Montana Republican U.S. Senate candidate Tim Sheehy greets supporters outside of a rally in Bozeman on Aug. 9, 2024. (Photo by Blair Miller, Daily Montanan)
A nonprofit campaign finance watchdog organization sued the Federal Elections Commission on Monday alleging commissioners wrongfully dismissed complaints it had filed against a political action committee arguing the committee was running attack ads against Republican U.S. Senate candidate Tim Sheehy while not filing required expenditure reports.
The Washington D.C.-based nonpartisan Campaign Legal Center filed the complaint against the FEC in the U.S. District Court for the District of Columbia. The organization, led by a former Republican FEC commissioner, is asking the court to declare that the FEC’s 4-2 dismissal of its complaints against the Last Best Place PAC violated the law.
“Voters have a right to know where campaign money comes from and how it is spent, and this dismissal is yet another example of the FEC failing to vindicate that right and uphold the core transparency purposes of federal campaign finance law,” CLC’s director of campaign finance litigation Megan McAllen said in a statement.
The complaints involve advertisements well-known at this point to Montanans. One of them the Campaign Legal Center alleges was an attack ad that was not properly reported essentially coined the nickname “Shady Sheehy” that has been widely used by Sheehy’s opponents throughout the Bozeman businessman’s campaign to unseat Democratic U.S. Sen. Jon Tester.
In February, the Campaign Legal Center filed complaints with the FEC alleging the Last Best Place PAC had been running advertisements that advocated against Sheehy’s candidacy without filing 48-hour independent expenditure reports, which are required to be submitted when a PAC spends more than $10,000 more than 20 days before an election.
The initial complaints
The complaint alleged that the PAC never submitted 48-hour independent expenditure reports, nor did it report any independent expenditures for 2023 on its year-end filing.
The PAC, registered in Helena by treasurer Dave Lewis, had started running ads in September 2023 that first mentioned “Shady Sheehy.” The ad discussed a Paycheck Protection Program loan Sheehy obtained for the business he ran at the time, Bridger Aerospace, and said that “he and his campaign spend millions trying to buy our Senate seat.”
A second ad that started running last September from the PAC also highlighted his PPP loan and said he “never paid a penny back.”
“That’s Shady Sheehy. Just another millionaire politician who says one thing and does another,” the voiceover said on the advertisement.
When the Campaign Legal Center filed its complaint with the FEC in February, it noted that the PAC had received all its funding at the time from Majority Forward, which supports Senate Democrats’ campaign efforts, and had spent much of its money on Mountain Media, a vendor that shares an address with another media buyer that works with Democrats.
The Campaign Legal Center argued that failing to disclose its expenditures meant the Last Best Place PAC was purposefully obscuring who was behind efforts to denigrate Sheehy in what, at the time, was the Republican primary for the Senate seat, which U.S. Rep. Matt Rosendale was considering entering. (Rosendale would months later enter and abruptly leave the race when former President Donald Trump endorsed Sheehy.)
Commission votes to dismiss complaints
The FEC opened an investigation into several of the PAC’s ads and received responses from Lewis, its treasurer, leading to the FEC’s nonpartisan Office of General Counsel concluding in May that at least five ads advocated for Sheehy’s defeat and should have led to the PAC filing independent expenditures. The Office of General Counsel recommended the commission find that the PAC failed to file 48-hour reports and to disclose independent expenditures on its regularly filed reports.
But in a 4-2 vote, the commission dismissed the Campaign Legal Center’s complaints on July 11. The four commissioners who voted to dismiss the complaint issued a statement of reasons explaining why on Aug. 6.
While the Office of General Counsel had found the phrase “Shady Sheehy” involved “magic words” that would make the ads independent expenditures because they hint at advocacy for or against a candidate, the four commissioners found the ad did not encourage viewers to vote a certain way, “but rather denigrates Sheehy’s character by calling him ‘shady,’ which we understand to mean untrustworthy in the context of this ad.”
The commissioners wrote that based on plain reading of the law and commission precedent on character attack ads, “we have little trouble concluding that the phase ‘shady Sheehy’ does not constitute express advocacy.”
