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AJS Complaint to FEC

April 11, 2007

Thomasenia P. Duncan
Office of General Counsel
Federal Election Commission
999 E Street, N.W.
Washington, D.C.  20463

 RE: Complaint against Americans for Job Security    MUR____

Dear Acting General Counsel Duncan:

 We, Laura MacCleery, Director of Public Citizen’s Congress Watch, Taylor Lincoln, Director of Research at Congress Watch, and Craig Holman, Lobbyist for Public Citizen, file this complaint with the Federal Election Commission (FEC) against Americans for Job Security (AJS), a 501(c)(6) non-profit organization. The evidence compiled in this complaint strongly indicate that AJS and its officers violated 2 U.S.C. §§433, 434, 441a(f) and 441b(a) of the Federal Election Campaign Act (FECA) by:

• Failing to register as a political committee with the Commission.
• Failing to report contributions and expenditures as a political committee to the Commission.
• Knowingly accepting contributions in excess of the $5,000 contribution limit.
• Knowingly accepting corporate contributions.

These violations have occurred at least since 1998, and are likely to continue in the current election cycle, as Americans for Job Security solicits and spends undisclosed and impermissible funds primarily for the purpose of promoting the election or defeat of candidates for federal elective office.

AJS has been the subject of several similar election complaints at the state and federal levels in Alaska,  Minnesota,  Pennsylvania  and Texas.  For the first time, however, Public Citizen’s complaint compiles a full evidentiary record of the electioneering abuses of AJS for the 2000, 2002 and 2004 election cycles. The complaint utilizes an extensive factual record of television and print advertisements produced and distributed by AJS as well as news accounts and the organization’s publicly-available tax records. This research originally was prepared as a complaint to the Internal Revenue Service (IRS) documenting the organization’s likely violation of its 501(c) non-profit tax status, but the evidence is equally compelling that AJS violated the requirements of political committee status under FECA.

FECA defines a political committee as “any committee, club, association, or other group of persons which receives contributions aggregating in excess of $1,000 during a calendar year or which makes expenditures aggregating in excess of $1,000 per calendar year.” 2 U.S.C. §431(4)(A). The Supreme Court has held that to qualify as a political committee under the Act and avoid “reach[ing] groups engaged purely in issue discussion,” only organizations whose major purpose is campaign activity may be considered political committees subject to federal campaign finance law. See Buckley v. Valeo, 424 U.S. 1, 79 (1975); FEC v. Massachusetts Citizens for Life, 479 U.S. 238, 262 (1989)(“MCFL”). It is also established that the “major purpose” standard may be met either by sufficient spending on campaign activity or through public statements of purpose. See MCFL at 262-264; FEC v. GOPAC, 917 F.Supp. 851, 859 (D.D.C. 1996).

Under Commission regulations, contributions and expenditures for communications that contain express advocacy for or against federal candidates are deemed for the purpose of influencing federal elections. Furthermore, communications that contain an “electoral portion” that is “unmistakable, unambiguous, and suggestive of only one meaning” and about which “reasonable minds could not differ as to whether it encourages actions to elect or defeat” a candidate when taken as a whole and with limited reference to external events, such as timing near an election and targeting a candidate’s voting constituency, also are deemed for the purpose of influencing federal elections. When such communications are of sufficient volume to qualify as an organization’s major purpose, and the organization receives or spends in excess of $1,000, registration as a political committee is then required regardless of the organization’s tax status, subject to the reporting requirements, contribution limits and source prohibitions of FECA.

Public Citizen’s complaint analyzes all television and print communications by AJS that were obtainable from the University of Wisconsin Advertising Project database and radio and direct mail advertisements in which Public Citizen was able to obtain a transcript or copy of the ads. Public Citizen was able to gather the full text of 32 advertisements disseminated by Americans for Job Security since the 2000 election cycle. Public Citizen also gathered the Form 990 tax records of AJS for the same time period.

All 32 communications identified a candidate for elective office and aired shortly before the candidate’s election. At least 94 percent of the ads targeted the candidate’s voting constituency (the targeted constituency of two ads were unknown). None of the ads ever identified specific legislation and none of the ads aired when pertinent public policies were being considered in Congress or by the executive branch. Consistent with the findings of the University of Wisconsin Advertising Project, and the related Buying Time studies from New York University, all of the AJS ads were viewed as supporting the election or defeat of federal candidates, not as issue advocacy. [Full texts of each of the ads are attached.]

Americans for Job Security readily boasts that it spends the bulk of its budget on its advertising campaign. Public Citizen has confirmed this, using the organization’s Form 990 tax records. Since all AJS ads obtained by Public Citizen aired shortly before an election, in the year 2000, AJS reportedly spent $9 million on political ads out of a total budget of $10.9 million. In 2002, AJS reported spending $4.5 million on media out of total expenditures of $5.3 million. In 2004, AJS reported expenditures of $3.8 million on media out of a total of $6 million. According to news reports, these funds derive largely from corporate contributions as well as contributions from individuals in excess of $5,000. Overall, about 78 percent of the AJS budget has been allocated to the political advertising campaign – all of which appears to be electioneering in nature.

Americans for Job Security clearly has as its major purpose promoting the election or defeat of candidates for federal office. As such, AJS should be required to register as a political committee, subject to the disclosure requirements and contribution limits of federal campaign finance law. Furthermore, to the extent that AJS knowingly evaded political committee status in prior years, the organization and its officers should be subject to appropriate fines and penalties for violating FECA.

Public Citizen requests an immediate investigation into the electioneering abuses of Americans for Job Security and the application of the full range of penalties provided by law.


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