Court Opinion

ID: 2738403
Source: CourtListenerOpinion
Date Created: 2014-09-30 19:01:53.798991+00
Date Added: 2024-06-11T15:47:43.547956
License: Public Domain

UNITED STATES DISTRICT COURT
                           FOR THE DISTRICT OF COLUMBIA
____________________________________
                                    )
FEDERAL ELECTION COMMISSION,        )
                                    )
                  Plaintiff,        )
                                    )
      v.                            )               Civil Action No. 12-0958 (ABJ)
                                    )
CRAIG FOR U.S. SENATE, et al.,      )
                                    )
                  Defendants.       )
____________________________________)

                                MEMORANDUM OPINION

       This opinion arises out of former Senator Larry Craig’s efforts to withdraw the guilty

plea he entered in Minnesota state court in 2007, after he was arrested for disorderly conduct in

the Minneapolis-St. Paul International Airport.      On June 11, 2012, the Federal Election

Commission (“FEC” or “the Commission”) brought suit against defendants Craig, the Craig for

U.S. Senate campaign committee (“Craig Committee”), and Kaye L. O’Riordan, the former

treasurer of the Craig Committee, 1 contending that defendants converted campaign funds to

personal use in violation of the Federal Election Campaign Act (“FECA” or “the Act”) when

they expended those funds to pay legal fees incurred in connection with Senator Craig’s efforts

to withdraw his plea. Defendants moved to dismiss the complaint for failure to state a claim on

August 2, 2012, and the Court denied that motion on March 28, 2013. The FEC then moved for

summary judgment on September 30, 2013, seeking an order disgorging from Senator Craig the

$216,984 sum that the FEC contends was unlawfully converted, a $70,000 civil penalty against

1       Defendant Craig has since been substituted for Ms. O’Riordan as the treasurer for the
Craig Committee, and he is now named as a defendant in this case in both his personal and
official capacities. See May 1, 2013 Minute Order.
defendant Craig, a $70,000 civil penalty against the Craig Committee, and declaratory and

injunctive relief.

        The Court will grant the FEC’s motion, although it will not award all of the relief the

FEC seeks. The Court finds that defendants violated the FECA when they converted campaign

funds to pay for legal expenses related to Senator Craig’s efforts to withdraw his guilty plea,

which was a personal matter that was not connected to the Senator’s duties as an officeholder.

Furthermore, the Court finds that the circumstances of this case merit the imposition of both a

penalty and an order of disgorgement, as well as the declaratory relief the FEC seeks. But the

Court finds that the amount that was unlawfully converted totals $197,535, not $216,984, and

that a penalty of $45,000 against Senator Craig is appropriate in this case. The Court will

therefore order Senator Craig to pay a total of $242,535 to the U.S. Department of the Treasury,

which is comprised of the amount he was unjustly enriched plus the additional penalty. The

Court will not order any relief against the now defunct Craig Committee, nor will it issue an

injunction in this case.

                                        BACKGROUND

        The following facts are not in dispute. 2 Defendant Larry Craig was a United States

Senator from Idaho from January, 1991 to January, 2009. Compl. [Dkt. # 1] ¶ 6; Answer [Dkt.

# 12] ¶ 6. Senator Craig is named in this case both in his personal capacity and in his official

2        Defendants did not file a statement of material facts in dispute that directly responded to
the statement of undisputed material facts filed by the FEC, as required by the Local Rules of
this Court and this Court’s Scheduling Order [Dkt. # 14]. See LCvR 7(h)(1) (“In determining a
motion for summary judgment, the court may assume that facts identified by the moving party in
its statement of material facts are admitted, unless such a fact is controverted in the statement of
genuine issues filed in opposition to the motion.”). Instead, defendants filed a non-responsive
statement of their own disputed facts. See Defs.’ Statement of Material Facts in Dispute [Dkt.
# 19-1]. The FEC, however, filed an additional statement of facts that directly responds to
defendants’ statement, which the Court will rely on in part to set forth the facts of this case. See
FEC’s Resp. to Defs.’ Statement of Alleged Material Facts in Dispute [Dkt. # 21].
                                                 2
capacity as treasurer of defendant Craig for U.S. Senate. See May 1, 2013 Minute Order.

Defendant Craig for U.S. Senate is a political committee authorized to receive contributions and

make expenditures on behalf of defendant Craig. Compl. ¶ 7; Answer ¶ 7. Plaintiff, the Federal

Election Commission, is an agency of the United States government that is authorized to enforce

the Federal Election Campaign Act. Compl. ¶ 5; Answer ¶ 5.

       On June 11, 2007, Senator Craig was arrested in the Minneapolis-St. Paul International

Airport and charged with two violations of Minnesota criminal law: “disturbing the peace-

disorderly conduct,” and interference with privacy. Compl. ¶ 12; Answer ¶ 12. On August 8,

2007, Senator Craig pled guilty to disorderly conduct, a misdemeanor. Compl. ¶ 12; Answer

¶ 12; see also FEC’s Resp. to Defs.’ Statement of Alleged Material Facts in Dispute [Dkt. # 21]

¶ 1 (“FEC Facts Resp.”). But on September 10, 2007, Senator Craig filed a motion in Minnesota

state district court to withdraw his guilty plea. Compl. ¶ 14; Answer ¶ 14. Senator Craig’s

efforts to withdraw his plea were unsuccessful, and his final appeal was denied on December 9,

2008. Compl. ¶ 14; Answer ¶ 14.

       On September 1, 2007, after the arrest and conviction became the subject of national

media attention, Senator Craig announced his intention to resign from the Senate effective

September 30, 2007. Compl. ¶ 15; Answer ¶ 15. Meanwhile, the U.S. Senate Select Committee

on Ethics (“Senate Ethics Committee”) launched an inquiry into the Senator’s arrest, guilty plea,

and subsequent conduct. Compl. ¶ 16; Answer ¶ 16. Senator Craig then decided not to resign so

that he could “continue [his] effort to clear [his] name in the Senate Ethics Committee,” and he

retired at the end of his term in January 2009 instead. Compl. ¶ 17; Answer ¶ 17.

       On July 25, 2008, the Senate Ethics Committee authorized Senator Craig to establish a

legal expense trust fund “to pay for expenses incurred in connection with” the Minnesota

                                               3
litigation, although it warned Senator Craig that its “approval of the Fund and of the trust

agreement [did] not indicate approval of [his] continuation of the proceedings in” Minnesota.

Ex. 9 to Defs.’ Opp. to Pl.’s Mot. for Summ. J. (“Defs.’ Opp.”) [Dkt. # 19-11] at 1. The

Committee also warned that it would “consider any further use of [Senator Craig’s] campaign

funds for legal expenses without the Committee’s approval to be conduct demonstrating [his]

continuing disregard of ethics requirements.” Id. at 2.

       Between July 9, 2007 and October 5, 2008, the Craig Committee disbursed more than

$480,000 of campaign funds for legal fees and other expenses. Compl. ¶ 18; Answer ¶ 18. The

Craig Committee paid at least $139,952 to the law firm of Sutherland, Asbill & Brennan LLP for

its legal services to Senator Craig in connection with his efforts to withdraw his guilty plea, and

approximately $77,032 to the law firm of Kelly & Jacobson for similar services, for a total of

$216,984. Compl. ¶¶ 19–20; Answer ¶¶ 19–20.

       On February 13, 2008, the Senate Ethics Committee issued a “Public Letter of

Admonition” to Senator Craig, which stated that some portion of the Craig Committee’s

expenditures “may not be deemed to have been incurred in connection with [Senator Craig’s]

official duties, either by the Committee or by the Federal Election Commission.” Ex. 7 to Defs.’

Opp. [Dkt. # 19-9] at 2. Then, on November 10, 2008, the FEC received an administrative

complaint alleging that Senator Craig had violated the FECA by spending more than $213,000 in

campaign funds to pay legal fees and expenses incurred in connection with his attempts to

withdraw his guilty plea. Compl. ¶ 24; Answer ¶ 24. The FEC investigated the complaint and

attempts to resolve the matter short of litigation were unsuccessful. Compl. ¶¶ 25–30; Answer

¶¶ 25–30.

                                                4
       The FEC filed this lawsuit on June 11, 2012, claiming that defendants violated 52 U.S.C.

§ 30114(b) 3 when they disbursed campaign funds to pay legal expenses related to the Senator’s

efforts to withdraw his guilty plea in Minnesota. Compl. ¶¶ 33–34. The FEC alleged that

defendants unlawfully “converted the Craig Committee’s funds to personal use” because these

expenditures were not “made in connection with Mr. Craig’s campaign for federal office and

were not ordinary and necessary expenses incurred in connection with his duties as a Senator.”

Id. ¶ 33. Defendants moved to dismiss the complaint on August 2, 2012 for failure to state a

claim. Defs.’ Mot. to Dismiss [Dkt. # 3]. On March 28, 2013, the Court denied defendants’

motion. See FEC v. Craig for U.S. Senate, 933 F. Supp. 2d 111, 113 (D.D.C. 2013). Accepting

the allegations in the complaint as true, the Court found that the FEC had stated a claim that

defendants violated the Act by converting campaign funds to personal use. Id. at 116–119. The

Court further found that defendants had failed to demonstrate that they were immune from

prosecution based on their alleged reliance on prior FEC Advisory Opinions because all of those

opinions were distinguishable. Id. at 120–25.

