527 organizations pay civil penalties

Three 527 organizations active in the 2004 Presidential election have entered into conciliation agreements and paid civil penalties totaling $630,000 to settle violations of the Federal Election Campaign Act (the Act). The Swift Boat Veterans and POWs for Truth, the League of Conservation Voters 527 and League of Conservation Voters 527 II, and MoveOn.org Voter Fund each paid civil penalties and agreed to cease violating the Act, to file reports disclosing their 2004 election cycle activity and to register with the Commission as political committees if they engage in similar conduct.

The Act and Commission regulations require a group whose major purpose is to influence federal elections to file a Statement of Organization with the Commission within ten days of receiving contributions or making expenditures to influence federal elections that exceed $1,000 per calendar year. All political committees must file regular reports with the Commission disclosing the committee’s receipts and disbursements. Additionally, political committees may not accept any contributions from corporations and, in the case of a political action committee (PAC), may accept no more than $5,000 per calendar year from an individual or another PAC. The following three summaries describe the specific violations and penalties paid by each of the groups.

MURs 5511 and 5525: Swift Boat Veterans and POWs for Truth

The Commission entered into a conciliation agreement with Swift Boat Veterans and POWs for Truth (Swift Boat Vets) for failing to register with the Commission as a political committee, failing to report its contributions and expenditures and knowingly accepting excessive and prohibited corporate contributions. Swift Boat Vets agreed to pay a civil penalty of $299,500.

Failure to file and report

Swift Boat Vets raised more than $25 million in the 2004 election cycle. The group’s fundraising solicitations clearly stated that funds would be used to target a particular candidate for defeat in the upcoming federal elections. The funds received for this purpose were contributions that triggered the $1,000 political committee registration threshold.

Swift Boat Vets also spent $22.6 million during the 2004 cycle on television advertisements and direct mail pieces targeted to presidential battleground states that criticized Senator John Kerry’s military record, questioned his ability to be Commander-in-Chief, and expressly advocated his defeat in the 2004 general election. While the communications did not include the words “vote for” or “vote against”, they did constitute express advocacy under the “unmistakable, unambiguous, and suggestive of only one meaning” standard set forth in the Commission’s regulations at 11 CFR 100.22(b). As a result, payments for the communications constituted expenditures that formed a separate basis for triggering the $1,000 political committee registration threshold.

Corporate and excessive contributions

Swift Boat Vets accepted more than $715,000 in receipts from corporations and $12.5 million from individuals who contributed more than the $5,000 per calendar year PAC contribution limit.

MUR 5753: League of Conservation Voters 527 I and II

The Commission entered into a conciliation agreement with the League of Conservation Voters 527 and the League of Conservation Voters II (LCV 527s) for failure to register as a political committee and report contributions and expenditures and for accepting excessive contributions. The LCV 527s are distinct entities related to the League of Conservation Voters, Inc., a 501(c)(4) organization, and the League of Conservation Voters Action Fund, a federally registered PAC. The LCV 527s agreed to pay a civil penalty of $180,000.

Failure to file

The LCV 527s raised $6.7 million in the 2004 election cycle. The group’s fundraising solicitations clearly stated that funds would be used to target particular candidates for election or defeat in the upcoming federal elections, thus the funds received counted as contributions towards the $1,000 political committee registration threshold.

The LCV 527s spent more than $850,000 to fund the Environmental Victory Project, a door-to-door canvass of swing voters in key Presidential election battleground states. Paid workers used scripts and talking points that expressly advocated the election of John Kerry and the defeat of George W. Bush and distributed fliers and door hangers, produced with funds provided by LCV Inc. and its PAC, which also contained express advocacy. One of these scripts read, “we think it’s dangerous to have George Bush in office another four years. So we encourage you to consider which candidate has the right priorities for health and safety of our families and vote for John Kerry in November.” [Emphasis in original.]

In addition, the LCV 527s made more than $1,000 in expenditures for a mailer expressly advocating the defeat of Senate candidate Pete Coors. The mailer depicted a beer can labeled “Pete Coors for Senate” along with the candidate’s picture, accompanied by text intended to resemble the Surgeon General’s warning label stating: “Warning: This candidate cares more about his bottom line than our kids’ safety. Elect at your own risk.” [Emphasis in original.]

By funding activities expressly advocating the defeat of George W. Bush or the election of John Kerry, the LCV 527s made expenditures under the Act that formed a separate basis for triggering the $1,000 political committee registration threshold.

Excessive contributions

Almost $6 million of the $6.7 million in total contributions received by the LCV 527s comprised contributions from individuals in excess of the Act’s limits.

MUR 5754: MoveOn.org Voter Fund

The Commission entered into a conciliation agreement with MoveOn.org Voter Fund (MOVF) regarding findings that it failed to register with the Commission as a political committee, failed to disclose its contributions and expenditures in reports filed with the Commission, and accepted excessive contributions. MOVF agreed to pay a civil penalty of $150,000 and agreed that the organization, its officers, principals, agents, representatives, successors and assigns would cease and desist violating the Act. In addition, MOVF will file disclosure reports with the Commission for the relevant periods containing all information that must be disclosed by federal political committees.

Failure to file

MOVF exceeded the $1,000 committee registration threshold by receiving contributions through solicitations that clearly indicated the funds received would be targeted to the election or defeat of a clearly identified candidate. MOVF reported receipts of $12.6 million to the IRS, although that number did not represent its total receipts, as MOVF made $21.3 in disbursements and had $150,000 cash on hand at the end of the 2004 election cycle.

MOVF also spent $14.6 million on television advertisements in battleground states shortly before the 2004 Presidential election that opposed President Bush and criticized his leadership. The remainder of MOVF’s spending went towards fundraising, administrative expenses and $724,000 in grants to other political organizations.

The Commission made its findings without concluding that any of the MOVF communications expressly advocated the election or defeat of a clearly identified federal candidate.

Excessive contributions

MOVF received $9.8 million in excessive contributions, with three contributions of $1 million or more.