UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

_______________________________________ 

 ) 

FEDERAL ELECTION COMMISSION, ) 

 ) Civ. No. 12-958 (ABJ) 

 Plaintiff, ) 

 ) 

 v. ) 

 ) REPLY IN SUPPORT OF 

CRAIG FOR U.S. SENATE, et al., ) SUMMARY JUDGMENT 

 ) 

 Defendants. ) 

_______________________________________) 

PLAINTIFF FEDERAL ELECTION COMMISSION’S REPLY MEMORANDUM 

IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT 

Lisa J. Stevenson 

Deputy General Counsel – Law 

Kevin Deeley 

Acting Associate General Counsel 

Harry J. Summers 

Assistant General Counsel 

Robert W. Bonham III 

Senior Attorney 

Kevin P. Hancock 

Attorney 

COUNSEL FOR PLAINTIFF 

FEDERAL ELECTION COMMISSION 

999 E Street, N.W. 

Washington, D.C. 20463 

January 10, 2014 (202) 694-1650 

 

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TABLE OF CONTENTS 

I. THERE ARE NO DISPUTED MATERIAL FACTS PRECLUDING 

SUMMARY JUDGMENT ............................................................................................2 

A. Defendants Have Admitted All of the Complaint’s Factual 

 Allegations and Thus Violated the Personal-Use Ban Under 

 the Court’s Preliminary Ruling ..........................................................................2 

 

B. Defendants’ Purported Facts Are Immaterial ....................................................3 

C. No FEC Advisory Opinion Shields Defendants from Sanctions 

for Their Personal-Use Violations .....................................................................4 

1. The Advisory Opinions Defendants Cite Are Materially 

Distinguishable from Their Personal Use of Campaign Funds .............4 

2. Defendants Failed to Rely Upon Any Advisory Opinions ....................6 

3. The Miller Advisory Opinion Does Not Help Defendants ....................9 

 D. The Amount of Campaign Funds Defendants Spent to Attempt to 

 Withdraw Craig’s Guilty Plea Was Admitted in Their Answer and 

 Was at Least $216,984 ....................................................................................10 

II. THE COURT SHOULD ORDER THE FEC’S REQUESTED REMEDIES .............12 

A. Defendants Do Not Deny That Craig Will Be Unjustly Enriched 

Unless He Disgorges the Campaign Funds He Used to Try to 

Withdraw His Guilty Plea ................................................................................12 

B. A Substantial Civil Penalty Is Necessary in This Case ....................................14 

1. Contributors to the Craig Committee Were Injured ............................14 

2. Defendants’ Violations Undermined the Public’s Confidence 

in Government and the Campaign Finance System .............................15 

3. Craig Profited from Defendants’ Violations ........................................16 

4. Defendants Should Face Punishment for Their Serious Violations .....17 

5. Future Personal-Use Violations Should Be Deterred, Particularly 

Since Billions of Dollars Are Contributed to Federal Candidates .......18 

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6. The Authority of the Commission Should be Vindicated and 

Pre-Litigation Settlement Encouraged .................................................20 

7. Defendants’ Purported Good Faith Does Not Warrant Penalties 

Below $70,000 for Each Defendant .....................................................20 

C. Defendants Have Confirmed That Craig Is Able to Disgorge the 

Converted Funds and Pay an Appropriate Civil Penalty .................................23 

D. This Court Should Issue a Declaration and a Permanent Injunction ...............25 

III. CONCLUSION ............................................................................................................25 

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1

In March 2013, this Court held that plaintiff Federal Election Commission (“FEC” or 

“Commission”) had successfully stated a claim that former Senator Larry Craig and his 

campaign committee, Craig for U.S. Senate (“Craig Committee”), violated the Federal Election 

Campaign Act’s (“FECA”) ban on converting campaign funds to personal use, 2 U.S.C. 

§ 439a(b). FEC v. Craig for U.S. Senate, 933 F. Supp. 2d 111 (D.D.C. 2013). Since then, 

defendants have admitted the facts of the Complaint, and now, in response to the Commission’s 

motion for summary judgment, fail to controvert any of the Commission’s proposed material 

facts. No FEC advisory opinion shields defendants from liability for their violations. Thus, the 

Court should hold that they violated section 439a(b), enter summary judgment for the 

Commission, and impose appropriate civil remedies, as the Commission requests. 

 Defendants have admitted that they spent at least $216,984 in Craig Committee funds in 

an effort to withdraw Craig’s guilty plea in Minnesota. Craig should be required to disgorge that 

amount, since otherwise he would profit from his violation. Craig and the Craig Committee 

should also each pay a $70,000 civil penalty, which is less than one third of what FECA 

authorizes for their violations. These reasonable penalties would effectively punish defendants’ 

violations, which injured their contributors and the public, and it would deter future personal use 

of campaign funds. These penalties would also reflect defendants’ lack of substantial good faith. 

Defendants ignored admonitory language in FEC guidance indicating their spending would be 

illegal, and they now admit that they did not ask for their own advisory opinion because they 

were concerned the Commission might say no. Instead, defendants spent the campaign funds, 

and they continued even after the Senate Ethics Committee warned them they were likely 

violating FECA. Defendants confirm in their opposition that Craig has the financial ability to 

disgorge his profits and pay the requested civil penalty. He should be ordered to do so. 

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I. THERE ARE NO DISPUTED MATERIAL FACTS PRECLUDING SUMMARY 

JUDGMENT 

A. Defendants Have Admitted All of the Complaint’s Factual Allegations and 

Thus Violated the Personal-Use Ban Under the Court’s Preliminary Ruling 

 

 This Court’s ruling denying defendants’ motion to dismiss addressed whether they had 

violated 2 U.S.C. § 439a(b) (“the personal-use ban”), see Craig for U.S. Senate, 933 F. Supp. 2d 

at 116-25, and defendants do “not ask the Court to revisit its analysis” (Defs.’ Opp’n to FEC’s 

Mem. in Supp’t of Mot. for Summ. J. (“Defs.’ Opp’n”) at 2 (Docket No. 19); see also id. at 14 

(“Defendants do not seek rehearing of their arguments.”)). In that analysis, this Court assumed 

the truth of the Complaint and determined that Craig’s Minnesota legal expenses were personal 

and not incurred in connection with his officeholder duties. (See FEC’s Mem. in Supp’t of Its 

Mot. for Summ. J. (“FEC SJ Br.”) at 7-8 (Docket No. 16).) While not asking the Court to revisit 

its analysis, defendants do incorrectly assert that the Court decided only “the legal standard 

relating to Senator Craig’s alleged personal use.” (Defs.’ Opp’n at 14.) The Court’s ruling, of 

course, also determined that defendants’ alleged conduct violated that standard. Craig for U.S. 

Senate, 933 F. Supp. 2d at 117-19. 

 Defendants have since admitted all of the Complaint’s factual allegations — not just 

“many” of the Complaint’s factual allegations, as they claim.1

 (See FEC’s Statement of Material 

Facts As to Which It Contends There Is No Genuine Issue (“FEC Facts”) ¶¶ 2-5, 7-10, 13-14, 

23-32 (Docket No. 16) (citing the Complaint and Answer); Defs.’ Opp’n at 14.) Defendants 

should also be deemed to have admitted the additional facts submitted in support of the FEC’s 

motion for summary judgment because defendants violated the Local Rules and this Court’s 

 

1

 The Answer’s five specific denials respond to legal conclusions in the Complaint, not 

factual allegations. (Answer ¶¶ 11, 22-23, 33-34 (Docket No. 12).) Defendants also stated in the 

parties’ Joint Local Rule 16.3 Report that they “do not dispute any of the relevant facts regarding 

the violations alleged in this case.” (Joint Local Rule 16.3 Report at 2, ¶ 1(2) (Docket No. 13).) 

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Scheduling Order by failing to file as part of their opposition “a separate document that responds 

directly and individually to the [FEC’s] material facts” and indicates “whether or not a dispute 

exists as to each.” Scheduling Order at 3, ¶¶ 6-7 (Docket No. 14); see LCvR 7(h)(1); Bonnette v. 

Shinseki, 907 F. Supp. 2d 54, 61 n.3 (D.D.C. 2012) (deeming admitted paragraphs for which 

opposing party “did not cite to specific parts of the record controverting” moving party’s 

statement). The Court should therefore hold that defendants violated the personal-use ban. 

 B. Defendants’ Purported Facts Are Immaterial 

 Defendants have alleged two sets of new facts that they contend are relevant to whether 

they violated the personal-use ban. Both sets, however, are immaterial. First, defendants allege 

“details about Senator Craig’s arrest.” (Defs.’ Opp’n at 5-6.) These details are irrelevant 

because they merely show that Craig feared his arrest would result in “embarrassing and 

damaging publicity” and that he acted accordingly. (Id. at 6.) After being arrested, Craig told 

the officer he was a Senator, pled guilty in hopes that his arrest would go unnoticed by the 

media, and asked his attorneys to rescind his guilty plea once the arrest went public to “defend[ 

his] reputation and vindicat[e] him personally and professionally.” (Id. at 5-6.) As this Court 

explained, though, “it does not matter” if Craig’s “decision to withdraw the guilty plea was 

motivated by political considerations” or if his conviction harmed his reputation or status as a 

Senator. Craig for U.S. Senate, 933 F. Supp. 2d at 119. What matters is whether Craig’s 

officeholder duties resulted in his arrest and expenses. Id. They did not, since “the charge did 

not relate[] to his conduct as a legislator, but only actions undertaken in the privacy and 

anonymity of a restroom stall.” Id.

 Second, the alleged facts relating to the Senate Ethics Committee’s 2008 decision to 

allow Craig to establish a legal defense fund for his Minnesota case are also irrelevant. (See

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Defs.’ Opp’n at 3, 7-8.) Defendants suggest that the Senate Ethics Committee’s decision shows 

that legal expenses relating to the Minnesota case are officeholder-related and not personal. (Id.) 

The Senate Ethics Committee’s letter approving the fund, however, states the exact opposite: It 

reminds Craig that the Senate Ethics Committee “has not approved your use of campaign funds” 

for the Minnesota case given that “‘some portion of these expenses may not be deemed to have 

been incurred in connection with your official duties.’” (Defs.’ Exhibit (“Exh.”) 9 at 2 (Docket 

No. 19-11).) The Committee then warned Craig that any further use of campaign funds for the 

Minnesota case would “‘demonstrat[e] your continuing disregard of ethics requirements.’” (Id.) 

Defendants’ attempt to equate their use of legal defense funds with their use of Craig Committee 

funds for the Minnesota case illustrates that they fail to appreciate the injury suffered by their 

campaign contributors, who did not intend to pay for Craig’s personal legal expenses.2

C. No FEC Advisory Opinion Shields Defendants from Sanctions for Their 

Personal-Use Violations 

 1. The Advisory Opinions Defendants Cite Are Materially 

Distinguishable from Their Personal Use of Campaign Funds 

 As defendants recognize, this Court held that no FEC advisory opinion that defendants 

purport to have relied upon shields them from sanctions for their violation. (Defs.’ Opp’n at 13-

14 (citing Craig for U.S. Senate, 933 F. Supp. 2d at 120-24).) To obtain protection under 2 

U.S.C. § 437f(c), defendants must have relied on, and acted in good faith accordance with, the 

provisions of an advisory opinion that is materially indistinguishable from their campaign 

spending. (See FEC SJ Br. at 9.) In denying defendants’ motion to dismiss, this Court 

 

2

 Defendants state that they have not abandoned their reliance upon the Speech or Debate 

Clause or other constitutional privileges in claiming that they did not violate section 439a(b). 

(Defs.’ Opp’n 14-15.) The FEC continues to oppose those arguments for the reasons stated in its 

previous briefing (see FEC’s Mem. in Opp’n to Defs.’ Mot. to Dismiss at 15-18 (Docket No. 5)) 

and in the Court’s previous ruling, Craig for U.S. Senate, 933 F. Supp. 2d at 117 n.5. 

