The Republican Commissioners and the Meaning of the Deadlocks at the FEC

Robert F. Bauer

(An abbreviated version of this presentation was delivered at a BNA Conference panel on developments in campaign finance law)

     The Federal Election Commission has lived with a mixed reputation since its first year—if one concedes that it is mixed.  On both left and right, on the Hill and in the press, it has found few friends.  Its destiny was not popularity:  to have a fan base, it would have to regulate wisely, neither too much nor too little, and in doing so, it would have to succeed where, as many see it, both the Congress and the Supreme Court have failed.

     It is an agency that is little understood, a misunderstanding in part the result of the small number of people who even try to understand it.  This limited understanding is evident now as the FEC enters a new period of controversy.  A deep division is apparent in the agency, separating three new Commissioners, appointed from the Republican ranks, from their colleagues.  This division shows up in enforcement case "deadlocks"—3-3 votes, resulting in no decision being made—but also in stalemates that develop over audits and over regulations long in the works and pending, but not receiving, final approval.  These divisions have raised the question of whether this conflict is exceptional, or just another example of an agency, foolishly structured for partisan deadlocks, that is ill-suited to the mission of campaign finance enforcement.

     One place to look for an answer is in the Statements issued by the three Republican Commissioners in explaining the deadlocks in enforcement matters.  These Statements are important as much for their picture of an agency in the midst of major change, as for their pronouncement on specific legal issues.  As legal statements, they are fairly standard issue:  dense argumentation through which long footnotes are threaded.  Readers already sympathetic to the position the Commissioners take will be impressed by their analysis; but this will not be the reaction of critics of the agency's enforcement posture. Nothing in the argument settles anything.

     What does make these Statements significant is a view of the Commissioners' role:   manifestos, in a sense, through which they declare themselves on the very character, as they see it, of their responsibilities.  Their position is new.  To these Commissioners, the agency must be re-made, and its re-making is necessary to realize a vision of the limits of the law.  In the service of this goal, these Commissioners are uncompromising and certainly, voting as a bloc on major issues, they are disciplined.  They have a program.

     In recent Statements, they have made clear that they will not follow, because they believe them to have been mistaken, prior positions taken by the agency on 527 and other activities that test the border between regulated campaign activity and protected speech.  They are countering prior courses of agency interpretation with their own legal standards.  They have suggested that a key agency regulation on "express advocacy" is probably unconstitutional.  Implied in their reasoning is a determination to closely follow the constitutional limits indicated even in lower court decisions.[1]  

     Now, because this novelty of approach may be missed by observers convinced that the agency has always been like this—that it has always been partisan or dysfunctional or both——taking the full measure of what is new here requires a little distance, a look back at the Commission’s history.

     Before proceeding, this disclaimer is in order:  as a Democratic practitioner, I have represented clients in enforcement and other proceedings among those discussed below.  In one case, a challenge to 527 activity, the Republicans voted against a client's position and caused it to fail for want of four votes to proceed.  But as noted below, the point here is not that these Commissioners are primarily motivated by partisanship, and the votes they have cast, some of them in defense of Democratic or Democratic-affiliated interests, establish this clearly.  And my own purpose in this discussion is, likewise, not partisan:  it is to examine the question of whether these Commissioners are staking out a position—a definition of their responsibilities—that is different from that embraced by past members of this agency.

The Role of Commissioners:  Earlier Eras of Republican Performance

     First among the teachings of this history is that Republicans have not, as might be imagined, aspired to an emasculated agency.  On the contrary, the Republican Party struck an alliance in the l970s with liberal Democrats to pursue an independent enforcement agency.  Opposing them were old-line members like Democrat Wayne Hays, Chairman of the Rules Committee, who despised the very notion of the agency—and then the agency—without apology.  Yet for Republicans, no reform accepted in the Watergate period of reforms was as important as an independent enforcement body. 

