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The Washington Independent

Except in the Narrowest Circumstances, FEC Won’t Enforce Disclosure Requirements

A relatively obscure document released by the Federal Election Commission on Wednesday bodes particularly ill for the chances of any form of meaningful campaign

Stefano Mclaughlin
Last updated: Jul 31, 2020 | Aug 20, 2010

A relatively obscure document released by the Federal Election Commission on Wednesday bodes particularly ill for the chances of any form of meaningful campaign finance disclosure from independent groups during the upcoming election cycle.

The document in question is a “Statement of Reasons” released by the FEC’s three Republican commissioners. It covers a 2008 advertisement, entitled “Family Taxes,” from Freedom Watch Inc., a 501(c)(4). Freedom Watch did not disclose any donor information for the ad. After the ad aired, the Democratic Congressional Campaign Committee (DCCC) filed a complaint: Freedom Watch Inc. had violated FEC disclosure rules by failing to identify the donors who made the political ad possible, it argued.

But in the Statement of Reasons, the commissioners argue the group didn’t violate relevant FEC rules that require donor disclosure for electioneering communications. The case hinges on the phrase “for the purpose of furthering electioneering communications.” According to current FEC rules, only funds donated for this express purpose must be disclosed.

Back in 2008, Freedom Watch fired back that it ”did not solicit any donations for the purpose of airing an electioneering communication in Louisiana or elsewhere” and that “[a]ll funds contributed to [Freedom's Watch] during 2008 have been for general purposes.”

How one interprets the above clause is up for debate. If an organization’s primary goal is to air electioneering communications, it might stand to reason that donations to that organization were made for that purpose. But the Republican FEC commissioners’ reply makes it clear that they are determined to interpret the rule as narrowly as possible:

The complaint in this matter points to no specific facts that demonstrate that Freedom’s Watch financed the “Family Taxes” advertisement in whole or in part with funds donated for the purpose of furthering that particular advertisement (or for that matter, for the purpose of furthering the group’s electioneering communications in general). Instead, the complaint points to a New York Times article that, on the basis of anonymous sources, reported that Sheldon Adelson was the primary financier of Freedom’s Watch, and that Mr. Adelson “insisted on parceling out his money project by project” and has “rejected almost all of the staffs proposals that have been brought to him.” The Complainant believes this is enough for the Commission to find reason to believe that Freedom’s Watch violated the Act’s electioneering communications reporting provisions and to initiate an investigation.

We disagree.

It’s worth nothing that the New York Times article they reference was a thorough work of investigating reporting. But the commissioners brush it aside, interpreting the law only in a very narrow context and leaving myriad ways to avoid its disclosure requirements. Because the FEC has six commissioners — and three of them signed their names to this document — don’t expect it to take meaningful action against any political nonprofit groups who choose not to reveal their donors for electioneering communications during this election cycle, either.

Stefano Mclaughlin | For the first five years of his career, Stefano worked as a financial advisor on state and local tax matters, developing internal marketing technology for his multinational tax business. With over 12 years of experience designing high-performance web applications and interactive interactions, Stefano is now a marketing technology specialist and founder.


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