Yang’s Possibly Illegal Giveaway Shows Why We Need a Working FEC

In his opening statement at the third Democratic debate, Andrew Yang said that his campaign would give $1,000 a month for a year to 10 people who signed up for a raffle through his campaign website. The program, which Yang is calling a “Freedom Dividend,” is meant to serve as a pilot for Yang’s campaign proposal to give every U.S. citizen above the age of 18 monthly payments of the same amount. Yang recently claimed that more than 450,000 people signed up for the pilot, and that the campaign raised millions of dollars in the three days after the announcement.

The problem: No one can agree on whether the campaign promotion is legal. I’m the former chair of the Federal Election Commission (FEC), and if such a program came to a vote while I was still on the commission, I would say that the program violated campaign finance regulations.

Federal election law bars using campaign funds for “personal use,” and the law prohibits such personal use by “any person.” Campaign money is given in trust by the donors for campaign activities, such as paying for consultants who are working on the campaign—not to benefit individuals who are not engaged in campaign activities. So the proposal to give raffle winners campaign money to be used for anything they like may well violate the law.

But there is no mechanism for deciding the legality of Yang’s pilot program right now. The confused legal debate over the program is just another reason why the current lack of a quorum, or a minimum number of commissioners, at the FEC is so concerning.

At the moment, the FEC cannot meet at all. After Vice Chair Matthew Petersen resigned in late August, his departure left the commission without the required quorum of four commissioners needed to vote to take action on issues such as enforcing regulations, imposing fines or approving audit reports on campaign finance issues. (Typically, the FEC has six members, but two seats have remained empty since early 2018 and Matthew Petersen’s departure brought the total number of commissioners down to three.) The FEC also cannot issue advisory opinions, which the commission generally produces at the request of the public to decide if a campaign-related proposal complies with the Federal Election Campaign Act and the commission’s regulations. Now, because of an extensive backlog, any re-convened quorum would be unable to decide if Yang’s program violates the law until long after the money has been distributed, rendering any FEC decision on the issue essentially useless.

Yang has contended that his giveaway is “perfectly legal.” “That’s actually essentially a marketing function on behalf of the campaign,” he said in a recent roundtable with Politico. “And we’re simply paying you the thousand dollars just [so] you can tell your story, so you can think of them as a variant of like a marketing consultant or a paid employee.” Erin Chlopak, director of campaign finance strategy at the Campaign Legal Center, disagrees. She told Vox that it “seems like an illegal prohibited personal use” of campaign funds, and went on to say the program couldn’t count as advertising because the recipients are under no obligation to advertise for Yang’s candidacy. Entrants must retweet the contest thread, according to the giveaway rules, and the winner is required to allow the campaign to use his or her name, hometown and photograph in promotional materials—but whether or not this counts as contributing to a campaign, again, all falls in a gray zone.

FEC advisory opinions could have been particularly useful in resolving questions about the legality of Yang’s proposal in advance of the announcement. The commission, when it has all four members, will respond to time-sensitive requests for advisory opinions within 30 days. Had the FEC been functioning properly, Yang’s campaign could have requested an opinion on the legality of the pilot proposal, and the FEC’s opinion would either have killed an illegal proposal or would have provided legal protection to the campaign if the proposal was found to be legal. But the Yang campaign did not request such advice, and it wouldn’t have gotten any if it had. Instead, the campaign was free to take advantage of the FEC’s inability to act on any improprieties.

The FEC has been dysfunctional for some time because of partisan deadlocks on issues such as dark money, which have led to low fines for clear violations of the law and an inability to investigate even major violations. But now, the commission has gone from dysfunctional to nonfunctioning. Legally dubious plans like Yang’s are the outcome.

Of course, the Yang giveaway is just one of the most visible potential violations. I shudder to think about the campaign finance law violations that might be happening behind closed doors—plans that the candidates are more worried about than Yang apparently is about his basic income pilot.

The FEC was established as a consequence of the lack of campaign law enforcement during the Watergate scandal. There was no independent enforcement agency to ensure compliance with the laws, and the president’s re-election committee took advantage of the void. After Nixon’s resignation, Congress established the FEC to administer and enforce the laws.

Sure, Yang’s pilot program might be a long way off from Watergate. But we can look at it as a test case for how—or whether—campaign finance laws will be enforced in 2020, and what campaigns do in the absence of their enforcement. It’s not looking good.

Article originally published on POLITICO Magazine


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