FEC to Eye Super PAC’s Hiring of Trump Campaign Workers

By Kenneth P. Doyle

Dec. 5 — An advisory opinion set to be considered Dec. 8 by the Federal Election Commission could clarify FEC rules regarding illegal coordination between candidates and super political action committees, but prospects for a definitive decision remain uncertain.

The advisory ruling was requested by a super PAC that supported President-elect Donald Trump, and it involves an apparently narrow question. The super PAC—called Great America PAC—said it wanted to hire former Trump campaign workers to help canvass and mobilize voters to turn out for Trump and asked if hiring the Trump campaign workers would make the super PAC’s spending an illegal contribution to Trump’s campaign, rather than an “independent expenditure.”

A dearth of FEC decisions drawing legal lines between candidates and super PACs means that, if at least four commissioners can agree, any decision on the Great America PAC advisory opinion (AO 2016-21) could have a wider impact on candidates and groups active in the 2016 campaign and beyond.

FEC rules restrict someone working for a candidate’s campaign—or someone who recently left a campaign—from working for a super PAC supporting the candidate. The rules establish a 120-day “cooling off” period intended to keep former campaign staffers from using their knowledge of a campaign’s strategy and needs to develop ads for an “independent” group.

Super PAC Allegedly Paid Bannon, Conway

Even though the election is over, the super PAC told the FEC it still wants an answer to guide its future activities. The FEC is set to consider a ruling at its final scheduled open meeting of 2016. The votes of at least four of the six FEC commissioners—who are equally divided among three recommended by Democrats and three by Republicans—would be needed for any final advisory opinion.

Among those possibly affected by any FEC ruling is another pro-Trump super PAC, known as Make America Number 1. The super PAC, funded by billionaire Republican donor Robert Mercer and others, has been accused of illegally contributing to Trump’s campaign by making payments to his top campaign aides, Kellyanne Conway and Stephen Bannon.

Mercer, co-CEO of the hedge fund Renaissance Technologies and regarded as a top Trump supporter in numerous media reports, gave a total of $13.5 million to Make America Number 1, according to disclosure reports filed with the FEC and compiled by the nonprofit Center for Responsive Politics.

The super PAC initially backed Sen. Ted Cruz (R-Texas) for the Republican presidential nomination, but later supported Trump. During the general election campaign, the super PAC produced videos attacking Trump’s Democratic opponent, Hillary Clinton, and maintained a website called DefeatCrookedHillary.com.

A triumphant Trump appeared Dec. 3 at a post-election party at Mercer’s house in Long Island, N.Y., Bloomberg News reported.

Future Enforcement Action Uncertain

The ability of super PACs and other outside groups to influence elections has increased sharply in recent years and can be far greater than the power of candidates operating on their own with limited funding. If super PACs and candidates can work hand-in-glove, candidate contribution limits could become meaningless, according to critics such as the watchdog group Campaign Legal Center (CLC).

Direct contributions to candidates remain limited—capped at $2,700 per election for an individual contributor in 2016. Super PACs can collect unlimited contributions—sometimes millions of dollars—from wealthy donors, corporations and unions.

CLC filed complaints with the FEC during the 2016 election cycle, pressing the agency to enforce anti-coordination rules against super PACs supporting Trump and Hillary Clinton. Determining how closely the Mercer-funded super PAC and others worked with the candidates they supported in 2016 would be crucial to possible future FEC enforcement action, as well as how outside spending groups will be able to operate in future campaigns.

In virtually all previous cases involving alleged illegal coordination, however, the FEC declined to take enforcement action or even to open a formal investigation.

Payments to Video Company, Data Analyst

CLC recently supplemented its complaint against Trump’s campaign and the Mercer-funded Make America Number 1, accusing the super PAC of making illegal campaign contributions by paying Bannon, who was announced in August by Trump’s campaign as its chief executive.

Despite that announcement of Bannon’s position last summer, Trump’s campaign has never reported any salary or other payments to Bannon. A video production company and a data analysis company that apparently are linked to Bannon have received large payments from the pro-Trump super PAC, according to CLC.

The supplemental complaint filed Dec. 2 by CLC said that, after Bannon joined Trump’s campaign, the Mercer-backed Make America Number 1 paid nearly $280,000 to “Glittering Steel LLC,” a production company located at the same Beverly Hills address as Bannon’s consulting firm. Additionally, Make America Number 1 paid more than $4.6 million to Cambridge Analytica, a data analytics firm also incorporated at the same address as Bannon’s consulting firm. The board of Cambridge Analytica includes both Bannon and Mercer.

CLC said that, after it filed an initial FEC complaint on this matter in October, Bannon’s consulting firm, Bannon Strategic Advisors, Inc., made a new filing with the California Secretary of State listing a different address.

Common Vendor

According to the CLC complaint filed with the FEC, Trump’s campaign also contracted with Cambridge Analytica, indicating that the campaign and Make America Number 1 ran afoul of the FEC’s “common vendor” rule. The rule restricts a candidate’s campaign and a super PAC supporting the candidate from using the same vendors for campaign services, such as targeting voters.

“The evidence suggests a Mercer-backed super PAC secretly subsidized Steve Bannon’s work for the Trump campaign,” Brendan Fischer, associate counsel at the Campaign Legal Center, said in a statement announcing the latest FEC supplemental complaint.

Previously, complaints filed by CLC also have alleged violations of FEC coordination rules by other super PACs and presidential campaigns. For example, one complaint said the rules were violated when another pro-Trump super PAC, called Rebuilding American Now, was formed by two of Trump’s former campaign staffers, Laurance Gay and Kenneth McKay, almost immediately after they left Trump’s campaign committee.

A separate CLC complaint filed in October alleged that a super PAC supporting Democratic presidential nominee Clinton also violated the FEC coordination rules. The pro-Clinton super PAC, called Correct the Record, asserted that it was allowed to coordinate directly with the Clinton campaign as long as it didn’t run paid advertising.

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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