Democracy 21 and Campaign Legal Center Call for FEC and Justice Department Investigations of Additional $1 Million Contributions to Pro-Romney Super PAC
Today, Democracy 21 and the Campaign Legal Center called on the Federal Election Commission and the Justice Department to investigate whether two $1 million contributions made by two different Utah corporations to Restore Our Future, a Pro-Romney Super PAC, violated the campaign finance laws.
The groups filed their wrote to the Justice Department requesting an investigation of whether the two corporations that were listed as $1 million donors to the Super PAC illegally masked the actual donors of the contributions. The Campaign Legal Center took the lead in preparing the complaints and letters.
The federal campaign finance laws prohibit a person making a contribution in the name of another.
Restore Our Future was formed by supporters of presidential candidate Mitt Romney and is expected to make “independent expenditures” to support Romney’s presidential campaign.
The two complaints filed today followed a similar complaint filed by Democracy 21 and the Campaign Legal Center last week against W Spann LLC, a Delaware corporation that also had made a $1 million contribution to Restore Our Future. Shortly after that complaint was filed, Edward W. Conard, a former official of Bain Capital and an individual with longstanding ties to Mitt Romney, identified himself as the actual source of the funds used by W Spann LLC for the contribution.
Statement of Democracy 21 President Fred Wertheimer
There are now three $1 million donors who apparently hid their true identities from the American people when they provided huge contributions to Restore Our Future, the pro-Romney Super PAC.
Both the secrecy and the size of these contributions to Restore Our Future are extremely dangerous to the interests of the American people. Secret and unlimited contributions in American politics invariably result in scandal and corruption.
Mitt Romney was dismissive of the first revelation of a secret $1 million contribution given to the Super PAC that is supporting his presidential campaign. That donor revealed himself following our request to the FEC and the Justice Department for an investigation of the secret donation to the Super PAC.
Mitt Romney needs to speak out loud and clear that he wants full transparency for all of the money being raised and spent to support his presidential campaign.
Mitt Romney also needs to act promptly against secrecy in his own campaign by disclosing the individual bundlers who are raising large amounts of money for his 2012 presidential campaign, as he was perfectly willing to do when he disclosed the bundlers for his 2008 presidential campaign. All of the 2012 presidential candidates should disclose the bundlers raising large amounts of money for them as presidential nominees Barack Obama and John McCain did in 2008, and as President Obama is doing for his 2012 presidential campaign.
The so-called Presidential Super PACs that are each “independently” supporting a presidential candidate are the new and dangerous campaign finance scam in the 2012 elections.
These Super PACs are nothing more than shadow arms of a presidential campaign that provide a vehicle for massive circumvention and evasion of the contribution limits applicable to donations made directly to a presidential candidate’s campaign committee.
Before we are done, every serious candidate in the 2012 presidential election will have one or more “independent” Super PACs supporting their candidacies. President Obama has one. Governor Perry has more than one, even before he has formally become a presidential candidate.
The Presidential Super PACs are controlled by individuals closely associated with the presidential candidates.
They raise huge, unlimited contributions from corporations, labor unions and individuals with economic interests pending before the government. And they spend the money to elect the presidential candidate they support.
In practical effect, the presidential Super PACs allow corporations, wealthy individuals and labor unions to make unlimited contributions to presidential candidates.
The Presidential Super PACs take us back to the days of Watergate and the unlimited influence-buying contributions that flowed to candidates. Today, as in the Watergate era, unlimited contributions to presidential Super PACs represent a direct, corrupting threat to the integrity of our democracy and our government decisions.
In the past, Democracy 21 has filed numerous FEC complaints, and the Democracy 21 pro bono legal team has filed a number of lawsuits to press for proper interpretation and enforcement of the campaign finance laws. Despite the fact that three Republican Commissioners on the six-member FEC have consistently blocked enforcement of the campaign finance laws in recent years, Democracy 21 will continue to press for compliance with and proper enforcement of the campaign finance laws.
Democracy 21 is currently exploring possible legal challenges to the new Presidential Super PACs and their fictional “independence” from the presidential candidates they are supporting. In reality, these PACs operate as little more than soft money arms of the presidential campaigns.
If the rise of candidate Super PACs is not stopped, it won’t be long before presidential candidates and members of Congress routinely have their own dedicated Super PACs operating in parallel to the candidate’s campaign committees, controlled by operatives closely associated with the candidate and raising and spending unlimited, corrupting contributions for the benefit of the candidate’s campaign.
