Robertson v. Federal Election Com'n

Decision Date03 February 1995
Docket NumberNo. 93-1698,93-1698
Citation45 F.3d 486
PartiesMarion G. ROBERTSON and Americans for Robertson, Inc., Petitioners, v. FEDERAL ELECTION COMMISSION, Respondent.
CourtU.S. Court of Appeals — District of Columbia Circuit

On Petition for Review from the Federal Election Commission.

Carol A. Laham, Washington, DC, argued the cause, for petitioners. With her on the briefs were Jan Witold Baran and Thomas W. Kirby, Washington, DC.

Richard B. Bader, Associate Gen. Counsel, Washington, DC, argued the cause, for respondent. With him on the brief were Lawrence M. Noble, Gen. Counsel, and Vivien Clair, Atty., Federal Election Com'n., Washington, DC.

Before: SILBERMAN, BUCKLEY, and SENTELLE, Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

SILBERMAN, Circuit Judge:

Marion G. (Pat) Robertson and Americans for Robertson, Inc. (collectively referred to as "petitioner"), seek review of a determination of the Federal Election Commission that petitioner must repay certain campaign matching funds. We reject petitioner's constitutional and statutory challenges, but grant the petition with respect to one of four disputed expense items.

I.

Petitioner made an unsuccessful bid for the Republican Party's nomination for election as President in 1988. During the course of the primary campaign, Robertson was eligible for and received campaign matching funds under the Presidential Primary Matching Payment Account Act, 26 U.S.C. Secs. 9031-9042 (1988). Robertson remained eligible to receive such funds from the beginning of the primary season until April 28, 1988. 1 He received funds thereafter only in conjunction with "winding down" expenses "associated with the termination of political activity" (e.g., administrative costs, expenses in fundraising to assist in retiring campaign debt). 11 C.F.R. Sec. 9034.4(a)(3)(i) (1994). He was given a total of $10,410,984.83 in public funds. A candidate who receives matching funds under the statute is obliged to maintain and provide documentation to the Commission verifying that all expenses are "qualified" campaign expenditures and that those expenditures fall within Commission limits. Any expenditure in excess of the individual state or overall limits or not properly documented is deemed a "nonqualified" campaign expense, and the FEC may seek a pro rata repayment (determined by a multiplier) of the share of public funds attributable to such nonqualified expenditures. Id. Secs. 9035.1, 9038.2. 2

Following petitioner's campaign, the Commission audited petitioner's campaign expenditures and his receipt and use of public funds. 3 26 U.S.C. Sec. 9038(a); 11 C.F.R. Sec. 9038.1(a)(1). Discovering irregularities in recordkeeping, disbursements, and expenditure levels, the Commission on December 19, 1989 issued an "Interim (preliminary) Audit Report" and "preliminary calculation" whereby petitioner was thought to be obliged to repay $290,772.60. Petitioner subsequently sought to convince the FEC as to the propriety of its expenditures, but on March 26, 1992, the Commission issued a "Final Audit Report" and "initial repayment determination" of $388,543.78; in addition, the FEC asserted that petitioner should refund $105,634.56 to certain press organizations that had allegedly overpaid for the cost of air travel with petitioner's entourage. Petitioner again responded in writing, on June 25, 1992, and also requested an oral presentation before the Commission. He made the presentation on December 2, 1992, and submitted supplemental documents on December 9, 1992.

The Commission thereafter (in September 1993) released its "final determination" accompanied by a "Statement of Reasons" concluding that petitioner was obliged to repay $290,793.66 to the United States Treasury. 4 The repayment figure reflected disallowances for, inter alia, the four insufficiently documented, excessive or otherwise not "qualified" campaign expenses which are the subject of this appeal. These four disputed repayment items include amounts that petitioner claims the Commission had either improperly allocated to or wrongly judged to have exceeded the Iowa and New Hampshire state expenditure limits; funds that had been transferred between petitioner's national and state campaign accounts; and monies that had been spent attending the 1988 Republican National Convention.

