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For Immediate Release                                                                               Contact: Bob Biersack
August 22, 2007                                                                                                      George Smaragdis
Corrected August 24, 2007*                                                                                      Michelle Ryan

FEC CLOSES 11 ENFORCMENT CASES; COLLECTS $24,000 IN CIVIL PENALTIES IN TWO CASES

WASHINGTON – The Federal Election Commission (FEC/the Commission) recently closed 11 enforcement cases, collecting $24,000 in penalties in two of those cases.

In Matter Under Review (MUR) 5714, the Commission found reason to believe the Montana State Democratic Central Committee (MSDCC/ the Committee) violated the Federal Election Campaign Act (the Act) by failing to properly report disbursements for federal election activity (FEA) in 2005.  Under the Act, committees that make FEA disbursements exceeding $5,000 are required to file monthly reports.  During 2005, MSDCC made disbursements totaling $106,022.89 for television advertisements concerning the relationship of then-Senator Conrad Burns and Jack Abramoff, but continued to file only on a quarterly basis.  The Commission concluded that these advertisements constituted FEA, and as a result, the MSDCC triggered monthly filing obligations.  MSDCC agreed to pay a civil penalty of $15,000.

In MUR 5527, the Commission found reason to believe Morse for Congress 2004, the campaign committee of Charles A. Morse (MA/04)), violated the Act’s reporting and disclaimer requirements when it failed to disclose that a portion of a public communication had been paid in the form of an in-kind contribution from the candidate personally.  Also, the disclaimer on that communication did not comply with the Act’s requirements.  Additionally, Morse for Congress 2004 failed to comply with the Act’s electronic filing requirements.  Morse for Congress 2004 agreed to pay a $9,000 civil penalty.

In MUR 5612, the Commission found no reason to believe Service Employees International Union (SEIU), Service Employees International Political Education & Action Fund (SEIU IPEA), America Coming Together (ACT) and the Democratic National Committee (DNC) violated the Act.  The complaint centered on allegations that SEIU and SEIU IPEA made prohibited contributions to ACT and the DNC.

In MUR 5789, the Commission found no reason to believe Bacardi, Inc. violated the Act by facilitating the making of contributions.  The Commission exercised its prosecutorial discretion and declined to pursue allegations that Bacardi failed to obtain advance payment from its political action committee (PAC) for catering expenses for a Bacardi PAC fundraising event.  The Commission sent Bacardi a letter instructing it to obtain advance payments for these events in the future. The Commission also found no reason to believe that Martinez for Senate, the principal campaign committee of Mel Martinez (FL), or Bill Nelson for U.S. Senate, the principal campaign committee of Bill Nelson (FL), knowingly accepted corporate contributions.  The Commission exercised its prosecutorial discretion and declined to pursue allegations that the Martinez Committee failed to provide employer information for certain contributors, but notified the committee that it should take steps to prevent similar mistakes in the future. 

In MUR 5844, the Commission exercised its prosecutorial discretion and declined to pursue allegations that then-Congressman Jim Gibbons (NV/02) violated the Act when his state political action committee, Silver State Leadership Fund (the Fund), accepted corporate contributions.  The Respondents maintained that four contributions in question were received prior to the effective date of BCRA or were from permissible sources.  With respect to a fifth contribution, the Commission admonished Gibbons and the Fund and required the Fund to refund $2,000 to the donor.

In MUR 5773, the Commission dismissed allegations that Denunzio for Congress, the principal campaign committee of Michael Anthony DeNunzio (CA/08), failed to use adequate disclaimers on mailed solicitations.  The Commission also dismissed allegations that Citizens for a Better San Francisco and Republicans United for San Francisco failed to report funds raised in support of the DeNunzio campaign.

Five enforcement cases involved candidate debates.  In MURs 5827 and 5829, complainants alleged Resodyn Corporation, along with the Montana Standard newspaper, made a prohibited in-kind contribution to Friends of Conrad Burns – 2006, the principal campaign committee of Conrad Burns (MT), by structuring a debate to ensure that Burns supporters were given prominent, visible seating.  The Commission dismissed the allegations after determining the matters did not warrant further review based on Enforcement Priority System criteria.**

In MURs 5836, 5858, and 5863, Congressional candidate Phil Maymin (CT/04), Senate candidate Richard Mack (AZ), and Congressional candidate James Hurysz (VA/08), alleged they were improperly excluded from debates held in their respective Congressional districts or states.  The Commission dismissed the allegations after determining each matter did not warrant further review based on Enforcement Priority System criteria.**

By law, the FEC must attempt to resolve its enforcement cases or Matters Under Review (MURs) through a confidential investigative process that may lead to a negotiated conciliation agreement between the FEC and the individual or group the Commission determines has violated the law.  Additional information regarding MURs can be found on the FEC website at http://www.fec.gov/em/mur.shtml.

