FEC Year in Review 2024

With a game-changing advisory opinion (AO 2024-01), 2024 started out with a bang at the Federal Election Commission (“FEC”). Other consequential opinions, enforcement actions, and regulations continued in the following months, challenging the notion that the divided Commission cannot find consensus.

While the Commissioners continued to deadlock on some enforcement and litigation matters, such as the evidence needed to investigate alleged violations of the Federal Election Campaign Act (“FECA”) and the appropriate penalties for violations, they found common ground on the use of campaign funds, rules related to regulatory modernization, and implementation of the FOIA Improvement Act of 2016. The Commission also advanced proposals related to the FEC’s administrative fines program and redaction of contributor information. In its advisory opinions, the Commission provided guidance on key topics, including coordinated communications and contribution limits for ranked choice voting.

Reflecting on his year as FEC Chair, Commissioner Sean Cooksey stated that one of his goals for the year was to “emphasize to anyone who will listen, that the commission is not structurally deadlocked and ineffective, and that actually we are getting a lot done on all fronts.”[1] Chairman Cooksey highlighted the FEC’s efficacy in cataloging the enormous amount of political spending this election cycle—more than $24 billion—which marked an 11 percent increase from the previous cycle.[2] In line with several of the FEC’s notable actions in 2024, Chairman Cooksey conveyed his hope that the Commission will continue streamlining its regulatory processes in 2025.[3]

Below we highlight the FEC’s major developments in 2024 across three areas: (1) advisory opinions; (2) rulemaking; and (3) enforcement and litigation.

Advisory Opinions

Coordinated communications (AO 2024-01): In a transformative opinion to start the year, the Commission stated that a Texas state political committee’s plan to distribute door-to-door canvassing literature and scripts would not raise coordination concerns. The state political committee told the FEC that it planned to "consult with federal candidates and political party committees" about the canvassing program, that the candidates and political parties would provide it with their "nonpublic plans, projects, activities, or needs" and "engage in substantial discussions" with the state political committee about its door knock program. The Commission determined that the state political committee’s costs to produce and distribute canvassing literature were expenditures for communications, and therefore should be evaluated under the FEC’s three-prong test for coordinated communications. Even though the literature and scripts were set to refer to federal candidates and political parties and potentially "include express advocacy," the Commission explained that the literature and scripts "d[id] not meet the content prong of the coordinated communication test." The Commission focused on whether they were a “public communication”—and therefore a coordinated communication—under the law. It determined that the activity did not meet this threshold, in part, because "door-to-door canvassing involves individual people talking face-to-face" with voters and such outreach "is not the type of mass communication contemplated" under the “public communication” definition.

This advisory opinion request was very narrowly tailored to the types of communications and supporting costs described by the state political committee requestors. It would be wise for anyone seeking to engage in these types of activities to also be aware of the Commissioners’ dueling Statements of Reasons in the Correct the Record matter discussed in more detail below, where the Commissioners describe different ways to analyze the types of activities and costs that might be permissible under this exception to the general prohibition on “coordination.” MUR 7146R.

Contribution limits for ranked choice voting (AO 2024-12): As ranked choice voting grows in popularity in several states, the Commission issued an important decision, in which it determined that a single contribution limit applied throughout Maine’s entire ranked choice voting process, including all necessary rounds of vote tallying. The opinion reasoned that the process constitutes a single general election under federal campaign finance law. Federal candidates will need to take this into account as they build campaign budgets in states with ranked choice voting.

Cost-splitting of hybrid TV ads (AO 2024-14): The Commission found that the Democratic Senatorial Campaign Committee and Sen. Jacky Rosen’s campaign committee could “evenly split the cost of hybrid television advertisements, so long as the time and space devoted to Senator Rosen [did] not exceed the time and space in the advertisement devoted to the generically referenced candidates.” With respect to a particular proposed advertisement, the Commission stated that portions of the hybrid ad that featured the clearly identified candidate direct to camera and/or were narrated by the candidate "should be allocated as candidate advocacy."

