FEC Completes Action on Four Enforcement Cases: Civil Penalties in Two Matters Total $19,600

For Immediate Release

Contact:  

Bob Biersack

December 27, 2007

George Smaragdis

Michelle Ryan

1.

MUR 5786

RESPONDENTS:

The Big Tent PAC and Sylvia Nolde in her official capacity as treasurer

COMPLAINANT:

FEC Initiated (Reports Analysis Division)

SUBJECT:

Failure to file timely reports

DISPOSITION

Conciliation agreement: $15,000

The matter originated from information ascertained by the FEC’s Reports Analysis Division (RAD) in the normal course of its supervisory responsibilities.  According to RAD’s referral, the Big Tent Political Action Committee (PAC) engaged in late and chronic non-reporting during 2004 and 2005.

The committee submitted its 2003 Year-End Report on paper disclosing $94,000 in receipts and $46,854 in disbursements.  With this report the committee exceeded the $50,000 threshold for mandatory electronic filing.  The committee continued to file paper reports and failed to file the following reports electronically: 2003 Year-End, 2004 April Quarterly, 2004 July Quarterly, 2004 October Quarterly, 2004 30 Day Post General, 2004 Year-End and 2005 Mid-Year reports.

On November 3, 2005, the committee filed, 598 days late, its 2004 April Quarterly.  Other delinquent reports were not filed electronically until August 2006.

The Commission found reason to believe the Big Tent PAC violated the Act by failing to comply with the Act’s reporting requirements.  Respondents agreed to pay a civil penalty of $15,000.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5786 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 5923

RESPONDENTS:

a.)  American Dream PAC and Cindy Barberio Payne in her official capacity as treasurer

b.)  Lydia Meuret

COMPLAINANT:

FEC Initiated (Reports Analysis Division)

SUBJECT:

Reporting

DISPOSITION

a.)  Conciliation Agreement: $4,600 Civil Penalty

b.)  Conciliation Agreement

The matter originated from information ascertained by the FEC’s Reports Analysis Division (RAD) in the normal course of its supervisory responsibilities.  According to RAD’s referral, the American Dream PAC (ADPAC) failed to comply with the Act’s reporting provisions after a former treasurer embezzled PAC funds and submitted inaccurate reports to the FEC.

In June 2006, the American Dream PAC (ADPAC) filed 12 amended reports, more than three years after the discovery of embezzlement by former ADPAC treasurer, Lydia Meuret.  The amended reports disclosed 39 expenditures totaling $39,173.82 paid to either Lydia Meuret or to various credit card companies with “Misappropraited Funds – L. Meuret” as the purpose of disbursement and three unreported receipts totaling $12,200, listed as “Reimbursement” from Meuret.

Lydia Meuret was the treasurer, Executive Director and custodian of records for ADPAC from 1999 to 2002.  Meuret began diverting funds from the committee in November 1999 to pay off her personal credit card balances.  She wrote checks from ADPAC accounts payable to the credit card companies and to herself.  According to Meuret, she took most of the funds from the committee’s nonfederal account and paid some money back by writing checks from her personal account.  In 2003, Mueret was prosecuted in the U.S. District Court and pled guilty to one count of mail fraud.  In October of that year she was sentenced to 15 months imprisonment and 3 years supervised release and was ordered to pay $119,021.28 in restitution to ADPAC and a $100 special assessment.

The embezzlement scheme was carried out over a three year period, and available information indicated that ADPAC did not have in place adequate internal control procedures over its finances that would have allowed for earlier discovery of the diversion of funds.  ADPAC did not segregate duties, regularly conduct audits, establish control procedures over receipts and disbursements, conduct periodic review of its finances, or have any other internal controls in place.

The Commission found reason to believe ADPAC violated the Act by failing to comply with the Act’s reporting requirements.  The commission decided that because ADPAC and its treasurer were responsible for complying with the Act, they were responsible for reporting violations that resulted from the committee’s lack of internal controls.  ADPAC agreed to pay a $4,600 civil penalty and to cease and desist from committing future similar violations.

In a signed conciliation agreement, Lydia Meuret admitted to knowingly and willfully violated the Act by failing to comply with multiple reporting provisions of the Act and by commingling $32,173.82 in ADPAC Federal funds with personal funds.  The FEC took into account Meuret’s financial hardship and departed from the civil penalty the Commission would normally seek for the violations at issue.  The FEC also prohibited Meuret from working or volunteering for federal political committees in a capacity involving the committee’s finances for a period of 5 years.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5923 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 5772

RESPONDENTS:

Kenneth Phelps

COMPLAINANT:

FEC initiated (Audit Division & Reports Analysis Division)

SUBJECT:

Knowing and willful commingling of committee funds with personal funds

DISPOSITION:

Reason to believe

The matter was initially generated by a Commission audit of the Lockheed Martin Employees’ Political Action Committee (LMEPAC) covering the period of January 1, 2001 through December 31, 2002.  The FEC audit of LMEPAC revealed that the committee’s former assistant treasurer, Kenneth Phelps, had embezzled $170,000, and that the committee’s apparent lack of internal controls on its finances may have made the embezzlement possible.

In MUR 5721, the Commission found reason to believe LMEPAC violated the Act by failing to accurately account for and report certain disbursements and failing to disclose certain receipts.  Additionally, the Commission found reason to believe Kenneth Phelps knowingly and willfully violated the Act by commingling committee funds with personal funds and failing to accurately account for and report certain disbursements.  The Commission reached a conciliation agreement with LMEPAC in MUR 5721, but was unable to successfully conciliate with Phelps.  As a result, the Commission accepted the agreement with LMEPAC in which they agreed to pay a $27,000 civil penalty and opened MUR 5772 to address the allegations against Phelps separately.

In MUR 5722, the FEC accepted a plea agreement with Mr. Phelps in which he acknowledged knowingly and willfully violating the Act and agreed to cease and desist from committing future similar violations.  The Commission prohibited Phelps from working or volunteering in federal political campaigns in a capacity involving a committee’s finances or disclosure reports for ten years.  In light of the financial circumstances of the respondent, the FEC sought no civil penalty.  Phelps was separately indicted with twelve counts of wire fraud and twelve counts of false statements in the District of Columbia based upon the knowing and willful filing of fraudulent reports with the Commission.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5772 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 5816

RESPONDENTS:

Montanans for Lindeen and Paul Ringling in his official capacity as treasurer

COMPLAINANT:

Charles Denowh

SUBJECT:

Corporate solicitations

DISPOSITION:

Admonish and dismiss the matter

The complaint alleged Montanans for Lindeen, the principal campaign committee of 2006 Congressional candidate Monica Lindeen (MT/01), violated the Act by soliciting funds from corporations.

The Lindeen committee’s website promoted a document labeled “Host a House Party for Monica.”  The document stated that, “Under Federal law, Montanans for Lindeen may accept contributions of up to $2,100 for the primary and general elections from individuals, business, corporations, and small contributor committees.”  The complaint alleged the committee violated the Act by soliciting corporate funds from entities that were not subject to the limitations, prohibitions and reporting requirements of the Act.

The Lindeen committee acknowledged the inadvertent violation and noted that the house party kit on the website was an edited version of a kit that was used by a committee staff member during a previous campaign job for a candidate for a nonfederal office in Oregon.

The Commission admonished Montanans for Lindeen and 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 5816 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.