     In the House, Representative Bill Frenzel, a leader within the Republican caucus on campaign finance issues, attached to the majority report on the bill an extended defense of an independent FEC.  There he described the FEC as "the single most important change needed in existing election law."[2]   Other prominent Republicans took up the same cause.  Bob Dole spoke out on behalf of the FEC:  it was clear from his remarks and from the material he provided for the record that the agency’s principal virtue was that, if effective, it would demonstrate that existing laws were adequate and required no radical revision.[3] 

     Improbable as this position might be for a party so skeptical of campaign finance regulation, the politics of this position were shaped by a cold logic.  Republicans in l971 and l974 were most troubled by the support for public financing, and their defense was that, as Senator Dole suggested, no such revolutionary step was needed if existing law was properly enforced.  In the Senate Report, the additional views filed by Senator Griffin reflect disquiet about public financing,[4] and after the bill was enacted, President Ford voiced these same concerns in the signing statement and ceremony.[5]

     Thwarted in l971, the Republicans and their liberal allies prevailed in l974.  The body they supported was an odd construction—its membership was selected in part by the President and in part by the Congressional leadership, a composition that did not meet with the Supreme Court’s favor.  The alternative promoted by Wayne Hays and those standing with him was, however, even more a creation of the Congress.  Hays finally gave in, never surrendering his misgivings.

     Further points of interest in this history are the early choices for the agency’s membership.  Former elected officials dominated the field, on both sides: Thomas Curtis (1975-1976), Vernon Thomson (1975-1979) and William Springer (1976-1979) had all served as Republican House members, and on the other side of the aisle were found Democratic alumni of that institution, such as Robert Tiernan (1975-1981) and Neil Staebler (1975-1978).  Other Commissioners, like Joan Aikens (1975-1995), had devoted years of service to electoral politics:  in her case, service to the Pennsylvania Republican Party.  These were individuals with considerable political experience:  they were not youngsters, and their service at the Commission came at an advanced stage in their careers.

     Now these choices would not translate into vigorous enforcement, not on every issue, and it certainly would not diffuse partisanship.  Practical political calculation would guide the Commission to a compromise between partisan interests and the fulfillment, to a creditable and publicly presentable degree, of the agency's mandate.

     The split provided for by law in the Commissioner membership, limiting any one party to three seats, was proof that Congress was under no illusion that the agency would escape the temptations and pressures of partisanship.  The law provided that each party could check the excesses of the other.  But for many years, while partisanship was hardly absent from the agency’s deliberations or actions, voting patterns showed a degree of bi-partisanship that would today count as something remarkable. 

     Consider the issuance of Advisory Opinions.  Not once did Springer, Staebler, Aikens, Curtis, or Thomson issue a dissent with all the other members of the same party in tow.  In one of the early Advisory Opinions, Aikens shared a dissent with Tom Harris, a Democratic appointee from the labor movement.[6]  Aikens and Democrat Tiernan also dissented together, across party lines, in an early ruling.[7]  Harris, a vigorous dissenter, produced in excess of forty dissenting opinions, but never did he have all the other Democrats with him, and for the most part, he dissented alone—against the position of the other Democratic, as well as the Republican Commissioners.

     Advisory Opinions in the early days of the agency, as vehicles for bringing the new law to life, were more routinely pivotal than they are today.  So it is notable how often Democrats and Republicans, in some combination, produced a result.

     It is true that one such case, a crucial opinion providing corporations with the right to solicit their executives for PAC contributions, effectively cost the Democratic cross-over, Neil Staebler, his job.[8]  But here it was the nature of the issue—so close to the nerve of labor-management and therefore Republican-Democratic political competition—that caused all the trouble for Staebler.  The mere fact that a Commissioner would cast his ballot with Republicans was, most of the time, unexceptional. 

    Similar patterns can be seen in enforcement actions.  The Commission by majority vote decided major cases against the interests of powerful professional interests (the American Medical Association),[9] labor interests (the National Education Association),[10] and corporate interests (the Prudential Securities case).[11]  When negotiations toward a settlement broke down, as they did in the NEA case, the Commission, on a bi-partisan vote, sought vindication from the courts.

     Even on issues much like those that now produce deadlock and deep ideological rifts, such as the ad language that could reasonably be construed as "express advocacy," Republicans supplied votes for enforcement.  In the Furgatch case,[12] the Commission declined to be bound by a "magic words" test and found express advocacy in ads critical of President Carter that ran a week prior to the general election and that exhorted voters:  "Don’t let him do it."  The Commission lost in district court.  With bi-partisan backing, it appealed and won in the Ninth Circuit.  The victory there came to be memorialized in regulation 100.22(b), now under  attack from the current Republican Commissioners.

