Violators Will Be Prosecuted

Campaign Scofflaws May Face Prison

Posted January 10, 2003 at 6:29pm

The sound of a clanging prison cell door came closer to becoming a harsh reality for anyone involved with illegal campaign contributions under tough sentencing guidelines adopted with little fanfare last week by a federal panel.

In an emergency meeting of the U.S. Sentencing Commission, the five-member panel unanimously voted to dramatically stiffen the penalties for violating the new Bipartisan Campaign Reform Act, making it more likely that donors, campaign officials and even candidates could face prison terms for criminal violations of the law.

Under the criminal provisions of the new law, the Federal Election Commission will have less discretion to enforce the statute under civil proceedings. And the sentencing guidelines give criminal prosecutors a formidable tool — the threat of incarceration — that can be used to force compliance with the law’s restrictions on contributions and other campaign activities.

While unheralded, the Sentencing Commission’s action marked a milestone in the enforcement of campaign finance laws and regulations. In the post-Watergate era, the vast majority of cases have been handled under civil procedures that critics decried as toothless and ineffective. Now, say attorneys from the political defense bar, the pendulum has swung all the way to the complete criminalization of political transgressions and may wind up ensnaring some unsuspecting participants in the electoral system.

“I’m simply telling my clients that the world has changed and the risks for proceeding right now with normal fundraising are higher than they were before. The consequences are more severe,” said Bob Bauer, the head of the political law group at Perkins Coie who counts dozens of top elected Democrats as clients.

“This is a statute that mandates criminal enforcement for certain kinds of violations. So, you need to take into account that people who have to make decisions now about what is legal and not legal are facing criminal prosecution under this statute in a way that they never have before,” Bauer said. “It’s going to influence decisions people make about certain communications and decisions about advertisements that they put on the air.”

Attorneys on the other side of the political spectrum agreed.

“We are really criminalizing all types of political activity,” said Cleta Mitchell, an attorney with Foley & Lardner, who noted that many of the cases typically handled under civil procedures by the FEC involve amounts that would automatically trigger prison terms under the new guidelines. “And Congress is having a collective out -of-body experience if they really think this isn’t going to affect them. It’s going to come back to hit them personally and not just somebody else.”

Still, proving criminal violations of campaign finance law will mean convincing a jury that the offender acted intentionally to evade the law. Those standards are often difficult to prove. But the terms of the law apply broadly to anyone involved in the chain of events connected to an illegal contribution. That includes the candidates themselves if it can be demonstrated that they knowingly participated in an illegal scheme.

For the first time ever, judges will be able to turn to a separate section of the sentencing guidelines reserved for violations of campaign finance law when deciding what penalties to impose on offenders. And aggressive prosecutors will have another tool available to convince potential targets of an investigation that cooperating may be more beneficial than fighting.

Judges may begin using the guidelines on Jan. 25, but there is little likelihood of a quick test case, since the new campaign finance law went into effect just two months ago and the prosecutorial pipeline hasn’t started to flow yet.

But the severity of the penalties may influence the judges who will ultimately decide the constitutionality of the law’s ban on soft money and restrictions on political advertising.

“When you insist on minimum jail time for a violation it means that an ambiguous or over-broad statute is more likely to be declared unconstitutional,” said Jan Baran, an attorney who argued against the law before a special three-judge panel last month. “It crystallizes the First Amendment issue.”

The commission, an independent judicial branch agency controlled by Democratic appointees, may still revisit the guidelines at its next meeting in April. But the panel largely adopted the recommendations pushed by the Justice Department, which has made the prosecution of public corruption cases a priority.

The commission’s action “has been a great shock to many of the usual campaign finance lawyers,” said Trevor Potter, an attorney with Caplin & Drysdale who worked closely with the architects of the McCain-Feingold legislation. “Those numbers really put some teeth into the campaign finance law.

[IMGCAP(1)] “For those that are used to believing that the Federal Election Commission isn’t going to do anything and that the Justice Department doesn’t take these cases seriously, there is now a change in the equation,” Potter said.

The guidelines adopted by the commission would set a “base offense level” for a variety of violations. The offenses include making or receiving illegal contributions; reporting violations; and fraudulent solicitation of campaign funds. Members of Congress and other senior elected officials could also face jail time for soliciting or receiving a donation on federal property.

The commission set the “base level” for these offenses at “8,” which under the sentencing schedule translates into an incarceration period of zero to six months. But any number higher than 8 is likely going to guarantee a prison term

The guidelines ensure tough sentences by assigning point levels for various factors. For example, an illegal campaign contribution of more than $5,000 automatically adds 2 points on to the base level, bringing the total points to 10. With a level of 10, the judge must issue a sentence of between six months and a year. And the greater the amount of money involved, the higher the number of points and, ultimately, prison time.

Any offenses scored at 9 or higher must involve some prison time under the mandatory sentencing rules that judges must follow. Additional points can be added if the contribution came from a a foreign government or if the contribution came about through intimidation or coercion. Those circumstances would each add four points to the base level.

The commission decided to create a new category for campaign finance cases to distinguish them from other types of corruption offenses, such as fraud and bribery.

“The Commission believes that pre-guidelines sentencing practice did not adequately reflect the seriousness of public corruption offenses. Therefore, these guidelines provide for sentences that are considerably higher than average pre-guidelines practice,” according to the panel.

Legal experts predicted that conduit-type cases involving “straw” donors may be the first area to see the effect of the changes. Previously, prosecutors didn’t even bother bringing charges under campaign law for schemes involving straw donors and instead turned to other, tougher statutes, such as the law making it a crime to file false statements with the government.

Many defense attorneys have little doubt that prosecutors will aggressively employ the new penalties and guidelines in pursuing corruption cases. And the Sentencing Commission’s action has put a spotlight on the new ability.

“It criminalizes a law that has typically not been treated as a criminal law. And to the extent it has been treated as a criminal law, it clearly has not involved sentences of incarceration. But these guidelines are clearly headed in that direction,” said Kenneth Gross, an attorney with Skadden, Arps, Slate, Meagher & Flom.

“Prosecutors are going to be looking for abusers, and they are going to want to come out of the box looking for a few scalps,” Gross said.

But Potter cautioned against some of the more dire predictions. He noted that many matters will still be handled under civil procedures by the FEC and that criminal wrongdoing is often tough to prove.

“I don’t think it means that candidates are going to be unknowingly drawn into some sort of grey area that suddenly results in jail sentences,” said Potter. “But for any of the people involved, whether it’s a campaign worker, treasurer, or candidate, who sets out to do something they know is illegal but they think they can do without getting caught, this raises the stakes.”