Politicos souring on FEC advice?

Requests for election law rulings plummet as ideological gridlock grips commission

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You operate a political committee.

You have a novel campaign idea — say, running tiny candidate ads on smartphones, or accepting donations in Bitcoin.

But you're not certain whether your brainstorm, put into action, would violate federal law and expose you to penalties.

Used to be that you'd file what's called an advisory opinion request with the Federal Election Commission. Advisory opinions, according to the FEC, are "official commission responses to questions regarding the application of federal campaign finance law to specific factual situations." 

These days, however, an historically low number of people are asking the frequently gridlocked FEC for its formal opinion. 

To wit: The six-member commission — three Republican appointees, three Democratic — has received only 10 advisory opinion requests this year, according to a Center for Public Integrity review.

That puts the FEC squarely on pace to receive 19 advisory opinion requests and tie its second-lowest yearly total since the commission's creation in 1975. The commission also received just 19 in 2013, edging out its lowest annual total — 15 — in 2002.

During the past three decades, the average number of FEC advisory opinion requests for one year is about 36. The agency has never received fewer than 20 during two consecutive years.

Four factors may be contributing to the decline in these requests.

First, it's increasingly likely the FEC won't formally respond to an advisory opinion request.

During 2013, commissioners deadlocked on three of 19 advisory opinion cases — 16 percent — presented to them.

While such a failure-to-rule rate is hardly overwhelming in a political vacuum, it would have been unheard of at the FEC just a few years ago.

Consider, for example, that the commission deadlocked on just one of the 170 advisory opinion request cases — half of one percent — presented to it from 2000 to 2005, FEC vote tallies indicate.

Secondly, the full commission sometimes reaches a conclusion, but it can't agree on the details or a rationale.

Take a case brought in April by Enterprise Holdings Inc., the corporate parent of rental car brands Enterprise, National and Alamo.

The company asked the FEC to rule on whether its employees could use payroll deductions to contribute to its federal political action committee. And the full commission, in a 6-0 vote, approved a formal response affirming they could.

But commissioners couldn't quite agree on a technical matter: whether it should state, straight up, that federal election law would trump New York state election law in the event that New York, one day, would chose to regulate the matter. So it simply didn't address the issue in its ruling. The FEC's three Republicans, however, felt compelled to issue their own statement arguing that yes, federal law would indeed supercede state law should a conflict arise.

Likewise, in May, the FEC concluded in a 6-0 decision that a political action committee could accept up to $100 worth of Bitcoin per contributor during an election.

After the vote, however, FEC Chairman Lee Goodman, a Republican, and Commissioner Ellen Weintraub, a Democrat, publicly disagreed on whether the agency would treat the digital currency like cash or an in-kind contribution. Also left unsaid is what the FEC would do to a committee that accepted $1,000 or $2,000 during an election — still well below the legal maximum for cash donations.

Confused? 

Attorney Joe Sandler seemed to be flummoxed following a deadlocked vote by the FEC on a client's request that small political advertisements it intended to be displayed on mobile phones be exempt from stringent federal disclosure rules. Small screens, Sandler and his colleagues at law firm Sandler Reiff Lamb Rosenstein & Birkenstock P.C. argued, made it impractical for political committees to include disclaimer text within their already tiny ads. Commission Democrats sharply disagreed.

The FEC ultimately didn't prohibit Washington, D.C.-based Revolution Messaging, whose generally left-leaning clients include organizations such as the Democratic Congressional Campaign Committee, MoveOn.org and Planned Parenthood, from proceeding with its mobile advertising plans. But it didn't say it could, either — sans disclaimers.

"It's created risk and uncertainty that doesn't need to be there," Sandler lamented afterward. "We've had a dysfunctional commission for some time now. It's frustrating."

Thirdly, the FEC is doling out fewer and fewer civil penalties for breaking election laws.

So, if there's a good chance the agency won't punish a perceived campaign transgression, why go through the bother and expense of preemptively seeking a formal ruling?

Fourthly, the FEC might simply rule against someone requesting an advisory opinion. In that case, the requestor may have been better off never seeking the agency's guidance in the first place and taking its chances.

In interviews with the Center for Public Integrity, both Goodman, the FEC chairman, and Vice Chairman Ann Ravel, a Democrat, downplayed the dip in advisory opinion requests.

Goodman noted that the FEC has of late received several advisory opinion requests, some of which have been formally accepted by the commission and others of which are still under review for completeness and validity. He said this indicated the "regulated community still views the advisory opinion process as an important outlet for getting answers to their compliance questions.

"Nevertheless," Goodman added, "I understand that some may be frustrated by the process, particularly when many noncontroversial requests for guidance are denied the four votes necessary to issue an opinion."

Ravel said she does worry that some political candidates and committees don't see the value in spending time and money seeking guidance from an FEC that may not provide it.

But she, too, noted that that the summer uptick in advisory opinion requests activity, even if it remains low overall this year, proves politicos still value the FEC's official word.

"Even though this may be fewer than historic average, the fact that so many are now pending seems to indicate that the regulated community is not shunning the process," Ravel said. 

Late last year, the FEC's three Democratic appointees blocked conservative attorney Dan Backer from obtaining a favorable ruling for a client, the Tea Party Leadership Fund. Perhaps unsurprisingly, Backer blames Democrats for poisoning the advisory opinion process.

"If you ask for an AO, it’s because you want an answer, and the inability to get even reasonable questions answered by Democrats makes doing so pointless, public and expensive," he said, adding that strong, deregulatory federal court rulings this decade in Citizens United v. Federal Election Commission and others give many political actors courage that their politicking is beyond FEC sanction.

For Brett Kappel, an election law attorney at Arent Fox LLP, the entire commission has an image problem.

"The public perception that the FEC is hopelessly deadlocked has definitely put a damper on the regulated community’s willingness to seek advisory opinions," he said. 

On Thursday, the FEC has its next opportunity to rule on a high-profile advisory opinion case.

That's when attorneys representing political committees controlled by Rep. Paul Ryan, R-Wis., are slated to argue the commission should grant Ryan's groups its official blessing to use campaign funds to purchase copies of Ryan's upcoming book, which, in turn, would be given away as freebies to supporters and donors.

The commission has already delayed voting on the matter once. As of today, the FEC has released two potential rulings that will compete for commissioners' support.