CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Writing for the CourtGOETTEL
Citation647 F. Supp. 987
Docket NumberNo. 84 Civ. 0866 (GLG).,84 Civ. 0866 (GLG).
Decision Date15 May 1986

647 F. Supp. 987


No. 84 Civ. 0866 (GLG).

United States District Court, S.D. New York.

May 15, 1986.

647 F. Supp. 988

Charles N. Steele, Gen. Counsel to the Federal Election Com'n, Washington, D.C. by Ivan Rivera, Asst. Gen. Counsel, Lisa E. Klein, of counsel, for the plaintiff.

Herge, Sparks, Christopher & Biondi, McLean, Va. by Robert R. Sparks, Jr., of counsel and Ford, Marrin Esposito & Witmeyer, New York City by William P. Ford, of counsel, for defendant Nat. Conservative Political Action Committee.


GOETTEL, District Judge:

The Federal Election Commission (the "FEC"), a federal agency empowered with exclusive jurisdiction to administer, interpret and enforce the Federal Election Campaign Act of 1971 ("FECA"; "the Act"), brought this action against the National Conservative Political Action Committee ("NCPAC") seeking declaratory and injunctive relief. NCPAC is a non-profit, non-membership organization registered in the District of Columbia to support or oppose candidates for elective office. During the period in question (March 1981 — August 1982), NCPAC was registered with the FEC as a multicandidate political committee ("MCPC").1 The FEC contends that during the 1982 New York senatorial campaign, NCPAC contributed more than $5000 to a single candidate in violation of section 441a(a)(2)(A) of the Act.2 In failing to report these contributions, NCPAC allegedly violated section 434(b)(4)(H)(i) of the Act as well.3 This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331 (1982).

Both parties now cross-move, pursuant to the Fed.R.Civ.P. 56, for summary judgment. NCPAC also moves, pursuant to Fed.R.Civ.P. 15 to amend its answer. For the purposes of this motion, the defendant's answer is deemed amended. For the reasons stated below, the plaintiff's motion for summary judgment is granted.

I. Background

The following facts are not in dispute. During the 1981-82 election cycle, NCPAC established "New Yorkers Fed Up with Moynihan," a political action committee dedicated to defeating the reelection bid of New York's United States Senator, Daniel Patrick Moynihan. NCPAC hired Arthur J. Finkelstein Associates ("Associates"), a polling and political consulting firm owned and operated by Arthur J. Finkelstein, to develop a media strategy, to conduct and analyze polls and to select election issues on which Senator Moynihan was most vulnerable. Finkelstein himself wrote the script for NCPAC's main radio commercial urging the defeat of Senator Moynihan. From April 1981 until August 1982 NCPAC funnelled $73,755 to Associates to urge Moynihan's defeat.

In March 1981, prior to the commencement of NCPAC's anti-Moynihan effort, Bruce Caputo announced his intention to seek the Republican nomination for the U.S. Senate seat in New York. On or about that time, Caputo and his political committee, the Caputo for Senate Committee (the "Committee"), retained Finkelstein, a longtime friend of the candidate, as a paid political consultant. Between March 1981 and March 1982, when Caputo withdrew

647 F. Supp. 989
from the race,4 the Committee paid Finkelstein's firm $28,000 to assist in all of the aspects of Caputo's campaign including formulating election strategy, hiring campaign staff, and utilizing the media

Finkelstein and NCPAC also had long been associated,5 and, during the time NCPAC retained Finkelstein, it knew that Finkelstein was working directly for Caputo. In fact, it was Finkelstein who recruited Robin Martin, a Caputo campaign volunteer, to head the "New Yorkers Fed Up with Moynihan" media campaign.

In January 1982, the FEC received a complaint from the New York State Democratic Committee alleging that independent expenditures reported by NCPAC for its anti-Moynihan campaign were actually in-kind contributions to Caputo and his authorized committee.6 The complaint further alleged that these contributions exceeded section 441a(a)(2)(A)'s $5,000 limit on contributions to a candidate and that NCPAC had violated section 434(b)(4)(H)(i) by failing to report the contributions. The FEC found reason to believe these allegations and, in April 1982, began an investigation.7 In September 1983 the FEC found probable cause to believe that NCPAC had violated FECA's contribution and disclosure requirements and attempted to correct these violations through informal methods.8 These methods failed9 and, on February 6, 1984, the FEC brought this action to enforce the provisions of the Act.10

