For Immediate Release |
Contact: |
Bob Biersack |
May 1, 2007 |
| George Smaragdis |
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Michelle Ryan |
FEC Collects $110,00 in Civil Penalties in Two Enforcement Actions and Dismisses
Complaints in Three Other Matters
WASHINGTON – The Federal Election Commission (FEC/the Commission) recently completed action on five matters previously under review (MURs), collecting a total of $110,000 in civil penalties and dismissing complaints against William D. Mason, Henry Ewert, and Friends for Harry Reid.
In MUR 5851, the Commission found reason to believe that the DNC Services Corporation/ Democratic National Committee (DNC) violated the Federal Election Campaign Act (the Act) by failing to file five 48 Hour Notices and four 24 Hour Notices for independent expenditures in the 2004 General Election. Under the Act, a political committee that makes an independent expenditure aggregating $10,000 or more during any time up to and including the 20th day before the date of an election is required to file a disclosure report with the Commission within 48 hours. Similarly, a political committee that makes an independent expenditure aggregating $1,000 or more within 20 days, but more than 24 hours, before the date of the election must file a disclosure report with the Commission within 24 hours. The FEC reached a conciliation agreement with the DNC in which it agreed to pay a civil penalty of $82,000.
MUR 5655 stemmed from an FEC audit of Rick Renzi for Congress, the principal campaign committee of Republican Representative Rick Renzi (AZ/01). Rick Renzi for Congress agreed to pay a civil penalty of $25,000 related to reporting violations in which they misstated financial activity on the Committee’s 2002 October Quarterly, Pre-General, Post General and Year-End Reports.
MUR 5604 centered on a handbill disseminated by the re-election campaign of nonfederal officeholder William D. Mason, advocating Mason’s re-election along with the election of John Kerry as President. The Commission found no reason to believe that a violation of the Act had occurred and closed the file.
In MUR 5723, the Commission exercised its prosecutorial discretion and dismissed a complaint against Henry Ewert, a candidate for Congress in Virginia’s Fifth District during the 2006 election, and his principal campaign committee Ewert for Congress. The complaint alleged that the respondents failed to register with the Commission in a timely manner.
MUR 5848 centered on the use of campaign funds by Friends for Harry Reid, the principal campaign committee of Democratic Senator Harry Reid (NV). In 2002, 2004 and 2005, Friends for Harry Reid used campaign funds totaling $3,300 to provide bonuses to staff members of the hotel in which the Senator resides. The Commission exercised its prosecutorial discretion and dismissed the matter in furtherance of the FEC’s priorities and resources relative to other matters pending before the Commission.
This release contains only disposition information.
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MUR 5851 |
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RESPONDENTS: |
DNC Services Corporation/ Democratic National Committee and Andrew Tobias, in his official capacity as Treasurer |
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COMPLAINANT: |
FEC Initiated (Reports Analysis Division) |
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SUBJECT: |
Failure to file 48 hour Notices and 24 Hour Notices |
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DISPOSITION: |
Conciliation agreement: $82,000
The matter was referred by the Reports Analysis Division (RAD) for enforcement after routine review of reports revealed that respondents failed to file 48 Hour and 24 Hour notices for independent expenditures related to the 2004 General election. The Committee made two independent expenditures in August of 2004 and seven independent expenditures in October of 2004. Respondents disclosed the expenditures on Schedule E of amended September Monthly and 12 Day Pre-General Reports, but failed to file 48 Hour notices for the nine independent expenditures totaling $165,190.98. During the 24 Hour Notice period for the 2004 General Election (October 14-October 31, 2004), the Committee made an additional nine independent expenditures totaling $1,196,239.07 for media production costs. These expenditures were reported on Schedule E of the Committee’s 30 Day Post-General Report, but respondents failed to file required 24 Hour Notices.
The Commission found reason to believe that the respondents violated the act by failing to file five 48 Hour Notices relating to the nine independent expenditures and failed to file four 24 Hour Notices relating to nine independent expenditures. Information provided by the DNC in response to the Commission’s reason to believe findings indicates that the one of these expenditures, in the amount of $58,220, was a pass-through payment to a mail vendor, Western Litho. The Committee timely disclosed this independent expenditure in a 48-Hour Notice filed on October 9, 2004 as a payment to the vendor and on Schedule E of the 2004 12-Day Pre-General Report as a payment to the U.S. Postmaster. The FEC reached a conciliation agreement with respondents in which they agreed to pay a civil penalty of $82,000.
