After Long Fight, Triad Files FEC Report

Posted October 31, 2005 at 6:32pm

After nine long years of legal battles, Triad Management Services and Carolyn Malenick have finally filed a report with the Federal Election Commission regarding Triad’s fundraising activities between 1996 and 2000.

But while Triad disclosed that it raised $3.86 million during that period and spent $3.875 million, according to documents first reported by PoliticalMoneyLine, Triad and former head Malenick did not disclose who the donors were.

The 300-plus page filing did not break out any details on who gave to Triad or why. No one signed the document on behalf of Triad. Instead, this response was entered into the area on the document where the treasurer would normally sign: “None. Court Did Not Clarify Status of Perjury for This Document As There Was Not A Treasurer For a PAC During Time Period.”

FEC officials declined to comment on whether the report violated a partial summary judgment that the agency won against Triad and Malenick last year. That agreement was finalized in July, and Malenick had until Oct. 26 to file a disclosure report for Triad with the FEC. Triad is now classified as a political action committee.

Malenick, who vehemently denied any wrongdoing when the FEC first start investigating her company in the late 1990s, remained as defiant as ever during an interview on Monday. Malenick said that if the FEC needed more information on donors, it would have to allow her more time to file her report or provide her with help in assembling Triad’s records. “I am relieved it’s over,” said Malenick. “I hope I will be able to get back to work again.”

Malenick said that disbursement records included in Triad’s filing demonstrate that Triad was not really a PAC, despite the FEC’s contention to the contrary, since no funds were ever given by the company itself to any national or state party, any affiliated groups, or any candidate or committee.

Instead, Triad was a marketing firm designed to assist well-heeled donors in figuring out who to give money to, whether a political cause or charity, much like a stockbroker advises clients about financial investments.

But Malenick’s activities came under considerable scrutiny during the Congressional investigations of campaign finance abuses following the 1996 presidential campaign, with Democrats pointing to her operation as evidence of Republican misdeeds, and the FEC spent years pursuing a legal case against her. Malenick refused to enter into a conciliation agreement with the FEC during that time because she felt that she had done nothing wrong.

According to Triad’s FEC recent filing, there were nine donations to Triad of more than $100,000 and one contribution of $300,000. Triad, in turn, sent nearly $506,000 to Citizens for the Republic Education Fund, which paid for issue ads in several federal campaigns.

Triad also forwarded 50 personal checks worth $43,000, and another 180 checks worth $142,500, to federal candidates or campaign committees, which helped make it a PAC in the eyes of the FEC.

Robert Cone, one of the founders of Graco Children’s Products, gave approximately $465,000 to Triad in 1996 alone. Cone said in a deposition in the case that Triad’s goal was “to get major donors involved so that the ideally conservative candidates could be elected” in order to enact a conservative legislative agenda. The FEC ruled that Cone’s transactions with Triad were in fact contributions to a PAC.

Cracker Barrel restaurants and Koch Industries also gave to Triad, according to court documents, although how much is still unclear.

The FEC began investigating Triad in 1997 following a complaint that alleged the organization was raising funds and then spending them on political campaigns in violation of the federal election code.

Malenick, who worked for the 1994 Senate campaign of Oliver North, had set up Triad the previous year as a for-profit clearinghouse of sorts for political donations, and it also ran issue ads through nonprofit affiliates. Triad’s goals in the 1996 election cycle included the re-election of freshman House Republican lawmakers, increasing the House GOP majority by 30 and boosting the Senate to a filibuster-proof 60 Republican seats.

By 1998, the FEC had concluded that Triad had violated federal campaign laws by failing to register as a federal political committee, which would have required the group to file detailed disclosure requirements with the agency.

FEC lawyers originally suggested that a $4.5 million civil penalty be levied against Triad and Malenick, and then asked for $200,000, although in the end the FEC settled for $5,000 in $100 payments over 50 months.