With the swearing in of Shana M. Broussard, Sean J. Cooksey, and Allen Dickerson, the Federal Election Commission now has a full roster of six Commissioners for the first time since 2017.  While the FEC briefly enjoyed a quorum with four Commissioners in May, since then it has lacked a sufficient number of Commissioners to promulgate rules or vote on enforcement matters.  Now, the FEC will turn to the significant backlog of cases, many of which are nearing the five year statute of limitations.

We have argued elsewhere that the most important decision these new Commissioners will make is how they work together to reach the four votes necessary for the Commission to take formal action on matters before it.  The first indications of this will appear internally, as they sort through the significant backlog of enforcement actions.  But those votes will remain confidential until each matter is fully resolved.  Externally, we will see the first signs of the approach the newly reconstituted Commission will take in Advisory Opinion votes, where the discussion, compromise and final decisions will be public.

For our clients last February, Covington’s Election and Political Law group looked back on the two prior years of agency decisions to identify trends in agency decision making.  There were several areas that fairly consistently showed a strong, bipartisan agreement on what the law said, and how it should be enforced.  We think there is a reasonable likelihood that consensus will remain in most of these areas.  These include:

Misuse of Federal Funds and Failure to Report.

Misappropriation of PAC funds, whether embezzlement, misappropriation, or use of non-Federal funds in Federal elections, is by far the most frequent subject of commonality among the Commissioners. Similarly, failure to file timely reports, disclose disbursements, or make timely corrections to reports, are likely to garner a unanimous vote to take action.  Thus, the routine “blocking and tackling” of political committee compliance remains essential, for there is little partisan or ideological divide over the need to comply with these rules.

Foreign National Contributions.

The FEC has voted to take action and impose penalties in matters involving reasonably straight forward violations of the ban on contributions by foreign nationals.  Most strikingly the Commissioners accepted the single largest penalty in 2019 — a staggering $940,000 — in a matter arising from a Chinese national approving a domestic corporation’s contribution to a Super PAC.  A similarly substantial penalty, relative to the size of the violation, arose from the Australian Labor Party’s payment of the travel expenses of Australians who came to work in federal elections.  There were also several cases where the FEC declined to pursue the violation only because those involved had already been prosecuted by the Justice Department.  At the same time, the agency has refused to investigate politically charged cases involving Russia and the Trump administration and NRA.

Prohibited Contributions.

Commissioners have agreed to take action in matters involving excessive contributions, contributions made in the name of another, reimbursed contributions, non-voluntary contributions and non-refunded general election contributions.  Like foreign national contributions, the Department of Justice also routinely pursues contributions in the name of another, sometimes more commonly known as “straw donor” contributions, magnifying the need for those soliciting and receiving contributions to understand and comply with these rules.

Technology and Deregulation. 

The Commission has frequently found consensus on questions involving the application of the agency’s rules to new technology.  This includes cases where the FEC concluded that technology companies did not make contributions” or “expenditures” or themselves become “political committees” despite the political content of their products.  There was also consensus on the application of the FEC’s rules to cryptocurrency use.  Finally, the Commissioners found consensus on a relaxed reading of the application of their rules to those companies providing tech solutions to FEC regulated entities that faced the risk of foreign state actors.

For many other important issues, consensus has been harder to find.  When does an entity become a “political committee”?  What is “coordination”?  How does the First Amendment inform agency decision making?  One example of the difficulty the agency has had in decision making:  It has been a decade since the agency completed a substantive rule making. With four new Commissioners appointed in the past year, it will be interesting to see what this new phase at the FEC will hold.

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Photo of Robert Lenhard Robert Lenhard

Robert Lenhard is a member of the firm’s Election & Political Law practice group and advises corporations, trade associations, not-for-profit organizations, and high-net-worth individuals on compliance with federal and state campaign finance, lobbying, and government ethics laws.

Mr. Lenhard routinely assists clients in…

Robert Lenhard is a member of the firm’s Election & Political Law practice group and advises corporations, trade associations, not-for-profit organizations, and high-net-worth individuals on compliance with federal and state campaign finance, lobbying, and government ethics laws.

Mr. Lenhard routinely assists clients in establishing and operating federal and state PACs, compliance programs associated with campaign finance and pay-to-play laws; advises advocacy groups and their donors; conducts compliance trainings and audits of federal and state lobbying and political programs; and counsels clients on compliance with congressional gift and travel rules.

Prior to joining the firm in 2008, Mr. Lenhard served as Chairman of the Federal Election Commission (FEC) in 2007 and Vice Chairman of the agency in 2006, during which time the agency handled over 10 major rulemakings, had among its most productive years in enforcement and audit, and adopted several reforms to the enforcement process.  Mr. Lenhard has also led the Presidential Transition Team that reviewed the FEC for the incoming Obama administration in 2008-2009.