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Why the Government's Top Campaign Finance Watchdogs Have No Teeth

Tuesday, September 13, 2016 By Mike Ludwig, Truthout | News Analysis
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Ann Ravel, the chairwoman of the Federal Election Commission, who says the gridlocked agency cannot rein in financial abuses, in Los Angeles, California, on April 29, 2015. There is a stalemate among the agency's six commissioners, who are perpetually locked in 3-to-3 ties along party lines because of a fundamental disagreement over the commission's mandate. (Kendrick Brinson / The New York Times)Ann Ravel, the chairwoman of the Federal Election Commission, who says the gridlocked agency cannot rein in financial abuses, in Los Angeles, California, on April 29, 2015. There is a stalemate among the agency's six commissioners, who are perpetually locked in 3-to-3 ties along party lines because of a fundamental disagreement over the commission's mandate. (Kendrick Brinson / The New York Times)

This story was updated on September 28.

Remember Bob Murray? He's the right-wing coal baron who fought off allegations that he ordered his miners in Ohio to attend a 2012 rally for then-presidential candidate Mitt Romney (some of them unwittingly ended up in a campaign ad) without pay. After Romney lost to Barack Obama, Murray said a prayer before ceremoniously laying off 156 of his workers in Utah and Ohio to protest environmental regulations.

In May, the Federal Elections Commission (FEC) deadlocked in a 3-3 vote over whether to investigate a 2012 complaint alleging that Murray and his company, Murray Energy, also coerced employees to donate to the company's political action committee, which has funneled nearly $1.5 million in campaign donations to pro-coal and Republican candidates since 2010.

For FEC Commissioner Ann Ravel, who voted to open the investigation along with the two other Democrats on the commission, it was the latest in a long line of disappointments.

For more original Truthout election coverage, check out our election section, "Beyond the Sound Bites: Election 2016."

"It's our basic obligation to ensure the First Amendment rights of employees to not have to participate in the electoral [activities] of their employer," Ravel told Truthout in an interview.

Murray's practice of pressuring employees to make political donations had been well-documented in the media, and in 2014 a former employee in West Virginia filed a lawsuit against the company alleging that she had been fired in part for refusing to donate to his favorite political candidates. FEC investigators even had copies of internal company documents showing that Murray Energy kept track of employee contributions on a spreadsheet.

Murray Energy denies any wrongdoing, but the FEC was not voting to find Murray or his company guilty of violating any laws or regulations, just on whether there was enough evidence to open up an investigation. Still, the six-member commission failed to reach a majority, and the case file was closed.

"In some ways, that case was the last straw for me," Ravel said.

Ravel has spent much of her three years at the FEC sparring with what she calls "the block" -- three Republican commissioners who consistently vote against taking action on the most controversial questions and complaints that come before them. She has been outspoken in her opinion that, in its current form, the FEC is simply incapable of addressing the fact that modern elections have become multibillion dollar bonanzas with real problems when it comes to transparency.

Since the Supreme Court's 2010 Citizens United ruling opened the doors for unlimited sums of cash to be spent influencing elections, the FEC has faced big questions about how to protect against corruption. Ravel can name them off the top of her head: What to do about dark money groups that exploit the tax code to conceal their donors? Should the FEC step in when wealthy businessmen set up sham corporations to secretly funnel money to super PACs? In this anything-goes campaign landscape, how do we keep wealthy foreigners from influencing our elections?

"Those are the things that actually matter to the public," said Ravel, who is currently pushing to crack down on money flowing into political committees from foreign corporations, a proposal she hopes will soften the Republican block.

To this day, all of these questions remain unanswered, and the commission is currently facing lawsuits from independent watchdog groups demanding action on complaints over dark money and other campaign finance violations dating as far back as 2010. Almost every time a potentially precedent-setting case comes before the FEC, voting ends with a 3-3 split, leaving the commission paralyzed in deadlock.

