[Lnc-business] Suing the FEC...again

Tue Nov 11 14:48:20 EST 2014

I presume that it could take some time to settle the estate (these things
often drag on longer than expected), so we will not necessarily be getting
the money immediately.  Although it would sure be nice if we could get the
first installment before the end of the year, so that it fit within the
2014 contribution limits.  Until then, a lawsuit would require us advancing
money at a time when money is very tight.

My reaction is that we should wait until we actually have the first
installment in the bank, and then use a portion of that to fund a lawsuit.
I see no reason to rush before then.  If we expect the bequest to otherwise
be spread over 6 to 8 years, that's plenty of time to sue and get the issue
resolved before it again becomes moot.  And I don't see how it would
legally hurt our case by waiting a few months until we were sure of getting
the money before filing the lawsuit.

This is a clear freedom of speech and freedom of association issue.  The
government should not be restricting political speech by imposing
contribution limits, especially since by doing so it is effectively
insulating the established political parties from competition.  This is
definitely a case the Libertarian Party should want to win on principle.
And it sounds like we have a good case as a practical matter.

In addition, there are strong political reasons we should pursue this. (1)
A legal victory will add to our credibility.  (2) The present value of
money is always greater than than having it spread out over a long time
period.  (3) The legal precedent may be crucially important in the future.

To expand on that last point, it may turn out that this particular bequest
is nearly as valuable to us by being spread over 6 to 8 years rather than
being received in a lump sum.  But what if someone were to leave a much
bigger bequest (say $20 million) to the LP?  It would take us sixty years
to receive that amount in installments.  Whereas a large one-time influx of
cash might allow us to do some major membership prospecting or take on
other significant projects which would have far greater long-term
benefits.  Correspondingly, if an individual knew that too large an amount
would have to be spread out over many years, that would serve as a
disincentive regarding the size of any bequest.

So I would support a motion to proceed with a lawsuit on the condition that
it not commence (or at least that there be no LP expenditure) until we
received the first installment of this new bequest.

Dan Wiener

On Tue, Nov 11, 2014 at 9:46 AM, Joshua Katz <planning4liberty at gmail.com>
wrote:

