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For Immediate Release

Contact: 

Bob Biersack

September 12 , 2007

George Smaragdis

Michelle Ryan

 

FEC Resolves Seven Enforcement Cases

WASHINGTON – The Federal Election Commission (FEC/the Commission) recently resolved seven enforcement cases. 

In Matter Under Review (MUR) 5568, the Commission found that the Empower Illinois Media Fund (EIMF) violated the Federal Election Campaign Act (the Act) by failing to register with the FEC as a political committee and file disclosure reports.  The FEC determined that EIMF’s fundraising communications made clear to potential donors that any funds received would be used to influence the 2004 Senate race in Illinois by conducting a media campaign targeting Barack Obama.    EIMF spent about $83,000 during the 2004 election cycle, with more than $75,000 devoted to production and placement of radio and television ads opposing Obama’s candidacy. 

The Federal Election Campaign Act states that an organization that makes expenditures, or receives contributions, in excess of $1,000 must register with the Commission as a political committee and file regular financial disclosure reports.  The Act prohibits political committees from receiving contributions from corporations or labor organizations and limits contributions from individuals to no more than $5,000 per year.  EIMF accepted approximately $70,000 in contributions in amounts exceeding $5,000 per individual.  EIMF signed a conciliation agreement and agreed to pay a civil penalty of $3,000.

In MURs 5422 and 5680, Texans for Henry Cuellar Congressional Campaign agreed to pay a civil penalty of $28,500 for violating the Act’s reporting provisions.  Henry Cuellar was a 2004 House candidate (TX/28) when his principal campaign committee failed to include adequate information on 2004 Pre-Primary and October Quarterly reports regarding a bank loan the candidate obtained for the committee.  The committee also failed to disclose disbursements totaling $100,000 on the Pre-General election report filed with the Commission in October of 2004. 

In MUR 5401, the Commission initially found reason to believe Texans for Henry Cuellar Congressional Campaign violated the Act’s disclaimer requirements.  This complaint stemmed from allegations that certain automated telephone calls made by the committee failed to include adequate disclaimers stating who paid for or authorized the communications.  Disclaimer rules apply to telephone banks involving more than 500 phone calls of an identical or substantially similar nature made within any thirty day period.  The Commission’s investigation of the matter revealed that fewer than 500 of the automated calls were made, and as a result, the FEC took no further action regarding the matter.

In MUR 5826, the Commission found no reason to believe former Representative Mark Green (WI/08) or his principal campaign committee, Mark Green for Congress, violated the Act.  In 2005, Mark Green for Congress transferred funds to Green’s (non-federal) gubernatorial campaign committee and Mark Green formally announced his candidacy for Governor in the State of Wisconsin.  The complaint alleged that the funds transferred from the Federal committee to the non-federal, gubernatorial committee violated Wisconsin state contribution limits.  The complaint further alleged the Federal committee violated a provision of the Act allowing Federal candidates to use Federal campaign funds to make donations to non-federal campaigns, subject to state law.  The FEC determined that the Act permits the transfer of Federal funds to a state campaign, subject to state law.  The enforcement of state law, however, is the responsibility of the state.

MURs 5779 and 5805 arose from allegations that the City of Santa Clarita, a corporate entity in the State of California, failed to comply with the Act’s corporate prohibitions and reporting requirements applicable to political committees.  In 2006, the city produced banners thanking Representative Buck McKeon (CA/25) for legislation he proposed that would help limit mining in the area.  The Commission determined that the banners contained no express advocacy and found no reason to believe the City of Santa Clarita violated the Act.

By law, the FEC must attempt to resolve its enforcement cases or Matters Under Review (MURs) through a confidential investigative process that may lead to a negotiated conciliation agreement between the Commission and the individual or group the Commission determines has violated the law.  Additional information regarding MURs can be found on the FEC website at http://www.fec.gov/em/mur.shtml.

This release contains only summary information.  For additional details, please consult publicly available documents for each case in the Enforcement Query System (EQS) on the FEC website at http://eqs.fec.gov/eqs/searcheqs .

1.

