United States District Court,
UNITED STATES of
GROWERS OF CALIFORNIA, Defendant.
Oct. 7, 1996.
Growers association was convicted by jury of violations of the Federal Election
Campaign Act (FECA) and other offenses. Association moved to dismiss five counts of
indictment relating to FECA offenses. The District Court, Urbina, J., held that: (1) FECA
applies to postelection contributions to unsuccessful candidates; (2) association had
sufficient notice of prohibited conduct, and thus FECA was not unconstitutionally vague;
and (3) FECA did not violate First Amendment as applied to association.
URBINA, District Judge.
Sun-Diamond's Motion to Dismiss Counts V through IX of Indictment
This matter comes before the court upon Sun-Diamond's Fed.R.Crim.P. 12(b) motion to
dismiss counts V through IX of the indictment. [FN1] Sun- Diamond maintains that the
Federal Election Campaign Act, 2 U.S.C. ss 431- 455 (FECA), does not prohibit the conduct
alleged in counts V through IX. Sun-Diamond further contends that FECA is
unconstitutionally vague as applied to its conduct; and finally, that FECA violates the
First Amendment of the United States Constitution.
Sun-Diamond made and the court considered this motion during the trial in this matter. The
court has, however, reserved its ruling on this motion until after trial.
After considering the parties' submission and the applicable law, the court concludes
that FECA applies to post-election contributions to unsuccessful candidates; that FECA and
the FEC opinions and cases that interpret it, provided Sun-Diamond sufficient notice of
the prohibited conduct, and as such, is not unconstitutionally vague; and lastly, that
FECA, as presently applied does not violate the First Amendment.
FN2. For a more
complete exposition of the facts surrounding this case see United States v. Sun-Diamond,
941 F.Supp. 1262 (D.D.C.1996).
On September 24, 1996, the jury in this case found Sun-Diamond guilty of making
illegal gratuities to former Secretary of Agriculture Alphonse Michael (Mike) Espy. The
jury also found Sun-Diamond guilty of wire fraud and making illegal campaign
contributions. During the trial, Sun-Diamond filed a motion to dismiss counts V through IX
of the indictment which alleged that Sun-Diamond violated FECA. Specifically, count V
charged that Sun-Diamond made a contribution in excess of $2,000 to Henry Espy, Secretary
Espy's brother, to help retire the debt of the former's failed Congressional campaign.
Counts VI through IX charged that Sun-Diamond caused four individuals to each contribute
$1,000 in corporate assets to retire Henry Espy's campaign debt. The jury found
Sun-Diamond guilty on these counts. [FN3]
FN3. Counts I
and II charged Sun-Diamond with making illegal gratuities to Secretary Espy. The jury
found Sun-Diamond guilty on count I; and not guilty on count II. Counts III and IV charged
Sun-Diamond with wire fraud; and the jury so found.
Post-Election Contributions to Unsuccessful Candidates
FECA is the regulatory scheme which provides for limits on campaign contributions. The
purpose of FECA's contribution limitations is to "limit the actuality and appearance
of corruption" in federal elections. Buckley v. Valeo, 424 U.S. 1, 26, 96 S.Ct. 612,
638, 46 L.Ed.2d 659 (1976). It was Congress' intent to prevent current or potential office
holders from receiving contributions from contributors who sought to secure
"political quid pro quo [s] [.]" Id. Count V alleged that Sun-Diamond violated 2
U.S.C. s 441b(a) by contributing over $2,000 to the Henry Espy for Congress Committee to
help retire Henry Espy's campaign debt. Section 441b(a) prohibits the making of a
corporate campaign contribution "in connection with any election" for Congress.
(emphasis supplied). Counts VI through IX alleged that Sun- Diamond violated 2 U.S.C. s
441f, which provides: "No person shall make a contribution in the name of another
person or knowingly permit his name to be used to effect such a contribution...."
