FEC Fines Club for Growth $350,000, Drops Law Suit

Posted September 5, 2007 at 1:00pm

The Federal Election Commission on Wednesday reached a deal with the conservative anti-tax group Citizens Club for Growth, which would escape an ongoing lawsuit by paying a fine for violating campaign finance laws. The agreement adds yet another scalp to the FEC’s ongoing crackdown of outside political groups.

The group, previously known as the Club for Growth, would pay $350,000 in exchange for the FEC’s withdrawal of a lawsuit against the club that was filed in the U.S. District Court for the District of Columbia, which still must OK the deal. The suit alleged that from 2000 to 2004 the group, which at the time was not registered with the commission as a political committee, spent at least $1.28 million taking sides in federal races, mailing out fundraising pleas and taking in excessive campaign contributions.

Because the club made both more than $1,000 in expenditures and received more than $1,000 in contributions, it met the statutory definition of a political committee and was required to register and report with the FEC, provided that its major purpose “was to influence federal elections,” according to a statement Wednesday by the commission.

In February, former Rep. Pat Toomey (R-Pa.), the Club for Growth president, told club members the group was phasing out its 527 status, switching the bulk of its activities to a registered political action committee and a 501(c)(4), a section of the tax code used by social welfare organizations.

“I’ll spare you all the minute details here, but in a nutshell, when you first joined the old Club it was a ‘527’ organization,” Toomey wrote in a mass e-mail. “Such groups proved so effective at highlighting the harmful policies of Members of Congress and presidential candidates like John Kerry that the political class made it practically impossible to continue in that type of structure.”

— Matthew Murray