Kennedy for President Committee v. Federal Election Com'n, 83-1521
| Decision Date | 15 May 1984 |
| Docket Number | No. 83-1521,83-1521 |
| Citation | 734 F.2d 1558 |
| Parties | KENNEDY FOR PRESIDENT COMMITTEE and Edward M. Kennedy, Petitioners, v. FEDERAL ELECTION COMMISSION, Respondent. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Petition for Review of an Order of the Federal Election commission.
William C. Oldaker, Washington, D.C., with whom David H. Larry, Washington, D.C., was on brief, for petitioners.
Richard B. Bader, Asst. General Counsel, Federal Election Commission, Washington, D.C., with whom Charles N. Steele, General Counsel and Miriam Aguiar, Atty., Federal Election Commission, Washington, D.C., were on brief, for respondent.
Before WALD, BORK and STARR, Circuit Judges.
Opinion for the Court filed by Circuit Judge WALD.
This case and the companion case decided today, Reagan for President Committee v. Federal Election Commission, 734 F.2d 1569, both present the issue of whether the Federal Election Commission (FEC or Commission) acted within its statutory authority under the Primary Matching Payment Account Act (the Act), 26 U.S.C. Secs. 9031-9042, in ordering a candidate to repay to the government the full amount of his campaign's unqualified expenditures without regard to whether those expenditures were paid out of federal matching funds or private contributions. We find that the statute gives rise to a repayment obligation only when the FEC determines that federal matching funds were used for unqualified purposes, and limits the repayment obligation to the amount of federal matching funds that the Commission reasonably determines were used for such unqualified purposes. The Commission's regulation however, on its face and as applied to the Kennedy for President Committee in this case, indulges the unreasonable presumption that all unqualified expenditures are paid out of federal matching funds. We therefore reverse the Commission's order because it failed to make a reasonable determination of the amount of federal matching funds used by the Committee for unqualified purposes, and does not limit the Committee's repayment obligation to such an amount.
On April 14, 1983, after lengthy administrative audits, the FEC determined that the Kennedy for President Committee (Committee) had exceeded the 1980 campaign expenditure limits by $14,889.17 in New Hampshire and $40,611.16 in Iowa. 1 Accordingly, the Commission found that the Committee had spent a total of $55,500.33 for unqualified purposes during the 1980 campaign. Invoking and applying FEC repayment regulations, the Commission ordered the Committee to repay the full $55,000.33 to the United States Treasury. 2
The Committee does not challenge the FEC's determination of the amount of unqualified expenditures. Rather, it contends that the Commission exceeded its statutory authority by ordering the repayment of the entire amount of those unqualified expenditures. According to the Committee, the Act requires the FEC to order repayment of only the amount of matching funds used for unqualified purposes. The Committee believes that the FEC is not authorized to demand repayment of the entire amount of unqualified spending. Instead, the Committee proposes that the repayment sum be calculated by "multiplying the total amount of unqualified expenditures by the proportion of matching funds to total campaign funds." Committee Brief at 16.
As explained below, we reverse the FEC's repayment order because it exceeds the FEC's authority under 26 U.S.C. Sec. 9038. We hold 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. However, because the statute does not prescribe a particular method for making the determination--while it does prescribe a method for determining the amount of surplus campaign funds to be repaid to the Treasury, see 26 U.S.C. Sec. 9038(b)(3)--we believe that the Commission enjoys discretion in formulating a proper method for calculating the amount of unqualified expenditures attributable to matching fund sources. We therefore do not think that the Committee's proposed method should be judicially mandated as the sole acceptable formula for calculating repayment obligations. At the same time, we think it is clearly unreasonable to presume that 100 percent of unqualified expenses are fairly attributable to federal matching funds. Accordingly, we reverse the FEC order and remand for further proceedings consistent with this opinion.
The relevant section of the Act provides:
If the Commission determines that any amount of any payment made to a candidate from the matching payment account was used for any purpose other than ... [qualified campaign expenses,] it shall notify such candidate of the amount so used, and the candidate shall pay to the Secretary an amount equal to such amount.