       Following the Court’s ruling on the motion to dismiss, on April 11, 2013, defendants

filed an answer that admitted nearly all of the factual allegations in the complaint. See Answer

¶¶ 12–31. Then, on September 30, 2013, the FEC moved for summary judgment. FEC’s Mot.

for Summ. J. [Dkt. # 16] (“FEC Mot.”). The FEC sought the following relief in addition to the

entry of judgment in its favor: an order disgorging from Senator Craig the $216,984 disbursed to

Sutherland, Asbill & Brennan LLP and Kelly & Jacobson; a $70,000 civil penalty against

Senator Craig; a $70,000 civil penalty against the Craig Committee; a declaration that defendants

3      All of pleadings in this case, as well as the Court’s previous opinion, refer to the relevant
portion of the FECA as 2 U.S.C. § 439a(b). As of September 1, 2014, however, that provision
was recodified at 52 U.S.C. § 30114(b).
                                                 5
violated the Act; and a permanent injunction against all defendants prohibiting them from

violating the Act in the future. Id. at 14. Defendants opposed the FEC’s motion on November

13, 2013, arguing in part that a portion of the legal fees were lawful campaign expenditures.

Defs.’ Opp. [Dkt. # 19]. Plaintiff filed its reply on January 10, 2014. FEC’s Reply Mem. [Dkt.

# 21] (“FEC Reply”). The Court heard oral argument on plaintiff’s motion on July 17, 2014.

After the hearing, the Court ordered defendants to submit a supplemental pleading “itemizing

and quantifying all of the legal expenses included in any of the bills submitted . . . by Kelly &

Jacobson and Sutherland, Asbill, and Brennan” that defendants maintained were permissible.

July 17, 2014 Minute Order. Defendants submitted their pleading on August 15, 2014, and the

FEC responded on August 29, 2014. Defs.’ Pleading Itemizing & Quantifying Legal Expenses

[Dkt. # 24] (“Defs.’ Supp. Mem.”); FEC’s Resp. to Defs.’ Pleading [Dkt. # 25] (“FEC Resp.”).

                                  STANDARD OF REVIEW

       Summary judgment is appropriate “if the movant shows that there is no genuine dispute

as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(a). The party seeking summary judgment bears the “initial responsibility of informing the

district court of the basis for its motion, and identifying those portions of the pleadings,

depositions, answers to interrogatories, and admissions on file, together with the affidavits, if

any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex

Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). To defeat

summary judgment, the non-moving party must “designate specific facts showing that there is a

genuine issue for trial.” Id. at 324 (internal quotation marks omitted). The existence of a factual

dispute is insufficient to preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 247–48 (1986). A dispute is “genuine” only if a reasonable fact-finder could find for the

                                                6
non-moving party; a fact is only “material” if it is capable of affecting the outcome of the

litigation. Id. at 248; Laningham v. U.S. Navy, 813 F.2d 1236, 1241 (D.C. Cir. 1987). In

assessing a party’s motion, the court must “view the facts and draw reasonable inferences ‘in the

light most favorable to the party opposing the summary judgment motion.’” Scott v. Harris, 550

U.S. 372, 378 (2007) (alterations omitted), quoting United States v. Diebold, Inc., 369 U.S. 654,

655 (1962) (per curiam).

                                             ANALYSIS

        The Court finds that there are no genuine issues of material fact in dispute in this case,

and that defendants are liable as a matter of law for converting campaign funds to personal use in

violation of section 30114(b) of the FECA. Defendants admitted all of the material facts with

respect to their liability in their answer to the complaint, and the Court has already concluded

that those facts amount to a violation of the federal campaign finance law. The Court has wide

discretion to fashion a remedy in this case, and it will order defendant Craig to pay $242,535 to

the United States Department of the Treasury. This amount is comprised of a disgorgement of

$197,535, the amount of campaign funds that were unlawfully converted to personal use, plus a

penalty of $45,000, which the Court finds necessary and appropriate to punish defendants’

misconduct and to deter future misconduct by others. The Court will also issue the declaratory

relief that the FEC seeks, but it finds that injunctive relief is not appropriate in this case.

I.      Defendants violated 52 U.S.C. § 30114(b).

        In its previous opinion in this case, the Court found that, accepting the allegations in the

complaint as true, the FEC had shown that defendants had violated the FECA’s ban on

                                                   7
converting campaign funds to personal use. 4 See Craig, 933 F. Supp. 2d at 116–119. The Court

“reject[ed] defendants’ assertion that the expenditures were permitted under the Act” because it

found that legal expenses incurred in withdrawing a plea to personal criminal conduct in the

airport could not be characterized as “ordinary and necessary expenses in connection with

Senator Craig’s duties as an office holder.” Id. at 113. Therefore, “the campaign funds were

converted to Senator Craig’s personal use as that term is defined in the Act.” Id. In addition, the

Court found that defendants could not find safe harbor in prior FEC opinions since they had

“misstate[d] the holding of those opinions, minimize[d] the key distinctions between those cases

and [their own], and disregard[ed] clear admonitory language” in the advisory opinion on which

they relied most heavily. Id.

       After the court issued its opinion denying defendants’ motion to dismiss, defendants

answered and admitted the critical facts. Compare Compl. ¶¶ 12–31 (setting forth the facts

section of the complaint), with Answer ¶¶ 12–31 (admitting all of the factual allegations

contained in the corresponding paragraphs of the complaint but maintaining Senator Craig’s

innocence as a matter of law). In particular, defendants admitted that “the Sutherland law firm

received at least $139,952 for providing legal services to Mr. Craig in connection with his efforts

to withdraw his guilty plea,” and that “[t]he Kelly law firm received approximately $77,032 from

the Craig Committee for providing legal services to Mr. Craig in connection with efforts to

withdraw his guilty plea.” Compl. ¶¶ 19–20; Answer ¶¶ 19–20. Thus, defendants have now

admitted to utilizing campaign funds in a manner that the Court has already found to be a

4      Section 30114(b) prohibits individuals from converting campaign funds to personal use.
52 U.S.C. § 30114(b)(1). The statute specifies that a contribution to a campaign fund “shall be
considered to be converted to personal use if the contribution . . . is used to fulfill any
commitment . . . or expense of a person that would exist irrespective of the candidate’s election
campaign or the individual’s duties as a holder of Federal office.” Id. at § 30114(b)(2).
                                                8
violation of the personal use ban of the FECA. See Craig, 933 F. Supp. 2d at 113; see also

Defs.’ Opp. at 2 (“Although defendants maintain that they did not violate the [FECA’s] personal

use ban, they recognize that the Court’s order denying their motion to dismiss essentially held to

the contrary.”). On that basis, alone, the Court could grant summary judgment to the FEC.

       Nevertheless, defendants contend that the FEC’s motion should be denied because

“material facts . . . remain in doubt.” Defs.’ Opp. at 2. First, defendants take issue with the

Commission’s failure, in their view, “to provide a full and accurate depiction of facts material to

this matter.” Id. at 4. Defendants submit that the FEC has not taken the following facts into

account: the date on which Senator Craig retained counsel; Senator Craig’s reliance on the

arresting officer’s assurance that he would not “call media”; Senator Craig’s state of mind

immediately after his arrest; and Senator Craig’s dispute with the Idaho Statesman newspaper.

Id. at 4–6; see also Defs.’ Statement of Material Facts in Dispute [Dkt. # 19-1] ¶¶ 1–15. But

even if all of these alleged facts are true, they do nothing to alter the Court’s conclusion that

defendants’ expenditure of campaign funds in connection with the Minnesota matter violated the

FECA’s personal use ban. See Craig, 933 F. Supp. 2d at 118 (“Neither the charge nor the

underlying conduct had anything to do with [Senator Craig’s] performance of his official duties,

so the legal expenses they generated were not incurred in connection with those duties.”). These

facts may illuminate why Senator Craig did what he did, but they do not change what he did: the

Senator’s arrest was personal and the attendant legal expenditures were not incurred in

connection with his official duties, even if he either elected to plead guilty or to change course

with his public image in mind.

       Defendants also claim that there is an issue of material fact with respect to defendants’

good-faith reliance on an FEC Advisory Opinion. Defs.’ Opp. at 7, 9–11, citing FEC AO 2006-

                                                9
35 (Kolbe), 2007 WL 419188 (Jan. 26, 2007). But the Court has already concluded that any

reliance by defendants on the Kolbe opinion does not relieve them of liability because the Kolbe

opinion does not actually support their claims. Craig, 933 F. Supp. 2d at 124 (“[D]efendants’

suggestion that the [Kolbe] Advisory Opinion stands for something other than what it said is

unsupported.”). Although the question of defendants’ good faith may still be relevant to the

question of punishment and the Court’s determination of the remedy it will impose, see infra

section III.B.1, it does not alter the Court’s finding that defendants violated section 30114(b).

       Next, defendants argue that the Court cannot grant summary judgment for the FEC

because there is a question of material fact as to the total amount of funds defendants converted

to personal use. Defs.’ Opp. at 12–13. The Court agrees that the FEC has failed to pinpoint the

precise dollar amount that defendants unlawfully converted, but that is not a material fact that

precludes summary judgment. There is no question that defendants unlawfully converted funds

to personal use. Thus, there is no material fact in dispute on the question of defendants’ liability.

