[00:00:01] Speaker 03:
Before you start, I just want to say we're very happy to be here.

[00:00:28] Speaker 03:
on the 150th anniversary of the second coming of GW Law School.

[00:00:33] Speaker 03:
We also go back, well, we go back actually more than 150 years with quite a few interesting cases in 1865, as you can imagine.

[00:00:41] Speaker 03:
We've decided that if we're really going to be a circuit court, we need to ride the circuit every once in a while.

[00:00:47] Speaker 03:
So that's what we're doing today.

[00:00:52] Speaker 01:
May it please the court.

[00:00:53] Speaker 01:
In 2007, Senator Larry Craig employed his substantial discretion over his committee funds, paying legal fees to address an inquiry into his personal conduct by the Idaho Statesman newspaper.

[00:01:06] Speaker 01:
His media expenses to address both this inquiry and the subsequent June 2007 arrest in the Minneapolis airport were similarly permissible.

[00:01:16] Speaker 01:
Yet, his legal expenditures to withdraw his guilty plea in that matter

[00:01:21] Speaker 01:
The cause of the ensuing political crisis were deemed irrespective of his office and candidacy, and thus were personal use.

[00:01:30] Speaker 01:
This result cannot be squared with the statute, and it is not what Congress contemplated when it enacted the law.

[00:01:38] Speaker 01:
Senator Craig possesses significant discretion to expend his committee funds to address any type of political matter that arises.

[00:01:47] Speaker 04:
OK, so you set up

[00:01:49] Speaker 04:
in terms of the meaning of the statute and also FEC interpretation.

[00:01:53] Speaker 04:
Let's talk about the plain meaning of the statute.

[00:01:56] Speaker 04:
Now, the statute defines a personal expense, one that's not, for which you cannot use campaign crimes as an expense that would exist irrespective of the candidate's election campaign or duties as a holder of federal office.

[00:02:16] Speaker 04:
How in the world

[00:02:18] Speaker 04:
is Senator Craig seeking to withdraw a guilty plea.

[00:02:24] Speaker 04:
Not squarely within the plainly extended statute.

[00:02:27] Speaker 01:
Well, Your Honor.

[00:02:28] Speaker 04:
There's nothing to do with him being an officer.

[00:02:31] Speaker 01:
Well, Your Honor.

[00:02:33] Speaker 01:
In 2006 and 2007, he employed the same attorneys he ultimately used to withdraw his guilty plea to address an inquiry by the Idaho Statesman into the exact same type of conduct that was at issue in the plea.

[00:02:49] Speaker 01:
After his arrest and his guilty plea, which he filed to try to maintain this as a personal, private matter, it was then leaked to Roll Call newspaper.

[00:03:01] Speaker 01:
It was immediately the subject of two Senate ethics complaints, including one that was filed by his Republican colleagues, essentially excommunicating him from the party.

[00:03:11] Speaker 01:
At that point, it became a political crisis that was driven solely by the fact... I'm asking you to look at the plain being statute.

[00:03:19] Speaker 04:
expense that would exist irrespective of the candidate's election campaign or duties.

[00:03:25] Speaker 04:
This is an expense that would have happened if he hadn't entered a guilty plea.

[00:03:34] Speaker 04:
I don't get it.

[00:03:36] Speaker 04:
This was based on a guilty plea that he entered and he was trying to withdraw.

[00:03:42] Speaker 04:
That's irrespective of his status and his duties.

[00:03:47] Speaker 01:
If he had not been a United States senator, he would have filed his guilty plea.

[00:03:52] Speaker 01:
There would not have been a leak to Roll Call newspaper.

[00:03:56] Speaker 01:
He would not have had to address all of the political repercussions.

[00:04:25] Speaker 01:
Well, Your Honor, under the formulation by Congress in enacting the statute, they use the irrespective, which is in the absence of or without regard to.

[00:04:40] Speaker 01:
In the absence of his senatorial position,

[00:04:53] Speaker 01:
Your Honor, as a result of the guilty plea, he lost his standing in the Senate.

[00:04:59] Speaker 01:
He was removed from the various committee positions that he had as the top ranking Republican on a number of committees.

[00:05:08] Speaker 01:
He lost professional stature.

[00:05:10] Speaker 01:
He also, of course, ultimately had to retire and opted not to run again for the 2008 election.

[00:05:19] Speaker 01:
All of these things were created by the fact that his guilty plea was... So you're saying if the Senate Ethics Committee hadn't taken action, it would be different?

[00:05:28] Speaker 04:
Because the wheelhouse of the type of legal expense that is not the comfortable right of the DUI, the divorce, right?

[00:05:38] Speaker 04:
Yeah.

[00:05:39] Speaker 04:
But each of those can also affect the status of a senator in the Senate in the eyes of his

[00:05:46] Speaker 04:
So what's different here?

[00:05:48] Speaker 01:
Well, they may, Your Honor.

[00:05:49] Speaker 01:
Again, the statute calls for a case-by-case analysis.

[00:05:53] Speaker 01:
This is an extremely unique situation where he was dealing with the issue about his personal conduct before this arrest, and he was permissibly

[00:06:04] Speaker 01:
using legal, expending committee funds for legal fees to deal with the Idaho statesman.

[00:06:10] Speaker 01:
The FEC doesn't maintain that his payment to the same attorney... While we're asking about the statute, maybe the FEC is wrong about that.

[00:06:18] Speaker 03:
Maybe the expenses for press relating to purely personal misbehaviors are also not proper under the statute.

[00:06:27] Speaker 03:
But let's first focus only on the statute.

[00:06:31] Speaker 03:
I think that's what's bothering us here.

[00:06:34] Speaker 03:
It's clear that the expenses for the Senate Ethics Committee are not personal, right, because only a senator has to appear before the Senate Ethics Committee, so that's not the issue.

[00:06:47] Speaker 03:
Is your position that if he was able to withdraw the guilty plea and go to trial, nothing after that, nothing after withdrawal would be permitted?

[00:06:56] Speaker 03:
Well, Your Honor... Expenses after withdrawal, you agree with that?

[00:06:59] Speaker 01:
Well, Your Honor, again, under this case-by-case analysis, the line that has to be drawn is, what would a reasonable person expend on a disorderly conduct misdemeanor charge?

[00:07:12] Speaker 01:
And this carried with it a $575 fine.

