FEC settles lawsuit against congressman’s former business partner (Updated)

Rep. Vern Buchanan, R-Sarasota, addresses the audience at a Bradenton town hall event (Pic via buchanan.house.gov)

A stipulated order and consent judgment in an FEC investigation into a former business partner of Rep. Vern Buchanan, R-Sarasota, was filed yesterday, a sign that the case may be nearing its end. According to the filing, Buchanan’s one-time business partner, Sam Kazran, must pay $5,000 for “a non-knowing and non-willful violation of” an ethics rule against knowingly helping or assisting any person in making a campaign contribution in the name of another.

As first reported by The Florida Independent, the FEC charged that Kazran and the dealership violated campaign laws by using funds from the company “to reimburse [dealership] employees, Kazran’s business partners, their family members and Kazran’s relatives for $67,900 in contributions to Buchanan’s 2006 and 2008 Congressional campaigns.”

The FEC also argued that Kazran violated contribution limits. During the 2006 election cycle, Hyundai of North Jacksonville contributed $49,500 to Vern Buchanan for Congress, in excess of the $2,100 per-election limit in effect for that cycle. During the 2008 election cycle, $18,400 of dealership funds went to Buchanan’s campaign, in excess of the $2,300 per-election limit for that cycle.

Though the campaign reimbursements occurred on Buchanan’s watch (he was, at the time, the majority owner of the dealership), it was Kazran who was slapped with a nearly $68,000 fine in June 2011.

Yesterday’s consent order lays out Kazran’s arguments that Buchanan “had a commanding knowledge of election laws far superior to that of” Kazran and it was “only without knowing that any laws may have been unintentionally violated,” that Kazran instructed his employees to donate to the Buchanan campaigns, with the promise of reimbursements.

According to the filing, the FEC has consented to enter a judgment against Kazran for “a non-knowing and non-willful violation of” a rule against knowingly helping or assisting any person in making a contribution in the name of another. The consent order stipulates that Kazran must satisfy that judgment by paying a total of $5,000 to the FEC by March 31. If he fails to pay the penalty on time, “the Court will enter a final judgment against [him] for $20,000,” less any sums already paid.

The court also asks that the FEC “release [Kazran] from any and all claims and cause of action that were the subject of this action or that relate directly or indirectly to the facts and circumstances that were the subject of this action,” other than those for which he must pay the $5,000 fine.

The order also stipulates that Kazran “specifically reserves all rights and remedies he may have against Congressman Buchanan or his related entities; provided, however, that Defendant hereby waives and releases Plaintiff from any claims or causes of action Defendant may have against Plaintiff that relate directly or indirectly to this action.”

In other words, Kazran retains his right to sue Buchanan, if he releases the FEC from any claims related to the campaign reimbursements.

According to a report obtained by TPM Muckraker in December 2011, the FEC at times doubted the credibility of Buchanan, even though the commission eventually chose not to fine him for the violations that occurred on his watch. In its report, the FEC concluded that the evidence in the case “comes close to supporting a finding that it is more likely than not that” Buchanan violated the law, but that there were “significant concerns regarding the credibility” of Kazran.

Update:

The Democratic Congressional Campaign Committee has released a statement in regards to yesterday’s filing:

“Yesterday, Buchanan’s former business partner was fined for breaking federal law when he took part in this illegal campaign finance scheme at Buchanan-owned dealerships. The Federal Election Commission has made clear that Buchanan ‘more likely than not’ violated federal law, the House Ethics Committee continues to investigate him and the Department of Justice is continuing to investigate Buchanan’s involvement in this ‘extensive and ongoing scheme’ to reimburse employees,” said Stephanie Formas of the Democratic Congressional Campaign Committee.