Navy Contractor Fined in Rare Campaign Finance Enforcement Case

A Louisiana-based tugboat company that’s received tens of millions of dollars from the U.S. Navy has paid a rare fine for making an illegal $100,000 contribution to a Republican super PAC.

Alpha Marine Services Inc was fined $17,000 for violating the longstanding ban on campaign contributions from a government contractor when it gave to the Congressional Leadership Fund, an independent-expenditure-only political action committee aligned with House Republican leaders, according to documents released Thursday by the Federal Election Commission.

The commission voted in secret to fine the company during a brief period earlier this summer when a quorum of commissioners was restored.

The FEC is unlikely to act on any other violations before the November election. It remains hamstrung without enough commissioners to vote on key matters during an election year in which spending in presidential and congressional races could exceed $10 billion.

Alpha Marine Services didn’t even know campaign money from government contractors was illegal, according to its lawyer, Daryl Owen, who said in a letter to the FEC that the contribution was a “clear and unfortunate oversight.”

The House Republican super PAC claimed it didn’t know Alpha Marine Services was a contractor, and the FEC took no action against it. The Congressional Leadership Fund gave back $100,000 last year after an FEC complaint was filed. The contribution was received shortly before the 2018 midterm elections.

Photographer: Stefani Reynolds/Bloomberg
The FEC levied a fine against a Navy contractor for contributing to a super PAC related to the House Republicans led by Rep. Kevin McCarthy.

“The ban on federal contractors making political contributions protects against the appearance or reality that taxpayer-funded contracts are for sale,” said Campaign Legal Center attorney Brendan Fischer, who filed the FEC complaint against Alpha Marine Services. He noted in an email that the ban “has been on the books for three-quarters of a century, and has been upheld by courts as an important means of preventing pay-to-play in the contracting process.”

Nevada, Michigan Party Fines

The Alpha Marine Services matter was among several newly revealed enforcement actions published on the FEC website Thursday.

The commission levied fines against the Nevada State Democratic Party and the Michigan Republican Party for reporting and record-keeping violations that led to failures to disclose millions of dollars in federal election activity during the 2016 and 2018 cycles. The Nevada Democrats were fined $34,000 and the Michigan Republicans were fined $37,500. The state parties claimed the violations were not intentional.

The votes on these matters occurred during a roughly two-week period in late June and early July when a quorum of four commissioners was restored by the Senate confirmation of James “Trey” Trainor to a Republican seat on the FEC. Before Trainor’s confirmation, the commission had been without a quorum since last August; the quorum was lost again with the resignation last month of Republican Commissioner Caroline Hunter.

The FEC can’t act on any other campaign finance violations before the November elections, unless at least one new commissioner is nominated by President Donald Trump and confirmed by the Senate.

The White House has announced Trump’s intent to nominate election lawyer Allen Dickerson to the commission, but no nomination has been sent to the Senate and no plans to confirm Dickerson have been announced. He is currently legal director of the Institute for Free Speech, a nonprofit that frequently challenges campaign finance laws in court.

The FEC’s paralysis means that long-pending allegations of campaign finance violations, including charges that Trump’s campaign broke the law in 2016, will remain unresolved before the presidential election, according to Trevor Potter, a former Republican FEC commissioner, who now heads the Campaign Legal Center.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bgov.com

To contact the editors responsible for this story: Bennett Roth at broth@bgov.com; Kyle Trygstad at ktrygstad@bgov.com

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