Campaign finance: Inmates running the asylum?

Do politicians have free rein to run amok with campaign financing?

In the last week the nation’s news media has been consumed with drama of the presidential impeachment, the spectacle of the Super Bowl, the point and counterpoint of the State of the Union Address, the latest numbers on the Coronavirus and the politician’s debacle surrounding the Iowa caucus.

Distracted by these events diverting the public’s attention — and largely ignored by the main stream media — the Government Accountability Office (GAO) on Feb. 3, 2020 issued GAO-26-66P “Campaign Finance: Federal Framework, Agency Roles and Responsibilities, and Perspectives,” a distressing report on Campaign Finance enforcement.

The report covers the two-year period between Jan. 1, 2017 and Dec. 31, 2018 — accounting for $8.6 billion raised to influence federal elections. The report states: “With such large sums of money involved, concerns about limiting the potential for political corruption and providing transparency to voters, while protecting free speech, have been at the heart of campaign finance law.” It examines the oversight function of the Federal Election Commission (FEC), the Department of Justice (DOJ) and to a lesser extent the Internal Revenue Service (IRS) in their shared responsibility to enforce these campaign finance laws.

GAO reports that the system for oversight of campaign financing is convoluted, with multiple steps dependent on party loyalties, no clear guidance and what appears to be an unwillingness to hold anyone accountable.

According to the report, “FEC officials noted that committee and candidate registration forms sometimes include false or fictitious information, such as fictitious or satirical names of a candidate, committee, or a committee’s treasurer…” The DOJ can prosecute these under Title 18 USC 1001, False Official Statements which states that submitting false, fictitious or fraudulent documents shall be fined and imprisoned for up to 5 years. But yet the report reflects “…that the incidence of such filings has increased since the 2016 presidential election cycle.”

The FEC Office of General Counsel’s Enforcement Division experienced a 30 percent reduction staff over eight years while enforcement matters more than tripled. That resulted in the individual workload more than quadrupling, adding significantly to the backlog.

The DOJ/FBI stated that typical fraud cases rely on a victim reporting, but in campaign finance violations there is no complaining victim.

In one scheme, offenders may exceed contribution limits by spreading the money through multiple individuals, using their names, either wittingly or unwittingly. This mechanism can also be used to funnel foreign contributions into campaigns. Without a complaint, the contributions appear to be legitimate. There was no evidence that there were any data analytics used by the DOJ or the FEC to identify campaign finance violations or fraudulent patterns, although the IRS does use this to identify potential violations within their jurisdiction.

The 13 steps required for the civil investigation, called Matters under Review, through the Federal Election Commission’s (FEC) Traditional Enforcement Process are outlined in the report. The average time for this review between 2002 through 2017 ranged from 304 days to 787 days. The average election cycle for a member of the House of Representatives is 730 days.

The election may well be over before any action is taken on a Matter under Review.

But to progress through each step requires the affirmative vote of at least four of the six FEC Commissioners. Yet, currently, there are only three commissioners. So no action can be taken on “Matters under Review,” FEC investigations — effectively eliminating any enforcement or administration actions of the campaign finance laws by the FEC.

The report reflects that DOJ, FEC and IRS officials find the rules so convoluted, lacking guidance and clarity that “…people may be genuinely unaware of the rules…” making it impossible to prove criminal intent for criminal prosecutions. Would not submission of “false,” “fictitious” or especially “satirical” names suffice to prove intent? 

A review of the “Report On The Investigation Into Russian Interference In The 2016 Presidential Election” (redacted), the so called Mueller Report, a two year investigation into Russian campaign interference conducted under the auspices of DOJ, failed to identify any of the above FEC, DOJ, IRS or GAO reported exploitable issues as problems resulting in the ineffective implementation of the Federal Election Commission Act (FECA).

The GAO report paints a broken campaign finance enforcement system providing minimal chance of detecting these fraudulent schemes and even less probability of exposure to civil or criminal enforcement.

This GAO report reflects “the heart of campaign finance law” is in need of major surgery or replacement, leaving the average voter with marginal political representation by political party candidates who can easily be motivated, manipulated and controlled by the corrupting influences of fraudulent financing.

John M. DeMaggio is a retired Special Agent in Charge for the U.S. Postal Service Inspector General. He is also a retired Captain in the U.S. Navy, where he served in Naval Intelligence. The above is the opinion of the author and is not meant to reflect the opinion of the U.S. Navy or the U.S. Government.