A Stalemate-Ridden Commission

The FEC may be the government's top election watchdog, but it's a child of Congress, which designed the commission to be weak when it was founded in 1975, according to the Campaign Legal Center, a group that has filed numerous complaints with the FEC. Power on the commission is split evenly between Republican and Democratic appointees, so stalemates on key issues are common, allowing candidates and political operatives to break campaign finance laws with impunity.

Jordan Libowitz, a spokesperson for the Committee for Responsibility and Ethics in Washington (CREW), said that the split is both partisan and ideological. The left-leaning side of the commission wants to enforce campaign finance laws to curb the influence of money in politics, while the three Republicans believe the government should not interfere with campaigning and political speech, so they use their votes to deadlock the commission.

"They have set a very high and almost impossible bar to clear for enforcement matters," Libowitz said of the Republican commissioners.

The offices of Republican FEC Commissioner Caroline Hunter and the commission's Republican Chairman, Matthew Petersen, did not respond to requests for comment from Truthout.

In 2016, the FEC has considered 90 enforcement matters, and the vast majority of them were closed without fines, according to CREW. Of the 20 cases that did end in fines, 14 were referred from inside the FEC itself and involve cut-and-dry violations that campaigns had every chance to remedy, such as a campaign treasurer's failure to file an annual report. The FEC almost always agrees to enforce the rules in these cases, but the vast majority of cases based on complaints filed by independent watchdogs end in a 3-3 split.

"The reality is that, in certain cases where there is such a totally clear violation that it would be very difficult to find a way not to enforce, there is enforcement," Ravel said.

The FEC has handed out $513,000 in fines so far this year, including $233,000 in fines for three groups in the Koch brothers' political network that failed to disclose the sources of funding for political ads they ran back in 2010 and 2012. CREW filed the original complaint against the Koch groups and declared a victory for watchdogs, but Ravel said that FEC fines are just a drop in the bucket compared to the cash regularly spent by political groups.

"The penalties are always so much lower than what is really required to cause scofflaws to think it's more than just the cost of doing business, but we agree to it because the alternative would be nothing at all," Ravel said.

The FEC's performance is perhaps better judged by what it's not enforcing, according to Joshua Stewart, a spokesperson for the Sunlight Foundation who has spent the past year following the FEC. For example, the law considers super PACs independent from official campaigns, and the two are not supposed to work together. In fact, this was a major justification behind the Citizens United decision. However, many campaigns have not been playing by the rules.

"Look at what candidates were willing to get away with during the primary," Stewart said. "Carly Fiorina essentially outsourced her entire campaign to her super PAC."

Last year, a bipartisan group of representatives introduced a bill in Congress that would reduce the number of commissioners to five, with no more than two commissioners from each party and an independent to serve as a tie-breaking vote. That bill has yet to make it out of committee.

Are Foreign Donors Swaying US Elections?

Republican commissioners may have the power to weaken the FEC into inaction, but Ravel said that public opinion is on her side. Polls have consistently shown that the vast majority of voters think the wealthy donors and corporations have too much influence over elections and politics, and one recent poll found that 66 percent of likely voters disagree with the Supreme Court's Citizens United ruling. Conservative activists have even launched their own group to combat money in politics.

Ravel and her close ally on the commission, Ellen Weintraub, are also betting the public will agree with them that wealthy foreigners should not be allowed to influence domestic elections.

Last month, an investigation by The Intercept revealed that a wealthy Chinese couple used a subsidiary of their company in the United States to make $1.3 million in donations to Right to Rise, a super PAC that supported Jeb Bush's presidential run.

Now, Ravel and Ellen Weintraub are proposing that the FEC rescind a 2006 advisory rulemaking that has allowed domestic subsidiaries of foreign corporations to make political donations in the US. This would allow the FEC to crack down on groups that allow foreign money to seep into US elections.

On Friday, Weintraub said that protecting elections from foreign influence is a "matter of national security," in a statement that seemed more directed at the block's fellow Republicans than progressive reformers.

"Today, the FEC cannot provide assurances to the American people that foreign money is not being used to sway how American citizens vote," Weintraub said. "This is unacceptable."

