United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 2, 2001 Decided June 29, 2001

No. 00-5163

Federal Election Commission,
Appellee

v.

National Rifle Association of America, et al.,
Appellants

Appeal from the United States District Court
for the District of Columbia
(No. 85cv01018)

Richard E. Gardiner argued the cause and filed the briefs
for appellants. Christopher A. Conte and Michael W. Lojek
entered appearances.

Richard B. Bader, Associate General Counsel, Federal
Election Commission, argued the cause for appellee. With
him on the brief were Lawrence M. Noble, General Counsel,
and Vivien Clair, Attorney.


Before: Edwards, Chief Judge, Ginsburg and Tatel,
Circuit Judges.

Opinion for the Court filed by Circuit Judge Tatel.

Concurring opinion filed by Circuit Judge Ginsburg.

Tatel, Circuit Judge: During the 1978, 1980, and 1982
federal election cycles, the National Rifle Association spent
$37,833 on behalf of its political action committee. In a civil
enforcement action brought by the Federal Election Commis-
sion, the district court found that the NRA violated the
Federal Election Campaign Act of 1971, which prohibits
corporations from making contributions or expenditures in
connection with elections for federal office. On appeal, the
NRA argues that its payments fall into various statutory and
regulatory exceptions to the general prohibition on corporate
contributions. Alternatively, the NRA argues that because it
is a not-for-profit organization formed to promote the political
views of its members, applying the Act to its activities
violates the First Amendment. We reject the NRA's statuto-
ry claims, as well as its constitutional challenge with respect
to the 1978 and 1982 election cycles. Although the NRA does
promote the political views of its members, the substantial
contributions it received from for-profit corporations in those
two years justify the application of the Act. But because the
corporate contributions the NRA received in 1980 were de
minimis, we agree that, on the record before us, the Act
cannot constitutionally be applied to the NRA's activities for
that year.

I

The Federal Election Campaign Act of 1971 ("FECA"),
2 U.S.C. ss 431-455, regulates the financing of campaigns for
federal office. Section 441b(a) prohibits corporations (and
labor organizations, which are not involved in this case) from
making "a contribution or expenditure in connection with any
[federal] election" and also prohibits "any candidate, political
committee, or other person [from] knowingly ... accept[ing]
or receiv[ing] any contribution prohibited by this section."
Id. s 441b(a). For the purposes of this section, the Act


defines "contribution or expenditure" as "any direct or indi-
rect payment, distribution, loan, advance, deposit, or gift of
money, or any services, or anything of value ... to any
candidate, campaign committee, or political party or organiza-
tion, in connection with any election to any of the offices
referred to in this section." Id. s 441b(b)(2).

In FEC v. Massachusetts Citizens for Life, Inc. ("MCFL"),
the Supreme Court articulated the justification for the regula-
tion of corporate political activity:

We have described that rationale ... as the need to
restrict the influence of political war chests funneled
through the corporate form, to eliminate the effect of
aggregated wealth on federal elections, to curb the politi-
cal influence of those who exercise control over large
aggregations of capital, and to regulate the substantial
aggregations of wealth amassed by the special advan-
tages which go with the corporate form of organization.

479 U.S. 238, 257 (1986) (internal citations omitted). FECA
thus "protect[s] the integrity of the marketplace of political
ideas" from the "corrosive influence of concentrated corporate
wealth." Id.

Notwithstanding FECA's prohibition against corporate
contributions to election campaigns, the statute does permit
corporations to participate in the electoral process in a limited
fashion. Section 441b(b)(2)(C) allows corporations to make
expenditures for "the establishment, administration, and solic-
itation of contributions to a separate segregated fund to be
utilized for political purposes by a corporation, labor organiza-
tion, [or] membership organization." 2 U.S.C.
s 441b(b)(2)(C). Though the treasuries of a corporation and
its fund must be kept separate, Pipefitters Local Union No.
562 v. United States, 407 U.S. 385, 414 (1972), a corporation
can nonetheless control how the separate segregated fund
spends its money, FEC v. Nat'l Right to Work Comm., Inc.,
459 U.S. 197, 200 n.4 (1982); 11 C.F.R. s 114.5(d).


At issue in this case are campaign-related payments made
by appellant, the National Rifle Association, a not-for-profit
membership organization, and its lobbying and fund-raising
division, the NRA Institute for Legislative Action ("ILA"), on
behalf of the Political Victory Fund ("PVF"), the NRA's
separate segregated fund created pursuant to section
441b(b)(2)(C). During the 1978, 1980, and 1982 federal elec-
tion cycles, the NRA paid $37,833 worth of PVF election-
related expenses for, among other things, direct mail cam-
paigns for and against individual candidates, as well as pro-
duction and mailing of pro- and anti-candidate bumper stick-
ers and brochures. The PVF distributed these materials to
NRA members, firearm dealers, gun and sportsmen clubs,
and gun shows. NRA money also paid for newspaper adver-
tising, telephone banks, and a fund-raising breakfast for an
individual candidate. The PVF thereafter reimbursed the
NRA and reported the payments to the Federal Election
Commission as independent expenditures.

Suspicious of the PVF's expenditures, the Commission
commenced administrative proceedings, subsequently finding
"reason to believe" that the NRA, ILA, and PVF had violated
FECA. 2 U.S.C. s 437g(a)(2). After conciliation efforts
failed, the Commission found "probable cause to believe" that
the three organizations had violated FECA section 441b. Id.
s 437g(a)(4)(A)(i). Following the failure of additional concili-
ation efforts, the Commission filed suit seeking declaratory
and injunctive relief in the United States District Court for
the District of Columbia pursuant to section 437g(a)(6)(A),
which authorizes the Commission to seek civil enforcement of
the Act. See FEC v. NRA, No. 85-1018, at 4-5 (D.D.C. July
27, 1999) (describing the proceedings before the Commission).

Defending its actions, the NRA argued that its payments
on behalf of the PVF were "establishment" and "administra-
tion" expenses permitted by section 441b(b)(2)(C) and FEC
regulations. 2 U.S.C. s 441b(b)(2)(C); 11 C.F.R. s 114.1(b).
Citing MCFL, the NRA also challenged the constitutionality
of the Act as applied to NRA activities. In MCFL, the Court
carved out an exception from section 441b for certain political
not-for-profit corporations. 479 U.S. at 254-55, 259-63. Be-


cause such organizations do not present the dangers ad-
dressed by the statute--contributions by for-profit corpora-
tions to political campaigns--the Court held that requiring
them to create separate segregated funds to finance their
political activities unconstitutionally burdens their First
Amendment free speech rights. Id.

