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Posts in "Compliance Activity"
July 15, 2014
A national accounting firm has agreed to pay $4 million to settle charges by the Securities and Exchange Commission that the firm violated rules relating to lobbying activities while claiming to be an independent auditor.
In the settlement, Washington Council EY, a unit of Ernst & Young, agreed to pay $4,071,925.98 including disgorgement, interest, and civil penalty. The settlement details the House and Senate lobbying activities of the firm, including letters, meetings, and draft legislation.
The summary of the settlement stated,
“These proceedings arise out of certain legislative advisory services provided by Washington Council EY (“WCEY”), which has been part of EY since 2000.
“Prior to 2009, certain conduct related to WCEY’s provision of legislative advisory services violated the independence rules with respect to two of EY’s SEC-registrant audit clients. For example, WCEY sent letters urging passage of bills to congressional staff on behalf of one of its clients (hereinafter, “Client A”). These bills were important to Client A’s business interests. In another instance, WCEY asked congressional staff to insert into a bill a provision favorable to Client A. For another audit client (hereinafter, “Client B”), WCEY attempted to persuade congressional offices to withdraw their support for legislation detrimental to that client’s business interests. In addition, WCEY worked closely with congressional staff in drafting an alternative bill more favorable to Client B. WCEY also marked up a draft of the alternative bill, inserting specific language written by Client B, and sent the mark-up to congressional staff. Full story
The blatant partisan activities of an employee of the Federal Election Commission have been detailed by the House Committee on Oversight and Government Reform, which is seeking information relating to a former co-worker, Lois Lerner. The loss of emails has hampered discovery.
The committee released a letter from chairman Darrell Issa, R-Calif., to Lee Goodman, the chairman of the Federal Election Commission, asking for records and information about the activities of April Sands. The Inspector General of the Commission reported she could not obtain some of Sands’ emails, since the Commission had recycled her computer hard drive. As a result, there was no prosecution.
July 7, 2014
Federal candidates, PACS, and party committees have a major reporting deadline coming up that will provide the public with an update on the campaign financing of the 2014 elections. The Federal Election Commission has provided a reminder and resources to filers.
July Quarterly Filing Reminder. Quarterly filers have a report due on Tuesday, July 15 (covering activity through June 30). Quarterly reports sent by registered, certified or overnight mail must be postmarked no later than July 15, and paper filings sent by other means must be received by close of business on July 15. Electronic filers have until 11:59 p.m. (EDT) on the due date of the report to submit their reports on time. (Federal Election Commission staff in the Reports Analysis Division (RAD) will be available until 8:00 pm (EDT) on Tuesday, July 15, to answer questions regarding the content and filing of reports. To reach RAD, call 800-424-9530 (press 5) or 202-694-1130. For help with technical issues relating to electronic filing, dial the same toll-free number and press 4 or call 202-694-1307.) Active in a primary election? See the Compliance Map and click on your state for specific filing information pertinent to that primary. Full story
July 3, 2014
A federal court has ruled that a super PAC making independent expenditures was not functionally distinct from its sister committee that was making contributions to candidates.
The U.S. Court of Appeals for the 2nd Circuit ruled yesterday in Vermont Right to Life v. Sorrel. Vermont Right to Life has two state accounts, one for a regular political committee that gives contributions, and one for a super PAC for making independent expenditures.
The Court found that the two committees were “enmeshed financially and organizationally.” The two entities had shared staff and often made joint expenditures. The Court found the two had not been acting independently and thus must share the state’s limitations on contributions to candidates.
At the federal level, hybrid Super PACs may Full story
July 1, 2014
The federal agency regulating and monitoring money in federal elections is seeking answers from a pro-Cochran Super PAC regarding what appears to be campaign finance violations.
The Federal Election Commission (FEC) has sent a Request For Additional Information (RFAI) to Mississippi Conservatives, a Super PAC supporting the re-election of Sen. Thad Cochran, R-Miss. The committee has until August 1st to respond, or the failure to do so “could result in an audit or enforcement action.”