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determined that the Kolbe, Boehner, McDermott, and Cunningham advisory opinions offer 

defendants no immunity because each is materially distinguishable from defendants’ alleged 

activities. Craig for U.S. Senate, 933 F. Supp. 2d at 120-25. 

 Defendants now renew their contention that their spending of campaign funds is 

materially indistinguishable from the facts of the Kolbe advisory opinion, and in so doing they 

continue their meritless efforts to rewrite that opinion. (Defs.’ Opp’n at 11, 15.) First, this 

Court’s reading of the Kolbe opinion did not reduce it to a “restatement of the personal use 

statute,” divorced from any application to facts, as defendants argue. (Id. at 15 n.13.) As 

detailed in the Kolbe opinion, the Department of Justice (“DOJ”) was conducting a preliminary 

inquiry into a Congressional trip to the Grand Canyon that then-Congressman Kolbe attended, 

and DOJ had yet to make the details of that inquiry public. FEC Advisory Op. (“AO”) 2006-35 

(Kolbe), 2007 WL 419188, at *3 (Jan. 26, 2007).3

 Applying section 439a to those facts, the 

Commission determined that because the subject of the inquiry at that time — the official trip — 

was officeholder-related and not personal, FECA permitted Kolbe to use campaign funds to 

respond to the inquiry (with the caveat that the result would be different if the scope of the 

inquiry were to extend beyond his duties as an officeholder). Id. Here, by contrast, Craig 

incurred legal expenses because he was arrested for what he admits was personal behavior. See 

Craig for U.S. Senate, 933 F. Supp. 2d at 120-22. 

 Second, defendants attempt to perform an end run around the Kolbe authority by 

claiming that two news articles show that the FEC’s opinion “endorsed” the use of campaign 

 

3

 FEC AO 2006-35 (Kolbe) can also be found at http://saos.fec.gov/aodocs/2006-35.pdf. 

Please note that the web addresses to FEC documents that the FEC provided in its opening brief 

and its statement of material facts (Docket No. 16) have since changed. Those web addresses 

can be brought up-to-date by replacing “saos.nictusa.com” with “saos.fec.gov,” 

“eqs.nictusa.com” with “eqs.fec.gov,” and “images.nictusa.com” with “docquery.fec.gov,” 

where applicable. The Commission regrets any inconvenience. 

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funds to defend against allegations of personal wrongdoing. (Defs.’ Opp’n at 11.) But neither 

news article was part of Representative Kolbe’s advisory opinion request, and section 437f(c) 

protects reliance on an advisory opinion, not “public materials” that defendants identify here for 

the first time more than five years after their illegal spending of campaign funds and nearly seven 

years after issuance of the Kolbe opinion. Id.; see Craig for U.S. Senate, 933 F. Supp. 2d at 122. 

Moreover, just like the pre-decisional communications on which defendants attempted to rely in 

their failed motion to dismiss, see Craig for U.S. Senate, 933 F. Supp. 2d at 122-24, neither 

article shows any Commission endorsement of campaign funds for personal litigation. On the 

contrary, the Arizona Republic article confirms that DOJ had not made public the details of its 

preliminary inquiry and that DOJ had not identified Kolbe as a target. (Defs.’ Exh. 14 (Docket 

No. 19-16) at 1 (stating that “Kolbe’s office . . . had not been contacted by” DOJ and that DOJ 

would not “discuss what specific allegations prompted the federal review” of the Grand Canyon 

trip).) And the Roll Call article also does not state that DOJ had made public why it was 

investigating Kolbe’s trip (since DOJ had not). (See Defs.’ Exh. 15 (Docket No. 19-17) at 1-3.) 

 2. Defendants Failed to Rely Upon Any Advisory Opinions 

 For an advisory opinion to protect defendants from sanctions for violating the personaluse ban, the opinion must not only be materially indistinguishable from their activities, but 

defendants must also have relied on, and acted in good faith accordance with, that opinion. See 2 

U.S.C. § 437f(c)(2); see also FEC SJ Br. at 12-13. In their opposition, defendants do not dispute 

the Commission’s contention that they did not rely upon the McDermott, Boehner, or 

Cunningham opinions. (See FEC SJ Br. at 12-13; see generally Defs.’ Opp’n.) 

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 The evidence also establishes that defendants did not rely on the Kolbe opinion for 

payment of the fees at issue here.4

 (See FEC SJ Br. at 12-13.) In December 2008, soon after the 

start of the FEC’s review of this matter, Craig told the Commission that he had made a “‘good 

faith effort to ascertain the legality of using campaign funds’” for his Minnesota legal expenses 

based on the advice from counsel he received in a letter dated October 4, 2007.5

 (FEC Facts ¶ 17 

(quoting FEC Exh. 4 (Docket No. 16-4)).) The October 4, 2007 letter advised Craig that there 

were “‘no directly applicable FEC opinions’” on whether he could spend campaign funds on his 

Minnesota legal fees, and claimed that the “‘FEC has apparently never addressed legal expenses 

stemming from official travel.’” (FEC Facts ¶ 18 (quoting FEC Exh. 5 at 1-2 (Docket No. 16-

5)).) The letter states this despite citing the Kolbe opinion for a separate issue. (Id.) Defendants 

started spending campaign funds on the Minnesota case just a little over three weeks later on 

October 29, 2007. (Id. ¶¶ 14, 23.) 

 Defendants do not dispute the Commission’s reading of the October 4, 2007 letter. 

Instead, they claim that the FEC unfairly “telescopes” ongoing advice into that one letter (Defs.’ 

Opp’n at 7), even though Craig focused on the letter exclusively in 2008 as evidence of his 

alleged good-faith compliance with the law (see FEC Facts ¶ 17). Now, defendants point to a 

later letter, dated November 14, 2007, that their counsel sent to the Senate Ethics Committee, 

and argue that it shows defendants relied upon the Kolbe opinion in spending the funds at issue 

 

4

 Defendants’ failure to rely in good faith on any advisory opinion is an additional and 

independent reason that section 437f(c) does not protect them from FECA sanctions. Even if 

defendants could successfully show that there is a genuine issue of material fact as to their 

purported good faith reliance on an advisory opinion, summary judgment would still be 

appropriate due to the material differences between the opinions and defendants’ activities. See 

supra pp. 4-6; FEC SJ Br. at 9-12. 

5

 Defendants’ brief incorrectly states that the October 4, 2007 letter was from Craig’s 

counsel to the Senate Ethics Committee. (Defs.’ Opp’n at 7.) It is addressed to Craig, not the 

Committee. (FEC Exh. 5 (Docket No. 16-5).) 

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here. (Defs.’ Opp’n at 7 (citing Defs.’ Exh. 6 (Docket No. 19-8)).) As an initial matter, to the 

extent defendants offer this letter in support of an advice-of-counsel defense on the merits, it 

should be disregarded, since defendants have expressly waived any such defense.6 

But even if considered, the November 14, 2007 letter does not show that defendants 

relied on the Kolbe opinion for their spending on the Minnesota case. Just like the October 4, 

2007 letter, the November 14, 2007 letter reflects reliance on the Kolbe opinion only for 

spending campaign funds on representation before the Senate Ethics Committee (which is related 

to holding office).7 (Defs.’ Exh. 6 at 6-9). The November 14, 2007 letter never discusses the 

 

6

 Defendants argue that based on the legal advice reflected in the November 14, 2007 

letter, they “were confident that the use of campaign funds for these expenditures was legal and 

customary” and that they would not have made the expenditures otherwise. (Defs.’ Opp’n at 7.) 

Defendants contend that this alleged fact precludes summary judgment. (Defs.’ Facts ¶ 18.) By 

doing so, they appear to be invoking an advice-of-counsel defense on the merits; however, 

defendants waived such a defense in discovery (see Defs.’ Resp. to FEC’s First Req. for Admis. 

and First Set of Interrogs. at 9, Interrog. 5, FEC Exh. 6 (Docket 16-6)), and, in reliance on that 

waiver, the FEC did not pursue discovery of defendants’ legal advice. The Court should 

therefore not allow an advice-of-counsel defense or admit any evidence for that purpose, such as 

the November 14, 2007 letter and parts of the Ware Declaration (Decl. of Michael O. Ware, ¶¶ 6, 

8-9, Defs.’ Exh. 2 (Docket No. 19-4).) See, e.g., Bailey v. Pataki, __ F. Supp. 2d __, No. 08-

8563, 2013 WL 3379305, at *1-*3 (S.D.N.Y. July 8, 2013) (precluding invocation of advice-ofcounsel defense following waiver). If defendants’ evidence is admitted, the Court should reopen 

discovery on the issue. In any event, defendants have failed to establish all four elements of an 

advice-of-counsel defense on the merits. See SEC v. Prince, 942 F. Supp. 2d 108, 138 (D.D.C. 

2013) (defendant must have “(1) made complete disclosure to counsel; (2) requested counsel’s 

advice as to the legality of the contemplated action; (3) received advice that it was legal; and (4) 

relied in good faith on that advice” (internal quotation marks omitted)). Finally, even if 

defendants were able to satisfy those elements, a general advice-of-counsel defense on the merits 

is not available here where the FEC has not sought to prove a knowing and willful violation and 

need not establish that defendants possessed a certain state of mind. Their state of mind is 

relevant only to the extent it bears on whether they relied in good faith on an advisory opinion 

under section 437f(c)(2) and what the appropriate remedies are. 

7

 (Compare Defs.’ Exh. 6 (Nov. 14, 2007 letter) at 6, ¶ 7 (“In using campaign funds to pay 

for both assistance with press relations and for representation before this Committee[,] Senator 

Craig relied on unequivocal, applicable guidance from the [FEC].” (emphasis added)), with FEC 

Exh. 5 (Oct. 4, 2007 letter) at 1, ¶ 2 (“First it is clear that FEC advisory opinions authorize full 

payment with campaign funds for legal representation in all matters before the Senate Ethics 

Committee. See FEC Advisory Opinion (“AO”) 2006-35 [(Kolbe)] at 3.” (emphasis added)).) 

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Kolbe opinion in relation to the Minnesota legal fees at issue here, and it is dated after October 

29, 2007 (id.), when Craig had already started spending campaign funds on his Minnesota legal 

fees — by then, Craig had already spent more than $66,000 (see FEC Facts ¶¶ 14, 23; Defs.’ 

Opp’n. at 9). As defendants do not contest, the October 4, 2007 letter shows that Craig did not

rely on the Kolbe opinion for that spending. And as late as August 2009, defendants’ counsel 

were maintaining to the FEC that “[o]ur legal analysis has not changed since we provided our 

letter to Senator Craig in October 2007,” while making no mention of the November 14, 2007 

letter. (Defs.’ Exh. 11 at 2 (Docket No. 19-13).) 8

 3. The Miller Advisory Opinion Does Not Help Defendants 

Defendants also cite the FEC’s recent Miller advisory opinion (Defs.’ Opp’n at 15), but 

that opinion offers defendants no help under section 437f(c). The FEC issued the Miller opinion 

less than three months ago, on October 31, 2013, and so defendants obviously did not rely on it 

in good faith while spending campaign funds in 2007 and 2008. See FEC AO 2013-11 (Miller), 

2013 WL 6022101 (Oct. 31, 2013). And the Miller opinion is materially distinguishable because 

it involved a federal candidate who incurred legal fees because of his candidacy: The lawsuit 

that resulted in Miller’s expenses was initiated by media entities that sought to obtain and 

publicize Miller’s employment records because he was running for federal office. Id. at *4. In 

 

The Commission has allowed federal officeholders to use campaign funds for expenses incurred 

in responding to House and Senate Ethics Committee inquiries. Expenses incurred in responding 

to those inquiries are in connection with the duties of holding office — even if the allegations 

concern activities unrelated to office — because those expenses would not exist if the subject of 

the inquiry was not a Member of Congress. See, e.g., FEC AO 2006-35 (Kolbe), 2007 WL 

419188, at *2; FEC AO 2008-07 (Vitter), 2008 WL 4265321, at *3 (Sept. 9, 2008). 

