Posted on 04/29/2003 6:03:35 PM PDT by Rensselaer
FEC dismisses action against ‘DeLay group’ By Jonathan E. Kaplan and Alexander Bolton
The Federal Election Commission (FEC) has dismissed a complaint against the Leadership Forum, a GOP fundraising group, vindicating Susan Hirschmann and former Rep. Bill Paxon (R-N.Y.), the organization’s president and vice president.
Hirschmann, former chief of staff to House Majority Leader Tom DeLay (R-Texas), and Paxon, an elite GOP lobbyist, had set up the group to raise soft money to fund television issue ads and other activities that would benefit Republican candidates in the upcoming election.
“The FEC ruling validates what we have said all along…the Leadership Forum was set up to and will function in compliance with BCRA,” said Hirschmann, referring to the McCain-Feingold campaign finance reform law. “This ruling reaffirms a citizen’s right to actively participate in the political process.”
The complaint, filed by four campaign finance watchdog groups, also named the National Republican Congressional Committee (NRCC), the Democratic National Committee (DNC), the Democratic State Parties Organization (DSPO), and DNC Chairman Terry McAuliffe.
Campaign finance watchdogs charged these groups had crafted schemes to “evade and violate soft money and disclosure provisions” of the Bipartisan Campaign Reform Act by setting up soft-money political action committees.
By a four-to-two vote, the FEC found that the Leadership Forum was not affiliated with the NRCC as the complaint had charged. Under the new campaign finance law, organizations affiliated with the national party committees may not raise and spend soft money.
Had the Leadership Forum been found by the commission to have been established, financed, maintained or controlled by the NRCC, the Forum would have been prohibited from raising or spending soft money in future elections.
“It looks like a clean bill of health for the Leadership Forum. It confirms what we thought which is that people can still organize political committees and operate them outside of the parties and outside of federal candidates,” said Jan Baran, a campaign finance lawyer at Wiley Rein & Fielding. “I’m not surprised. Once they returned the money to the NRCC I fully expected this result.”
Commission Chairwoman Ellen Weintraub, a Democratic appointee, sided with the three Republican-appointed commissioners.
The election agency also dismissed the complaint against McAuliffe, the DNC, and the DSPO. However, the commission found that the DNC and the DSPO were affiliated.
This will pose a major hurdle to Democratic Party strategists who had spun the state party organization off from the DNC in order to raise approximately $40 million in soft money before the 2004 presidential election.
The commission’s finding of affiliation between the two groups means the DSPO will not be able to raise unlimited soft-money contributions to aid Democratic candidates in 2004. The commission dismissed the complaint against the Democratic groups and McAuliffe because the DNC and the DSPO had not begun raising or spending soft money.
“We are pleased but not at all surprised by the decision of the Commission to dismiss these complaints,” said Guillermo Meneses, a spokesman for the DNC.
The decision is a victory for House Republicans and a setback to Democrats. Now, Republicans will be able to continue to raise soft money to promote a conservative message in the months leading up to the 2004 election, something sure to help GOP candidates.
Democrats will have to return to the drawing board to find a fundraising vehicle that is not affiliated with the national parties and thus able to raise soft money, but at the same time is recognized by donors as the primary Democratic soft money fundraising committee.
The basis of the complaint against the Leadership Forum was a $1 million contribution it received from the NRCC and later returned. Watchdog groups charged the contribution, which happened after the date the new campaign finance law went into effect, established affiliation between the group and party committee.
However, in its decision the election commission found the Leadership Forum “did not violate prohibitions codified in the Bipartisan Campaign Reform Act.”
The decision went on to say: “The Commission, at the [Office of General Counsel’s] recommendation, found Reason to Believe that the National Republican Congressional Committee violated 2 USC section 441 I(a) in transferring $1 million to the Leadership Forum.”
However, it added: “Due to mitigating circumstances, including the return of the money to the original donors, the Commission by [a] 4-2 vote, accepted [Office of General Counsel’s] recommendation to issue a letter of admonishment to the NRCC but take no further action.”
Fred Wertheimer, president of Democracy 21, one of the four groups that filed the complaint, said: “There’s an overriding message involved here, and that is that no one is going to get a free ride in trying to evade the new campaign finance laws....”
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