The FEC is considering an advisory opinion for the National Association of Realtors in which two activities undertaken by the NAR and its PAC that when taken separately are completely legal, but when done in conjunction are somehow illegal. he two activities involved are joint fundraising for the federal and state PACs and the transfer of funds between the national assocation and state associations. Each activity, when done on its own, is clearly legal and actually pretty common. Indeed the transfer of association general treasury funds is not even the jurisdiction of the FEC. Yet, when done together, the two actions may be prohibited. The Center for Competitive Politics has a great breakdown of the legal arguments as to why this Advisory Opinion is bad regulation.
But there is an even broader problem we are facing when presented with these kinds of questions. NAR has significant resources and retained Jan Baran as their attorney, one of the best in the business. But what if an association had not retained an attorney and simply looked at the law themselves. Both activities are legal and it would not be a long stretch of the imagination to think that an association would simply proceed with its plan and if this Advisory Opinion is adopted, it would be likely to be found in violation of campaign finance laws.
The tortured reasoning of the NAR draft AO will not add to the comfort level of PACs as they seek to fulfill their mission. In law school, we were taught over and over again that the law seeks predicatbility, for it is only with predicatbility that people can understand the bounds of what is permissible and what is not. But when it comes to campaign finance law, we have moved from the realm of the predictable to the realm of the surreal. Only in FEC regulations and Dali paitings can two legal things be bent and distorted so as to become suddenly become illegal. Only in campaign finance law is predictability not a cherished goal.
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