     This is not to say that in years past, deadlocks never occurred:  they did.  Partisan scuffling also went on in other ways, behind the scenes.  And in some cases, the agency adopted weak positions, or adopted one tepid option in lieu of stronger enforcement alternatives, because Commissioners strove hard to cut the best deal for respondents they favored for partisan or political reasons.

      One more qualification:  for years the Commission membership displayed continuity, but there were changes in the agency and there is no neat dividing line between one era and the other.  The earlier era discussed, immediately following Republican promotion of an independent enforcement agency, serves to highlight the extent of the change on the Republican Commission from that period to the present one.  It is a change that did not come suddenly; it developed over time.  But even in more recent times, before the Commission of today, there was notable interest in projecting an agency capable of bi-partisan enforcement.  Michael Toner came from the 2000 Bush campaign, and he would carry his party's banner on 527 issues, advocating rules to limit the activities of 527s critical of George W. Bush and the war in Iraq.  But he also paired with Democrat Scott Thomas to press for reform of public financing rules.  Trevor Potter, a Republican Commissioner, left the agency to become a leading member of the reform community. 

     In general, for the better part of its history, the FEC did decide cases, and these decisions were possible only if at least one Commissioner crossed lines and the other side held firm, or there was multiple line-crossing. 

Sources of Change at the FEC

     This view of the agency’s mission—the achievement of a balance between partisan interest and the agency’s self presentation as bona fide enforcement agency—no longer carries the day.  The agency is said to be polarized, along both ideological and partisan lines, and this is true, in a sense.  But this only describes, and it does not really explain, changes at the agency, and the description is crude.

     The sources of the change we see now are various but they are interrelated and mutually reinforcing.

     Change in the Nature of the Agency’s Work.  First if not foremost is the change over time in the work of the agency. Congress at first imagined that the FEC’s task was relatively straightforward.  Laws on the books for years had gone un-enforced.  Enforcement was needed, and an independent agency could provide it. With the exception of public financing, the substance of the law occasioned little argument: financing limits and disclosure had been staples of regulation for decades.  And in the early years, the "filling in" required of an administrative agency was routine. 

     As the law became more complicated—as inevitably it did, over time, and then still more, with a vengeance, with the passage of McCain Feingold—the law itself became an issue.  The "filling in" began to look more like "building out," and the agency was engaged in more than giving effect to a legislative command to fend off clear cases of misconduct.  Over the course of the development of this regulatory regime, the blacks and whites were becoming submerged, to the eyes of some observers, in grey.  Bob Dole, promoting the FEC in l974, cited approvingly to the need to "deal with the individual instances of dishonesty,"[13] but this pre-supposed clear rules being unambiguously violated.  In practice, the cases were both factual and legally more complex.

     Now this meant that the Republicans, having supported the agency to keep the legal regime within bounds, could conclude that it was eluding control.  The very agency they had hoped would make further regulatory activity unnecessary was the prime source of fresh, often ambitious, regulation.  Well before John Roberts uttered his famous "enough is enough" declaration in the Wisconsin Right to Life case, the Republicans had begun to feel that way about the FEC.

     Pressure from the Courts.  Moreover, as time went by, the courts rattled the foundations of campaign finance law, and this validated the growing Republican resistance to the regulatory enterprise.  The Supreme Court was not of one mind on major issues, and its jurisprudence was astoundingly lacking in coherence and persuasiveness.  For all that, the Court added to the sense of instability by issuing a series of rulings trimming the agency’s sails.  Now the agency was operating under the pressure of an unstable and, on certain issues, adverse constitutional regime, and for Republicans, this was one additional incentive to draw harder lines in the sand. 

     The Republicans had, after all, long held to strong constitutional reservations about the law, notably succumbing to regulatory temptation when it served partisan purposes.[14]  A shift in the constitutional lay of the land, more favorable to de-regulation, interacted with other pressures for change to move the Republicans back to a traditional position of  criticism and resistance.

