Money in Politics

Still No FEC Quorum. So What?

April 01, 2020 Season 1 Episode 4
Money in Politics
Still No FEC Quorum. So What?
Chapters
Money in Politics
Still No FEC Quorum. So What?
Apr 01, 2020 Season 1 Episode 4

Since August 2019, the Federal Elections Commission has lacked the minimum number of commissioners it needs to undertake some of its most essential operations, including the enforcement of America's federal election laws. With the 2020 campaigns well underway, Blair Schuman, a compliance expert and the founder of Roger That Compliance, joins the Money in Politics Podcast to talk about why this matters, how we got here, and what may be in store for the future of the FEC. 

Show Notes Transcript

Since August 2019, the Federal Elections Commission has lacked the minimum number of commissioners it needs to undertake some of its most essential operations, including the enforcement of America's federal election laws. With the 2020 campaigns well underway, Blair Schuman, a compliance expert and the founder of Roger That Compliance, joins the Money in Politics Podcast to talk about why this matters, how we got here, and what may be in store for the future of the FEC. 

Andrew Blumenfeld:   0:04
Welcome to the money in politics podcast, where we talk about how money gets into the political system and all that happens to it when it's there, including how it gets policed and regulated. I'm Andrew Blumenfeld and that piece of the equation, that regulation, that policing, that is the topic of our conversation today. You probably know that the federal elections in this country are supervised by the F E C. That's the Federal Elections Commission. What you may or may not know is that the FEC has been without a quorum. That's just a fancy word to mean that they don't have enough members to actually meet and take formal action. And they've been without that quorum for quite some time now. And as you can imagine, that raises a lot of questions among the many many finance staff, consultants, campaigns, candidates, that we interact with all the time. So we decided what we needed to do was learn a bit more about this. We were intrigued about what kind of effect this lack of quorum was having on campaigns, what we could expect in the future, do we think this quorum-lessF E. C. is gonna persist for some time? Or is there some solution on the horizon? To answer all of those questions and a bunch more, we decided to speak with someone who knows quite a bit about this. That's Blair Shuman. He is the president of Roger That Compliance. That's a Washington D. C based full-service compliance consulting firm. So he works with campaigns and state parties, you name it, helping them navigate these questions, and especially during this tricky time. Our episode today is sponsored by CallTime.AI.

Sponsor:   2:20
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Andrew Blumenfeld:   2:20
Hey, we're so grateful to have you with us today, Blair. Before we dive too deeply into our topic, it would be great if you could just give us an introduction of who you are, what you do, how you got to what you do?

Blair Schuman:   2:20
Yeah, absolutely. First of all, thanks for having me, really appreciate taking the time. As you may have mentioned, my name is Blair Schuman. I run a campaign compliance consulting company called Roger That Compliance. I've been doing this business for about five years or so, and it's something that I just kind of stumbled into. I was working in the Senate for a little bit, left to go work on a presidential campaign. and was just applying for every job that I could and found a job that did not require a cover letter. And it was a compliance position, and I managed to somehow get it. And I worked at another firm for a couple of years, Left that to go get out of the business for a little bit. And a couple of my client's, six months or so after I left, reached out to me and said, "Hey, we're having some issues we'd like to see if you'd like to come and help us out with their compliance again." I started doing that for a few state parties and continued growing my business from there and been independent, fully independent for a year and 1/2 or so. It's been really good. We've experienced a lot of growth. It's been a lot of fun to see how the industry has changed over the last couple of years. It's been interesting. Campaign finance law has been kind of a hot topic for the first time, maybe ever. So it's been exciting.

Andrew Blumenfeld:   3:36
So that brings us right to the topic we're investigating for this conversation, which is we've got an FEC here that at least as we're discussing this and for kind of a long time now, does not have a quorum. That's something that doesn't get a ton of attention but does seem to get mentioned from time to time and articles pertaining. to campaigns, presidential otherwise. So we want to know more about this, and we're curious to start actually, with just some of the basics. Like to all those who are just sort of barely knowledgeable about even what the FEC is or what they do just give us the boilerplate. What is the FEC? What do they normally do? What function does it typically serve?

