In the spring of 2018, the now- indicted Ukrainian- and Belarusian- Americans, Lev Parnas and Igor Fruman, were pleased to discover a “kink in the system” that enabled them to gain access to the president of the United States: Donald Trump’s supposedly independent super PAC, America First Action. As Parnas, who used that phrase in an interview with the Washington Post, explained and as other evidence subsequently confirmed, their six-figure super PAC contribution became the ticket that launched the pair into President Trump’s circle—and ultimately landed them in the middle of the U.S. House of Representatives’ 2019 impeachment inquiry into President Trump.
But this path would appear to bear little resemblance to what courts envisioned 10 years ago when they allowed unlimited contributions to PACs that make only “independent” expenditures. “By definition, an independent expenditure is political speech presented to the electorate that is not coordinated with a candidate,” proclaimed Justice Anthony Kennedy in Citizens United v. FEC (2010), writing for the majority. This reasserted a long-standing assumption in campaign finance jurisprudence: that organizations that make expenditures independently of the candidates they support do not pose the same dangers of corruption that direct contributions to candidates do. But, in a departure from previous cases, Citizens United for the first time used that assumption to open the door to committees that can raise unlimited amounts from wealthy individuals and large corporations on the completely impractical assumption that the effort will be wholly independent of parties and candidates.
In a profound misunderstanding of how elections would operate in practice under this new regime, the courts opened our elections to a maelstrom of unlimited spending by “outside groups,” an increasing amount of which is far from independent by any reasonable assessment. “Independence” is a central concept in campaign finance jurisprudence, yet only vaguely defined in the negative: as spending that is not “coordinated” with a candidate. “Coordination,” in turn, is defined by Congress and the Federal Election Commission (FEC). Under current law, an outside group’s spending on a TV ad, for example, is coordinated if the ad is produced or distributed in “cooperation, consultation or concert with, or at the request or suggestion of,” a candidate or her campaign; the spending is also coordinated if the group uses strategic information obtained from a campaign to develop the ad. Yet, in reality, existing coordination rules fail to address many practices that have emerged in the post-Citizens United era, and the FEC has failed to enforce even those rules that do exist.
Courts failed to anticipate how closely super PACs and campaigns would work together—and failures of the FEC since then have exacerbated the problem even further. Parnas and Fruman’s access to the president via a $325,000 contribution to “his” super PAC is one of many recent illustrations of this problem.
Parnas and Fruman—“somewhat hapless operators,” as the New York Times would later characterize them—committed a number of missteps along the way that brought much more activity to light than we are otherwise able to see concerning megadonors to presidential super PACs. Parnas and Fruman’s principal legal error was making their $325,000 contribution to the super PAC not in their own names, but instead in the name of a shell corporation that they named Global Energy Producers, LLC (GEP).
In July 2018, the organization I lead, Campaign Legal Center (CLC), filed a complaint with the FEC asking it to investigate this contribution because it appeared to violate campaign finance law’s ban on donors making political contributions in other than their own names (a so-called “straw donor” situation, which the Federal Election Campaign Act prohibits at 52 U.S.C. § 30122). CLC noticed a number of signs that GEP appeared to fit the straw donor profile: GEP had incorporated in Delaware just five weeks before the six-figure contribution was dated, it showed no evidence of business activity, and it had no public footprint. By matching addresses in campaign finance records, CLC then connected the apparent shell LLC to Parnas and Fruman.
At the time of CLC’s original complaint, Parnas and Fruman had virtually no public profile in the United States, but they used their connections to president Trump’s inner circle (via the super PAC) to arrange meetings for the President’s personal lawyer, Rudy Giuliani, to promote allegations of corruption against Joe and Hunter Biden, to push officials in Ukraine to announce an investigation into Joe and his son, Hunter Biden, to lobby for the removal of the U.S. ambassador in Ukraine, whom they and other allies of president were falsely rumoring was working against Trump, and, ultimately, to become key figures in the impeachment inquiry. Along the way, they left a trail of photographic evidence of the high-dollar political fundraisers to which they gained access, and prolifically posted photos with Trump’s family, numerous candidates and officeholders, and the president himself on social media.
We later learned that it appears to have been their laundered contribution to Trump’s super PAC that helped make all of that possible.
In October 2019, the Federal Bureau of Investigation arrested Parnas and Fruman at Dulles Airport on charges of criminal violations of the Federal Election Campaign Act. First among those charges was their illegal laundering of $325,000 to America First Action in the name of a shell company, as CLC’s complaint first alleged—and then lying to the FEC about it. The indictment emphasized that Parnas and Fruman made political contributions in order to “buy potential influence with candidates, campaigns, and the candidates’ governments.” They then used that influence, and the access it afforded them, to advance the same theories that President Trump would express in the phone call with Ukrainian President Volodymr Zelensky that led to Trump’s impeachment.
Fruman and Parnas may appear to be unique, but the reality is that a core feature to their activity was not: In order to gain access to a politician, they made a large contribution to a super PAC that is supposedly independent of that politician and his campaign.
