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With Roger Sollenberger, Political Reporter

Pay Dirt is a weekly foray into the pigpen of political funding. Subscribehere to get it in your inbox every Thursday.

 

The Big Dig this week… Inside the House Democrats’ new push to reform the Federal Election Commission.

Government watchdogs have long accused the Federal Election Commission of failing in its mission to enforce laws regulating money in politics. Next week, however, those questions will come from members of Congress, when the FEC faces its first oversight hearing in years.

 

Rep. Joe Morelle (D-NY), ranking member on the House Administration Committee, which will host the hearing, told The Daily Beast that the FEC must be modernized, or political money will continue to flood the system and outmatch the voices of everyday voters.

 

“The FEC simply is not keeping up with modern campaigns. There is more money coming into elections than ever before, most of it dark and undisclosed, and it’s increasing at an exponential rate. It increases the risk for corruption and is a threat to national security. Voters’ voices are drowned out and they have less insights into who is trying to influence their votes and their representatives,” Morelle said in a statement.

 

“Congress should not and cannot wait to pass reforms to put the FEC in position to enforce the law and hold candidates, committees, and mega donors accountable to voters,” he said.

Past due notice

 

Watchdog groups are also applauding the hearing. These transparency advocates have been frustrated for years, as the FEC’s six-person bipartisan panel has frequently failed to attain the necessary four votes to act on enforcement matters—even in major cases where the agency’s general counsel recommends action.

 

Brendan Fischer, deputy executive director at Documented, told The Daily Beast that the agency has walled itself off from oversight, and congressional hearings are “one of the few remaining ways to hold the FEC accountable to its mission of upholding and enforcing the laws governing money in our political system.”

 

“The FEC is largely shielded from judicial oversight, with commissioners hiding behind ‘prosecutorial discretion’ to insulate their decisions from review by courts,” Fischer told The Daily Beast. He added that this sense of immunity appears to extend to the commissioners themselves, with GOP commissioner Trey Trainor “recently blowing off an investigation by the FEC’s ethics watchdog without consequence,” referring to Trainor’s refusal to cooperate with an internal ethics investigation into his appearance at a political event.

 

Let’s go to the videotape

 

Ahead of the hearing, HAC Democrats asked the FEC to provide data about its enforcement decisions. Most unnerving for transparency advocates is the FEC’s failure to follow the recommendations of its own general counsel.

 

For instance, the OGC has recommended action in 59 cases alleging unlawful super PAC coordination. The commissioners did so in just seven of those cases. And in cases involving potential committee status violations, the FEC acted on five of OGC’s two dozen recommendations.

 

The Democrats are also disappointed in the FEC’s limited ability to identify and regulate foreign money filtering into elections. And on that issue, the FEC has taken up the OGC’s recommendation less than half the time, the data shows. Almost every one of those decisions not to act—11 times out of 13—were related to former President Donald Trump.

 

Last year, The Daily Beast reported that Trump has posted a conspicuously remarkable undefeated record against campaign finance allegations—43 and 0. The HAC Democrats also asked for FEC data on Trump investigations, and found that the numbers had increased in the meantime, with Trump surviving all 56 matters since he declared his candidacy in June 2015.

 

Of those 56 cases, OGC recommended that the commissioners find reason to believe a violation had occurred in 26 of them. The GOP commissioners voted down all 26.

 

Deadlock

 

Government transparency groups know this data all too well, having filed years of complaints that have been validated by the OGC only to be shot down by a deadlocked commission.

 

Saurav Ghosh, director of federal reform for nonpartisan watchdog Campaign Legal Center, told The Daily Beast that the FEC’s inaction has had lasting negative effects on the democratic process, and public accountability is “long overdue.”

 

“For well over a decade now, the FEC has failed to enforce the laws that govern our federal elections, and the result has been a drastic increase in political spending, commonsense laws being broken without recourse, less transparency for American voters and more influence for wealthy special interests,” Ghosh said, adding that the FEC’s “ideological split…has gone on far too long.”

 

Splitsville

 

Asked for comment, FEC Chair Dara Lindenbaum and Vice Chair Sean Cooksey—a Democrat and a Republican—provided a statement claiming that the commissioners reach bipartisan agreement in “nearly 90 percent” of enforcement matters.

 

“As Commissioners, we do our level best to work together and to enforce the law fairly and consistently. Without commenting on any specific case, Commissioners take each enforcement matter on its merits, and we reach bipartisan agreement in nearly 90 percent of them,” the statement said, without providing a timeframe or other context for that statistic. “Any narrative that the Commission is mired in deadlock or that its bipartisan structure prevents it from enforcing the law is misinformed.”

 

But “partisanship” can be sliced a number of ways. The FEC is required to have six commissioners, three Democratic appointees, three Republican, with four votes required for enforcement action. For a long time, one of the “Democrats” was an independent who typically voted with the Dems. And for more than a year under Trump, the agency didn’t have enough commissioners to attain a quorum, meaning enforcement matters couldn’t even be considered.

 

Now the agency is back to its 3-3 partisan balance, but the new composition has also ruffled watchdogs.

 

“Certain commissioners simply do not appear to support the mission of the agency they were appointed to lead,” Ghosh said.

 

He appears to be referring at least in part to Lindenbaum, who upon her swearing-in has sided against her Democratic colleagues Ellen Weintraub and Shana Broussard in a number of enforcement matters. Most specifically, Lindenbaum—who unlike Weintraub and Broussard came to the FEC from a private political firm—has voted with the three GOP commissioners to close deadlocked matters, robbing watchdog groups of a judicial end-around they had devised to bring unresolved investigations to federal court.

