Citizens for Responsibility and Ethics in Washington-Original FEC complaint filed June 30, 2004)

FEDERAL ELECTION COMMISSION
In the Matter of:      Nader for President 2004
Clarissa Peterson, Treasurer
Oregon Citizens for a Sound Economy
Russ Walker, Northwest Director
Oregon Family Council
Tim Nashif, Staff MUR:
Mike White, Staff
Bush-Cheney ‘04
David Herndon, Treasurer
Steve Schmidt, Spokesman
Oregon Republican Party
Kevin Mannix, Chariman

AMENDED COMPLAINT

        1. Citizens for Responsibility and Ethics in Washington hereby brings this amended complaint before the Federal Election Commission seeking an immediate FEC investigation and enforcement action against Nader for President 2004, Clarissa Peterson, Citizens for a Sound Economy, Russ Walker, the Oregon Family Council, Tim Nashif, Mike White, Bush-Cheney ‘04, David Herndon, Steve Schmidt, the Oregon Republican Party, and Kevin Mannix for direct and serious violations of federal campaign finance law.

Complainant

        2. Citizens for Responsibility and Ethics in Washington is a non-profit, non-partisan organization dedicated to ensuring accountability in public officials.

Respondents

        3. Nader for President 2004 is the principal campaign committee for the effort to elect Ralph Nader to the office of President of the United States. The committee is registered with the Federal Election Commission (“FEC”). Clarissa Peterson is the Treasurer of Nader for President 2004.

        4. Oregon Citizens for a Sound Economy (“CSE”) is a non-profit corporation organized under section 501(c)(4) of the Internal Revenue Code. According to its web site, CSE is a membership organization of “360,000 Americans who are passionate about changing policy.” www.cse.org/know/president.php. Russ Walker is the northwest director of CSE.

        5. The Oregon Family Council (“OFC”) is a non-profit organization organized under section 501(c)(4) of the Internal Revenue Code. According to its web site, “OFC is an information service for Oregon Christians since 1980.” www.ofc.org. Tim Nashif and Mike White are officials with OFC.

        6. Bush-Cheney ‘04 (“BC ‘04")is the principal campaign committee for the effort to reelect George Bush and Dick Cheney to the offices of President and Vice President of the United States, respectively. The committee is registered with the FEC. David Herndon is the treasurer of BC ‘04 and Steve Schmidt is a spokesperson for BC ‘04.

        7. The Oregon Republican Party is a state party committee for the state of Oregon. The committee is registered with the FEC. Kevin Mannix is the Chairman of the Party.

Factual Allegations

        8. CSE is a “corporation” within the meaning of 2 U.S.C. § 441b(a). CSE also accepts many substantial contributions from other corporations. The Washington Post reports, for example, that CSE has accepted at least $1 million from Phillip Morris, $1 million from US West, $25,000 from Hertz, $25,000 from DaimlerChrysler AG, $175,000 from Exxon, $280,000 from the U.S. Sugar Corporation, $280,000 from Florida Crystals, $140,000 from the Sugar Cane Growers Cooperative of Florida, and $380,000 from Microsoft. Dan Morgan, Think Tanks: Corporations’ Quit Weapon, Nonprofits’ Studies, Lobbying Advance Bug Business Causes, Washington Post, January 29, 2000 (attached as Exhibit A).

        9. According to a press release found on CSE’s website, Oregon CSE members have been working to get Ralph Nader on the November ballot in the state of Oregon. Citizens for a Sound Economy, Phone Script: Conservatives for Ralph Nader?, June 27, 2004 (attached as Exhibit B).   The release notes that “Ralph Nader opposes nearly every issue CSE fights for” but that having Nader on the ballot should help to defeat John Kerry.

        10. According to CSE’s press release, CSE provided a script that CSE employees used to make telephone calls to CSE members urging them to sign a petition to put Ralph Nader on the Oregon ballot. The release includes the language of the script, which specifically states that having Nader on the ballot could “peel away a lot of Kerry support in Oregon, but he has to be on the ballot first.” Id. The script continues, “He will make it if at least 1,000 people show up . . . and sign the petition to certify his candidacy.” Id.1

        11. Similarly, according to the Oregon Family Council’s Tim Nashif, OFC “has been making hundreds of phone calls to members urging them to help get Nader on the ballot.” Mr. Nashif stated that his group would “like to take a few votes away from John Kerry if it would be possible.” American Political Network, White House 2004 – The Purple States Oregon: With Friends Like These . . ., The Hotline, June 25, 2004 (attached as Exhibit C).

        12. The OFC script states “We’re calling about a great opportunity for you to help President Bush . . . If Ralph Nader gets on the ballot, he would pull thousands of liberal votes that would otherwise go to Kerry and perhaps cause President Bush [sic] to lose the election. Would you like to take this opportunity to help President Bush by coming out Saturday night to make sure Ralph Nader gets on the ballot?” Id.

        13. CSE northwest director Russ Walker explained that “the idea of helping Nader has been widely discussed among conservative groups and activists.” Id. OFC official Mike White said “he was encouraged by someone” in the Oregon GOP “to help boost turnout” for Nader’s convention. White “said the effort” was “some kind of party outreach thing.” Id.

        14. Bush-Cheney ‘04 campaign spokesman Steve Schmidt explained that BC ‘04 did not officially sanction efforts by BC ‘04 staff to encourage Oregon Republicans to support efforts to place Nader on the ballot. He conceded, however, that while no campaign staffers were making calls to encourage Republicans to help Nader, “some volunteers may well have made calls from the campaign’s office.” Id.

