FEC Fines Ferguson $210K for Loan

Posted June 13, 2003 at 6:04pm

Rep. Mike Ferguson (R-N.J.) will pay the Federal Election Commission a $210,000 fine stemming from an illegal loan his campaign received from his parents in 2000.

The civil penalty, announced Friday, is the sixth largest paid to the FEC since 1980. Ferguson will pay it out of his campaign account, which showed $278,000 in the bank at the end of March.

Ferguson called the ruling “inexplicable,” noting that election lawyer James Bopp had advised him that the loan was legal.

“We sought the advice of counsel and followed the advice of counsel,” Ferguson said.

He also pointed out that two commissioners — Bradley Smith and Michael Toner — filed a “statement of reason” opposing the FEC decision; the two men said the “penalty was grossly disproportionate to the offense.”

The fine was approved by a vote of 4-to-2.

The settlement between the New Jersey Congressman and the FEC ends two and a half years of questions surrounding a $525,000 loan Ferguson made during his open-seat race against then-Fanwood Mayor Maryanne Connelly.

In that contest, one of a handful of seats targeted by both national parties, Ferguson loaned himself a total of $760,000, roughly one-third of the $2.3 million he spent on the race. Connelly spent $1.8 million.

The bulk of that personal loan came from a trust established by Ferguson’s parents for each of their four children. In affidavits filed for the FEC case, Ferguson’s father explained that he and his wife had created the trusts after bouts with cancer. Shortly after the funds were transferred to the trust, Ferguson loaned a portion of them to his campaign. Under FEC law, a candidate can contribute unlimited personal sums to his or her campaign.

The FEC found that the parents’ gift constituted an illegal donation, as individual contributors are allowed to give only $1,000 per election to a candidate. The commission rejected Ferguson’s argument that his parents had not transferred the money to be spent on his campaign, but added that there appeared to be no intent to break the law by either party.

During the 2000 race, Connelly attempted to make an issue of the loan, but failed to drive the point home, losing 52 percent to 46 percent.

After the 2001 redistricting shored up Ferguson’s 7th district, he won a much more easy second term, taking 58 percent last year.

Democrats on Friday were quick to pounce on Ferguson’s misdeed.

“Clearly Mike Ferguson’s problems extend well beyond getting into trouble in college bars in Georgetown,” said Democratic Congressional Campaign Committee spokesman Greg Speed. “This is a major fine for a serious violation of campaign law.”

In April, The Washington Post reported that Ferguson had given his Congressional Member pin to a university undergraduate in a Georgetown bar, and the undergraduate accused the Congressman of groping her. Ferguson has denied the Post’s version of events.

Amid the controversy swirling around Ferguson, a potential Democrat candidate has emerged. Lt. Col. Steve Brozak (D), who has just returned from the Iraq, is interested in the race, according to Democratic sources. Brozak lives in Westfield, N.J., and is president of a securities firm.

Ferguson said the recent incidents would not impact him politically.

“If Democrats want to make a campaign issue out of my parents battling cancer and being generous to their kids, and a candidate for office taking every step he could to follow the rules then I say ‘bring it on,’” he said.