When operating at capacity, the FEC has six commissioners, three from each party, who serve six-year terms. For the commission to take action on most matters, four commissioners must agree. Currently, the FEC has only two commissioners, Republican chairman David Mason and Democratic vice chairman Ellen Weintraub, so no significant action can be taken. Democrats and Republicans have not been able to agree on how to fill the four open slots. At the heart of the Senate impasse is one of the two Republican nominees, a former Justice Department lawyer named Hans von Spakovsky. The Democrats consider him a deal breaker and view him as one of the leading forces in the Republican Party's efforts to use the seemingly nonexistent specter of voter fraud as a means to disenfranchise minority—and largely Democratic—voters. The Democrats have been unwilling to vote for a group of nominees that includes von Spakovsky—and the Republicans have refused to withdraw his nomination.
Senate majority leader Harry Reid (D-Nev.) has offered the Republicans a simple majority vote on each nominee, a move minority leader Mitch McConnell (R-Ky.) has rejected because it will almost certainly result in the rejection of von Spakovsky. "That's an unacceptable outcome," says Don Stewart, McConnell's communications director. Stewart says that the Republican leadership has also been offered a deal in which one Democrat and one Republican (sitting FEC chairman Mason) would move forward, leaving von Spakovsky behind. "Then you've got a two-to-one ratio and you still don't have [the four votes needed for] a quorum," says Stewart. The delay in holding a confirmation vote has already caused one nominee, Democrat Robert Lenhard, to drop out of the nomination process. Even so, McConnell's position, as stated by Stewart, remains a simple one: "All three move, or they don't move at all. In fact, that's more important now because that's the only way to get a quorum."
According to Jim Manley, Reid's spokesman, that's not going to happen. "The next step is for the White House to withdraw his nomination," he says of von Spakovsky. Stewart's response: "Why should the Republicans have to choose a different nominee just because the Democrats don't like him?"
Both Stewart and Manley insist that their bosses desire a fully functioning FEC, and that the other party is the impediment. Both also acknowledge there is little room for progress on the horizon.
Good government groups working for campaign-finance reform believe the delay isn't an accident. "You're basically expecting the regulated to have an affection for the agency responsible for the regulating," says Paul Ryan, FEC program director at the Campaign Legal Center.
"They wouldn't say this publicly," adds Ryan's colleague Meredith McGehee, policy director at the CLC, "but I don't think a lot of members [of Congress] are losing a lot of sleep" over the FEC's situation. "One of the big roles of the FEC is to police congressional races, so many incumbents are not big fans of the FEC. [They're saying,] 'Hey, if I don't have anybody looking over my back, what do I care?'"
McGehee puts a larger share of the blame for the deadlock on McConnell's shoulders, pointing out that he has long opposed campaign-finance regulations. She doesn't let the backbenchers of both parties off the hook, either. "If you look at the rank and file of Congress, they don't feel a sense of urgency about the FEC because to them the FEC is just a pain." The downside, McGehee says, is that "there's not really anyone standing up for the public's interests."
Robert Lenhard, who served as the FEC's chairman until December, when his two-year recess appointment ran out, withdrew his name from contention last week citing a need to move on. He says the FEC is "an agency that regulates politics in a political town," a fact that naturally makes it unpopular. "This is an agency that suffers two enormous disabilities," he says. "The first is that this is an agency without a constituency group. There is no one other than the American people in some sort of broad and abstract sense whose self-interest is advanced by the existence of the FEC. There is no group that comes forward and says, 'No, no, no. This agency's work is essential and must continue.'"
"The second is that it regulates politicians," he continues. "Everyone on the Hill has some interest in how things run over there. And so the mixture of everyone being somewhat interested in it and no one really defending it make it a very tough road for this agency to hoe."
Even when the FEC functions at full strength, good government groups aren't terribly impressed with its performance. The fact that nominees are often party loyalists means that the commission rarely makes a move that upsets party headquarters, these groups say. And when an issue comes before the commission that could greatly help one party at the expense of the other, gridlock kicks in.
Ed Davis, the research director of Common Cause, a lobbying group that advocates for government accountability, doesn't think that's going to change. "[Congress doesn't] want it to be a strong enforcement agency, so typically they send up nominees who are going to protect them and protect the parties' interests." He adds, "It's been a weak enforcement agency for a very long time."
Lenhard defends the commission. "This sense that the agency is at the beck and call of politicians—it really wasn't borne out by the experiences I had there," he says. "I think that there is no doubt that the good government groups want a more aggressive, prosecutorial agency. But what [they're] missing often is that there is a very deep philosophical divide on how active a role the federal government should play in policing elections."
And that divide isn't just among politicians, he argues. "My sense is that if the agency were to be dramatically more effective and were to intervene in elections, and get court orders to get candidates to take ads off the air, to raid offices and conduct audits in the midst of elections, and were to play a prosecutorial role that is more similar to traditional law enforcement, that people would be very uncomfortable with the federal government being that aggressive."
Lenhard also points out that the commission operates with relatively scarce resources. "The thing people need to understand about this agency is that this is among the smallest federal agencies. It has 375 employees and about a $60 million a year budget to regulate a $4 billion industry, for lack of a better term," he says. "The federal government spends more money at the Department of Labor regulating union elections than is spent at the FEC regulating all federal elections."
