Tough evidentiary standards call into question the DOJ’s ability to stop illegal finance coordination between super PACs and campaigns—at least in the short term, LeClairRyan attorneys comment in law journal article

New York City (10/7/15) – The first successful prosecution of a corrupt campaign manager earlier this year triggered talk of a Department of Justice crackdown on illegal finance coordination between super PACs and political campaigns. But in an Expert Analysis article in the October issue of Westlaw Journal White-Collar Crime, two LeClairRyan attorneys question the likelihood of such a crackdown—at least in the short term—given the high evidentiary standards involved in such cases.

In the column (“DOJ’s First Prosecution for Campaign Finance Coordination—A Sign of Things to Come?”), white-collar crime attorneys Michael D. Goldklang and Madeleine E. Moise Cassetta note that the campaign consultant prosecuted by the DOJ—Tyler Harber of Alexandria, Va.—was found guilty of unusually blatant offenses. Harber, who received a two-year prison sentence in the case (United States v. Harber, District Court for the Eastern District of Virginia, no. 1:14-cr-00373), was also part of a lower-level campaign, rather than the professionally operated bid of a major contender for the presidency.

Indeed, improper finance coordination prosecutions involving the 2016 presidential candidates are unlikely despite media attention focused on the issue, write Goldklang and Cassetta, who are based in the national law firm’s Newark, N.J. and New York City offices, respectively.

“Presidential candidates, after all, are typically well represented by teams of attorneys with extensive knowledge of campaign-finance laws and regulations,” they write. “Practically speaking, their campaigns and loosely aligned PACs are far less likely to commit clearly defined, prosecutable violations.”

Under the Federal Election Campaign Act (52 U.S.C. § 30101), Super PACs may raise unlimited sums from individuals, unions and corporations, none of which are subject to federal contribution limits so long as the Super PACs do not contribute to or coordinate with political parties or candidates. As the government noted in a press release, Harber had helped to create and operate a supposedly independent super PAC even as he simultaneously managed a candidate’s 2012 congressional campaign. The campaign consultant earlier this year pleaded guilty to one count of coordinated federal election contributions and one count of making false statements to the FBI.

“The allegations included that Harber paid himself $9,000 as a commission and skimmed approximately $250,000 of contributed funds for personal use, including $138,000 paid to his mother’s company for work that was never performed and $118,000 for so-called ‘personal expenses,’ ” the attorneys note in the article. “Reportedly, Harber’s own campaign colleagues supplied the FBI with all the information it needed to act. To use the vernacular, Harber was caught dead to rights.”

Few coordination cases are so blatant, the attorneys write, and so there are ample reasons to question whether this prosecution truly signals a wave of coming enforcement actions.

“Indeed, the need to prove that alleged violators ‘knowingly and willfully’ broke the law makes the evidentiary standard in coordination cases particularly demanding,” write Goldklang and Cassetta. “Campaign finance laws and regulations happen to be complex and technical, thus increasing the difficulty of proving knowing violations.”

With time, however, the DOJ could gradually establish case law that addresses the many unanswered questions with respect to illegal coordination, largely by prosecuting violations that occur periodically in lower-level political campaigns, the attorneys observe.

In the meantime, Goldklang and Cassetta say, campaigns and super PACs should count on being the focus of greater scrutiny—both by the DOJ and by their political opponents.

From a risk-management perspective, then, fundraising operatives at all levels must fully understand the imperative to maintain complete separation and independence with respect to the coordination of funds, the attorneys write. “This is not simply a matter for the highest echelons of the organization,” they note. “Indeed, the greatest risk of a violation might well lie with lower-level staffers who may seek to bend the rules in an effort to bolster their status.”

A written coordination policy should detail the procedures for interaction and communication based on a reasonably conservative interpretation of the law. Likewise, the governance structure of these organizations should be designed to ensure that there is no impermissible overlap between campaign and super PAC staff, Goldklang and Cassetta advise. “In addition, all communications between the two organizations should be thoroughly documented,” they write. “These communications should be the responsibility of a select few designated individuals who have legal backgrounds or receive clear legal guidance.”

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