Funding Liberty! Table of Contents
Funding Liberty!
Chapter 11
The Browne Campaign and the Federal Election Commission
Because this Chapter is a bit dry, I open with a
Summary
Under Federal Law, Presidential candidates who have raised at least $5000 are required to file financial reports with the Federal Election Commission. Who is a Presidential candidate? Federal Law provides the legal definition. When did Browne become a candidate? There are rationales for identifying several slightly different dates as the day on which Browne truly became a Presidential candidate under Federal Law. It is extremely difficult to avoid the conclusion that Harry Browne had become a candidate by early 1999. Browne's formal declaration, an act with no legal meaning, was not made until February 2000.
The Browne 2000 campaign refused to file financial reports with the Federal Election Commission until Spring 2000. Browne claimed that he was declining to file in order to permit litigation against Federal Election Laws. In 2002, the FEC finally cited him for a late filing, and fined his campaign. His campaign paid immediately.
By delaying its filings until May 2000, the Browne campaign gained an enormous political advantage over its opponents. The Browne campaign's alleged strong points included its early start, its legions of volunteers, and its huge campaign warchest. Because it did not file with the FEC, Harry Browne's campaign was able to hide from the Libertarian public a modest difficulty: its fabled campaign warchest was a myth. Throughout the campaign, the Browne campaign was almost, but never quite, broke.
Details
We have reached 2000, the Presidential election year. We'll now take a seeming detour. We're going to discuss Federal Law as it relates to Presidential election campaigns. The seeming detour is not really a detour. Election law was central to the 2000 nomination campaign.
Federal Law imposes major burdens on every candidate for President. It limits contributions. It affects spending plans. Most importantly for the discussion here, Federal Law requires Presidential campaigns to file public reports on where they raised their money, how they spent their money, and how much money they have.
These requirements apply to Presidential campaigns, not to the man on the street. The Federal Election Commission (FEC) has no mandate to inspect the private doings of private citizens. However, once you become a candidate for President, the FEC puts a variety of requirements on your cash transfers, and requires that many of them be reported in a public forum. Public reporting requirements put serious constraints on real campaigns. Your press secretary may talk a good line about fundraising, but if your FEC reports show that your cash flow has withered, your campaign may well soon follow. If you don't believe me, ask some of the Republican also-rans of 1999 and 2000.
FEC Financial Report requirements directly affected the Browne Campaign. Reporting requirements restricted how the campaign could present itself to the world, and reasonably should have affected the campaign's tactics. Reporting requirements were a very real threat to the campaign's success.
Recall that the Browne campaign's basic plan included a campaign warchest: $1,000,000 in the bank by January 2000 for a campaign kickoff. The Browne campaign's aura of inevitability rested in substantial part on the impression that it had vast cash reserves, so it could do things that other campaigns could not. After all, in late 1999 the Browne campaign announced that it had set aside $750,000 to cover all technical expenses through election day, enough to ensure that every penny afterwards donated to the campaign could go to real campaigning. The campaign warchest appeared to be a big advantage of Browne over his competitors.
Alas, the Browne campaign didn't have the money. As was eventually revealed, it had not one million dollars, but only a tiny fraction of that amount. However, at the start of 2000, the Browne campaign's actual financial status was the Campaign's most closely held secret.
FEC reporting requirements made it increasingly difficult for the Browne campaign to hide its actual financial status from the Party faithful. Now we come to the Chapter's main topic: What are those FEC reporting requirements? What burdens does Federal Election Law impose on a Presidential candidate, and when are those burdens imposed?
In short, a campaign that receives more than $200 in cumulative total from a single person must identify that person as a donor, report the donor's name, address, employer, and occupation, and report how much the donor gave. A campaign must also report all of its expenditures: who it gave money to, their address, how much it paid, and a short statement of the expenditure's purpose. Finally, campaigns must report cash flow, cash on hand, and any and all debts. All those reports are public information, available on the World Wide Web at http://www.fec.gov to all comers.
When was the Browne campaign legally required to file its first reports? The answer to that question was determined by Browne's legal status. Was he a candidate? Or was he a private citizen speaking out on the issues? Private citizens do not, in general, have to report to the FEC. Candidates must report contributions and expenses on a regular schedule.
How does one become recognized as a candidate for President? Is it press coverage? Filing government forms? Having enough supporters? From the standpoint of the mandatory FEC reporting requirements, the only definition of "candidate" that matters is the FEC's definition.
So how does the FEC define candidacy?
The Federal Election Commission "Campaign Guide for Congressional Candidates and Committees" (April 1999) deals with reporting requirements. The FEC opens by stating that the document
"...may be used by committees supporting Presidential candidates who are not seeking Federal matching funds. However, special reporting rules apply to Presidential candidates..."
