Skepticseye.com

Brad Smith comments on the ACT settlement.

You really owe it to yourself to read this.

Shady California-based Chinese businessmen donating to a candidate for President whose surname is Clinton.

C’mon.  I’m relatively sympathetic to the problems big campaigns have with rogue fundraisers - and the petty hustler camp followers that come with national prominence, but have you ever heard of “constructive notice?”

Caging - that is, reviewing incoming mail for problems - isn’t always a bad thing.

Read this.

Happy Birthday to the Bull Moose Senator! Here’s a gift idea for the first contender to qualify for matching tax dollars.

There’s a drinking game that goes along with the films. You drink everytime TR shakes his finger, then try to look sober-minded when Elihu Root shows up on screen.

This time its of the more conventional variety than that last post.  Funds to Hillary Clinton from obscure hotbed of political activism . . . Daly City, California.

Maybe they live frugally so that they can afford to give money to candidates?  It’s civic engagement! Or something.

The Arizona GOP taps businessman and resort owner Horst Klaus for its Finance Committee. Klaus’s Shangri La Ranch webpage proves quite revealing. (Warning - ordinary non-airbrushed naked people alert. Click the link at your own risk.)

No chance he’ll be hitting up the “deep pockets” for the Party - no pockets!

Yes, like “man bites dog.” Here, the “man” is bold hero of cyberspace Lane Hudson, who has filed a well-publicized complaint against the Thompson campaign for violating the “testing the waters” regulation. And the dog is . . . the Thompson exploratory effort, I guess.

Hudson’s complaint, in pertinent excerpt, is this:

As I understand the law, a “testing the waters” fund is only legitimate for the purpose of helping an individual decide whether he should become a candidate. Once someone has decided to become a candidate, the exemption no longer applies, and 11 CFR 100.72 lists five factors to determine when that has taken place. On three of these factors, the examples are numerous that indicate that Mr. Thompson has gone far beyond the activities and speech allowable under the law. These examples do not come from personal knowledge, but rather from numerous accounts in the press, some being direct quotations from Mr. Thompson or his staff.

To evaluate this complaint, let’s look first at why we even have a “testing the waters” exemption. The regulatory exemption was promulgated to add flexibility to the statutory definition of “candidate.” In the statute, once an individual has raised or spent $5,000 for a run for federal office, all the filing and disclosure requirements kick in. But you can’t do a whole lot with $5,000 if you’re serious about “testing” yourself as a candidate. So the regulations permit candidates for federal office to raise and spend money without the registration and reporting obligations, to “test” their candidacy. It does this by exempting such funds from the definitions of “contribution” and “expenditure.”

If you’re really eager and want more background on this, take a look at the FEC’s E&J for its 1985 amendments to the “testing the waters” regulation.

Subsequent to all this, of course, Congress enacted disclosure requirements for 527s. “527″ would be the tax code exemption applied to a “testing the waters” committee, so they disclose to the IRS now anyway. Moreover, a “testing the waters” effort must observe the source restrictions and limits in the FECA. In the bad old days these committees could also accept funds illegal to federal candidates (extra big contributions and money from corporations and unions) but if you read the 1985 rule you’ll see that this changed in 1985. Twenty-two years ago.
So what we have here is a committee that - best case for Hudson now - should have registered and reported with the FEC, not the IRS. Wow. It takes a special kind of hero to break open this kind of scandal.

Meanwhile, I think there’s a legit beef against the “testing the waters” regulation, and the “candidate” threshold. Isn’t the $5,000 threshold for “candidate” absurdly low for statewide and national federal offices? If it were set more reasonably, we wouldn’t need this “testing the waters” exception, that (as we see) serves to confuse voters and activists, makes hypocrites out of candidates, provides and excuse for pre-election FEC complaints, and traps the unsophisticated or unwary.

In the “aren’t you doing more harm than good” department comes the Fieger litigation.  In today’s BNA M&P report, we learn that another judge has rejected a Fieger defendant’s argument that DOJ cannot proceed to prosecute a FECA case without a referral from the FEC. See the FEC Record for a summary of these cases here.
That doesn’t say much about whether DOJ lawyers or AUSAs frolicking about the countryside should proceed.  Especially given what I’ve observed to be a real lack of interest in the intricacies of FECA among prosecutors, as well as their relative lack of experience with the gloss of interpretive authority people use to figure out what the heck they can do under the federal laws, I think some deference/coordination with the FEC is a good idea.

You really don’t want theories in a prosecution contradicting those used by civil enforcers. Especially in matters that can involve important political liberties.
For their own reasons, prosecutors aren’t thrilled about “keeping in touch” with anyone outside an investigation during the investigation.  So the better approach would be to have an agreement setting out in advance how FECA violations will be handled, managed, and resolved by these overlappiing agencies.
Once upon a time, boys and girls, we had a Memo of Understanding between the two agencies.  (See Commissioner Lenhard’s testimony for background). Do we today?  Not sure.

