FEC Completes Action in 12 Enforcement Cases; Civil Penalties in Two Matters Total $30,000

For Immediate Release

Contact:  

Bob Biersack

November 5, 2007

George Smaragdis

Michelle Ryan

1.

MUR 5587R

RESPONDENTS:

a.)  David Vitter for U.S. Senate and William Vanderbook in his official capacity as treasurer

b.)  McRei, Inc., and Sandra McDade

COMPLAINANT:

John A. Miller, Ph.D.

SUBJECT:

Failure to include adequate disclaimers on public communication

DISPOSITION:

a.)  Conciliation agreement: $25,000**

b.)  No reason to believe

According to the complaint, David Vitter for U.S. Senate failed to include adequate disclaimers on telephone bank calls made on its behalf before the 2004 General election. 

The Vitter committee hired McRei, Inc. to conduct two sets of telephone bank calls prior to the 2004 General election.  The first set of calls consisted of approximately 400,000 advocacy and voter identification calls in which the caller stated that he or she worked for the committee.  The calls did not, however, clearly state that the David Vitter for U.S. Senate committee paid for the communication.  The second set of calls, referred to as the “Undecided” calls, consisted of approximately 90,000 calls intended to elicit voter preferences in the Senatorial race.  These calls also did not clearly state that they were paid for by the Vitter committee. 

Both sets of calls consisted of more than 500 calls of an identical or substantially similar nature made within a 30-day period, and were therefore public communications subject to the Act’s disclaimer requirements. 

The Commission reached a conciliation agreement with the Vitter committee in which they agreed to pay a $25,000 civil penalty to settle the matter and avoiding the expense of litigation. 

A Statement of Reasons from Commissioner von Spakovsky is available at http://www.fec.gov/members/von_Spakovsky/sor/sormur5587R.pdf.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5587R 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.

2.

MUR 5812

RESPONDENTS:

a.)  Jamee L. Patton

b.)  Ohio State Medical Association Political Action Committee and Timothy Maglione in his official capacity as treasurer

COMPLAINANT:

FEC Initiated (Reports Analysis Division)

SUBJECT:

a.)  Knowing and willful commingling of political committee funds with personal funds

b.)  Failure to disclose all financial activity, failure to timely disclose financial activity

DISPOSITION:

a.)  Conciliation agreement: Prohibited from working or volunteering with committee finances

b.)  Conciliation agreement: $5,000

The matter was initiated after the Commission was alerted by the Ohio State Medical Association PAC (OSMAPAC) that its reports contained errors due to embezzlement by a former employee.  A Commission investigation revealed the committee failed to disclose disbursements totaling $83,579 and failed to disclose a receipt of $81,070 in a timely manner.

Jamee L. Patton was employed by the Ohio State Medical Association (OSMA) and authorized to write checks on behalf of its PAC.  From December 2000 through May 2005, she made unauthorized disbursements to herself totaling $83,570.  During that time, Patton disguised 57 checks to herself as contributions to the American Medical Association PAC (AMAPAC), an affiliated committee of OSMAPAC.  The unauthorized disbursements were noted only in internal accounting records and not on FEC reports.  In January 2006, Patton was sentenced in Franklin County, Ohio for charges related to the embezzlement.

In July 2005, OSMA discovered the embezzlement through an internal audit.  OSMAPAC’s accounting records indicated that it contributed $266,725 to AMAPAC between December 2000 and May 2005 while FEC reports disclosed contributions totaling $183,155 to AMAPAC.  As a result of the unreported disbursements, its FEC reports disclosed inaccurate cash on hand balances during that period.

OSMA filed a claim with its insurance company to recover the OSMAPAC funds embezzled by Ms. Patton, and received a check for $81,070 to cover the loss.  This check was received in September 2005, but was not timely disclosed on the Committee’s 2005 Year End Report.

The Commission reached a conciliation agreement with OSMAPAC in which the committee agreed to pay a civil penalty of $5,000 and amend FEC disclosure reports.  This penalty was assessed in light of the PAC’s inadequate internal financial controls.  However, since the discovery of the embezzlement, the PAC instituted remedial measures and adopted Commission policies on internal financial controls.

