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FEC v. Friends for Fasi


On January 12, 2000, the Commission filed a complaint alleging that Mr. Fasi, a former Mayor of Honolulu and gubernatorial candidate in Hawaii, and his campaign committee, Friends for Fasi, had accepted prohibited contributions in the form of reduced rent for space that was owned, managed and/or controlled by foreign nationals. The Federal Election Campaign Act (the Act) prohibits foreign nationals from making "any contribution of money or other things of value . . . in connection with an election to any political office." 2 U.S.C. §441e(a). The Commission asked the court to declare that Fasi had violated the Act, enjoin them from accepting further contributions prohibited by 2 U.S.C. §441e and assess appropriate civil penalties.

Subsequently, Fasi filed a motion to dismiss the Commission's complaint, arguing three major points:

  • First, 2 U.S.C. §441e does not apply to contributions for non-federal elections because the statute defines "contribution" as anything of value given "for the purpose of influencing any election for Federal office" (2. U.S.C. §431(8)(A)(i));
  • Second, because the reductions in rent began prior to 1995, the Commission's January 12, 2000, complaint was filed after the 5-year statute of limitations had expired and, thus, was time-barred (28 U.S.C. §2462); and
  • Third, the Commission's request for injunctive relief was "improper and unauthorized by law" because there was no basis to allege that the defendants were "about to commit" a violation of the Act.

The court rejected Fasi's argument that §441e only applies to federal elections. Although the court found the language of the statute to be ambiguous in this regard, it concluded that the Commission's interpretation of §441e-as expressed in its own regulations and advisory opinions-was consistent and reasonable. The court said that the Commission has express authorization to "elucidate statutory policy in administering FECA" unless the court finds the Commission's interpretations "demonstrably irrational or clearly contrary to the plain meaning" of the Act. United States v. Kanchanalak, 192 F.3d at 1049; Nevitt v. United States, 828 F.2d at 1406-07.

The court granted in part and denied in part Fasi's motion to dismiss based on Fasi's second argument, that the Commission had filed its suit after the statute of limitations had expired. The court agreed that any claims based on alleged violations that occurred before January 12, 1995, were barred by the statute. The court also found, however, that the reduced rent constituted a "continuing violation" and that each month that Fasi was allowed to rent space at a reduced rate marked a new and separate contribution. The court reached this decision both because the Act makes each contribution a separate violation of 441e and because, in the absence of a long-term rental agreement or a fixed rental rate, the court concluded that Fasi had rented on a month-to-month basis. Thus, the court ruled that the Commission could only file claims based on alleged violations occurring between January 13, 1995, and November 1996, after which Fasi allegedly stopped receiving prohibited contributions.

On January 19, 2001, the court signed a consent judgment, in which it:

  • Found that Friends for Fasi violated the ban on contributions from foreign nationals by accepting the discounted rental space from January 1995 to November 1996;
  • Ordered Friends for Fasi to pay a $15,000 civil money penalty; and
  • Permanently enjoined Friends for Fasi and its agents, employees, attorneys, including Frank F. Fasi, from accepting "something of value from a foreign national at less than market value in connection with U.S. elections for public office."

Source:   FEC Record June 2001; and August 2000.