# Mariani v. United States

> District Court, M.D. Pennsylvania · October 27, 1999 · 80 F. Supp. 2d 352

URL: https://www.frixlaw.com/law-library/cases/2565550

## Case

- **Full name:** Renato P. MARIANI, Plaintiff, v. UNITED STATES of America, Defendant, Federal Election Commission, Intervenor-Defendant
- **Court:** District Court, M.D. Pennsylvania
- **Decided:** October 27, 1999
- **Citations:** 80 F. Supp. 2d 352; 53 Fed. R. Serv. 766; 1999 U.S. Dist. LEXIS 20571; 1999 WL 1390368
- **Precedential status:** Published
- **Opinion:** Opinion by Vanaskie
- **Judges:** Vanaskie
- **Cited by:** 9 later opinions in the Frix Law Library

## Citator (automated)

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## Opinion text

MEMORANDUM
VANASKIE, Chief Judge.
INTRODUCTION
This action under 2 U.S.C. § 437h challenges the constitutionality of provisions of the Federal Election Campaign Act (“FECA” or “Act”), 2 U.S.C. §§ 431 ,
et seq.,
which ban corporate contributions to candidates for federal elective office, 2 U.S.C. § 441b (the “corporate contribution ban”), and prohibit making campaign contributions in the name of another person, 2 U.S.C. § 441f (the “conduit contribution ban”). Section 437h of Title 2 U.S.C. assigns to the
en banc
court of appeals the role of decision maker on constitutional challenges to FECA provisions, with the district court’s task being relegated to determining, in the first instance, whether the constitutional challenge is frivolous.
See California Med. Ass’n v. FEC,
453 U.S. 182 , 193-94 n. 14, 101 S.Ct. 2712 , 69 L.Ed.2d 567 (1981). If the issues presented are not frivolous, the district court is to make findings of fact and certify the issues to be resolved to the appellate court.
See Buckley v. Valeo,
519 F.2d 817, 818 (D.C.Cir.1975)
(en
banc)
(per curiam)
(remanding to district court for findings of fact before reaching merits).
Plaintiff Renato P. Mariani’s constitutional challenges to the corporate and conduit contribution bans arise in the context of a criminal prosecution against him and others in connection with contributions made to several candidates for federal elective office, including the presidential candidacies of Bob Dole and Bill Clinton. Essentially, the indictment in question charges that between August of 1994 and December of 1996, Mariani, who was then president of Empire Sanitary Landfill, Inc. (“Empire”) and Danella Environmental Technologies, Inc. (“Danella”), as well as other officers of Empire and Danella, used various employees and others associated with Empire and Danella as conduits for contributions to the campaigns of Dole, Clinton and others, with the ultimate source of the campaign contributions being Empire’s corporate treasury.
Mariani contends that the ability of corporations to make contributions to political parties and political action committees (“soft money”) in unlimited amounts undermines the justification for the corporate contribution ban — eliminating corruption and the appearance of corruption arising from financing campaigns from large aggregations of wealth embodied in corporate treasuries. As explained by Mariani:
Because a statute that limits First Amendment interest (as FECA concededly does) can only survive the strict scrutiny imposed by law if it directly advances a compelling state interest in a narrow and precise way, ... the easy availability of the elephantine soft money loophole leaves the statute one that simultaneously — and thus unconstitutionally — limits First Amendment interests
and
fails directly to advance its goals.
(Brief in Opposition to Defendants’ Motion to Dismiss, Dkt. Entry 32 at 6 (emphasis in original).)
By Memorandum and Order filed on March 25, 1999, I determined that Maria-ni’s challenge to the corporate contribution ban was not legally frivolous. In making this determination, I observed that “Mar-iani has presented facts on which to base a rational argument that the ostensible pur
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poses of a ban on corporate contributions to candidates for federal elective office— eliminating the corruption and appearance of corruption resulting from corporate contributions to individual candidates,
see, e.g., FEC v. National Right to Work Comm.,
459 U.S. 197, 207-08 , 103 S.Ct. 552 , 74 L.Ed.2d 364 (1982)-is completely undermined by the allowance of ‘soft money’ contributions by corporations.”
(Id.
at 4.) Because the challenge to the corporate contribution ban was not frivolous, I declined to make a separate determination as to the challenge to the conduit contribution ban, finding that interests of judicial economy and expedition militated against such a separate determination.
Id.
at 9 n. 3.
Having decided that this action is not frivolous, I must now make findings of fact pertinent to the issues to be certified to the Third Circuit for
en banc
resolution. In connection with this endeavor, the parties were directed to submit proposed findings of fact following the completion of pertinent discovery.
As a result of the process established by Court Order, the parties have stipulated to 117 proposed findings of fact and agreed to the inclusion of 279 documents in the evi-dentiary record for this case.
See
Joint Stipulation of Facts filed on July 26, 1999, Dkt. Entry 53. The United States and intervenor-defendant Federal Election Commission (“FEC”) (referred to jointly as the “Government”), submitted 36 separate proposed findings of fact, a number of which are admitted by Mariani. In addition to the 117 findings of fact to which he has stipulated, Mariam has also proposed 468 additional findings of fact. In addition to the 279 documents to which the parties had stipulated, Mariani has also filed “Supplemental Exhibits.”
I have carefully reviewed the parties’ submissions and find that many proposed findings, particularly those that are not disputed as to factual accuracy, may be adopted verbatim.
1
A number of proposed findings, particularly those that merely quote or restate another person’s testimony or statement, however, are not appropriate as findings of fact.
2
As argued by the Government, a number of Mariani’s proposed findings are also redundant and have not been adopted for that reason.
3
While both the United States and FEC have agreed to the accuracy of an overwhelming majority of the remainder of Mariani’s proposed findings, they have contested the relevancy and materiality of all but six of Mariani’s factual assertions. The United States and/or the FEC have also objected to particular findings on the grounds that the evidence proffered by Mariani in support of particular assertions is not admissible. Examples of purportedly inadmissible evidence include documents that had been filed by the FEC in other litigation; an FEC Notice of Proposed Rulemaking; the Minority Report of the
Final Report of the Committee on Governmental Affairs: Investigation of Illegal or Improper Activities in Connection With 1996 Federal Election Campaigns,
S.Rep. No. 105-167 (1998) [Joint Exhibit (“JEx.”) ] 21;
4
statistics from a study con
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ducted by the Center for Responsive Politics; and testimony of several witnesses, including former United States Senator Alan K. Simpson.
Some objections have merit; for example, hearsay objections where Mariani is relying on out of court statements for the truth of the matter asserted.
5
Generally speaking, however, the Government’s objections are meritless. Indeed, only a few of the particular objections warrant any substantial discussion. Before proceeding to making my findings of fact, I will briefly explain my rulings on evidentiary objections.
RULINGS ON EVIDENTIARY OBJECTIONS
A.
Relevance and Materiality
The Government contends that in light of its concession “that soft money donations, and expenditures of soft money on issue advertisements and party-building activities, may influence federal elections to some degree, no evidentiary record, or at least not the incredible detail regarding those activities proposed by plaintiff (particularly the witness statements and expert testimony), is necessary to decide whether the existence of soft money donations and expenditures renders sections 441b and 441f unconstitutional.” Joint Response to Plaintiffs Proposed Findings of Fact, Dkt. Entry 69, at 2-3. The Government thus contends that all but 6 of Maria-ni’s 585 proposed findings are irrelevant and/or lack sufficient probative value. The Government makes this argument despite having stipulated to 117 of Mariani’s' 585 separate statements of fact and notwithstanding the fact that it does not contest the factual accuracy of the overwhelming majority of Mariani’s assertions.
Mariani’s non-frivolous constitutional challenge concerns the impact of corporate soft money contributions on federal elections and the public’s perception of the influence of such contributions. Any evidence that has a tendency to prove that impact and/or the public’s perception of the influence of such soft money contributions is plainly relevant. FRE 401;
Failla v. City of Passaic,
146 F.3d 149, 159 (3d Cir.1998).
The Government does not seriously contest the obvious fact that the evidentiary materials tendered in this case do indeed have a tendency to show the influence of soft money contributions and/or the public perception of those contributions. Instead, the Government essentially maintains that the corporate contribution ban is unassailable in light of existing case law precedents. As pointed out by Mariani, the Government is essentially rehashing arguments I considered in determining that Mariani’s claims are non-frivolous. Now that this threshold question has been answered in favor of Mariani, the Government’s efforts to avoid findings of fact pertinent to the existing political contribution scheme is unavailing. The general objections of irrelevance and immateriality are, therefore, overruled.
6
The Government has argued in the alternative that, rather than making any findings of fact, I should simply certify a documentary record to the Court of Appeals, thereby allowing it in the first instance to draw factual conclusions from the voluminous record. While this proposal has some attraction, it is inconsistent with what I understand to be the role of the
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district court in this legislative review mechanism. Because it is incumbent upon the district judge to make findings of fact,
Bread Political Action Comm. v. FEC,
455 U.S. 577, 580 , 102 S.Ct. 1235 , 71 L.Ed.2d 432 (1982);
Khachaturian v. FEC,
980 F.2d 330, 331 (5th Cir.1992)
(en
banc)
(per curiam); Buckley v. Valeo,
519 F.2d 821 (D.C.Cir.1975)
(en banc) (per curiam),
the Government’s request that I simply certify a documentary record must be rejected.
B.
FEC Filings in Other Cases
Also without merit is the objection interposed by the United States to every fact proffered by Mariani that relies upon the FEC’s submissions in other litigations. Mariani has tendered a number of proposed findings that are based upon filings made by the FEC in cases pending in other jurisdictions pertaining to the impact of soft money contributions. Notably, the FEC has not objected to such proposed findings of fact. The FEC contends in those other cases that its factual assertions are correct and that the underlying source materials are competent evidence. Furthermore, it is clear that FEC statements made in other litigations constitute “admissions of a party opponent” under FRE 801(d)(2). While the United States itself may not be “bound” by FEC’s admissions, they are nonetheless admissible in this case. The United States was, of course, free to offer countervailing evidence, but it cannot compel exclusion of FEC’s admissions.
Likewise, the United States’ objections to statements made by FEC witnesses in other cases are generally meritless. As pointed out by Mariani, the declarations from which these statements were taken are among the documents to which the parties jointly stipulated, reserving the right to object only to relevance and materiality. As further pointed out by Mariani, these declarations were submitted by the FEC in other cases and were relied upon by the FEC in those cases in submitting “Statements of Material Fact Not in Genuine Dispute.”
7
Under these circumstances, it is appropriate for Mariani to present these declarations as evidentiary support for proposed findings of fact.
C.
The Competence of Various Witnesses
Objections interposed only on behalf of the United States to various proposed findings of fact on the grounds that the witness declarations underlying the factual assertions are not based upon personal knowledge or reflect incompetent opinions are generally without merit. Mariani has sufficiently demonstrated that witnesses such as Leon Billings, formerly Executive Director of the Democratic Senatorial Campaign Committee, Alan Hassenfeld, Chairman of the Board of Hasbro, Inc. who has conveyed personal and corporate monies to political party committees, and others possess the requisite personal knowledge for the factual assertions contained in their declarations.
8
Moreover, Mariani has shown that the opinions of these and other witnesses are both rationally based on their perceptions and helpful to a clear understanding of their testimony or to the determination of facts in issue so as to be admissible under FRE 701. The fact that the FEC has not joined in the United States’ challenge to the adequacy of the foundation for the testimony provided by these witnesses buttresses the con-
*358
elusion that their testimony is indeed competent.
D.
Admissibility of List of Top Soft Money Contributors
The Government’s objection to the admissibility of the Center for Responsive Politics’ (“CRP”) “Top Fifty Soft Money Contributors” list is also without merit.
9
The Government contends that the CRP figures should be excluded because they purportedly aggregate permissible “hard money” and “soft money” contributions. The declaration of the CRP Executive Director, submitted as Joint Exhibit 6, however, points out that CRP separated hard from soft money contributions in compiling its list. The fact that the CRP grouped contributions from corporate donors with contributions made by employees of those corporations is supported by a rational inference that the intent of the donations is to benefit the corporate entity itself. That it may not be possible to divine the motivation of an individual contributor who is affiliated with a large corporate donor may serve to undermine the point sought to be made by the evidence, but it does not compel its exclusion.
E.
Admissibility of FEC Notice of Proposed Rulemaking
Another objection amenable to discussion in a generalized manner is the Government’s contention that the FEC Notice of Proposed Rulemaking (“NOPR”) cannot form the basis for factual findings in this case.
10
The Government points out that the NOPR “makes
tentative
conclusions and factual assumptions about the corrosive effects of soft money on the federal campaign finance system and the need for reform.” (Joint Response to Plaintiffs Proposed Findings of Fact, Dkt. Entry 69, at 16; emphasis added.) That the statements in the NOPR are “tentative,” however, does not detract from the fact that they nonetheless constitute admissions of a party opponent under FRE 801(d)(2). While the Government is entitled to present evidence that may persuade a fact-finder that the “tentative” conclusions and assumptions are erroneous, it cannot avoid the admissibility of the NOPR in the first instance.