So what happens going forward? "We don't know, to be honest," says Davis of Common Cause. "We and the other groups continue to hold the position that Hans von Spakovsky is an exceptionally bad nominee for the agency. At the same time, campaign finance is a key issue for us, and we're concerned that the FEC is not functioning. It doesn't function at a level we'd like it to anyway, but to be out of commission in a presidential election year is outrageous." In essence, he says, the nation could be headed into an election year with effectively no oversight of campaign fundraising or spending.
As it stands, there are a number of pressing matters currently on hold, pending an FEC quorum. First, candidates who applied for matching funds in the primary election are unable to get the money they were promised, which they would traditionally use to pay off debts. Those funds are usually distributed around the end of March, when the tax funds that supply the public financing program begin rolling in. For money to be distributed, it requires the votes of four commissioners. There is also the outstanding question of lobbyist bundling rules. "When lobbyists bundle contributions to candidates or [political action committees], the recipients have to disclose who the lobbyist was that bundled them, over a certain amount of money," says FEC spokesman Bob Biersack. "The technical rules for the mechanics of that process—who is defined as a lobbyist, how the disclosure works—are pending before the commission and can't be approved finally until there are at least four members." So lobbyists who double as major fundraisers can continue to work in the shadows.
Nor can the FEC deal with a variety of election-year complaints. Last week, for example, the Democratic Congressional Campaign Committee filed a complaint with the commission alleging that Freedom's Watch, the conservative political advocacy group backed by casino mogul Sheldon Adelson, broke the law by coordinating with the National Republican Congressional Committee in planning an ad campaign. Traditionally, FEC staff would do a little fact-finding and present what they discovered to the commissioners, who would then vote on whether or not to begin a full-scale investigation (which customarily takes over a year, much to the chagrin of reform groups). At the end of the investigation, the commissioners would review all the evidence and vote on whether to fine the violator. Without a quorum, no new investigations can even begin, nor can ongoing ones be resolved.
Two pending issues could affect the candidacy of John McCain.
The first is a complaint by the Democratic National Committee that alleges that McCain, in taking out a much-needed campaign loan in late 2007, gamed the matching-funds system for the primaries. McCain applied for matching funds in August 2007. Had he gone on to participate in the program, the federal government would have matched every donation from an individual donor up to $250. In exchange, McCain would have had to accept spending limits in each state and an overall spending cap of around $50 million during the primary season.
Running low on money last November, before the matching funds became available, the McCain campaign took out a loan using a life-insurance policy as collateral. In December, McCain looked to take out a second loan.
Hoping to avoid the spending limits but in need of collateral to justify the loan, McCain and his lawyers did some fancy legal footwork. They promised the bank that if he were to win in New Hampshire and beyond, he would repay the loan using the fundraising that would inevitably be received by a winning candidate. If he were to lose, he would drop out of the public spending system and then promptly opt back in. With this agreement, McCain wasn't technically promising the bank the matching funds he was currently lined up for. Doing so would have tied him to the spending limits. Instead, he was backing the loan—supposedly—with future funds that he had yet to apply for.
By February 2008 McCain had locked up the nomination, and he dropped out of the matching-funds program. The DNC complaint alleges that McCain could not drop out without getting the affirmative votes of four FEC commissioners, and that McCain would have prohibited from bailing because he effectively used matching funds as collateral for his loan. If the FEC were to rule for the Democrats, McCain would already be in excess of nationwide spending limits, and would likely have to pay a fine as well as curb his campaign's spending until the convention. The DNC has filed a lawsuit against the FEC in federal court, asking a judge to force the commission to act despite the lack of a quorum.
The second major McCain-related issue could hit later in the campaign, should McCain decide to accept public financing in the general election. Under that program the Arizona senator would receive a public grant of $84 million to cover the entire cost of his campaign from the convention until Election Day. McCain will likely opt in for a couple of reasons: He's a supporter of the program because it limits the influence of special interests in politics and because he doesn't expect to raise more than what the federal government can promise him. Every presidential nominee since the public funding system was established in 1974 has opted into public financing. But disbursing the funds requires an FEC vote, meaning that McCain's campaign funds could be tied up until there's a quorum. (Obama likely won't run into the same problem, since, due to his historic fundraising numbers, it does not appear that he will accept federal money. Clinton hasn't said one way or the other whether she will participate in the public financing system.)
What would happen then is anyone's guess, says Lenhard. "A candidate who wanted public financing could sue in federal court and get a federal judge to authorize the treasury to release those funds, or order the FEC to authorize the release despite an insufficient number of commissioners," he says. "But I think if you read the statute as written, it requires the affirmative vote of four commissioners to do it."
Biersack, the FEC spokesman, notes that some functions of the FEC are not hampered by the lack of a quorum. "All the disclosure activity that the Commission routinely does continues," he says. "Candidates file reports, we make them available, we ask questions if there are things on the reports that we think are unclear or problematic—all of that carries on."
But without Senate action on the FEC nominees, the commission will be unable to act on any significant issue that arises during this election cycle.
Senate Democrat and Republican leaders could reach a deal on the nominees "if they wanted to," says a Democratic Senate staffer, "but they're too dug in. If we go into this next recess [in late May] without an FEC, we probably won't have one until the next administration." But Reid's office notes it wall take "several moths" just to replace Lenhard as one of the two Democratic nominees.
Lenhard agrees that no quick solution is likely. "My sense is that there is a window that will close when this Congress goes into recess for folks to come together and reach an accord. And if they don't get the deal done then, my guess is that it will be early in the next administration until some sort of deal is struck." And that will mean an election with no referees.