On cross motions for summary judgment, the district court
found that because the NRA made payments from its corpo-
rate treasury for the PVF's electioneering expenses and
because the PVF accepted those payments, the NRA, ILA,
and PVF all violated FECA section 441b. Persuaded by the
Commission's interpretation of "establishment" costs as limit-
ed to initial costs incurred in setting up and running political
committees, the district court concluded that the NRA's
payments did not fall under section 441b(b)(2)(C)'s exception
for establishment, administration, and solicitation costs. FEC
v. NRA, No. 85-1018, at 11. The court also rejected the
NRA's constitutional challenge, id. at 12, finding that because
the organization had not been formed for the express purpose
of promoting political ideas, and because it had no policy
against accepting corporate contributions, it could not qualify
for an MCFL exception. Mem. & Order Denying Def.'s Mot.
for Recons., FEC v. NRA, No. 85-1018, at 3 (D.D.C. Aug. 1,
1995). The court imposed a $25,000 fine on the NRA and
ILA, finding them jointly and severally liable, and a separate
$25,000 fine on the PVF. Final Order & J., FEC v. NRA,
No. 85-1018 (D.D.C. Apr. 3, 2000). Renewing their statutory
and constitutional arguments, all three organizations appeal.

II

The NRA divides the payments it made on behalf of the
PVF into three categories: payments to third-party vendors,
in-kind payments, and payments for employee time. Accord-
ing to the Commission, all payments amounted to illegal
corporate contributions because they were "advance[s]" of
funds within the meaning of section 441b(b)(2) and were made
"in connection with" a federal election. 2 U.S.C.
ss 441b(b)(2), 441b(a). The NRA argues that because the


PVF fully reimbursed the NRA, and because the payments
fell into various statutory and regulatory exceptions, they
were not "contributions" prohibited by the Act. We consider
each category in turn.

Payments to Third-Party Vendors

The NRA paid $3,710.56 to third-party vendors for services
related to the production of election advocacy materials. The
services included the design, layout, and preparation of me-
chanical art; typography for an anti-candidate brochure; and
data processing and printing for candidate endorsement let-
ters.

According to the NRA, these payments did not run afoul of
the Act because they fell within section 441b(b)(2)(C)'s excep-
tion for the "establishment [and] administration" costs of the
corporation's separate segregated fund. Id. s 441b(b)(2)(C).
FEC regulations define establishment and administration
costs as "the cost of office space, phones, salaries, utilities,
supplies, legal and accounting fees, fund-raising and other
expenses incurred in setting up and running a separate
segregated fund." 11 C.F.R. s 114.1(b). Declaring that this
regulation is "not intended to be read restrictively," the NRA
argues that the definition covers "direct financial support to
the dissemination of communications advocating the election
or defeat of candidates in federal elections." Appellant's
Opening Br. at 22. "Were [such expenditures] not provided
by the corporation," the NRA explains, "[they] would be an
administrative burden on the ... fund which would substan-
tially diminish the amount of money available for contribu-
tions and expenditures." Id. at 22-23.

The NRA's argument suffers from two defects. First,
neither the statute nor the regulation requires separate seg-
regated funds to reimburse their corporations for legitimate
administrative expenses. If the NRA's payments to third-
party vendors qualified as such expenses, why did the PVF
reimburse the NRA? Second, the Commission flatly rejects
the NRA's expansive reading of section 114.1(b). According
to the Commission, that section permits corporations to pay


only for the general administrative overhead and start-up
costs of their separate segregated funds--not for expenses
incurred in producing express electoral advocacy. The Com-
mission points out that another section of its regulations
expressly provides that "[a] corporation ... may not use the
establishment, administration, and solicitation process as a
means of exchanging treasury monies for voluntary contribu-
tions." 11 C.F.R. s 114.5(b).

We review the Commission's interpretation of its own
regulations pursuant to "an exceedingly deferential stan-
dard." Trinity Broad. of Fla., Inc. v. FCC, 211 F.3d 618, 625
(D.C. Cir. 2000). An agency's interpretation "will prevail
unless it is plainly erroneous or inconsistent with the plain
terms of the disputed regulation." Everett v. United States,
158 F.3d 1364, 1367 (D.C. Cir. 1998) (internal quotation
omitted). Applying this standard, we see no basis for ques-
tioning the Commission's interpretation of section 114.1(b) as
allowing corporations to cover only the overhead and start-up
costs of their separate segregated funds. The regulation's
list of covered expenses--"office space, phones, salaries, utili-
ties, supplies, legal and accounting fees, fund-raising and
other expenses incurred in setting up and running a separate
segregated fund"--suggests, as the Commission argues, that
the regulation covers only expenses for administrative over-
head, not, as the NRA claims, for production and distribution
of political materials. Moreover, pointing out that FECA
section 441b(b)(2)(C) does not require reimbursement of ad-
ministrative payments, the Commission argues that treating
direct support for production and dissemination of political
materials as administrative expenses would enable corpora-
tions to use section 441b(b)(2)(C) to dispense money from
their treasuries to pay for direct political activity--precisely
what the statute forbids. Indeed, as the Commission re-
peatedly emphasizes, section 441b requires strict segregation
of corporate and fund monies, a purpose that would be
undermined by the NRA's broad interpretation of administra-
tive costs. In support of this view, the Commission cites
Pipefitters for the proposition that section 441b's predecessor
statute was intended to provide


a strong prohibition on the use of corporate and union
treasury funds to reach the general public in support of,
or opposition to, Federal candidates and a limited per-
mission to corporations and unions ... to make political
contributions and expenditures financed by voluntary
donations which have been kept in a separate segregated
fund.

407 U.S. at 431.

We are equally unpersuaded by the NRA's argument that
its payments to third-party vendors were legal because they
were reimbursed and "made ... for the administrative conve-
nience of [the] PVF." Appellant's Opening Br. at 24. Be-
cause virtually any reimbursed payment by a corporation to
or for its separate segregated fund could be so characterized,
the NRA's interpretation of section 441b(b)(2)(C)'s adminis-
trative cost exception would eviscerate the distinction be-
tween corporations and their funds and swallow the statute's
prohibition on corporate advances.

