Political Law Alert Series
Land mark Development: The US
Supreme Court Strikes Down
Limits on Corporate and Union
Independent Expenditures
In a far-reaching decision, on January 21, 2010, the US Supreme Court overturned
decades-old precedent in Citizens United v. Federal Election Commission and
ruled that the First Amendment protects corporate speech as vigorously as it
protects individual speech. The practical result is that corporations and labor
unions may now make unlimited “independent expenditures” and “electioneering
communications” regarding federal candidates. This means that corporations may
either expressly advocate an election or defeat of clearly identified candidates,
or simply mention candidates in the course of discussing political issues or
policy, even within the last days before an election. This constitutional protection
applies to both for-profit and nonprofit corporations, such as incorporated 501(c)
organizations, although tax law restrictions remain on nonprofit groups.
Some key notes on the decision include the following:
„„No Coordination: The Court extended constitutional protections to
independent expenditures, meaning that corporations may not “coordinate”
their spending with any candidates. Thus, ensuring lack of coordination (a
term that the Federal Election Commission (FEC) has defined heretofore
quite broadly) with candidates will be a critical requirement for corporations
wishing to place campaign ads.
„„Protects All Communications/Speech: This historic decision not only
protects broadcast ads by corporations, but also any type of communications,
including print ads, the Internet, On-Demand video, pamphlets and leaflets.
„„Direct Contributions and Coordinated Expenditures Still Banned: The
Court kept intact the law’s limits on direct contributions to candidates—
including in-kind ones. Therefore, corporate and labor union PACs will still
have a role in the political process.
„„Foreign Contributions Ban Intact: The Court found that there was no need
to reach the question of whether there was a compelling interest in preventing
foreign influence on the US political process, thus maintaining the ban on
state and federal contributions and expenditures by foreign nationals.
ARNOLD PORTER LLP
Landmark Development: The US Sup reme Court 2
Strikes Down Limits on Corporat e and Union
Independent Expenditu res
Commitment | Excellence | Innovation
„„Party Soft Money Ban Intact: Similarly, the McCain-
Feingold (or Bipartisan Campaign Reform Act (BCRA))
prohibitions on political party soft money are still in
effect.
„„Hard Money Ban Not Affected: The contribution
limits that apply to hard money remain untouched by
the Supreme Court’s decision.
„„Disclosure Still Required: Disclosure, including
the names of donors, is still required for corporations
engaging in certain political speech.
„„State Laws in Peril: The decision referenced the 26
state laws that do not restrict corporate independent
expenditures, intimating that the remaining states will
be responding to this decision, thus prompting a fury of
state and local legislative activity on this issue.
„„Unknown Effect on Other Businesses Such as
Non-Corporate Federal Contractors: The Court’s
ruling was limited to corporate and labor union spending
in campaigns. It did not touch upon, for example, the
restrictions imposed on federal contractors that are
not incorporated entities, such as partnerships and
unincorporated associations, which are governed by
separate provisions of the law. Whether and how this
will be resolved is unclear. On one hand, the decision
stood for the proposition that the government cannot
restrict speech based on the speaker’s identity. And
treating federal contractors distinctly would contradict
this principle. On the other hand, there arguably is a
different compelling government interest in restricting
communications by those with federal government
contracts, as there is with foreign contributors. If
the latter rationale is employed, however, fairness
would dictate that corporate entities that are federal
contractors also be subject to these restrictions, which
the Citizens United decision would clearly not permit.
Because the Court was silent on this issue, it is possible
that Congressional action, not simply FEC regulations,
may be required to address this inconsistency.
„„Charitable Nonprofits Will Still Be Constrained
by Federal Tax Laws: While the FEC restrictions on
corporate spending will no longer apply to nonprofits,
the Internal Revenue Code provisions remain the law.
In effect, 501(c)(3) organizations and foundations will
not benefit greatly, if at all, from this ruling.
„„Other Nonprofits Will Be Freed from Campaign
Speech Restraints: While the headlines prophesize
a fury of corporate and union spending on campaign
ads, the fact remains that interest groups organized in
the form of 527, 501(c)(4) corporations, and 501(c)(6)
trade associations also will be able to spend treasury
funds now on ads that not only suggest a candidate
preference, but clearly state one.
These, and many other issues and unanswered questions,
will need to be resolved by the FEC, and perhaps the
Congress, which has already promised to step into the
debate to somehow counteract the decision. And, as
noted above, the states may be brought into the fray with
respect to their own campaign finance laws.
We therefore urge you to consult with counsel before
exercising your newly validated rights to campaign speech.