FECA defines the term contribution to include: "[A]ny 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. s 431(8)(A) (emphasis
 Congress failed to define the phrase "for the purpose of influencing any
election," and further, did not state whether post-election contributions are subject
A plain meaning cannot be discerned from the language of the statute [ ], and there is
no legislative history to guide this court in determining the scope of the critical
phrase. Thus, under Chevron, USA, Inc. v. Natural Resources Defense Council, 467 U.S. 837
[104 S.Ct. 2778, 81 L.Ed.2d 694] (1984), since Congress did not address the precise
question at issue, leaving Congressional intent unclear, [this court] may not impose [its]
own construction. Rather this court must determine whether the FEC's interpretation of
FECA regarding post-election campaign contributions is a permissible construction.
Federal Election Com'n v. Ted Haley Cong. Com., 852 F.2d 1111, 1114 (9th Cir.1988).
[FN4] The FEC, in 1976, promulgated this regulation: "Contributions made to retire
debts resulting from elections held after December 31, 1974 are subject to the limitations
[of these regulations]." 11 C.F.R. s 110.1(g). [FN5] The FEC submitted this
regulation for Congressional approval and Congress failed to disapprove the regulation
thus "strongly imply[ing] that the regulations accurately reflect congressional
intent." Id. (quoting Grove City College v. Bell, 465 U.S. 555, 568, 104 S.Ct. 1211,
1218, 79 L.Ed.2d 516 (1974)). [FN6] Moreover, as the Court of Appeals for the Ninth
Circuit has observed, "though Congress has made other changes in the definition of
'contribution', it has not added a definition of 'for the purpose of influencing an
election or federal office' nor did it create an exception for post-election
contributions." Ted Haley Cong. Comm., 852 at 1114.
Chevron, USA, Inc.,
When a court
reviews an agency's construction of the statute which it administers, it is confronted
with two questions. First, always, is the question whether Congress has directly spoken to
the precise question at issue. If the intent of Congress is clear that is the end of the
matter; for the court, as well as the agency, must give effect to the unambiguously
expressed intent of Congress. If, however, the court determines Congress has not directly
addressed the precise question at issue, the court does not simply impose its own
construction on the statute, as would be necessary in the absence of an administrative
interpretation. Rather if the statute is silent or ambiguous with respect to the specific
issue, the question for the court is whether the agency's answer is based on a permissible
construction of the statute. 467 U.S. at 842-43.
agency's interpretation of its governing statute is entitled to due deference. Florida
Cellular Mobil Communications v. F.C.C., 28 F.3d 191, 196 (D.C.Cir.1994) (citing Udall v.
Tallman, 380 U.S. 1, 16- 17, 85 S.Ct. 792, 800-801, 13 L.Ed.2d 616 (1985)). Moreover, a
statute should be construed the same way, whether it be for purposes of administrative
action or criminal prosecution. F.C.C. v. American Broadcasting Co., 347 U.S. 284, 296, 74
S.Ct. 593, 600, 98 L.Ed. 699 (1954).
FN6. See also
FEC v. Democratic Senatorial Campaign Comm., 454 U.S. 27, 34-35, 102 S.Ct. 38, 43-44, 70
L.Ed.2d 23 (1982) (Congress' failure to disapprove regulation is an "indication that
Congress does not look unfavorably" upon the FEC's construction of FECA).
Congressional silence is made more poignant by the fact that the FEC has issued
several opinions which clearly set forth its position that the FECA requirements apply to
post-election contributions. "The Commission in both its regulations and prior
advisory opinions has emphasized that funds raised after an election to retire election
campaign debts are just as much for the purpose of influencing an election and in
connection with the election as are those contributions received before the
election." Advisory Opinion 1983-2, 1 Fed.Elec.Camp.Fin.Guide [CCH] ¶ 5709 (February
24, 1983). In another opinion, the FEC concluded that "monies received to defray the
cost of post-election litigation which arises out of the election are treated the same as
monies received to defray the cost of litigation during the election." Advisory
Opinion 1981-16, 1 Fed.Elec.Camp.Fin.Guide [CCH] ¶ 5604 (April 15, 1981). [FN7]
FN7. Even after
the FEC's issuance of these opinions, Congress has not acted to modify the definition of
the term "contribution."