In addition to disputing these assessments, petitioner, at the oral hearing, also challenged the Commission's authority to issue any repayment determination. Petitioner contended that the Commission had failed to meet the statutory three-year period for "notification" of repayment determinations, see 26 U.S.C. Sec. 9038(c), a period which ran from August 18, 1988 (the date of the GOP nomination of George Bush) to August 18, 1991. The FEC (Commissioner Elliott dissenting) rejected this argument as not properly presented to the Commission since it had only first been made at the oral hearing. Pursuant to FEC regulations, oral presentations to the Commission may only deal with matters raised in prior written submissions, 11 C.F.R. Sec. 9038.2(c)(3), which are themselves due within 30 days of the issuance of the Final Audit Report (although an extension to 45 days was granted here). See 11 C.F.R. Sec. 9038.2(c)(2). Petitioner did not raise the issue of the three-year limit on "notification" of repayment determinations in compliance with the Commission's internal procedures for challenging agency action.

II.

Petitioner, before us, presents an array of objections to the Commission's order of repayment, ranging from a challenge to the constitutionality of the FEC's composition to a claim that the Commission's actions exceeded its statutory authority to a dispute as to the merits of four separate expense items. The constitutional challenge is based on the presence of two congressionally appointed, non-voting ex officio members on the Commission throughout the proceedings in this case. We have recently held that the Commission so composed is unconstitutional. See Federal Election Comm'n v. NRA Political Victory Fund, 6 F.3d 821, 826-27 (D.C.Cir.1993), cert. granted, --- U.S. ----, 114 S.Ct. 2703, 129 L.Ed.2d 832 (1994), cert. dismissed, --- U.S. ----, 115 S.Ct. 537, 130 L.Ed.2d 439 (1995). 5 The Commission, however, in an effort to avoid the effect of our opinion, voted on December 1, 1993, to ratify its past "actions in audits of publicly funded presidential campaigns," including this case, without the presence of the two ex officio members. Petitioner disputes the Commission's claim that this action undoes any taint of unconstitutionality.

The Commission's response is that petitioner's constitutional challenge is not properly raised because it was not brought before the Commission. The latter point need not detain us. It was hardly open to the Commission, an administrative agency, to entertain a claim that the statute which created it was in some respect unconstitutional. See Mitchell v. Christopher, 996 F.2d 375, 378-79 (D.C.Cir.1993). Still, we do not need to decide whether the FEC's subsequent ratification vote obliterated the unconstitutional taint because petitioner is estopped from challenging the Commission's constitutionality. See Fahey v. Mallonee, 332 U.S. 245, 255, 67 S.Ct. 1552, 1556-57, 91 L.Ed. 2030 (1947) (where a party has enjoyed benefits from agency under a statutory scheme, courts will not entertain challenges to agency's existence); Brockert v. Skornicka, 711 F.2d 1376, 1380 (7th Cir.1983) (constitutional estoppel "most appropriate when a party seeks to retain the benefits of a governmental act while attempting to invalidate its burdens").

Petitioner, after all, voluntarily accepted over $10 million in public funds disbursed at the Commission's direction. It is hardly open to it now, after having taken the money, to claim that the very statutory instrumentality by which the funds are dispensed may not seek reimbursement because its composition is unconstitutional. Under the statute only the Commission may seek reimbursement (not, for example, the Justice or Treasury Departments), so under petitioner's logic, if it had taken the funds and spent them in a gambling casino, the taxpayers would have no recourse--at least as to compelling repayment. 6

The doctrine of constitutional estoppel, as petitioner points out, has its limits. The government may not interpose the doctrine as a defense if a party wishes to challenge an unconstitutional condition which is imposed on the receipt of federal funds. See Kadrmas v. Dickinson Pub. Schools, 487 U.S. 450, 456-57, 108 S.Ct. 2481, 2486-87, 101 L.Ed.2d 399 (1988). But that limitation is not applicable here; rather, petitioner has mounted a categorical, structural challenge unrelated to the funds he has received and now attempts to avoid repaying. Petitioner is claiming, in effect, that the entire process by which it received funds--not the criteria for eligibility, disbursement, or repayment--is unconstitutional. It would seem that a party wishing to make such a challenge must do so before it accepts and spends federal funds--not after, as a ploy to avoid its part of a bargain.

Petitioner's second, statutory argument is more troublesome, however. It is claimed that the Commission's "final determination" came down after the three-year period during which the statute permits the Commission to "notif[y]" the candidate of a repayment "determin[ation]." See 26 U.S.C. Sec. 9038(b), (c). The Commission, in accordance with its regulation (adopted before both the end of the three-year period and the Commission's final determination in this case and ostensibly representing a "clarification" of prevailing Commission practice), contends that the statute requires only that the Commission issue its "interim audit report" (preliminary calculation) prior to the expiration of the three-year period; it is not even obliged to issue its initial...

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