Nearly a year and a half ago, Fred Thompson was called to task on his blatant abuse of the ‘testing the waters’ exemption of campaign finance law. That complaint was a compilation of research and writing by progressive bloggers. It was also a result of wide coverage in the mainstream media about Thompson’s lack of compliance with the law.

The complaint was roundly validated by campaign finance law experts like Bob Bauer, now General Counsel at the DNC. Holly Bailey at Newsweek agreed with the basis of the complaint. The conservative New York Sun also chimed in supporting the complaint. Other validating coverage ranged from Good Morning America to The Economist and The Colbert Report.

Now, the Federal Election Commission has finally acted on it. From the statement of the Commissioners I received (PDF):

In this matter, the Office of General Counsel recommended the Commission find reason to believe Senator Fred Thompson, his committee, and treasurer, in his official capacity, violated 2 U.S.C. §§ 432(e)(1); 433(a), and 434 of the Federal Election Campaign Act of 1971, as amended (The Act), by improperly using the regulatory "testing the waters” exemption to the statutory requirement to register with the Commission.

Translation: the professionals who spend every day enforcing campaign finance laws think that Thompson et al. should be the subject of a formal investigation.

The statement continues:

Because we do not believe Senator Thompson’s public statements establish that he had definitively decided to become a federal candidate before he filed his Statement of Candidacy on September 6, 2007, we voted against finding reason to believe that a violation occurred.

Translation: Because Thompson didn’t explicitly state he was running for President, he can exploit the ‘testing the waters’ exemption without any limit whatsoever.

Here is language from the General Counsel’s report when the Commission found that the Rev. Al Sharpton had violated the ‘testing the waters’ exemption by portraying himself as a candidate:

…The Commission’s regulations look objectively to candidate’s activities, not to the stage of an individual’s subjective decision making process, in determining whether the "testing the waters" exemption applies….Once an individual becomes a candidate, equivocal statements of intent, or a future "official announcement" do not eradicate the registration and reporting requirements that have been triggered.

It should be noted that violating ONE of the exemptions allowed under law is sufficient basis for the FEC to act on a complaint. The Commission’s almost sole focus on Thompson’s public statements make it seem as if this is the crux of determining that a violation occurred. It’s not. Not even close.

Most egregiously missing from the FEC’s Statement is any addressing of the big issue here: MONEY. Nowhere in its statement does the Commission acknowledge that Thompson’s own actions prove he was raising money beyond that needed for exploratory activities. He had millions in the bank when he filed his statement of candidacy — money left over from his ‘testing the waters’ phase. Here is the relevant federal regulation explaining when the exemption has been violated (emphasis added):

11 CFR 100.72(B)(2) — "The individual raises funds in excess of what could reasonably be expected to be used for exploratory activities or undertakes activities designed to amass campaign funds that would be spent after he or she becomes a candidate."

The bottom line is that the Federal Election Commission continues to prove that it is impotent in effectively meeting its mandate and remaining a relevant body in the American political system. In this one decision, they have gutted the intent of the ‘testing the waters’ exemption. The precedent this creates is a threat to our electoral system, allowing future candidates to raise unlimited sums of money to engage in political activity completely outside of the purview of the regulatory body for such activity.

The Statement by the FEC was signed by the three Republican Commissioners as well as longtime (burnt out?) Democratic Commissioner Ellen Weintraub. I’d really love to hear them defend this in person.

Options moving forward are not good. The decision can be challenged in Federal Court. However, I’m told that these are almost never successful, as a judge would have to order the Commission to do something that it said it didn’t want to do. Apparently, there is ample precedent that the FEC has the discretion to act only on the complaints it decides it wants to, without any outside body as a proper oversight venue.

So, the effort to rein in some of the unregulated money in politics has fallen victim to a lazy, ineffective Commission that has just made itself increasingly irrelevant. The sad thing is that there is no other body that can fill in where it won’t do its job. The time has come to throw the bums out and overhaul the FEC so it can be an effective regulatory agency that helps strengthen our political system and has the confidence of the American public.