Money, Politics, and Cuba

The Federal Election Commission has a few questions for an influential Miami political action committee

Then in July and August, amid growing internal dissatisfaction, about two dozen of the approximately 150 directors resigned to protest the new direction in which Mas Santos was leading the foundation. The departing directors were among the organization's oldest and richest. Radio host and long-time foundation spokeswoman Ninoska Perez Castellon was the first big name to resign (though she's not one of the elders). She and most of the other ex-directors have now formed their own organization, the Cuban Liberty Council. Perez says the group "probably" will form a political action committee in the future, but for now she believes the former foundation directors "might contribute [to political campaigns] as citizens, not through the [Free Cuba PAC]." If indeed the ex-directors abandon the Free Cuba committee, it could suffer the loss of tens of thousands of dollars annually.

For the moment the PAC has some past financial issues to resolve. A new administrative-fines program approved by Congress in 1999 establishes a streamlined process for the Federal Election Commission to financially punish candidates and committees who file late disclosure reports. Since the program began in July 2000, the commission has collected a total of almost $426,000 in fines. The process is so streamlined, in fact, that a visitor to the commission's Website (www.fec.gov) with basic information about a late filer can calculate on the spot the probable amount of a fine. Yet the Free Cuba PAC, despite its habitual tardiness and numerous reminders to that effect from the FEC, has not been fined as of this past Monday. But it's doubtful the commission is ignoring Free Cuba. FEC spokesman Ian Stirton flatly declares: "You will get fined if you report late."

About a year ago, correspondence from the FEC to the Free Cuba PAC began to indicate more concern over not just late reports but their content as well.

On March 15, 2000, the commission asked treasurer del Valle about the PAC's almost nonexistent administrative costs reported (this actually is not a new concern of the FEC, judging from correspondence over the past several years) and about a refund of a contribution from the PAC to Rep. Joe Kennedy (who left Congress in 1999). Free Cuba told the FEC the Kennedy campaign gave back a $2500 donation, while Kennedy reported refunding $2000.

As for the PAC's low administrative costs, FEC records show Free Cuba has filed amended disclosure forms that include previously unreported bank charges but nothing in the way of rent or personnel costs. Analyzing the administrative costs of an unquestionably small operation may seem to be nitpicking, but those expenses (or lack thereof) can assume larger legal significance. For the FEC's purposes, it is important to document who pays the bills. The Free Cuba PAC is classified as "nonconnected," meaning it's not affiliated with any other organization or corporation. A nonconnected political action committee is free to accept donations from anyone, whereas "affiliated" PACs -- so-called separate segregated funds -- can raise money only from their parent corporation's executives and stockholders. The sponsoring corporation also picks up its PAC's administrative expenses. A nonaffiliated or nonconnected committee pays its own overhead.

"The assumption is that all [political action] committees have administrative expenses, so if administrative costs aren't reported, it raises several possibilities," observes Lawrence Noble, executive director of the Center for Responsive Politics and former general counsel to the FEC. "One, the committee is a separate segregated fund affiliated with another organization which is paying their expenses; two, it's just not reporting [its administrative costs]; or three, somebody else is paying the expenses, in which case that is considered a campaign contribution, which, if it's from a corporation, is prohibited; if from an individual, it applies against the limits on personal campaign contributions, and if it's from a foreign national, it's illegal." Correspondence currently posted on the FEC Website doesn't indicate if the commission's current queries have been resolved.

Another set of questions is prompted by the Free Cuba PAC's financial-disclosure reports covering the election cycle 1999-2000. For one thing the reports were filed quite late. Both the 1999 year-end (due January 31, 2000) and the 2000 April quarterly (due April 15, 2000) reports arrived at the FEC mailroom on October 16, 2000. (To the FEC a "late" report is filed within 30 days of its due date; anything after that is considered to have been "not filed" at all.) The reports were seriously overdue despite the commission having repeatedly advised treasurer del Valle in writing of the consequences of ignoring FEC deadlines and requests for information. In a letter dated June 2, 2000, in fact, an FEC analyst seems to acknowledge that Free Cuba was already under surveillance. The letter from Lisa J. Stolaruk of the Reports Analysis Division reminds del Valle that the 1999 year-end and 2000 first-quarter reports still hadn't come in, and adds, "Notwithstanding any matters which may be pending before the commission, any additional report which is not submitted in a timely manner by your committee may result in the commission initiating legal enforcement or audit action."

Additionally it turns out the PAC's original pre- and postelection itemizations of contributions received and disbursed are largely inaccurate. Some of the problem may be careless record-keeping. For example, on its post-general election 2000 report, filed more than a month late, the PAC lists a $2000 contribution it made on November 2, 2000, to "Victory PAC." With no further identification, it's impossible to tell where the money went. "There are a lot of small committees that make a lot of mistakes, but that's not an excuse," Noble asserts. "Sometimes they work with volunteer help and that can be sloppy, but the problem is they have obligations under the law, so they shouldn't be allowed to get away with sloppiness."

« Previous Page
 |
 
1
 
2
 
3
 
All
 
Next Page »
 
My Voice Nation Help
0 comments
 
Loading...