Rather, the dispute centers on the amount of that liability, which the Court will address further

below. 5

5       The Court also notes that the lack of clarity surrounding the expenditures in this case is
attributable to defendants’ own actions. Defendants claim, with justification, that some of their
legal expenditures qualify for payment with campaign funds under two FEC Advisory Opinions.
Defs.’ Opp. at 12–13, citing FEC AO 2008-7 (Vitter), 2008 WL 4265321, at *4–5 (Sept. 9,
2008), and FEC AO 1998-1 (Hilliard), 1998 WL 108618, at *4 (Feb. 27, 1998). But these
opinions also clearly place the onus on defendants to obtain “billing documentation” that
“provide[s] sufficient details as to the precise legal services rendered” so that there are “adequate
records to determine which amounts are lawfully payable from campaign funds.” Hilliard, 1998
WL 108618, at *5; see also Vitter, 2008 WL 4265321, at *5 (outlining the requirement to
“maintain appropriate documentation”). Defendants did not obtain this detailed documentation,
or at least they have yet to provide it to the FEC or the Court, even after repeated requests that
they do so. So, they have no grounds to complain about the FEC’s over-inclusiveness or lack of
precision, and they did little to carry their burden to establish the amount of the legal expenses
that qualified for at least partial payment with campaign funds.
                                                 10
       Finally, defendants argue that a recently-released FEC Advisory Opinion indicates that

they should not be found liable in this case. Defs.’ Opp. at 15, citing FEC AO 2013-11 (Miller),

2013 WL 6022101 (Oct. 31, 2013). But this opinion has no bearing on defendants’ case. The

Advisory Opinion concerns Joe Miller, a former candidate for U.S. Senate in Alaska. During

Miller’s campaign, certain media outlets sued to obtain personnel records related to his previous

public employment.       Id. at *1. The court found that Miller’s “right to privacy . . . [was]

outweighed by the public’s significant interest in the background of a public figure that is

running for U.S. Senate,” and ordered the release of the records. Id. Miller then requested an

Advisory Opinion from the FEC as to whether his campaign committee could use campaign

funds to post the cash deposit required to appeal the ruling, “and/or to pay the judgment should

his appeal be unsuccessful.” Id. at *2. The FEC determined that it was lawful for Miller to use

campaign funds in this manner because the underlying lawsuit and the verdict would not have

arisen but for Miller’s status as a candidate for office. Id. at *3. As the FEC explained: “[T]he

Alaska media outlets’ suit to obtain Miller’s personnel records, as well as the court’s order

granting that relief, directly related to his federal campaign.” Id.

       Defendants claim that “[m]uch like Miller’s decision to fight disclosure of personal

material that could harm his campaign, Senator Craig’s challenge to his plea stemmed from his

desire to counter allegations that he believed would be damaging to his public stature as a United

States Senator and his viability as a future candidate.” Defs.’ Opp. at 15–16.     But the Miller

ruling was not based on the fact that Miller had his public profile in mind; it was based on the

fact that the lawsuit in which the fees were incurred was occasioned by his status as a candidate

for office. As the FEC put it, “the lawsuit would not have existed irrespective of Miller’s

campaign,” 2013 WL 6022101, at *2, and that is simply not the case for the criminal proceedings

                                                  11
in Minnesota. Moreover, since the Miller Advisory Opinion was not issued until October 2013,

there can be no argument that defendants relied on it in good faith to justify expenditures that

began in 2007.

       Thus, the Court finds that defendants have not identified any material facts in dispute as

to their liability. The Court therefore holds that defendants violated section 30114(b) of the

FECA by converting campaign funds to the personal use of Senator Craig.

II.    Defendants converted $197,535 to personal use in violation of the FECA.

       Although the FEC has proven that defendants violated the FECA, neither the FEC nor

defendants have established the precise amount of funds that defendants unlawfully converted.

Defendants admitted in their answer that they paid $216,984 in campaign funds to the Sutherland

and Kelly law firms for “legal services” related to the Minnesota guilty plea. See Answer ¶¶ 19–

20; see also Compl. ¶¶ 19–20. But they contend that $46,464 of that amount was permissible

under FEC Advisory Opinions that provide that spending on legal services related to media and

ethics issues can be exempt from the personal use ban. See Defs.’ Supp. Mem. at 1–4, 18. In

response, the FEC argues that defendants have not carried their burden to establish that any

portion of the $216,984 was permissibly spent, and it urges the Court to find that the full amount

                                               12
was converted to personal use, or, in the alternative, to apply a flat discount rate of 10 percent,

resulting in a reduction of only $10,856. FEC Resp. at 10–13. 6

       The Court finds that while defendants have established that some portion of the $216,984

in campaign funds was permissibly spent, their estimate of that lawful portion is over-inclusive.

But the FEC’s approach fares no better: it is under-inclusive, imprecise, and disconnected from

its legal underpinnings. Therefore, the Court has undertaken its own line-by-line analysis of

defendants’ legal invoices, and it concludes – to the extent it is possible to derive a dollar figure

– that $19,449 of the $216,984 spent was a permissible use of campaign funds under the

principles set forth in the FEC’s Hilliard and Vitter Advisory Opinions. See Appendix A

(detailing the Court’s calculations); see also Ex. 1 to FEC Resp. [Dkt. # 25-1] (the relevant

invoices).

       The Hilliard and Vitter opinions establish that certain legal expenses devoted to media

relations or responding to ethics inquiries are partially or fully payable with campaign funds.

These opinions are based upon the principle that these sorts of legal expenses would not

ordinarily be incurred if the client were not a candidate or federal officeholder. See Vitter, 2008

WL 4265321, at *3–4; Hilliard, 1998 WL 108618, at *4. In the Hilliard opinion, the FEC stated

6       It is important to note that the FEC has already excluded significant portions of the
campaign funds defendants spent in connection with the Minnesota matter from the $216,984
figure, apparently in keeping with the principles articulated in the Hilliard and Vitter Advisory
Opinions. Specifically, the $216,984 the Commission seeks to recoup does not include the more
than $100,000 defendants paid to Impact Strategies, a public relations firm, nor does it include
the campaign funds paid to the Brand Law Group in connection with its representation of
Senator Craig in the Senate Ethics Committee inquiry. See FEC Reply at 11 n.10 (noting the
exclusion of the funds paid to Impact Strategies); Ex. 12 to FEC Reply [Dkt. # 21-1] at 5 (stating
that defendants retained the Brand Law Group to respond to the Senate Ethics Committee
inquiry); see also Hr’g Tr. at 7 (explaining that the FEC excluded all payments to Impact
Strategies and the Brand Law Group). So the order of disgorgement imposed in this opinion
does not include those expenditures.

                                                 13
that “any legal expense that relates directly and exclusively to dealing with the press . . . would

qualify for 100% payment with campaign funds.” 1998 WL 108618, at *4, quoting FEC

Advisory Opinion 1997-12. 7       The Vitter opinion explains that “a candidate’s campaign

committee [may] pay legal fees incurred in preparing press releases, appearing at press

conferences, meeting or talking with reporters, reviewing and monitoring media allegations,

responding to media requests for comment, and conferring with the candidate or officeholder

regarding media allegations.” Vitter, 2008 WL 4265321, at *4 n.2. It also states that campaign

funds may be used to pay legal fees and expenses incurred in responding to a Senate Ethics

Committee inquiry, even when the alleged wrongdoing is “unrelated to candidacy and the duties

of an officeholder.” Id. at *3. Finally, both opinions make it clear that the party claiming that its

use of campaign funds is permissible has the burden to obtain and retain records that show

precisely which expenditures qualified for payment with campaign funds. See Hilliard, 1998

WL 108618, at *5 (stating that a campaign committee is required to obtain “billing

documentation” from its attorneys that “provide[s] sufficient details as to the precise legal

7      In full, the Hilliard Advisory Opinion provides that:

       1) any legal expense that relates directly and exclusively to dealing with the press,
       such as preparing a press release, appearing at a press conference, or meeting or
       talking with reporters, would qualify for 100% payment with campaign funds
       because [the person is] a candidate or Federal officeholder;

       2) any legal expense that relates directly to allegations arising from campaign or
       officeholder activity would qualify for 100% payment with campaign funds;

       3) 50% of any legal expense not covered by 1 above that does not directly relate
       to allegations arising from campaign or officeholder activity can be paid for with
       campaign funds because [the person is] a candidate or Federal officeholder and
       [is] providing substantive responses to the press (beyond pro forma “no
       comment” statements).

1998 WL 108618, at *4, quoting FEC Advisory Opinion 1997-12 (alteration in original).
                                                 14
services rendered” so that there are “adequate records to determine which amounts [were]

lawfully payable from campaign funds”); see also Vitter, 2008 WL 4265321, at *5 (outlining the

requirement to “maintain appropriate documentation”).

       There is no question that the invoices that defendants submitted to the FEC and to the

Court include charges for legal services related to both public relations and the Senate Ethics

Committee inquiry. See, e.g., Ex. 13 to Defs.’ Opp. [Dkt. # 19-15] at “Craig 36” (“Research and

review draft Press Release.”); id. at “Craig 59” (“Teleconference regarding Senator ethics issues;

discussion with ethics counsel.”). But defendants’ legal invoices utilize a “block” billing style,

where multiple tasks performed are grouped together within undifferentiated blocks of time.

See, e.g., Ex. 1 to FEC Resp. at “Craig 34” (reflecting charges for 5.10 hours of work described

as follows: “Revise motion to withdraw guilty plea and supporting affidavit. Discuss same with

B. Martin and K. Verdi. Various calls with Senate staff . . . [and] with T. Kelly regarding legal

issues associated with motion. Various calls with J. Smith and staff regarding publicity issues

associated with motion.”). Thus, defendants did not fulfill their obligation to retain “adequate

records” so that the Court or the FEC can “determine which amounts [were] lawfully payable

from campaign funds.” Hilliard, 1998 WL 108618, at *5. 8

       Still, the Court gave defendants one more chance to make this showing. After hearing

oral argument on the FEC’s motion for summary judgment, the Court ordered defendants to

submit a supplemental pleading “itemizing and quantifying all of the legal expenses included in

any of the bills submitted . . . by Kelly & Jacobson and Sutherland, Asbill and Brennan that they

8       Moreover, although the FEC expressly asked defendants to identify campaign funds used
to pay legal fees related to media inquiries, defendants declined to do so. See FEC Reply at 11;
see also Ex. 13 to FEC Reply [Dkt. # 21-2] at 3 (FEC questionnaire asking defendants to “[s]tate
the total amount of Craig for U.S. Senate funds that were disbursed to pay legal fees . . . to
respond to media inquiries”); Ex. 14 to FEC Reply [Dkt. # 21-3] at 1 (letter from defendants’
counsel stating that defendants “decline to respond directly to [the FEC’s] questions”).
                                               15
contend were permissible under [the Hilliard and Vitter] FEC Advisory Opinions.” July 17,

2014 Minute Order.       The Court further instructed that “[d]efendants’ submission should

separately identify each entry by date and by attorney and indicate the amount of time involved

and the specific dollar amount they claim constituted an appropriate use of campaign funds.” Id.

