Shays v. Federal Election Commission

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 5, 2008 Decided June 13, 2008

No. 07-5360

CHRISTOPHER SHAYS,
APPELLEE/CROSS-APPELLANT

v.

FEDERAL ELECTION COMMISSION,
APPELLANT/CROSS-APPELLEE

Consolidated with 07-5361

Appeals from the United States District Court
for the District of Columbia
(No. 06cv01247)

David Kolker, Associate General Counsel, Federal
Election Commission, argued the cause for appellant/cross-
appellee. With him on the briefs was Vivien Clair, Attorney.
Gregory J. Mueller, Attorney, entered an appearance.

Sean P. Trende was on the brief of amicus curiae Center
for Competitive Politics in support of appellant urging
reversal.
 2
Charles G. Curtis, Jr. argued the cause for
appellee/cross-appellant. With him on the briefs were
Michelle M. Umberger, David L. Anstaett, Lissa R. Koop,
Roger M. Witten, Randolph D. Moss, Fred Wertheimer, and
Donald J. Simon.

J. Gerald Hebert and Paul S. Ryan were on the brief of
amicus curiae U.S. Senator Russell D. Feingold in support of
appellee.

Before: TATEL, GARLAND, and GRIFFITH, Circuit Judges.

Opinion for the court filed by Circuit Judge TATEL.

TATEL, Circuit Judge: Congress passed the McCain-
Feingold Act, formally known as the Bipartisan Campaign
Reform Act of 2002 (BCRA), Pub. L. No. 107-155, 116 Stat.
81, in an effort to rid American politics of two perceived
evils: the corrupting influence of large, unregulated donations
called “soft money,” and the use of “issue ads” purportedly
aimed at influencing people’s policy views but actually
directed at swaying their views of candidates. The Federal
Election Commission promulgated regulations implementing
the Act, but in Shays v. FEC, 414 F.3d 76 (D.C. Cir. 2005)
(“Shays II”), we rejected several of them as either contrary to
the Act or arbitrary and capricious, concluding that the
Commission had largely disregarded the Act in an effort to
preserve the pre-BCRA status quo. Now the FEC has revised
the regulations we earlier rejected and issued several new
ones, three of which are before us here: (1) a “coordinated
communication” standard, the original version of which we
rejected in Shays II; (2) definitions of “get-out-the-vote
activity” and “voter registration activity”; and (3) a rule
allowing federal candidates to solicit soft money at state party
fundraisers. Although we uphold one part of the coordinated
 3
communication standard known as the “firewall safe harbor,”
we reject the balance of the regulations as either contrary to
the Act or arbitrary and capricious. We remand these
regulations in the hope that, as the nation enters the thick of
the fourth election cycle since BCRA’s passage, the
Commission will issue regulations consistent with the Act’s
text and purpose.

I.
Because both we and the Supreme Court have provided
detailed histories of campaign finance regulation, see
generally McConnell v. FEC, 540 U.S. 93, 115-32 (2003);
Shays II, 414 F.3d at 79-82, here we provide only the
background necessary to understand this case. Since long
before BCRA, the Federal Election Campaign Act (FECA), 2
U.S.C. §§ 431-455, has regulated many aspects of campaign
finance. Relevant here, FECA prohibits corporations and
unions from making direct contributions or expenditures in
connection with federal elections, id. § 441b, and it imposes
dollar limits on individuals’ contributions to federal
candidates, id. § 441a(a). FECA defines “contributions” as
“any gift . . . made . . . for the purpose of influencing any
election for Federal office,” id. § 431(8)(A)(i), and it defines
“expenditures” as “any purchase, payment, distribution, . . .
or gift of money or anything of value, made by any person for
the purpose of influencing any election for Federal office,” id.
§ 431(9)(A)(i). Over time, “contributions subject to
[FECA’s] source, amount, and disclosure requirements” came
to be known as “hard money,” Shays II, 414 F.3d at 80, while
“[p]olitical donations made in such a way as to avoid federal
regulations or limits” came to be known as “soft money,” The
American Heritage Dictionary of the English Language 1652
(4th Ed. 2006); see also Shays II, 414 F.3d at 80 (defining
“soft money” as “[f]unds outside FECA’s sphere”).
 4
In Buckley v. Valeo, 424 U.S. 1 (1976), the Supreme
Court, invoking constitutional avoidance, construed FECA’s
limitation on expenditures to apply only to funding of
communications that “express[ly] . . . advocate the election or
defeat of a clearly identified candidate for federal office,” i.e.,
those that contain phrases such as “‘vote for,’ ‘elect,’
‘support,’ ‘cast your ballot for,’ ‘Smith for Congress,’ ‘vote
against,’ ‘defeat,’ [or] ‘reject.’” Id. at 43-44 & n.52. Thus,
by avoiding these “magic words,” organizations unable to
make “expenditures”—such as corporations and unions—
could fund so-called “issue ads” that were “functionally
identical” to campaign ads and just as effective. McConnell,
540 U.S. at 126; see also FEC v. Mass. Citizens for Life, 479
U.S. 238, 249 (1986) (clarifying that the limited definition of
“expenditures” applied to ads funded by corporations and
unions). “Little difference existed, for example, between an
ad that urged viewers to ‘vote against Jane Doe’ and one that
condemned Jane Doe’s record on a particular issue before
exhorting viewers to ‘call Jane Doe and tell her what you
think.’” McConnell, 540 U.S. at 126-27.

Following Buckley, the Commission repeatedly
interpreted FECA to expand the permissible uses of soft
money. In particular, because FECA only regulated
contributions intended to influence elections “for Federal
office,” 2 U.S.C. § 431(8)(A)(i) (emphasis added), “questions
arose concerning the treatment of contributions intended to
influence both federal and state elections.” McConnell, 540
U.S. at 123. As the Supreme Court explained:

Although a literal reading of FECA’s
definition of “contribution” would have
required such activities to be funded with hard
money, the FEC ruled that political parties
could fund mixed-purpose activities—
 5
including get-out-the-vote drives and generic
party advertising—in part with soft money. In
1995 the FEC concluded that the parties could
also use soft money to defray the costs of
“legislative advocacy media advertisements,”
even if the ads mentioned the name of a federal
candidate, so long as they did not expressly
advocate the candidate’s election or defeat.

Id. at 123-24 (footnote and citations omitted).

Because soft money could now be spent in so many ways
that benefited federal candidates, and because it could be
raised in massive amounts without any of FECA’s limitations
or reporting requirements, federal candidates would often
solicit such donations directed to their political party. The
party would then spend the money on ads supporting the
candidate—omitting the magic words—or on get-out-the-vote
activity and voter registration activity aimed at helping the
candidate. This “enabled parties and candidates to
circumvent FECA’s limitations on the source and amount of
contributions in connection with federal elections.” Id. at
126. “As the permissible uses of soft money expanded, the
amount of soft money raised and spent by the national
political parties increased exponentially,” from $22 million in
1984 to $498 million in 2000. Id. at 124. Thus, “the ‘soft
money loophole’ had led to a ‘meltdown’ of the campaign
finance system that had been intended ‘to keep corporate,
union and large individual contributions from influencing the
electoral process.’” Id. at 129 (quoting S. REP. NO. 105-167,
vol. 4, at 4611 (1998); id. vol. 5, at 7515).

