Tuesday, March 14, 2006

John Edwards Fundraiser Fined for Illegal Funneling by FPPC

As the Fair Political Practices Commission reports on its website, today the commission fined Los Angeles trial lawyer and major Democratic fundraiser Pierce O'Donnell $72,000 for making $25,500 in illegal campaign contributions through his employees to the 2001 mayoral campaign of James Hahn. Hahn went on to beat current mayor Antonio Villaraigosa in the election.

O'Donnell was convicted by a trial court in February for the same crimes, for which he was fined $155,000 and barred from participating in political contributions for three years. And the LA Ethics Commission also nailed him for the same crime last week, fining him $147,000.

O'Donnell also drew attention during the 2004 presidential race for the same crime, this time for contributions to the campaign of John Edwards. Edwards eventually returned some $44,000 in contributions from O'Donnell and employees at his firm due to concerns that the contributions may have been illegally funneled "straw donations".

Straw donations are a tough thing to track down without insider information from the "straw donors", who are usually reluctant to spill the beans on what are quite often their employers. Several of the Bush Pioneers - fundraisers for George W. Bush that raise and bundle more than $100,000 for his 2000 or 2004 campaigns - have been indicted for straw donations. Other Edwards donors have also come under scrutiny for the practice.

But under current law, campaigns are not required to divulge which bundlers raised which funds, making it nearly impossible to examine whether straw donations are being made in the absence of investigations into other possible illegal activities. The case of Tom Noe, the Bush pioneer and coin collector indicted for defrauding the people of Ohio of more than $10 million, is a perfect example. Without the investigation into the fraud, his straw donations to president Bush's 2004 campaign wouldn't have turned up.

In light of these difficulties, we recently called on the Justice Department to perform a random audit of both the Edwards bundling program and the Bush Pioneer program.
Current campaign laws are unfair in allowing wealthy donors to influence election outcomes more than the rest of us, but that doesn't mean that enforcement of those laws isn't important.

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