Republican Federal Election Commissioners Seek to End Cooperation with Justice Department
By Jennifer Koons | July 7, 2013 7:42 pm

As part of an internal power play to hobble criminal enforcement of campaign finance violations, Republicans on the Federal Election Commission are attempting to make it harder for the commission to cooperate with the Department of Justice.

Led by Vice Chairman Donald McGahn II, the three GOP commissioners have proposed changes to the FEC’s enforcement manual, namely that all Justice Department information requests be accompanied by a subpoena and be approved by a commission vote. The FEC had planned to take up the proposal on June 27 but commission Chairwoman Ellen Weintraub said during that meeting that a fellow commissioner had requested that the topic be held over until the agency’s next meeting, scheduled for Thursday.

“This is the culmination of a long-term battle between the three GOP commissioners and the general counsel’s office,” according to a campaign finance attorney who has brought enforcement cases before the commission for many years. “The commissioners believe the General Counsel’s Office has been overly aggressive in enforcing FECA.”

FECA is the Federal Election Campaign Act, the statute governing fundraising for political campaigns.

Anthony Herman became the FEC’s general counsel in September 2011, joining from Covington & Burling LLP. Herman pushed to expand the relationship with the Justice Department, hiring Dan Petalas, a former Justice Department prosecutor, as chief of the FEC’s enforcement operations.

Petalas came to the FEC from the DOJ’s Public Integrity Section, responsible for criminal enforcement of campaign finance violations. The hiring of Petalas was viewed as a way to strengthen the relationship with Justice, which had not always been smooth.

In 1977, the FEC and DOJ agreed upon a Memorandum of Understanding, which promoted cooperation between the two agencies for document and record requests associated with the Federal Election Campaign Act. The FEC has civil jurisdiction and the DOJ has criminal jurisdiction.

But for many years, staff at the commission felt the MOU was a one-way street, with Justice requesting information but rarely sharing it to help the FEC in its civil enforcement goals. That relationship changed under Herman. With one of the Public Integrity Section’s own running the FEC enforcement operations, Justice began sharing information from its criminal investigations with the commission.

Herman last year tried to update the MOU to cement the relationship between the two agencies, but appears to have been thwarted by the Republican commissioners.

Instead, the three Republican commissioners, McGahn, Caroline Hunter and Matthew Petersen, proposed the new limitations on the FEC staff’s ability to share information with criminal prosecutors.

Under current procedures, the Justice Department can obtain that information informally, by simply asking for it. It does not have to issue a formal subpoena.

“It’s unusual for a disagreement with the general counsel and the commission to spill out in the public like this,” said a former FEC official.

FEC Commissioner Donald McGahn

Neither Herman nor Petalas immediately returned requests seeking comment.

The proposed new restriction would require the affirmative vote of four commissioners to share information. Because there are only six commissioner positions on the FEC, which are split evenly between Democrats and Republicans, any action requiring four votes is likely to fail.

“This is a grudge match between Tony Herman and Donald McGahn over the future of the general counsel’s office,” according to the campaign finance attorney.

And that future is now, as Herman recently resigned from the commission, while President Barack Obama has nominated Republican Lee Goodman to replace McGahn. Like other commissioners, McGahn is serving beyond the expiration of his six-year term, because until recently Obama had not made new nominations to the commission.

McGahn is the former general counsel to the National Republican Congressional Committee and was campaign finance and ethics lawyer for former House Majority Leader Tom DeLay (R-Texas). He has been a vocal critic of FECA enforcement, writing in a 2009 op-ed that “many in election law have long realized that what reformers characterize as enforcement is often based on their political interpretation of the law and that only with the ‘right’ FEC commissioners can the law become whatever they want it to be.”

In a statement after Obama announced the nomination of McGahn’s replacement, McGahn said: “I have long desired to leave, but committed to stay to prevent the FEC from further trampling on our First Amendment and Due Process Rights.”

Liberal-leaning watchdog groups Citizens for Responsibility and Ethics in Government and Public Citizen have decried partisan deadlock that they say is paralyzing the commission. In an April 29 letter to Obama, CREW and other organizations urged the president to address “the absence of meaningful enforcement,” adding: “This failure to enforce the laws is its own campaign finance scandal and you have been unwilling to do anything about it.”

Former FEC Chairman Bradley Smith, a Republican who like McGahn was an outspoken opponent of campaign finance regulation, acknowledged that the number of tie votes on enforcement issues has increased since his term concluded in 2005. But, he said, there is a misguided view of the magnitude of FEC violations.

“There’s this prevalent belief that there’s a whole bunch of corruption that the FEC just isn’t interested in pursuing, but once you get on the inside you realize there’s not really a lot of corruption in the true sense of people taking bribes and cutting deals,” Smith said. “The vast majority of FECA violations are inadvertent, failures to report or just not realizing you’ve gone over the limit of what you can give.”

Outgoing FEC General Counsel Anthony Herman

Herman promoted the benefits of freely sharing information with federal prosecutors. He authored a memo last month defending the current informal arrangement. He also orchestrated the updated MOU between the FEC and DOJ, which he presented to the commissioners in January but failed to receive approval for.

Herman, however, announced in June that would leave the commission. His last day was Friday. But he’ll returnto speak at the commission’s meeting on Thursday where it will take up the proposed restrictions on sharing information with Justice, according to Weintraub.

“Information received from DOJ saves the commission valuable time and resources in its enforcement efforts; allows it to obtain evidence quickly; and helps [the general counsel's office] make more accurate recommendations to the commission,” Herman wrote in his memo. “Members of the regulated community also benefit, as the commission’s legal advice and records help DOJ avoid unnecessary investigations and prosecutions of public officials, candidates, and other political actors.”

Herman cautioned that “any new requirement that DOJ requests be accompanied by a subpoena or be approved by a commission vote would put these benefits at risk.

He added: ‘Perhaps most troubling, such an approach — which seems to be unprecedented — would expose the commission to allegations that politics and partisanship motivate its case-by-case decisions whether to release records to DOJ.”

Justin Shur, the former deputy chief of the Public Integrity Section, expressed surprise at the proposed changes, noting that he’d seen increased cooperation between both agencies in recent years.

“Practically speaking, cooperation between the two is on a case-by-case basis and often depends on the personalities involved just like anything else. But I saw increased communication and cooperation between the two when I was there,” said Shur, now of MoloLamken LLP. “When I left, I got a sense that there was an uptick and that was because of the personnel involved.”

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