Rulemaking

Candidate use of funds. The FEC finalized two rules related to candidates’ use of their campaign funds. In January, the Commission published a final rule, approved in December 2023, to broaden the eligibility criteria for candidates who may collect a salary from their campaign and to extend the window of time when candidates may do so. Later in the year, the agency codified existing advisory opinions that clarify that the use of campaign funds to pay for certain security expenses is not a prohibited personal use expense.

Technical modernization. More than a decade in the making, the FEC’s rule to modernize its regulations was finalized. The rule updates existing regulations to account for electronic modes of communication, payment, and bookkeeping; facilitate compliance; and implement other conforming edits. In addition, the rule updated the definition of a “public communication” to include communications that are “promoted for a fee,” which clarified how social media activity should be treated under certain FEC rules. Because the FEC defined “promoted for a fee” to include only situations where a payment is made to a website or platform to promote or boost content, the definition does not cover payments to social media influencers to post content on their accounts. This revision clarifies when FEC disclaimers are required on social media content and also when social media communications are subject to the FEC’s coordinated communications rules.

Form 3-Z obligation. The agency further streamlined its regulations in recognition of technological development by easing the paperwork burden for certain candidate committees. Previously, when a candidate had multiple authorized committees, their principal committee had to aggregate financial information from the other committees—which was separately reported—on one unified form (Form 3-Z). The Commission determined that, with the ability to easily aggregate the data online, this was no longer necessary.

Freedom of information. The Commission published its interim final rule to implement the FOIA Improvement Act of 2016, which would revise regulations governing public access to FEC records. The new rules strengthen public access to records and the rights of persons requesting them, including by requiring certain records to be available electronically and by generally prohibiting the Commission from charging fees to Freedom of Information Act requesters if the agency misses a production deadline.

Administrative fines. The Commission proposed a new rule to expand its Administrative Fines Program to cover additional reporting violations related to certain 24-hour and 48-hour reports and notices. The Program is intended to provide a consistent and efficient mechanism for resolving filing violations, with fines commensurate with the report’s election sensitivity, tardiness (or total failure to have been filed), and activity levels disclosed, as well as the offending committee’s prior history of noncompliance.

Contributor information redaction. The FEC approved a draft rulemaking to create a means for contributors to request that their information be redacted from disclosures if there is a reasonable likelihood that the availability of the information would lead to threats, harassment, or reprisal. Public comments are due by February 18, 2025.

Declined rulemaking petitions. The Commission declined to initiate rulemakings regarding AI in campaign ads; the reportability of equal-value exchanges of mailing lists; adding “valuable information” to the definition of “contribution”; and requiring all contributions from corporations or organizations to be traceable to a disclosed natural person. While the FEC declined to initiate new rulemaking on AI, it did issue an Interpretive Rule to emphasize that, in communications that relied on AI, the agency would apply the existing statutory prohibitions on (a) candidates "fraudulently misrepresenting themselves... as 'speaking, writing, or otherwise acting' for or on behalf of" another candidate in a way that is damaging to that candidate; and (b) the making of a fraudulent misrepresentation that you are “'speaking, writing, or otherwise acting' for or on behalf of [a] candidate or political party... for the purpose of soliciting" a donation.

Enforcement and Litigation

Reviewability of FEC dismissals based on prosecutorial discretion: In Campaign Legal Center v. FEC, the Campaign Legal Center sued over the Commission’s dismissal of an administrative complaint alleging that certain committees associated with then-candidate Donald Trump failed to properly disclose disbursements. The Commission argued that the dismissal was unreviewable because it was based on its prosecutorial discretion. The district court agreed and dismissed the claim. The D.C. Circuit affirmed, rejecting the plaintiff’s argument that the Commission’s dismissal decision was predicated on legal analysis and therefore reviewable. In October, the D.C. Circuit announced it would rehear en banc a separate case, End Citizens United PAC v. FEC, which raises the issue of whether an invocation of prosecutorial discretion by only three out of six commissioners should shield a dismissal from judicial review. The original three-judge D.C. Circuit panel previously affirmed the district court’s ruling that such a dismissal was unreviewable.

