Watchdog assails FEC for letting dark money go unchecked
(Courthouse News Service) WASHINGTON – Accusing regulators of dropping the ball on dark political spending, a watchdog group brought two federal complaints Friday about shady donations to super PACS on both sides of the aisle.
CREW, a group whose name is short for Citizens for Responsibility and Ethics in Washington, brought the mirror-image lawsuits in Washington, represented by in-house counsel.
The first suit details a $1 million donation from Christmas Eve 2015, made by a Delaware statutory trust to Coalition for Progress, a super PAC that was formed in 2015 to support the expected New Jersey gubernatorial run of Steven Fulop.
CREW said the trust, DE First Holdings, declines to identify its clients, and the super PAC offered up nothing more than the trust’s name in its report that year to the Federal Election Commission.
But the trust did not even exist until Dec. 23, 2015, “the day before it contributed the $1,000,000 to Coalition for Progress,” according to the complaint.
“On information and belief, DE First Holdings did not generate sufficient income in its one day of existence prior to the $1,000,000 donation to Coalition for Progress to account for the contribution,” the complaint states. “DE First Holdings does not appear to conduct any business, and it does not have a presence on the Internet. Rather, it appears an unknown respondent (or respondents) used DE First Holdings as a conduit to make the $1,000,000 contribution to Coalition for Progress.” (Parentheses in original.)
Claiming that this donation was illegal, CREW notes that the Federal Election Campaign Act of 1971 bars campaign contributions that are made in the name of another.
Though the watchdog flagged this donation in a February 2016 administrative complaint, it says it is still waiting for the FEC to take action. Federal law puts a 120-day deadline for the commission to act, according to the complaint.
Fulop, a Democrat who has been mayor of Jersey City since 2013, meanwhile never took his gubernatorial bid out of the exploratory stages, opting instead to run for re-election.
CREW’s second complaint identifies smaller donations made in 2015 to Right to Rise, a super PAC that supported Jeb Bush’s presidential campaign.
In its FEC filings that year, Right to Rise disclosed only that it received $100,000 apiece from TH Holdings LLC and Heather Oaks LLC.
“Right to Rise USA’s disclosure reports provide little information about the donor limited liability corporations other than their addresses,” the complaint states. “The lack of information about these corporations and about the original source of the contributions has led to questions about ‘mystery money’ and ‘ghost companies’ funding groups supporting presidential candidates.”
As with DE First Holdings, CREW says neither TH Holdings nor Heather Oaks could have generated enough income to fund their six-figure donations.
FEC spokesman Christian Hilland declined to comment on the lawsuits, citing an agency policy concerning active litigation.
CREW notes that multiyear delays are characteristic of the commission, which then makes it difficult for the commission “to carry out its enforcement function, as documents may be destroyed or lost and witness memories may fade.”
“In addition, the running of the five-year statute of limitations constrains the FEC’s enforcement, as after the statute has run, it can no longer issue fines,” the complaint states.
CREW wants the FEC’s failure to investigate declared unlawful, and it wants responses to its administrative complaints within 30 days.