CLC: Clinton Super PAC Accepted $200,000 in Illegal Contributions from Government Contractor

Priorities USA Action, a super PAC backing Hillary Clinton, accepted $200,000 in contributions from a government contractor in violation of federal law, according to the Campaign Legal Center.

While Priorities USA – following press coverage of the illegal contribution – returned the money to Suffolk Construction Co., it still failed to do so within 30 days of learning of the possible violation, as the law requires, the nonprofit alleged.

The Campaign Legal Center and Democracy 21 recently filed a complaint with the Federal Election Commission demanding the agency investigate and impose appropriate sanctions on both Priorities USA and Suffolk Construction Co.

“If it wasn’t for news reports highlighting these violations of the law, we’d never know if Priorities USA Action would have still refunded those contributions,” said Paul S. Ryan, deputy executive director of the Campaign Legal Center. “Super PACs and their deep-pocketed donors should not be allowed to skirt and violate the laws we have in place to protect the integrity of our democracy. This is exactly why Americans don’t have confidence in our political process, and why there is overwhelming support for reforming our campaign finance system, which includes a strong, effective FEC that enforces the law.”

“Priorities USA Action had a duty at the time it accepted two illegal contributions from Suffolk Construction Company in 2015 to determine if it could accept these contributions and the Super PAC apparently failed to perform that duty,” said Democracy 21 President Fred Wertheimer. The FEC needs to investigate this and also needs to investigate whether the Super PAC solicited these government contractor contributions in violation of the law. The fact that Priorities USA is now returning the contributions, after questions about them had been raised in published reports does not cure any violations that occurred.”

Suffolk Construction is a major federal contractor, having received $168.8 million in contracts since 2008, and its donations put it among Priorities USA’s top donors in 2015. The law is clear that federal contractors are prohibited from making contributions to a political committee while negotiating or performing a federal contract, and a political committee is similarly prohibited from soliciting and receiving contributions from a federal contractor.

The law also makes clear that political committees must examine the legality of contributions when they are received — and when later faced with new evidence that a contribution came from a prohibited source like a federal contractor, must refund the contribution within 30 days.

Priorities USA knew about the company’s status as a contractor at least as early as April 2016, when the Center for Public Integrity asked the super PAC for comment – and then published a story – about Priorities USA receiving contributions from the contractor. Yet the contributions were not returned until July, following a Hill story raising the same issue but which attracted wider attention.

“Priorities USA could have easily determined from the outset that Suffolk Construction Company was a major federal contractor, and certainly has known since April, when reporters first raised the issue,” said Brendan Fischer, associate counsel with the Campaign Legal Center. “Yet, the super PAC didn’t return the contribution when they learned it was illegal – they only did so when it became politically inconvenient.”

Advocates: U.S. Supreme Court Must Take Action so None Are Harmed by Voter ID Law in Texas

As election 2016 continues, voter ID laws – and their effects – keep making headlines. We wanted to draw your attention to a story developing out of Texas.

Here’s what’s happening:

The Campaign Legal Center recently called on the U.S. Supreme Court to take immediate action in the Texas voter ID case so voters will not be harmed by the law in the 2016 presidential election.

The application filed with SCOTUS follows the 5th U.S. Circuit Court of Appeals’ refusal to offer relief in time for the upcoming election.

Earlier this month, the appellate court effectively denied the Campaign Legal Center’s emergency motion to vacate its stay of a lower court’s ruling that struck down the law. Under the 5th Circuit’s order, the voter ID law will remain in effect as the case proceeds once again in the 5th Circuit, where it has languished since October 2014.

“Seven federal judges have ruled that Texas’ voter ID law discriminates against minority voters, but the law is still in effect,” said Gerry Hebert, executive director of the Campaign Legal Center. “The 5th Circuit has set up a schedule that likely forecloses our ability to obtain relief in time for the presidential election. We are asking the U.S. Supreme Court to ensure that that no one is prevented from casting a ballot because this discriminatory law is in place.”

The D.C. District Court, a Texas district court, and a three-judge panel of the 5th Circuit have all found that the law discriminates against minority voters. The 5th Circuit’s stay of the district court’s decision in 2014 is the only reason the law is in effect.

“The stay was only granted because the District Court’s order was handed down days before the 2014 election and the 5th Circuit was concerned about changing procedures so close to the election. It should never have extended past 2014,” said Danielle Lang, legal fellow of the Campaign Legal Center. “The dangers identified by the court of appeals have passed, so there is no reason eligible Texas voters should once again be denied the right to vote.”

 

Watchdog Groups File Campaign Finance Complaint Against ‘Ghost Corporation’

Another day, another headline about problems with money in politics.

The Campaign Legal Center, a leading campaign finance watchdog, along with Democracy 21, filed a complaint recently with the Federal Election Commission, calling on the agency to investigate contributions to “the ghost corporation” “Children of Israel LLC” – which funneled $400,000 to two super PACs.

According to an article by The Washington Post, the California-based LLC contributed $50,000 to Pursuing America’s Greatness, a super PAC supporting Mike Huckabee’s previous presidential run, and another $100,000 in November.