> 1.  So the principle we're arguing is a person's choice in how they
> spend their money.  I agree that a person has the right to spend their
> money as they choose.  It's also unlikely that dead people very
> effectively buy political influence.  But this dead person hasn't been
> prevented from giving us money, the timing is being impacted.
> 2.  Well, yes.  That unlimited contributions would lead to a larger
> gap between the old parties and us seems intuitive to me.  Again, not
> a reason to advocate for government intervention - and likely swamped
> by their ability to get around the laws as they exist anyway.
> 3.  I agree with the math, but I don't see how the math means it
> doesn't exacerbate our current financial situation.  It's moving
> income 6-8 years down the road to maybe 3 years down the road - but I
> expect (unless I'm wrong) that we'll need to pay $5,000 in the next
> month, unless the attorney has agreed to wait longer than that to be
> paid.  But our cash crunch isn't 3 years down the road, it's right
> now.
> I stand corrected on the tax question and the lump-sum comment, and
> I'm glad to hear it.
> 5.  Paying extra in taxes to receive a refund seems to be the opposite
> of what I'm talking about, not a parallel.  People buy service
> contracts on expensive machinery because they'd rather pay a
> predictable amount each year than a large amount once.  We buy
> insurance for the same reason.  Similarly, we talked before about the
> value of donors who commit to a fixed amount each month, year, etc.,
> even if the amount isn't huge, because it lets us plan programs.  Here
> we have the opportunity, through circumstances, to have a donor of
> that sort, except that it's a rather large amount.  Yes, I understand
> the value of getting the money now (I'm an Austrian and all about time
> preference) but I also see value in being able to say "ok, this money
> comes in each year and can fund x."  If someone approaches us with
> $1,000,000, and it were legal to take it all, I'm not saying we should
> ask them to pay it out over 100 years, but I'm just not convinced that
> the value of moving from a schedule to a faster payment is worth the
> cost of continuing the suit.
>
> If I understand the last paragraph here correctly, it seems you're
> making an argument of the type I normally agree with - when the LNC
> enters into something, we're in it for the long haul, and we don't
> back out.  I don't know that I agree with this principle when a
> previous LNC entered into it, though, and in that case, my opinion
> would vary based on current factors.
> Joshua A. Katz
> Westbrook CT Planning Commission (L in R seat)
>
>
> On Tue, Nov 11, 2014 at 12:29 PM, Nicholas Sarwark <chair at lp.org> wrote:
> > On Tue, Nov 11, 2014 at 10:12 AM, Joshua Katz
> > <planning4liberty at gmail.com> wrote:
> >> The following is what strikes me:
> >> 1.  Annual contribution limits, while they aren't ideal, appear to be
> >> applied relatively uniformly, with the exception that the old parties,
> >> due to size, have more "tricks" to get around them - but if money were
> >> left to them in a will, they'd be in roughly the same boat.
> >
> > This is not a fairness suit, it's a First Amendment suit.  The
> > government shouldn't be able to tell someone (not even a dead someone)
> > how much money they can spend on politics in a year.
> >
> >> 2.  Getting annual contribution limits overturned would not be in the
> >> political best-interest of the LP.  It can be objected that we
> >> shouldn't want government intervention even when it is in our benefit,
> >> and I agree.  However, I'm not sure there is a 'principled'
> >> libertarian answer to contribution limits.  It's not like we're
> >> talking true free-market entities when we talk about the old parties.
> >
> > Why not?  Because the old parties would have a significant financial
> > and size advantage over us?
> >
> >> 3.  We are in a cash-crunch, and could use that money now.  However,
> >> we won't get it now even if we sue.  What we'll get now, or shortly,
> >> is a lawyer's bill.  We will get the money, in a lump-sum (probably
> >> subject to taxation at higher rates) in 1 or 2 years, if I read the
> >> original message correctly, so it won't help us out of our current
> >> situation, it may even exacerbate it.
> >
> > We will get the first distribution late this year or early next, at
> > the discretion of the executor of the estate.  Subsequent
> > distributions would be subject to the cap unless or until we can
> > strike the limits down.  We would not get the total amount for 6-8
> > years in absence of a suit.
> >
> > It would not exacerbate the current situation.  Look at it as a
> > reduction in the amount received each year by $5,000 until the suit is
> > resolved (likely less than 2 years) in an attempt to move the last 4-6
> > years' disbursements up into year 3.
> >
> > I don't believe the LNC pays any tax on political contributions
> > received and estate tax is paid on the size of the initial estate, not
> > based on when/how it is distributed, so I think your lump-sum comment
> > is just incorrect.
> >
> >> 4.  The amount of the bequest is greater than the cost of the lawsuit,
> >> but we will still get it if we do not sue, we'll just get it over
> >> time.
> >
> > Yes.
> >
> >> 5.  It's quite nice to have regular, predictable income.
> >>
> >
> > It's nice to get a large check in the Spring from the U.S. Treasury,
> > but I still conduct my affairs to try to owe taxes rather than receive
> > a refund.
> >
> >
> >> So from my standpoint, it's hard to see the value of filing a suit,
> >> other than pure principle - but I'm not convinced that there is a
> >> principle at stake here.  However, I could potentially be convinced
> >> that there is a libertarian principle at stake in contribution limits
> >> if someone wants to make the case.
> >>
> >
> > Well, we already did file the suit, got all the discovery and evidence
> > done, and the D.C. Circuit punted.  Our suit was dismissed as moot
> > because we waited too long to act and ended up getting all the money
> > before the court could hear it.  This is our chance to finish the last
> > lawsuit and get an actual decision.
> >
> > See: http://www.fec.gov/law/litigation/LNC.shtml and
> >
> http://www.campaignfreedom.org/litigation/completed-litigation/libertarian-national-committee-v-fec/
> > for background.
> >
> > -Nick
> >
> > _______________________________________________
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> > Lnc-business at hq.lp.org
> > http://hq.lp.org/mailman/listinfo/lnc-business_hq.lp.org
>
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>

-- 
*"In general, we look for a new law by the following process. First, we
guess it (audience laughter), no, don’t laugh, that’s the truth. Then we
compute the consequences of the guess, to see what, if this is right, if
this law we guess is right, to see what it would imply and then we compare
the computation results to nature or we say compare to experiment or
experience, compare it directly with observations to see if it works. If it
disagrees with experiment, it’s WRONG. In that simple statement is the key
to science. It doesn’t make any difference how beautiful your guess is, it
doesn’t matter how smart you are, who made the guess, or what his name is.
If it disagrees with experiment, it’s wrong. That’s all there is to it.”*
-- Richard Feynman (https://tinyurl.com/lozjjps)
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