- The Washington Times - Monday, September 17, 2012

This year’s political campaigns are saturated with money, yet the Federal Election Commission, the watchdog on all the raising and spending, is issuing fewer warnings and completing fewer audits — and even when it does issue fines, political committees routinely don’t bother to pay.

The FEC’s powers are so weak that for most offenses it can only ask political groups to enter a voluntary process in which they bargain to agree to a monetary settlement. If the group refuses or an agreement isn’t reached, then the FEC must take them to court to try to enforce its judgment.

For more straightforward offenses such as failing to file reports or missing deadlines, Congress gave the FEC the ability to automatically levy fines. But campaigns have learned not to fear the body, and even those fines are often simply ignored, The Washington Times found.

Since the year 2000, the FEC has levied 2,500 “administration fines,” and nearly 20 percent went unpaid. For fines greater than $1,000, the non-pay rate was still substantial at 12 percent.

In 2010, Joel Pollak, who is now editor-in-chief of Breitbart.com, the conservative website founded by Andrew Breitbart, ran as a Republican challenging Illinois Rep. Janice D. Schakowsky, raising $700,000 and garnering one-third of the vote.

After the election, the FEC said the campaign failed to file necessary reports and fined it $11,000. It was the third penalty assessed to the committee. Mr. Pollak’s campaign neither responded to nor paid the FEC.

“Apparently without my knowledge the campaign treasurer, legally liable for administrative fines, had not filed the final report or closed the campaign committee as he had indicated to me in writing,” Mr. Pollak told The Times. “I consulted legal options and it turns out there is nothing I can do since it turns out I am not personally liable for the fine nor do I have legal standing to sue the treasurer.”

Other times those who are subject to fines “just disappear,” said Bob Biersack, a longtime top FEC official now at the Center for Responsive Politics.

“People move, people die. Those automatically get turned over to a collections agency,” he said. “But some of them are never going to get paid because the organization just dissolves” — something that is easy for a failed campaign to do after it has served its purpose.

In 2003, the commission noted that Philip Lowe, a House candidate in California whose LinkedIn profile says he is an investor who was once featured on Black Entertainment Television’s “Making It,” raised $280,000 and accumulated $500,000 in debt, then repeatedly failed to report on the status of that money. The campaign had six previous FEC violations and was fined $23,750.

Nine years later, he has yet to pay or even formally respond to the notice of infraction, though in 2004 the treasurer wrote to the FEC with the inverse of Mr. Pollak’s reasoning: “I have not worked for Mr. Lowe since the campaign ended,” Patricia Jones wrote. “I am not responsible for this debt of his campaign.”

Under FEC rules, treasurers are the responsible party, even though they are often accountants on retainer and not employed by the campaign.

When violations get more serious, the FEC cannot automatically issue fines, but must try to negotiate a penalty with the campaign or else go to court. But FEC watchers said that is rare. It has occurred about 100 times since 1976, an FEC spokesperson said.

“At one time when the FEC was actually taking people to court, it was actually a threat. If it’s not going to litigate these cases you lose a lot of leverage,” said Lawrence M. Noble, a former commissioner. “All of this sends a signal that this is not a regulatory agency that has to be feared.”

In cases where the FEC suspects severe problems in a campaign, they conduct a comprehensive audit. But that process touches few committees. As of this month, the FEC has released audits of five candidates and three political action committees for the 2010 election, compared with 27 candidates and 11 PACs for 2006.

That’s in part because of the slow process, which often takes two to four years — long after the campaign is over. Still, by this point following the 2006 cycle, it had released 13 candidate audits.

More to oversee, fewer auditors

The FEC has 30 auditors, the same number it did a decade ago, even though the amount of money in campaigns has grown dramatically. In the 2000 election cycle, the agency oversaw 5,700 committees that raised $2.3 billion; this election, there are 8,400 committees and by this summer they had already raised $3 billion.

Then there are the FEC analysts in the Reports Analysis Division (RAD), who do front-line reviews of campaign finance reports and give early notice of problems that could result in penalties if they aren’t corrected, and whose ranks have risen from 32 to 37 in the last decade, over the course of which their workload was well over 500,000 reports.

In correspondence with analysts, campaigns are often cavalier. In the last year, for example, analysts have written to campaigns 184 times to say that they violated rules by not giving more details when they said money was “reimbursed” to someone.

But nearly every one of those warnings went without response or was rejected by the campaign. Three times the FEC wrote to Newt Gingrich’s presidential campaign detailing problems, and its treasurer responded, without explanation, that “no further itemization is required.”

Lack of detail is becoming epidemic. Instances where committees simply said “reimbursement” instead of revealing the recipient of the money rose from 91 in 2008 to 117 two years later, to 166 already this year.

Cases where recipients were disclosed but the campaigns didn’t say why they got the money have also risen, doubling in the last four years, as if campaigns have watched their forebears ignore such warnings without repercussion.

Yet overall, the agency seems to be taking far less of a hard look at the disclosures it requires from campaigns than it once did. Last year, it wrote 5,000 warning letters, called Requests for Additional Information (RFAIs) — its fewest in 12 years — compared with 6,900 four years prior and 7,900 four years before that, a Times analysis of 115,000 letters showed.

More than a quarter of those who received letters saying their reports had problems last year never amended the reports. That rate is double what it was a decade ago.

“For 36 years RFAIs were regular and predictable — you’d issue a letter and you’d get answers,” Mr. Noble said. But in 2011, the commission said campaigns who were told to take action by staff could go over their heads to seek review by commissioners. “When it gets conflicting signals or is told commissioners are going to be looking very skeptically at actions by the staff, they’re going to pull back.”

The FEC said one possibility for decreased scrutiny is that campaigns are being more careful to follow the rules.

“Over the past few cycles, the FEC has increased its educational outreach initiatives, including offering more reporting round tables, developing a Best Practices for Compliance workshop, and creating a RAD webpage. As a result of these initiatives, the RAD review process has become more transparent. This increase in educational outreach has likely resulted in greater compliance,” the agency said in a statement.

But FEC insiders said that in an environment that relies on competitive bargaining, one example of such transparency has certainly weakened the agency’s hand: The House Administration Committee in May forced the FEC to make public materials detailing their strategy for dealing with filers and agreeing to settlements, including what magnitude of offense is likely to draw a serious look. (Certain dollar amounts and other critical figures were redacted.)

“What made the members of that committee think they should have some sort of right to have that sort of information, when with enforcement that happens in other venues — securities law, etc. — the process for establishing priorities for cases and working through them is not generally publicly available?” Mr. Biersack said.

Mr. Noble, who represented campaigns after his tenure on the FEC, put it differently: “I’d love to go into a settlement and know exactly what limitations they face when they don’t know mine.”

• Luke Rosiak can be reached at lrosiak@washingtontimes.com.

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