FEC v. Friends of Lane Evans (04CV4003)
On June 27, 2005, the U.S. District Court for the Central District of Illinois signed a consent judgment reflecting an agreement in this case between the Commission and Friends of Lane Evans, the 17th District Victory Fund and the Rock Island Democratic Central Committee. Under the consent agreement, the defendants neither admit nor deny violating the Federal Election Campaign Act (the Act), but agree to pay civil penalties. Friends of Lane Evans will pay a $185,000 civil penalty for violations by the Evans campaign and the 17th District Victory Fund, while the Rock Island Democratic Central Committee has agreed to a $30,000 civil penalty for its role in the violations.
The consent judgment signed by the court decrees that the defendants committed violations of the Act as presented in the Commission’s January 30, 2004, court complaint. According to that complaint, during the 1998 and 2000 elections, Congressman Lane Evans’ campaign committee established a purportedly independent committee, the 17th District Victory Fund (the Victory Fund), that was in fact nothing more than an alter ego of the Congressman’s campaign committee.
For the 1998 and 2000 elections, a candidate’s principal campaign committee could accept up to $1,000 per election from an individual, and the committees of a national party could accept up to $20,000 per year in the aggregate from an individual. Any other political committee could accept $5,000 per year from an individual. 2 U.S.C. §441a(a)(1). Additionally, under the Act an expenditure made by any person in “cooperation, consultation or concert, with, or at the request or suggestion of, a candidate, his authorized political committees, or their agents” is considered a contribution to the candidate. 2 U.S.C. §441a(a)(7)(B)(i). Corporations and unions are barred from making contributions or expenditures in connection with any federal election. 2 U.S.C. §441b(a).
During the period in question, the Victory Fund raised and spent more than $500,000. Congressman Evans and his staff raised a majority of the money contributed to the Victory Fund, including more than $200,000 in prohibited contributions from labor union treasury funds.
The Victory Fund then spent the majority of its funds on voter identification and get-out-the-vote activities promoting Congressman Evans. The Commission found that at least $330,000 of these campaign-focused activities were so closely coordinated with the campaign that they represented contributions from the Victory Fund to Congressman Evans. The contributions exceeded the Act’s limits and included funds from sources prohibited by the Act.
In addition, in 1998 the Rock Island Democratic Central Committee (the Rock Island Committee) spent approximately $18,000 on a radio ad, two direct mail pieces and a newspaper ad that expressly advocated the Congressman’s re-election and were coordinated with the Evans Committee. These coordinated expenditures exceeded the applicable $1,000 contribution limit and the communications did not include the required disclaimer stating whether they were authorized by Congressman Evans or the Evans Committee. 2 U.S.C. §441d(a).
The Rock Island Committee failed to register as a political committee and did not report its financial activity, even though it received several hundred thousand dollars during the 1998 and 2000 cycles after becoming a political committee. See 2 U.S.C. §433. Also, while it did not establish separate federal and nonfederal accounts, it accepted contributions outside the Act’s limits and prohibitions.
In addition to the civil penalties assessed, the agreement requires the Victory Fund to pay the Commission all funds remaining in its accounts on the date that the parties executed the Stipulation for Entry of Consent Judgment. The court also enjoined the defendants from committing similar violations of the Act in the future.