F.Admissibility of the Thompson Committee Minority Report
The final objection worthy of general discussion concerns the proposed findings that rely upon the Thompson Committee Minority Report. This objection, interposed on behalf of the United States only, pertains to Mariani’s Proposed Findings 10, 11, 12-14, 34-36, 46, 94, 104, 106, 121, 126, 143, 172-181, 183-188, 191-99, 360, 361, 364, 438, 466, 467, 476-78, 521, 542, 581, and 583-85.
Mariani contends that this court should admit parts of the Thompson Committee Minority Report under the exception to the hearsay rule applicable to public records and reports set forth in Federal Rule of Evidence 803(8)(C). One scholar has noted that “[t]he Rule 803(8)(C) hearsay exception goes far beyond the common law exception for public records, is controversial and complex, [and] raises numerous difficult evidentiary issues....”
11
The rule, in pertinent part, states:
The following are not excluded by the hearsay rule, even though the declarant is available as a witness:
(8) Public records and reports. Records, reports, statements, or data compilations, in any form, of public offices or agencies, setting forth ... (C) in civil
*359
actions and proceedings ... factual findings resulting from an investigation made pursuant to authority granted by law, unless the sources of information or other circumstances indicate lack of trustworthiness.
Mariani claims that the Thompson Committee Minority Report falls squarely within this hearsay exception, while the United States claims that the report is inadmissible because the “Minority Report’s findings and conclusions were not adopted by the majority.” (Dkt. Entry 70 at 7.) The United States ties this argument to the fact that the “report’s findings must be ‘authorized by law.’ ”
Id.
The United States argues in the alternative that if the court admits the evidence, the court should give that evidence little weight.
Id.
(citing cases of statutory construction in which courts paid little heed to the minority view).
Mariani responds to these arguments on various levels. First he notes that many of the findings of the Minority and Majority Reports “overlap.” (Reply Br. in Supp. of PL’s Proposed Findings of Fact and Proposed Certified Questions, Dkt. Entry 93 at 24.) Next, he notes that the FEC, an intervenor-defendant in this case, itself offered portions of the Minority Report in an ongoing case,
Federal Election Comm’n. v. Colorado Republican Fed. Campaign Comm.,
Civil Action No. 89-N-1159 (D.Colo.).
Id.
Third, Mariani cites a long line of decisions purporting to support the admissibility of congressional reports. Finally, Mariani argues that he offers the evidence, not for its truth, but to show the “appearance of corruption.” (Dkt. Entry 93 at 24.)
The seminal Supreme Court case of
Beech Aircraft v. Rainey,
488 U.S. 153 , 109 S.Ct. 439 , 102 L.Ed.2d 445 (1988), helped clarify the law relating to Rule 803(8)(C). The Court unanimously held that the rule has a broad application that includes both the “factual findings” and the “opinions” that accompany such findings. And it went on to emphasize the mechanisms trial courts possess to protect the integrity of evidence. The Court, in an extensive analysis of the ramifications of a liberal policy of admission under Rule 803(8)(C), discussed the Advisory Committee’s comments on the rule.
Nowhere in its comments is there the slightest indication that it even considered the solution of admitting only “factual” statements from such reports. Rather, the Committee referred throughout to “reports” without any such differentiation regarding the statements they contained .... Its solution as to their admissibility is clearly stated in the final paragraph of its report on this Rule. That solution consists of two principles: First, “the rule ... assumes admissibility in the first instance .... ” Second, it provides “ample provision for escape if sufficient negative factors are present.”
Id.
at 166-7 , 109 S.Ct. 439 (internal notes omitted). The Court went on to discuss those important “escape” mechanisms, including “safeguards built into other portions of the Federal Rules, such as those dealing with relevance and prejudice.”
Id.
at 167-8 , 109 S.Ct. 439 . The Court also laid great emphasis on the “trustworthiness” evaluation Rule 803 requires.
12
Fi
*360
nally, the Court noted that “the admission of a report containing ‘conclusions’ is subject to the ultimate safeguard — the opponent’s right to present evidence tending to contradict or diminish the weight of those conclusions.”
Id.
at 168 , 109 S.Ct. 439 .
While the
Beech
decision is not precisely on point in this case because the report at issue was not congressional, its holding is central to resolving the government’s objections. The
Beech
decision validates liberal admissibility and then recognizes the built-in protections against extraneous evidence. Much of the decision focuses on the trial court’s superior vantage point and ability to regulate the evidence through its discretion.
Id.
at 162 , 109 S.Ct. 439 .
Lower courts have explicitly addressed the admission of congressional reports. In
Hobson v. Wilson,
556 F.Supp. 1157 (D.D.C.1982),
aff'd in part, rev’d in part,
737 F.2d 1 (D.C.Cir.1984),
cert. denied,
470 U.S. 1084 , 105 S.Ct. 1843 , 85 L.Ed.2d 142 (1985), the court admitted into evidence portions of the
Staff Report of Select Committee to Study Governmental Operations with respect to Intelligence Activities
(“Church Report”), S.Rep. No. 94-755, Supp. Vol. 3.
Hobson
focused on the fact that “[t]he segments of the Church Committee Report submitted to the jury reflected adherence to appropriate standards of scholarly responsibility, investigative integrity, and trustworthiness.”
Id.
at 1181 .
Other courts have excluded congressional reports. In
Anderson v. City of New York,
657 F.Supp. 1571 (S.D.N.Y.1987), the district judge found a congressional subcommittee report inadmissible because it lacked the “ordinary [indicia] of reliability.”
Id.
at 1579 . That court’s decision, although a
pre-Beech
ruling, relied on the four main criteria the Advisory Committee laid out in the notes to the rule — the same trustworthiness criteria on which
Beech
placed so much emphasis.
Anderson,
657 F.Supp. at 1578-9 .
Professor Schwartz notes that “because it is assumed that public officials perform their duties properly, investigatory reports encompassed within Rule 803(8)(C) are presumed to be trustworthy. The burden is thus placed upon the party opposing the admissibility of the report to demonstrate its lack of reliability,” (citing
Miller v. Field,
35 F.3d 1088, 1090 (6th Cir.1994);
Montiel v. City of Los Angeles, 2
F.3d 335 (9th Cir.1993).
13
This meshes well with the
Beech
Couit’s holding that the rule “presumes admissibility.”
Beech,
488 U.S. at 167 , 109 S.Ct. 439 .
In the matter
sub judice,
the United States hints at the report’s untrustworthiness, but does not directly address it. Instead, it suggests that the report be excluded because, according to the United States, the Minority Report is not “authorized by law as required by Rule 803(8)(C).” (Dkt. Entry 70 at 7.) In making this argument, the United States does
not
assert that the Thompson Committee Report itself was not authorized by law. Moreover, the United States offers no concrete support that a minority report is not authorized by law. Instead, the United States cites many courts that have ignored minority views in statutory construction. (Dkt. Entry 70 at 7-8.) These cases are inapposite; Mariani does not offer the Minority Report for statutory construction, but rather to address the subject of the investigation,
i.e.,
campaign finance.
Rule 803(8)(C) requires that the “factual findings” must result from “an investigation made pursuant to authority granted by law.” The Rule does not, however, require that the “factual findings” represent a majority view.
The nature of Congress is such, of course, that opposing views tend to be separated for political reasons. The United States, however, has not established that the mere separation of the Minority Report from the Majority Report proves
*361
that the Minority Report is not “authorized by law.” In fact, Senate rules explicitly allow minority reports:
If at the time of approval of a measure or matter by any committee (except for the Committee on Appropriations), any member of the committee gives notice of intention to file supplemental,
minority,
or additional views, that member shall be entitled to not less than three calendar days in which to file such views, in writing, with the clerk of the committee.
All such views
so filed by one or more members of the committee shall be included within,
and shall be a part of, the report
filed by the committee with respect to that measure or matter.
Senate Rules, XXVI; Committee Procedures, 10(c), 105th Cong., Congressional Information Service, Inc. 1998 (emphasis added). Clearly, the Minority Report meets the threshold requirement of being authorized by law.
The “rule of completeness” embodied in FRE 106 buttresses the conclusion that the Minority Report is to be regarded as “authorized by law.” FRE 106 requires that a court allow the parties to demonstrate the overall tenor of a document. “When a writing or recorded statement or part thereof is introduced by a party, an adverse party may require the introduction at that time of any other part or any other writing or recorded statement which ought in fairness to be considered contemporaneously with it.”
Id.
Acceptance of only the Majority Report would be directly contrary to the concerns that Rule 106 addresses.
14
In the context of congressional reports, one must expect at least some polarity between the majority and minority. Allowing in one side without the other might do violence to the completeness doctrine that Rule 106 supports.
The Joint Stipulation of Facts notes that the committee “held 32 days of hearings ... took 200 depositions ... [and] received more than 1,500,000 pages of documents.”
Id.
at ¶ 105. The investigation was timely, comprehensive, conducted by those with special skill and experience, and employed procedural safeguards. An extensive record exists. Thus, circumstantial guarantees of trustworthiness and reliability abound. Accordingly, the Minority Report will be admitted and its contents considered to the extent they are probative of any fact material to the issues presented by Mariani.
G.
Remaining Objections
The remaining objections do not require extensive discussion. As to Mariani’s objections to the Government’s proposed findings of fact, I have sustained the objection to proposed finding 7 for lack of evi-dentiary support. I have also declined to adopt those proposed Government Findings of Fact that simply recite excerpts of testimony from former Senator Alan K. Simpson (Government Findings of Fact 27, 31-36.) I have also carefully considered objections to proposed Government findings that pertained to phraseology (e.g., Government Proposed Findings 21, 22 and 23) and have modified those proposed findings so they are consistent with the evidence and the law.
As to the remaining objections interposed by the FEC and/or the United States, I have carefully considered contentions that certain factual assertions were actually legal conclusions. I have also carefully considered how certain findings proposed by Mariani have been phrased. As noted above, I have generally not accepted proposed findings of fact that merely quote testimony or statements. I have also not accepted proposed findings that
*362
are vague or are otherwise inappropriate for a factual finding.
(E.g.,
Mariani’s Proposed Findings 97, 214, 222, 257, 315, 324, 343, 471, 472, 541, 545 and 546.) As noted above, I have also eliminated a number of proposed findings of fact that, although not necessarily disputed by FEC and/or the United States, are cumulative and redundant. Objections to findings of fact that cite newspaper and magazine articles (Mariani’s proposed findings 518-24, 534-535, 541, 560 and 561), interposed only on behalf of the United States, have been overruled to the extent that the articles have not been offered for the truth of the matter asserted, but instead to demonstrate the appearance of corruption created by soft money contributions. As explained in
Democratic Party v. National Conservative Political Action Committee,
578 F.Supp. 797, 829 (E.D.Pa.1983),
aff'd in part, rev’d in part,
470 U.S. 480 , 105 S.Ct. 1459 , 84 L.Ed.2d 455 (1985), “[t]he hearsay evidence rule does not bar ... the admissibility of ... authenticated news reports when used to show public perceptions of corruption, rather than corruption in fact.” Objections that proposed findings mischaracterize evidence or are vaguely stated have also been taken into account in determining the facts to be found in this case.
H.
Summary
In summary, I have carefully parsed the parties’ submissions and have rejected proposed findings to which meritorious objections pertain. Having eliminated the objectionable proposed findings, there remain more than 400 of the 600+ findings proffered by the parties. As noted above, the parties have stipulated to 117 facts, and the parties are in remarkable agreement as to the accuracy of an overwhelming majority of the additional statements of fact each side has proffered. Where there is no serious dispute as to the accuracy of a parties’ proposed finding, I have relied upon the absence of dispute in making a particular finding. Where, however, there is a dispute, I have examined the underlying documents cited by the parties and have either adopted a proposed finding verbatim or modified it to reflect the contents of the underlying evidentiary submission.
After much deliberation as to the appropriate approach to be taken in this unusual posture of deciding only the facts, not the issues of law presented by the parties, I have opted to make detailed findings as opposed to conclusory, ultimate findings. While ultimate factual findings could be made (and are indeed set forth in ■ the Conclusion section to this opinion), I determined that it was appropriate to defer to the approach advanced by the party challenging the validity of the corporate and conduit contributions bans, with the district judge’s role being to resolve eviden-tiary objections and decide contested facts. The court of appeals will thus be presented with extensive findings that comprehensively describe the soft money system, setting forth in sometimes excruciating detail how corporations can give unlimited amounts of money that influence elections and grant the donors access to elected officials and those running for office.
Consistent with the foregoing, I now set forth as findings of fact the following:
Findings of Fact
I.
BACKGROUND FACTS
A.
The Litigation
1. In October 1997, defendant UNITED STATES OF AMERICA filed an indictment in this Court charging plaintiff, RENATO P. MARIANI, a citizen and resident of the State of Pennsylvania who is eligible to vote for the office of President of the United States, and other individuals with,
inter alia,
violations of the Federal Election Campaign Act, as amended (“FECA”). That action,
United States v. Mariani,
No. 3:CR-97-225, is presently pending before this Court. Joint Stipulation of Facts (“Joint Stip.”) ¶ 1. A copy of
*363
the Indictment is Joint Exhibit (“JEx”) 264.