[00:07:13] Speaker 01:
And I would offer this probably the most expensive disorderly conduct defense in history.

[00:07:20] Speaker 03:
Well, that's because he was trying to withdraw his plea.

[00:07:22] Speaker 03:
But let's just, I still would like the answer to my question.

[00:07:29] Speaker 03:
had decided to go to trial originally, or if he had won his withdrawal of a plea and went to trial, then what?

[00:07:38] Speaker 03:
Would those expenses have been personal or not?

[00:07:41] Speaker 01:
Well, it would depend on the case.

[00:07:42] Speaker 03:
On this specific case?

[00:07:44] Speaker 01:
Your Honor, the extent to which his expenses were increased because he was a United States Senator or a candidate for Congress, those would be reimbursable with committee funds.

[00:07:56] Speaker 03:
It's clear in your view, then, that

[00:07:59] Speaker 03:
that somebody who was drinking under the influence of alcohol would be able to expend money to defend themselves if they were a member of Congress or the Senate, because that often leads to your constituents deciding to vote you out, right?

[00:08:14] Speaker 03:
So it's your position that anybody who is convicted a charge, or imagine he was charged with murder.

[00:08:25] Speaker 03:
uh... chances of him succeeding as a senator uh... uh... he pled guilty or uh... was convicted would be pretty small uh... so if your position and if every senator who's charged with murder can spend his campaign money let's use that as the uh... i know it's kind of a compound question so let's leave it at that with respect to murder if you're charged with murder can you use your campaign funds to defend yourself i would say

[00:08:53] Speaker 01:
almost undoubtedly know your honor.

[00:08:55] Speaker 01:
But if I may, we do have another example.

[00:09:00] Speaker 01:
Not along the lines of murder, but along the lines of personal misconduct.

[00:09:04] Speaker 03:
I want to get into the, we'll get to the previous decisions by the FEC.

[00:09:09] Speaker 03:
That's what you're getting to, right?

[00:09:11] Speaker 03:
We'll get to that in just a moment.

[00:09:12] Speaker 03:
I just want to stay with this action for a minute.

[00:09:14] Speaker 03:
And drunken driving?

[00:09:15] Speaker 01:
To the extent that your status as a senator or candidate increases your cost for defense

[00:09:22] Speaker 01:
then under that irrespective standard, yes, Your Honor.

[00:09:25] Speaker 03:
It increases your costs, like you've got to get a really good lawyer, you mean?

[00:09:28] Speaker 01:
Well, Your Honor, if you're charged with a DUI and you're going to lose your license and all the other consequences, that is something that any defendant is going to attend to.

[00:09:39] Speaker 01:
But to the extent that 99 defendants are charged with a DUI and the DA asks for a year suspended license

[00:09:48] Speaker 01:
And this member, the DA, says, we want to put him in jail for five years.

[00:09:52] Speaker 01:
At that point, then, that is available to the irrespective standard.

[00:09:58] Speaker 01:
It's possible to look at that and say, well, gee, this person is being treated differently.

[00:10:02] Speaker 03:
That's if you were targeted.

[00:10:04] Speaker 03:
There was no claim that he was targeted on his arrest here, right?

[00:10:06] Speaker 01:
Well, he was certainly targeted with the leak of his plea.

[00:10:10] Speaker 01:
Not with his arrest?

[00:10:11] Speaker 01:
No, Your Honor.

[00:10:12] Speaker 01:
Not with his arrest.

[00:10:13] Speaker 01:
But again, to be clear, these expenses were for the withdrawal of the plea.

[00:10:16] Speaker 01:
They were not to attack the charges directly.

[00:10:19] Speaker 04:
Isn't your concession on the murder hypothetical that Judge Gardner gave you, isn't that crippling to your argument?

[00:10:25] Speaker 04:
How can you distinguish that setting from any other criminal setting?

[00:10:32] Speaker 01:
Well, Your Honor,

[00:10:34] Speaker 01:
in a murder setting, if you're charged with murder, generally prosecutors don't allow suspected murderers to escape.

[00:10:47] Speaker 01:
In this case, how many other disorderly conduct pleas nationally resonated so strongly?

[00:10:54] Speaker 01:
How many were leaked to the newspaper?

[00:10:56] Speaker 01:
How many were utilized to inflict political damage for someone because of

[00:11:01] Speaker 01:
implications of what his personal conduct were.

[00:11:05] Speaker 01:
This is not a case where he blew a DUI and it was clear that he'd had ten drinks or he committed murder.

[00:11:14] Speaker 01:
This is a case where he pled guilty to causing alarm because of the way that he moved his feet and his hands.

[00:11:21] Speaker 01:
And he pled guilty to a misdemeanor disorderly conduct charge carrying a $575 fine.

[00:11:28] Speaker 01:
And as a result of that, he was essentially hounded out of the Republican Party.

[00:11:32] Speaker 04:
So what's the rule you would have the FEC adopt or us adopt?

[00:11:36] Speaker 04:
How do we distinguish between various criminal charges and whether campaign funds can be used to aid the defense of a member of Congress charged with something like that?

[00:11:49] Speaker 04:
I would use... What's the rule?

[00:11:50] Speaker 04:
I mean, you said case by case, but... Sure.

[00:11:53] Speaker 04:
What's the rule we would use in exchange?

[00:11:55] Speaker 01:
Well, Your Honor, I would employ the rule that was used by three FEC commissioners in the Vitter advisory opinion, where they looked at the fact that there were 15,000 people who were potentially the subject of the... were part of the... Can you get to the rule?

[00:12:14] Speaker 01:
Sure.

[00:12:14] Speaker 01:
The rule is...

[00:12:16] Speaker 02:
When compared with people who are not members of Congress, what were the delta in costs between a normal person and a member of Congress or a candidate?

[00:12:46] Speaker 02:
I don't think it's significantly different from what's essentially a reasonable person rule.

[00:13:10] Speaker 01:
Would a reasonable person have spent the hundreds of thousands of dollars to try to attack

[00:13:15] Speaker 04:
So do candidates from now on need to announce in advance that if you're going to give money to me, part of this money may go in case I'm defending off a criminal charge.

[00:13:25] Speaker 04:
That's part of what it is.

[00:13:26] Speaker 04:
It's not just for television advertisements.