8

 Defendants also suggest that invoices for legal services that Craig received in October 

and November 2007 and the Ware Declaration show that defendants relied on advisory opinions 

to use campaign funds for the Minnesota fees. (Defs.’ Opp’n at 9-10 (citing Defs.’ Exhs. 2 

(Docket No. 19-4), 13 (Docket No. 19-15).) But neither exhibit even mentions any FEC 

advisory opinions, let alone reflects reliance on the Kolbe opinion. (See Defs.’ Exhs. 2, 13.) 

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contrast, the fact that Craig was a Senator did not cause his arrest or any of his resulting legal 

fees. Craig for U.S. Senate, 933 F. Supp. 2d at 119. 

 D. The Amount of Campaign Funds Defendants Spent to Attempt to Withdraw 

Craig’s Guilty Plea Was Admitted in Their Answer and Was at Least 

$216,984 

 Defendants spent at least $216,984 in campaign funds trying to withdraw Craig’s guilty 

plea. There is no dispute over this fact, contrary to what defendants now claim (Defs.’ Opp’n at 

12-13), since defendants admitted in their Answer that they spent that amount in their effort to 

withdraw the plea (Answer ¶¶ 19-20). Defendants admitted they paid “at least $139,952” to 

Sutherland, Asbill & Brennan (“Sutherland”), and “approximately $77,032” to Kelly & Jacobson 

(“Kelly”) “for providing legal services to Mr. Craig in connection with his efforts to withdraw 

his guilty plea.” (Compl. ¶¶ 19-20; see Answer ¶¶ 19-20; see also FEC Facts ¶ 23.) 

Now, faced with the FEC’s motion for summary judgment, defendants apparently would 

like to take back their admission. However, “admissions in the pleadings are binding,” Nat’l 

Ass’n of Life Underwriters, Inc. v. C.I.R., 30 F.3d 1526, 1530 (D.C. Cir. 1994), and because they 

remain binding “throughout the course of the proceeding,” they “may support summary 

judgment against the party making such admissions,” Schott Motorcycle Supply, Inc. v. Am. 

Honda Motor Co., Inc., 976 F.2d 58, 61 (1st Cir. 1992) (internal quotation marks omitted); see 

also Fed. R. Civ. P. 56(c)(1)(A) (“A party asserting that a fact cannot be . . . genuinely disputed” 

may cite to “admissions”). Admissions remain binding and continue to support summary 

judgment “even if the post-pleading evidence conflicts with the evidence in the pleadings.” 

Bright v. QSP, Inc., 20 F.3d 1300, 1305 (4th Cir. 1994). 

 Even if post-pleading evidence were relevant, defendants have failed to identify any 

evidence that actually conflicts with their admission. Defendants do not deny that the entire 

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$216,984 in legal fees they paid to the Sutherland and Kelly firms was for work relating to 

Craig’s effort to revoke his guilty plea. (See Defs.’ Opp’n at 12-13.) Instead, they claim that 

some unspecified portion of those fees may “not necessarily” constitute personal use under FEC 

advisory opinions, because vague entries they selected from the Sutherland and Kelly invoices 

use the words “ethics,” “appropriation,” “media,” and “public relations.” (Id. at 12.) But 

defendants make no effort to show that they satisfy section 437f(c)’s requirements for protection 

by these advisory opinions, nor could they show that.9 

The $216,984 figure already reflects deductions the FEC made during its investigation 

for expenditures that clearly related directly and exclusively to media work.10 Also during that 

investigation, the FEC offered defendants the opportunity to identify the amount of campaign 

funds “that were disbursed to pay legal fees to [the Sutherland and Kelly firms] to respond to 

media inquiries.” (Letter from Shana M. Broussard, Attorney, FEC to Andrew D. Herman, Esq., 

Brand Law Group PC at 3, ¶ 5 (Aug. 19, 2009), FEC Exh. 13 (Docket No. 21-2).) In response, 

defendants “decline[d] to respond directly to [the FEC’s] questions.” (Letter from Andrew D. 

Herman, Brand Law Group, to Shana Broussard, Esq., FEC at 1 (Sept. 21, 2009), FEC Exh. 14 

(Docket No. 21-3).) Defendants similarly fail to identify any such amount here. 

 

9

 For example, defendants cite the Hilliard advisory opinion (Defs.’ Opp’n at 12), which 

states that legal expenses relating to allegations of personal wrongdoing are nevertheless 

considered 50 percent officeholder-related where the expense involves “providing substantive 

responses to the press (beyond pro forma ‘no comment’ statements).” FEC AO 1988-01 

(Hilliard), 1998 WL 108618, at *5 (Feb. 27, 1998). None of the invoice entries that defendants 

cite show that they qualify. (See, e.g., Defs.’ Opp’n at 13 (citing Defs.’ Facts ¶ 25.f (citing 

Defs.’ Exh. 13 at Craig 71 (“Review draft letter to Idaho Statesman.”)); Defs.’ Exh.13 at Craig 

35 (“Attend to media . . . issues.”)); Defs.’ Facts ¶¶ 25.a (citing Defs.’ Exh. 13 at Craig 44 

(“Field and redirect media calls.”)); 25.d (citing Defs.’ Exh. 13 at Craig 79 (“Handle calls from 

sources wanting factual information relevant to the case.”)).) 

10 Craig hired a public relations firm (called Impact Strategies) to perform media work 

relating to the Minnesota case. The FEC did not include Impact Strategies’ fees of more than 

$100,000, which are reflected in Sutherland’s invoices to Craig, in the $216,984 figure. (General 

Counsel’s Br. at 5-6, MUR 6128 (Craig) (Apr. 8, 2011), FEC Exh. 12 (Docket No. 21-1).) 

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 In any event, defendants are bound by their prior admission to spending at least $216,984 

on legal expenses in their effort to withdraw Craig’s guilty plea.11 

* * * 

In sum, the Court should grant the FEC’s motion for summary judgment because 

defendants converted $216,984 in campaign funds to Craig’s personal use in violation of 2 

U.S.C. § 439a(b), and no FEC advisory opinion shields them from sanctions for that offense. 

II. THE COURT SHOULD ORDER THE FEC’S REQUESTED REMEDIES

A. Defendants Do Not Deny That Craig Will Be Unjustly Enriched Unless He 

Disgorges the Campaign Funds He Used to Try to Withdraw His Guilty Plea 

In their opposition, defendants do not dispute that Craig profited from his use of 

campaign funds to try to withdraw his guilty plea. Defendants also do not deny that Craig would 

be unjustly enriched unless he were to disgorge the entire $216,984 he used. This Court should 

therefore order Craig to disgorge that amount. (See FEC SJ Br. at 14-17.) 

FECA gives this Court broad authority to remedy FECA violations by “grant[ing] a 

permanent or temporary injunction, restraining order, or other order, including a civil penalty.” 

2 U.S.C. § 437g(a)(6)(B) (emphasis added). Defendants argue that this statute does not permit 

disgorgement and a civil penalty (Defs.’ Opp’n at 17), but the statute’s open-ended language 

contains no such restriction and does not require the Court to choose one remedy over another. 

The FEC regularly requires both disgorgement of profits and a civil penalty to conciliate 

personal-use violations.12 

 

11 If the Court were to conclude that defendants are not bound by their admission, discovery 

should be reopened on the issue of how much defendants spent in violation of the personal-use 

ban, since the Commission relied upon that admission in not seeking discovery on the issue. 

12 In its opening brief, the FEC cited examples of conciliation agreements where the agency 

required respondents to disgorge converted funds and pay a civil penalty. (See FEC SJ Br. at 

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13

In fact, without disgorgement, any civil penalty in this case would amount to no penalty 

at all. If Craig were allowed to keep his $216,984 ill-gotten profit, the $70,000 civil penalty the 

FEC has requested would amount to a $146,984 net gain for Craig. This result would obviously 

fail to punish Craig or deter future violations of the personal-use ban. Even if the Court imposed 

the maximum civil penalty permitted here, without disgorgement, Craig would simply break 

even on his violation of FECA. Civil penalties, however, are “intended to punish culpable 

individuals,” not merely to “restore the status quo.” Tull v. United States, 481 U.S. 412, 422 

(1987); see also, e.g., SEC v. Levine, 517 F. Supp. 2d 121, 141-42 (D.D.C. 2007) (imposing a 

$200,000 civil penalty in addition to a $217,368.59 disgorgement order for securities fraud). 

Defendants repeatedly suggest that disgorgement is a type of civil penalty, apparently so 

they can incorrectly claim that the FEC is requesting “severe” civil penalties. (Defs.’ Opp’n at 

17, 20, 24 n.19.) In reality, the civil penalty the FEC requests is less than one third of the 

amount defendants spent and so reflects restraint, particularly in light of FEC v. Furgatch, 869 

F.2d 1256 (9th Cir. 1989). There, the Ninth Circuit affirmed a civil penalty that was just shy of 

100 percent of the amount spent in violation of FECA. Id. at 1258, 1264. Disgorgement was not 

necessary, since Furgatch involved a reporting violation which conferred no profit to the 

violator, see id. at 1258 n.1, unlike the personal use of campaign funds. Disgorgement is 

therefore not only statutorily authorized in this case, but it is essential to ensure that Craig does 

not profit and that a civil penalty is effective.13

 

15.) The fact that these respondents also violated FECA disclosure requirements, as defendants 

note (Defs.’ Opp’n at 19), is irrelevant to the disgorgement they agreed to pay. No profit results 

from failing to disclose (and so there is nothing to disgorge), and disclosure violations are 

distinct FECA violations, punishable in their own right. 

13 The FEC does not “rely solely” on Furgatch, as defendants assert (Defs.’ Opp’n at 18); 

Furgatch illustrates that a court may consider “‘the desire to eliminate the benefit derived from 

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B. A Substantial Civil Penalty Is Necessary in This Case 

 Section 437g(a)(6)(B) authorizes this Court to assess a civil penalty against each 

defendant in “an amount equal to” the full $216,984 they spent in violation of FECA. The 

Commission requests that the Court order Craig to pay a $70,000 civil penalty and the Craig 

Committee to pay a $70,000 civil penalty. (FEC SJ Br. at 14.) These measured and appropriate 

penalties, when coupled with disgorgement, would effectively serve the important interests 

identified by the Commission (id. at 18-29) and discussed further below. Defendants do not 

dispute the relevance of any of these interests, and they have failed to present any convincing 

reason why they should face lesser civil penalties.14

1. Contributors to the Craig Committee Were Injured 

 Contributors to the Craig Committee were injured by defendants’ violations. (See FEC 

SJ Br. at 21.) Their contributions were First Amendment-protected acts of political affiliation 

with, and general expressions of support for, Craig’s candidacy and political views. (Id.) 

However, defendants used those contributions for a different and illegitimate purpose. (Id.) 

Nevertheless, defendants now object that the Commission has presented no evidence of injury, 

such as “requests for refunds from contributors.” (Defs.’ Opp’n at 22.) But the nature of the 

injury here is self-evident: Contributor funds were used for an unintended and improper 

purpose. Cf. Furgatch, 869 F.2d at 1259 (“In this case, the [FECA] violations were clearly 

serious, and serious public harm should therefore be presumed.”). Indeed, defendants do not 

 

the violation’” when ordering remedies under section 437g(a)(6)(B) (see FEC SJ Br. at 15 

(quoting Furgatch, 869 F.2d at 1258 n.1)). 

