James E. Akins v. Federal Election Commission

Opinion concurring in part and dissenting in part filed by Circuit Judge SILBERMAN.

SENTELLE, Circuit Judge:

Appellants sought review in district court of the Federal Election Commission’s dismissal of their administrative complaint alleging various violations of the Federal Election Campaign Act, 2 U.S.C. §§ 431-55 (1994). The district court granted summary judgment for the Federal Election Commission. Because we agree that the Commission acted in a reasonable manner in its interpretation and application of the Federal Election Campaign Act as to the administrative complaint, we affirm.

I. BACKGROUND

James E. Akins, Richard Curtiss, Paul Findley, Robert J. Hanks, Andrew Killgore, and Orin Parker (collectively, “appellants”) are former ambassadors, congressmen or government officials. They are politically active people who seek to influence policymakers and the public and who oppose the views of the American Israel Public Affairs Committee (“AIPAC”) regarding United States foreign policy in the Middle East.

AIPAC is an incorporated, tax-exempt organization with approximately 50,000 supporters nationwide that lobbies Congress and the Executive Branch for military and economic aid to Israel. AIPAC has an annual budget of close to $10 million. AIPAC’s stated purpose is to encourage close relations between the United States and Israel.

On January 9,1989, appellants filed a complaint with the Federal Election Commission (“FEC” or “Commission”), the independent government agency responsible for enforcement of the Federal Election Campaign Act (“FECA” or “Act”), claiming that AIPAC was a political committee under 2 U.S.C. §§ 431(4) and 431(9)(A)(i) because it made expenditures, including contributions, aggregating in excess of $1,000 in a year for the *350purpose of influencing any election for federal office. As a political committee, AIPAC would be subject to registration and reporting requirements involving disclosure of its donors and the amounts it had contributed to candidates, as well as the $1,000 limit for contributions to individual candidates. 2 U.S.C. §§ 433, 434(a)(1) and (b), 441a(l) and (2) (1994).

The FEC investigated the allegations and after a substantial investigation, the General Counsel issued a report regarding AIPAC’s corporate expenditures, campaign-related activities and political activities. While the FEC found that AIPAC has made contributions that likely crossed the $1,000 threshold, it concluded that AIPAC is not a political committee under the statute because its campaign-related activities constitute only a small portion of its overall activities and are not AIPAC’s major purpose. The FEC stated that AIPAC is primarily a lobbying organization interested in promoting U.S.-Israel relations and its campaign-related activities are undertaken as an adjunct to its lobbying efforts.

Adopting the General Counsel’s recommendations, the Commission found that there was no probable cause to believe that AIPAC was a political committee in violation of the disclosure and reporting requirements of sections 433 and 434 of the Act. The Commission did find probable cause to believe that AIPAC violated section 441b, which restricts expenditures and contributions by corporations, but unanimously voted to take no action.

Appellants filed suit in district court claiming that the FEC’s final agency action — its determination of no probable cause to believe that AIPAC was a political committee under the Act — was arbitrary, capricious and contrary to law. Appellants allege that the FEC’s major purpose standard is contrary to law and that the Commission’s findings, reasons, and investigation were insufficient to support its conclusion that there is no probable cause to believe that AIPAC’s campaign-related activities were at such a level as to make them a major purpose of the organization. The district court granted summary judgment on the basis that the FEC’s construction and application of the major purpose standard was proper under the Supreme Court’s and this Circuit’s interpretations of the Act. The court found no evidence that the Commission failed to investigate adequately appellants’ administrative complaint.

II. DISCUSSION

A. Standing

Before addressing appellants’ claim on the merits, we must first resolve a jurisdictional issue: whether appellants have standing, both constitutional and prudential, to pursue their claims in federal court at all. In order to establish constitutional standing, appellants “must show injury in fact that is fairly traceable to the defendant’s action and redressable by the relief requested.” Animal Legal Defense Fund, Inc. v. Espy, 23 F.3d 496, 498 (D.C.Cir.1994) (“ALDF”) (citing Allen v. Wright, 468 U.S. 737, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984); Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 474-75, 102 S.Ct. 752, 759-60, 70 L.Ed.2d 700 (1982)).