[00:13:29] Speaker 04:
It's not just for getting out the vote.

[00:13:30] Speaker 04:
It's now for a personal defense fund.

[00:13:32] Speaker 04:
That's a staggering implication that you're suggesting.

[00:13:36] Speaker 04:
Because you're a senator, you're going to get access to campaign funds that normal citizens wouldn't have access to.

[00:13:44] Speaker 02:
I recognize that's, that's a policy argument that's up for the FTC to bring us to the remedy, which is another issue you have here that we haven't allowed.

[00:13:55] Speaker 03:
Yeah, I do have some more questions on the substance.

[00:13:58] Speaker 03:
It's okay.

[00:13:59] Speaker 03:
How do you know when you say that three FTC commissioners signed on to a particular thing, the only thing we have in the bitter case is a draft from

[00:14:13] Speaker 03:
the general counsel to the commission, saying, we have been asked to circulate the alternative graph.

[00:14:18] Speaker 03:
There is nowhere published that this was the view of three senators, is there?

[00:14:24] Speaker 01:
Well, Your Honor, in the actual advisory, the bitter advisory opinion, which is a public opinion, they answer the various questions.

[00:14:34] Speaker 01:
And then when they deal with the question of whether his attorneys

[00:14:38] Speaker 01:
whether he could have spent campaign funds to pay the attorney to quash the subpoena and to monitor the criminal case, the FEC stated that they could not reach agreement, that they were deadlocked 3-3.

[00:14:50] Speaker 03:
Correct.

[00:14:50] Speaker 03:
But the question is, what was the reasoning?

[00:14:53] Speaker 03:
If we're going to have gifts, you want us to give some kind of deference to three who voted against a probable cause finding in that case or reasonable?

[00:15:06] Speaker 01:
That's an advisory opinion, it comes as a result of a request.

[00:15:09] Speaker 03:
No, no, no, I know, but this was in not being able to give an advisory opinion.

[00:15:13] Speaker 01:
That's right, because they were unable to get the requisite forethought.

[00:15:16] Speaker 03:
Was there a reasoning?

[00:15:18] Speaker 03:
We never give deference to any kind of advisory opinion, minority or majority, without reasoning.

[00:15:23] Speaker 03:
What was the reasoning?

[00:15:24] Speaker 01:
Well, the reasoning in the opinion was that there were 15,000 people who could have possibly been the subject of subpoenas.

[00:15:30] Speaker 03:
How do you know that?

[00:15:31] Speaker 01:
That's at page seven and eight at tab C of the draft advisory opinion.

[00:15:35] Speaker 03:
Yes, but how do we know that that is the views of the three rather than a draft opinion prepared by staff?

[00:15:44] Speaker 03:
How do we know that there just weren't three?

[00:15:46] Speaker 03:
I agree that there were obviously three who wouldn't go with an advisory opinion.

[00:15:51] Speaker 03:
But how do we know what the rationale for the three were?

[00:15:53] Speaker 01:
Well, Your Honor, I was asked earlier, how do we provide a workable standard?

[00:16:00] Speaker 01:
I'm not asking.

[00:16:00] Speaker 01:
I'm asking you that.

[00:16:01] Speaker 03:
You're not, but.

[00:16:03] Speaker 03:
But the big part of your argument here is some deference to a decision by the commission.

[00:16:11] Speaker 03:
Whether this is entitled to deference or not is another question, but it has to have a rationale.

[00:16:16] Speaker 03:
And we don't have a rationale stated by any commission.

[00:16:20] Speaker 01:
Well, Your Honor.

[00:16:22] Speaker 01:
We're not asking you to defer to that.

[00:16:26] Speaker 01:
Clearly the court is not going to defer to a draft advisory opinion.

[00:16:30] Speaker 01:
But what we are indicating is that that was a workable line of analysis for some part of the commission, that they could distinguish between what a normal

[00:16:41] Speaker 01:
person would encounter and what a candidate... Obviously the other three didn't think it was... That's correct, Your Honor.

[00:16:46] Speaker 01:
We have to decide whether... Well, and this is a matter of first impression, and this Court will draw that line?

[00:16:51] Speaker 03:
So in a divorce case, the Commission's view is that, in the Federal Register, that expenditures in divorce cases are not, are personal, right?

[00:17:02] Speaker 01:
Yes, Your Honor.

[00:17:02] Speaker 03:
Do you agree with that?

[00:17:04] Speaker 01:
As a general matter, yes, Your Honor.

[00:17:06] Speaker 03:
Well, all expenditures, or do we have to do a case by case?

[00:17:10] Speaker 01:
As a general matter, a divorce case is going to be personal.

[00:17:13] Speaker 03:
But to the extent that a divorce case becomes politicized or that someone's opponent uses it, then there may be a situation where... If the person comes from a religious area that doesn't believe in divorce, and of course everybody in that area might fight their divorce, one side or the other, but the senator wants to fight it even more.

[00:17:33] Speaker 03:
You would measure that delta somehow?

[00:17:35] Speaker 01:
There would have to be an application of a reasonable standard.

[00:17:39] Speaker 03:
How much a reasonable person would spend in resisting a divorce they don't want, and how much a senator would spend, and how would we calculate that?

[00:17:50] Speaker 01:
Again, Your Honor, Congress enacted a case-by-case analysis.

[00:17:55] Speaker 03:
The FEC regulations... I don't see anything in the statute that says case-by-case.

[00:17:59] Speaker 01:
Well, but Congress listed a number of things which were per se personal, and then they

[00:18:04] Speaker 01:
Everything else was left to the irrespective standard, and the FEC regulations mirror that.

[00:18:09] Speaker 01:
The regulations specifically say that legal fees are going to utilize a case-by-case standard.

[00:18:13] Speaker 04:
Let me ask you, what are we to make of the argument that Senator Craig made to the ethics committee when he was contesting their jurisdiction?

[00:18:24] Speaker 04:
My notes say he said he was arrested, quote, for purely personal conduct.

[00:18:31] Speaker 04:
unrelated to the performance of official Senate duties, end of quote.

[00:18:35] Speaker 04:
What are we supposed to make of that in our analysis?

[00:18:38] Speaker 01:
Well, Your Honor, that statement addressed the jurisdiction of the Senate Ethics Committee.

[00:18:43] Speaker 01:
It didn't address the application of the personal use statute.