Recognizing these problems, Congress passed BCRA, the
“central provisions” of which were “designed to address
Congress’ concerns about the increasing use of soft money
 6
and issue advertising to influence federal elections.” Id. at
132. BCRA made a number of dramatic changes to campaign
finance law to achieve these goals, including barring national
political parties from soliciting soft money. 2 U.S.C.
§441i(a). Relevant here, the Act required the FEC to develop
a new test for determining what advertisements count as
“coordinated communications,” BCRA § 214(c), 116 Stat. at
95 (codified at 2 U.S.C. § 441a note); barred state parties
from spending soft money on “federal election activity,”
including “get-out-the-vote activity” and “voter registration
activity,” 2 U.S.C. § 441i(b)(1); and prohibited federal
candidates from soliciting soft money, id. § 441i(e).

The FEC first issued regulations implementing BCRA in
2003. Believing these regulations far too permissive,
Representative Chris Shays, a prime BCRA sponsor,
challenged nineteen of them in the United States District
Court for the District of Columbia, arguing that they either
violated the Act or were arbitrary and capricious. In Shays v.
FEC, 337 F. Supp. 2d 28 (D.D.C. 2004) (“Shays I”), the
district court largely agreed with Shays, rejecting fifteen of
the nineteen regulations. On appeal, the FEC challenged the
district court’s decision as to five of the regulations, and in
Shays II, 414 F.3d 76, we affirmed the district court.

In response, the Commission modified or more
thoroughly justified its proposed regulations and reissued
them, along with several new ones. Shays now challenges
three of these regulations. The first is the Commission’s
definition of “coordinated communications,” the original
version of which we rejected in Shays II. This regulation
includes three subparts: (1) a “content standard” providing
that only ads containing certain content may be deemed
coordinated, 11 C.F.R. § 109.21(c); (2) a “conduct standard”
governing when campaign employees and vendors who go to
 7
work for outside organizations may share campaign
information, id. § 109.21(d)(4)-(5); and (3) a “firewall safe
harbor” provision that is also part of the conduct standard and
protects groups hiring former campaign employees and
vendors, id. § 109.21(h). The second challenged regulation
defines “get-out-the-vote activity” and “voter registration
activity,” id. § 100.24(a)(2)-(3), while the third allows federal
candidates to solicit soft money at state party fundraisers, id. §
300.64.

In a thorough opinion, the district court rejected each of
these rules except the last one, finding them either contrary to
BCRA’s purpose or arbitrary and capricious. See Shays v.
FEC, 508 F. Supp. 2d 10 (D.D.C. 2007) (“Shays III”). The
FEC now appeals as to the rules the district court struck
down, and Shays cross appeals as to the rule the district court
upheld. Senator Russell Feingold, another prime BCRA
sponsor, has filed an amicus brief supporting Shays.

We address each rule in turn, employing two familiar
standards of review: Chevron and the Administrative
Procedure Act. As we explained in Shays II:

[B]ecause the regulations at issue interpret
statutes the FEC administers, we review them
under the two-step analysis set forth in
Chevron U.S.A., Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984),
asking first whether Congress has spoken
directly to the precise question at issue, and
second, if it has not, whether the agency’s
interpretation is reasonable. At the same time,
because the regulations reflect final agency
action under the APA, we ask whether they are
“arbitrary, capricious, an abuse of discretion,
 8
or otherwise not in accordance with law.” 5
U.S.C. § 706(2)(A).

414 F.3d at 96 (citation omitted). In applying Chevron’s
second step and the APA, we “must reject administrative
constructions of [a] statute . . . that frustrate the policy that
Congress sought to implement.” Cont’l Air Lines, Inc. v.
Dep’t of Transp., 843 F.2d 1444, 1453 (D.C. Cir. 1988)
(quoting FEC v. Democratic Senatorial Campaign Comm.,
454 U.S. 27, 32 (1981)). We review the district court’s
Chevron and APA holdings de novo. See Am. Legion v.
Derwinski, 54 F.3d 789, 795 (D.C. Cir. 1995).

II.
The first and most important issue before us is the FEC’s
revised “coordinated communication” standard. Federal
election law “has long restricted coordination of election-
related spending between official campaigns and outside
groups. The reason . . . is obvious. Without a coordination
rule, politicians could evade contribution limits and other
restrictions by having donors finance campaign activity
directly,” e.g., by asking a donor to buy air time for a
campaign-produced advertisement. Shays II, 414 F.3d at 97.

To prevent such evasion, FECA defines “contributions”
to include “expenditures made by any person in cooperation,
consultation, or concert, with, or at the request or suggestion
of, a candidate.” 2 U.S.C. § 441a(a)(7)(B)(i).

Under pre-BCRA regulations, the FEC
determined whether public communications
such as radio and television ads were
“coordinated” based largely on whether the
candidate had engaged in “substantial
discussion or negotiation” with an outsider,
 9
resulting in “collaboration or agreement.” See
Shays [I], 337 F. Supp. 2d at 55-56 & n.25
(quoting old regulation). Absent that degree of
cooperation, the communication was
considered uncoordinated and thus would not
count as a FECA contribution. BCRA
instructed the Commission to scrap this
approach. “The regulations on coordinated
communications . . . are repealed,” Congress
declared. “The Federal Election Commission
shall promulgate new regulations on
coordinated communications paid for by
persons other than candidates, authorized
committees of candidates, and party
committees. The regulations shall not require
agreement or formal collaboration to establish
coordination.” BCRA § 214(c), 116 Stat. at
95. Apart from this negative command—
“shall not require”—BCRA merely listed
several topics the rules “shall address,”
providing no guidance as to how the FEC
should address them. See id.

Shays II, 414 F.3d at 97-98 (omission in original).

Responding to BCRA, the FEC issued new coordinated
communication regulations. “Under its new test,
communications count as ‘coordinated’ (and thus as
contributions) if: (1) someone other than the candidate, party,
or official campaign pays for them, (2) the communication
itself meets specified ‘content standards,’ and (3) the payer’s
interaction with the candidate/party satisfies specified
‘conduct standards.’” Id. at 98 (quoting 11 C.F.R. § 109.21).
The conduct standard can be satisfied in several ways, e.g., if
“[t]he communication is created, produced, or distributed at
 10
the request or suggestion of a candidate,” 11 C.F.R.
§ 109.21(d)(1)(i); if “[t]he communication is created,
produced, or distributed after one or more substantial
discussions about the communication between the person
paying for the communication . . . and the candidate who is
clearly identified in the communication,” id. § 109.21(d)(3);
or if the person paying for the communication hires a
candidate’s vendor or former employee “to create, produce, or
distribute” it and in doing so that vendor/employee uses
“material” information about “campaign plans, projects,
activities, or needs” or shares such information with the
payer, id. § 109.21(d)(4)-(5).

Shays challenges the content standard and two features of
the conduct standard. We address each challenge in turn.

