The 2020 Democratic presidential primary has been notable not only for the multitude of declared candidates, but also for the others who may still run. But a vague Federal Election Commission regulation makes “testing the waters” a legal minefield for prospective candidates. A recently released FEC enforcement matter involving former senator and presidential candidate Rick Santorum illustrates the danger.
Federal law caps individual contributions to candidates at $2,800 per election and bans corporate contributions. Candidates must file FEC reports listing all of their contributors and vendors who have given or received more than $200.
The FEC’s “testing the waters” rule provides a limited exemption under which potential candidates may raise and spend money for exploring a run without having to report to the FEC. But all of those contributions must comply with the FEC rules if they become candidates. All pre-candidacy contributions and payments also become reportable after one becomes a candidate.
Although the FEC rule appears to be a shield, it often becomes a sword to investigate and punish candidates. If the FEC decides pre-candidacy activities were “for the purpose of” determining whether an individual should run, that can result in violations if they were not paid for or reported in accordance with FEC rules. However, the rule fails to clearly articulate which pre-candidacy activities are regulated.
More than 40 years ago, the U.S. Supreme Court held that a “for the purpose of” standard was unconstitutional. The court concluded an identically worded intent-based standard in the federal campaign finance statute was impermissibly vague. Under the standard, would-be speakers could not know what was legal and what was not. By continuing to rely on such a discredited regulatory standard in its testing the waters rule, the FEC may as well stand for the Flat Earth Commission.
In Santorum’s case, the FEC general counsel’s office recommended investigating expenses paid for by a nonprofit advocacy group led by Santorum for speeches he gave at the Iowa Freedom Summit and Conservative Political Action Conference in January and February of 2015. Santorum officially began “testing the waters” that April for a 2016 presidential bid. He did not account for the expenses related to his earlier speeches as part of pre-candidacy activities.
The general counsel’s memo conceded Santorum did not explicitly say he was considering running for president. Rather, the memo contended certain parts of his speeches “appear[ed]” to indicate and “allude” to such an intent. These interpretations were subjective, and reasonable minds could have understood Santorum’s statements differently. Further demonstrating the vagueness of the FEC rule, the general counsel’s office argued that “any activities [that] could be construed as ultimately benefiting a potential candidacy” could be regulated.
Equally disturbing, one Democrat commissioner stated that “‘pre-pre-candidacy’ is not a thing.” In other words, at any time, everyone is either a regulated pre-candidate or a candidate. Under this logic, every school-aged child who is told that one day she too can become president is in trouble. Every dime that she spends or is spent on her behalf thereinafter may be subject to the FEC’s rules on pre-candidacy expenses if she eventually runs.
While this may seem like an extreme (but theoretically possible) outcome under the FEC rule, consider some recent examples.
After Beto O’Rourke lost the 2018 U.S. Senate race in Texas, he went on a well-publicized road trip. Many thought that he was considering a presidential run. Under the FEC’s “testing the waters” rule, O’Rourke would have to account for and report every dollar he spent for gas, mileage, and lodging if his journey of introspection “could be construed as ultimately” made “for the purpose of” deciding to run.
Former Starbucks Chairman and CEO Howard Schultz has long been mentioned as a potential presidential contender, even while he was still with the company. Under the FEC rule, if Schultz gets in the race, could Starbucks land in hot water for having made illegal corporate contributions to Schultz? After all, the FEC might conclude that expenses Starbucks paid in connection with Schultz running the company were “for the purpose of” deciding to run for president.
Running for office and making speeches before one runs for office — as Santorum did — are core First Amendment rights. The FEC’s “testing the waters” rule unconstitutionally burdens those rights. The rule makes it impossible to determine when candidates’ pre-candidacy activities are regulated and subjects them to arbitrary enforcement. The FEC should repeal this inherently vague and subjective regulation or replace it with clear standards.
Eric Wang is a political law attorney and senior fellow with the nonprofit Institute for Free Speech.
