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Archive for Friday, October 4, 2002

FEC trims campaign finance penalty

October 4, 2002

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— Rejecting the record $4.5 million penalty its lawyers recommended, the Federal Election Commission has fined a Republican consulting firm $200,000 for political donations it made in the 1996 congressional elections.

Democrats accused Triad Management Services of illegally using nonprofit groups to run pro-GOP ads and of helping donors get around federal contribution limits by directing them to political action committees that then gave the money to Republican candidates.

Triad Management is owned by Carolyn Malenick, once the chief fund-raiser for Iran-Contra figure Oliver North's unsuccessful Senate campaign. Triad denies wrongdoing and has refused to pay the fine; the FEC is suing the company for it in federal court in Washington.

FEC attorneys recommended that the commission fine Triad $1.15 million for making illegal contributions and failing to report contributions and spending.

It sought an additional $3.4 million in fines against two nonprofit groups Triad controlled, the Citizens for the Republic Education Fund and Citizens for Reform. They were accused of spending about $3 million on pro-Republican TV, radio, phone bank and direct-mail advertising despite a federal ban on partisan political activity by such nonprofits.

Democrats on the Senate Governmental Affairs Committee investigating Triad's activities said in a 1998 report that the two nonprofit groups' spending included $1 million to promote four Kansas campaigns, those of Sen. Sam Brownback and Reps. Vince Snowbarger, Todd Tiahrt and Jim Ryun. They have denied any wrongdoing.

In a decision backed by the three Democratic commissioners and opposed by two of the three Republicans, the FEC fined Triad $200,000 and took no action against the nonprofits. The commission's third Republican member, Michael Toner, removed himself from the case because he joined the commission only days before the vote.

Details of the April vote, not yet released by the commission, were made public in a written statement from Republican Commissioner Bradley Smith released Thursday by PoliticalMoneyLine, a nonpartisan Web site that tracks campaign finance. It got the statement from the FEC, which briefly placed it on the public record Wednesday before withdrawing it.

Smith, whose statement outlines his reasons for opposing the fine, said his statement was made available inadvertently and should have been withheld until the commission released its decision and documents in the case, expected in the future.

Commission Chairman David Mason, also a Republican, said the Triad penalty was just one of the fines the FEC had issued in the case.

"It's going to look a lot different when the whole file is out there because there are other respondents and some of those other respondents did pay significant fines," Mason said. "They'll be significant in comparison to other FEC cases in the recent past."

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