Opinion: FEC levies 3rd largest fine ever on liberal 527 group

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The Federal Election Commission has levied the third largest fine in its 33-year history--$775,000--on a liberal 527 group America Coming Together for violation of federal campaign laws.

The FEC announcement dealt with arcane fund allocation provisions of the rules governing political action committees such as ACT, which can keep separate accounts for raising both federal and non-federal funds for activities that match those two criteria.

Donations to non-federal accounts may be raised outside of federal fundraising limits and source prohibitions. Donations to the PAC’s federal accounts must follow federal limits and prohibitions.

ACT raised about $137 million during the 2004 election cycle from liberal donors such as billionaires George Soros and Peter Lewis, as well as the Service Employees International Union. Of that, the FEC said, approximately $33.5 million in federal funds was raised and $103.5 million in non-federal funds.

After a lengthy investigation the commission decided that about $70 million listed by ACT as administrative expenses for door-to-door canvassing, telemarketing and direct mail were actually attributable to clearly identified federal candidates and should have been paid by 100% federal funds or by an allocation formula higher than ACT actually used.

Campaign finance watchdogs alerted the FEC to the suspected violations and expressed disappointment to the Roll Call newspaper that the investigation took so long and the fine was relatively small given almost $100 million in illegal expenditures.

A joint statement issued today by Democracy 21 and the Campaign Legal Center said, ‘The bottom line here is that almost all of ACT’s voter drive activities in the 2004 election were required by federal law to be financed with federally legal funds, and ACT, instead, financed almost all of those voter drive activities with federally illegally soft money.’

The FEC’s largest fine was $3.8 million last year against the Federal Home Loan Mortgage Corp. for illegal corporate contributions. Last December the commission fined Swift Boat Veterans and POWs for Truth $300,000.

--Andrew Malcolm