Cancer Treatment Centers, Founder Admit Illegal Campaign Contributions

By Kenneth P. Doyle

Hospital company Cancer Treatment Centers of America, its founder and chairman Richard Stephenson, and two other company executives agreed to pay a fine of $288,000 to the Federal Election Commission for making illegal campaign contributions to dozens of federal candidates, according to newly released FEC documents.

The documents outlined a decade-long scheme in which the company reimbursed lower-level managers for campaign contributions through bonuses, which the employees said they believed were intended to reimburse their contributions. The documents included a conciliation agreement between the FEC and the company, as well as separate settlements with Stephenson and two other company executives, Stephen Bonner and Robert Mayo.

A total of nearly $700,000 in reimbursed contributions were made from 2009 to 2014, the FEC said. Almost $150,000 came before 2009—outside the statute of limitations period set by federal campaign finance law. Most of the candidates receiving the money weren’t identified, and there was no indication they knew the contributions they received were illegal.

The company agreed to waive any rights to seek refunds of its illegal contributions and agreed to seek disgorgement of its contributions from all recipient candidates and political committees to the U.S. Treasury.

The company, along with Bonner and Mayo, acknowledged making illegal corporate campaign contributions and contributions in the name of another person. Stephenson acknowledged making corporate contributions but not contributions in the name of another.

The settlement said Stephenson was “aware of and generally supported political activity by” executives of the company, known as CTCA. However, it said, Stephenson wasn’t aware that bonuses were being used to reimburse employees for political contributions until late 2014 when he initiated an internal investigation.

Company Beefing Up Compliance

A spokesperson for CTCA said in a statement emailed to Bloomberg BNA that the FEC enforcement matter resulted from the hospital company’s voluntary disclosure of its actions, which occurred years ago.

“Importantly, the FEC found that CTCA’s conduct was not `knowing and willful,’” the company spokesman added. “At the direction of the company’s chairman, upon learning of the issue, CTCA promptly conducted a comprehensive internal investigation and voluntarily reported the results to the FEC. In addition, CTCA immediately terminated the program in question and implemented a system of rigorous internal controls and enhanced compliance measures. This activity had no impact on patient care, and our commitment to the patients and families we serve is unwavering.”

The results of the company’s internal investigation were provided to the FEC and became the basis of a civil enforcement matter, designated Matter Under Review (MUR) 7248. The fine resulting from the enforcement matter was among the largest collected by the FEC in recent years.

After years of gridlock over disclosure issues, the FEC last year imposed $233,000 in fines against three conservative groups tied to the so-called Koch network of conservative donors linked to Koch Industries leaders Charles and David Koch. The fines were assessed for failing to report sources of funding for political advertising. Many other FEC enforcement matters have been dismissed because of deadlocks among Democratic and Republican commissioners.

Disclosure of FreedomWorks Contributions

Among the enforcement matters leading to FEC deadlocks was one involving nondisclosure of contributions totaling $12 million allegedly from Stephenson to the conservative group FreedomWorks.

The watchdog groups Campaign Legal Center and Democracy 21 have gone to court to challenge the FEC’s dismissal of this matter and others. The court case is ongoing.

The latest FEC enforcement action is apparently unrelated to the FreedomWorks contributions and involves a more straightforward issue: direct contributions to candidates. Individual contributors can legally give no more than $2,700 per election to a federal candidate. The law prohibits circumventing the contribution limits by reimbursing others for their contributions and prohibits all corporate contributions to federal candidates.

The newly released FEC documents said those receiving bonuses under a program established by CTCA made hundreds of individual campaign contributions over the period from 2002 to 2014. The total amount of the bonuses was over $1.5 million and more than two dozen bonus recipients made a total of more than $1 million in contributions.

To contact the reporter on this story: Kenneth P. Doyle in Washington at

To contact the editor responsible for this story: Paul Hendrie at

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