Few face greater peril under the campaign finance and criminal laws than an undisputed bad actor. Yesterday, former Iowa state senator Kent Sorenson admitted in a plea agreement that he willfully caused Representative Ron Paul’s 2012 presidential campaign to falsely report payments made to two companies. In fact, Sorenson acknowledged, the campaign paid the companies—who then paid Sorenson—to induce him to switch his endorsement to Paul from Representative Michele Bachmann. The Center for Responsive Politics has published the text of Sorenson’s plea agreement here, along with other documents and a summary of the case.
Sorenson pleaded guilty to substantive violations of the Federal Election Campaign Act of 1971’s reporting provisions. His case raises a tricky question under FECA: when does a committee violate the reporting statutes by paying one person, who then pays another? Unlike some states, federal law does not generally require the disclosure of sub-vendor payments. Moreover, multi-level transactions happen all the time. Campaigns pay media companies, who then pay cameramen and lighting crews. They pay pollsters, who then pay call centers. To identify situations when ultimate payees must be disclosed, the Federal Election Commission has used a rule of reason that, by its nature, can be somewhat indeterminate: does the sub-vendor “play a role” in the services being provided by the vendor, as the agency once put it in a 2002 settlement?
That settlement involved the 1996 Louisiana Senate campaign of Woody Jenkins, who tried to hide payments to a phone vendor associated with notorious Klansman David Duke. To avoid being connected with Duke through its FEC reports, the Jenkins campaign publicly paid its regular media vendor, which then privately paid the Duke-associated firm as a purported sub-vendor. Jenkins asserted first that he had committed no violation, because FECA required disclosure only of “the person to whom an expenditure is made and not the ‘ultimate vendor.’” But he admitted that the regular media vendor’s “only role in this matter was to serve as a conduit for payment … so as to conceal the transaction.”
Unlike Sorenson’s case, Jenkins’s case was handled administratively. Sorenson’s equivalent in the Jenkins case—the phone firm associated with Duke—was not a respondent. The FEC found that Jenkins committed a knowing and willful violation and settled with him for $3,000, “based on documentation and representations” made about his lack of funds. It said “a civil penalty of $82,500 ordinarily would be appropriate in this matter …”
Sorenson might have argued that the standard’s indeterminacy weighed against criminal prosecution on his facts, and toward civil enforcement—although the FEC’s recent enforcement trends would not have helped him. He might also have pointed to an interpretive rule the FEC published in July 2013—adopted after the transactions in his case took place—on how campaigns must report the “ultimate payees” of certain types of disbursements, as reflecting potential uncertainty about the law. He could have argued that he did not know “that the conduct was unlawful,” as the statute he violated requires. But the deceptive nature of what he did could only have undercut his position.