     "Winners" and "Losers" Under the Regulatory Regime.  Then the law as it grew came to have, or seemed to have, disproportionately adverse effects on one set of political actors and unjustified advantages for another.  These effects were experienced keenly in areas particularly important to the institutional Republican Party and its ideological preoccupations.  Regulation came increasingly to be a poor bargain for political parties and "independent" speech, crafted by incumbents for their own benefit.  The FECA had become a "big government" issue, signifying the abuse of state power to privilege those who hold power and to weaken the channels of official (party) and independent opposition.

     When the FECA was first enacted, parties seem to have been well provided for.  Or so the sponsors believed, having written into the law special spending and contribution limits higher than those granted to non-party "political committees."  Early agency decision-making was also favorable to party organizations:  opinions and regulations carved out certain party activities from the limits, so that party committees could spend without limit for research and training activities conducted for its candidates as a class.  In time, as the post-regulatory legal regime settled into place, the form it assumed seemed to Republicans decidedly less favorable to parties. 

     Parties in particular were limited in what they could offer to their candidates while "independent" organizations of various kinds were free to spend at will.  The Republican Party responded in part by seeking judicial relief form the spending limits, only to end up with rulings that lifted the limits only for "independent" expenditures.[15]  Now the parties could spend freely in races if they keep their distance from their own candidates.  To the extent that parties could (and did) compensate in part with "issue advertising," paid with soft money, McCain-Feingold closed off that practice.  The Supreme Court, in upholding this new anti-soft money ban, did so on the unflattering basis that political parties functioned as conduits of "corruption." 

     Independent spending, by 527s or 501(c)s or others threatened, the Republicans believed, the ability of parties to maintain their primary and hallowed place in the political process.  The statutory regime, its scope limited by constitutional interpretation, had come to be slanted in favor of the non-party entities.  Observing this state of affairs, Republican observers were necessarily ambivalent.  On the one hand, their sympathies naturally lay with independent speech holding its own against the suppressive tendencies of the State.  On the other, the regulatory regime was clumsily tilted against parties and encouraging a shift of resources—and possibly over the long run, control over strategy and authority—to independent groups.  Republican officials like the idea of Club for Growth more than they like the organization operating under the name of Club for Growth.

     Both the Republican Party and independent groups could find common cause, however, in the maligned and self-interested source of the attacks on their welfare:  entrenched political interests misusing state power to stifle their opposition.  Incumbent politicians, in control of regulatory authority, could misuse it and did, for their own political purposes.  In this critique, McCain-Feingold represented the triumph of incumbent self-dealing in the preservation of a "candidate-centered" (Republicans would have said "incumbent-centered") campaign finance system that diminished the power and undermined the traditional role of parties.[16]   

     The new law showed how regulation could strike blows at both parties and independent speech and still leave parties the worse off.  Most of the law fell on party soft money practices, with one provision directed to pre-election advertising, known by its proponents as "sham" issue advertising, paid for by corporations or unions.  Neither of these targets was happy with the result, but Republicans saw the parties as the victims that had lost the most.  The Court then loosened the issue advertising restrictions on nonparty independent spending, in Wisconsin Right to Life, which exacerbated the uneven effects perceived by Republican officials and operatives.  At the end of 2008, the parties retaliated, filing suits to invalidate the McCain-Feingold soft money restrictions[17] and the limits on hard money spending on behalf of their individual candidates.[18] 

The Republican Response to Change

     In mapping out a new strategy for their role in enforcement, the Republicans have concluded that there is no place for accommodation, or the appearance of accommodation, on the major issues before the agency.  The fate of David Mason, one of their Commissioners, was one marker on this new road.  Mason came to the agency from the Heritage Foundation, an informed and skeptical student of campaign finance regulation, but he was, in temperament, similar to Commissioners in the past who believed that the agency should be able to produce workable, practical results.  He would not rule out compromise.  Eventually, though re-nominated by President Bush, his nomination was withdrawn:  he was fired. 

     The immediate cause of his termination, as far as one could tell, was the embarrassment he caused Republican nominee McCain by challenging the Senator’s withdrawal from the primary public funding system.  But this was a symptom of a broader dissatisfaction with Mason.  Mason, though he could be found regularly on the Republican side of the partisan divide, had (as described to me by one senior Republican) "gone native."  He worked to balance partisan concerns with the attention to fulfillment of the agency’s mandate.[19]  This balancing act was out of step with a new, harder-line Republican strategy for the agency.

