Having not posted on campaign finance issues in a while, I figured now is a good time since the Federal Election Commission has filed suit against the Club for Growth alleging failure to register as a political committee.
Having now read through the complaint, there are only a couple of things that are really at issue. First, is whehter the FEC has the authority to regulate IRS 527 organziations. Club for Growth is registered as a 527 (registration documents can be found here) but has stated in the past that its goal is to elect people to Congress who support pro-growth, anti-tax policies. According to its initial registration, the Club is "dedicated to helping election pro-growth, pro-freedom candidates through political contributions and issue advocacy campaigns." But is most recent amended registration statements notes something a little different in its purpose, at least different from a semantic point of view.
Allison Hayward makes one point about some of the communications the FEC alleges are expenditures, if it a communication to members, then such communications are exempt from the definition of expenditure. Let's assume that some of the communications detailed in the FEC's complaint are actually communications to members. Another question will be about solicitations for membership into the club. Some of thse solicitations could be viewed a solicitations for contributions to candidates rather than for membership depending upon the language used. Clearly, this is an issue of fact to be determined by the court.
Another interesting question for me is why did the FEC choose some of the examples of expenditures they used. For example, Paragraph 37 of the complaint talks about a $30,000 radio ad buy in Florida's 8th District in September/October of 2000 in support of Ric Keller, who was then a candidate in a run-off election. Leaving aside the question of whethe Club for Growth should be an FEC regulated committee, nothing in this allegation is a violation of then existing law. The ad said, according to the complaint, "This is a mission for Orange County Republican primary run-off voters. Your mission is to find a Republican for Congress who will battle liberal Democrat Linda Chapin...Remember, only a tax cutter like Rick Keller can help you accomplish your mission."
This ad buy and broadcast took place well before BCRA became law. Under the Buckley "magic words" test, this ad is a legitimate ad. It did not use words like Vote for, Vote Against, Elect or similar words. Even if Club for Growth was a political committee, this expenditure while reportable, could have been paid for entirely with soft money.
Subsequent paragraphs also allege behavior as improper when it was permitted under then existing law. At the time, Club for Growth's activities were permissible, but the implication made by these specific allegations is that the Club violated the law. Perhaps they violate law as it is now written, but not as it was at that time.
Some of the Club's more recent action may be more suspect. Matters related to the 2004 election cycle are clearly questionable if they maintained the types of activity they had done in the past.
The big issue is a question of law, that is can a 527 organization, with the express intent of affecting federal election, be considered a political committee for purposes of FEC law and thus regulated by the FEC? The outcome of this case will definitely reshape the campaign finance landscape. But the problem may be bad facts making bad law. The Club for Growth was explicitly engaged in election activities, but other groups like American Coming Together and MoveOn.org had more generic purposes, but some very similar activities.
Antoher interesting issue from a meta standpoint will be which DC District Judge will get the case. Judge Kollar-Kotelly has done a number of campaign finance cases, including McConnell v. FEC and Shays v. FEC in recent years. Judge Leon also served on the McConnell three judge panel.
For some news links:
New York Times
Washington Times
Associated Press
Roll Call (subscription required)
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