X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
U.S. Sen. Arlen Specter, R-Pa., suffered a major setback this week in his court battle with the Federal Election Commission when a federal judge refused to toss out a lawsuit against his 1996 presidential campaign over the amount it paid for air flights during his year on the campaign trail. The FEC contends that the campaign committee, Specter 96, should have paid charter air rates for all of the flights it took on jets owned by Pennsylvania-based Koro Aviation. But Specter insisted that he followed the rules since federal election law requires candidates simply to pay first-class fares for each passenger when flying on corporate jets. The charter rates, he said, apply only when the flight is a route not offered by any commercial airline. The FEC disagreed and argued that Koro Aviation isn’t just a corporation, but also a commercial airline. The reason candidates pay first-class fares for flights on private corporate jets is that there is no other way to set a price for such a flight since the planes aren’t routinely leased out, the FEC argued. But when the candidate flies on a charter air company’s planes, the FEC said, the campaign must pay the same charter rate that any other customer would pay for the same service. Now federal Judge J. Curtis Joyner of the U.S. District Court for the Eastern District of Pennsylvania has ruled in Federal Election Commission v. Specter 96 that the FEC’s interpretation of its own rules is a reasonable one and that it did not exceed its authority in passing it. Joyner also ruled that Specter had “fair warning” of the rule and therefore that his due process rights were not violated when the FEC enforced it against him. Those rulings were a significant blow to Specter 96 because they amounted to a complete rejection of Specter’s argument that the suit should be dismissed. But Joyner stopped short of handing the FEC a complete victory, saying he could not grant summary judgment in the agency’s favor since there are factual disputes about whether Specter 96 actually violated the rule. Specter announced his candidacy for the presidency in March 1995, but withdrew from the race just eight months later. For years, Specter’s senate campaigns had used corporate jets owned by KAMA Plastics Co. in Hazelton, Pa., always paying first-class fares. But by 1995, KAMA had sold its plastics manufacturing operations and converted its air fleet into a commercial charter business, renaming the new company Koro. Although the new company was now a charter airline, Specter’s campaign continued to pay for its flights at first-class rates instead of paying Koro’s charter rates. The FEC audits all presidential campaigns that receive federal matching funds. It found that Specter 96 may have committed several violations including a prohibited in-kind contribution of at least $155,251 from Koro Aviation. In December 1999, the FEC found there was probable cause to believe that Specter 96 and Koro violated election law. But Specter rejected the FEC’s proposed conciliation, forcing the agency to go to court. One of the central disputes in the lawsuit was a semantic one. Specter’s lawyers — Thomas A. Leonard and Stephen W.W. Ching of Obermayer Rebmann Maxwell & Hippel — argued that the flights were covered by 11 CFR Section 114.9(e), the regulation that governs campaign travel on corporate or union jets. But the FEC’s lawyers — Lois G. Lerner, Richard B. Bader, Stephen E. Hershkowitz, Leigh G. Hildebrand and Benjamin A. Streeter III — argued that Section 114.9 specifically excludes any corporation that is “engaged in the commercial air transportation business.” Specter’s lawyers read the phrase differently. They insisted that the judge should look at the entire sentence, which reads: “A candidate, candidate’s agent, or person traveling on behalf of a candidate who uses an airplane which is owned or leased by a corporation or labor organization other than a corporation or labor organization licensed to offer commercial services for travel in connection with a Federal election must, in advance, reimburse the corporation or labor organization.” Koro isn’t excluded, Specter 96 argued, because it is not “licensed to offer commercial services for travel in connection with a Federal election.” The FEC argued that Specter was calling for an absurd reading of the rule since there is no such thing as a license to offer federal election travel services. But Specter argued that under the “doctrine of the last antecedent,” any qualifying words or phrase in a should be applied to the words or phrase immediately preceding. As a result, Specter said, the phrase “for travel in connection with a federal election” modifies the noun “services” immediately preceding it. Judge Joyner ultimately rejected Specter’s reading of the rule, but agreed that its wording is ambiguous and that Specter’s argument made sense from a linguist’s standpoint. “We agree that Specter 96′s reading of Section 114.9(e) may be the more natural of the two. However, Section 114.9(e)’s lack of