In-Kind Contributions

During the three election cycles at issue in this case, the
NRA provided the PVF with $26,076.76 worth of goods and
services. These in-kind contributions from NRA in-house
inventories and facilities included envelopes, postage, data
processing, photocopying, mail and machine room processing,
and graphics work, all of which the PVF used to produce and
distribute advocacy materials for various election campaigns.

In defense of these payments, the NRA cites section
114.9(c) of the Commission's regulations: "Any person who
uses the facilities of a corporation or labor organization to
produce materials in connection with a Federal election is
required to reimburse the corporation or labor organization
within a commercially reasonable time for the normal and
usual charge for producing such materials in the commercial
market." 11 C.F.R. s 114.9(c). The NRA then points out
that the statute defines "person" as "an individual, partner-
ship, committee, association ... or any other organization or
group of persons." 2 U.S.C. s 431(11). According to the


NRA, these provisions, when read together, authorize a sepa-
rate segregated fund--a "committee" under the terms of the
statute--to use corporate facilities as long as the fund reim-
burses the corporation. The NRA argues that because the
PVF reimbursed the NRA within a commercially reasonable
period of time--a claim not disputed by the Commission--the
in-kind payments did not violate FECA.

The Commission responds that section 114.9(c) applies only
to the use of corporate facilities by stockholders and employ-
ees engaged in individual volunteer activity. According to the
Commission, it never intended section 114.9(c) to apply to
financial transactions between corporations and their sepa-
rate segregated funds, which are subject to a different section
of the regulations--section 114.5. See FEC Advisory Opinion
1984-24, 1 Fed. Election Campaign Fin. Guide (CCH) p 5771,
at 11,083 (concluding that 11 C.F.R. s 114.9(c) applies only to
the use of corporate facilities by individuals engaged in their
own volunteer activities and does not authorize a reimburse-
ment payment method for separate segregated funds). The
Commission explains that it created different rules for sepa-
rate segregated funds because "[t]he relationship between a
corporation ... and its own separate segregated fund is
unique and raises concerns about circumvention of the prohi-
bition in section 441b that are not presented by others that
are not acting under the corporation's ... control and for its
benefit." Appellee's Br. at 29.

The legality of the NRA's in-kind contributions, like the
legality of its payments to third party vendors, turns on the
Commission's interpretation of its own regulations, so our
review is again at its most deferential. See Trinity Broad.,
211 F.3d at 625. Not only has the NRA given us no basis for
questioning the Commission's reasonable reading of section
114.9(c), but the Commission's position comports well with
FECA's basic purpose: keeping corporate and fund treasur-
ies separate. Because the relationship between corporations
and their separate segregated funds presents risks that do
not arise when individuals use corporate facilities, it makes
perfect sense for the Commission to distinguish between


corporations and individuals, prohibiting reimbursement ar-
rangements for the former but not for the latter.

Payments for Employee Time

During the 1980 election cycle, several NRA employees
worked for the PVF on the campaigns of two candidates for
the House of Representatives. During that time, the employ-
ees earned $3,729.64 from the NRA. The PVF reimbursed
the NRA within 30 days. In defense of this arrangement, the
NRA points to the definition of "contribution" contained in
section 431, the statute's general definition section:

The term contribution includes--(i) any gift, subscription,
loan, advance, or deposit ... or anything of value made
by any person for the purpose of influencing any election
for Federal office; or (ii) the payment by any person of
compensation for the personal services of another person
which are rendered to a political committee without
charge for any purpose.

2 U.S.C. s 431(8)(A). The NRA contends that because the
PVF reimbursed it for the $3,729.64 worth of employee time,
the employees' services were not provided "without charge."
According to the NRA, it would have been "absurd" for
Congress to have intended section 431(8)(A)(ii) to require
candidates to pay for personal services either in advance or at
the very moment those services are rendered. Reading the
Act that way, the NRA argues, would prevent candidates
from using temporary employment agencies without paying in
advance.

We think the NRA misreads the statute. Section
431(8)(A)(ii) has nothing to do with this case. The issue here
relates to whether the NRA's payments amounted to illegal
corporate contributions within the meaning of section
441b(b)(2), which contains its own definition of contribution:
"For the purposes of this section ... the term 'contribution
or expenditure' shall include any direct or indirect payment,
distribution, loan, advance, deposit, or gift of money, or any
services, or anything of value." This definition includes noth-


ing comparable to section 431(8)(A)(ii)'s provision regarding
"personal services" provided "without charge."

In Advisory Opinion 1984-24, moreover, the Commission
expressly ruled that a corporation--in that case the Sierra
Club--may not provide to its separate segregated fund the
services of its employees to work on congressional campaigns,
even if the fund fully reimburses the corporation within thirty
days. 1 Fed. Election Campaign Fin. Guide at 11,082-83.
Stating that a "corporation's donation of the services of its
employees and the use of its facilities incident to its employ-
ees' services qualifies as a gift of something of value to the
candidate," id. at 11,083, the Commission explained:

[T]he initial disbursement of corporate treasury monies
is a loan, advance, or something of value to both the
candidate and the corporation's separate segregated
fund.... None of the exceptions in the Act or regula-
tions remove such a disbursement from the general
prohibition of s 441b.... [O]nce the [corporation] dis-
burses its treasury funds to pay an employee for political
services rendered to a Federal candidate, ... the [corpo-
ration] makes a prohibited contribution or expenditure
and a violation of the Act occurs.... [A] reimbursement
payment method ... does not cause the violation to
abate.

Id.

In response, the NRA, relying on Christensen v. Harris
County, 529 U.S. 576 (2000), argues that FEC advisory
opinions are entitled to no deference. We disagree. Distin-
guishing between interpretive rules and guidelines on the one
hand and "norms that derive from the exercise of the Secre-
tary's delegated lawmaking powers" on the other, Christen-
sen declined to give deference to an opinion letter issued by a
division of the Department of Labor. Id. at 587 (quoting
Martin v. OSHRC, 499 U.S. 144, 157 (1991)). The critical
Christensen passage reads:

[We] confront an interpretation contained in an opinion
letter, not one arrived at after, for example, a formal


adjudication or notice-and-comment rulemaking. Inter-
pretations such as those in opinion letters--like interpre-
tations contained in policy statements, agency manuals,
and enforcement guidelines, all of which lack the force of
law--do not warrant Chevron-style deference. Instead,
interpretations contained in formats such as opinion let-
ters are 'entitled to respect' under our decision in Skid-
more v. Swift, 323 U.S. 134, 140 (1944).