     Now the three Republican Commissioners are lawyers with party experience who have apparently entered into a fully functioning unity pact.  It has been observed, correctly, that the work of these Commissioners is, in one respect, bi-partisan.  They vote to limit the agencies’ reach even where the beneficiaries are Democrats—including none other than George Soros.  This throws into sharp relief the break with the past.  Previous Republican Commissioners might be careful to look after their own and far stricter in their treatment of alleged transgressions by the opposition party.  Where Republican interests were less directly implicated, they would put their best, bi-partisan foot forward.  In effect, they would attend to party interests within their larger, professed commitment to the statutory scheme.

    It seems the current Republican Commissioners are effectively suggesting that their party responsibility is to question that scheme, and this is a point they make in part by voting in favor of Democrats and Republicans alike.  One aspect of their strategy is to call into question how the agency operates—its processes for reaching decision.  If the agency is an organ of "big government," its reach exceeding both its grasp and constitutional authority, then it is natural for the Republicans to emphasize reforms of procedure.  More protections for respondents, the deck less stacked in the agency’s favor:  these are elements of the new Republican plan for the agency.  A number of these reforms are entirely reasonable—years ago, the American Bar Association agitated for similar procedural reforms and the FEC recently implemented a few of them.  For the Republicans, this is a point of emphasis well connected to the primary objections they are lodging against the campaign finance regulatory regime. 

     Another characteristic of the Republican de-regulatory program is assertiveness in the face of staff recommendations, an unwillingness to have the General Counsel's office or Audit Division dictate or heavily influence outcomes.  This is not altogether ground-breaking.  For many years, Commissioners have tussled over what weight to assign to the positions advocated by the professional staff.  Democrats have tended to be more sympathetic to staff; Republicans, less so.  Each side have had their reasonable points to make, while from the sidelines, proponents of reform have judged the reasonableness of agency action in part by whether the Commissioners "overruled" staff recommendations.  The new Commissioners, publicly and by all accounts of their less visible actions within the agency, emphatically expect the decisions to rest with the appointed Commissioners, without any presumption in favor of staff analysis.  This is a natural outgrowth of the Republican view that, as the law becomes complex and its application more threatening or burdensome, a bureaucracy without political accountability but full of instinctive zeal for regulation must be limited to a subordinate, advisory role.

     Republicans will respond that the agency continues to enforce the law with Republican support, meting out fines for clear violations.  One can find those votes.  They are the votes that Bob Dole would have forecast when, in l974, he supported an agency capable of enforcing against "individual instances of dishonesty."  The Republican Commissioners will do that much. 

     But on the most prominent issues of the day, involving the power of the agency to "fill in" with rules and interpretations aimed at perceived abuses and "circumvention," this Republican team is implementing a program of protest and resistance.  Much of this program is directed against post-McCain-Feingold but not all:  McCain-Feingold may have stimulated this counter-attack but it has been building for years longer. 

Conclusion

     So what is observed today at the FEC is new.  It is clear that it is not a momentary shift in direction, willed by specific Commissioners.  Driving it are long-standing ideological commitments renewed by what the Republican Party sees as the unfortunate path of regulation since the l970s.  The Republican Party imagined in the l970s that the regulation would remain confined within a fairly constant set of parameters—contribution and spending limits, source restrictions, disclosure—presenting manageable problems of interpretation.  And they did not foresee a major threat to their own institutional welfare.  They see things differently today, and the stance of these three Republican Commissioners is the result.

     This seems to have brought an end to the search for a middle ground on certain of the issues considered "cutting edge" in this field.  But that search will have to continue.  Challenges in the administration of this law will not now vanish.  Congress chose, with bi-partisan support, to task the agency with those challenges, and the complexity of this task cannot relieve the Commissioners of trying to manage it. 