The Content Standard

“Under the ‘content’ element” of the original rule,
“communications made within 120 days of a general election
or primary and ‘directed’ at the relevant electorate [could]
qualify as ‘coordinated’ if they refer[red] to a political party
or ‘clearly identified candidate for Federal office.’” Shays II,
414 F.3d at 98 (quoting 11 C.F.R. § 109.21(c)(4) (2003)).
“Before the 120-day mark,” however, “the rule cover[ed] only
communications that either recycle[d] official campaign
materials or ‘expressly advocate[d] the election or defeat of a
clearly identified candidate for federal office.’” Id. (emphasis
added) (quoting 11 C.F.R. § 109.21(c)(2)-(3) (2003)). Thus,
more than 120 days before a federal election, the FEC’s
original rule allowed candidates to coordinate with outside
groups so long as the ads those groups funded did not include
the magic words or recycle campaign materials.
 11
Challenging the rule, Shays argued that limiting
regulation outside the 120-day window only to advertisements
containing certain types of content violated the Act’s plain
language and purpose, and that the Commission had failed to
provide any good reason for doing so. The district court
rejected Shays’s Chevron step one argument but found that
the regulation failed Chevron step two because “exclud[ing]
certain types of communications” based solely on their
content “regardless of whether or not they are coordinated
would create an immense loophole that would facilitate the
circumvention of the Act’s contribution limits, thereby
creating ‘the potential for gross abuse.’” Shays I, 337 F.
Supp. 2d at 65 (quoting Orloski v. FEC, 795 F.2d 156, 165
(D.C. Cir. 1986)).

In Shays II, we agreed with the district court that the rule
was invalid, but for slightly different reasons. Like the
district court, we “reject[ed] Shays’s . . . argument that FECA
precludes content-based standards under Chevron step one,”
Shays II, 414 F.3d at 99, but we “disagree[d] with the district
court’s suggestion that any standard looking beyond
collaboration to content would necessarily ‘create an immense
loophole,’ thus exceeding the range of permissible readings
under Chevron step two,” id. at 99-100 (emphasis added)
(quoting Shays I, 337 F. Supp. 2d at 65). Rather, we saw no
need to reach the Chevron step two question—whether this
particular content standard violated BCRA—because
“contrary to the APA, the Commission offered no persuasive
justification for the provisions challenged . . . , i.e., the 120-
day time-frame and the weak restraints applying outside of
it.” Id. at 100; see also id. at 97 (“[W]e need not decide
whether [this rule] represent[s an] altogether impermissible
interpretation[] of FECA and BCRA—the Chevron step two
inquiry—because in any event the FEC has given no rational
justification for [it], as required by the APA’s arbitrary and
 12
capricious standard.” (citation omitted)). Remanding the rule,
we directed the FEC to provide “some cogent explanation”
for it, “not least because” it effectively “allowed a coordinated
communication free-for-all for much of each election cycle.”
Id. at 100. As we explained:

Under the[se] . . . rules, more than 120 days
before an election or primary, a candidate may
sit down with a well-heeled supporter and say,
“Why don’t you run some ads about my record
on tax cuts?” The two may even sign a formal
written agreement providing for such ads. Yet
so long as the supporter neither recycles
campaign materials nor employs the “magic
words” of express advocacy—“vote for,” “vote
against,” “elect,” and so forth—the ads won’t
qualify as contributions subject to FECA.

Id. at 98.

On remand, the Commission published a new notice of
proposed rulemaking, took comments, held hearings, and
analyzed extensive data on television advertising by
candidates for federal office. It then issued a revised
regulation identical to the original regulation except that it
shortened the length of stricter regulation in congressional
races to 90 days. The revised regulation prohibits coordinated
advertisements “refer[ring] to a clearly identified House or
Senate candidate . . . in the clearly identified candidate’s
jurisdiction 90 days or fewer before the clearly identified
candidate’s general, special, or runoff election, or primary or
preference election.” 11 C.F.R. § 109.21(c)(4)(i). It prohibits
coordinated advertisements “refer[ring] to a clearly identified
Presidential or Vice Presidential candidate . . . in a
jurisdiction during the period of time beginning 120 days
 13
before the clearly identified candidate’s primary or preference
election in that jurisdiction, or nominating convention or
caucus in that jurisdiction, up to and including the day of the
general election.” Id. § 109.21(c)(4)(ii). Outside the 90/120-
day windows, however, the regulation still prohibits only
coordinated advertisements that “disseminate[], distribute[],
or republish[] . . . campaign materials prepared by a
candidate,” or “expressly advocate[] the election or defeat of a
clearly identified candidate.” Id. § 109.21(c)(2)-(3).

Again challenging the rule, Shays argued that the 90/120-
day windows were unsupported by the evidence, violating the
APA, and that the lax standard applying outside the windows
was both unexplained and contrary to BCRA’s purpose,
violating the APA and failing Chevron step two review. The
district court concluded that the FEC had adequately justified
the 90/120-day windows because the record showed that the
“vast majority of candidate advertising occurred within” those
periods. Shays III, 508 F. Supp. 2d at 42; see id. at 40-43. It
also rejected Shays’s claim that the lax pre-window standard
would undermine the Act’s purposes. The district court
nonetheless struck down the revised regulation as arbitrary
and capricious because the FEC “ma[de] no attempt
whatsoever to justify the Commission’s continued reliance on
the express advocacy standard” outside the windows, id. at
47, thus “fail[ing] to meet the APA’s standard of reasoned
decisionmaking,” id. at 48-49.

The FEC appeals this finding, but before we can reach
the merits, we face a jurisdictional question. In Shays II we
held that Shays had standing to challenge the regulations at
issue there because he satisfied standing’s three requirements,
“demonstrat[ing] that he ha[d] suffered ‘injury in fact,’ that
the injury [wa]s ‘fairly traceable’ to the actions of the
defendant, and that the injury w[ould] likely be redressed by a
 14
favorable decision.” Bennett v. Spear, 520 U.S. 154, 162
(1997) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555,
560-61 (1992)). The “injury in fact” was the FEC’s “illegal
structuring of [the] competitive environment” in which Shays
ran for Congress, Shays II, 414 F.3d at 85, that injury was
traceable to the Commission because it promulgated the
challenged rules, id. at 92-95, and a favorable decision could
redress the injury by striking down the rules, id. at 95.

The FEC suggests that this case is different, saying “[i]t
is unclear whether the Court has jurisdiction to rule on
Shays’[s] challenge to the portion of the regulation governing
the presidential election because he has never been, or stated
any intention to be, a candidate for president.” Appellant’s
Reply Br. 25 n.12. The Commission failed to mention this
argument in its opening brief, first raising it in a footnote in
its reply brief. Moreover, although the Commission assured
us in its brief that it was “not challeng[ing] Shays’[s]
standing,” but rather only highlighting this issue for the court
because we have our “own obligation to determine that [we
have] jurisdiction over each of [Shays’s] claims,” id., the
Commission changed its tone at oral argument, asserting that
Shays lacked standing to challenge the 120-day window
applicable to presidential candidates, Oral Arg. at 47:16-:38.
Normally we would not consider an argument first raised in a
reply brief, Carter v. George Washington Univ., 387 F.3d
872, 883 (D.C. Cir. 2004), much less one raised only in a
footnote, Hutchins v. District of Columbia, 188 F.3d 531,
539-40 n.3 (D.C. Cir. 1999) (en banc). But because this
argument goes to our jurisdiction, we must consider it, see
United States v. Hylton, 294 F.3d 130, 136 (D.C. Cir. 2002),
though we are disappointed in the FEC for raising this issue
so late that Shays had no adequate opportunity to respond.
 15
That said, Shays plainly has standing under FEC v. Akins,
524 U.S. 11 (1998). Indeed, after some prodding at oral
argument, FEC counsel virtually conceded as much, Oral Arg.
at 47:45-49:15. In Akins, the petitioners—a group of voters
seeking information about the political activities of the
American Israel Public Affairs Committee (AIPAC)—
challenged the FEC’s determination that AIPAC did not
qualify as a “political committee,” a decision that meant
AIPAC had no obligation to report information about its
“members, contributions, and expenditures.” Id. at 16. The
Court held that petitioners had suffered an injury in fact,
namely “their inability to obtain information—lists of AIPAC
donors . . . and campaign-related contributions and
expenditures—that, on [their] view of the law, the statute
require[d] that AIPAC make public,” id. at 21; see also id.
(“[A] plaintiff suffers an ‘injury in fact’ when the plaintiff
fails to obtain information which must be publicly disclosed
pursuant to a statute.” (citing Pub. Citizen v. DOJ, 491 U.S.
440, 449 (1989)).

