The CPD violates FEC and IRS regulations

By implementing Memoranda of Understanding drafted by the major party campaigns at the expense of third-party challengers, the CPD violates federal regulations established by the Federal Election Commission (FEC) and the Internal Revenue Service (IRS).

IRS Violations

Section 501(c)(3) of the Internal Revenue Code explicitly prohibits organizations exempt under that provision from “participating or intervening , directly or indirectly, in any political campaign on behalf of or in opposition to any candidate for public office.” This prohibition is absolute. The IRS has stated, “For purposes of section 501(c)(3), intervention in a political campaign may be subtle or blatant. It may seem to be justified by the press of events. It may even be inadvertent. The law prohibits all forms of participation or intervention in ‘any' political campaign.”

A section 501(c)(3) organization may conduct a candidate debate, but only pursuant to strict restrictions of neutrality. The IRS explained, “[I]f the forum is operated to show a bias for or against any candidate, then the forum would be a prohibited activity as it would constitute an intervention or participation in a political campaign.”

Violating Section 501(c)(3) of the Internal Revenue Code, the CPD “participates” and “intervenes,” directly and indirectly, “on behalf of” the Republican and Democratic candidates and “in opposition to” third-party and independent candidates, by secretly executing Memoranda of Understanding drafted by the Republican and Democratic candidates. The Memoranda of Understanding stipulate precisely which candidates will participate in the presidential debates, and the CPD invites only those candidates to the debates and excludes all other candidates. The “Memoranda of Understanding” stipulate precisely how the debate formats will be structured, and the CPD sets up the presidential debates in perfect compliance with those format instructions. The CPD uses its tax-exempt status to shield the major party candidates from public criticism and public accountability. Such debates demonstrate a clear “preference for” the Republican and Democratic nominees, and “preference against” independent and third-party candidates, and therefore the hosting of such debates is a prohibited activity.

The civic group Open Debates filed an IRS complaint against the CPD on April 12, 2004 .

FEC Violations

Under the Federal Election Campaign Act of 1971, corporations are prohibited from making contributions in connection with federal elections. In 1979, pursuant to statutory authority, the FEC promulgated regulations that allow corporations to donate funds to a debate sponsor as long as that sponsor meets the requirements of 11 C.F.R. §110.13.

With respect to the nature of acceptable sponsors, 11 C.F.R §110.13(a) provides: “Nonprofit organizations described in 26 U.S.C. 501 (c)(3) or (c)(4) and which do not endorse, support, or oppose political candidates or political parties may stage candidate debates in accordance with this section and 11 CFR 114.4(f).”

With respect to candidate selection criteria, 11 C.F.R §110.13(c) provides: “For all debates, staging organization(s) must use pre-established objective criteria to determine which candidates may participate in a debate.” When promulgating 11 C.F.R. §110.13(c), the FEC explained: “Staging organizations must be able to show that their objective criteria were used to pick the participants, and that the criteria were not designed to result in the selection of certain pre-chosen participants.”

If a debate sponsor failed to stage a debate among candidates for federal office in accordance with the requirements of 11 C.F.R. §110.13, then the corporate donations used to defray the costs incurred by the sponsor would constitute illegal contributions to the participating candidates.

The CPD implements contracts jointly drafted by the Republican and Democratic campaigns, which dictate the debate participants and the debate formats, often resulting in the exclusion of third-party challengers. In doing so, the CPD clearly “support[s]” the Republican and Democratic candidates, clearly “oppose[s]” third-party and independent candidates, and fails to “use pre-established objective criteria,” in violation of 11 C.F.R §110.13(a).

Consequently, the debates staged by the CPD constitute illegal corporate contributions to the participating candidates.

A number of civic groups and third-party candidates have filed FEC complaints claiming that the CPD is a partisan organization and, therefore, ineligible under federal election law to sponsor presidential debates. In 1997, Larry Noble, then General Counsel of the FEC, recommended a full-blown investigation (6.6MB zipped PDF) of the CPD because he suspected that it had violated FEC debate regulations in 1996. On August 12, 2004, after plaintiffs sued the FEC for dismissing their complaint, a District Court ordered the FEC to open a full investigation into whether the CPD acted in a “partisan manner” when sponsoring the 2000 presidential debates. The U.S. District Court for the District of Columbia, Judge Henry H. Kennedy, Jr., found that the FEC acted “contrary to law” in dismissing the complaint.

The District Court's ruling – which will produce an FEC investigation of the CPD – is an important victory in the campaign for transparent and nonpartisan presidential debates, particularly in light of the Court's limited judicial review. The District Court explained: “A FEC dismissal is contrary to law only if it was arbitrary, capricious, or an abuse of discretion. … An agency's interpretation of its own rules control unless ‘plainly erroneous' or ‘inconsistent with the regulation.'” Still, the District Court found the evidence of partisanship sufficient to conclude that the FEC's dismissal of the complaint had indeed been “contrary to law.”

The 7 Major Problems with the CPD
The CPD was created by the major parties to strengthen the major parties.
The CPD is primarily financed by multinational corporations.
The CPD awards the candidates absolute control over the debate process.
The CPD excludes popular candidates
The CPD employs uninspiring formats.
The CPD shields the major party candidates from public accountability.
The CPD violates FEC and IRS regulations.