Alliance for Democracy v. Federal Election Commission

362 F. Supp. 2d 138, 2005 U.S. Dist. LEXIS 3254, 2005 WL 503729
CourtDistrict Court, District of Columbia
DecidedMarch 4, 2005
Docket1:04-mj-00127
StatusPublished
Cited by81 cases

This text of 362 F. Supp. 2d 138 (Alliance for Democracy v. Federal Election Commission) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alliance for Democracy v. Federal Election Commission, 362 F. Supp. 2d 138, 2005 U.S. Dist. LEXIS 3254, 2005 WL 503729 (D.D.C. 2005).

Opinion

MEMORANDUM OPINION

WALTON, District Judge.

This is an action that has been brought pursuant to the Federal Election Campaigns Act (“FECA”), 2 U.S.C. § 431 et seq., and the Declaratory Judgment Act, 28 U.S.C. § 2201. The plaintiffs seek redress for the Federal Election Commission’s (“FEC”) dismissal of the central allegations of their administrative complaint claiming that the dismissal was arbitrary and capricious, contrary to law, and a clear abuse of the agency’s discretion. Plaintiffs’ Complaint (Compl.) ¶ 2. Currently before the Court is Defendant Federal Election Commission’s Motion to Dismiss, or in the Alternative, for Summary Judgment (“Def.’s Mot.”) [D.E. # 13], the plaintiffs’ opposition thereto and the defendants reply. For the reasons discussed below, this Court will grant the defendant’s motion. 1

I. Background

On the day of John Ashcroft’s Senate confirmation hearing for the position of Attorney General, the Washington Post reported that during his 2000 Missouri Senate campaign, Spirit of America PAC (hereafter “SOA”) 2 gave a fundraising list of 100,000 donors to Ashcroft 2000, and that neither Ashcroft’s campaign nor his political action committee (“PAC”) reported the contribution to the Federal Election Commission (“FEC”). Plaintiffs Alliance For Democracy, Hedy Epstein, and Ben Kjelshus’ Opposition to Defendant’s Motion to Dismiss, or in the Alternative, For Summary Judgment (“PL’s Opp’n”) at 2 & Exhibit (“Ex.”) D (Walter Pincus, “Possible Ashcroft Campaign Violation,” Washington Post, February 1, 2001) at A4. The article did not report the market value of the list or any quote from the Ashcroft campaign or his PAC regarding the value of the list. Id. About one month later, on March 8, 2001, the plaintiffs filed an administrative complaint with the FEC against Ashcroft 2000 and SOA. Compl. ¶ 9. The administrative complaint, designated MUR 5181, alleged that SOA “contributed a fund-raising list of approximately 100,000 donors to Ashcroft 2000 and that, in turn, Ashcroft 2000 made a significant amount of money by renting the list to other entities.” Id. ¶ 10. 3 The adminis *140 trative complaint further alleged that “the donation of the fund-raising list by SOA to Ashcroft 2000 constituted a ‘contribution’ as defined by federal law,” and that the contribution was illegal because it exceeded the applicable limit on PAC contributions to candidate committees. Id. ¶ 11 (citing 2 U.S.C. § 431(8) and 11 C.F.R. 100.7). Additionally, the administrative complaint alleged that “neither Ashcroft 2000 nor the SOA [ jreported the contribution of the fund-raising list to the FEC, as required by [the FECA].” Id. (citing 2 U.S.C. § 441a(a)(2)(a); 2 U.S.C. § 441a(f); and 2 U.S.C. § 434(b)). 4

The FEC’s investigation of the administrative complaint by the'FEC’s Office of the General Counsel (“OGC”) revealed that SOA spent approximately $1.7 million to develop the fund-raising list. 5 Id. ¶ 13. According to the plaintiffs, a work product agreement was reached whereby the list was transferred to Ashcroft 2000 in exchange for permission to use his name and likeness in SOA’s mailings. Id. The plaintiffs note that both organizations, SOA and Ashcroft 2000, “were controlled by the same individuals,” and that “SOA already had the use of Mr. Ashcroft’s name and likeness for at least six months prior to the work product agreement.” Id. The OGC concluded that the exchange was neither bargained-for at arms’s length, nor was it commercially reasonable, and the transfer of the mailing list therefore constituted an in-kind contribution to Ashcroft 2000 as defined by the FECA. Id. Documents describing the results of the OGC’s investigation, including the OGC’s reports and other FEC documents referenced in the complaint filed with the Court in this case are publicly available through the Enforcement Query System on the Commission’s website. Id.

The OGC’s investigation further revealed that by transferring the mailing list, SOA and its treasurer, Garrett Lott, violated the $5,000 limit on contributions from a political committee to a candidate in an election covered by 2 U.S.C. § 441a(a)(2)(A). Id. ¶ 14. Furthermore, the investigation disclosed that Ashcroft 2000 and its treasurer violated the prohibition on candidates accepting contributions prohibited by 2 U.S.C. § 441a(f). 6 Id. Moreover, the OGC found that both SOA and Ashcroft 2000 had violated the disclo *141 sure requirements contained in 2 U.S.C. § 434(b) by failing to report the value of the mailing list as an in-kind contribution. Id. The OGC specifically found that “excessive, unreported contributions were created by ... the transfer of list rental income (‘LRI’) from [SOA] to Ashcroft 2000” totaling $66,662. Id. ¶ 15. Additionally, it determined that excessive unreported contributions in the' amount of $46,300 was derived from “Ashcroft 2000’s sale of accounts receivable from persons who had rented the list from SOA” and $80,000 from “Ashcroft 20Ó0’s own rental income [derived] from the list.” Id. Finally, the OGC concluded that “Ashcroft 2000’s use of the list in its own mailings” resulted in excessive unreported contributions totaling $61,955. Id. According to the plaintiffs, “the OGC’s findings concerning these contributions necessarily assume that the mailing list did not become the property of Ashcroft by virtue of the [Work Product Agreement], further establishing that the transfer of the list constituted an in-kind donation to Ashcroft 2000 that should have been reported under 2 U.S.C. § 434(b).” Id. The plaintiffs complain, however, that the Commission “failed to find probable cause to believe that the transfer of the mailing list constituted an in-kind donation, the value of which had to be reported by both SOA and Ashcroft 2000.”

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Bluebook (online)
362 F. Supp. 2d 138, 2005 U.S. Dist. LEXIS 3254, 2005 WL 503729, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alliance-for-democracy-v-federal-election-commission-dcd-2005.