When does a person become a candidate? The FEC recognizes an activity that is not candidacy by using the cognomen "testing the waters", saying of it:
"An individual may conduct a variety of activities to test the waters. Examples of permissible testing-the-waters activities include polling, travel, and telephone calls undertaken to determine whether the individual should become a candidate. 100.7(b)(1) and 100.8(b)(1)." [The last numbers are references to Federal Regulations 11 CFR. GP]
However, at specified points 'testing the waters' becomes 'campaigning'. The FEC then writes of campaigning:
"Certain activities, however, indicate that the individual has decided to become a candidate and is no longer testing the waters. In that case, once an individual has raised or spent more than $5,000, he or she must register as a candidate. Note that, when an individual decides to run for office, funds that were raised and spent to test the waters apply to the $5,000 threshhold.
Campaigning (as opposed to testing the waters) is apparent, for example, when individuals
(1) [Numbering is mine. GP] Make or authorize statements that refer to themselves as candidates ("Smith in 2000" or "Smith for Senate");
(2) Use general public political advertising to publicize their intention to campaign;
(3) Raise more money than what is reasonably needed to test the waters or amass funds (seed money) to be used after candidacy is established;
(4) Conduct activities over a protracted period of time or shortly before the election; or
(5) Take action to qualify for the ballot."
In addition to this, Federal Regulation (11 CFR 100.7(b)(ii) and (ii)(B) provide
(6) "Examples of activities that indicate that an individual has decided to become a candidate include, but are not limited to:...(B) The individual raises funds in excess of what could reasonably be expected to be used for exploratory activities or undertakes activities designed to amass campaign funds that would be spent after he or she becomes a candidate."
If a person 'performs activities that indicate that (he) has decided to become a candidate', and if that person raises more than $5000, the person must register with the FEC as a candidate. He must also start filing FEC spending reports on a schedule set by the Federal Election Commission. The formal 'declaration of candidacy' with press conferences and advertising only appears on the above list in the positive sense: If you authorize statements that refer to you as a candidate, then you are a candidate. A Press Conference in which you say 'I am a candidate for President' makes you a candidate. Your silence does not make you a non-candidate.
After the 2000 election, the FEC removed this possible ambiguity in their rules. If you have raised more than $5000, you are legally a candidate. Under this clarification of existing rules, Browne would have become a candidate required to file in 1997.
When did Browne become a candidate? The Browne campaign built up gradually, from letters in late 1996 to a full-blown, albeit low-budget, Presidential campaign in 2000. From the beginning, it was obvious to many readers that Browne intended to run for President, at least if his preconditions could be met.
Under several of the FEC standards Browne appears to have become a candidate for President long before he filed with the FEC. Let us compare actions of the Browne campaign with the standards for becoming a candidate:
On December 19, 1996, Harry Browne announced that he would be creating an exploratory committee, whose purposes would include raising money. Browne wanted to know if he could begin the campaign with $1,000,000 in hand, and the exploratory committee was the vehicle for making the determination experimentally. However, under (3) and (6) "amass funds to be used after candidacy is established" is an activity that demonstrates campaigning. By late 1996, Browne had already announced that he would be performing activities that would make him a candidate. When his exploratory committee began performing those activities, he became a candidate.
On December 24, 1996, discussing limitations on campaigning, Browne asked Libertarian readers of lpus-pres@dehnbase.fidonet.org "Will you please help us raise more money the next time". That's a request to Libertarians to help Browne amass more money for the 2000 campaign. That statement by itself potentially made Browne a candidate.
Furthermore, Browne began his activities in late 1996 and early 1997. At some ill-defined point in the next year or two, those activities had 'persevered for a protracted period of time', so under (4) Browne was no longer testing the waters but was in fact campaigning.
We thus have identified multiple points at which the Browne effort appears to have started campaigning in the sense specified by the FEC. The FEC also lists other actions that can be identified as campaigning, but which the Browne Campaign did not perform:
With respect to (1), Browne's campaign committee, through its name, might have shown that Browne had approved steps that showed him as a candidate. However, Browne took the precaution of referring to the committee as an exploratory committee, so it may reasonably be argued that the Committee's name by itself did not make Browne into a candidate.
With further respect to (1), Browne was entered into several primary elections, including California and Massachusetts. As we will see in a later chapter, Browne was crushed in California. However, the outcomes of the primaries were meaningless.
Meaningless? In the Democratic and Republican Parties, many primaries are at least somewhat binding. In some states the candidates through the primaries run their own slates of delegates. In other states the delegates are chosen at convention but are required by party rules to support the candidate who won their state's primary, either on the first convention ballot or until released.
In contrast, the Libertarian Party's Bylaws and Convention Rules guarantee that each delegate has freedom of conscience. Under Libertarian Party rules, no seated delegate may be bound to support a particular candidate. If bound delegates appeared at a Libertarian Party National Convention, the convention would refuse to seat them. Libertarian Primaries are meaningless beauty contests. Browne could reasonably argue that running in primaries was not for him a step toward becoming a candidate, because primaries have no role within the Libertarian Party in the nomination process. Furthermore, most Libertarian Party members are not influenced by primary outcomes, especially in states like Massachusetts and California where people who are not registered in the Party are allowed to vote in the primary.