Defendants submitted a pleading on August 15, 2014, and the FEC submitted its response on

August 29, 2014. See Defs.’ Supp. Mem.; FEC Resp.

       The Court finds that defendants have still failed to establish what portion of their legal

bills was permissibly paid with campaign funds under the standards articulated in the Hilliard

and Vitter opinions. Rather than complying with the Court’s instruction to identify the specific

amounts of time spent on activities that might constitute an appropriate use of campaign funds,

defendants simply discounted entries containing a mix of exempt and non-exempt activities by a

flat and unduly generous 50 or 25 percent. For instance, defendants applied a 50 percent

discount to 7.5 hours billed by the Sutherland firm for the following:

       Attend to finalizing motion to withdraw guilty plea and affidavit. Additional
       research regarding same. Discuss same . . . . Various calls with Senate staff
       regarding legal issues associated with motion to withdraw guilty plea. Various
       calls with [public relations consultant Judy] Smith regarding legal and publicity
       issues associated with motion to withdraw guilty plea . . . .

See Defs.’ Supp. Mem. at 7. There is no apparent factual basis for applying the 50 percent

discount to this entire entry; defendants should have applied any discount only to the portion of

the time that was spent on the calls with the public relations consultant concerning “legal and

publicity issues.” In another instance, defendants discounted by 50 percent the 9.9 hours of legal

work by the Sutherland firm described in the following block entry:

       Numerous conference recalls [sic] regarding political and legal issues regarding
       Minneapolis incident.   Confer with local counsel regarding Minneapolis
       proceedings. Review police report and other documents regarding Minneapolis
       proceedings.

                                                16
See id. at 6. But the only portion of that entry that is even arguably media or ethics related is the

first sentence about the conference calls; the remaining two sentences of the entry describe work

that is purely legal. 9 Defendants’ submission is replete with entries like these, and it falls far

short of compliance with the Court order entered for their own benefit. 10 The Court therefore

rejects defendants’ contention that $46,464 of the campaign funds disbursed to the two law firms

was exempt from the personal use ban. 11

       The FEC argues that in light of defendants’ failure to document the expenditures that

should be exempt from the personal use ban, the Court should either consider the full $216,984

to have been converted to personal use, or apply a flat discounting rate of 10 percent. FEC Resp.

9      Defendants themselves acknowledged the mixed nature of these billing entries in their
pleading by highlighting only certain sentences of the entries in yellow. See Defs.’ Supp. Mem.
at 5–17.

10     See, e.g., Defs.’ Supp. Mem. at 12 (applying 50 percent discount to 2.10 hours billed by
Kelly & Jacobson for the following: “Attend to various public relations issues. Research
procedures for filing notice of appeal. Discuss same with T. Kelly.”); id. at 16 (applying a 25
percent discount rate to the following billing entry from Kelly & Jacobson: “Redraft and finalize
oral argument; Telephone conferences with counsel for the defense; Review of cases;
Preparation for oral argument with counsel for the defense; Court – Appellate Hearing; Debrief
with co-counsel; Post-hearing press conference.”).

11      Defendants also contend that legal fees associated with “the attorneys’ consultations with
staff members in Senator Craig’s office, a meeting with another United States Senator,
addressing a Senate Committee on Appropriations issue and addressing FEC disclosure
concerns” qualified for payment with campaign funds because these activities constituted
“consultations with the Senator and his advisors” under the Vitter Advisory Opinion. Defs.’
Supp. Mem. at 2; see also id. at 5–17 (reflecting numerous deductions for “political” expenses).
But the Vitter opinion exempts only those “consultations” that involved “Ethics Counsel” and “a
public relations professional.” See 2008 WL 4265321, at *3 (authorizing the use of campaign
funds to “pay legal fees for Subpoena Counsel’s consultations with Ethics Counsel”); id. at *4
(authorizing the use of campaign funds to pay “legal fees and expenses incurred by Subpoena
Counsel in press relations . . . including . . . consultations with a public relations professional”).
Defendants’ claim that it was permissible to use campaign funds to pay for legal expenses
broadly related to “political” issues is an unwarranted expansion of the principles established in
the Vitter opinion for which defendants have offered no legal authority.
                                                 17
at 10–12. The FEC’s proposed approach would result in a discount of zero or $10,856. Id. at 13.

But although defendants’ legal invoices are not sufficiently specific, and although defendants

have been maddeningly cavalier in responding to both the FEC’s and the Court’s inquiries, the

Court is bound to follow the law, and the bills are not so vague that the Court cannot do a better

job than that in calculating the exempt amount.

       The Court undertook its own evaluation of the invoices provided by the parties, and it

determined that of the $216,984 at issue here, defendants permissibly spent approximately

$19,449 in campaign funds on media or ethics related legal services. See Appendix A. The

Court’s review of the invoices from the Sutherland and Kelly law firms revealed forty-nine

entries that included at least some legal work related to public relations or ethics matters. The

Court found that fourteen of these entries described work that was fully payable with campaign

funds and that the remaining thirty-five entries billed for a mix of tasks that were only partially

exempt from the personal use ban. Given the undifferentiated nature of the data, the Court used

its best judgment to estimate the amount of time spent on the exempt activities, multiplied those

hours by the relevant attorneys’ rates, and deducted that amount from the full $216,984 that

defendants have admitted they paid to the Kelly and Sutherland firms. Through this process, the

Court determined that defendants spent $19,449 on legal services related to media or ethics

concerns, and that defendants converted the remaining $197,535 to personal use in violation of

the FECA. 12 A chart setting forth the Court’s calculations in detail is available as Appendix A to

this Memorandum Opinion.

12      Any imprecision in the math is attributable to the quality of the information provided by
the defendants.

                                                  18
III.   The Court will order Senator Craig to pay $242,535 to the U.S. Department of the
       Treasury and will issue a declaration that defendants violated section 30114(b).

       Now that the Court has found that defendants converted $197,535 in campaign funds to

personal use, it must determine the appropriate remedy for defendants’ violation of the FECA.

The Court’s judgment in this case will be the first of its kind; it appears that no other court has

been asked to determine the remedy for a violation of the particular section of the FECA

involved here.

       The FEC asks the Court to: (1) order Senator Craig to disgorge the full amount of funds

converted to personal use; (2) levy a $70,000 civil penalty against Senator Craig; (3) levy a

$70,000 civil penalty against the Craig Committee; (4) issue a declaration that defendants

violated the Act; and (5) order a permanent injunction against all defendants that prohibits them

from violating the Act in the future. FEC Mot. at 14. Defendants contend that the FEC’s request

for both a disgorgement and civil penalties is excessive and unwarranted, and that injunctive

relief is not appropriate in this case. 13 Defs.’ Opp. at 2, 4. In an exercise of its broad discretion

to fashion a remedy for a violation of the FECA, the Court will order Senator Craig to pay

$242,535 to the U.S. Treasury, which is the sum of a disgorgement of $197,535 and a penalty of

$45,000. The Court will also issue the declaratory relief that the FEC requests. But the Court

does not find that injunctive relief is appropriate in this case, nor will it order the Craig

Committee to pay a penalty.

13     Defendants do not, however, oppose the FEC’s request for declaratory relief. See Defs.’
Opp. at 16.

                                                 19
   A. The Court has broad discretion to fashion a remedy under the FECA.

       The FECA provides that a court

       may grant a permanent or temporary injunction, restraining order, or other order,
       including a civil penalty which does not exceed the greater of [$7,500] 14 or an
       amount equal to any contribution or expenditure involved in such violation, upon
       a proper showing that the person involved has committed, or is about to commit
       (if the relief sought is a permanent or temporary injunction or a restraining order),
       a violation of this Act . . . .

52 U.S.C. § 30109(a)(6)(B). Despite defendants’ claim that “no authority justifies [the FEC’s]

request for both disgorgement and sizable civil penalties,” Defs.’ Opp. at 2, the plain language of

the Act accords the Court the discretion to call for disgorgement (an “other order”), a penalty, the

declaration, and the injunctions that the FEC seeks. 15

       Moreover, the cases addressing violations of other provisions of FECA all suggest that

the Court has broad discretion to fashion a remedy that is appropriate to the particular

circumstances of this case. See, e.g., FEC v. Furgatch, 869 F.2d 1256, 1258, 1262, 1264 (9th

Cir. 1989) (imposing a penalty of $25,000 where the defendant willfully and knowingly failed to

report and disclose $25,008 in independent expenditures, and suggesting that a temporary

injunction would be appropriate because the defendant was likely to commit further violations);

FEC v. Ted Haley Cong. Comm., 852 F.2d 1111, 1115–17 (9th Cir. 1988) (deferring to the

FEC’s interpretation of the FECA but affirming the district court’s decision not to impose

approximately $85,000 in civil penalties because the defendants had acted in good faith); FEC v.

Comm. of 100 Democrats, 844 F. Supp. 1, 7–8 (D.D.C. 1993) (holding that the defendants’

willful violation of two FEC conciliation agreements warranted civil penalties, an order to repay

14      As of July 24, 2013, this amount was increased from $5,000 to $7,500 to adjust for
inflation. 11 C.F.R. § 111.24(a)(1).

15     Notably, at the hearing on the FEC’s motion, counsel for defendants conceded that the
Court “ha[s] discretion to impose the penalty that [it] see[s] fit.” Hr’g Tr. at 39.
                                                 20
$3,500, and an injunction against future violations); FEC v. Kalogianis, No. 8:06-cv-68-T-

23EAJ, 2007 WL 4247795, at *6–8 (M.D. Fla. Nov. 30, 2007) (declining to award the maximum

penalty or a permanent injunction for the defendant’s reporting failures and then-unlawful

acceptance of corporate contributions where the defendant had acted in good faith, any injury to

the public was “remote and circumscribed,” and there was “no indication . . . that [the defendant

was] likely to violate the Act again”); FEC v. Friends of Jane Harman, 59 F. Supp. 2d 1046,

1057, 1059 (C.D. Cal. 1999) (declining to award a penalty, disgorgement, or injunction where

the case “involve[d] a detailed analysis of complex statutes and regulations,” the defendants’

violations were not “substantial nor obvious,” the Harman campaign no longer existed, and

Representative Harman was no longer in office).

