Court Ruling Could Flush Out Hidden Campaign Spending

But Will the FEC Get Serious About Enforcement?

A little noticed federal appeals court ruling last week could bring a wealth of information about political spending into the open, helping campaign donors get a better handle on how their contributions are being used and giving voters a clearer picture of campaign tactics.

But the ultimate impact of the decision by the 8th U.S. Circuit Court of Appeals likely depends on an aggressive response by the Federal Election Commission, perhaps Washington’s most dysfunctional government agency. With the exception of Vice Chair Ellen Weintraub, a Democrat, the commission’s four current members generally have favored a light touch in enforcing campaign finance laws.

The 8th Circuit decision involved three former staffers for the 2012 presidential campaign of former Rep. Ron Paul, R-TX. The men were convicted in 2016 of funneling $73,000 from Paul’s campaign treasury to Iowa state Sen. Kent Sorenson to secure Sorenson’s endorsement in the Iowa Republican caucuses.

Sorenson originally endorsed Rep. Michelle Bachmann, R-MN, but switched to Paul after receiving the payment from the Paul campaign. He is in prison on a bribery conviction.

To conceal the bribe, the money was reported on Paul’s campaign finance disclosure forms only as a payment to a video production company for “audio/visual services.” Based on the incomplete disclosure, prosecutors charged the Paul staffers with falsifying their campaign finance report; the defense argued that the Federal Election Commission has construed election laws as not requiring the of payments by a campaign vendor — in this case the video production company — to subvendors.

The decision “makes clear that when you lie to the federal government about election spending, you can be prosecuted and convicted not only for violating campaign finance law reporting requirements, but also multiple other federal criminal statutes that prohibit making false statements and filing false paperwork with the government,” said Paul S. Ryan, Common Cause’s vice president for policy and litigation.

Larry Noble, general counsel for the nonpartisan Campaign Legal Center, told the Center for Public Integrity that the green light from the court may prod the FEC to be more aggressive in applying the reporting requirements and limiting the use of subvendors to conceal the true purpose of some campaign spending.

The FEC “could also look at this and say it’s a unique situation involving a clear scheme to hide the use of the funds,” Noble acknowledged.