Here, as in Akins, Shays’s injury in fact is the denial of
information he believes the law entitles him to. Specifically,
under the FEC’s definition of coordinated communications,
presidential candidates need not report as contributions many
expenditures that Shays believes BCRA requires them to
report. Thus, Shays claims the regulation illegally denies him
information about who is funding presidential candidates’
campaigns. We see no difference between this injury and the
injury deemed sufficient to create standing in Akins. Here, as
there, “the information would help [Shays] (and others to
whom [he] would communicate it) to evaluate candidates for
public office . . . , and to evaluate the role that [outside
groups’] financial assistance might play in a specific
election.” Id. And here, as there, Shays’s “injury
consequently seems concrete and particular.” Id. Finally, as
 16
in Akins, Shays’s injury is fairly traceable to the FEC because
it is caused by the Commission’s rule, and the injury would be
redressed were this court to invalidate the rule. Id. at 25.

Assured of Shays’s standing to challenge this rule in its
entirety, we turn to the merits. Shays claims the rule suffers
from two flaws. First, the FEC failed to justify the length of
the 90/120-day windows, violating the APA. And second, the
lax standard the Commission imposed outside those windows
not only runs counter to BCRA’s purpose, but also was
entirely unjustified, failing both Chevron step two and APA
review. After describing the evidence before the
Commission, we address each argument in turn.

On remand the Commission gathered extensive evidence
about the timing of advertising in federal election campaigns.
Reviewing data from the Campaign Media Analysis Group
regarding television ads run by federal candidates in the 2004
election cycle, the Commission found that “Senate candidates
aired only 0.87 percent and 0.39 percent of their
advertisements more than 90 days before their primary and
general elections, respectively,” while “House candidates
aired only 8.56 percent and 0.28 percent of their
advertisements more than 90 days before their primary and
general elections, respectively.” Coordinated
Communications, 71 Fed. Reg. 33,190, 33,194 (2006). In the
2004 presidential campaign, 8.44 percent of all candidate TV
ads in the primary ran outside the 120-day window, as did 16
percent of all candidate TV ads in Iowa before its crucial
caucus. Shays III, 508 F. Supp. 2d at 45. While these
percentages are small, the total amount spent on pre-window
ads was substantial, totaling into the millions of dollars. See
id.
 17
In addition to evidence about spending by candidates, the
Commission had before it many examples of expenditures by
outside groups before the 90/120-day windows. For example,
in the 2004 Alaska Senate race, the U.S. Chamber of
Commerce began running TV ads supporting Senator Lisa
Murkowski nine months before the primary election. In the
2004 Florida Senate race, the illuminatingly-named “People
for a Better Florida” began running ads attacking candidate
Mel Martinez over five months before the primary. In the
2006 Pennsylvania Senate race, a group called “Americans
for Job Security” spent $500,000 on TV ads supporting
Senator Rick Santorum starting six months before the
primary. In the 2004 South Dakota Senate race, the Club for
Growth began running ads attacking Senator Tom Daschle
fifteen months before the general election. The group ran
similar ads against Rhode Island Senator Lincoln Chafee
beginning nine months before his 2006 primary. Because
none of these ads contained the “magic words” of express
advocacy, all could have been coordinated with candidates
under the Commission’s rule.

The record also reveals that the vast majority of
campaign ads omit “express advocacy.” “In the 1998 election
cycle, just 4% of candidate advertisements used magic words;
in 2000, that number was a mere 5%.” McConnell, 540 U.S.
at 127 n.18. “Indeed, campaign professionals” told Congress
while it was considering BCRA “that the most effective
campaign ads . . . avoid the use of the magic words.” Id. at
127. Because campaign advertisements rarely use magic
words, the Supreme Court has declared the express advocacy
test “functionally meaningless.” Id. at 193.

In sum, the record demonstrates several key points: (1)
the vast majority of advertising by candidates occurs in the
90/120-day windows the FEC regulates more strictly; (2)
 18
candidates and outside groups nonetheless run a significant
number of ads before the 90/120-day windows; and (3) very
few ads contain magic words. These facts lead us to two
inexorable conclusions: the FEC’s decision to regulate ads
more strictly within the 90/120-day windows was perfectly
reasonable, but its decision to apply a “functionally
meaningless” standard outside those windows was not. Id. at
193.

Beginning with the windows, we made clear in Shays II
that nothing in BCRA forbids the FEC from “dr[awing]
distinctions based on content, time, and place”; its failure then
was that it provided no evidence in support of the window it
chose. 414 F.3d at 100. But given the record evidence
showing that the vast majority of federal campaign
advertisements run within the more strictly regulated
windows, the FEC now “appears to have drawn the line in a
reasonable place based on the data available to it.” Shays III,
508 F. Supp. 2d at 43.

The next issue is whether the FEC’s decision to regulate
only ads containing express advocacy outside the 90/120-day
windows fails Chevron step two review or violates the APA.
As our cases explain, these inquiries overlap, for “[w]hether a
statute is unreasonably interpreted is close analytically to . . .
whether an agency’s actions under a statute are
unreasonable.” Gen. Instrument Corp. v. FCC, 213 F.3d 724,
732 (D.C. Cir. 2000). At Chevron step two and under the
APA, “[courts] must reject administrative constructions of [a]
statute . . . that frustrate the policy that Congress sought to
implement.” Cont’l Air Lines, 843 F.2d at 1453 (quoting
Democratic Senatorial Campaign Comm., 454 U.S. at 32).
While that policy may sometimes be unclear, here it is not:
“BCRA’s fundamental purpose [is] prohibiting soft money
from being used in connection with federal elections.”
 19
McConnell, 540 U.S. at 177 n.69; see also id. at 132
(“BCRA’s central provisions are designed to address
Congress’ concerns about the increasing use of soft money
and issue advertising to influence federal elections.”). Recall
that “soft money” refers to political donations made in such a
way as to avoid FECA’s restrictions. See Shays II, 414 F.3d
at 80.

