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Challenge to Campaign Disclosure Rules Faces Skeptical D.C. Cir.

By Casey C. Sullivan, Esq. on October 27, 2015 | Last updated on March 21, 2019

The Federal Election Commission's campaign disclosure rule was back before the D.C. Circuit last week -- and just in time for a ramped up election season. The disclosure rules in question require groups that spend more than $10,000 annually on electioneering to disclose donors who give more than $1,000 for political ads.

Some critics see that as no disclosure rule at all, but a guide to avoiding disclosure. Want to finance political advertising but remain secret? Just don't say your donations need to be used for ads. Lead by Representative Chris Van Hollen, a Democrat from Maryland, they've spent years challenging the rule.

Disclosure or Disclosure Workaround?

The FEC's rule was prompted by the McCain-Feingold Act, the campaign finance reform law formally known as the Bipartisan Campaign Reform Act of 2002. The BCRA requires that everyone who "makes a disbursement" for "electioneering communications" file disclosures with the FEC. "Electioneering communications" are broadcast advertisements airing within a month of a primary election or two months before a general election.

The Commission's regulations interpreting and implementing the law state that if a corporation or labor union donates money for electioneering, the organization (not the donor) must disclose the donation if it was over $1,000 and made for the purpose of furthering electioneering communications.

Representative Van Hollen sued in 2011, arguing that the Commission's interpretation was actually a work around of the law. The plain language of the law requires "every person" who gives money to "electioneering communications" to donate "all contributors." What the FEC created, Rep. Van Hollen argued, was a system whereby contributors can easily avoid disclosing almost any contribution -- the opposite of what the law intended.

Van Hollen Faces a Skeptical Court

The lawsuit has been bouncing between district and circuit court ever since. Judge Amy Berman struck down the rules in 2012, only to be reversed by the D.C. Circuit, which remanded the case to her for a more thorough inquiry into whether the FEC had been "arbitrary and capricious." Two years later, she ruled just that and the case was again appealed to the D.C. Circuit, which heard oral arguments last Tuesday.

The court didn't exactly seem enthusiastic about Van Hollen's arguments. Judge Raymond Randolph seemed skeptical as to whether the rules had lead to the "mass evasion" of disclosure that Van Hollen alleges, the National Law Journal reports. Judge David Sentelle questioned how the rules could be considered capricious given the FEC's explanations for them.

If the D.C. Circuit changes tone and upholds the district court's ruling, however, voters may soon be able to peak behind the curtain of campaign advertising -- just in time for the 2016 Presidential campaign.

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