Court rules against FEC in ad case

A U.S. District Court judge ruled Monday that the country’s top election watchdog misinterpreted campaign finance law when it dismissed a progressive group’s complaints against two conservative organizations.

The complaint against the American Action Network and Americans for Job Security was brought by Citizens for Responsibility and Ethics in Washington (CREW), a liberal group that is targeting so-called “dark money” groups.

{mosads}Campaign finance reformers, typically progressives, use the term “dark money” to describe politically-motivated spending channeled through non-profit groups that keep their donors hidden.

CREW argued that American Action Network and Americans for Job Security had violated federal campaign finance law and should be forced to disclose their donors.

The court’s decision has the potential to stymie the avalanche of untraceable cash spent by Republican and Democratic donors during election years.

“I think it’s very significant,” said Larry Noble, general counsel of the non-partisan watchdog, the Campaign Legal Center.

“This should be of concern to organizations which have been very politically active, while failing to report as political committee, relying on the FEC’s refusal to enforce the law.”

Federal law requires groups to register as political committees – and therefore reveal their donors – when their “major purpose” is to nominate or elect political candidates. But if their major purpose is to promote “social welfare” or to educate voters on issues they are allowed to keep their donors’ identities hidden.

American Action Network and Americans for Job Security argued they had every right to protect their donors’ privacy because the groups’ spending during the 2010 Tea Party wave election was more about educating voters than defeating Democrats.

That remains the position of American Action Network, a well-funded 501(c)4 group with close ties to House Speaker Paul Ryan (R-Wis).

“AAN will continue to move forward as it always has: a social welfare organization primarily dedicated to center-right policy advocacy,” said Emily Davis, a spokeswoman for the group.

The FEC initially dismissed CREW’s complaints, finding no reason to believe that either group was spending most of their money on electoral politics.

Republican commissioners made that case by counting only ads that explicitly told voters to support one candidate over another. The commissioners also tallied spending over the entire lifetime of the groups rather than over the 2010 election cycle.

On Monday, the federal court supported CREW’s appeal that “many or even most electioneering communications” funded by American Action Network and Americans for Job Security “indicate a campaign-related purpose.”

U.S. District Judge Christopher Cooper wrote, “It blinks reality to conclude that many of the ads considered by the Commissioners in this case were not designed to influence the election or defeat of a particular candidate in an ongoing race.”

Cooper’s ruling cited an American Action Network ad – backed by a $1.1 million buy – stipulating that three Democratic House candidates had worked with then-Speaker Nancy Pelosi (Calif.) to give “free healthcare to illegal immigrants” and “even Viagra for convicted sex offenders.”

Fred Wertheimer, president of the non-partisan watchdog Democracy 21, said the court had “slapped down” the Republican FEC commissioners for having “very permissive and unjustified interpretations of the law.” 

It was “ridiculous” of the commissioners to look at a group’s spending over its lifetime to determine whether it’s a politically-motivated organization, Wertheimer said. Such an approach, he argued, ignores the reality that some groups change over time, strategically shifting their operations into politics during election years.

Many conservatives will take a different view of the decision, which they see as being the product of a liberal group teaming up with a sympathetic court.

Charlie Spies, a campaign finance lawyer who oversaw super-PACs supporting GOP presidential candidates Jeb Bush and Mitt Romney, said, “Judge Cooper’s ruling is significant because it is the first evidence of success for CREW’s forum shopping strategy to limit political speech by non-profit organizations.”

“CREW is engaging in a well-funded effort to limit the speech of issue organizations that it disagrees with,” he added, “and this case is a partial victory for CREW because they found a judge to say the controlling FEC Commissioners’ ruling was arbitrary and capricious.” 

Spies pointed out that the court did, however, reject “CREW’s attempt to impose its own standard for triggering political committee status” and instead pushed the ultimate decision back to the FEC.

The American Action Network hopes that when the FEC commissioners reconsider the allegations they’ll do exactly what they did the first time: Dismiss them.

“While we respectfully disagree with the judge’s opinion, this preliminary ruling does not conclusively resolve the case,” said Davis, the American Action Network spokeswoman. “We are confident that the FEC’s original ruling to dismiss this matter was correct and will be affirmed.”