The Commission also reached a conciliation agreement with Patton in which she is prohibited from working or volunteering for federal political committees in a capacity involving finances for 10 years.  In light of Ms. Patton’s financial situation, no civil penalty was assessed.  Separately, Ms. Patton was criminally prosecuted on related charges, received five years’ probation and was ordered to make full restitution.   

All respondents agreed to cease and desist from committing future similar violations.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5812 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.

3.

MUR 5886

RESPONDENTS:

Democratic Voters Choice

COMPLAINANT:

Bill Durston, MD

SUBJECT:

Fraudulent misrepresentation

DISPOSITION

2006 Congressional candidate Bill Durston (CA/03) alleged that a mailer sent by Democratic Voters Choice (DVC) violated campaign ethics and “unfairly affected” his chance of winning the election.  Durston specifically alleged DVC styled the mailer to appear as if it came from the Democratic Party and that the mailer “deliberately attempted to trick Democratic voters into voting for the Republican candidate.”

The Commission found no reason to believe a violation of the Act occurred.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5886 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.

4.

MUR 5884

RESPONDENTS:

a.)  William T. Sali

b.)  Larry Grant

c.)  Paul Smith

d.)  Andy Hedden-Nicely

COMPLAINANT:

Dave Olson

SUBJECT:

Failure to provide statement of candidacy to opponents

DISPOSITION

a-c.)  No reason to believe

d.)  Dismiss the matter

The complainant, Dave Olson, a 2006 Congressional candidate (ID/01), alleged that his opponents, William T. Sali, Larry Grant, Paul Smith, and Andy Hedden-Nicely, failed to provide him with a copy of their respective Statements of Candidacy (FEC Form 2).

FEC Form 2 discloses, among other things, each candidate’s intent to spend personal funds that may trigger increased contribution limits for opposing candidates under the Millionaires’ Amendments.  Candidates are required to either fax or e-mail Form 2 to all opposing candidates when they register with the FEC.  The Commission determined that they are not, however, required to continue notifying new candidates who register subsequently. 

William T. Sali and Larry Grant each claimed they registered with the FEC well before Olson and were not required to share a copy with the complainant.  Paul Smith’s committee noted the complaint should not have applied to him since he received and spent less than $5,000 in contributions.  Andy Hedden-Nicely entered the race after Olson and failed to provide him with a copy of his Form 2, but it did not appear the complainant was unfairly limited in soliciting contributions as a result.

The Commission found no reason to believe Sali, Grant or Smith violated the Act and dismissed allegations against Hedden-Nicely.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5884 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.

5.

MUR 5919

RESPONDENTS:

a.)  Rhode Islanders for Jobs and Tax Relief, Inc.

b.) Paul Pezzella

COMPLAINANT:

Self-Reported (sua sponte)

SUBJECT:

Corporate expenditure

DISPOSITION:

a.)  Dismiss the matter

b.)  Dismiss the matter and admonish

Harrah’s Entertainment, Inc. (Harrah’s) and its wholly owned subsidiary, Rhode Islanders for Jobs and Tax Relief, Inc. (RIJTR), submitted a sua sponte report of an apparent violation of the Act along with the results of an internal investigation regarding an RIJTR e-mail communication that advocated the election of a 2006 federal candidate.

Paul Pezzella, an independent contractor who managed RIJTR’s daily operations, sent an e-mail three days before the 2006 general election that advocated the election of Democratic Senate candidate Sheldon Whitehouse (RI) and opposed Republican Senate candidate Lincoln Chaffee (RI).  The communication was sent to approximately 17,000 recipients on an RIJTR list.  As a result of Pezzella’s actions, RIJTR made and Mr. Pezzella consented to a corporate expenditure expressly advocating the election of a Federal candidate. 

Within 90 minutes after the e-mail was sent, RIJTR personnel recognized a violation of company policy had occurred and e-mailed a retraction of the endorsements to each original recipient.  RIJTR informed the Commission it provided all employees and contractors, including Pezella, with election law compliance training and required them to sign a statement acknowledging policies prohibiting partisan election activity regarding candidate elections. 