The new decision seems not yet available online, but this is the decision out of Colorado in a related matter from earlier this year.  I see no mention made of the MOU, or of its passing.

But - perhaps the most important yet overlooked element to this case - the relationship between Fieger and these guys. Recognize a familiar name?

“Good girls don’t . . .” but brother Doug Fieger apparently did.

(HT to the FOTS who handled the investigation of this detail).

From the happy folks at CREW, we can read the documents in MUR 5568, relating to an anti-Obama 527 active in Illinois in 2004. In short, the conciliation with the FEC concedes that the group raised contributions over the statutory threshold and was thus obligated to register and report as a political committee. To wit:

The Commission concludes that contributions received in response to EIMF’s solicitations that clearly indicated the funds received would be used to defeat Barack Obama in the 2004 general election caused EIMF to surpass the $1,000 statutory threshold. See 2 U.S.C. § 431 (4)(A). EIMF received its first $1,000 in contributions in August 2004. During a fundraising meeting held on August 23, 2004, EIMF raised $30,000 when it used the EIMF and EI Fall 2004 Plan script described in paragraph 15.

EIMF accepted contributions from individuals in amounts exceeding $5,000. During the 2004 election cycle, EIMF accepted approximately $70,000 in contributions in amounts exceeding $5,000 per individual.

And they will pay a $3,000 penalty. No mention anywhere of “major purpose” by the way. What of the donors who gave? Well, in the FEC factual and Legal analysis, we learn this:

Roeser gave $10,000 to EI and $30,000 to EIMF on August 23,2004. Because EIMF is a political committee under 2 US.C. § 431(4)(a), Roeser’s contribution exceeded the $5,000 contribution limit in 2 USC. § 441a(a)(1).

With respect to the funds that Roeser gave to EI, the Commission’s investigation did not find sufficient evidence to establish that EI obtained contributions through solicitations clearly indicating that the funds received would be targeted to the election or defeat of a clearly identified federal candidate. See FEC v. Survival Education Fund,
Inc., 65 F.3d 285 (2d Cir. 1995). In addition, EI did not spend funds on paid political advertisements and limited its expenses to website development and maintenance and administrative activities. Because there is insufficient evidence to establish that EI triggered political committee status by receiving contributions under 2 U.S.C. § 431(8)(A) or making expenditures under 2 U.S.c. § 431(9)(A), the Commission finds no reason to believe that Jack Roeser violated 2 U.S.c. § 441a(a) by making an excessive contribution to EI.

I’m not quite sure what to make of this. It’s a committee, but if we’re not sure the donor’s contributions triggered committee status, we don’t go forward? Or it isn’t clear that it’s a committee - that is until the respondent stipulates that it is? Or these weren’t contributions because the solicitations didn’t mention the funds would be used to defeat a candidate?

A three judge panel of the DC District court has held that Jack Davis’s facial challenge to the Millionaires’ Amendment fails on cross-motions for summary judgment.

(The Millionaires’ Amendment allows candidates running against self-funded opponents to raise money under higher contribution limits, among other things).

The opinion, written by Judge Thomas Griffith, (action photo here) has a couple of odd elements in it worth noting.  First, in its articulation of the standard applied to facial challenges, it doesn’t mention McConnell.  “Some people” think that McConnell’s application of the facial-challenge standard in First Amendment cases was a little too tough.  What is a “substantial amount of protected speech” anyway?  But this opinion doesn’t wrestle with McConnell at all.

Second, in its discussion of whether the higher contribution limits provided under the Amendment injure the millionaire, it says that this statute is little different from statutes that “permit higher contribution limits for candidates who agree to public financing of their campaigns.”  Hmm . . . typically the public funding is a substitute for private contributions, and provided in trade for an expenditure limit.  Usually what the publicly funded candidate gets when a well funded opponent or independent effort spends tons against him is more public money, and a higher “expenditure limit.”  And indeed that is what the cases cited in the opinion are talking about.

Finally, the opinion talks about how the Amendment is fine because it is compulsory.  Once again, it borrows from public financing/expenditure limit cases, when those cases aren’t really relevant.  Compulsion matters there because under Buckley expenditure limits must be voluntary in fact.  This isn’t an expenditure limit case.

So, much as I like Judge Griffith, I think the panel should have taken a little more time with this opinion.  None of my issues call into question the ultimate decision - that the Amendment doesn’t unconstitutionally burden the millionaire (I think that’s right, by the way - the neat issue raised by the Milliionaires’ Amendment is how in the world - if these higher contribution limits aren’t “corrupting” in this context, that they are corrupting in ordinary times . . .) .  But these kinds of slips have a way of growing, and life is confusing enough as it is.