The federal suit, Carey et al v. FEC, asks the FEC to acknowledge what the courts have already decided: that any political action committee may make contributions to federal candidates using limited funds while also engaging in independent expenditures using segregated funds raised for that purpose. The FEC has demanded that grassroots organizations jump through burdensome regulatory hoops just to speak out about candidates running for office.

National Defense PAC, created by retired Rear Admiral James J. Carey, submitted a request to the FEC for an advisory opinion on the matter in August 2010. Previous court rulings, most notably in SpeechNow.org v. FEC (SpeechNow.org was represented jointly by CCP and the Institute for Justice) and EMILY’s List v. FEC, uphold the principle that organizations may engage in both types of political speech and association so long as funds are properly segregated.

The FEC deadlocked on the issue, with three commissioners voting in support of National Defense PAC’s argument. In response to National Defense PAC’s suit, the FEC has argued against injunctive relief, claiming that the plaintiff’s First Amendment rights were not immediately, irreparably harmed based on the PAC’s ability to clone itself and create another organization to speak on its behalf.

Ultimately the FEC acknowledged that rules preventing PACs from both contributing to candidates and conducting independent expenditures were unconstitutional. The settlement effectively forfeits the FEC’s ability to enforce regulations requiring separate PACs for independent expenditures and candidate contributions, provided those activities are conducted from segregated bank accounts.