Friday, January 22, 2010
USDOJ: Louisiana Man Convicted of Civil Rights Violation in Connection with Cross-Burning
For Immediate Release
January 22, 2010 United States Attorney's Office
Western District of Louisiana
Contact: (318) 676-3641
Louisiana Man Convicted of Civil Rights Violation in Connection with Cross-Burning
WASHINGTON—Daniel Earl Danforth of Minden, La., was convicted yesterday by a jury in Shreveport, La., of a civil rights conspiracy, use of fire in the commission of a federal felony, and obstruction of justice in connection with a cross-burning near the home of an interracial couple in Athens, La., the Justice Department announced.
Sentencing has been set for April 14, 2010. At sentencing, Danforth, 31, faces a maximum penalty of 10 years for the civil rights conspiracy; 20 years for obstruction of justice; and an additional 10 years for use of fire.
At trial, evidence revealed that on Oct. 23 or 24, 2008, Danforth agreed with his two cousins to build, erect, and burn a cross near the homes of a cousin and her African-American boyfriend (now husband), and other relatives who approved of their interracial relationship. Danforth and his co-conspirators built the cross using two pine trees, wire or cable, and a large nail. One of Danforth’s cousins then went to get diesel fuel to use to burn the cross. Meanwhile, Danforth and his other cousin transported the cross to an area adjacent to the victims’ homes where, using chainsaw gas, they set the cross on fire in order to intimidate the victims. On Oct. 26, 2008, Danforth telephoned a relative who was living with the victims and directed her to the location of the burned cross.
The evidence also showed that several days later, after the defendant and his co-conspirators learned that the FBI was investigating this crime as a potential civil rights violation, Danforth, his cousin who helped transport and burn the cross, and the cousin’s girlfriend formed a plan to get rid of the burned cross to prevent the FBI from discovering it and using it as evidence. Danforth’s cousin then drove Danforth to the woods behind the victims’ homes, where Danforth removed the cross, disassembled it and hid it in the woods in an effort to thwart the FBI investigation.
“The defendant and his co-conspirators, driven by hatred, threatened a family with violence simply because they associated with persons of another race. Incidents of this kind have no place in this country, but they are regrettably all too common,” said Assistant Attorney General Thomas E. Perez of the Justice Department’s Civil Rights Division.
“Burning a cross near someone's home to threaten or strike fear and terror in the hearts of other human beings is a criminal act deserving vigorous investigation and punishment. This office will continue to aggressively direct federal law enforcement resources toward investigating and prosecuting those criminals who infringe and violate the civil rights of others,” said William J. Flanagan, Acting U.S. Attorney for the Western District of Louisiana.
This case was investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorney Mary J. Mudrick for the Western District of Louisiana and Trial Attorney Erin Aslan from the Justice Department’s Civil Rights Division.
January 22, 2010 United States Attorney's Office
Western District of Louisiana
Contact: (318) 676-3641
Louisiana Man Convicted of Civil Rights Violation in Connection with Cross-Burning
WASHINGTON—Daniel Earl Danforth of Minden, La., was convicted yesterday by a jury in Shreveport, La., of a civil rights conspiracy, use of fire in the commission of a federal felony, and obstruction of justice in connection with a cross-burning near the home of an interracial couple in Athens, La., the Justice Department announced.
Sentencing has been set for April 14, 2010. At sentencing, Danforth, 31, faces a maximum penalty of 10 years for the civil rights conspiracy; 20 years for obstruction of justice; and an additional 10 years for use of fire.
At trial, evidence revealed that on Oct. 23 or 24, 2008, Danforth agreed with his two cousins to build, erect, and burn a cross near the homes of a cousin and her African-American boyfriend (now husband), and other relatives who approved of their interracial relationship. Danforth and his co-conspirators built the cross using two pine trees, wire or cable, and a large nail. One of Danforth’s cousins then went to get diesel fuel to use to burn the cross. Meanwhile, Danforth and his other cousin transported the cross to an area adjacent to the victims’ homes where, using chainsaw gas, they set the cross on fire in order to intimidate the victims. On Oct. 26, 2008, Danforth telephoned a relative who was living with the victims and directed her to the location of the burned cross.
The evidence also showed that several days later, after the defendant and his co-conspirators learned that the FBI was investigating this crime as a potential civil rights violation, Danforth, his cousin who helped transport and burn the cross, and the cousin’s girlfriend formed a plan to get rid of the burned cross to prevent the FBI from discovering it and using it as evidence. Danforth’s cousin then drove Danforth to the woods behind the victims’ homes, where Danforth removed the cross, disassembled it and hid it in the woods in an effort to thwart the FBI investigation.