 

Ann Ravel, a Democrat who left the commission in early 2017, also disagreed with the commissioners’ statement, telling The Daily Beast that the FEC continues to fail in “matters of great importance” to democracy.

 

“The FEC, unfortunately, continues to rarely have the needed four votes to enforce the law in cases that have deleterious impact on democracy,” Ravel said. “Money in politics is one of the biggest ways that corruption in the political process undermines democracy. The FEC has failed to enforce the law in matters of great importance to the electoral processes.”

 

Read the full story here.

 

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From Roger’s Notebook...

Good cause. Sen. Ted Cruz (R-TX) defeated a campaign finance complaint alleging that he unlawfully used campaign funds to profit from book sales. While FEC investigators did find reason to believe that Cruz used campaign money to promote retail sales of his book online, he slipped the FEC noose by stating in an affidavit that those royalties were directed to charity, not to himself.

 

But the timing of Cruz’s decision—in the words of Cruz’s own counsel in the matter—came while the case was under investigation, which his counsel presented as “additional evidence” to dispute the allegations.

 

“At the end of 2021 and 2022 (during the pendency of this matter before the Commission), Senator Cruz twice directed that all royalties on One Vote Away that otherwise would have been payable to him under the publishing agreement be donated to charity in accordance with FEC advisory opinions,” Cruz’s lawyers wrote.

 

Cruz received a $400,000 advance for the book.

 

Survivors. Documents released last week show that the Fulton County special grand jury investigating Trump’s efforts to overturn the 2020 election in Georgia recommended charging multiple additional high-profile Republicans, many of whom ultimately dodged the indictment in August. The newly published report revealed charging recommendations against Sen. Lindsey Graham (R-SC), with one charge, and then Georgia GOP Senators David Perdue (two charges) and Kelly Loeffler (one charge), related to their alleged efforts to change the election results.

 

The report also recommended a number of charges against Cleta Mitchell, the GOP lawyer who joined Trump and his chief of staff Mark Meadows on a Jan. 2, 2021 recorded call in which the then president pressured state officials to “find” extra votes. Mitchell, the special grand jury found, was likely guilty of eight charges, including solicitation to commit election fraud, influencing witnesses, forgery, election interference, and multiple counts related to false statements. She has not been named in either the Georgia indictment or the federal indictment related to the Jan. 6 attack.

 

Redemption. Sen. Richard Blumenthal (D-CT) is on the road to redemption after the new HBO docuseries Telemarketers aired a meeting on Capitol Hill in which the Democrat came off as dismissive of information about scam PAC operators. On Monday, CNBC reported that Blumenthal was launching new oversight and legislative missions to crack down on those scammers, who have stolen untold millions of dollars from unwitting donors.

 

Blumenthal, who shrugged off pleas from the independent journalists that produced the series, has now sent letters to the heads of the FEC and Federal Trade Commission, to “solicit necessary changes to the law to hold these scammers accountable.”

 

Gaetzgate. Rep. Matt Gaetz (R-FL) survived a campaign finance challenge that he had unlawfully tapped campaign funds to pay for lawyers in his sex trafficking allegation. The complaint, however, appeared misguided from the jump, because—as the OGC noted—the money went to pay attorneys representing the campaign, not Gaetz personally. (One of the lawyers, Marc Fernich, represented convicted pedophile Jeffrey Epstein and Mexican druglord Joaquín “El Chapo” Guzmán.) The commission agreed, tossing the complaint in a 5-0 vote.

 

Dynasty. The FEC has alerted the “American Values 2024” super PAC—which backs Democratic presidential longshot Robert F. Kennedy, Jr—that it appears to have deposited massively excessive contributions into the wrong account. The two contributions in question came from billionaire megadonor Gavin De Becker ($200,000) and Timothy Mellon ($5,000,000), heir to the Mellon banking fortune, and appear to have been deposited in the super PAC’s hard-dollar account, which caps individual donations at $5,000 a year.

 

Closed for inspection. Gov. Sarah Huckabee Sanders of Arkansas is joining two fellow Republican governors in efforts to keep executive travel information out of the public record.

 

The Associated Press reported on Friday that Sanders proposed measures that would shield “a broad range of records about her administration, travel and security from public release,” while calling a special legislative session on additional tax cuts. The proposed exemptions come as the Arkansas State Police faces a Freedom of Information Act lawsuit from an attorney and blogger, alleging the state patrol has illegally blocked access to the governor’s travel and security records, AP reported. Legal experts told AP that Sanders’ proposal would “severely weaken” the state’s FOIA laws.


Sanders is at least the third GOP governor to champion similar efforts. Last year, left-leaning accountability group American Oversight sued South Dakota’s Kristi Noem for withholding documents related to her travel costs. And in May, Florida’s Ron DeSantis signed a bill that exempted his travel records from the state’s otherwise sweeping sunshine laws.

 

More From The Beast’s Politics Desk

House Speaker Kevin McCarthy is facing blowback from his own party as he moves forward with an impeachment inquiry that, according to members of his own caucus, appears headed straight into the political windmill. Read Sam Brodey’s exclusive report on what those Republicans are warning.

 

Lawyers working for Kentucky Attorney General Daniel Cameron Office have been quitting the office, alleging a politically toxic work culture that is pushing career attorneys out the door—and Cameron is nowhere in sight. I spoke with several career attorneys, and they have plenty to say about the way their office has been run.

 

Arizona Republicans Kari Lake and Blake Masters each appear to be waiting for the other one to show their hand in the 2024 Senate race. Jake LaHut and Zach Petrizzo caught wind of a testy conversation between the two of them, as the pressure from Trumpland mounts—read their exclusive here.

 

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