Ravel says stopping foreign donors is an issue that most politicians and voters are bound to agree on, regardless of political ideology, which should put pressure on the Republican block to allow the FEC to act. If they block the proposal with deadlock, the political backlash may bring a lot of attention to the FEC's chronic dysfunction in weeks leading up to a major national election.

"What I want now is public comment," Ravel said. "The commission is extremely insular and the block does not like public comments, but we owe an obligation to the public to allow them to speak to these issues."

Still, Ravel is not ready to be optimistic. The FEC already had a chance to rule on this issue after subsidiaries of a foreign pornography company spent hundreds of thousands of dollars opposing a 2012 ballot initiative in Los Angeles that would have required porn actors to use condoms, but a vote on a complaint against the companies last year ended in the usual 3-3 deadlock.

"I think the likelihood of us coming to an agreement on making sure that there are no foreign companies or subsidiaries of foreign companies contributing to our elections is small," Ravel said.

Weintraub and Ravel plan on initiating a rulemaking on foreign donors at the FEC's September 15 meeting.

Update: Shortly after this article was published, the FEC deadlocked 3-3 on Ravel and Weintraub's proposal, with all three Republicans voting against it. 

 Clarification: This article originally stated that Bob Murray ordered his miners to attend the 2012 Romney rally in Ohio, an accusation that Murray denies. After the rally, several miners complained to reporters and a local radio host that they feared losing paid hours or even their jobs if they did not attend. A top company official told the same radio host that attendance "was mandatory, but no one was forced to attend," and the company didn't penalize no-shows. Murray later told the Cleveland Plain Dealer that "nobody was ordered to attend" the rally, and the company shut down nearby mining operations due to security concerns. Miners lost pay during the time the mine was shut down.  

Copyright, Truthout. May not be reprinted without permission.

Mike Ludwig

Mike Ludwig is a staff reporter at Truthout and a contributor to the Truthout anthology, Who Do You Serve, Who Do You Protect? In 2014 and 2017, Project Censored featured Ludwig's reporting on its annual list of the top 25 independent news stories that the corporate media ignored. Follow him on Twitter: @ludwig_mike.

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Why the Government's Top Campaign Finance Watchdogs Have No Teeth

Tuesday, September 13, 2016 By Mike Ludwig, Truthout | News Analysis
  • font size decrease font size decrease font size increase font size increase font size
  • Print

Ann Ravel, the chairwoman of the Federal Election Commission, who says the gridlocked agency cannot rein in financial abuses, in Los Angeles, California, on April 29, 2015. There is a stalemate among the agency's six commissioners, who are perpetually locked in 3-to-3 ties along party lines because of a fundamental disagreement over the commission's mandate. (Kendrick Brinson / The New York Times)Ann Ravel, the chairwoman of the Federal Election Commission, who says the gridlocked agency cannot rein in financial abuses, in Los Angeles, California, on April 29, 2015. There is a stalemate among the agency's six commissioners, who are perpetually locked in 3-to-3 ties along party lines because of a fundamental disagreement over the commission's mandate. (Kendrick Brinson / The New York Times)

This story was updated on September 28.

Remember Bob Murray? He's the right-wing coal baron who fought off allegations that he ordered his miners in Ohio to attend a 2012 rally for then-presidential candidate Mitt Romney (some of them unwittingly ended up in a campaign ad) without pay. After Romney lost to Barack Obama, Murray said a prayer before ceremoniously laying off 156 of his workers in Utah and Ohio to protest environmental regulations.

In May, the Federal Elections Commission (FEC) deadlocked in a 3-3 vote over whether to investigate a 2012 complaint alleging that Murray and his company, Murray Energy, also coerced employees to donate to the company's political action committee, which has funneled nearly $1.5 million in campaign donations to pro-coal and Republican candidates since 2010.

For FEC Commissioner Ann Ravel, who voted to open the investigation along with the two other Democrats on the commission, it was the latest in a long line of disappointments.

For more original Truthout election coverage, check out our election section, "Beyond the Sound Bites: Election 2016."

"It's our basic obligation to ensure the First Amendment rights of employees to not have to participate in the electoral [activities] of their employer," Ravel told Truthout in an interview.

