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FEC v. AUTOMATED BUS. SERVS.

May 30, 1995

FEDERAL ELECTION COMMISSION, Applicant, against AUTOMATED BUSINESS SERVICES, CAKIM MANAGEMENT, INC., CASTILLO INTERNATIONAL, INC., CASTILLO COMMUNICATIONS, CASTILLO CULTURAL CENTER, INC., ILENE ADVERTISING, INC., INTERNATIONAL PEOPLES' LAW INSTITUTION, NEWMAN AND BRAUN, FRED NEWMAN PRODUCTIONS, INC., NEW ALLIANCE PARTY, RAINBOW LOBBY, INC., NATIONAL ALLIANCE, INC., Respondents.


The opinion of the court was delivered by: DAVID N. EDELSTEIN

 EDELSTEIN, District Judge:

 Petitioner, the Federal Election Commission ("the F.E.C."), has served, pursuant to 2 U.S.C. § 437d(a)(3), administrative subpoenas duces tecum on respondents, twelve vendors of goods or services to the Lenora B. Fulani for President Committee ("the Fulani Committee"). Currently before the Court is the F.E.C.'s motion for an order enforcing these subpoenas. This matter came before this Court sitting in Part I and was argued at a hearing on April 18, 1995. For the reasons discussed below, the motion is granted.

 BACKGROUND

 The F.E.C. is an independent agency of the federal government responsible for the administration and civil enforcement of the Federal Election Campaign Act of 1971, 2 U.S.C. § 431 et seq., and the Presidential Primary Matching Payment Account Act ("the Matching Payment Act"), 26 U.S.C. § 9031 et seq. The Matching Payment Act provides for partial federal financing of the campaign of any presidential primary candidate who meets certain eligibility requirements. Once a candidate's eligibility is established, he is entitled to receive payments from the Presidential Primary Matching Payment Account to match individual contributions of up to $ 250, subject to an overall ceiling of 50% of the statutory expenditure limitation. A candidate may use the public funds he receives only to defray qualified campaign expenses, as set forth by statute.

 Pursuant to its authority, the F.E.C. conducts investigations relating to its duty to examine and audit presidential campaigns that receive public funds under the Matching Payment Act. As part of its investigatory power, the F.E.C. is authorized to require the production of documentary evidence relating to its investigations, and the F.E.C. is authorized to initiate civil actions in order to obtain judicial enforcement of its subpoenas. If the F.E.C. finds that any amount of federal matching funds paid to a candidate was used for any purpose other than qualified campaign expenses, the candidate must repay that amount to the United States Treasury. In addition, if the F.E.C. finds that the candidate received matching funds in excess of his actual entitlement under the statute, the candidate must repay that amount to the Treasury.

 Lenora Fulani was a candidate for the 1992 presidential nomination of the Democratic Party, the New Alliance Party, and several other parties. The Lenora B. Fulani for President Committee registered with the F.E.C. as Ms. Fulani's authorized campaign committee, and received a total of $ 2,013,323.42 in public funds to use for qualified campaign expenses. The F.E.C. is currently investigating whether the Fulani Committee spent federal matching funds on non-qualified campaign expenses, received funds for non-qualified campaign expenses, and received funds in excess of its entitlement. Pursuant to this investigation, the F.E.C. served respondents with the administrative subpoenas duces tecum that are the subject of the instant motion. *fn1" The purpose of these subpoenas is to examine books and records from respondent vendors in order to determine whether these books and records are consistent with the Fulani Committee's books and records.

 DISCUSSION

 A court will enforce an administrative subpoena served by a government agency if the agency satisfies four requirements: (1) the agency subpoena must be for an investigation pursuant to a legitimate purpose; (2) the specific inquiries must be relevant to that purpose; (3) the information sought must not already be within the agency's possession; and (4) the administrative procedures must have been followed. See In re McVane, 44 F.3d 1127, 1135 (2d Cir. 1995). Respondents object to the subpoenas served on them for three reasons. *fn2"

 First, respondents argue that the instant subpoenas implicate their First Amendment associational rights, and that this Court must, therefore, employ a heightened standard of scrutiny in reviewing the subpoenas. Respondents argue that the subpoenas should not be enforced because the subpoenas do not meet the heightened scrutiny mandated by the First Amendment. In Federal Election Commission v. LaRouche Campaign, 817 F.2d 233, 234 (2d Cir. 1987) (per curiam), the Second Circuit held that when an administrative subpoena implicates First Amendment associational concerns, the administrative agency "is not automatically entitled to obtain all material that may in some way be relevant to a proper investigation. Rather, where the disclosure sought will compromise the privacy of individual political associations, and hence risks a chilling of unencumbered associational choices, the agency must make some showing of need for the material sought beyond its mere relevance to a proper investigation."

 Respondents have failed, however, to establish that they have any First Amendment associational rights that are implicated by the instant subpoenas. As this Court observed previously in denying respondents' motion to quash subpoenas served on a bank used by the Fulani Committee:

 
Although members of a political association and contributors to a political association have First Amendment associational rights, see Buckley v. Valeo, 424 U.S. 1, 66, 46 L. Ed. 2d 659, 96 S. Ct. 612 (1976), that may be implicated when an administrative agency serves that political association with a subpoena, the Vendors have failed to cite to any law in support of the proposition that a party that vends goods or services to a political association is entitled to similar First Amendment protection. The mere vending of goods or services to a political association neither evinces support for that association, nor makes the vendor a member of that association. Thus, the First Amendment clearly affords no such protection to vendors of goods or services to political associations.

 FEC v. Automated Business, Inc., M8-85, April 19, 1995 Memorandum Endorsement, at 3-4 (S.D.N.Y. 1995).

 Respondents argue, however, that they are entitled to First Amendment protection not normally available to vendors because they, and the persons who own or operate them, are long-time political associates of Lenora Fulani. This argument is entirely without merit. The notion that by doing business with vendors that are owned or operated by its political supporters, a campaign committee can shield those vendors from investigation by the F.E.C. is a baseless attempt to hamper the proper functioning of the F.E.C. As petitioner correctly points out, if respondents' argument were valid, "then ultimately all campaigns could make themselves immune from federal election laws, by only doing business ...


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