Skepticseye.com

So investigators are looking at Spitzer’s use of his fundraising consultant as a front for travel and other expenses to out of town locations where he might frolic a bit?  Do fundraising contractors usually front their clients the money?

Such an arrangement is unusual, said several people with considerable experience in the financial dealings of campaign committees, including one who had worked on a prior Spitzer campaign. They said fund-raising consultants usually insist that the campaign pay directly for flights, hotels and ballrooms because they do not want to be without that money while waiting for reimbursement or to get stuck with the bill.

(He IS Governor.  One might expect he’d be good for it.)  More practically, it makes honest reporting easier for the poor kid who gets to sit with the compliance software, hour after hour. More:

Several people briefed on the government’s investigation have said in recent days that the authorities were going to examine whether Mr. Spitzer had used campaign funds in connection with his reported meetings with prostitutes. Both New York and federal law prohibit the personal use of campaign funds.

He’s rich, he’s self-righteous, and he (may be) using his campaign account for this?   The one source of funds that has to be transparent to the public for years to come.

Larry Gold (pictured here, ironically hosted by the CLC web page) former student of Hadley Arkes (yes, it’s true!) and all-around smart puppy, has posted this piece to the world via the Election Law Blog. Larry is a shy and demure type, and apparently reluctant to start a blog of his own.

Larry’s inquiry? Where, or where have the reforms groups gone? Will they speak up about McCain’s entanglement in the public funding program? Do the have a view about McCain’s relationship to lobbyists?

As if summoned by Zeus, we now read in the Hill that, yes, they do. Public Citizen, at least, wants the world to know that, however corrupting lobbyists might be, McCain himself is uncorruptable.

That’s a relief.

Don’t get me wrong - I think the allegation that campaign actors who are also registered lobbyists pose a problem is probably spurious, in a day and age where lobbyist registration is, for many people a precaution not (necessarily) a career. This reminds me of the “lobbyist as treasurer” kerfuffle from a while back. Some registered lobbyists are real inside baseball players, while others have occasional and isolated contact with the Hill or agencies. Unless you distinguish between the two, you aren’t saying anything interesting.

What does Public Citizen think about the expansive application of the “lobbyist” epithet? Hmmm.

See Bloomberg report here.  It would be interesting to know the exact status of the Venezuelans who had been “living in the US for 10 years”  Were they green card holders?

15 counts, involving primarily investment fraud, but also including counts that he used ill-gotten gains to make excessive federal contributions via straw donors. Newday speculates on impact this will have on Clinton campaign. Here’s the Press Release from the Manhattan US Attorney’s office, which among other things, says:

In an effort to raise his public profile and thereby convince more victims to invest in his fraudulent scheme, HSU pressured many of his victims to individually contribute thousands of dollars to various candidates for President of the United States, the United States Senate, and the United States House of Representatives whom HSU supported. HSU allegedly made direct and implied threats to these victims, leading them to believe that their failure to make the required political contributions would adversely impact their ongoing investment relationships with HSU.

Coercing contributions in an effort to further a Ponzi scheme? That’s new.

Why do people even try to pull these things off? Do the math. It will end badly.

Another fine poetic offering from the most talented FOTS we are honored to know:

Kubla McKhain

(with apologies to Samuel Taylor Coleridge)

In Washington did Kubla McKhain
A stately campaign-finance law decree:
Where Potomac, the sacred river, ran
Through Capitol buildings measureless to man
Down to a sunless Chesapeake.

So twice five miles of bureaucratic ground
With lawyers and civil servants were girdled round:
And there were offices bright with those who lobby,
Where blossomed ideas that caused fierce fights
And here were protections that shouldn’t be wobbly,
Enfolded in amendments in the Bill of Rights.

But oh! Those deep rights to speak and petition did cost soft money
And Kubla McKhain in his incumbency did disdain the right
That created a wild marketplace! Of ideas and criticisms funny
As e’er beneath a national media market that shined too bright
A light on his and others’ doings in the Halls of Congress!
Electioneering communications caused turmoil seething
And the mention of his name led to rage and heavy breathing,
A mighty fountain of these Communications must be damned
And comments on congressional doings must be condemned,
Sharp fragments vaulted like rebounding hail,
In chatty ads beneath the attacker’s flail:
So mute these communications at once and ever
Stop those nonprofits quartered on the sacred river.
Five miles meandering with a mazy motion
Through Unions and Corporations the sacred river ran,
Then reached the Trade Associations measureless to man,
And sank in tumult to a lifeless ocean:
And ‘mid this tumult Kubla McKhain heard from far
The Reformers’ voices prophesying war!

The shadow of the campaign reforms
Floated midway on the waves;
Where was heard the critics’ storms
From Wertheimer in his raves.
It was a new Sedition Act to stem the tide,
A dark campaign-reform we were forced to abide!

A lawyer with a brief
At the Supreme Court I sought:
He was Bopp from Indiana,
And for WRTL he fought,
Arguing for the First Amendment.
Could he revive within our system
The symphony resplendent,
Of political speech, chaotic as it may be?
Would be a deep delight ‘twould win me,
That with Justices holding so loud and long,
We could rebuild our ancient rights, bar the FEC,
That great Constitution! The First Amendment!
And all who speak should know they are there,
And all should cry, Beware! Beware!
That McCain-Feingold law, those holier-than-thou Reformers!
Weave a brief round them thrice,
Bind them tight with Justice Robert’s thread,
For they on Pew-money hath been fed,
And drunk the fantasy of Election-Paradise.

