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Joe Biden fined $219k for 2008 presidential campaign violations

The Federal Election Commission has penalized Vice President Joe Biden’s
2008 presidential campaign $219,000 for accepting over-the-limit
contributions and a deeply discounted flight on a private jet owned by an
embattled New York hedge fund, as well as for sloppy record-keeping.

Biden’s campaign has indicated to the FEC that it will pay the penalty to
the U.S. Treasury to resolve the campaign finance compliance issues, which
were revealed in an audit
report<http://www.politico.com/static/PPM152_100717_fecaudit.html>
released
Friday by the commission.

Elizabeth Alexander, a spokeswoman for Biden in the vice president’s office,
called the FEC-ordered repayment “relatively small,” and said "some
repayment is commonplace after presidential campaign audits.”

Biden was subject to the audit as a condition of accepting taxpayer funds
for his campaign through the presidential public financing system. In all,
Biden, whodropped out <http://www.politico.com/news/stories/0108/7705.html> of
the race after coming in fifth in the Iowa caucuses and was tapped eight
months later to be Barack Obama’s running
mate<http://www.politico.com/news/stories/0808/12770.html>,
received $857,000 in taxpayer money for his presidential campaign
(including thousands of
dollars<http://www.politico.com/news/stories/0109/17853.html>after
he was elected vice president) which raised $8.2 million from individual
contributions, according to the report.

It found that the campaign accepted an illegal corporate contribution in the
form of a round-trip flight between New Hampshire and Iowa in June 2007 for
three people (it does not indicate if Biden, then a Senator from Delaware,
was among the passengers) on a private jet owned by GEH Air Transportation,
LLC. Federal Aviation Administration records <http://
http://registry.faa.gov/aircraftinquiry/NNum_Results.aspx?NNumbertxt=702GH>
show
that GEH Air Transportation is owned by the Clinton Group, a New York hedge
fund controlled by George E. Hall.

Biden for President (BFP) reimbursed GEH Air Transportation, LLC $7,911 for
the flight –the estimated cost of first-class airfare for three on a
comparable commercial flight. But the FEC determined that the flight should
have been reimbursed at a charter rate of $34,800.

FEC auditors concluded that “By failing to pay a charter rate, BFP received
an in-kind contribution of $26,889 (the $34,800 owed less the $7,911 paid)
from GEH,” which would be illegal, since corporations are barred from
contributing to federal campaigns. Biden’s representatives “indicated that
they agreed with the finding and would write a check for $26,889 to the U.S.
Treasury,” the auditors wrote.

Neither Biden’s spokeswoman Alexander, nor Biden’s campaign lawyer or
treasurer could immediately answer questions about Biden’s relationship with
Hall or whether Biden was on Hall’s corporate plane during the flight in
question.

A major Democratic donor who has contributed more than $180,000 to
Democratic candidates and causes since 1999 (including $19,000 to Biden’s
various committees), Hall’s firm has been
implicated<http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aMt0AhyGwcQc>
– but not charged – by Attorney General Andrew Cuomo in a New York state
pension fund kickback investigation into a joint venture that paid the
Clinton Group $750 million in state funds.
Page 2 of 2

In October 2008, with the probe underway, Cuomo
returned<http://www.villagevoice.com/2010-02-02/news/the-reinvention-of-andrew-cuomo/4>
a
$10,000 donation from Hall.

The FEC audit also found that Biden’s campaign failed to quickly return or
otherwise rectify at least $106,000 in excessive contributions beyond the
$2,300 maximum donation for individuals during the 2008 election cycle. That
was based on an analysis of a sample of contributions, FEC auditors wrote,
projecting that the actual total of excessive contributions could exceed $1
million.

It appears that most of the excess contributions stemmed from individuals
who donated $4,600 to Biden’s campaign, which would have been the maximum
allowable contribution had Biden won the Democratic presidential nomination
and progressed to the general election ($2,300 for the primary and another
$2,300 for the general).

Biden’s campaign told the FEC it would re-pay the $106,000 into the Treasury
for the excessive contributions.

But it also stressed that it had previously attempted to contact each of the
maxed-out donors to properly dispense with their excess contributions,
partly by re-designating some of that money to Biden’s still-operational
Senate campaign committee and leadership political action committee, Unite
Our States.

Yet the report states Biden’s campaign “staff was unable to locate the
letters or evidence that they were sent,” attributing the confusion to
records lost when the campaign moved offices, as well as the death of the
staffer “primarily responsible for sending the compliance letters, including
letters to resolve excessive contributions.”

The FEC also ordered Biden’s presidential campaign to pay the Treasury
$86,000 for stale-dated checks it issued, including for contribution
refunds.

In February, Biden’s representatives had requested a hearing before the FEC
to address the findings, but they withdrew the request in April, setting the
stage for the release of the report.

Alexander explained “we withdrew our request for a hearing because we
concluded we could present all relevant information in writing, as we did."

Campaign lawyers and operatives dread FEC audits, which can be
embarrassing<http://www.politico.com/news/stories/0507/4269.html>,
expensive and arduous – and which typically drag on for months, if not
years.

Obama’s presidential campaign, which raised a record-shattering $750
million, is unlikely to be subject to such an audit
<http://www.politico.com/news/stories/1108/15497.html>because
it did not participate in the public financing program, which automatically
triggers an audit.
--
Eric D. Schwerin
Rosemont Seneca Partners
(202) 333-1880
eschwerin@rosemontseneca.co