Bachmann Presidential Campaign, PAC Fined Over Hidden Payments

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By Kenneth P. Doyle

The Federal Election Commission has fined former Rep. Michele Bachmann’s presidential campaign and “leadership” political action committee $35,000 for disguising thousands of dollars in payments to an Iowa state senator to buy support in that state’s 2012 presidential caucuses, according to newly released FEC documents.

Bachmann (R-Minn.) wasn’t named in the FEC enforcement case. Her congressional campaign committee paid the fines of $17,500 each, which were assessed against Bachmann’s presidential campaign committee and her leadership political action committee.

Bachmann, a favorite among conservative Tea Party activists, announced in 2013 that she would not seek re-election to the House in 2014. The congresswoman denied at the time that her retirement was prompted by concerns about investigations or her prospects for re-election, saying simply that “eight years is … long enough” to serve in Congress.

The latest fines resulted from FEC enforcement cases—designated Matters Under Review 6724 and 7089—which centered on the web of intrigue that ultimately entangled two Republican presidential campaigns in 2012—those of Bachmann and former Rep. Ron Paul (R-Texas). Both campaigns made hidden payments to state Sen. Kent Sorenson (R), who was viewed as a key supporter in Iowa Republican politics.

The FEC commissioners voted unanimously to find that the hidden payments to Sorenson violated federal campaign finance law. The FEC found “reason to believe that the [Bachmann campaign] committee failed to properly disclose $33,750 in disbursements to Sorenson,” according to a conciliation agreement settling the case.

Paul Aides Prosecuted

The Justice Department criminally prosecuted aides to the Paul for their role in disguising payments to Sorenson. Sorenson also pleaded guilty to federal criminal charges.

The Paul aides argued that their actions were legal because FEC rules allowed reporting of payments to a vendor even when the money ultimately flowed to another, unnamed party. However, a federal judge rejected this argument.

Paul campaign aides—including political consultant Jesse Benton, who later headed presidential super political action committees backing candidate Donald Trump and Sen. Rand Paul (R-Ky.)—were found guilty last year following a jury trial in federal district court in Iowa. Their case is under appeal before the U.S. Court of Appeals for the Eighth Circuit.

Benton is married to Ron Paul’s granddaughter and has a long history of political work on behalf of the Paul family and others. He and campaign manager John Tate were sentenced to six months of home detention, while deputy manager Dimitrios Kesari received three months in prison and three months home detention.

FEC Finds Bachmann Disclosure Violation

In the newly revealed matter involving Bachmann’s campaign, the FEC found “reason to believe that [the Bachmann campaign] committee failed to properly disclose $33,750 in disbursements to Sorenson,” according to a conciliation agreement settling the case. The earmarked payments to Sorenson were reported as payments to a campaign vendor, the consulting firm C&M Strategies, according to the settlement.

Any violations of campaign finance law in its case “were not knowing and willful,” Bachmann’s campaign contended in its conciliation agreement with the FEC. The campaign wasn’t “admitting liability in this matter or with respect to any other proceeding,” the settlement said. The campaign agreed to pay the FEC fine and amend its disclosure report “to resolve this matter.”

Similar language was included in a separate settlement agreement with the Bachmann leadership PAC, known as MichelePAC. The PAC also made payments to C&M Strategies, which ultimately went to Sorenson.

MichelePAC paid $45,000 to C&M Strategies for services performed for Bachmann’s campaign committee in November and December 2011, the FEC found. In addition to violating disclosure rules, these payments resulted in excessive in-kind contributions from the leadership PAC to the campaign committee.

Sorenson Switched Endorsement

In the Ron Paul campaign case, Justice Department prosecutors charged that the campaign aides—but not Paul himself—violated disclosure requirements by hiding $73,000 in payments to Sorenson. The secret payments were made in return for Sorenson switching his endorsement before the 2012 Iowa presidential caucuses. He had originally endorsed Bachmann but switched his support to Paul.

To hide the payments to Sorenson, Paul campaign disbursements were listed in FEC disclosure reports as going to a film production company called ICT, which then paid a company owned by Sorenson, prosecutors said.

Sorenson pleaded guilty and cooperated with prosecutors. A first trial in the case of the Paul campaign aides yielded a mixed verdict. However, several charges that were dismissed without prejudice before the first trial were refiled, and prosecutors were allowed to reopen the case in 2015.

The U.S. District Court for the Southern District of Iowa last year found Benton and Tate guilty on four counts, including conspiracy, causing false records, causing false campaign contribution reports, and a false statements scheme. Kesari was found guilty of three of the same counts but not causing false records.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

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