For all practical purposes, this would mean that the ban on corporate and labor union contributions to candidates and the limits on individual contributions to candidates will have been eviscerated.
Democracy 21 also has taken the lead in pressing the Internal Revenue Service to properly interpret and enforce the Internal Revenue Code as it applies to campaign activities.
Last October Democracy 21, joined by the Campaign Legal Center, requested an investigation of Crossroads GPS, a 501(c)(4) organization and the brainchild of Karl Rove, and whether it was entitled to tax-exempt status given that the overriding purpose of the group is to conduct campaign activities.
Democracy 21 is currently developing further complaints to seek IRS investigations of pro-Democratic and pro-Republican 501(c)(4) groups on the grounds that these groups have an overriding purpose to spend money to influence elections and therefore are not entitled to tax-exempt status under the Internal Revenue Code.
Earlier this year, Democracy 21, joined by the Campaign Legal Center, also filed a rulemaking petition with the IRS that challenged existing IRS regulations as improperly allowing 501(c)(4) groups to spend far more money on campaign activities than is permitted by the Internal Revenue Code and by court decisions interpreting the Code.
The petition called on the IRS to promptly issue new regulations that comply with the law and that would greatly reduce the expenditures on campaign activities by 501(c)(4) groups and thereby also greatly reduce the amount secret contributions funding these expenditures.
Statement of Paul Ryan FEC Program Director at the Campaign Legal Center
The use of "straw companies" to funnel money anonymously into Restore Our Future does not appear to have been limited to a single company, but seems to be a pattern that places additional urgency on the need for the FEC and DOJ to vigorously investigate these companies and to enforce the laws on the books before this problem becomes even more widespread. Existing laws must be enforced to give citizens a fighting chance of knowing who or what is spending millions of dollars in an attempt to influence their vote and to curry favor with elected officials.
The enforcement agencies need to send a clear message to donors that they need to put their name on the check if they’re going to be giving to Super PACs and I hope that reporters are taking a close look at filings by other Super PACs so that these types of abuses are smoked out. The fact that Restore Our Future has been the recipient of all three mysterious $1 million contributions warrants exploration of the PAC’s knowledge of or involvement in this "straw company" donation scheme.
The Two FEC Complaints Filed Today By Democracy 21 and the Campaign Legal Center
The complaints filed today were against F8 LLC and Eli Publishing L.C., both corporations that are based in Provo, Utah and share an address there. Each corporation made a $1 million contribution to the Restore Our Future Super PAC, which reported the contributions as being made by the corporations.
According to press reports, the two companies “don’t seem to do any business.” The press reports indicate that at the companies’ listed address, there was “only an accounting firm whose employees weren’t aware of the companies’ activities.”
The registered agent for Eli Publishing, Steven J. Lund, told a local reporter that he made the $1 million contribution “through a corporation he created to publish a book years ago because donating through a corporation has accounting advantages.”
The complaint alleges that Eli Publishing may have violated the law by giving money that was provided to it by the true contributor, Steven J. Lund, without disclosing the source of the funds to the Super PAC. The complaint also alleges that Steven J. Lund may have violated the law by making a contribution to the Super PAC in the name of Eli Publishing.
The registered agent for F8 LLC, Jeremy S. Blickenstaff, did not respond to press inquiries about the contribution from that company.
The complaint alleges that F8 LLC may have violated the law by giving money that was provided to it by the person or persons who created or contributed to the corporation, without disclosing the source of the funds to the Super PAC. The complaint also alleges that the person who created or contributed to the corporation may have violated the law by making a contribution to the Super PAC in the name of F8 LLC.
According to the complaint filed with the FEC and the letter sent to the Justice Department, with a copy of the complaint, there is reason to believe, based on published reports, that Eli Publishing LLC and Steven J. Lund, and F8 LLC and any person(s) who created, operated and made contributions in the name of F8 LLC may have violated 2 U.S.C. 441f by making a contribution(s) to the political committee Restore Our Future in the name of another person, namely the corporation.
The complaint and letter also state that the two corporations may have violated 2 U.S.C. 441f by knowingly permitting its name to be used for the making of such contribution(s).
The complaint and letter further state that, based on published reports, the two corporations and the person(s) who created and operated the corporations may have violated 2 U.S.C. 432, 433 and 434 by failing to organize a political committee, register the political committee and file disclosure reports as a political committee, as defined at 2 U.S.C. 431(4).
