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May 15, 1986


The opinion of the court was delivered by: GOETTEL


The Federal Elections Commission (the "FEC"), a federal agency empowered with exclusive jurisdiction to administer, interpret and enforce the Federal Elections Campaign Act of 1971 ("FECA"; "the Act"), brought this action against the National Conservative Political Action Committee ("NCPAC") seeking declaratory and injunctive relief. NCPAC is a non-profit, non-membership organization registered in the District of Columbia to support or oppose candidates for elective office. During the period in question (March 1981 - August 1982), NCPAC was registered with the FEC as a multi-candidate political committee ("MCPC"). *fn1" The FEC contends that during the 1982 New York senatorial campaign, NCPAC contributed more than $5000 to a single candidate in violation of section 441a(a)(2)(A) of the Act. *fn2" In failing to report these contributions, NCPAC allegedly violated section 434(b)(H)(i) of the Act as well. *fn3" This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331 (1982).

Both parties now cross-move, pursuant to the Fed. R. Civ. P. 56, for summary judgment. NCPAC also moves, pursuant to Fed. R. Civ. P. 15 to amend its answer. For the purposes of this motion, the defendant's answer is deemed amended. For the reasons stated below, the plaintiff's motion for summary judgment is granted.

 I. Background

 The following facts are not in dispute. During the 1981-82 election cycle, NCPAC established "New Yorkers Fed Up with Moynihan," a political action committee dedicated to defeating the reelection bid of New York's United States Senator, Daniel Patrick Moynihan. NCPAC hired Arthur J. Finkelstein Associates ("Associates"), a polling and political consulting firm owned and operated by Arthur J. Finkelstein, to develop a media strategy, to conduct and analyze polls and to select election issues on which Senator Moynihan was most vulnerable. Finkelstein himself wrote the script for NCPAC's main radio commercial urging the defeat of Senator Moynihan. From April 1981 until August 1982 NCPAC funnelled $73,755 to Associates to urge Moynihan's defeat.

 In March 1981, prior to the commencement of NCPAC's anti-Moynihan effort, Bruce Caputo announced his intention to seek the Republican nomination for the U.S. Senate seat in New York. On or about that time, Caputo and his political committee, the Caputo for Senate Committee (the "Committee"), retained Finkelstein, a longtime friend of the candidate, as a paid political consultant. Between March 1981 and March 1982, when Caputo withdrew from the race, *fn4" the Committee paid Finkelstein's firm $28,000 to assist in all of the aspects of Caputo's campaign including formulating election strategy, hiring campaign staff, and utilizing the media.

 Finkelstein and NCPAC also had long been associated, *fn5" and, during the time NCPAC retained Finkelstein, it knew that Finkelstein was working directly for Caputo. In fact, it was Finkelstein who recruited Robin Martin, a Caputo campaign volunteer, to head the "New Yorkers Fed Up with Moynihan" media campaign.

 In January 1982, the FEC received a complaint from the New York State Democratic Committee alleging that independent expenditures reported by NCPAC for its anti-Moynihan campaign were actually in-kind contributions to Caputo and his authorized committee. *fn6" The complaint further alleged that these contributions exceeded section 441(a)(2)(A)'s $5,000 limit on contributions to a candidate and that NCPAC had violated section 434(b)(4)(H)(i) by failing to report the contributions. The FEC found reason to believe these allegations and, in April 1982, began an investigation. *fn7" In September 1983 the FEC found probable cause to believe that NCPAC had violated FECA's contribution and disclosure requirements and attempted to correct these violations through informal methods. *fn8" These methods failed *fn9" and, on February 6, 1984, the FEC brought this action to enforce the provisions of the Act. *fn10"

