Federal Campaign Finance Fraud

Federal Campaign Finance Fraud – Table of Contents

• Overview
• Prosecuting
• Defending
• Campaign Finance Fraud – Hire Us

Federal Campaign Finance Fraud – Overview

Federal campaign finance fraud is an incredibly complex area of law. In its simplest terms, it involves laws that stringently regulate any type of financing related to fundraising in political campaigns or for political candidates. These laws also closely regulate “political action committees” (PACs) and their marketing strategies and activities. The laws also address proper registration requirements (for example, PACs must be organized and registered per federal election laws). Political candidates need to understand these laws as well as those who assist them financially in their candidacy.

Likewise, those individuals making financial contributions to the candidates or their campaigns must also understand the nuances of these laws. For example, suppose a political candidate or their organizers are found to have disregarded or violated these often-complex laws. In that case, they will be subject to severe penalties, both at the state and federal levels. Every state has its own laws related to campaign finance. Violations will result in civil penalties.

In addition, since 1971, the United States government created a governmental agency entitled the Federal election Commission (FEC) to oversee and enforce the Federal Election Campaign Act (FECA). FECA has now been incorporated into Title 52 of the U.S. Code. Some such penalties at the civil level can include significantly hefty fines, restitution, and prohibition of future engagement in any political campaign endeavors, as well as a damaged reputation. Moreover, besides a damaged reputation, if the crimes are prosecuted on the federal level, the penalties can include prison sentences of as much as one (1) to 20 years in prison and severe fines.

Campaign Finance Fraud

As stated above, these crimes can be brought at both the state and federal levels. Again, every state has its own laws related to campaign finance. Our focus will be on when these crimes are brought at the federal level. It was not until 1971 that the United States government passed the Federal Election Campaign Act (FECA), which outlined campaign finance laws at the federal level. This law also established a government agency to oversee these laws, and established the Federal Election Commission; this agency enforces these laws and regulations.

Eventually, these statutes were incorporated into Title 52 of the U.S. Code. This Title contains additional laws related to voting and political election. Subtitle III covers campaign finance with 46 specific regulations. In addition to the FEC, the United States Department of Justice (DOJ), and other agencies closely and actively monitor political candidates and political action committees (PACs) for any signs of violations of the campaign finance fraud laws.

Some of the more common ways in which these cases are prosecuted are under the following statutes:

1. 52 U.S.C. § 30101; (Definitions);
2. 52 U.S.C. § 30102; (Organization regarding Political Committees);
3. 52 U.S.C. § 30103; (Registration of Political Committees); and
4. 52 U.S.C. § 3010; Enforcement

The previous sections outline who can or cannot organize political committees and the regulations for which these committees can function. In addition, the sections make clear the enforcement proceedings under FECA; these proceedings can be civil or criminal depending on whether there were knowing and willful violations of the law.

FECA allows for the formation of the political action committees and “Super” political action committees as well as party and candidate committees. Each particular committee can work in different ways. However, under 52 U.S.C. § 30102, a treasurer is required to keep a record of any and all contributions or disbursements. In addition, the statutes can be violated in various ways, including keeping too much petty cash, not recording contributions properly, and failing to disclose all expenses adequately.

Violating these statutes can mean a prison sentence of one to five years and a harsh fine. (For a case involving a civil FECA matter, the defendant could face steep fines, restitution, and being barred from involvement in future campaign activities.

Other Common Violations

52 U.S.C. § 30114: Contributions

Under this section, the candidate can only spend contribution funds on “campaign-related expenses.” This section has baffled some candidates over the years, and prosecutors often bring charges for violations of this statute. Moreover, the law clearly bars the candidate from spending funds on “any commitment, obligation, or expense of a person that would exist irrespective of the candidate’s election campaign or individual’s duties as a holder of the federal office.” In practice, it might seem easy enough to understand; however, many have found it difficult to differentiate what constitutes part of someone’s campaign and what does not. For example, clothes and vacations are expressly forbidden even though, in theory, these would be useful in a candidate’s campaign.

52 U.S.C. § 30116: Limitations on Contributions and Expenditures

This section sets strict guidelines on the limits for individuals who make contributions to political campaigns, and it changes for index inflation. As of 2021-2022, the limit for contributions by individuals to federal candidates are $2,900 per election for the President of the United States. That dollar figure is also the same for an election involving the United States Senate and the United States House of Representatives.

It should be noted that the limit of contributions for individuals for non-multicandidate PACs to national party committees is now capped at $36,500. Moreover, the contributions limit for individual and non-multicandidate PAC contributions to each of the additional national party committee accounts is now $109,500 per year.
A related section is FECA section 30118, which sets forth limits for campaign contributions and expenditures related to a corporation, labor organizations, and national banks.

52 U.S.C. § 30116: Limitations on Contributions and Expenditures

This section sets strict guidelines on the limits for individuals who make contributions to political campaigns, and it changes for index inflation. As of 2021-2022, the limit for contributions by individuals to federal candidates are $2,900 per election for the President of the United States. That dollar figure is also the same for an election involving the United States Senate and the United States House of Representatives. It should be noted that the limit of contributions for individuals for non-multicandidate PACs to national party committees is now capped at $36,500. Moreover, the contributions limit for individual and non-multicandidate PAC contributions to each of the additional national party committee accounts is now $109,500 per year.

