Trump Super PAC Received Illegal Donations from Private Prison Company

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WASHINGTON  – The Campaign Legal Center filed a letter today with the Federal Election Commission providing additional evidence that private prison company GEO Group illegally contributed a total of $225,000 to the Donald Trump-affiliated super PAC Rebuilding America Now, in violation of the 75-year-old ban on government contractors making political contributions.

“By contributing to a super PAC closely associated with Trump—the only presidential nominee to endorse private prisons—GEO presumably sought to influence the government contracting process and to ensure that a Trump administration would protect its access to taxpayer dollars,” said Brendan Fischer, associate counsel for the Campaign Legal Center.

“Government contracting is the most obvious way for a politician to reward friends and political donors, which is why companies that receive contracts have been banned for 75 years from making political contributions. Officials are supposed to decide how taxpayer money is spent based on what's best for the public, not based on what's best for their big money backers.”

Today’s filing is a follow-up letter to CLC’s original complaint filed on Nov. 1, 2016 after GEO gave  $100,000 to Rebuilding America Now the day after the Obama Administration announced it would be ending private prison government contracts. GEO receives 45 percent of its annual revenue from federal contracts, and its stock soared the day after Trump’s election.

The filing describes how the GEO subsidiary that made the $225,000 in contributions, GEO Corrections Holdings, Inc., is listed as the “employer” in multiple labor relations cases involving federally-contracted detention facilities, and has stated in state and federal proceedings that it operates detention facilities. Additionally, both GEO Group and GEO Corrections Holdings, Inc. are effectively indistinguishable and both appear to rely on taxpayer funds for their operations.  

The company also contributed $200,000 to the Senate Leadership Fund, a super PAC associated with Senate Majority Leader Mitch McConnell, and last year gave $100,000 to super PAC supporting Sen. Marco Rubio’s presidential bid.

CLC filed a similar complaint in July against a super PAC supporting Hillary Clinton, Priorities USA Action, for accepting a $200,000 contribution from a federal contractor, Suffolk Construction Company.

CLC more recently filed complaints with the FEC against both the Trump and Clinton campaigns for coordinating with their super PACs in violation of federal law.

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Campaign Finance
Ethics

The Federal Election Commission Must Update Rules to Reflect Today’s Internet Use

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CLC and D21 Submit Comments Calling for “Public Communication” Definition to Include Mobile Ads, Address “Internet Exemption” loophole

The Federal Election Commission is updating and clarifying its rules for the 21st century.

Last week the Campaign Legal Center and Democracy 21 submitted comments in support of the agency’s proposal to revise the definition of “public communication” to take into account that paid ads seen on Internet applications are no different than paid ads seen on websites.

Because the current definition was drafted a decade ago, when websites were the predominant outlet for paid internet advertising, it is silent on digital ads that appear on mobile apps.  But digital political ads are increasingly viewed on apps rather than a browser window: $1 billion was spent on digital advertising in the 2016 election cycle, about half of which went towards mobile and social ads.

For example, Facebook has emerged as a major source of campaign spending --the National Republican Congressional Committee reportedly increased its Facebook advertising by 1,500%, and Trump’s campaign “embraced Facebook as a key advertising channel in a way that no presidential campaign has before”—and almost 60 percent of Facebook users access the social network exclusively from the Facebook app. As the letter notes: 

“It would be absurd if a paid political Facebook ad were considered a ‘public communication’ when viewed on the Facebook website, but now when viewed through the Facebook app – where a majority of its users now access the social media platform,” the comments state.  

The definition matters because only “public communications”—TV and radio ads, mass mailers, paid internet ads, and any other form of ‘‘general public political advertising” —are subject to coordination rules  applicable to communication rules and disclaimer requirements.

Paid digital ads that are viewed on a mobile app, rather than viewed on a “web site,” would still constitute ‘‘general public political advertising” and should be covered under existing rules.

Political operatives have taken advantage of the FEC’s dysfunction to push aggressive legal theories exploiting any possible ambiguity in the law, so the FEC’s proposed clarification of its rules is a welcome development.

For example, during the 2016 election cycle, the pro-Clinton super PAC Correct the Record raised huge checks and spent at least $8 million in open coordination with the Clinton campaign. Coordination between candidates and super PACs is strictly limited under federal law, but Correct the Record claimed that its conduct was legal based on an extremely narrow reading of the “public communications” rule and other regulations.

