FEC Completes Action on Three Enforcement Cases

1.

MUR 5721

RESPONDENTS:

Lockheed Martin Employees’ PAC, Stephen E. Chaudet, treasurer

COMPLAINANT:

FEC Initiated (Audit/RAD)

SUBJECT:

Failure to accurately account for and report disbursements; failure to disclose receipts; failure to maintain payroll deduction authorization forms

Conciliation Agreement: $27,000 civil penalty*[re: failure to accurately account for and report disbursements; failure to disclose receipts]

No reason to believe*[re: failure to maintain payroll deduction records]

This matter originated from referrals by the Commission’s Audit and Reports Analysis Divisions. According to the Audit Report the committee failed to accurately disclose operating expenditures which resulted from an embezzlement scheme perpetrated by Kenneth Phelps.  The committee also failed to maintain payroll deduction authorization forms. The RAD report referred apparent reporting violations stemming from the committee’s failure to disclose certain receipts. The Commission found no reason to believe with regard to the committee’s failure to maintain payroll deduction records, because the policy on payroll deduction authorization forms had changed and the committee was not given the opportunity to demonstrate compliance under the new policy. The Commission reached a conciliation agreement with the Lockheed Martin PAC regarding the other reporting matters. Two Statements of Reasons were issued, one by Chairman Toner and Commissioner Mason, and a second by Chairman Toner, Vice Chairman Lenhard and Commissioners Mason, Walther, Weintraub and von Spakovsky.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5721 under case number in the Enforcement Query System.  They are also available in the FEC’s Public Records Office at 999 E St. NW in Washington.

RESPONDENTS:

(a)   Russ Diamond

COMPLAINANT:

Republican State Committee of Pennsylvania

SUBJECT:

Failure to file Statement of Candidacy; failure to register and report; use of non-federal (state) funds for a federal election

(a)      Reason to believe, but took no further action*[re: failure to file Statement of Candidacy; failure to register and report; use of non-federal (state) funds for a federal election]

(b)      Reason to believe, but took no further action*[re: use of non-federal (state) funds for a federal election]

(a-b)  Sent admonishment letters.

The complaint alleged that Russ Diamond was a candidate for Federal office for Pennsylvania’s 17th District in the 2004 election and failed to register a political committee and file disclosure reports. Mr. Diamond claimed that he never accepted more than $5,000 in contributions or made more than $5,000 in expenditures, and therefore never qualified as a candidate under the Act.  Mr. Diamond admitted, however, to paying for filing fees, flyers, a pro-rated Federal portion of his campaign’s shared website, and use of office space and equipment of his business for his federal campaign, all of which may have totaled more than $5,000. The Commission found reason to believe the law may have been violated, but determined that further investigation would be needed to learn the extent of any violation. Based on the Commission’s priorities and resources relative to other pending matters, it decided to take no further action and send admonishment letters.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5636 under case number in the Enforcement Query System.  They are also available in the FEC’s Public Records Office at 999 E St. NW in Washington.

RESPONDENTS:

(a)   New York Senate 2000, Andrew Grossman, treasurer

(b)   Friends of Hillary, John F.X. Mannion, treasurer

(c)   Hillary rodham Clinton for US Senate Committee, Inc.     (FKA Hillary Rodham Clinton for U.S. Senate        Exploratory Committee), Shelly Moskwa, treasurer

(d)  Hillary Rodham Clinton

COMPLAINANT:

Patricia Waters

SUBJECT:

Contract dispute/not FECA related

The complaint alleged that Ms. Waters was hired as a consultant and performed work and incurred expenses on behalf of a fundraiser to salute President Clinton in 2000 and was not fully paid for her work or reimbursed for her expenses. New York Senate 2000 responded that the conciliation agreement in MUR 5225 concluded all FECA matters related to the jointfundraising effort.  As part of that conciliation, the Commission found that Ms. Waters made an in-kind contribution to the committee and New York Senate 2000 issued a check to the complainant in the amount in question, thereby refunding that contribution.  New York Senate 2000, along with Hillary Rodham Clinton for U S Senate also argued that this dispute is purely contractual in nature, and not subject to the Federal Election Campaign Act, and that the statute of limitations had expired.  After reviewing the merits and procedural posture of MUR 5699, and in light of the Commission’s previous findings and conciliation agreement in MUR 5225, and based on Commission’s priorities and resources relative to other pending matters, the Commission exercised its prosecutorial discretion and dismissed the matter.

*The Enforcement Priority System (EPS) rates all incoming cases against objective criteria to determine whether they warrant use of the Commission’s limited resources.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5699 under case number in the Enforcement Query System.  They are also available in the FEC’s Public Records Office at 999 E St. NW in Washington.

1. Receipt of proper complaint

3. “Probable cause” stage

2. “Reason to believe” stage

4. Conciliation stage