Blair Schuman:   4:17
Yeah, absolutely. So the FEC is a regulatory commission set up after Watergate, supposed to be a six-person panel that is there to enforce all of the campaign finance laws we have across the country. So that includes when you see those disclaimers at the end of ads of "I'm Barack Obama and I approve this message" or at the bottom of mailers that say "this has been paid for by Barack Obama for president." They're the ones that are putting out those laws and the reason why you see those disclaimers. Additionally, they handle all public reporting of any disbursements, any contributions, any debts by all political committees. So that's candidate committees. That's political parties. That's political action committees. The dreaded super PAC files through the FEC. Their role is to guide politicians and their committees through how they should run, where they can accept money from, where they can spend money, and how much money they can accept from each person. Additionally, they're supposed to audit campaigns, and, if there's ever any problems, they're the first line of defense for making sure that people are fined or even face criminal prosecution. They sometimes work in hand with the Justice Department or the FBI to go for particularly egregious cases. But for the most part, they're there to set, advise and enforce federal election law.

Andrew Blumenfeld:   5:42
And to be clear, each of those things to be done, like officially, requires a vote by the commission, right? If they want to issue a formal opinion, if they want to enforce a particular action, they actually need to vote. And there needs to be a quorum of the commission to do that,

Blair Schuman:   6:00
Yes. So if the FEC decides that someone needs to be fined, if the FEC decides that they want to issue a new regulation or an opinion on a particular case, they need at least four members, a quorum, in order to get anything passed, any fines issued or any campaigns administratively closed if they've decided you've really messed up. We are unable to do that right now because we're sitting with only three members since August of 2019

Andrew Blumenfeld:   6:27
And just a couple of clarifying points there. So first the fact that they don't have a quorum, that's the legal minimum that they need in order to take official action as a body, right?

Blair Schuman:   6:36
Yeah, absolutely. The FEC is a panel that's supposed to be made up of six people. Typically, it is two Republicans, two Democrats and to independents. It's supposed to be a very nonpartisan board. It has been neglected over the last couple of years. People have their terms expire. There's currently three commissioners on the FEC. You need four for quorum, and nobody has been appointed since 2013.

Andrew Blumenfeld:   6:59
And then the point you just made about the terms expiring. What does it mean that there are members that are currently serving, only three, so less than quorum? Not enough to take votes and make formal actions. But then you said those three have expired terms. What does that mean?

Blair Schuman:   7:14
If your term expires and you are still on the commission and no one has replaced you, you are allowed to continue serving until you've been replaced. As I mentioned, no one's even been seated since 2013. So everyone there has their terms well expired and back in August, it was previously four people for quite a while. Back in August  one of the members, Matthew Peterson, decided that he was going to move on to another role and resigned his position. So since then, we have not had any rulings from the FEC, and that's been an issue because any internal enforcement and any advisory opinions have been unable to be issued since then. So anyone who has a question that hasn't really been answered by the commission yet is kind of at a standstill, and similarly, anyone who may have broken the law or that the FEC would consider fining, they have not been able to do that for quite a while. I think we're nearing on nine months now. That's been kind of an issue, as you can imagine, though,

Andrew Blumenfeld:   8:17
And speaking, though to its toothlessness and the timing of it right in the heat of a major election cycle, there was, I believe, just by way of example, of the kind of cause you said they can't make advisory opinions, they can't pass enforcement actions. To put some concrete nous around that idea. I believe you were telling me before that they had passed a regulation or issued an advisory opinion pertaining to foreign influence, right? I mean, can you tell us more about what that was? And now what? It isn't because there is no longer a quorum.

Blair Schuman:   8:49
Yeah. So this was either the last or like next to the last thing that the FEC did before they had a quorum was, you may have heard, if you're familiar at all with campaign finance, you may have heard the term in-kind thrown around that that was brought up a lot in the Stormy Daniels situation, which made the news and in-kind is a nonmonetary contribution to a campaign. A lot of times, it's something like food for an event. In the Stormy Daniels situation, it was hush money, and that needs to be reported. For the longest time, that was always considered, like I said, the food, the hush money, something that has a physical value. One of the very last things that the FEC did when they had a quorum was they passed a resolution to say that advice from a foreign influencer or a foreign person or any information gained that is, I believe it was valuable information or valuable credible information or something like that that I can look up the exact wording if you'd like. That said that that would be considered in-kind to a campaign. They had issued it as a "We're going to open this up for comments," then they closed it, and that was the last we heard about it. But I think that that was pretty clearly a direct response to the Russia Gate controversy that we had experienced

Andrew Blumenfeld:   10:06
Because to be clear, what that would have done is say if a foreign actor, foreign government agency abroad, came to a campaign of federal campaign someone running for Congress, someone running for president and said, "Hey, you know what? We've done our own polling of people and we find that this is their opinion on this issue and you should serve them ads about that or whatever." That would say, Well, that's the thing of value. That's something that needs to be reported as a contribution, and in this case, it would be a foreign contribution and so wouldn't be allowed. I mean, that's the practical reality that was trying to be carved out by that attempt at regulation, right?

