FEC v. America's PAC
Summary
In a default judgment entered on January 14, 1993, the U.S. District Court of the Central District of California ordered America's PAC (a state committee) and Neil Barry Rincover, as executive director and acting treasurer, to pay a $25,000 civil penalty for violating the Federal Election Campaign Act. (Civil Action No. CV-92-2747-LGB.)
The court found that defendants failed to forward a $2,000 earmarked contribution from the Physicians Interindemnity/PAC to Bill Press, a U.S. Senate candidate. The acceptance of the earmarked contribution caused America 's PAC to become a federal political committee with registration and reporting obligations. The court ruled that the defendants, by failing to fulfill those obligations, violated 2 U.S.C. §§433(a) and 434(a)(1). The court also found that they violated §432(b)(1) by failing to forward the earmarked contribution and the required information to the candidate. Finally, because the check contained corporate funds, the court found that defendants knowingly accepted a prohibited contribution, in violation of §441b(a). They were ordered to pay a $25,000 penalty, refund the $2,000 contribution to the PAC and file a Statement of Organization and required reports, all within 15 days.
Furthermore, given defendants' default in the litigation, the court found there was a likelihood that defendants would repeat the violations and therefore enjoined them from further violations of the provisions cited above.
Contempt ruling
On May 23, 1994, America's PAC and Mr. Rincover, were held in civil contempt by the district court for failing to comply with the January 1993 default judgment.
Earlier, on April 18, 1994, responding to an FEC petition, the court had ordered the defendants to show cause why they should not be held in contempt. That same day, Mr. Rincover filed a motion to set aside the January 1993 default judgment. (America's PAC never responded to the order to show cause.)
The court, however, rejected Mr. Rincover's motion, finding that his claims did not indicate the "extraordinary circumstances" necessary for the court to set aside a judgment. The court therefore ordered Mr. Rincover and America's PAC to comply with the January 1993 order within 30 days or pay $50 for each day of delay. Exercising its discretion, the court reduced the penalty to $5,000 because all the violations stemmed from a single incident.
Source: FEC Record— August 1994; and April 1993. FEC v. America's PAC, No. 92-2747 LGB (Tx) (C.D. Cal. May 23, 1994).