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On July 10, 1990, the U.S. District Court for the District of Columbia granted the FEC's motion for summary judgment, ruling that the American Federation of State, County and Municipal Employees-P.E.O.P.L.E., Qualified (AFSCME-PQ), the separate segregated fund of AFSCME, and its treasurer, William Lucy, violated the law when they delayed the disclosure of in-kind contributions to the 1982 and 1984 Indiana House campaigns of Representative Frank McCloskey. (Civil Action No. 88-3208.) On October 31, 1991, the court assessed a civil penalty of $2,000 against the defendants.

During September of 1982 and 1984, AFSCME-PQ established telephone banks that were used in part to advocate the election of Representative McCloskey. Instead of reporting these in-kind contributions at the time they were made (i.e., when the services were provided on behalf of the candidate), AFSCME-PQ reported them after it paid the bills for the services, some months after the services were provided.

Although AFSCME-PQ claimed that the in-kind contributions were reported on time (i.e., when the funds were disbursed), the court disagreed, citing the statutory requirement that a committee must disclose the name and address of "each political committee which has received a contribution from the reporting committee during the reporting period, together with the date and amount of any such contribution." 2 U.S.C. §434(b)(6)(B)(i). Because AFSCME-PQ reported on a monthly basis, the contributions should have been disclosed in the months immediately following the making of the contributions, i.e., the operation of the phone banks.


In its October 1991 ruling on the penalty, the court observed that, although there was no bad faith by the defendants, "there is always harm to the public when the FECA is violated." Considering the maximum penalty of $10,000 inappropriate here, the court said a $2,000 penalty would serve the public's interest "by punishing a violation of the plain language of the statute." The court declined, however, to permanently enjoin defendants from future violations of 2 U.S.C. §434(b). The court pointed out that defendants cured the violation and have since complied with the reporting provision. Because "there has been no showing of a reasonable likelihood that the defendants will commit future violations," the court decided the public interest would not be substantially advanced by an injunction.

Source: FEC RecordJanuary 1992; and October 1990