FEC’s Republican Commissioners explain position in Crossroads GPS case

In December the FEC finally voted, deadlocking 3-3, in the protracted Crossroads GPS case. The inquiry into whether the group must register with the FEC as a political action committee is now closed. The result is a victory for all grassroots organizations wishing include express advocacy as part of their overall political strategy.

Last week in a joint statement, Republican Commissioners Lee Goodman, Caroline Hunter, and Matthew Petersen explained their votes that favored ending the investigation.

Crossroads GPS is a 501(c)(4) nonprofit organization, which participates in variety of political activities. Only four months after its formation, in June 2010, liberal “reform” groups formally complained to the FEC about its committee status. Thus began a seemingly unending investigation into the organization’s inner workings.

Analysis of FEC jurisdiction is two-pronged. The first is statutory and straightforward: whether a group “receives contributions aggregating in excess of $1,000 during a calendar year or which makes expenditures aggregating in excess of $ 1,000 during a calendar year.” The second requirement is judicially constructed to limit the onerous disclosure and reporting burdens for politically active groups not focused on electioneering. As first stated in Buckley v. Valeo, groups are political action committees only if they “are under the control of a candidate or [their] major purpose . . . is the nomination or election of a candidate.”

In determining whether Crossroads GPS met this “major purpose” test, the Republican Commissioners evaluated a variety of materials dictated by both case law and the FEC’s own regulations. The Commissioners began by reviewing Crossroads GPS’s organizational documents, mission statement, IRS tax status, and its primary political activities. They found the group focused on a variety of exploits beyond express advocacy for or against candidates.

The Commissioners next reviewed the group’s finances and determined—depending on the time period—it spent only 25%-36% of its budget on independent expenditures, which under current case law are the only expenditures properly evaluated for FEC jurisdiction.

Thus, reviewing the totality of evidence, the Commissioners properly concluded Crossroads GPS was not a political action committee.

The Democrat Commissioners predictably took a different view, describing the case as “clear cut.” But a closer examination of its arguments does not render such easy pellucidity.

First the Democrats (and the FEC Office of General Counsel which recommended further investigation) considered irrelevant evidence to support their determination, for instance how media outlets described the organization.

Secondly, they evaluated spending based only on 2010, the year the group was formed and during the time when the midterm elections first began to seep into public consciousness. This artificial time period skewed the organization’s spending to highlight independent expenditures. Finally, they included monies Crossroads GPS spent on communications that merely criticized or opposed federal candidates without containing express advocacy. This approach undermines multiple court decisions.

Put in the proper context, neither Crossroads GPS’s spending nor its communications demonstrated an electioneering “major purpose.” And now grassroots organizations, whatever their size, that make independent expenditures can worry a little less about being hauled before the FEC’s enforcement division. 

By Paul Jossey