Goland v. U.S.

• Citation: 903 F.2d 1247
• Decision Date: 21 May 1990
• Docket Number: No. 89-55422,89-55422
• Parties: Michael R. GOLAND, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee, and Federal Election Commission, Intervenor-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1247

903 F.2d 1247

Michael R. GOLAND, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee, and Federal Election Commission, Intervenor-Appellee.

No. 89-55422.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Dec. 12, 1989.

Decided May 21, 1990.

Seth P. Waxman, Miller, Cassidy, Larroca & Lewin, Washington, D.C., for plaintiff-appellant.

George B. Newhouse, Jr., Asst. U.S. Atty., Los Angeles, Cal., for defendant-appellee.

Janice P. Lacy, Federal Election Com'n, Washington, D.C., for intervenor-appellee.

Appeal from the United States District Court for the Central District of California.

Before CHOY, TANG and FLETCHER, Circuit Judges.

FLETCHER, Circuit Judge:

This case requires the court to apply the Federal Election Campaign Act (FECA or the Act) to a peculiar political imbroglio. Appellant Michael Goland was indicted for FECA violations stemming from his activities during the 1986 United States Senate election in California. In response he filed a civil suit challenging the constitutionality of certain provisions of the Act as applied to his alleged participation. Goland invoked a statutory provision unique to FECA that permits any individual eligible to vote for President to initiate an action to construe the constitutionality of the Act. That provision also directs the district court immediately to certify all questions of constitutionality to the courts of appeals, sitting en banc. The district court found the constitutional challenge frivolous, dismissed the complaint, and refused to certify the constitutional claim to the en banc court. Goland appeals. We affirm.

FEDERAL ELECTION CAMPAIGN ACT

In the aftermath of Watergate, Congress overhauled the Federal Election Campaign Act of 1971. ¹ The 1974 amendments set various limits on the size of individuals' contributions to federal candidates, of expenditures by the candidates themselves, and of independent expenditures to promote a candidate. ² The amendments further imposed strict recordkeeping and public reporting obligations, and created the Federal Election Commission (FEC or the Commission) to oversee and enforce the Act.

The constitutionality of this campaign reform legislation was immediately challenged, and in Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) the Supreme Court upheld against first amendment attack the individual contribution limits and the recordkeeping and reporting requirements. Focusing on a distinction that has continued to evade many observers and some Justices, the Court, however, struck down the limitations on independent expenditures and candidate expenditures. ³

The Court accepted the premise that limits on either contributions or independent expenditures place substantial and direct a limitation upon the amount that any one person or group may contribute to a candidate or political committee entails only a marginal restriction upon the contributor's ability to engage in free communication. A contribution serves as a general expression of support for the candidate and his views, but does not communicate the underlying basis for the support. The quantity of communication by the contributor does not increase perceptibly with the size of his contribution, since the expression rests solely on the undifferentiated, symbolic act of contributing.

limits on speech and association, ⁴ but distinguished the first amendment values implicated by each fiscal activity. The Court reasoned that

The Court opined that contribution limits imposed "little direct restraint" on political communication because the contributor remains still free to discuss candidates and issues. "While contributions may result in political expression if spent by a candidate or an association to present views to the voters, the transformation of contributions into political debate involves speech by someone other than the contributor." Id. at 19-21. An independent expenditure, in contrast, was seen by the Court as a means of facilitating the spender's own political speech. The Court, therefore, viewed limitations on independent expenditures as directly restricting the degree to which the spender can speak autonomously.

The FEC and Congress advanced three governmental interests promoted by the contribution and expenditure limits: preventing corruption and the appearance of corruption, equalizing the relative ability of rich and poor to affect the outcome of elections, and braking the skyrocketing cost of political campaigns, thereby opening the political system more widely to candidates without access to large amounts of money. The Court found it unnecessary to look beyond the "primary" purpose of preventing corruption in order to uphold the limitation on individual contributions, but found this interest insufficient to justify the ceiling on independent expenditures because in the absence of coordination and prearrangement with the candidate, the danger of a quid pro quo exchange of money for improper commitments would be slight. The majority refused to find the other state interest--equalizing access to the political process--legitimate, let alone substantial. ⁵

