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November 11, 2015

Conservative Nonprofit Broke Campaign-Finance Law, Says FEC

A 501(c)(4) group with links to prominent conservative operatives violated federal law by failing to properly disclose details about its political advertising during the 2010 congressional elections, the Center for Public Integrity writes, citing a Federal Elections Commission report.

In split party-line votes, the commission, which includes three Democratic and three Republican appointees, rejected taking action against the Commission for Hope, Growth and Opportunity, which the GOP members said "would be futile" because the group is now defunct. The panel also deadlocked on whether to find that the nonprofit further broke the law by failing to register and operate as a political-action committee.

"Social-welfare" groups are barred from engaging in electioneering as their primary activity. In a report issued Friday, FEC lawyers said the nonprofit, which characterized itself in tax filings as an advocacy group supporting free-market principles, was explicitly political, spending 85 percent of the $4.8 million it raised in 2010 on ads aimed at Democratic House incumbents.

According to the report, William Canfield and Scott Reed — now, respectively, the general counsel for a pro-Carly Fiorina super PAC and the senior political strategist for he U.S. Chamber of Commerce — coordinated the conservative group's advertising. Wayne Berman, national finance chairman for Marco Rubio's White House run, received a fundraising fee from the nonprofit.

Ann Ravel, the FEC's Democratic chairwoman, said the decision to take no action in the case sends a message that the agency is unwilling to enforce campaign-finance laws. "When people see that, they tend to act with impunity," she said.