Today reform groups urged a House Judiciary subcommittee to hold hearings on the “Clean Up Government Act of 2011” (H.R. 2572), legislation that would provide critically needed amendments to the federal criminal statutes to hold public officials accountable for a broad range of corrupt practices.  The letter to the Chair and Ranking Member of the Subcommittee on Crime, Terrorism, and Homeland Security emphasizes the critical need for updates to these statutes in the wake of a series of court decisions that have drastically undermined prosecutors’ ability to address a broad swath of public corruption.

H.R. 2572, the letter stresses, will allow prosecutors to “hold accountable public officials who secretly act in their own financial self-interest, rather than in the interest of the public.”

The organizations signing the letter include the Campaign Legal Center, Citizens for Responsibility and Ethics in Washington (CREW), Democracy 21, Public Citizen, Project on Government Oversight (POGO) and U.S. PIRG.

 The full letter follows below.

September 7, 2011

 Re:      H.R. 2572, the “Clean Up Government Act of 2011”

Sent Via Fax

 Dear Reps. Sensenbrenner and Scott:

Today our organizations write to strongly endorse and call for swift committee consideration and passage of the “Clean Up Government Act of 2011” (H.R. 2572), legislation that would provide critically needed amendments to the federal criminal statutes.

As you are well aware, last year’s Supreme Court decision in Skilling v. United States eviscerated an entire category of deceptive, fraudulent and corrupt conduct from the scope of what was known as the honest services fraud statute (18 U.S.C. § 1346).  For decades government attorneys have used § 1346 to prosecute public officials who engage in malfeasance, such as undisclosed self-dealing, that is not as simple as a direct quid pro quo or a freezer full of money.  Unfortunately, the Skilling decision effectively struck down as unconstitutionally vague the honest services language and consequently, there is now a gaping hole in the Department of Justice’s (DOJ) ability to address a vast swath of public corruption.

H.R. 2572 is constitutionally sound and heeds the Supreme Court’s directive for more clarity and specificity.  The “Clean Up Government Act” directly and effectively addresses concerns raised about previous versions regarding over overcriminalization and prosecutorial abuse because of vagueness and lack of clarity.  The bill borrows existing language from 18 U.S.C. § 208, a well-established federal conflict-of-interest statute that already applies to the executive branch and, more importantly, has been upheld as constitutionally sound by the Supreme Court and U.S. Court of Appeals for the Fifth Circuit. Further, as DOJ correctly testified at the hearing, under the proposed statute no public official could be prosecuted unless he or she knowingly conceals, covers up, or fails to disclose material information, which the official already is already required by law or regulation to disclose, with the specific intent to defraud.  As crafted, H.R. 2572 removes the risk that a public official can be convicted for unwitting conflicts of interest or mistakes.

The legislation also overturns other misguided court decisions limiting the use of the illegal gratuities statute.  By reversing the Supreme Court’s decision in United States v. Sun-Diamond Growers, 526 U.S. 398 (1999), the bill revives the federal government’s power to criminally charge public officials who receive gifts because of their governmental positions with accepting illegal gratuities.  In addition, responding to United States v. Valdes, 475 F.3d 1319 (D.C. Cir. 2007), the bill makes clear government officials who accept private compensation for using the powers their jobs afford them may be subject to criminal prosecution.

We urge you to ensure that any modifications made to the bill before it is reported out of committee leave intact these critically needed legislative reforms.  Only then can we hold accountable public officials who secretly act in their own financial self-interest, rather than in the interest of the public.

Sincerely,

Today, the Campaign Legal Center, with Democracy 21, will urge the Federal Election Commission (FEC) and Department of Justice (DOJ) to investigate more possible violations of campaign finance law by companies that appear to have been utilized to hide the identity of $1 million contributors to Restore Our Future, a Super PAC operated by former Mitt Romney campaign staffers.  Today’s complaints come on the heels of a complaint filed last Friday by the Campaign Legal Center and Democracy 21 against another $1 million mystery donor to Restore Our Future, W Spann LLC.  Shortly after Friday’s filing, the true donor behind W Spann LLC came forward.

Today’s complaints to the FEC and letters to DOJ will ask the agencies to formally investigate the activities of the F8 LLC and Eli Publishing L.C. for possible violations of the ban on making contributions in the name of another and for failing to organize and register as a political committee.  The activities outlined in media reports paint a picture of companies used to hide the identities of the actual donors seeking to curry favor with a candidate running for the highest office in the land.