14 The Commission notes that civil penalties are paid to the United States Treasury, not the 

Craig Committee as defendants suggest, perhaps as a result of their confusion of disgorgement 

with civil penalties. (Defs.’ Opp’n at 24 n.19.) In contrast, the FEC recommends that any funds 

disgorged by Craig be refunded to the Craig Committee to restore the status quo, or alternatively 

to the Treasury, if the Court deems appropriate. (FEC SJ Br. at 17 & n.12.) 

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15

actually deny that Craig Committee contributors were injured, they simply complain about a lack 

of evidence. 

 Defendants’ apparent failure to appreciate the nature and significance of their 

contributors’ injury is further illustrated by their attempt to equate their use of legal defense 

funds with their use of campaign funds for Craig’s Minnesota legal fees. (Defs.’ Opp’n at 3, 7-8, 

18.) While donors to Craig’s legal defense fund knew they were paying for his personal legal 

expenses stemming from an arrest, contributors to the Craig Committee did not. Craig 

Committee contributors, of course, gave funds to support Craig’s candidacy for Senate.

2. Defendants’ Violations Undermined the Public’s Confidence in 

Government and the Campaign Finance System 

 The personal-use ban is intended to prevent officeholders from engaging in corrupt selfdealing with campaign funds, and by doing so, to promote the public’s confidence in government 

and the campaign finance system. (See FEC SJ Br. at 21-23.) To the extent the personal-use ban 

is violated, as here, these important interests suffer. 

 Defendants point out that their self-dealing did not also result in a different kind of 

corruption — quid pro quo corruption. (Defs.’ Opp’n at 22-23.) While the need to prevent quid 

pro quo corruption undergirds FECA’s contribution limits, Buckley v. Valeo, 424 U.S. 1, 26-29 

(1976) (per curiam), the personal-use ban also serves Congress’s different interest in preventing 

personal enrichment with funds contributed for campaign purposes (see FEC SJ Br. at 22-23). 

That defendants did not also engage in quid pro quo corruption does not justify a lower penalty. 

 The personal-use ban plays such a critical role in protecting the integrity of our 

government that in recent years the FEC has recommended that Congress expand the law’s 

application to all political committees. See FEC SJ Br. at 20; see also Press Release, FEC, FEC 

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16

Approves . . . Legislative Recommendations[] (Dec. 17, 2013).15 In mid-November, a bipartisan 

bill was introduced in the House of Representatives that would enact the Commission’s 

recommendation.16 Defendants argue that these efforts actually show that it is unfair that they 

have been pursued and face penalties for their violations. (Defs.’ Opp’n at 21-22.) But instead, 

the recent legislative activity shows just the opposite, highlighting the importance of the 

personal-use ban, especially as applied to campaign committees, which are at the core of the 

campaign finance system. Defendants contend that spending by “leadership PACs,” which 

candidates create to support other candidates, 11 C.F.R. § 100.5(e)(6), demonstrates that the 

Commission’s pursuit of their violations of the law is misplaced (Defs.’ Opp’n at 3-4). Because 

the personal use of candidate campaign funds is clearly prohibited, however, contributors to 

committees like the Craig Committee reasonably expect that their contributions will not be 

subject to personal use, despite what may happen in other contexts, such as with contributions to 

leadership PACs. Defendants’ violation of the 34-year-old personal-use ban is no less injurious 

to the public because some in Congress believe the scope of the ban should be broader.17 

3. Craig Profited from Defendants’ Violations 

The Court should impose a significant penalty for the additional reason that Craig 

profited from defendants’ violation of the personal-use ban, and defendants do not claim 

 

15 See http://www.fec.gov/press/press2013/news_releases/20131217release2.shtml. 

16 See H.R. 3466, 113th Cong. (Nov. 13, 2013), available at http://www.gpo.gov 

/fdsys/pkg/BILLS-113hr3466ih/pdf/BILLS-113hr3466ih.pdf. 

17 In arguing that the FEC is treating them unfairly, defendants blatantly mischaracterize the 

FEC’s determination in an enforcement matter named Matter Under Review (“MUR”) 6105 

(Palin). (Defs.’ Opp’n at 4 n.3, 22.) In MUR 6105, the FEC found no reason to believe that 

then-Vice Presidential candidate Sarah Palin violated the personal-use ban, because the clothing 

purchases at issue were made with Republican Party funds — to which section 439a(b) does not 

apply — as opposed to campaign committee funds. Factual and Legal Analysis at 1-3, MUR 

6105 (Palin), http://eqs.fec.gov/eqsdocsMUR/29044241486.pdf. The FEC did not conclude that 

the clothing purchases were made “in connection with” Palin’s candidacy, as defendants claim. 

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otherwise. His use of more than $216,000 from Craig Committee contributors allowed him to 

pay for high-priced legal representation in a personal matter, while leaving his own funds 

available for personal purchases and expenses. (See FEC SJ Br. at 23.) 

4. Defendants Should Face Punishment for Their Serious Violations 

 The Court should impose a civil penalty that will effectively punish defendants’ violation 

of FECA. (See FEC SJ Br. at 24.) Punishing wrongdoers is an appropriate goal of a civil 

penalty. Gabelli v. SEC, 133 S. Ct. 1216, 1223 (2013). Defendants’ actions were contrary to 

clear guidance from the FEC and demonstrated a lack of substantial good faith. As this Court 

stated, defendants’ claim that their spending was legal “disregards clear admonitory language in 

the very opinion that defendants insist bears most directly on this case” — the Kolbe advisory 

opinion. Craig for U.S. Senate, 933 F. Supp. 2d at 113. Defendants were aware of the Kolbe 

opinion at the time of their violation (FEC Facts ¶¶ 18, 22), and yet they claim that they could 

use campaign funds for all legal expenses related to any conduct on an official trip, even though 

the Kolbe opinion states “just the opposite,” Craig for U.S. Senate, 933 F. Supp. 2d at 121. 

 Nevertheless, defendants suggest that they deserve leniency for not also being 

“intransigent,” citing Furgatch. (Defs.’ Opp’n at 18.) However, as explained above, Furgatch 

illustrates that the civil penalty the FEC seeks here is reasonable and appropriate.18 See supra p. 

13. Defendants also ask for leniency because they did not also violate other provisions of 

 

18 Defendants rely on two additional cases (see Defs.’ Opp’n at 17-18), but both are very 

different from this case. In FEC v. Ted Haley Congressional Committee, the court’s civil penalty 

decision was based in part on the defendant-candidate’s “rapid repayment,” from his own 

personal funds, of an excessive contribution his committee received in violation of FECA. 852 

F.2d 1111, 1113 (9th Cir. 1988). Essentially, the defendant disgorged the proceeds of his 

committee’s FECA violation even though he did not personally profit, while here, Craig, who 

did profit, continues to fight any disgorgement. In FEC v. Friends of Jane Harman, a district 

court determined that the defendant’s FECA violation was “not substantial nor obvious,” 59 F. 

Supp. 2d 1046, 1057 (C.D. Cal. 1999), in stark contrast to the violation here. 

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FECA: They repeatedly point out that they reported the funds they spent for Craig’s personal 

benefit to the FEC. (Defs.’ Opp’n at 1, 18-20, 23.) But had they not, it would have violated a 

separate provision of FECA, 2 U.S.C. § 434, resulting in additional civil penalties. Defendants 

do not deserve lesser civil penalties for their personal-use violations because they did not also 

illegally hide the funds they were personally using. Compliance with other laws makes their 

violation no less punishable. 

5. Future Personal-Use Violations Should Be Deterred, Particularly 

Since Billions of Dollars Are Contributed to Federal Candidates 

A civil penalty should be imposed to deter defendants and others from future violations. 

To be effective, the penalty must be large enough that it amounts to more than a license fee or 

low interest rate for defendants’ personal use of campaign funds. (See FEC SJ Br. at 18-20.) 

 The legal fees that Craig has incurred in this case are not a penalty or a sufficient 

deterrent, as defendants argue. (Defs.’ Opp’n at 21.) Defendants claim without citation that 

Craig has made “significant expenditures” to pay for legal counsel (id.) — but that is what he 

largely did not do and the record shows Craig spending at most a couple thousand dollars (see

Defs.’ Exh. 16 (Docket No. 19-18)). In any event, if paying legal fees in one case to contest 

liability for failing to pay them in another were the only “penalty,” it would fail to deter personal 

use and encourage litigation over conciliation, since a roll-of-the-dice in court would never result 

in a civil penalty. No case defendants cite (see Defs.’ Opp’n at 21)supports their position.19 

 

19 Defendants misrepresent what occurred in FEC v. Gus Savage for Congress ’82 Comm., 

606 F. Supp. 541 (N.D. Ill. 1985). There, the court ordered the defendant to pay a $5,000 civil 

penalty for failing to file reports, which he proceeded to pay despite having to hire an attorney 

and accountant and despite having “no substantial assets and only a modest salary,” unlike Craig. 

Id. at 542, 545 & n.8. The court denied the FEC’s request for an additional civil penalty, which 

the agency had sought due to the defendant’s failure to timely comply with the initial order. Id.

at 547-48. In FEC v. Nat’l Educ. Ass’n, 457 F. Supp. 1102 (D.D.C. 1978), the district court held 

that it would be a “sufficient penalty” for a national teachers union to bear the costs of executing 

a court-approved plan to inform about 760,000 of its members that the court had found it liable 

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19

 Defendants also point out that the “professional and personal consequences of Senator 

Craig’s guilty plea have been severe” (Defs.’ Opp’n at 21), but as defendants acknowledge, those 

consequences resulted from Craig’s “guilty plea” (id.), not his subsequent decision to illegally 

spend campaign funds. A civil penalty is needed to deter that latter decision. Courts’ declining 

to impose sanctions on this ground would essentially give free reign to scandal-plagued 

officeholders to raid their campaign accounts for legal fees on their way out of office. 

 The need for deterrence of others here is particularly great given the “dramatic rise” in 

personal use of political funds observed by DOJ and the similarly dramatic rise in contributions 

to federal candidates in recent years ($2.65 billion in the 2012 election cycle). (See FEC SJ Br. 

at 19-20.) Defendants attempt to dismiss these facts as “irrelevant” (Defs.’ Opp’n at 21 n.16), 

but the facts highlight the need to deter others from taking advantage of the ever-increasing 

opportunities for abuse of campaign funds. The Commission does not seek to “make an 

example” of Craig, as defendants assert (id. at 20) — indeed, the civil penalty the FEC seeks is 

far less than what is statutorily authorized. Nor are the requested sanctions “unprecedented,” as 

defendants contend (id. at 23), as the Commission has obtained larger penalties in cases 

involving purported advice of counsel and disclosed spending, see, e.g., Conciliation Agreement, 

MURs 5403, 5466 (America Coming Together) ¶¶ IV.1, IV.16, IV.20, VI.1 (reciting a $775,000 

civil penalty) (Aug. 20, 2007).20 The FEC recognizes that an effective civil penalty must be 

substantial enough to motivate others to make every good-faith effort to comply with the 

personal-use ban, as defendants failed to do here.21 See infra pp. 20-23. 

 

for illegally collecting contributions from them and to return such contributions to those who 

wanted a refund. Id. at 1108, 1112. Defendants point to no similar costs they would incur here. 

20 See http://eqs.fec.gov/eqsdocs/000061A1.pdf. 

21 Because civil penalties encourage others to make good-faith efforts to comply with the 

law, deterrence is a valid civil penalty consideration even in cases involving non-knowing and 

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6. The Authority of the Commission Should Be Vindicated and PreLitigation Settlement Encouraged 

 In setting the civil penalty, this Court should also consider the importance of vindicating 

the FEC’s authority and the need to encourage pre-litigation settlement during the Commission’s 

conciliation process, which is the “preferred method of dispute resolution under FECA.” FEC v. 

