Regulator splits on disclosure requirements for pro-Clinton PAC

Reuters News
Posted: Mar 16, 2015 6:28 PM

By Lucas Iberico Lozada

NEW YORK (Reuters) - The U.S. federal agency that oversees political spending has deadlocked on a motion to open a limited investigation into whether a pro-Hillary Clinton PAC violated campaign finance disclosure rules.

The Federal Election Commission's split decision, revealed in documents made public on Friday, defied conventional partisan expectations. Three commissioners appointed by Democrats voted to open a probe into the Ready for Hillary PAC, while the FEC's three Republicans voted to dismiss the complaint, brought by the conservative Stop Hillary PAC.

The complaint broadly alleged that Ready for Hillary had improperly acted as Clinton's official campaign committee, an option the FEC unanimously rejected, the documents showed.

But the commissioners split on whether to investigate the PAC's failure to disclose a $136,000 payment for the one-time rental of an email list from Clinton's official Senate campaign committee. The Republicans said no further probe was needed, while Democrats backed a limited investigation.

The ruling refuted a commonly held assumption that commissioners' partisan bent will favor their fellow party-members, campaign finance experts and former FEC staffers said.

"It illustrates that although the FEC splits on party lines, they don't split for partisan advantage," said Paul Ryan, senior counsel for the Campaign Legal Center in Washington, D.C., a non-partisan group that advocates for campaign finance reform.

Democrats on the FEC have broadly favored increased campaign disclosure, while Republicans have tended to veer away from it, Ryan said.

"This is something that in the wisdom of the three Republicans did not require further inquiry, regardless of the apparent partisan nature of the complaint," said Kenneth Gross, a former associate general counsel for the FEC.

The Ready for Hillary PAC was formed in 2013 by Clinton supporters to encourage her to run. It provided an unofficial campaign infrastructure for the former secretary of state ahead of her expected entry in the next few months into the 2016 presidential race.

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Dan Backer, an attorney at DB Capitol Strategies in Washington who represented Stop Hillary, said the ruling leaves a lot of "open questions" about disclosure requirements.

"It's a tricky question of law, it's somewhat novel - I think we're going to have to look at it very closely," said Backer, adding that he and Stop Hillary had not yet decided whether to challenge the FEC's ruling in court.

(Reporting by Lucas Iberico Lozada; Editing by Leslie Adler)