Wednesday, January 28, 2009, 11:26 AM

A New Era Of Cooperation in Washington? Federal Election Commission Didn’t Get The Memo

A deepening paralysis at the Federal Election Commission may prompt President Obama to replace half the members of the election panel soon after their terms expire late this Spring, or join forces with his former rival, Senator John McCain, to scrap the agency and start over.

Partisan acrimony on the six-member panel is hardly new, but current divisions run much deeper. When the Commission deadlocked over a proposed settlement with a 527 group, two of the Democratic Commissioners charged their Republican colleagues with failing to enforce the law. "Enough is enough," the Republicans shot back in a statement issued Friday, charging the Commission with using its enforcement powers to intimidate and expand restrictions on political speech. With these battle lines drawn, the resolution of cases has slowed and recent monetary penalties are hardly eye-catching.

The rulemaking process has been affected, too. When the Commission approved new bundling rules at the end of 2008, it promised to produce a written explanation in a couple of weeks – a necessary step for the rules to take effect. But then a vote planned for January 15 was abruptly postponed. While a document will probably emerge soon, the last-minute delay suggests that when the Commission voted to approve the bundling rules, there was no common understanding about what the rules actually mean.

Other projects appear stalled. Last June a federal appeals court struck down most of the FEC's rules on coordination, but there has been no move to replace them – even though these rules were called for by the 2002 McCain-Feingold law.

As terms for three Commissioners expire this Spring, the agency itself may be in some peril. Senator McCain hardly needs prodding. He has long supported legislation to replace the FEC with a more vigorous three-member body. The President’s position on the FEC is less known, though campaign finance reform appears to fit with his good-government agenda. Recent events at the FEC may well forge an alliance between former rivals.

The Department of Justice Stepping Into the Breach?

Court documents reveal that a former official of the U.S. Department of Housing and Urban Development has pleaded guilty to illegally reimbursing campaign donors, according to a report last week in the D.C. Examiner. The official faces up to a year in prison and $50,000 in fines, according to sentencing guidelines.

The lesson in this matter? The FEC may be at war with itself, but the Department of Justice isn't hesitating to assert its overlapping jurisdiction. Indeed, the Department recently took the unprecedented step of publicly urging the FEC to refer more election cases for criminal investigation. Also, it's essential that companies have clear policies against reimbursing employees for campaign contributions. Companies should never use bonuses, salary increases, or other artifice to cover campaign contributions made by their employees.

New Executive Order On Ethics: Who Wins?

President Obama came to office promising to minimize the influence of lobbyists on the federal government. On his first full day, the new President took steps to deliver on that promise.

On January 21, President Obama signed an Executive Order concerning ethical standards for new non-career government appointees. What did it do? New government appointees must sign a "pledge" that commits them to abide by certain standards. First, they cannot accept gifts from registered lobbyists. While there are some exceptions to the gift ban, a number of customary exceptions for government employees (such as the ability to accept gifts under $20 and go to widely-attended events) are now off limits. In addition, registered lobbyists cannot seek or accept employment with an agency that the individual has lobbied within the prior two years. Finally, appointees who decide to leave government are prohibited from lobbying any executive branch agency for the duration of the Administration. If that's not enough, appointees who violate the "pledge" can have their lobbying freeze-out extended for up to an additional five years.

The day after its issuance, the Administration had to waive the new Executive Order so a defense industry lobbyist could fill the number two job at the Defense Department. We're told such waivers will be "limited." But waivers and exceptions aside, the Executive Order contains significant new restrictions on federal lobbyists. For many of them the inability to serve the government and return to lobbying in the private sector is simply too big of a price to pay. Undoubtedly, the President is no fan of the "revolving door." But with significant challenges facing the country, who really benefits from expertise that is never brought to the table?

Federal Contribution Limits Raised for 2009-2010 Election Cycle

The Federal Election Commission has increased the contributions that individual donors can give to federal candidates to $2400 per election, or $4800 for a primary and general. This is up from the $2300 limit during the last election cycle. Individuals may also give $30,400 to national parties, up from the $28,500 they could give last cycle.

Bear in mind that individuals are also subject to a biennial limit on total contributions to federal candidates, party committees, and PACs. The current two-year period began on January 1, 2009. Under this limit, a single donor may contribute a total of $115,500, of which $46,500 may be donated to federal candidates and $69,900 to federal PACs and political parties.

2008 Election Postscript

On January 22, the FEC released the official 2008 Presidential general election results. (NOTE: you have to use the general search engine on the FEC website to find this.) For those who like numbers, here's the final tally:

Obama: 69,456,897 (52.92%) and 365 electoral votes

McCain: 59,934,814 (45.66%) and 173 electoral votes
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