Federal Election Commission v. Craig for U.S. Senate
70 F. Supp. 3d 82
D.D.C.2014Background
- Senator Larry Craig (R‑Idaho) was arrested in Minneapolis in 2007, pled guilty to disorderly conduct, and later sought to withdraw the plea; his appeals failed. The arrest and conviction generated national media attention and a Senate Ethics Committee inquiry.
- Craig for U.S. Senate (the Committee) paid legal bills between July 2007 and October 2008 totaling $216,984 to two law firms for work connected to efforts to withdraw the plea. The Committee also paid other PR and ethics counsel (excluded from the disgorgement amount by the FEC).
- The Senate Ethics Committee authorized a legal defense fund but warned that its approval did not endorse continuing the state proceedings or use of campaign funds for those matters. The Ethics Committee later issued a public letter of admonition noting some expenditures might not relate to official duties.
- The Federal Election Commission sued in 2012, alleging defendants converted campaign funds to personal use in violation of 52 U.S.C. § 30114(b) and sought disgorgement, penalties, declaratory and injunctive relief. Defendants moved to dismiss; the Court denied that motion in 2013. Defendants subsequently admitted the material facts relevant to liability.
- On summary judgment, the Court held defendants violated the FECA personal‑use ban. After a line‑by‑line review of invoices (defendants’ block billing left much ambiguous), the Court found $19,449 of the $216,984 was permissibly spent on media/ethics‑related legal work and ordered disgorgement of the remaining $197,535.
- The Court exercised its remedial discretion to order Senator Craig to pay $242,535 to the U.S. Treasury (disgorgement of $197,535 plus a $45,000 civil penalty); it declined to assess relief or penalties against the defunct campaign committee and denied injunctive relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether campaign funds used to pay legal fees to withdraw Craig's guilty plea constituted impermissible "personal use" under § 30114(b) | FEC: fees were for a personal matter unrelated to campaign or official duties and thus converted to personal use | Craig: spending addressed reputational, media, and ethics concerns tied to office; reliance on FEC advisory opinions and counsel justified payments | Held: Liability established — expenditures were personal use in violation of § 30114(b) |
| Whether defendants reasonably relied on FEC Advisory Opinions (e.g., Kolbe) to avoid liability | FEC: advisory opinions cited by defendants are distinguishable and do not authorize the challenged spending | Craig: relied in good faith on Kolbe and related advisory opinions and on counsel's advice | Held: Reliance on Kolbe/unrequested later AOs insufficient; good‑faith reliance does not negate liability (may bear on penalty) |
| Precise amount of campaign funds unlawfully converted and permissibly spent | FEC: defendants failed to document exemptions; either disgorge full $216,984 or apply modest discount (10%) | Craig: at least $46,464 of the $216,984 was exempt under Hilliard and Vitter advisory principles | Held: Court performed invoice analysis; $19,449 found permissible, $197,535 converted to personal use |
| Appropriate remedy (disgorgement, civil penalties, injunction, payee) | FEC: disgorgement of full converted amount; $70,000 penalty each for Craig and committee; declaratory and injunctive relief | Craig: penalties excessive; injunctive relief unnecessary; any penalty should not exceed amount unlawfully spent | Held: Court ordered disgorgement ($197,535) + $45,000 penalty payable by Craig to U.S. Treasury; declaratory relief granted; no injunction; no penalty against defunct committee |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (movant’s burden and summary judgment framework)
- Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (standard for genuine issue of material fact at summary judgment)
- Scott v. Harris, 550 U.S. 372 (2007) (view facts in light most favorable to nonmoving party but consider videotaped evidence and clear record)
- United States v. Diebold, Inc., 369 U.S. 654 (1962) (courts may assume facts admitted unless controverted on summary judgment)
- SEC v. Bilzerian, 29 F.3d 689 (D.C. Cir. 1994) (disgorgement to prevent unjust enrichment)
- FEC v. Furgatch, 869 F.2d 1256 (9th Cir. 1989) (factors for assessing civil penalties under FECA)
- FEC v. Ted Haley Cong. Comm., 852 F.2d 1111 (9th Cir. 1988) (penalty considerations where defendants acted in good faith)
- Comm. of 100 Democrats v. FEC, 844 F. Supp. 1 (D.D.C. 1993) (use of civil penalties and injunctions for FECA violations)
- Friends of Jane Harman v. FEC, 59 F. Supp. 2d 1046 (C.D. Cal. 1999) (declining penalty/disgorgement where violations were not substantial and defendants acted in good faith)