The FEC letter states Full story
June 20, 2014
A U.S. Representative must repay $59,000 to those who provided improper gifts, as well as be reproved by the House Ethics Committee.
The House Ethics Committee released a report on Rep. Don Young, R-Alaska, stating that in regard to fifteen trips and certain gifts, (1) Young violated House rules, and other laws and standards of conduct, (2) Young failed to report certain gifts, (3) Young must repay the $59,064 value of those trips and gifts, (4) Young must amend his personal financial disclosure report to show the gifts, and (5) Young should be reproved for his conduct with respect to his personal use of campaign funds, his acceptance of improper gifts, and his failure to report certain gifts.
Roll Call’s Matt Fuller recaps the report in his article, Don Young Broke House Rules, Ethics Committee Says.
June 19, 2014
A New York federal grand jury and the Securities and Exchange Commission have issued subpoenas for a Congressional committee staff member who may have information about providing knowledge of Congressional action on health care policy to stock traders on Wall Street.
The subpoenas were issued for documents, as well as the testimony of Brian Sutter, staff director of the Ways and Means subcommittee on health, according to an article by Brody Mullins and Andrew Ackerman in the Wall Street Journal. On May 9th, Sutter notified the House of Representatives he had received the New York subpoena.
Under the Stop Trading on Congressional Knowledge (STOCK) Act, Full story
June 11, 2014
The House Ethics Committee announced that it was continuing an investigation of Rep. Steven Stockman, R-Texas, for obtaining illegal campaign contributions from his congressional staff.
The House Ethics Committee announced their move as it released the report from its Office of Congressional Ethics, which concluded the following:
(1) that there is a substantial reason to believe that Rep. Stockman conspired to accept contributions to his congressional campaign committee from individuals who were prohibited from contributing to his campaign because they were employed by his congressional office at the time the contributions were made in violation of federal law and House rules.
(2) that there is a substantial reason to believe that Rep. Stockman made false statements and endeavored to impede the OCE inquiry when he filed Payroll Authorization Forms with the House Office of Payroll and Benefits in December 2013, purporting to document the termination of Mr. Posey and Mr. Dodd from his congressional staff on February 12, 2013, and their rehiring on February 13th.
(3) that there is substantial reason to believe that Full story
June 6, 2014
A federal agency has closed its investigation of a U.S. Representative for using campaign funds and his leadership PAC funds for his family’s trip to Scotland, and his daughters expenses to promote her business and her graduation party.
The Federal Election Commission’s (FEC) closure of Matter Under Review (MUR) #6511 against Rep. Robert Andrews, D-N.J., was disclosed in a letter to the Citizens for Responsibility and Ethics in Washington (CREW), who had filed the original complaint.
CREW had alleged Andrews had used his campaign funds and leadership PAC funds for non-campaign or personal use. The FEC found $13,540 spent on expenses for a family trip to Scotland involving a gift at Bloomingdales and $7,725 for rooms at the Balmoral Hotel; $16,575 for air tickets paid by his PAC; expenses for his teenage daughter’s travel with him to promote her show business career; $20,159 for a June 2011 party celebrating his career and his daughter’s high school graduation; and more than $12,500 in contributions to theaters where his daughter performed.
A businessman has admitted providing $150,000 to straw donors who then contributed to candidates in the 2010 U.S. Senate election in Utah.
Jeremy Johnson, a Utah businessman, stated in an affidavit, he laundered $50,000 through straw donors to the 2010 campaign of Sen. Mike Lee, R-Utah, and $100,000 to Mark Shurtleff, R-Utah, who was considering a 2010 Senate race, but later dropped out. It is illegal to give contributions in the names of others in federal elections.
Johnson is a Utah businessman currently under indictment for fraud, and under investigation in a civil suit by the Federal Trade Commission.
May 31, 2014
A Congressman, who had trouble getting on the primary election ballot, has set up a legal expense trust to solicit funds to pay his legal fees.
