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The Justice Department Is Now on the Campaign Finance Beat

With the Federal Election Commission hopelessly deadlocked, campaign finance enforcement is now coming as federal criminal cases.

October 12, 2015

The Federal Election Commission is still living up to its unfortunate nickname as the Little Agency That Wouldn’t. This means that in the pricey and already in full swing 2016 presidential election, the FEC is likely to be sitting on its hands instead of enforcing the law. But would be scofflaws do have something to worry about: the Justice Department is on the beat.

The FBI has a handy primer of potential campaign finance crimes which include spending through a straw donor; being a corporation that gives directly to a federal candidate in violation of the Tillman Act; or being a foreign national (without a green card) who gives money to a federal candidate; or violating the hard money limits under the Federal Election Campaign Act (they need to update this to 2016’s $5,400, but I digress).

Back in 2013, the Senate urged the Justice Department to take campaign finance prosecutions more seriously. And they have been bringing a fresh batch of cases. For example in 2014, DOJ charged Dinesh D’Souza with making campaign contributions through straw donors. This is not allowed and D’Souza pled guilty. He was sentenced to five years of probation – including eight months in a “community confinement center” – and fined $30,000.  

The DOJ also recently went after a campaign manager named Tyler Eugene Harber for illegal coordination with a candidate.  The Supreme Court has allowed unlimited independent expenditures in elections from individuals, groups and corporations. But these expenditures must be made independently. If they are not independent (or in the language of campaign finance law are coordinated) then the spending frequently violates campaign contribution limits and are thus illegal. Harber pleaded guilty, and in June he  received a two year sentence for illegally coordinating $325,000 in contributions with a congressional campaign.

The DOJ is ramping up its scrutiny of candidates and their independent supporters. Now it is prosecuting Sen. Robert Menendez (D-N.J.) for allegedly giving official acts as favors to a Super PAC donor named Salomon Melgen, a Florida ophthalmologist. 

The original indictment can be found here. CNN colorfully summed up the indictment as covering “3 girlfriends, 7 lavish trips, more than $750,000.”  But the heart of the matter is very serious. Federal health officials allege that Melgen over-billed Medicare for $8.98 million and that Menendez intervened on Melgen’s behalf with Health and Human Services (the federal agency that runs Medicare) in exchange for political donations.

Although U.S. District Judge William Walls threw out four of the bribery charges against Menendez last month, he refused to throw out the charges related to the Super PAC.

Menendez’s lawyers had argued that after Citizens United (which invalidated restrictions on corporate political spending) and McCutcheon (which did away with an aggregate limit for individuals), the Constitution protects all “efforts to influence and obtain access to elected officials.”

Walls found this largely unpersuasive, noting, “Defendants here have been charged with engaging in a quid pro quo bribery scheme, not with exceeding limits set by a prophylactic campaign finance regulation.” And moreover, “[n]othing in either Citizens United or McCutcheon implies that the first Amendment prevents prosecution of an alleged conspiracy in which things of value were exchanged for official acts.”

The court’s reading of Citizens United is particularly intriguing.  As Walls concluded, “[n]otwithstanding the statement in Citizens United that independent expenditures have no actual value to candidates, a jury could find that Defendant Menendez placed value, albeit subjective, on the earmarked donations given to Majority PAC by Melgen.” And the judge wrote, “Even if contributions to Majority PAC had no objective value to Menendez, they unquestionably had value to Majority PAC as an entity, and § 201(b)(2) criminalizes corruptly seeking anything of value, even for another person or entity, in return for being influenced in the performance of an official act.”

So Menendez’s case will proceed to trial (or settlement), but it is not going away entirely.  This may give the courts a chance to clarify the contours of bribery law in the post Citizens United/McCutcheon world. 

When I started as an election lawyer, I thought I’d spend more time on actual elections. As it turns out, I spend way too much time on white collar crime. But strangely federal campaign finance regulation now is only being enforced at the criminal level, which without a functioning FEC, is DOJ’s bailiwick.

(Photo: Thinkstock)

The views expressed are the author’s own and not necessarily those of the Brennan Center for Justice.