[00:18:46] Speaker 03:
Well, you agree, though, he was arrested for purely personal.

[00:18:49] Speaker 03:
You're not disputing that, are you?

[00:18:50] Speaker 01:
Well, his conduct in the restroom certainly was purely personal.

[00:18:53] Speaker 01:
We're not maintaining that it was not.

[00:18:58] Speaker 03:
So one of the great things about this particular circuit is you have a clock, but we don't.

[00:19:31] Speaker 02:
Now, the order of disgorgement ran to Senator Craig, not to the committee.

[00:19:41] Speaker 02:
Is that correct?

[00:19:43] Speaker 01:
Well, yes, Your Honor.

[00:19:44] Speaker 01:
The order of disgorgement ran to Senator Craig, and disgorgement would come from Senator Craig.

[00:19:50] Speaker 02:
And you would agree that there can be a disgorgement remedy, but not that it can go to the Treasury.

[00:19:57] Speaker 01:
Well, if it goes to the Treasury, it's not disgorgement anymore.

[00:20:07] Speaker 02:
Yes, Your Honor, that's exactly right.

[00:20:12] Speaker 03:
I didn't keep it much longer.

[00:20:18] Speaker 03:
You would agree though that there are many, many cases where courts have ordered disgorgement.

[00:20:35] Speaker 03:
all cited in the Fishback case.

[00:20:36] Speaker 01:
All cited in the Fishback case, which is not in an election context.

[00:20:40] Speaker 03:
It's not, but it's the word disgorgement, right?

[00:20:42] Speaker 03:
That's what we're talking about.

[00:20:43] Speaker 03:
The statute says, in this case, any orders or something like that, right?

[00:20:55] Speaker 03:
Other orders.

[00:20:56] Speaker 03:
It says other orders.

[00:20:58] Speaker 03:
The court may grant permanent or temporary injunction, restraining or any other order, right?

[00:21:03] Speaker 03:
And disgorgement is certainly in other order.

[00:21:05] Speaker 01:
Disgorgement is in other order.

[00:21:07] Speaker 03:
And it is certainly, at least the historical precedent is relatively strong for the proposition that it can go to the Treasury.

[00:21:14] Speaker 03:
It does not have to go back to the people who originally did the minor threat.

[00:21:19] Speaker 01:
Well, yes, Your Honor.

[00:21:20] Speaker 01:
But I mean, in this case, unlike any disgorgement where there's fraud or some other criminal misconduct, and this is a case discussing a regulation, a statute,

[00:21:33] Speaker 01:
There is a clear locus for the money to return to.

[00:21:37] Speaker 01:
The FEC maintains it was improperly spent from the committee.

[00:21:41] Speaker 01:
The FEC below, their primary request was that the money be disgorged back to the committee so that it can be utilized in accordance with the statute.

[00:21:50] Speaker 02:
So you would have a quarrel if they had ordered Senator Craig to disgorge the money back to the committee and then the committee were ordered to disgorge it back to the donor?

[00:21:59] Speaker 01:
Well, Your Honor, if the money were ordered to scourge back to the committee, then it could be theoretically refunded to the donors, although there's no indication in the record that any donor has requested a refund.

[00:22:12] Speaker 02:
At that point, then, what would be wrong with ordering it as the key bid to get it to scourge to the Treasury as fit met with

[00:22:20] Speaker 01:
Well, Your Honor, I think the disgorgement would then be in the matter.

[00:22:26] Speaker 01:
It would really be a penalty at that point.

[00:22:29] Speaker 02:
That penalty would not be above the cap.

[00:22:32] Speaker 01:
No, the $197,000 would not be above the cap, but it would leave the remaining $45,000.

[00:22:36] Speaker 02:
If that were to come from the committee rather than Craig.

[00:22:48] Speaker 01:
Well, it would be effective in two ways.

[00:22:53] Speaker 01:
First of all, it would be disgorgement to the committee, and then it would be a penalty paid by the committee to the United States Treasury.

[00:23:00] Speaker 02:
And I don't think that's a... I think there is a...

[00:23:19] Speaker 02:
That's correct.

[00:23:21] Speaker 02:
Then the committee could be ordered to distort, but the Senate could say, the path is not clear to get it back to the donors, then why not, as Fitchback would suggest, send it to the Secretary.

[00:23:33] Speaker 01:
Well, the Court would have been permitted to have ordered that.

[00:23:37] Speaker 01:
They did not.

[00:23:37] Speaker 01:
But it would also leave the question of the additional $45,000, which would then exceed that capital.

[00:23:42] Speaker 02:
That would be a personal penalty on, well, that's on Craig.

[00:23:45] Speaker 02:
You're distinguishing between the Senator and the committee.

[00:23:47] Speaker 01:
Yes, Your Honor.

[00:23:51] Speaker 01:
The statute does not indicate that there can be a double penalty.

[00:24:01] Speaker 03:
Why do you think Fishback isn't wrong here and all those other cases?

[00:24:06] Speaker 01:
Well, none of those cases are federal election commissions.

[00:24:10] Speaker 03:
Scourgement is an equitable remedy.

[00:24:12] Speaker 03:
It's not particularly provided in the statute.

[00:24:15] Speaker 03:
It's just within equitable power of the court.

[00:24:17] Speaker 03:
Yes, Your Honor.

[00:24:18] Speaker 03:
Why isn't Fishback not a good example?

[00:24:21] Speaker 01:
When you're creating a remedy, you have to look towards the intent of the statute.

[00:24:25] Speaker 01:
And in this case, the money was contributed to Senator Craig by donors, by people who wanted to support Senator Craig.

[00:24:32] Speaker 01:
Now, even if this court were to say that Senator Craig

[00:24:36] Speaker 01:
misspent $197,000.

[00:24:37] Speaker 01:
There's no indication that the donors don't remain in support of Senator Craig or that there's no indication of a request for a refund.

[00:24:47] Speaker 03:
So for cases like Fishback, which are insider trading cases, it's pretty clear that the people who were insider traded against, that is, when Fishback traded and

[00:24:58] Speaker 03:
got a better benefit than they would have if the information had been disclosed.

[00:25:01] Speaker 03:
If not just that case, all those cases.

[00:25:03] Speaker 03:
Pretty clear that those people who sold their stock on the market would have liked their money back.

