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For Immediate Release

Contact: 

Bob Biersack

December 27, 2007

George Smaragdis

Michelle Ryan

FEC Completes Action on Four Enforcement Cases;

 Civil Penalties in Two Matters Total $19,600

WASHINGTON – The Federal Election Commission (FEC/the Commission) recently completed action on four enforcement cases.

In Matter Under Review (MUR) 5786, the Big Tent Political Action Committee (Big Tent PAC) agreed to pay a civil penalty of $15,000 for a series of reporting violations.  The committee engaged in late and chronic non-reporting during 2004 and 2005 and failed to file reports electronically after exceeding the $50,000 threshold for mandatory electronic filing.

In MUR 5923, the American Dream Political Action Committee agreed to pay a civil penalty of $4,600 for failing to disclose to the FEC financial activity consisting of $32,173.82 in disbursements and $12,200 in receipts.  These omissions were the result of embezzlement activity by former treasurer, Lydia Meuret.  In connection with this matter, the Commission also reached a conciliation agreement with Ms. Meuret, who acknowledged knowingly and willfully violating the Act by commingling the committee’s funds with her own personal funds and failing to disclose receipts and disbursements in FEC reports.  The FEC prohibited her from working or volunteering for federal political committees in a capacity involving the committee’s finances for a period of five years.  Due to the mitigating circumstances presented by Ms. Meuret’s financial condition, the Commission agreed to not seek a civil penalty from her.  Ms. Meuret separately entered into a criminal plea agreement on related charges in 2003 in United States District Court.

In MUR 5772, the FEC accepted a plea agreement with Kenneth Phelps in which he acknowledged knowingly and willfully violating the Act by commingling funds from the Lockheed Martin Employees’ Political Action Committee (LMEPAC) with his own personal funds and failing to accurately report disbursements made by the committee to him.  The matter originally stemmed from an FEC audit which revealed that Mr. Phelps embezzled $170,000 from LMEPAC during his tenure as the committee’s assistant treasurer.  The Commission prohibited Phelps from working or volunteering in federal political campaigns in a capacity involving a committee’s finances or disclosure reports for ten years.  In light of the financial circumstances of the respondent and an order entered by the U.S. District Court for D.C. for Phelps to pay restitution in the amount of $163,115.53, the FEC sought no civil penalty.  In addition to the civil violations, Phelps plead guilty to twelve counts of wire fraud and twelve counts of false statements in the District of Columbia based upon the knowing and willful filing of fraudulent reports with the Commission.

In MUR 5816, the Commission dismissed allegations that Montanans for Lindeen, the principal campaign committee of 2006 Congressional candidate Monica Lindeen (MT/01), violated the Act by soliciting corporate funds.  The complaint centered on allegations that a document on the committee’s website solicited contributions from prohibited sources.  The Commission admonished Montanans for Lindeen and dismiss the matter because it did not warrant further review based on the Enforcement Priority System criteria.**

Under the 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 5786

RESPONDENTS:

The Big Tent PAC and Sylvia Nolde in her official capacity as treasurer

COMPLAINANT:

FEC Initiated (Reports Analysis Division)

SUBJECT:

Failure to file timely reports

DISPOSITION

Conciliation agreement: $15,000

The matter originated from information ascertained by the FEC’s Reports Analysis Division (RAD) in the normal course of its supervisory responsibilities.  According to RAD’s referral, the Big Tent Political Action Committee (PAC) engaged in late and chronic non-reporting during 2004 and 2005.

The committee submitted its 2003 Year-End Report on paper disclosing $94,000 in receipts and $46,854 in disbursements.  With this report the committee exceeded the $50,000 threshold for mandatory electronic filing.  The committee continued to file paper reports and failed to file the following reports electronically: 2003 Year-End, 2004 April Quarterly, 2004 July Quarterly, 2004 October Quarterly, 2004 30 Day Post General, 2004 Year-End and 2005 Mid-Year reports.

On November 3, 2005, the committee filed, 598 days late, its 2004 April Quarterly.  Other delinquent reports were not filed electronically until August 2006.

The Commission found reason to believe the Big Tent PAC violated the Act by failing to comply with the Act’s reporting requirements.  Respondents agreed to pay a civil penalty of $15,000.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5786 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.

MUR 5923

RESPONDENTS:

a.)  American Dream PAC and Cindy Barberio Payne in her official capacity as treasurer

b.)  Lydia Meuret

COMPLAINANT:

FEC Initiated (Reports Analysis Division)

SUBJECT:

Reporting

DISPOSITION

a.)  Conciliation Agreement: $4,600 Civil Penalty

b.)  Conciliation Agreement

The matter originated from information ascertained by the FEC’s Reports Analysis Division (RAD) in the normal course of its supervisory responsibilities.  According to RAD’s referral, the American Dream PAC (ADPAC) failed to comply with the Act’s reporting provisions after a former treasurer embezzled PAC funds and submitted inaccurate reports to the FEC.