       In addition, several FEC conciliation agreements provide for relief similar to the relief the

FEC requests in this case; that is, some combination of penalties, disgorgement, refunds, and

injunctions. See, e.g., Istook Conciliation Agreement at 5–7 (Sept. 25, 2008) 16 (assessing a civil

penalty of $14,600, requiring the disgorgement of excessive contributions and the refund of

funds converted to personal use, and ordering defendants to “cease and desist” violations of the

FECA); Kalyn Free for Congress Conciliation Agreement at 7 (Sept. 23, 2008) 17 (assessing a

civil penalty of $10,000, requiring a refund by the candidate to the campaign committee, and

ordering defendants to “cease and desist” violations of the FECA); Meeks for Congress

Conciliation Agreement at 6–7 (Feb. 4, 2008) 18 (assessing a civil penalty of $63,000 against the

campaign committee, requiring a refund and disgorgement of other funds, and ordering

16     Available at http://eqs.fec.gov/eqsdocsMUR/28044212385.pdf.

17     Available at http://eqs.fec.gov/eqsdocsMUR/28044212013.pdf.

18     Available at http://eqs.fec.gov/eqsdocsMUR/000EC959.pdf.

                                                21
defendants to “cease and desist” violations of the FECA); Campbell for Senate Conciliation

Agreement at 3–4 (Oct. 31, 2003) 19 (assessing a civil penalty of $79,000, requiring a refund of

up to $104,434 in excess contributions, and ordering defendants to “cease and desist” violations

of the FECA).

        Thus, based on the language of the FECA, the case law, and the FEC’s own conciliation

agreements, the Court concludes that it has broad discretion to impose a remedy that it deems

appropriate under the specific circumstances of this case.

     B. The Court will order Senator Craig to pay $242,535 to the U.S. Department of the
        Treasury.

        The Court will require defendant Craig to pay $242,535, which is comprised of a

disgorgement of the $197,535 the Court has determined that defendants converted to personal

use, plus a penalty of $45,000. The $242,535 is to be paid to the U.S. Department of the

Treasury.

        The Court finds that the disgorgement order is necessary to avoid the unjust enrichment

of Senator Craig, and to “deprive the wrongdoer of his ill-gotten gain.” SEC v. Bilzerian, 29

F.3d 689, 697 (D.C. Cir. 1994). Moreover, even defendants do not dispute that they should be

required to repay an amount equal to the funds they converted to personal use. See Defs.’ Opp.

at 16 (“If the Court does find a violation of the personal use ban, then . . . the penalty should be

no greater than the amount the Commission can establish was improperly spent solely on legal

issues relating to the Minnesota case.”). Therefore, the Court finds that a disgorgement is

warranted in this case.

        The Court further finds that a penalty over and above the disgorgement is also

appropriate given the seriousness of the violation here. Although the D.C. Circuit has not

19      Available at http://eqs.fec.gov/eqsdocsMUR/000006E2.pdf.
                                                22
articulated any standards to guide the Court’s discretion in imposing a penalty, courts in this

district and elsewhere have turned to the factors articulated by the Ninth Circuit in Furgatch.

See 869 F.2d at 1258; see also Comm. of 100 Democrats, 844 F. Supp. at 7 (applying Furgatch

factors); FEC v. Am. Fed. of State, Cnty., & Mun. Employees—P.E.O.P.L.E. Qualified, No. 88-

3208 (RCL), 1991 WL 241892, at *2 (D.D.C. Oct. 31, 1991) (same); Kalogianis, 2007 WL

4247795, at *6 (same). The Court will do the same.

       In Furgatch, the Ninth Circuit looked to the following factors to determine whether a

civil penalty was appropriate: “(1) the good or bad faith of the defendants; (2) the injury to the

public; (3) the defendant’s ability to pay; and (4) the necessity of vindicating the authority of the

responsible federal agency.” 869 F.2d at 1258, citing United States v. Danube Carpet Mills, Inc.,

737 F.2d 988, 993 (11th Cir. 1984). The FEC also asks the Court to consider the need to deter

and punish serious violations of the FECA. See FEC Mem. at 18. The Court finds that all of

these factors and considerations are relevant and, taking them together, that a penalty is

appropriate in this case.

       1. The good or bad faith of defendants.

       The facts and circumstances of this case do not suggest that defendants have acted in

particularly good or particularly bad faith. Defendants reiterate the claim that they relied in good

faith on the FEC’s Kolbe for Congress Advisory Opinion. Defs.’ Opp. at 2, 23–24. Defendants

also contend that they tried in good faith to comply with the requirements of FECA, noting in

particular that their unlawful expenditures were authorized by counsel and disclosed to the FEC.

See Defs.’ Opp. at 2–3.       And defendants argue that when the Senate Ethics Committee

authorized Craig to set up a legal defense fund and trust, it “necessarily acknowledged that

                                                 23
Senator Craig’s legal expenditures ‘relate to or arise by virtue of the service of the Member.’”

Id. at 3. 20

         Defendants’ arguments are largely unavailing. First, the Court has already held that any

reliance by defendants on the Kolbe decision was misplaced. Craig, 933 F. Supp. 2d at 113. At

the motion to dismiss stage, defendants claimed their reliance on the Kolbe opinion exempted

them from sanctions under the FECA. See id. at 120; see also 52 U.S.C. § 30108(c)(1)(B)–(c)(2)

(stating that an individual who relies in good faith upon an FEC advisory opinion involving

activity that “is indistinguishable in all its material aspects” from his or her own activity “shall

not, as a result of any such act, be subject to any sanction provided by th[e] Act”). The Court

observed that the Kolbe opinion was distinguishable, and, more important for these purposes,

that defendants had ignored its “clear admonitory language.” Craig, 933 F. Supp. 2d at 113.

The Court also rejected defendants’ argument that the record underlying the Kolbe opinion

supported their claims. Id. at 122–24.

         Now, defendants again point to the record underlying the Kolbe opinion as evidence that

they relied on that opinion in good faith. Defs.’ Opp. at 10–11. While it may be true that there is

“[n]o bar . . . on [defendants’] use of the [Kolbe] record to establish good faith reliance” at the

penalty stage of the case, Defs.’ Opp. at 11, the Court has already concluded that the Kolbe

record does not support defendants’ arguments.           See Craig, 933 F. Supp. 2d at 124.

Furthermore, defendants’ purported evidence of their longstanding reliance on the Kolbe opinion

– a letter from Senator Craig’s counsel to the Senate Ethics Committee in November, 2007 –

20     Defendants further contend that the issue of good faith is a question of fact that “is
ordinarily a question for the jury” and that summary judgment is inappropriate at this time.
Defs.’ Opp. at 9, quoting Landrum v. Moats, 576 F.2d 1320, 1329 (8th Cir. 1978). But the Court
has already determined as a matter of law that defendants violated section 30114(b), and the
question of their good or bad faith goes only to the remedy that the Court will impose.
                                                24
only indicates that defendants relied on the Kolbe opinion as authority for spending campaign

funds on representation before the Senate Ethics Committee, which is not included in the

$197,535 the Court has found defendants wrongfully converted to personal use. See Defs.’ Opp.

at 9; see also Ex. 6 to Defs.’ Opp. [Dkt. # 19-8] at 6–9. Any reliance on the Kolbe opinion to

authorize that spending is therefore irrelevant to the question of what penalty the Court should

impose.

       It is true, though, that defendants reported the expenditures at issue in this case to the

FEC as required by law, and that the Senate Ethics Committee permitted Senator Craig to

establish a legal defense fund and trust. But as with the Kolbe Advisory Opinion, defendants

disregard the stern admonition contained in the Senate Ethics Committee’s letter of approval:

“the Committee’s approval of the Fund and of the trust agreement does not indicate approval of

your continuation of the proceedings in State of Minnesota v. Larry Edwin Craig.” Ex. 9 to

Defs.’ Opp. at 2. The letter further states: “The Committee also reminds you that it has not

approved your use of campaign funds for the payment of legal expenses in connection with this

proceeding, noting in its Public Letter of Admonition that ‘[i]t appears that some portion of these

expenses may not be deemed to have been incurred in connection with your official duties.’” Id.

at 3. Given these express admonitions, it is difficult to understand how defendants can claim that

the Senate Ethics Committee “acknowledged that Senator Craig’s legal expenditures ‘relate to or

arise by virtue of the service of the Member.’” Defs.’ Opp. at 3.

       It is undisputed that defendants sought advice from counsel as to whether they could

lawfully expend campaign funds in connection with Senator Craig’s legal matters in Minnesota,

and that counsel took the position that the expenditures were authorized. See Ex. 5 to FEC Mot.

[Dkt. # 16-5] at 1 (letter from counsel to Senator Craig dated October 4, 2007 stating, “it is our

                                                25
conclusion that you may utilize campaign funds to pay for all of your legal expenses relating to

this matter”). Throughout their opposition brief, defendants repeatedly claim that their reliance

on the advice of counsel indicates that they acted in good faith. See, e.g., Defs.’ Opp. at 2

(“Senator Craig sought the advice of counsel and made the expenditures only after receiving

authorization from counsel.”); id. at 7 (“Based on the legal advice, defendants were confident

that the use of campaign funds for these expenditures was legal and customary. Indeed, they

would not have made the committee expenditures had they not received authorization from

counsel.”); id. at 19 (citing reliance on advice of counsel as evidence of defendants’ “good faith

efforts to comply with the Act”); id. at 20 (same); id. at 23 (same).

