Let’s play Guess The Federal Agency in order to see where the next political scandal may originate. Here are a few hints: This bureaucracy supposedly has safeguards to prevent politicization, enforces a broad, arcane, and contradictory regulatory and statutory code, and treats potential targets of investigations as guilty unless they prove themselves innocent.  Wait a moment … I just described nearly every federal agency in existence.  My bad.

In this case, though, I’m talking about the Federal Election Commission, which is tasked with enforcing the Byzantine, irrational campaign regulations put in place over the last several decades on federal candidates and officeholders.  Theoretically, as the Wall Street Journal’s Kimberley Strassel explains, these investigations have to get bipartisan approval from the equally-apportioned commissioners.  Lately, though, the FEC has lost control of its bureaucracy — and the White House likes that just fine, thanks to their choice of targets:

The FEC was created in the wake of Watergate, in part to remove primary power over political actors from the Justice Department. It sports an equal number of Democratic and Republican commissioners, so that neither side can easily impose a partisan agenda. This means a lot of deadlocks, a situation that infuriates the left, which prefers a fire-and-brimstone regulator.

It also frustrates the FEC’s staff, which has responded by going around the commissioners. The Federal Election Campaign Act (FECA), for instance, makes it clear that staff may not commence investigations until a bipartisan majority (four members) of the commission votes that there is a “reason to believe” a violation has occurred. In theory, this provision should guard against IRS-like witch hunts.

Except that over the years staff have come to ignore the law, and routinely initiate their own inquiries—often on little more than accusations they find on blogs or Facebook. For a sense of how these investigations can go off the rails, consider that Lois Lerner—before serving as the center of today’s IRS scandal—was the senior enforcement officer at the FEC. A Christian Coalition lawyer has testified that during a (sanctioned) FEC investigation in the 1990s—in addition to generating endless subpoenas, depositions and document requests, Ms. Lerner’s staff demanded to know what Coalition members discussed at their prayer meetings and what churches they belonged to. Once staff gets rolling, there is little to stop them.

More troubling to some FEC commissioners has been the staff’s unsanctioned and growing ties to the Obama Justice Department. In September 2011, Tony Herman was named FEC general counsel. Mr. Herman in early 2012 brought in Dan Petalas, a Justice prosecutor, as head of the agency’s enforcement section. FECA is clear that a bipartisan majority of commissioners must vote to report unlawful conduct to law enforcement. Yet FEC staff have increasingly been sending agency content to Justice without informing the commission.

The structure of the commission is supposed to keep the lid on politicization. Any investigator at the FEC might have a particular political bias, which is why FECA requires a majority of the commission to refer cases to prosecutors.  That is an important safety valve, not just for the potential targets of an investigation, but also for free political activity.  If career bureaucrats can sic prosecutors on innocent Americans simply for engaging in political activities that go against the taste of the bureaucracy, then the FEC’s unaccountable organization will have plenty of leeway into squelching such activity even if it’s perfectly lawful.

This mirrors the kind of abuse we have seen at the IRS.  It also has the same root cause — the labyrinth of irrational and arbitrary designations of money in politics.  If the US reformed its campaign-finance regulatory regime to allow unlimited contributions directly to candidates and parties with immediate disclosure of the amounts and identities of all contributions, two outcomes would be produced.  Most political money would go directly to candidates and parties, forcing them to be responsible for the messaging and providing a much higher degree of transparency.  That would eliminate most of the IRS issues with tax-exempt classifications, and it would also simplify the FEC’s job to enforcement of disclosures.  All of this would make compliance a lot easier for everyone, and encourage more political involvement.

Rearranging personnel in both bureaucracies misses the point.  In order to solve the problems of abuse of power and eliminate the incentives for it, we have to reduce the power and reach of both agencies.  That requires smart reform, not more arbitrary and irrational barriers to true transparency.