Campaign Donor Advertising Rule Invalidated by U.S. Judge

The U.S. Federal Election Commission overstepped its authority by allowing groups that give money for election advertising to withhold the names of their donors from the public, a federal judge ruled.

U.S. District Judge Amy Berman Jacksonin Washington yesterday threw out FEC regulations adopted in 2007 that let organizations and nonprofit groups keep secret the names of donors who pay for pre-election ads. She said the regulations clashed with requirements of the 2002 campaign finance law known as McCain-Feingold that groups report their ad spending to the commission.

“When the agency determined in this instance that the statute should be revised in light of legal developments, it undertook a legislative, policy making function that was beyond the scope of its authority,” Jackson said in her 31-page ruling.

Democratic Representative Chris Van Hollen of Maryland sued the FEC last year, arguing that McCain-Feingold requires full disclosure of funders who contribute $1,000 or more for so- called electioneering communications. Those messages are broadcast or cable ads identifying a federal candidate within 30 days of a primary or 60 days of the general election.

“This is good news for our democracy and for voters --this victory will compel the FEC to require enhanced disclosures of the funders of campaign-related advertisements,” Van Hollen said in a statement.

Citizens United’s Promise

Paul Ryan, an attorney with the Washington-based Campaign Legal Center and a member of Van Hollen’s legal team, said in an interview, “This FEC rule that was invalidated is one of the reasons voters don’t have all the information that the Citizens United court promised we’d have.”

Julia Queen, a spokeswoman for the FEC, declined to comment on the ruling.

The FEC argued that the rule was designed in response to a 2007 Supreme Court decision that gave companies, labor unions and interest groups more power to run broadcast ads before elections.

The FEC disclosure rule has allowed nonprofit groups such as the U.S. Chamber of Commerce, Karl Rove’s Crossroads GPS and Priorities USA, a group supporting President Barrack Obama, to spend millions of dollars on elections without disclosing their donors.

Groups that don’t disclose their donors spent $137 million in the 2010 elections, 25 times the amount they spent during the previous off-year elections in 2006, Federal Election Commission records show.

The case is Van Hollen v. Federal Election Commission, 11-0766, U.S. District Court, District of Columbia (Washington).

To contact the reporters on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net; Jonathan D. Salant in Washington at jsalant@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net; Jeanne Cummings at jcummings21@bloomberg.net

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