The question, then, is this: Does the challenged
regulation frustrate Congress’s goal of “prohibiting soft
money from being used in connection with federal elections”?
McConnell, 540 U.S. at 177 n.69. We think it does. Outside
the 90/120-day windows, the regulation allows candidates to
evade—almost completely—BCRA’s restrictions on the use
of soft money. As FEC counsel conceded at oral argument,
Oral Arg. at 0:46-2:00, the regulation still permits exactly
what we worried about in Shays II, i.e., more than 90/120
days before an election, candidates may ask wealthy
supporters to fund ads on their behalf, so long as those ads
contain no magic words. 414 F.3d at 98. Indeed, pressed at
oral argument, counsel admitted that the FEC would do
nothing about such coordination, even if a contract
formalizing the coordination and specifying that it was “for
the purpose of influencing a federal election” appeared on the
front page of the New York Times. Oral Arg. at 7:34-8:03.
Thus, the FEC’s rule not only makes it eminently possible for
soft money to be “used in connection with federal elections,”
McConnell, 540 U.S. at 177 n.69, but it also provides a clear
roadmap for doing so, directly frustrating BCRA’s purpose.
Moreover, by allowing soft money a continuing role in the
form of coordinated expenditures, the FEC’s proposed rule
would lead to the exact perception and possibility of
corruption Congress sought to stamp out in BCRA, for
“expenditures made after a ‘wink or nod’ often will be ‘as
useful to the candidate as cash,’” id. at 221 (quoting FEC v.
 20
Colo. Republican Fed. Campaign Comm., 533 U.S. 431, 442,
446 (2001)), and “[i]t is not only plausible, but likely, that
candidates would feel grateful for such donations and that
donors would seek to exploit that gratitude,” id. at 145.

The FEC offers four reasons why we should nonetheless
uphold this lax standard. First, explaining that it chose the
standard to protect the First Amendment rights of outside
groups conducting independent expenditures, it argues that
any standard more vague than “express advocacy” would
unacceptably chill the speech of such groups. We applaud the
Commission’s sensitivity to First Amendment values, but as
we said in Shays II, “regulating nothing at all” would achieve
the same purpose, “and that would hardly comport with the
statute.” 414 F.3d at 101. Thus, “[n]otwithstanding its
obligation to attempt to avoid unnecessarily infringing on
First Amendment interests, the Commission must establish,
consistent with APA standards, that its rule rationally
separates election-related advocacy from other activity falling
outside FECA’s expenditure definition,” id. at 101-02
(citation omitted), which, remember, defines “expenditure” as
“any purchase, payment, . . . or gift of money or anything of
value, made by any person for the purpose of influencing any
election for Federal office.” 2 U.S.C. § 431(9)(A)(i)
(emphasis added). Here the Commission failed to show that
its rule rationally separates election-related advocacy from
other speech, for many of the ads its rule leaves unregulated
are plainly intended to “influenc[e] an[] election for Federal
office.” Id. The FEC claims it has drawn a rational line
because ads omitting magic words run by outside groups in
coordination with candidates before the windows are
generally not intended to influence federal elections. But this
is absurd. Because the magic words test is “functionally
meaningless,” McConnell, 540 U.S. at 193, and “expenditures
made after a ‘wink or nod’ often will be ‘as useful to the
 21
candidate as cash,’” id. at 221 (quoting Colo. Republican
Comm., 533 U.S. at 442, 446), there is no question that
coordinated ads omitting magic words are often intended to
influence federal elections. This is true even outside the
90/120-day windows, for as the FEC itself found, “[a]ny time
a candidate uses campaign funds to pay for an advertisement,
it can be presumed that this advertisement is aired for the
purpose of influencing the candidate’s election.” 71 Fed.
Reg. at 33,193 (emphasis added). We have no reason to think
this is any less true of spending that candidates coordinate
with outside groups. In sum, although the FEC, properly
motivated by First Amendment concerns, may choose a
content standard less restrictive than the most restrictive it
could impose, it must demonstrate that the standard it selects
“rationally separates election-related advocacy from other
activity falling outside FECA’s expenditure definition.”
Shays II, 414 F.3d at 102. Because the “express advocacy”
standard fails that test, it runs counter to BCRA’s purpose as
well as the APA.

Second, the FEC points to our decision in Orloski v.
FEC, 795 F.2d 156 (D.C. Cir. 1986), as support for the rule it
chose. Orloski dealt with 2 U.S.C. § 441b(a), which prohibits
corporations from making “contribution[s] or expenditure[s]
in connection with any election to any political office.” The
FEC interpreted this provision to allow corporations to fund
events for federal officeholders so long as those events were
“non-political,” i.e., “(1) there is an absence of any
communication expressly advocating the nomination or
election of the congressman appearing or the defeat of any
other candidate, and (2) there is no solicitation, making, or
acceptance of a campaign contribution for the congressman in
connection with the event.” Orloski, 795 F.2d at 160.
Upholding the regulation under Chevron, we explained that
although it was “at the outer bounds of permissible choice,” it
 22
was “still a ‘reasonable choice within a gap left open by
Congress.’” Id. at 167 (quoting Chevron, 467 U.S. at 866).

The FEC urges us to reach the same conclusion here, but
it ignores the crucial differences separating Orloski from this
case. Most important, in Orloski we found that “the FEC’s
interpretation does not create the potential for gross abuse”
because “under the FEC’s interpretation, corporations can
make little more than insignificant, indirect donations to a
candidate’s political warchest, which are unlikely to give the
corporations improper influence over candidates for federal
office or to significantly increase the level of campaign
spending.” Id. at 165-66. Here, by contrast, the coordinated
expenditures the Commission’s rule allows “often will be ‘as
useful to the candidate as cash,’” McConnell, 540 U.S. at 221
(quoting Colo. Republican Comm., 533 U.S. at 446), and “[i]t
is not only plausible, but likely, that candidates would feel
grateful for such donations and that donors would seek to
exploit that gratitude,” id. at 145. This “create[s] the potential
for gross abuse” that was absent in Orloski. Orloski, 795 F.2d
at 165. Moreover, in Orloski we said “[i]f the FEC’s
interpretation unduly compromises the Act’s purposes, it is
not a ‘reasonable accommodation’ under the Act, and it would
therefore not be entitled to deference.” Id. at 164 (quoting
Chevron, 467 U.S. at 845). Here, as we have explained, the
rule “unduly compromises” the Act’s purpose of “prohibiting
soft money from being used in connection with federal
elections.” McConnell, 540 U.S. at 177 n.69.

Third, the FEC disparages the many examples Shays
provides of pre-window expenditures by candidates and
outside groups, calling them mere “anecdotes” and saying
Shays failed to offer any evidence of their relative
significance. See Appellant’s Reply Br. 19-21. But the
FEC’s own study showed that almost 10% of primary election
 23
advertisements by House candidates and presidential
candidates in 2004—plainly “aired for the purpose of
influencing the candidate’s election,” 71 Fed. Reg. at
33,193—ran before the windows, and Shays provided
numerous examples of pre-window ads funded by outside
groups that were obviously intended to influence federal
elections. Notably, many of Shays’s examples came from
media markets excluded from the FEC’s study, and they
suggest that the percentage of early advertising may be even
greater than that captured by the FEC’s analysis. Shays’s
evidence, combined with the FEC’s study, proves his point.
Given the rule the FEC chose, which regulates virtually no
coordinated pre-window ads, the Commission could
demonstrate that it met its statutory obligation—“rationally
separat[ing] election-related advocacy from other activity
falling outside FECA’s expenditure definition,” Shays II, 414
F.3d at 102—only by showing that a truly insignificant
number of ads intended to influence federal elections run
before the windows. See Shays II, 414 F.3d at 99 (“[T]he
FEC lacks discretion to exclude [communications intended to
influence federal elections] from its coordinated
communication rule.”). The evidence in the FEC’s own
study, as well as the evidence Shays provided, refutes any
such contention.

