Source: https://www.scribd.com/document/65203645/Most-Corrupt-2011-Dishonorable-Mention-Rep-Jeff-Denham-R-CA
Timestamp: 2017-08-23 04:49:28
Document Index: 250141682

Matched Legal Cases: ['§ 441', '§ 441', '§ 114', '§ 434', '§ 100', '§ 441', '§ 434', '§ 441', '§ 300', '§ 437', '§ 110', '§ 439', '§ 113']

Most Corrupt 2011 Dishonorable Mention: Rep. Jeff Denham (R-CA) | Campaign Finance In The United States | Federal Election Commission
Description: Most Corrupt 2011 Dishonorable Mention: Rep. Jeff Denham (R-CA)
DISHONORABLE MENTION: REPRESENTATIVE JEFF DENHAM Representative Jeff Denham (R-CA) is a first-term member of Congress, representing California’s 19th
congressional district. Rep. Denham’s ethics issues stem from using his state political campaign account to bolster his congressional bid and illegal use of a corporate plane. Remembering the Brave Before running for Congress, Rep. Denham was a California state senator, and his state Senate campaign accepted corporate contributions. 1 On April 12, 2010, Rep. Denham, then running in the Republican primary for a seat in the U.S. House of Representatives, donated $25,000 from his state Senate campaign account to Remembering the Brave, a Colorado-based charity dedicated to remembering fallen veterans. 2 Between April 19 and May 25, 2010, Rep. Denham made three loans from his state Senate campaign account, totaling $200,000, to the same nonprofit. 3 A campaign consultant to Rep. Denham said the money from Rep. Denham’s state Senate campaign account was donated purely to benefit the charity and had nothing to do with his campaign. 4 During May – mere weeks before the June 8, 2010 primary – Remembering the Brave ran radio and television ads featuring Rep. Denham promoting a May 28 benefit concert for the organization. 5 The goal was to raise money for Project Gold Star, a program administered by the California Department of Veteran Affairs to raise private donations to pay for specialized license plates for the families of U.S. military personnel killed while serving on active duty. 6 Remembering the Brave asked Rep. Denham to serve as a spokesman and appear in the ads. 7 The concert took place at the Chukchansi Gold Resort and Casino, owned by the Chukchansi
See, e.g., Jeff Denham for State Senate, California Form 460 Semi-Annual Statement 2006, Secretary of State: Sacramento, California, filed January 30, 2007 (listing corporate contributions, including from Anheuser-Busch Cos., Inc., General Electric, Paramount Pictures Group, and Pepsi-Cola Co.). 2 Jeff Denham for State Senate, California Form 460 Pre-Election Statement 2010, Secretary of State: Sacramento, California, filed May 27, 2010; see also http://cal-access.ss.ca.gov/Campaign/Committees/Detail.aspx?id= 1251652&session=2009&view=expenditures. Remembering the Brave is organized under section 501(c)(3) of the Internal Revenue Code. Remembering the Brave Inc., 2009 IRS Form 990-EZ, August 12, 2010. 3 Jeff Denham for State Senate, California Form 460 Semi-Annual Statement 2010, Secretary of State: Sacramento, California, filed July 29, 2010; see also http://cal-access.ss.ca.gov/Campaign/Committees/Detail.aspx?id= 1251652&session=2009&view=expenditures. 4 E.J. Schultz, John Ellis and Michael Doyle, Denham Raises Eyebrows with $175,000 to Charity, Modesto Bee, May 30, 2010; Alex Isenstadt, GOP Feud Sparks Funding Complaint, Politico, June 18, 2010. 5 Schultz, Ellis and Doyle, Modesto Bee, May 30, 2010; http://www.youtube.com/user/RememberTheBrave; Federal Election Commission, MUR No. 6362 (Denham for Congress and David Bauer), Factual and Legal Analysis. 6 Federal Election Commission, MUR Nos. 6289 and 6362, First General Counsel’s Report, p. 7, April 13, 2011. 7 Id.