Blair Schuman:   10:44
Yeah, I think that pretty clearly that's what it was for. To be clear, it wasn't just saying that foreign information from that's illegal or I mean that is legal, but what it was saying that anything that was considered valuable information from any source, be it legal source or an illegal source would be considered an in kind. And I think that was almost laser-targeted at the infamous Trump Tower meeting. If this was in effect at the time, then I cannot imagine that even the most ardent blinders on wouldn't consider that meeting to be considered valuable information at the time that they took it. What this regulation would do is make it so that any time you get that email that says "we have dirt on your opponent," and you decide to accept that, you've got to report that. And that's not the case right now. Because almost immediately after they started seeking public comment, the Republican commissioner, Mr. Peterson, departed

Andrew Blumenfeld:   11:39
To me, though what it's stunning about it that is not so like, "Oh, well, it's universal, right? There's no quorum for Republicans. There's no quorum for Democrats, there's no quorum for Trump. There's no quorum for Biden." It's a little bit more complicated than that because one of the main air quotes "enforcement mechanisms" of the FEC is just that by requiring that everything be transparent and public, it creates this media pressure, this competitive pressure, it creates the prospect of like a shaming that could happen that could be politically detrimental. We're dealing in some ways tremendously asymmetric warfare when it comes to political liability of shame, because this is now probably the only thing holding up in some regards. I don't want to sound too extreme here, but in some regards, the thing that is standing in the way of misbehavior is the specter of it being public and you being shamed for it. Well, that doesn't matter if you have no shame or if there's no political consequence to acting poorly, and that's not something that is universally true in our system. But it is especially true for particular people in our system like our current president.

Blair Schuman:   12:46
Yeah, I couldn't agree more on that, just in general, the's asymmetric thing. That's a whole other topic. But I tend to agree with you there that the primary purpose of the FEC. I mean, it came about after Watergate. That's when the commission came into existence, when it was supposed to shed light on what each campaign is doing because it was a total mystery before then, Campaign finance reform was for such a long time, a very bipartisan thing. The most famous campaign finance act that I could think of is McCain Feingold, and those two people are very ideologically opposed to each other. But they really help to crack down on where funds air coming from. And we've seen that bipartisanship erode over the last couple of years, and I do think that one particular side, not everyone on the side, but a lot of people on one particular side don't care about that shaming like you said. And that does concern me. The good news is that while they do not have a quorum, if you do violate campaign finance laws statute of limitations is a couple of years, so as long as there is eventually a quorum, hopefully they can take action. And I think once you start getting into fines, usually public pressure does tend to escalate because people do take note of that. If your fined a couple $100,000, that's kind of hard to ignore for being that bad at keeping your books.

Andrew Blumenfeld:   14:06
We should mention that there are roughly 300 staff people that work for the F E C. And presumably they still work there even now, while it is without a quorum. So what is their day today, when there is no quorum? Are they preparing materials in anticipation of a future quorum? Or they sort of biding their time, collecting information on violations? What does that look like?

Blair Schuman:   14:28
Essentially, what they're doing is keeping score until we once again have a quorum. For the most part, their day today is unchanged. There is no longer the bi-monthly meetings that the FEC has. The lawyers are not doing as much. A lot of what they do is work on advisory opinions and none of those are getting issued. So I assume that they're kind of working on figuring out who's getting audited. Or as I mentioned earlier, in particularly egregious examples, people can get referred to other law enforcement agencies, so they're still keeping an eye on things as best as they can.

Andrew Blumenfeld:   15:03
Let's talk a little bit about the fact that, I believe just this week, there was an appointment. I don't think it was made this week, but an appointment to the FEC got a hearing this week, and unsurprisingly, it didn't meet the typical norms of appointment. I think we're outside of the world where norms still applies. So can you tell us a little bit about that nomination? Should we expect a quorum soon? What does it mean?