 II. Discussion

 Section 441a(a)(2)(A) of the Act forbids a multi-candidate political committee from making a contribution "to any candidate and his authorized political committees with respect to any election for Federal office which, in the aggregate, exceeds $5000." 2 U.S.C. 441a(a)(2)(A) (1982). Expenditures made "in cooperation, consultation, or concert, with, . . . a candidate, his authorized political committees, or their agents, shall be considered to be a contribution to such candidate." *fn11" 2 U.S.C. § 441a(7)(B)(i) (1982). FEC regulations clarify this language. *fn12" According to those regulations, the aforementioned definition of contribution includes any expenditure "[m]ade with the cooperation or with the prior consent of, or in consultation with, or at the request or suggestion of, a candidate or any agent . . . of the candidate . . . ." 11 C.F.R. § 109.1(b)(4) (1986). This definition, in turn, encompasses

 [a]ny arrangement, coordination or direction by the candidate or his or her agent prior to the publication, distribution, display, or broadcase of the communication. An expenditure will be presumed to be so made when it is --

 (A) Based on information about the candidates plans, projects, or needs provided to the expending person by the candidate, or by the candidate's agents, with a view toward having an expenditure made;

 (B) Made by or through any person who is, or has been, authorized to raise or expend funds, who is, or has been, an officer of an authorized committee, or who is, or has been, receiving any form of compensation or reimbursement from the candidate, the candidate's committee or agent . . . .

 Id. at § 109.1(b)(4)(i). The FEC argues that the $73,755 NCPAC expended through Finkelstein, who was Caputo's agent, actually constituted contributions to the Caputo campaign. NCPAC thereby exceeded the $5,000 limit on contributions *fn13" and violated the corresponding disclosure provisions.

 NCPAC does not dispute that, on their face, the statute and the relevant regulations forbid its conduct. It, nevertheless, maintains that it can prevail on its crossmotion for summary judgment because it relied on an FEC advisory opinion. *fn14" Under the Act,

 any person involved in the specific transaction or activity with respect to which [an] advisory opinion [has been] rendered . . . [and] who [has] relied upon [that] advisory opinion and who act[ed] in good faith in accordance with the provisions and findings of [that] advisory opinion shall not, as a result of any such act be subject to any sanction provided by [FECA].

 2 U.S.C. §§ 437f(c)(1)(A) & (2) (1982). NCPAC claims to have relied in good faith on a December 1980 advisory opinion and asserts that it would not have exceeded the $5000 contribution limit had it believed it was acting contrary to the provisions of the Act.

 In December 1979, NCPAC wrote to the FEC requesting an advisory opinion with regard to certain proposed activities it was contemplating. NCPAC was particularly concerned about whether an agency relationship between a political consultant or any other vendor and a candidate would jeopardize its ability to use the same consultant or vendor to oppose the candidate's opponent. *fn15" NCPAC posited nine, fact-specific questions to the FEC. It now contends that it relied on the FEC's responses to two of those questions in taking the actions that are the subject of this suit.

 The first question (or "situation," as NCPAC termed it) posits NCPAC hiring an advertising firm to design advertisements which advocate the defeat of a candidate campaigning for the Democratic nomination for President. This same agency is working for a candidate seeking the Republican nomination. Although the Commission did not have enough information to determine whether the firm was an "agent" of the Republican candidate, it noted that since these "are two separately distinct races . . . and the Democratic candidate and the Republican candidates are not opponents at this point" it would be permissible to retain the same advertising agency. *fn16" NCPAC's Memorandum of Law, Exhibit A at 4.

 The eighth situation posits NCPAC contributing a poll undertaken as part of an independent expenditure campaign against a candidate for the Democratic senatorial nomination to a candidate for the Republican nomination in the same state. The FEC stated that contributing the poll results "would, of course, constitute a contribution in-kind by NCPAC to the candidate's campaign committee." Id. at 9-10. However, during the primary campaign, NCPAC could "communicate" with the Republican candidate. *fn17"

 The advisory opinion contained the caveat that "an expenditure that appears to be independent on the facts presented [by NCPAC] may not in fact be so [in a different factual setting]". Id. at 4. Moreover, section 437f(c)(1)(B) of FECA provides that an advisory opinion can be relied on only if the "specific transaction or activity [is] indistinguishable in all its material aspects from the transaction or activity [about] which the advisory opinion [was] rendered." 2 U.S.C. § 437f(c)(1)(B) (1982). Thus, NCPAC can prevail in this action only if it can establish that the situation at bar is indistinguishable from the situations reviewed in the advisory opinion.

