Election Law Blog: “Hidden Super-PAC Contributors Win Round as Court Upholds Secrecy” (In the News)

Election Law Blog: “Hidden Super-PAC Contributors Win Round as Court Upholds Secrecy”

By Rick Hasen

 Bloomberg BNA:

A federal court upheld the Federal Election Commission’s dismissal of disclosure charges involving two wealthy contributors who allegedly funneled $14 million to super-political action committees through obscure companies.

The FEC’s three Republican commissioners, who voted to dismiss the charges, exercised permissible discretion in “an issue of first impression” following the Supreme Court’s 2010 decision in Citizens United v. FEC, ruled Judge Trevor McFadden of the U.S. District Court for the District of Columbia. The judge accepted the Republican commissioners’ argument that the rules for such contributions were uncertain and a new legal standard should be established going forward…

The three Democratic FEC commissioners said longstanding rules barring “straw donations” applied to campaign money funneled through a company… 

The judge’s decision to uphold the Republican commissioners’ view drew praise from David Keating, president of the nonprofit Institute for Free Speech, which criticizes campaign regulation.

“It was the right decision,” Keating said in a phone interview, adding that the FEC should provide “formal guidance” going forward about the legal standard for straw donations. Such guidance would require FEC Democrats and Republicans to agree on an approach.

The judge’s decision was faulted by Paul Seamus Ryan, a lawyer with the nonprofit Common Cause, which supports strong disclosure rules. On Twitter, Ryan noted that McFadden is a judge appointed by President Donald Trump and said his ruling bent “over backwards … to let campaign finance law violators off the hook for laundering millions of dollars into our elections.”

The Center for Competitive Politics is now the Institute for Free Speech.