April 24, 2011
Van Hollen's Suit Against the FEC
Representative Chris Van Hollen (D-Md) last week filed suit against the FEC seeking declaratory and injunctive relief to get the agency to change its regulations to come into line with reporting requirements under the Bipartisan Campaign Reform Act. He also filed a petition with the FEC seeking the change.
Van Hollen argues that the BCRA requires corporations--including non-profits and labor unions--to report the names of contributors who give $1,000 or more. But the FEC issued a regulation, initiated in 2007, that limited reporting to those contributions that are donated for the express purpose of furthering electioneering communication. According to Van Hollen, the agency made the change because it found that corporations and labor unions receive many "donations" by a lot of different individuals--investors, customers, and political donors--and it's difficult and costly to keep track of them all.
This new "purpose" test in the regulation allows corporations, non-profits, and labor unions to sidestep reporting requirements and shield donors. According to Van Hollen's complaint:
The U.S. Chamber of Commerce, a Section 501(c) corporation, spent $32.9 million in electioneering communications in the 2010 congressional elections, and disclosed none of its contributors; American Action Network, a Section 501(c) corporation, spent $20.4 million in electioneering communications in the 2010 congressional elections, and disclosed none of its contributors; Americans for Job Security, a Section 501(c) corporation, spent $4.6 million in electioneering communication in the 2010 congressional elections, and disclosed none of its contributors . . . .
The list goes on.
Van Hollen was the principal House sponsor of the Disclose Act, which would have expanded contribution reporting requirements for corporations, non-profits, and labor unions. (The Court in Citizens United v. FEC upheld contribution reporting requirements for corporations and labor unions, even it overturned restrictions on "electioneering communications" by those entities.) The Act passed the House, but fell one vote short of a supermajority (60 votes) to defeat a filibuster in the Senate.
Van Hollen's suit is hardly a back-door way to get a Disclose Act in another form, though. His suit is based on the Administrative Procedures Act and claims only that the FEC's regulation is arbitrary, capricious, and contrary to law (the BCRA). In other words, the claim is merely that the "purpose" requirement in the regs is contrary to the broader disclosure requirement in the BCRA--a law already on the books. If this is right, it only affirms what the law already says.
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