Blair Schuman:   15:29
Yeah, I was a little bit surprised at that. The person in question was nominated back in 2017. His name is James Trainor. He's just kind of been sitting in limbo for a very long time. I was honestly very surprised that they brought this up, since it's been quite a while since anyone has been affirmed, as I mentioned 2013. One of the things that you said earlier this was norm-breaking. Unsurprisingly. Usually, what happens with the commission it's supposed to be a very, very nonpartisan commission, is any time anyone is appointed, they're supposed to have someone of the opposing party brought up to be appointed along with them. So when Barack Obama introduced a nominee to the Federal Election Commission, Mitch McConnell was able to bring up one of his own, and they were brought onto the commission together so as not to upset the balance. That has not happened. In this instance, I have not yet heard the reason from Republicans why that hasn't happened. But I don't think that's particularly surprising to anyone who's been paying attention to politics in the last four years. He said that he would not recuse himself from anything involving Trump, despite the fact that he worked in the White House in 2016. To be honest, I understand why, he said, that he won't blanket recuse himself from anything because that is such a large number of topics with him that are going to be brought up. I do hope that if he is appointed that he would recuse himself from anything that directly involves the Trump campaign. But the fact that he's been so evasive about this does seriously concern me. But at the same time, I get where he's coming from there.

Andrew Blumenfeld:   17:08
Is it realistic to expect that he'll get any further than the hearing stage since there wasn't a Democratic nominee kind of appointed in tandem like they're normally is?

Blair Schuman:   17:18
Well, Republicans control the Senate. If they want to just push him through, they can. That wouldn't shock me just based on everything else. I don't think that this is the sort of thing that you're gonna get us Susan Collins or Lisa Murkowski to take a stand on.

Andrew Blumenfeld:   17:31
Yeah, there is some irony and that this does seem to be an era where attentiveness to donations is quite high from the public. From a political standpoint, it's, "oh I swear I won't take any money from the oil industry. Or I swear I don't take any money from billionaires or I won't go to a wine cave to ask people for money," like money is a topic in a campaign in a way that I think is actually, for those of us who have spent a lot of time in politics in recent years, that seems like the norm. But if you actually take a slightly wider lens, I don't think that's always been so typical. And it's kind of ironic. I never thought of it like that. Where that attentiveness is married at this moment with a totally unsupervised actual election process.

Blair Schuman:   18:10
Yeah, absolutely. That has become such an especially, I'd say, since 2014 maybe, is when that really started to take off. I think that the no PAC pledges have been really influential in that, but a lot of people, they do care about where that funding comes from, and I think that the moment that we're in here is one that would be be very good to have a fully functioning FEC. So I would not just like to see a quorum restored. I would genuinely like to see all six members, even just a clean slate. I don't know how great of an idea that is to have no institutional knowledge, but to at least have six members filled would be very good for the functioning of our democracy.

Andrew Blumenfeld:   18:51
It's really remarkable to me that this actually hasn't gotten more attention. It is kind of the perfect storm. When you think about it, we've got an election underway, a major election underway for obviously the presidency, the entire house, a big chunk of the Senate. And yet that election to date is happening completely unsupervised and is happening in the most norm-breaking era of modern American politics. And the consequence of that has got to be significant, and yet you really don't hear a ton of about it, so I'm glad that we're able to cover it today. I think that it's potentially a source of optimism that there has been a nomination made. The fact that it is just a lone Republican doesn't inspire a ton of confidence. I think it's remarkable and noteworthy that even if that person is seated before the election, and so the FEC quorum is finally restored in time to supervise this election, because there will then only be four members., every decision will need to be unanimous by the existing sitting members of that FEC. And as of course, is we've noted it, means that that nomination will have come without the partnered Democratic nomination that has been the norm. So mixed signals there. Not to mention we, of course, never know. Just because we got a hearing doesn't necessarily mean that that nomination vote will take place and that that person will be successfully appointed and seated in the FEC. A very interesting time to be working in the mix and in the throes of money and politics. When here we are facing down the barrel of a major election and we're in unchartered territory when it comes to the level of supervision that's there, I'm curious. Actually, if any of our listeners have been impacted in some way by this lack of quorum. Or just have any other thoughts. Things we didn't think of our stones we haven't yet turned over on this topic. Please shoot them our way. You can reach us at hello@calltime.ai . I So please let us know if you have any thoughts. And thank you, Blair so much for being here. Your insight is tremendous. And as I've mentioned, I think this is a topic that is right for additional insight in conversation. So I'm really grateful for you shedding some light on it for us. I imagine those listening share my gratitude for that. Thanks so much.