        1CSE also appears to have a second, slightly different script. This script states “Ralph Nader needs 1000 signatures to qualify for the ballot, and we need to ensure he gets them. Ralph Nader is undoubtedly going to pull away some very crucial votes from John Kerry, and that could mean the difference in a razor-thin Presidential election. Can we count on you to come out on Saturday night and sign the petition to nominate Ralph Nader?” American Political
Network, White House 2004 – The Purple States Oregon: With Friends Like These . . ., The Hotline, June 25, 2004.

COUNT I

        15. As corporations, neither CSE nor OFC is permitted to make a contribution to a federal candidate. 2 U.S.C. §441b(a) and 2 U.S.C. §431(8)(A)(I). Federal campaign law defines “contribution” to include “any gift . . . or anything of value . . .” 2 U.S.C. §431(8)(A)(i). FEC regulations further define “contribution”:

For purposes of this section, the term anything of value includes all in-kind contributions. Unless specifically exempted under 11 CFR part 100, subpart C,
the provision of any goods or services without charge or at a charge which is less than the usual and normal charge for such goods or services is a contribution.

11 C.F.R  § 100.52(d)(1).

        16. The fair market value of the costs of the telephone calls made, the costs of creating the scripts, and the costs of organizing the telephone banks, all used to benefit Nader for President 2004, constitute prohibited in-kind corporate contributions. Moreover, if the list of telephone numbers was purchased, rented, or on loan from CSE, OFC, the Oregon Republican Party, or BC ‘04, the value of that list would similarly constitute an illegal in-kind contribution.

        17. If Nader for President 2004 was aware that the telephone calls were being made on its behalf, the campaign improperly accepted an in-kind corporate contribution. 2 U.S.C. §441b(a).

        18. Because Nader for President 2004 cannot accept corporate contributions, it must reimburse CSE and OFC for all costs associated with the development and use of the script, the list or lists, and the telephone bank within a commercially reasonable time. 11 C.F.R. §114.9(d); FEC Advisory Opinion 2000-20.

COUNT II

        19. The Oregon Republican Party, as a state party committee, cannot use soft money to send out public communications referring to a clearly identified candidate and promoting or supporting candidates for federal office. 2 U.S.C. §431(20)(A)(iii). Included in the definition of “public communication” is a telephone bank, which is defined as over 500 calls of a similar nature made within a 30 day period. 2 U.S.C. §431(22). Clearly then, the Oregon Republican Party could not have legally made telephone calls utilizing OFC’s script, which refers to both President Bush and Ralph Nader and supports the candidacy of both men.

        20. What the Oregon Republican Party could not do directly, it could not do indirectly; yet Mike White of OFC stated that he was “encouraged by someone” in the Oregon Republican Party “to help boost turnout” for the Nader for President 2004 convention in Oregon. American Political Network, The Hotline, June 25, 2004. By encouraging OFC to assist the Nader campaign’s turnout, the Oregon Republican Party illegally conspired with OFC to evade the prohibition on the use of soft money to pay for public communications. 2 U.S.C. §441i(b)(1), 18 U.S.C. §371.

COUNT III

        21. BC '04 spokesman Steve Schmidt said that while "no paid campaign staff were making calls to encourage" BC '04 supporters in Oregon "to help Nader," some BC '04 volunteers may well have made calls "from the [BC '04] campaign office." Id. Mr. Schmidt appears to be arguing that, while working as agents of BC '04, an unknown number of BC '04 volunteers each individually, yet somehow simultaneously, decided to abandon their volunteer efforts for BC '04 and, without the prior permission or knowledge of BC '04, use valuable BC '04 assets to carry out individual volunteer efforts on behalf of Nader for President 2004.

        22. This argument strains credulity beyond the breaking point. In order for these efforts by agents of BC '04 to be truly voluntary, each individual who used BC '04 assets in support of their supposedly individual volunteer efforts on behalf of Nader for President 2004 would have to reimburse BC '04 for the costs of using any BC '04 assets within a commercially reasonable time. See, e.g., 11 C.F.R. §114.2(f)(2)(i)(B). These costs would include, at a minimum, the fair market of value of the BC '04 mailing list that was used by the pseudo-Nader volunteers to identify BC '04 supporters in Oregon, a pro rata share of the cost to BC '04 of establishing the telephone bank used to make the calls, as well as the costs of the local and/or long distance calls that were actually made. The pseudo-Nader volunteers may also have to reimburse CSE or OFC for the costs of developing any script that was provided to make the calls. If, however, that script was provided by BC '04, Mr. Schmidt's argument that BC '04 volunteers were acting in their own when the made calls in support of Nader for President 2000 simply fails and the entire cost of this telephone bank operation is a contribution to Nader for President 2004 by BC '04.

        23. Finally, there is a question as to how much money BC ‘04' spent on the effort to turn out people to sign Nader’s petition. By allowing CSE and OFC members to use Bush-Cheney ‘04 telephones to make calls encouraging people to sign the Nader campaign’s petition, the campaign made a contribution to the Nader campaign which must be reported to the FEC. 2U.S.C. §434 (a)-(b). Moreover, if the cost of the list of telephone numbers, the scripts and telephone calls was more than $5,000, Bush-Cheney ‘04 may have made a prohibited excessive in-kind contribution to Nader for President ‘04. 2 U.S.C. §441a(a)(1)(C).

        WHEREFORE, Citizens for Responsibility and Ethics in Washington requests that the Federal Election Commission conduct an investigation into these allegations, declare the respondents to have violated the federal campaign finance laws, impose sanctions appropriate to these violations and take such further action as may be appropriate.



                                                            Melanie Sloan, Executive Director
Citizens for Responsibility and Ethics in
Washington
2nd Floor
11 DuPont Circle, N.W.
Washington, D.C. 20036
(202) 588-5565