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Libertarian Party Suit Against FEC For Restrictions on How it Can Spend Its Donations to Proceed

Friday, January 6, 2017 18:33
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The Libertarian Party’s National Committee (LNC) is suing the Federal Elections Commission (FEC) over aspects of the Federal Elections Campaign Act (FECA) that they say unjustly and unconstitutionally prohibit it from using contributions over a certain limit for the purposes they want to use them. The LNC believes this amounts to an illegitimate “content-based restriction” on its political speech.

This week Judge Beryl A. Howell of U.S. District Court in D.C. allowed the suit to go forward, rejecting an FEC attempt to get the suit thrown out on the grounds that the LNC lacks proper legal standing to challenge their regulation.

The background: As it now stands, FECA allows single entities to donate to political parties up to $334,000, so long as that money is used only on these three purposes: running its presidential nominating convention, spending on its headquarters, and helping with election challenges or recounts.

Such money must legally be segregated from contributions available for other Party expenses. (The legal contribution total for other money is currently $33,400.)

THe LNC received a bequest from deceased member Joseph Shaber in 2014 of $235,575.20.

The money is in a trust and is being dribbled out to the Party $33,400 per year in obedience to that legal limit.

The Party thinks they shouldn’t have to do this. To quote from a Memorandum Opinion issued this week from Judge Beryl A. Howell of U.S. District Court in D.C.:

The LNC’s complaint alleges in three counts that application of the…contribution limits to the Shaber bequest “violates the First Amendment speech and associational rights of the LNC and its supporters,”…and that the segregated accounts scheme, which allows parties to accept larger donations for three specified purposes only, amounts to a contentbased restriction on speech, both on its face and as applied to the Shaber bequest

The FEC tried to argue that since the LNC could take all of Shaber’s money at once as long as it segregated it according to law, they are in fact injuring themselves. And the FEC further tried to insist that to the extent that the LNC is allegedly injured by lack of ability to use the donation as they see fit, that “actors in the political marketplace, not FECA, caused LNC’s claimed competitive disadvantage, and that a favorable decision from this Court is not likely to redress the claimed injury.”

Judge Howell found both arguments wanting. The LNC is arguing more specifically that the inability to take the money and use it for purposes of its own choice, not an inability to take the money at all, is the injury, and Howell agrees that is a legal issue worth consideration and that the LNC is indeed asserting a legitimate possible injury from FEC’s policies.

Howell further says that the FEC’s attempt to categorize the injury as merely being about the L.P.’s “competitive disadvantage” is not an accurate summation of why they are claiming injury.

Howell’s conclusion:

The LNC has standing to challenge FECA provisions that restricted immediate access to the full amount of a bequest for expressive activities. That the LNC could accept the entire bequest by depositing the funds into segregated accounts does not alter this analysis because the LNC alleges that it wishes to use the funds for expressive activities. Accordingly, the FEC’s motion to dismiss is denied.

The LNC’s lawsuit against the FEC will indeed have its future day in court.

Bloomberg BNA has a nice summation of what’s at issue in the suit.


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