 Careful analysis reveals substantial dissimilarities between the facts in issue and those posited in the FEC's advisory opinion, First, Finkelstein's role was far more crucial than that of the specified "agents" in situations 1 and 8. Second, NCPAC's coordination with Caputo, through Finkelstein, far exceeded the "communication" sanctioned by the FEC. Finally, Caputo and Moynihan were more like opponents than like the candidates in "separate and distinct races" envisioned by the FEC.

 A. Finkelstein's Role

 In the two "situations" upon which it relies, NCPAC hypothesized an advertising firm that would work simultaneously for NCPAC and for a Republican candidate and a polling concern working for NCPAC that would contribute a poll to the Republican candidate. The role of Finkelstein and his firm in both the NCPAC and Caputo efforts was far more significant than that of a vendor of advertising services or a polling concern. Finkelstein was NCPAC's key strategist. He formulated and directed the execution of NCPAC's plan to defeat Senator Moynihan. Finkelstein drafted NCPAC's radio spots and recruited the chairman of NCPAC's anti-Moynihan effort. Simultaneously, he served as the chief architect of Bruce Caputo's campaign. Finkelstein helped prepare the candidate's announcement speech and initial fundraising letter. He also chaired staff meetings, made recommendations with respect to staff assignments, and authored, in large part, the Caputo Committee's campaign commercials. Although the general questions with which NCPAC prefaced its request for an advisory opinion referred to "consultants," see supra n. 15, neither that general reference, nor the specific references in situations 1 or 8 to an "advertising firm" or a "poll," can reasonably be interpreted to apply to a key campaign strategist for both a candidate and a committee making independent expenditures designed to defeat that candidate's future opponent.

 B. Communication v. Coordination

 NCPAC asserts that it communicated with the Caputo campaign in reliance on the FEC's answer to situation 8 which stated, "During the primary election period NCPAC may communicate with the Republican candidate . . . ." See supra n. 17. According to NCPAC's Chairman, John T. Dolan: "We believed all communications . . . between [us] and [the] agents for the Caputo for the Senate Committee were 100 percent legal up until the time . . . Mr. Caputo got the nomination." FEC Memorandum of Law, Exhibit No. 4, Deposition of John T. Dolan at 46. In fact, NCPAC believed the advisory opinion permitted NCPAC and the Caputo committee to "coordinate" their activities. Dolan thus asserted,

 If someone can tell me the difference between communication and coordination, I would like them to tell me what it is.

 I can't believe when we asked this opinion the Federal Election Commission thought we meant communications discussing the weather. We were very specific in the types of information we asked about in that Advisory Opinion, and communications to any normal, rational human being, I am sure, would imply as related to political information.

 FEC Memorandum of Law, Exhibit No. 4, Deposition of John T. Dolan at 53.

 As part of its strategy, NCPAC commissioned a poll from Finkelstein to assess Moynihan's strengths and weaknesses and to determine the best way to oppose him. NCPAC then shared the results of its poll, which revealed Moynihan's vulnerabilities and profiled public attitudes about crucial issues, with the Caputo campaign. Were this the extent of NCPAC's consultation with the Caputo committee, it might fall within the realm of communication sanctioned by the advisory opinion. But NCPAC went much further.

