FEC v. Beatty for Congress

On January 15, 1987, the U.S. District Court for the Southern District of New York granted the FEC's application for a default judgment in FEC v. Beatty for Congress Committee (Civil Action No. 86-Civ-3894- [RLC]). The court's default judgment decreed that the Beatty for Congress Committee, the principal campaign committee for Vander L. Beatty's 1982 House campaign, and the committee's treasurer, Edward Myers, Jr., violated the election law on several counts.

The court imposed a $5,000 civil penalty on the defendants for each violation and required the defendants to pay the FEC's court costs and attorney's fees. On March 31, 1987, the defendant entered a motion to vacate the default judgment.

On March 21, 1988, the U.S. Court of Appeals for the Second Circuit dismissed the appeal of Mr. Myers in FEC v. Beatty for Congress Committee and Edward Myers (Civil Action No. 88-6011). The FEC and Mr. Myers had filed a Stipulated Dismissal and Settlement Agreement with the court.

Background

On May 16, 1986, the FEC filed suit with the U.S. District Court for the Southern District of New York against the Beatty for Congress Committee and against the committee's treasurer, Mr. Myers. The FEC asked the court to find the defendants in violation of federal campaign finance laws on the following counts:

• Knowingly accepting excessive contributions from individuals and from a political committee (2 U.S.C. §441a(f));
• Knowingly accepting an excessive loan from the candidate's family and failing to report the loan (2 U.S.C. §434(b)(3)(E) and 441a(f) and 11 CFR 104.11(a));
• Accepting prohibited contributions from corporations and labor organizations (2 U.S.C. §441b); and
• Accepting corporate loans and failing to report them (2 U.S.C. §441b and 434(b)(3)(E) and 11 CFR 104.11(a)).

The Commission also asked the court to find the defendants in violation of the FECA's recordkeeping and reporting laws on the following counts:

• Failing to file two 1982 quarterly reports on time (2 U.S.C. §434(a)(2)(A)(iii));
• Failing to file 1982 pre-primary and year-end reports and a 1983 mid-year report (2 U.S.C. §434(a)(2)(A)(i) and (iii) and 434(a)(2)(B)(i));
• Failing to maintain adequate records of contributions (2 U.S.C. §432(c)(1-3));
• Failing to itemize certain contributions and expenditures (2 U.S.C. §434(b)(3-4) and 434(b)(5)(A)); and
• Failing to continuously report two loans until extinguished (11 CFR 104.11(a)).

District court ruling

In granting the default judgment against Mr. Myers and the Beatty Committee in January 1987, the court imposed a $5,000 civil penalty for each of the violations. The court denied a motion by Mr. Myers to vacate the default judgment against him in October 1987. Mr. Myers appealed the default judgment to the U.S. Court of Appeals for the Second Circuit.

Court of appeals

In March 1988, the appeals court dismissed the case after a stipulated agreement was reached between the FEC and Mr. Myers.

By the terms of the agreement, Mr. Myers would withdraw his appeal of the district court's October 1987 decision in the case. The court's decision denied Mr. Myers' motion to set aside the default judgment the court had entered against him in January 1987. That decision had imposed a $5,000 civil penalty on the defendants for each of 17 independent violations of the election law. In addition, the parties agreed that:

• Mr. Myers would pay a $15,000 civil penalty in increments spelled out in the payment schedule contained in the agreement. If he failed to meet the payment schedule within the time frame specified by the agreement, the FEC might reinstate the penalty originally imposed by the district court, plus interest from the entry date of the default judgment.
• After Mr. Myers' final penalty payment, the FEC would file a satisfaction of judgment notice with the court.
• By July 1, 1988, Mr. Myers would file certain original or amended reports for each year between 1983 and 1988. Should Mr. Myers fail to file the reports by July 1, 1988, or if the reports are not adequately filled out, the FEC may increase his civil penalty by $1,000 per month until the reports are filed in compliance with FEC disclosure requirements.
• Upon the acceptable filing of all the Beatty committee's required reports, Mr. Myers would follow FEC procedures for requesting termination of the committee.

Source: FEC Record— June 1988; March 1987; and June 1986. FEC v. Beatty for Congress, No. 86 Civ. 3894, (S.D.N.Y. Oct 23, 1987) (unpublished opinion).