Id. (internal citations omitted). Just last week, the Supreme
Court, citing Christensen, declined to give Chevron deference
to U.S. Customs Service ruling letters. United States v.
Mead Corp., No. 99-1434, 2001 WL 672258, at *9 (U.S. June
18, 2001).

We have previously considered Christensen's implications
for the deference owed to FEC interpretations of FECA,
though in a different context: an FEC probable cause deter-
mination made pursuant to FECA section 437g(a)(4). See In
re Sealed Case, 223 F.3d 775, 779 (D.C. Cir. 2000). Pointing
out that Christensen "appeared to make the interpretation's
legal effect the touchstone," id. at 780, we held that, for
several reasons, the probable cause determination and its
underlying statutory interpretation had sufficient legal effect
to warrant Chevron deference. Id. at 780-81. First, the
Commission makes probable cause determinations pursuant
to detailed statutory procedures analogous to formal adjudica-
tion. Id. at 780. The FEC's interpretation of its statute
therefore assumes a "form expressly provided for by Con-
gress." Id. (citing Martin, 499 U.S. at 157). Second, in
making probable cause determinations, the Commission ful-
fills its statutorily granted responsibilities, giving ambiguous
statutory language concrete meaning through case-by-case
adjudication. Id. Finally, the Commission itself--not its
staff--makes probable cause determinations, which in the
case of a "no probable cause" finding precludes further FEC
enforcement. Id.

FEC advisory opinions possess the same three characteris-
tics. First, FECA section 437f establishes a detailed frame-
work for issuing advisory opinions. Any candidate, person, or


authorized committee may request an opinion concerning the
statute's application to a "specific transaction." 2 U.S.C.
s 437f(a)(1). The Commission must make public all requests
for advisory opinions and "shall accept written comments
submitted by any interested party." Id. s 437f(d). Second,
in issuing advisory opinions, the Commission fulfills its statu-
torily granted responsibility to interpret the Act. See, e.g.,
id. s 437f(a)(1). Indeed, a House Report concerning later
amendments to FECA says quite specifically that "[t]he
Committee reaffirms its opinion that the advisory opinion
process is central to the Commission's responsibility to clarify
the Act." H.R. Rep. No. 96-422, at 20 (1979); cf. FEC v.
Democratic Senatorial Campaign Comm., 454 U.S. 27, 37
(1981) (concluding that the FEC is "precisely the type of
agency to which deference should presumptively be afford-
ed"). In pre-Christensen cases involving advisory opinions,
we too have acknowledged that section 437f authorizes the
Commission to formulate general policy with respect to the
Act's administration and to resolve ambiguities in the stat-
ute's language. See, e.g., Orloski v. FEC, 795 F.2d 156, 164
(D.C. Cir. 1986); cf. In re Sealed Case, 237 F.3d 657, 670
(D.C. Cir. 2001) (concluding that "choices made by FEC
attorneys--without the Commission's ratification and accep-
tance--do not stand as the authoritative interpretation of the
agency requiring deference"). Finally, advisory opinions
have binding legal effect on the Commission. Any person
involved in either the specific transaction or another material-
ly indistinguishable transaction may rely on the opinion.
2 U.S.C. s 437f(c)(1). As the Commission pointed out at oral
argument, the statute creates a "safe harbor" for parties who
rely on advisory opinions, providing that "any person who ...
acts in good faith in accordance with the provisions and
findings of such ... opinions shall not ... be subject to any
sanction provided by this Act." Id. s 437f(c)(2).

To be sure, Advisory Opinion 1984-24 involved the Sierra
Club, not the NRA, whereas the parties to In re Sealed Case,
223 F.3d 775, were the same parties involved in the earlier
probable cause determination. But this is a distinction with-
out a significant difference. Our decision in In re Sealed


Case to give Chevron deference to the probable cause deter-
mination had nothing to do with the fact that the case and the
earlier proceedings involved the same parties. The difference
between this case and In re Sealed Case, moreover, does
nothing to change the fact that FEC advisory opinions not
only reflect the Commission's considered judgment made
pursuant to congressionally delegated lawmaking power, but
also have binding legal effect.

The appropriateness of giving FEC advisory opinions Chev-
ron deference is reinforced by the significant differences
between them and the Labor Department letter at issue in
Christensen. Unlike FEC advisory opinions, the Labor De-
partment letter bound neither the requesting party nor the
agency, nor was the letter the product of a statutorily created
decision-making process. Rather, the Labor Department of-
ficial who issued the letter did so pursuant to informal agency
procedures. Virtually every relevant post-Christensen deci-
sion has declined to give Chevron deference to just this type
of informal agency action. See, e.g., Scales v. INS, 232 F.3d
1159, 1165 (9th Cir. 2000) (concluding that a State Depart-
ment Foreign Affairs Manual is not entitled to deference
because the Attorney General, not the State Department, has
statutory authority to interpret immigration statutes); Madi-
son v. Res. for Human Dev., 233 F.3d 175, 185-87 (3d Cir.
2000) (denying Chevron deference to interpretations of FLSA
authorized by the Secretary of Labor as interpretive guide-
lines with no legal effect); United States v. 162 Megamania
Gambling Devices, 231 F.3d 713, 719 (10th Cir. 2000) (con-
cluding that opinion letters issued by the National Indian
Gaming Commission are not entitled to Chevron deference);
Ball v. Memphis Bar-B-Q Co., 228 F.3d 360, 365 (4th Cir.
2000) (concluding that a statutory interpretation advanced by
the Secretary of Labor as a litigating position in an amicus
brief was entitled only to Skidmore deference); Utah Wilder-
ness Alliance v. Dabney, 222 F.3d 819, 829 (10th Cir. 2000)
(holding that agency policies still in draft form are not
entitled to Chevron deference); Bussian v. RJR Nabisco,
Inc., 223 F.3d 286, 296-97 (5th Cir. 2000) (finding that al-
though public notice was given of a proposed rulemaking, the


notice did not focus on the issue involved in a DOL interpre-
tive bulletin, which lacked the force of law, and was therefore
not entitled to Chevron deference). FEC advisory opinions
are equally distinguishable from the U.S. Customs Service
ruling letter at issue in Mead: the Court there found "no
indication that Congress meant to delegate authority to Cus-
toms to issue classification rulings with the force of law."
Mead, 2001 WL 672258, at * 7.

