Group Wants FEC to Tell It What the Rules Are

DES MOINES, Iowa (CN) - The Hispanic Leadership Fund sued the Federal Election Commission, claiming the FEC's failure to determine after Citizens United whether financial disclosure requirements apply to issue ads leaves political activists unsure what they must report, could subject them to prosecution and restricts their speech.

The organization says that, if applied to its activities, the "broad and sweeping" disclosure requirements may discourage donations and violate its rights to speech and association under the First Amendment.

It seeks declaratory judgment, an injunction against enforcement of 2 U.S.C. §§ 431 (18) and 434 (f) and applicable rules and regulations, and nominal damages of $1, in Federal Court.

The Hispanic Leadership Fund says its purpose is to "advance free enterprise, limited government, and individual freedom."

It says that beginning this month it is planning to air some of its issue ads in Iowa and other states, encouraging citizens to urge the government to act on matters of national importance.

Under the Federal Election Campaign Act, any person who makes an election-related communication must disclose certain information to the FEC, including the source of advertisement funds.

The Supreme Court's 2010 landmark ruling in Citizens United v. Federal Election Commission overturned a slew of campaign finance laws, including regulations that barred corporations and unions from financing campaign ads. The ruling did not affect the ban on corporate or union contributions or the reporting requirements for political ads.

The U.S. District Court for the District of Columbia this year rejected FEC disclosure requirements as too lax and ordered the FEC to rewrite disclosure and reporting rules.

The court found in favor of U.S. Representative Chris Van Hollen, who challenged regulations that require disclosure of donations of $1,000 or more to corporations or labor organizations for the purpose of funding "electioneering communications."

Electioneering communications are political ads that may picture or name a candidate without soliciting votes on his or her behalf, which are aired within 30 days of a primary or 60 days of a general election, and target relevant voters.

The Hispanic Leadership Fund claims its proposed advertisements are not election-related, because they do not involve "clearly identified candidates."

But when another nonprofit, the American Future Fund, submitted similar ads to the FEC, the commission failed to determine whether the ads qualified as "electioneering communications" and whether the disclosure requirements applied, the Hispanic Leadership Fund says.

The FEC initially determined that most of the ads were not election-related, because they did not show clearly identified candidates, but the commission could not reach a conclusion because it lacked the necessary number of votes.

"Because of the FEC's failure to faithfully apply the FECA and controlling Supreme Court opinions, HLF intends to refrain from speech in which it had previously engaged and is halting its communications in the future for fear of civil and criminal penalties which potentially and realistically may be brought for failure to comply with the FECA," the complaint states.

The plaintiff claims the FEC's inaction prevents it from educating the public on federal and state policy issues, and forces it to seek a court order whenever it wants to engage in political speech.

It claims the lack of clear guidelines from the FEC exposes it and other political players to civil and criminal penalties for engaging in constitutionally protected speech.

"Given that the FEC could not issue a definitive statement concerning the application of the statute to AFF's planned actions, HLF will likely have to mute itself and curtail its own speech during the upcoming electioneering communication period," the complaint states.

The Hispanic Leadership Fund says its ads most likely do not require donor disclosure or other reporting under the FECA, but says it may be subjected to government investigation and penalties because of the FEC's failure to clearly interpret the law.

It claims there is no danger of corruption, because it never has made and does not plan to make contributions to candidates.

It seeks declaratory judgment that of 2 U.S.C. § 431 (18), 2 U.S.C. § 434 (f), 11 C.F.R. § 100.17 and 11 C.F.R. § 100.29 are unconstitutional as applied to its proposed ads, and void as applied under 5 U.S.C. § 706.

And it wants the FEC enjoined from enforcing the first two sections, immediately above.

The Hispanic Leadership Fund is represented by Matt Dummermuth with Whitaker Hagenow & Gustoff, of Cedar Rapids.

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