A related section is FECA section 30118, which sets forth limits for campaign contributions and expenditures related to a corporation, labor organizations, and national banks.

Common Ways to Prosecute

18 U.S.C. § 1001: Material False Statements

Typically, the prosecution will bring charges for knowingly filing a false campaign disclosure under this section, which disallows making material false statements. However, it is also common for a similar charge of filing false campaign disclosure forms under the Federal Election Statute (2 U.S.C. § 441(a)).

This regulation makes it a crime under federal law to accept or receive a contribution that is more than what is allowed under the law. It should be noted that this is an intent-based crime, meaning the person must knowingly and willfully accept the contribution even though they know it violates the allowable contribution.

18 U.S.C. § 371: Conspiracy

When two or more people conspire to violate a particular law, another intent-based crime, the prosecutors will file federal charges. Under this scenario, two or more people conspire to hide or otherwise conceal the amount of the donation or the identity of the donor of the money. This usually occurs when the amount donated exceeds what is allowed and is a large sum of money.

Note that prosecutors can get creative and bring several charges for this illegal activity. For example, they could use the conspiracy statute (18 U.S.C. § 371) and the false statement statute (18 U.S.C. 1001). They can even use the illegal campaign excessive spending statute, which is defined under 2 U.S.C. § 1446.

Other violations involving campaign finance are prosecuted under the following federal statutes:

1. 18 U.S.C. § 156; Money dispositions;
2. 18 U.S.C. § 1341: Mail fraud;
3. 18 U.S.C. § 1343; Wire fraud;
4. 18 U.S.C. § 1957; Money laundering;
5. 26 U.S.C. § 7201; Tax evasion

Some of the statutes (such as mail fraud and wire fraud) are very broad. For example, under these two statutes, it is a crime for an individual to use modes of communication such as the phone, internet, or United States mail to commit a fraudulent scheme. Thus, most activities related to campaign finance fraud would also fall under the auspices of these two statutes, as well as others described above.

Examples

While there are many examples of this fraud, as discussed above, here are some additional examples:

1. An individual solicits donations for two political action committees that are not legally registered;
2. Falsely representing that a political action committee has been registered pursuant to federal election laws and then falsely stating that all donations were spent to support legitimate candidates;
3. Collecting over $2 million in donations to illegitimate political action committees and not filing the required documents and reports with the Federal Election Committee;
4. Using $2 million for personal expenses from donations that were given to fake PACs; and
5. Using “straw donors” or what is often called “conduits” to funnel cash towards a particular political candidate or a campaign so that the amount of the donations total more than is allowed by law.

Prosecuting Federal Campaign Fraud

Typically, the discovery of potential violations of these statutes is found through the following:

1. Routine audits, such as those done by the FEC or IRS;
2. Sworn Complaints from individuals with knowledge of a violation;
3. Referrals from government agencies to other government agencies; and
4. Self-admission by those who believe they violated the statutes.

Generally, the FEC handles civil enforcement through its Office of General Counsel. This is usually done in one of two ways:

1. Alternative Dispute Resolution; reach a settlement through mutual consent of both parties;
2. Administrative Fines: Penalties are assed on committees for late reports or reports that were not filed.

The DOJ handles criminal prosecutions. As outlined above, the penalties vary. However, they are severe depending on which statute/s or law/s were broken. This is most often an intent crime. The person had to have the actual knowledge and intent to commit or violate the law. Violations related to a presidential campaign could mean a maximum prison sentence of 5 (five) years and $50,000. However, there could be several statutes that have been violated and several charges brought, which can each carry different maximum sentences.

Again, each state has its own laws related to campaign finance fraud, and individuals and PACs must adhere to those laws as well or face civil penalties.

Defending Federal Campaign Finance Fraud

You need an experienced federal defense attorney to assist you in defending against these serious crimes and potential convictions and penalties. The government has most likely spent weeks, months, or years in obtaining the evidence they will use against you. This can make it difficult to defend against such charges. For these reasons, you need an experienced federal criminal defense attorney. The government has the burden to prove each element of the charge beyond a reasonable doubt. You are also presumed innocent until proven guilty in a court of law. If the prosecution cannot meet the burden of proving each element of the crime, there cannot be a conviction. This is a high standard for the prosecution. An experienced defense attorney can help you prepare the best possible defense to challenge the prosecution’s case.

Each case is different, but federal campaign fraud tends to focus on intent when charged at the federal level. Thus, the defense will focus on your intentions, knowledge of any alleged crime, and state of mind.

We Want to Help

If you’ve been charged with Federal Campaign Finance Fraud Crimes in the Los Angeles area, contact us today for a free consultation. Your freedom depends on finding an experienced defense attorney immediately. The sooner you reach out, the sooner we can work on getting your case drastically reduced or dismissed entirely.

If you or a loved one has been charged with Federal Campaign Finance Fraud Crimes, we invite you to contact us immediately for a free case review.

Our experienced and assiduous attorneys will be sure to fight until the end to reduce or drop your charges entirely.

Call Us for a FREE Case Review: 310-274-6529