WASHINGTON — More than 60 wealthy donors exceeded the $25,000 annual limit on campaign contributions in the last election, and the Federal Election Commission did not enforce the law in these cases, according to the agency's own records.
A Times review of FEC campaign finance files found that enforcement of the annual limit on individual donations--a cornerstone of the election reforms enacted after the Watergate scandal of the 1970s--has been so lax that at least 10 contributors appear to have exceeded it with impunity in both 1989 and 1990, and at least three people gave more than double the allowable sum without any repercussions.
For the Record
Los Angeles Times Saturday September 28, 1991 Home Edition Part A Page 2 Column 1 National Desk 3 inches; 76 words Type of Material: Correction
Campaign Contributions--A story that appeared in editions of Sept. 15 reporting on 60 wealthy donors who had exceeded the $25,000 annual limit on contributions to federal campaigns included the name of Lewis Rudin. Although Federal Election Commission records indicate that he made contributions totaling $28,000 in 1989 and $29,140 in 1990, Rudin, a New York real estate investor and manager, has informed the FEC that two inaccurately reported contributions were corrected last spring, putting him below the $25,000 cap in both years.
The biggest contributor last year was Michael L. Keiser, president of Recycled Paper Products of Chicago, the nation's fourth-largest greeting-card manufacturer. FEC records show that Keiser made a total of $95,750 in campaign contributions last year--almost four times the federal limit. There is no record that the FEC ever asked him to explain his actions. Efforts by The Times to reach Keiser for comment were unsuccessful.
Not all the contributors whose names appear in FEC files as having given more than $25,000 would necessarily be found guilty of violating federal elections laws. Some of them are likely to be victims of reporting errors and other commonplace glitches in the complex campaign finance disclosure system.
But critics contend that by failing to investigate any such cases, the FEC is sending a signal to rich campaign contributors that there is no reason to worry about violating the law.
"The fact that the FEC refuses to act in these cases is a disservice to the system," said Ellen Miller, executive director of the Center for Responsive Politics, a think tank devoted to campaign finance reform. "It means there is no deterrent at all."
FEC Commissioner Joan R. Aikens, asked why violators of the $25,000 limit are almost never brought to justice, said her agency, which has a budget of nearly $19 million for the current fiscal year, does not have the personnel to monitor contributions by individuals.
"There are parts of the law that we consider more serious," Aikens said. "We have to focus our resources on the violations of the law that we consider more egregious. . . . We do monitor (individual campaign contributions) to a certain extent. But we have found that it is not as widespread a violation as others."
Aikens said the FEC depends primarily upon public disclosure of contributions to act as a deterrent to would-be lawbreakers. She noted that some news organizations have publicized the names of violators over the last year, prompting several public interest groups to file FEC complaints against them. The Times last year named nine persons who had exceeded the limits in 1988, and the citizens lobbying group Common Cause asked the FEC to investigate many of these cases.
But there is no evidence that the FEC has ever fined any of the people named in these complaints, and FEC officials refuse to discuss specific cases. "These cases have disappeared into the deep, dark recesses of the FEC," said Miller, whose organization has filed complaints against 15 contributors who appear to have exceeded the limit.
Even contributors of more than $25,000 who come to the attention of the FEC have little or nothing to worry about. Not only are the penalties relatively mild, but most people escape punishment by agreeing to "reallocate" their contributions--assigning them to other years--or by requesting a refund from the recipient of the contribution long after the election is over.
Under the federal campaign laws, the FEC is empowered to negotiate civil fines of up to $5,000 for unwitting violations and up to $10,000 for willful violations. But few contributors have ever been fined for exceeding the $25,000 limit, and the penalties in the rare cases where this provision of the law is invoked are never more than a few hundred dollars.
Ironically, the FEC's super-secretive approach to these cases and its lax enforcement also deprive innocent contributors of an opportunity to clear their names after widely publicized complaints have proved to be unfounded.
For example, after the Center for Responsive Politics filed a complaint last June against five persons, including Joseph J. Bogdanovich of Rolling Hills, Calif., chairman of Starkist Foods Inc., attorneys for Bogdanovich persuaded the agency that he had been the victim of an "accounting error" by the Democratic Senatorial Campaign Committee.
The FEC did not investigate the matter, according to David Lawson, spokesman for Bogdanovich. Nor did the agency make any public statement clearing Bogdanovich.
Of the more than 60 contributors whose reported annual donations add up to more than $25,000 in the last election, The Times found that they generally fall into one of two categories: