Beleaguered Federal Election Commission enters 2017 as marginalized as ever

Donald Trump panned “pay-to-play” politics, blasted "rigged" elections and vowed to "drain the swamp" that is Washington, D.C.

But Trump has so far forsaken the very government agency Congress created after Watergate to work as the nation’s campaign season Roto-Rooter.

The Federal Election Commission’s six commissioners, including the agency's three Republicans, say neither Trump nor his transition team has contacted them.

Trump, meanwhile, appointed Don McGahn, a former FEC chairman and preeminent enemy of campaign finance regulations, as his top White House lawyer. Representatives for the Trump transition declined to answer questions from the Center for Public Integrity about the FEC.

The developments together are evidence that the FEC — once a reasonably robust and bipartisan judge of political misdeeds — heads into 2017 even more marginalized than ever before by the very politicians it’s supposed to advise and police.

Making matters bleaker:

• The FEC finds itself torn by internal strife between increasingly disgruntled employees and top agency managers
• Its own inspector general in October stopped just short of declaring the FEC an operational disaster
• While outward hostilities are less frequent, the agency’s commissioners continue to grapple with ideological impasses so pitched that at least two commissioners — Democrat Ann Ravel and Republican Caroline Hunter — barely speak to one another anymore
• Every FEC commissioner but Ravel continues to serve despite his or her term having expired long ago, and some may soon quit the agency

Such FEC decreptitude also coincides with the body politic, having endured the most expensive and bruising presidential election in recent U.S. history, becoming overwhelmingly cynical and angry about how money affects elections.

Nearly nine in 10 Americans believe wealthy people will figure out new ways to influence politics, regardless of whether campaign finance laws are changed, according to a new Center for Public Integrity/IPSOS poll conducted in early December.

The poll also indicates that more than seven in 10 Americans want the federal government to impose moderate or strict contribution limits on super PACs — technically independent political committees that may raise and spend unlimited amounts of money to advocate for or against candidates. They are not supposed to “coordinate” their spending with candidates’ campaigns.

Together, super PACs, politically active nonprofits and similar groups spent more than $743 million to influence the 2016 presidential election alone, the Center for Responsive Politics calculated. They include super PACs with close ties to Trump, Democrat Hillary Clinton and other also-ran presidential candidates such as Republicans Jeb Bush, Ted Cruz, John Kasich and Marco Rubio.

The FEC’s newly minted chairman, longtime commissioner Steven Walther, will attempt to orchestrate his agency’s discord into something modestly more symphonic, at least on a couple of imminent matters: overseeing the agency’s move to a new headquarters and completing an overhaul of its outmoded website.

He defended the agency’s relevance, particularly as a campaign finance data clearinghouse.

“People who complain about the FEC would complain a lot more if it wasn’t there,” said Walther, a Democratic appointee who identifies as an independent and also served as agency chairman in 2009. “Sure, people here have strong views and don’t always agree. I wouldn’t expect anything else, and we’ll do what we can to work together.”

Outgoing FEC Chairman Matthew Petersen last year vowed to dial down intra-commission acrimony, which at its worst prompted bizarre, public debates about men’s nipples and space aliens. He concurred that 2016 is proof “we can disagree without being disagreeable” and “operate in a collegial manner.”

But Walther acknowledged he’s all but powerless to break deadlocks on the agency’s thorniest issues, such as defining political “dark money” or determining what constitutes illegal political activity.

Take the case this year of a coal company allegedly coercing employees to attend political rallies and make contributions. The commission deadlocked 3-3 along ideological lines, as it has on a variety of issues, and the matter died on their desks. Or another 3-3 case where a North Carolina nonprofit organization that seemingly existed only to promote Sen. Thom Tillis, R-N.C., avoided registering as a political group and disclosing its funders despite protests from Democrats.

“Steve is an extremely gracious person who will make every effort to reach consensus,” said Ravel, who told the Center for Public Integrity that she will resign her seat no later than May, when her term expires. “But I can’t imagine anything changing at the agency except for it to become even more dysfunctional, the stalemates on significant matters to continue.”