26 U.S.C. Sec. 9038(b)(2). By its terms, therefore, the statute creates a repayment obligation only "[i]f the Commission determines" that matching fund payments were used for unqualified purposes, and expressly limits the repayment obligation to "such amount," i.e., the amount of matching funds "so used." Because nothing in the legislative history suggests that Congress intended any other result, we interpret the statute in accordance with its straightforward meaning.
The FEC regulations, by contrast, require repayment of "any payment made to a candidate from the matching payment account or any contributions received by the candidate" used for unqualified purposes. 11 C.F.R. Sec. 9038.2(a)(2) (1982) (emphasis added). 3 Thus the regulations require repayment of unqualified expenditures regardless of whether the expenditures could properly be attributed to federal matching fund payments. 4 We believe that if Congress had intended the total amount of every unqualified expenditure to be repaid, the statute would not have expressly limited the repayment obligation to unqualified expenditures paid out of matching fund sources.
Instead, the statute contemplates a "Commission determin[ation]" that the sum to be repaid equals the "portion of [the] payment[s] made to a candidate from the matching payment account [that] was used for" unqualified purposes. 26 U.S.C. Sec. 9038(b)(2). Since federal funds and private contributions are commingled in the candidate's coffers, this determination may never be perfectly accurate. Nevertheless, the statute delegates to the Commission the task of estimating the amount of federal funds, rather than private contributions, that were spent for unqualified purposes. By requiring repayment of 100 percent of the amount of all unqualified expenditures, without at least estimating the extent to which such expenditures derived from matching fund sources, the Commission has shirked its statutory responsibility to make a reasonable determination that the repayment sum represents the matching funds used for unqualified purposes. After all, matching funds do not comprise even fifty percent of total funds in any campaign. 5 For this reason, we believe the regulation and the order in which the Commission applied that regulation, see FEC Statement of Reasons at 14 n. 12, reprinted in Joint Appendix (J.A.) at 210, exceed the FEC's statutory authority under 26 U.S.C. Sec. 9038(b)(2). 6
The FEC believes that well-established rules of statutory construction support its interpretation of section 9038(b)(2). As the Commission reminds us, the Act specifically requires candidates at the end of a campaign to repay out of their surplus funds "that portion of any unexpended balance ... which bears the same ratio to the total unexpended balance as the total amount received from the matching payment account bears to the total of all deposits made into the candidate's accounts." 26 U.S.C. Sec. 9038(b)(3). In contrast, the statute provides no specific formula for the repayment of amounts used for unqualified purposes. See id. Sec. 9038(b)(2). In light of "the presumption that 'where Congress includes particular language in one section of a statute but omits it in another section of the same Act, ... Congress acts intentionally and purposely in the disparate inclusion and exclusion,' " FEC Brief at 25 (quoting United States v. Martino, 681 F.2d 952, 954 (5th Cir.1982) (en banc) (citations omitted)), the Commission argues that the Committee's proposed repayment formula, see supra at 1561--which is identical to the formula specified in the statute for surplus repayments--should not be mandated for repayments of unqualified expenditures, for which Congress specified no particular formula.
We agree with the FEC that section 9038(b)(2) mandates no particular repayment formula, but we do not agree that the FEC's repayment scheme is therefore within the bounds of the statute's delegated authority. The statute's silence as to the proper repayment formula for unqualified expenditures, read alongside its quite definite mandate of a particular repayment formula for surplus funds, manifests a discernible congressional intent to accord to the FEC discretion in the formulation of a method for determining the repayment obligations of candidates who have used matching funds for unqualified purposes. Such leeway, however, does not authorize the FEC to abandon its responsibility to arrive at some reasonable method for determining the extent to which matching funds, rather than private contributions, were used for unqualified purposes. We think it to be patently unreasonable for the FEC to assume, as it did in this case, that all unqualified expenditures were paid out of matching funds. Thus, the principle of statutory interpretation invoked by the FEC, properly applied, justifies only an inference that Congress afforded to the FEC discretion to devise a formula for determining repayment...
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