15
2. According to the Indictment, Mr. Mariani was the president, treasurer and 25% shareholder of Empire Sanitary Landfill, Inc. (“Empire”) and Danella Environmental Technologies, Inc. (“Danella”). The Indictment charges that between August 1994 and December of 1996, Mr. Mar-iani and other officers and employees of Empire and Danella sought to make campaign contributions to a number of candidates for federal election. The campaigns to which they allegedly contributed were those of Presidential hopefuls Bob Dole, Bill Clinton and Arlen Specter, Senatorial candidates Rick Santorum, Chuck Haytai-an, Richard Duhaime and Max Baucus, and candidates for the House of Representatives Frank Pallone, Jr., Jon Fox and Bill Paxon. Indictment at ¶ 23; Joint Stip. ¶ 2.
3. The Indictment alleges that Mr. Mariani and the other Empire/Danella officers and employees solicited numerous Empire and Danella employees, business associates, friends and family members to make contributions of $1,000 per person (or in one case $5,000 in the name of a political action committee) to the campaigns of the chosen candidates. Indictment at ¶ 21 and Counts 14-134 (listing individual contributions). According to the Indictment, these contributions were reimbursed either directly or indirectly by Empire. Indictment at ¶ 21. It is also alleged that Mr. Mariani and other officers and employees at Empire and Danella made individual contributions to these federal candidates which were also reimbursed by Empire.
Id.;
Joint Stip. ¶3.
4. Paragraph 10 of the indictment in
United States v. Mariani,
3:CR-97-225 (M.D.Pa.), alleges that in 1995, Empire retained a D.C. lobbying firm “to have an impact on legislation and policies which could affect the flow of interstate waste to the landfill. Specifically, Empire desired to have an impact on the reconfiguration of the Interstate Transportation of Municipal Waste bill which was pending in the 104th Congress.” The Indictment alleges that in April 1995, Mr. Mariani and other officers and employees of Empire and Danella contacted employees, associates, friends and family members in an effort to raise funds for the New Jersey Steering Committee, a state fundraising arm of the Dole campaign. Indictment at ¶¶ 25-26. Contributors allegedly were asked to write personal checks in amounts of $1,000 (or, in the case of couples, $2,000) and were reimbursed with Empire corporate funds.
Id.
at ¶¶ 26, 28-31. It is also alleged that on April 29, 1995, Mr. Mariani and another defendant in the criminal case, Michael Serafim, attended a Steering Committee luncheon at which they handed over an envelope containing the contributions to Dole campaign officials.
Id.
at ¶ 27. When the Dole campaign reported the contributions to the Federal Election Commission (“FEC”), its filing allegedly attributed these $80,000 worth of contributions to the individual contributors, rather than Empire.
Id.
at ¶ 32; Joint Stip. ¶ 4. The Dole contributions came approximately 10 days prior to a crucial vote in the Senate on the Interstate Transportation of Municipal Waste bill. Dole was the Senate majority leader at the time.
5. As a result of this alleged conduct, the Indictment charges Mr. Mariani (and others) with criminal violations of FECA. Specifically, Mr. Mariani is charged with violations of 2 U.S.C. §§ 441b and 441f.
Id.;
Joint Stip. ¶ 5.
6. Empire had made substantial soft money contributions at about the same time it engaged in the hard money scheme alleged in the indictment. For example, Empire made a $ 50,000 contribution to the Democratic National Committee between November 28, 1995 and April 26,
*364
1996; a $ 20,000 contribution to the Senate President’s Committee on October 19, 1996; and, a $ 15,000 contribution to the Republican National Committee on February 1, 1995. These soft money contributions do not form part of the indictment.
7. Section 441b of FECA prohibits any corporation from making any contribution in connection with any campaign for federal office and provides that it is unlawful for any officer of a corporation to consent to any prohibited corporate contribution. Section 441f of FECA, the conduit contribution ban or “anti-conduit” provision, prohibits one from making a contribution “in the name of another person” or “knowingly permit[ting] his name to be used to effect such a contribution.” 2 U.S.C. §§ 441b and 441f.
8. The purpose of the corporate contribution and conduit contribution bans is to avoid corruption and the appearance of corruption. Simpson Dep. at 66, [J.Ex. 38],
9. Mr. Mariani moved to dismiss all of the FECA charges in the Indictment, and simultaneously instituted this action against the United States seeking declaratory relief pursuant to 2 U.S.C. § 437h. The FEC was thereafter granted leave to intervene in this action as a defendant. Joint Stip. ¶ 6.
B.
The Witnesses in this Case
10. The parties have stipulated that the testimony of the following listed witnesses should be included in the evidentiary record in this action.
16
(a)Professor Paul S. Herrnson.
Professor Herrnson is a Professor of Government and Politics at the University of Maryland and a nationally recognized expert on campaign finance legislation. Professor Herrnson was retained by the FEC as an expert witness in this action and in
Republican National Committee v. Federal Election Commission
(No. 98-CV-1207 (WBB))(D.D.C.) (hereinafter
“RNC v. FEC
”), an action presently pending before the federal district court in the District of Columbia. Professor Herrnson’s Professional Statement in
RNC v. FEC,
which was incorporated in his report in this action, is JEx. 17; his supplemental report in this action is JEx. 18. Drafts of both reports were submitted to FEC counsel for their review and comments before they were finalized. Deposition of Paul S. Herrnson,
Mariani v. United States
(“Herrnson Dep.”) at 28, 32-83. Professor Herrnson’s curriculum vitae is annexed to JEx. 17.
(b)
Alan K. Simpson.
Mr. Simpson, who served as a United States Senator from Wyoming from 1978-1996, was retained by plaintiff as an expert witness in this action. His affidavit is JEx. 1; his deposition transcript (with exhibits) is JEx. 38.
(c)
Daniel H. Murray.
Mr. Murray is a government relations specialist who has engaged in lobbying activities for corporate clients for more than 16 years. His affidavit, which was prepared at the request of plaintiffs counsel in this action, and which was also proffered by the FEC to the district court in support of its summary judgment motion in
RNC v. FEC,
is JEx. 2; his deposition transcript (with exhibits) is JEx. 37.
(d)
Dale Bumpers.
Dale Bumpers served as a United States Senator from the State of Arkansas from 1975 through 1998. Before being elected to the Senate, Mr. Bumpers also served as the Governor of Arkansas from 1971-1975. At the request of the FEC, Mr. Bumpers prepared a declaration, dated December 22, 1998, that was proffered by the FEC in support of its motion for summary judgment in
RNC v. FEC.
That declaration is JEx. 3.
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(e)
Paul Simon.
Mr. Simon served in Congress for approximately 22 years, first as a Representative and then later as a Senator from Illinois. At the request of the FEC, Mr. Simon prepared a declaration, dated May 3, 1997, that was proffered by the FEC in support of its motions for summary judgment in both
FEC v. Colorado Republican Federal Campaign Committee
(Civil Action No. 89-N-1159) (D.Colo.) (hereinafter
“FEC v. CRFCC”)
and
RNC v. FEC.
That declaration is JEx 9.
(f)
Timothy E. Wirth.
Mr. Wirth served in Congress for approximately 18 years, first as a Representative and then later as a Senator from Colorado. At the request of the FEC, Mr. Wirth prepared a declaration, dated May 5, 1997, that was proffered by the FEC in support of its motions for summary judgment in both
FEC v. CRFCC
and
RNC v. FEC.
That declaration is JEx 10.
(g)
Christopher Shays.
Since August of 1987, Congressman Shays has served as a Member of the United States House of Representative, representing the Fourth District of the State of Connecticut. At the request of the FEC, Congressman Shays prepared a declaration, dated December 7, 1998, that was proffered by the FEC in support of its motion for summary judgment in
RNC v. FEC.
That declaration is JEx. 5.
(h)
Martin Meehan.
Congressman Meehan has served as a Member of the United States House of Representatives, representing the Fifth District of the State of Massachusetts, since January 1993. At the request of the FEC, Congressman Meehan prepared a declaration, dated November 6, 1998, that was proffered by the FEC in support of its motions for summary judgment in both
FEC v. CRFCC
and
RNC v. FEC.
That declaration is JEx. 4.
(i)
R. William Johnstone.
Mr. John-stone served as Legislative Assistant and then Administrative Assistant to Congressman, and then Senator, Wyche Fowler from 1977 through January 1993. Mr. Johnstone also served as campaign manager for Mr. Fowler during his 1986 and 1992 Senate campaigns. At the request of the FEC, Mr. Johnstone prepared a declaration, dated April 7, 1997, that was proffered by the FEC in support of its motions for summary judgment in both
FEC v. CRFCC
and
RNC v. FEC.
His declaration is JEx. 15.
(j)
Leon G. Billings.
Mr. Billings was the Executive Director of the Democratic Senatorial Campaign Committee (“DSCC”) from 1982-1983. At the request of the FEC, Mr. Billings prepared a declaration, dated April 15, 1997, that was proffered by the FEC in support of its motions for summary judgment in both
FEC v. CRFCC
and
RNC v. FEC.
That declaration is JEx 11.
(k)
Robert Hickmott.
Mr. Hickmott has served as an Associate Finance Director of the Democratic National Committee (1980), the Executive Director of the Democratic Business Council (1981), the National Finance Director for Timothy Wirth’s Senatorial campaign (1985-1986) and the Deputy Executive Director of the Democratic Senatorial Campaign Committee (“DSCC”) (1991-1992). At the request of the FEC, Mr. Hickmott prepared a declaration, dated April 8, 1997, that was proffered by the FEC in support of its motions for summary judgment in both
FEC v. CRFCC
and
RNC v. FEC.
That declaration is JEx 12.
(l)
Robert Rozen.
Mr. Rozen worked for Senator Wendell Ford (1980-1985) and Senator George Mitchell (1985-1995), handling a variety of financial legislative issues for both. Both Senator Ford and Senator Mitchell chaired the Democratic Senatorial Campaign Committee (“DSCC”) while Mr. Rozen worked for them. At the request of the FEC, Mr. Rozen prepared a declaration, dated April 17, 1997, that was proffered by the FEC in support of its motions for summary judgment in both
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FEC v. CRFCC
and
RNC v. FEC.
That declaration is JEx 13.
(m)
Professor Clyde Wilcox.
Mr. Wilcox is a Professor of Government at Georgetown University specializing in public opinion research. At the request of the FEC, Mr. Wilcox prepared a statement offering his expert views about public perceptions concerning the campaign finance system that was proffered by the FEC in support of its motions for summary judgment in both
FEC v. CRFCC
and
RNC v. FEC.
His statement is JEx. 20.
(n)
Frank J. Sorauf and Jonathan S. Krasno.
Mr. Sorauf and Mr. Krasno are political science professors at the University of Minnesota and Princeton University, respectively. At the request of the FEC, they prepared a report entitled “Political Party Committees and Coordinated Spending”, that was proffered by the FEC in support of its motions for summary judgment in both
FEC v. CRFCC
and
RNC v. FEC.
That report is JEx 19.
(o)
Charles E.M. Kolb.
Since September of 1997, Mr. Kolb has served as the President of the Committee for Economic Development (“CED”), an independent, nonpartisan research and policy organization comprised of more than 250 prominent business leaders and educators. Between November 1997 and early 1999, the CED conducted a comprehensive study of the 1996 election specifically focusing on the campaign finance system. At the request of the FEC, Mr. Kolb prepared a declaration (attaching the CED’s final report and policy statement), dated April 29, 1999, that was proffered by the FEC in support of its motion for summary judgment in
RNC v. FEC.
That declaration is JEx. 16.
(p)
Alan H. Hassenfeld.
Since 1989, Mr. Hassenfeld has served as Chairman of the Board and Chief Executive Officer of Hasbro, Inc., a global manufacturing company based in Rhode Island with annual revenues in excess of $3 billion. At the request of the FEC, Mr. Hassenfeld prepared a declaration, dated April 19, 1999, that was proffered by the FEC in support of its motion for summary judgment in
RNC v. FEC.
That declaration is JEx. 14.
(q)
Larry Makinson.
Mr. Makinson has been a staff member since 1988 of the Center for Responsive Politics, a non-partisan non-profit research organization that monitors and analyzes campaign contributions in federal elections. He currently serves as its executive director. Mr. Ma-kinson submitted a declaration in this action in response to a subpoena issued by plaintiffs counsel. That declaration is JEx. 6.
(r)
Pat Huyck.
Mr. Huyck has been an employee of the Republican National Committee for 16 years and currently serves as its Director of Accounting. Mr. Huyck submitted a declaration in this action in response to a subpoena issued by plaintiffs counsel. That declaration is JEx. 7.
(s)
Joseph E. Sandler.
Mr. Sandler was the General Counsel of the Democratic National Committee from 1995-1996. Mr. Sandler submitted a declaration in this action in response to a subpoena issued by plaintiffs counsel. That declaration is JEx. 8.
C.
The Documentary Evidence in this Case
11. On March 11, 1997, the United States Senate voted unanimously to authorize the Governmental Affairs Committee to conduct an investigation of alleged illegal or improper activities in connection with 1996 federal election campaigns. Joint Stip. ¶ 104.
12. Over the course of nine and a half months, the Committee issued 427 subpoenas and held 32 days of hearings at which some 70 witnesses testified. Committee staff took 200 depositions, conducted more than 200 witness interviews, and received more than 1,500,000 pages of documents in response to the Committee’s subpoenas. Finally, the Committee memorialized its findings in a report, including both Majority and Minority views.
See Investigation of Illegal or Improper Activities in Connection with 1996 Federal Election Cam
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paigns,
S.Rep. No. 105-167 (1998) (hereinafter “Report”). Joint Stip. ¶ 105.
