.{~GrNDA DOCUMENT N0.13-JI-t--i 

FEDERAL ELECTION COMMISSION 

Washington, DC 20463 

June 26,2013 

MEMORANDUM 

TO: The Commission Secretary 

FROM: Anthony Herman (\ I \ 

General Counsel - ) W 

SUBJECT: Relationship between the FEC and DOJ 

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AGENDA ITEM 

For Meeting of ~ .. bl1- 13 

SUBMITTED LATE 

Attached is the August 7, 2008 email from Ann Marie Terzaken to the 

Commissioner regarding the relationship between the FEC and DOJ. The Commission 

has requested the document be placed on the agenda for June 27, 2013. 

Attachment 
,;fAll ~ 'If Fw: Relationship between the FEC and DOJ 

From 

To: 

Cc: 

D;;,te: 

SLbject: 

Ann Marie Terzaken/FEC/US 

Commissioners Office, 

Thomasenia Duncan/FEC/US@FEC, Christopher Hughey/FEC/US@FEC, Kathleen 

Guith/FEC/US@FEC, Gregory Baker/FEC/US@FEC 

08!0712008 02:26PM 

Relationship between the FEC and DOJ 

In connection with the first round of Enforcement recommendations circulated for Commission 

consideration, which included matters with parallel criminal proceedings, questions have been asked 

about our relationship with the Department of Justice, including how and when we work with one another 

on matters within our overlapping jurisdictions. We thought it might be helpful to briefly summarize some 

of the historical background and key points about our relationship with DOJ. We understand that our 

relationship with DOJ may be discussed at the next Executive Session in the context of specific matters, 

and we, of course, remain available to discuss this topic at any time. 

As a preliminary matter, I should note that the FECA violations within DOJ's jurisdiction are a small subset 

of the violations within the jurisdiction of the Commission. Whereas the Commission has exclusive civil 

jurisdiction over all FECA violations, DOJ only has criminal jurisdiction over knowing and willful FECA 

violations. DOJ's jurisdiction in this regard is not exclusive, however. Knowing and willful violations can 

be addressed both civilly by the FEC and criminally by DOJ. 

The cases we most often see with criminal and civil overlap are (1) Section 441f reimbursement schemes, 

(2) embezzlement schemes, (3) Section 441 h fraudulent representation/solicitation schemes, and (4) 

intentional misreporting to the FEC. Since Congress enhanced the criminal and civil penalties for 

knowing and willful reimbursement schemes in its enactment of BCRA, 441f violations have been DOJ's 

top priority in terms of criminal prosecution of FECA violations. 

With respect to our relationship with DOJ, the FECA is largely silent. It gives the Commission the 

authority to refer knowing and willful violations of the FECA to DOJ after a finding of probable cause, but 

these referrals are not required. The statute merely states that the Commission "may" refer such matters. 

See2 U.S.C. § 437g(a)(5)(C). 

According to our records, the Commission has made four referrals to DOJ since 2001 pursuant to this 

provision. After a referral has been made, the statute requires that DOJ send the Commission status 

reports within the first 60 days and then 30 days thereafter until final disposition. (In practice, we do not 

receive these status reports from DOJ with any consistency.) The statute also gives the Commission the 

authority to report non-FECA crimes to the appropriate authorities. See 2 U.S.C. § 437d(a)(9). We most 

often use this provision to report apparent violations of 18 U.S.C. § 1001 (false statements) to DOJ and 

sometim1~s apparent violations of the Internal Revenue Code to the I.R.S. 

Following the enactment of the FECA, the Commission and DOJ entered into a Memorandum of 

Understanding (MOU). This brief agreement, which dates back to 1977, acknowledges the Commission's 

exclusive jurisdiction in the civil enforcement of the FECA, establishes a framework for the two agencies 

with respect to the discharge of their respective responsibilities, and outlines circumstances warranting 

referral of matters between the two agencies. The MOU does not, however, dictate the nature of the 

working relationship between the agencies in each matter that has civil and criminal implications and has, 

therefore, become largely outdated and irrelevant. A dialogue between the two agencies about 

negotiating a new MOU that would better explain each agency's responsibilities and facilitate more 

cooperation began in the latter part of 2003 and has had a number of starts and stops since then. Most 

recently, we sent a revised draft MOU to DOJ in the Spring of 2006 and have not received a substantive 
response. 

In the 1977 MOU, the Commission and DOJ acknowledged that not all knowing and willful violations may 

be proper subjects for criminal prosecution and agreed that only knowing and willful violations "which are 

significant and substantial and which may be described as aggravated in the intent in which they were 

committed, or in the monetary amount involved" should be referred to DOJ. In those cases, the MOU 

contemplates that the Commission will complete its investigation and find probable cause before referring 

the matter to DOJ and will attempt to do so expeditiously. The 1977 MOU also states that if DOJ obtains 

information indicating a probable violation of the FECA, it shall apprise the Commission "at the earliest 

opportun1ty" and refer all knowing and willful violations that it does not deem significant and substantial to 

the Commission for civil enforcement. 