647 F. Supp. 990

II. Discussion

Section 441a(a)(2)(A) of the Act forbids a multicandidate political committee from making a contribution "to any candidate and his authorized political committees with respect to any election for Federal office which, in the aggregate, exceeds $5000." 2 U.S.C. 441a(a)(2)(A) (1982). Expenditures made "in cooperation, consultation, or concert, with, ... a candidate, his authorized political committees, or their agents, shall be considered to be a contribution to such candidate."11 2 U.S.C. § 441a(a)(7)(B)(i) (1982). FEC regulations clarify this language.12 According to those regulations, the aforementioned definition of contribution includes any expenditure "made with the cooperation or with the prior consent of, or in consultation with, or at the request or suggestion of, a candidate or any agent ... of the candidate...." 11 C.F.R. § 109.1(b)(4) (1986). This definition, in turn, encompasses

any arrangement, coordination or direction by the candidate or his or her agent prior to the publication, distribution, display, or broadcase of the communication. An expenditure will be presumed to be so made when it is —
(A) Based on information about the candidates plans, projects, or needs provided to the expending person by the candidate, or by the candidate's agents, with a view toward having an expenditure made;
(B) Made by or through any person who is, or has been, authorized to raise or expend funds, who is, or has been, an officer of an authorized committee, or who is, or has been, receiving any form of compensation or reimbursement from the candidate, the candidate's committee or agent....

Id. at § 109.1(b)(4)(i). The FEC argues that the $73,755 NCPAC expended through Finkelstein, who was Caputo's agent, actually constituted contributions to the Caputo campaign. NCPAC thereby exceeded the $5,000 limit on contributions13 and violated the corresponding disclosure provisions.

NCPAC does not dispute that, on their face, the statute and the relevant regulations forbid its conduct. It, nevertheless, maintains that it can prevail on its cross-motion for summary judgment because it relied on an FEC advisory opinion.14 Under the Act,

any person involved in the specific transaction or activity with respect to which an advisory opinion has been rendered ... and who has relied upon that advisory opinion ... and who acted in good faith in accordance with the provisions and findings of that advisory opinion shall not, as a result of any such act be subject to any sanction provided by FECA.

2 U.S.C. §§ 437f(c)(1)(A) & (2) (1982). NCPAC claims to have relied in good faith on a December 1980 advisory opinion and asserts that it would not have exceeded the

647 F. Supp. 991
$5000 contribution limit had it believed it was acting contrary to the provisions of the Act

In December 1979, NCPAC wrote to the FEC requesting an advisory opinion with regard to certain proposed activities it was contemplating. NCPAC was particularly concerned about whether an agency relationship between a political consultant or any other vendor and a candidate would jeopardize its ability to use the same consultant or vendor to oppose the candidate's opponent.15 NCPAC posited nine, fact-specific questions to the FEC. It now contends that it relied on the FEC's responses to two of those questions in taking the actions that are the subject of this suit.

The first question (or "situation," as NCPAC termed it) posits NCPAC hiring an advertising firm to design advertisements which advocate the defeat of a candidate campaigning for the Democratic nomination for President. This same agency is working for a candidate seeking the Republican nomination. Although the Commission did not have enough information to determine whether the firm was an "agent" of the Republican candidate, it noted that since these "are two separately distinct races ... and the Democratic candidate and the Republican candidates are not opponents at this point" it would be permissible to retain the same advertising agency.16 NCPAC's Memorandum of Law, Exhibit A at 4.

647 F. Supp. 992

The eighth situation posits NCPAC contributing a poll undertaken as part of an independent expenditure campaign against a candidate for the Democratic senatorial nomination to a candidate for the Republican nomination in the same state. The FEC stated that contributing the poll results "would, of course, constitute a contribution in-kind by NCPAC to the candidate's campaign committee." Id. at 9-10. However, during the primary campaign, NCPAC could "communicate" with the Republican candidate.17

The advisory opinion contained the caveat that "an expenditure that appears to be independent on the facts presented by NCPAC may not in fact be so in a different factual setting". Id. at 4. Moreover, section 437f(c)(1)(B) of FECA provides that an advisory opinion can be relied on only if the "specific transaction or activity is indistinguishable in all its material aspects from the transaction or activity ... about which the advisory opinion was rendered." 2 U.S.C. § 437f(c)(1)(B) (1982). Thus, NCPAC can prevail in this action only if it can establish that the situation at bar is indistinguishable from the situations reviewed in the advisory opinion.

Careful analysis reveals substantial dissimilarities between the facts in issue and those posited in the FEC's advisory opinion,...

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  • Virginia Society for Human Life v. Fed. Election Comm'n, 00-1252
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • February 26, 2001
    ...that aired in Atlanta and for distribution of postcards to Georgia voters); FEC v. Nat'l Conservative Political Action Comm., 647 F. Supp. 987 (S.D.N.Y. 1986) (D.C. organization prosecuted in New York for activities related to campaign to defeat Senator Daniel Patrick Moynihan). The FEC has......

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