Media Watch: “When Regulators are Mocked”

April 29, 2013   •  By David Keating
Default Article

That was the headline on a recent New York Times editorial.  Another misinformed one.  I sent a letter to the editor trying to correct it.  Here’s the text:

Your editorial misled readers about campaign finance law (“When Election Regulators Are Mocked,” page SR10, April 14) and incorrectly implied that Crossroads GPS disobeyed disclosure rules.

In fact, the FEC inquiry to the group about its donors was routine.  The League of Conservation Voters replied to a similar FEC letter stating they “did not receive any contributions … that were made by a contributor for the purpose of furthering an independent expenditure,” the standard that triggers disclosure.  Both LCV and Crossroads GPS told the FEC they did not receive or solicit such donations.

Finally, the claim of “a mounting backlog of complaints about blatant campaign abuses” also appears unfounded.  In FY 2012, the FEC processed 70% of “enforcement cases within an average of 15 months,” up slightly from the last presidential election year.  This month the agency has already imposed 17 penalties for violations.

The Times editorial capped a run in the media on this same “story.”  It is remarkable how the news media runs in a pack on campaign finance issues, and if it has something to do with Crossroads GPS, then it appears irresistible to write on it.

Now I will grant, the facts are not easy to get here.  In this particular case, many, and probably most, campaign finance lawyers likely don’t know much about it.

The latest reporting on this started with Huffington Post, then Bloomberg, The Wall Street Journal’s Washington Wire and then an incendiary editorial in the New York Times that basically accused Crossroads GPS of breaking the law.

Huffington Post reported:

For the third time, the Federal Election Commission has sent a letter to Crossroads GPS, the “dark money” nonprofit founded by Karl Rove, stating that the group had failed to comply with disclosure rules for political spending in the run-up to an election.

In its request for information on Tuesday, the FEC said that Crossroads GPS must disclose contributors to the $50 million the group spent in the final three months of 2012 under a statute that requires the disclosure of contributions earmarked for specific candidates or races. The FEC’s letter appears to endorse a broader version of the law by seeking the names of all donors, a reading of the law challenged by Crossroads GPS.

The other stories are more or less the same.  A reader would think, the FEC is pressing Crossroads GPS on this donor issue or that the law is open to interpretation.  Wrong.

Left out of the story is that nearly every group (or maybe every nonprofit group – I don’t have time to look up everyone) that ran an independent expenditure (IE) and did not report donors on the independent expenditure form got one or more of these letters and has for almost six years.  It is not just Crossroads GPS.

Basically, this is the FEC equivalent of a form letter.  It is a routine letter.  You do an IE, don’t list donors on the FEC form for the independent expenditure, and your group will get the form letter.

These letters are known as “Requests for Additional Information” and they are sent out by the people in the FEC who review the filings made by groups, candidates and PACs.  When they see information that is missing or perhaps incorrect, they send letters asking for a clarification or correction.

The groups that make IEs and do not raise money for IEs are not required to disclose donors.  This is clear under the law and the FEC knows it.  In fact, the FEC has a guidebook for groups and it says how to report independent expenditures.

On page 36 of the guide it describes what must be in such an IE report:

Content of Independent Expenditure Report

The report (or statement) must include:

  • The reporting person’s name, mailing address, occupation and employer (if any);
  • The name and mailing address of the person to whom the expenditure was made;
  • The amount, date and purpose of each expenditure;
  • A statement as to whether the expenditure(s) was in support of or in opposition to a candidate and the candidate’s name and office sought; and
  • The identification of each person who contributed more than $200 for the purpose of making the independent expenditures. 109.10(e).

As you can see, if the group has raised money for IEs and did not report the donors, then the names must be reported.  However, few groups do that.  They just finance the IEs out of their operating budget and have not asked any donors to support the IEs.

I think the FEC sends the form letter out to ensure there is no oversight of this requirement if that part of the form is left blank.

The letters are not aimed at Crossroads and it isn’t some new probe by FEC’s lawyers of just that group or a few groups.  It is not some new interpretation by the FEC.  It is a form letter that probably every group gets for such IE filings.  The fact that they get a letter after many of their filings probably explains the exasperated tone of the Crossroads GPS reply.

I did a search on the FEC website and I found many such letters going back at least to 2007, and the letters were sent to groups of all ideological stripes.  The groups often write a response back that is more or less the same as that done by Crossroads GPS.

Here are a few FEC inquiry letters to left-leaning groups (I could come up with just as many for conservative-leaning groups).  You can click on the dates and see the letters, which are nearly identical.

NARAL Pro-choice America
September 28, 2011
Nov. 15, 2011
Nov. 19, 2011

Feb. 26, 2013

Friends of the Earth Action
September 11, 2008

League of Conservation Voters
July 3, 2008
October 14, 2008
April 1, 2008
July 12, 2007

Humane Society Legislative Fund
October 6, 2011

Defenders of Wildlife Action Fund
June 10, 2008

Hopefully this will show you that the FEC sends out a lot of these form letters and has been doing it for years.

David Keating

Share via
Copy link
Powered by Social Snap