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For Immediate Release                                                                               Contact: Bob Biersack
April 11, 2007                                                                                                         George Smaragdis
                                                                                                                              Michelle Ryan

FEC Collects $81,578 in Civil Penalties for Prohibited Corporate Contributions Made by Highmark Inc. 

WASHINGTON – The Federal Election Commission (FEC/the Commission) recently collected civil penalties totaling $81,578 for Highmark Inc.’s payment of fundraising costs associated with events held for America’s Foundation and former Senator Rick Santorum’s (R-PA) campaign committee.

Highmark Inc., a Pittsburgh based insurance company, agreed to pay a civil penalty of $54,078 for using corporate funds to pay for costs related to four fundraising events.  Former Highmark Vice President for Government Affairs, Bruce Hironimus, agreed to pay a civil penalty of $20,000 for his involvement as the corporate officer who arranged Highmark’s payments. Highmark disclosed these violations to the FEC after discovering them during a routine audit.  America’s Foundation, a Federal political action committee  agreed to pay a civil penalty of $7,500.  The Commission took no further action with regard to the Santorum campaign committee because the evidence did not indicate that Santorum 2006 had a reason to think that an outside party had paid any prohibited costs and therefore no evidence that the committee knowingly accepted a contribution from an impermissible source.

This release contains only disposition information.

1.

Matter Under Review (MUR) 5645

RESPONDENTS:

(a) Highmark Inc.

(b) Bruce Hironimus

(c) George Grode

(d) David O’Brien

(e) America’s Foundation, Meredith G. Kelley, treasurer

(f) Santorum 2006, Gregg R. Melinson, treasurer

COMPLAINANT:

Highmark Inc. (Sua Sponte submission)

SUBJECT:

Prohibited corporate contribution;

Prohibited contributions by Federal contractors;

Failure to disclose in-kind contributions

DISPOSITION:

(a-f) Reason to believe

(a) Conciliation agreement: $54,078 civil penalty

(b) Conciliation agreement: $20,000 civil penalty

(c,d,f) Take no further action and close file

(e) Conciliation agreement: $7,500 civil penalty

Highmark Inc., made a voluntary submission notifying the FEC that it appeared to have violated the Federal Election Campaign Act (the Act) by using corporate funds to defray fundraising costs for events held for former Senator Rick Santorum’s authorized campaign committees and leadership PAC, America’s Foundation.  The apparent violations, discovered during a routine internal audit, occurred between 1999 and 2003 and were related to four fundraising events.  Highmark submitted extensive documentation to the Commission indicating that activities in question primarily involved former Highmark Vice President for Government Affairs, Bruce Hironimus, who used expense reports and check requests to authorize the use of corporate funds to pay costs related to fundraising events.  Some payments were approved by Highmark Executive Vice Presidents George Grode and David O’Brien.

The costs at issue totaled $54,078.47 and related to four fundraising events:  three golf tournaments at the Country Club of Hershey and a fundraiser held at a private home.  Neither America’s Foundation nor the Santorum committees reported in-kind contributions related to fundraising costs for these events. 

The Commission found reason to believe that Highmark Inc. violated the Act by making corporate contributions to America’s Foundation and the Santorum committees, and that Highmark officers Bruce Hironimus, George Grode and David O’Brien violated the Act by consenting to those corporate contributions.  Highmark Inc. and Bruce Hironimus agreed to pay civil penalties of $54,078 and $20,000, respectively.  No further action was taken regarding George Grode and David O’Brien.

The Commission also found reason to believe that America’s Foundation and Santorum 2006 violated the Act by accepting prohibited corporate contributions and failing to report in-kind contributions related to fundraising events.  The Commission collected a $7,500 civil penalty from America’s Foundation and instructed them to pay $14,604.45 to the U.S. Treasury to offset prohibited contributions that were received.  The Commission took no further action with regard to the Santorum campaign committee because the evidence did not indicate that Santorum 2006 had a reason to think that an outside party had paid any prohibited costs and, therefore, no evidence that the committee knowingly accepted a contribution from an impermissible source. Santorum 2006 was instructed to pay $7,938.81 to the U.S. Treasury to offset prohibited contributions that were received unknowingly.

 

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5645 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, DC.

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

1. Receipt of proper complaint

2. “Reason to believe” stage

3. “Probable cause” stage

4. Conciliation stage

FEC decisions require the votes of at least four of its six Commissioners.

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.                                                      

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

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