NRA, 553 F. Supp. 1331, 1338 (D.D.C. 1983); see also FEC SJ Br. at 24-25. A civil penalty that 

is too low would create a perverse incentive for parties to forego meaningful efforts at 

conciliation in favor of litigation, resulting in increased burden for the courts. 

In their opposition, defendants dispute none of these points. Instead, they argue that they 

are entitled to seek judicial review on what they claim is the “complicated question” involved in 

this case. (Defs.’ Opp’n at 19.) To be sure, defendants are entitled to have this Court consider 

their case, but that does not mean that there should be an incentive to litigate instead of conciliate 

— particularly in this case, which does not involve a complicated question. See supra p. 17. 

7. Defendants’ Purported Good Faith Does Not Warrant Penalties 

Below $70,000 for Each Defendant

 The record in this case does not reflect significant good faith on defendants’ part, and that 

justifies a higher, not lower, civil penalty. At the time they spent their campaign funds for 

Craig’s personal use, defendants were aware of the Kolbe advisory opinion (FEC Facts ¶¶ 18, 

22-23), which has “clear admonitory language” stating that campaign funds cannot be used for 

legal fees resulting from personal allegations relating to official travel, Craig for U.S. Senate, 

933 F. Supp. 2d at 113. Defendants nevertheless did not rely on the Kolbe opinion. See supra

 

willful violations of FECA. See, e.g., Furgatch, 869 F.2d at 1259 (stating that the district court 

in a non-knowing and willful FECA case was “free to conclude that the absence of good faith 

efforts by [the defendant] to undo or cure his violations is indicative of the need for a large 

penalty to deter future wrongdoing”). Defendants incorrectly suggest otherwise. (See Defs. Br. 

at 20 n.15.) A substantial civil penalty here would also deter knowing and willful violations of 

the personal-use ban by signaling that the courts take all personal-use violations seriously. 

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21

pp. 6-9. They instead took the implausible view that the “FEC has apparently never addressed 

legal expenses stemming from official travel” and that there were “no directly applicable FEC 

opinions” on the issue. (FEC Facts ¶ 18 (internal quotation marks omitted).) 

 In light of this supposed lack of Commission guidance, defendants could have obtained 

from the FEC, in just 60 days or less, their own advisory opinion on whether their proposed 

spending would comply with the law. See 2 U.S.C. § 437f(a)(1). But they did not, and that 

failure alone suggests a lack of good faith in attempting to comply with the law. Cf. United 

States v. Reader’s Digest Ass’n, Inc., 662 F.2d 955, 968 (3d Cir. 1981). And defendants’ 

opposition reveals a fact that is even more damaging to their claim to good faith: Defendants 

admit that they did not ask for an advisory opinion because they were concerned the FEC might 

say no. Defendants state that they did not seek FEC “prior approval” in lieu of judicial review 

here because the “‘FEC’s business is to censor’” and so it “‘may well be less responsive than a 

court’” to assertions of constitutional rights. (Defs.’ Opp’n at 23 (quoting Citizens United v. 

FEC, 558 U.S. 310, 335-36 (2010).) 

 Defendants’ position is untenable. Their spending involved no protected speech, and 

their argument amounts to an admission that they did not seek an advisory opinion because they 

were concerned they might not like the answer they were likely to get from the agency charged 

with interpreting FECA. In effect, defendants appear to have gambled that they would not be 

pursued for their violations, or if they were, that they would manage to prevail in court. Their 

conduct may reflect hope in Grace Hopper’s famous observation that it is often easier to seek 

forgiveness than permission. But that conduct does not reflect much effort to comply with 

federal law. Moreover, defendants were not faced with a choice between a before-the-fact 

advisory opinion and after-the-fact judicial review: Had the FEC denied their request, 

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22

defendants could have asked a district court in this Circuit to review the FEC’s advisory opinion. 

See Unity08 v. FEC, 596 F.3d 861, 864-67 (D.C. Cir. 2010). 

 In October 2007, defendants started to spend more than $200,000 in campaign funds on 

legal fees for the Minnesota case, ostensibly based on Craig’s counsel’s view that provisions of 

the Constitution (that have nothing to do with the use of campaign funds) permitted their 

spending. (See FEC SJ Br. at 27; FEC Facts ¶ 20.) Four months later, on February 13, 2008, the 

Senate Ethics Committee warned Craig in a public letter of admonition that “some portion of 

[your] expenses may not be deemed to have been incurred in connection with your official 

duties, either by the Committee or by the Federal Election Commission.” (FEC Facts ¶ 27.) 

Eight months later, on October 5, 2008, defendants nevertheless continued to spend campaign 

funds for Craig’s personal use. (Id. ¶ 23.) 

 Now that defendants face civil liability, they assert, contrary to their previous position, 

that they did rely upon the Kolbe opinion. (Defs.’ Opp’n 9-11.) But in doing so, defendants 

argue that the Kolbe opinion approves “just the opposite” of what its “clear admonitory 

language” bars, and they have even “altered the language of the opinion” in an “inaccurate” and 

“misleading” way before this Court, Craig for U.S. Senate, 933 F. Supp. 2d at 113, 121, all in an 

effort to rationalize their illegal spending after the fact.22 

 Thus, although defendants claim they are entitled to a lower civil penalty in light of their 

“good faith attempts” to comply with FECA (Defs.’ Opp’n at 20), this sequence of events does 

not show significant good faith. In addition, defendants face a penalty under a statute that 

 

22 Faced with their own shifting rationales for their illegal spending, defendants accuse the 

FEC of creating a “necessary nexus” standard under section 439a(b) and then abandoning it. 

(Defs.’ Opp’n at 24.) The FEC has never used an alternative standard. The FEC’s Factual and 

Legal Analysis (Docket No. 5-1) used the “necessary nexus” phrase not as a legal term of art, but 

as a descriptive shorthand for the actual legal standard (id. at 10), which the analysis states in full 

a page earlier (id. at 9), and which the FEC has consistently applied throughout this matter. 

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already takes into account their non-“knowing and willful” state of mind, see 2 U.S.C. 

§ 437g(a)(6)(B)-(C); FEC SJ Br. at 28 (explaining that total penalties for knowing and willful 

violations could have been twice as large, or approximately $870,000), and the Commission has 

recommended a civil penalty far below what that statute authorizes. The Court should not reduce 

the penalty even further based on defendants’ dubious claims of good faith. 

 C. Defendants Have Confirmed That Craig Is Able to Disgorge the Converted 

Funds and Pay an Appropriate Civil Penalty 

 Defendants confirm in their opposition that Craig has the ability to disgorge the 

converted funds and pay an appropriate civil penalty. As they point out, Craig could liquidate a 

portion of his retirement assets to pay the penalty the Commission requests. (Defs.’ Opp’n at 24-

25.) And defendants do not dispute that Craig owns at least $629,000 in assets that are either 

liquid or could be easily liquidated. (FEC SJ Br. at 28-29 (citing FEC Facts ¶¶ 35.a, 35.c.i-v).) 

 Additionally, Craig’s financial documentation shows that his net worth is at least 

$685,000, and likely much higher. (See FEC Facts ¶ 41.) Defendants claim that Craig has a 

negative net worth (Defs.’ Opp’n at 24), but their incorrect calculation (Defs.’ Facts ¶ 26 (citing 

FEC Exh. 8 at 4)) is a result of two significant omissions they made from Craig’s assets. First, 

defendants failed to include Craig’s Thrift Savings Plan (“TSP”) account balance of $454,848.37 

among Craig’s assets. (See FEC Exh. 9 (Craig’s TSP statement reflecting balance) (Docket No. 

16-9); FEC Exh. 8 at 4, 8 (asset calculations omitting the TSP’s surrender value) (Docket No. 

16-8).) This omission is particularly glaring given that defendants admit that Craig could 

liquidate his TSP to pay a civil penalty. (Defs.’ Opp’n at 24-25 (citing Defs.’ Facts ¶ 29).) 

 Second, defendants vastly understate the asset value of Craig’s $600,000 home. They 

inaccurately claim it is worth only $190,446 (see FEC Exh. 8 at 4) by counting his unpaid 

mortgage amount as not only a liability (see id. (listing a $410,000 mortgage liability)) but also a 

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24

deduction from the value of his home on the asset side of the ledger (see id. at 7 (stating that 

$190,466.41 is the home’s “market price less unpaid mortgage” of $409,553.59)). In reality, 

Craig’s home is a $600,000 asset (FEC Facts ¶ 35.b) and his mortgage for the home is 

approximately a $410,000 liability (FEC Facts ¶ 37.a). 

 These two omissions allowed defendants to understate Craig’s assets by more than 

$860,000. Even after adjusting for these two errors, Craig’s net worth is likely well in excess of 

the FEC’s $685,000 estimate, given that defendants failed to provide any information on the cash 

surrender value of three other retirement accounts that Craig holds (see FEC Facts ¶¶ 35.c.iii-v; 

FEC Exh. 8 at 8) or the value of Craig’s share of the two limited liability companies he owns 

(see FEC Facts ¶ 35.g (citing FEC Exh. 8 at 13, Sched. 7)). 

 Thus, Craig is able to disgorge his profits and pay an appropriate civil penalty, and he 

should be required to do so. Craig’s current net worth reflects the profits of his offense, and so 

disgorgement would properly restore the pre-violation status quo. As for the civil penalty, to be 

sure, all civil penalties impose difficulties on liable defendants. But that is the point, since 

punishment is a proper purpose of a civil penalty. Further, any difficulty Craig might experience 

from paying an effective civil penalty would be due in significant part to the amount of monthly 

expenses he has chosen to incur generally (allegedly, $14,451 per month (FEC Facts ¶ 40)), and 

particularly, the discretionary spending he has engaged in since being put on notice in May 2009 

that he may face significant financial liability in this case (see FEC SJ Br. at 29). Craig’s income 

and home value are far above average for his place of residence, Boise, Idaho. His claimed 

household income of more than $196,800 per year (see FEC Facts ¶ 39) is more than four times 

the median annual household income for Boise of $49,182.23 Craig’s $600,000 home (FEC 

 

23 U.S. Census Bureau, Quick Facts for Boise City, Idaho, http://quickfacts.census.gov/qfd/ 

states/16/1608830.html. 

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Facts ¶ 35.b) is worth more than three times as much as the $188,200 median value of an owneroccupied home in Boise. See supra note 23. Craig has the resources to disgorge his illegal 

profits and pay an appropriate penalty while still maintaining a relatively high standard of living. 

 D. This Court Should Issue a Declaration and a Permanent Injunction 

 This Court should declare that defendants violated 2 U.S.C. § 439a(b) and permanently 

enjoin them from committing future violations. See 2 U.S.C. § 437g(a)(6)(B); FEC SJ Br. at 30. 

In their opposition, defendants do not object to the FEC’s requested declarative relief, but they 

do oppose injunctive relief. (Defs.’ Opp’n at 25.) An injunction under section 437g(a)(6)(B) is 

proper where “there is a likelihood of future violations,” as evidenced by, inter alia, a 

“defendant’s persistence in claiming that (and acting as if) his conduct is blameless,” such as “by 

rejecting the FEC’s attempts at conciliation.” Furgatch, 869 F.2d at 1262. Here, defendants do 

not state that Craig will forego a future run for federal office. Moreover, defendants did not 

conciliate with the Commission, and they continue to maintain that their conduct is blameless in 

this litigation. Indeed, defendants continued to divert campaign funds to Craig’s personal use 

more than eight months after being warned by the Senate Ethics Committee that they were likely 

violating FECA. See supra p. 22. For these reasons, a permanent injunction is warranted. 

III. CONCLUSION 

 For the foregoing reasons, the Court should (1) hold that defendants violated 2 U.S.C. 