By contesting a primary, a Libertarian candidate can gain publicity for his party, but running in a Primary Election does not advance a candidate toward nomination. You can win all the Libertarian Primaries you want, but they aren't worth a single delegate vote. Indeed, I personally received a letter from one state party inviting me to run in their Presidential Primary, if I satisfied their requirements. I'm not sure the letter was serious. At least one requirement appeared to be written specifically to keep me personally off their ballot. The state in question later put on the ballot people who had not satisfied their alleged requirements. Harry Browne, in particular, was placed on their ballot even though his campaign did not satisfy their requirement that only candidates who had filed with the FEC would appear on the ballot.
With respect to (2), the Browne campaign did almost no public political advertising prior to the 2000 National Convention. There was an extensive direct mail campaign to raise money, but direct mail is not public advertising. Fundraising events and State Party conventions are also not public advertising. Without public political advertising, (2) does not lead to candidacy.
Browne did have a major email newsletter, LibertyWire. That newsletter was clearly identified as being distributed only to subscribers who had asked to be sent the material. LibertyWire was on occasion transmitted to Libertarian newsgroups and email lists, but these transmissions were—in every case that I saw—done by outside persons, not by the Browne campaign. There was no indication that Browne incited outside parties to forward his newsletter to these lists, so the forwards were not public advertising by Browne. Thus, under (2) Browne does not appear to have qualified as a candidate.
With respect to (5), Browne did not take substantial active steps to put his name on the General Election ballot. Most Libertarian Presidential ballot access drives are run by the National Party or state parties, not by a Presidential campaign. Such drives routinely serve to qualify a generic Libertarian to be named later for the November ballot. Even as late as Summer 2000, when Browne was the Party's nominee, the Browne campaign did not try to help the Party put Browne on the ballot in Pennsylvania.
In addition, during 1999 the Browne campaign retained a producer to create a half-hour television infomercial for its campaign. Funds were raised, and some aspects of production occurred. The Fall 1999 fundraising letter associated with the infomercial left the impression that fundraising was being done for its production and distribution. The infomercial had nothing to do with testing the waters; it was a campaign advertisement. While the FEC did not enumerate 'production of campaign advertisements' as an act establishing that a person has become a candidate, (1)-(5) were clearly labelled as examples.
In summary, under (3), (4), and (6), Browne had clearly qualified as a candidate within the FEC's definition, and would be obliged to file with the FEC so soon as he raised $5,000. Browne had also performed non-enumerated acts that only a candidate would perform, notably producing campaign advertising. In contrast, (1), (2) and (5) did not qualify Browne as a candidate. However, (1)-(5) are only examples of ways in which a person may qualify as a candidate. Qualifying as a candidate under any one of them is adequate to make someone a candidate.
One might reasonably dispute the precise date on which Browne had qualified as a candidate and was required to file. However, an effort to amass money for the election campaign was claimed to have begun in early 1997. As we saw in the previous chapters, the effort was not very effective, but it was an effort. 'Protracted' is also imprecise, but by the start of 1999 Browne activities had gone on for several years, which is longer than the full lifetimes of campaigns of most other major party Presidential candidates. By early 1999, Browne had raised more than $5000 and thus was almost certainly obliged to file campaign finance reports with the FEC.
Indeed, in a letter dated 30 June 2000 from the FEC to Perry Willis, the FEC said of the February 1999 and later reports "...your committee has apparently failed to file in a timely manner." Thus, in the end the FEC did finally determine—subject to an appeal that does not seem to have been made—that Browne was obliged to file reports beginning in early 1999. To date, the FEC has not undertaken further enforcement action in support of its observations about Browne’s 1999 filings.
Behind the FEC reporting issue was the reality of the Browne campaign. By December 1999 the Browne campaign had come nowhere close to either of its objectives. The new members weren't there. The money wasn't there.
How did the Browne campaign survive these failures? Membership recruitment was said to be a task for the National Party. Failure to recruit members was a failure of the National Party, not the Browne Campaign. To his credit, Browne repeatedly urged Libertarians to support Project Archimedes, so these failings lay not on his shoulders but on the shoulders of his hand-picked National Chair, David Bergland.
The Campaign's financial failings were more serious, because money management was the Campaign's responsibility. There was no possibility—at the start of 2000—that the Campaign could scapegoat someone else with the Campaign's financial failings. No one outside the campaign knew that the campaign did not have the three-quarters of a million dollars it claimed. The Browne Campaign failed to accumulate its planned cash reserves. It was unable to launch the ad campaign it had announced for early 2000.
The financial failure should have been a showstopper. The Browne financial juggernaut, 'the best-organized campaign in the party's history' in the words of several activists, was a Potemkin village. Under the shiny coat of paint, behind the layers of fundraising letters and television production efforts, the money was not there. Fortunately for the Browne campaign, the Libertarian body politic was only to learn about Browne 2000's total financial failure at the last moment. The Browne campaign's deception was possible for one reason: Harry Browne hid his finances from the Libertarian public.
Browne finally made his campaign declaration on February 14, 2000. There was absolutely no possible doubt that he was now a candidate. He then refused to file with the Federal Election Commission. We will return later to Browne's skirmishes with the FEC and his Libertarian opponents.