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FEC Record: Litigation

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Herron for Congress v. FEC

On August 12, 2011, Herron for Congress filed suit against the FEC. The lawsuit seeks declaratory judgment and injunctive relief for the dismissal of an administrative complaint filed by the plaintiff for a violation of the Federal Election Campaign Act (FECA). The plaintiff argues that the dismissal was arbitrary, capricious, an abuse of discretion and contrary to law.

Background
Plaintiff Herron for Congress is the authorized campaign committee of Roy Herron, the Democratic nominee in 2010 for the 8th Congressional District of Tennessee. Steven Fincher for Congress is the authorized campaign committee of Steven Fincher, the incumbent Republican Representative for the 8th Congressional District of Tennessee.

On September 29, 2010, the plaintiff filed an administrative complaint with the FEC against Steven Fincher for Congress. The complaint alleged that there was reason to believe that Steven Fincher for Congress had improperly obtained a loan for $250,000 and subsequently reported the loan incorrectly to the Commission. The complaint noted that Steven Fincher for Congress initially reported the $250,000 loan as a personal loan from the candidate when, in fact, the loan had been obtained from a local Tennessee bank. The complaint also alleged that there was reason to believe that the loan was not obtained in the ordinary course of business as the loan had been improperly collateralized with both insufficient assets and assets already in lien, and thus, the bank did not establish a perfected security interest in the collateral.

Commission staff investigated the complaint and issued a report and recommendations to the Commission. The General Counsel’s Report found that the committee had improperly reported the loan, a violation of 2 U.S.C. §434(b)(3)(E) and 11 CFR 104.3(d)(4). The staff report did not find any wrongdoing in the terms of the loan. The staff report did not find the violation to be knowing or willful. The staff recommended negotiating a civil fine settlement of the violation.

On June 14, 2011, the Commission considered the General Counsel’s Report and was unable to reach a consensus on whether to seek a civil money penalty. The Commission then voted 5-1 to close the file.

The Plaintiff finds fault with the Commission’s dismissal of the administrative complaint. The Plaintiff alleges that the Commission had reason to find that Steven Fincher for Congress had knowingly and willfully violated FECA.

Complaint
The plaintiff asks the Court to find the Commission’s dismissal of the administrative complaint against Steven Fincher arbitrary, capricious, an abuse of discretion and contrary to law. The Plaintiff asks the Court to remand the administrative complaint to the Commission with an Order to conform to the Court’s declaration.

(Posted 9/11/11; By: Stephanie Caccomo)

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The FEC Record is produced by the Information Division, Office of Communications. Toll free 800-424-9530; Local 202-694-1100; E-mail info@fec.gov. Greg Scott, Director; Amy Kort, Asst. Director; Myles Martin, Editor