17
13. Currently, the Federal Election Commission is in the midst of a rulemak-ing proceeding concerning the use of soft money by political parties. Notice of Proposed Rulemaking, 63 Fed.Reg. 37721, 37722 (1998).
14. On July 13, 1998, the FEC issued its Notice of Proposed Rulemaking: “Prohibited and Excessive Contributions; Soft Money; Proposed Rule,” 63 Fed.Reg. 37721 (1998) (to be codified at 11 C.F.R. Pts. 102, 103 & 106) (“FEC Notice of Proposed Rulemaking”).
18
15. In support of its motion for summary judgment in
FEC v. CRFCC,
the FEC submitted “Federal Election Commission’s Statement of Material Facts Not in Genuine Dispute” to the district court (“FEC Statement of Facts I”). Joint Stip. ¶ 114. It is PSEx. I.
19
16. In support of its motion for summary judgment in
RNC v. FEC,
the FEC submitted “Defendant Federal Election Commission’s Statement of Material Facts” to the district court (“FEC Statement of Facts II”). Joint Stip. ¶ 116. It is PSEx. 2.
17. In support of its motion for summary judgment in
RNC v. FEC,
the FEC submitted “Federal Election Commission’s Memorandum In Support of its Motion for Summary Judgment” to the district court (“FEC RNC Mem.”). Joint Stip ¶ 117. It is PSEx. 3.
II.
THE FEDERAL ELECTION CAMPAIGN ACT
A.
Historical Background
18. FECA, enacted by Congress in 1971, was a comprehensive attempt to regulate the financial aspects of federal political campaigns.
See
Federal Election Campaign Act of 1971, Pub.L. No. 92-225, 86 Stat. 3. FECA has since been amended a number of times.
19. In response to perceived abuses in the 1972 presidential election, in 1974 Con-, gress enacted the Federal Election Campaign Act Amendments of 1974, Pub.L. No. 93-443, 88 Stat. 1263. The Amendments placed further restrictions on campaign contributions and expenditures and, among other things, adopted a system for public financing of presidential election campaigns.
20. Under FECA, it is illegal for individuals to make contributions of more than $1,000 to a candidate for federal office per election, $20,000 per year to a national party’s political committees, $5,000 per year to any other political committee, and $25,000 per year in total contributions to all federal candidates, party committees, or political committees. 2 U.S.C. § 441a(l), (3).
21. Under FECA, it is illegal for political action committees (“PACs”) to make contributions of more than $5,000 to a federal candidate per election, $15,000 per year to a national party’s political committees and $5,000 per year to any other political committee. 2 U.S.C. § 441a(2).
22. Under FECA, it is illegal for corporations and labor unions to make any contributions in connection with a candidate’s election for federal office from their own treasury funds. 2 U.S.C. § 441b(a).
23. The ban on corporate contributions to candidates for federal office has been in
*368
effect for almost a century, since the Tillman Act became law in 1907. Professional Testimony of Paul S. Herrnson,
Mariani v. United States,
No. 3:CV-98-1701 (M.D.Pa.) Herrnson Report at 2 [JEx. 18].
24. The prohibitions in section 441b apply equally to both corporations and labor organizations, although its coverage of unions was added long after the original 1907 statute, which applied only to corporations.
25. 2 U.S.C. § 441b has always been applied only to federal elections.
26. The anti-conduit provision in 2 U.S.C. § 441f applies to
all
contributions, not just those from corporations.
27. One purpose of 2 U.S.C. § 441f is to prevent the circumvention of the ban on corporate and union contributions. Section 441f similarly helps to prevent circumvention of the limits on contributions by individuals and groups in 2 U.S.C. § 441a and the prohibition on contributions by foreign nationals in 2 U.S.C. § 441e. Section 441f also ensures that proper disclosure of the actual sources of campaign contributions occurs in federal elections. These provisions of the law, as well as section 441b, are intended to promote a fair, open, and legitimate campaign finance system and to prevent corruption or the appearance of corruption in federal elections. Herrnson Report at 3 [JEx. 18].
28. FECA also contains extensive disclosure and reporting requirements for candidates and political committees, as well as for other entities that make independent expenditures.
29. In 1976, the United States Supreme Court issued its decision in
Buckley v. Valeo,
424 U.S. 1 , 96 S.Ct. 612 , 46 L.Ed.2d 659 (1976). In upholding FECA’s individual contribution limits while striking down the statute’s corresponding expenditure limits, the Court drew a distinction between contributions to candidates and independent political spending.
30. As a result of numerous judicial decisions and FEC advisory opinions following the Supreme Court’s decision in
Buckley,
by 1980 a distinction had developed between what is often referred to as “hard” and “soft” money in the campaign finance context.
B.
The Distinction Between “Hard” and “Soft” Money
31. Entities that are prohibited from making contributions to a federal (ie., “hard money”) account and individuals wishing to make donations in excess of the contribution limits set forth in FECA have generally been permitted to direct those donations to a nonfederal
(ie.,
“soft money”) account, even though donations to nonfederal accounts are often used for activities that have an impact on federal elections. FEC Notice of Proposed Rule-making at 37727 [JEx. 39].
32. Many political party committees (such as the Republican or Democratic National Committees) solicit two kinds of contributions: those that can permissibly be used under the Federal Election Campaign Act “for the purpose of influencing” federal elections, 2 U.S.C. § 431 (8)(A)(i), and those that may not be used for that purpose. Contributions that are permissible under the Act are often referred to as “hard money” contributions. Contributions that are not
permissible'
— e.g., contributions in excess of the section 441a dollar limits, all contributions from corporate and labor organization general treasuries, and contributions from federal contractors— are commonly known as “soft money.” Although this soft money cannot be contributed to federal candidates or otherwise used to influence federal elections, political party committees may deposit such funds in a separate account to be used for state and local campaign activity to the extent allowed by state law, and for limited, party-building activities specifically designated in the statute.
See Colorado Republican,
518 U.S. at 616, 116 S.Ct. 2309 ; 2 U.S.C. § 431 (8)(B); 11 C.F.R. § 102.5 .
33. All contributions to federal candidates’ campaigns are by definition hard
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money contributions.
See
2 U.S.C. § 431 (8)(A);
California Medical Ass’n. v. FEC,
453 U.S. 182 , 101 S.Ct. 2712 , 69 L.Ed.2d 567 (1981);
FEC v. Ted Haley Congressional Comm,.,
852 F.2d 1111 (9th Cir.1988).
34. Corporations cannot give money to federal candidates.
35. Corporate donations to political party committees have never been prohibited by FECA.
36. There are important legal distinctions among 1) expenditures made from the treasuries of corporations, labor unions, or other groups that are intended to influence the outcome of a federal election without expressly advocating a federal candidate’s election or defeat, 2) corporation and union treasury funds that are contributed to political parties that later use these monies to influence the outcome of a federal election without expressly advocating a federal candidate’s election or defeat, 3) hard money contributions from individuals, political parties, or PACs to federal candidates, 4) monies from the treasuries of corporations, labor unions, or other groups if contributed directly to a federal candidate, and 5) monies from the treasuries of corporations, labor unions, or other groups that are given to an individual who serves as a conduit for contributing the money to a federal candidate. Herrnson Report at 3-4 [Jex 18].
37. An important legal distinction among the preceding activities is based on the amount of control that the candidate has over them. Party funds that originate as contributions from corporation or union treasuries are at no time directly under the candidate’s control. Nonetheless, candidates often are involved in the collection of party soft money, and many candidates expect that some of the party monies they help collect will be used to help their election efforts.
Id.
at 4.
38. Money that a federal candidate has complete control over, including hard money raised from individuals, parties, PACs, or the candidate himself or herself, is money that a candidate can spend any way that he or she wishes (within the confines of the law). Money that both a candidate and a party have some control over, such as coordinated expenditures (referenced as § 441a(d) under FECA), is often subject to some negotiation. The fact that party committees usually influence how these funds are spent occasionally leads to friction between a candidate’s campaign and the party organization making the expenditure.
Id.
at 4.
39. Candidates have less control over party soft money expenditures than funds contributed to them directly. Party soft money that is raised with the assistance of a federal candidate may be spent, in conjunction with hard money, in accordance with allocation formulas promulgated by the FEC, for party-building activities, agenda-setting efforts, issue advocacy ads, voter mobilization drives, and a variety of other activities designed to help the election of candidates apart from the candidate who helped raise the money. Moreover, some party agenda-setting efforts, issue ads, and other activities may actually be contrary to
a
candidate’s wishes. For example, the issue ads that the Democratic Senatorial Campaign Committee spent to help reelect Wisconsin Democrat Russell Feingold to the Senate were made over the candidate’s objections. Feingold stated that outside spending was against his principles. It also was not consistent with his image and campaign message.
Id.
at 4-5; 11 C.F.R. Part 106.
40. Hard money can be spent to explicitly advocate the election of a federal candidate; “expenditures,” as defined in FECA, from corporation or union treasuries cannot presently be used directly for that purpose. Herrnson Report at 5 [JEx. 18].
41. Under the current rules, parties can only use soft money to finance issue advocacy advertisements and other campaign activities carried out in a specific state using a ratio of hard to soft money
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that reflects the number of federal, state, and local offices that are on the ballot in a particular state.
Id.
42. Although there are important legal distinctions between “hard” and “soft” money contributions, soft money plays an important role in contested races for federal elective offices. Soft money is, in essence, the “black market” economy of campaign finance. Ceilings on individual contributions to federal candidates and the party’s federal campaign accounts have encouraged wealthy individuals to look for alternative ways to spend money in elections. Prohibitions against corporations, trade associations and unions contributing or spending funds from their treasuries have had similar effects. Dep. of Prof. Paul S. Herrnson in
Mariani v. United States
(“Herrnson Dep.”) at 51-52 [JEx. 36]. Soft money has proved to be the means by which wealthy individuals and corporations evade FECA restrictions in order to influence elections and secure access to elected officials and candidates for federal elective office.
III.
RAISING SOFT MONEY
A.
Soft Money Is Easier To Raise Than Hard Money
43. Soft money is much easier to raise than hard money because it can be donated in large sums. Because parties can raise more soft money, they spend more soft money. Herrnson Dep. at 81 [JEx. 36].
44. One reason soft money is easier to raise is that entities such as corporations, which are barred from contributing directly to campaigns, are permitted to donate soft money.
Id.
45. Although corporations are flatly barred from making any contributions to campaigns in hard money, they may at the same time make gifts in literally unlimited amounts to political parties via soft money. Herrnson Dep. at 91-92 [JEx. 36].
46. Some soft money contributions are collected from corporations, unions and wealthy individuals in excess of $1 million.
Id.
at 40.
47. Although FECA bans businesses and unions from making contributions directly to candidates, and limits individuals to contributions of $1,000 and PACs to contributions of $5,000 per candidate during each phase of the election, the law has not prevented wealthy individuals, corporations, and other collective entities from playing important roles in campaign finance.
Id.
at 48-49.
48. A 1992 DNC fundraising guide entitled “Democratic National Committee DNC Victory Fund ’92” stated as follows:
“HOW TO WRITE THE CHECK(S)
(A) Federal Contributions from individuals of up to $20,000 should be made by personal check payable to:
DNC VICTORY ’92/FEDERAL ACCOUNT
(B) Non-Federal Contributions from individuals can be made payable to:
DNC VICTORY ’92/NON-FEDERAL ACCOUNT”
Democratic National Committee Fund-Raising Guide, 1992,
Fig. 5.1
in
Herbert E. Alexander & Anthony Corrado,
Financing the 1992 Election
112 (1995); Joint Stip. ¶ 81.
49. The same document stated:
“HOW TO WRITE CORPORATE/UNION CHECK(S)
Checks from corporate treasury funds or labor union treasury funds may be written in an
unlimited
amount to:
DNC VICTORY ’92/NON-FEDERAL ACCOUNT”
Id.
at 113 (emphasis in original); Joint Stip. ¶ 82.
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50. Soft money contributions have provided corporations, labor unions, and wealthy individuals with a way around FECA’s restrictions on the amounts that may be contributed by individuals and the ban on corporate contributions to candidates for federal elective office. Minority Report at 7516 [JEx. 21],
B.
The Growth of Soft Money
51. It is estimated that in the 1980 election cycle, the national party committees raised and spent approximately $19 million in soft money funds. Anthony Cor-rado,
Giving, Spending and “Soft Money
”, 6 J.L. & Pol’y 45, 50-51 (1997) [JEx. 33].
20
52. In the 1987-1988 election cycle, it is estimated that approximately $45 million was raised and spent in soft money funds.
Id.
at 51.
53. The RNC estimates that it raised and spent approximately $22 million in nonfederal funds during the 1987-1988 election cycle. Huyck Decl. at ¶ 7 [JEx. 7],
54. In the 1991-1992 election cycle, the total amount of soft money raised by the national party committees, as set forth in their reports to the FEC, was approximately $86 million ($49.8 million by the Republican national party committees and $36.3 million by the Democratic national party committees). Federal Election Commission,
National Party Nonfederal Activity
(visited April 13, 1999) [JEx. 40]; Joint Stip. ¶ 9.
55. In the 1993-1994 election cycle, the total amount of soft money raised by the national party committees, as set forth in their reports to the FEC, was approximately $101.7 million ($52.5 million by the Republican national party committees and over $49.1 million by the Democratic national party committees).
