{"id":4806,"date":"2022-09-23T09:54:15","date_gmt":"2022-09-23T14:54:15","guid":{"rendered":"https:\/\/blogs.luc.edu\/compliance\/?p=4806"},"modified":"2022-09-23T09:54:15","modified_gmt":"2022-09-23T14:54:15","slug":"largest-alleged-violation-in-fec-history-investigation-blocked-case-closed","status":"publish","type":"post","link":"https:\/\/blogs.luc.edu\/compliance\/?p=4806","title":{"rendered":"Largest Alleged Violation in FEC History \u2013 Investigation Blocked, Case Closed"},"content":{"rendered":"

Sam Schwab <\/span><\/em>
\nAssociate Editor <\/span><\/em>
\nLoyola University Chicago School of Law, JD 2024<\/span><\/em><\/p>\n

In June, the Federal Elections Commission (FEC) announced that they would not investigate allegations<\/a> that two of former President Trump\u2019s campaign committees illegally misreported hundreds of millions of dollars in spending. If true, these allegations would constitute the \u201clargest alleged violation in FEC history<\/a>\u201d according to FEC Commissioner Ellen L. Weintraub. The initial complaint<\/a> alleged that the committees failed to disclose payments to friends and family members of the former President, such as\u00a0 Lara Trump, who is Trump\u2019s daughter-in-law, and Kimberly Guilfoyle \u2013 Donald Trump Jr.\u2019s fianc\u00e9<\/a>. In it’s decision<\/a>, the FEC\u2019s Republican Commissioners voted not to investigate the matter, which is therefore no longer being pursued. This situation illustrates how the FEC has consistently failed<\/a> to investigate the Trump reelection campaign for alleged violations of campaign finance law.\u00a0<\/span><\/p>\n

<\/p>\n

The FEC\u2019s structure and complaint process <\/strong><\/span><\/p>\n

The FEC is a federal agency whose <\/span>mission<\/a> is to \u201cprotect the integrity of the campaign finance process by providing transparency and fairly enforcing and administering federal campaign finance laws.\u201d The agency has six Commissioners<\/a>, who are appointed by the President, with the advice and consent of the Senate. There can be no more than three Commissioners of the same political party, and \u201cat least four <\/em>votes are required for any official Commission action<\/a>\u201d to take place. As such, opening an investigation into alleged campaign finance violations requires votes from four Commissioners. When the Commission votes 3-3 as to whether to open an investigation, the allegations are not investigated. Each side then releases a \u201cStatement of Reasons\u201d which describes why each commissioner voted the way they did. At the time of the decision, three Republicans, two Democrats, and one Independent were on the Commission. Since then, the Independent commissioner stepped down<\/a> and Democratic Commissioner Dara Lindenbaum now occupies the seat<\/a>.<\/span><\/p>\n

Anyone can file a complaint<\/a> with the FEC when suspected campaign finance violations arise. On July 28, 2020, a nonprofit watchdog group called the Campaign Legal Center<\/a> filed a complaint against two campaign committees<\/a> that were part of former President Trump\u2019s reelection campaign. The complaint alleges violations of 52 U.S.C. \u00a7 30104(b)(5)(A) \u2013 a law known as the Federal Election Campaign Act (FECA)<\/a>. First passed in 1972 after the Watergate scandal<\/a>, FECA created the FEC and imposed reporting and disclosure requirements onto campaigns for federal office. The law requires<\/a> that every committee disclose payments to individuals and report the individuals\u2019 name, the date of the payment, the amount, and the \u201cpurpose of such operating expenditure.\u201d\u00a0<\/span><\/p>\n

\u201cMake America Great Again PAC\u201d complaint<\/strong><\/span><\/p>\n

MUR (Matter Under Review) #7784<\/a> alleges that two Trump campaign committees misreported the recipients of payments to two companies \u2013 American Made Media Consultants (AMMC) and Parscale Strategy \u2013 as well as the purpose of those payments. The funds were reportedly being used to pay the salaries of Trump campaign advisors, family members and friends \u2013 a fact that the Trump team does not deny. When asked for comment, Trump advisor and former campaign manager Brad Parscale said of the advisors being paid, \u201cI can pay them however I want to pay them.\u201d<\/a> However, according to the complaint, the purpose descriptors in the committees\u2019 FEC disclosures did not account for the payment of these salaries<\/a>.<\/span><\/p>\n