This brings us to the Chevron question presented by the
NRA's payments for employee time: does Advisory Opinion
1984-24 represent a "permissible construction of the statute"?
Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467
U.S. 837, 843, 863 (1984). We think it does. To begin with,
interpreting "advance" to include a corporation's payment of
its employees to work for its separate segregated fund is
consistent with the statute's language. Although there may
be other possible interpretations, Chevron deference does not
require that we "conclude that the agency construction was
the only one it permissibly could have adopted ... or even
the reading the court would have reached." Id. at 843 n.11;
see also Serono Labs., Inc. v. Shalala, 158 F.3d 1313, 1321
(D.C. Cir. 1998) ("[U]nder Chevron, courts are bound to
uphold an agency interpretation as long as it is reasonable--
regardless whether there may be other reasonable, or even
more reasonable, views."). As the Commission explains,
moreover, its interpretation would not restrict candidates
from using temporary employment agencies without paying in
advance. The extension of credit by an employment agency,
the Commission points out, would constitute a perfectly legal
arm's length commercial transaction. But because the NRA
does not engage in the business of contracting out its employ-
ees, allowing the PVF to use NRA employees for campaign
work is not "in the ordinary course of [the] corporation's
business." 1 Fed. Election Campaign Fin. Guide at 11,083.
Permitting reimbursement arrangements such as the one at
issue here would thus compromise the separation of corporate
and fund treasuries--a separation that both Congress and the
Supreme Court consider essential to preventing the use of


corporate wealth to fund political advocacy. See Pipefitters,
407 U.S. at 414.

III

Having rejected the NRA's statutory claims, we turn to its
as-applied constitutional challenge. The NRA contends that
as a political, not-for-profit membership organization, it is
exempt from FECA under the Supreme Court's decision in
FEC v. Massachusetts Citizens for Life. In MCFL, the
Supreme Court sustained the Massachusetts Citizens for
Life's as-applied challenge to the statute, finding that section
441b, by encompassing all corporations, swept too broadly.
479 U.S. at 263. The Court observed that the Act's require-
ment that corporations establish separate segregated funds to
finance their political activities amounts to a substantial bur-
den that threatens to discourage organizations from engaging
in political speech:

These [FECA regulations] may create a disincentive for
such organizations to engage in political speech. De-
tailed record-keeping and disclosure obligations, along
with the duty to appoint a treasurer and custodian of the
records, impose administrative costs that many small
entities may be unable to bear. Furthermore, such
duties require a far more complex and formalized organi-
zation than many small groups could manage. Restric-
tion of solicitation of contributions to "members" vastly
reduces the sources of funding for organizations with
either few or no formal members, directly limiting the
ability of such organizations to engage in core political
speech. It is not unreasonable to suppose that, as in this
case, an incorporated group of like-minded persons might
seek donations to support the dissemination of their
political ideas and their occasional endorsement of politi-
cal candidates, by means of garage sales, bake sales, and
raffles. Such persons might well be turned away by the
prospect of complying with all the requirements imposed
by the Act. Faced with the need to assume a more
sophisticated organizational form, to adopt specific ac-


counting procedures, to file periodic detailed reports, and
to monitor garage sales lest nonmembers take a fancy to
the merchandise on display, it would not be surprising if
at least some groups decided that the contemplated
political activity was simply not worth it.

Id. at 254-55. At the same time, the Court acknowledged
that the statute's "concern over the corrosive influence of
concentrated corporate wealth reflects the conviction that it is
important to protect the integrity of the marketplace of
political ideas." Id. at 257. This concern justifies imposing
such a burden in some cases to prevent "resources amassed
in the economic marketplace" from being "used to provide an
unfair advantage in the political marketplace." Id.; see also
id. at 258-59.

Balancing these interests, the Court concluded that FECA
could not constitutionally be applied to an organization like
the MCFL:

MCFL was formed to disseminate political ideas, not to
amass capital. The resources it has available are not a
function of its success in the economic marketplace, but
its popularity in the political marketplace. While MCFL
may derive some advantages from its corporate form,
those are advantages that redound to its benefit as a
political organization, not as a profit-making enterprise.
In short, MCFL is not the type of traditional corporation
organized for economic gain that has been the focus of
regulation of corporate political activity.

Id. at 259 (internal citations omitted); see also id. at 263. In
support of this conclusion, the Court pointed to several char-
acteristics of the MCFL that made it look more like a
"[v]oluntary political association" than a traditional business
corporation. Id. at 263. First, MCFL members formed the
organization and participated in its activities for the express
purpose of promoting its political ideas. Id. at 264. Second,
individuals connected with the MCFL, unlike corporate
shareholders, would have had no economic reason to continue
their association with the organization if they disagreed with
its political positions. Id. Finally, because of the MCFL's


policy against accepting corporate contributions, the organiza-
tion could not become a conduit for direct corporate spending
on election campaigns. Id.

A few years later, the Court explored the limits of the
MCFL exception in Austin v. Michigan Chamber of Com-
merce, 494 U.S. 652 (1990). There, the Michigan Chamber of
Commerce challenged the constitutionality of a state cam-
paign finance statute modeled on FECA. Again applying a
demanding standard of review, the Court asked whether the
statute "burdens the exercise of political speech and, if it
does, whether it is narrowly tailored to serve a compelling
state interest." Id. at 657. This time, however, the Court
upheld the statute, concluding that the Michigan Chamber of
Commerce was not the type of voluntary, political organiza-
tion that qualified for the MCFL exception. To begin with,
as the Court pointed out, not all Chamber goals were inher-
ently political. Id. at 669. "Unlike MCFL's, the Chamber's
educational activities are not expressly tied to political goals;
many of its seminars, conventions, and publications are politi-
cally neutral and focus on business and economic concerns."
Id. at 662. Moreover, though the Chamber "lacks sharehold-
ers, many of its members may be similarly reluctant to
withdraw as members even if they disagree with the Cham-
ber's political expression, because they wish to benefit from
the Chamber's nonpolitical programs and to establish con-
tacts with the other members of the business community."
Id. at 663. Finally, because more than three-fourths of
Chamber members were corporations, the organization ran
the risk of becoming precisely the type of conduit for corpo-
rate funding that the campaign finance statute was designed
to prevent. Id. at 664.