MUR 5568

RESPONDENTS:

  1. Empower Illinois
  2. Empower Illinois Media Fund
  3. Jeffrey D. Davis
  4. Alan L. Keyes
  5. Keyes 2004, Inc. and Eugene T. Carter in his official capacity as treasurer
  6. Jack Roeser

COMPLAINANT:

Center for Responsibility and Ethics in Washington

SUBJECT:

Failure to register as a Political Committee

Excessive contributions

DISPOSITION:

  1. Take no action
  2. Conciliation agreement: $3,000 civil penalty
  3. No reason to believe
  4. No reason to believe
  5. No reason to believe
  6. Dismiss the matter

The complaint alleged that Empower Illinois and Empower Illinois Media Fund failed to register and file reports, that they received excessive contributions from individuals and made excessive contributions to Alan Keyes 2004 Senate campaign in Illinois, and that Jack Roeser made excessive contributions to the Empower Illinois groups.  The complaint also alleged that the groups illegally coordinated their activities with Alan Keyes and his campaign committee, Keyes 2004 Inc.

An investigation revealed that EIMF made approximately $83,000 in disbursements related to Federal elections during the 2004 election cycle and accepted about $70,000 in contributions that violated the Act’s contribution limits.

The Commission found reason to believe EIMF violated the Act and reached a conciliation agreement with them containing a $3,000 civil penalty.  Additionally, the Commission voted to take no action against Empower Illinois, found no reason to believe that Jeffrey Davis, Alan Keyes, or Keyes 2004 Inc. violated the Act.  The FEC exercised its prosecutorial discretion and dismissed the allegation that Jack Roeser made excessive contributions to the Empower Illinois groups.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5568 under case numbers in the Enforcement Query System. They are also available in the FEC’s Public Records Office at 999 E St. NW in Washington.

2/3.

MURs 5422 and 5680

RESPONDENTS:

Texans for Henry Cuellar Congressional Campaign and Rosendo Carranco, in his official capacity as treasurer

COMPLAINANT:

Debbie Martinez (5422)
FEC Initiated, Reports Analysis Division (5680)

SUBJECT:

Failure to disclose loan information properly, failure to disclose disbursements

DISPOSITION:

Conciliation agreement: $28,500

In MUR 5422, the complainant alleged the Texans for Henry Cuellar Congressional Campaign failed to file a Schedule C-1 with its Pre-Primary report filed on February 26, 2004.   The Schedule C-1 would have provided detailed information on a bank loan the candidate obtained for the committee from the International Bank of Commerce.  The complainant further alleged that the absence of such information, including the description and value of collateral, the repayment schedule and a certification from the bank, raised questions regarding whether the terms on which the loan was made complied with the Act. 

The committee failed to file the Schedule C-1 with its Pre-Primary report when the loan was initially obtained and also failed to do so with its October Quarterly report when the loan was restructured.  Respondents did not contest that they failed to timely file a Schedule C-1 with either report, but contended the information disclosed on this schedule was not explicitly required by the Act.  The Commission rejected these contentions and found probable cause to believe the respondents violated the Act by failing to timely and accurately file Schedule C-1 with its Pre-Primary and October Quarterly disclosure reports.

In MUR 5680, the FEC’s Reports Analysis Division referred the Texans for Henry Cuellar Congressional Campaign for failing to report disbursements on the Pre-General report filed on October 21, 2004.  The committee failed to disclose a disbursement for $100,000 to a media vendor.  The expenditure was reported for the first time when the Pre-General report was amended in January of 2005.  The omitted expenditure represented 56% of the committee’s total disbursements for that reporting period.  The Commission found probable cause to believe Texans for Henry Cuellar Congressional Campaign violated the Act by failing to disclose certain disbursements.

In order to conclude the matter and avoid litigation, the respondents entered into a conciliation agreement with the Commission, and agreed to pay a civil penalty of $28,500, and cease and desist from making future similar violations.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5422 or 5680 under case numbers in the Enforcement Query System. They are also available in the FEC’s Public Records Office at 999 E St. NW in Washington.

4.

MUR 5401

RESPONDENTS:

Texans for Henry Cuellar Congressional Campaign and Rosendo Carranco, in his official capacity as treasurer

COMPLAINANT:

Manuel Medina

SUBJECT:

Failure to include adequate disclaimers

DISPOSITION:

Reason to believe and take no further action

The complaint alleged automated telephone calls made by the Henry Cuellar Congressional Campaign, the principal campaign committee of 2004 Congressional candidate Henry Cuellar (TX/28), failed to include an adequate disclaimer indicating who paid for, or authorized, the communication. 

