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On April 14, 2010, the United States District Court for the Northern District of Texas granted the Commission’s Motion for Summary Judgment against the Defendants, Jody L. Novacek, Republican Victory Committee, Inc. (“RVC”), BPO, Inc., and BPO Advantage, LP (Defendants). The court found that Ms. Novacek and the RVC knowingly and willfully violated 2 U.S.C §441h(b)(1) by fraudulently misrepresenting themselves as acting for, or on behalf of, a political party for the purpose of soliciting contributions. The court also found that BPO, Inc., and BPO Advantage, LP, knowingly and willfully violated 2 U.S.C §441h(b)(2) by participating in Novacek and RVC’s plan, scheme or design to fraudulently misrepresent themselves as acting for, or on behalf of, a political party for the purpose of soliciting contributions. Finally, the court found that Ms. Novacek and RVC violated 2 U.S.C § 441d(a) and (c) by failing to include on their communications the required disclaimer information in the manner specified by the statute. The court ordered the Defendants to pay a civil penalty of $47,414.15.
On June 29, 2004, the Republican National Committee filed an administrative complaint with the Commission that alleged certain solicitations made by RVC violated the Federal Election Campaign Act (the Act) because these solicitations contained misrepresentations that RVC was acting on behalf of the Republican Party.
The Commission began its own investigation in 2005 and found probable cause that the Defendants had knowingly and willfully violated the Act. In October 2008, the Commission sent letters to the Defendants which proposed a conciliation agreement. The Commission was unable through informal methods to secure an acceptable conciliation agreement with the defendants.
On March 6, 2009, the Commission filed a Complaint in the U.S. District Court for Northern Texas against the Defendants for violations of the Act. On November 30, 2009, the Commission filed a Motion for Summary Judgment. The Commission argued that the Defendants made fundraising solicitations by phone and in mailers that fraudulently misrepresented the source of the solicitation as the Republican National Committee and the Republican Party in what constitutes a knowing and willful violation of the Act. Ms. Novacek created and operated the RVC, as well as BPO, Inc., and BPO Advantage, LP. Through these entities, Ms. Novacek made misrepresentations to vendors and the general public stating or implying that RVC was raising money for the Republican Party and the Republican National Committee. In addition, Ms. Novacek and RVC violated the Act by failing to include on their communications some of the required disclaimer information in the manner specified by the Act.
The court granted the Commission’s Motion for Summary Judgment against the Defendants. The court found that the Defendants had violated 2 U.S.C. §441h(b)(1) and (2). The court noted that Ms. Novacek and RVC had knowingly and willfully misrepresented themselves as acting for, or on behalf of, the Republican Party and the Republican National Committee for the purpose of soliciting contributions. The court also found that the defendants BPO, Inc., and BPO Advantage, LP, had willfully and knowingly participated in Ms. Novacek and RVC’s scheme, design or plan to fraudulently misrepresent themselves for the purpose of soliciting contributions. The court found that the Defendants failed to argue any of the material facts of the allegations and that the Defendants admitted to authoring scripts and follow-up letters to potential contributors for solicitation purposes.
The court rejected the Defendants’ claim that the call transcripts obtained by the Commission may not be an accurate sample of the calls made by call centers on behalf of the Defendants. The court also denied the Defendants’ request for additional discovery regarding further evidence from the call centers.
The court rejected the Defendants’ claim that Ms. Novacek did not commit any “knowing and intentional” fraud and misrepresentation because the “RNC does not own the term ‘Republican Party.’” FEC v. Novacek, No. 09-00444 (N.D. Tex. April 14, 2010). The court found the Defendants’ position unsupportable in light of the script’s clear implication that donations were solicited for the Republican Party and/or the Republican National Committee.
Finally, the court found that Defendants violated 2 U.S.C. § 441d(a) and (c) by failing to include a disclaimer in their communications. The Defendants failed to include RVC’s permanent address, phone number or website address, or state that the solicitation was not authorized by a candidate or candidate committee. In RVC’s mailings, the written material failed to properly format that information in clearly readable type size in a printed box set apart from the content of that communication. The court dismissed the Defendants’ arguments that the violations were unintentional since intent is not an element of the offense and the Commission did not request higher civil penalties that would become available if Ms. Novacek had acted with “knowing and willful” intent for those violations.
The court ordered the Defendants to pay a civil penalty in the amount of $47,414.15. The court also ordered that any funds raised by these solicitations and held by a non-party, the call center Apex CoVantage, L.L.C., shall be turned over to the Commission for return to the contributors.
Source: FEC Record -- May 2010 [PDF].