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FEC Commissioners State Reasons for Dismissal of NGP Complaint; Powerful Aristotle Data-Mining Cleared
May 18, 2010 (01:05 PM EDT)
Significant election, fundraising and compliance advantage seen for Aristotle's clients
WASHINGTON, May 18 /PRNewswire-USNewswire/ -- Elaborating on an important election law decision that will likely influence the technology selected by political committee treasurers and fundraisers, Federal Election Commission commissioners this week issued a "Statement of Reasons" explaining the FEC's decision to close the file and take no action on a complaint filed by competitor NGP Software. NGP sought to stop Aristotle from making FEC data available to clients through Aristotle's software.
Aristotle's attorney, Stephen Hershkowitz, partner of the election law firm Sandler, Reiff and Young, is the former Assistant General Counsel at the Federal Election Commission. He and partners Joe Sandler and Neil Reiff represent Aristotle on matters related to elections law. "This was a significant decision that clarifies the appropriate use of Commission data," said Hershkowitz. "After devoting considerable resources and carefully considering the issues, the Commission made the correct decision."
The legal victory makes Aristotle's patent-pending technology for data-mining by political organizations more valuable. The patent application, prepared by the national law firm DLA Piper, is entitled: "Integration of Voter and Contributor Data Into Political Software and Compliance Systems for Purposes of Solicitation, Compliance, Vetting and Calls to Action."
The Aristotle proprietary software enables users to access, mine and harness contribution disclosure records in a manner consistent with the law and for compliance purposes. Aristotle's platform also incorporates detailed state contributor and voter lists with highly accurate consumer databases to illuminate exactly how much a donor has given, how much they can give, and to suggest the maximum they might agree to contribute where allowed by law.
The FEC Chairman and the two commissioners who signed the "Statement of Reasons" highlighted the usefulness of a program such as Aristotle's in contrast with the FEC's own offering, called FECFile:
Because FECFile is a free service offered to any campaign or committee, it does not provide the broad range of features that other companies, such as Aristotle, can offer…Companies such as Aristotle offer these larger, more sophisticated committees a product that makes compliance easier and fulfills the purpose of ensuring their financial activity is accurately and timely disclosed.
The Statement of Reasons also contrasted the way that Aristotle uses federal contributor data with the FEC's earlier, unanimous decision to reject NGP's own efforts to use FEC data (FEC AO 2004-24):
NGP did not provide any limitations on its proposed use of the data, asking instead whether it could be used "regardless of their intended use of contributor data." NGP also confirmed the product could be used for solicitation and prospecting purposes.
In contrast, the Commissioners' Statement of Reasons notes:
Aristotle's feature, and its limited use of FEC data, is distinguishable in almost every way from NGP's. Unlike the feature presented by NGP, Aristotle's compliance/vetting feature is part of Aristotle's much larger Campaign Manager 5 software program, which has more than 400 features. And the compliance/vetting feature at issue was one of more than 50 new features Aristotle offered as part of an upgrade to its existing customers in the spring of 2004. Critically, this upgrade did not increase the price of the program itself.
The Statement adds that including this information assists with legal compliance. As the Commissioners point out:
It [Aristotle's FEC data feature] lets the user know how much a person has already contributed, and thus avoids the situation of inadvertently soliciting and/or accepting a contribution that would exceed the limitations of the Act, and could lead to an excessive contribution. Certainly, the converse is true - since the data shows whether or not a contributor has given the maximum permissible amount, a user would then know precisely how much it could legally solicit from a contributor. But this is not its sole function, and does not convert what is otherwise a compliance function into a "sale" or "use," since this information originated from the committee and is already readily available from that committee's own records. [SOR p. 6 and n. 22]
Finally, the Statement of Reasons concludes with the acknowledgement that Aristotle's feature furthers the FEC's goals: "Such commercial innovation should not be discouraged when it assists the agency in achieving its goal of encouraging compliance by all campaigns and committees."
"We agree with the Commission's decision," said John Aristotle Phillips, CEO of Aristotle. "This was an attempt to use complaints and litigation to stifle competition. NGP lost. Aristotle's customers won. We welcome federal and state campaign committee treasurers who were awaiting this decision, and now wish to switch to Aristotle's more capable and 100% FEC compliant platform."
"Aristotle goes to great lengths to design its products to be 100% legal, and we are the only company that unconditionally guarantees compliance with FEC and state disclosure laws. Aristotle clients now have a significant data-mining advantage using our very powerful software," said Phillips.
As J. Blair Richardson, General Counsel of Aristotle stated, "The FEC's decision to close the file validates what we have been saying all along. This restricted FEC data can be used in campaign software that is properly designed in conjunction with advice from experienced counsel. NGP previously asked the FEC to approve NGP's own proposed design, and, as we urged at the time, the Commission unanimously denied NGP's request. See AO 2004-24.
Richardson added, "Although NGP's now-dismissed complaint against us has failed to slow down our implementation of this innovation, we do not know if NGP will sue the commission in an effort to overturn its determination to close this matter. If NGP does so, however, we look forward to the opportunity to participate in that suit and to defend our technology successfully again."
Aristotle and NGP are still locked in litigation relating to claims of deceptive marketing. Aristotle alleges that NGP has for years falsely marketed itself by falsely claiming to serve "only Democrats and their allies," and NGP has filed counterclaims. NGP now appears to have removed such marketing claims from its website.
Aristotle is recognized as a global pioneer in political technology, providing indispensable tools to those who seek to use the Democratic process to influence decisions at the ballot box. Every occupant of the White House — Democrat and Republican — for more than 25 years has been an Aristotle customer, as are most U.S. Senators, most members of the U.S. House of Representatives, and Democratic and Republican state party organizations. For information about career opportunities or for client inquiries, go to www.aristotle.com.