MUR 5645: prohibited corporate in-kind contributions
The Commission has collected a total of $81,578 in civil penalties resulting from Highmark Inc.'s payment of fundraising costs associated with events held for former Senator Rick Santorum's (R-PA) campaign committees and his leadership PAC, America's Foundation. The Commission assessed penalties against Highmark Inc., America's Foundation and Bruce Hironimus, Highmark Inc.'s former Vice President of Government Affairs. The Commission took no further action regarding Senator Santorum's campaign committee, Santorum 2006, because the evidence did not show that Santorum 2006 had reason to know of the impermissible contributions.
Background
Under the Federal Election Campaign Act (the Act), a corporation may not use its treasury funds to make a contribution or expenditure in connection with a federal election. 2 U.S.C. 441b(a). Commission regulations include in the definition of "contribution" any payment made for the purpose of influencing any election to federal office. 11 CFR 100.52(a).
Highmark Inc., a Pittsburgh based insurance company, made a voluntary submission notifying the FEC that it appeared to have violated the Act by using corporate funds to defray fundraising costs for events held for Santorum 2000, Santorum 2006 and America's Foundation. Between 1999 and 2003, Highmark Inc. made payments totaling $54,078 related to four fundraising events: three golf tournaments and an event at a private home. Highmark officer Bruce Hironimus arranged all of these payments. None of the three committees reported in-kind contributions related to fundraising costs for these events.
Conciliation agreements
The Commission found reason to believe that Highmark Inc. violated the Act by making corporate contributions to the Santorum committees and that Highmark officers Bruce Hironimus, George Grode and David O'Brien violated the Act by consenting to those corporate in-kind contributions. In separate conciliation agreements, Highmark Inc. and Mr. Hironimus agreed to pay civil penalties of $54,078 and $20,000, respectively. No further action was taken regarding Mr. Grode and Mr. O'Brien.
The Commission also found reason to believe that America's Foundation and Santorum 2006 violated the Act by accepting prohibited corporate contributions and failing to report in-kind contributions related to fundraising events. In its conciliation agreement, America's Foundation agreed to pay a $7,500 civil penalty and to disgorge $14,604.45 to the U.S. Treasury to offset the prohibited contributions that it received.
The Commission took no further action regarding Santorum 2006 because the evidence did not indicate that the committee had reason to think an outside party had paid any prohibited costs. Thus, the Commission had no evidence that the committee knowingly accepted a contribution from an impermissible source. Santorum 2006 was instructed to pay $7,938.81 to the U.S. Treasury to offset prohibited contributions that it received unknowingly.