WASHINGTON – The Federal Election Commission announced today that it has reached settlements with three 527 organizations accused of violating the federal campaign finance laws during the 2004 presidential election. The League of Conservation Voters 527 and 527II, MoveOn.org Voter Fund, and Swiftboat Veterans and POWs for Truth have collectively paid almost $630,000 to settle charges that they failed to register and file disclosure reports as federal political committees, and accepted contributions in violation of federal limits and source prohibitions. The Commission approved all three conciliation agreements by a vote of 6-0.
“These unanimous decisions provide important guidance as to when organizations must register and report as political committees,” said Commission Chairman Michael Toner. “The findings and six-figure penalties we are announcing today send a strong message that the Commission takes these kinds of cases very seriously, and that when an organization fails to file as a political committee, it carries serious legal consequences,” he added. “The bipartisan and unanimous nature of the Commission’s action today leaves little doubt that this agency is willing to regulate election activity more aggressively than it has in the past” said Vice Chairman Robert Lenhard. “These settlements resulted from thorough investigations of all aspects of these groups’ activities, full and fair consideration of the complex legal issues, and tough, constructive negotiations,” added Lawrence H. Norton, the Commission’s General Counsel.
If an organization receives contributions or make expenditures in excess of $1,000, and its major purpose is involvement in campaign activity, it must register with the Commission and abide by the contribution restrictions and reporting requirements of the Federal Election Campaign Act. Each of these entities registered with the Internal Revenue Service as “Section 527” organizations – tax exempt groups whose function is to influence the selection, nomination, election, or appointment of any individual to Federal, State, or local public office or office in a political organization, or the election of Presidential electors.
Through their public statements, solicitations for contributions, and various communications to the public, these organizations clearly established that they were political committees during the 2004 campaign. Their failure to register with the Commission, abide by contribution limits and prohibitions, and file disclosure reports resulted in the organizations agreeing to pay the following civil penalties:
The organizations also agreed to cease and desist from violating applicable laws and regulations and to file reports with the Commission for the relevant periods containing all of the information that must be disclosed by federal political committees.
Among other spending in the 2004 election, the League of Conservation Voters 527 groups funded door-to-door and phone canvassing activities that expressly advocated the election of Senator Kerry and the defeat of President Bush. MoveOn.org Voter Fund produced television advertisements targeted to Presidential battleground states aimed at defeating George W. Bush, and its solicitations for funds clearly indicated that the funds received would be used to defeat President Bush in the 2004 general election. Swiftboat Veterans and POWs for Truth produced advertisements and sent out direct mail that attacked John Kerry and expressly advocated his defeat.
Case Summaries:
1. |
MUR 5511 & 5525 |
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RESPONDENTS: |
(a) Swift Boat Vets and POWs for Truth [5511 & 5525]
(b) Bush-Cheney ’04, Inc., David Herndon, treasurer [5525]
(c) Alachua County Republican Party [5525]
(d) Republican National Committee, Mike Retzner, treasurer [5525]
(e) George W. Bush [5525]
(f) Dick Cheney [5525]
(g) Karl Rove [5525]
(h) Kenneth Cordier [5525]
(i) Harlan Crow [5525]
(j) William Franke [5525]
(k) Roy Hoffman [5525]
(l) Alvin Horne [5525]
(m) Bill Lannom [5525]
(n) John O’Neil [5525]
(o) Bob Perry [5525]
(p) Charles Plumly [5525]
(q) Weymouth Symmes [5511] [5525]
(r) Merrie Spaeth [5525]
(s) Alachua Bush/Cheney Committee |
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COMPLAINANT: |
Kerry-Edwards 2004, Inc. [5525]
Fred Werthheimer, on behalf of Democracy 21 [5511]
J. Gerald Hebert, on behalf of Campaign Legal Center [5511]
Steven Weiss, on behalf of Center for Responsive Politics [5511] |
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SUBJECT: |
Failure to register as a political committee; failure to report contributions and expenditures; knowingly accepting excessive contributions from individuals; knowingly accepting corporate contributions; coordination. |
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DISPOSITION: |
(a) Conciliation Agreement: $299,500 civil penalty*[re: political committee status]
(b) Reason to believe, took no further action [re: coordination]
(c-h) Close the file*
(i-s) Take no action* |
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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
5511 or 5525 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. |
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2. |
MUR 5753 |
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RESPONDENTS: |
(a) League of Conservation Voters 527
(b) League of Conservation Voters 527 II
(c) League of Conservation Voters Action Fund, and Barbara Gonzalez-Mcintosh in her official capacity as treasurer |
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COMPLAINANT: |
Thomas J. Josefiak, General Counsel, Bush-Cheney ’04, Inc.
