Who's afraid of the F.E.C.? - Federal Election Commission

Washington Monthly, March, 1986 by Colleen O'Connor

WHO'S AFRAID OF THE F.E.C.?

In 1982, Mississippi's second district hosted one of the closest congressional races in the country. The Democratic candidate and odds-on favorite to win was Robert Clark, a state representative who had been the first black since Reconstruction to win a Mississippi Democratic congressional primary. His Republican opponent was Webb Franklin, a white circuit court judge and former Democrat. When Franklin scored an upset and won by 2,914 votes, many were taken by surprise. And when the Federal Election Commission (FEC) announced three years later that Franklin's campaign committee had broken campaign laws by accepting more than $60,000 in illegal contributions, many who had been surprised felt they had found the secret to Franklin's narrow triumph.

The illegal funds came in a last-minute avalanche. During the period starting five days before the election and ending two weeks after, the Franklin campaign obtained the money through a series of bank overdrafts from the Bank of Greenwood, a branch of the First National Bank of Jackson. Because the bank had not formally extended overdraft protection to the campaign account, the FEC considered the overdrafts to be campaign contributions--which banks are prohibited from making under the Federal Election Campaign Act of 1971. In addition, the FEC cited three men, one of whom was William B. Crump III, now Franklin's chief congressional aide, for endorsing a $30,000 loan to cover Franklin's overdrafts. Under the law, endorsing a bank loan is considered a campaign contribution. All three already had contributed to the legal limit, so the endorsement amounted to an excess contribution of $10,000 from each.

The money clearly had a critical effect on the election. At a time when campaign bank books are usually looking anemic, Franklin had money for a last-minute media assault and, according to forms filed with the FEC, for election day transportation, a key element for turning out black voters, especially in rural areas, where they often have no way to get to polling places. (A large percentage of the voters in the second district are black.) There were also a number of donations to black churches made the day after the election; candidates frequently pledge contributions to black churches so the preacher will lend support or at least hold his peace. According to Fred Slabach, executive director of the Mississippi Democratic party and a volunteer on the Clark campaign, the money was decisive. "If we had had an extra $30,000 in 1982 there is no doubt in my mind that it would have made a difference,' he says. "During the last three or four weeks, Robert Clark was scratching for money.'

But running afoul of the FEC proved to be a painless affair for Franklin. His campaign committee was penalized $7,500 and the Bank of Greenwood $2,000. "Franklin basically got off with a slap on the wrist,' says Slabach. "If $30,000 in illegal contributions will get me elected, why not just take the risk and pay the $7,500 later? What's the deterrent?'

Pay the man the $5

If anything, the FEC proved fiercer in its handling of the Franklin case than it has in most others. A look at more than 300 cases on file reveals an organization that is somewhat less than intimidating.

After a 1978 campaign in Alabama, the Walter Flowers for U.S. Senate Committee paid a $1,500 penalty for receiving almost $140,000 in illegal contributions. Most of that money came in the form of overdrafts, but $35,000 of it was a loan from Flowers's brother. (Loans from anyone, including blood relatives, are considered contributions, according to the Federal Campaign Act.) Calculated on the entire sum, the fine is equivalent to a loan at about 1 percent. You'd have a hard time getting that rate at your local bank.

A whopping $200 penalty--less than a round-trip fare from Washington to Kennebunkport --was assessed to the George Bush for President Committee for violations that included failure to report as campaign funds bank accounts in 37 states during the 1980 presidential campaign and for accepting $20,195 in illegal contributions during that campaign.

A $500 penalty was paid by the Republican National Committee for receiving $33,933.23 in corporate contributions, which are prohibited, and for spending more than the allowed limit of $10,000 on the campaign of a candidate for Congress in Michigan.

A $4,000 penalty was paid by Senator Edward Kennedy's presidential campaign committee for receiving excess contributions totaling $75,092 during the 1980 campaign and for failing to report a $400 contribution from a labor union and a $1,500 loan from an Arizona bank.

A $4,000 penalty was paid by the 1980 Reagan for President (RFP) Committee for receiving $194,056 in excess contributions from the Citizens for the Republic (CFTR), Reagan's PAC. (CFTR was hit for a stiff $1,000.) In a separate case, RFP was fined $9,500 for accepting $187,349.94 in illegal contributions. So in sum, RFP had the use of $381,405.94 for the low, low price of $13,500. Equally damaging to the Reagan effort was that the first penalty wasn't assessed until three years after the election and the second not until four years after.