Federal Election Commission v. Craig for U.S. Senate
421 U.S. App. D.C. 432
| D.C. Cir. | 2016Background
- Senator Larry E. Craig (R‑Idaho) was arrested in a Minneapolis airport bathroom on June 11, 2007, pled guilty to misdemeanor disorderly conduct, and later sought to withdraw the plea.
- After the plea became public and media/ethics attention followed, Craig’s campaign committee paid roughly $197,535 in legal fees for attempts to withdraw the plea; payments continued through appeal (unsuccessful in 2008).
- The FEC investigated and found "probable cause" that campaign funds had been converted to personal use in violation of 52 U.S.C. § 30114(b); it filed suit after conciliation failed.
- The district court granted summary judgment for the FEC, holding the payments were personal use because the underlying allegations were unrelated to campaign activity or official duties; ordered disgorgement of $197,535 to the U.S. Treasury and a $45,000 civil penalty.
- On appeal, Craig argued alternative standards (a reasonableness/"reasonably related" test, an officeholder‑motive test, and a "delta" marginal‑cost test) and challenged disgorgement to the Treasury and the civil penalty; the D.C. Circuit affirmed.
Issues
| Issue | Plaintiff's Argument (FEC) | Defendant's Argument (Craig) | Held |
|---|---|---|---|
| Whether campaign funds used to pay legal fees to withdraw a personal guilty plea violated §30114(b) | Legal fees to contest allegations unrelated to campaign or official duties are "personal use" because they would exist irrespective of office or campaign | Fees were tied to Craig's status (media, ethics scrutiny) and thus related to office/campaign | Held for FEC: expenditures were personal use; violation of §30114(b) affirmed |
| Proper legal standard for legal‑fees personal‑use analysis | Apply the FEC "allegations" standard: if allegations relate to campaign or office duties, fees are permissible; if not, they are personal | Apply a broader "reasonableness" / "reasonably related" test considering circumstances and impact of officeholder status | Held for FEC: adopt the allegations standard; reject defendants' reasonableness test |
| Alternative standards (officeholder's motive or "delta") | No support; inconsistent with statute and prior FEC practice | Use officeholder motive or allow payment of the incremental (delta) cost caused by public status | Rejected: motive and delta standards are inconsistent with statute, unworkable, and largely forfeited on appeal |
| Remedies: disgorgement destination and civil penalty | Disgorgement to Treasury and an additional civil penalty appropriate to deprive wrongdoer and deter | Disgorgement should return funds to the committee; Treasury transfer and penalty are punitive and infringe First Amendment | Held: district court did not abuse discretion ordering disgorgement to Treasury and a $45,000 penalty; remedies affirmed |
Key Cases Cited
- United States v. Mead Corp., 533 U.S. 218 (agency deference and factors for Skidmore weight)
- Skidmore v. Swift & Co., 323 U.S. 134 (1944) (respect due to agency interpretations proportional to persuasiveness)
- Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984) (deference to reasonable agency statutory interpretations)
- Gonzales v. Oregon, 546 U.S. 243 (2006) (consideration of agency interpretation factors)
- SEC v. Bilzerian, 29 F.3d 689 (D.C. Cir. 1994) (disgorgement deprives wrongdoer of ill‑gotten gains)
- SEC v. First City Fin. Corp., 890 F.2d 1215 (D.C. Cir. 1989) (limitations on using disgorgement punitively)
- Buckley v. Valeo, 424 U.S. 1 (1976) (campaign contributions as speech component)
- McCutcheon v. FEC, 572 U.S. 185 (2014) (campaign finance First Amendment jurisprudence)