- Justice Department won guilty pleas in three `scam PAC’ cases
- Gridlocked FEC can’t agree what to do about misleading tactics
Both of these statements seem to be equally true:
1) Federal authorities are cracking down on grifters who live large on money that Americans thought they gave to legitimate political campaigns.
2) Federal authorities might be encouraging scammers by doing nothing about misleading appeals for political money.
The first set of authorities work for the U.S. Justice Department. The other is the Federal Election Commission, made up of two Democrats and two Republicans. When their views clash, it’s a 2-2 tie and nothing can happen.
“The Justice Department has become the primary enforcer of campaign finance laws because the FEC is unable to do its job,” said election attorney Brett Kappel, who represents Democratic candidates. A potential down side, he said, is that prosecutors focus on the most egregious cases that can lead to a criminal conviction, so many other cases can slip through the cracks.
Former FEC Chairwoman Ann Ravel (D) wrote in a 2015 op-ed that gaps in the law contributed to the commission’s poor enforcement record. For instance, she wrote, the FEC couldn’t do anything about a scammer who purported to be raising money to support the candidacy of former Rep. Allen West (R-Fla.) because laws against fraudulent fundraising and personal use of campaign funds applied only to candidates, not PACs.
Congress hasn’t acted on a unanimous FEC legislative recommendation to outlaw fraudulent campaign solicitations. That suggestion has been pending since 2017.
The FEC’s gridlock stands in contrast with the activity in federal courthouses around the country. Among the cases closed by prosecutors over the past year:
- In Rhode Island, politician Russell Taub pleased guilty to fraud and violating FEC reporting rules after being accused of using PAC donations to support a lifestyle that included cigars and adult entertainment.
- In New York, William Tierney was sentenced to two years in prison for pocketing donations to six PACs – the first prison sentence for a political scammer during the DOJ crackdown, according to Kappel.
- In Texas, Kyle Prall pleaded guilty to fraud. He was accused of pocketing money donated to political action committees with deceptive names linked to 2016 presidential candidates Donald Trump, Hillary Clinton and Bernie Sanders.
According to an indictment, he falsely reported to the FEC that money raised by his presidential-sounding PAC sites went to pay for legitimate PAC expenses, like “meals and entertainment.”
In fact, Prall was spending thousands of dollars on alcohol, “club dances performed by entertainers” a massage, and other personal expenses, prosecutors said. None of his PACs’ money went to support candidates.
Cigars, Escorts Tab Picked Up by Politician’s Fundraising Scam
Prall decided to enter the plea after first fighting federal fraud charges and arguing they were “pre-empted and unconstitutional” because campaign finance laws are supposed to protect First Amendment rights.
Disclaimer Case
In late April, the FEC announced it had dismissed a complaint that alleged the deceptive use of candidates’ names when gathering online donations.
The commission dropped on party-line vote a five-year-old enforcement complaint alleging the National Republican Congressional Committee violated campaign finance laws by creating dozens of websites that used the names of Democratic lawmakers targeted for defeat.
An image of one NRCC web site had a large banner at the top saying “Kirkpatrick for Congress” and a picture of Rep. Ann Kirkpatrick, according to an FEC general counsel’s report . Smaller text on the site criticized the Arizona Democrat and asked for a contribution, which went to the Republican Party committee.
The NRCC said the websites had disclaimers identifying the party committee as sponsor. Responses filed with the FEC by lawyers for the committee also noted that an FEC regulation restricting use of candidate names had been struck down in court.
“Attack microsite webpages are protected core political speech made by a political party expressing opposition to political candidates, and protected by the First Amendment” said William McGinley, an election lawyer who represented the NRCC before going to work in the Trump White House as Cabinet secretary.
`Dirty Trick’
A decision handed down in March by the federal district court in Washington struck the commission’s rule restricting use of a candidate’s name in a title of a fundraising project unless the title clearly indicates opposition to the candidate. The court said deceptive practices could be countered by disclaimers disclosing who funded a website or other communication.
FEC Chairwoman Ellen Weintraub (D) said that viewers don’t always notice disclaimers, especially when they’re in fine print under a flashy title.
She expressed frustration that the NRCC was able to exploit search engine optimization techniques to get its websites into the search results when voters googled the names of Democratic candidates. “It’s a dirty trick one should expect from Internet trolls and hackers, but not from a national party organization,” Weintraub said.
The court ruling striking restrictions on use of a candidate’s name created “a hole that scam PACs are going to drive a truck through,” she said in a separate comment on Twitter.
(Photo by Scott Olson/Getty Images)
Citizens United President David Bossie
Curbing enforcement of FEC rules on use of a candidate’s name could make it easier for scam PACs to mislead donors, said Brendan Fischer, an election lawyer with the nonprofit Campaign Legal Center.
In a new report, Fischer writes about the Presidential Coalition, a group created by former Trump political advisor David Bossie. It “raised millions by playing up Bossie’s ties to Trump, and using messaging and imagery that suggested an official White House connection,” Fischer said in an email.
Bossie is the president of Citizens United, the successful plaintiff in a Supreme Court case that allowed corporations to spend unlimited sums to influence elections. He didn’t immediately return a calls and an email seeking comment.
The Presidential Coalition raised $13 million last year, mostly from elderly, small-dollar donors, according to the report. About 3% of that money went to direct political activity, while the rest went mainly for direct mail marketing and telemarketing.
In a three-page statement to Axios, the group wrote that the Campaign Legal Center’s work lacked credibility because it’s “made up largely of former FEC officials and left-wing activists who have made a career out of imposing excessive regulatory burdens on the exercise of 1st Amendment rights, especially in the political arena.”
The statement described Presidential Coalition as an affiliate of Citizens United.
To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bgov.com
To contact the editors responsible for this story: Katherine Rizzo at krizzo@bgov.com; Bennett Roth at broth@bgov.com