Murray's practice of pressuring employees to make political donations had been well-documented in the media, and in 2014 a former employee in West Virginia filed a lawsuit against the company alleging that she had been fired in part for refusing to donate to his favorite political candidates. FEC investigators even had copies of internal company documents showing that Murray Energy kept track of employee contributions on a spreadsheet.

Murray Energy denies any wrongdoing, but the FEC was not voting to find Murray or his company guilty of violating any laws or regulations, just on whether there was enough evidence to open up an investigation. Still, the six-member commission failed to reach a majority, and the case file was closed.

"In some ways, that case was the last straw for me," Ravel said.

Ravel has spent much of her three years at the FEC sparring with what she calls "the block" -- three Republican commissioners who consistently vote against taking action on the most controversial questions and complaints that come before them. She has been outspoken in her opinion that, in its current form, the FEC is simply incapable of addressing the fact that modern elections have become multibillion dollar bonanzas with real problems when it comes to transparency.

Since the Supreme Court's 2010 Citizens United ruling opened the doors for unlimited sums of cash to be spent influencing elections, the FEC has faced big questions about how to protect against corruption. Ravel can name them off the top of her head: What to do about dark money groups that exploit the tax code to conceal their donors? Should the FEC step in when wealthy businessmen set up sham corporations to secretly funnel money to super PACs? In this anything-goes campaign landscape, how do we keep wealthy foreigners from influencing our elections?

"Those are the things that actually matter to the public," said Ravel, who is currently pushing to crack down on money flowing into political committees from foreign corporations, a proposal she hopes will soften the Republican block.

To this day, all of these questions remain unanswered, and the commission is currently facing lawsuits from independent watchdog groups demanding action on complaints over dark money and other campaign finance violations dating as far back as 2010. Almost every time a potentially precedent-setting case comes before the FEC, voting ends with a 3-3 split, leaving the commission paralyzed in deadlock.

A Stalemate-Ridden Commission

The FEC may be the government's top election watchdog, but it's a child of Congress, which designed the commission to be weak when it was founded in 1975, according to the Campaign Legal Center, a group that has filed numerous complaints with the FEC. Power on the commission is split evenly between Republican and Democratic appointees, so stalemates on key issues are common, allowing candidates and political operatives to break campaign finance laws with impunity.

Jordan Libowitz, a spokesperson for the Committee for Responsibility and Ethics in Washington (CREW), said that the split is both partisan and ideological. The left-leaning side of the commission wants to enforce campaign finance laws to curb the influence of money in politics, while the three Republicans believe the government should not interfere with campaigning and political speech, so they use their votes to deadlock the commission.

"They have set a very high and almost impossible bar to clear for enforcement matters," Libowitz said of the Republican commissioners.

The offices of Republican FEC Commissioner Caroline Hunter and the commission's Republican Chairman, Matthew Petersen, did not respond to requests for comment from Truthout.

In 2016, the FEC has considered 90 enforcement matters, and the vast majority of them were closed without fines, according to CREW. Of the 20 cases that did end in fines, 14 were referred from inside the FEC itself and involve cut-and-dry violations that campaigns had every chance to remedy, such as a campaign treasurer's failure to file an annual report. The FEC almost always agrees to enforce the rules in these cases, but the vast majority of cases based on complaints filed by independent watchdogs end in a 3-3 split.

"The reality is that, in certain cases where there is such a totally clear violation that it would be very difficult to find a way not to enforce, there is enforcement," Ravel said.

The FEC has handed out $513,000 in fines so far this year, including $233,000 in fines for three groups in the Koch brothers' political network that failed to disclose the sources of funding for political ads they ran back in 2010 and 2012. CREW filed the original complaint against the Koch groups and declared a victory for watchdogs, but Ravel said that FEC fines are just a drop in the bucket compared to the cash regularly spent by political groups.

"The penalties are always so much lower than what is really required to cause scofflaws to think it's more than just the cost of doing business, but we agree to it because the alternative would be nothing at all," Ravel said.