       But whether or not defendants would have made the expenditures at issue in this case

without counsel’s approval, defendants have been on notice since at least February 13, 2008 that

their expenditures might not comport with the law. See Ex. 7 to Defs.’ Opp. at 1–2 (public letter

of admonition from Senate Ethics Committee dated Feb. 13, 2008 stating “[i]t appears that some

portion of these 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”). Defendants

persisted in expending campaign funds on the Minnesota lawsuits for several more months,

despite this warning. See, e.g., Ex. 1 to FEC Mot. at “Craig 75” (legal invoice from the Kelly

law firm for legal services provided between April 1, 2008 and September 15, 2008). And

defendants decided to forego what would have been a significant demonstration of good faith

and declined to request an advisory opinion from the FEC about their spending before disbursing

the funds. FEC Mem. at 26.

       In sum, the Court finds that the evidence of defendants’ good or bad faith in this case

points in both directions: defendants ignored clear admonitions against their use of campaign

                                                 26
funds and declined to seek an advisory opinion from the FEC, but they also relied on the advice

of counsel and disclosed all of their spending. Thus, the Court concludes that the factor that

takes defendants’ “faith” into consideration was largely neutral, and it neither aggravates nor

mitigates the penalty the Court will impose.

       2. The injury to the public, the necessity of vindicating the FEC’s authority, and the
          need to deter and punish violations of the FECA.

       The Court finds that these factors weigh in favor of imposing a penalty in this case.

First, although the injury to the public caused by defendants’ misappropriation of campaign

funds is difficult to discern, “there is always harm to the public when FECA is violated.”

P.E.O.P.L.E. Qualified, 1991 WL 241892, at *2.           It is also reasonable to conclude that

defendants’ actions caused harm to the contributors to the Craig Committee, who presumably

intended that their donations be used for lawful, campaign-related purposes. Moreover, a penalty

here would certainly vindicate the authority of the FEC and strengthen its ability to enforce the

FECA’s personal use ban in the future.

        In addition, the FEC argues that a penalty is necessary to deter similar violations and to

punish defendants, noting that the purpose of a civil penalty is “to punish culpable individuals,”

not just to “restore the status quo.” FEC Reply at 13, quoting Tull v. United States, 481 U.S.

412, 422 (1987).     Defendants counter that there is no need for deterrence or additional

punishment in this case because they, and especially Senator Craig, have already paid a high

price for their actions. Defs.’ Opp. at 20–21. But defendants’ view of deterrence is too narrow:

a penalty would deter not only future misconduct by these defendants, but also the

misappropriation of campaign funds by others.            Therefore, the Court finds that these

considerations all weigh in favor of imposing a penalty in this case.

                                                27
       3. The defendants’ ability to pay.

       Despite defendants’ protestations to the contrary in their opposition brief, defendants’

counsel acknowledged at oral argument that Senator Craig has the ability to pay the full

$216,984 disgorgement plus the $70,000 penalty that the FEC seeks. Hr’g Tr. at 48–49 21 (“It

would not be our position that [Senator Craig] could not afford to pay.”). Therefore, there is no

question that Senator Craig can also pay the reduced total that the Court will impose. But

defendant the Craig Committee has “now spent virtually all its funds,” and would have no ability

to pay its own penalty. See FEC Mem. at 17 n.12.

       4. The Court’s analysis.

       The Court finds that all of the Furgatch factors are either neutral or weigh in favor of

imposing a penalty. This is not a case like Furgatch, where the defendant plainly acted in bad

faith and refused to report the unlawful expenditures, which warranted a penalty equal to the

amount of the violation. See 869 F.2d at 1259. On the other hand, this is also not a case like Ted

Haley, where the court assessed no penalty because the statute and regulations were unclear, the

defendants acted in good faith, and the defendants quickly remedied their unintentional

violations. See 852 F.2d at 1116–17. Some penalty, therefore, is called for.

       But the Court does not agree that defendants’ violation warrants the full $140,000

penalties the FEC seeks on top of an order of disgorgement. The FEC states that it requested

penalties in the amount of $70,000 for defendants Craig and the Craig Committee because the

sum must be sufficient to deter and punish violations of section 30114(b) without being overly

punitive. See FEC Mem. at 18. At oral argument, counsel for the FEC noted that penalties that

21      All citations to the transcript of the hearing on the FEC’s motion for summary judgment
are to the unofficial transcript.

                                               28
are too low are ineffective, since they “threaten[ ] to become something equivalent to interest on

a loan payment for the immediate use of campaign funds.” Hr’g Tr. at 16.

          This argument has some force, but in the court’s view, the proposed $140,000 penalty

would be excessive given all of the facts and circumstances, including the amount that was

diverted. The Court notes that the total penalty requested here exceeds the assessment in most of

the conciliation agreements that the FEC cites in its pleadings. See, e.g., Campbell for Senate

Conciliation Agreement at 3–4 (Oct. 31, 2003) (assessing civil penalty of $79,000 where

violation was not willful or knowing and requiring refund of up to $104,434 in excess

contributions); Meeks for Congress Conciliation Agreement at 8 (Feb. 4, 2008) (assessing civil

penalty of $63,000 against campaign committee and ordering refund and disgorgement of other

funds).     But see America Coming Together Conciliation Agreement at 11–12 (August 24,

2007) 22 (assessing civil penalty of $775,000 where organization had misreported and misspent

“millions of dollars” in funds but had agreed to wind down its affairs). Therefore, in an exercise

of the Court’s discretion, and in consideration of all the factors presented in this case, the Court

will order a penalty in the amount of $45,000, which is between 20 and 25 percent of the amount

diverted to Senator Craig’s personal use. The Court finds this civil penalty to be sufficient but

not greater than necessary and it will be added to the $197,535 disgorgement for a total order of

$242,535.

          Furthermore, the Court will not order that any funds be disgorged to the Craig

Committee, 23 nor will it impose a penalty on the Craig Committee, as the FEC requests. At oral

22        Available at http://eqs.fec.gov/eqsdocs/000061A1.pdf.

23     The parties agreed that any disgorged funds should be repaid to the Craig Committee.
FEC Mem. at 17; Defs.’ Opp. at 24 n.19. But the FEC proposed in the alternative that the funds
be paid to the U.S. Department of the Treasury. FEC Mem. at 17 n.12.
                                                29
argument, the FEC acknowledged that the Craig Committee is essentially defunct; Senator Craig

has no plans to run for office again, and he is the Committee’s only staff member. Hr’g Tr. at

14; see also id. at 19 (reflecting FEC counsel’s statement that “the Committee at this point seems

to be a shell”). So a disgorgement from Senator Craig to the Committee would essentially move

the funds from one pocket to another, and then he would be solely responsible for the proper

disposition of the funds. Moreover, counsel for the FEC was “not sure” whether it was possible

to identify and repay any of the donors whose funds defendants converted to personal use on

some sort of pro rata basis.     Id. at 11.   And, again, without the disgorgement, the Craig

Committee has essentially no money. See FEC Mem. at 17 n.12. So if the Senator repaid the

Committee and it was ordered to pay a penalty, the outcome would be the same as under the

terms of the Court’s order.

       Under these circumstances, where the Craig Committee is little more than an alter-ego for

Senator Craig himself, the Court finds that any disgorgement of funds to the Committee would

be little more than an empty gesture and a logistical headache. So, the Court will simply order

Senator Craig to pay both the $197,535 disgorgement and the $45,000 penalty to the U.S.

Department of the Treasury.

   C. The Court will issue declaratory relief.

       The FEC asks the Court to declare that defendants violated the FECA by converting

campaign funds to personal use. Defendants do not object to this request beyond their general

contention that they did not break the law. As the Court has already determined that defendants

did, indeed, violate section 30114(b) by converting campaign funds to the personal use of

Senator Craig, the Court will issue the declaration that the FEC seeks.

                                                 30
                                            APPENDIX A

                    Legal      Description (exemptions            Total   Exempt   Hourly   Exempt
Law Firm    Date    Prof’l     italicized and bolded)             Hours   Hours    Rate     Amount    Page
                               Attend to public relations
                               issues regarding motion to
                               withdraw guilty plea. Call
                               with C. Garrett (Impact
Sutherland,                    Strategies) regarding same.
Asbill, &   9/28/   K.H.       Review draft q&a regarding                                             Craig
Brennan     2007    Sinclair   same.)                             1.10    1.10     $355     $390.50   31 1
                               Attend to public relations
                               issues related to ACLU
Sutherland,                    involvement in motion to
Asbill, &   9/29/   K.H.       withdraw guilty plea. Call to                                          Craig
Brennan     2007    Sinclair   M. Ware regarding same.            0.20    0.20     $355     $71.00    31
                               Confer with local counsel
                               regarding upcoming hearing.
                               Miscellaneous calls with press
Sutherland,                    staff and staff of Senator Craig
Asbill, &   9/17/   K.H.       regarding legal and media                                              Craig
Brennan     2007    Sinclair   issues pertaining to motion to     2.10    0.50     $355     $177.50   32

      1     The relevant legal invoices are numbered “Craig 30” to “Craig 90.” See Ex. 1 to
      FEC Resp.
                                                  32
                    Legal      Description (exemptions            Total    Exempt      Hourly     Exempt
Law Firm    Date    Prof’l     italicized and bolded)             Hours    Hours       Rate       Amount    Page
                               withdraw guilty plea. Review
                               ACLU amicus brief. 2
                               Various calls with M. Ware, J.
                               Smith, 3 T. Kelly regarding
                               upcoming hearing on motion
                               to withdraw guilty plea.
                               Confer with L. Craig regarding
                               same. Review ACLU amicus
Sutherland,                    brief. Attend to miscellaneous
Asbill, &   9/18/   K.H.       legal and medial [sic] issues                                                Craig
Brennan     2007    Sinclair   regarding same.                    1.10     0.50        $355       $177.50   32