[00:25:08] Speaker 03:
And there are mechanisms to give their money back.

[00:25:10] Speaker 03:
That's normally what happens in plaintiff's class actions, right?

[00:25:13] Speaker 03:
So it's not true that I'm not seeing a distinction here.

[00:25:19] Speaker 03:
We have a group of people who we don't know whether they want their money back or not.

[00:25:25] Speaker 03:
seems perfectly reasonable that they would.

[00:25:26] Speaker 03:
And yet, in fishback, it wasn't required to give it back to them.

[00:25:29] Speaker 01:
But, Your Honor, there's nothing in the record of any request for a refund.

[00:25:33] Speaker 02:
And clearly, this is a... Disorgument is not reimbursement.

[00:25:39] Speaker 02:
Disorgument is a separate remedy that doesn't, in fishback, in the case it's out of their entity, does not necessarily have to go with my

[00:25:53] Speaker 02:
precisely the ante.

[00:25:57] Speaker 02:
Why aren't the cases that the Chief Judge is referring to authority from the proposition that he can go to the treason?

[00:26:06] Speaker 02:
It does not have to go to the original domain.

[00:26:10] Speaker 01:
Because in those cases there was some difficulty or

[00:26:15] Speaker 01:
some friction to returning the money to status quo ante.

[00:26:18] Speaker 01:
In this case, there is absolutely no friction to that.

[00:26:21] Speaker 01:
It is a simple matter of returning the money to the committee, and as the FEC requested below, allowing him to use it consistent with their view of the statute.

[00:26:30] Speaker 01:
So this is money that was donated to Senator Craig for his use.

[00:26:36] Speaker 02:
For his campaign.

[00:26:37] Speaker 02:
And if this court... It was donated in for his campaign.

[00:26:40] Speaker 02:
It was not donated for his use.

[00:26:41] Speaker 01:
Well, it's beyond his campaign, respectfully, Your Honor.

[00:26:45] Speaker 02:
The money donated to his campaign is beyond his campaign?

[00:26:48] Speaker 02:
Well, it was for purposes... The whole reason we're here is that there is a line between your personal use and your campaign.

[00:26:55] Speaker 01:
Yes, Your Honor.

[00:26:56] Speaker 02:
That's the whole reason we're here.

[00:26:57] Speaker 01:
Yes, Your Honor.

[00:26:58] Speaker 01:
But my point is that if the funds, this court, were to find that the funds were misspent, as the FEC requested and as we agreed below,

[00:27:09] Speaker 01:
They can be returned to his committee, and he can use them consistent with what this court defines as a permitted use under this statute.

[00:27:19] Speaker 01:
Thank you.

[00:27:31] Speaker 00:
Good morning, Your Honors, and may it please the Court, Kevin Hancock for Appellee Federal Election Commission.

[00:27:36] Speaker 00:
The district court's ruling should be affirmed.

[00:27:38] Speaker 00:
For at least two decades, the Commission has consistently applied a clear and simple test to determine when an officeholder may spend campaign funds on his legal expenses.

[00:27:47] Speaker 00:
The allegations of the legal proceeding must relate to his officeholder duties.

[00:27:52] Speaker 00:
In Senator Craig's legal proceeding, he was prosecuted for disturbing the peace, an offense which, he first admitted in 2007 to the Senate Ethics Committee, had absolutely nothing to do with his officeholder duties.

[00:28:02] Speaker 04:
Why did he seek to withdraw the plea?

[00:28:06] Speaker 00:
So first, factually, it's not clear at all that he was actually motivated by his office to withdraw the plea.

[00:28:12] Speaker 00:
He announced at a press conference that he was going to withdraw the plea, and during that press conference also said that he was going to resign from office.

[00:28:19] Speaker 00:
And so he said he wanted to clear his name.

[00:28:21] Speaker 00:
So he was personally motivated to withdraw the plea once.

[00:28:24] Speaker 04:
Let's imagine a hypothetical.

[00:28:26] Speaker 04:
Let's imagine a situation in which we knew that the only reason the office holder would withdraw his or her plea was for the reelection campaign.

[00:28:36] Speaker 04:
There's a hypothetical, I understand, but that's the only reason it motivated them.

[00:28:41] Speaker 04:
What do we do with that set of facts?

[00:28:43] Speaker 00:
It'd be irrelevant, as the district court found, because it's not an office-holder duty.

[00:28:46] Speaker 00:
The statute requires duties to have caused an expense that can be paid for with campaign funds.

[00:28:52] Speaker 00:
And so, even if the senator's expenses did not exist irrespective of his motivations, of his fear of not winning re-election, of his guilty plea,

[00:29:02] Speaker 00:
They did exist irrespective of his office holder duties.

[00:29:15] Speaker 03:
about their situation.

[00:29:18] Speaker 00:
Well, that's part of the examination that the commission engages in when it looks at one of these cases.

[00:29:23] Speaker 03:
But it always allows the expenses for press, doesn't it?

[00:29:27] Speaker 00:
It's not a per se rule.

[00:29:28] Speaker 00:
So the commission does look to see if one's candidacy or one's office holder status or duties has caused the press attention.

[00:29:36] Speaker 04:
I'm sorry, I'm failing to see the distinction.

[00:29:38] Speaker 04:
The hypothetical idea here was that you have an office holder who is interested in maintaining and holding onto their office

[00:29:45] Speaker 04:
in being re-elected, and the sole motivation for super-overdrawing the plea is that.

[00:29:52] Speaker 04:
Is that.

[00:29:53] Speaker 04:
Now why doesn't that fall within the meaning of the statute?

[00:29:57] Speaker 00:
Well, because the motivations are irrelevant for responding in the legal proceeding and irrelevant for responding to the heightened media attention.

[00:30:04] Speaker 00:
The issue is, did the media attention occur because the person is an office holder?

[00:30:08] Speaker 02:
Did the media target?

[00:30:18] Speaker 02:
That's not duties, that's tax.

[00:30:20] Speaker 00:
I think it is, respectfully, duties, Your Honor, because if that person, if Senator Craig did not have office-holder duties, the media wouldn't have cared about his prosecution for these different duties.

[00:30:31] Speaker 02:
Do you think there's no line between status and duties?

[00:30:32] Speaker 02:
I thought you were briefed.

[00:30:34] Speaker 00:
It's also a line.

