Maybe you are next!
Posted in Dangerous Politics by R Lee Wrights on April 23rd, 2009 by Mike Seebeck
The section of the CFR Aaron Starr cites in his bogus memo relates to federal election campaigns, specifically back to federal law, 2 USC 431-442.
It does NOT apply to political party officers or their dues, but rather contributions to candidates and their campaigns.
Specifically, Aaron cites 11 CFR 110.4, which ties back to 2 USC 441f:
Section 441f. Contributions in name of another prohibited
No person shall make a contribution in the name of another person or knowingly permit his name to be used to effect such a contribution, and no person shall knowingly accept a contribution made by one person in the name of another person.
BUT:
Section 431. Definitions
When used in this Act:
(8)(A) The term “contribution” includes -
(i) any gift, subscription, loan, advance, or deposit of money or anything of value made by any person for the purpose of influencing any election for Federal office; or
(ii) the payment by any person of compensation for the personal services of another person which are rendered to a political committee without charge for any purpose.
Obviously Lee’s dues don’t qualify as a contribution to influence election for Federal office, so 2 USC 441-f and the related CFR do not apply to this case, or to any membership dues at all. In fact, the federal law and matching regulations are completely silent on membership dues, so there is no governing law or regulations on the issue at all! Starr’s claims are to the contrary, but he confuses campaign contributions and membership dues, which is one of the reasons those funds are kept separate from each other.
Because the LP office serves as a middleman for dues received, and because dues applied to party operations are used in more than just federal campaigns, there is no direct link between Lee’s dues paid to the LP and the LP paying out any funds for a campaign. If Lee had given funds directly to a campaign, then that would definitely be the case. But that’s not what happened here. Dues are only indirectly tied to such campaigns.
It’s the equivalent of saying an employer contributes to their employee’s alcoholism because they pay him a salary and he uses it to buy his booze, instead of the real case of the employer buying the booze for him.
The point is that because the Party is the middleman between the contributor and the campaign (whatever federal campaign it is), and the middleman expends those funds on more than just that campaign, the funds cannot be considered a contribution under 2 USC 441f.
Had the contribution been earmarked for a campaign, then FEC rules apply, but not for mere membership dues.
The rest of the memo is just spin to explain away yet another failure of Raiser’s Edge and shoddy bookkeeping.
What we’re really dealing with here is a systematic purge in the Party. First they drove out Angela Keaton, and now they’re trying to do the same to Lee Wrights. Who’s next? Hawkridge? LaBianca? Ryan? Fox? Ruwart? YOU?
Sources:
http://caselaw.lp.findlaw.com/casecode/uscodes/2/chapters/14/subchapters/i/toc.html
http://caselaw.lp.findlaw.com/casecode/uscodes/2/chapters/14/subchapters/i/sections/section_431.html
You can contact Mr. Seebeck at michael@seebeck.us
John Famularo said,
April 23, 2009 @ 7:52 pm
Michael said.
“Obviously Lee’s dues don’t qualify as a contribution to influence election for Federal office, so 2 USC 441-f and the related CFR do not apply to this case”
I agree that Starr, Sullentrop, Redpath and Kraus’s actions were despicable and they are the ones who should be thrown out. But, your opinion that membership dues are not federal PAC contribution in the LNC’s case is erroneous. They didn’t have to be, but that is the way the LNC decided to arrange it. My experience comes from being the treasurer of a number of federal, state and local PACs.
There are a number ow ways that the LNC could organize itself so that certain contributions for non-federal activities could be kept in a separate account and not have to be reported to the FEC. They could also organize in such a way so they didn’t have to report to any government agency. The LNC chose not to take advantage of any of these avenues. Why?, because it would limit them from raising money for one project and spending it on another. Most LNC members, current and past have no idea of what they are doing, so they get led around by a few like Redpath and Starr who claim to have certain expertise (which they don’t). If Starr knew what he was doing he wouldn’t have to hire a consultant to submit the LNC’s FEC filings.
Lee wrights was not only entitled to get more details from Starr, but obligated to do so as his fiduciary duty as a corporate bosard member.
No one has to get into the fine technical points in order to defend Wrights and condemn Starr et al.
Michael Seebeck said,
April 23, 2009 @ 8:32 pm
John, the FEC reports do not list membership dues as contributions. Sean Haugh checked that. Furthermore, FEC regs have minimum limits on contribution reporting, and all $25 annual dues fall below that limit, so as far as the FEC is concerned, off the radar and not subject to the rules.
That’s one of the reasons Obama ran with the small amounts done often routine in the election–it hid his funds and gave him a tremendous advantage down the line.