      2       The American Civil Liberties Union (“ACLU”) filed briefs of amicus curiae in
      support of Senator Craig’s efforts to withdraw his guilty plea, and the invoices reflect that
      his lawyers devoted some time to reviewing those submissions. Defs.’ Supp. Mem. at 2.
      Defendants argue that legal expenditures relating to the ACLU’s filings should be
      payable with campaign funds because, if Senator Craig had not been an officeholder,
      there would not have been public interest in the case, and the ACLU would not have been
      prompted to become involved. Id. The FEC did not contest defendants’ use of campaign
      funds for expenses related to the ACLU pleadings. See, e.g., FEC Resp. at 13 (indicating
      the FEC’s view that ACLU-related expenses were not “personal use” by highlighting in
      yellow the portion of a billing entry that refers to the ACLU); id. at 15 (same); id. at 16
      (same). But the ACLU’s pleadings addressed only the claimed overbreadth of the
      criminal statute to which the Senator entered his guilty plea, and privacy concerns raised
      by prosecuting individuals for personal conduct within the confines of a restroom stall.
      See Br. for ACLU, et al., as Amici Curiae in Supp. of Def. Craig, State of Minnesota v.
      Craig, No. 07043231, 2007 WL 2892651 (Minn. Dist. Ct. Oct. 4, 2007). None of this
      had anything to do with the Senator’s status as an officeholder, and the defense lawyers’
      review of the amicus briefs was simply part of their representation of Craig in connection
      with what the Court has already concluded was a personal matter. Those expenses were
      not incurred in connection with Senator Craig’s duties as an officeholder, and neither
      Hilliard nor Vitter – which were limited to lawyers’ media and ethics efforts – goes so far
      as to cover this purely legal work.

      3       J. Smith is Judy Smith, a media relations consultant with Impact Strategies. See
      Defs.’ Supp. Mem. at 4. The Court has deemed entries reflecting Ms. Smith’s
      involvement to be at least partially exempt from the personal use ban under the principles
      set forth in the Hilliard and Vitter Advisory Opinions.
                                                   33
                    Legal      Description (exemptions            Total   Exempt   Hourly   Exempt
Law Firm    Date    Prof’l     italicized and bolded)             Hours   Hours    Rate     Amount    Page
                               Telephone call with L. Craig
                               regarding upcoming hearing
                               and factual details surrounding
                               conversations with
                               prosecutors. Call with M.
                               Ware regarding case status.
                               Meet with L. Craig, M. Ware
                               regarding case status. Brief
                               Senator A. Specter regarding
                               case status. Travel to and from
                               same. Various calls with T.
                               Kelly, J. Smith regarding
Sutherland,                    procedural issues. Review
Asbill, &   9/20/   K.H.       Motion to strike ACLU amicus                                           Craig
Brennan     2007    Sinclair   brief.                             5.20    1.00     $355     $355.00   32
                               Review motion to strike
                               ACLU amicus brief. Draft
                               waiver of appearance. Discuss
                               same with T. Kelly, L. Craig.
                               Discuss various publicity
                               issues with J. Smith, C.
Sutherland,                    Garrett. Discuss motion to
Asbill, &   9/21/   K.H.       strike ACLU brief with B.                                              Craig
Brennan     2007    Sinclair   Martin.                            2.10    0.50     $355     $177.50   32
                               Prepare for hearing on motion
                               to withdraw guilty plea.
                               Various calls with J. Smith, T.
                               Kelly, M. Ware, L. Craig
                               regarding upcoming hearing.
                               Confer with B. Martin
                               regarding motion. Review
                               government response to
Sutherland,                    motion to withdraw guilty
Asbill, &   9/24/   K.H.       plea. Review case law                                                  Craig
Brennan     2007    Sinclair   regarding same.                    4.60    0.50     $355     $177.50   32
                               Finalize motion. Discuss same
                               with B. Martin. Research on
                               ethics and procedural rules
                               regarding media. Discussion
                               with L. Craig regarding
                               motion. Calls with M. Ware
Sutherland,                    regarding motion. Discussion
Asbill, &   9/9/    K.H.       of final edits to motion with T.                                       Craig
Brennan     2007    Sinclair   Kelly.                             7.50    2.00     $355     $710.00   33

                                                  34
                    Legal      Description (exemptions           Total   Exempt   Hourly   Exempt
Law Firm    Date    Prof’l     italicized and bolded)            Hours   Hours    Rate     Amount    Page
                               Various calls with J. Smith,
                               M. Ware, L. Craig, T. Kelly
                               regarding case status and
                               strategy. Attend to issues
Sutherland,                    relating to filing of motion to
Asbill, &   9/10/   K.H.       withdraw guilty plea. Review                                          Craig
Brennan     2007    Sinclair   rules regarding same.             2.30    0.50     $355     $177.50   33
                               Various calls with M. Ware, L.
                               Craig, J. Smith, T. Kelly, B.
Sutherland,                    Martin regarding legal and
Asbill, &   9/11/   K.H.       media issues related to motion                                        Craig
Brennan     2007    Sinclair   to withdraw guilty plea.        1.60      0.50     $355     $177.50   33
                               Various calls with J. Smith,
                               M. Ware, B. Martin, T. Kelly
                               regarding case filing. Review
Sutherland,                    draft of ACLU brief. Attend to
Asbill, &   9/12/   K.H.       issues related to scheduling                                          Craig
Brennan     2007    Sinclair   hearing.                        2.20      0.50     $355     $177.50   33
                               Various calls with T. Kelly, J.
                               Smith regarding legal and
                               media issues related to motion
                               to withdraw guilty plea and
Sutherland,                    upcoming hearing. Review
Asbill, &   9/13/   K.H.       ACLU arguments related to                                             Craig
Brennan     2007    Sinclair   constitutional law.             1.40      0.50     $355     $177.50   33
                               Various calls with M. Ware, J.
                               Smith, B. Martin, T. Kelly
                               regarding upcoming hearing on
                               motion to withdraw guilty plea
                               and related media issues.
Sutherland,                    Review media documents and
Asbill, &   9/14/   K.H.       revise same. Transmit same to                                         Craig
Brennan     2007    Sinclair   M. Ware and D. Whiting.        3.00       1.00     $355     $355.00   33
                               Consult with client regarding
                               case strategy and costs and
                               benefits of motion to withdraw
                               plea. Research and draft
                               motion to withdraw guilty
                               plea. Discuss same with B.
                               Martin. Various calls with
Sutherland,                    Senate staff regarding public
Asbill, &   9/4/    K.H.       relations and legal issues.                                           Craig
Brennan     2007    Sinclair   Various discussions with J.    4.50       1.00     $355     $355.00   34

                                                   35
                   Legal      Description (exemptions           Total   Exempt   Hourly   Exempt
Law Firm   Date    Prof’l     italicized and bolded)            Hours   Hours    Rate     Amount    Page
                              Smith regarding legal issues.
                              Draft and revise motion to
                              withdraw guilty plea. Discuss
                              same with B. Martin. Various
                              calls to Senate staff regarding
                              legal and political issues
                              associated with motion.
Sutherland,                   Various calls with J. Smith
Asbill, &   9/5/   K.H.       regarding publicity issues                                            Craig
Brennan     2007   Sinclair   associated with motion.           10.50   2.00     $355     $710.00   34
                              Attend to finalizing motion to
                              withdraw guilty plea and
                              affidavit. Additional research
                              regarding same. Discuss same
                              with B. Martin and K. Verdi.
                              Various calls with Senate staff
                              regarding legal issues
                              associated with motion to
                              withdraw guilty plea. Various
                              calls with J. Smith regarding
                              legal and publicity issues
                              associated with motion to
                              withdraw guilty plea. Various
                              calls with T. Kelly regarding
Sutherland,                   motion to withdraw guilty
Asbill, &   9/6/   K.H.       plea. Review supporting                                               Craig
Brennan     2007   Sinclair   materials for same.               7.50    1.50     $355     $532.50   34
                              Revise motion to withdraw
                              guilty plea and supporting
                              affidavit. Discuss same with B.
                              Martin and K. Verdi. Various
                              calls with Senate staff
                              regarding legal issues
                              associated with motion.
                              Various calls with T. Kelly
                              regarding legal issues
                              associated with motion.
Sutherland,                   Various calls with J. Smith
Asbill, &   9/7/   K.H.       and staff regarding publicity                                         Craig
Brennan     2007   Sinclair   issues associated with motion.    5.10    1.50     $355     $532.50   34

                                                 36
                      Legal      Description (exemptions           Total   Exempt   Hourly   Exempt
Law Firm      Date    Prof’l     italicized and bolded)            Hours   Hours    Rate     Amount    Page
                                 Review response letter from
                                 Statesman. Discuss same with
                                 B. Martin. Discuss same with
                                 J. Smith. Conference call with
Sutherland,                      M. Ware, B. Roberts, S.
Asbill, &     8/9/    K.H.       Smith, S. Potano, W. Hart, D.                                         Craig
Brennan       2007    Sinclair   Whiting. Draft reply letter.      2.40    2.40     $355     $852.00   35
Sutherland,                      Draft response letter to
Asbill, &     8/10/   K.H.       Statesman. Discuss same with                                          Craig
Brennan       2007    Sinclair   J. Smith.                         1.40    1.40     $355     $497.00   35
Sutherland,                      Strategy call with M. Ware, S.
Asbill, &   8/15/     K.H.       Smith, W. Hart, D. Whiting, J.                                        Craig
Brennan     2007      Sinclair   Smith.                            0.80    0.80     $355     $284.00   35
                                 Draft response letter to
                                 Statesman. Confer with J.
Sutherland,                      Smith regarding same. Confer
Asbill, &   8/16/     K.H.       with B. Martin regarding                                              Craig
Brennan     2007      Sinclair   same. Transmit same to client.    1.50    1.50     $355     $532.50   35
                                 Attend to media and legal
                                 issues surrounding
                                 Minneapolis proceedings.
                                 Attend to senate ethics issues.
Sutherland,                      Numerous teleconferences
Asbill, &   9/1/      K.H.       with M. Ware, J. Smith, B.                                            Craig
Brennan     2007      Sinclair   Martin regarding same.            6.80    2.50     $355     $887.50   35
                                 Teleconference to discuss
Sutherland,                      arrest of Senator Craig and
Asbill, &   8/27/     B.         possible legal and PR                                                 Craig
Brennan     2007      Martin     implications of arrest.           1.00    0.50     $650     $325.00   36
                                 Teleconference with Senator
                                 Craig, Office of the
Sutherland,                      Prosecution and local counsel.
Asbill, &   8/30/     B.         Press accounts and PR                                                 Craig
Brennan     2007      Martin     strategy.                         0.80    0.40     $650     $260.00   36