“The use of ‘straw companies’ to funnel money anonymously into Restore Our Future does not appear to have been limited to a single company, but seems to be a pattern that places additional urgency on the need for the FEC and DOJ to vigorously investigate these companies and to enforce the laws on the books before this problem becomes even more widespread,” said Paul S. Ryan, FEC Program Director at the Campaign Legal Center, which took the lead in drafting the FEC complaint and letter to the Justice Department.  “Existing laws must be enforced to give citizens a fighting chance of knowing who or what is spending millions of dollars in an attempt to influence their vote and to curry favor with elected officials.”

“The enforcement agencies need to send a clear message to donors that they need to put their name on the check if they’re going to be giving to Super PACs and I hope that reporters are taking a close look at filings by other Super PACs so that these types of abuses are smoked out,” said Ryan.  “The fact that Restore Our Future has been the recipient of all three mysterious $1 million contributions warrants exploration of the PAC’s knowledge of or involvement in this ‘straw company’ donation scheme.”

“There are now three $1 million donors who apparently hid their true identities from the American people when they provided huge contributions to Restore Our Future, the pro-Romney Super PAC,” according to Democracy 21 President Fred Wertheimer. “Both the secrecy and the size of the contributions to Restore our Future are extremely dangerous to the interests of the American people.  Secret and unlimited contributions in American politics invariably result in scandal and corruption. Mitt Romney needs to speak out loud and clear that he wants full transparency for all of the money being raised and spent to support his presidential campaign.”

“Mitt Romney also needs to act promptly against secrecy in his own campaign by disclosing the individual bundlers who are raising large amounts of money for his 2012 presidential campaign, as he was perfectly willing to do when he disclosed the bundlers for his 2008 presidential campaign,” Wertheimer said. “All of the 2012 presidential candidates should disclose the bundlers raising large amounts of money for them as presidential nominees Barack Obama and John McCain did in 2008, and as President Obama is doing for his 2012 presidential campaign,” according to Wertheimer.

To read the FEC complaints, click here and here.  To read the letters to the Department of Justice, click here and here.

The American Bar Association’s (ABA) House of Delegates yesterday passed a resolution urging the Congress to amend and strengthen the Lobbying Disclosure Act (LDA).  The resolution, which passed without opposition, urges a narrowing of the reporting threshold (currently 20%), requiring disclosure of “lobbying support” activities by strategists, pollsters, and “grass tops” firms paid as part of  lobbying campaigns, prohibiting fundraising by lobbyists for Members of Congress they lobby, and transferring  authority to enforce the LDA to a suitable administrative authority.

“This resolution urges Congress to bring the Lobbying Disclosure Act into line with the sort of lobbying that occurs today,” said Legal Center President Trevor Potter, who was also a co-chair of the ABA Task Force on Lobbying Regulation.   “These are common sense solutions to restore the faith of citizens in their elected officials by bringing the business of government out into the sunlight.  It is important to emphasize that these recommendations were initially proposed by a Task Force of lawyers, academics, lobbyists, and public interest representatives with a wide range of experiences and perspectives.”  

The Task Force on Lobbying Disclosure Reform was appointed by the ABA’s Administrative Law and Regulatory Practice Section to study the issue in 2010.  The Task force was co-chaired by Campaign Legal Center President Trevor Potter (a former Chair of the FEC and General Counsel to the McCain Presidential campaign) ; Harvard Law Professor Charles Fried (who was Solicitor General of the United States under President Reagan); Rebecca Gordon of the law firm of Perkins Coie; and Joseph Sandler of the Sandler, Reiff and Young law firm (and former General Counsel of the DNC),  and included a broad spectrum of academics and practitioners, including Legal Center Policy Director Meredith McGehee.   

The Task Force Report, “Lobbying Law in the Spotlight: Challenges and Proposed Improvements,” the product of strong consensus among the diverse group, was presented to the ABA’s Administrative Law Section in August 2011. The Administrative Law and Regulatory Practice Section then proposed its Lobbying Resolution to the ABA House of Delegates, which adopted it this week after incorporating proposals to clarify it from the ABA Tax Section and Individual Rights and Responsibilities Section.  The effect of ABA approval is that the organization can now push Congress to adopt these reforms.