George Phillies said,
April 23, 2009 @ 10:30 pm
Mike,
You have completely missed the point of Sean’s statement. The FEC filings do not *itemize* membership dues, because the donors are under $200 for the year. That means that the donations are reported in the “unitemized” line on the FEC report.
Your assertion that donations under $200 are “not subject to the rules” is totally and completely wrong. A treasurer who follows your claim and is caught is looking at civil action — as is his committee, if they knew — and possible fines or jail time.
Your claims about Obama fundraising are equally wrong — he seems to have reported as is legally mandatory every penny he raised. Try comparing the total of all itemized donations with the total of itemized expenditures and see if your claim makes sense.
John Famularo said,
April 23, 2009 @ 10:35 pm
Michael wrote,
“so as far as the FEC is concerned, [LNC dues] .. not subject to the rules”
I don’t care what Sean Haugh “checked” he and you are wrong. All contributions to a federal PAC are subject to all the rules. It is just that itemized reporting is only required for donations of $200 or more in one year. The donations of less than that are reported in aggregate on each and every monthly report. A donation of $1 is subject to ALL the rules, such as no corporate donations, no donations from foreign nationals AND no donations in the name of another.
Again, this is a losing and unnecessary approach in defending Lee Wrights.
John Famularo said,
April 24, 2009 @ 7:47 am
I would like to modify my statements above based on what “Shane” posted elsewhere.
If Sean Haugh donated money to the LNC in his own name without the intention to deceive or disguise the source, then no violation has taken place on his part or Lee wrights’ part. The fact that he “ear marked” the donation as to where it should be applied is an internal LNC matter and not the province of the FEC. If the LNC treasurer reported the donation as coming from Lee, Wrights, then he is the one in violation of FEC rules.
MG said,
April 24, 2009 @ 1:37 pm
Hi John,
Could you tell me more (You can e-mail me if you wish)?
Thanks.
MG
RE ” There are a number ow ways that the LNC could organize itself so that certain contributions for non-federal activities could be kept in a separate account and not have to be reported to the FEC. They could also organize in such a way so they didn’t have to report to any government agency.”
MG said,
April 24, 2009 @ 1:38 pm
My e-mail is gilsondelemosATmsn.com
John Famularo said,
April 25, 2009 @ 6:31 pm
MG said,
“Could you tell me more”
RE ” There are a number ow ways that the LNC could organize itself so that….they didn’t have to report to any government agency.
By not contributing money or services to, or advocating the election of, any “candidates”.
They could help recruit “potential candidates”, build parties, et cetera. Once a person becomes a “candidate” i.e gathers enough signatures, signs a candidate affidavit and/or pays a fee, all financial support should be raised by that candidate’s PAC. They could run candidate training seminars but they would have to be open to all and the candidates would have to pay a market rate fee.
Michael Seebeck said,
April 26, 2009 @ 1:20 am
Sorry, John, but I pay my wife’s dues regularly and there never is any problem.
And then there’s this:
——— Forwarded message ———-
From: Leonard Schwartz
Date: Sat, Apr 25, 2009 at 10:59 AM
Subject: FEC regulations and gift memberships
To: Aaron Starr
Cc: Robert Kraus , Bill Gelineau , Scott Boman , Nathan Allen , Mark Norrod , William Hall , Nicole Michalak , Jim Allison , Greg Creswell , Daniel Grow , Bob Jackson , Emily Salvette , Erin Stahl , Greg Stempfle , Brian Wright , Bob Sullentrup , Michael Jingozian , William Redpath , R Lee Wrights
Aaron,
RE: Your April 21 memo to the LNC regarding R. LEE Wrights
The Libertarian Party of Michigan Executive Committee referred your April 21 memo to me for my professional opinion.
1. FEC Regulations
FEC regulations require that a political committee accurately record and report the person who made a contribution.
As long as a political committee spends contributions for lawful purposes, it doesn’t matter which lawful purpose a contribution is spent for. There is nothing unlawful about gift memberships.
Therefore, as long as the Party properly records and reports that Sean Haugh’s contribution was made by Sean Haugh, it doesn’t matter that the money was used for a gift membership.
2. Gift Memberships
I think that gift memberships should not merely be allowed, but also should be encouraged.
Gift memberships for young libertarians can encourage them to become active in the Party.
Gift memberships for Libertarian Party activists who have fallen on hard times financially can encourage them to remain active.
Leonard Schwartz, attorney at law
LP Michigan campaign finance law adviser since 1999
LP Michigan Political Director since 2005
LP member since 1980
13711 Victoria
Oak Park MI 48237
248-546-3569
Leonard@LeonardSchwartz.us
MG said,
April 28, 2009 @ 2:40 pm
Thanks John,
Bill Hall told me something along those lines some years ago on an informal basis.
Let me know of any other wrinkles. I, as always, appreciate your creative advice.
Best,
MG