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Pelosi Facing Federal Probe of PAC Fundraising ^ | 11/15/02 | Jeff Johnson

Posted on 11/15/2002 8:02:48 PM PST by gubamyster

Capitol Hill ( - The first full day on the job for the first woman ever to lead her political party in the U.S. House of Representatives began under a cloud Friday over allegations of campaign fundraising violations by California Democrat Nancy Pelosi.

Pelosi, who voted in favor of the McCain-Feingold bill to change the nation's campaign finance laws, is the subject of a formal complaint with the Federal Elections Commission, and other election law experts claim the new House minority leader flat out broke the law in her pursuit of campaign cash for her fellow House Democrats.

It's also been insinuated that by raising large sums of cash and spreading it among the campaigns of dozens of her Democratic peers, Pelosi may have, in effect, bought the votes that elevated her to her status in the House.

PAC Woman Pelosi

Pelosi's reputation for bringing in cash is well documented.

In a report entitled "Buying Leadership: How Money Fueled Nancy Pelosi's Rise in the Democratic Ranks," the Center for Responsive Politics (CRP) described the incoming House Democratic leader as "one of the Democratic Party's most prolific fund-raisers, surpassing [Rep. Richard] Gephardt (D-Mo.) and virtually all House Republicans when it comes to raising money for and contributing to candidates for Congress."

During the 2002 election cycle, Pelosi made $1,037,000 in contributions to candidates, including $69,000 from her personal "candidate's committee," and $968,000 from one Political Action Committee, "PAC to the Future," according to the CRP.

That's nearly $200,000 more than the second largest congressional distributor of campaign cash, new House Majority Leader Tom Delay (R-Texas), and $400,000 dollars more that the nearest Democrat, incoming minority whip Steny Hoyer (D-Md.)

The CRP report, issued the day before Democrats elected Pelosi their leader in the House, noted that through Sept. 30, Pelosi's leadership PAC and campaign committee had contributed more than a half million dollars "to 69 current and incoming Democratic members of the House, the same individuals who will vote tomorrow on her bid for leadership."

Pelosi's Leadership PACs Spark FEC Complaint

The National Legal and Policy Center (NLPC), a non-profit corporation established in 1991, "to foster and promote ethics in government," filed a complaint with the Federal Election Commission alleging that Pelosi intentionally set out to violate both campaign fundraising and contribution limits.

"No Member of Congress has ever set up a second leadership political committee to evade contribution limits," explained NLPC Chairman Ken Boehm. "Representative Pelosi has been a strident supporter of campaign finance reform yet she's been caught violating the clearest and most basic law of all, the limits on contributions."

The NLPC complaint, filed less than two weeks before the November elections, alleges that Pelosi, who has operated "PAC to the Future" for several years, created a second organization, "Team Majority," in April of 2002 specifically to circumvent legal limits on the amount of money that PACs are allowed to receive from donors and contribute to candidates.

According to Federal Election Commission records, PAC to the Future contributed the $5,000 maximum amount allowed by law to 26 Democratic candidates. Team Majority then contributed an additional $127,500 to those same 26 candidates, mostly in $5,000 increments.

On the issue of fundraising, FEC records show that 16 donors gave the maximum annual contribution of $5,000 to both PAC to the Future and Team Majority. Five of those sixteen-paired contributions were recorded on the same day.

FEC rules state that two PACs are considered to be affiliated for the purpose of contribution limits "when they are established, financed, maintained or controlled by the same persons or organization," when one of the organizations plays an "active or significant role" in creating the other, or when the two PACs share "common or overlapping officers or employees."

NLPC noted that Pelosi is the organizer of both entities, and that former California Lt. Gov. Leo McCarthy serves as treasurer of both organizations.

Boehm cited a comment McCarthy made during an interview published in the Oct. 24 issue of "Roll Call," a Capitol Hill political newspaper. The publication described McCarthy as having acknowledged that, "the PACS are identical in all but name."

"The main reason for the creation of the second PAC, frankly, was to give twice as much hard dollars," he told the newspaper.

McCarthy also told the publication that Team Majority would cease operations, "if it's a problem." He insisted, however, that he had cleared the second group with an unnamed "FEC analyst" over the telephone.

