Appeals Court Strikes Down FEC Campaign Finance Regs

WASHINGTON – An appeals court agreed Friday that federal election regulators wrongly opened several loopholes in a new campaign finance law (search) that is meant to take big contributions out of congressional and presidential elections.

The federal appeals court in Washington affirmed U.S. District Judge Colleen Kollar-Kotelly's (search) 2004 ruling striking down several Federal Election Commission (search) regulations interpreting the 2002 campaign finance law. She ordered the FEC to write tougher rules.

The lower court judge struck down more than a dozen commission regulations. The FEC asked the appeals court to overrule her on five of them, but lost its bid Friday in a 2-1 decision.

If the commission rules were allowed to stand, "we have no doubt that savvy campaign operators will exploit them to the hilt, reopening the very soft money floodgates" the law aimed to close, Judge David Tatel wrote for himself and Judge Harry Edwards. Judge Karen Henderson disagreed with the ruling, saying she didn't believe the lawmakers who challenged the commission's regulations had legal standing to do so.

The commission is reviewing the ruling and has not yet decided whether it will appeal to the Supreme Court, FEC spokesman Ian Stirton said.

The cornerstone of the 2002 law is a ban on the raising of so-called soft money (search) — corporate and union contributions in any amount and unlimited donations from any source — by national party committees, the president, vice president, members of Congress and federal candidates. The law also broadly bars the use of soft money in federal elections.

The law, sponsored by Sens. John McCain, R-Ariz., and Russ Feingold, D-Wis., and Reps. Christopher Shays, R-Conn., and Martin Meehan, D-Mass., was meant to rid federal elections of special-interest contributions that had ballooned into six- and even seven-figure checks from some donors.

The law's sponsors argued the FEC's interpretation would weaken that and other new limits, and Shays and Meehan sued to try to force the commission to write new rules.

The commission has already started work on some new regulations, but asked the appellate court to uphold a handful of the rules Kollar-Kotelly struck down. Those included:

— Its interpretation of the campaign finance law's new limits on coordination among interest groups, federal candidates and national party committees.

— The test it used to decide whether a lawmaker was violating the law's ban on the solicitation of corporate, union and unlimited donations known as soft money. Under the commission's original interpretation, the only way a federal candidate or officeholder could violate the solicitation ban would be by explicitly asking for soft money.

— Its reading of new campaign finance limits on ads and other outreach naming specific federal candidates close to elections.

The commission consists of three Democrats and three Republicans appointed by the president.