Federal Election Commission v. Committee to Elect Lyndon La Rouche
| Decision Date | 19 February 1980 |
| Docket Number | No. 77-1987,77-1987 |
| Citation | 613 F.2d 849 |
| Parties | FEDERAL ELECTION COMMISSION, Appellee, v. COMMITTEE TO ELECT LYNDON LA ROUCHE et al., Appellants. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
David S. Heller, New York City, a member of the bar of the Supreme Court of Wisconsin, Pro hac vice, by special leave of the court, with whom Joel D. Joseph, Washington, D. C., was on the brief, for appellants.
Charles N. Steele, Associate Gen. Counsel, and Barbara Van Gelder, Atty., Federal Election Commission, Washington, D. C., with whom William C. Oldaker, Gen. Counsel, Lester N. Scall, Asst. Gen. Counsel, Federal Election Commission, Washington, D. C., were on the brief, for appellee.
Paul D. Kamenar, Washington, D. C., entered an appearance for appellants.
Before McGOWAN and TAMM, Circuit Judges, and JUNE L. GREEN, * District Judge.
Opinion for the court filed by Circuit Judge McGOWAN.
This is an appeal from an order of the District Court enforcing subpoenas issued by the Federal Election Commission (Commission) during an investigation into possible violations of the federal election laws in connection with the campaign of Lyndon La Rouche for the 1976 Presidential nomination of the United States Labor Party (USLP). 1 Appellants, the Committee to Elect Lyndon La Rouche (CTEL), the National Caucus of Labor Committees (NCLC), the New Solidarity International Press Service, Inc. (New Solidarity), and Campaigner Publications, Inc. (Campaigner), challenge the decision under review on the grounds that the District Court lacked subject matter jurisdiction to entertain the suit, that appellants were not subject to extraterritorial service of process, and that the District Court erred in not permitting appellants to demonstrate that the subpoenas were issued for an improper purpose. For reasons hereinafter appearing, we affirm the decision under review.
The events culminating in the issuance of the Commission's subpoenas began on October 14, 1976, when Lyndon La Rouche applied to the Commission for primary matching funds under the Presidential Primary Matching Payment Account Act, 26 U.S.C. §§ 9031-9042 (1976). To qualify for such funds, a candidate must certify, Inter alia, that he has received in excess of $5,000 in contributions of $250 or less in each of at least 20 states. Id. § 9033(b)(3)-(4). In support of his application, La Rouche submitted a notarized statement that he had raised the threshold amount. But neither LaRouche nor CTEL, his principal campaign committee, provided appropriate documentation of the contributions.
On November 4, 1976, the Commission authorized its staff to conduct a field audit in order to verify La Rouche's eligibility for matching funds. That audit, which took place shortly thereafter at CTEL's headquarters in New York City, uncovered many instances where contributions made by money order or cashier's check raised substantial questions as to whether the contributions were made by residents of the states indicated. In addition to these irregularities, the audit revealed a pattern of heavy last-minute contributions from persons listing their occupation as that of "volunteer coordinator" for NCLC, an organization that, during the last two weeks of the eligibility period, received payments from CTEL of more than $310,000. It further indicated that CTEL shared office space and common personnel with NCLC and three other organizations (New Solidarity, Campaigner, and the USLP) and that those organizations accounted for 78% Of CTEL's expenditures and 97% Of its debt. These findings seemed particularly significant in light of the fact that CTEL had surpassed the $5,000 threshold by only a narrow margin in at least several states.
In response to these findings, the Commission both expanded the audit to include the four organizations closely related to CTEL and authorized the Commission staff to interview CTEL contributors in order to verify their contributions. During the week of January 26, 1977, agents of the Commission either did, or attempted to, interview listed contributors in three states, Delaware, Massachusetts, and Wisconsin. The results of the field interviews revealed that in neither Delaware nor Wisconsin had La Rouche raised the threshold amount. Accordingly, on February 10, 1977, the Commission rejected La Rouche's application for matching funds. We today affirm that decision in No. 77-1184. Committee to Elect Lyndon La Rouche v. Federal Election Commission, 198 U.S.App.D.C. ---, 613 F.2d 834 (D.C.Cir. 1979).
