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April 15, 2008

DNC, McCain Stuck In FEC Quagmire

By Reid Wilson

Seeking to severely wound John McCain's presidential efforts, the Democratic National Committee on Monday filed suit in federal court that could force McCain's campaign to give up millions of dollars in fines after applying for, then ultimately declining, federal matching funds and the accompanying spending limits. But because of a more than two year-old feud between Senate Majority Leader Harry Reid and the White House, the organization charged with overseeing campaign finance law - the Federal Election Commission - has become almost totally incapacitated and is powerless to resolve the dispute.

The Democratic complaint centers on McCain's certification for public matching funds, which the FEC would give to candidates who agree on spending limits during the primary that max out near $54 million. After putting together an early winning streak, McCain decided not to accept those matching funds - he would have been eligible for $5.8 million in funds as of December 20, according to the FEC. Democrats, though, contend that McCain used the promise of matching funds to obtain a loan that kept his campaign afloat at a crucial juncture.

Now, with McCain apparently actively planning to accept the approximately $84.1 million in public financing for the general election, the DNC suit seeks to speed up the process by which they can take legal action against McCain. The party filed a complaint with the FEC in February, upon which the body has 120 days to act; the complaint filed in court on Monday acknowledges that, thanks to the impasse, there is virtually no way the FEC will be able to act that quickly.

Barring action from a quorum of commissioners, the complaint filed this week would require FEC staff to conduct a staff-level evaluation and offer a draft opinion on McCain's situation within 60 days. Without a quorum by that point, in mid-June, DNC lawyers would be able to return to court to request permission to file a claim against McCain themselves.

The McCain campaign remains confident that both the initial complaint and the follow-up suit filed Monday will end in their favor, spokesman Brian Rogers said. As for the February complaint, Rogers pointed to an FEC statute that says campaigns that don't accept public financing are not required to abide by spending caps. McCain, Rogers and FEC spokesman Bob Biersack said, has not taken any money from the FEC, even though the other six candidates who qualified for the funds did so.

But the problem is that without an active Federal Election Commission, what should have been an open-and-shut case continues with no end in sight. "You could have gotten a clear, definitive answer on this, literally now, months ago" if the FEC were functional, said campaign finance expert Anthony Corrado. Progress toward that goal looks a long way off; so far, three additional potential commissioners had been nominated by President Bush, but on Monday, one of them, Democrat Robert Lenhard, withdrew his name from consideration, according to a letter Reid sent to White House chief of staff Joshua Bolten.

In the past two years, Senate Majority Leader Harry Reid and the White House and Senate Republicans have been at loggerheads over how to proceed with FEC nominees. The body has just two commissioners sitting on its six-member panel; without at least four members, the FEC cannot act on issues that may come up in this year's election, including McCain's attempt to withdraw from accepting primary season matching funds and their accompanying spending caps. "There is a pretty narrow range of activities the FEC can conduct absent a quorum," said Paul Ryan, of the nonpartisan Campaign Legal Center.

Both the remaining potential members, Republican Hans von Spakovsky and Democrat Steven Walther, along with Lenhard, served through the end of last year thanks to recess appointments, made with the consent of Senators on both sides of the aisle. But as Reid continues to hold the Senate in pro forma session through planned recesses, neither von Spakovsky nor Walther can be reappointed without a full vote in the Senate.

That vote looks unlikely to happen any time soon. Democrats object strongly to von Spakovsky, who as an official in the Justice Department's Civil Rights division helped restrict Justice's investigation into a ruling in Minnesota that critics said could have suppressed voting rights of Native Americans. Von Spakovsky was also involved in advocating the approval of a law in Georgia that would require voters to show identification at the polls.

In the letter to Bolten, Reid contends that von Spakovsky, the only controversial nominee to the election watchdog, be subjected to an individual confirmation vote requiring a simple majority. Republicans in Congress and the White House instead want to include von Spakovsky as a part of a package with Walther, a Nevada lawyer with close ties to Reid, that would guarantee both men's confirmation. "Historically, that's how it's been done," said White House spokeswoman Emily Lawrimore, speaking of the precedent of nominees being voted on as a package.

Reid said Lenhard's withdrawal will set the seating of a full commission back significantly, as the search for a new commissioner could take several months. But whether that search is fast or slow, it is unlikely the Senate will reach agreement on von Spakovsky any time soon. Reid will not bring the two remaining commissioner candidates up for a vote in a package, and the White House, said Lawrimore, isn't budging. "We continue to support the nominees that are up there and hope that they will be voted on as soon as possible," she said.

The impasse, election law experts say, could have a significant impact on the 2008 presidential election, not only because of the DNC's complaint but because of any future hurdles that the FEC has not tackled yet that could arise this year. And given the way this campaign has played out so far, virtually everyone expects more new ground to be broken.

Problems arise, said Corrado, "when you come up against a question that hasn't come up in the past." Corrado, a campaign finance expert at Colby College and a senior fellow at the Brookings Institute, said without a quorum, the FEC is virtually powerless. "The problem that the FEC has is just in being able to render decisions" on uncharted legal territory. "You need FEC guidance in those instances."

The FEC's impotence could create problems for candidates up and down the ballot. "The reality is, none of us knows when the FEC will be reconstituted," Ryan said. In fact, if McCain accepts public financing for the general election, such funds would have to come out of a vote by the body, which, without a quorum, is impossible. Ryan said by the time a candidate would look for general election financing, and without a resolution to the FEC crisis, a court will have to be involved.

If national Democrats can convince the court to allow them to carry forward with a suit against McCain, and despite the strong position in which the GOP nominee-in-waiting would likely find himself in such a suit, the issue is one that could hurt him come November. With possible Democratic nominee Barack Obama considering skipping out on public financing, McCain taking public money could be a strong contrast that would benefit the Republican.

But if legal action is pending, it could blunt any clean campaign benefit McCain should get, even if he backs up his argument with a legal victory. That's the biggest problem with the current FEC stalemate, campaign finance expert Corrado said. "Your opponents can play politics with you because of the void created by the regulator." Without the FEC around to act, one side is "allowed to draw out the story," he said.

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