And in January, it donated $250,000 to Stand for Truth, a pro-Ted Cruz super PAC. These donations made “Children of Israel LLC” the fourth-biggest donor to each of these groups, although the true source of the funding was never disclosed to the public.

Additionally, Shaofen “Lisa” GAO, the founder of the LLC,  filed paperwork with the California’s secretary of state’s office in September listing “donations” as her company’s type of business, an apparent admission the company was created to act as a conduit for secret money.

“Without FEC action, we’ll continue to see a trend of donors hiding behind LLCs to skirt disclosure laws,” said Larry Noble, general counsel of the Campaign Legal Center. “As secret super PAC donors face no consequences, Americans are left in the dark, without any way of knowing who is funding and influencing campaigns, including whether illegal foreign money is creeping into American elections.”

This is the fourth complaint this year that the Campaign Legal Center has filed with the FEC against donors funneling money through LLCs to avoid disclosure laws. CLC and Democracy 21 await FEC action.

 

FEC Complaint Filed Against Cruz, His 2012 Senate Campaign, for Failure to Report Loans and Possible Improper Use of Assets to Secure the Loans

The Campaign Legal Center, with Democracy 21, filed a complaint recently with the Federal Election Commission urging the FEC to investigate apparent violations of campaign finance laws by Sen. Ted Cruz and the 2012 Cruz for Senate Campaign relating to loans he obtained from Goldman Sachs and Citibank for use in his 2012 Senate campaign.

According to the complaint, Cruz failed to report the loans to the FEC, as required by law, and may have used a portion of his wife’s assets to secure the loan resulting in the campaign accepting excessive contributions.

The complaint asks the FEC to formally investigate the apparent violations and seek appropriate sanctions.

According to published reports, Cruz used loans from Citibank and Goldman Sachs to help finance his 2012 election to the U.S. Senate, but his campaign committee failed to include the loans on the reports his campaign filed with the FEC.

While it has been reported that Cruz claimed that he and his wife had liquidated their “entire net worth, liquid net worth, and put it into the campaign,” it instead appears that he used both personal and joint assets to secure loans from the two banks, a fact he failed to disclose.

A review of Cruz’s Senate Financial Disclosure Reports for 2011 and 2012 also raise the question of whether he used his wife’s share of their joint assets as security for the loans, which would likely result in the campaign accepting an illegal contribution.

“The failure to report these loans is a clear cut violation of the law and kept voters in the dark about the money behind the Cruz campaign,” said Paul S. Ryan, Deputy Executive Director of the Campaign Legal Center, which took the lead in drafting the FEC complaint. “If he also used his wife’s assets to obtain these unreported loans, he caused his committee to accept illegal excessive contributions from his wife.”

To read the FEC complaint, click here.

Citizens Seek Sanctions Against City for Attempting to Punish them for Bringing Voting-Rights Case

Editor’s Note: We wanted to put this on your radar – an interesting case out of Albuquerque that related to voting rights. Below is information from The Campaign Legal Center.

Earlier this month, four Albuquerque voters, plaintiffs in Baca v. Berry, a voting rights case currently before the U.S. Court of Appeals for the Tenth Circuit, filed a motion for sanctions against the city and its attorneys for pursuing a frivolous cross-appeal in bad faith.  This cross-appeal had sought to force the voters to pay the city’s attorneys’ fees.  The voters are represented before the Tenth Circuit by the Campaign Legal Center.

The voters originally brought the case to challenge the City of Albuquerque’s redistricting plan for city council districts.  After the case was brought, Albuquerque voters passed a referendum that altered the way the city council is elected.  In light of this change in the law, the case was dismissed.

The city then sought to recover its attorneys’ fees from the voters and their attorneys.

The district court granted the city’s motion to sanction the voters’ attorneys for prolonging the case, ordering them to pay $48,000, but refused to award fees against the individual voters.  After the attorneys appealed this sanctions order to the Tenth Circuit, where they are represented by the law firm Jenner and Block, the city filed a cross-appeal seeking fees against the individual voters.  But the city presented essentially no legal argument in support of this cross-appeal and dropped the cross appeal at oral argument before the Tenth Circuit on May 6, 2015.

Rather than a good faith effort to recover its attorneys’ fees, the city’s cross-appeal was likely a bad faith attempt to intimidate civil rights plaintiffs and coerce their former attorneys into dropping their appeal.

“The City of Albuquerque and its Mayor acted shamelessly to intimidate and punish minority voters with gratuitous sanctions for attempting to safeguard their voting rights as residents of the city,” said Joshua Bone, the Legal Center attorney who argued before the Tenth Circuit.  “The city’s conduct was so reprehensible that the Albuquerque City Council passed a resolution condemning the city’s pursuit of attorneys’ fees against its own citizens.  We hope the court will see fit to rule in a manner that will dissuade other elected officials from abusing their office by bullying their own constituents and scaring them away from their recourse to the courts.”

To read the motion filed today seeking sanctions against the city, click here.