The Commission dismissed the complaint with respect to RIJTR based on the presence of a compliance program, the one-time nature of the violation combined with the immediate corrective action, and RIJTR’s prompt disciplinary action and self-reporting.  The FEC admonished Paul Pezzella for his role in the apparent violations of the Act.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5919 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.

6.

MUR 5870

RESPONDENTS:

a.)  West Virginia Values, LLC

b.)  Alan Mollohan for Congress and Richard S. Pizatella in his official capacity as treasurer

c.)  Alan Mollohan

COMPLAINANT:

William J.M. Holley

SUBJECT:

Excessive in kind contribution in the form of coordinated communications

DISPOSITION:

a-c.)  No reason to believe

The complaint alleged television advertisements paid for by West Virginia Values, LLC constituted excessive in-kind contributions to Alan Mollohan for Congress, the principal campaign committee of Alan Mollohan (WV/01).

West Virginia Values spent $75,000 for two television advertisements that ran in West Virginia in October 2006 and were reported as electioneering communications.  Both ads used testimonials from veterans to argue Mollohan’s opponent, Chris Wakim, lied about his military record and questioned his character.  The complaint alleged the communications were coordinated with Allan Mollohan and his campaign committee.

The Commission found no reason to believe West Virginia Values made or Alan Mollohan for Congress and Alan Mollohan accepted an excessive in-kind contribution in the form of coordinated communications.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5870 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.

7.

MUR 5739

RESPONDENTS:

a.)  Darcy Burner for Congress and Philip Lloyd in his official capacity as treasurer

b.)  Eastside Democracy for America

c.)  Democracy for Washington

d.)  Democracy for American and Kathy Hoyt in her official capacity as treasurer

COMPLAINANT:

Diane E. Tebelius

SUBJECT:

Corporate or excessive in-kind contribution, reporting

DISPOSITION:

a-d.)  No reason to believe (re: corporate or excessive contribution)

a.)  Dismiss and admonish (re: failure to report in-kind contribution)

The complaint alleged Eastside Democracy for America (EDFA) made and Darcy Burner for Congress, the principal campaign committee of 2006 Congressional candidate Darcy Burner (WA/08), received and failed to report a corporate or excessive in-kind contribution. 

According to the complainant, a violation of the Act occurred when EDFA hosted a campaign event for Burner, filmed her speech and used the footage to produce and distribute a video promoting Burner’s candidacy.  The complaint also questioned whether EDFA was a political committee, asserted EDFA was affiliated with Democracy for America (DFA), a federal PAC and noted that EDFA may have posted copies of the video on the website of state Democracy for Washington (DFW), a political committee.

EDFA denied it was a PAC or corporation and contended the event at which Burner appeared and the videos that were produced were the voluntary effort of Andrew Tsao, one of two local citizens who organized EDFA.  Tsao estimated the cost for hosting the event, filming the speech, producing the DVD and distributing copies was approximately $178, which he paid with his personal funds.  He further stated he made a second similar Burner video that cost him $116.

The Commission found no reason to believe the Burner committee accepted or EDFA made excessive or corporate contributions.  The FEC also dismissed allegations concerning the failure to report in-kind contributions from Tsao’s because the unreported amounts were de minimus, but admonished the committee for failing to properly disclose the contributions.  The Commission found no reason to believe DFW or DFA violated the Act. 

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5739 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.

8.

MUR 5629

RESPONDENTS:

Newberry for U.S. Congress and R. Mark Morris in his official capacity as treasurer

COMPLAINANT:

Donald F. McGahn II

SUBJECT:

Failure to include adequate disclaimers

DISPOSITION:

Take no further action

According to the complaint, Newberry for U.S. Congress, the principal campaign committee of 2004 Congressional candidate Jim Newberry (MO/07), failed to comply with certain disclaimer provisions of the Act.  The complainant alleged the committee ran several advertisements the week before the November election that failed to include a clearly readable message that Newberry approved the ad.