Id.;
Joint Stip. ¶10.
56. During the 1995-1996 election cycle, the Republican national party committees reported receipts of approximately $138.2 million and expenditures of approximately $149.7 million in soft money, increases of 178 percent and 224 percent respectively, when compared to the similar period in 1991-1992. Federal Election Commission,
FEC Reports Major Increase in Party Activity for 1995-96
(FEC press release), March 19, 1997, at 1 [JEx. 47]; Joint Stip. ¶ 11.
57. During the 1995-1996 election cycle, the Democratic national party committees reported approximately $123.9 million in receipts and approximately $121.8 million in expenditures of soft money, increases of 242 percent and 271 percent respectively, from the similar period in 1991-1992.
Id.;
Joint Stip. ¶ 12.
58. The growth in soft money since 1980 has been fueled by the solicitation of large contributions of $100,000 or more from corporations, as well as from wealthy individuals and labor unions, and the corresponding ability of the party committees to spend such funds. Herrnson Dep. at 94-95 [JEx. 36].
59. In addition to the increase in the total dollar amount of soft money contributions over the last decade, there was also an increase in the number of contributions made to the party committees’ nonfederal accounts that would have been prohibited under FECA if they had been made to a
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federal account. FEC Notice of Proposed Rulemaking at 37727 [JEx. 39].
60. During the 1992 presidential election cycle, the national party committees’ nonfederal accounts received at least 381 individual contributions of more than $20,-000. During the 1992 presidential election cycle, the national party committees’ non-federal accounts received about 11,000 soft money contributions from sources that are prohibited from making contributions under federal law into federal accounts. Joint Stip. ¶¶ 14-15.
61. In the 1995-1996 election cycle, the national party committees’ non-federal accounts received close to 1,000 individual contributions in excess of $20,000, and approximately 27,000 contributions from sources that are prohibited from contributing to federal accounts. Joint Stip. ¶ 16.
C.
Sources of Soft Money
62. According to reports filed with the FEC, during the 1994 and 1998 election cycles, corporations donated over 50% of all itémized soft money contributions. Committee for Economic Development,
Investing in the People’s Business: A Business Proposal for Campaign Finance Reform,
at 26 (1999) (“[fjigures based on unadjusted FEC data”). Declaration of Charles E.M. Kolb in
RNC v. FEC,
Attachment at 26 [JEx. 16].
63. Corporate donations were especially important to the growth of soft money in 1996. For example, a 1997 analysis conducted by the
Los Angeles Times
of the political donations made by the 544 largest public and private companies revealed that soft money donations by these corporations had more than tripled between 1992 and 1996, growing from $16 million to $51 million. Herrnson Dep. at 98 [JEx. 36].
64. Common Cause compiled the. following list of soft money donors of $250,-000 or more to Republican party committees from January 1, 1995, through June 30, 1996, including how much they contributed, and sent the list to various newspapers. (The dollar figures encompass donations from subsidiaries and company executives).
Philip Morris Co. Inc.-1,632,283
RJR Nabisco Inc.-970,450
Amer. Financial Group-794,000
Atlantic Richfield Co.-615,175
US Tobacco Co.-448,768
Joseph E. Seagram
&
Sons Inc.-435,000
Eli Lilly & Co. 425,000
AT & T-417,590
Brown & Williamson Tobacco Corp-400,000
Burlington Northern Santa Fe Corp-367,000
Bristol-Meyers Squibb Co.-355,000
Cintas Corp-355,000
News Corp.-351,500
Amway Corp-350,000
Reliance Group Holdings Inc.-340,000
Tele-Communications Inc.-340,000
Chevron Corp.-336,650
AG Spanos Construction-335,000
Anschutz Corp.-335,000
Archer Daniels Midland Co.-335,000
Enron Corp-320,000
Limited Inc.~320,000
Nynex Corp.-313,505
Forstman Little & Co.-309,000
Pfizer Ine.-306,000
Tobacco Institute-303,250
Coca-Cola Co.-292,580
PaineWebber Group Inc.-290,000
Time Warner Inc.-290,000
Travelers Group-284,025
Anheuser-Busch Co. Inc.-281,250
WMX Technologies Inc.-278,600
MCI Telecommunications Corp-270,000
Blue Cross & Blue Shield Assn.-255,078
AFLAC Inc-251,752
Druckenmiller, Stanley F.-250,000
Kellet, Stiles A-250,000
Pilgrim’s Pride Corp.~250,000
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FEC Statement of Material Facts II at ¶ 217 [PSEx. 2]; Common Cause List of Soft Money Donors [JEx. 26].
65. The Center for Responsive Politics compiled a list of the “Top 50 Soft Money Contributors” in the 1995-1996 election cycle. Declaration of Larry Makinson in
Mariani v. United States
(“Makinson Deck”) [JEx. 6] The list, which was recently updated to include all amendments to FEC filings, and which aggregates corporate contributions with contributions from individuals associated with a particular corporation, is as follows:
CONTRIBUTOR SOFT TOTAL
Philip Morris $3,018,036
Joseph E. Seagram & Sons $2,035,583
RJR Nabisco $1,442,931
Walt Disney Co. $1,347,000
Atlantic Richfield $1,250,843
Communications Workers of America $1,150,300 American Fedn of SVCnty/Munic
Employees $1,134,962
AT
&
T $ 999,524
Federal Express Corp. $1,157,044
MCI Telecommunications $1,005,418
News Corp. $ 869,700
Assn, of Trial Lawyers of America $ 803,400
Lazard Freres & Co. $ 758,956
Anheuser-Busch $ 766,057
MacAndrews & Forbes $ 779,649
Eli Lilly & Co. $ 746,835
United Food & Commercial Workers Union $ 727,550
Time Warner $ 736,250
Chevron Corp $ 702,306
Archer-Daniels Midland Co. $ 700,000
Enron Corp. $ 686,900
UST Inc/US Tobacco $ 725,250
NYNEX Corp. $ 652,802
Textron Inc. $ 654,227
American Financial Group $ 645,000
Brown & Williamson Tobacco $ 642,500
Laborers Union $ 634,588
Loral Corp. $ 632,000
Integrated Health Services Inc. $ 609,000
American Defense Institute $ 600,000
Goldman, Sachs & Co. $ 600,230
Entergy Corp. $ 592,371
Northwest Airlines $ 609,445
Blue Cross/Blue Shield $ 577,688
WMX Technologies $ 576,500
PaineWebber $ 560,750
Travelers Group $ 562,344
FreddieMac $ 558,250
Bristol-Myers Squibb $ 552,400
BankAmerica Corp. $ 552,379
Tobacco Institute $ 537,357
DreamWorks SKG $ 702,400
Milberg, Weiss et al. $ 530,000
Coca-Cola Co. $ 519,640
Pfizer Inc. $ 514,971
Glaxo Wellcome Inc. $ 510,322
General Motors $ 504,150
Stride-Rite Foundation $ 500,000
Hayes, Mariam Cannon $ 500,000
Public Securities Assn. $ 507,313
Makinson Decl. at ¶ 13 & Attachment [JEx. 6],
E.
Soft Money Donations: Industries with Pressing Legislative Concerns
An Overview
66. As a general rule, in the 1996-1996 election cycle, the largest soft money gifts came from corporations or interest groups that faced pressing issues in Washington. Herrnson Dep at 98, J.Ex. 36. For example:
• Tobacco companies contributed huge sums of soft money to both of the major parties. Philip Morris and its executives gave a total of more than $3 million in soft money, including about $2.5 million to the Republicans, and close to $500,000 to the Democrats. RJR Nabisco contributed over $1.4 million, including almost $1.2 million to Republican committees and $255,000 to the Democrats. US Tobacco donated $675,000, of which $556,000 went to the Republicans. Brown and Williamson Tobacco gave about $642,000, almost all of which, $635,000, went to the Republicans. And the Tobacco Institute gave $531,000, with $425,000 going to the Republicans and $106,000 to the Democrats.
• AT
&
T gave almost $1 million in soft money, with $552,000 going to the Republicans and $447,000 to the Democrats. AT & T’s major competitor, MCI Telecommunications, contributed $966,-000, $607,000 of which went to the Democrats. NYNEX Corporation, a regional telecommunications company, donated $651,000, with $411,000 given to the Republicans and $240,000 to the Democrats.
• The Association of Trial Lawyers of America gave over $800,000, with approximately $606,000 donated to the Democrats and $197,000 to the Republicans.
• Blue Cross/Blue Shield donated almost $578,000 in soft money, giving $438,000 to the Republican Party and
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about $140,000 to the Democratic Party. Integrated Health Services, Inc., contributed $609,000, $574,000 of which went to the Democrats. Eli Lilly & Co. donated $747,000, with $507,000 given to the Republicans and $240,000 to the Democrats. Another pharmaceutical giant, Bristol-Myers-Squibb, gave $552,000, with $438,000 going to the Republicans and over $114,000 to the Democrats.
Center for Responsive Politics, “Top 50 Soft Money Contributors,”
The Big Picture: Who Won the Last Election
(visited October 8, 1998) (hereinafter “Top 50 Contributors List”); Herrnson Dep. Ex. 10 [JEx. 36].
See
Hermson Dep. at 98-101, 105-106 [JEx. 36].
The Tobacco Industry
67. National party committee reports filed with the FEC indicate that during the 1995-1996 election cycle the total amount of soft money donated by five tobacco companies (Brown & Williamson, Lorillard Tobacco, Philip Morris, RJR Nabisco, and U.S. Tobacco Co.) to the national party committees was approximately $5,304,508. Joint Stip. ¶ 17.
68. National party committee reports filed with the FEC indicate that during the 1995-1996 election cycle Philip Morris gave a total of $3 million in soft money to the national party committees, including $2.5 million to the Republican national party committees, and one half million to the Democratic national party committees. Top 50 Contributors List.
69. National party committee reports filed with the FEC indicate that during the 1995-1996 election cycle RJR Nabisco donated $1.4 million in soft money to the national party committees, including $1.2 million to Republican national party committees and $255,000 to Democratic national party committees.
Id.
70. National party committee reports filed with the FEC indicate that during the 1995-1996 election cycle U.S. Tobacco donated $675,000 in soft money to national party committees, of which $556,000 went to the Republican national party committees.
Id.
71. National party committee reports filed with the FEC indicate that during the 1995-1996 election cycle Brown & Williamson Tobacco donated $643,000 in soft money to national party committees, of which $635,000 went to Republican national party committees.
Id.
72. National party committee reports filed with the FEC indicate that during the 1995-1996 election cycle the Tobacco Institute, a trade organization of the tobacco industry, gave $531,000 in soft money to the national party committees, with $425,-000 going to the Republican national party committees and $106,000 to the Democratic national party committees.
Id.
The Telecommunications Industry
73. National party committee reports filed with the FEC indicate that during the 1996 election cycle AT & T donated approximately $1 million in soft money to the national party committees, with $552,000 going to Republican national party committees and $447,000 to Democratic national party committees. Top 50 Contributors List.
74. National party committee reports filed with the FEC indicate that during the 1996 election cycle MCI Telecommunications donated $966,000 in soft money to the national party committees, $607,000 of which went to Democratic national party committees.
Id.
75. National party committee reports filed with the FEC indicate that during the 1996 election cycle NYNEX Corporation, a regional telecommunications company, donated $651,000 in soft money to national party committees, with $411,000 going to Republican national party committees and $240,000 to Democratic national party committees.
Id.
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76. Telecommunications legislation governing the entry of the seven local “Baby Bell” telephone companies into the long-distance telephone service market was drafted and signed into law during the 1996 election cycle. Common Cause,
Local & Long Distance Telephone Companies Give Record Soft Money During Final Months of Telecommunications Overhaul
(February 9, 1996) chttp: //www. commoncause. org/publications /296com. htm> [JEx. 25].
77. Certain telephone companies donated large sums of soft money diming the drafting of the proposed telecommunications legislation. On October 17, 1995, the week after House-Senate telecommunications bill conferees were named and a week before their negotiations began, MCI donated $100,000 in soft money to the DNC. On December 20, 1995, the conferees’ reached agreement on the bill. On December 21, AT & T gave $190,000 to the DNC. The same day, the agreement was put on hold because House Republican conferees objected to certain .provisions and to Clinton Administration statements claiming victory. On December 28, AT
&
T donated $200,000 to the RNC. On December 29, MCI gave $100,000 to the DNC and $20,000 to the NRCC. The final version of the bill was subsequently passed by the House and Senate, and President Clinton signed it into law on February 8, 1996.
Id.
The Association of Trial Lawyers
78. National party committee reports filed with the FEC indicate that during the 1996 election cycle the Association of Trial Lawyers of America donated $803,000 in soft money to the national party committees, with approximately $606,000 donated to Democratic national party committees and $197,000 to Republican national party committees. Top 50 Contributors List.
79. A series of legal reform initiatives, including tort reform legislation, were introduced in Congress during the 1996 election cycle.
See
Herrnson Dep. at 101 [JEx. 36].
The Health Care Industry
80. National party committee reports filed with the FEC indicate that during the 1996 election cycle Blue Cross/Blue Shield donated almost $578,000 in soft money to the national party committees, giving $438,000 to Republican national party committees and about $140,000 to Democratic national party committees. Top 50 Contributors List.