The Commission has not established specific internal thresholds for referring knowing and willful 

violations to DOJ. When deciding whether to recommend that the Commission refer such violations to 

DOJ, OGC has historically considered a number of factors, including the nature and extent of the 

violations, whether DOJ or another agency has already pursued or is pursuing the same violations or 

players, and whether the statute of limitations on the criminal violations has passed or is imminent 

Historically, very few referrals have been made to DOJ in large part because few cases progress to the 

probable cause stage, most of the ones that do reach the probable cause stage do not involve knowing 

and willful violations, and the few knowing and willful violations that do reach the probable cause 

often have criminal that are a or have been concluded. 

While the statute only contemplates formal referrals after a finding of probable cause, there is nothing 

preventing the Commission and DOJ from collaborating with one another on parallel proceedings at any 

stage in the enforcement process, and, at times, we have reached out to DOJ to discuss cases of mutual 

interest or to determine whether they have a parallel proceeding relating to a respondent in one of our 

cases. Our collaboration and information sharing with DOJ has been an evolving process. For a long 

time, our two agencies did not work together very often on cases within our overlapping jurisdictions. On 

our end, this was due in large part to the fact that DOJ historically took the position that the Commission 

should drop or hold any matter in abeyance whenever so requested by DOJ. On DOJ's end, 

I 

disincentives included concern that we might interfere with their investigations and the fact that 

conciliation agreements reached between the Commission and a respondent may, under FECA, be 

introduced in a criminal proceeding as evidence of a lack of knowledge or intent to commit the violation, 

and the fact that FECA requires a court to take a conciliation agreement with the FEC into account when 

determining the appropriate criminal sentence. See 2 U.S.C. § 437g(d)(2) and (3). DOJ has also cited to 

the grand jury secrecy requirements ("Rule 6"), and its interpretation of ethical rules that DOJ cannot raise 

the possibility of a global settlement with a defendant and, instead, the subject of a global settlement 

must originate from the defendant. 

In at least the last two years, there has been an increase in communication and cooperation between our 

two agencies, though additional improvement in these areas would be helpful. The players we usually 

deal with of the Criminal 

Divi 

attorneys in the Public Integrity Section 

as well as about 200 Assistant United States Attorneys who serve as "District Election Officers" in the 93 

federal judicial districts across the country. 

As with formal referrals after a finding of probable cause, the Commission has not established specific 

internal thresholds or guidelines for determining whether and when we should reach out to DOJ at early 

stages in the enforcement process. In addition, the issue of early notice to DOJ had been a big part of the 

MOU renegotiations, with no resolution to date. Nevertheless, we have consulted with DOJ with much 

more frequency in the last couple years, and often contact them before we circulate to the Commission 

our First General Counsel's Reports in cases potentially involving knowing and willful violations to 

determine whether DOJ has a parallel criminal matter. When they do, we attempt to cooperate with them. 
The level of cooperation ultimately achieved, however, often depends upon the trial attorney handling the 

criminal matter and the extent to which that person takes an open approach with us. It also depends upon 

the specific circumstances in each case, including the priority that DOJ places on the matter, the extent to 

which the FBI is actively involved, the stage or progress of DOJ's case as compared to the Commission's, 

whether a grand jury has been impaneled, and any other special circumstance that may be present. As a 

result, a one-size-fits-all approach to determine how much cooperation should be achieved, and when, 

has not been feasible; exercising a great deal of flexibility is usually necessary. 

When we believe we have a case with knowing and willful violations, the factors we consider when 

determining whether to contact DOJ before a findi of include violations are 

of the type DOJ traditionally pursues and the 

amount in violation. Of course, if we proceeding 

underway, we will contact them. If we have information that a parallel proceeding is being handled by a 

US Attorney's Office instead of Public Integrity, we may contact the USAO directly. If we don't have 

information that a matter is already being handled by DOJ or a USAO, we will look to see whether the 

violations are currently being prosecuted at the state level. If they are, I don't believe we have routinely 

consulted DOJ. We work instead with the state prosecutor's office to the extent possible and appropriate. 

Again, this has been an evolving process, and we contact DOJ much more routinely now than we did just 

3 to 4 years ago. 

One final note is that while the Commission and DOJ sometimes 

not ,_,.,,...,1'\loto 

nr"'"'"'"'• reasons, not use e statute 

see 2 U.S.C. § 437g(d)(2) and (3), we have always maintained 

that DOJ involvement should not preclude parallel civil enforcement Another reason for this view is that 

sometimes DOJ holds a matter open indefinitely because they have an interest in the case but they do not 

pursue it aggressively because it is either not a high priority case for them or they don't have the present 

resources to pursue the matter, or both. In these cases, we have taken the lead in building the evidence, 

sometimes finding respondents or witnesses that the FBI had not located for DOJ. In cases that are high 

priorities for DOJ, however, we have cooperated with them to ensure that we do not frustrate their 

prosecutions, and, in appropriate cases, we have held our investigations in abeyance pending the 

criminal matter in exchange for DOJ's promise to share evidence once the criminal matter has concluded. 

See, e.g., MUR 5818 (Fieger) and MUR 5903 (PBS&J). 

I hope this information is helpful. Cooperation in carrying out our respective responsibilities benefits both 

agencies. It saves resources, avoids unnecessary duplication, and generally helps us enforce the law in 

a cohesive fashion. The results can be very positive, particularly when they lead to evidence sharing and, 

when possible, global settlement agreements.