John Glenn Presidential Committee, Inc. v. Federal Election Com'n, 86-1348

• Decision Date: 23 June 1987
• Docket Number: No. 86-1348,86-1348
• Citation: 822 F.2d 1097
• Parties: JOHN GLENN PRESIDENTIAL COMMITTEE, INC., Petitioner, v. FEDERAL ELECTION COMMISSION, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1097

822 F.2d 1097

262 U.S.App.D.C. 35

JOHN GLENN PRESIDENTIAL COMMITTEE, INC., Petitioner, v. FEDERAL ELECTION COMMISSION, Respondent.

No. 86-1348.

United States Court of Appeals District of Columbia Circuit.

Argued Feb. 20, 1987.

Decided June 23, 1987.

As Amended June 23, 1987.

Petition for Review of an Order of the Federal Election commission.

Harlan Pomeroy, with whom Lee T. Ellis, Jr. and D. Brent Gunsalus, Washington, D.C., were on the brief, for petitioner.

Richard B. Bader, Asst. General Counsel, Federal Election Com'n, with whom Charles N. Steele, General Counsel and David I. Futter, Atty., Federal Election Com'n, Washington, D.C., were on the brief, for respondent.

Before RUTH BADER GINSBURG and BUCKLEY, Circuit Judges, and FAIRCHILD, ^* Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge RUTH BADER GINSBURG.

RUTH BADER GINSBURG, Circuit Judge:

The John Glenn Presidential Committee, Inc. (Glenn Committee) has invoked this court's authority to review a final repayment determination, rendered May 15, 1986, by the Federal Election Commission (FEC or Commission). See 26 U.S.C. Sec. 9038(b)(2) and 11 C.F.R. Sec. 9038.2 (Commission repayment determinations); 26 U.S.C. Sec. 9041(a) (judicial review). The Glenn Committee received approximately $2,800,000 in federal matching payments under the Presidential Primary Matching Payment Account Act (Matching Payment Act), 26 U.S.C. Secs. 9031-9042, for use in the 1984 presidential primary campaign; the contested Commission determination directs the Glenn Committee to repay $74,955.62. This amount, according to the FEC's determination, represents the federal funds paid for campaign expenditures in Iowa and New Hampshire in excess of the state expenditure limits prescribed in the Federal Election Campaign Act, 2 U.S.C. Sec. 441a(b)(1)(A) ("aggregate of expenditures ... in any one State shall not exceed the greater of 16 cents multiplied by the voting age population of the State ..., or $200,000"); see id. Sec. 441a(c) (providing for upward adjustment of limits annually, based on average percentage rise in the consumer price index for the 12 preceding months).

The Glenn Committee initially resists repayment on the ground that the state, expenditure limits Congress ordered in 2 U.S.C. Sec. 441a(b)(1)(A) are unconstitutional. The Committee also contests the FEC's determination on three specific items: a $120,000 telephone call expenditure the Commission allocated to Iowa; polling expenditures of $2,578.25 (allocated by the FEC to Iowa) and $64,284.56 (allocated by the FEC to New Hampshire); and button and bumper sticker expenditures of $6,415.72 (allocated by the FEC to Iowa) and $814.78 (allocated by the FEC to New Hampshire).

We affirm the Commission's final repayment determination. The Glenn Committee "is certainly correct when it states that ... the government may not deny a benefit to a person because he exercises a constitutional right." Regan v. Taxation with Representation, 461 U.S. 540, 545, 103 S.Ct. 1997, 2000, 76 L.Ed.2d 129 (1983). But this repayment determination case does not fit that description. The statutory recoupment remedy pursued by the FEC does not call back private spending; it does police the restrictions Congress placed on the expenditure of public moneys. Campaign speech within a state is surely activity sheltered by the Constitution. A ceiling on public subsidies for that activity, however, cannot be equated, under currently governing precedent, with a proscription of or a penalty on the activity. See Taxation with Representation, 461 U.S. at 545, 103 S.Ct. at 2000; Harris v. McRae, 448 U.S. 297, 317 n. 19, 100 S.Ct. 2671, 2688, n. 19, 65 L.Ed.2d 784 (1980). As to the claims that the FEC misapplied Commission regulations in three specific areas, we find in each instance that the FEC has ruled rationally and has not abused the authority Congress delegated to it.

I.