The FEC has levied its second highest ever penalty in MUR 5666 against a government contractor who gave $78,000 in corporate funds via straw donors to two federal candidates. Here is the conciliation agreement.
From the FEC news release:

The FEC has accepted a conciliation agreement in which [Mitchell] Wade admits to knowingly and willfully violating the Federal Election Campaign Act (the Act) by funneling $78,000 in corporate contributions to two federal candidates. The Commission unanimously approved the conciliation agreement. …

This penalty brings the total civil penalties assessed by the FEC in 2007 to more than $4.7 million, which is the second largest amount ever collected in a single year in the Commission’s history. The Commission collected $6.2 million in all of 2006.

Mr. Wade used MZM corporate funds to reimburse employees and their spouses for contributions to the campaign committees of Representatives Virgil Goode and Katherine Harris. …

Respondents disclosed the violations of the Act to the U.S. Department of Justice and have cooperated with the Commission in resolving this matter. Mitchell Wade and MZM have also taken responsibility for the liability of the former employees of MZM and their spouses who acted as conduits for the reimbursed contributions.

(This is the contractor who purchased FRep. “Duke” Cunningham’s house (”FRep stands for “Felon Representative”), if you may recall). Why is this a complaint-triggered investigation? Wouldn’t DOJ refer such civil violations to the FEC? isn’t there some kind of operating agreement between the two agencies? You might wonder. I did.
As near as I can tell, the CREW complaint cited in the record was based on newspaper reports about MZM coercion of employee contributions. CREW filed its complaint 4 days after local papers in June 2005 reported that MZM employees claimed to reporters they were paid inflated salaries in order to contribute to candidates. CREW did no additional work, as far as I can tell. But the conciliation discusses information produced in the criminal investigation. How does this fit together? Does CREW deserve all the credit?
In General Counsel’s Report #2 we get some answers. In general, the explanation seems to be “both.” The CREW complaint triggered an ordinary investigation, and the DOJ referral opened another matter, and the two were merged into MUR 5666 because they raised similar issues about more or less the same people. It seems to my casual eye that the information pout of the DOJ investigation was the heart of the matter. (Additional descriptions of the plea agreement, entered into in February 2006, can be found in this Factual and Legal Analysis).

So, for those of you interested in “the rest of the story” well, there it is.

We’ve got bloggers!  If you haven’t already, check out the impressive Hsu array here.  Of course, there may be some inaccuracies depending on the completeness of the donor information provided (and reported) - garbage in means garbage out.

It would seem, if straw donors are at work here, they showed some gumption in using real (and distinctive) names.  If you were really donating through third parties and hoping to escape detection, wouldn’t you be looking for Smiths, Johnsons, and Joneses?

The Boston Globe reports about Marty Meehan’s “largess” in the closing days of his reign. This quote struck me, particularly:

“I’m not generous by nature,” Meehan said in a recent telephone interview with The Associated Press. “It was a painful quarter for me … I wouldn’t call it a spending spree. These are more like natural wrap-up costs as I was leaving Congress.”

Meehan left the House seat he held for nearly 15 years with a $4.8 million campaign account that the Lowell Democrat plans to hold onto.

For what? Buying pencils and chalk for the University of Massachusetts?

He reported $145,765 in expenses for the quarter, including:

- a $590 dinner for former staffers at Restaurant Thalia in New York City’s theater district.

- a supporters appreciation dinner at Scalinatella Restaurant in New York City costing $990.

- a $867 dinner tab at The Monocle Restaurant on Capitol Hill with fellow House members.

- a $427 dinner at Morton’s steakhouse in downtown D.C. with House colleagues.

OMG! literally hundreds of dollars spent on restaurant dinners! I’d bet they had tableclothes and everything! You know, the masses would feel so much better if these dinners of appreciation were at Applebees. Not to mention your staff.

Republican political consultant Jim Nuzzo said Meehan’s recent spending underscores the need to tighten campaign finance laws on how money can be used.

“I’m not attacking Marty for being profligate or illegal or immoral,” Nuzzo said. “He’s doing what the game is. … He’s got this big chunk of change. He views it essentially as his slush fund and the law allows him to do that.”

What? “Slush fund?” Spent on a nice dinner for people who worked for you? No, slush fund is when you spend it on a weekend in Vegas with your buddies or a special friend. Or wacky dirty tricks, or whatever. The public confidence in the integrity of democracy is hardly at risk.
Meanwhile, he’s hanging onto a hefty chunk of it. Like that’s more honorable.

The Divine Ms. G. has been widely quoted on “caging.” For those of you involved for years and years in fundraising, the promotion of this term must come as some surprise.

What is caging? Well, it doesn’t involve locking people in cages. Or even locking up their returned mail. Here’s a reference from Bruce Eberle, noted direct-mailer-type guy:

Transparency International’s 2007 Global Corruption Report focuses on corruption in the judiciary.  Reading down the page, apparently the Justice Department’s political decisionmaking ranks up there with threats on life and limb in other countries.  Isn’t there a wee lack of, I don’t know, perspective here?