Indian tribe, located in the congressional district in which Rep. Denham was running. 8 While the ads didn’t directly promote Rep. Denham’s candidacy, they were widely aired throughout the district and provided valuable exposure for the congressional candidate. 9 Remembering the Brave apparently spent between $100,000 and $200,000 on the ads. 10 Remembering the Brave raised $105,442.24 for Project Gold Star. 11 A Chukchansi casino marketing department meeting agenda memo indicated the concert was intended to raise money for the campaigns of both Rep. Denham and that of a candidate for Madera County Supervisor: “On 5/28, the Charity Concert by Phil Vassar will be performing to raise funds for Jeff Denham and Joe Alberta campaigns.” 12 Chukchansi officials later said the memo was inaccurate and they were unsure whether it was authentic. Rep. Denham’s campaign consultant said the memo was “obviously a misprint.” 13 Rep. Denham won the Republican primary by six points. 14 Two weeks after he won the general election in November 2010, he forgave the $200,000 in loans. 15 Use of Corporate Jet In March 2010, Rep. Denham and another Republican candidate for Congress, Andy Vidak, flew on a corporate jet owned by Harris Farms, a California agribusiness, accompanied by Karl Rove. 16 The flight left Fresno and landed at the East Bay before continuing on to Harris Ranch near Coalinga. 17 Mr. Vidak acknowledged that he had broken the law and said he had informed the Federal Election Commission (FEC) about the situation, but Rep. Denham did not. 18 In April 2010, Rep. Denham reported owing Harris Farms $150 for travel expenses, but local charter operators estimated the cost of a charter flight from Fresno to Coalinga to be at least $750. 19
Schultz, Ellis and Doyle, Modesto Bee, May 30, 2010. Id.; Isenstadt, Politico, June 18, 2010; Michael Doyle, Nunes Urges Investigation of Denham, Fresno Bee, June 10, 2010. 10 Federal Election Commission, MUR No. 6362 (Denham for Congress and David Bauer), Factual and Legal Analysis, p. 6; Federal Election Commission, MUR No. 6362 (Remembering the Brave), Factual and Legal Analysis, p. 6. 11 Federal Election Commission, MUR Nos. 6289 and 6362, First General Counsel’s Report, p.10, April 13, 2011. 12 Schultz, Ellis and Doyle, Modesto Bee, May 30, 2010; see also http://www.flashreport.org/files/ 2010052802565298.pdf. 13 Schultz, Ellis and Doyle, Modesto Bee, May 30, 2010. 14 Greg Giroux, Denham Wins GOP Nod to Succeed Radanovich, Roll Call, June 9, 2010. 15 Jeff Denham for State Senate, California Form 460 Semi-annual Statement 2010, Secretary of State: Sacramento, California, filed January 27, 2011; see also http://cal-access.ss.ca.gov/Campaign/Committees/Detail.aspx?id= 1251652&session=2009&view=expenditures. 16 John Ellis, Two GOP Hopefuls Probably Broke Law, Fresno Bee, May 6, 2010. 17 Id. 18 Id. 19 Id. Although Rep. Denham initially reported the $150 travel expense in an FEC report, he later amended his report to exclude it altogether. Cf. Denham for Congress, FEC Form 3, April Quarterly Report 2010, May 13, 2010; Denham for Congress, Amended FEC Form 3, April Quarterly Report 2010, May 25, 2010.