[00:30:35] Speaker 00:
There is a line between status and duties.

[00:30:37] Speaker 02:
Duties must... And that's why you just erased it when I asked you about it.

[00:30:41] Speaker 00:
I don't think that's the case, Your Honor.

[00:30:42] Speaker 00:
I think if an office-holder did not have duties, the press would not care about whether they were arrested for disturbing the peace.

[00:30:48] Speaker 02:
And it's all about... How do you distinguish that from the status of being a senator?

[00:30:54] Speaker 02:
You're saying because he was a senator, made you a senator.

[00:30:58] Speaker 02:
You're not saying about any duty of the office.

[00:31:01] Speaker 02:
It's like, aren't you just erasing the line that I think you did pretty well in your brief?

[00:31:04] Speaker 00:
I don't think that's right because it's broader.

[00:31:06] Speaker 00:
So one, the senator's argument deals with his subjective motivations.

[00:31:11] Speaker 00:
With the media attention, it's targeting.

[00:31:13] Speaker 00:
Did the media target the senator?

[00:31:15] Speaker 00:
It's different.

[00:31:16] Speaker 00:
It doesn't hinge upon what the senator may have had subjectively in his mind at the time.

[00:31:21] Speaker 00:
The Kerry advisory opinion is a great example of an application of this test as the commission.

[00:31:27] Speaker 00:
Tell me why.

[00:31:28] Speaker 00:
Because the issue in that case was Senator Bob Kerry was a Vietnam veteran.

[00:31:34] Speaker 02:
I remember the issue, tell me what the distinction is, if you're drawing between duties and status.

[00:31:39] Speaker 00:
The distinction is, Senator Kerry was out of office at the time he incurred his press expenses.

[00:31:46] Speaker 00:
So he couldn't have been motivated by office holder duties.

[00:31:48] Speaker 02:
He was really using authority between duties and status because he didn't have either duties or status at that point, right?

[00:31:54] Speaker 02:
I'm sorry?

[00:31:55] Speaker 02:
He didn't have either duties or status at that point.

[00:31:59] Speaker 02:
So that case doesn't seem to make the distinction.

[00:32:02] Speaker 02:
that you make in your brief and don't make here?

[00:32:05] Speaker 00:
Well, I think it does because the heightened media attention was caused by his candidacy and by his status because it occurred when he was still a candidate.

[00:32:14] Speaker 00:
But then later on when he incurred his media expenses, when presumably one would be motivated to respond, he no longer was a candidate or officer.

[00:32:21] Speaker 00:
So he couldn't have been motivated by, he must have had personal motivations.

[00:32:26] Speaker 00:
The commission allowed that expense because they looked to what caused the expense in the first place.

[00:32:31] Speaker 00:
not what was going on in the office holder's mind after the fact.

[00:32:59] Speaker 00:
I'm lost in your position.

[00:33:08] Speaker 00:
In that case, then shouldn't he get reimbursed?

[00:33:17] Speaker 00:
No, because he's arguing that his subjective motivations are what caused him to engage in certain actions.

[00:33:23] Speaker 00:
When the Commission just looks to the nature of the legal proceeding that caused his expenses, do they involve officeholder duties?

[00:33:30] Speaker 00:
That's the question.

[00:33:31] Speaker 00:
To the extent there is any inconsistency between the Commission's approach with media expenses and legal proceedings, there's not.

[00:33:37] Speaker 00:
But to the extent there were, it doesn't help him anyway, because the statute is what guides the analysis.

[00:33:43] Speaker 00:
And here it's clear that his office holder duties are not what caused his expenses.

[00:33:49] Speaker 04:
Distinguish his case from Senator Bidder's case.

[00:33:52] Speaker 04:
I know you don't have a final decision.

[00:33:56] Speaker 00:
Senator Bidder's case involved targeting.

[00:33:58] Speaker 00:
He alleged he was targeted for a legal proceeding because he was a senator.

[00:34:03] Speaker 00:
The defendant in the action that subpoenaed him basically admitted that I'm only going after Senator Bidder because he is a senator.

[00:34:10] Speaker 00:
I'm going to drag him into this case.

[00:34:12] Speaker 00:
The senator came to us and said, look, admittedly the case does not involve, it involves personal allegations, and usually that would be game over, but I've been targeted here.

[00:34:21] Speaker 00:
The commission deadlocked on that issue.

[00:34:24] Speaker 00:
However, Senator Craig doesn't allege that he was targeted.

[00:34:27] Speaker 00:
Doesn't allege that he was targeted with arrest or for prosecution.

[00:34:31] Speaker 00:
And so bidder is irrelevant to this case.

[00:34:33] Speaker 00:
Even had bidder's spending been approved, it still wouldn't help Senator Craig, because again, he doesn't even allege that he's been targeted.

[00:34:40] Speaker 03:
What about his claim of being targeted for the week?

[00:34:41] Speaker 00:
I'm sorry, Your Honor.

[00:34:42] Speaker 03:
He claimed that he was targeted for the leak.

[00:34:45] Speaker 03:
For the leak?

[00:34:46] Speaker 03:
The leak of his tape, the leak of the fact that his arrest, et cetera.

[00:34:52] Speaker 00:
That just goes to the media attention.

[00:34:55] Speaker 00:
He has made no claim that he was subject to a legal proceeding because he was an office holder.

[00:35:01] Speaker 00:
That's all after the arrest.

[00:35:03] Speaker 00:
Your Honor, I think any, so the commission

[00:35:08] Speaker 00:
has essentially rejected Senator Craig's main argument 20 years ago in its interpretive guidance for its regulation.

[00:35:15] Speaker 00:
In 1995, it passed a regulation defining personal use.

[00:35:18] Speaker 00:
And in its interpretive guidance, the explanation and justification for that regulation, it explains how the test would apply to legal expenses.

[00:35:26] Speaker 00:
And it said, as Your Honors noted, in a personal case like drunk driving,

[00:35:31] Speaker 00:
That does not get transformed into something office holder related merely because it has an impact on the senators status now.

[00:35:39] Speaker 00:
If that were the rule, it would completely swallow the personal use ban.

[00:35:43] Speaker 00:
There is no personal offense that would not have a major impact on the sitting office holders status or chances for reelection.

[00:35:50] Speaker 00:
There would always be media attention and response that cannot possibly just transform what is ordinarily a personal expense into something officeholder duty related, or else there would be no more personal use ban when it comes to legal expenses.