In June 2006, the American Dream PAC (ADPAC) filed 12 amended reports, more than three years after the discovery of embezzlement by former ADPAC treasurer, Lydia Meuret.  The amended reports disclosed 39 expenditures totaling $39,173.82 paid to either Lydia Meuret or to various credit card companies with “Misappropraited Funds – L. Meuret” as the purpose of disbursement and three unreported receipts totaling $12,200, listed as “Reimbursement” from Meuret.

Lydia Meuret was the treasurer, Executive Director and custodian of records for ADPAC from 1999 to 2002.  Meuret began diverting funds from the committee in November 1999 to pay off her personal credit card balances.  She wrote checks from ADPAC accounts payable to the credit card companies and to herself.  According to Meuret, she took most of the funds from the committee’s nonfederal account and paid some money back by writing checks from her personal account.  In 2003, Mueret was prosecuted in the U.S. District Court and pled guilty to one count of mail fraud.  In October of that year she was sentenced to 15 months imprisonment and 3 years supervised release and was ordered to pay $119,021.28 in restitution to ADPAC and a $100 special assessment.

The embezzlement scheme was carried out over a three year period, and available information indicated that ADPAC did not have in place adequate internal control procedures over its finances that would have allowed for earlier discovery of the diversion of funds.  ADPAC did not segregate duties, regularly conduct audits, establish control procedures over receipts and disbursements, conduct periodic review of its finances, or have any other internal controls in place.

The Commission found reason to believe ADPAC violated the Act by failing to comply with the Act’s reporting requirements.  The commission decided that because ADPAC and its treasurer were responsible for complying with the Act, they were responsible for reporting violations that resulted from the committee’s lack of internal controls.  ADPAC agreed to pay a $4,600 civil penalty and to cease and desist from committing future similar violations.

In a signed conciliation agreement, Lydia Meuret admitted to knowingly and willfully violated the Act by failing to comply with multiple reporting provisions of the Act and by commingling $32,173.82 in ADPAC Federal funds with personal funds.  The FEC took into account Meuret’s financial hardship and departed from the civil penalty the Commission would normally seek for the violations at issue.  The FEC also prohibited Meuret from working or volunteering for federal political committees in a capacity involving the committee’s finances for a period of 5 years.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5923 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.

3.

MUR 5772

RESPONDENTS:

Kenneth Phelps

COMPLAINANT:

FEC initiated (Audit Division & Reports Analysis Division)

SUBJECT:

Knowing and willful commingling of committee funds with personal funds

DISPOSITION:

Reason to believe

The matter was initially generated by a Commission audit of the Lockheed Martin Employees’ Political Action Committee (LMEPAC) covering the period of January 1, 2001 through December 31, 2002.  The FEC audit of LMEPAC revealed that the committee’s former assistant treasurer, Kenneth Phelps, had embezzled $170,000, and that the committee’s apparent lack of internal controls on its finances may have made the embezzlement possible.

In MUR 5721, the Commission found reason to believe LMEPAC violated the Act by failing to accurately account for and report certain disbursements and failing to disclose certain receipts.  Additionally, the Commission found reason to believe Kenneth Phelps knowingly and willfully violated the Act by commingling committee funds with personal funds and failing to accurately account for and report certain disbursements.  The Commission reached a conciliation agreement with LMEPAC in MUR 5721, but was unable to successfully conciliate with Phelps.  As a result, the Commission accepted the agreement with LMEPAC in which they agreed to pay a $27,000 civil penalty and opened MUR 5772 to address the allegations against Phelps separately.

In MUR 5722, the FEC accepted a plea agreement with Mr. Phelps in which he acknowledged knowingly and willfully violating the Act and agreed to cease and desist from committing future similar violations.  The Commission prohibited Phelps from working or volunteering in federal political campaigns in a capacity involving a committee’s finances or disclosure reports for ten years.  In light of the financial circumstances of the respondent, the FEC sought no civil penalty.  Phelps was separately indicted with twelve counts of wire fraud and twelve counts of false statements in the District of Columbia based upon the knowing and willful filing of fraudulent reports with the Commission.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5772 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 5816

RESPONDENTS:

Montanans for Lindeen and Paul Ringling in his official capacity as treasurer

COMPLAINANT:

Charles Denowh

SUBJECT:

Corporate solicitations

DISPOSITION:

Admonish and dismiss the matter

The complaint alleged Montanans for Lindeen, the principal campaign committee of 2006 Congressional candidate Monica Lindeen (MT/01), violated the Act by soliciting funds from corporations.

The Lindeen committee’s website promoted a document labeled “Host a House Party for Monica.”  The document stated that, “Under Federal law, Montanans for Lindeen may accept contributions of up to $2,100 for the primary and general elections from individuals, business, corporations, and small contributor committees.”  The complaint alleged the committee violated the Act by soliciting corporate funds from entities that were not subject to the limitations, prohibitions and reporting requirements of the Act.

The Lindeen committee acknowledged the inadvertent violation and noted that the house party kit on the website was an edited version of a kit that was used by a committee staff member during a previous campaign job for a candidate for a nonfederal office in Oregon.

The Commission admonished Montanans for Lindeen and dismissed the allegations after determining the matter did not warrant further review based on Enforcement Priority System criteria.**

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5816 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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