Section 437g(a)(1) of FECA allows any person who believes that there has been a violation of the Act to file a complaint with the FEC. In turn, section 437g(a)(8)(A) states that any party aggrieved by an order of the FEC dismissing its complaint may file a petition with the U.S. District Court for the District of Columbia.

Appellants allege that the FEC’s action has denied them their right as citizens, registered voters, and members of the public to obtain information that AIPAC as a political committee would be required to disclose. They contend that their ability to influence and inform policymakers and the public is impaired by the lack of information about AIPAC’s contributors and expenditures.1 While arguably an injury of this type would not appear to meet the requirements of Arti*351cle III standing, a line of circuit precedent, beginning with a footnote in Scientists’ Inst. for Public Info., Inc. v. Atomic Energy Comm’n, 481 F.2d 1079 (D.C.Cir.1973), has recognized certain “informational injuries” resulting from agency action. Id. at 1087 n. 29 (finding appellants have standing to challenge AEC decision not to issue environmental impact statement because agency action limited appellants’ ability to inform public about social issues and questions of public policy); see also Action Alliance of Senior Citizens v. Heckler, 789 F.2d .931, 937-38 (D.C.Cir.1986) (finding organization adequately alleged informational injury in regulations restricting flow of information regarding services available to the elderly); Foundation on Economic Trends v. Lyng, 943 F.2d 79, 83-85 (D.C.Cir.1991) (assuming that Agriculture Department’s failure to prepare impact statement with respect to germplasm program injured Foundation because its mission is to provide information to its members and general public about such matters, but holding that appellants lacked standing on grounds that they failed to show particular agency action that triggered violation and caused injury). This court recently found informational injuries that satisfied the minimum requirements of Article III standing in Animal Legal Defense Fund, Inc. v. Espy, 29 F.3d 720 (D.C.Cir.1994) (finding constitutional standing, but dismissing case for lack of prudential standing); ALDF, 23 F.3d 496 (same). Although we acknowledge that this broad approach raises “complex and difficult considerations,” Lyng, 943 F.2d at 84 (quoting Natural Resources Defense Council, Inc. v. SEC, 606 F.2d 1031, 1042 n. 6 (D.C.Cir. 1979)), circuit precedent compels that we find that appellants in this ease meet the requirements of Article III standing with the informational injury they have alleged.

Appellants must also satisfy the prudential prerequisites of standing; they must show that they fall within the statute’s “zone of interests” by demonstrating “either a congressional intent to protect or regulate the interest asserted, or some other indication that the litigant is a suitable party to pursue that interest in court.” ALDF, 23 F.3d at 502 (citations omitted).

Given the broad purposes of FECA, appellants appear to meet this test. Two of the three purposes of the Act’s disclosure requirements were intended to serve the information interests of the public, the electorate, and individual voters. These purposes were noted in Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976):

First, disclosure provides the electorate with information “as to where political campaign money comes from and how it is spent by the candidate” in order to aid the voters in evaluating those who seek federal office_ Second, disclosure requirements deter actual corruption and avoid the appearance of corruption by exposing large contributions and expenditures to the light of publicity.... A public armed with information about a candidate’s most generous supporters is better able to detect any post-election special favors that may be given in return.

Id. at 66-67, 96 S.Ct. at 657 (footnotes omitted). Because appellants allege that they are voters and persons who seek to communicate to policymakers and the public about AI-PAC’s campaign contributions, their interest in information about campaign contributions falls within the “zone of interests” intended to be served by the statute. While arguably this interest is so generalized as to encroach upon the separation of powers concerns underlying Article III standing requirements, see Lujan v. Defenders of Wildlife, 504 U.S. 555, 571-78, 112 S.Ct. 2130, 2142-46, 119 L.Ed.2d 351 (1992), to reject standing on that basis would put us at odds with circuit precedent on informational injury as discussed above.