A Huffington Post article<\/a> describes why this is an issue. \u201cA lot of people close to Donald Trump are getting rich off of his campaign,\u201d said one campaign finance expert. \u201cThey don\u2019t want donors to know that they\u2019re getting rich. Because\u2026it\u2019s donor money.\u201d A source for the article described Trump\u2019s former campaign manager Brad Parscale as \u201ca money launderer, not a campaign manager.\u201d In other words, the vendors AMMC and Parscale Strategy were likely being used as front companies to conceal that members of Trump\u2019s inner circle were secretly profiting off campaign contributions to the tune of tens of millions of dollars.<\/span><\/p>\n

The Republican and Democratic Commissioners\u2019 Statements of Reasons<\/strong><\/span><\/p>\n

According to the Republican Commissioners\u2019 Statement of Reasons<\/a>, the committees were not required to separately report AMMC and Parscale Strategies\u2019 payments to third parties, so long as they were \u201cpayments for services or goods used in the performance of the consultant\u2019s contract with the committee.\u201d<\/a> The immediate recipient must be \u201cmerely a conduit for the intended recipient of the funds<\/a>\u201d to establish a FECA violation. The Republican Commissioners found that the committees\u2019 stated purposes \u201ccredibly explain that each vendor paid its respective sub-vendors and employees for services provided in performing the vendors\u2019 contracts with the Committees.\u201d<\/a> Thus, the Commissioners found \u201clittle support for pursuing enforcement action.\u201d<\/span><\/p>\n

The FEC\u2019s Democratic Commissioners saw it differently<\/a>. They highlighted the fact that of the 43 complaints filed<\/a> against the Trump campaign (24 of which the FEC\u2019s nonpartisan attorneys recommended for investigation<\/a>), none<\/em> were investigated by the Commission. The Democratic Commissioners also explained that the FEC did however follow through with an investigation of the DNC and the Hillary Clinton campaign<\/a> for misreporting payments to a law firm. The facts in that case were nearly analogous to the alleged violation by the Trump campaign, though the DNC case came out to only \u201ca tiny fraction of the amount of money<\/a>.\u201d Thus, the Republicans\u2019 refusal to investigate Trump carried \u201cthe unmistakable stench of partisanship<\/a>.\u201d<\/span><\/p>\n

Conclusion and a proposal<\/strong><\/span><\/p>\n

On its website<\/a>, the FEC claims that it\u2019s structure of requiring votes from four commissioners encourages \u201cnonpartisan decisions.\u201d Instead, the Republicans on the Commission have never once voted to investigate the former President, even when 24 of those times the nonpartisan staff attorneys at the FEC recommended an investigation<\/a>. As a result, Donald Trump and his enablers have almost certainly enriched themselves without even so much as an investigation from the FEC.<\/span><\/p>\n

I propose that Congress should amend FECA to make the FEC a nonpartisan, rather than a bipartisan, crop of commissioners. This could also be achieved by replacing the commissioners with a panel of administrative law judges. This would enable the FEC to move forward with enforcement of FECA, rather than being subject to partisanship rendering it basically toothless in the face serious and ever-increasing campaign finance violations.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

In June, the Federal Elections Commission (FEC) announced that they would not investigate allegations that two of former President Trump\u2019s campaign committees illegally misreported hundreds of millions of dollars in spending. If true, these allegations would constitute the \u201clargest alleged violation in FEC history\u201d according to FEC Commissioner Ellen L. Weintraub. The initial complaint alleged that the committees failed to disclose payments to friends and family members of the former President, such as\u00a0 Lara Trump, who is Trump\u2019s daughter-in-law, and Kimberly Guilfoyle \u2013 Donald Trump Jr.\u2019s fianc\u00e9. In it’s decision, the FEC\u2019s Republican Commissioners voted not to investigate the matter, which is therefore no longer being pursued. This situation illustrates how the FEC has consistently failed to investigate the Trump reelection campaign for alleged violations of campaign finance law.\u00a0<\/p>\n","protected":false},"author":122,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26],"tags":[343,695,731,818,851,1690,2016],"class_list":["post-4806","post","type-post","status-publish","format-standard","hentry","category-finance-banking","tag-campaign-finance","tag-elections","tag-enforcement","tag-fec","tag-finance","tag-regulation","tag-trump"],"_links":{"self":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts\/4806","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/users\/122"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4806"}],"version-history":[{"count":0,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts\/4806\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4806"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4806"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4806"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}