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DOCUMENTS ON PUBLIC RECORD: |
Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5851 under case numbers in the Enforcement Query System. They are also available in the FEC’s Public Records Office at 999 E St. NW in Washington, DC. |
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2. |
MUR 5655 |
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RESPONDENTS: |
(a) Richard G. Renzi
(b) Rick Renzi for Congress and Nancy H. Watkins, in her official capacity as treasurer
(c) Patriot Insurance Agency, Inc. (Renzi & Co., Inc.)
(d) Fountain Realty & Development, Inc. (Fountain Hills Realty & Development/ Renzi Investments, Inc.) |
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COMPLAINANT: |
FEC Initiated (Audit) |
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SUBJECT: |
Prohibited corporate contributions; misstatement of financial activity. |
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DISPOSITION: |
(a,c,d) No further action
(b) Conciliation agreement:$25,000
According to FEC audit findings, Representative Renzi made $369,090 in loans to Rick Renzi for Congress (the Committee) that came from two Subchapter S corporations, Patriot Insurance Inc. (Renzi & Co.), and Fountain Realty & Development, Inc. (Renzi Investments), and the Committee committed several reporting violations. The matter was referred for enforcement.
During the enforcement investigation, however, respondents provided more extensive information regarding all transactions that occurred during the audit period between Renzi and the S corporations. Representative Renzi’s amended tax returns show that the source of the $369,090 that Renzi loaned to his campaign came from personal loan repayments to him, and were his personal funds, not prohibited corporate contributions. The Renzis each submitted sworn affidavits attesting to the transactional underlying the loans to the Committee and their sources.
Audit findings also revealed that the Committee violated numerous reporting provisions of the Act. On its 2002 October Quarterly, Pre-General, Post General and Year-End Reports, the Committee understated receipts by a net total of $37,539 and understated its disbursements by a net total of $101,105, which resulted in an overstatement of net cash on hand of $63,566. Additionally, the Committee disclosed three transfers totaling $134,495 from the Leadership Committee, an affiliated committee that engaged in joint fundraising with Renzi’s Committee, by itemizing $130,495 of the transfers as ordinary contributions on Schedule A, instead of providing memo entries on Schedule A disclosing original contributors who gave more than $200, or political committees that contributed any amount. The Committee failed to disclose the remaining $4,000 at all.
Based on the amended returns and new information regarding the loans, the Commission decided to take no further action and close the file. The Commission also found reason to believe that the Committee violated several reporting provisions of the Act and reached a conciliation agreement with Rick Renzi for Congress in connection with the Committee’s failure to accurately disclose cash on hand, receipts and disbursements on its 2002 reports. Respondents agreed to pay a civil penalty of $25,000.
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DOCUMENTS ON PUBLIC RECORD: |
Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5655 under case numbers in the Enforcement Query System. They are also available in the FEC’s Public Records Office at 999 E St. NW in Washington, DC. |
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3. |
MUR 5604 |
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RESPONDENTS: |
(a) William D. Mason
(b) Friends of William D. Mason, Thomas Regas, treasurer
(c) Kerry-Edwards, Inc., Robert Farmer, treasurer |
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COMPLAINANT: |
Charles R. Spies |
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SUBJECT: |
Prohibited contribution made from non-federal committee to publicly funded Presidential candidate; failure to register as Federal political committee; failure to provide adequate disclaimers |
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DISPOSITION: |
(a,b,c) No reason to believe.
