held. In 1986, the NRSC was the agent of the Republican National Committee, and therefore under 2 U.S.C. § 441a(d)(3) could also make a contribution to each U.S. Senate candidate equal to the greater of (a) $ 20,000, or (b) two cents multiplied by the voting age population of the state in which the Senate candidate is running.
3. 11 C.F.R. § 110.6(b) provides that a contribution is "earmarked" if it is subject to a designation, instruction or encumbrance which results in all or any part of that contribution being made to a clearly identified candidate.
4. 11 C.F.R. § 110.6(d) provides that, if a person or entity acts as a conduit for the earmarked contribution of another person, the contribution limits of the conduit are not affected by passing on the earmarked contribution, except where the conduit exercises "any direction or control" over the recipient candidate, in which case the contribution affects the contribution limits of both the original donor and the conduit.
5. 2 U.S.C. § 437g(a)(8) provides that any person who files a complaint with the FEC may file suit within 60 days of the date when the Commission dismisses that complaint to have the dismissal set aside as contrary to law. Common Cause's filing of this suit was timely under this provision.
6. Contributions sent in response to the NRSC's 1986 Bush solicitation mailings were not "earmarked" within the meaning of 11 C.F.R. § 110.6(b). Contributions were made payable to the NRSC or some organization under their control (such as the "Inner Circle" or "Republican Presidential Task Force"), and not to specific candidates. The NRSC was not clearly obliged by law to pass on all those contributions to the candidates in the states mentioned in the mailings pursuant to the formula indicated in the letter. The candidates who ultimately received these contributions were not "clearly identified" in the mailings in that neither their names nor their pictures appeared in the mailings and their identities were not apparent to many contributors. See 2 U.S.C. § 431(18) (defining "clearly identified"). Record evidence on the point suggests that individual donors had often never even heard of the candidates to whom they supposedly had earmarked contributions. Donors did not make a meaningful designation, instruction or encumbrance on the NRSC's use of the contributed funds. The record evidence also suggests that individual donors intended to give to the NRSC for use in its discretion. The FEC's decision to dismiss the portion of Common Cause's complaint alleging that the NRSC violated its contribution limits and reporting obligations when the NRSC treated contributions received as a result of the 1986 Bush mailings as "earmarked" was arbitrary and capricious and contrary to law.
7. The FEC's decision that the NRSC did not exercise "any direction or control" over the 1986 Bush mailings was not mandated by prior FEC precedent, was effected by a 3-3 tie vote and was contrary to the recommendation of the FEC General Counsel. It cannot be upheld, because it ignored the plain language of the applicable regulation and was not rationally explained.
8. Contrary to the conclusion of Commissioner Josefiak's Statement of Reasons, the fact that the donors were informed by the Bush letter of the formula for division of contributions and gave voluntarily does not decide the "direction or control" issue. The plain language of the regulation controls.
9. The decision of the FEC not to enforce in the circumstances presented by the record was contrary to the intent of Congress to limit participation of national parties in campaign fund-raising.
10. The NRSC exercised some "direction or control" within the meaning of 11 C.F.R. § 110.6(d) over the contributions at issue. The NRSC chose the twelve campaigns which were mentioned in the letters; the NRSC chose how many letters in which each campaign would be mentioned; and the NRSC chose which mailing lists, with which donation histories, would be used for each version of the letter. The contributions were to be made to the NRSC or an organization controlled by the NRSC, were deposited in the NRSC's bank accounts, and were disbursed to the campaigns by the NRSC. Accordingly, the FEC's decision to dismiss the portion of Common Cause's complaint alleging that the NRSC violated its contribution limits and reporting obligations in connection with the 1986 Bush mailings was arbitrary and capricious.
Upon consideration of the administrative record and the full briefs of the parties supporting and opposing their respective cross-motions for summary judgment in this action for declaratory judgment and injunctive relief, and for the reasons set forth in the attached findings of fact and conclusions of law, it is hereby
ORDERED that the Federal Election Commission's dismissal of part of Common Cause's complaint against the National Republican Senatorial Committee is reversed as arbitrary and capricious and contrary to law; and it is further
ORDERED that this matter is remanded, pursuant to 2 U.S.C. § 437g(a)(8)(C), to the Federal Election Commission, which is directed to conform with this declaration and proceed accordingly within 30 days of the date of this Order.