If post-election contributions for the purpose of retiring campaign debts were not
subject to FECA's limits, "it would permit candidates to evade FECA's restrictions on
contributions and expenditures by running their campaigns at a deficit and then collecting
contributions after the election." FEC v. Lance, 617 F.2d 365, 372 n. 4 (5th
Cir.1980), cert. denied, 453 U.S. 917, 101 S.Ct. 3151, 69 L.Ed.2d 999 (1981). Thus,
contrary to Sun-Diamond's argument, post-election contributors could seek to secure a
political quid pro quo from potential office holders by making post-election
 In sum, Sun-Diamond has not demonstrated that the FEC's interpretation of FECA
through its regulations and advisory opinions is contrary to the plain meaning of the
statute. The FEC's constructionis entitled to due deference and the court concludes that
the FEC's interpretation of post-election contributions as falling within the ambit of
FECA is a permissible construction. [FN8] See Chevron, 467 U.S. at 844-45, 104 S.Ct. at
Sun-Diamond contends that even if Congress intended to prohibit post-election
contribution, FECA is void for vagueness. However, because FECA and the FEC opinions and
cases that interpret it, provided Sun-Diamond with sufficient notice of the prohibited
conduct, the statute is not void for vagueness as it relates to Sun-Diamond's conduct. See
Connally v. Gen'l Construction, Co., 269 U.S. 385, 391, 46 S.Ct. 126, 127, 70 L.Ed. 322
(1925) (holding that "the terms of a penal statute creating a new offense must be
sufficiently explicit to inform those who are subject to it what conduct on their part
will render them liable to its penalties[.]").
B. FECA and the
 It is well settled that limitations on contributions to candidates are
consistent with the First Amendment where they are narrowly tailored to serve compelling
government interests. The primary government interest advanced by FECA is the interest in
preventing corruption or the appearance of corruption in the political process. Buckley v.
Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976); FEC v. National Conservative
Political Action Committee, 470 U.S. 480, 105 S.Ct. 1459, 84 L.Ed.2d 455 (1985).
To the extent that large contributions are given to secure a political quid pro quo
from current and potential office holders, the integrity of our system of representative
democracy is undermined ... Of almost equal concern as the danger of actual quid pro quo
arrangements is the impact of the appearance of corruption stemming from public awareness
of the opportunity for abuse inherent in a regime of large individual financial
Buckley v. Valeo, 424 U.S. at 26-27, 96 S.Ct. at 638-39.
These concerns are similarly applicable vis-a-vis post-election campaign contributions
to unsuccessful candidates. This is so because, as referenced above, a candidate could
defer campaign contributions until after an election and thereby make illegal campaign
contributions legal. Sun-Diamond's conduct, as found by the jury, clearly falls within the
parameters of the type of behavior that would lead to the corruption of the political
process, or at a minimum, to the appearance of corruption of the political process. Count
V through IX charged Sun-Diamond (and the jury so found) with the following: Sun-Diamond's
former Senior Vice President, Richard Douglas, and James H. Lake, a principal of a
lobbying firm, Robinson-Lake, employed by Sun-Diamond, together devised a scheme to enable
Sun-Diamond to make an unlawful corporate contribution in the name of another. To effect
this contribution, Mr. Douglas and Mr. Lake agreed that Mr. Lake would obtain $1,000
contribution checks from several employees of Robinson-Lake. Robinson-Lake then invoiced
Sun-Diamond for a false and fictitious expense sufficient to cover the contributions.
Finally, Sun-Diamond's payment of the expense to Robinson-Lake was used to reimburse the
individuals that advanced the campaign contributions. If such conduct were permitted in
connection with an election, [FN9] the judicially recognized purpose of FECA would be
emasculated. Consequently, FECA, as presently applied, does not violate the First
FN9. See 2
U.S.C. s 441b(a).
For the foregoing reasons, it is this 7th day of October 1996,
ORDERED that Sun-Diamond's motion to dismiss counts V through IX be and is hereby