The FEC's performance is perhaps better judged by what it's not enforcing, according to Joshua Stewart, a spokesperson for the Sunlight Foundation who has spent the past year following the FEC. For example, the law considers super PACs independent from official campaigns, and the two are not supposed to work together. In fact, this was a major justification behind the Citizens United decision. However, many campaigns have not been playing by the rules.

"Look at what candidates were willing to get away with during the primary," Stewart said. "Carly Fiorina essentially outsourced her entire campaign to her super PAC."

Last year, a bipartisan group of representatives introduced a bill in Congress that would reduce the number of commissioners to five, with no more than two commissioners from each party and an independent to serve as a tie-breaking vote. That bill has yet to make it out of committee.

Are Foreign Donors Swaying US Elections?

Republican commissioners may have the power to weaken the FEC into inaction, but Ravel said that public opinion is on her side. Polls have consistently shown that the vast majority of voters think the wealthy donors and corporations have too much influence over elections and politics, and one recent poll found that 66 percent of likely voters disagree with the Supreme Court's Citizens United ruling. Conservative activists have even launched their own group to combat money in politics.

Ravel and her close ally on the commission, Ellen Weintraub, are also betting the public will agree with them that wealthy foreigners should not be allowed to influence domestic elections.

Last month, an investigation by The Intercept revealed that a wealthy Chinese couple used a subsidiary of their company in the United States to make $1.3 million in donations to Right to Rise, a super PAC that supported Jeb Bush's presidential run.

Now, Ravel and Ellen Weintraub are proposing that the FEC rescind a 2006 advisory rulemaking that has allowed domestic subsidiaries of foreign corporations to make political donations in the US. This would allow the FEC to crack down on groups that allow foreign money to seep into US elections.

On Friday, Weintraub said that protecting elections from foreign influence is a "matter of national security," in a statement that seemed more directed at the block's fellow Republicans than progressive reformers.

"Today, the FEC cannot provide assurances to the American people that foreign money is not being used to sway how American citizens vote," Weintraub said. "This is unacceptable."

Ravel says stopping foreign donors is an issue that most politicians and voters are bound to agree on, regardless of political ideology, which should put pressure on the Republican block to allow the FEC to act. If they block the proposal with deadlock, the political backlash may bring a lot of attention to the FEC's chronic dysfunction in weeks leading up to a major national election.

"What I want now is public comment," Ravel said. "The commission is extremely insular and the block does not like public comments, but we owe an obligation to the public to allow them to speak to these issues."

Still, Ravel is not ready to be optimistic. The FEC already had a chance to rule on this issue after subsidiaries of a foreign pornography company spent hundreds of thousands of dollars opposing a 2012 ballot initiative in Los Angeles that would have required porn actors to use condoms, but a vote on a complaint against the companies last year ended in the usual 3-3 deadlock.

"I think the likelihood of us coming to an agreement on making sure that there are no foreign companies or subsidiaries of foreign companies contributing to our elections is small," Ravel said.

Weintraub and Ravel plan on initiating a rulemaking on foreign donors at the FEC's September 15 meeting.

Update: Shortly after this article was published, the FEC deadlocked 3-3 on Ravel and Weintraub's proposal, with all three Republicans voting against it. 

 Clarification: This article originally stated that Bob Murray ordered his miners to attend the 2012 Romney rally in Ohio, an accusation that Murray denies. After the rally, several miners complained to reporters and a local radio host that they feared losing paid hours or even their jobs if they did not attend. A top company official told the same radio host that attendance "was mandatory, but no one was forced to attend," and the company didn't penalize no-shows. Murray later told the Cleveland Plain Dealer that "nobody was ordered to attend" the rally, and the company shut down nearby mining operations due to security concerns. Miners lost pay during the time the mine was shut down.  

Copyright, Truthout. May not be reprinted without permission.

Mike Ludwig

Mike Ludwig is a staff reporter at Truthout and a contributor to the Truthout anthology, Who Do You Serve, Who Do You Protect? In 2014 and 2017, Project Censored featured Ludwig's reporting on its annual list of the top 25 independent news stories that the corporate media ignored. Follow him on Twitter: @ludwig_mike.