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Libertarians Fighting Payment-Plan Rules Stumble at DC Circuit

The en banc D.C. Circuit appeared likely at oral arguments Friday to endorse the installment plan forced upon the Libertarian Party after it was bequeathed a hefty donation.

WASHINGTON (CN) - The en banc D.C. Circuit appeared likely at oral arguments Friday to endorse the installment plan forced upon the Libertarian Party after it was bequeathed a hefty donation.

Though federal elections rules permit individuals to give up to $339,000 per year to political parties, that total comes with certain specifications. Donors can give $101,700 each to accounts used for presidential-nominating conventions, building expenses and legal proceedings, but the maximum allowed to general-purpose accounts is $33,900.

The scheme drew a challenge from the Libertarian National Committee after Joseph Shaber left it $235,000 when he died in 2014. Shaber's gift came with no strings attached, but the Libertarian Party says that $33,900 limit on general-expenditure donations forces it to collect the money in installments each year, leaving the rest in an escrow account.

Before the D.C. Circuit on Friday, Libertarian National Committee attorney Alan Gura attacked the limits as unconstitutional both on their face and as applied to Shaber's gift.

Casting the donation caps as a restriction on political speech, Gura told the judges the party knows of donors who would be willing to give the party more of their money if not for the fact that it would need to go to things like building maintenance.

Gura said Congress passed the campaign-finance restrictions in 2014 hastily and without explaining its justifications. While Congress has a general interest in protecting against the appearance of corruption in campaign donations, Gura said there is no obvious reason a donation to a building-maintenance fund would not be just as corrupting as a donation to a general-use fund.

Furthermore, Gura said, the government has given no plausible reason to justify capping the contributions from a dead person, the potential corrupting influence of which are obviously limited.

"The dead are different than the living," Gura said Friday.

Gura argued as well that the policy inherently benefits the two major political parties because they have larger expenses for their presidential-nominating conventions and headquarters. Allowing larger donations used for those specific expenditures frees up the parties to spend more on campaigning, Gura said.

Each of Gura’s arguments appeared unlikely, however, to strike a chord with the en banc panel. Chief Judge Merrick Garland observed the party could have accepted all of Shaber's bequest shortly after receiving it had it simply split up his money into the different accounts.

Judge David Tatel also noted the limits are really on the donors, not the party.

"You're representing the Libertarian Party, and it doesn't limit the Libertarian Party's expenditures," Tatel said.

Later, with a wink to the 18 extra minutes Gura received to make his argument Friday, Judge Robert Wilkins asked whether the judges should consider the fact that, by segregating the maximum donations by purpose, Congress actually greatly expanded the amount individuals can give to parties.

"But Mr. Gura, you had 30 minutes for oral arguments, but to the extent that we gave you one minute more, you're better off," Wilkins said.

Federal Election Commission attorney Jacob Siler defended the donation limits by saying Congress has a clear incentive to protect against the potentially corrupting influence of campaign donations. Even in the case where the donor has died, Siler said, that person's representatives can still attempt to gain some benefit by steering money to political parties.

Siler said by dividing up the donation limits, Congress was looking to allow donors to cover the administrative expenses that all political parties have while limiting the potential for corruption.

As for Garland’s point that the Libertarian Party could have taken in Shaber's entire contribution if it wanted to, Siler said the party misread an FEC advisory opinion it cited as the reason it did not do so.

Siler faced fewer questions than his opposing counsel, but some of the judges appeared to question the harm in allowing parties to accept money from dead people, especially if the gift comes with no strings attached.

"What is the fear of corruption in a bequest that is not coordinated?" Judge Thomas Griffith asked.

Though the Libertarian National Committee had filed its challenge initially at the trial-court level, Chief U.S. District Judge Beryl Howell made findings of fact and certified three questions of law to the D.C. Circuit.

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