"At this juncture, I'm counting on the FEC staff with whom I spoke and who gave me guidance on this," McCarthy reportedly stated. "That FEC staffer was the one who told me that many PACs have the same treasurer or share the same address."

In fact, Team Majority was shut down after NLPC's complaint was filed with the FEC.

"I want to remove any question or doubt in this matter so we will suspend activities in this PAC," McCarthy said in a written statement. "We do not want this to become a campaign issue for any candidate Team Majority has supported."

The PAC is reported to have asked 40 Democrats to return contributions prior to last Tuesday's elections. Twenty-four Democrats who received money from both PACs have reportedly returned the Team Majority contributions.

FEC Guidance Limited

Ron Harris, spokesman for the FEC, would not comment on the specific allegations, but said that the FEC's rules regarding requests for information over the telephone are clear.

"All we can do over the phone is refer people to the regulations," Harris explained. "As far as offering, or issuing, or telling someone over the phone what they should or shouldn't do, we just refer them to the regulations as they exist and if the regulations don't exist in particular areas ... then that's all the more reason for an advisory opinion."

The FEC issues an "advisory opinion" when an area of its regulations is unclear with regard to a specific allegation of wrongdoing.

"There are gray areas in all of the regulations that require advisory opinions," Harris continued. "Those are written. Those opinions come in. Our general counsel's office goes over them and makes recommendations about how they should be answered to the commissioners. Then the commissioners make the final decision on advisory opinions."

Questions of Legality Raised

Election law specialist Cleta Mitchell with the Washington, D.C., office of the Foley & Lardner law firm told that there would be no need for an advisory opinion had McCarthy looked at the FEC rules.

"This is a pretty simple, long-standing rule. Affiliated committees have one, single limit that prohibits doing what she was doing," said Mitchell, a former Democratic member of the Oklahoma legislature. "What Nancy Pelosi did is illegal."

Mitchell predicted that, because the rules on affiliated PACs are so clear, the FEC will dispose of the complaint quickly.

"All of the candidates who received an excessive contribution are going to have to give it back and probably pay a fine," she predicted, "if the FEC actually enforces the law, which I tend to think that they will do."

The process for dealing with complaints under FEC rules is heavily structured:

The commission staff has five days to determine if a complaint is "faulty." If not;

The respondent (person the complaint is against) has 15 days to reply to the charge(s);

The FEC general counsel then informs the commission whether or not there is preliminary "reason to believe" that a violation has occurred;

If the commissioners find "reason to believe," they order an investigation;

The respondent has an additional 15 days to reply after the general counsel's investigation is completed;

The commission reviews the report and response to determine if there is "probable cause" to believe that a violation occurred;

If so, the commission attempts "conciliation," a process to persuade the respondent to resolve the issue voluntarily;

If not agreement is reached on conciliation, the FEC files suit against the respondent in federal court.

Mitchell said she finds Pelosi's involvement in the allegedly illegal activity ironic. "What's interesting is that she supports all of these restrictions," Mitchell observed. "She just doesn't intend to abide by them apparently."

Calls Friday to Pelosi's congressional and leadership press offices were not returned.

E-mail a news tip to Jeff Johnson.

Send a Letter to the Editor about this article.

TOPICS: Crime/Corruption; News/Current Events; Politics/Elections
KEYWORDS: cfrlist; fundraising; nancypelosi; violations
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1 posted on 11/15/2002 8:02:48 PM PST by gubamyster
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To: gubamyster
"2PAC" Pelosi ... If she had principles, she would resign.
2 posted on 11/15/2002 8:07:14 PM PST by NormsRevenge
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To: gubamyster
Thanks for the update. Remember when :-) Pelosi's PAC Stirs Questions - On Drudge as Creative Nancy: Legality Of Pelosi's Double PAC Fundraising Questioned...

October 24, 2002
3 posted on 11/15/2002 8:18:06 PM PST by NormsRevenge
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To: gubamyster
And who is surprised at these revelations, isn't she a chip off the "old butt"(the Clintons)?
4 posted on 11/15/2002 8:19:56 PM PST by VOYAGER
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To: NormsRevenge
Let me get this straight. Pelosi has committed a "crime," but the only penalty is that the politicians who double-dipped from her two PACs have to return the money.

