By Michael D. Gilbert and Samir Sheth/TakeCare
The Federal Election Commission recently levied a record-breaking fine against Right to Rise, a Jeb Bush-connected super PAC, for soliciting an illegal contribution from a foreign national.
The fine brought cheers – and self-congratulation – for the FEC, an agency infamous for deadlock, and heartened people on both sides of the aisle who want better enforcement of campaign finance laws.
There’s just one catch: Right to Rise came out ahead.
Newly-released documents tell the tale. In exchange for a $1.3 million contribution, the super PAC paid a $390,000 fine. The difference – $910,000 in illegal money – is the Super PAC’s to keep.
So much for the cheers.
The enforcement action began with promise. In 2016, an explosive report in The Intercept uncovered a contribution by APIC, a domestic subsidiary of a foreign corporation, to Right to Rise.
The FEC investigated, and the facts unspooled.
Neil Bush, an agent of Right to Rise (and brother of Jeb and George W. Bush), solicited money from APIC, and APIC obliged, giving a total of $1.3 million.
Because foreign nationals at APIC were involved, Bush’s ask and APIC’s give both violated federal law.
This is not a case with blurry facts or vague law; the violations are plain, and Right to Rise and APIC have admitted that they violated the law.
The FEC fined APIC $550,000 and Right to Rise $390,000.
FEC Chair Ellen Weintraub celebrated the fines: “At every step along the way, the system worked.”
We respectfully disagree. For two reasons, the fines showcase a system that failed.
First, consider the time lag. The illegal contributions occurred in March and June of 2015, but they did not receive attention until the August 2016 news report. Seven days after that report, the Campaign Legal Center filed a complaint with the FEC. The FEC announced the fines on March 8, 2019, more than two years later.
Investigations and enforcement take time, especially when the facts and law are confusing. But this case doesn’t seem to fit that scenario. Taking too long to levy a fine lessens the sting of enforcement. This is especially true in the campaign finance setting. Right to Rise still exists, but many super PACs form and dissolve over the course of a single two-year election cycle. They have no long-term reputations to protect or assets to manage; they come and go. When the FEC knocks two years on, who will answer? Who will pay the bill?
Second, and more fundamentally, the FEC’s fines will not deter violations of the law. To discourage bad behavior, the costs of the conduct must exceed the benefits. In this case, there were no prosecutions, no restrictions other than to follow the law going forward, and, as we’ve stated, Right to Rise came out $910,000 in the black.
(To be precise, Right to Rise came out $757,770 in the black. The Super PAC refunded $152,230 to APIC in May 2016, but there is no indication the refund was related to the FEC’s investigation, which began months later. Right to Rise refunded almost $14 million to donors after Donald Trump secured the Republican nomination.)
Right to Rise probably spent money on legal fees in connection with this case. And it might have suffered a reputational hit, though we have doubts about that since Jeb Bush is no longer running for office. However, those kinds of costs are not usually considered when determining punishment.
Consider the prosecution of William Tierney, who was charged with raising over $1 million through political action committees and diverting some $400,000 to himself. He was ordered to pay restitution of $1,175,417.23 to his victims, forfeit an additional $410,649.18 to the United States, pay a fine of $50,000, and spend two years in prison. Prosecutors did not give him a break because his lawyers charged a lot or his reputation suffered.
Penalties like Tierney faced foster deterrence. Fines like the FEC’s do not. They are just the cost of doing business.
Republicans and Democrats often disagree about the purpose and efficacy of campaign finance laws. However, we can all agree that clear violations of law should be met with a reasonable, proportionate punishment. Enforcement actions that are too little too late do not prevent future foreign interference in our elections. As the 2020 election cycle gets underway, more Super PACs might flout the rules, confident that their punishment won’t fit the crime.
Michael Gilbert is a professor, and Samir Sheth is a third-year student, at the University of Virginia School of Law.
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Comments welcome.
Posted on April 30, 2019