Jill Holtzman Vogel, Chief Counsel, Republican National Committee |
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SUBJECT: |
Failure to register as a political committee; failure to report contributions and expenditures; knowingly accepting excessive contributions from individuals; allocation |
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DISPOSITION: |
(a-b) Conciliation Agreement: $180,000 civil penalty*
(c) Reason to believe, no further action [re:allocation] |
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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
5753 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. |
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3. |
MUR 5754 |
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RESPONDENTS: |
(a) MoveOn.org Voter Fund (MOVF)
(b) MoveOn PAC
(c) MoveOn.org |
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COMPLAINANTS: |
Thomas J. Josefiak, General Counsel, Bush-Cheney ’04, Inc.
Jill Holtzman Vogel, Chief Counsel, Republican National Committee |
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SUBJECT: |
Failure to register as a political committee; failure to report contributions and expenditures; knowingly accepting excessive contributions from individuals; allocation. |
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DISPOSITION: |
(a) Conciliation Agreement: $150,000 civil penalty* [re: failure to register as a political committee; failure to report contributions and expenditures; knowingly accepting excessive contributions from individuals]; no reason to believe [re: coordination with John Kerry for President Inc.]
(b) Reason to believe, take no further action [re: allocation]
(c) Take no action |
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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
5754 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. |
There are four administrative stages to the FEC enforcement process:
1. Receipt of proper complaint |
3. “Probable cause” stage |
2. “Reason to believe” stage |
4. Conciliation stage |
It requires the votes of at least four of the six Commissioners to take any action. 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.
MURs 5511 and 5525
SWIFT BOAT VETERANS AND POWS FOR TRUTH
QUICK REFERENCE SHEET
BASIC FACTS
- The Commission found reason to believe that Swift Boat Veterans and POWs for Truth (“SwiftVets”) violated:
- 2 U.S.C. § 433 (failure to register with the Commission as a political committee);
- 2 U.S.C. § 434 (failure to report contributions and expenditures to the Commission);
- 2 U.S.C. § 441a(f) (knowingly accepting contributions in excess of $5,000 from individuals); and
- 2 U.S.C. § 441b(a) (knowingly accepting corporate contributions).
- SwiftVets is a 527 organization that filed its Notice of 527 Status with the IRS on April 23, 2004.
- SwiftVets did not register with the FEC as a federal political committee.
CONCILIATION AGREEMENT
- SwiftVets will pay a Civil Penalty of $299,500.
- This Agreement settles all alleged violations as to SwiftVets’ status and obligations as a Federal political committee.
- SwiftVets will file reports with the FEC containing all information that it should have disclosed as a Federal PAC during 2004. The Commission has agreed that this obligation may be met by filing copies of its IRS reports with the FEC, along with certain supplemental information.
- SwiftVets will register with the FEC and report as a political committee if its activities trigger federal political committee status in the future.
- SwiftVets will cease and desist from further violating the provisions of the law at issue here.
CONTRIBUTIONS
- SwiftVets’ fundraising solicitations clearly indicated that the funds sought would be targeted to the defeat of John Kerry (e.g. “[W]e plan to make sure every American is aware of how John Kerry is misrepresenting his record and ours in Vietnam... ...and to demonstrate why he is clearly unfit for command.….”). Funds received in response to such solicitations are “contributions” under the Act.
- SwiftVets raised approximately $25 million during the 2004 election cycle.
- SwiftVets accepted approximately $12.5 million in individual contributions in excess of the $5,000 per year limit.
- Swift Vets accepted $715,050 in prohibited corporate contributions.