Friends of William D. Mason disseminated a handbill supporting the re-election campaign of William D. Mason, County Prosecutor of Cuyahoga County, Ohio and the election of John Kerry election as President. The complaint alleged that the at least half the cost of the handbill was an in-kind contribution from Mason’s non-federal committee to the Kerry-Edwards publicly funded campaign committee, violating presidential public financing laws. It also alleged that payment of the Federal share of the handbill exceeded $1,000 and that the Mason committee should have registered as a Federal political committee as a result of the expenditure. Additionally, the complaint alleged that handbill’s disclaimer was inadequate since it was not contained in a printed box and failed to state whether or not it was coordinated with and authorized by the Kerry campaign. The Commission found no reason to believe that respondents violated the Act. |
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DOCUMENTS ON PUBLIC RECORD: |
Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5604 under case numbers in the Enforcement Query System. They are also available in the FEC’s Public Records Office at 999 E St. NW in Washington, DC. |
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4. |
MUR 5723 |
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RESPONDENTS: |
(a) Ewert for Congress, Janet Ewert, in her official capacity as treasurer
(b) Henry Bernard Ewert, II |
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COMPLAINANT: |
Lisa H. Blanton |
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SUBJECT: |
Failure to register with the FEC in a timely manner.
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DISPOSITION: |
(a,b) Dismiss the matter
The complaint alleged Henry Ewert failed to register his authorized campaign committee, Ewert for Congress, with the Commission in a timely manner. The complainant contended that Mr. Ewert began discussing running for Congress with the Chairman of the Virginia State Democratic Committee in the summer of 2005 and announced his candidacy on several occasions. The complaint asserted that, based on Mr. Ewert’s statements, he should have filed his statement of candidacy with the FEC prior to February of 2006.
Henry Ewert filed his statement of candidacy and registered his principal campaign committee, Ewert for Congress (the Committee) with the FEC sometime before March 7, 2006. On its 2007 April Quarterly Report, the Committee disclosed contributions received from January 1, 2006 to March 31, 2006, accurately reflecting the total financial activity for the Committee at the first opportunity the contributions could be reported. The Commission exercised its prosecutorial discretion and dismissed the matter in furtherance of the FEC’s priorities and resources relative to other matters pending before the Commission. |
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DOCUMENTS ON PUBLIC RECORD: |
Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5723 under case numbers in the Enforcement Query System. They are also available in the FEC’s Public Records Office at 999 E St. NW in Washington, DC. |
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5. |
MUR 5848 |
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RESPONDENTS: |
(a) Friends for Harry Reid and Cliff Beadle, in his official capacity as treasurer
(b) Senator Harry Reid |
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COMPLAINANT: |
Michael Boos |
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SUBJECT: |
Personal use of campaign funds |
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DISPOSITION: |
(a,b) Dismiss the matter.
The complainant alleged that bonuses paid to hotel employees with campaign funds from Senator Harry Reid’s campaign committee constituted personal use and violated the Act. The allegations concerned $3,300 in bonuses paid over three calendar years by the Friends for Harry Reid campaign committee to support personnel employed by the Ritz-Carlton Hotel located in Washington, DC, where Senator Reid resides. Friends for Harry Reid denied that the payments were a personal use of campaign funds; instead, the committee claimed that the payments were a form of gift of nominal value that was made on a special occasion and permissible under the regulations. To support this, the Committee pointed out that the payments benefited a large staff of personnel and were made in the amount of $600 in 2002, $1,200 in 2004 and $1,500 in 2005. The Commission exercised its prosecutorial discretion and dismissed the matter as a low-rated case. |
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DOCUMENTS ON PUBLIC RECORD: |
Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5848 under case numbers in the Enforcement Query System. They are also available in the FEC’s Public Records Office at 999 E St. NW in Washington, DC. |
*There are four administrative stages to the FEC enforcement process:
1. Receipt of proper complaint |
2. Reason to believe stage |
3. Probable cause stage |
4. Conciliation stage |
FEC decisions require the votes of at least four of its six Commissioners.
The FEC can close a case at any point after reviewing a complaint. If a violation is found and conciliation cannot be reached, then the FEC can institute a civil court action against a respondent.
**The Enforcement Priority System (EPS) rates all incoming cases against objective criteria to determine whether they warrant use of the Commission’s limited resources.
The Federal Election Commission (FEC) is an independent regulatory agency that administers and enforces federal campaign finance laws. The FEC has jurisdiction over the financing of campaigns for the U.S. House, the U.S. Senate, the Presidency and the Vice Presidency. Established in 1975, the FEC is composed of six Commissioners who are nominated by the President and confirmed by the U.S. Senate.
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