 A comparison of the NCPAC and Caputo campaign materials evidences extensive consultation and coordination. The materials are remarkably similar in style, content and language. In Caputo's announcement speech and initial fundraising letter, for example, Senator Moynihan is said to have "voted to give away the Panama Canal" and "voted against capital punishment." Exhibits to Defendant [sic] Federal Election Commission's Motion for Summary Judgment, Exhibit 22. Senator Moynihan is also labelled. the "father of the runaway welfare system," rated by the American Conservative Union as "the most liberal Senator, tied with George McGovern, more liberal in fact than Ted Kennedy." Id., Exhibit 21. NCPAC's radio spot repeats these same allegations almost word for word. Moynihan is depicted therein as having "voted to give away the Panama Canal," as having "voted against capital punishment," and as "the father of our runaway welfare system." NCPAC's radio spot also refers to Moynihan's American Conservative Union rating, and contrasts Moynihan's record with those of Senators Kennedy and McGovern. Id., Exhibit 17. *fn18"

 According to NCPAC, the advisory opinion permits communication and coordination between NCPAC and a Republican candidate, the result of which are a NCPAC "independent expenditure" campaign and a campaign for the Republican nomination that are mirror images of one another. That NCPAC overstates the scope of permissible communication is made plain by the degree of coordination that NCPAC would have the advisory opinion sanction.

 C. The Primary/General Election Distinction

 NCPAC's final contention is that it relied on the advisory opinion's distinction between (1) a political consultant who works for NCPAC in opposing a Democratic candidate for the nomination while also performing services for a candidate for the Republican nomination and (2) a consultant who supports the Republican candidate during the general election and, at the same time, assists NCPAC in opposing that candidate's opponent. No doubt the answers to both situations 1 and 8 recognize the primary/general election distinction. And, indeed, Moynihan and Caputo were candidates in separate primary races. However, the primary/general election distinction is blurred beyond recognition in this case. Caputo and Moynihan were, for all practical purposes, opponents. When Caputo announced his candidacy in September 1981, no other Republican was seeking that nomination. *fn19" Two months later, in November 1981, NCPAC announced its drive to unseat Moynihan. At that time, Moynihan was the only Democratic candidate. *fn20"

 Finkelstein's strategy makes clear that Caputo and Moynihan were more than simply candidates in separate primaries. Before his withdrawal, Caputo was the frontrunner to win the Republican nomination. Thus, Finkelstein's strategy for Caputo was to preempt the field and make Caputo the only viable Republican candidate. Finkelstein consciously set out to make Caputo Moynihan's tacit opponent during primary period. *fn21" Thus, Finkelstein had Caputo open his campaign with an attack on Moynihan. NCPAC ignores the reality when it contends that Caputo and Moynihan were in two distinct races in the same sense as the hypothetical candidates in the FEC's advisory opinion. NCPAC's expenditures were not only hurting Moynihan, they were aiding Caputo. More important for our purposes, they were increasing Caputo's chances for success in any future general election confrontation with Moynihan. The FEC's concern about coordination between contributions to a candidate and expenditures against that candidate's opponent is clearly implicated by NCPAC's anti-Moynihan activities.

 It matters not that Caputo never actually opposed Moynihan in a primary or general election. Had Caputo not departed the race, Moynihan and Caputo may well have remained opponents through the general election. Caputo's withdrawal prior to the primary does not negate the impact of any prior conduct that may have violated the federal election laws.

 The distinctions between the facts as they actually unfolded and the facts addressed in the FEC's advisory opinion are patent. Finkelstein's central role in both the NCPAC and Caputo efforts, the obvious coordination between the two efforts, their shared goals and parallel strategies, and the posture of the Caputo/Moynihan contest together demonstrate an impermissible degree of coordination and preclude any reliance on the advisory opinion. Any such reliance would overstep the wording of the advisory opinion and contradict its underlying spirit as well. Simply put, the advisory opinion does not sanction NCPAC and a Republican candidate to develop and implement, through a common political consultant, nearly identical campaigns -- regardless of whether those campaigns take place during the primary or general election season. *fn22"

 III. Conclusion

 NCPAC's anti-Moynihan expenditures must be deemed contributions to the Caputo campaign. NCPAC thus exceeded FECA's $5000 limit on contributions by a multi-candidate political committee to a candidate or its political committee and violated the Act's disclosure requirements by failing to report its contributions. The plaintiff's motion for summary judgment is granted. The defendant's cross-motion for summary judgment is denied.

 The plaintiff will enter judgment accordingly.

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