American Leadership Project

A group called American Leadership Project drew fire from the Obama camp, as summarized in “Clinton 527 Will Endure Unbearable, Life-changing Misery, Obama Lawyer Says:”

In a conference call [Feb. 21], Obama campaign lawyer Bob Bauer predicted that the FEC would administer a smackdown to the pro-Clinton 527 American Leadership Project , predicting criminal charges against its organizers and donors, who he said were willfully breaking election law.

There would be a “reckoning,” he said.

“This is not a case where there are shades of gray,” said Bauer. “This is not a case where they will be saved by some form of ‘Philadelphia’ lawyering. This is absolutely a cold, calculated move to violate the law for the benefit of the candidate and to assume that any penalty will be so deferred to the future that the immediate benefits can be gained now without consequence. I think the miscalculation on their part is that the penalties are going to be bearable for them. But I think at the end they will prove to be unbearable for them. This is going to wind up being a very, very miserable experience for the people involved. Maybe in some respects life-changing.”

When asked how this was different from independent expenditures benefiting Obama, Bauer said, “I’m not aware of any organization to date in circumstances like this has been active on behalf of the Obama campaign with anything like our acquiescence or content or wink or nod.”

“We told them we do not wish to have any independent activity on our behalf,” said Bauer adding, “We have certainly never been in the position where it—having been perceived that we were running out of money, and immediately on the cusp of a primary election campaign, an organization sprung up by people connected to us to run ads on our behalf that we couldn’t run ourselves.”

The Obama memo:

FW: MEMO: A New 527 & the Law of the Swift Boats

TO: Interested Parties

FR: Obama Campaign

RE: The American Leadership Project and the Law of Swift Boats

DA: February 20, 2008

The America Leadership Project is organized on the same model as Swift Boats Veterans for Truth and other “527s” operating outside the financing limits of federal campaign finance law. It has been established without regard to the changes in the law, made after 2004 and under court supervision, to stop this type of activity.

Under those changes, the Project should be registered with the Federal Election Commission as a regulated “political committee,” and it should be complying with all the rules such committees should follow-such as limits on contributions they receive. The Project is flouting those requirements, so that it-like Swift Boats and others before it-can use six-figure checks from wealthy contributors to influence the outcome of the primaries ahead in Ohio, Texas and Pennsylvania.

The law, however, provides clearly that the American Leadership Project is indeed a political committee subject to the federal financing limits. The FEC has stated specifically that any 527 becomes a political committee if it (a) spends or receives more than a $1,000 in a calendar year on federal election-related purposes and (b) has an overall organizational major purpose of influence of elections.

(a) Press reports make clear, moreover, that the Project will spend in the millions of dollars, crossing well over the $1,000 annual threshold for political committee spending. The monies received and spent will be treated as political “contributions” or “expenditures” for campaign purposes. In addressing this issue of purpose, the Federal Election Commission has specifically considered what contributors will be told about the use of their monies. Where the money was solicited with an “indication” that it will benefit Hillary Clinton, nothing more is needed to trigger federal regulatory jurisdiction, under rules adopted by the FEC in 2004. In the light of the large sums the Project will be asking, for commercials built entirely around Hillary Clinton and broadcast to primary state electorates, there is no question here about purpose.

(b) Organizational “major purpose” is then determined by a whole range of factors, any one of which will be decisive. How does the organization explain its purpose? What other evidence is there of its purpose? Has it conducted other activities, beyond the communication it disseminates about particular candidates in particular elections? What is the timing of those activities — immediately before an election?

Here we have a committee that springs up on the eve of an election, promotes a specific candidate, and has no history or apparent purpose of lobbying specific issues outside the benefit to the candidate of these communications. Its “major purpose” is no mystery.

Liability for violating the federal campaign finance laws is both civil and criminal. Any investigation, like the investigations conducted after 2004, will involve the Project’s officers, staff and donors. Because the FEC specifically addressed and publicly explained the applicable standards in the recent past, the violation of those standards in this instance presents a clear indication of knowing violations of the law. Once again, the issues raised here affect all who knowingly participate in a scheme to violate the rules: the officers, the staff and the donors.

The Politico printed an email response from the group:

 There isn’t anything in our efforts that would warrant such a barefaced attempt to quell free speech with this kind of unsupported legal bullying.

The American Leadership Project was organized in strict adherence to all new federal rules and regulations as a result of a recent Supreme Court decision. It was established to highlight issues of importance to middle-class families. The type of 527 we have organized does not intend to engage in express advocacy or the functional equivalent of express advocacy and so will not qualify as a political committee under the Federal Election Commission rules, but it will, however, fund “electioneering communications” — ads that feature a candidate and run within the 30 days before the election — and so will have reporting requirements with the FEC as well as the IRS. We intend to be open, transparent and to make all full and appropriate disclosures as required by the law.

The Politico provides a legal memo.

We next learn that American Leadership Project, according to later reports, has not aired any ads:

Given that the American Leadership Project — a professionally run operation — still hasn’t spent a dime…


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