EXPENDITURES
- According to IRS reports, SwiftVets spent approximately $22.6 million during the 2004 election cycle attacking John Kerry and/or expressly advocating John Kerry’s defeat in the 2004 Presidential election.
- SwiftVets spent approximately $20 million, or more than 90% of its reported disbursements, on television advertisements and direct mail pieces targeted to presidential election battleground states, including Ohio, Pennsylvania, Florida, Nevada, New Mexico, Colorado, Minnesota, West Virginia, Wisconsin and Tennessee.
- SwiftVets spent $9.4 million on 5 television advertisements that expressly advocated the defeat of John Kerry.
- SwiftVets spent $1.1 million on two mail pieces that expressly advocated the defeat of John Kerry.
- These express advocacy communications, along with others, constitute “expenditures” under the Act.
COORDINATION ALLEGATIONS
- Following an investigation, the Commission dismissed allegations that SwiftVets unlawfully coordinated its activities with President Bush’s campaign committee, Bush-Cheney ’04
MUR 5753
League of Conservation Voters 527 I and II (LCV 527s)
QUICK REFERENCE SHEET
BASIC FACTS
- The Commission found reason to believe that two League of Conservation Voters 527s (known as LCV 527 I and II) violated three provisions of the Federal Election Campaign Act:
- 2 U.S.C. § 433 (failure to register with the Commission as a political committee);
- 2 U.S.C. § 434 (failure to report contributions and expenditures to the Commission); and
- 2 U.S.C. § 441a(f) (knowingly accepting contributions in excess of $5,000 from individuals).
- The LCV 527s are 527 organizations. They are part of the larger League of Conservation Voters “family,” which also includes the League of Conservation Voters, Inc. (a 501(c)(4) organization), and the League of Conservation Voters Action Fund (a federal political action committee registered with the Commission).
- League of Conservation Voters 527 I was founded in 1997 and filed a Notice of 527 Status with the IRS in 2000. The League of Conservation Voters 527 II filed a Notice of 527 Status with the IRS in October 2004.
CONCILIATION AGREEMENT
- The League of Conservation Voters 527s will pay a Civil Penalty of $180,000.
- This Agreement settles all alleged violations as to the League of Conservation Voters family of organizations with respect to the 2004 election cycle. In particular, this Agreement settles all alleged violations as to the LCV 527s’ status and obligations as a federal political committee.
- LCV 527 I and II will file reports with the FEC containing all information that it should have disclosed as a federal PAC from January 1, 2003 through December 31, 2004. The Commission has agreed that this obligation may be met by filing copies of its IRS reports with the FEC, along with certain supplemental information.
- The Agreement requires the LCV 527s to register and report as federal PACs if either engages in activities that trigger federal political committee status in the future.
- The LCV 527s have agreed to cease and desist from further violating the provisions of the law at issue here.
CONTRIBUTIONS
- The LCV 527s’ fundraising solicitations clearly indicated that the funds sought would be used to target the defeat of George W. Bush and the election of John Kerry, or to influence the election or defeat of specific candidates in Congressional races (e.g. “support LCV’s Environmental Victory Project, our uniquely strategic plan with the capacity to persuade independents, moderate Republicans and Nader-folk to cast deciding votes for John Kerry in what’s sure to be a breathtakingly close election.”). Funds received in response to such solicitations are “contributions” under the Act.
- During the 2004 election cycle, the LCV 527s reported $6.7 million in receipts to the IRS. Of this amount, almost $6,000,000 consisted of contributions in amounts exceeding the legal maximum of $5,000 per individual per year to a federal PAC.
- The Commission did not find that the LCV 527s accepted contributions from prohibited sources (such as corporations, labor unions, or foreign nationals).
EXPENDITURES
- In 2004, the LCV 527s spent $3,900,000 for television and radio advertisements and printed materials such as mailers and door-hangers, some of which expressly advocated the election or defeat of clearly identified federal candidates. Activity was focused in battleground states such as Florida, New Mexico, Oregon, and Wisconsin.