“The defendant and his co-conspirators, driven by hatred, threatened a family with violence simply because they associated with persons of another race. Incidents of this kind have no place in this country, but they are regrettably all too common,” said Assistant Attorney General Thomas E. Perez of the Justice Department’s Civil Rights Division.
“Burning a cross near someone's home to threaten or strike fear and terror in the hearts of other human beings is a criminal act deserving vigorous investigation and punishment. This office will continue to aggressively direct federal law enforcement resources toward investigating and prosecuting those criminals who infringe and violate the civil rights of others,” said William J. Flanagan, Acting U.S. Attorney for the Western District of Louisiana.
This case was investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorney Mary J. Mudrick for the Western District of Louisiana and Trial Attorney Erin Aslan from the Justice Department’s Civil Rights Division.
Oh What A Tangled Web MORRIS COMMUNICATIONS Has Weaved -- Bad Journalism and Bankruptcy for Dozens of Publications
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New Transit-Funding Rules Make Streetcars More Desirable
By Melanie Trottman & Josh Mitchell
The Wall Street Journal
January 15, 2010
The Obama administration said it was revamping rules on federal transit funding to funnel more of the money to streetcars, bus routes and other projects that promote "livability."
The new policy announced Wednesday, part of a broader effort by the Obama administration to use transportation and housing programs to reduce driving, contain sprawl and create transit-related jobs, could lift the fortunes of makers of light-rail and other transit equipment sold to states and cities.
Among more than 80 cities that could now qualify for funding are Seattle; Cincinnati; Boise, Idaho; and Fort Lauderdale, Fla., said Rep. Earl Blumenauer (D., Ore.), who led the push for a federal program designed to promote transit projects. Transit-industry officials said many projects had been stymied by a Bush administration policy requiring the government to evaluate projects based largely on reducing commuting times at the lowest possible expense.
HNTB Corp., an infrastructure firm that serves federal, state, and other clients, is working on a commuter-rail project in Indianapolis that could benefit from the change, said Liz Rao, the firm's national public-transit services chairwoman.
Click here to view the full article
This Progressive Blog Has Far More Visitors Than Local KKK-style Hate Websites
MICHAEL GOLD f/k/a "MICHAEL TOBIN" and SHERIFF DAVID SHOAR f/k/a "DAVID HOAR" -- Their Hate Website Has Many Fewer Viewers Than This Anti-Corruption, Anti-Pollution Blog
Local KKK-style hate website "Plazabum.com" approvingly cites Alexa.com as a source of accurate Internet statistics. Ipse dixit.
According to Alexa.com, this blog's rank among websites is: 7,443,132
According to Alexa.com, Plazabum's rank among websites is 17,308,054
According to Plazabum, at least 13% of its visits are Spammers.
According to Alexa.com, there is no data about www.shamefulpeople.com
Sounds like hate is going out of style, particularly at local KKK-tyle hate websites operated by no-bid Sheriff's uniform salesman, private investigator, Sheriff SHOAR's erstwhile campaign manager and bagman MICHAEL GOLD f/k/a "MICHAEL TOBIN."
There are now only 93 registered users/abusers of Plazabum.com (mostly NICS of MICHAEL GOLD f/k/a "MICHAEL TOBIN"). Other registered users/abusers include City and County government misanthropes posting under their own names or as "Anonymice," and their shills, including wicked, evil tree-killing developers, and assorted illiterate, racist, sexist, homophobic, misogynist anti-Gay hicks who how at the moon). The "Anonymice" on local KKK-style hate websites are not necessarily to be confused with the movie Blazing Saddles' bon mot (from Harvey Korman's Wyoming State Attorney General character Hedley Lamarr): "rustlers, cutthroats, murderers, bounty hunters, desperadoes, mugs, pugs, thugs, nitwits, half-wits, dimwits, vipers, snipers, con men, Indian agents, Mexican bandits, muggers, buggerers, bushwhackers, hornswagglers, horse thieves, bull dykes, train robbers, bank robbers, ass kickers, shit kickers and Methodists."
Wyoming Attorney General "Hedley Lamar," played by Harvey Korman in Blazing Saddles
Money contaminates politics
As the Federal Elections Commission (FEC) reports (below) demonstrate, money is contaminating American politics, even before yesterday's Supreme Court decision. Enough. Read the PBSJ report. Ask the County, School Board, St. Johns River Water Management, Florida Department of Environmental Protection and other buzzards why they're still giving contracts to PBSJ. Ask recipients of dirty PBSJ money about the quid pro quo, if any.
