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United States: Federal Appeals Court Holds Election Funding Regulations for Non-Profits Violate First Amendment

(Oct. 2, 2009) The United States Court of Appeals for the District of Columbia Circuit has held that Federal Election Commission (FEC) regulations restricting the way non-profit organizations can raise and distribute funds violates the First Amendment to the U.S. Constitution and exceeds the commission's authority under the Federal Election Campaign Act (FECA).

The case dealt with the FEC's response to the uproar over hundreds of millions of dollars spent by non-profit political groups – known as “527s” after the Internal Revenue Code provision that governs them – during the 2004 election. In response, the FEC required “covered non-profits” to pay for certain activities – “administrative expenses, costs of generic voter drives, and costs of public communications that refer to any political party” – out of hard money accounts, which have limits upon the amounts individuals can contribute. In addition, covered non-profits had to treat as hard money contributions all donations given in response to solicitations indicating that “any portion” of the funds would be used to support or oppose a candidate in a federal election.

The court rejected the regulations as not “closely drawn” to thwart corruption or the appearance of corruption that Supreme Court precedents on the First Amendment require for campaign finance limits. The court also ruled that the regulations exceeded the Commission's statutory authority under FECA. FECA authorized the FEC to regulate donations and expenditures made “for the purpose of influencing any election for Federal office.” However, the challenged regulations' requirements on the use of hard money accounts had the effect of influencing non-profit solicitation for funds and spending on non-federal elections. The court held that there was a “significant mismatch” between the regulations and the FEC's authority under FECA and, as a result, the regulations exceeded the FEC's statutory authority. It concluded that the FEC could not enforce the challenged regulations. (EMILY's List v. Federal Election Commission, No. 08-5422 (D.C. Cir. Sept. 18, 2009), available at http://pacer.cadc.uscourts.gov/common/opinions/200909/08-5422-1206889.pd
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