B. Standard of Review

The district court’s grant of summary judgment is subject to de novo review. Petersen v. Dole, 956 F.2d 1219, 1221 (D.C.Cir.1992). In conducting that review, we must determine anew whether the Commission’s dismissal of the portion of appellants’ administrative complaint alleging that AIPAC violated the Act by failing to register and report as a political committee is “contrary to law.” 2 U.S.C. § 437g(a)(8)(C). It is well settled that judicial review under this provision is limited. Common Cause v. FEC, 842 F.2d 436, 448 (D.C.Cir.1988). The Com*352mission’s dismissal of an administrative complaint cannot be disturbed unless it was based on “an impermissible interpretation of the Act” or was “arbitrary or capricious, or an abuse of discretion.” Orloski v. FEC, 795 F.2d 156, 161 (D.C.Cir.1986). See also FEC v. Democratic Senatorial Campaign Comm., 454 U.S. 27, 37, 102 S.Ct. 38, 44-45, 70 L.Ed.2d 23 (1981) (“DSCC”).

Appellants bear the difficult burden of demonstrating that the Commission’s interpretation was impermissible and contrary to law. The Commission must show only that its disposition of the administrative complaint was “sufficiently reasonable.” DSCC, 454 U.S. at 39, 102 S.Ct. at 46 (citations omitted). Thus, the Commission’s construction of its own statute cannot be disturbed if it is a permissible one. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-45, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694 (1984). Under this standard of review, the court will presume that the Commission’s action was valid, even if the court would have interpreted the Act in a different manner. See American Horse Protection Ass’n v. Yeutter, 917 F.2d 594, 596 (D.C.Cir.1990). Indeed, the Supreme Court has held that the Commission “is precisely the type of agency to which deference should presumptively be afforded.” DSCC, 454 U.S. at 37, 102 S.Ct. at 45. Accord Common Cause, 842 F.2d at 448 (“Deference is particularly appropriate in the context of the FECA....”).

C. Analysis

FECA defines a “political committee” as “any committee, club, association, or other group of persons which receives contributions aggregating in excess of $1,000 during a calendar year or which makes expenditures aggregating in excess of $1,000 during a calendar year.” 2 U.S.C. § 431(4)(A).2 The Act limits contributions to political eommit-tees, 2 U.S.C. § 441a(a)(l)(C), and requires any organization that qualifies as a political committee to register with the Commission and file periodic reports of all its receipts and disbursements for disclosure to the public. 2 U.S.C. §§ 433 and 434.

The Act defines “contribution” to include “any gift, subscription, loan, advance, or deposit 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(8)(A)(i). The definition of “expenditure” includes “any purchase, payment, distribution, loan, advance, deposit, 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). An expenditure “for a communication expressly advocating the election or defeat of a clearly identified candidate” is a “contribution in kind” unless it is “not made with the cooperation or with the prior consent of, or in consultation with, or at the request or suggestion of, a candidate....” 11 C.F.R. § 109.1(a), (c) (1995).

The debate in this case centers around the definition of “political committee” and the FEC’s application of the major purpose standard. Appellants argue that the Act’s language governing whether an organization making contributions is a political committee depends on a single quantitative standard: if its aggregate contributions are in excess of $1,000 in a calendar year. 2 U.S.C. § 431(4). They assert that because the statutory language is clear, the Commission’s interpretation is not entitled to deference under Chevron. Appellants also argue that the major purpose test conflicts with the fundamental purposes of the Act, which are to prevent corruption and the appearance of corruption that arise when large contributions are given to secure a political quid pro quo from current and potential officeholders. Buckley, 424 U.S. at 26, 96 S.Ct. at 638.

