Public Citizen complaint against Freddie Mac lobbyist results in record fine

A 2003 Public Citizen complaint against a Freddie Mac lobbyist's extravagant congressional fundraising results in a $3.8 million FEC fine, the largest civil penalty it ever issued.

  • $3.8M Largest FEC penalty ever for a civil enforcement action
  • 45 Number of congressional fundraisers hosted by Freddie Mac lobbyist during the 2002 election cycle

During the 2002 election cycle, Robert Mitchell Delk, a lobbyist for Federal Home Loan Mortgage Corporation (Freddie Mac), hosted at least 45 fundraising events for lawmakers, including U.S. Rep. Michael Oxley (R-Ohio), chair of the House Committee on Financial Services, which regulates mortgage loan practices. At least 19 of these events were held directly for the benefit of lawmakers with oversight responsibilities for Freddie Mac.

So in 2003, Public Citizen filed a complaint against Delk, because Delk’s personal in-kind contributions to the 45 events appeared to exceed his aggregate contribution limits. And the company enlisted to promote these fundraising events – Epiphany Productions, run by a former Republican Party official – routinely was not paid for its services, also a violation of campaign finance law.

In April 2006, the Federal Election Commission (FEC) issued a record-setting $3.8 million fine against the Freddie Mac as a result of Public Citizen’s complaint.

While it is not illegal for lobbyists to host fundraising events for lawmakers whom they are trying to influence, it raises the specter of corruption. The corrupting nexus between lobbyists, campaign cash and lawmakers is far more prevalent than just the practices of one or two lobbyists. Campaign fundraising by lobbyists – even constant, round-the-clock fundraising by lobbyists for those whom they lobby – is considered business as usual on Capitol Hill.

Public records available at the time of the complaint didn’t prove that Freddie Mac was footing the bill illegally for these fundraising events, but the ensuing FEC investigation of Freddie Mac’s finances and business practices led the commission to conclude that Freddie Mac used corporate resources to support Delk’s fundraisers, which is illegal.

This is yet another example of the corrupting nexus between lobbyists, campaign money and lawmakers Craig Holman, campaign finance lobbyist, told the New York Times

Highlights

  • Public Citizen filed a complaint against Freddie Mac lobbyist due to large number of fundraisers he hosted for lawmakers who oversaw mortgage lending practices.
  • A 2006 federal probe confirmed Public Citizen suspicion of campaign finance violations.
  • The $3.8 million against Freddie Mac was the largest civil penalty it ever issued.
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