This release contains only summary information.  For additional details, please consult publicly available documents for each case in the Enforcement Query System (EQS) on the FEC website at http://eqs.fec.gov/eqs/searcheqs .

 

1.

MUR 5714

RESPONDENTS:

Montana State Democratic Central Committee (MSDCC) and Brenda Schye in her official capacity as treasurer

COMPLAINANT:

Charles Denowh

SUBJECT:

Failure to properly report disbursements for federal election activity (FEA); failure to properly pay wages and salaries

DISPOSITION:

Conciliation agreement: $15,000 civil penalty

The complaint alleged MSDCC failed to report disbursements properly for federal election activity by failing to file monthly reports after making FEA disbursements exceeding $5,000.  The complaint also alleged the Committee improperly paid wages and salaries in 2005.

FEA includes  public communications that refer to clearly identified candidates for Federal office and that promote, support, attack or oppose a candidate for that office.  FEA also includes services provided by State, district or local party committee employees who spend more than 25% of their compensated time per month working on activities related to a Federal election.

MSDCC, a state party committee of the Democratic party, made $106,022.89 in disbursements for a television advertisement entitled “Smell Test” attacking then-Senator Conrad Burns (MN) for his relationship with lobbyist Jack Abramoff.  At the time, Senator Burns was a Republican Senator running for re-election in the 2006 election.  The MSDCC made the first disbursement for the advertisement in August 2005 and made three related disbursements during October and November of that year.  The ad began airing in Montana on August 8, 2005.  The MSDCC first disclosed the disbursements made in connection with “Smell Test” on its 2005 Year End Report.  The FEC concluded that the “Smell Test” advertisement constituted FEA and as a result the MSDCC should have filed monthly reports.

The MSDCC’s executive director, Jim Farrell, received a salary paid entirely from the Committee’s non-federal account.  The complaint alleged Mr. Farrell spent more than 25% of his time per month on federal election activity and should have been paid with federal funds.  Given the lack of evidence supporting this allegation and sworn information provided by the respondent, the

Commission found no reason to believe the Committee violated the Act’s provisions regarding salary and wages.

The Commission found reason to believe MSDCC violated the Act by failing to file monthly reports to disclose disbursements made for FEA during 2005.  The Committee agreed to pay a civil penalty of $15,000.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5714 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.

2.

MUR 5527 & 5527R

RESPONDENTS:

Morse for Congress (MA/4) and Charles A. Morse in his official capacity as treasurer 

COMPLAINANT:

William H. Shaevel

SUBJECT:

Failure to adequately disclose contributions and expenditures

DISPOSITION:

Conciliation agreement: $9,000 civil penalty

This case arose from a complaint filed by William H. Shaevel on behalf of the Barney Frank for Congress Committee and a referral from the FEC’s Reports Analysis Division.  The complainant alleged Morse for Congress 2004 (the Committee), the principal campaign committee of Congressional candidate Charles A. Morse, violated the Act by failing to report financial activity properly and failing to include adequate disclaimers on public communications paid for by the Committee.  The Committee paid $1,000 of the cost and the remaining portion was an in-kind contribution from the candidate.  In its year-end filing, the Committee disclosed a $3,000 disbursement for the advertisement and did not disclose the full cost paid by the committee or the in-kind contribution made by the candidate.  Additionally, the ad contained a disclaimer that failed to comply with all disclaimer requirements.

Additionally, the Committee was required to file electronically starting with the 2003 October Quarterly in addition to any election related reports in 2004.  Several reports were filed during that period but the failed to comply with electronic filing requirements that were triggered as a result of the Committee’s financial activity.

The Commission found reason to believe Morse for Congress 2004 violated the Act by failing to comply with reporting and disclaimer requirements.  Respondents agreed to pay a civil penalty of $9,000, cease and desist from committing future similar violations and amend FEC reports accordingly.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5527 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.

3.

MUR 5612

RESPONDENTS:

(a) Service Employees International Union (SEIU)

(b) SEIU International Political Education & Action Fund (SEIU IPEA)

(c) America Coming Together (ACT)

(d) Democratic National Committee (DNC) and Andrew Tobias in his official capacity as treasurer

COMPLAINANT:

Stefan Gleason

SUBJECT:

Prohibited labor union contributions

DISPOSITION:

(a-d) No reason to believe.

The complaint alleged SEIU and SEIU IPEA, a non-federal political action committee, violated the Act by making prohibited cash and in-kind contributions to ACT, a non-connected political committee with federal and non-federal accounts, during the 2004 election cycle.  The complaint also alleged SEIU general treasury funds were used to support an ACT fundraising event for the DNC.

