Should the executive branch of the federal government yield to the judicial branch in determining if a conservative political group must disclose its donors?
That’s at the heart of a legal battle between the American Action Network (AAN) and Citizens for Responsibility and Ethics in Washington (CREW), a liberal watchdog organization. AAN and CREW have been at spearpoints since 2012, when the watchdogs asked the Federal Election Commission (FEC) to mandate the disclosure of AAN’s donors.
The conservative group has collected and spent a lot of money — nearly $50 million invested in campaigns from 2010-16. The money was spent primarily on TV advertisements, which AAN claims were issue-oriented ads. CREW alleges the ads were intended to support congressional Republican candidates or attack their opponents.
Jesse Panuccio
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The AAN changed tactics after the 2016 campaign season and currently donates to the Congressional Leadership Fund (CLF), a super-political action committee (super PAC) controlled by GOP leaders in the U.S. House. It provided almost $25 million during the 2018 campaign and has so far given $20 million during the 2020 campaign.
It’s an easy exchange for the AAN and the CLF as they share staff and office space. The American Action Network refers to the Congressional Leadership Fund as its “sister super PAC.”
CREW wants to know who is funding these siblings, arguing that the Federal Election Campaign Act (FECA) of 1971 requires it to disclose its revenue sources, but the FEC has twice declined to do so. On Sept. 30, U.S. District Judge Christopher Cooper said the lawsuit can proceed, as reported by Bloomberg. Cooper quoted what he referred to as the punchline to an “old Washington joke” in his ruling.
“The Federal Election Commission is the only government agency that does exactly what Congress designed it to do: nothing,” he wrote.
With the FEC divided on party lines, a legal challenge is allowed under existing rules, Cooper said in his opinion. It’s up to a court to determine if AAN must reveal its funding sources. Cooper was nominated to the bench by President Barack Obama in 2013 and approved 100-0 by the Senate in 2014.
Jesse Panuccio, an attorney with Boies Schiller Flexner LLP, and former acting associate attorney general at the U.S. Department of Justice (DOJ), says the issue has yet to be settled.
“The First Amendment protects the freedom of speech and association, both of which encompass a right to anonymity,” Panuccio told Legal Newsline. “The Supreme Court has recognized this point on many occasions. The Supreme Court has also held, however, that in some circumstances, government-compelled disclosure of donors can be permissible. It’s a hotly debated point because government-compelled disclosure can lead to harassment, intimidation and retaliation — thus chilling the exercise of constitutional rights. The current ‘cancel culture,’ which seeks to curb free speech through just such tactics, makes this an increasingly important concern and could lead the court to re-evaluate some of its precedent on this issue.”
The American Action Network is a 501(c)(4) organization that eschews the term “think tank” and instead describes itself as an “action tank” designed toward further center-right policies and “based on the principles of freedom, limited government, American exceptionalism and strong national security. The American Action Network’s primary goal is to put our center-right ideas into action by engaging the hearts and minds of the American people and spurring them into active participation in our democracy,” the group states on its website.
The AAN argues that the lawsuit involves significant separation of powers and that the DOJ should intervene to protect the U.S. interests.
“Yes, I agree,” Panuccio said. “The Constitution entrusts the executive branch with enforcing the law on behalf of the public, and the FEC is charged with enforcing campaign finance laws. Here an ideological special-interest group that disagrees with the FEC’s enforcement decisions is attempting to enforce the law. But that special-interest group is not accountable to the public and serves its own interests rather than the public interest. This intrusion on executive-branch authority is the type of structural constitutional issue that should interest the Department of Justice.”
Panuccio says that the DOJ has inserted itself into legal matters such as this before and, sometimes, it is requested to do so.
“At the district court level, when the DOJ is not a party to a case but has an interest in making the views of the government known, the DOJ typically files a ‘statement of interest’ under 28 U.S.C. § 517,” Panuccio said. “This statute authorizes the Department of Justice ‘to attend to the interests of the United States in a suit pending in a court of the United States.’ If the case were to reach the Supreme Court, it is likely that the court would call for the views of the solicitor general, granting the DOJ more formal participation in argument of the case.”
American Action Network spokesman Ian Prior told the Washington Times in July that this case has serious implications.
“If CREW were to prevail, it would dramatically alter the separation of powers between the executive branch and the courts,” Prior said. “Attorney General Bill Barr has long been an advocate of a strong and independent executive branch, and it is important that the Department of Justice join this suit to prevent a political organization from hijacking an executive-branch prosecution and using the courts to weaken our American system of checks and balances.”
Panuccio predicts that the lawsuit will move up the legal ladder before it is decided.
“The district court in this case has sided with the plaintiffs on several occasions, but the important issues in this case will likely ultimately be decided by the D.C. Circuit or the Supreme Court,” he said. “I have no information about timing.”
When he worked for the DOJ, Panuccio oversaw the civil and criminal work of the antitrust, civil, civil rights, environment and natural resources, and tax divisions and was chair of its Regulatory Reform Task Force and vice chair of the DOJ’s task force on market integrity and consumer fraud. He counseled the attorney general, deputy attorney general, general counsels at other federal agencies and White House officials.
Previously, Panuccio was the secretary of Florida’s labor, economic-development, and land use agency, the Florida Department of Economic Opportunity. Before that, he was general counsel to Florida Gov. Rick Scott, currently a U.S. senator.