Surely the person who organizes and presides over a criminal conspiracy should bear the largest share of the guilt and should be prosecuted.

If Pelosi gets off scot-free, then it appears to me that the election laws are fundamentally biased toward the Democrats. Because if a Republican did something like this, he would be blasted by all the media and forced out of office. But if a Democrat does it, the media say nothing and, having gotten away with it once, they will simply be encouraged to do it again.

Note that this story is posted here on a conservative web site from CNS news, a small conservative news service. Very few voters will see it. Don't count on Dan Rather or Perky Katie to report it to their listeners.
5 posted on 11/15/2002 8:21:29 PM PST by Cicero
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To: Cicero
All PACs are equal...but some (Pelosi)PACs are more equal than others
6 posted on 11/15/2002 8:30:56 PM PST by spokeshave
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To: NormsRevenge
"2Pac" Pelosi. We have a winner!

That is one we have to spread around, she surely deserves
a nickname.

"2Pac" Pelosi, Gangsta Playa of the DNC.
7 posted on 11/15/2002 8:31:04 PM PST by tet68
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To: Cicero
Didn't the dems go after Tom Delay hard one year and wanted to bring him up on ethics charges (the media covered this heavily)over a PAC? Hmmm...let's see if the New York Times or Washington Post puts this on their front page first. Maybe Time magazine will investigate?
8 posted on 11/15/2002 8:36:10 PM PST by Reb Raider
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To: Cicero
Person accused of theft, to attorney, after non-guilty verdict comes in: Does this mean I don't have to give the money back?
9 posted on 11/15/2002 8:36:55 PM PST by breakem
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To: gubamyster
This is just too sweet, I know it gets better than this but this is good. Just when you think the Democrats can't possibly look any more un-American, they suprise yet again.
10 posted on 11/15/2002 8:44:04 PM PST by MissAmericanPie
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To: gubamyster
We knew this the first time her name was mentioned but no one in the media let it out.

Probably another dumb Dem move.

Most of the world never heard of Pelosi until a week ago, and now, I hope, the immediate connection to Dem corruption sets in

-------------------------------------------------------------------------------- To: kattracks

Isn't Pelosi the one whos started multiple PAC's (and got caught)?

17 posted on 11/09/2002 10:51 AM EST by mcenedo

11 posted on 11/15/2002 8:51:35 PM PST by mcenedo
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To: mcenedo
On Brit Hume yesterday, Mort Krondracke made the comment that "Nancy Pelosi is very good a raising money...some of it illegally." This could get interesting.
12 posted on 11/15/2002 8:54:03 PM PST by Wphile
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To: *CFR List; KQQL
13 posted on 11/15/2002 9:00:04 PM PST by Free the USA
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To: gubamyster
The Democrats will say that this is another example of Republicans over-reaching after winning what they think is a mandate. The Democrats will learn that the best time to push the limits of the law is right around an election: if they win then they control the outcome of any investigation, and if they lose they claim partisan witch-hunting by Republicans.

Watch, and learn.


14 posted on 11/15/2002 9:00:33 PM PST by Political Junkie Too
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To: NormsRevenge
"2PAC" Pelosi ... If she had principles, she would resign.

Excuse me, but she's a Democrat - Laws don't apply to her....

15 posted on 11/15/2002 9:12:58 PM PST by Wil H
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To: gubamyster
It's a 'Right Wing Conspiracy Fascist' plot!
16 posted on 11/15/2002 9:13:01 PM PST by Exit148
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To: Wphile
Should be interesting to watch the next two years and the obvious connection to PAC money. Everyone will be watching her and what she does....which means more news time...but very negative news.
17 posted on 11/15/2002 9:31:39 PM PST by pepsionice
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To: Liz; Howlin; Mudboy Slim
JUST when things were goin' good...
18 posted on 11/15/2002 10:37:01 PM PST by Libloather
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To: Libloather
To Democrats, political wrongdoing is a badge of (barf) honor. Just as long as they get elected, doesn't matter how. Babs Strident and the gang will rally round Nancy and pony up even more cash now that Pelosi's in a position of power.
19 posted on 11/15/2002 11:12:56 PM PST by Liz
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To: Libloather; Liz
With any luck, some of that money came from Hillary!
20 posted on 11/16/2002 5:20:11 AM PST by Howlin
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