How many of the 100 politicians are in our 7th Congressional District?
When will President Obama take steps to reform the FEC, which deadlocked 3-3, voting not to do anything about PBSJ despite the fact that two successive CEOs pled guilty to criminal charges?
We need action, not lip service.
How many of the 100 politicians are in our 7th Congressional District?
When will President Obama take steps to reform the FEC, which deadlocked 3-3, voting not to do anything about PBSJ despite the fact that two successive CEOs pled guilty to criminal charges?
We need action, not lip service.
1st Federal Elections Commission General Counsel Report on PBSJ Corruption of our Democracy
FEDERAL ELECTION COMMISSION
999 E Street, N.W.
Washington, D.C. 20463
FIRST GENERAL COUNSEL’S REPORT
PRE-MUR: 441
DATE REFERRED: September 18, 2006
DATE ACTIVATED: September 20, 2006
Exemption 2
STATUTE OF LIMITATIONS: October 4, 2009
SOURCE: Exemption 7(D)
RESPONDENTS: William Scott DeLoach
RELEVANT STATUTES: 2 U.S.C. § 441f
INTERNAL REPORTS CHECKED: Disclosure Reports
FEDERAL AGENCIES CHECKED: U.S. Attorney for the Southern District of Florida
I. INTRODUCTION
Exemption 7(D) Exemption 7(D) .[1] Exemption 7(D) William Scott DeLoach, the former Chief Financial Office of PBS&J Corporation, admits that he knowingly and willfully violated 2 U.S.C. § 441f by using straw donors to disguise six contributions totaling $11,000 made to Martinez for Senate (“Martinez Committee”) in October 2004. While the factual record regarding the reimbursement scheme is limited, and we do not know the scope of the scheme or many other facts, the available information presents a sufficient basis to investigate this alleged violation. We therefore recommend the Commission find reason to believe DeLoach knowingly and willfully violated 2 U.S.C. § 441f.
II. DISCUSSION
The U.S. Attorney’s Office for the Southern District of Florida filed a criminal information in this case on September 15, 2006, and DeLoach agreed to plead guilty to a felony under 2 U.S.C. §§ 441f and 437g(d)(1)(D). See Information, U.S. v. DeLoach, Crim. No. 06-20583 (S.D. Fla. filed Sept. 15, 2006). According to DOJ,
[T]he trial judge in this case has an aversion to formal written plea agreements. As is the case with a few other Judges, this Judge prefers to have the prosecutor state the facts underlying a plea in open court and on the record, and then have the defendant agree on the record that (s)he agrees with the facts as stated by the prosecutor.
While we have not been informed of the date on which the plea will be heard, based on information obtained from DOJ and through press reports, it may be as soon as September 29, 2006. See Patrick Danner and Dan Christensen, Three Charged in Embezzlement Scheme, Miami Herald, Sept. 19, 2006, at A1.
The § 441f charge is one of two charges filed against DeLoach in connection with an apparent embezzlement scheme at PBS&J Corporation, a Florida-based government contractor that provides a range of services related to transportation, environmental, construction management, and civil engineering. According to the Information, DeLoach and two employees, Maria Garcia and Rosario Licata, admit that they conspired to embezzle more than $35 million by issuing company checks to themselves, diverting money from the company healthcare benefit fund into secret bank accounts, charging personal expenses on the company credit card, and concealing the theft of these funds by altering and fabricating the company’s books. In connection with this embezzlement, DeLoach, Garcia and Licata will plead guilty to a felony count of conspiracy to commit mail fraud.
The factual record regarding the § 441f charge is sparse. DeLoach admits that he knowingly and willfully made $11,000 in illegal contributions to the Martinez Committee through six straw donors on October 4 and 5, 2004, but the Information does not specify whether DeLoach used personal or corporate funds to reimburse the contributions or whether other PBS&J employees or the corporation itself were involved. In addition, it identifies the straw donors only by their initials, although, based on statements by the Assistant U.S. Attorney and a review of disclosure reports, we believe the following PBS&J employees were the conduits.
| DATE | NAME | AMOUNT |
| October 4, 2004 | Shannan Ighodaro | $2,000.00 |
| October 4, 2004 | Sybil Thomas | $1,000.00 |
| October 5, 2004 | Lourdes Fernandez | $2,000.00 |
| October 5, 2004 | Reinaldo Fernandez | $2,000.00 |
| October 5, 2004 | Ana Quinones | $2,000.00 |
| October 5, 2004 | Victor Quinones | $2,000.00 |
Despite the limited facts included in the Information and the inability of the U.S. Attorney’s office to disclose grand jury evidence, news reports suggest that the reimbursement scheme may have been broader than these contributions. Importantly, one news article stated,
The case also carries national implications because PBS&J does business with and contributes to politicians across the country. Fort Lauderdale attorney Benson Weintraub, one of [Maria] Garcia’s lawyers, said he expects other company officials and possibly the company itself to be indicted as the investigation continues.
