How a Mysterious Redacted Document Could Affect Money in Politics

Why have FEC lawyers locked away a potentially crucial bit of evidence that campaigns could use to craft election strategy?

National Journal
Shane Goldmacher
Add to Briefcase
See more stories about...
Shane Goldmacher
March 11, 2014, 1 a.m.

The Fed­er­al Elec­tion Com­mis­sion was dead­locked, and no one was sur­prised. Demo­crats had wanted to crack down; Re­pub­lic­ans didn’t. No mat­ter that it could have been among the most im­port­ant cam­paign fin­ance de­cisions in years. No mat­ter that the agency’s gen­er­al coun­sel had re­com­men­ded ac­tion. Di­vided equally and hope­lessly by ideo­logy, the six com­mis­sion­ers were at a stale­mate.

It was all per­fectly or­din­ary for this dys­func­tion­al agency. All ex­cept for foot­note 111.

The case in­volved com­plaints against Cross­roads GPS, a non­profit af­fil­i­ated with Karl Rove that burst onto the na­tion­al polit­ic­al scene in 2010 and had since spent tens of mil­lions of dol­lars on cam­paign ad­vert­ise­ments. For the FEC, the ques­tion was wheth­er all of that polit­ic­al spend­ing meant that Cross­roads was not, in fact, a non­profit — and thus en­titled to keep secret its list of donors and de­tails of its activ­it­ies. The out­come had the po­ten­tial to im­pact what polit­ic­ally minded non­profits every­where — from the Koch Broth­ers’ vast net­work to Or­gan­iz­ing for Ac­tion, the out­growth of Pres­id­ent Obama’s cam­paign — could and couldn’t do.

The FEC’s gen­er­al coun­sel, a non­par­tis­an of­fice in­side the agency, had con­cluded that Cross­roads should have re­gistered as a polit­ic­al com­mit­tee, not as a non­profit. But with the Re­pub­lic­ans on the com­mis­sion still un­con­vinced, all that was left in the case was the pro forma pub­lish­ing of par­tis­an state­ments and the gen­er­al coun­sel’s find­ings, a re­port that would be parsed by polit­ic­al at­tor­neys and strategists around the coun­try look­ing to know just how far their cli­ents could stretch the leg­al lim­its of elec­tion law without earn­ing an FEC re­buke.

Then came the con­tro­ver­sial foot­note.

In a move that in­furi­ated Demo­crats and stopped some elec­tion law­yers cold, the Re­pub­lic­ans on the com­mis­sion dropped a bur­eau­crat­ic bomb­shell. They re­vealed in a foot­note that the of­fi­cial re­port of the FEC’s leg­al team, known form­ally as the First Gen­er­al Coun­sel’s Re­port, was not the “first” re­port at all. There had been a pre­vi­ous re­port-a “first First Gen­er­al Coun­sel’s Re­port,” the GOP com­mis­sion­ers called it — and it had come al­most a year and a half earli­er.

In the name of trans­par­ency and be­cause it “in­formed our de­cision,” the Re­pub­lic­ans said they were pub­lish­ing that doc­u­ment. Ex­cept that each of the 76 pages they at­tached was blank, the con­tents re­placed by the gen­er­al coun­sel’s of­fice with one word:

“RE­DAC­TED.”

What’s in this re­port? Why have Re­pub­lic­ans pushed to pub­lish it? How did it get re­dac­ted over the ob­jec­tions of pres­id­en­tially ap­poin­ted com­mis­sion­ers?

The Re­pub­lic­ans aren’t talk­ing. And neither is the FEC’s staff. But elec­tion law­yers around the coun­try can ap­pre­ci­ate the re­dac­ted doc­u­ment’s po­ten­tial im­pact, should it ever be re­vealed: A roadmap for cam­paigns and their non­profit sup­port­ers to evade FEC en­force­ment.

HID­DEN TREAS­URE?

The mag­nitude of this case is hard to over­state. Cross­roads col­lec­ted $255 mil­lion from 2010 to 2012, and used it to helped fund and shape the mes­sages of cam­paigns across the coun­try. So, not sur­pris­ingly, the re­dac­tion has sparked in­trigue out­side and fight­ing in­side the elec­tions agency.