Citizens United’s Mistakes
Campaign finance law’s modern jurisprudential framework dates back to the 1976 U.S. Supreme Court decision, Buckley v. Valeo. In that case, the Court drew a constitutional distinction between limits on candidate contributions, which implicated associational rights and were upheld as a means of preventing corruption, and limits on independent expenditures, which were struck down as a burden on core First Amendment speech that could not be justified on anti-corruption grounds. In particular, the Court emphasized that when expenditures are made independently of candidates, the risks of corruption that arise in the case of direct contributions to candidates are mitigated: the independence of the expenditures, the Court wrote, “alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate.” In drawing this conclusion, the Court hypothesized that expenditures independent from the candidates they support would hold less value to candidates by virtue of “[t]he absence of prearrangement and coordination”—and may even be “counterproductive.”
Under this logic, the Buckley Court struck down limits on individuals making political expenditures, provided they made them independently of the candidates they supported. More than three decades later, in Citizens United (2010), the Court extended Buckley’s rationale to strike down limits on independent expenditures by corporations.
In 2010, Justice Kennedy’s basis for extending that right to corporations was, as the Court had likewise taken as a given in Buckley, the assumption that, “[b]y definition, an independent expenditure is political speech presented to the electorate that is not coordinated with a candidate,” and that because such expenditures posed little risk of corruption, the limits could not survive strict scrutiny. The Court in Citizens United also held that preventing corruption is the only basis for campaign finance regulation, and construed corruption narrowly as only encompassing a quid pro quo. Two months after Citizens United, in SpeechNow.org v. FEC (2010), the D.C. Circuit reasoned that it therefore followed that if independent expenditures cannot be limited, then contributions to political committees (also known as “PACs”) that only made independent expenditures could not be limited, either.
From that pair of decisions came the modern era of “independent expenditure-only” groups that raise and spend unlimited amounts from individuals, corporations, and unions: super PACs. Since 2010, super PACs and other purportedly independent outside groups have spent over $4.5 billion in federal elections, and super PACs that support only a single candidate have spent over $1 billion, according to the Center for Responsive Politics.
A large and growing number of these groups regularly engage in close relationships with the campaigns they purport to be independent from: super PACs hire close aides and recent employees of the candidate; candidates appear as “special guests” at super PAC fundraisers; super PACs creatively synchronize media strategy with the campaign through vendors, aides, the internet, or other channels; candidates regularly signal to donors which super PAC to direct funds to after they reach the maximum legal limit to the campaign; and much more. The Trump campaign proclaimed its close relationship with the supposedly independent super PAC, America First Action, by releasing a press statement last year emphasizing that “there is one approved outside non- campaign group, America First Action, which is run by allies of the President and is a trusted supporter of President Trump’s policies and agendas.” (CLC filed a complaint to the FEC about this.)
By most reasonable observations, activities like this would appear to directly contravene the Court’s rationale in Citizens United. And when it does, such non-independent spending, as Justice Kennedy did not dispute, can be extremely valuable to candidates, functions similarly as direct campaign contributions, and presents a host of dangers of corruption. The question, then, is: why has this non-independent spending flourished?
The Illusion of Independence in Practice
Fundamentally, it is happening because actual independence turns out to be very difficult to ensure in practice. One reason is that coordination between outside groups (such as super PACs or 501(c)(4) nonprofit corporations) and candidates can take a number of forms that go well beyond formal agreements. The Citizens United majority failed to anticipate (or perhaps, as some argue, willfully ignored) the many less formal ways in which outside groups would—and, today, do—work hand-in-hand with campaigns.
Parnas and Fruman illustrate one iteration of that problem. After their arrest, Parnas released a revealing audio recording of a closed-door dinner hosted by the super PAC that he, Fruman, President Trump, and a small handful of other major super PAC donors attended in April 2018. That meeting provided a rare glimpse into the access to political candidates that major super PAC donors can buy. The recording features Parnas and Fruman advocating for the removal of the U.S. ambassador to Ukraine, Marie Yovanovitch, among other matters, and also features the other donor attendees raising their pet issues directly with the president. For Fruman and Parnas, the price of that access to the president was their $325,000 contribution to his super PAC.
We also learned that Fruman and Parnas, who hailed from Florida, not Texas, landed a meeting the following week (apparently through super PAC officials) with then Congressman Pete Sessions of Texas. At that meeting, Fruman and Parnas criticized Ambassador Yovanovitch and aired the same unfounded rumors about her that they would soon go on to repeat in their work with Giuliani in Ukraine. That same day, Representative Sessions sent a letter to U.S. Secretary of State Mike Pompeo, urging the ambassador’s ouster. America First Action would later spend $3 million in Sessions’s congressional race, the greatest amount that that super PAC spent on any congressional contest in that election cycle.
Such activity—gaining candidate access through super PAC contributions—may not involve explicit agreements, but it mocks the idea of independence and non-corruption with the same effect. Activity by a super PAC need not be formally prearranged or contracted with the campaign in order to be valuable to the candidate, and to raise corruption issues.