To read the full ABA Resolution, click here. 

To read the Task Force Report from January 2011, click here.

Yesterday the Campaign Legal Center, together with Democracy 21, filed a complaint with the Federal Election Commission (FEC), and also sent the complaint to the Department of Justice (DOJ), urging investigation of a fly-by-night company called W Spann LLC, which was created in March, contributed $1 million to the Romney-supporting Super PAC Restore Our Future in April and then dissolved in July.

Today the anonymous million dollar donor behind W Spann LLC came forward.  The donor is Ed Conard, a former Bain Capital official with long ties to Mitt Romney.

“We are pleased to see that our complaint prompted this immediate disclosure by Mr. Conard,” said Campaign Legal Center attorney Paul S. Ryan.  “The FEC and DOJ will still have to determine whether the actions to date violated federal law and, if so, pursue appropriate penalties to deter such conduct in the future.”

“The Campaign Legal Center is prepared to vigorously seek legal redress against any similar schemes to hide the true sources of funding of political organizations active in the 2012 election,” Ryan continued.  “The American people should not have to put up with such schemes to evade disclosure of money in our elections.  Both donors and recipient committees, and the candidates they support, should be aware we will be seeking enforcement of the law in every case.”

The complaint filed by the Legal Center and Democracy 21 urged investigation into whether W Spann LLC and the mystery donor behind it violated a federal campaign finance law that prohibits making political contributions through a straw donor to evade disclosure.  The complaint further urged investigation into whether W Spann LLC violated the laws requiring a group with the major purpose of influencing federal elections to register with the FEC as a “political committee” and file disclosure reports. 

To read the FEC complaint, click here.  To read the letter to the Department of Justice, click here.

Today, the Campaign Legal Center, with Democracy 21, will urge the Federal Election Commission (FEC) and Department of Justice (DOJ) to investigate possible violations of campaign finance law by a company that appears to have been created for the purpose of funneling $1 million to a Super PAC operated by former Mitt Romney campaign staffers.

The complaint to the FEC and letter to DOJ ask the agencies to formally investigate the activities of the W Spann LLC for possible violations of the ban on making contributions in the name of another and for failing to organize and register as a political committee.  The activities outlined in media reports paint a picture of a corporation created for no other purpose than to hide the identity of the individual or individuals or corporations seeking to curry favor with a candidate seeking election to the highest office in the land.

“This case deserves a good hard look from the agencies charged with enforcing our nation’s election laws and if violations are found they must be prosecuted vigorously to deter such violations in the future – otherwise ‘straw companies’ will make a mockery of campaign finance disclosure and the specter of foreign campaign contributions will hang over the process,” said Paul S. Ryan, FEC Program Director at the Campaign Legal Center, which took the lead in drafting the FEC complaint and letter to the Justice Department.  “The case should serve as yet another wake up call for Congress to shore up our woefully inadequate disclosure laws in the wake of the Supreme Court’s Citizens United decision before still more scandals emerge, further undermining the country’s faith in representative democracy.”

“If the FEC remains unwilling to enforce the nation’s election laws, we hope the Department of Justice will take up the slack as it did with Pierce O’Donnell, a case resolved yesterday when O’Donnell agreed to serve six months in jail for making ‘straw donor’ contributions to the presidential campaign of John Edwards,” said Ryan.  The Campaign Legal Center and Democracy 21 participated as “friends of the court” in the O’Donnell lawsuit urging prosecution.

“This case involves a stark example of the secret money we can expect to see poured into the 2012 presidential and congressional races in the wake of theCitizens United decision,” said Democracy 21 President Fred Wertheimer.  “In this case, it appears that someone has gone to great lengths to evade the campaign finance disclosure laws in order to hide what they are doing from the American people.  This is unacceptable and potentially illegal conduct and we are calling for an investigation of possible campaign finance violations by the Federal Election Commission and Justice Department,” Wertheimer said.

“If the three Republican Commissioners on the six-member FEC, however, continue to keep blocking enforcement of the campaign finance laws, as they have consistently done, the American people face widespread blatant evasion, circumvention and violation of the campaign finance laws in the 2012 elections,” Wertheimer said.

To read the FEC complaint, click here.  To read the letter to the Department of Justice, click here.