While the FEC’s stated policy is to put “all First Gen­er­al Coun­sel’s re­ports on the pub­lic re­cord,” this one some­how was and re­mains fully blacked out. “I have been pay­ing pretty close at­ten­tion to the FEC for more than a dec­ade,” said Paul S. Ry­an, seni­or coun­sel to the Cam­paign Leg­al Cen­ter, “and I can­not re­call an­oth­er in­stance in which I’ve seen a com­pletely re­dac­ted doc­u­ment at­tached to a state­ment of reas­on, let alone such a lengthy doc­u­ment.”

Larry Noble, who spent 13 years as the FEC’s gen­er­al coun­sel and now ad­voc­ates for cam­paign fin­ance re­form, said the black­out was un­usu­al. “It shows the dys­func­tion of the agency that they get in­to this battle and re­lease a doc­u­ment that is re­dac­ted,” he said. He called the Re­pub­lic­ans’ de­cision to at­tach the re­dac­ted re­port “a bit of a stunt.”

For its part, the FEC isn’t talk­ing, either about what’s in the re­dac­ted re­port or how it got blacked out.

Ac­cord­ing to Noble, the coun­sel’s of­fice dur­ing his ten­ure had the power to re­dact doc­u­ments, even over the ob­jec­tions of com­mis­sion­ers. Only a ma­jor­ity vote of the com­mis­sion­ers can over­rule that de­cision.

In­deed, people in­volved in the Cross­roads de­lib­er­a­tions, who spoke on con­di­tion of an­onym­ity due to its sens­it­iv­ity and a sep­ar­ate-but-re­lated law­suit that’s pending, said the Of­fice of Gen­er­al Coun­sel had re­dac­ted its ini­tial re­port against the wishes of the GOP com­mis­sion­ers. Re­pub­lic­ans have yet to find that fourth vote needed to over­rule the agency’s law­yers.

Be­hind closed doors, com­mis­sion­ers are set to dis­cuss the doc­u­ment on Tues­day.

With the com­mis­sion­ers keep­ing si­lent, FEC-watch­ers are float­ing com­pet­ing the­or­ies for why Re­pub­lic­ans would try so hard to get the re­port pub­lished. Maybe the com­mis­sion­ers wanted to show that even the FEC’s leg­al team was torn over the reas­on­ing in this weighty case. Maybe the ini­tial coun­sel’s re­port was weak­er, more poorly ar­gued, or re­lied on more cir­cum­stan­tial evid­ence — all of which would bol­ster the GOP’s de­cision to dis­miss.

Whatever the mo­tiv­a­tion, the doc­u­ment mat­ters.. The FEC’s dead­lock doesn’t set leg­al pre­ced­ent but it means that, de facto, everything Cross­roads was ac­cused of do­ing would con­tin­ue to be al­lowed by the cur­rent com­mis­sion. Thus, if the re­dac­ted doc­u­ment was ac­tu­ally more sweep­ing in its scope and con­dem­na­tions of Cross­roads than the gen­er­al coun­sel’s fi­nal re­port, it could, coun­ter­in­tu­it­ively, broaden the kinds of activ­it­ies that polit­ic­al pro­fes­sion­als con­sider safe from pro­sec­u­tion.

“It’s cer­tainly not any­thing you can rely on in a court of law,” said Dan Back­er, a prom­in­ent Re­pub­lic­an elec­tion law­yer. But he said the stale­mate sug­gests “if my cli­ents en­gage in this activ­ity, in ex­actly the same man­ner, they are likely to avoid re­per­cus­sions for do­ing so,” as long as the makeup of the com­mis­sion re­mains the same.

In­ter­est­ingly, the Wash­ing­ton law firm that em­ploys the former FEC gen­er­al coun­sel who au­thored the agency’s pub­lished Cross­roads re­port de­scribed how cam­paigns and non­profits use such dead­locks to plan and jus­ti­fy their activ­it­ies.

“It will not be a path for the faint of heart, for a 3-3 dead­lock on an en­force­ment mat­ter is weak pre­ced­ent for those who later face an in­vest­ig­a­tion on some­what dif­fer­ent facts,” Cov­ing­ton & Burl­ing told cli­ents in a re­port pub­lished in Feb­ru­ary. “But we can ex­pect to find that the pub­lished state­ments of these three com­mis­sion­ers will re­sur­face as an ap­pendix to de­fense plead­ings ar­guing that due pro­cess pre­cludes the agency from en­for­cing rules that, for at least a peri­od in time, lacked the sup­port of a ma­jor­ity of the com­mis­sion.” The re­port was coau­thored by former FEC Gen­er­al Coun­sel Tony Her­man.