Most of the close relationships that have become commonplace between super PACs and political candidates since the Citizens United decision would appear not to meet the Court’s own descriptions of independent activity, which it emphasized should be viewed not through the lens of the existence of a particular agreement, but rather through the results of the spending: in McConnell v. FEC (2003), for example, in upholding the McCain-Feingold campaign finance reform package, the Court acknowledged that “expenditures made after a ‘wink or nod’ often will be ‘as useful to the candidate as cash.’”
Our modern campaign finance system is replete with winks and nods. Indeed, today, it would be highly unusual to see a super PAC aligned with a major candidate’s campaign engage in activity that the campaign viewed as “counterproductive.” Instead, they usually complement or amplify campaigns’ strategies in ways that can be highly valuable—and then major donors who funded those efforts enjoy privileged access to the candidates themselves.
When writing a check to a super PAC earns a donor a closed-door dinner with the candidate that super PAC supports, when a campaign directs donors to the supportive super PAC, when a super PAC is established by close aides of the candidate, or when a super PAC coordinates its media strategy with the campaign, the line between the campaign and the super PAC blurs to the point that contributions to the super PAC almost become indistinguishable in function and effect from contributions made directly to that candidate. And, for those, the Court has repeatedly acknowledged that heightened corruption concerns justify capping those contributions.
One reason all of this has occurred is that the agency tasked with regulating and enforcing our election laws has not enforced or interpreted the law at all in this area since 2010.
The Federal Election Commission
The Federal Election Commission has woefully failed to perform the core tasks with which Congress entrusted it. Over the last decade, Senate Majority Leader Mitch McConnell and his allies have discovered that rather than trying to repeal popular campaign finance laws through legislation, it is easier to hamstring the FEC by stacking it with commissioners opposed to those laws and the mission of the agency. This successful project has led to an era of unprecedented dysfunction at the FEC, thanks to a bloc of Republican commissioners who prevent the agency from issuing sorely needed rules, and who repeatedly vote to block enforcement of election laws against violators of either party.
One of the FEC’s core duties is to issue regulations, but, by its own admission, the FEC has issued only one substantive new regulation since Citizens United 10 years ago. This means that many regulations on the books were promulgated in a pre- Citizens United era when super PACs did not exist, and corporations were not permitted to make political donations in federal elections. Today, not only do FEC rules still not even mention the term “super PAC,” but the agency has not issued a single new regulation on coordination between those organizations and political campaigns. Congress could—and should—go even further in preventing that activity, such as through legislation like the 2019 democracy reform package H.R. 1, which the U.S. House passed last year and which would, among many other reforms, strengthen anti-coordination laws. But the FEC on its own could go a long way toward clarifying the boundaries of permissible activity. It is well past time for the FEC to update its coordination rules so that they better reflect the reality that Citizens United failed to anticipate.
The FEC has also failed in the other core duty to which Congress entrusted it: enforcing the law. By its own admission, since Citizens United, the FEC has not found a single coordination violation of the election laws that are on the books. While some super PAC activity today may comply with the currently inadequate legal line without crossing it, there is overwhelming public evidence of actual violations of the existing law. The Department of Justice can only step in if the activity meets the high bar of knowing and willful behavior, which is the required criterion for criminal prosecutions under campaign finance law. For everything else, it falls to the FEC to enforce the law.
The FEC has repeatedly failed to do so. Today, Campaign Legal Center has a long list of unresolved FEC complaints it has filed dating back to 2015 that allege illegal coordination between candidates and super PACs of both parties—from facts involving a candidate who himself set up his super PAC before officially declaring his candidacy, to those involving former employees who hopped almost immediately from a campaign to a super PAC, to those where a super PAC organized and funded the candidate’s campaign events. And those are just the instances with publicly available evidence pointing to coordination. As the Parnas and Fruman example illustrated, a sea of this activity happens behind closed doors in intimate donor dinners and other private communications completely out of the public eye.
Were the FEC to enforce the laws in instances like these, and were it to clarify the coordination lines through rulemakings, the world of unlimited but independent spending that the Court imagined in Citizens United would still present line-drawing challenges, but it would be closer to reality. And the likelihood is that these groups would raise and spend far less money than they do now, without access to grateful candidates and rewards from successful officeholders.
Lev Parnas himself summed up the present mirage well: “I went from being a top donor,” he told CNN, “to becoming a close friend of Rudy Giuliani’s, to eventually becoming his ally and his asset on the ground in Ukraine.” The only part he failed to mention was that his access was won not by being “a top donor” to the president’s campaign, but to his “independent” super PAC.
That is not the world Citizens United promised.
Trevor Potter is the founder and president of Campaign Legal Center, a nonpartisan, nonprofit legal organization that works to protect and strengthen the U.S. democratic process across all levels of government. Potter is a former commissioner and chairman of the Federal Election Commission. To many, he is perhaps best known for his recurring appearances on The Colbert Report as the lawyer for Stephen Colbert’s super PAC during the 2012 election.
Campaign Legal Center’s Maggie Christ assisted with the preparation of this article.