§ 439a(b) and grant summary judgment in favor of the Commission; and (2) order appropriate 

remedies as the Commission has proposed under 2 U.S.C. § 437g(a)(6)(B). 

Respectfully submitted, 

Lisa J. Stevenson (D.C. Bar No. 457628) 

Deputy General Counsel – Law 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 28 of 43
26

Kevin Deeley 

Acting Associate General Counsel 

Harry J. Summers 

Assistant General Counsel 

Robert W. Bonham III 

Senior Attorney 

/s/ Kevin P. Hancock 

Kevin P. Hancock 

Attorney 

COUNSEL FOR PLAINTIFF 

FEDERAL ELECTION COMMISSION 

999 E Street, N.W. 

Washington, D.C. 20463 

January 10, 2014 (202) 694-1650 

 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 29 of 43
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

_______________________________________ 

 ) 

FEDERAL ELECTION COMMISSION, ) 

 ) Civ. No. 12-958 (ABJ) 

 Plaintiff, ) 

 ) 

 v. ) 

 ) RESPONSE TO DEFENDANTS’ 

CRAIG FOR U.S. SENATE, et al., ) STATEMENT OF FACTS 

 ) 

 Defendants. ) 

_______________________________________) 

PLAINTIFF FEDERAL ELECTION COMMISSION’S RESPONSE TO 

DEFENDANTS’ STATEMENT OF ALLEGED MATERIAL FACTS IN DISPUTE 

Lisa J. Stevenson 

Deputy General Counsel – Law 

Kevin Deeley 

Acting Associate General Counsel 

Harry J. Summers 

Assistant General Counsel 

Robert W. Bonham III 

Senior Attorney 

Kevin P. Hancock 

Attorney 

COUNSEL FOR PLAINTIFF 

FEDERAL ELECTION COMMISSION 

999 E Street, N.W. 

Washington, D.C. 20463 

January 10, 2014 (202) 694-1650 

 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 30 of 43
1

 On September 30, 2013, plaintiff Federal Election Commission (“FEC” or 

“Commission”) filed a motion for summary judgment accompanied by a statement of material 

facts as to which the FEC contends there is no genuine issue, as required by Local Civil Rule 

7(h)(1). (See FEC’s Statement of Material Facts as to Which It Contends There Is No Genuine 

Issue (“FEC Facts”) (Docket No. 16).) In response, defendants failed to file “a separate 

document that responds directly and individually to the [Commission’s] material facts” and 

indicates “whether or not a dispute exists as to each,” as required by this Court’s Scheduling 

Order and Local Civil Rule 7(h)(1). (See Scheduling Order at 3, ¶¶ 6-7 (Docket No. 14).) The 

FEC Facts should therefore be deemed admitted by defendants. See, e.g., Bonnette v. Shinseki, 

907 F. Supp. 2d 54, 61 n.3 (D.D.C. 2012) (deeming admitted paragraphs for which opposing 

party “did not cite to specific parts of the record controverting” moving party’s statement). 

 With their opposition to the FEC’s motion for summary judgment, however, defendants 

did file a statement of alleged material facts in dispute. (See Defs.’ Statement of Material Facts 

in Dispute (“Defendants’ Facts”) (Docket No. 19-1).) But Defendants’ Facts fail to present any 

genuine dispute of material fact for trial. The vast majority of Defendants’ Facts are immaterial 

for the reasons noted below and explained more fully in the FEC’s Reply Memorandum in 

Support of Its Motion for Summary Judgment (“FEC Reply Br.”) (Docket No. 21), and so any 

disputes regarding those immaterial facts do not preclude this Court from granting the 

Commission’s motion for summary judgment and the relief the Commission requests. To the 

extent defendants have presented any undisputed material facts, those facts support summary 

judgment in favor of the Commission. Below, pursuant to the Court’s Scheduling Order (see 

Scheduling Order at 4, ¶ 11 (Docket No. 14)), the Commission responds to each of defendants’ 

alleged facts individually. 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 31 of 43
2

# Defendants’ Alleged Material Fact FEC Response 

1 Senator Craig plead guilty in Minnesota 

district court to a charge of disorderly 

conduct; specifically that he “[e]ngaged in 

conduct which [he] knew or should have 

known tended to arouse alarm or 

resentment of others which conduct was 

physical (versus verbal) in nature.” (See

Motion to Withdraw Plea, Exhibit E 

(Petition to Enter Plea) at 1, Defendants’ 

(“Defs.’)” Exhibit (Exh.”) 1.) 

Not disputed. 

This alleged fact is material and supports 

summary judgment against defendants 

because it demonstrates that the conduct 

resulting in Senator Craig’s arrest was 

personal and not officeholder-related. 

2 The arresting officer reported that Senator 

Craig placed his roller bag against the 

front of his stall door, tapped his feet, 

moved his foot closer to the officer and 

swiped his hand under the stall divider a 

number of times. (See Defs.‘ Exh. 1 at 3-

4; see also Defs.’ Exh. 1, Exh. B at 7-8.) 

Not disputed. 

This alleged fact is material and supports 

summary judgment against defendants 

because it demonstrates that the conduct 

resulting in Senator Craig’s arrest was 

personal and not officeholder-related. 

3 After he was detained, Senator Craig 

displayed his “business card that identified 

himself as a United States Senator as he 

stated, ‘What do you think about that?‘“ 

(Defs.’ Exh. 1, Exh. B at 8.) 

Not disputed. 

This alleged fact is immaterial because, inter 

alia, Craig’s fear that his arrest for personal 

behavior would harm his reputation or status 

as an officeholder is irrelevant to whether 

defendants violated 2 U.S.C. § 439a(b). (See

FEC Reply Br. at 3.) 

4 During the arresting officer’s interview he 

informed Senator Craig that: “You‘re 

gonna have to pay a fine and that will be 

it. Okay. I don‘t call media. I don’t do any 

of that type of crap.” (Defs.’ Exh. 1, Exh. 

C at 3.) 

Not disputed. 

This alleged fact is immaterial because, inter 

alia, Craig’s fear that his arrest for personal 

behavior would harm his reputation or status 

as an officeholder is irrelevant to whether 

defendants violated 2 U.S.C. § 439a(b). (See

FEC Reply Br. at 3.) 

5 The officer also commented twice about 

Senator Craig’s status as a Member of 

Congress. First, saying, “I guess I’m 

gonna say I‘m just disappointed in you sir. 

I’m just really am. I expect this from the 

guy that we get out of the hood. I mean, 

people vote for you.” As the interview 

concluded, he again commented, 

“Embarrassing, embarrassing. No wonder 

Not disputed. 

This alleged fact is immaterial because, inter 

alia, Craig’s fear that his arrest for personal 

behavior would harm his reputation or status 

as an officeholder is irrelevant to whether 

defendants violated 2 U.S.C. § 439a(b). (See

FEC Reply Br. at 3.) 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 32 of 43
3

# Defendants’ Alleged Material Fact FEC Response 

why we’re going down the tubes.” (Defs.’ 

Exh. 1, Exh. C at 6.) 

6 As Senator Craig explained in his affidavit 

filed in connection with his withdrawal 

motion, “Deeply panicked about the 

events, and based on [the officer’s] 

representations to me regarding the 

potential outcome, my interest in handling 

the matter expeditiously, and the risk that 

protracting the issue could lead to 

unnecessary publicity, I did not seek the 

advice of an attorney on the date of my 

arrest, and I made the decision on that date 

to seek a guilty plea to whatever charges 

would be lodged against me.” (Defs.’ Exh. 

1, Exh. A ¶ 12.) On August 1, 2007, 

Senator Craig signed and returned 

“Petition to Enter Plea of Guilty – 

Misdemeanor” to the court. (Defs.’ Exh. 

1, Exh. E.) 

Not disputed. 

This alleged fact is immaterial because, inter 

alia, Craig’s fear that his arrest for personal 

behavior would harm his reputation or status 

as an officeholder is irrelevant to whether 

defendants violated 2 U.S.C. § 439a(b). (See

FEC Reply Br. at 3.) 

7 In Senator Craig‘s mind, “the terms of the 

plea included the promise made by [the 

officer] that the alleged incident would not 

be released to the media.” (Defs.’ Exh. 1 

at 6; see also Defs.’ Exh. 1, Exh. A ¶¶ 12-

13.) 

Not disputed. 

This alleged fact is immaterial because, inter 

alia, Craig’s fear that his arrest for personal 

behavior would harm his reputation or status 

as an officeholder is irrelevant to whether 

defendants violated 2 U.S.C. § 439a(b). (See

FEC Reply Br. at 3.) 

8 Wishing to “seek a speedy resolution of 

the matter,” Senator Craig “did not seek 

the advice of an attorney” before entering 

his plea. ((Defs.’ Exh. 1, Exh. A ¶ 13.) 

Senator Craig plead guilty, in part because 

he was concerned that the allegations 

would be made public and that they would 

provide the Idaho Statesman with an 

excuse to publish the article it had been 

threatening to run. (Defs.’ Exh. 1 at 2.) 

Not disputed. 

This alleged fact is immaterial because, inter 

alia, Craig’s fear that his arrest for personal 

behavior would harm his reputation or status 

as an officeholder is irrelevant to whether 

defendants violated 2 U.S.C. § 439a(b). (See

FEC Reply Br. at 3.) 

9 In 2006, well before his arrest in 

Minnesota, Senator Craig learned that the 

Idaho Statesman was “investigating 

allegations related to alleged homosexual 

Not disputed. 

This alleged fact is immaterial because, inter 

alia, it does not concern Craig’s personal 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 33 of 43
4

# Defendants’ Alleged Material Fact FEC Response 

activity by him.” (Defs.’ Exh. 1 at 1.) 

“The Statesman’s investigation included 

such tactics as contacting scores of the 

Senator’s friends and family, demanding 

the Senator’s FBI files, and patrolling bars 

and restrooms with the Senator’s picture.” 

(Id.)

behavior on June 11, 2007 that resulted in his 

arrest and defendants’ subsequent violation of 

2 U.S.C. § 439a(b). 

10 Senator Craig retained both legal counsel 

and media consulting services to address 

the Statesman’s investigation. (See 

Affidavit of Michael O. Ware, Chief of 

Staff to Senator Craig, Defs.’ Exh. 2 ¶ 3.) 

His campaign committee, Craig for U.S. 

Senate, paid for their services. Id.

Not disputed. 

This alleged fact is immaterial because, inter 

alia, it does not concern Craig’s personal 

behavior on June 11, 2007 that resulted in his 

arrest and defendants’ subsequent violation of 

2 U.S.C. § 439a(b). 

11 In June 2007, shortly before his Minnesota 

arrest, Senator Craig met with reporters 

for the Statesman and requested that the 

newspaper cease its harassment and other 

activities relating to its investigation. (See 

Defs.’ Exh. 1 at 2.) 

Not disputed. 

This alleged fact is immaterial because, inter 

alia, it does not concern Craig’s personal 

behavior on June 11, 2007 that resulted in his 

arrest and defendants’ subsequent violation of 

2 U.S.C. § 439a(b).

12 Despite the arresting officer’s statements 

to the contrary, the details relating to 

Senator Craig’s arrest and misdemeanor 

plea soon became public. (See John 

McArkle, Craig Arrested, Pleads Guilty 

Following Incident in Airport Restroom, 

Roll Call, August 27, 2007, Defs.’ Exh. 

3.) 

Not disputed. 

This alleged fact is immaterial because, inter 

alia, Craig’s fear that his arrest for personal 

behavior would harm his reputation or status 

as an officeholder is irrelevant to whether 

defendants violated 2 U.S.C. § 439a(b). (See

FEC Reply Br. at 3.) 

13 After his plea became public, Senator 

Craig and his Chief of Staff viewed the 

matter as a continuation of the Statesman 

investigation. (See Defs.’ Exhibit 2 ¶ 4.) 

