FEC Fight Leaves Candidates Hanging

In 2004, the Federal Election Commission took 231 formal votes. This year, it may take none.

With November’s elections a little more than six months away, a Senate stalemate over nominations has left the FEC powerless to act on anything from John McCain’s bid for $84 million in public financing to a stay-at-home dad’s request to pay himself a small salary from whatever campaign contributions he can raise as an independent candidate for Congress.

With only two of its six commissioners in place — Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.) and the White House can’t agree on how to handle nominations to the empty seats — the FEC lacks the four-person quorum needed to take any official action.

That means no investigations can officially begin, no new rules can be made and no legally binding opinions can be offered. It means lobbyists get a free pass for another year to bundle campaign donations without revealing what they’ve done, and independent groups can spend money with impunity and not worry until well after the election whether they’ll be investigated.

It’s hard to calculate the political impact of the FEC’s inability to make certain decisions, but it may be as simple as this: Voters across America may see controversial political ads funded by shady groups who have no fear of being investigated or fined until well after the election. And creative election lawyers will have a field day exploring murky areas of election law since the FEC is not issuing advisory opinions.

“It is an example of Washington not functioning well,” says Michael Toner, a former FEC commissioner who is now with the political consulting firm Bryan Cave. “This standoff has a disproportionate impact on candidates who actually want to comply with the law. … And it creates the incentive to push the envelope” by bad actors.

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Some election experts downplay the sky-is-falling rhetoric, saying that people who violate the law will still be punished eventually — and that the FEC rarely issues enforcement actions until well after elections anyway.

“It’s not going to affect people’s everyday lives,” said Rick Hasen, an election law expert at Loyola Law School in Los Angeles. “And I don’t see what the Democrats’ incentive is to play ball — it’s under the radar and there’s no political heat on this.”

But for political insiders — those who give, get and spend campaign money — the uncertainty caused by the nomination stalemate is very real indeed.

The highest-profile problems arise in the presidential race, of course. Without a quorum, the FEC couldn’t rule in February when McCain asked to withdraw from the federal matching funds program for the Republican primary.

Without a quorum, the FEC couldn’t address questions surrounding McCain’s apparent use of the matching funds as collateral for a bank loan. Without a quorum, the FEC can’t rule on a Democratic National Committee complaint challenging McCain’s attempt to get out from under the matching funds spending limit for the primaries.

And without a quorum, the FEC won’t be able to “certify” McCain’s eligibility for $84.1 million in public financing for the general election, meaning he’ll need judicial intervention, a legislative fix from Congress or perhaps a massive line of credit using the promise of eventual public financing as collateral.

Another high-profile problem: Without a quorum, the FEC can’t issue the regulations needed to enforce a requirement that lobbyists disclose the contributions they “bundle” for presidential and congressinal campaigns.  The disclosure requirement was part of the post-Abramoff lobbying reform bill Congress passed last year — Sen. Barack Obama (D-Ill.) pushed for the bundling-disclosure provision — but it’s a meaningless law as long as there aren’t any regulations to put it into effect.

Also in limbo are so-called hybrid ads that combine national political party money and presidential campaign funds to promote lower-level congressional races. The legality of these hybrid ads — which the Bush-Cheney campaign used to the tune of $81 million in 2004 — has been called into question, but the FEC cannot issue a new rule on the ads without the quorum it now lacks.

All enforcement actions — the cases that can lead to fines against companies and independent groups — are also on hold for now. 

Four out of the five biggest FEC fines in the agency’s history were issued in the past two years — at a time when the FEC still had a quorum — and former FEC Commissioner Robert Lenhard, who earlier this month gave up waiting for confirmation of his renomination, says the agency was on pace to continue such aggressive enforcement this year. But without a quorum, no official investigations can be initiated and no fines can be assessed.

Other problems caused by the lack of a quorum:

The FEC can’t issue advisory opinions. That means questions like those posed by the conservative group Speech Now, which wants to overturn FEC limits on how much individuals can give to independent advocacy groups, will end up before the courts instead of the FEC.

The FEC can’t appeal any losses it may suffer at the district court level because it takes a vote by the commission to authorize an appeal.

The FEC can’t conduct an official investigation or make any final decisions on a Democratic Congressional Campaign Committee complaint charging casino mogul Sheldon Adelson with violating campaign laws by coordinating an ad campaign with the National Republican Congressional Committee.

Smaller matters — like the question of whether New York congressional candidate Todd Goldup can draw a salary and pay for child care from campaign contributions — will simply fall through the cracks. Goldup got an unofficial opinion from two FEC commissioners rejecting his request to draw a salary, but it was not legally binding.

“I feel like I’ve given the best effort to follow the rules,” he says. “The stalemate just adds increased aggravation for independent candidates. I just wanted to cover all my bases, and they couldn’t give me an official opinion.”

Lenhard said he isn’t worried so much about lawlessness in the absence of a quorum — “The sheriff will eventually come back to town,” he said — but rather about the FEC’s falling behind in its efforts to “regulate a $4 billion election industry.”

FEC spokesman Robert Biersack says that “much of the routine work of the agency is unaffected” and that it’s “not as if the law doesn’t exist.” And both FEC staff and outside legal experts say the inability to give advisory opinions isn’t necessarily creating a huge backlog of paperwork at the FEC. The reason: Election lawyers simply aren’t asking for legal guidance, either because they know it won’t come or because they don’t want to feel constrained if they end up on the wrong side of a nonbinding opinion issued by the two current FEC members.

In one case, Republican election lawyer Don McGahn actually yanked a request for an opinion on whether Sen. Pete V. Domenici (R-N.M.) could use campaign funds to cover his staff’s legal expenses for the high-profile investigation into the firings of U.S. attorneys in 2006.

There is one winner in this stalemate: Mitch McConnell. The Senate minority leader has always been a fo of the 2002 campaign finance reform act known as McCain-Feingold, and he has served as a plaintiff in court challenges against the ban on soft money. A prolific fundraiser who is facing reelection this year, McConnell has little incentive to make life easier for the FEC right now.

“The ball is in McConnell’s court,” said Fred Wertheimer, president of the ethics watchdog group Democracy21. “He doesn’t like campaign finance law, he doesn’t like the commission, there’s no bundling disclosure for the money lobbyists will bundle for him, and he’s up for reelection.”

McConnell spokesman Don Stewart says the resolution to the problem is simple; the minority leader simply wants a vote on the most controversial FEC nominee, Republican Hans von Spakovsky. “This could be settled today,” Stewart says.

Reid doesn’t seem like he’s interested in cutting a deal. Reid offered a simple up-or-down vote on each of the three nominees, including von Spakovsky, and McConnell rejected that offer. Now Reid says the process may take “months.”

“They said we must approve these nominees by unanimous consent all together or none will be approved,” Reid spokesman Jim Manley said. “Why? Because they know their nominee is so controversial that a majority of the Senate is opposed to him.”