In short, Democratic commissioners accuse their Republican colleagues of refusing to enforce some campaign finance rules at all. Republican commissioners argue that the Democrats regularly attempt to enforce campaign finance rules that simply don't exist.

Herein lies the root of the FEC’s existential problem: today’s commissioners frequently can’t agree on what the rules even are — something agency leaders from years past say wasn’t usually true.

First: repairing damage

Foremost on Walther’s immediate agenda is some internal housekeeping: walking floor-by-floor through the FEC’s nine-story building to speak face-to-face with the agency’s rank-and-file, who’ve been shaken this year by what many consider a gross breach of their trust.

At issue: FEC Inspector General Lynne McFarland accused one of the agency’s senior managers of misleading her into releasing confidential employee morale surveys that, in some cases, were highly critical of agency commissioners and managers.

The senior manager, Chief Compliance Officer Patricia Orrock, then shared the survey data with Staff Director Alec Palmer, Acting Deputy Staff Director Edward Holder and Human Resources Director Derrick Allen, as Petersen and Walther acknowledged in a Nov. 15 letter to National Treasury Employees Union President Anthony Reardon. The union represents FEC employees. Reardon called the situation “inexcusable.”

In the Nov. 15 letter, which the Center for Public Integrity obtained this month, Petersen and Walther told Reardon to “rest assured that if we become aware of any acts or threats, however subtle, of retaliation resulting from the information disclosed in the survey comments, or any protected activity in which an employee engages, we will ensure that appropriate measures are taken.”

They further described the situation as a “serious mistake” that “has resulted in an erosion of trust between FEC management and staff.” They vowed to “rectify, to the extent possible, any ill will that has been generated.”

Reardon, in an email, said his union “is reviewing the letter to determine next steps.” Orrock and Palmer did not respond to request for comment.

In the meantime, the FEC’s commissioners must grapple with some of the lowest staff morale among federal government agencies. It’s a staff that, on balance, considers the agency’s commissioners bickering blowhards, top managers ineffectual, career prospects bleak and work environment dreary. That’s according to the agency’s own “Root Causes of Low Employee Morale Study” from July 2016.

Some FEC employees also believe the work they do — preparing cases, developing briefings, birddogging political committees — is largely for naught, lost in the swirl of commissioners’ ideological advocacy and posturing.

‘Abiding by the law as written’

Take Election 2016 itself.

Political neophytes could be forgiven for believing that the FEC would aggressively pursue law-breaking candidates and political committees, including the big-spending super PACs and “social welfare” nonprofits that have profoundly influenced campaigns since the Supreme Court’s Citizens United v. FEC decision in January 2010.

But no.

One measure of how the FEC’s law enforcement function has diminished is the fines it levies. During fiscal year 2016, the agency doled out about $788,000 in civil penalties, according to agency records. That’s the lowest amount in any presidential election year since 1992.

A single case — a surprising unanimous vote to fine three nonprofit groups once connected to conservative billionaire brothers David and Charles Koch — accounted for almost one-third of the FEC’s fines this year.

The 2016 fines also represent a fraction of the high-water mark the agency set a decade earlier, in 2006, when it hit dozens of political committees with a collective $5.92 million in fines.

That year, the average FEC fine for the most severe enforcement cases was about $179,500; the average such fine in 2016 was about $19,850, FEC records show.

Hunter, the incoming vice chairwoman, says fewer fines mean — at least in part — that political candidates and committees are doing a better job voluntarily complying with campaign laws. She credits an FEC staff that this year reviewed millions of pages of campaign finance documents and fielded 13,000 phone calls.

“People in politics don’t want to get it wrong,” Hunter said. “And the FEC has done a good job of abiding by the law as written.”

On the contrary, said Craig Holman of government reform organization Public Citizen.

“The FEC is now the weakest it’s ever been, and it’s completely dysfunctional on key issues,” he said.

Either way, justice for those who might skirt campaign laws is slow.

The most recent 15 enforcement cases the FEC resolved took, on average, 675 days to close, according to agency records. That’s roughly the gestation period of an elephant.

