Federal campaign finance laws are designed to increase transparency, reduce corruption and the appearance of corruption, and prevent foreign electoral influence.

To achieve these goals, the Federal Election Campaign Act (FECA) prohibits certain types of political contributions, including contributions from foreign nationals and federal contractors, as well as contributions made through shadow donor programs that conceal the true sources of election spending and thus prevent voters’ right to know who is spending to influence their vote.

Although FECA makes it clear that committees cannot accept contributions that violate these prohibitions, it does not specifically tell political committees what to do if they receive contributions that are found to be illegal.

But the Federal Election Commission (FEC), the independent agency responsible for interpreting and enforcing laws regarding money in politics, has regulations in place to address this issue. These rules provide that when a committee receives a contribution that is later found to be illegal, it “reimburses” the contribution.

Repaying an illegal contribution “unties” the illegal transaction, which could remove the funds from our political system before they can be used to influence elections or elected officials.

But it also often rewards contributors by returning the instrument of their illicit activity — the money they used to try to influence elections despite federal laws prohibiting them from doing so.

Even if the FEC enforces the law—and often does not—and requires the contributor to pay a civil penalty (a monetary fine), this is almost always less than the illegal contribution, which means that when the contribution is reimbursed, the offender is in the dark even after paying the penalty.

It encourages bad actors by sending the problematic message to the public that breaking the law offers great rewards with little risk, and any potential penalties are just a cost of doing business.

For example, the FEC recently discovered that Barry Zekelman, a foreign national and CEO of a Canadian steel company, illegally ordered his company to make a $1.75 million contribution to a super PAC supporting the re-election campaign. by Donald Trump in 2020 – a key part of Zekelman’s efforts to influence Trump over U.S. steel tariffs related to his company’s operations.

Consequently, the FEC demanded that Zekelman pay a civil penalty of $975,000, the third largest in FEC history.

Yet the FEC left the door open for the super PAC to repay the $1.75 million contribution despite Zekelman’s blatantly corrupt and illegal conduct, which it did, resulting in a clear miscarriage of justice.

It was not an isolated case. Federal contractors are routinely reimbursed for their illegal contributions almost as soon as an administrative complaint is filed with the FEC, likely because the committees can cross-check federal contract records and campaign finance records, all of which are publicly available. .

Even if the FEC finds a violation and forces the federal contractor to pay a civil penalty, the violator gets most of their money back.

For years, the FEC has recognized that it has the implicit power to pursue another remedy that avoids this kind of unjust outcome: to require the recipient committee to return the illegal contribution – relinquish or confiscate the proceeds of illegal activity – to the US Treasury.

This way, if a contributor is found to have broken the law, they pay a fine, but they also lose the initial “investment” with which they tried to illegally influence our elections.

But restitution is not explicitly mentioned in either FECA or FEC regulations; it is an “equitable” remedy, which arises not from the law as written, but from the government’s authority to seek remedies that avoid patently unjust results.

Thus, some FEC commissioners felt that they did not believe the FEC could require committees to return illegal contributions, since the regulations only refer to refunds.

It’s high time the FEC fixed the rulebook by explicitly including restitution not just as an option for committees, but as a remedy the agency can demand when a refund would be unfair.

The Campaign Legal Center (CLC) has filed a rulemaking petition with the FEC, urging the agency to change or clarify its rules to achieve this goal.

The FEC should clarify that committees can return illegal contributions instead of returning them to the contributor who broke the law and that it will demand restitution to promote enforcement of campaign finance laws and avoid unfair results.

The unchecked power of wealthy special interest money in our politics threatens the rights of ordinary Americans to have their voices heard.

To deter illegal election spending, defend the interests of federal campaign finance law enforcement, and maintain the integrity of our elections, the FEC must act now to explicitly incorporate restitution into its regulations.

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