Respondents acknowledged the violation, but claimed the omission was inadvertent since Newberry was a first time candidate.  The committee also noted the ads complied with other disclaimer requirements and Newberry stated his approval of the communication during the ads to satisfy the “stand by your ad” requirement.

The Commission took into consideration the ads’ inclusion of oral statements of approval by the candidate and disclosure of the source of payment for the ads and decided to take no further action.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5629 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.

9.

MUR 5821

RESPONDENTS:

a.)  Judi Parker

b.)  Judi Parker for Congress

c.)  Judi Parker for State Representative

COMPLAINANT:

Paul Green

SUBJECT:

Engaging in and failing to report financial activity after termination

DISPOSITION:

a-c.)  Dismiss the matter

The complainant alleged Judi Parker for Congress, the principal campaign committee of 2006 Congressional candidate Judi Parker (MS/02), continued to raise funds after the committee filed a termination report with the FEC.  The complainant cited a $1012 transfer from the Congressional committee to Parker’s state committee, Judi Parker for State Representative.

The Commission dismissed the allegations after determining the matter did not warrant further review based on Enforcement Priority System criteria.*

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5821 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.

10.

MUR 5803

RESPONDENTS:

a.)  Coloradans for Rick O’Donnell and Justin Lippard in his official capacity as treasurer

b.)  Arthur J. Bushell

c.)  Bushell Insurance Agency, Inc.

d.)  State farm Investment Management Corp.

COMPLAINANT:

Thomas M. Rogers III

SUBJECT:

Prohibited in-kind corporate Contribution

DISPOSITION:

a-d.)  Dismiss the matter

The complaint alleged Coloradans for Rick O’Donnell, the principal campaign committee of 2006 Congressional candidate Rick O’Donnell  (CO/07), accepted prohibited contributions from the Bushnell Insurance Agency in the form of postcard invitations to a campaign event containing Bushell’s name and the State Farm Insurance logo and the use of Bushell’s mailing list. 

No contributions were received at the event and Bushell reimbursed their insurance agency $170 for the cost of the mailing.  The mailing-related costs were reported as an in-kind contribution by the O’Donnell committee.

The Commission dismissed the allegations after determining the matter did not warrant further review based on Enforcement Priority System criteria.*

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5803 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.

11.

MUR 5838

RESPONDENTS:

a.)  Friends of Stephen Harrison and Alice Harrison in her official capacity as treasurer

b.)  Stephen A. Harrison, Esq.

c.)  Friends of Ralph Perfetto

COMPLAINANT:

Vincent Ignizio

SUBJECT:

Failure to disclose financial activity

DISPOSITION:

a-c.)  Dismiss the matter

The complaint alleged 2006 Congressional candidate Stephen Harrison (NY/13) and his principal campaign committee, Friends of Stephen Harrison failed to report an in-kind contribution or disbursement for office space provided by the candidate’s law firm.  Additionally, the complaint alleged the committee accepted contributions from prohibited sources, including a $1,500 contribution from state candidate committee, Friends of Ralph J. Perfetto. 

The Commission dismissed the allegations after determining the matter did not warrant further review based on Enforcement Priority System criteria.*

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5838 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.

12.

MUR 5906

RESPONDENTS:

a.)  The Schwan Food Company Inc.

b.)  The Schwan Food Company Inc., PAC and Gordon Crow in his official capacity as treasurer

COMPLAINANT:

Robert T. Quasius

SUBJECT:

In-kind corporate contributions, failure to disclose financial activity

DISPOSITION:

a,b.)  Dismiss the matter

The complaint alleged the Schwan Food Company Inc, Political Action Committee (PAC) received in-kind corporate contributions from its connected organization, Schwan Food Company Inc.  According to the complainant, the in-kind contributions were the result of operating from Schwan’s headquarters and using corporate resources.  The complaint also alleged the PAC failed to report the in-kind contributions and to comply with other reporting provisions of the Act.

The Commission dismissed the allegations after determining the matter did not warrant further review based on Enforcement Priority System criteria.*

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5906 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.