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October 2004
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Court Throws Out Campaign Finance Regulations
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Court Throws Out Campaign Finance Regulations
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Court Throws Out Campaign Finance Regulations
A recent ruling by the U.S. District Court for the District of Columbia has struck down many of the regulations written by the Federal Election Commission (FEC) in the wake of the Bipartisan Campaign Reform Act of 2002 (BCRA, better known as the McCain-Feingold law). While the court's ruling could have an impact on nonprofit advocates, it is not clear that it will have any effect prior to the November elections.
The court ruled in a case brought by the two congressmen who sponsored BCRA in the U.S. House of Representatives, Rep. Chris Shays (R-CT) and Rep. Marty Meehan (D-MA). Among other key regulations rejected by the court, several parts of the ruling could have an impact on nonprofit advocates:
- The court ruled that the FEC's regulations limiting coordination with federal candidates, campaigns, and political parties were not restrictive enough to meet the requirements of BCRA.
- The court ruled that the FEC had failed to follow adequate rulemaking procedures in creating the exemption for 501(c)(3) organizations from BCRA's restrictions on TV and radio ads broadcast close to an election that feature a federal candidate (the "electioneering communications" restrictions).
- The court rejected the FEC's efforts to exempt Internet communications from some of BCRA's restrictions, ruling that Congress intended these provisions to reach online communications.
- The court rejected the FEC's language which limited to actual requests for funds the prohibition on candidate fundraising for nonprofits, finding the prohibition should apply more broadly.
In some instances (such as the 501(c)(3) exemption from BCRA's electioneering communications provisions) the court found fault with the process by which the FEC adopted the regulation rather than the actual substance of the rule. Therefore, it seems possible that some of these regulations might be revived by the FEC in their current form by simply going through another, more careful, rulemaking process.
The release of the ruling a mere six weeks before the election has created a great deal of confusion about what rules apply now. Representatives Shays and Meehan had asked the court to make clear that the rejected regulations were without force, but the court declined. Instead, the court merely instructed the FEC to take action to remedy the defects found by the court.
The FEC is expected to decide soon whether to appeal the lower court ruling and, if so, whether to seek to block the ruling's effect during the appeal. Even without further court action, the old regulations will still be on the books while the FEC attempts to write new regulations that will survive any future legal challenge.
Because the court consistently ruled that BCRA's restrictions should be interpreted more broadly than the restrictions created by the rejected FEC rules, it is at least clear that organizations should still comply with any limits in those rules.
Although it seems unlikely that the FEC will act swiftly to undertake broader enforcement actions, it is possible that others will seek to file complaints with the FEC, claiming that activities permitted under the rejected FEC rules are nonetheless prohibited in light of the court's ruling. We urge organizations planning activities that put them in touch with candidates or political parties to consult with knowledgeable counsel before proceeding. Likewise, any 501(c)(3) that planned to run TV or radio ads prior to the election should check with a lawyer before proceeding.
by John Pomeranz
This publication is designed to provide accurate and authoritative information about the subject matter covered. It is not distributed with the intent to render legal, accounting, or other professional advice. The services of a competent professional should be sought if legal advice or other expert assistance is required.
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