FEC Slaps Kerry-Edwards Campaign with $1.3 Million Fine

Yesterday, the Federal Election Commission fined the 2004 Kerry-Edwards campaign $1.3 million for overspending in the 2004 General election race. Under the law, when a campaign accepts public funding for the General election, which Kerry did in 2004, the campaign is limited in how much it may spend. According the legally mandated audit of the campaign, the FEC Auditors believe the campaign spent $1.4 million dollars over the legal limit.

But Kerry’s lawyer immediately pledged to appeal the decision, which will likely lead to an administrative hearing since the commissioners indicated a willingness to reconsider at least part of their decision. And that could set the stage for a potentially partisan battle before the panel over a relatively technical point – how labor costs are assessed.

“We will save for a later day the resolution of the labor cost issue,” commissioner Ellen Weintraub said after the 5-0 vote.

Marc Elias, a lawyer for the Kerry campaign, called the labor cost decision “stupid” and accused the panel of using “novel” criteria to single out his client.

The campaign was subject to an audit because it accepted $74.6 million in taxpayer funds for its general election campaign against President Bush. As a condition of taking the public money, Kerry, a Democratic senator from Massachusetts, and his running mate, former North Carolina Sen. John Edwards, agreed to limit their spending.

But FEC auditors found the campaign spent nearly $1.4 million more than federal rules allowed, primarily on customizing two planes and on payments to its media firm.

Before approving the audit, commissioners agreed to reduce the amount of the fine proposed by auditors by about $140,000 – the cost of disputed expenses commissioners agreed could be paid through private contributions.

The fine includes more than $500,000 in labor costs associated with reconfiguring the Boeing 757 that jetted Kerry around the country and the Boeing 727 that carried Edwards. But those expenses could be the subject of a tussle between commissioners if the appeal by the Kerry-Edwards campaign results in an administrative hearing, as expected.

While the dispute will continue over the customization of aircraft for a campaign, the real dilemma is for the current crop of candidates.

One of the real questions regarding Presidential campaigns is the ongoing efficacy of the public fudning system. Already, several of the leading candidates for 2008 are collecting funds that might be used in a general election campaign, freeing them from the kind of audit that has lead to the big fine. (That is not to say they won't be audited by the FEC--but it would be a different audit). The spending limit has been one question, but the manner in which the FEC Auditors made their recommendation, assuming Elias is right and the methods used were "novel," may lead campaigns to forgo not only the limitation of public funding but the headaches and hassles associated with public funding.

Elias himself maybe involved in that decision for at least one candidate. His firm, Perkins Coie, represents Barack Obama in the 2008 Presidential campaign.

Related Posts: Kerry-Edwards Campaign Audit