- The LCV 527s spent in excess of $850,000 to fund the Environmental Victory Project, a door-to-door canvass of swing voters in key Presidential election battleground states, where paid workers used scripts and talking points expressly advocating the election of John Kerry and the defeat of George W. Bush. The LCV 527s’ canvassers distributed fliers and door hangers, produced with funds provided by LCV Inc. and its PAC, that also expressly advocated the election of John Kerry. 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.
- 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.”
- The LCV 527s made more than $1,000 in expenditures for a mailer expressly advocating the defeat of Senate candidate Pete Coors.
- Coors beer can mailer: depicts 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”
MUR 5754
MOVEON.ORG VOTER FUND (MOVF)
QUICK REFERENCE SHEET
BASIC FACTS
- The Commission found reason to believe that MoveOn.org Voter Fund (MOVF) violated three provisions of the Federal Election Campaign Act:
- 2 U.S.C. § 433 (failure to register with the Commission as a political committee);
- 2 U.S.C. § 434 (failure to report contributions and expenditures to the Commission); and
- 2 U.S.C. § 441a(f) (knowingly accepting contributions in excess of $5,000 from individuals).
- MoveOn.org Voter Fund is a 527 organization. It is part of the larger MoveOn “family,” which also includes MoveOn.org (a 501(c)(4) organization) and MoveOn PAC (a federal PAC registered with the Commission).
- MoveOn.org Voter Fund filed a Notice of 527 Status with the IRS in September 2003
- MoveOn.org Voter Fund did not register with the FEC as a federal political committee.
CONCILIATION AGREEMENT
- MoveOn.org Voter Fund will pay a Civil Penalty of $150,000.
- This Agreement settles all alleged violations as to MoveOn.org Voter Fund’s status and obligations as a federal political committee.
- MoveOn.org Voter Fund will file reports with the FEC containing all information that it should have disclosed as a federal PAC from September 2003 through December 31, 2006. The Commission has agreed that this obligation may be met by filing copies of its IRS reports with the FEC, along with certain supplemental information.
- The Agreement requires MOVF to register and report as a federal PAC if it engages in activities that trigger federal political committee status in the future.
- MoveOn.org Voter Fund, and all its officers, principals, and agents, have agreed to cease and desist from further violating the provisions of the law at issue here.
- The Commission found no reason to believe that MoveOn.org Voter Fund violated the Act in connection with allegations of coordination with John Kerry for President, Inc. and took no action as to MoveOn.Org.
CONTRIBUTIONS
- MoveOn.org Voter Fund sent solicitations for contributions mostly by email communication, but also via their website and by blast fax.
- MoveOn.org Voter Fund’s solicitations clearly indicated that the funds sought would be used to target the election or defeat of specific federal candidates (e.g “Our objective is to challenge George Bush’s policies and record in order to reduce support for his re-election in 2004.”) Funds received in response to such solicitations are “contributions” under the Act.
- During the 2004 election cycle, MoveOn.org Voter Fund accepted $9.8 million in contributions in amounts exceeding the legal maximum of $5,000 per individual for federal PACs.
- The Commission did not find that MOVF accepted contributions from prohibited sources (such as corporations, labor unions, or foreign nationals).
SPENDING
- The Commission made its findings without concluding that any of the MoveOn.org Voter Fund communications expressly advocated the election or defeat of a clearly identified federal candidate.
- MoveOn.org Voter Fund spent $21 million in the 2004 election cycle.
- Between September 2003 and November 2004, MOVF spent $14.6 million (70% of $21.3 million total spending) on 25 television ads targeted to presidential battleground states (Pennsylvania, Florida, Maine, West Virginia, Minnesota, Iowa, Ohio, Colorado, Oregon, Nevada, Michigan, Missouri, Wisconsin, and on CNN). The advertisements opposed George W. Bush’s record on campaign issues and criticized his leadership.
- These advertisements included the following language:
- “Face it. George Bush is not on our side.”
- “M-I-S leader”
- The remaining 30% went to administrative expenses (including fundraising) and a $724,000 grant to other political organizations.
- MoveOn.org Voter Fund’s advertising stopped on November 2, 2004 and all election-related activity stopped less than 2 months later.
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