[00:36:03] Speaker 00:
The same is true of one's officeholder motivations.

[00:36:06] Speaker 00:
Any expense could be turned into something officeholder related with their motivations.

[00:36:10] Speaker 00:
Buying a home, that's a per se personal use under Congress's test.

[00:36:14] Speaker 00:
But one could imagine a situation where an office holder could say, well, I only want to buy this house in Washington DC because I need to be near Congress, so therefore I can use campaign funds.

[00:36:22] Speaker 00:
But that is not the test that Congress provided for.

[00:36:29] Speaker 00:
Now, the commission's approach and what the district court did is perfectly consistent with the case-by-case approach required by the regulation.

[00:36:37] Speaker 00:
Case-by-case approach means

[00:36:38] Speaker 00:
We don't know just from looking at the fact that something is a legal proceeding, whether it's office holder duty related or not.

[00:36:43] Speaker 00:
And then the commission's test is to look at the allegations.

[00:36:46] Speaker 00:
What's the legal proceeding about?

[00:36:48] Speaker 00:
Just because the senator disagrees with the commission's test and what the district court did in that case-by-case approach doesn't mean the district court wasn't actually applying a case-by-case approach.

[00:36:57] Speaker 00:
It was just applying case-by-case approach.

[00:36:59] Speaker 00:
The senator does not lie.

[00:37:03] Speaker 00:
Your Honor, it's moving on to the issue of disgorgement.

[00:37:08] Speaker 00:
The district court's order of discouragement to the Treasury was not an abuse of discretion.

[00:37:12] Speaker 00:
That is the issue here.

[00:37:13] Speaker 00:
The case law is clear that it had the discretion once it ordered the discouragement to determine where it properly should go after it took it out of Senator Craig's possession.

[00:37:23] Speaker 00:
The revenue of discouragement requires only that, that the defendant be restored to his or her status quo, that the profits of the lawbreaking be removed from the lawbreaker.

[00:37:35] Speaker 00:
It may turn out to be irrelevant.

[00:37:53] Speaker 00:
Yes.

[00:37:55] Speaker 00:
So the cap for each defendant would be $197,000.

[00:37:57] Speaker 00:
That's correct.

[00:37:59] Speaker 03:
And that's based on?

[00:38:00] Speaker 00:
The statute.

[00:38:02] Speaker 00:
The FECA's penalty statute, 3109A6B.

[00:38:06] Speaker 00:
What answers the question?

[00:38:08] Speaker 03:
In the statute, what answers the question that Judge Santel just asked, whether he could do these penalties for each defendant?

[00:38:15] Speaker 00:
It specifically says that a civil penalty can, the max for a civil penalty is the amount expended in violation of the statute.

[00:38:22] Speaker 00:
So here, that was the 197,000.

[00:38:25] Speaker 00:
So each defendant could have faced.

[00:38:28] Speaker 02:
The total between the two could not exceed 197,000 or could exceed 197,000.

[00:38:32] Speaker 00:
It could.

[00:38:33] Speaker 00:
The cap is for each individual defendant.

[00:38:36] Speaker 02:
The statute is clear on that.

[00:38:40] Speaker 00:
And the district court was correct in making that observation when it laid out its very good reasons for sending the discouragement not back to essentially Senator Craig's possession.

[00:38:50] Speaker 00:
He is now the only employee of the Craig committee.

[00:38:53] Speaker 00:
The Craig committee is essentially just his other pocket.

[00:38:55] Speaker 00:
He's the treasurer.

[00:38:57] Speaker 00:
The credit committee would seem to have no purpose, no campaign to run.

[00:39:01] Speaker 00:
So the district court was correct to say this is maybe not the best situation for this money.

[00:39:06] Speaker 00:
I have the discretion to send it to the treasury and that's what I'm going to do.

[00:39:10] Speaker 00:
District court also observed that it could have simply just penalized the credit committee in the $197,000 amount anyway.

[00:39:19] Speaker 00:
There's no First Amendment issue with the District Court's order of disgorgement to the Treasury.

[00:39:26] Speaker 00:
Any injury to the donors' rights to the Craig Committee was caused by Senator Craig's offense.

[00:39:32] Speaker 00:
The District Court certainly is at fault for that simply because it ordered a remedy that it's perfectly entitled to order.

[00:39:38] Speaker 00:
Also, the First Amendment rights of Craig and the Craig Committee have also not been harmed if it were the case that having a penalty violated their First Amendment rights because that money could not be spent going forward.

[00:39:51] Speaker 04:
Every civil penalty would be a violation of the First Amendment.

[00:40:04] Speaker 04:
to Chevron in your briefs.

[00:40:07] Speaker 04:
What's the level of deference we're supposed to give to your advisory opinions?

[00:40:11] Speaker 00:
Well, this court determined in the National Rifle Association versus FEC case that the FEC's advisory opinions are entitled to deference.

[00:40:20] Speaker 00:
I think the critical reason why- What level of deference?

[00:40:29] Speaker 00:
Well, I'm not sure the exact level of deference, Your Honor, but the Commission's reasonable interpretation of the statute is entitled to deference.

[00:40:34] Speaker 00:
And the reason why it hasn't come up is because Senator Craig doesn't challenge the regulation.

[00:40:39] Speaker 00:
The regulation is very clear about how it applies.

[00:40:42] Speaker 00:
The Senator could have brought a Chevron challenge if he felt that interpretation was inconsistent with the statute, and that doesn't exist in this case, and so therefore... Has the advisory committee's interpretation, the advisory opinions of the

[00:40:55] Speaker 03:
But not the regulation.

[00:40:57] Speaker 00:
Right.

[00:40:57] Speaker 00:
So there's, I mean, the senator urges this court to defer to those advisory opinions and we agree.

[00:41:05] Speaker 02:
Okay.

[00:41:09] Speaker 03:
Thank you.

[00:41:10] Speaker 03:
All right.

[00:41:17] Speaker 03:
Thank you.

[00:41:22] Speaker 01:
Thank you for your indulgence, Your Honor.

[00:41:24] Speaker 01:
I'd really just like to make one point about the disgorgement issue.

[00:41:28] Speaker 01:
The FEC has now reiterated that the Craig Committee is defunct and it serves no purpose.

