commission discussed settlement of the "matter," and because the Commission in some contexts refers to the entire series of transactions or occurrences raised by a filed complaint as a "matter," the agreement bars the agency from maintaining this action. It is true that the Commission may not commence an action regarding a violation comprehended by a conciliation agreement--except, of course, an action to compel compliance with the agreement's terms. 2 U.S.C. § 437g(a)(4)(A)(i). It is also true that complaint proceedings before the agency are styled "Matter Under Review." But the specifics of the agreement and the pre-agreement correspondence between NRSC and the agency here lead us to reject the NRSC's claim that the agreement comprehended the charge before us.

The conciliation agreement signed by counsel for NRSC ⁵ stated that the Commission had found probable cause to believe that NRSC had "violated 2 U.S.C. §§ 434(b), 441a(h), and 441d(a)." Conciliation Agreement at 1 (Dec. 23, 1988). It made no mention of 11 C.F.R. § 110.6(d)(2), or of direction or control. After setting forth the parties and the facts, the agreement, in paragraphs V-VIII, specifically describes the alleged violations. ⁶ Nothing in that description even hints at the violation involved in this case. We...