81. National party committee reports filed with the FEC indicate that during the 1996 election cycle Integrated Health Services, Inc. contributed $609,000 in soft money to the national party committees, $574,000 of which went to Democratic national party committees.
Id.
82. National party committee reports filed with the FEC indicate that during the 1996 election cycle Eli Lilly
&
Co. donated $747,000 in soft money to the national party committees, with $507,000 given to Republican national party committees and $240,000 to Democratic national party committees.
Id.
83. National party committee reports filed with the FEC indicate that during the 1996 election cycle, Bristol-Myers-Squibb gave approximately $552,000 in soft money to the national party committees, with $438,000 going to Republican national party committees and $115,000 to Democratic national party committees.
Id.
84. Members of Congress proposed numerous health care reform initiatives, including potential changes in Medicare and managed care regulations, during the 1996 election cycle.
See
Herrnson Dep. at 105-106 [JEx. 36].
F.
Corporate Donors Give Soft Money to Both Democrats and Republicans
85. The business community quite often makes soft money donations to both the Democratic and Republican parties because they feel they are buying access. FEC Statement of Material Facts II at
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¶ 339 [PSEx. 2]; Declaration of Hon. Dale Bumpers,
RNC v. FEC
(“Bumpers Decl.”) at ¶ 15 [JEx. 3].
86. Some donors give to whichever party is in power. FEC Statement of Material Facts II at ¶ 340 [PSEx. 2]; Declaration of Hon. Martin Meehan,
RNC v. FEC
(“Meehan Decl”) at ¶9 [JEx. 4].
87. Contributions by individuals, organizations and companies to both Republican and Democratic political parties is pervasive and gives the impression that the purpose of the contributors’ goal is “making political investments and protecting their flanks.” FEC Statement of Material Facts II at ¶ 343 [PSEx. 2] (quoting Richmond Times Dispatch, Editorial, “Cash Cows,” August 6,1997 [JEx. 195]).
88. A study conducted by the Center for Responsive Politics found that donors representing five traditionally Republican industries shifted their patterns of soft money giving in the period after the 1992 Democratic convention: three shifted from an average of 3 to 1 or 4 to 1 in favor of the Republicans to an advantage in favor of the Democrats, while in the cases of the other two the gap between Republicans and Democrats narrowed significantly. Herbert E. Alexander
&
Anthony Corrado,
Financing the 1992 Election
156 (1995); Joint Stip. ¶ 18.
89. Some corporations observing shifts in power have made adjustments in their soft money giving. In the 1992 election, for instance, the Democrats received sizable contributions from individuals or corporations that had donated funds to the RNC earlier in the election cycle. In most instances, these gifts were offered late in the race, as the likelihood of a Democratic victory increased. Herrnson Dep. at 107 [JEx. 36].
90. During December 1995, Eli Lilly contributed $20,000 to the DCCC, $25,-000 to the NRSC, $20,000 to the DSCC, and $20,000 to the NRCC, because these congressional committees “represent the major party Congressional campaign committees and will provide a premier opportunity for us [Eli Lilly] to interact with senior Congressional and Administration officials. These organizations are important and our participation in them will have an immediate value.” FEC Statement of Material Facts II at ¶ 344 [PSEx. 2]; Eli Lilly Proposed Corporate Political Contributions, November 15, 1995 [JEx. 155].
91. When the Republican Party took control of the U.S. House and Senate in 1994, the tobacco industry dramatically increased its soft money donations to the Republican Party, including the Republican National Committee. The industry also gave to the Democratic Party, but in significantly smaller amounts. This was part of a tobacco industry strategy to avoid what it regarded as undue regulation at a time when there was much discussion of such regulation, in view of the settlements of pending tobacco-related disputes then being negotiated with state attorneys general around the country. FEC Statement of Material Facts II at ¶ 522 [PSEx. 2]; Meehan Decl at ¶ 11.
92. Although in the 1994 cycle MCI reportedly gave comparable amounts of soft money to Republicans (over $168,000) and Democrats (over $188,000), during the 1996 cycle the company’s giving did tilt heavily away from the Republicans (over $358,000) and toward the Democrats (over $607,000). However, in the 1998 cycle, the company’s soft money giving swung back again, with over $719,000 reportedly going to Republicans and over $422,000 to Democrats. FEC Brief,
RNC v. FEC,
at 28 n.21 [PSEx. 3],
93. Microsoft Corporation, which played little role in political giving for years — reportedly giving only $10,000 in soft money in the 1994 election cycle— radically changed its approach and became a major donor to both parties when its activities came under intense federal scrutiny.
Id.
at 32.
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IV.
ISSUE ADVOCACY ADVERTISEMENTS
21
A.
Issue Ads Are Funded with Soft Money
94. Corporations, unions and individuals who are not candidates are permitted to spend unlimited amounts on issue advocacy so long as those expenditures are neither coordinated with nor earmarked for a particular candidate. Herrnson Statement at 61 [JEx. 17]; Minority Report at 7522 [JEx. 21].
95. Under current FEC regulations, national party committees are permitted to spend unlimited amounts of soft money on issue advocacy, subject to FEC allocation formulas, so long as those expenditures are not coordinated with a candidate. 11 C.F.R. § 106.5 (b); FEC Statement of Material Facts II at ¶ 99 [PSEx. 2].
96. Under current FEC guidelines, state party committees are permitted to spend unlimited amounts of soft money on issue advocacy, subject to even more permissive allocation formulas, so long as those expenditures are not coordinated with a candidate. 11 C.F.R. § 106.5 (c); Herrnson Dep. at 111 [JEx. 36]; FEC Statement of Material Facts II at ¶ 369 [PSEx. 2], National party “issue advocacy” advertising is often bought by state parties but funded by national party committees, who transfer the funds needed to the state parties.
Id.
97. Most issue ads are financed in large part with soft money that is raised outside of the federal system from sources and in amounts that the FECA was meant to prohibit. Herrnson Dep. at 50-51 [JEx. 36].
98. For example, the great bulk of issue ads paid for by the Democratic National Committee are funded with soft money.
Id.
at 73 .
B.
Increase in the Use of Issue Advocacy
99. In recent federal election cycles, the national party committees have increasingly used so-called “issue advocacy” that promotes their federal candidates or criticizes the opposing candidates as a tool to influence federal campaigns, while carefully avoiding particular words expressly advocating the candidates’ election or defeat. This use of soft money to influence federal campaigns has led to a shift in the parties’ fundraising focus from hard to soft money. FEC RNC Brief at 8-9 [PSEx. 3].
100. The race to air issue ads has encouraged national party committees, especially national party organizations, to focus more of their efforts on raising soft money contributions from individuals and groups. Herrnson Statement at 61. [JEx. 17]
101. The political parties are increasingly using so-called issue advocacy campaigns to influence federal elections. Herrnson Statement at 21-22 [JEx. 17]; FEC Statement of Material Facts II at ¶ 382 [PSEx. 2],
102. In the 1996 election cycle, the use of issue ads increased dramatically, as many groups ran advertisements that appeared to favor one candidate over another. Minority Report at 6301 [JEx. 21],
103. While the national party organizations had engaged in issue advocacy before the 1996 election cycle, the amounts that they spent during that cycle to promote the parties’ respective presidential candidates was unprecedented. Herrnson Dep. at 114 [JEx. 36].
104. Political parties, unions, corporations and tax-exempt organizations all paid for issue ads during the 1996 election cycle. Minority Report at 7522 [JEx. 21].
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105. The DNC estimates that it and state Democratic party committees spent approximately $42 million on issue advertising during the 1995-1996 election cycle. Declaration of Joseph Sandler,
Mariani v. United States
(“Sandler Decl.”) at ¶ 12 [JEx. 8],
106. All six national party committees, as well as many state party committees, sponsored issue advocacy ads during the 1996 elections. Herrnson Statement at 43 [JEx. 17].
107. The 1996 election shows that parties can use issue advocacy ads to influence the national campaign agenda and the agendas in individual House and Senate contests.
Id.
at 46 .
C.
Tactical Advantages of Using Issue Ads
108. An advantage of airing issue ads against an opposing party’s candidates, including safe incumbents, is that the ads can encourage the candidates to spend more time at home and less time traveling the country raising money for challengers and needy colleagues. Herrnson Statement at 47 [JEx. 17].
109. The effect of issue advocacy ads is usually magnified many times over because they routinely receive free media coverage.
Id.
110. Issue advocacy is a preferred campaign approach by the party committees, because their staffs are heavily involved in Members’ campaigns and it would therefore be difficult for the party to run television ads as independent party expenditures. FEC Statement of Material Facts II at ¶ 357 [PSEx. 2]; Herrnson Statement at 44 [JEx. 17].
111. Party issue advocacy ads are important late in the election. The ads can supplement a candidate’s advertisements and catch an opponent off guard and without the funds needed to respond. The ads also have the benefit of limiting the media time that might otherwise be purchased by an opponent. FEC Statement of Material Facts II at ¶ 362 [PSEx. 2]; Herrnson Statement at 48 [JEx. 17].
D.
Issue Advocacy Advertisements Are Extremely Similar to Express Advocacy and Are Designed to Influence Elections
112. During the 1996 elections, the parties spent record sums of soft money on issue advocacy ads that presented the names and likenesses of federal candidates. Many of these ads bore similarities to candidate ads and were intended to influence the election prospects of individual federal candidates despite the fact that they did not expressly call for a candidate’s election or defeat. Herrnson Statement at 2 [JEx. 17].
113. Issue advocacy ads that are communicated during the election season and present the names or likenesses of federal candidates are intended to influence federal elections. Herrnson Statement at 43, 61-62 [JEx. 17]; Herrnson Dep. at 145, 147 [JEx. 36],
114. Most issue advocacy ads are nearly identical to hard money ads in that they praise or criticize federal candidates by name or feature their likeness. The only major visible difference is that the issue advocacy ads cannot expressly call for a candidate’s election or defeat. Herrnson Dep. at 45 [JEx. 36].
115. As used in 1996, many televised ads were characterized as issue ads but appeared to function as attack ads on candidates. By claiming the ads to be discussions of issues, the ad sponsors were able to evade federal election law contribution limits and disclosure requirements applicable to candidate ads. Since no disclosure laws apply, issue ads run by unknown organizations leave the public in the dark in terms of knowing who is financing candidate attack ads. Minority Report at 7521; FEC Statement of Material Facts II at ¶ 431 [PSEx. 2].
116. Many party committee “issue ads” have compared the positions or past ac
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tions of two competing federal candidates, rather than focusing on pending federal legislation. FEC Statement of Material Facts II at ¶ 451 [PSEx. 2]; FEC RNC Mem. at 24-25 [PSEx. 3].
117. The overwhelming majority of the RNC’s “issue ads” in the last two election cycles named specific federal candidates. FEC RNC Mem. at 21 [PSEx. 3].
118. The RNC estimated that between 1995 and 1998 it spent $8,109,516 in soft money on “issue ads” that identified a federal candidate, $539,053 on ads that identified a federal officeholder not seeking election, and $1,108,194 on ads that identified no federal candidates or office holders but that may have identified a party. Thus, of all the soft money issue ad spending during the period that RNC did identify, at least 83% was on ads that identified a federal candidate.
Id.
at 21 n. 13.
119. The parties use the very large soft money donations to fund issue ad campaigns that are clearly designed to influence federal elections. FEC Statement of Material Facts II at ¶ 353; Shays Decl. ¶ 8 [JEx. 5].
E.
Democratic Issue Ads During the 1995-96 Election Cycle
120. In 1995, President Clinton’s reelection team came up with an innovative strategy through which to spend millions of dollars on televisions ads to bolster Clinton’s popularity heading into the 1996 election year without using the campaign’s precious, and limited, spending capabilities: they would use the resources of the DNC and other party organizations. Those millions of dollars were indeed spent by the DNC and other party organizations for television advertisements as planned. Herrnson Dep. at 110 [JEx. 36].
121. The Democrats’ issue ads largely targeted states related to the presidential campaign, including $4 million in California and several million dollars each in Illinois, New York, and some other key electoral states, including Pennsylvania. The ads were used to deliver the Democrats’ basic message, policy proposals, and accomplishments, and to criticize Senator Dole’s views and record, and the record of the Republican controlled Congress.
Id.
at 115 .
122. These party-sponsored issue ads that were broadcast in late 1995 and throughout 1996 were designed to promote specific federal candidates, especially the parties’ respective presidential nominees and House and Senate candidates, and thus build electoral support for their candidacies. The Democrats aired an extensive series of commercials that sought to advance the Democratic legislative agenda and improve the reelection prospects of President Clinton. The Democrats broadcast ads in 24 states, focusing on the Republican Congress’s role in the government shutdown, the Clinton Agenda to protect Social Security and Medicare, and the strength of the economy. Herrnson Dep. at 115-118.
123. During the 1996 election cycle, the DNC was the first national party committee to broadcast issue advocacy ads to help a candidate. It began televising ads in mid-October 1995 in order to counteract President Clinton’s low standing in the polls. Don Fowler and presidential adviser Dick Morris advocated using TV to get out the message that the president was doing a good job and to paint the Republican-controlled Congress as a group of radical extremists who wanted to help large corporations and wealthy individuals at the expense of working people. TV ads focusing on GOP proposals to downsize the growth of Medicare and Medicaid, cut spending on education, allow corporations to pollute the environment, and out taxes for the wealthy were aired in states critical to the president’s reelection prospects, and their impact on congressional elections was unmistakable. The $42.4 million that the DNC spent on issue advocacy ads over the course of the election helped set the national political agenda and the tone for
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many House and Senate campaigns. Herrnson Statement at 21-22 [JEx. 17].