Finally, the FEC assures us that we have no reason to
worry about lax regulation outside the 90/120-day windows
because it has received very few complaints alleging that
candidates are currently coordinating expenditures with
outside groups before the windows, and there is no evidence
that candidates will begin coordinating with outside groups if
we uphold the regulation. This argument flies in the face of
common sense. Of course the FEC hasn’t received many
complaints: the challenged rule allows unlimited coordination
so long as the resulting advertisements omit express
 24
advocacy. In other words, people have had no reason to
report this type of coordination because it is perfectly legal
under the FEC’s rule. Moreover, the Commission’s
prediction about what will happen in the future disregards
everything Congress, the Supreme Court, and this court have
said about campaign finance regulation. In passing BCRA,
Congress found that ads funded with soft money “were often
actually coordinated with, and controlled by, the campaigns.”
McConnell, 540 U.S. at 131 (citing S. REP. NO. 105-167, vol.
1, at 49 (1998); id. vol. 3, at 3997-4006). In McConnell, the
Supreme Court said, “[m]oney, like water, will always find an
outlet,” id. at 224, and BCRA reflects “the hard lesson of
circumvention” Congress has learned from “the entire history
of campaign finance regulation,” id. at 165. And in Shays II,
we said, “if regulatory safe harbors permit what BCRA bans,
we have no doubt that savvy campaign operators will exploit
them to the hilt, reopening the very soft money floodgates
BCRA aimed to close.” 414 F.3d at 115. Common sense
requires the same conclusion here. Under the present rules,
any lawyer worth her salt, if asked by an organization how to
influence a federal candidate’s election, would undoubtedly
point to the possibility of coordinating pre-window
expenditures. The FEC’s claim that no one will take
advantage of the enormous loophole it has created ignores
both history and human nature.

Conduct Standard: Campaign Vendors and Former
Employees

BCRA directed the FEC, in issuing its revised
coordinated communication rules, to address “payments for
the use of a common vendor” and “payments for
communications directed or made by persons who previously
served as an employee of a candidate or a political party.”
BCRA § 214(c), 116 Stat. at 95 (codified at 2 U.S.C. § 441a
 25
note). The FEC’s original post-BCRA regulations
implemented these provisions by specifying that the “conduct
prong” of the coordinated communication test would be
satisfied if a candidate’s vendor or former employee
“create[d], produce[d], or distribute[d]” a communication
using “material” information about “campaign plans, projects,
activities, or needs,” or shared such information with the
person paying for the communication, throughout the “current
election cycle.” 11 C.F.R. § 109.21(d)(4)-(5) (2003).

Shays chose not to challenge these original provisions,
but the FEC nonetheless revisited them after we remanded
other aspects of the coordinated communication rule in Shays
II. Because campaign vendors and employees complained
that the regulation was unnecessarily cumbersome—they
claimed that the information they possess quickly loses
value—the FEC decided to change the rule so that it only
prohibits vendors and former employees from using “material
information” about “campaign plans, projects, activities, or
needs,” or sharing such information with the person funding
the ad, for 120 days, rather than throughout the whole election
cycle. 11 C.F.R. § 109.21(d)(4)-(5).

In the district court, Shays challenged the revised
regulation, arguing that it ran counter to BCRA’s purpose and
violated the APA. Although the district court rejected the
Chevron step two argument, it found the revised regulation
arbitrary and capricious because the FEC had failed to justify
its policy change. Shays III, 508 F. Supp. 2d at 49-52. We
agree.

Explaining the new rule, the FEC reasoned that
“[r]educing the temporal limit to 120 days will not undermine
the effectiveness of the conduct standards and will not lead to
circumvention of the Act” because “material information
 26
regarding candidate and political party committee campaigns,
strategy, plans, needs, and activities . . . does not remain
‘material’ for long periods of time during an election cycle.”
71 Fed. Reg. at 33,204. The Commission went on to say that
“a limit of 120 days is more than sufficient to reduce the risk
of circumvention of the Act.” Id. at 33,205. We see two
flaws in this rationale.

First, as the district court pointed out, “the Commission’s
generalization that material information does not remain
material for long overlooks the possibility that some
information—for instance, a detailed state-by-state master
plan prepared by a chief strategist—may very well remain
material for at least the duration of a campaign.” Shays III,
508 F. Supp. 2d at 51. Indeed, the Commission’s own
regulations recognize that some types of information retain
value for longer than 120 days. For example, the Commission
says that polling data—arguably the campaign information
that most quickly becomes obsolete—retains some value for
180 days. See 11 C.F.R. § 106.4(g). Yet the Commission
inexplicably asserts that other types of campaign
information—including some far more durable information
such as donor lists and lists of supportive voters—will have
lost value within 120 days. As Shays points out, under the
FEC’s regulation, a top presidential campaign staffer could
leave a campaign after an early primary, wait 120 days, and
then spend the entire general election working for an outside
group on behalf of his former candidate, using that
candidate’s donor lists, mailing lists, and long-term strategic
plan. The Commission never explains why this type of
coordination should go unregulated.

Second, the FEC has provided no explanation for why it
believes 120 days is a sufficient time period to prevent
circumvention of the Act. Though the Commission certainly
 27
has some discretion in choosing exactly where to draw a
bright line such as this one, it must support its decision with
reasoning and evidence, for “a bright line can be drawn in the
wrong place.” Shays II, 414 F.3d at 101.

Conduct Standard: Firewall Safe Harbor

When it revised the conduct standard with regard to
former employees and vendors following Shays II, the FEC
created a new “firewall safe harbor” provision to protect
vendors and organizations in which some employees are
working on a candidate’s campaign and others—separated by
a firewall—are working for outside groups making
independent expenditures. Under the new regulation, “[t]he
conduct standards . . . are not met if the commercial vendor,
former employee, or political committee has established and
implemented a firewall that meets the requirements of
paragraphs (h)(1) and (h)(2) of this section.” 11 C.F.R.
§ 109.21(h). Those requirements are: “(1) The firewall must
be designed and implemented to prohibit the flow of
information between employees or consultants providing
services for the person paying for the communication and
those employees or consultants currently or previously
providing services to the candidate who is clearly identified in
the communication . . . ; and (2) The firewall must be
described in a written policy that is distributed to all relevant
employees, consultants, and clients affected by the policy.”
Id. According to the regulation, “[t]his safe harbor provision
does not apply if specific information indicates that, despite
the firewall, information about the candidate’s or political
party committee’s campaign plans, projects, activities, or
needs that is material to the creation, production, or
distribution of the communication was used or conveyed to
the person paying for the communication.” Id.
 28
Shays challenged this regulation, arguing that it was so
vague as to invite near-certain circumvention, undermining
BCRA’s purpose, and that the Commission failed not only to
justify it, but also to explain why it changed its mind after
rejecting a similar provision in 2003, violating the APA. The
district court agreed with both arguments. Shays III, 508 F.
Supp. 2d at 53-56.