The Commission’s investigation revealed that fewer than 500 substantially similar automated calls were made, and therefore, no disclaimer was required.  Under the Act, the disclaimer provisions apply only to telephone banks involving more than 500 phone calls of an identical or substantially similar nature made within any thirty day period.

The Commission took no further action in the matter.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5401 under case numbers in the Enforcement Query System. They are also available in the FEC’s Public Records Office at 999 E St. NW in Washington.

5.

MUR 5826

RESPONDENTS:

  1. Mark Green for Congress and Richard Johnson in his official capacity as treasurer
  2. Mark Green

COMPLAINANT:

Wisconsin Democracy Campaign Education Project

SUBJECT:

Transfer to state campaign committee prohibited under state law

DISPOSITION:

  1. No reason to believe
  2. No reason to believe

The complaint alleged Mark Green for Congress, the principal campaign committee of former Representative Mark Green (WI/08), violated the Act and Wisconsin state law when the committee transferred funds to the candidate’s state gubernatorial campaign committee in amounts that exceeded the limits of Wisconsin state law. 

Mark Green was a member of the U.S. House of Representatives from 1999-2006.  In May of 2005, he formally announced his candidacy for Governor of Wisconsin in 2006.  On January 25, 2006, Green’s Federal campaign committee transferred $1,285,973.70 to his gubernatorial campaign committee.  The day after the transfer was made, the Wisconsin State Elections Board promulgated an Emergency Rule that retroactively invalidated part of the transfer and required the state committee to divest itself of approximately $468,000 of the transferred funds. 

The Commission found no reason to believe the respondents violated the Act.  The Commission determined that the Act permits the transfer of Federal funds to a non-federal committee, subject to state law. The “subject to…state law” clause was included to notify a transferor that state law is not preempted by the Act, not to prohibit the violation of the state law, and thus, the Act does not expressly prohibit the violation of state law.

The Commission determined that the enforcement of state law was the purview of the state, and it should not expend resources to investigate such alleged violations.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5826 under case numbers in the Enforcement Query System. They are also available in the FEC’s Public Records Office at 999 E St. NW in Washington.

6/7.

MURs 5779 & 5805

RESPONDENTS:

City of Santa Clarita

COMPLAINANT:

Bruce McFarland (5779)
Eddy Shalom (5805)

SUBJECT:

Prohibited in-kind contributions in the form of coordinated communications; failure to register as a political committee

DISPOSITION:

Complainants alleged the City of Santa Clarita violated the Act by making an independent expenditure or coordinated communication on behalf of a Federal candidate, Buck McKeon.  Complainants further alleged the respondents failed to register as a political committee with the FEC.

Congressman Howard P. “Buck” McKeon represents the 25th District of California and was running for re-election in 2006 when the City of Santa Clarita, a corporate entity in California, created and paid for fourteen large banners reading “Thank you Buck for H.R. 5471! – No Mega Mining in Soledad Canyon.”  The banners were displayed throughout the city from July 1, 2006 to July 31, 2006.  Respondents argued that the banners were part of an ongoing attempt to halt mining in Soledad Canyon and were an effort to thank McKeon for introducing legislation (H.R. 5471) with similar goals.

The Commission determined that the banners did not expressly advocate McKeon’s re-election, and  found no reason to believe the City of Santa Clarita violated the Act by making an independent expenditure or coordinated communication on behalf of a Federal candidate.  Additionally, the Commission found no reason to believe the City violated the Act by failing to register as a political committee.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5779 or 5805 under case numbers in the Enforcement Query System. They are also available in the FEC’s Public Records Office at 999 E St. NW in Washington.

*There are four administrative stages to the FEC enforcement process:

1. Receipt of proper complaint
2. Reason to believe stage
3. Probable cause stage
4. Conciliation stage

FEC decisions require the votes of at least four of its six Commissioners.

The FEC can close a case at any point after reviewing a complaint.  If a violation is found and conciliation cannot be reached, then the FEC can institute a civil court action against a respondent.

**The Enforcement Priority System (EPS) rates all incoming cases against objective criteria to determine whether they warrant use of the Commission’s limited resources.

The Federal Election Commission (FEC) is an independent regulatory agency that administers and enforces federal campaign finance laws. The FEC has jurisdiction over the financing of campaigns for the U.S. House, the U.S. Senate, the Presidency and the Vice Presidency. Established in 1975, the FEC is composed of six Commissioners who are nominated by the President and confirmed by the U.S. Senate.

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