Posted November 28, 2006 by Paul S. Ryan

FEC Proposal To Hold Enforcement Hearings Is A Bad Idea

Campaign finance reform opponent Bob Bauer blogged today on some proposed changes to FEC enforcement procedures to be considered at the Commission’s meeting Thursday.  Mr. Bauer seems particularly excited about the opportunity for those who have been accused of violating campaign finance laws to have a hearing before the Commission prior to the time that the Commissioners actually vote on whether “probable cause” of a violation exists.  Mr. Bauer wrote:

“The FEC bar could not fail to be excited by the suggestion that some oral argument, in some enforcement cases, might be under consideration.  For many years, counsel have noted the absence of any direct contact with the agency in enforcement matters.  The arguments are presented on paper, in cases large and small.  By contrast, the Office of General Counsel, effectively the respondent’s adversary who prepares the case for enforcement action, including the probable cause determination to which the respondent is entitled to reply, has a free run of the agency.  In other words, one ‘party’ can consult at will with the Commissioners; the other not at all.”

Mr. Bauer’s description of the proposal is based on a fundamental mischaracterization of the FEC enforcement process.  Mr. Bauer misleadingly identifies the OGC as the “respondent’s adversary” (i.e., the opposing party) in enforcement actions, and the Commission itself as an independent judge.  In truth, as a matter of law, the Commission and the OGC are a single entity, with the OGC serving and representing the Commission in its capacity as the civil prosecutor of suspected violations of the law.  After all, the Commission never even reaches a “probable cause” vote unless a majority of Commissioners vote in the affirmative to find “reason to believe” that a violation of the law has occurred and, as a result of such a vote, directs the OGC to conduct an investigation and to further brief the Commission on the possible violation.

To be clear, the FEC enforcement process is non-adjudicatory—the agency generally can not impose fines.  Instead, the Commission attempts to enter a conciliation agreement (a plea bargain, of sorts) with a person when a majority of Commissioners first finds “reason to believe” that person has violated the law, and then after further investigation finds “probable cause” to believe that person has violated the law.  If such person disagrees with the Commission’s findings, the person may simply refuse to enter into a conciliation agreement with the Commission.  If no conciliation agreement is reached, the Commission may then by a majority vote decide to file a civil action in federal court against the alleged violator.  (The exception to the Commission’s general inability to assess fines is its “administrative fines” program, through which the Commission assesses fines for facial violations of the reporting deadlines.  Even these administrative fines can be challenged in federal district court.)

FEC enforcement procedures, detailed both in FECA and in the Commission’s regulations, make clear that the Commission and its OGC are a unified entity and do not—as Mr. Bauer claims—fulfill separate roles of independent judge and adversary.  The FEC is the prosecutor, and if the respondent wishes to fight the prosecution, the respondent can request her day in federal district court.

Although the proposal to hold hearings for respondents appears on its face to promote fairness, one problem with the proposal is that hearings will further retard an already-molasses-slow process while not shedding any more light on the case.  The proposal seems only to contemplate a respondent’s counsel making oral arguments, without witnesses, so it will not aid the Commission in fact finding.  And, who is going to do the questioning?  Will the Commission’s General Counsel even be permitted to ask questions, or will he have to sit at the table with the respondents’ counsel?  Mr. Bauer’s mischaracterization of the OGC as the opposing counsel seems to urge the latter.

Moreover, it will be interesting to see what type of cases will be considered appropriate for this new oral argument.  It’s difficult to imagine many lawyers not requesting an oral argument if it is available.  And the availability of oral argument will likely deter respondents from settling at the pre-“probable cause” stage (a fairly common practice), because respondents will want a shot at arguing before the Commission—further exacerbating the already sizeable backlog of unresolved enforcement actions.

On balance, the pending proposal will likely dramatically slow the Commission’s resolution of enforcement actions, while doing nothing to aid the Commission in its fact finding responsibility.  For these reasons, we think Mr. Bauer has it wrong—the proposal is bad policy.  But if the FEC is prepared to adopt this new procedure, we hope it will also provide complainants’ counsel an opportunity to argue and cross-examine the respondent.  Now that would be fun.