The law in the polit­ic­al non­profit area is no­tori­ously vague. For Cross­roads, or any oth­er non­profit, the leg­al ques­tion fa­cing the FEC is wheth­er its “ma­jor pur­pose” is to af­fect fed­er­al elec­tions. If so, then it must re­gister as a polit­ic­al com­mit­tee. The prob­lem is, there’s no de­tailed defin­i­tion of what con­sti­tutes “ma­jor pur­pose,” though it’s been widely in­ter­preted to mean wheth­er a group spends more than half its money on cam­paigns.

In the re­leased gen­er­al coun­sel’s re­port, FEC in­vest­ig­at­ors stud­ied Cross­roads’ 2010 spend­ing and said 53 per­cent went to­ward fed­er­al cam­paign activ­ity — enough, the FEC leg­al team ar­gued, to make the group a polit­ic­al com­mit­tee. (Cross­roads GPS dis­puted this ana­lys­is and noted it cre­ated a sep­ar­ate su­per PAC, Amer­ic­an Cross­roads, for polit­ic­al work.) The Re­pub­lic­an com­mis­sion­ers did their own cal­cu­la­tion, us­ing a dif­fer­ent time­frame, and de­term­ined that Cross­roads GPS spent only 25 per­cent of its money on cam­paigns between mid-2010 and the end of 2011.

The mys­ter­i­ous re­dac­ted re­port could give cam­paign law­yers a bet­ter un­der­stand­ing of how the cur­rent FEC coun­sel’s of­fice is in­ter­pret­ing these vagar­ies of “ma­jor pur­pose,” law­yers say.

For its part, the FEC isn’t talk­ing, either about what’s in the re­dac­ted re­port or how it got blacked out. “We are not au­thor­ized to com­ment,” FEC spokes­wo­man Ju­dith In­gram wrote in an email, “and there is no in­form­a­tion on the pub­lic re­cord to which we could point you to an­swer your ques­tion.”

FROM DEAD­LOCK TO DARK­NESS

The ori­gin­al com­plaints against Cross­roads were filed in fall of 2010. The FEC’s law­yers pre­pared their re­port and sub­mit­ted it to the com­mis­sion­ers on June 22, 2011. The tim­ing was awk­ward. Only a week earli­er, the FEC had named Her­man its new gen­er­al coun­sel. That meant that, in the biggest case snak­ing its way through the agency, Her­man would be in­her­it­ing and de­fend­ing a pre­de­cessor’s work.

When Her­man form­ally began at the com­mis­sion, the com­mis­sion­ers were only days from an ex­ec­ut­ive ses­sion set to con­sider Cross­roads. That closed-door hear­ing would mark a turn­ing point. “The dis­cus­sion dur­ing that meet­ing ap­par­ently caused OGC to re­con­sider its leg­al the­or­ies,” wrote the Re­pub­lic­an com­mis­sion­ers in their state­ment about the case, at­tached to the fi­nal gen­er­al coun­sel re­port.

At the meet­ing, Her­man asked to with­draw his of­fice’s re­port, and the com­mis­sion­ers agreed, ac­cord­ing to the Re­pub­lic­ans’ state­ment and to people fa­mil­i­ar with the pro­cess. Craig Hol­man, a cam­paign fin­ance re­former with Pub­lic Cit­izen, who is among those who filed the ori­gin­al com­plaint against Cross­roads, pre­sumes the law­yers “pulled it back them­selves and came up with a stronger ar­gu­ment.”

Her­man won’t say. “It would not be ap­pro­pri­ate for me to dis­cuss this mat­ter,” he told Na­tion­al Journ­al in an email. Cross­roads at­tor­ney Thomas Jose­fiak, a former FEC com­mis­sion­er, also de­clined to com­ment.

The with­draw­al of the re­port in Septem­ber 2011 en­sured that the case would drag on past the 2012 pres­id­en­tial elec­tion. That year, Cross­roads would raise $179 mil­lion and spend nearly $75 mil­lion on polit­ic­al cam­paign­ing, ac­cord­ing to its tax re­turns, pos­ted on­line by ProP­ub­lica.

The FEC’s second and fi­nal coun­sel’s re­port was de­livered to com­mis­sion­ers in Novem­ber 2012, shortly after the elec­tion. The com­mis­sion took 13 months be­fore it form­ally dead­locked. The Of­fice of Gen­er­al Coun­sel pub­lished its re­port in Janu­ary 2014.

