LifeCare Companies and Former Employees to Pay $200,000 penalty for Illegal Contribution Reimbursements

Washington -- The Federal Election Commission has entered into three Conciliation Agreements with LifeCare Holdings Inc. (“LifeCare”) and LifeCare Management Services, LLC (“LMS”) and two of these companies’ former officers requiring the payment of combined civil penalties totaling $200,000.  The agreements resolve knowing and willful violations of the Federal Election Campaign Act (FECA) in which corporate funds were used to reimburse approximately $50,000 in contributions made between 1997 and 2002.

According to the Conciliation Agreements, former LifeCare/LMS President and CEO David LeBlanc and former LMS Vice President for Government Affairs Donald Boucher (who both left the companies in 2003) caused LifeCare/LMS to reimburse political contributions that Mr. Boucher and Mr. LeBlanc made to a number of federal candidates, political party committees and political action committees.  These reimbursements were made via irregular bonuses, unscheduled salary increases, and undocumented expense payments authorized and approved by Mr. LeBlanc, to whom Mr. Boucher directly reported.

Mr. LeBlanc and Mr. Boucher both admitted to knowingly and willfully violating the law.  Mr. LeBlanc will pay a $100,000 civil penalty, while Mr. Boucher will pay a $50,000 civil penalty.

The Commission and the Department of Justice Public Integrity Section worked cooperatively in this matter, and the Conciliation Agreements with Mr. LeBlanc and Mr. Boucher were addenda to related criminal plea agreements reached with the Justice Department, filed at U.S. District Court for the District of Columbia. In light of LifeCare/LMS’ cooperation in this matter, the FEC made no finding of knowing and willful violations against the companies based on the activities of their former employees.  In addition to paying a $50,000 civil penalty, the agreement prohibits LifeCare/LMS from engaging in future misconduct, implements corrective action, and waives any right to a refund. The company’s civil penalty reflects a reduction from the penalty the Commission would have sought if the violations had not been voluntarily disclosed.         

The FECA prohibits corporations from making contributions or expenditures from their general treasury funds in connection with any election of any candidate for federal office.  In addition, the Act prohibits making a contribution in the name of another, knowingly permitting one’s name to be used to effect such a contribution and knowingly accepting such a contribution.  Further, no person may knowingly help or assist any person in making a contribution in the name of another.  This prohibition also applies to any person who provides the money to others to effect contributions in their names.

There is no indication that any of the recipient federal candidates and political committees were aware that the contributions were being reimbursed with corporate funds.

*There are four administrative stages to the FEC enforcement process:

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.                                                     

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