This is a big deal, because although Clinton could only accept checks of up to $2,700 from individuals, Correct the Record could accept unlimited contributions from individuals, corporations and labor unions. By working directly with Correct the Record, Clinton could evade the contribution limits and benefit from million-dollar checks.

CLC filed a complaint against Correct the Record in October, but since the FEC is mired in an ideological standoff, it is unlikely to take action for quite some time.

The FEC correctly recognizes that both technology and political campaigning are evolving and is taking the right step in proposing rules that recognize those changes. 

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Campaign Finance

Bipartisan Coalition Calls on Trump to Divest His Business into a True Blind Trust

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CLC, Leading Governance Experts Urge the President-elect to Avoid Ongoing Conflicts of Interest and Protect the Integrity of the Presidency

WASHINGTON – The Campaign Legal Center joined today with a bipartisan group of signers, including past Republican and Democratic White House Counsels, in a letter to President-elect Donald Trump calling on him to divest his business enterprises into a true blind trust managed by an independent trustee with no family relationship. Trump will announce his plans regarding his and his family’s financial stake in his business on December 15.

 “Should  President-elect Trump fail to put his business enterprises into a blind trust, his actions would undermine public confidence in decisions he would make as president,” said Trevor Potter, president of the Campaign Legal Center. “Choosing not to separate from these business interests will haunt President-elect Trump throughout his entire presidency. It will distract him and the American people from the important decisions he will need to make about domestic and foreign policies. It will create confusion and undermine his credibility when foreign nations and state-owned companies interact with the Trump Organization, or when the U.S. government undertakes actions that affect Trump business interests overseas.

“Maintaining ownership of the Trump enterprises will create the appearance that President-elect Trump and his family are using the presidency to enrich themselves, even if that is not his intention. The last thing President-elect Trump should ever want is a never-ending battle over the conduct of his personal business affairs.”

The following groups and individuals signed on to the letter:

Ambassador (ret.) Norm Eisen, chief White House ethics lawyer, 2009-2011

Richard Painter, chief White House ethics lawyer, 2005-2007

Campaign for Accountability

Arne H. Carlson, Former Governor of Minnesota (R)

Kathleen Clark, Professor of Law, Washington University, Affiliation noted for identification

purposes only

Center for American Progress

Center for Media and Democracy

Common Cause

CREW

Democracy 21

Former Rep. Mickey Edwards (R-OK), Former Chairman, House Republican Policy Committee Every Voice

Issue One

Thomas Mann

OpenTheGovernment.org

Norm Ornstein

People For the American Way

Trevor Potter, President, Campaign Legal Center

Project On Government Oversight (POGO)

Public Citizen

John Pudner, Executive Director, Take Back Our Republic

The Rootstrikers Project at Demand Progress

Former Rep. Claudine Schneider (R-RI) 4
Former Rep. John J.H. Schwarz, M.D. (R-MI)

Peter Schweizer, President, Government Accountability Institute

Former Rep. Peter Smith (R-VT)

Sunlight Foundation

Laurence H. Tribe, Carl M. Loeb University Professor and Professor of Constitutional Law,

Harvard Law School, Affiliation noted for identification purposes only

Christie Whitman, Former Governor of New Jersey (R)

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Ethics

Press Release: New Evidence of Illegal Compensation to Steve Bannon by Mercer-Backed Super PAC

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Pattern emerges of Mercer-backed entities compensating Bannon through use of ‘front groups’ 

Today, The Campaign Legal Center presented new evidence to the Federal Election Commission alleging that the super PAC Make America Number 1 illegally compensated Steve Bannon’s work as Donald Trump’s campaign CEO. Make America Number 1 is largely funded by hedge fund billionaire Robert Mercer and chaired by Rebekah Mercer, who is now on Trump’s transition team.

After Bannon joined Trump’s campaign in August, the Mercer-backed Make America Number 1 paid nearly $280,000 to “Glittering Steel LLC,” a production company described as “a front for Bannon” which is located at the same address as Bannon’s consulting firm. During that same period the Trump campaign reported no payments to Bannon.

“The evidence suggests a Mercer-backed super PAC secretly subsidized Steve Bannon’s work for the Trump campaign by funneling $280,000 in payments to a firm described as a ‘front’ for Bannon,” said Brendan Fischer, associate counsel at the Campaign Legal Center.  