As such, they sought assistance from the 

same legal and media consulting team that 

they had put into place to address the 

Statesman matter. (Id.) 

To the extent the proposed fact extends 

beyond alleging “the new matter related to the 

same issues as the Statesman investigation,” it 

is unsupported. The fact is otherwise not 

disputed. 

This alleged fact is immaterial because, inter 

alia, Craig’s reasons for selecting media 

consultants and the lawyers who would 

attempt to overturn his guilty plea have no 

bearing on whether he violated 2 U.S.C. 

§ 439a(b). 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 34 of 43
5

# Defendants’ Alleged Material Fact FEC Response 

14 In the days following the leak and 

publication of the story, two complaints 

relating to the Minnesota incident were 

filed with the Senate Select Committee on 

Ethics (“Ethics Committee”). (See 

Politico, Daniel W. Reilly, Senate 

Republicans Urge Ethics Investigation of 

Craig, August 28, 2007, Defs.’ Exhibit 5; 

see also Letter (Complaint) from Melanie 

Sloan, Executive Director, Citizens for 

Responsibility and Ethics in Washington 

(“CREW”) to the Hon. Barbara Boxer, 

Chair and the Hon. John Cornyn, Vice 

Chair, Senate Select Committee on Ethics 

(Aug. 28, 2007), Defs.’ Exh. 4.) 

Not disputed. 

This alleged fact is immaterial because, inter 

alia, it has no bearing on whether defendants 

violated 2 U.S.C. § 439a(b). 

15 Senator Craig’s legal counsel suggested 

that his campaign committee retain other 

counsel to assist with the Senate ethics 

issues. (Defs.’ Exh. 2 ¶ 4.) 

Disputed. The alleged fact is hearsay, and 

defendants’ citation to the record does not 

support the proposition asserted. 

In any event, this alleged fact is immaterial 

because, inter alia, defendants’ choice of 

counsel has no bearing on whether they 

violated 2 U.S.C. § 439a(b). 

16 In response to a request from the Ethics 

Committee, on November 14, 2007, 

Senator Craig’s counsel sent an eight-page 

letter to the Chairwoman and Ranking 

Member of the Committee. (Letter from 

Stanley M. Brand and Andrew D. 

Herman, Brand Law Group to the Hon. 

Barbara Boxer, Chair and the Hon. John 

Cornyn, Vice Chair, Senate Select 

Committee on Ethics (Nov. 14, 2007), 

Defs.’ Exh. 6.) 

The Commission does not dispute that the 

letter was sent. 

The Commission objects to this fact because 

defendants waived any advice-of-counsel 

defense in discovery. (Defs.’ Resp. to FEC’s 

First Req. for Admission and First Set of 

Interrogs. at 9, Interrog. 5, FEC Exh. 6 

(Docket 16-6); see also FEC Reply Br. at 8 & 

n.6.) 

If considered, this alleged fact would 

nevertheless be immaterial because, inter alia, 

this letter fails to demonstrate that defendants 

relied in good faith on the Kolbe advisory 

opinion while spending campaign funds on 

legal fees in their attempt to overturn Craig’s 

guilty plea. Also, the letter is dated after 

October 29, 2007, when Craig had already 

started spending campaign funds on his 

Minnesota legal fees. (See FEC Reply Br. at 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 35 of 43
6

# Defendants’ Alleged Material Fact FEC Response 

7-9.) In any event, even if the letter did 

demonstrate relevant reliance on the Kolbe 

opinion, it still would not preclude summary 

judgment for the FEC. (See id. at 7 n.4.) 

17 Senator Craig’s counsel cited to the Kolbe 

advisory opinion, explaining that the FEC 

had recently advised “that a member of 

Congress could utilize campaign funds to 

pay for legal expenses incurred in 

connection with inquiries by House Ethics 

Committee and the Department of Justice. 

FEC AO 2006-35 [Kolbe].” (Id. at 7 

(emphasis added).) The letter continued: 

“Relying on the advice of counsel and 

applying this framework, Senator Craig 

determined that the FEC guidance was 

clear and controlling on this issue. All 

expenditures of campaign funds for legal 

fees have been properly reported in 

accordance with FEC regulations.” (Id.) 

The Commission does not dispute that the 

letter was sent as quoted. 

The Commission objects to this fact because 

defendants waived any advice-of-counsel 

defense in discovery. (Defs.’ Resp. to FEC’s 

First Req. for Admission and First Set of 

Interrogs. at 9, Interrog. 5, FEC Exh. 6 

(Docket 16-6); see also FEC Reply Br. at 8 & 

n.6.) 

If considered, this alleged fact would 

nevertheless be immaterial because, inter alia, 

the November 14, 2007 letter cited does not 

show that defendants relied on the Kolbe 

opinion for their spending on legal 

representation to attempt to overturn Craig’s 

guilty plea in Minnesota. Also, the letter is 

dated after October 29, 2007, when Craig had 

already started spending campaign funds on 

his Minnesota legal fees. (See FEC Reply Br. 

at 7-9.) In any event, even if the letter did 

show relevant reliance on the Kolbe opinion, 

this would not preclude summary judgment 

for the FEC. (See id. at 7 n.4.) 

18 During this process and based on this legal 

opinion, defendants “were confident that 

the use of campaign committee funds for 

these expenses was legal and customary.” 

Senator Craig would not have made the 

committee expenditures had they not 

received authorization from counsel. 

(Defs.’ Exh. 2 ¶ 7.) 

Disputed. The alleged fact is hearsay, and the 

citation to the record does not support the 

proposition asserted. 

The Commission objects to this fact because 

defendants waived any advice-of-counsel 

defense on the merits during discovery, and, 

in any event, defendants’ state of mind is 

irrelevant to their violation. (See FEC Reply 

Br. at 8 & n.6.) 

If considered, this alleged fact would 

nevertheless be immaterial because, inter alia, 

it does not demonstrate that defendants relied 

in good faith on the Kolbe advisory opinion 

while spending campaign funds on legal fees 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 36 of 43
7

# Defendants’ Alleged Material Fact FEC Response 

in their attempt to overturn Craig’s guilty 

plea. (See id. at 6-9.) 

19 On February 13, 2008, the Committee 

issued a “Public Letter of Admonition” to 

Senator Craig, finding that: “The conduct 

to which you pled guilty, together with 

your related and subsequent conduct . . . 

constitutes improper conduct reflecting 

discreditably on the Senate and through 

this letter the Select Committee on Ethics, 

on behalf of and pursuant to authority 

granted by the United States Senate, 

publicly admonishes you for that 

conduct.” (Letter from Six Members of 

the Senate Select Committee on Ethics to 

the Hon. Larry E. Craig (Feb. 13, 2008), 

Defs.’ Exh. 7 at 2.) 

Not disputed. 

This alleged fact is immaterial because, inter 

alia, any effect that Craig’s arrest for personal 

behavior may have had on his officeholder 

reputation or status has no bearing on whether 

defendants violated 2 U.S.C. § 439a(b). (See

FEC Reply Br. at 3.) 

20 On June 5, 2008, Senator Craig submitted 

a legal trust fund agreement to the Ethics 

Committee, requesting approval of the 

"Fund for Justice." (Fund for Justice (A 

Legal Trust Fund for Hon. Larry Craig) 

Agreement (June 5, 2008), Defs.’ Exh. 8.) 

Attached to the Agreement was an 

“Affidavit of Senator Larry E. Craig,” 

stating that: “This fund is necessitated by, 

and intended to defray, legal expenses and 

related expenses I incur and am 

responsible for in connection with the 

State of Minnesota v. Larry E. Craig, a 

criminal action arising from an incident 

that occurred while I was returning to the 

United States Senate to cast a vote and 

therefore related to my service to the 

United States Senate.” (Id., Craig Aff. at 

1.) 

Disputed to the extent that the first sentence 

of this alleged fact is not supported by 

defendants’ citation to the record and the 

embedded legal assertion that funds spent in 

the effort to withdraw Craig’s guilty plea 

were “related to” his Senate service is 

incorrect. Otherwise, this alleged fact is not 

disputed. 

This alleged fact is immaterial because, inter 

alia, the Senate Ethics Committee’s approval 

of a legal defense fund under its rules does 

not establish that defendants’ use of campaign 

funds was legal under the Federal Election 

Campaign Act (“FECA”), 2 U.S.C. §§ 431-

57, as the Senate Ethics Committee warned 

defendants. (See FEC Reply Br. at 3-4.) 

21 On July 25, 2008 The Ethics Committee 

approved Senator Craig’s request to 

establish a legal defense fund “to pay for 

expenses incurred by you in connection 

with State of Minnesota v. Larry Edwin 

Craig, a criminal action.” (Letter from 

Not disputed. 

This alleged fact is immaterial because, inter 

alia, the Senate Ethics Committee’s approval 

of a legal defense fund under its rules does 

not establish that defendants’ use of campaign 

funds was legal under FECA, as the Senate 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 37 of 43
8

# Defendants’ Alleged Material Fact FEC Response 

Hon. Barbara Boxer, Chair and the Hon. 

John Cornyn, Vice Chair, Senate Select 

Committee on Ethics to Larry E. Craig 

(July 25, 2008), Defs.’ Exh. 9 at 1.) 

Ethics Committee warned defendants in the 

exhibit cited. (See FEC Reply Br. at 3-4.) 

22 Senator Craig’s legal defense fund, the 

“Fund for Justice,” received thousands of 

dollars in contributions. (See Defs.’ Exh. 

10 (spreadsheet listing legal defense fund 

contributions).) Senator Craig also 

expended personal funds in the course of 

this matter. (See, e.g., Defs.’ Exh. 16 

($1,797.51 invoice for expenses relating to 

legal defense fund).) 

Not disputed to the extent that the cited 

evidence shows that Craig spent $1,797.51 on 

his legal defense fund. 

This alleged fact is immaterial because, inter 

alia, defendants’ use of money from donors to 

Craig’s legal defense fund, who knew they 

were supporting Craig’s effort to withdraw 

his guilty plea, has no bearing on the legality 

of defendants’ use of money from 

contributors to Craig’s campaign committee, 

who had no idea they were supporting such an 

effort. (See FEC Reply Br. at 4.) 

23 On August 10, 2009, Senator Craig’s 

counsel sent a detailed letter responding to 

the Commission’s Factual and Legal 

Analysis. (Letter from Stanley M. Brand 

and Andrew D. Herman, Brand Law 

Group to Thomasenia P. Duncan, FEC 

(Aug. 10, 2009), Defs.’ Exh.11.) In that 

letter, Senator Craig’s counsel articulated 

its position regarding the official elements 

of the Minnesota case and provided 

extensive citations to the Commission’s 

relevant advisory opinions. (Id. at 2-4.) 

The letter also addressed a newly-minted 

“necessary nexus” standard proposed by 

the Commission and demonstrated that it 

had no basis in relevant law, regulations 

or previous advisory opinions. (Id. at 4.) 

Disputed to the extent that defendants rely on 

the incorrect legal assertion that the letter 

“addressed a newly-minted ‘necessary nexus’ 

standard proposed by the Commission and 

demonstrated that it had no basis in relevant 

law, regulations or previous advisory 

opinions.” The FEC Factual and Legal 

Analysis that defendants’ exhibit refers to 

(see Defs’ Exh. 11 at 4 (citing Docket No. 5-

1)) used the “necessary nexus” phrase not as a 

legal term of art, but as a descriptive 

shorthand for the actual legal standard (see 

Docket No. 5-1 at 10), which the analysis 

states in full a page earlier (id. at 9), and 

which the FEC has consistently applied 

throughout this matter. Thus, there was no 

“newly-minted” standard and defendants did 

not demonstrate that it had no basis in law. 

(See FEC Reply Br. at 22 n.22.) 

The first two sentences of this alleged fact are 

not disputed. 