punctuation and less-than-artful drafting make it difficult, if not impossible, to divine the true meaning of the regulation by cursorily reading it,” Joyner wrote. For that reason, Joyner said, the court was forced to reject Specter’s argument that a “plain reading” of the rule supported his interpretation. “The dispute over the so-called plain language in this case involves application of sometimes imprecise rules of syntax and grammar. The poor drafting and absence of punctuation in Section 114.9(e) make that application all the more difficult. Indeed, the only matter that is certain with respect to the language of Section 114.9(e) is that it is neither plain, nor clear,” Joyner wrote. But Joyner said the court’s job was not to decide which interpretation was best. Instead, he said, the FEC’s interpretation “must be given controlling weight unless it is either plainly erroneous or inconsistent with the regulation.” The FEC won on that point, Joyner found, since its interpretation fits in with the entire statutory and regulatory scheme while Specter’s interpretation “would create what appears to be a policy contradiction in the FEC’s overall regulatory scheme.” And while Specter’s reading isn’t flatly absurd, Joyner still found that it “would result in an absurdity in fact by producing a regulation that requires a license that does not exist.” Joyner also rejected Specter’s argument that the FEC’s interpretation conflicts with prior FEC precedent. “Because we have determined that the FEC’s interpretation of Section 114.9(e) neither conflicts with that regulation’s plain language, nor violates prior FEC precedent, we will defer to the FEC’s interpretation,” Joyner wrote. RULE OF LENITY Specter argued that even if the FEC’s interpretation were accepted by the court, the rule should not be enforced against him because doing so would violate the “rule of lenity” and due process. The rule of lenity requires that ambiguities in a criminal or punitive statute must be resolved in favor of the defendants. But Joyner found that the rule is invoked only when a rule or law is so unclear that the court “can make no more than a guess as to what Congress intended.” For the same reasons that he had already held that the FEC’s reading of the rule is reasonable, Joyner said, it also survived a rule-of-lenity challenge. “The rule of lenity does not provide an interpretive back door through which to avoid that determination,” he wrote. Joyner also rejected Specter’s argument that the FEC had impermissibly exceeded its statutory authority. “There is nothing unreasonable about adopting separate regulations for corporations that are FAA-licensed charter services (and therefore have a ‘usual and normal’ fare) and for corporations that are not in the business of providing air service (and therefore do not have an established ‘usual and normal’ fare),” Joyner wrote. “That distinction is at least a reasonable attempt to ensure that political candidates pay the same fares that a member of the public would pay if he or she contracted with a commercial charter service business, such as Koro.” In the end, Joyner said, Specter 96′s objection is that it is unfair for flights on large corporations’ aircraft to be valued at a lower price than flights on a small commercial charter service’s aircraft. But that complaint, Joyner said, “is really a criticism of the current valuation formula used for non-charter corporate air travel — not a justification for allowing a lower rate for commercial charter air travel itself or a basis for finding the current regulatory distinction unreasonable.” Likewise, Joyner rejected Specter’s claim that his due process rights were violated because he was forced to pay charter fares for corporate flights while every other presidential campaign paid only first-class fares for similar flights. “These two types of flights are not the same,” Joyner found. “Specifically, the distinction exists between flights on aircraft owned by corporations that provide commercial charter service and flights owned by corporations that do not engage in the air transportation business. Specter 96′s apparent contention that, under the applicable regulations, there is no difference between flights on aircraft owned by a commercial carrier like Koro and flights on aircraft owned by a corporation not in the air transportation business like Phillip Morris or IBM is simply wrong.” In his final paragraphs, Joyner rejected the FEC’s argument that it was entitled to summary judgment because Specter 96 and Koro have essentially conceded that the campaign only paid first-class fares for flights for which Koro normally charged a charter rate. Joyner found that the case wasn’t so easy to decide since Specter and Koro both say that the true nature of the flights was “stand-by” and that the normal price charged for such flights was only a first-class fare. There are also disputes over the actual ownership of the jets that Koro used for several of flights and the exact number of flights, Joyner noted.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.