*353We recognize that the Act has a broad definition of political committee; Congress intended to “addressf ] broadly the problem of political campaign financing,” and wanted to “promote full disclosure of campaign-oriented spending” with FECA. Id. at 78, 96 S.Ct. at 663. The Commission, however, has construed the words “political committee” narrowly and applied a major purpose standard in determining whether AIPAC was a political committee. Under this narrow interpretation, gleaned from case law, an organization is not a political committee unless, in addition to crossing the $1,000 threshold, it is under the control of a candidate or its major purpose is the nomination or election of a candidate. Buckley, 424 U.S. at 79, 96 S.Ct. at 663; FEC v. Massachusetts Citizens for Life, 479 U.S. 238, 252 n. 6, 107 S.Ct. 616, 624-25 n. 6, 93 L.Ed.2d 539 (1986). Accord FEC v. Machinists Non-Partisan Political League, 655 F.2d 380, 391-92 (D.C.Cir.), cert. denied, 454 U.S. 897, 102 S.Ct. 397, 70 L.Ed.2d 213 (1981). A more expansive definition would be constitutionally dangerous due to interference with “fundamental First Amendment interests.” Buckley, 424 U.S. at 23, 96 S.Ct. at 636; Machinists, 655 F.2d at 392.

We agree with appellants that the statutory language is clear in that it broadly defines political committee in economic terms. But our inquiry does not end there. Rather, we must determine whether the Commission acted contrary to law by going beyond the text of the statute to narrow the definition of the term “political committee.” To answer this question, we must look to case law interpreting the Act.

In Buckley, one of the plaintiffs’ claims was that the reporting and disclosure provisions applicable to political committees were overbroad in their application to minor-party and independent candidates and in their extension to small contributions. 424 U.S. at 26, 96 S.Ct. at 638. The Court cautioned that the phrase “for the purpose of ... influencing” an election or nomination in section 431’s definition of “expenditure” could raise vagueness problems and “could be interpreted to reach groups engaged purely in issue discussion.” Id. at 79, 96 S.Ct. at 663. Noting that the lower courts had construed the term “political committee” more narrowly, the Court went on to state that to fulfill the purposes of the Act the term “need only encompass organizations that are under the control of a candidate or the major purpose of which is the nomination or election of a candidate.” Id. It further noted that expenditures by political committees can be assumed to fall within the core area Congress sought to address because “[t]hey are, by definition, campaign related.” Id.

Prior to Buckley, at least two lower courts were concerned with the Act’s broad-based definition of political committee because it would likely include groups that were not meant to be subject to the restrictions of the Act. See United States v. National Comm, for Impeachment, 469 F.2d 1135, 1141-42 (2d Cir.1972) (“NCFI”); American Civil Liberties Union v. Jennings, 366 F.Supp. 1041 (D.D.C.1973), vacated on other grounds, 422 U.S. 1030, 95 S.Ct. 2646, 45 L.Ed.2d 686 (1975).

In NCFI the Second Circuit considered whether a newspaper advertisement was an “expenditure,” and whether the National Committee must be deemed a political committee. 469 F.2d at 1138. The court articulated a test that construed “the Act to apply only to committees soliciting contributions or making expenditures the major purpose of which is the nomination or election of candidates.” Id. at 1141. It concluded that the advertisement was not an “expenditure,” but noted that its interpretation of the phrase “for the purpose of influencing ... [an] election” might make “enforcement of the Act ... somewhat more burdensome, as the supervisory officials will be forced to glean the principal or major purpose of the organizations they seek to have comply with the Act.” Id. at 1142. This test was later adopted by the United States District Court for the District of Columbia in ACLU v. Jennings, supra.