124. Because the cost of DNC ads did not count as expenditures by the Clinton campaign, the DNC’s media effort allowed the Clinton campaign to benefit from favorable advertising without depleting its scarce, federally-capped campaign coffers. The DNC’s advertisements were shown in states considered key to the President’s reelection, and funds were transferred from the DNC to the state parties in order to take advantage of the state parties’ ability to spend a larger percentage of soft money on the advertisements. While the transfers were made to take advantage of the state parties’ greater ability to spend soft money, there were no restrictions on this type of transfer. Minority Report at 8286, 8336-37 [JEx. 21]; FEC Statement of Material Facts II at ¶ 387 [PSEx. 2].
125. The DNC ran an expensive issue advocacy campaign in 1996. The DCCC and the DSCC ran issue advocacy campaigns that complemented those spearheaded by the DNC. The DCCC transferred $8.5 million to Democratic state committees to help finance television ads that were aired in the districts of sixty marginal House members, most of whom were Republican freshmen. In addition to criticizing House Republicans, many of the ads touted the congressional Democrats’ Families First Agenda. Herrnson Statement at 44-45 [JEx. 17].
126. The DSCC transferred an additional $10 million for issue advocacy ads to fourteen states that hosted the nation’s closest Senate races.
Id.
at 45 . FEC Statement of Material Facts II at ¶ 465 [PSEx. 2],
F.
Republican Issue Ads During the 1995-96 Election Cycle
127. The day after nominee Bob Dole decided to resign from the Senate to devote himself to full-time campaigning, RNC Chairman Haley Barbour announced a $20 million issue advocacy campaign. In addition, the Republicans later mounted another effort costing approximately $20 million to counteract the $21 million issue advocacy advertising campaign launched by labor unions. The Republicans similarly made transfers to state parties to take advantage of beneficial allocation formulas. Herrnson Dep. at 111-112 [JEx. 36].
128. The Republican Party waited until March 1996, when Senator Robert Dole of Kansas had clinched the nomination, prior to launching their issue advocacy ad campaign. From late March through the Republican national convention, the RNC spent approximately $20 million on ads designed to boost Dole’s image. The party’s initial ads were financed by the RNC and designed to boost Dole’s image at a time when he had virtually run out of federal matching primary funds. The RNC spent $20 million between March 1996 and its August 1996 national convention, when the Dole campaign received its general election funds. Although these ads were primarily intended to influence the presidential contest, their impact reverberated in campaigns at all levels. Herrnson Statement at 22 [JEx. 17].
129. The Republican national party committees spent approximately $34 million on issue advertising in 1996, $14 million of which was used to fund ads in support of the Dole campaign. Herrnson Dep. at 79-81 [JEx. 36] Some portion of these expenditures was funded by soft money.
Id.
130. The RNC’s issue advocacy ads in 1996 were supplemented by ads financed by the GOP Hill committees. The NRCC televised six issue advocacy ads in the districts of Republican candidates involved in competitive elections. The first three ads were designed to remind voters of GOP accomplishments and to clarify for the public its positions on welfare reform, congressional reform, and Medicare. They cost $7 million and were aired in thirty House districts from the third week in July through Labor Day. The second three ads sought to counter the anti-Re
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publican media campaign waged by organized labor and the Democrats, to remind voters of some of the policy failures of the Clinton administration, and to discourage them from electing a Democratic Congress. These ads, which were cosponsored by the RNC, cost roughly $20 million and were broadcast in fifty-eight districts from October 5 through election day. Herrnson Statement at 45 [JEx. 17]; FEC Statement of Material Facts II at ¶ 421 [PSEx. 2].
131. The NRSC took a different route from that of its House counterpart or Democratic rival, setting up a special division composed of twelve full-time staffers to handle its issue advocacy and independent expenditure advertising. Herrnson Statement at 45-46 [JEx. 17].
132. The NRSC spent about $2 million to televise issue advocacy ads in five states during the 1996 elections. The ads focused on welfare reform, the Republican plan to balance the budget, and Republican spending priorities. Between April and October 3, 1996, which marked the end of the Senate session, the NRSC aired prime-time ads in Iowa, Minnesota, and Montana that were tailored to highlight vulnerabilities in Democratic candidates’ records. Herrnson Statement at 46 [JEx. 17].
G.
Independent Groups ’ Issue Ads
133. Corporations, unions and other groups, although prohibited from spending money from their treasuries or operating accounts expressly to advocate voting for or against a particular candidate, may conduct “issue advocacy” campaigns intended to harm or help a candidate without directly telling people to vote for or against that candidate Herrnson Dep. at 66-67 [JEx. 36].
134. During the 1996 election cycle, both parties benefited from the expenditures and activities of independent groups. The most visible example is televised ads. A study conducted by a nonpartisan organization, the Annenberg Public Policy Center, estimated that, during the 1996 election cycle, independent groups spent between $67 and $82 million on televised ads that split about evenly in their support of the two parties. Almost 90 percent of these ads named specific candidates. Groups like the AFL-CIO, Citizen Action, Citizens for Reform, and Citizens for the Republic Education Fund each spent millions of dollars on these televised ads. Minority Report at 5927 [JEx. 21].
135. Contributors are able to avoid limits on campaign contributions by donating to ostensibly “nonpolitical” groups engaged in issue advocacy. Since these donations are not classified as campaign contributions, corporations, which are forbidden to contribute to candidates, are free to donate; there are no limits on the size of contributions; and donors can hide their identities.
Id.
at 5969-70 (footnote omitted).
136. Triad Management Services (“Triad”) is a for-profit business established in the Washington area in 1995 by Carolyn Malenick, a former fundraiser for Oliver North, a figure in the Iran-Contra scandal and, in 1994, an unsuccessful candidate for a Senate seat in Virginia.
Id.
at 5982 .
137. Triad held itself out as a consulting business that provides advice to conservative donors about how to maximize their political contributions.
Id.
at 6289 .
138. In addition to providing advice and fundraising assistance to candidates, Triad worked to raise funds for individual candidates.
Id.
at 6296 .
139. Triad managed two tax-exempt organizations whose names suggested they were large, grassroots organizations: Citizens for Reform and Citizens for the Republic Education Fund. In fact, both entities were shell companies with no offices, no employees, and no members. They were established in the spring of 1996 for the sole purpose of running attack ads under the guise of “issue advocacy” to help
*382
Republican candidates win election to Congress.
Id.
at 5982 .
140. The primary means by which Triad assisted in the election of conservative candidates was by overseeing millions of dollars’ worth of advertising placed by these two nonprofit organizations.
Id.
at 6301 .
141. Citizens for Reform and Citizens for the Republic spent a combined total of between $3 million and $4 million on advertising in 29 races.
Id.
at 6304 .
142. Like other groups running so-called issue advertisements in the 1996 campaign, Triad carefully avoided the words “vote for,” “support,” or “defeat,” in the advertisements it funded, but otherwise attacked the positions, ideology, and frequently, the character of candidates. The advertising created by Triad focused on no single set of issues. It more closely resembled negative attack advertising aired by an opposing candidate. The candidates benefiting from the advertising were the same candidates for whom Triad had solicited contributions and advised on campaign and fundraising strategy.
Id.
at 6304 .
143. The sole purpose of the advertising was to influence voters in favor of conservative Republican candidates in those races.
Id.
at 6301 .
144. Bank records reviewed by the Committee on Governmental Affairs revealed that two secret trusts together contributed $2.34 million to Citizens for Reform and Citizens for the Republic, over 83 percent of the total money received by the organization. Triad’s attorneys publicly confirmed that Triad entered into written agreements to keep the identity of funding sources secret.
Id.
at 6309 .
145. Triad succeeded in pouring millions into televised advertisements designed to attack particular candidates in hotly-contested races, while concealing the identities of the individuals and companies that provided the moneys.
Id.
at 6313 . 146. In 1996, The AFL-CIO announced its plans to spend $35 million to counter the Republican “Contract with America.”
Id.
at 7522-23 .
147. In 1996, the AFL-CIO spent about $25 million on media advertising in 44 congressional districts.
Id.
148. The majority of the AFL-CIO-funded issue ads aired during the 1996 election cycle criticized Republican House freshmen who won office in 1994.
Id.
149. In April of 1996, a coalition of 32 business groups called The Coalition: Americans Working for Real Change, spent $5 million on issue ads and mailed two million letters to members. Annen-berg Study at 28-29 [JEx. 29], The Coalition raised funds from its member groups, including $1 million from the National Restaurant Association.
Id.
150. In 1995 and 1996, Coalition for Our Children’s Future (“CCF”) ran a series of “issue ads” on such subjects as Medicare and the balanced budget. In August 1995, CCF received a $500,000 donation from the National Republican Congressional Committee, part of the RNC. Additional money for the issue ads was raised by RNC Chairman Barbour and Speaker Gingrich. Among the donors were major Republican contributors, including large corporations. Minority Report at 5981 [JEx. 21].
151. In 1995 alone, CCF spent $3.18 million on advertisements supporting the Republican positions on the Balanced Budget Amendment and Medicare. Even after the demise of the Republican Balanced Budget legislation prior to the government shut-down in 1995, CCF continued to air advertising in key congressional races.
Id.
at 6772 .
152. The purpose of CCF was to raise funds from corporate interests to fund a media campaign in support of Republican legislation on the balanced budget and Medicare reform.
Id.
at 6772 .
153. After a very active fundraising campaign through the summer of 1995,
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CCF commenced its advertising campaign. Between August and December 1995, CCF funded four waves of advertising totaling at least $3.18 million. The advertisements aired during this period include a Medicare advertisement featuring one Senator, a Balanced Budget ad featuring a second Senator, an advertisement entitled “Meet Priscilla,” which focused on the federal debt and the need for a balanced budget for the future, and a fourth advertisement urging support for the Republican Medicare plan.
Id.
at 6774 .
154. A memo produced by a Stevens & Co. employee contains a list of media markets where CCF’s 1995 advertising aired. The memo shows that ads were targeted to air in particular congressional districts, many of which were the districts of vulnerable Republican freshman.
Id.
at 6775 .
155. Shortly before the November 1996 election, the RNC gave $4.6 million to Americans for Tax Reform, $650,000 to the National Right to Life Committee, and $600,000 to the American Defense Institute. This direct payment to tax-exempt organizations is an unprecedented amount.
Id.
at 5976 .
156. Americans for Tax Reform — the largest recipient of RNC funds- — used this money to conduct a massive “issue advocacy” campaign aimed at helping the Republicans.
Id.
at 5978-79 .
157. Shortly before the November election, RNC Chairman Barbour acknowledged, in effect, that the RNC’s contribution to Americans for Tax Reform made it possible for the party to circumvent the campaign finance laws. At an October 1996 press conference, Barbour was asked about the RNC’s $4.6 million transfer to ATR and he made the following statement:
You’ll see in our FEC report ... that we’ve made contributions to a number of organizations that are like-minded, share our views, promote our ideas.... [W]hen we do advocacy, no matter what we do, we typically have to pay for it, either totally with FEC dollars or a mixture of FEC and. non-FEC dollars .... [W]e often find ourselves in the position where we cannot match up non-FEC funds with enough FEC funds. So, when we came to that point, we decided we would contribute to several groups who are like-minded and whose activities we think, while they’re not specifically political, we think are good for the environment for us.
Id.
at 5979 .
158. The FEC has instituted no civil actions under 2 U.S.C. § 437g(a)(6)(A) with regard to any issue advertisements aired during the 1996 election cycle.
See
Transcript of Oral Argument,
Mariani v. United States
(M.D.Pa. Mar. 12, 1999) at 16-17 [PSEx. 5].
159. In 1998, FEC auditors investigated the alleged coordination between the Clinton and Dole campaigns and their respective national party committees on issue ads during the 1996 election cycle. The auditors ultimately recommended that the campaigns be required to repay $7 and $17.7 million, respectively, of federal matching funds.
See
FEC Agenda Document No. 98-85, “Report of the Audit Division on Clinton/Gore ’96 Primary Committee, Inc.” at 72 (1998); FEC Agenda Document No. 98-87, “Report of the Audit Division on the Dole for President Committee, Inc. (Primary)” at 112 (1998); FEC Agenda Document No. 98-88, “Report of the Audit Division on the Dole/ Kemp ’96 and Dole/Kemp Compliance Committee, Inc. (General)” at 61 (1998) [JEx. 42].
160. The Commission unanimously rejected the recommendation of the auditors. “Statement of Reason of Vice Chairman Darryl R. Wold and Commissioners Lee Ann Elliott, David M. Mason and Karl J. Sandstrom On The Audits Of ‘Dole For President Committee, Inc.’ (Primary), ‘Clinton/Gore ’96 Primary Committee, Inc.,’ ‘Dole/Kemp ’96, Inc.’ (General), ‘Dole/Kemp ’96 Compliance Committee, Inc.’ (General), ‘Clinton/Gore ’96 General Committee, Inc.,’ and ‘Clinton/Gore ’96
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General Election Legal And Compliance Fund’ ” (June 24,1999) [JEx. 43],
Y.