Status of Investigation The transfers to Remembering the Brave and the ads promoting the concert prompted Rep. Denham’s political opponents to file two FEC complaints alleging he had illegally used state political funds to promote a federal candidacy and improperly coordinated with Remembering the Brave and the Chukchansi tribe. 20 On August 2, 2011 the FEC dismissed the allegations that Rep. Denham received prohibited in-kind corporate contributions resulting from coordinated communications and, because the commission was equally divided, took no further action regarding the allegations Rep. Denham had illegally transferred funds from his state Senate campaign to finance electioneering communications. 21 The FEC’s First General Counsel’s Report, released on September 9, 2011, revealed that the commission’s general counsel found reason to believe the Denham state committee illegally transferred funds from his state Senate campaign to pay for electioneering communications featuring Rep. Denham. 22 Legal Fees Rep. Denham’s campaign committee has paid the law firm Bell, McAndrews & Hiltachk $3,556 in legal fees since 2010. 23 Potential Violations Transfer of State Campaign Funds The Federal Election Campaign Act (FECA) prohibits a congressional candidate or any entity established, financed, maintained, or controlled by a candidate from soliciting, receiving, directing, transferring, or spending funds in connection with an election for federal office, unless the funds are subject to the limitations, prohibitions, and reporting requirements of the FECA. 24 Rep. Denham established and controlled his state Senate campaign fund, which accepted corporate contributions prohibited in federal elections. 25 The Denham state committee then contributed $225,000 to Remembering the Brave, which immediately spent between $100,000 and $200,000 on ads that qualify as “electioneering communications” under the FECA and FEC regulations because they referred to a candidate for federal office and were broadcast within 30 days of a primary election. 26
Isenstadt, Politico, June 18, 2010; Schultz and Ellis, Fresno Bee, June 7, 2010; Schultz, Ellis and Doyle, Modesto Bee, May 30, 2010; Federal Election Commission, MUR No. 6362 (Denham for Congress and David Bauer), Factual and Legal Analysis, p. 1. 21 Id., pp. 1-2; John Ellis, FEC Clears Denham On Allegations He Misused Campaign Funds, Fresno Bee, August 12, 2011, available at http://fresnobeehive.com/news/2011/08/fec_clears_denham_on_allegatio.html. 22 Federal Election Commission, MUR Nos. 6289 and 6362, First General Counsel’s Report, p. 22, April 13, 2011. 23 Denham for Congress, FEC Form 3, April Quarterly Report 2011, April 15, 2011; Denham for Congress, FEC Form 3, Year-End Report 2010, January 31, 2011; Denham for Congress, FEC Form 3, October Quarterly Report 2010, July 5, 2010; Denham for Congress, FEC Form 3, April Quarterly Report 2010, April 15, 2010. 24 2 U.S.C. § 441i(e)(1)(A). 25 2 U.S.C. § 441b(a); 11 C.F.R. § 114.2(d). 26 2 U.S.C. § 434(f)(3)(A); 11 C.F.R. § 100.29(a). While congressional candidates are permitted – despite these provisions – to solicit funds for charitable organizations, 2 U.S.C. § 441i(e)(4), they may not do so for a charitable organization they established, financed, maintained, or controlled. Federal Election Commission, Advisory Opinion
Although the FEC commissioners split three-three, stymying further action, the FEC’s general counsel found reason to believe Rep. Denham’s state committee transferred non-federal funds to finance electioneering communications in connection with Rep. Denham’s federal election. 27 A knowing and willful violation would violate criminal law. 28 Campaign Finance Disclosures While the FEC concluded the ads were exempt from the definition of coordinated communications under the safe harbor exception for candidate charitable solicitations that do not promote, attack, support or oppose a candidate, the general counsel found reason to believe Remembering the Brave violated 2 U.S.C. § 434(f) by failing to report electioneering communications. 29 Similarly, the general counsel found reason to believe Remembering the Brave violated 2 U.S.C. § 441d(a) by failing to include disclaimers with the radio and television ads noting who paid for the ads, that the ads were not paid for by the candidate or committee, and listing the address, telephone number or web address of the person who paid for the communications. 30 The general counsel noted the involvement of Denham campaign consultants in the purchase of the ads and the Denham state campaign account’s role in funding the ads “militate[d] against a dismissal.” 31 Use of Corporate Jet House candidates are prohibited from making expenditures to fly on non-commercial aircraft and from accepting non-commercial flights as in-kind contributions. 32 By flying on the corporate jet owned by Harris Farms, Rep. Denham violated the law.
2003-12 (July 29, 2003). By donating $225,000 to Remembering the Brave, Rep. Denham financed it. 11 C.F.R. § 300.2(c). 27 Federal Election Commission, MUR Nos. 6289 and 6362, First General Counsel’s Report, p. 25, April 13, 2011. 28 2 U.S.C. § 437g(d)(1)(A)(i). 29 Federal Election Commission, MUR Nos. 6289 and 6362, First General Counsel’s Report, p. 18, April 13, 2011. 30 Id., p. 19 (citing 11 C.F.R. § 110.11(b)(3)). 31 Id., p. 20. 32 2 U.S.C. § 439a(c)(2); 11 C.F.R. § 113.5(b).
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