Judge Reverses FEC Dismissal of Election Ad-Related Complaint

CREW argued that American Action Network and Americans for Job Security had violated federal campaign finance law and should be forced to disclose their donors. The court’s decision has the potential to stymie the avalanche of untraceable cash spent by Republican and Democratic donors during election years. “I think it’s very significant,” said Larry Noble, general counsel of the non-partisan watchdog, the Campaign Legal Center. “This should be of concern to organizations which have been very politically active, while failing to report as political committee, relying on the FEC’s refusal to enforce the law.”

A U.S. District Court judge has rejected a Federal Election Commission dismissal of a campaign ad-disclosure related complaint by Citizens for Responsibility and Ethics in Washington (CREW), signaling that the FEC will need to take a more expansive view of political ads requiring disclosure. Disclosure requirements are triggered when a group spends more than $10,000 on electioneering communications–broadcast, cable or satellite ads–in the run-up to primaries or general election, and even more extensive disclosures are required of political committees (PACs) whose “major purpose” is determined to be the “nomination or election of a candidate.”

The Federal Election Commission reviewed the ad, but found that the nonprofits’ percentage of annual spending on the ads should not be considered in evaluating whether their “major purpose” was the “nomination or election of a candidate.”      Although AJS spent approximately 75 percent of its annual expenditures in 2010 on electioneering communications, the commissioners only considered how much the organization had spent over its lifetime. Founded over 15 years ago, AJS spent about 10 percent of its lifetime budget on express advocacy.