CLC Files Suit Against Iowa Values for Breaking Federal Campaign Finance Laws

Today, Campaign Legal Center (CLC) filed suit directly against Iowa Values, a nonprofit dedicated to supporting the reelection of Sen. Joni Ernst, for failing to register as a political action committee (PAC) as required by federal law. This rare step was taken after the Federal Election Commission (FEC) failed to act when it was made aware that Iowa Values broke federal law by not reporting who their contributors are or where that money went and deprived voters of the right to know who funded its spending to influence a Senate election. The FEC's failure to act triggered a little-used provision in the Federal Election Campaign Act (FECA), which allows direct suits by nonagency actors like CLC against a violator like Iowa Values, but only when the FEC fails to enforce the law.

The lawsuit asks the court to declare Iowa Values a political committee and order it to provide CLC and the FEC with information it illegally concealed, including the sources of its funding and the recipients of its spending in support of Sen. Ernst. The suit also asks the court to require Iowa Values to continue filing reports disclosing its receipts and disbursements, including the more than $156,000 Iowa Values spent on digital ads supporting the senator and/or opposing her opponent in the months before the 2020 election. Finally, it asks the court to assess an appropriate civil penalty against Iowa Values, to be paid to the federal government.

"Federal campaign finance laws require an organization like Iowa Values, whose 'major purpose' is campaign activity, to register with the FEC as a political committee and file regular reports disclosing its contributions, expenditures, and debts," said Erin Chlopak, director of campaign finance strategy at CLC. "In failing to do so, they violated federal law and harmed CLC and the electorate at large by concealing critical information about its sources of funding and the recipients of its spending in support of the senator."

CLC filed an administrative complaint with the FEC about these violations in December of 2019. After waiting more than 190 days for the FEC to act on the matter, CLC sued the FEC in federal court over its delay. On Oct. 14, 2020, the court issued an order finding that the FEC's failure to act on CLC's complaint was, "contrary to law" and ordering the Commission to conform by acting on CLC's complaint within 90 days. The FEC still failed to act and on Feb. 11, 2021, the court issued an order declaring that the FEC had failed to enforce the law and that CLC had a right to sue Iowa Values directly over the violations in federal court.

"Transparency around who is spending money to support or oppose federal candidates is a cornerstone of the Federal Election Campaign Act (FECA) and critical to our democracy," said Chlopak, "Under FECA, organizations that exist primarily to engage in political activity including making expenditures to support their preferred candidates must register as a PAC with the FEC and disclose their donors, along with other information about their financial activities."

Iowa Values has deprived and continues to deprive the public of critical information about who is seeking to influence elections by failing to comply with federal PAC registration and reporting requirements. Its unlawful concealment of this information undermines voters' trust in our democratic process.