Appellants argue that the major purpose test set forth in NCFI and Jennings is the correct one because it centers on the major purpose of the expenditure as opposed to the purpose of the organization itself. We reject this argument for three reasons. First, it is *354inconsistent with the language in NCFI noting that “supervisory officials will be forced to glean the principal or major purpose of the organizations they seek to have comply with the Act.” 469 F.2d at 1142. Second, the statutory definition of “expenditure” includes the requirement that it be made “for the purpose of influencing any election for Federal office,” 2 U.S.C. § 431(9)(A)(i), making the test that every expenditure have the major purpose of nomination or election of a candidate and rendering appellants’ test a tautology. Third, Supreme Court precedent supports a conclusion that the focus is on the major purpose of the organization, rather than the major purpose of individual expenditures by an organization.

For example, in Massachusetts Citizens, the Supreme Court again mentioned the major purpose test while discussing whether a small-issue advocacy group could be considered a political committee. 479 U.S. at 262, 107 S.Ct. at 680. The Court found that although the group had made $10,000 in independent expenditures to influence federal elections, it had not violated the restriction on independent spending by corporations contained in section 441b. The Court based its holding on three features of the citizens group, one of which was that its purpose was promoting political activities, not amassing capital.3 Id. at 263-64, 107 S.Ct. at 630-31. The Court further noted that if the group’s independent spending became “so extensive that the organization’s major purpose may be regarded as campaign activity,” then it would be classified as a political committee. Id. at 262, 107 S.Ct. at 630 (citing Buckley, 424 U.S. at 79, 96 S.Ct. at 663).

This Circuit also adopted a narrow construction to determine whether a “draft group,” that is, an organization that seeks to encourage a specific candidate to run for office, is a political committee under FECA. See Machinists, 655 F.2d at 394-96. In Machinists, we expressed concern about finding a fair reading of the statute that “comports with first amendment safeguards,” and recognized the “grave constitutional difficulties inherent in construing the term ‘political committee’ to include groups whose activities are not under the control of a ‘candidate’ or directly related to promoting or defeating a clearly identified ‘candidate’ for federal office.” Id. at 393. We declined to extend the term “political committee” to cover draft groups and noted that in doing so we would “avoid the constitutional problems which Buckley and its lower court predecessors were able to avoid by narrowly construing the term....” Id. at 394. Because we found the Machinists Non-Partisan Political League’s activities did not support an existing candidate, it was not a political committee under the Act. Id. at 396.

Appellants ask that we disregard both Buckley and Massachusetts Citizens as mere dicta. However, the scope of our inquiry is limited to the issue of whether the Commission’s interpretation of the Act was contrary to law. Thus, even if the Court’s discussion of the major purpose test in these decisions was dicta — and we do not necessarily agree — that would not make it an abuse of discretion for the Commission to follow this construction of the Act by the Supreme Court, particularly in light of our decision in Machinists. The Supreme Court’s dicta may not bind federal courts and agencies, but an agency’s reliance on dicta may nonetheless be reasonable. See generally McCoy v. Massachusetts Inst. of Technology, 950 F.2d 13 (1st Cir.1991), cert. denied, 504 U.S. 910, 112 S.Ct. 1939, 118 L.Ed.2d 545 (1992).

Although Buckley and Massachusetts Citizens concern expenditures under the Act, the Court’s rationale concerning the constitutional implications of a broad application of the Act to expenditures applies equally to the Act’s reach over contributions. A broader construction of “political committee” would likely require advocacy groups to disclose their contributors even though the group is not principally involved in advancing the election or defeat of a candidate. This could raise a First Amendment issue of the sort seen in cases like NAACP v. Alabama, 357 *355U.S. 449, 460, 78 S.Ct. 1163, 1170-71, 2 L.Ed.2d 1488 (1958). It is our duty in the interpretation of a federal statute to avoid serious constitutional doubt. United States v. Rumely, 345 U.S. 41, 47, 73 S.Ct. 543, 546, 97 L.Ed. 770 (1953).

We find that it was reasonable for the Commission to follow the Court’s and this Circuit’s narrow interpretation of “political committee.” Because a judicial gloss on the statute has limited the application of FECA’s restrictions for political committees to groups whose major purpose is the nomination or election of a candidate, the FEC’s interpretation of the major purpose test was not contrary to law.