                                                   37
                      Legal      Description (exemptions             Total   Exempt   Hourly    Exempt
Law Firm      Date    Prof’l     italicized and bolded)              Hours   Hours    Rate      Amount      Page
                                 Research and review draft
                                 Press Release; telephone
                                 conversation with client;
                                 discuss options, prepare and
Sutherland,                      review of press conference;
Asbill, &   9/1/      B.         telephone conference with                                                  Craig
Brennan     2007      Martin     Stan Brand. 4                       2.50    2.00     $650      $1,300.00   36
                                 Meetings in Minneapolis with
                                 trial team, T. Kelly, K. Sinclair
Sutherland,                      and PR team to prepare for
Asbill, &   9/26/     B.         hearing and press conference.                                              Craig
Brennan     2007      Martin     Attendance at Motion hearing.       14.00   3.00     $650      $1,950.00   36
            8/28/                Case law research;
            2007                 Supplemental research; Draft
            to                   correspondence and court
Kelly &     9/26/     J.         documents; Field and redirect                                              Craig
Jacobson    2007      Katan      media calls.                        8.00    2.00     $110      $220.00     44
                                 Attend to filing notice of
                                 appeal. Confer with P.
                                 Jacobson regarding same.
                                 Confer with J. Smith and D.
Sutherland,   10/                Rene regarding media issues.
Asbill, &     15/     K.H.       Call to L. Craig regarding                                                 Craig
Brennan       2007    Sinclair   status of appeal.                   1.80    0.80     $355      $284.00     49
Sutherland,   10/
Asbill, &     19/     K.H.       Review media goals statement.                                              Craig
Brennan       2007    Sinclair   Revise statement of case.      0.60         0.30     $355      $106.50     49
                                 Review draft question and
Sutherland,                      answer documents. Confer
Asbill, &     10/5/   K.H.       with J. Smith and Senate staff                                             Craig
Brennan       2007    Sinclair   regarding same.                0.70         0.70     $355      $248.50     50
Sutherland,                      Review draft question and
Asbill, &     10/6/   K.H.       answer for poll. Confer with                                               Craig
Brennan       2007    Sinclair   Senate staff regarding same.   0.60         0.60     $355      $213.00     50

       4      Mr. Brand was Senator Craig’s counsel for the Senate Ethics Committee inquiry,
       and so the Court has deemed entries that reflect his involvement to be at least partially
       exempt from the personal use ban under the principles set forth in the Hilliard and Vitter
       Advisory Opinions. See Ex. 12 to FEC Reply at 5 (stating that defendants retained the
       Brand Law Group to respond to the Senate Ethics Committee inquiry).
                                                     38
                      Legal      Description (exemptions            Total   Exempt   Hourly   Exempt
Law Firm      Date    Prof’l     italicized and bolded)             Hours   Hours    Rate     Amount    Page
                                 Review draft question and
                                 answer documents. Confer
                                 with J. Smith regarding same.
                                 Attend to scheduling issues.
Sutherland,                      Attend to issues related to
Asbill, &   10/7/     K.H.       upcoming poll. Confer with                                             Craig
Brennan     2007      Sinclair   D. Whiting regarding same.         2.10    2.10     $355     $745.50   50
                                 Attend conference call with M.
                                 Ware, L. Craig, J. Smith and
                                 Senate staff regarding next
Sutherland,                      steps. Discuss notice appeal
Asbill, &   10/8/     K.H.       with T. Kelly. Prepare notice                                          Craig
Brennan     2007      Sinclair   appeal.                            2.70    0.50     $355     $177.50   50
                                 Attend to filing issues related
                                 to notice of appeal with local
                                 counsel. Attend to billing
                                 issues in relation to FEC
                                 disclosure. Confer with T.
                                 Kelly regarding notice appeal.
                                 Confer with P. Jacobson
                                 regarding notice of appeal.
                                 Confer with J. Smith
Sutherland, 10/                  regarding public relations
Asbill, &   12/       K.H.       issues related to notice of                                            Craig
Brennan     2007      Sinclair   appeal.                            3.10    0.60     $355     $213.00   50
                                 Conference call with Senator
Sutherland,                      Craig, K. Sinclair and PR team
Asbill, &     10/4/   B.         to discuss and review Judge's                                          Craig
Brennan       2007    Martin     decision.                          1.50    0.75     $650     $487.50   51
Sutherland,   10/
Asbill, &     15/     B.         Review of Press Release for                                            Craig
Brennan       2007    Martin     appeal.                            0.50    0.50     $650     $325.00   51
                                 Attend to various public
                                 relations issues. Research
Sutherland,                      procedures for filing notice of
Asbill, &   10/2/     K.H.       appeal. Discuss same with T.                                           Craig
Brennan     2007      Sinclair   Kelly.                             2.10    1.00     $355     $355.00   51
                                 Prepare for issuance of order.
                                 Review procedures for filing
                                 appeal. Various calls to client,
Sutherland,                      J. Smith, Senate staff
Asbill, &   10/3/     K.H.       regarding scheduling and                                               Craig
Brennan     2007      Sinclair   procedural issues.                 3.10    0.30     $355     $106.50   51

                                                    39
                     Legal      Description (exemptions          Total   Exempt   Hourly   Exempt
Law Firm      Date   Prof’l     italicized and bolded)           Hours   Hours    Rate     Amount    Page
                                Teleconference regarding
Sutherland,   10/               Senator ethics issues;
Asbill, &     30/    B.         discussion with ethics                                               Craig
Brennan       2007   Martin     counsel.                         1.50    1.50     $650     $975.00   59
Sutherland,   10/
Asbill, &     26/    K.H.       Review appellate rules. Attend                                       Craig
Brennan       2007   Sinclair   to media issues with J. Smith. 1.10      0.50     $355     $177.50   59
                                Call with M. Ware, B.
                                Roberts, D. Whiting regarding
                                Senate Ethics Committee
                                issue. Conference call with
                                M. Ware, B. Roberts, D.
                                Whiting, S. Brand, B. Martin,
Sutherland,   10/               J. Smith regarding Ethics
Asbill, &     31/    K.H.       Committee issues and media                                           Craig
Brennan       2007   Sinclair   relations.                     0.70      0.70     $355     $248.50   60
Sutherland,   11/               Review ethics committee
Asbill, &     14/    K.H.       submission. Confer with B.                                           Craig
Brennan       2007   Sinclair   Martin regarding same.         0.30      0.30     $355     $106.50   60
Sutherland,   11/
Asbill, &     29/    K.H.       Call with M. Ware regarding                                          Craig
Brennan       2007   Sinclair   public relations issues.         0.30    0.30     $355     $106.50   61
                                Review research on factual
                                basis of guilty plea. Confer
                                with T. Kelly regarding case
Sutherland, 11/                 status and research issues.
Asbill, &   30/      K.H.       Conference call on public                                            Craig
Brennan     2007     Sinclair   relations issues.                1.30    0.80     $355     $284.00   61
                                Revise appellate brief. Confer
                                with B. Martin regarding same.
                                Call to Senator's staff
Sutherland, 12/                 regarding legal and political
Asbill, &   19/      K.H.       issues related to Idaho                                              Craig
Brennan     2007     Sinclair   Statesman.                       1.30    0.80     $355     $284.00   71
                                Call to B. Roberts. Review
Sutherland, 12/                 draft letter to Idaho
Asbill, &   20/      K.H.       Statesman. Review revisions                                          Craig
Brennan     2007     Sinclair   to appellate brief.              0.30    0.10     $355     $35.50    71

                                                  40
                   Legal    Description (exemptions            Total   Exempt   Hourly   Exempt
Law Firm   Date    Prof’l   italicized and bolded)             Hours   Hours    Rate     Amount    Page
                            Redraft and finalize oral
                            arguments; Telephone
                            conferences with counsel for
                            the defense; Review of cases;
                            Preparation for oral arguments
                            with counsel for the defense;
                            Court - Appellate Hearing;
Kelly &    9/8/    T.       Debrief with co-counsel; Post-                                         Craig
Jacobson   2008    Kelly    hearing press conference.          13.00   1.00     $550     $550.00   75
                            Review Judge Porter's Orders;
                            Review court transcript; Assist
                            in drafting Notice of Appeal &
                            Statement of Case documents;
                            Research relevant case law;
                            Telephone conferences with
                            the prosecuting attorney;
                            Telephone conferences with
                            the Appellate Court Clerk;
                            Review court filings from
                            prosecuting attorney; Review
                            public statements made by
                            client regarding the case;
                            Handle calls from sources
                            wanting factual information
                            relevant to the case; Review of
           9/27/            ACLU court filings; Review
           2007             Appellate Court Orders;
           to               Multiple telephone
           11/              conferences and email
Kelly &    30/     T.       correspondence with counsel                                            Craig
Jacobson   2007    Kelly    for the defense.                   7.50    1.50     $550     $825.00   79
           9/27/
           2007             Draft correspondence and
           to               court documents; Field and
           11/              redirect media calls; Facilitate
Kelly &    30/     J.       filing of Appellate Court                                              Craig
Jacobson   2007    Katan    documents.                         1.00    0.50     $110     $55.00    87
TOTAL                                                                                    $19,449

                                               41