Fed. Election Comm'n v. Swallow
Fed. Election Comm'n v. Swallow
Opinion of the Court
In this case, the Federal Election Commission accuses two individuals of violating the Federal Election Campaign Act's prohibition on making contributions in the name of another. Defendant Jeremy Johnson is accused of making approximately twenty contributions to the 2010 senatorial campaign of Mike Lee in the names of other people. Defendant John Swallow is not accused of making any contributions himself but of assisting Defendant Johnson in doing so. The motion now before the Court is Defendant Swallow's motion to dismiss the case against him because what he is accused of is not against the law. His position is straightforward: the Federal Election Campaign Act applies to only three types of people and he is not one of them. He claims that the case against him only charges him with secondary liability and that Congress clearly did not include a ban against secondary actors in the Act. The case against Defendant Swallow rests entirely on
The Commission admits that its case against Mr. Swallow is based on the CFR, which was adopted in 1989. It claims that the CFR is a proper exercise of the Commission's authority to enforce FECA. It claims that a person such as Mr. Swallow, who assists another person in violating the Act, is just as liable as the person who made the improper contribution. The Commission goes so far as to say that a person who does not part with his own money and whose only role is to assist another to make a contribution in someone else's name qualifies as a person who actually "makes" the contribution. On this basis, the Commission both opposes Mr. Swallow's motion and asks the Court to grant its own motion for partial judgment on the pleadings.
Oral argument was heard on the motions on March 27, 2018. Ms. Sana Chaudhry and Mr. Harry Summers appeared on behalf of the Commission, with Ms. Chaudhry making the argument. Mr. Allen Dickerson, Mr. Tyler Martinez, and Mr. Scott Williams appeared on behalf of Mr. Swallow, with Mr. Dickerson making the argument.
DISCUSSION
Congress passed the Federal Election Campaign Act in 1971 ("FECA").
No person shall make a contribution in the name of another person or knowingly permit his name to be used to effect such a contribution, and no person shall knowingly accept a contribution made by one person in the name of another person.
In 1974, Congress created the Federal Election Commission ("FEC" or "the Commission") as an independent agency to civilly enforce FECA's monetary limits and disclosure requirements. In 1976, the Commission promulgated a regulation regarding FECA's ban on contributions made in the name of another, which made specific reference to the two most common forms of such contributions: false name and conduit contributors.
For 13 years after
Thus, for the first time, secondary actors, what the criminal law calls "aiders and abettors," and what the new regulation calls "helpers and assisters," were brought into the realm of persons who face civil liability under FECA.
The question framed by the parties' cross motions, as outlined above, asks simply whether the Federal Election Commission had the right to promulgate section 110.4(b)(1)(iii). The answer is no. The Commission, as an independent agency created by Congress for the sole purpose of enforcing FECA had no authority to write a regulation that went beyond the Act itself. The Court finds FECA's language to be unambiguous. It is limited to a prohibition on three types of persons and only those three: 1) a person who makes a contribution in the name of another; 2) a person who knowingly allows his name to be used by the contributor; and 3) a candidate who knowingly accepts such a contribution. Nowhere in the language of section 30122 is there any room for adding a fourth category consisting of secondary actors.
*1116While it may, or may not, be a good idea to expand the reach of FECA in such a way, such expansion may happen only through an Act of Congress, pursuant to Article I of the United States Constitution. Such power does not exist in an independent agency comprised of six unelected commissioners.
The Commission makes several arguments in an effort to persuade the Court that it had the authority to pass
Next, the Commission argues that the language of section 30122 that states: "[N]o person shall make a contribution in the name of another person" should be construed to include as prohibited "persons" not only the person who is the source of the contribution but also those who help or assist the actual contributor. The Commission claims the word "make" means "to cause (something) to happen" and therefore includes secondary actors together with principals as prohibited persons under section 30122. The Commission argues as follows:
Given the broad definition of "make," section 30122 does not unambiguously foreclose that someone can make a contribution in the name of another by initiating, instigating, or significantly participating in a conduit-contribution scheme, even where that person was not the source of the contributed funds.... For example, "a head of state 'makes war' through soldiers." ... "In common usage, one who causes something to happen or brings it about ... 'made' it happen just the same as the person who executed the action." United States v. Danielczyk ,788 F.Supp.2d 472 (E.D. Va. 2011).
(Dkt. 103 at 16 (citation omitted).)
This argument strains logic. First of all, the case cited, Danielczyk , had nothing to do with secondary actors who helped and assisted another. It dealt with a conduit-contribution scheme which is clearly within the prohibition of section 30122. Furthermore, the comparison to a "head of state who makes war through soldiers" could hardly be more inapt. The only interpretation of the phrase "no person shall make a contribution in the name of another" in section 30122 that is consistent with the English language is that the prohibited "person" is the actual contributor, that is, the source of the monetary donation. Nothing else makes sense. An apt analogy would be to a person who "makes" a basket in a basketball game. Some other person may have passed the ball to the player who makes the shot, and thereby earns credit for an "assist," but the player who made the assist cannot fairly be considered to be the person who made the basket. Other examples would be a child who "makes" a wish, or, to use the Commission's reference, to a head of state who "makes" a declaration of war. In each example there is a clear reference to only one principal source of the thing made. The same holds true for the persons who "make" contributions to political candidates pursuant to FECA. Only the person *1117(or persons) who are the source (or sources) of the monetary donation can qualify as those who "make" contributions to the political candidates.
In pressing its illogical interpretation of the word "make" in the context of FECA, the Commission relies on Chevron U.S.A., Inc. v. NRDC ,
The Commission also devotes considerable attention in its briefs, and at oral argument, explaining how
Finally, the Commission claims
In contrast to the FEC's arguments, which are without precedent, Mr. Swallow cites Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A. ,
In Central Bank , the issue was whether secondary civil liability could attach to violations of the securities laws under section 10(b) of the Securities and Exchange Act of 1934. The Bank served as indenture trustee for bond issues surrounding a Colorado development.
The Court agrees with Mr. Swallow that Central Bank is applicable here. As the Supreme Court put it, "courts are not free to 'amend the statute to create liability for acts that are not themselves ... within the meaning of the statute.' "
SUMMARY AND CONCLUSION
The United States was founded on the rule of law. Article I Section 1 of the Constitution vests all legislative power in "a Congress of the United States," which alone is authorized to make laws; all others, including independent government agencies, are not. The FEC's authority exists no further than the boundaries of the law it was created to enforce. When it promulgated
IT IS SO ORDERED.
In considering the FEC's argument that it needs the regulation against secondary actors because without it "helpers and assisters" such as Mr. Swallow would be allowed to defeat the government's disclosure and anti-circumventing interests, it is worth noting that section 30122 already includes, in addition to civil penalties, the possibility of criminal felony charges. In contrast to the civil penalties under section 30122, in a section 30122 criminal case, secondary actors-those who aid and abet the person who illegally makes a contribution in the name of another (precisely what Mr. Swallow is accused of)-are subject to criminal liability. This is because the United States criminal code,
Reference
- Full Case Name
- FEDERAL ELECTION COMMISSION v. John SWALLOW and Jeremy Johnson
- Cited By
- 1 case
- Status
- Published