The Statement of Reasons now tendered by Republican Commissioners in defense of their “November Fund” position—against enforcement—deserves careful study.  It is dense in argument and notes; and the notes, sometimes the carrier of authorities, are also important to understanding the overall argument.  It can be said that, if it will not be persuasive to all on the immediate question of the November Fund’s activities in the 2004 election, it is a vigorous warning about the tortured state of the law and its implications for “coherent and sound legal theory” on issue advocacy generally and 527 activity more particularly. 

The Statement: On Matters of Substance

     On substance, the Republican Commissioners' position can be restated, reductively but usefully, as follows: determining which group is a political committee cannot be an exercise in refined sensibility by which one knows one when one sees one.  WRTL stands for the proposition that a roaming inquiry into context is not permissible (except in limited respects): the question of whether a group has engaged in express advocacy or its functional equivalent depends on content. 

     There the Republican Commissioners concluded that the November fund case is open-and-shut.  If the November Fund’s purpose is clear—the defeat of Edwards as a Vice Presidential candidate—its statements of purpose, the Commissioners believe, stayed close to the issues side of the border between issues and candidacy advocacy. The Commissioners argue that the FEC impermissibly borrowed from context, from materials outside the four corners of the solicitation, to make its case for regulated, electoral purpose.  A point they push zestfully is that “none of the funds raised by the November Group…were spent on public communications that expressly advocated the election or defeat of a Federal candidate”.  Statement at 6.

     To this, a critic might respond; “oh, come on: there is no question of what this group was up to”.  One of the Statement’s footnotes confronts this challenge, refusing to give weight to such factors as “the name of the organization, the timing of its formation, or “that some of its communications criticized a Federal candidate”.  Id. at 15, n. 69.  These considerations are subjective, the Commissioners, reply, and not consistent with Buckley v. Valeo.

     Note that the Commissioners are arguing Buckley and declining to rest their case on Wisconsin Right to Life: they are appealing to the foundation of modern reform and the unanimous court that put it in place, rather than lodging their position within the contested territory created by the Roberts’ Court’s recent decisions.

     This is the famous language from Buckley that they cite more than once: “

The distinction between the discussion of issues and candidates and advocacy of election or defeat of candidates may often dissolve in practical application.  Candidates, especially incumbents, are intimately tied to public issues involving legislative proposals and governmental actions.  Not only do candidates campaign on the basis of their positions on various issues, but campaigns themselves generate issues of public interest.

424 U.S. at 42.  It is here, of course, that this Statement merges with the matters before the Court in Citizens United.  One of the large questions—the largest perhaps—in the sphere of issue advocacy law is whether the fact of a candidacy, as the incentive and occasion for issues advocacy, causes the activity to fall within the zone of regulation.  The Commissioners here say that it cannot, by the mandate of Buckley. They point out that progressive as well as conservative organizations have fought government intrusions on candidate-related issue advocacy: on their candidate-related issue advocacy.  Statement at 16-17, n.77.

     Now, of course, the November Fund case was decided under a set of standards, developed by the FEC after 2004, that looks to how an organization raises its money.  If it appears that it was asking for funds with an “indication” that they will be used for express advocacy, the money received would be treated as contributions counted toward “political committee” status.  The Republican Commissioners dispute that this rule, promulgated after 2004, could be applied to events occurring in 2004 or before; and they object to the use of a case, Survival Education Fund, that the Commission has used as a proxy for the later-developed rule and that the Republican Commissioners insist is being misread and misapplied.

     In any event, the Republican Commissioners argue, how money is raised cannot overcome the controlling significance of how it is spent.  The money, if not converted to regulated “expenditures”, does not lose its character as the material of direct, constitutionally protected speech.  The Commissioners deny that Survival Education Fund licenses any other result.  “To read the case otherwise allows the Government to glean subjective intent—precisely what was rejected in Buckley.”  Id. at 9, n. 32,   

The Statement: On Matters of Process

     Along the way, the Commissioners take issue with matters of process in the Commission’s enforcement of the law.  Here they may gain an audience with even those practitioners skeptical about their theory of the case. 

     The Commissioners note that often the “analysis” given Respondents to explain an adverse administrative finding is far too conclusory.  Then, in questioning the quality of “precedent” developed under the Commission’s case by case approach to 527 enforcement, the Commissioners remind their readers that organizations enter into settlements with the agency without conceding liability and to spare the cost of further proceeding, including years of litigation.  The point is fairly made that this is precedent after a fashion, crucial in counseling clients, and yet less than the cases-on-point that sets out clear direction for their conduct.

     It happens, moreover, that, as here, the case by case approach will sneak into the “law” what the agency would not adopt by rule: the agency could not agree that the fact of 527 status, as a result of which an organization is a political organization for tax purposes, is highly relevant to finding a "political committee" for FECA purposes.  The FEC resisted formal rules, and it had understandable reasons, such as the absence of a consensus on key parts; but this is a choice that it must live with, necessarily clouding the actual state of the law.

The Statement: Problems

     So the Statement is effective in making much of its argument, not that it will or should expect that it will be persuasive to all readers.  In campaign finance, points of view seem to settle in place and shift position only a little.  But there are criticisms to match any recognition of the Statement’s strengths.

     First, it did not serve the Statement well to begin with Roberts’ famous “enough is enough” proclamation.   First, “enough is enough” never answers the central question: “enough of what?”  It aligns the Republican Commissioners with the position, not especially fitting for regulators, that active resistance must be mounted against modern campaign finance law, and it is not sufficiently clear in explaining that resistance to cite the First Amendment.  By starting this way, the Republican Commissioners were sure to give their critics an opening to call the entire Statement in question. It gave their document the ring of a manifesto when it was a presented as a Statement of Reasons.

     Second, and more substantively, the Commissioners have shown how doctrine and the Commission’s application of it is in a bad way. This is not hard to do.  On both the right and the left, it is widely accepted that campaign finance law on the hard questions is in a shambles. 

     Yet the Statement of Reasons, from Commissioners, amplifies this point and stops there.  If there is a vision of how the agency might address what the Supreme Court refers to (however unfortunately) as “circumvention”, it is not found here.  Constitutional limitations occupy the attention of these regulators, and this is appropriate: but there is the next step they face as regulators, which is to explain how enforcement (a la McConnell) and constitutional limitation (a la Buckley, and later WRTL) might be reconciled. 

     For example, the Court in WRTL believed that references to candidacy or election were meaningful in the analysis of the “functional equivalence” of express advocacy.  Commission regulations track this analysis. 11 CFR § 114.15  The Commissioners say nothing about these “indicia of express advocacy”, except seemingly to suggest that they are of no account in determining when a 527 may have crossed the line from issues to regulated electoral advocacy.  For that matter, the Commissioners imply that organizational status as a 527 has no bearing on the “political committee”—they lean on the Commission’s failure to promulgate a rule to that effect—but it is not clear whether they mean to say that it is not to be considered at all, in any circumstances.

     Third, even in the presentation of the constitutional limitations, these Commissioners might have been clearer.  There is a discussion at pp 9-11 of the distinction between contributions and expenditures, and it is not easy reading.  It highlights what has always proven elusive in Buckley’s framework.  It does not make it more comprehensible. 

     Is the Statement mostly a credal manifesto, or more a reasoned statement of views about the law, with emphasis on the constitutional limitations the agency cannot ignore?  The answer will vary with the reader, as it usually does in campaign finance.  It is certainly an extraordinary document.

Bob Bauer