WASHINGTON — On Jan. 13, 2015, the Federal Election Commission took up allegations that former congresswoman Jean Schmidt, R-Ohio, and her campaign committee had knowingly violated election laws.
The move came more than two years after Schmidt had been voted out of office — and more than three years after the original complaint had landed in the federal agency’s lap. On that day, the FEC’s commissioners deadlocked on the first 24 questions related to Schmidt’s case.
It would take another round of votes that day, and another 18 months of legal wrangling and bureaucratic stalemate, before the FEC closed the 800-plus-page case file. In June, what started with a bang ended with a whimper when the federal election agency fined Schmidt’s campaign $2,500 for accepting an illegal corporate contribution.
Schmidt’s attorney, in an interview this week, said the former congresswoman was “exonerated” by the outcome. He noted that as part of the agreement, she did not have to admit any wrongdoing.
“The FEC imposed a very minuscule fine because there wasn’t any there there,” said Columbus attorney Donald Brey.
But critics say Schmidt’s five-year fight with the FEC illustrates how toothless the agency is, and how easy it is for lawmakers to flout the law without worrying about serious consequences.
“The FEC is basically a dysfunctional agency,” said Larry Noble, who served as the agency’s general counsel for 13 years and now works for the Campaign Legal Center, which advocates for campaign finance reform. “It very often splits three-three on issues. It takes a very long time to do anything. Most of that time, it’s the commission not wanting to consider a matter and not being willing to make decisions.”
Noble said the $2,500 fine in the Schmidt case was startlingly small, especially given the facts and the amount of improper campaign contributions. The legal battle centered on Schmidt’s acceptance of at least $500,000 worth of free legal services from the Turkish Coalition of America, via an affiliated defense fund.
The FEC probe began in 2011, when Schmidt’s Democratic foe in the 2008 election, David Krikorian, filed a complaint arguing Schmidt should have reported that $500,000 as an in-kind campaign donation. But as a corporation, the TCA is banned by federal law from donating to any candidate for federal office, so it would be an illegal contribution.
Schmidt’s attorney argued her legal tab with the Turkish Coalition was not related to her election and that she didn’t “knowingly” accept any corporate contributions. The House Ethics Committee had already concluded the legal services amounted to an improper gift and ordered Schmidt to repay that money.
At one point in the FEC proceedings, it looked like the agency was poised to bring a hammer down on the former congresswoman. In 2014, the FEC’s general counsel issued a scathing analysis of the matter.
That report calls Schmidt’s various accounts about her relationship with the Turkish group “implausible” and “inconsistent with the record.” And the general counsel urged the FEC to find that Schmidt and her campaign committee had “knowingly and willfully” violated election law.
During the January 2015 vote, the FEC’s three Democratic commissioners voted in favor of that and other findings, while the three Republican commissioners voted 'no.' Because the six-member commission is evenly divided between the two parties, that result is routine.
“They end up deadlocked on everything,” said Jordan Libowitz, a spokesman for Citizens for Responsibility and Ethics in Washington, a left-leaning government watchdog group.
The commissioners did accept a set of lesser findings — that Schmidt’s campaign committee violated the law, but not the congresswoman herself. The FEC also concluded the Turkish Coalition had run afoul of the ban on corporate contributions.
“In ordinary circumstances, the commission would seek a substantially higher civil penalty based on the violations outlined in this agreement,” the FEC wrote in a June 2016 settlement of the matter. But because Schmidt was out of office and her campaign account was nearly empty, the FEC agreed to the $2,500 penalty, along with a $25,000 fine for the Turkish Coalition.
“It is a very little amount of money for that kind of a violation,” said Noble.
Christopher Finney, the attorney for Krikorian, called it a “joke.”
“She took a half a million dollars in illegal gifts … and her fine was what? 2,500 bucks,” Finney said. “It took them five years to process a simple complaint when the facts were never in dispute. … And then when they did address it, they didn’t do anything.”
"... It is an utterly ineffectual system,” Finney added.
Brey, Schmidt’s attorney, agreed that the FEC's handling of the matter was plodding, but he said the outcome was appropriate. “It didn’t even warrant a slap on the wrist,” he said of the allegations against his client.
The Cincinnati Enquirer was not able to reach Schmidt. On July 6, her campaign committee paid the FEC fine after she raised one last campaign donation — $1,140 from Broadway Bound, a dance studio run by her daughter.