During the 2004 election cycle, SEIU provided both financial and in-kind support for ACT’s get-out-the-vote and voter registration efforts.  ACT reported cash contributions to its non-federal account from SEIU totaling $4 million dollars.  From April to November of 2004, ACT disclosed in-kind contributions from SEIU totaling $18 million.  During this time, ACT transferred funds from its federal account to its non-federal account in an effort to compensate the non-federal account for what it contended to be the federal share of any allocable federal and non-federal activities of the in-kind contributions received from SEIU.  SEIU stated that it was not involved in the planning, administering or financing of the ACT fundraiser for the DNC. 

In light of the above facts, the Commission found no reason to believe SEIU, SEIU IPEA or the DNC violated any provisions of the Act.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5612 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.

4.

MUR 5789

RESPONDENTS:

(a) Bacardi U.S.A., Inc.

(b) Bacardi U.S.A, Inc. PAC and Robert Higdon, in his official capacity as treasurer

(c) Martinez for Senate (FL) and Nancy H. Watkins in her official capacity as treasurer

(d) Bill Nelson for U.S. Senate (FL) and Peggy Gagnon in her official capacity as treasurer

COMPLAINANT:

Melanie Sloan

SUBJECT:

Corporate facilitation of the making of contributions, receipt of prohibited corporate contributions, failure to use best efforts to obtain and report contributor information

DISPOSITION:

(a,) No reason to believe, admonish and dismiss.

(c) No reason to believe, admonish and dismiss the matter.

(b, d) No reason to believe.

The complaint alleged Bacardi, Inc. violated the Act by facilitating the making of contributions to a political committee.  The complaint also alleged Martinez for Senate and Bill Nelson for U.S. Senate knowingly accepted prohibited corporate contributions.  Additionally, the complaint alleged Martinez for Senate failed to use best efforts to obtain and disclose employer information for contributions received at a fundraising event hosted by the Bacardi political action committee (PAC).
In May of 2004 the Bacardi PAC held a fundraising event at Bacardi’s corporate headquarters for Martinez for Senate.  The complaint alleged Bacardi facilitated the making of contributions by failing to obtain pre-payment for food and liquor provided by in-house catering staff and by using a corporate list of vendors to distribute invitations to the event. 

According to Bacardi, its PAC held the event in a meeting room that the company regularly makes available to community civic and educational organizations at no charge, serving limited refreshments and food provided by Bacardi’s in-house caterers.  Bacardi also asserted that two employees who volunteered their time to the Martinez campaign planned the fundraiser and extended no more than 25 invitations to personal and business contacts.

In September of 2005, the Bacardi PAC held a fundraiser for Bill Nelson for U.S. Senate.  The complaint asserted Bacardi used a corporate list of vendors to distribute invitations to the fundraiser and solicit contributions from employees of those vendors.  Bacardi denied the maintenance of a list of corporate vendors or use of such list to distribute fundraiser invitations.

The Commission found no reason to believe Bacardi violated the Act by facilitating the making of contributions, dismissed allegations that Bacardi failed to obtain pre-payment from its PAC for catering expense and admonished Bacardi to ensure that it obtains pre-payment for catering expenses for future Bacardi PAC fundraising events.  The FEC found no reason to believe that Bacardi PAC violated the Act.  The Commission found no reason to believe Martinez for Senate or Bill Nelson for U.S. Senate knowingly accepted corporate contributions.  The Commission dismissed allegations that the Martinez Committee failed to provide employer information for certain contributors and admonished them to prevent future similar mistakes. 

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5789 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.

5.

MUR 5844

RESPONDENTS:

(a) James A. Gibbons

(b) Silver State Leadership Fund

COMPLAINANT:

Bill Romjue

SUBJECT:

Acceptance of contributions from prohibited sources

DISPOSITION:

(a,b) Admonish and dismiss the matter.

(b) Refund $2,000 contribution.

The complaint alleged then-Congressman Jim Gibbons (NV/02) violated the Act when his state PAC, Silver State Leadership Fund (the Fund), accepted corporate contributions.  The Bipartisan Campaign Reform Act of 2002 (BCRA) prohibits political committees affiliated with Federal officeholders or candidates from accepting contributions that exceed the Act’s limits and prohibitions.  The complainant alleged the Fund violated the Act by accepting five corporate contributions from November of 2002 to November of 2004.

The respondents maintained that to the best of their knowledge the contributions in question either were received prior to effective date of BCRA or from sources permissible under the Act.

Based on information provided, the Commission admonished the respondents, dismissed the allegations and required the Silver State Leadership Fund to refund $2,000 related to one of the contributions in question.

* In MUR 5844 the respondent refunded a $2,000 contribution. The original release incorrectly stated that $2,000 was paid to the U.S. Treasury.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5844 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.

6.