Challenging the district court’s ruling and acknowledging
that the regulation provides few details on what constitutes an
acceptable firewall, the FEC argues that “a firewall is more
effective if established and implemented by each organization
in light of its specific organization, clients, and personnel.”
71 Fed. Reg. at 33,206. The Commission emphasizes that
“[a]n organization cannot come within the firewall safe harbor
simply by alleging that it has an internal firewall”; rather,
“[a]n entity seeking to use the firewall safe harbor must be
‘prepared to provide reliable information . . . about [its]
firewall, and how and when the firewall policy was
distributed and implemented.’” Appellant’s Opening Br. 33
(quoting 71 Fed. Reg. at 33,207). Moreover, the FEC insists,
it provided a good reason for implementing the safe harbor: to
make it easier for candidates and independent organizations to
hire consultants, vendors, and former employees—thus
facilitating protected speech—without fear of being falsely
accused of improper coordination. See 71 Fed. Reg. at
33,206. And it claims it did explain why it has now adopted a
firewall safe harbor despite rejecting a similar proposal in
2003, namely in the interim it approved a firewall created by
EMILY’s List and found it sufficient to protect against
coordination. See id.; Coordinated Communications:
Proposed Rules, 70 Fed. Reg. 73,946, 73,955 (2005).

Though we think this a close question, we agree with the
FEC. The district court and Shays are undeniably correct that
 29
the regulation is vague as to what constitutes an acceptable
firewall, but “when Congress has not specified the level of
specificity expected of the agency,” as here, “the agency is
entitled to broad deference in picking the suitable level.”
Cement Kiln Recycling Coal. v. EPA, 493 F.3d 207, 217 (D.C.
Cir. 2007) (citation omitted). Moreover, “[t]he APA does not
require that all the specific applications of a rule evolve by
further, more precise rules rather than by adjudication.”
Shalala v. Guernsey Mem’l Hosp., 514 U.S. 87, 96 (1995).
Thus, there is no “basis for suggesting that the agency has a
statutory duty to promulgate regulations that, either by default
rule or by specification, address every conceivable question.”
Id. Instead, the Commission has authority to flesh out its
rules through adjudications and advisory opinions. In
addition, the Commission’s sensible conclusion that firewalls
will be “more effective if established and implemented by
each organization in light of its specific organization, clients,
and personnel,” 71 Fed. Reg. at 33,206, represents just the
kind of agency expert judgment to which we owe deference.
See, e.g., North Carolina v. FERC, 112 F.3d 1175, 1189 (D.C.
Cir. 1997) (“So long as the Commission has examined the
relevant data and provided a reasoned explanation supported
by a stated connection between the facts found and the
choices made, we will defer to the agency’s expertise.”
(citation omitted)). Shays doubts whether the Commission
will enforce the safe harbor provision in a way that actually
requires meaningful firewalls, but as a court reviewing this
facial challenge we must presume that the Commission will
enforce its rule in good faith. See Sullivan v. Everhart, 494
U.S. 83, 94 (1990) (holding that in facial challenges to
regulations courts must presume agencies will implement
them in good faith).

We also believe that the FEC adequately justified the rule
and its departure from past practice. Hardly contrary to
 30
BCRA, the regulation makes it easier for candidates and
organizations to engage in protected speech by helping them
hire consultants and employees without fear of false
accusations of coordination. Moreover, the Commission’s
favorable experience with the EMILY’s List firewall
represents a perfectly reasonable basis for its change of heart
since the 2003 rulemaking.

III.
As part of its effort to reduce the influence of soft money,
BCRA requires that all “federal election activity” be paid for
with either hard money or “Levin funds”—limited
contributions to state parties specifically earmarked for
“federal election activity.” See 2 U.S.C. § 441i(b)(2); see also
Shays II, 414 F.3d at 112-13. The statute defines federal
election activity as including “get-out-the-vote activity”
(GOTV activity) and “voter registration activity,” but it leaves
these terms undefined. 2 U.S.C. § 431(20). In 2003 the
Commission issued regulations defining GOTV and voter
registration activity:

(2) Voter registration activity means contacting
individuals by telephone, in person, or by other
individualized means to assist them in
registering to vote. Voter registration activity
includes, but is not limited to, printing and
distributing registration and voting
information, providing individuals with voter
registration forms, and assisting individuals in
the completion and filing of such forms.

(3) Get-out-the-vote activity means contacting
registered voters by telephone, in person, or by
other individualized means, to assist them in
 31
engaging in the act of voting. Get-out-the-vote
activity includes, but is not limited to:

(i) Providing to individual voters
information such as the date of the
election, the times when polling places
are open, and the location of particular
polling places; and

(ii) Offering to transport or actually
transporting voters to the polls.

11 C.F.R. § 100.24(a).

In Shays I, the district court invalidated these definitions
on procedural grounds. See 337 F. Supp. 2d at 101-07
(holding that the FEC violated the APA’s notice requirements
in promulgating these definitions because interested parties
could not reasonably have anticipated the final rulemakings
from the notice of proposed rulemaking). “On remand, the
Commission re-promulgated its regulations defining voter
registration activity and GOTV activity (with minimal
alterations to the definition of GOTV activity), and issued an
expanded [explanation and justification].” Shays III, 508 F.
Supp. 2d at 63.

Shays again challenged the regulation, and the district
court found that the definitions survived Chevron step one but
failed Chevron step two because both left unaddressed “vast
gray area[s]” of possible GOTV and voter registration
activity, making it possible for state parties to circumvent the
statute and frustrate BCRA’s purpose. See id. at 63-70.
According to the district court, the definitions also violated
the APA because the Commission gave no good reason for
leaving such large gray areas. See id. at 66, 69-70.
 32
Challenging the district court’s ruling, the FEC again
emphasizes the deference to which it is entitled “when
Congress has not specified the level of specificity expected of
the agency.” Cement Kiln, 493 F.3d at 217 (citation omitted).
We agree with the FEC that its decision to promulgate a
somewhat vague regulation, in and of itself, runs afoul of
neither BCRA nor the APA, for there is no “basis for
suggesting that the agency has a statutory duty to promulgate
regulations that, either by default rule or by specification,
address every conceivable question.” Guernsey Mem’l, 514
U.S. at 96. Thus, the Commission has discretion to leave a
large gray area and fill it in later through adjudication and
advisory opinions. That said, we reject the regulation for
other reasons.

As Shays explains, the FEC’s definitions of GOTV
activity and voter registration activity create “two distinct
loopholes.” Appellee’s Opening Br. 41. First, both
definitions require that the party contacting potential voters
actually “assist” them in voting or registering to vote, 11
C.F.R. § 100.24(a)(2)-(3), thus excluding efforts that actively
encourage people to vote or register to vote and dramatically
narrowing which activities are covered. Second, both
definitions require the contact to be “by telephone, in person,
or by other individualized means,” thus entirely excluding
mass communications targeted to many people. Id. (emphasis
added). As Shays points out:

under the Commission’s construction, a state
party within days of a federal election can send
out multiple direct mailings to every potential
voter sympathetic to its cause urging them to
vote, and can blanket the state with automated
telephone calls by celebrities identifying the
date of the election and exhorting recipients to
 33
get out to vote, without being deemed to be
engaged in GOTV activity. Likewise, large-
scale efforts encouraging potential supporters
to register to vote and directing them how they
may do so are not “voter registration activities”
under the Commission’s definitions. Indeed,
the more people that a communication is
intended to reach, and the more money the
party spends, the less likely it is that the
communication will be an “individualized
means” of “assistance” subject to BCRA’s
restrictions on [federal election activity].

Appellee’s Opening Br. 43. These examples are not merely
hypothetical. In a recent advisory opinion, the FEC decided
that letters and pre-recorded telephone calls directed to
registered Democrats in Long Beach, California, encouraging
them to vote in an upcoming election, did not count as GOTV
activity because they provided no individualized information
to any particular recipient. See FEC Advisory Op. 2006-19
(June 5, 2006).

