Board of Elections Assesses $25K Fine Against Todd Stroger PAC

Cross posted (or soon to be) from ICPR's blog, The Race is On:

Can paying $25K save $100K?

The State Board of Elections met Monday to consider the fine to be assessed against Friends of Todd H. Stroger for President of the Cook County Board of Commissioners. [See previous post here] The Stroger PAC had failed to report 78 contributions, totaling more than a quarter million dollars, during the 2006 General Election as required on A-1 forms. The donations were not reported until 3 months after voting was over, when the PAC filed their semi annual report. After failing to agree on a penalty at the October meeting, the Board of Election continued the matter to the November meeting.

Long story short, the Board voted 5-1 to assess a penalty of $25.5K for the PAC's failure to timely report $255K in A-1 contributions. The five votes came from Republicans Jesse Smart, Bryan Schnieder, and Robert Walters and Democrats John Keith and Wanda Rednour. Democrat (and Chairman) Albert Porter voted no, while Republican Patrick Brady and Democrat William McGuffage abstained. The penalty was, in our estimation, lower than it should have been, and shows how the Board is determined to stick with a faulty formula for A-1 fines.

But to understand the big picture, you'll need a few more details. Now, beware: thar be inside baseball ahead.

Since the October meeting, two developments are worth noting. First, the Stroger PAC filed an argument with the Board that the failure to assess the fines in October meant that the Board could not assess a fine now. It's hard to tell if they seriously mean that the PAC was off the hook or if they merely intended to press the Board to wrap this up. And second, former Stroger opponent Tony Peraica filed a complaint alleging that another Todd Stroger PAC had a previous A-1 violation, making this his second, not first, violation. That distinction is important because first violations are, by Board practice, assessed penalties at 10% of the unreported donations, while second violations are fined at 50%. If the Board had been persuaded that the Stroger for President PAC was a successor to Friends for Todd Stroger, the Board's formula could have indicated a fine of $125K. This argument is just as novel as Stroger's claim that the Board had missed its chance to levy a fine; the successor committee rule has not previously been used to determine A-1 fines, and Peraica may have been asserting it more for show than for real. But it's apparent from these two developments that both sides were ratcheting up the rhetoric for Monday's meeting.

It was against that backdrop that the Board considered the penalty. The Stroger fund failed to timely disclose more donations than any previous campaign (that we can find), both in the number and the total value of donations. The PAC acknowledged creating a clumsy and time-consuming apparatus to screen donations, taking far longer than other campaigns to review donations. Apparently, no donations were returned as a result of this vetting process. But some members of the Board appeared reluctant to assess a penalty as large as $25K, urging a reduced fine only on transfers from other PACs (which, they said, should not have taken so long to vet). The Board found itself in its classic box, splitting along partisan lines and unable to take action. But the logjam broke under the added pressure from Stroger to wrap up the matter, and from Peraica to claim that the fine should be quintupled (from 10% to 50%), not to mention all the reporters buzzing around (see, for instance, yesterday's Sun-Times story and today's Trib editorial ).

The Board ultimately levied one of the larger fines they've ever handed out. Still, the bigger problem remains: the Board's slavish adherence to a formula that automatically assesses penalties at 10% for first violations. Statute clearly urges the Board to consider individual circumstances, including:

(1) whether in the Board's opinion the violation was committed inadvertently, negligently, knowingly, or intentionally
(2) the number of days the contribution was reported late; and
(3) past violations of [the Election Code].

In our view, based on this assessment, the Stroger PAC deserved a penalty of far more than 10%. As a general rule, the Board's decision affirms that campaigns who have never paid an A-1 violation in the past can rest assured that they can hide donations they don't want to disclose so long as they're willing to pay 10% as a penalty. On that score, our disclosure system, and the public's right to know, is compromised.