Before addressing the NRA's reasons for believing that it
resembles the MCFL, not the Chamber, we pause to consider
the Commission's contention that because the NRA failed to
raise its constitutional defense in either its answer or a
subsequent amendment, the issue is not properly before us.
See Harris v. Sec'y, U.S. Dep't of Veterans Affairs, 126 F.3d
339, 345 (D.C. Cir. 1997) (holding that "a party must first
raise its affirmative defenses in a responsive pleading before


it can raise them in a dispositive motion"). According to the
NRA, it did raise the constitutional defense by bringing the
MCFL decision to the district court's attention in a "Notice of
Related Decision" filed on January 6, 1987. We agree that
this was sufficient. The requirement that a party raise
affirmative defenses in a responsive pleading is designed to
"give[ ] the opposing party notice of the defense ... and
permit[ ] the party to develop in discovery and to argue
before the District Court various responses to the ... de-
fense." Harris, 126 F.3d at 343. The record demonstrates
that the Commission had notice of the NRA's constitutional
claim, conducted discovery on the issue, and had ample
opportunity to respond.

The NRA claims entitlement to an MCFL exception be-
cause the organization has features "more akin to voluntary
political associations than business firms." MCFL, 479 U.S.
at 263. Like the MCFL, the NRA was not formed to amass
capital, and its resources reflect not the "economically moti-
vated decisions of investors and customers, but rather its
popularity in the political marketplace." Appellant's Opening
Br. at 33. The very first goal listed in the NRA's bylaws is:

To protect and defend the Constitution of the United
States, especially with reference to the inalienable right
of the individual American citizen guaranteed by such
Constitution to acquire, possess, transport, carry, trans-
fer ownership of, and enjoy the right to use arms, in
order that the people may always be in a position to
exercise their legitimate individual rights of self-
preservation and defense of family, person, and property,
as well as to serve effectively in the appropriate militia
for the common defense of the Republic and the individu-
al liberty of its citizens.

NRA Bylaws, Art. I, s 1. Moreover, the NRA tells us that,
like the MCFL, "NRA members and supporters, unlike
shareholders of a business corporation, 'are fully aware of its
political purposes, and in fact contribute precisely because
they support those purposes.' " Appellant's Opening Br. at
34 (quoting MCFL, 479 U.S. at 260-61).


The NRA acknowledges that it differs from the MCFL in
some respects. For example, the NRA sponsors seemingly
non-political activities, such as firearm competitions and train-
ing classes, and provides non-political goods and services to
its members, such as magazines, fraternal items, and accident
insurance. The organization also has no policy against ac-
cepting corporate contributions. According to the NRA, how-
ever, none of these differences disqualifies it from an MCFL
exception. The organization's non-political activities and the
individuals participating in them are "supportive of, and
enmeshed with, its primary, and plainly political, purpose."
Id. at 36. The NRA's political mission, moreover, extends
well beyond defending the right to bear arms and includes
the promotion of "public safety, law and order, ... the
national defense,.... hunter safety, ... and hunting as a
shooting sport." NRA Bylaws, Art. I, ss 2-5. Finally, the
NRA argues, because contributions received from for-profit
corporations during the three years at issue in this case
amounted to an "insignificant portion of [its total] revenues,"
its "actual practice was tantamount to such a policy [prohibit-
ing contributions]." Appellant's Opening Br. at 37.

The NRA also distinguishes itself from the Michigan
Chamber of Commerce. Not only did the Chamber compile
and disseminate information relating to social, civic, and
economic conditions unrelated to any political objectives, but
its publications focused primarily on business and economic
issues. By contrast, the NRA claims that its publications and
activities all relate to its political goals. The NRA also
contends that, unlike the Chamber, it neither was established
by business corporations nor has for-profit corporate mem-
bers. For these reasons, the NRA believes that, in contrast
to the Chamber, it does not risk becoming a conduit for direct
corporate spending on election campaigns.

The Commission has a very different view of the NRA. In
contrast to the MCFL, described by the Commission as
having a narrow political focus, the NRA performs a wide
variety of services for its members, only some of which are
political in nature. The Commission points out that in the
1970s the NRA amended its corporate charter to include the


education and training of "citizens of good repute in the safe
and efficient handling of small arms" and the promotion of
"public safety, hunter safety, ... [and] efficiency in the use of
such arms on the part of members of law enforcement
agencies [and] of the armed forces." Certificate of Amend-
ment of the Certificate of Incorporation, May 9, 1978. The
NRA also sponsors shooting competitions, sells accidental
death and dismemberment insurance, helps train the United
States Olympic shooting team, and provides grants for wild-
life studies. According to the Commission, the NRA's busi-
ness activities, including its sales of magazines and fraternal
items, also distinguish it from the MCFL, whose resources
came from garage sales, bake sales, dances, raffles, and
picnics. MCFL, 479 U.S. at 242.

As to the issue of corporate contributions, the Commission
reads MCFL and Austin as establishing a prophylactic re-
quirement that an organization have a policy against accept-
ing such contributions in order to qualify for an MCFL
exception. According to the Commission, because the NRA
has no policy against corporate contributions, and because it
accepted such contributions during the election cycles at issue
in this case, the organization should not be exempted from
the Act.

In deciding how to resolve this debate and whether to
apply section 441b to the NRA, we tread within closely
guarded First Amendment territory. FECA "operate[s] in
an area of the most fundamental First Amendment activities.
Discussion of public issues and debate on the qualifications of
candidates are integral to the operation of the system of
government established by our Constitution." Buckley v.
Valeo, 424 U.S. 1, 14 (1976). Precisely because of the funda-
mental freedoms at stake, MCFL rejected a rigid, bright-line
interpretation that would have subjected all corporations to
FECA requirements, fearing that such an approach might
unduly burden "core political speech." See 479 U.S. at 263.
Instead, "[w]here at all possible, government must curtail
speech only to the degree necessary to meet the particular
problem at hand, and must avoid infringing on speech that


does not pose the danger that has prompted regulation." Id.
at 265.