Some blame falls with the commissioners, who periodically hold up the most contentious cases for one reason or another. But delays also originate in the agency’s Office of General Counsel, which hasn’t had a permanent leader since July 2013, when General Counsel Anthony Herman resigned to re-enter private practice.

Of the 274 open complaints pending at the FEC in early December, 224 were awaiting action by the Office of General Counsel, commissioners confirmed. Another 21 were pending before commissioners themselves. The rest are under active investigation. The FEC will likely settled some and head to federal court on others in an effort to enforce provisions in the Federal Election Campaign Act or other federal election laws.

Commissioner Lee Goodman, a Republican, noted that the FEC typically experiences a higher-than-normal caseload volume during election years. Many of the complaints pending at the FEC will be closed without controversy because of flimsy evidence or clear lack of merit.

But financial and personnel limitations are also a major factor, said Daniel Petalas, who resigned in September as the FEC’s acting general counsel to join the D.C. office of law firm Garvey Schubert Barer.

“We had limited resources, and there’s only so much we can do at the supervisory level, even if the quality of the work product was, I feel, exceptional,” Petalas said. “There are all sorts of stresses on the staff … Your client is a six-headed hydra that’s always fighting with itself and often taking on the body itself.”

Such fighting also continued to chill political committees’ interest in asking the FEC for formal legal advice by requesting what’s called an “advisory opinion” from the commission.

The FEC this year has voted on just 22 such requests — tied with 2008 for the lowest number ever during a presidential election year. In 1976, the first presidential year after the FEC’s creation, it fielded 117 advisory opinion requests.

These days, most political committees are content avoiding the hassle and expense of going before the commission and taking their chances that the FEC, even if they break a law, couldn’t agree that they did.

Some room for agreement

Earlier this month, the FEC, as it does every year, sends what amounts to a Christmas wish list to Congress.

This year’s list was longer than others and previews priorities that, while modest in scope, constitute rare common ground among all commissioners.

Of particular note, the FEC wants the U.S. Senate to file its campaign finance disclosures electronically, saving taxpayers hundreds of thousands of dollars annually. They also want more power to sanction political committees that misrepresent themselves. The authority to pay top managers more money — key in attracting qualified candidates — is also essential, they argue.

The problem: Congress almost always ignores the FEC’s requests. So no matter how much commissioners themselves concur, they’re all but powerless to determine, structurally, how campaigns are funded and waged.

Commissioners are therefore resigned in 2017 to give up on blasting any regulatory home runs and will try, as Petersen and Walther both put it, to “hit singles.”

Petersen, for his part, wants to conduct a public hearing on how rapidly evolving technology is changing political campaigns. Such a hearing, if it occurs, would almost certainly reignite debate over political advertising on the internet — a flashpoint this year between Goodman and Ravel, in particular, and one that even led to Ravel receiving death threats.

Goodman says he’ll continue his push to relax regulations affecting how state and local political parties operate — something on which the commission’s Democrats have shown a willingness to work.

He also wants to address how the commission responds to requests under the Freedom of Information Act, saying the agency gives its staff too much power in determining what information is released — or withheld. “I do not believe the Commission complies with the Freedom of Information Act or its own regulations when it asserts exemptions and privileges to public requests for records,” Goodman said.

Democratic Commissioner Ellen Weintraub says the FEC is motivated to crack down on so-called “scam PACs” that, under the guise of supporting a candidate, generally exist to make money for the people associated with the political committee.

Commissioners — especially Walther — also cited the specter of foreign money seeping into U.S. elections as an area of shared interest.

Major changes ahead?

One commissioner — Ravel — says she’ll quit the agency by May, when her term expires.

She says she hasn’t decided what she’ll do next, but that it likely will involve working for a foundation or, perhaps, in the private sector. She’ll depart the FEC having largely seen her standing goal of revealing sources of secret money in politics stymied.

Goodman, in an interview, wouldn’t commit to staying at the FEC through 2017.

“I will make a decision early next year about my future plans,” he said.

