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Federal Court Tosses Out FEC Regulations

A federal judge on Saturday handed a major victory to sponsors of the Bipartisan Campaign Reform Act and a stinging rebuke to the Federal Election Commission, tossing out more than a dozen campaign-finance regulations authored by the FEC.

The 157-page opinion by Judge Colleen Kollar-Kotelly struck down 15 regulations that the six-member FEC had crafted to implement BCRA after its passage the 2002, concluding that the FEC had acted contrary to Congress’ intent and “severely undermined” the nation’s campaign finance law.

Reps. Christopher Shays (R-Conn.) and Marty Meehan (D-Mass.) had challenged the FEC’s rules in court in late 2002, alleging that in its implementation of BCRA, the agency had created a web of loopholes that were “contrary to law.”

In her opinion, Kollar-Kotelly largely agreed with Shays and Meehan, invalidating regulations the FEC had crafted to cover coordinated communications, a federal soft-money ban and soft-money rules for state parties.

The FEC, which has not yet indicated whether it will appeal the decision, will now have to go back and substantially rewrite the rules consistent with the court’s opinion — a process that could take months and which is not likely be completed by Election Day.

Among the portions of the FEC’s regulations that came under the harshest fire from Kollar-Kotelly were the agency’s coordination rules.

In its rulemaking, the FEC had originally exempted from “coordinated-communications” rules communications made more than 120 days prior to an election, or those that didn’t refer to a specific candidate or a political party. The agency also exempted Internet communications from the definition of a coordinated public communications.

Kollar-Kotelly — a member of the three-judge panel at the U.S. District Court for the District of Columbia who heard the original challenge to BCRA led by Sen. Mitch McConnell (R-Ky.) before it went to the Supreme Court — threw out both exemptions, concluding that the first of the two would “create an immense loophole that would facilitate the circumvention” of contribution limits and allow “potential for gross abuse.”

In addition, the ruling rejected the FEC’s definition of the term “solicit” as it applies to the federal ban on party soft money. The FEC had chosen to read the term “solicit” as meaning only “to ask” — an overly narrow definition that would be easy to manipulate, Kollar-Kotelly wrote.

“The purpose of Title 1 of BCRA is to divorce national political parties, as well as candidates for federal office and federal officeholders, from the nonfederal money business,” the court wrote. “To permit such individuals and entities to funnel nonfederal money into different organizations by simply not ‘asking’ the donors to do so, but using more nuanced forms of solicitation, would permit conduct that would render the statute largely meaningless.”

Kollar-Kotelly also struck down regulations defining the term “agent,” as it applies to the coordination rules and the soft money ban, and she threw out the FEC’s exemption of 501(c)(3) charity groups from electioneering-communications provisions. While the FEC had reasoned that the Internal Revenue Service prevents such groups from intervening in political campaigns, thereby negating the need for FEC action, Kollar-Kotelly rejected this approach.

“It is the FEC, not the IRS, that is charged with enforcing” the Federal Election Campaign Act, she wrote.

Campaign-reform advocates hailed Kollar-Kotelly’s decision as an indictment of a runaway agency that needs to be overhauled.

Trevor Potter, a former Republican chairman of the FEC and current general counsel of the Campaign Legal Center, said Monday that the judge’s ruling and other recent legal wranglings prove that the FEC itself is “actively undermining campaign-finance law.”

“The decisions show that over the past generation, the Commission has often been the agent of the law’s undoing, actually causing some of the nation’s most notable campaign finance disasters, including the soft money system and the current attempts to recreate that scheme through the improper use of so-called 527 organizations,” Potter said in a written statement.

Democracy 21 President Fred Wertheimer agreed.

“First we have the Supreme Court in the McConnell decision strongly admonishing the FEC, saying its flawed regulations allowing political party soft money had ‘subverted’ and ‘invited widespread circumvention’ of the nation’s campaign finance laws,” Wertheimer said in a press release. “Now we have a federal district court tossing out 15 FEC regulations to implement the BCRA with equally strong and rebuking language.”

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