Having established the validity of the Commission’s major purpose test, we must next determine whether its application of that test and its determination that AI-PAC is not a political committee under the Act was contrary to law. 2 U.S.C. § 437g(a)(8)(C). The Commission determined that AIPAC’s campaign-related expenditures, while likely to have exceeded $1,000 in some years, were not its major purpose but were made as an adjunct to, and in support of, the lobbying efforts that were the organization’s primary focus. The Commission correctly applied the major purpose test, the concern of which is the core purpose of the organization itself, not the individual expenditure or contribution. We are convinced that the Commission’s determination was not so arbitrary or capricious to render it contrary to law.

Appellants’ final and related argument is that the Commission’s findings, reasons, and investigation were inadequate to support its conclusion that “only a small portion” of AIPAC’s activities are campaign related. They assert that the inadequacy of the FEC’s findings, reasons, and investigation preclude affirmance of the Commission’s decision. In challenging the extent and techniques of the Commission’s investigation, appellants are asking that we review the Commission’s exercise of prosecutorial discretion, a sensitive matter within the Commission’s expertise. See Heckler v. Chaney, 470 U.S. 821, 831, 105 S.Ct. 1649, 1655-56, 84 L.Ed.2d 714 (1985). We are mindful that “[i]t is not for the judiciary to ride roughshod over agency procedures or sit as a board of super-intendanee directing where limited agency resources will be devoted. We are not here to run the agencies.” FEC v. Rose, 806 F.2d 1081, 1091 (D.C.Cir.1986).

Under FECA, the Commission enjoys a “broad grant of discretionary power in determining whether to investigate a claim or to bring a civil action....” Common Cause v. FEC, 655 F.Supp. 619, 623 (D.D.C.1986), rev’d on other grounds, 842 F.2d 436 (D.C.Cir.1988). A review of the General Counsel’s report reveals that the Commission conducted a fairly extensive inquiry into appellants’ claims, even if it was not as in-depth an investigation as appellants would have liked. The Act does not require the Commission to invoke any particular investigatory techniques, nor does it require the Commission to exhaust every last inquiry. Moreover, appellants suggest no specific areas that the FEC failed to investigate that would have undermined its determination. The Commission has broad discretion to decide whether further investment of resources is worthwhile, Heckler, 470 U.S. at 831, 105 S.Ct. at 1655-56, and we defer to its expertise regarding the direction and extent of the investigation. Based on all of the evidence, it was reasonable for the Commission to conclude that campaign-related activities were not a major purpose of AIPAC. There is no evidence that the Commission failed to investigate adequately the administrative complaint.

III. CONCLUSION

The Commission’s interpretation of the statute was permissible, its application of the interpretation was reasonable, and its underlying investigation was adequate. Thus, we are unable to find that the Commission’s actions were “contrary to law” or arbitrary, capricious, or an abuse of discretion. The decision of the district court is therefore

Affirmed.

. Appellants have also alleged that their ability to compete in the political arena with AIPAC is weakened without the information. We do not recognize standing on that basis in this case.

. Section 431(4) also includes two other definitions of the term “political committee” not pertinent to this case:

(B) any separate segregated fund established under the provisions of section 441b(b) of the title; or
(C) any local committee of a political party which receives contributions aggregating in excess of $5,000 during a calendar year, or makes payments exempted from the definition of contribution or expenditure as defined in paragraphs (8) and (9) aggregating in excess of $5,000 during a calendar year, or makes contribution aggregating in excess of $1,000 during a calendar year or makes expenditures aggregating in excess of $1,000 during a calendar year.

. The Court also based its holding on the fact that the citizens group had no shareholders or other persons having a claim on its assets or earnings and that the group was not formed by a labor union or business corporation, and its policy was not to accept contributions from these entities. Massachusetts Citizens, 479 U.S. at 264, 107 S.Ct. at 631.