As we read MCFL and Austin, the Commission must
demonstrate that the NRA's political activities threaten to
distort the electoral process through the use of resources
that, as MCFL put it, reflect the organization's "success in
the economic marketplace" rather than the "power of its
ideas." Id. at 258-59. And because important First Amend-
ment rights are involved, the Commission "must do more
than simply posit the existence of the disease sought to be
cured. It must demonstrate that the recited harms are real,
not merely conjectural, and that the regulation will in fact
alleviate these harms in a direct and material way." Turner
Broad. Sys., Inc. v. FCC, 512 U.S. 622, 664 (1994) (internal
citation omitted); see also Members of City Council v. Tax-
payers for Vincent, 466 U.S. 789, 803 n.22 (1984) ("[This
Court] may not simply assume that the ordinance will always
advance the asserted state interests sufficiently to justify its
abridgement of expressive activity.").

Applying this demanding standard, we think the Commis-
sion has failed to demonstrate that the NRA resembles a
business firm more closely than a voluntary political associa-
tion. The NRA repeatedly emphasizes not only that its
political and non-political activities interrelate, but also that
its members join precisely because all NRA activities are
enmeshed in the organization's core political purpose--de-
fending the constitutional right to bear arms. Although the
Commission had full discovery, it offers no factual basis for
questioning these claims. It merely asserts that the "variety
of activities [the NRA] actually undertook reinforces [the]
conclusion" that the NRA's purposes are not strictly political.
Appellee's Br. at 40. This is not enough. To justify subject-
ing the NRA to FECA regulation, the Commission must
actually demonstrate that, as in the case of the Michigan
Chamber of Commerce, the NRA's political advocacy is suffi-
ciently distinct from its allegedly non-political activities such
that members who disagree with the former are still likely to
participate in the latter.


This conclusion, however, does not end our task. Notwith-
standing the fact that, on this record, the NRA appears to be
a voluntary political association akin to the MCFL, we must
determine whether the corporate contributions it received in
the three years at issue nevertheless justify subjecting it to
FECA's requirements. After all, the Supreme Court never
would have exempted the MCFL had there been evidence
that, even given the organization's core political mission, it
had accepted substantial corporate contributions that it could
have used for campaign purposes.

To begin with, we are unpersuaded by the Commission's
argument that the absence of a policy against the receipt of
corporate contributions automatically makes the NRA ineligi-
ble for an MCFL exception. As we read Austin, the Court
relied not on the Chamber's failure to have a policy against
corporate contributions, but rather on the likelihood that the
Chamber could become a conduit for political spending by its
corporate members. The Court emphasized that over three-
fourths of Chamber members were corporations and that
they "could circumvent the Act's restrictions by funneling
money through the Chamber's general treasury." Austin,
494 U.S. at 664. All three of our sister circuits to have
addressed this issue have read Austin as we do. See N.C.
Right to Life, Inc. v. Bartlett, 168 F.3d 705, 714 (4th Cir.
1999) (holding that courts should be concerned with the
amount of contributions received and whether the "accep-
tance of those contributions means that [the organization] is
serving as a conduit for the type of direct spending by for
profit corporations that creates a threat to the political mar-
ketplace") (internal quotation omitted); FEC v. Survival
Educ. Fund, Inc., 65 F.3d 285, 292-93 (2d Cir. 1995) (noting
that "[t]he only concern that justifies application of s 441b to
nonprofit political advocacy corporations is the prospect that
business firms or labor unions would funnel their wealth,
which derives from the commercial marketplace, into the
political marketplace of ideas," and not the absence of a policy
against corporate contributions); Day v. Holahan, 34 F.3d
1356, 1364 (8th Cir. 1994) (holding that a corporate expendi-
tures statute could not be applied constitutionally to a not-for-


profit organization that received no "significant contributions
from for-profit corporations," even though it did not have a
policy against such contributions). Were we to interpret
Austin differently, an organization that has no policy banning
corporate contributions but that nevertheless receives no such
contributions would be subject to the statute despite the fact
that it would not be serving as a conduit for corporate
campaign contributions. We agree with the Second Circuit
that a not-for-profit organization with no corporate ties "does
not surrender its First Amendment freedoms for the want of
... a policy" against corporate contributions. Survival Educ.
Fund, 65 F.3d at 293.

Like our sister circuits, we therefore focus not on the
absence of a policy against corporate contributions, but on
whether such contributions could have turned the NRA into a
potential conduit for corporate funding of political activity.
In 1978 and 1982, the NRA received $7000 and $39,786,
respectively, in contributions from for-profit corporations.
We disagree with the NRA that because these contributions
represented a small percentage of its total revenues, they
were de minimis and thus beyond the Act's purview. See
Day, 34 F.3d at 1365 ("[T]he key issue here is the amount of
for-profit corporate funding a nonprofit receives.") (emphasis
added). The harm contemplated by the statute stems from
the absolute amount of corporate money an organization has
to spend in the political process, not from the relationship
between corporate contributions and the organization's total
revenues. But see N.C. Right to Life, 168 F.3d at 714
(holding that because corporate contributions represented a
"modest percentage" of the right to life organization's reve-
nues, the organization qualified for the nonprofit exemption)
(emphasis added); Survival Educ. Fund, 65 F.3d at 293
(same). Because corporate contributions in 1978 and 1982
were substantial, we see no constitutional barrier to applying
the Act to the NRA for those two years.

But 1980 is a different matter. In that year, the NRA
received only $1000 in corporate contributions. Hinting that
the actual amount might be greater, the Commission points
out that the organization did not record corporate contribu-


tions of less than $500. But First Amendment rights cannot
turn on such speculation. See Turner, 512 U.S. at 664. The
Commission also points to the substantial revenues the NRA
received from corporate advertising in its magazines, yet
offers nothing to suggest that the purchasing of advertise-
ments was not legitimate. Because we consider the $1000 to
be de minimis, and because the Commission, as an alternative
to its argument that the NRA lacks a policy against corporate
contributions, does not claim that even this small amount
demonstrates that the organization was serving as a conduit
for corporate funding of election campaigns, we hold that the
Act cannot constitutionally be applied to the NRA for the
1980 election cycle.