Prohibited corporate contributions: When does sharing “political intelligence” become a “contribution”? In MURs 8117 and 8118, the Commission declined to find reason to believe that Fox Corporation made and the Make America Great Again PAC (“MAGA PAC”) knowingly accepted a prohibited corporate contribution in the form of information allegedly shared by Rupert Murdoch with an agent of the Trump campaign. The Commission’s Office of General Counsel (“OGC”) had concluded that information Murdoch shared about President Biden’s non-public campaign strategy to air a particular ad during a particular broadcast qualified as “anything of value” and therefore a prohibited contribution.

The Commissioners, however, split on whether the information Murdoch shared was “anything of value.” Chairman Cooksey concluded the information was not “anything of value,” as the advertisement at issue was “already in the public domain at the time Murdoch sent it to” the campaign agent and the Biden campaign had already "disseminated a 'substantially similar ad'" several weeks earlier.[4] He also emphasized that in the absence of a market for the information conveyed, any effort by the FEC to set a valuation would be “inherently subjective.” Commissioners Dickerson and Trainor agreed that the prior public airing of the ad largely resolved the matter. They also emphasized that the fact that the Trump campaign did not make any use of the information meant the information was of little or no value.[5] Vice Chair Weintraub and Commissioners Broussard and Lindenbaum, however, deemed the information a thing of value because it was material information about Biden’s campaign strategy that was not public—specifically “that the Biden campaign was airing this particular ad, to a particular and large audience, during a particular broadcast.”[6] Further, these Commissioners critiqued Commissioners Dickerson and Trainor’s conclusion that this was at most a de minimis infraction because “the value of such information cannot be considered de minimis by looking at the value relative to the exponential growth of political spending in a presidential race.”[7]

The internet exception: Through a series of opinions, recent court decisions provided additional color on when coordinated activities are not in-kind contributions because they fall within the FEC’s exemption for certain internet activities. On October 6, 2016, the Campaign Legal Center and Catherine Hinckley Kelly filed an administrative complaint with the FEC alleging that the PAC Correct the Record (“CTR”) had illegally engaged in coordinated communications with Hillary for America during the 2016 election. They alleged CTR spent close to $6 million in coordination with the Clinton campaign and publicized that it was doing so but characterized all of its expenditures as unreportable inputs to unpaid communications over the internet. The procedural history of the matter is complex, but eventually the U.S. District Court for the District of Columbia found the Commission’s dismissal was contrary to law and also concluded that there was ample evidence of coordination the Commission failed to consider.

On July 9, 2024, the D.C. Circuit agreed. It found that the internet exception was never intended “as a FECA-swallowing loophole enabling political committees to launder all their coordinated expenditures via unpaid internet postings.”[8] Rather, the D.C. Circuit concluded that the “internet exemption cannot be read to exempt from disclosure those expenditures that are only tangentially related to an eventual internet message or post” and that “the exemption does not effect wholesale deregulation of coordinated expenditures that contribute in some part to an eventual internet posting.”[9] The matter was sent back to FEC to “draw the line” as to “precisely which expenses can be exempt from regulation as inputs to unpaid internet communications.”[10]

On October 10, 2024, the Commission dismissed the complaint due to the expired statute of limitations, among other reasons, but voted to begin a rulemaking to more clearly define the types of expenses covered by the internet exception.[11]

Engaging the same lawyer: In MUR 7908, four Commissioners issued a statement of reasons stating their view that the fact that two parties engaged the same lawyer, and that the lawyer "reviewed and approved" an allegedly coordinated advertisement did not, without more, support a finding of reason to believe that the parties coordinated the advertisement. The Commissioners declined to “adopt the presumption that attorneys, sworn officers of the court, may be serving as conduits for illegal coordination merely because they provide legal counsel to both parties.”

If you have any questions concerning the material discussed in this client alert, please contact the members of our Election and Political Law practice.