NATIONAL AND STATE PARTY ORGANIZATIONS COOPERATE TO SPEND LARGE SUMS OF SOFT MONEY IN CONNECTION WITH CAMPAIGNS FOR FEDERAL OFFICE
161. National party “issue advocacy” advertising is often bought by state parties but funded by national party committees, who transfer the funds needed to the state parties. These transfers allow a far higher percentage of soft money to be used to pay for the advertising, under the different allocation formulas applicable to state parties. FEC Statement of Material Facts II at ¶ 369 [PSEx. 2]; Herrnson Dep. at 111 [JEx. 36].
162. Much of the party money used to finance issue advocacy campaigns originates at the national level and is transferred to state party committees. Herrn-son Statement at 43 [JEx. 17].
163. By transferring large sums to the state or local level, national parties can also avoid effective disclosure. Under federal regulations, the committees are only required to report the amounts transferred to other committees; they do not have to account for how these funds were ultimately spent. Herrnson Dep. at 113— 114 [JEx. 36].
164. During the 1996 elections, soft money enabled the national parties to wage a coordinated campaign that supplemented, and in some cases replaced, the voter mobilization efforts of presidential and other candidates. The national committees assist their candidates’ campaigns by distributing both hard and soft money to state parties that they use to finance voter mobilization drives and party-building activities. The DNC transferred more than $76 million, roughly $11 million more than its Republican counterpart. Most of these funds were distributed in accordance with the strategies of their presidential candidates. Herrnson Statement at 21 [JEx. 17]; FEC Statement of Material Facts II at ¶ 66 [PSEx. 2],
165. In election years, the national party committees transfer more soft money to state and local party committees in states with closely contested races for federal office. Joint Stip. ¶ 103.
166. During the 1996 election cycle, the national party committees reported transferring a combined $14.3 million in soft money to state and local party committees in California, an important battleground state in the Presidential election. FEC Notice of Proposed Rulemaking at 37727 [JEx. 39].
167. During the 1996 election cycle, the national party committees reportedly transferred a combined sum of $325,332 to state and local party committees in New York, where polls indicated that President Clinton had a substantial lead.
Id.
168. During the 1996 election cycle, the RNC transferred funds to state Republican party committees, who used soft money to publish and pay for issue advocacy advertisements critical of President Clinton and/or supportive of Senator Robert Dole. Huyck Decl. at ¶ 4 [JEx. 7]
169. State Democratic Party committees generally received funds from the DNC in order to pay for the broadcast of issue advertisements. Sandler Decl. ¶ 5 [JEx. 8].
170. A memorandum dated March 18, 1996 apparently from the RNC’s Political Director Curt Anderson to RNC Chairman Haley Barbour regarding “Ballot Allocation of States” stated, in part: “The following chart clearly demonstrates what we already know, that any media we place in the target presidential states should be placed through state parties. The average ballot allocation in the top 17 target states is 37% federal-63% non-federal, this obviously contrasts very well with our 65% federal — 35% non-federal allocation _ Some have voiced concern that buying through the state parties could result in a
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loss of control on our part. There is absolutely no reason to be concerned about this. As was demonstrated in our efforts recently in the CA and OR special elections, our field staff is fully able to insure that state parties make good on any arrangement we make with them. This is simply a book keeping hassle, but not in anyway [sic] a reason not to proceed.” March 18, 1996 Memorandum from “Curt” to “the Chairman” [JEx. 163]; FEC Statement of Material Facts II at ¶ 389 [PSEx. 2].
171. A memorandum dated May 24, 1996 from the Republican National Finance Committee’s A1 Mitchler to RNC Finance Chairman Howard Leach, Team 100’s Tim Barnes and other RNC personnel stated: “Over the next two weeks, we are going to have to raise $4 million [handwritten correction from $2 million], minimum, in soft money that has to be transferred to the CA State Party. If this money does not come from CA donors, then we must have donors from other states agree to be listed as a major donor in CA .... Let me stress how critical it is that this money be raised and assigned as quickly as possible so that
ive can get on the air
and stay on the air for the next three months in CA. Anyone who is going to give $50,000, $100,000, or $200,000 should be looked at as a potential major donor for the state of CA.” May 24 1996 Memorandum from A1 Mitchler to Howard Leach, et al. [JEx. 162] (emphasis in original); FEC Statement of Material Facts II at ¶ 403 [PSEx. 2].
VI.
DONORS RECEIVE ACCESS IN EXCHANGE FOR LARGE SOFT MONEY DONATIONS AND CANDIDATES BENEFIT FROM RAISING IT
A.
Large Donors Obtain Access to Officeholders and Candidates
172. Soft money donations have resulted in donors getting access to elected federal officials and to candidates for federal elective office. Joint Stip. ¶ 107; Affidavit of Daniel H. Murray,
Mariani v. United States
(“Murray Afft”) ¶ 14 [JEx. 2]; Herrnson Statement at 57 [JEx. 17]; FEC RNC Mem. at 35 [PSEx. 3]; Minority Report at 4573 [JEx. 21];.
173. The success of contributors in affecting policy depends on the quality and extent of the access they gain. Large contributors, especially if they are repeat contributors, inevitably gain a special or privileged access. Repeated giving establishes deep and enduring relationships with public officials and party committees, relationships formed and enhanced by face to face conversations and the social familiarity of the “occasions” to which the parties invite contributors. The access of those contributors is also often reinforced by the skilled and experienced lobbyists they employ. It is very common, for example, for the PAC of a union, a corporation, or an association to coordinate its contributions with the goals and strategies of the lobbyists of its parent organization.
174. Most of the largest contributors to the party committees customarily have received more access to a member than individuals who contributed only $1,000, or average constituents who gave little or not at all. FEC Statement of Facts I at ¶ 162 [PSEx. 1]; Declaration of Former Senator Timothy E. Wirth,
FEC v. CRFCC
(“Wirth Decl.”) ¶ 1 [JEx. 10].
175. Contributions help contributors gain access and have their phone calls taken. And access can influence action, since the totality of the information a Member has is significantly affected by which people gain access to the Member. FEC Statement of Facts-I at ¶ 168 [PSEx. 1]; Declaration of Leon Billings,
FEC v. CRFCC
(“Billings Decl”) ¶ 13 [JEx. 11].
176. Small contributions are typically raised using direct-mail and telemarketing solicitations, which do not require personal contact between the party and its contributors. FEC Statement of Material Facts II at ¶ 62 [PSEx. 2]; Herrnson Statement at 1 [JEx. 17].
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177. Daniel H. Murray served from 1982-1995 as a government relations specialist for Sprint, GTE and BellSouth Corporations. Murray Afft ¶3 [JEx. 2]; Joint Stip. ¶ 65.
178. Mr. Murray assisted these companies and their PACs in selecting candidates and political groups for financial support through both hard and soft money. Murray Afft ¶ 3 [JEx. 2]; Joint Stip. ¶ 66.
179. This support was offered in order to gain access to and build relationships with lawmakers and their staffs, including efforts to gain the opportunity to persuade them to support or oppose legislation that was of interest to his employers. Murray Afft ¶ 3 [JEx. 2]; Joint Stip. ¶ 67.
180. From the point of view of the individuals Mr. Murray’s employers were financially supporting, no difference was perceived between hard and soft money. Murray Afft ¶ 3. No recipient ever asked that Mr. Murray try to give more of either hard or soft money as opposed to the other. Murray Afft ¶ 3 [JEx. 2],
181. On the basis of the financial support his employers provided to the Democratic and Republican parties, Mr. Murray had the opportunity to serve on the Democratic Business Council of the DNC, the Advisory Council of the Democratic Leadership Council, the 1988 and 1992 DNC Convention Site Selection Committees, the Democratic Senate Campaign Committee Leadership Circle, the Democratic Congressional Campaign Committee Annual Dinner Committee, the Republican Senate Campaign Committee Annual Dinner Committee, and steering committees for many House and Senate campaigns. Murray Afft ¶ 4 [JEx. 2].
182. As part of his current work as a government relations consultant, Mr. Murray develops legislative plans designed to foster relationships between a given client and key legislators in order to advance the client’s legislative goals. Murray Afft ¶¶ 5-6 [JEx. 2]; Joint Stip. ¶ 68.
183. Mr. Murray also develops a parallel political financial support plan in which he advises his clients as to which federal office-holders (or candidates) they should contribute to and in what amounts, in order to best use the resources they are able to allocate to such efforts to advance their legislative agendas. Murray Afft ¶ 7 [JEx. 2]; Joint Stip. ¶ 69
184. Such plans include soft money contributions to political parties and interest groups associated with political issues. Murray Afft ¶ 7 [JEx. 2]; Joint Stip. ¶ 70.
185. “In recent years, contributions of soft money ... has proven to provide excellent access to federal officials and to candidates for federal elective office. Since the amount of soft money that an individual, corporation or other entity may contribute has no limit, soft money has become the favored method of supplying political support.” Murray Afft II14 [JEx. 2]; FEC Statement of Material Facts II at ¶ 283 [PSEx. 2].
186. As a lobbyist, Daniel Murray would, where appropriate, arrange meetings between employees of his corporate clients and executive and legislative staff members. Murray Dep. at 69-70 [JEx. 37].
187. If a client had been a regular contributor to a party, and Mr. Murray did not have a relationship with an official whom that client sought to contact, Mr. Murray would sometimes “call the Senate or House Campaign Committee and say, ‘I really need an appointment to see Senator X or Congressman X,’ and they would... arrange those meetings.” Murray Dep. at 70 [JEx. 37].
188. Daniel Murray described the development of a campaign contribution plan to serve a client’s legislative agenda as follows:
You know how much the PAC has and you know how much the company will spend in soft money and then you decide the priorities of where you are going to give the money during the campaign.
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On the House side they are always up for re-election, but some of the Senators would be out of the cycle. There is only one-third up in any particular two year period. But if they were Chairman of a major committee, it didn’t matter where in the cycle they were.
So, you would lay out your plan that way and make sure to attend fund-raising events or even host fund-raising events and gather people from the telecommunications industry or whatever. It would be a steering committee type operation. You would contact their fundraiser and say we would like to do something for Senator X or the Majority Leader, whatever, and you usually got a very favorable response and went forward.
Murray Dep. at 76-77 [JEx. 37].
189. According to Mr. Murray, this access translates into opportunities to discuss issues and obtain information from the candidates, officials and staff.
Id.
at 35.
190. Membership on not just one committee but on “a series of them” begets lobbyists or donors membership in additional committees, like the Republican and Democratic Site Selection Committees, as well as the opportunity to participate in formulating policy papers. Murray AfPt ¶¶ 14-15 [JEx. 2]; Murray Dep. at 59 [JEx. 37],
191. One benefit available to large contributors is the opportunity to give input on policy issues through the drafting of “white papers.” The drafting process entails gathering representatives of contributors from a certain industry along with party and/or government officials so that those present can share their views about issues. Murray Dep. at 104 [JEx. 37] Once a white paper was written, it would be distributed under DNC letterhead “as a DNC white paper.”
Id.
at 107.
192. At some party fund-raisers, donors may select the officeholder(s) with whom they wish to be seated. Such donors often select officeholders with committee memberships relevant to their business interests. FEC RNC Mem. at 38 [PSEx. 3],
193. Large donations to party committees may actually provide a more efficient means of gaining access to legislators and regulators than smaller donations directly to the candidates, since a single large party donation can buy the opportunity to attend party events involving and make connections with many of the party’s key office holders during party events. FEC RNC Mem. at 39 [PSEx. 3],
194. Parties are allowed to collect large, individual soft-money donations. Fundraisers attempt to cultivate big donors by, for example, providing them and their guests an opportunity to meet public officials at special events. Joint Stip. ¶ 109.
195. Political parties and candidates play to the motives of individual and group donors when they organize fund-raising events. For this reason, the parties provide their big donors with the opportunity to meet with high-ranking officials who are in the strongest position to influence public policy. These individuals include the president (or a party’s presidential candidate), cabinet members, congressional party leaders, committee chairs, or other well-known policy entrepreneurs. FEC Statement of Material Facts II at ¶ 116 [PSEx. 2]; Herrnson Statement at 55 [JEx. 17].
196. The parties enlist the help of elected officeholders and high-ranking political appointees in their fund-raising efforts because contributors respond to these officials’ appeals. The opportunity to be briefed by, meet with, or talk to a high-ranking official is a major draw for many who make contributions to the parties. Contributors who are motivated by material incentives, for example, usually want access to political decision makers who are in a position to influence the environment in which their organizations conduct their business. FEC Statement of
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Material Facts II at ¶206 [PSEx. 2]; Herrnson Statement at 57 [JEx. 17].
197. In recent years, both major parties have offered soft money donors access to elected leaders in exchange for contributions. White House officials and congressional leaders have been asked to appear at fundraisers, participate in party-sponsored policy briefings, attend weekend retreats with donors, and play a role in other small group meetings. Elected officials have even been recruited by the party committees to solicit soft money donations from potential contributors, especially from their own financial supporters and others with whom they have a relationship. Federal officeholders have thus assisted their parties in raising funds for issue advocacy advertising, voter registration, election day turnout drives

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/2565550. Public record. Not legal advice.