Michigan Attorneys Indicted for Illegal Campaign Finance

Michigan attorneys Geoffrey Fieger and Vernon Johnson have been indicted by a federal grand jury in the Eastern District of Michigan for alleged crimes relating to fundraising for the 2004 presidential campaign.^[1] Included in the indictment were violations of the Federal Election Campaign Act, making false statements, and obstruction of justice.^[2]

According to the indictment Fieger and Johnson conspired to make more than $125,000 in illegal campaign contributions to the 2004 presidential campaign of U.S. Senator John Edwards.^[3]

The indictment charges that, unbeknownst to Senator Edwards' campaign, the defendants caused more than 60 “straw donors” to make contributions in the then-maximum allowable amount of $2,000 per donor - contributions which were actually paid for by the Fieger firm rather than the named donors.^[4] The indictment that on four separate occasions, Fieger and Johnson identified and solicited different groups of straw donors, each of whom was either an employee of the Fieger firm or a family member of a Fieger firm employee.^[5] Once the straw donors had been selected, Fieger and Johnson allegedly caused the Fieger firm to pay each firm employee in the amount of that straw donor's own contribution plus the amount of any contribution made by that donor's family members.^[6] The indictment charges that, in March alone, $38,000 worth of illegal contributions were arranged for by Fieger and Johnson.^[7]

Also included to the indictment was the allegation that Fieger tried to obstruct and impede the grand jury's investigation of the illegal campaign contributions. Specifically the government is asserting that he attempted to shift responsibility for the illegal contributions to a deceased officer of the Fieger firm, attempted to mislead the grand jury by telling witnesses false information with the intent that the witnesses would repeat that false information to law enforcement authorities, and attempted to conceal an incriminating document from the grand jury.^[8]

The 10-count indictment charges Fieger and Johnson, with conspiracy; causing the Edwards Campaign to unwittingly make false statements; making illegal campaign contributions in the name of another; and making illegal campaign contributions from a corporation.^[9]

The maximum penalty for each charge of conspiracy, false statements, and illegal campaign contributions is up to five years in jail and a $250,000 fine; the maximum penalty for the obstruction of justice charge is up to 10 years in jail, with the same maximum fine.^[10]

The Federal Election Campaign Act of 1971^[11] (FECA) is a United States federal law which increased disclosure of contributions for federal campaigns, and amended in 1974 to place legal limits on the campaign contributions. The amendment also created the Federal Election Commission (FEC). The major provisions of the 1971 Act and the 1974 amendment are listed below, do note that some provisions, including legal limits of contributions have been modified by subsequent Act.

• Requirement for candidates to disclose sources of campaign contributions and campaign expenditure.
• Federal Election Commission created.
• Public funding available for Presidential primaries and general elections. Legal limits on campaign expenditure for those that accept public funding.
• Legal limits on campaign contributions by individuals and organizations.
  Prohibition of campaign contributions directly from: Corporations, Labor Organizations and National Banks; Government Contractors; Foreign Nationals; Cash Contributions over $100; and Contributions in the Name of Another^[12]

Making False Statements
It is a violation of section 18 U.S.C. § 1001 for a person, to knowingly and willfully falsify, conceal, or cover up by any trick, scheme, or device a material fact; falsify, conceal, or cover up by any trick, scheme, or device a material fact; make or use any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry.^[13]

Federal criminal defense attorney Douglas McNabb has previously discussed the federal crime of obstruction of justice in his blog, here.

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^[1] U.S. Dep’t of Justice Press Release, Michigan Attorneys Indicted for Alleged Campaign Finance Violations, US DOJ Website, August 24, 2007, available at http://www.usdoj.gov/opa/pr/2007/August/07_crm_655.html (last visited August 27, 2007).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.
^[10] Id.
^[11] Federal Election Campaign Act of 1971, Pub.L. 92-225, 86 Stat. 3, enacted 1972-02-07, 2 U.S.C. § 431 et seq. (2007).
^[12] Id.
^[13] 18 U.S.C. § 1001 (2007).