MUR 5773

RESPONDENTS:

(a) DeNunzio for Congress and Paul S. May in his official capacity as treasurer

(b) Michael Anthony DeNunzio

(c) Citizens for a Better San Francisco and Edward G. Poole in his official capacity as treasurer

(d) Republicans United for San Francisco and Howard Epstein in his official capacity as treasurer

COMPLAINANT:

Eve Del Castello

SUBJECT:

Use of inadequate disclaimers on a public communication; failure to report financial activity

DISPOSITION:

(a-d) Dismiss the matter and take no further action.

The complaint alleged DeNunzio for Congress, the principal campaign committee of Michael Anthony DeNunzio (CA/08), failed to use the appropriate disclaimers on mailed solicitations sent out on San Francisco Republican Party stationery.  Additionally, the complaint alleged Citizens for a Better San Francisco and Republicans United for San Francisco failed to report over $5,000 they each raised in support of the DeNunzio campaign.

The DeNunzio committee denied the use of inadequate disclaimers or any stationery other than its own.  Citizens for a Better San Francisco and Republicans United for San Francisco claimed they did not provide any support for DeNunzio’s candidacy.

The Commission dismissed all allegations.

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5773 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.

7/8.

MUR 5827 & 5829

RESPONDENTS:

(a) Resodyn Corporation (5827 & 5829)

(b) Lee Enterprises, Inc./ Montana Standard (5827 & 5829)

(c) Friends of Conrad Burns – 2006 and James Swain in his official capacity as treasurer (5827)

COMPLAINANT:

John J. Mudd (5827)

Jaime Mac Naughton (5829)

SUBJECT:

Improper exclusion from candidate debate

DISPOSITION:

(a-c) Dismiss the matter.

Complainants alleged Resodyn Corporation along with the Montana Standard Newspaper structured a debate between then-Senator Conrad Burns (MT) and Jon Tester in a way that ensured Burns supporters were given prominent and visible positions.  Resodyn Corporation allegedly contributed $200 to the debate in exchange for reserved seating.  The complainant alleged that this amounted to an in-kind contribution to the Friends of Conrad Burns – 2006 Committee.

Resodyn denied that it structured the debate to promote one candidate over the other.

The Commission dismissed the allegations after determining the matter did not warrant further review based on Enforcement Priority System criteria.**

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5827 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.

9.

MUR 5836

RESPONDENTS:

The Stamford (CT) Chamber of Commerce

COMPLAINANT:

Phil Maymin

SUBJECT:

Failure to use pre-established objective criteria to determine which candidates may participate in a debate

DISPOSITION:

Dismiss the matter.

The complainant, a Congressional candidate in Connecticut’s fourth district, alleged he was improperly excluded from a debate involving candidates from his district sponsored by the Stamford Chamber of Commerce.  The complaint alleged the Stamford Chamber of Commerce violated the Act by failing to use pre-established objective criteria to determine which candidates could participate.

The respondents indicated they did establish objective criteria to determine who was eligible to participate in the debate and noted the complainant did not meet those criteria.

The Commission dismissed the allegations after determining the matter did not warrant further review based on Enforcement Priority System criteria.**

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5836 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.

10.

MUR 5858

RESPONDENTS:

KNAZ Television Flagstaff AZ

COMPLAINANT:

Richard Mack

SUBJECT:

Improper exclusion from candidate debate

DISPOSITION:

Dismiss the matter.

The complainant, Richard Mack, alleged he was improperly excluded from one of three Senatorial debates sponsored by the respondent, KNAZ television.  The debate was held in October of 2006 when Mack was a candidate for Senate in Arizona.

The respondent claimed Mack was not included in the debate because he did not meet criteria they established that participants were required to meet in order to participate.

The Commission dismissed the allegations after determining the matter did not warrant further review based on Enforcement Priority System criteria.**

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5858 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.

11.

MUR 5863

RESPONDENTS:

(a) Reston Citizens Association

(b) Comcast Cable Communications Holdings, Inc.

(c) John Lovaas

COMPLAINANT:

James Hurysz

SUBJECT:

Improper exclusion from candidate debate

DISPOSITION:

(a-c)Dismiss the matter.

The complainant, James Hurysz, alleged he was improperly excluded from a Congressional candidate debate broadcast through the Reston Impact, a community broadcast provided by Comcast Cable.  The debate was held in October of 2006 when Hurysz was a candidate for Virginia’s Eighth Congressional district.

The Commission dismissed the allegations after determining the matter did not warrant further review based on Enforcement Priority System criteria.**

DOCUMENTS ON PUBLIC RECORD:

Documents from this matter are available from the Commission’s web site at http://www.fec.gov by entering 5863 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.

 

*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.

The Federal Election Commission (FEC) is an independent regulatory agency that administers and enforces federal campaign finance laws. The FEC has jurisdiction over the financing of campaigns for the U.S. House, the U.S. Senate, the Presidency and the Vice Presidency. Established in 1975, the FEC is composed of six Commissioners who are nominated by the President and confirmed by the U.S. Senate.

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