It said whether another portion of law was violated was a “closer call.” The commissioners relied on the timing of the ads in relation to the June 4 primary election, saying the commission had previously found violations occurred when similar ads ran within weeks or two months of an election. But the Last Best Place PAC’s ads were running in September, nine months before Montana’s primary, they noted.
“We are unaware of Commission precedent finding express advocacy for a character attack ad this long before the relevant election,” the four commissioners wrote. “While there is no bright line on timing, it is axiomatic that the further an ad is run from a given election, the more likely that reasonable minds could differ about whether the ad constitutes an ‘exhortation to vote for or against a specific candidate.’”
“Given the high standard for finding express advocacy in a character attack ad – that it can ‘have no other reasonable meaning than to encourage actions to elect or defeat the candidate in question’ – we conclude that the ads here do not reach this high bar,” the commissioners concluded.
The FEC sent letters to the parties on Aug. 16 notifying them of its decision and telling them they had 60 days to file a complaint with the district court.
Two commissioners disagree with majority’s decision
On Sept. 6, the two commissioners who voted against dismissing the complaint – Ellen Weintraub and Shana Broussard – wrote their own statement of reasons as to why they believe the commission should not have dismissed the complaint.
They said utilizing phrases including “Shady Sheehy” and “Millionaire Politician” while showing Sheehy campaigning and identifying him as a politician could only constitute express advocacy against him as a candidate since he holds no political office. They also wrote that “reasonable minds” could not decide as to whether those phrases were meant to encourage Sheehy’s defeat or something else.
“There is no call to action, and no attempt to influence policy or legislation because Sheehy is not a public official,” the two commissioners wrote. “However, the ads do draw a direct connection between Sheehy’s character and his candidacy and can ‘only be interpreted by a reasonable person as containing advocacy’ of his defeat in the election for which he had just declared his candidacy.”
They also said their four colleagues, in deciding the ads ran too far out from the election, had misinterpreted the timeframe regulation regarding express advocacy.
“These ads contained express advocacy. Last Best Place PAC should have reported them as independent expenditures. The Commission should have found reason to believe a violation occurred and opened an investigation to determine how much money was spent on these ads that were plainly intended to influence an election. Montana voters are entitled to know this information, which the law requires be disclosed,” Weintraub and Broussard wrote.
Lawsuit accuses majority of ‘one-sided’ analysis
Monday’s lawsuit from the Campaign Legal Center accuses the four commissioners who agreed to dismiss the complaint of performing a “perfunctory and one-sided” analysis that did not fit with law or regulations. The group said allowing the dismissal to stand could have dire ramifications for campaign finance law and PAC spending in the future.
“If permitted to stand without correction, the decision thus effectively lays out a roadmap for spenders seeking to evade their disclosure obligations and opens an immense loophole in the (Federal Election Campaign Act)’s transparency requirements,” the lawsuit says.
The organization is asking the court to declare the FEC’s dismissal of the complaint was arbitrary, capricious and contrary to law and to have the FEC conform with that declaration within 30 days. It is also asking for attorneys’ fees should it win the case.
Lewis said in an email that the PAC’s attorney filed an “excellent” response with the FEC in the case and that the commission dismissed the complaint. He said he had nothing further to add regarding the lawsuit. FEC records show the PAC has brought in $12.5 million from Sept. 5 last year through June 30 this year and spent about $12.4 million of it, including $5.6 million reported as independent expenditures and about $6.7 million in operating expenditures. The records show the PAC has filed twenty 48-hour expenditure reports since April.
Its most recent 48-hour independent expenditure report , filed on Sept. 6, shows it has now spent about $10.7 million in Montana’s U.S. Senate election.
McAllen, with the Campaign Legal Center, said the organization hopes challenging the dismissal will uphold enforcement of campaign finance laws and transparency for voters.
“Poor enforcement of the law makes our campaign finance system vulnerable to more secret spending,” McAllen said in a statement. “Despite FEC inaction, we will still be pushing for super PACs like Last Best Place PAC to be fully transparent with voters about their spending aimed at swaying voters in federal elections.”
Editor’s note: This story has been updated to include comments from Dave Lewis.
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