Rep. John Conyers, D-Mich., has registered his Conyers 13th District Legal Expense Trust with the Internal Revenue Service as a Section 527 political organization. The Trust is based in Washington, D.C. and was filed on May 30th by treasurer Amy Gilbert. The stated purpose is “To defray legal fees and other expenses…”
County and Michigan state officials had ruled Conyers did not have enough signatures to qualify for the ballot, but U.S. District Judge Matthew Leitman reversed the decision and insisted Conyers be placed on the ballot.
May 29, 2014
A new government report is out on how the choir of lobbyists and lobbying firms comply with the disclosure requirements of federal lobbying law, but fails to show anything about those who never registered to lobby or report in the first place.
The Government Accountability Office has released its new report, 2013 Lobbying Disclosure: Observations on Lobbyists’ Compliance with Disclosure Requirements. The GAO report is required by the Lobbying Disclosure Act of 1995, as amended. The GAO audits the extent to which lobbyists can demonstrate compliance with disclosure requirements, identifies challenges to compliance that lobbyists report, and describes resources available and improvements on enforcement.
The report, in general, states those who do file do a pretty good job. The report did find improvements could be made in properly disclosing the names of lobbyists who were in previous covered positions in the government, and in properly reporting those lobbyists that terminated activity.
While the audit is a helpful way to monitor activity of lobbyists who do file, it should not be read as a true measure of overall compliance. The GAO report states, “The mandate does not require us to identify lobbyists organizations that failed to register and report in accordance with LDA requirements. The mandate also does not require us to determine whether reported lobbying activity or political contributions represented the full extent of lobbying activities that took place.”
May 22, 2014
The chief financial officer of a corporation has pleaded guilty to a conspiracy to commit campaign fraud, as well as other charges, that could bring pressure on the company’s founder, whose trial on similar charges starts on June 2.
Michael Giorgio, CFO of the SCI in Ohio, pleaded guilty on Monday to seven charges, including obstruction of justice, conspiracy to commit campaign fraud, witness tampering, and making a false statement.
In his plea deal, Giorgio accused his boss Benjamin D. Suarez of personally directing a scheme to move $100,000 to the 2012 federal re-election campaign of Rep. Jim Renacci, R-Ohio, and $100,000 to the 2012 U.S. Senate campaign of candidate Josh Mandel, R-Ohio.
May 20, 2014
A former college president and conservative filmmaker has pleaded guilty to one count of making illegal campaign contributions in a federal election.
Dinesh D’Souza, pleaded guilty today to contributing $15,000 more than permitted to Wendy Long, R-N.Y., a 2012 federal U.S. Senate candidate in New York who ran against Sen. Kirsten Gillibrand, D-N.Y. Charges of making false statements to the Federal Election Commission were dropped.
D’Souza was indicted in January for contributing in the names of others, after asking two friends to be straw donors and contribute to Long, and promising to reimburse them. View earlier posting.
D’Souza was president of King’s College in New York. He was a political advisor to President Reagan, and released the film, 2016: Obama’s America, based on his book, The Roots of Obama’s Rage.
View Department of Justice press release.
New federal financial reports from Super PACs continue to show the use of hundreds of thousands of dollars from individuals for impacting on the 2014 elections. However, the big exception is $250,000 from an unknown source that a Super PAC has not identified.
In a new filing from a Super PAC, New Republican.org reported it had receipts of $287,291 during April, of which $285,000 was contributed on April 24th by Californian John Jordan, CEO of Jordan Winery. The Super PAC spent $258,444 in April on independent expenditures supporting Monica Wehby, R-Ore., in the Oregon U.S. Senate race. The Super PAC was initially funded with $500,000 from members of the DeVos family.
New Hampshire Priorities, a Republican-oriented Super PAC, reported it had receipts of $174,025 during the first quarter of the year, with $174,000 being contributed by Portsmouth, N.H. businessman Peter Paul, chairman and CEO of Headlands Asset Management. The PAC spent $20,372 in March supporting Daniel Innis, R-N.H., in his New Hampshire U.S. House race.
The Spirit of America, a Republican-oriented Super PAC, reported it had receipts of $100,000 during April, with all of it coming from Full story