Party Misuse of Soft Money To Pay for Issue Ads Results in $280,000 Civil Penalty
| For Immediate Release April 9, 2004 |
Contact: | George Smaragdis Bob Biersack Ian Stirton Kelly Huff |
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| PARTY MISUSE OF SOFT MONEY TO PAY FOR ISSUE ADS RESULTS IN $280,000 CIVIL PENALTY | |||||||||||||||||||||||||||
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WASHINGTON -- The FEC has entered into a conciliation agreement with the
National Republican Congressional Committee (NRCC) resulting from its 1999
transfer of $500,000 in soft money to the U.S. Family Network (USFN) to pay
for issue advertisements. The NRCC violated the Act by making the transfer
to USFN knowing that USFN planned to transfer at least some of the funds to
a third party to pay for issue ads in the 2000 election cycle. As part of
the conciliation agreement, the NRCC agreed to pay a $280,000 civil penalty. Under the law in effect at the time, the NRCC was required to pay for issue ads with a minimum of 65% hard money. A party committee could not give nonfederal funds to a third party to pay for such an ad, and could not simply transfer funds to another group to run the ads. In the fall of 1999, USFN solicited $500,000 in soft money from the NRCC to pay for "media and grassroots." After initially denying these requests, the NRCC donated $500,000 to USFN without following its usual procedures to approve and process large donations. Prior to the donation, Ed Buckham, the founder of USFN, had agreed with Jim Ellis, who was affiliated with Americans for Economic Growth (AEG), that AEG would run radio ads accusing Democrats of planning to raid the Social Security Trust Fund surplus. After receiving the NRCC''''s $500,000 donation, USFN transferred $300,000 to AEG. AEG then spent approximately $260,000 for two sets of radio ads criticizing Democratic efforts to spend portions of the Social Security surplus on "foreign aid and big government programs." The NRCC knew through its agents that USFN planned to pass all or part of the $500,000 to a third party to pay for party issue advertisements. Therefore, the NRCC violated the Act by using only soft money to pay for activity that should have been allocated between their hard and soft money accounts. The investigation stemmed from a complaint filed by David Plouffe, Executive Director of the Democratic Congressional Campaign Committee.
*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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