[00:41:35] Speaker 01:
And I really think that's a stunning statement by the FEC.

[00:41:38] Speaker 01:
I mean, there are literally dozens of campaign committees that are still extant.

[00:41:44] Speaker 01:
by former members.

[00:41:46] Speaker 01:
And in fact, the Kerry advisory opinion is an exact example of the utilization of one of those campaign committees by a retired member.

[00:41:56] Speaker 03:
And so to somehow say that if the money were to go back to the Craig committee, that... But isn't it, since the Scorsman has an equitable remedy, including who it goes back to, and given the district court's view that the person who is the treasurer

[00:42:13] Speaker 03:
has abused his authority in that respect, why is it an abuse of discretion for the district court to say, well, I'm not giving it back to the control of the person who committed abuse in the first place?

[00:42:27] Speaker 01:
Well, Your Honor, the district court applied a bright line standard here, which essentially said because Craig's conduct in Minneapolis was personal, that I'm not looking at any of the other circumstances.

[00:42:38] Speaker 01:
As we've discussed,

[00:42:39] Speaker 01:
It's a much broader standard than that.

[00:42:41] Speaker 01:
Even if this court were to find that the money were spent improperly, that doesn't establish Senator Craig as an intentional law breaker.

[00:42:52] Speaker 01:
Senator?

[00:42:52] Speaker 03:
Mr. Court thought that he had advanced knowledge that he shouldn't be doing that.

[00:42:58] Speaker 03:
We're not even discussing that at this point.

[00:43:00] Speaker 03:
Mr. Court thought that he had advanced knowledge he shouldn't be doing that.

[00:43:03] Speaker 03:
He got the warning from the ethics committee, et cetera.

[00:43:06] Speaker 03:
Given that, and he did it anyway,

[00:43:08] Speaker 03:
And in her view, it was clear that he couldn't.

[00:43:11] Speaker 03:
Given that, and I want you to assume those are all true couple of presuppos, why was it an abuse of discretion to decide not to give it back to the person who had acted improperly under those circumstances?

[00:43:23] Speaker 01:
Because, Your Honor, the district court misperceived the function of a campaign committee, which there are numerous ways you can utilize that money.

[00:43:32] Speaker 01:
It's not defunct.

[00:43:33] Speaker 01:
It would not be an empty gesture.

[00:43:35] Speaker 03:
Okay, let me ask you a question raised somewhat elliptically by your opponent.

[00:43:41] Speaker 03:
This has to do with the specific list of prohibited uses in the statute.

[00:43:47] Speaker 03:
So it says, the statute B2 says, shall be converted to personal use if it was for the expense of a person who exists irrespective of the candidate's election campaign or individual duties as a holder of federal office, including

[00:44:05] Speaker 03:
and then lists a number of conclusions.

[00:44:08] Speaker 03:
So these are examples.

[00:44:10] Speaker 03:
Now, is there any reason why these examples shouldn't inform our view generally as to what it meant by the more general statement irrespective of the candidates?

[00:44:22] Speaker 03:
Normally, we would do that, right?

[00:44:23] Speaker 01:
Yes, Your Honor.

[00:44:24] Speaker 03:
So the first two give me some pause over your argument.

[00:44:29] Speaker 03:
So first one is a home mortgage, right?

[00:44:32] Speaker 03:
So imagine, and the second one is the clothing purchase.

[00:44:35] Speaker 03:
Maybe the easiest is to start with the clothing purchase.

[00:44:39] Speaker 03:
The person says, look, I don't have enough money to spend on cool clothes.

[00:44:44] Speaker 03:
And I've got a really cool constituency.

[00:44:46] Speaker 03:
And they want me to wear the latest.

[00:44:49] Speaker 03:
I've got only wide lapels, and they're all young, and they're from Brooklyn, and they need narrow ones.

[00:44:56] Speaker 03:
So I need to buy new clothes, or I won't be able to continue as a

[00:45:01] Speaker 03:
Congressman, I guess.

[00:45:03] Speaker 03:
So why is it?

[00:45:04] Speaker 03:
And that's his motive.

[00:45:05] Speaker 03:
That's the person's clear motive.

[00:45:07] Speaker 03:
Everybody agrees.

[00:45:08] Speaker 03:
Normally, the guy dresses like a slut.

[00:45:11] Speaker 03:
But now he's been elected, and he's got to dress up.

[00:45:14] Speaker 03:
No dispute about that.

[00:45:16] Speaker 03:
And that's the only reason he's buying the clothes.

[00:45:19] Speaker 03:
What do you think?

[00:45:20] Speaker 01:
I think it's a much more subjective analysis than the concrete repercussions of Sandra Craig's plea and the leak of that.

[00:45:31] Speaker 03:
This is a very hard line.

[00:45:33] Speaker 03:
So imagine the first one, home mortgage.

[00:45:35] Speaker 03:
Imagine the person is way behind and is about to be foreclosed on his mortgage.

[00:45:42] Speaker 03:
And people don't like the idea that he can't pay his bills or his rent or his utility payments or whatever it is.

[00:45:51] Speaker 03:
And he says, look, I can't get by as a member of the house unless I use my money to pay for that.

[00:45:59] Speaker 03:
And this is what my

[00:46:00] Speaker 03:
Donors would have wanted they want me to continue in office.

[00:46:03] Speaker 03:
How do I draw the line against that one?

[00:46:06] Speaker 03:
It's really hard.

[00:46:08] Speaker 03:
It's hard, Your Honor.

[00:46:08] Speaker 03:
So if we don't want to draw really hard lines, then maybe you don't make this down, Your Honor.

[00:46:37] Speaker 01:
Your Honor, I may be wrong on this, but I don't think you actually have to live in the district to be, to represent that district as a member of Congress.

[00:46:46] Speaker 01:
You have to live there to get elected and not a lot of this.

[00:46:50] Speaker 02:
I would not like to manage the campaign if somebody is elected.

[00:46:57] Speaker 01:
Well, Your Honor, this is a matter of first impression, and this is a line that this Court is now going to have to confront.

[00:47:04] Speaker 02:
I can't ask you to leave here.

[00:47:07] Speaker 03:
Thank you both sides.

[00:47:09] Speaker 03:
It was a very good and interesting argument.

[00:47:10] Speaker 03:
We'll take them out on your side.