     For example, it is not necessary for the FEC to anticipate the Courts on "issue advertising" by nonprofit (c) organizations or 527s, stretching the court’s rulings beyond the commands of the plain text.  It is not obvious, for example, that 527s and (c) organizations occupy the same position under the law, and there is no warrant for the claim, advanced by the Commissioners in a footnote, that political parties can recover the right to spend soft money if they are engaged in pure issue advocacy or nonfederal activity.[20]  Adjudication under the federal campaign finance laws proceeds case by case.  Seizing on WRTL and lower court decisions to build a position that the Supreme Court has not adopted, as a result of which prior agency interpretations would be disregarded, is a curious undertaking by those in charge of an enforcement agency.

     It might be healthy if these issues could be brought out into the open, by having the Republicans and Democrats explain their theories of adjudication and their understanding of the meaning of these deadlocks.  The Statements issued by the Republicans defend their positions in the particular cases.  But is plain that tying these works together is a unique—and I have argued, novel—perspective on their duties as Commissioners, and it would be far better to have it presented and defended directly.

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  [1]  See FEC MURs 5977 and 6005 (In the Matter of American Leadership Project, et al.) and MURs 5694 and 5910 (In the Matter of Americans for Job Security, et al.).

  [2]  Report of the Committee on House Administration on the Federal Election Campaign Act Amendments of 1974, Supplemental Views of Representative Bill Frenzel , H. Rep. No. 93-1239, 93d Cong., 2d Sess. at 131 (1974).

  [3]  120 CONG. REC. S5647 (daily ed. April 10, 1974) (statement of Sen. Dole), incorporating into the record an article by a former Senator, John Williams, who concluded that "[i]f properly enforced, existing statutes are by and large adequate to deal with individual instances of dishonesty that will always be with us."

 [4]  Report of the Committee on Rules and Administration on the Federal Election Campaign Act Amendments of 1974, Additional views of Senator Robert P. Griffin, S. Rep. No. 93-689, 93d Cong. 2d Sess. at 89. (1974)

  [5]  Remarks of President Gerald R. Ford at Bill Signing Ceremony for the Federal Election Campaign Act of 1974, Presidential Documents, Vol. 10, No. 42 at 1285 (Oct. 15, 1974).

  [6]  FEC Advisory Opinion 1975-100.

  [7]  FEC Advisory Opinion 1975-27.

  [8]  FEC Advisory Opinion 1975-23.

  [9]  FEC Matter Under Review 253, consolidated with 253A, 289, 302, 369 and 618.

  [10]  Federal Election Comm'n v. National Education Ass'n, 457 F.Supp. 1102 (1978).

  [11]  FEC Matter Under Review 3540.

  [12]  Federal Election Comm'n v. Furgatch, 807 F.2d 857 (1987).

  [13]  See supra, note 3.

  [14]  John Curtis Samples, The Fallacy of Campaign Finance Reform (2006) at 12-13.  Samples argues that both parties, particularly in the defense of incumbent interests, have worked the regulatory regime to partisan advantage.  For the Republicans, long suspicious of reform, the embrace of regulatory tactics was the sharper break with professed constitutional ideals.

  [15]  Federal Election Comm'n v. Colorado Republican Federal Campaign Comm., 518 U.S. 604 (1996); Federal Election Comm'n v. Colorado Republican Federal Campaign Comm., 533 U.S. 431 (2001).

  [16]  A very recent version of this view can be found in Peter J. Wallison, Joel M. Gora, Better Parties, Better Politics:  A Realistic Program for Campaign Finance Reform (2009)

  [17]  Republican National Comm. v. Federal Election Comm'n, Case. No. 08-1953, filed in the U.S. District Court for the District of Columbia.

  [18]  Cao v. Federal Election Comm'n, Case No. 08-4887, filed in the Eastern District of Louisiana. 

  [19]  Rick Hasen, "Still More on Commissioner Mason and the FEC," May 22, 2008, reporting one view that "if you look at the history of Commissioner Mason's voting on the commission, there have been times when he has strayed from the reservation and voted with Democrats rather than have a 3-3 deadlock on some issues. Republicans were never particularly happy with Mason for this reason….  The McCain situation involving the public financing was the straw that broke the camel's back."  Available at http://electionlawblog.org/archives/010872.html

  [20]  Statement of Reasons of Vice Chairman Matthew S. Peterson and Commissioners Caroline C. Hunter and Donald F. McGahn in FEC MURs 5977 and 6005 (American Leadership Project), p. 15, n. 67.