I've discussed this situation before, and now, it's official. WaPo, A-1:
The Federal Election Commission will effectively go dark on Jan. 1 because Congress remains locked in a standoff over the confirmation of President Bush's nominees to the panel. As a consequence, the FEC will enter 2008 with just two of six members -- short of the four votes needed for the commission to take any official action.
"There is, in effect, nobody to answer the phone," said Robert F. Bauer, a leading Democratic campaign finance lawyer.
Although the 375 auditors, lawyers and investigators at the FEC will continue to process work already before them, a variety of matters that fall to the commissioners will be placed on hold indefinitely. Chief among them are deciding whether to launch investigations into possible campaign finance violations and determining the penalties.
This occurred because Democratic courage -- Sens. Obama and Feingold stood their ground to block the reappointment of Bush recess appointee Hans von Spakovsky to a full term, and when Sen. Mitch McConnell refused to allow an up-or-down on von Spakovsky alone, all three current recess appointments to the FEC now terminate at year's end. What are the consequences?
When it comes to federal matching funds, Democrat John Edwards has the most to lose. The FEC certified the payment of the first installment of funds this week, including $8.8 million for Edwards. But matching payments for money he has raised this month, or will receive in subsequent months, may have to wait until the FEC has four members.
There is debate among campaign finance lawyers about whether matching funds could be released without a formal commission vote, one Edwards campaign official said. Because the next installment of funds would not arrive until after the early primaries, strategists inside the Edwards campaign said they are not worried.
[N.B. I disagree with the Edwards claims about whether a formal vote was needed. I've directly spoken with a former FEC commissioner about this, who confirmed to me that four Commissioners' votes would be needed to certify the availability of funds.]
And, in the meantime, there is no enforcement:
[T]here is a range of vexing campaign finance questions that hang in limbo: Can a firm that operates a blimp accept unlimited contributions to fly it over New Hampshire with Ron Paul's name on the side? Can a senator use his campaign account as a legal defense fund? How will campaigns comply with the new law that requires them to identify the lobbyists who are collecting campaign checks on their behalf?
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"Work on those questions will grind to a halt," said FEC Chairman Robert D. Lenhard, whose recess appointment will expire on New Year's Eve. ...
"For all of the complaints about the FEC, when it comes to campaign finance law, it is the enforcement agency," said Lawrence Noble, a former FEC general counsel. "We're in the middle of one of the most hotly contested elections in recent years -- where you have a campaign that started so early, where they're raising more money than ever before, where there are new concerns about fundraising and about the bundling of contributions. I think the public would like to know that someone is keeping an eye on all this."
And one more question: who is going to stop former campaign managers of presidential candidates from starting unregulated, "independent" 527s from dumping third-quarters of a million dollars in ads on Iowans?
update: Edwards, 40 minutes ago:
After a rally here, the former North Carolina senator told reporters that by law, he can have no control or over such groups, known as "527s."
"I can’t talk to them at all," he said. When asked if he would say publicly that he wished the groups would stop running ads for him, Edwards changed the subject. But later, in Coralville, he said that he did wish the groups would drop the ads.
"I would encourage all the 527s, not just this one, but all the 527s to stay out of it," he said. "But I have no legal authority over that."