The Court was more expansive in its thinking regarding the purposes of FECA's reporting and disclosure requirements. Although sensitive to the dangers of compelled disclosure of political activity, the Court found that the governmental interests were of such magnitude that the requirements passed the strict test established Under the current system of regulation of federal campaign financing, which was in effect during the 1986 Congressional elections, an individual may contribute no more than $1,000 to any one candidate, $5000 to a political action committee ("PAC"), and an aggregate of $20,000 to political committees of a national political party in any one election. 2 U.S.C. Sec. 441a(a)(1). Contributions include payment for goods and services, including media advertisements. 2 U.S.C. Secs. 431(8)(A), 441a(a)(7)(B) and 441a(a)(8).

by NAACP v. Alabama, 357 U.S. 449, 78 S.Ct. 1163, 2 L.Ed.2d 1488 (1958). The Court accepted as substantial all three purposes behind the disclosure requirement: to provide the electorate with information as to where political campaign money comes from and how it is spent by the candidate in order to aid the voters in evaluating those who seek federal office, to deter actual or apparent corruption, and to gather the data necessary to detect violations of the contribution limits. Buckley, 424 U.S. at 66-68, 96 S.Ct. and 657-658.

A candidate's campaign committee must keep detailed records of its financial activities and file periodic reports with the FEC. Those reports are made available for public inspection. Specifically, the political committee must keep a record of the identity of each person who contributes more than $50 (2 U.S.C. Sec. 432(c)(2)), and must disclose in reports filed with the FEC the identification of each person whose total contributions to the campaign exceed $200 within the calendar year (2 U.S.C. Sec. 434(a) & (b)).

The Act prohibits the use of "conduits" to circumvent these restrictions: "No person shall make a contribution in the name of another person or knowingly permit his name to be used to effect such a contribution, and no person shall knowingly accept a contribution made by one person in the name of another person." 2 U.S.C. Sec. 441f.

FACTS

Alan Cranston (Democrat), Ed Zschau (Republican), and Ed Vallen (American Independent Party) ran in the 1986 California election for the United States Senate. The race between Cranston and Zschau was close, and pollsters predicted a narrow margin would decide the election. To help Cranston's odds, Goland decided to divert Republican votes from Zschau by giving a boost to the ultra-conservative Vallen.

Aware that Vallen would refuse to accept money from him if he knew Goland was the source, Goland devised a plan to fund television advertisements for Vallen without revealing the true source of the money. According to Goland's criminal indictment, the facts of which he does not dispute in this civil suit, Goland advanced $120,000 to a media company to produce advertisements for Vallen. (Vallen had raised only about $5000 up to this time.) Goland wrote the script advocating Vallen and criticizing Zschau, which Vallen read on the air.

The commercial began airing two weeks prior to election day. Sometime later but before the election, Vallen's campaign committee sought the identify of its benefactor. Presumably in order to avoid both FEC detection of the excessive contribution and Vallen's awareness of the true source of the funds, Goland arranged for 56 persons to make payments ranging from $1000 to $4500 to the media company with the understanding that Goland would reimburse them, which apparently he did.

The list of these 56 persons was then given to Vallen's campaign treasurer, who in turn reported them as the source of the advertising windfall in Vallen's report to the FEC. ⁶ The media company eventually On December 14, 1988, a federal grand jury in Los Angeles indicted Goland and three other individuals. The indictment specifically charged Goland with violating 18 U.S.C. Sec. 1001 and 18 U.S.C. Sec. 371 ⁸ by knowingly and willfully causing the treasurer of the Vallen Campaign Committee to make false statements to the Commission for the purpose of concealing the fact that Goland had made a $120,000 contribution. The grand jury also charged Goland with making an excessive campaign contribution in violation of 2 U.S.C. Sec. 441a, and making a contribution in the name of another in violation of 2 U.S.C. Sec. 441f.

paid back the total $120,000 to Goland's corporation. Cranston won the election by a slim margin of about as many votes as Vallen received. ⁷

On March 13, 1989, Goland filed this civil complaint pursuant to 2 U.S.C. Sec. 437h, seeking immediate certification by the district judge of three constitutional challenges to...