On April 28, 1977, the USLP, CTEL, and ten individuals who contributed to CTEL in 1976 filed suit in the District Court, seeking damages and injunctive relief against the Commission and various members of its staff. The principal allegations were that the field interviews of CTEL contributors were unauthorized by statute and violative of the first and fourth amendments. On October 25, 1977, the District Court granted defendants' motion for summary judgment, concluding that "nothing in the record . . . supports or . . . could support any alleged violation of Plaintiffs' . . . statutory or constitutional rights." In No. 77-2093, we today affirm that decision in part, and reverse in part. Jones v. Unknown Agents of the Federal Election Commission, 198 U.S.App.D.C. ---, 613 F.2d 864 (D.C.Cir. 1979).
While the Jones case was pending in the District Court, the Commission, upon reviewing both the results of the inquiry into La Rouche's eligibility for matching funds and various reports of contributions and expenditures required to be filed with the Commission pursuant to 2 U.S.C. § 434, determined that there was reason to believe that the USLP, CTEL, NCLC, New Solidarity, and Campaigner (the five organizations) had violated certain provisions of the federal elections laws. By letters dated May 13, 1977, the Commission notified each of the five organizations that they were under investigation and, in each case, detailed the nature of the suspected statutory violations. Thus, the letter to NCLC indicated that there was reason to believe that NCLC was a political committee and, as such, had violated 2 U.S.C. sections 433 and 434 by failing to register and file reports with the Commission; that there was reason to believe that NCLC had violated 2 U.S.C. section 441a by making excessive in-kind contributions to CTEL and the USLP; and that there was reason to believe that NCLC had violated 2 U.S.C. section 433(b)(2) by not registering as an affiliated committee with CTEL and the USLP.
The letters to New Solidarity and Campaigner notified them that they might be in violation of 2 U.S.C. section 441b(a) for making illegal in-kind corporate contributions to CTEL and the USLP by extending to those organizations long-term credit on behalf of the La Rouche campaign. The Commission notified the USLP that there was reason to believe that, in contravention of 2 U.S.C. section 433(b)(2), it had failed to report its affiliation with CTEL and NCLC. Finally, the Commission notified CTEL that not only had it failed to report its apparent affiliation with NCLC and the USLP, but also that there was reason to believe that CTEL had made false or misleading statements in its submissions for matching funds. 2
On June 9, 1977, the Commission, having yet to receive a response to its letters of May 13, sent follow-up letters to the five organizations. By letters of June 11, 1977, and June 13, 1977, local Washington counsel notified the Commission that they had been retained to represent the five organizations. In addition to seeking further information about the charges, counsel requested the Commission to stay its investigation until the District Court decided the Jones case. This request was denied.
On June 24, 1977, the Commission, in furtherance of its investigation, subpoenaed the five organizations to produce at their New York offices on July 8, 1977, specified documents pertaining to their expenditures, contributions, and lease and loan agreements. 3 On July 1, 1977, the Commission received a request from local Washington counsel asking for additional time in which to secure counsel in New York and to assemble the documents for Commission review. This request was denied; however, the Commission staff offered to reschedule the return date.
On July 8, 1977, when the Commission staff went to New York to examine the subpoenaed documents, representatives of the five organizations and newly retained New York counsel indicated that the materials were not yet assembled. Counsel for the Commission nonetheless used the occasion to review each subpoena and the attachments thereto with the representatives of the organizations and New York counsel. At the July 8 meeting, New York counsel stipulated to produce the documents on July 20, 1977; counsel for the Commission agreed to return to New York to review the documents on that date. On July 19, 1977, however, New York counsel notified the Commission that the five organizations would not comply with the subpoenas.
On August 23, 1977, the Commission petitioned the District Court below for enforcement of the subpoenas pursuant to 2 U.S.C. section 437d(b), which authorizes any United States district court "within the jurisdiction of which any inquiry is carried on" to order compliance with a Commission subpoena. That same day, the District Court issued a show cause order requiring the five organizations to appear on September 8, 1977, to demonstrate why the subpoenas should not be enforced. The District Court further directed that the show cause order be served on the organizations by the United States Marshal in New York. Copies of the petition, exhibits, and memoranda also were mailed to the organizations' New York counsel and hand delivered to local Washington counsel.
On September 7, 1977, local...
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