FEC Rarely Votes to Refer Criminal Cases to Justice

By Kenneth P. Doyle

July 28 --The Federal Election Commission has referred no campaign finance enforcement cases to the Justice Department for criminal prosecution since 2008 and rarely made referrals to the DOJ even before then, according to FEC figures recently provided to Bloomberg BNA.

Such FEC referrals to DOJ have been made only 22 times in the FEC's 40-year history, with 14 referrals, nearly two-thirds of the total, coming in just the first four years of the FEC's existence from 1975 through 1978.

The lack of FEC referrals apparently has not diminished the Justice Department's capability to prosecute campaign finance cases on its own, however.

The department frequently has initiated such cases, achieving numerous convictions over the years and winning tough sentences, including prison terms. The most common criminal cases involve violations such as illegal campaign contributions through straw donors, embezzlement of campaign funds, and more recently illegal coordination between a candidate's campaign and a super political action committee.

Commission Votes on Referrals

The FEC, which has civil enforcement authority over campaign finance, has the legal power under the Federal Election Campaign Act to make formal criminal referrals. The law allows the FEC to make such referrals in cases where a majority of the six commissioners vote to find probable cause to believe there was a “knowing and willful” violation serious enough to warrant criminal prosecution.

The FEC does not routinely publish information about such referrals, but a list of referrals by year was provided at the request of Bloomberg BNA. The list made clear that referrals have been very rare over the years.

The list did not name the respondents in each case. FEC officials said that, even though closed FEC enforcement cases are required to be made public, it would not necessarily be clear from publicly released case files which closed matters were referred to DOJ for criminal prosecution. In general, FEC officials said they try to get something out on the public record even if it is after a criminal case is resolved.

Matters Referred by the FEC to the Department of Justice by Year:

1975: 8
1976: 2
1977: 2
1978: 2
1992: 1
1997: 1
1998: 1
2002: 2
2004: 1
2007: 1
2008: 1

Source: FEC

The low number of referrals, averaging about one every two years, reflects the sometimes difficult relationship between the FEC, an independent agency headed by a bipartisan group of six commissioners, and the Justice Department, led by an attorney general appointed by the president.

Lawrence Noble, who served as FEC general counsel for 13 years until 2000, told Bloomberg BNA recently that, in his experience, it was always rare for the agency to formally refer a case to DOJ for prosecution.

Noble, now a senior counsel with the nonprofit Campaign Legal Center, noted that the federal campaign finance law requires the FEC to conduct a full investigation and make a probable cause finding before such a referral is made. Even at that point, the FEC has authority to pursue enforcement action on its own either through settlement talks or by filing a civil enforcement lawsuit in federal court.

In recent years, Republican and Democratic FEC commissioners frequently have deadlocked over whether even to begin an investigation of alleged campaign finance violations. Such 3-3 deadlocked votes result in dismissal of a case without any further FEC enforcement action.

Public Spat in 2013

While the FEC's relationship with the Justice Department apparently has been a concern intermittently for years behind the scenes, the issue exploded into view in a series of public meetings that the FEC held in the spring and summer of 2013. At that time, three Republican FEC commissioners, with the support of Republican lawmakers on Capitol Hill, called for new enforcement procedures to be adopted by the FEC general counsel's office, which investigates alleged campaign finance violations and spearheads civil enforcement actions.

Among the key changes that the Republican commissioners sought was a bar on contacts between the FEC counsel's office and other law enforcement agencies, including the Justice Department, except in cases where a majority of FEC commissioners voted to allow sharing of information. The three commissioners holding Democratic seats resisted major changes in enforcement procedures.

The dispute led to the departure of FEC General Counsel Anthony Herman in July of 2013. Two new FEC commissioners, Democrat Ann Ravel and Republican Lee Goodman, arrived later that year. Ravel filled a vacant seat, while Goodman replaced Donald McGahn, the commissioner who was most outspoken in calling for new limits on FEC enforcement procedures.

Despite the arrival of the new commissioners, the stalemate over enforcement policy has not been resolved and the post of FEC general counsel remains vacant more than two years after Herman's departure.

Memo of Understanding Not Updated

The FEC and Justice Department signed a memorandum of understanding in 1976, soon after the enactment of Federal Election Campaign Act, in an attempt to sort out the responsibilities of each agency. The memo has not been updated or renewed since. The FEC and DOJ made an attempt to renegotiate the memo after passage of the 2002 Bipartisan Campaign Reform Act, which amended major provisions of FECA, but the interagency negotiations later were abandoned, according to documents released by the FEC in 2013.

Even without a renewed formal memo, cooperation between the FEC and DOJ at the staff level has been fairly extensive during some periods in the past, according to Noble and other former FEC officials.

One of the documents released by the FEC in 2013 was a memo prepared years earlier by former FEC enforcement official Ann Marie Terzaken describing staff contacts between the agencies. Terzaken wrote in 2008: “While the statute only contemplates formal referrals after a finding of probable cause, there is nothing preventing the Commission and DOJ from collaborating with one another on parallel proceedings at any stage in the enforcement process, and, at times, we have reached out to DOJ to discuss cases of mutual interest or to determine whether they have a parallel proceeding relating to a respondent in one of our cases.”

She added that collaboration and information-sharing with DOJ was “an evolving process.” Terzaken's memo added that in previous times “the two agencies did not work together very often on cases within our overlapping jurisdictions” because of disputes about whether the FEC should defer action on matters when requested by DOJ and concerns by prosecutors that the FEC investigations could interfere with criminal cases.

The level of cooperation between the FEC and DOJ since 2008 is not clear. The questions about enforcement procedures have not often been discussed publicly at the FEC since 2013. It remains uncertain whether or how much the commission's continuing stalemate over enforcement procedures may have hindered FEC staffers from cooperating with other agencies.

One thing certain from the newly released figures is that formal referrals of cases to DOJ following a vote of the FEC commissioners have not been a significant factor in campaign fiance enforcement in recent years and was rarely a factor even before then.

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

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com