Additionally, Make America Number 1 paid at least $4,633,876 to Cambridge Analytica, a data analytics firm incorporated at the same address as Bannon’s consulting firm whose board includes both Bannon and Robert Mercer. Trump also contracted with Cambridge Analytica, indicating that Make America Number 1 ran afoul of the “common vendor” rule designed to preserve the independence of campaigns and political committees. The Trump campaign began contracting with Cambridge Analytica at the request of the Mercer family.

“Once Bannon was taken on as CEO of Trump’s campaign and continued to be paid by Mercer’s entities, this became an issue,” said Larry Noble, general counsel at the Campaign Legal center. “It is especially concerning now that Bannon is White House chief strategist. Bannon’s compensation shows the pervasive influence of the Mercer family of donors in the Trump orbit.”

The letter is a follow-up to the complaint filed by CLC on Oct. 6. That complaint described the significant overlap between Make America Number 1 and the Trump campaign. The Chair of Make America Number 1, Rebekah Mercer, requested that Trump hire Bannon as his campaign CEO, and two former presidents of the super PAC became Trump’s campaign manager and deputy campaign manager, reportedly at Mercer’s suggestions.

CLC also filed complaints against super PACs supporting Trump’s Democratic rival Hillary Clinton.

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Campaign Finance

Americans for Prosperity Foundation v. Bonta

At a Glance

Americans for Prosperity Foundation has failed to comply with California state law by providing its list of donors with the AG's office. They are challenging the law. CLC filed a brief in favor of the law, which seeks to protect taxpayers against fraud.

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About This Case/Action

About the Case

The state of California requires 501(c)(3) nonprofits like the Americans for Prosperity Foundation to submit on a confidential basis a report of their large donors to the Attorney General  (AG) as part of the state’s administration of its laws and regulations governing tax-exempt groups. The law applies to all charities that solicit donations or have an office in California.

Americans for Prosperity Foundation has repeatedly failed to provide its “Schedule B” donor report to the AG’s office.  And when the organization was put on notice that it had not been complying with the law, it responded by suing the state.

Americans for Prosperity argues that the law violates the donors’ right to privacy under the First Amendment. It claims that submission of the Schedule B would result in harassment and threats to its donors, alleging that the billionaire Koch Brothers helming the foundation had suffered from harassment due to their political activity.  U.S. District Court Judge Manuel Real agreed with the Foundation and temporarily blocked the law, barring the AG from collecting the Foundation’s Schedule B’s—even on a non-public basis—but the Ninth Circuit reversed this ruling, ordering the AG only to keep the Schedule B’s confidential.  After trial on the merits, the district court again ruled in favor of the Foundation, holding that it was constitutionally entitled to an as-applied exemption from the reporting requirement on ground that compliance with the law would likely subject the Foundation’s donors to harassment and reprisals.

What’s at Stake

The law requires reporting of donors to help the Attorney General administer the tax laws and protect taxpayers against fraud.  This is not even a case about public disclosure—although the Foundation alleges that the AG had inadvertently made a small number of confidential reports available on its website in the past.  But even if this case did concern a public reporting requirement, the Foundation is not entitled to an exemption from disclosure because it failed to show that reporting would subject its donors to harassment and reprisals and instead focused merely alleged that publicizing its donors’ association with the Foundation may draw criticism and protest.

Expanding the “harassment exemption” from political disclosure laws as the district court did here would create an exception that swallows the rule.  This narrow exemption was designed to protect politically and socially marginalized groups—like the NAACP in the civil rights era or the Socialist Workers’ Party—whose members were subject not only to private threats and violence, but also state surveillance and harassment.  By contrast, Americans for Prosperity Foundation is attempting to escape general laws regulating tax-exempt groups simply because its donors would prefer to remain anonymous and avoid public criticism for their political stances.  Permitting the wealthy and powerful to exempt themselves from disclosure to avoid a critical public response would eviscerate political disclosure laws and undercut the free-flow of information and robust debate the First Amendment is meant to protect.

CLC filed a friend-of-the-court brief with the 9th U.S. Circuit Court of Appeals on Dec. 2, 2016 in support of California Attorney General Kamala Harris. In its brief, CLC argues the Foundation should not receive an exemption from the California reporting law because it is its reporting will be confidential and that even in the unlikely event that its Schedule B is made public, it has failed to demonstrate a reasonable fear of donor harassment as a result.

