September 20, 2019
More than 7 years after CREW filed an FEC complaint against Americans for Job Security, a dark money giant, the FEC has reached a conciliation agreement with the group. AJS spent millions on political ads following the 2010 Citizens United decision, which weakened restrictions on independent expenditures and other election-related spending by corporations. The agreement will require AJS to disclose their donors from 2010, when they were one of the biggest dark money groups in the country.
Following the Citizens United ruling, dark money groups began spending millions on political ads, and a number of them violated the requirement to register as political committees and disclose their donors and expenditures to the FEC.
AJS took advantage of the ruling more than most, and was one of the top five dark money spenders during both the 2010 and 2012 election cycles, spending more than $25 million on independent expenditures and electioneering communications in those cycles. Their spending for the 2010 cycle on political ads alone totaled $9.5 million. That figure includes both independent expenditures (IEs), which are ads explicitly advocating for or against the election of a candidate, and electioneering communications (ECs), which are ads referring to candidates, run close to their election, and targeting their electorate. The ECs included requests to “call” candidates not currently serving in office to make requests about federal policy the candidate could only implement if elected, making them clearly political in nature.
CREW filed its FEC complaint in March 2012, alleging that AJS was in fact a political committee because of its extensive spending on IEs and ECs in 2010. Groups whose major purpose is influencing elections must register as political committees, and AJS spending more than 70% of their expenditures in a year on political ads clearly qualified them as a political committee. Political committees are required to register with the FEC, and regularly disclose their donors and spending. AJS failed to do so, and CREW filed our initial complaint with the FEC asking them to take action and enforce the law.
The FEC deadlocked on both our AJS complaint and a similar one CREW filed about American Action Network. According to the three Republican commissioners who voted against pursuing enforcement, AJS’s ECs could not establish that the organization’s purpose was to influence elections because ECs are unrelated to elections, despite the ads being “electioneering” communications. The three commissioners also believed that AJS’s pre-Citizens United spending, dating back to its founding more than a decade earlier–when the organization’s activity could not legally include campaign activity–were relevant to showing what AJS’s primary purpose was in 2010 after the Supreme Court decision and after AJS began to spend millions on campaigns. So we sued the FEC for its failure to enforce the law. When the district court ruled in our favor in 2016, it found the Republican commissioners’ analysis “blinks reality,” and agreed that ECs should be included as political activity in the determination of the group’s purpose. The court ordered the FEC to reopen our case against AJS.
Although it took more than 7 years, and required 3 lawsuits, ultimately the FEC adopted CREW’s initial position from 2012: that ECs can qualify a group as a political committee and that a group’s status as a political committee can be determined based on one year of its spending. AJS claimed it is now defunct and has no ability to raise additional funds, so the agreement does not include a fine, but the group will be disclosing their donors and expenditures starting from 2010, when it was at its dark money peak.
This decision is groundbreaking– it marks the first time a dark money organization has been found to be a political committee since Citizens United, and it means that they are required to disclose their donors and spending. If a dark money giant like AJS can be held to account, it sets a new and clear precedent that dark money will not remain entirely unchecked.
CREW has filed complaints and lawsuits related to many of the largest dark money groups that took advantage of the Citizens United ruling, including American Action Network, Crossroads GPS, the American Conservative Union, American Future Fund, and the 60 Plus Association. We’ve had several wins in those cases both at the agency and in court, generating record breaking fines, reinstating broad disclosure statutes ignored for decades, and setting new paths for private Americans to protect themselves from dark money when the FEC proves incapable. CREW’s victory in AJS is yet another example. The fact that it took so many years, and so many lawsuits, for this decision to finally be made illustrates how broken our campaign finance system is. If nothing changes at the FEC or in our campaign finance laws, it may well continue to take nearly a decade for legally mandated disclosures to actually be made. Though this AJS decision is a huge win for transparency, it also underscores the urgent need for reform.
Photo by Tax Credits.