This alleged fact is immaterial because, inter 

alia, defendants’ counsel’s opinion as to 

whether defendants violated FECA has no 

bearing on whether defendants in fact violated 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 38 of 43
9

# Defendants’ Alleged Material Fact FEC Response 

FECA. 

24 On September 21, 2009, defendants also 

responded to the Commission’s request 

for invoices relating to legal services 

provided to Senator Craig and provided 

those invoices to the Commission. (Letter 

from Andrew D. Herman, Brand Law 

Group to the Shana Broussard, FEC (Sept. 

21, 2008), Defs.’ Exh. 12.) 

Not disputed. 

This alleged fact is immaterial because, inter 

alia, it has no bearing on whether defendants 

violated 2 U.S.C. § 439a(b), and defendants 

admitted in their answer that they spent at 

least $216,984 in their effort to withdraw 

Craig’s guilty plea. (See FEC Reply Br. at 

10-12.) 

25 Senator Craig’s expenditures in 

connection with his effort to withdraw his 

guilty plea do not all relate solely to those 

efforts, and some of the fees for those 

services could be partially or fully paid 

with committee funds: 

Disputed. Defendants admitted in their 

answer that they spent at least $216,984 in 

their effort to withdraw Craig’s guilty plea. 

(See FEC Facts ¶ 23.) Also, defendants’ legal 

conclusion that “some of the fees for those 

services could be partially or fully paid with 

committee funds” is inaccurate for the reasons 

explained in the FEC’s reply brief. (See FEC 

Reply Br. at 10-12.) 

25 

a 

The September 27, 2007, Invoice from 

Kelly & Jacobson, Attorneys At Law, lists 

activity relating to “media calls.” (Defs’ 

Exh. 13 at “Craig 44”); 

Not disputed. 

This alleged fact fails to create a genuine 

issue because, inter alia, defendants admitted 

in their answer that they spent at least 

$216,984 in their effort to withdraw Craig’s 

guilty plea, and the phrase does not establish 

that defendants spent less than that amount. 

(See FEC Reply Br. at 10-12.) 

25 

b 

The October 26, 2007, Invoice from 

Sutherland, Asbill & Brennan LLP lists 

numerous activities relating to media 

issues, conferences with senatorial staff, 

“political issues,” and ethics issues. 

(Defs.’ Exh. 13 at “Craig 36, 35, 34, 33, 

32, 31”); 

Not disputed. 

This alleged fact fails to create a genuine 

issue because, inter alia, defendants admitted 

in their answer that they spent at least 

$216,984 in their effort to withdraw Craig’s 

guilty plea, and the phrase does not establish 

that defendants spent less than that amount. 

(See FEC Reply Br. at 10-12.) 

25 

c 

The November 16, 2007, Invoice from 

Sutherland, Asbill & Brennan LLP lists 

numerous activities relating to media 

issues, conferences with senatorial staff, 

political issues, and ethics issues. (Defs.’ 

Not disputed. 

This alleged fact fails to create a genuine 

issue because, inter alia, defendants admitted 

in their answer that they spent at least 

$216,984 in their effort to withdraw Craig’s 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 39 of 43
10

# Defendants’ Alleged Material Fact FEC Response 

Exh. 13 at “Craig 51, 50, 49”); guilty plea, and the phrase does not establish 

that defendants spent less than that amount. 

(See FEC Reply Br. at 10-12.) 

25 

d 

The January 1, 2008, Invoice from Kelly 

& Jacobson, Attorneys At Law, lists 

activity relating to “Handl[ing] calls from 

sources wanting factual information 

relevant to the case.” (Defs’ Exh. 13 at 

“Craig 79, 87”); 

Not disputed. 

This alleged fact fails to create a genuine 

issue because, inter alia, defendants admitted 

in their answer that they spent at least 

$216,984 in their effort to withdraw Craig’s 

guilty plea, and the phrase does not establish 

that defendants spent less than that amount. 

(See FEC Reply Br. at 10-12.) 

25 

e 

The January 7, 2008, Invoice from 

Sutherland, Asbill & Brennan LLP lists 

numerous activities relating to media 

issues, conferences with senatorial staff, 

political issues, and ethics issues. (Defs.’ 

Exh. 13 at “Craig 59-61”); 

Disputed to the extent defendants claim there 

are “numerous” such activities listed. 

This alleged fact fails to create a genuine 

issue because, inter alia, defendants admitted 

in their answer that they spent at least 

$216,984 in their effort to withdraw Craig’s 

guilty plea, and the phrase does not establish 

that defendants spent less than that amount. 

(See FEC Reply Br. at 10-12.) 

25 

f 

The January 17, 2008, Invoice from 

Sutherland, Asbill & Brennan LLP lists 

numerous activities relating to media 

issues, conferences with senatorial staff, 

political issues, and ethics issues. (Defs.’ 

Exh. 13 at “Craig 71”); 

Disputed to the extent defendants claim there 

are “numerous” such activities listed. 

This alleged fact fails to create a genuine 

issue because, inter alia, defendants admitted 

in their answer that they spent at least 

$216,984 in their effort to withdraw Craig’s 

guilty plea, and the phrase does not establish 

that defendants spent less than that amount. 

(See FEC Reply Br. at 10-12.) 

25 

g 

The September 17, 2008, Invoice from 

Kelly & Jacobson, Attorneys At Law, lists 

activity relating to a “Post-hearing press 

conference.” (Defs’ Exh. 13 at “Craig 

75”); 

Not disputed. 

This alleged fact fails to create a genuine 

issue because, inter alia, defendants admitted 

in their answer that they spent at least 

$216,984 in their effort to withdraw Craig’s 

guilty plea, and the phrase does not establish 

that defendants spent less than that amount. 

(See FEC Reply Br. at 10-12.) 

25 The November 1, 2007, Invoice from the 

Brand Law Group, PC lists numerous 

Not disputed. 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 40 of 43
11

# Defendants’ Alleged Material Fact FEC Response 

h activities relating to “FEC rules” and 

related FEC issues. (Defs.’ Exh. 13 at 

Craig 41-42”; 

This alleged fact fails to create a genuine 

issue because, inter alia, defendants admitted 

in their answer that they spent at least 

$216,984 in their effort to withdraw Craig’s 

guilty plea, and the phrase does not establish 

that defendants spent less than that amount. 

(See FEC Reply Br. at 10-12.) 

25 

i 

The December 7, 2007, Invoice from the 

Brand Law Group, PC lists activities 

relating to “FEC fees guidance” and “FEC 

proposed rule (use of campaign funds).” 

(Defs.’ Exh. 13 at Craig 55-56”.) 

Not disputed. 

This alleged fact fails to create a genuine 

issue because, inter alia, defendants admitted 

in their answer that they spent at least 

$216,984 in their effort to withdraw Craig’s 

guilty plea, and the phrase does not establish 

that defendants spent less than that amount. 

(See FEC Reply Br. at 10-12.) 

26 Senator Craig and his wife disclosed a 

“total net worth” of negative $155,258.12. 

(Financial Disclosure Statement of Larry 

E. Craig (Aug. 13, 2013) (“Fin. Discl. 

Stmt.”) at 4, Summary, FEC Exhibit 8.) 

Not disputed to the extent that this alleged 

fact asserts that defendants state on page four 

of Craig’s financial summary that his “total 

net worth” is negative $155,258.12. (FEC 

Exh. 8 at 4.) 

This alleged fact is immaterial, however, 

because defendants do not dispute the FEC’s 

proposed material fact accurately stating that 

Craig’s net worth is — in reality — at least 

$685,827.85. (See FEC Facts ¶ 41.) 

Defendants inaccurately calculated Craig’s 

net worth by omitting more than $860,000 in 

assets Craig admitted having elsewhere in his 

financial disclosure form and related 

documents. (See FEC Reply Br. at 23-24 

(citing FEC Exhs. 8-9)). Craig’s true net 

worth is likely well in excess of $685,827.85 

due to additional omissions defendants made 

on Craig’s financial disclosure form. (See id.

at 24 (citing FEC Facts ¶¶ 35.c.iii-v, 35.g; 

FEC Exh. 8 at 8, 13).) 

Also, this fact fails to create a genuine issue 

because, inter alia, it allegedly relates only to 

the appropriate remedies for defendants’ 

FECA violation. 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 41 of 43
12

# Defendants’ Alleged Material Fact FEC Response 

27 The “Fair Market Value” of his home is 

$190,466.41. (Id. at 7, Schedule 3.) 

Not disputed to the extent that this alleged 

fact asserts that defendants state on page 

seven of Craig’s financial disclosure form that 

the “Fair Market Value” of Craig’s home is 

$190,466.41. (See FEC Exh. 8 at 7.) 

This alleged fact is immaterial, however, 

because defendants do not dispute the FEC’s 

proposed material fact accurately stating that 

Craig’s home’s value is — in reality — 

$600,000. (See FEC Fact ¶ 35.b.) 

Defendants inaccurately calculated Craig’s 

home’s value as only $190,446 (see FEC Exh. 

8 at 4) by counting Craig’s unpaid mortgage 

amount ($409,553.59) as not only a liability 

(see FEC Exh. 8 at 4 (listing a $410,000 

mortgage liability)), but also as a deduction 

from the value of his home on the asset side 

of the ledger (see id. at 7 (stating that 

$190,466.41 is the home’s “market price less 

unpaid mortgage” of $409,553.59)). (See

FEC Reply Br. at 23-24.) 

Also, this fact fails to create a genuine issue 

because, inter alia, it allegedly relates only to 

the appropriate remedies for defendants’ 

FECA violation. 

28 The “Current Value” of his 1977 Bertram 

Motor Vessel is negative $15,000. (Id. at 

11, Schedule 6.) Both automobiles are 

leased and have “no value to owner.” (Id.)

Not disputed to the extent that this 

information is what defendants assert on 

Craig’s financial disclosure form. (See FEC 

Exh. 8.) Defendants provide no basis for their 

assertion, and the FEC notes that similar 

yachts can be found for sale today for 

$85,9001

 and $109,000.2 

Also, this fact fails to create a genuine issue 

because, inter alia, it allegedly relates only to 

the appropriate remedies for defendants’ 

FECA violation. 

 

1

 See http://www.boattrader.com/listing/1977-Bertram-42-Motor-Yacht-102083953 (last 

visited Jan. 9, 2014). 

2

 See http://www.yachtworld.com/boats/1977/Bertram-42-foot-Convertible2236214/Montauk/NY/United-States#.UjeAcn_iv8A (last visited Jan. 9, 2014). 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 42 of 43
13

# Defendants’ Alleged Material Fact FEC Response 

29 Senator Craig is currently drawing about 

$2500 a month from his Thrift Savings 

Plan for living expenses. (Id. at 8; 

Schedule 4; 20, Schedule 21.) 

Not disputed to the extent that this 

information is what defendants assert on 

Craig’s financial disclosure form, and that 

Craig alleges that his current required 

expenses are in excess of $14,000 per month. 

(See FEC Exh. 8.) 

Also, this fact fails to create a genuine issue 

because, inter alia, it allegedly relates only to 

the appropriate remedies for defendants’ 

FECA violation. 

Respectfully submitted, 

Lisa J. Stevenson (D.C. Bar No. 457628) 

Deputy General Counsel – Law 

Kevin Deeley 

Acting Associate General Counsel 

Harry J. Summers 

Assistant General Counsel 

Robert W. Bonham III 

Senior Attorney 

/s/ Kevin P. Hancock 

Kevin P. Hancock 

Attorney 

COUNSEL FOR PLAINTIFF 

FEDERAL ELECTION COMMISSION 

999 E Street, N.W. 

Washington, D.C. 20463 

January 10, 2014 (202) 694-1650 

 

Case 1:12-cv-00958-ABJ Document 21 Filed 01/10/14 Page 43 of 43