LaRouche v. Federal Election Com'n, 92-1100
| Citation | 996 F.2d 1263 |
| Decision Date | 02 July 1993 |
| Docket Number | No. 92-1100,92-1100 |
| Parties | Lyndon H. LaROUCHE and Democrats for Economic Recovery-LaRouche in 92, Petitioners, v. FEDERAL ELECTION COMMISSION, Respondent. |
| Court | United States Courts of Appeals. United States Court of Appeals (District of Columbia) |
Petition for Review of An Order of the Federal Election Commission.
James F. Schoener, Sarasota, FL, argued the cause for petitioners. With him on the brief was Richard Mayberry, Washington, DC.
Richard B. Bader, Associate General Counsel, Federal Election Com'n, Washington, DC, argued the cause for respondent. With him on the brief were Lawrence M. Noble, General Counsel and Marcus C. Migliore, Attorney, Federal Election Com'n, Washington, DC.
Before: WALD, BUCKLEY and WILLIAMS, Circuit Judges.
Opinion for the Court filed by Circuit Judge WILLIAMS.
The Presidential Primary Matching Payment Account Act, 26 U.S.C. §§ 9031-42 ("Matching Payment Act" or "the Act"), sets forth specific requirements that must be satisfied before the Federal Elections Commission certifies a candidate for receipt of matching funds. The key criteria are expressed in § 9033(a), which requires that an applicant "agree" to various commitments to keep and supply records that the Commission might find useful for enforcement of the statutory requirements as to use of campaign funds; and in § 9033(b), which requires a commitment as to prospective use of campaign funds and a representation as to past receipt of a minimum quantity of small campaign contributions from many states.
Although the papers filed by individual petitioner Lyndon H. LaRouche, Jr. and his campaign organization, Democrats for Economic Recovery--LaRouche in 92 (collectively "LaRouche") concededly provided the agreements and commitments required by § 9033, and although the Commission did not contest the truth of LaRouche's representations as to contributions received, it nonetheless denied him certification for matching funds for the 1992 election cycle. In essence, the Commission inferred from various factors in LaRouche's background--including his prior dealings with the Commission and his conviction for fraud partially involving election-related activities--that LaRouche's agreements and commitments were not made "in good faith". Because we agree with LaRouche that the statute gives the Commission no authority to engage in such an assessment of candidates, we reverse.
* * *
On November 18, 1991 LaRouche filed with the FEC to receive matching funds for his campaign. His submission consisted of a Candidate Letter of Agreements and Certifications, along with supporting documentation. Shortly thereafter, the Commission replied that the letter was defective because it contained language limiting LaRouche's personal responsibility under § 9033(a) to furnish financial records and other information for FEC review. LaRouche then submitted a revised letter. The Commission does not dispute that the new submission formally satisfied the statutory and regulatory requirements.
The Commission nonetheless made an initial determination that LaRouche was not eligible for matching funds, which it explained in a Statement of Legal and Factual Reasons. LaRouche submitted responses to the initial determination, including offers to supply whatever documentation the Commission needed to verify the legitimacy of his filings. After reviewing the campaign's responses, the Commission issued a final determination of ineligibility. Statement of Legal and Factual Reasons: Final Determination of FEC Regarding Application of Lyndon H. LaRouche Jr. for Presidential Primary Matching Funds, Joint Appendix ("J.A.") 255 ("Final Determination").
The Commission based its denial on LaRouche's alleged history of non-compliance with the Act, as well as on his criminal indictments and convictions. The Final Determination specifically referred to the following: (1) In 1976 the Commission found LaRouche ineligible for matching funds because he had listed invalid contributions to meet the certification threshold. (2) In 1980 the Commission found LaRouche eligible to receive funds, but a subsequent audit turned up various violations leading to a $15,000 penalty. LaRouche denied personal liability for the penalty, making arguments about the meaning of his candidate letter that appear at best flimsy and at worst casuistical, and paid only when forced to do so as a condition for receiving matching funds in 1984. (3) In the 1984 election cycle LaRouche's campaign vehicle engaged in substantial campaign irregularities, including unauthorized charges against the credit cards of persons who had not agreed to contribute to the campaign; LaRouche refused to turn over documents for purposes of an audit into these events. (4) In 1988, after an audit disqualifying certain purported contributions, followed by documentation of additional contributions, the Commission certified LaRouche for funds. (5) A federal jury convicted LaRouche in 1988 on several counts of mail fraud. While it is plain that a substantial portion of the evidence involved fraud in the raising of campaign funds, the parties dispute whether such evidence was essential to the conviction. The conviction was indisputably not for violation of election laws. J.A. 265-78. We assume for purposes of this case that the Commission's findings of past misconduct by LaRouche were entirely valid.
The Final Determination is quite clear that the Commission viewed LaRouche's past misconduct as going to the substantiality of LaRouche's agreements and commitments, not as bearing on the credibility of his representations as to campaign contributions already received. The Determination said that the Commission need not ignore "behavior which convinces it that promises made to secure eligibility to receive public financing are not made in good faith." J.A. 261 (emphasis added). And it concluded that there was "a clear basis ... to determine that Mr. LaRouche's candidate agreement cannot be accepted on its face." Id. at 278 (emphasis added).
* * *
The statute controlling the Commission's disposition of applications for matching funds provides in pertinent part as follows:
§ 9033 Eligibility for payments
(2) agree to keep and furnish to the Commission any records, books, and other information it may request, and
(3) agree to an audit and examination by the Commission under section 9038 and to pay any amounts required to be paid under such section.
(3) the candidate has received matching contributions which in the aggregate, exceed $5,000 in contributions from residents of each of at least 20 States, and
(4) the aggregate of contributions certified with respect to any person under paragraph (3) does not exceed $250.
26 U.S.C. §§ 9033(a) & (b). Once the candidate "establishes his eligibility" under § 9033, the Act directs the Commission to certify him for matching funds within ten days.
The sole issue before us is whether the Matching Payment Act permits the Commission to withhold matching funds on the basis of its assessment of evidence leading it to distrust the agreements and commitments made by an applicant under § 9033(a) & (b). Under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), unless Congress has clearly resolved the issue, we must sustain the Commission's position if it is reasonable. We believe Congress has clearly resolved the issue; we find the language, structure and purpose of the Act to be inconsistent with the Commission's interpretation.
We may dispose at the outset of the Commission's reliance on one of its regulations, 11 CFR § 9033.4(b), which provides that, in evaluating a candidate's submission,
the Commission may consider other information in its possession, including but not limited to past actions of the candidate in an earlier publicly-financed campaign, that is relevant to a determination regarding the candidate's eligibility for matching funds.
Putting aside the elusive question of whether or in what sense LaRouche's 1988 conviction can be said to have been "in [the Commission's] possession", the regulation does not even purport to answer the question before us. It permits the Commission to consider information that is "relevant to a determination regarding the candidate's eligibility", but it doesn't attempt to define what subjects are relevant. Even if it did, the regulation would of course be valid only to the extent that it conformed to the statute.
The language of the statute includes no modifiers requiring that the "agree[ments]" of § 9033(a), or the certification of a commitment to adhere to campaign expenditure limits in § 9033(b)(1), be "in good faith" or trustworthy. It is of course true that Congress could have secured the applicant's legal commitment simply by providing that any application would be deemed to commit the candidate to the obligations stated, so we may infer that Congress sought more. One benefit that Congress secured by requiring express, signed commitments was to focus any applicant on the obligations to be undertaken, which an automatic commitment arising by operation...
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