The FEC’s restrictive definitions of GOTV activity and
voter registration activity run directly counter to BCRA’s
purpose, and the Commission has provided no persuasive
justification for them. Indeed, though Shays has not argued as
much here, we question whether these definitions could even
survive at Chevron step one, for we doubt whether the
meaning of GOTV activity and voter registration activity can
plausibly be limited to individualized assistance. In any
event, the definitions fail at Chevron step two because they
conflict with BCRA’s purpose of “prohibiting soft money
from being used in connection with federal elections.”
McConnell, 540 U.S. at 177 n.69. The regulation will allow
the use of soft money for many efforts that influence federal
 34
elections, for as the Supreme Court observed in McConnell,
“[c]ommon sense dictates” that “any efforts [by state or local
parties] that increase the number of like-minded registered
voters who actually go to the polls” will “directly assist [a]
party’s candidates for federal office.” Id. at 167-68.

Moreover, the only rationales the Commission gave for
adopting its limited constructions of GOTV activity and voter
registration activity were: (1) to ensure that mere exhortations
to get out and vote or register to vote made at the end of a
political event or speech would not count as federal election
activity; and (2) to give clear guidance to state and local party
organizations so they know what activities they can engage in.
Definition of Federal Election Activity, 71 Fed. Reg. 8,926,
8,928-29 (2006). The first rationale is unpersuasive. As
Shays points out, “a definition could surely be crafted that
would exempt such routine or spontaneous speech-ending
exhortations without opening a gaping loophole permitting
state parties to use soft money to saturate voters with
unlimited direct mail and robocalls that unquestionably
benefit federal candidates.” Appellee’s Opening Br. 45. And
the second rationale doesn’t even amount to an argument for a
limited definition of GOTV activity and voter registration
activity; instead, it’s an argument for a clear and detailed
definition. But because any clear definition would satisfy the
FEC’s goal of providing precise guidance—one that forbade
any activity designed to get people to register or vote would
be just as easy to follow as one that allowed unlimited GOTV
and voter registration efforts—the desire for a clear rule, in
and of itself, provides no justification for this limited
definition.

IV.
The single regulation the district court upheld—as to
which Shays cross appeals—deals with soft-money
 35
solicitations by federal candidates at state party fundraising
events. BCRA prohibits those seeking or holding federal
office from “solicit[ing] . . . funds in connection with an
election for Federal office, including funds for any Federal
election activity, unless the funds are subject to the
limitations, prohibitions, and reporting requirements of this
Act,” i.e., the funds solicited must not be soft money. 2
U.S.C. § 441i(e)(1)(A). It also prohibits federal candidates
and officeholders from “solicit[ing] . . . funds in connection
with any election other than an election for Federal office or
disburs[ing] funds in connection with such an election unless
the funds” are hard money or Levin funds. Id.
§ 441i(e)(1)(B). The statute specifies, however, that
“[n]otwithstanding” these prohibitions, “a candidate or an
individual holding Federal office may attend, speak, or be a
featured guest at a fundraising event for a State, district, or
local committee of a political party.” Id. § 441i(e)(3).
Asserting that this latter provision made the statute
ambiguous, the FEC issued a regulation allowing federal
candidates and officeholders to solicit soft money at state and
local party fundraisers. See 11 C.F.R. § 300.64 (“Candidates
and individuals holding Federal office may speak at [state and
local party] events without restriction or regulation.”
(emphasis added)).

In Shays I the district court found that although the
regulation survived Chevron review, the FEC had failed to
provide an adequate justification for it, violating the APA.
See Shays I, 337 F. Supp. 2d at 92-93. Choosing not to appeal
this aspect of Shays I, the FEC instead issued a new notice of
proposed rulemaking, took additional comments, and issued
the same regulation with an expanded explanation. This time
the district court found the FEC’s explanation satisfactory.
See Shays III, 508 F. Supp. 2d at 60-61. Shays now appeals,
arguing that the regulation violates BCRA and the APA.
 36
In our view, the regulation fails because it allows what
BCRA directly prohibits. As noted above, section
441i(e)(1)(A) expressly prohibits federal candidates and
officeholders from soliciting soft money, yet the
Commission’s rule allows federal candidates and
officeholders to do just that at state and local party
fundraisers. See Chevron, 467 U.S. at 842 (“If the intent of
Congress is clear, that is the end of the matter . . . .”).

Contrary to the Commission’s position, section
441i(e)(3)—“a candidate or an individual holding Federal
office may attend, speak, or be a featured guest at a
fundraising event for a State, district, or local committee of a
political party”—does nothing to make the statute’s
prohibition on soft-money solicitations ambiguous. Rather,
section (e)(3) merely clarifies that despite the statute’s ban on
soliciting soft money, federal candidates may still “attend,
speak, or be a featured guest” at state party events where soft
money is raised, which the statute might otherwise be read as
forbidding. Indeed, several factors demonstrate that section
(e)(3) cannot plausibly be read to allow federal candidates to
solicit soft money at state party events. Most important, when
Congress wanted to create an exception to the ban on federal
candidates soliciting soft money, it did so explicitly. Section
441i(e) contains three express exceptions to section
(e)(1)(A)’s general prohibition on raising soft money. See 2
U.S.C. § 441i(e)(2) (allowing candidates for federal office
who are also candidates for local or state office to solicit soft
money authorized under state law for their state or local
campaign); id. § 441(e)(4)(A) (authorizing federal candidates
to solicit soft money for certain nonprofit groups); id. §
441i(e)(4)(B) (authorizing candidates to solicit up to $20,000
per individual to fund state party GOTV and voter registration
activities). Given these express exceptions, we have no basis
for reading section 441i(e)(3) as creating an implied fourth
 37
exception. “Where Congress explicitly enumerates certain
exceptions to a general prohibition, additional exceptions are
not to be implied, in the absence of evidence of a contrary
legislative intent,” none of which is present here. TRW Inc. v.
Andrews, 534 U.S. 19, 28 (2001) (citation omitted).
Moreover, these exceptions expressly allow “solicitation” of
soft money, yet section 441i(e)(3) says only that federal
candidates may “attend, speak, or be a featured guest” at state
party fundraisers. The difference in terminology matters, for
“Congress’ choice of different verbs to characterize the two
situations is a choice which we properly take as evidence of
an intentional differentiation.” Nat’l Insulation Transp.
Comm. v. ICC, 683 F.2d 533, 537 (D.C. Cir. 1982) (citation
omitted). This is especially true because Congress repeatedly
used the term “solicit” and “solicitation” in section 441i—
over a dozen times—yet chose not to do so in section
441i(e)(3). Reading section 441i(e)(3) as allowing
solicitation in light of the clear differences between it and
other sections of the statute that expressly allow solicitation
“inverts the usual canon that when Congress uses different
language in different sections of a statute, it does so
intentionally.” Fla. Pub. Telecomms. Ass’n v. FCC, 54 F.3d
857, 860 (D.C. Cir. 1995).

V.
For the foregoing reasons, we affirm the district court
with respect to the content standard for coordinated
expenditures, the rule for when former employees/vendors
may share material information, and the definitions of GOTV
activity and voter registration activity. With respect to the
firewall safe harbor provision and the rule allowing soft-
money solicitations at state party events, we reverse and
remand for further proceedings consistent with this opinion.

So ordered.