Plaintiffs

Americans for Prosperity Foundation

Defendant

Xavier Becerra

HISTORIC DECISION: Wisconsin Federal Court Strikes Down Partisan Gerrymander

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Litigators and Lead Plaintiff React to Decision


WASHINGTON – A three-judge panel in the U.S. District Court for the Western District of Wisconsin today struck down Wisconsin’s state assembly district map, which is one of the most extreme partisan gerrymanders in the United States in the post-2010 cycle.

With this decision, plaintiffs have successfully alleged and proven that a state legislative redistricting plan is an unconstitutional partisan gerrymander for the first time in 30 years.

The Campaign Legal Center (CLC) along with regional local counsel represent lead plaintiff Bill Whitford and the other 11 plaintiffs in the case.

CLC Director of Voting Rights and Redistricting Program Gerry Hebert released the following statement:

“This is truly a monumental victory for the plaintiffs in this case, but more importantly this is an historic moment for our nation and the betterment of democracy. This case proves that the rights of Wisconsin voters were infringed upon and that the self-interested, unfair practice of partisan gerrymandering hurts our democracy. With this decision, partisan gerrymandering should come to an end in Wisconsin and is now on its way to extinction across the nation.  And with the implementation of the test we proposed and the court accepted, there will be, for the first time, a standard to identify this harmful practice.”

Peter Earle, one of the Wisconsin-based attorneys representing the plaintiffs, released the following statement:

“Today is a historic day and I am thrilled with the result not only for our plaintiffs, but for all Wisconsin voters. This decision will finally give voters in Wisconsin the power they deserve to shape their democracy. Now a fairer system will be created here in Wisconsin so all voters, not just a select few, will be able to have their voices heard.”

Bill Whitford, the lead plaintiff in the case, released the following statement:

“I’m very pleased with this decision. It is truly historic. As a lifelong Democrat the court’s decision recognizes the power of my voice and the voices of all other Democrats across the state. This decision could have a monumental impact in ensuring that voters’ voices are heard across the nation, regardless of party. I want fair elections, where the voters have the power, not a gerrymander for either side created by self-interested politicians. That’s what today’s decision is all about.”

The ruling issued today by the court stated the following:

“We find that Act 43 was intended to burden the representational rights of Democratic voters throughout the decennial period by impeding their ability to translate their votes into legislative seats. Moreover, as demonstrated by the results of the 2012 and 2014 elections, among other evidence, we conclude that Act 43 has had its intended effect.”

The parties have 30 days to submit their proposals for the nature and timing of the remedial process.  The plaintiffs’ three-part test, which was adopted in this case, can now be used across the country to fight back against unfair partisan gerrymandering.
 

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Redistricting

House and Senate Leaders Urged to Strengthen Congressional Ethics Rules for 115th Congress

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Congress can make good on calls to ‘drain the swamp’

WASHINGTON – Today, a coalition of watchdog groups and congressional scholars urged House and Senate leaders from both parties to strengthen ethics rules and address known weaknesses in current rules. The package of proposed reforms cover travel, conflicts of interest, campaign activities by members and staff while Congress is meeting, the revolving door and enforcement. 

“With the incoming Trump administration’s promise to ‘drain the swamp,’ Congress has an opportunity to clean up its own house and enact common sense reforms to help restore faith in government,” said Meredith McGehee, strategic advisor at the Campaign Legal Center. “Americans are looking for Congress to recommit to ethics by closing loopholes and addressing conflicts of interest.”

“These reforms are non-partisan solutions that Republicans and Democrats should support,” said Aaron Scherb, director of legislative affairs at Common Cause, “because the American public expects and deserves a Congress that holds itself to the highest ethical standard.”

“This House of Representatives should seize on these recommendations during this rare opportunity to systematically address longstanding issues with the way it polices ethics,” said Daniel Schuman, policy director at Demand Progress.

Detailed in the attached report are 15 specific recommendations for the 115th Congress. This Congress must work to follow through on its promises to put the American people before big donors and special interests by strengthening ethical protections. Endorsing these recommendations will show Americans that their government stands with them and is serious about changing Washington.

Joining in urging support for the proposed reforms are:

  • Campaign Legal Center
  • Citizens for Responsibility and Ethics in Washington (CREW)
  • Common Cause
  • Demand Progress
  • Democracy 21
  • Issue One
  • Project on Government Oversight
  • Public Citizen
  • Thomas Mann
  • Norm Ornstein
  • James Thurber
Issues
Ethics
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