“This is just the tip of the iceberg,” Weintraub said.
Mark Schnapp, a Miami lawyer for PBS&J, acknowledged that company money apparently was used in the 1990s to make illegal reimbursements but said they “were not of any significant magnitude.”
“Charges shouldn’t be on the table, and as far as I know they aren’t,” Schnapp said.
Schnapp said DeLoach carried out the reimbursement scheme described by the government in court papers alone to put “himself into a highly visible position in the Mel Martinez campaign.” He did not elaborate.
Danner and Christensen, Sept. 19, 2006, supra. Another news article stated,
While working for PBS&J in 2003 and 2004, DeLoach, Garcia and Licata contributed more than $44,000 to federal candidates, election records show. Other PBS&J executives, board members and managers contributed another $60,000 to federal candidates and PACs during the same period.
Individual contributions like those are the focus of the grand jury’s reimbursement probe.
Recipients include President Bush, Florida senators Bill Nelson, a Democrat, and Mel Martinez, a Republican; and Broward U.S. Rep. Debbie Wasserman Schultz.
In some cases, executives’ contributions added to giving by PBS&J itself or its political action committees. For example, the biggest federal recipient since 2003 is Democracy Believers, the joint leadership PAC of brothers Lincoln and Mario Diaz-Balart, Republican congressmen from Miami. DeLoach, Garcia, Licata and the PBS&J’s federal PAC combined gave $20,000 in September 2004.
Patrick Danner and Dan Christensen, A Rich History of Political Giving, Miami Herald, Sept. 13, 2006, at B1. In addition, although these news reports assert that PBS&J and its employees have contributed more than $500,000 in political contributions since 2003, a search of the Commission’s disclosure database by employer name lists only $41,033 in contributions made by identified PBS&J employees during that time period, and neither DeLoach nor the likely conduits identified PBS&J as their employer in connection with contributions made to the Martinez Committee. See Martinez for Senate, 12 Day Pre-General Report at 308-310 (Oct. 22, 2004).
Given that DeLoach will plead guilty in connection with the conduit contributions, we recommend that the Commission find reason to believe that he knowingly and willfully violated 2 U.S.C. § 441f.
III. PROPOSED INVESTIGATION
We anticipate that we will be able to conduct a focused investigation in this matter, Exemption 7(D)
Exemption 7(D) Exemption 7(D) [2] In particular, we will seek to discover: (1) Whether the money DeLoach used to reimburse conduits was his personal money or included corporate funds; (2) The relationship of the conduits to DeLoach and the extent to which they may be culpable; (3) Whether these six contributions are the only contributions that may have been reimbursed; (4) The role of PBS&J and/or its executives in the apparent reimbursement scheme; (5) Whether the Martinez Committee was the only recipient committee, and what it or other committees knew about these or other reimbursed contributions; (6) How the embezzlement and reimbursement schemes became known or the extent of DeLoach’s cooperativeness with DOJ; and (7) What penalty DOJ is seeking against DeLoach.[3]
IV. RECOMMENDATIONS
1. Open a MUR.
2. Find reason to believe that William Scott DeLoach knowingly and willfully violated 2 U.S.C. § 441f.
3. Authorize compulsory process.
4. Approve the appropriate letters.
_________________________
Date James A. Kahl
Deputy General Counsel
Rhonda J. Vosdingh
Associate General Counsel for Enforcement
Julie McConnell
Attorney
Attachment:
Exemption 7(D)
[1] Section 441f prohibits any person from making a contribution in the name of another. This includes making a monetary contribution and attributing as the source of the money another person when in fact the contributor is the true source. See 11 C.F.R. § 110.4(b)(2)(ii).
[3] One news article reported that DeLoach has given approximately $16 million in assets, including homesteaded property and the proceeds from his 401(k) retirement account, to PBS&J. See Danner & Christensen, Sept. 19, 2006, supra. The Assistant U.S. Attorney noted that DeLoach may be unable to pay even the minimum statutory criminal penalty for the felony § 441f violation because the embezzlement charge requires him to relinquish virtually all he owns and imposes a future restitution obligation, such that DeLoach likely will be making payments long after he completes any potential prison sentence.
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