Oct. 15, 2003
Public Citizen Urges FEC to Investigate Possible Campaign Finance Violations by Freddie Mac Lobbyist
Epiphany Productions May Have Violated Ban on Corporate Contributions; Lobbyist Mitch Delk Appears to Have Violated Contribution Limits
WASHINGTON, D.C. – Public Citizen today filed a complaint with the Federal Election Commission (FEC) urging the agency to conduct an immediate investigation into apparent violations of contribution limits, a ban on corporate campaign contributions and reporting requirements by Freddie Mac’s chief lobbyist, Mitch Delk, and the fundraising firm Epiphany Productions Inc.
The complaint was filed the day before the Senate Banking, Housing and Urban Affairs Committee was scheduled to discuss mortgage lending practices, including those of Freddie Mac.
During the 2002 election cycle, Delk hosted at least 45 fundraising events for federal officeholders and candidates – many with direct oversight of Freddie Mac. While Delk reported absorbing the costs of dinners at most of the fundraising events as in-kind contributions to the officeholders and candidates, he paid significantly discounted prices for the events, according to news accounts, the low-balling of which kept Delk’s total contributions within federal limits. But if the actual value of the events were charged, Delk would have exceeded these limits.
Delk enlisted Epiphany Productions – primarily a Republican fundraising business – to organize these fundraising events. In at least 19 of the events, Epiphany Productions appears not to have been paid by the campaigns for its services, which would constitute an illegal corporate contribution to the campaigns. In at least another 19 Delk fundraising events, Epiphany productions was paid late – up to 20 months late – and apparently only after news stories reported the questionable fundraising activity.
Freddie Mac, a congressionally chartered mortgage lending company, is subject to oversight by the House Financial Services Committee and the Senate Banking, Housing and Urban Affairs Committee. Both committees have conducted a series of hearings regarding the business activities of Freddie Mac, especially since Freddie Mac recently has been drawn into controversy due to financial scandals. More than half (24) of the fundraising events organized by Delk have featured as a special guest U.S. Rep. Michael Oxley (R-Ohio), chair of the House Financial Services Committee, and 19 of these events were held explicitly for the benefit of congressional members with oversight responsibility over Freddie Mac.
“The close fundraising relationship between Freddie Mac lobbyist Delk, Epiphany Productions and the congressional oversight committee is a serious source of concern,” said Craig Holman, legislative representative for Public Citizen’s Congress Watch. “Freddie Mac’s lobbyist is out there hosting lavish fundraisers for the same members of Congress who are now deciding the company’s future. This is treading near a quid pro quo.”
Whatever legislative favors may have been sought, Public Citizen’s analysis strongly suggests that federal campaign finance laws may have been broken in the process. Delk may have exceeded his individual and aggregate contribution limits in unreported in-kind contributions. The discounted value Delk reported for each fundraiser usually ran between $500 and $750 per event. With the help of his wife, Mandy, who paid $6,600 of the fundraising dinner bills, Mitch Delk was able to keep his reported aggregate contributions of $20,100 to federal candidates and committees in 2002 just under the aggregate annual limit of $25,000. But had Delk reported the true cost of the dinners, which may have been at least twice as much as he claimed, Delk is likely to have exceeded both the individual ($1,000) and aggregate ($25,000) limits.
Epiphany Productions, working with Delk, appears to have been providing services free of charge for many of these fundraisers with its own corporate money. It is clearly illegal for a corporation to pay campaign expenses or make an in-kind campaign contribution to a federal candidate. At least 19 of the fundraising events organized by Epiphany were never paid for by the recipient campaign committees, FEC records show; most of the other payments received by Epiphany came after news broke about the fundraising. One news story even quotes campaign officials as saying that they had never received a bill for the fundraising services from Epiphany.
“Epiphany Productions appears to have engaged in a systematic effort to foot the fundraising bill for candidates. If so, that’s a clear violation of law,” said Frank Clemente, director of Public Citizen’s Congress Watch. “The big question is: Was someone reimbursing Epiphany on the sly? The FEC needs to get to the bottom of this.”
Click here to view Public Citizen’s full complaint.