On October 6, 1983, the FEC determined that Senator John Glenn, having satisfied the requirements of 26 U.S.C. Sec. 9033(a) and (b), and 11 C.F.R. Secs. 9033.1, 9033.2, was eligible to receive payments from the Presidential Primary Matching Payment Account pursuant to 26 U.S.C. Sec. 9037(b) and 11 C.F.R. Sec. 9037.1. Under the Matching Payment Act prescription, 26 U.S.C. Sec. 9034, a candidate whose eligibility is established is entitled to receive federal Candidates may use the public funds they receive to help defray "qualified campaign expenses"; campaign expenses are not "qualified" if they exceed the limits Congress set, including the limits on spending in each state. 26 U.S.C. Sec. 9035(a); see Kennedy for President Committee v. FEC, 734 F.2d 1558, 1560 n. 1 (D.C.Cir.1984). The Matching Payment Act directs the FEC, after a nomination campaign ends, to conduct a thorough audit of the campaign finances of every publicly-funded candidate, 26 U.S.C. Sec. 9038(a); if the Commission determines that matching fund payments were used for unqualified purposes, the Commission is to order repayment of the amount of matching funds--and only the amount of matching funds--so used. 26 U.S.C. Sec. 9038(b)(2); Kennedy for President Committee, 734 F.2d at 1559, 1561 (holding that "the statute requires the Commission to make a reasonable determination of the amount of matching funds used for unqualified purposes, and to limit its repayment order to that amount") (emphasis in original).

funds to match individual contributions up to $250, subject to an overall ceiling of 50% of the expenditure limits stated in 2 U.S.C. Sec. 441a(b)(1)(A). In 1984, the total (national) limit was $20.2 million (so that candidates could receive no more than $10.1 million in matching fund payments), the limit for New Hampshire was $404,000, and the limit for Iowa was $684,537.50.

On March 16, 1984, Senator Glenn announced he was no longer a candidate for the Democratic presidential nomination. After conducting the audit required by 26 U.S.C. Sec. 9038(a), the FEC ultimately adopted its final repayment determination for the Glenn Committee. That decision, rendered May 15, 1986, states and explains the FEC's findings that the Committee's total expenditures for Iowa were $758,666.70, or $74,129.20 above the statutory ceiling for Iowa, and that total expenditures for New Hampshire were $577,831.77, or $173,831.71 above the New Hampshire ceiling. Joint Appendix at 30. Recognizing that the statute gives rise to a repayment obligation only as to the federal matching funds portion of expenditures above the ceilings, see Kennedy for President Committee, 734 F.2d at 1559, 1561, the FEC directed the Glenn Committee to repay $74,955.62. See 11 C.F.R. Sec. 9038.2(b)(2)(iii) (providing for repayment of that portion of nonqualified campaign expenses which equals the proportion of the candidate's total campaign funds made up of matching fund payments).

In addition to its first amendment challenge, the Glenn Committee, in its petition for court review, contests three of the Commission's findings. See supra pp. 1098-1099. We address the constitutional objection first, and next, the three specific allocation rulings the Glenn Committee questions.

II.

The Glenn Committee "does not here question the constitutionality of the [Federal Election Campaign] Act's limitations on total expenditures made by candidates receiving public financing." Brief of Petitioner at 10 (emphasis in original); see Buckley v. Valeo, 424 U.S. 1, 57 n. 65, 96 S.Ct. 612, 653 n. 65, 46 L.Ed.2d 659 (1976) ("Congress may engage in public financing of election campaigns and may condition acceptance of public funds on an agreement by the candidate to abide by specified expenditure limitations."); Republican National Committee v. FEC, 487 F.Supp. 280 (S.D.N.Y.) (three-judge court), 616 F.2d 1 (2d Cir.) (en banc), aff'd mem., 445 U.S. 955, 100 S.Ct. 1639, 64 L.Ed.2d 231 (1980) (upholding against first amendment challenge overall spending limitations prescribed for public financing of presidential candidates in general election). Rather, the Committee confines its attack to the state-by-state limitations. ¹

The imposition that the Glenn Committee resists, this court has underscored, applies only to federal funds, not to private moneys, spent for unqualified purposes, i.e., in excess of congressionally-prescribed limitations on spending in each state. Kennedy for President Committee, 734 F.2d at 1559, 1561, reiterates in text and notes this clear construction: the statute's repayment directive, 26 U.S.C. Sec. 9038(b), allows the FEC to recoup only the public moneys--the matching funds--not the entire sum used for unqualified expenditures. And as the Supreme Court has recently restated, a legislature's decision not to subsidize the exercise of a fundamental right--a fortiori, a decision to place dollar limits on public subsidies--does not infringe that right. Regan v. Taxation with Representation, 461 U.S. at 545, 103 S.Ct. at 2001 (public interest organization's lobbying, though sheltered by first amendment, need not be subsidized by government); Harris v. McRae, 448 U.S. at 316, 317 n. 19, 100 S.Ct. at 2687, 2688 n. 19 (no constitutional entitlement to public funds for engaging in protected activity).

Significantly, the Glenn Committee states that this case entails "an inadvertent overshooting of the limitations." Brief of Petitioner at 18. The FEC agrees; it has made simply and solely a repayment determination, one "not considered to involve violations of law." See Reagan Bush Committee v. FEC, 525 F.Supp. 1330, 1337 (D.D.C.1981). This court has observed that the Matching Payment Act does authorize the imposition of penalties "[w]hen a candidate knowingly and willfully violates the spending ceilings." Kennedy for President Committee, 734 F.2d at 1565 (citing 26 U.S.C. Secs. 9035, 9042, also 2 U.S.C. Sec. 437g). The parties have not cited, however, nor have we found any case in which the FEC sought to sanction a candidate for...