The opinion of the court was delivered by: SWEET
This is an action brought by the Federal Election Commission (FEC) charging defendants Weinsten and Winfield Manufacturing Company with violations of the Federal Election Campaign Act of 1971 ("F.E.C.A." or "the Act"). More specifically, the complaint alleges that each defendant violated the Act as follows: Each
(a) made an illegal corporate contribution, in violation of 2 U.S.C. § 441b and its predecessor 18 U.S.C. § 610;
(b) made an illegal political contribution as a government contractor, in violation of 2 U.S.C. § 441c and its predecessor 18 U.S.C. § 611; and
(c) illegally made contributions in the names of others, in violation of 2 U.S.C. § 441f and its predecessor 18 U.S.C. § 614.
See complaint at paragraphs 7(a), 7(b), 7(c), 8(a), 8(b)(c).
Based upon these alleged violations, the complaint seeks the following relief:
(1) A permanent injunction prohibiting defendants and their successors in interest from acting in the manner specified in the complaint.
(2) A permanent injunction prohibiting defendants and their successors in interest "from taking any adverse action or discriminating against any employee of Winfield, or former employee seeking re-employment, on the basis of that employee's cooperation with the Federal Election Commission or this court action in the matters at issue herein." Complaint at page 4.
(3) The imposition of a "civil penalty" in the amount of $ 10,000 against each defendant.
Defendants have now moved to dismiss the complaint on the grounds that the version of the Act in effect at the time of the alleged violations did not provide for civil damages and that to apply the provisions of the Act which were enacted subsequent to the activities alleged in the complaint would violate the ex post facto clause of the Constitution; that injunctive relief would be improper in this case; and that the relevant provisions of the Act are unconstitutional. For the reasons stated below, the motion is denied.
This case arises out of facts discovered by the FEC as a result of its review of Governor Milton Shapp's submission for federal matching funds for his presidential primary campaign in 1976. The Presidential Primary Matching Payment Account Act (Pub.L.No.94-283), Chapter 96 of Title 26 of the United States Code, 26 U.S.C. 9031 Et seq., requires a primary candidate to obtain financial support from the residents of at least 20 states, in amounts of no more than $ 250 per contributor. A candidate who has received over $ 5,000 in contributions from residents of 20 states or more becomes eligible for matching funds. The candidate is then required to certify to the federal agency overseeing this program, the FEC, that these contributions have been received. Among the states Governor Shapp certified was Alabama, with $ 5,000 in contributions received, the minimum needed to qualify.
During its required review of listed contributions certified as matchable, the Commission learned that the employees of defendant Winfield Manufacturing Company (hereinafter "Winfield"), listed as contributors, had contributed funds supplied to them by defendants. Unable to reach a conciliation agreement with defendants, the F.E.C. then filed the complaint in this case, alleging that defendant Milton Weinsten, chief executive officer and sole shareholder of Winfield, a New York corporation in the business of manufacturing military uniforms for the federal government, directed a scheme whereby Winfield's corporate funds would be used to make those contributions. In sum, that scheme involved Weinsten telling the plant manager of the Winfield plant in Alabama, Hugh Walker, that the Shapp campaign needed $ 2,000 in contributions in amounts of no more than $ 250 per individual, that the manager should distribute funds among various Winfield employees, that the manager and these employees and their spouses should then write checks to the Shapp campaign for these amounts, and that the company would reimburse the manager for the funds so contributed. Mr. Walker did this, and Winfield's check was then given to him.
The parties are in substantial agreement about the above-described facts.
Defendants move to dismiss the complaint first on the ground that 2 U.S.C. §§ 441b, 441c and 441f (provisions of the F.E.C.A.) and their predecessors, are unconstitutional. The core of defendants' position is that § 441b is overly broad in prohibiting corporate political contributions in connection with enumerated political campaigns,
and therefore violates Winfield Corporation's First Amendment rights.
The issues presented here have been the subject of decisions in this Circuit and in the Supreme Court which demonstrate the complexity of the competing considerations. In United States v. Chestnut, 394 F. Supp. 581 (S.D.N.Y.1975) (Weinfeld, J.), Aff'd., 533 F.2d 40, 50-51 (2d Cir. 1976) the court upheld the predecessor of § 441b against a First Amendment attack on the ground that it was, Inter alia, overbroad. The court of appeals found "no need to amplify further the district court's comprehensive ...