The four other commissioners say they have no immediate plans to leave the commission, but Hunter and Petersen, in particular, could prove attractive prospects for other postings in what’s now Republican-dominated Washington, D.C.

And, save for Ravel, all of the FEC commissioners’ six-year terms have expired. But they continue to serve, because no law compels them to leave, and their authority remains the same. Come April, Weintraub will have served 10 years past her term’s expiration date, Walther eight years. Petersen’s term ended nearly six years ago, Hunter’s term four years ago.

“Congress has limited commissioners to one six-year term, and that was precisely because at the time many commissioners had been there for many years,” said Brad Smith, a former Republican FEC chairman who now leads the Center for Competitive Politics, which favors campaign deregulation. “Clearly, Congress did not want commissioners being there forever.”

A worst-case scenario in 2017?

The FEC can’t maintain the four commissioners needed by law to punish campaign scofflaws, issue formal guidance to political candidates and committees and conduct other high-level business.

This last happened at the FEC in 2008, and it prevented the agency from making many important decisions.

President Obama could yet nominate FEC commissioners before his term expires on Jan. 20.

But Obama last nominated FEC commissioners in mid-2013, when he floated Ravel and Goodman, and he has only nominated three commissioners overall during his nearly eight years in office.

Obama, meanwhile, has continued in recent weeks to nominate people to other governmental posts, including an under secretary at the Department of Veterans Affairs, an inspector general for the National Security Agency and a judge for the Superior Court of the District of Columbia.

White House spokeswoman Katie Hill declined to comment on whether Obama will nominate new FEC commissioners.

If Obama doesn’t make FEC nominations, the job falls to Trump, whose transition team is already struggling to fill thousands of other federal government jobs.

Were Trump to take it, it would be a “unique opportunity” for his administration to “clean the deck” and name a full slate of new commissioners, said Michael Toner, a former Republican FEC chairman and a current partner at law firm Wiley Rein.

The nation is also experiencing an era when federal courts — think the Citizens United decision, among other recent and pivotal cases — are most responsible for profound changes in election law.

McGahn, the former FEC chairman now serving as Trump’s White House counsel, will play a pivotal role in identifying a new Supreme Court nominee, meaning the high court’s next justice is likely to favor fewer, not more, campaign regulations.

“I would assume he would be very involved and influential in those discussions,” said Petersen, who has stayed in touch with McGahn since he resigned from the FEC in 2013. McGahn did not respond to requests for comment.

Ravel says McGahn’s role in the Trump administration is a “strong indication to me that [Trump] doesn’t consider campaign finance to be a very significant issue.”

Also expect Senate Majority Leader Mitch McConnell, R-Ky., to involve himself in all major campaign finance matters, as he has for years.

This includes legislation congressional members float — Sen. Ted Cruz, R-Texas, for one, wants to end limits on how much money donors may directly give political candidates — and the appointment of new FEC commissioner nominees, who the Senate must approve.

Weintraub, the FEC’s longest-serving commissioner, says Trump could surprise everyone and stick to his promises to “drain the swamp” in D.C., and set a higher standard for what’s legal and ethical during elections.

Campaign finance reform group Issue One — a bipartisan group that includes 150 former members of Congress — agrees. It’s prodding Trump to support an idea that Congress hasn’t yet seriously considered: turning the six-member FEC into a five-member body with a chairman who serves a 10-year term.

A five-member body could end what many view as its current “permanent gridlock,” said Issue One senior strategic adviser Tim Roemer, a Democrat who previously represented Indiana in the U.S. House of Representative and served as U.S. ambassador to India under Obama.

“It was a good idea to fix the FEC when Obama was president, and it’s still a good idea to fix the FEC now that Trump is president,” he said.

Weintraub, for her part, says she can’t envision Congress or Trump championing political disclosure or strengthening election laws.

“Get better? Good luck,” Weintraub said. “I’m hoping not to see things get worse.”

Michael Beckel contributed to this report. This story was first published by the Center for Public Integrity, a nonpartisan, investigative newsroom in Washington, D.C.