IV

The decision of the district court is vacated, and this matter
is remanded with instructions to recalculate the penalties
based on the 1978 and 1982 violations.

So ordered.


Ginsburg, Circuit Judge, concurring: I write separately to
point out that the Commission's interpretation of 2 U.S.C.
s 441b, to which the court accords deference under Chevron
step two, see Ct. Op. at 15-16, seems to be inconsistent with
the statute. Because the NRA failed to argue the point,
however -- although it feints in the right direction -- I join in
the court's opinion, leaving the neglected argument to another
day when it may be fully developed and debated by the
parties.

Section 441b prohibits "any corporation" from making a
"contribution or expenditure in connection with any election
to any political office." 2 U.S.C. s 441b(a). The statute
defines "contribution or expenditure" broadly as

any direct or indirect payment, distribution, loan, ad-
vance, deposit, or gift of money, or any services, or
anything of value (except a loan of money by a national
or State bank made in accordance with the applicable
banking laws and regulations and in the ordinary course
of business).

Id. s 441b(b)(2). The Commission holds it unlawful for a
corporation's employees to provide services for the benefit of
a candidate and for which the corporation is reimbursed by
its separate segregated fund within a commercially reason-
able time; this arrangement, according to the Commission,
involves the corporation giving a "loan, advance, or something
of value to both the candidate and the corporation's separate
segregated fund." FEC Advisory Opinion 1984-24, 1 Fed.
Election Campaign Fin. Guide (CCH) p 5771, at 11,083. This
near quotation of the statutory definition of "contribution,"
see 2 U.S.C. s 441b(b)(2) ("contribution" means "loan, ad-
vance, ... or anything of value") makes it clear that the
Commission views that definition as embracing the extension
of ordinary trade credit for the period between rendition of
the services and reimbursement therefor.

The Commission's interpretation is not necessarily unrea-
sonable. It does, however, imply that a corporate vendor
may not lawfully enter into an ordinary commercial contract
with a candidate to provide goods and services for which the
candidate will be subsequently and promptly billed. The


NRA argues in particular that the Commission's interpreta-
tion must be in error because it would be impractical and
"absurd" to require a candidate wishing to engage a tempo-
rary personnel firm to pay for such services in advance; for
the ordinary arrangement whereby services are rendered and
the bill then paid would constitute an illegal "loan, advance or
something of value" provided to the candidate by the firm.
The same might be said also of in-kind contributions, see Ct.
Op. at 8-10 -- although the argument is not relevant to the
NRA's third-party contributions, which indisputably are ad-
vances, see Ct. Op. at 6-8.

The Commission responds to this criticism by invoking its
own regulation under which a corporation may "extend credit
to a candidate ... provided that the credit is extended in the
ordinary course of a corporation's business and the terms are
substantially similar to extensions of credit to nonpolitical
debtors." 11 C.F.R. s 114.10(a) (1980), current version at 11
C.F.R. s 116.3(b) (2000); see 1 Fed. Election Campaign Fin.
Guide at 11,083 to 11,083-2. By recognizing this "exception
in the ... regulations," 1 Fed. Election Campaign Fin. Guide
at 11,083, the Commission makes its ban upon rendering
services to a candidate in advance of payment applicable only
to corporations not acting in the ordinary course of busi-
ness -- such as the NRA or other corporations "more akin to
voluntary political associations than business firms," FEC v.
Massachusetts Citizens for Life, Inc., 479 U.S. 238, 263
(1986).

The statute, however, unequivocally prohibits "any corpora-
tion" -- commercial or ideological -- from providing "any ...
loan [or] advance," etc., to a candidate without regard to
whether it does so in the ordinary course of business. 2
U.S.C. s 441b(a). It is clear, moreover, that the Congress
considered whether the Act might prohibit ordinary commer-
cial transactions and crafted an exception to the Act in order
to avoid that result: no corporation may make a "loan" to a
candidate "except a loan of money by a national or State bank
made ... in the ordinary course of business." Id.
s 441b(b)(2). No such exception is provided for corporations
other than banks. "[W]here Congress includes particular


language in one section of a statute but omits it in another
section of the same Act, it is generally presumed that Con-
gress acts intentionally and purposely in the disparate inclu-
sion or exclusion." Russello v. United States, 464 U.S. 16, 23
(1983) (internal quotations and citations omitted); see also
NextWave Personal Communications, Inc. v. FCC,
No. 00-1402 slip op. at 34-35 (D.C. Cir. June 22, 2001).

The Commission might reasonably read s 441b strictly and
deem an ordinary commercial transaction, that is, one in
which performance precedes payment, a prohibited "loan,
advance ... or [ ]thing of value." 2 U.S.C. s 441b(b)(2).
Perhaps it could also reasonably permit such a transaction by
reading that phrase as not including the extension of ordinary
trade credit for services rendered if payment is made within a
commercially reasonable time. What the Commission cannot
reasonably do, however, is distinguish between the provision
of a service by a commercial vendor in the ordinary course of
business and the provision of the same service by a non-
commercial corporation not in the ordinary course of its
business; the statute, with its explicit exception for banks
acting in the ordinary course of business, cannot reasonably
be read to contain a broader but implicit exception for
commercial vendors acting in the ordinary course of business.

Nor do I see how holding that the Commission may not ban
the extension of ordinary trade credit by a corporation to a
candidate or to its separated segregated fund except when
such credit is extended in the ordinary course of business
would meaningfully "compromise the separation" between a
corporation's treasury and that of its separate segregated
fund, see Ct. Op. at 15. Were the Commission to construe
"advance" broadly, and thus to bar services not paid for in
advance -- whether provided by a commercial vendor or by
any other corporation -- that separation would not be affect-
ed at all. Were the Commission to construe "loan, advance,
... or anything of value" narrowly, and thus to permit the
provision of services by any corporation so long as it was
promptly reimbursed by the segregated fund, the corporation
presumably would still be required to provide such services
upon commercially reasonable terms. That a fund and the
candidates it supports could briefly enjoy the time value of
not paying for employee services until billed in the ordinary


course would in no way alter the relationship between the
corporation and the separate segregated fund envisioned in
the Act.