John Ashcroft Gets a Bye in Investigation of Campaign Financing Fraud

Editor's note: Would you consider it front page news that the nation's chief law enforcement officer evidently has committed federal crimes? The Washington Post (and most newspapers) didn't. Two Post reporters wrote this thorough story, which editors then decided to bury on page 4 of the Saturday paper (the least-read day) with a title that both conceals its seriousness and begs to be skipped over: "Ashcroft Not Queried On Campaign Funds, Critics See Weakness in Election Panel."

During more than two years of investigating two campaign committees that Attorney General John D. Ashcroft maintained when he was in the Senate, the Federal Election Commission never directly questioned Ashcroft or obtained a sworn statement from him even though the issue of his personal ownership of a mailing list and the income it produced were central to the inquiry.

Ellen L. Weintraub, chairwoman of the FEC, said she and the other two Democrats on the panel did not have the required four votes to carry a motion to interview Ashcroft. In addition, she said, all the commissioners did not want to be seen as "harassing the attorney general of the United States" and so never sought to question him.

Critics of the commission say the handling of the case illustrates the FEC's reluctance to aggressively investigate people in power -- a tendency exacerbated by the partisan split among the six commissioners. By law, three are from each party.

"The FEC is known to be 'squeamish' about bothering people in the administration," said Lawrence M. Noble, a former FEC general counsel and now executive director of the Committee for Responsive Politics. Noble said the first choice when dealing with someone central to an investigation would be a deposition; second would be written questions; third would be an affidavit; and the last choice would be a statement from his lawyer.

"They bypassed all these," Noble said, "and the result is a weak ending to an important case."

"Normally [the commission] requires a statement," said Trevor Potter, a former FEC chairman who is now a Washington attorney and chairman of the Campaign Legal Center. Potter called the Ashcroft case "another instance of a partisan 3-3 tie where the commission cannot act without a majority."

David M. Mason, a Republican member of the commission, said no one "inside the commission ever asked for Ashcroft to be deposed" and noted that "it's unusual when our investigators require depositions of candidates." The fact that the commission fined two Ashcroft political committees, Mason argued, is "proof that the commission can and does work, despite our critics."

The case has its roots in 1998, when then-Sen. Ashcroft (R-Mo.) created a leadership political action committee (PAC), Spirit of America, to raise money and develop a donor list for a possible presidential race. A year later, when the list totaled 80,000 names, Ashcroft dropped the presidential plan and created Ashcroft 2000 to raise money for his Senate reelection campaign.

A key element of the FEC case was an unusual document called a "work product agreement" spelling out that by allowing Spirit of America to use his name, signature and image to raise money, the donor list was to be the "exclusive property of John Ashcroft." Ashcroft signed the document, as did Jack Oliver, acting as executive director of the PAC. Drawn up "as of the 17th day of July, 1998," the document produced for the FEC was signed on Aug. 4, 1999, because, as the FEC was told, all the original 1998 copies were lost.

The date was important because, "as of the 1st day of January, 1999," Ashcroft signed a "list license agreement" with Ashcroft 2000, which gave the Senate campaign committee use of the PAC list, which cost $1.7 million to develop. That transfer saved Ashcroft 2000 the cost of creating a fundraising list. But because the PAC had contributed $10,000 in cash, the amount permissible under law, to the Senate campaign committee, three public interest groups called for an FEC investigation after the 2000 election, arguing that the mailing list was an additional donation that violated the law.

On Tuesday, the FEC announced a "conciliation agreement" under which the complaint was settled when the Spirit of America PAC and Ashcroft 2000 agreed to pay a $37,000 fine for what the FEC said was $112,000 in illegal contributions to the Senate campaign committee.

In papers filed with the FEC, lawyers for the Ashcroft committees argued that Ashcroft owned the PAC mailing list as well as more than $110,000 earned from selling the list to other campaigns. Therefore, they argued, he was entitled to give both the earnings and the list to the campaign committee because there are no restrictions on a candidate's giving to his own campaign.

However, the claim opens the attorney general to charges that he failed to report the list and the income in his 1998 and 1999 Senate financial disclosure statements.

FEC general counsel Lawrence H. Norton and the commission's three Democrats -- Weintraub, Scott E. Thomas and Danny L. McDonald -- rejected the lawyers' claims and pointedly noted in a statement released Tuesday that Ashcroft did not mention the list in his Senate disclosure statements.

They added that "Ashcroft cannot have it both ways; he cannot on the one hand for FEC purposes sign a Work Product Agreement by which terms he receives ownership of the mailing list but then, on the other hand, for Senate financial purposes, claim not to own the mailing lists."

In the statement, the three Democrats also noted that "the FEC did not subpoena Mr. Ashcroft's personal income tax records, neither did respondents [the Ashcroft committees] produce those tax records as evidence that Mr. Ashcroft treated the rental income as personal income."

Justice Department spokesman John Novaski said Ashcroft was not available to comment. Oliver, now finance director of the Bush-Cheney '04 reelection committee, declined to talk about the case. Oliver, one of the major participants in the case whose signature appears with Ashcroft's on many key documents released on Tuesday, was deposed by FEC investigators in February.

Mason and another Republican commission member, Michael E. Toner, played down the significance of the case, describing it as a "garden variety complaint" that had been "blown out of proportion" because it involved a sitting attorney general.

Officials of the National Voting Rights Institute, one of the original groups that brought the case, said it will request a criminal investigation by the Justice Department and ask the federal courts to order tougher penalties than the $37,000 fine accepted by the FEC.

© 2003 Washington Post Co.

See these two related guest commentaries by Lisa Danetz and Bonnie Tennerrielo of the National Voting Rights Institute for more on this issue.

Go to Political Reform index page