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For Immediate Release

Contact: 

Bob Biersack

May 9, 2008

George Smaragdis

Michelle Ryan

FEC Collects $64,000 in Civil Penalties

WASHINGTON – The Federal Election Commission (FEC/the Commission) today announced final action in six enforcement cases, two of which led to civil penalties totaling $64,000.

The Commission completed action in these matters in 2007, and documents from these cases have now been included on the public record.  Detailed information on all FEC enforcement actions is available through the Enforcement Query System (EQS) at http://eqs.fec.gov/eqs/searcheqs.

In Matter Under Review (MUR) 5731, the Commission found that DeRossett for Congress and Oscar DeRossett, a candidate in the 2004 primary election in Michigan’s 7th Congressional District, violated campaign finance law by failing to file on time a statement that personal spending by Mr. DeRossett exceeded $350,000.  The Millionaires’ Amendment, passed as part of the Bipartisan Campaign Reform Act of 2002, requires House candidates whose personal campaign spending exceeds $350,000 to submit a statement advising the FEC and opposing candidates within 24 hours of this fact.  Opposing candidates may receive increased contribution limits and additional party support when the $350,000 threshold has been passed.  The FEC found that Mr. DeRossett exceeded the threshold on March 31, 2004, but did not file the appropriate statement until April 19 — 18 days late.  Mr. DeRossett and his campaign signed a conciliation agreement and paid a civil penalty of $59,000.

In MUR 5813, the Commission found that Stephanie Verden, an employee of the Georgia Medical Association, knowingly and willfully violated campaign finance law by diverting a total of $23,700 from the Georgia Medical Political Action Committee (GMPAC) to an account known only to her.  This activity occurred between November 2003 and March 2005.  The Federal Election Campaign Act (FECA/ the Act) prohibits commingling of committee funds with personal funds.  In a separate criminal proceeding, Ms. Verden pled guilty to twenty counts of bank fraud in connection with this activity.   She was sentenced to one year in prison and ordered to pay $2,000 in government assessments and $141,296.90 in restitution to the Georgia Medical Association and GMPAC.  Due to the mitigating circumstances presented by Ms. Verden’s financial condition and by her criminal conviction on related charges, the Commission agreed not to seek a civil penalty in this instance.  The FEC also voted to take no further action against GMPAC for failing to account for and report certain receipts and disbursements because the committee met the Commission’s policy guidance for maintaining internal controls.

In MUR 5925, the Commission found no reason to believe Kyle Foust, Foust for Congress or Friends of Kyle Foust violated the Act by using nonfederal funds in “testing the waters” for a possible federal campaign in Pennsylvania’s 3rd Congressional District.  The Erie County Republican Committee filed a complaint with the FEC alleging that references to a city council reelection web site represented the use of nonfederal funds in an effort to assess Mr. Foust’s viability in a possible Congressional campaign.  The Commission found that, because the web site was created by a volunteer and involved only Internet activity, it did not represent a contribution under FECA and could not have resulted in improper use of nonfederal funds for “testing the waters” activities. The Commission dismissed all other allegations, but admonished Foust for Congress for failing to meet all of the formatting requirements in disclaimers that identify who paid for and authorized communications.

In MUR 5850, the FEC found reason to believe the Republican National Committee (RNC) violated the Act by failing to report certain independent expenditures properly within 24 hours of the dissemination of the communications and by failing to report certain independent expenditures properly on its 2004 post-election report.  Following its investigation, the Commission found that the amount of activity not properly reported was $26,302.  The FEC voted to take no further action in the matter other than to admonish the RNC for failing to maintain records to verify the dates of certain independent expenditures and failing to file two required notices.

In MUR 5542, the Commission found that Texans for Truth (TFT) violated the Act by failing to register with the Commission as a political committee, by failing to disclose its contributions and expenditures and by knowingly accepting contributions from individuals in amounts exceeding $5,000. TFT registered with the Internal Revenue Service (IRS) as a tax-exempt political organization in August of 2004.  From September 13 through October 20, 2004, TFT spent $303,000 for television ads alleging that President Bush evaded National Guard service while in Alabama.    The FEC reached its conclusion because the group told potential donors that their funds would be targeted to the defeat of a specific federal candidate.  All proceeds from these solicitations are, therefore, contributions under the Act.  If a group receives contributions in excess of $1,000 and its major purpose is influencing federal elections, it is required to register with the FEC and abide by the restrictions of the Act.  The Commission also found that the group’s statements and activities demonstrated that its major purpose was to defeat George W. Bush.  In a conciliation agreement, TFT agreed to pay a $5,000 civil penalty and register as a political committee and file reports with the FEC covering its 2004 activities.

The Commission has also concluded action on three complaints related to the Association of Community Organizations for Reform Now (ACORN).  The complaints alleged that ACORN either conducted activities or worked with Project Vote in Florida in 2004 (MUR 5820) and Give Missourians a Raise in Missouri in 2006 (MUR 5843) in ways that should have caused the organizations to register with the FEC as political committees.  Another complaint (MUR 5859) alleged that ACORN illegally coordinated activities with a Pennsylvania Congressional campaign during the 2006 cycle.  The FEC found no reason to believe ACORN should have registered as a committee because its activities in Florida were nonpartisan.  The Commission also found no reason to believe that ACORN coordinated activities with the Lois Murphy for Congress Committee in Pennsylvania.  The Commission dismissed the allegations that ACORN made unreported independent expenditures in the context of a ballot measure campaign in Missouri.

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

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.

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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.

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