Don­ald McGahn, a former Re­pub­lic­an FEC com­mis­sion­er who has seen the “first First” re­port, thinks he knows what happened. “It seems that the Demo­crats can make things pub­lic as they see fit, and the Re­pub­lic­ans can­not,” said McGahn, who served on the com­mis­sion from 2008 through Septem­ber 2013.

While he would not dis­cuss the con­tents of the re­dac­ted re­port, McGahn ac­cused the FEC’s Of­fice of Gen­er­al Coun­sel of treat­ing com­mis­sion­ers dif­fer­ently based upon their ideo­logy. He con­tras­ted a blacked-out memo he had tried to at­tach to a state­ment in 2013 to a case in 2009 in which Demo­crat­ic com­mis­sion­ers had suc­cess­fully at­tached a sim­il­ar memor­andum. “Bot­tom line, there is a double stand­ard,” McGahn said.

El­len Wein­traub, a cur­rent Demo­crat­ic FEC com­mis­sion­er who feuded with McGahn throughout his ten­ure, de­fends the FEC staff. “I cat­egor­ic­ally deny that our staff plays fa­vor­ites in any way,” she said. “Some­times when people dis­agree with re­com­mend­a­tions, they take it per­son­ally,” she said of her former col­league. “It’s cer­tainly not per­son­al, and it’s not polit­ic­al.” Wein­traub also de­clined to dis­cuss spe­cific­ally the Cross­roads case or the re­dac­ted re­port.

Be­sides a vote of the com­mis­sion­ers, there re­mains one way the miss­ing doc­u­ment could go still pub­lic: as a res­ult of a fed­er­al law­suit filed by con­sumer groups against the FEC, ar­guing the com­mis­sion failed to en­force the law in the Cross­roads case. Those groups could de­mand that the FEC turn over its law­yers’ first re­port — but they would do so at their per­il, know­ing it is a doc­u­ment that the Re­pub­lic­ans they are bat­tling want pub­lic.

“We haven’t made any de­cisions what­so­ever along those lines,” said Ry­an, who is in­volved in the law­suit.

However the epis­ode is re­solved, or left un­re­solved, it is just the latest ex­ample of the agency’s para­lys­is. A Cen­ter for Pub­lic In­teg­rity study last year re­por­ted that 41 per­cent of the com­mis­sion’s votes in the first half of 2013 lacked the sup­port of four com­mis­sion­ers; that was up from only 7 per­cent in 2007. The gen­er­al coun­sel post — one of the agency’s most im­port­ant staff po­s­i­tions — has been va­cant since Her­man de­par­ted. Mor­ale is low and frus­tra­tion is high.

“They have six bosses, and three of them nev­er agree with the oth­er three,” Wein­traub said. “That makes their job very dif­fi­cult.”

What We're Following See More »
MODELED ON 9/11 COMMISSION
House Dems Introduce Legislation to Investigate Russian Hacking of Elections
25 minutes ago
THE LATEST

"On Wednesday afternoon, Rep. Eric Swalwell, (D-Calif.), a Democrat on the House intelligence committee, and Rep. Elijah Cummings (D-Md.), the senior Democrat on the House government oversight committee, announced they were introducing legislation to create a bipartisan commission to investigate any attempt by the Russian government or persons in Russia to interfere with the recent US election. The commission they propose is modeled on the widely-praised 9/11 Commission."

Source:
$6.3 BILLION FOR RESEARCH AND OPIOIDS
Senate Sends Medical Cures Bill to Obama’s Desk
30 minutes ago
THE LATEST
DON’T WANT TO VOTE HILLARY
Colorado Electors Sue State for Right to Vote Third Party
1 hours ago
THE LATEST

"Two Colorado presidential electors Tuesday filed a lawsuit in federal court challenging a state law that requires them to vote for the winner of the state’s popular vote," in this case Hillary Clinton. They say they want to "vote for a third-party candidate to keep Trump from receiving 270 electoral votes," and work with other faithless electors around the country to "shift their Democratic votes to a consensus pick."

Source:
HAD CONSIDERED RUNNING FOR GUV IN 2018
Oklahoma AG Pruitt to Get the Nod for EPA Chief
1 hours ago
THE DETAILS
TOO LITTLE, TOO LATE
New Hampshire Called for Hillary Clinton
3 hours ago
WHY WE CARE
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login