Barack Obama can’t seem to win for losing when it comes to his nominees. Earlier this week, I wrote about the possible ethics violations committed by Congresswoman Hilda Solis, who has been nominated by President Obama to head the Labor Department. Not only was she the treasurer and on the board of directors of American Rights at Work, an organization lobbying Congress on bills she cosponsored, but she failed to reveal that information as required on financial disclosure forms until January 29.
The nomination of Solis was supposed to be voted out of committee on Thursday, but was postponed indefinitely just after USA Today reported that her husband paid off $6,400 in tax liens against his business on Wednesday, some of which had been outstanding for as long as 16 years.
Now the DC Examiner is reporting what could turn out to be an even more serious problem, one with potential criminal consequences. According to the report, American Rights at Work collected “at least $1 million in contributions from labor unions.” It also filed electioneering communications reports with the Federal Election Commission prior to the November election showing that ARW spent hundreds of thousands of dollars on television ads in states targeting Republican senators.
One of the purposes of the 2002 McCain-Feingold amendments to the Federal Election Campaign Act (“FECA”) was to drive “soft money” out of federal election campaigns. “Soft money” refers to funds that are outside of the limits and prohibitions of the federal law and was considered one of the biggest loopholes in the campaign finance system. And one of those long-standing prohibitions is that unions are barred from spending funds to influence federal elections and making contributions to federal candidates, as are corporations and national banks.
To accomplish the objective of getting rid of soft money, §441i(e) of FECA prohibits a candidate or an individual holding federal office or “an entity directly or indirectly established, financed, maintained or controlled by or acting on behalf of” such a candidate or officeholder from soliciting, receiving, directing, transferring or spending funds in connection with an election for Federal office “unless the funds are subject to the limitations [and] prohibitions” of FECA. In other words, if Solis, as an officer and member of the board of directors played a role in “controlling” the activities and spending of American Rights at Work on “electioneering communications” that were political ads, ARW and Solis could be in violation of BCRA’s soft money rules. This could subject the offenders not only to civil penalties from the Federal Election Commission, but possible criminal prosecution by the Department of Justice if the law was knowingly and intentionally violated.
ARW may claim that these electioneering communications that they reported to the FEC were simply issue ads that were not intended to affect the election. However, the disclosures filed by ARW self-described the ads as electioneering communications, and stated which candidates they were targeting. This latest problem raises serious questions about the involvement of Solis with an organization that received soft money funds from union contributors that are outside of the limits and prohibitions of FECA and then may have spent those funds on ads intended to affect federal campaigns. This issue needs to be investigated and Solis and ARW need to answer questions about it. The ramifications for Solis could be severe and throw even greater doubt on the wisdom of Obama’s nomination.