A federal court is imposing a $67,900 fine on a car dealership once owned by Rep. Vern Buchanan, R-Sarasota, for what the Federal Election Commission calls an “extensive and ongoing scheme” to funnel “secret, illegal contributions” to Buchanan’s 2006 and 2008 campaigns.
The fine comes as the result of a suit filed by the Federal Election Commission in December 2010, against Sam Kazran and Hyundai North Jacksonville. The Hyundai dealership was once owned by both Kazran and Buchanan, until Buchanan sold his majority interest in the company to Kazran in 2008.
As first reported by The Florida Independent, the Commission’s complaint alleged that Kazran violated campaign laws by using funds from the dealership “to reimburse HNJ 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 complaint also alleged violations of excessive contribution laws: During the 2006 election cycle, Hyundai 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 Hyundai North Jacksonville funds went to Buchanan’s campaign, in excess of the $2,300 per-election limit for that cycle.
According to a default judgment filed May 27, the Commission says that the dealership, which is no longer in operation, “illegally spent $67,900 in an attempt to influence an election for Congress, presumably believing this to be a worthwhile investment.”
From the judgment:
From 2005 to 2007, certain HNJ employees and their family members made what purported to be individual contributions to Buchanan’s campaign. In reality, these contributions were made by HNJ, which reimbursed each individual for the funds s/he provided to the campaign.
Though the dealership was fined a penalty of $67,9000, the damage could have been worse. According to the motion, the court could have imposed an additional penalty of $59,100 based on the sheer amount of the contributions involved in the dealership’s violations (for a total penalty of $127,000). The Commission argued that the $67,900 fine “fairly reflects the size and seriousness of HNJ’s violations.”
Though the Commission seemed to grant the dealership leniency in imposing a lesser fine, it made clear its disappointment in the motion, coming down hard on the defendant for failing to appear in court and for never acknowledging any wrongdoing:
HNJ’s lawbreaking was not a mere error or lapse in judgment: It was an extensive and ongoing scheme that spanned two election cycles, three calendar years, and dozens of secret, illegal contributions. Despite the duration and breadth of these violations, HNJ has never acknowledged any wrongdoing. To the contrary, HNJ’s refusal even to appear before this Court manifests a complete absence of a commitment not to violate the same legal provisions in the future.
In an interview with the Bradenton Herald‘s Washington bureau, Kazran pointed the finger directly at Buchanan, saying he was unfamiliar with campaign laws, as he is not a politician, but a “regular Joe”:
“I’ve done nothing wrong,” said Sam Kazran, who said he told the FEC he was unfamiliar with campaign finance law. “I am not a politician, just a regular Joe. I had no idea.”
He said Buchanan told a group he needed to raise $1 million “to look good.”
“It was ‘This is what I need to do and this is what you need to do to take care of it,’” Kazran told the Herald.
A campaign spokesman for Buchanan called Kazran’s allegation “absolutely false.”
“Sam is lashing out because he was slapped by a summary judgment today by the Hillsborough County Circuit Court for $624,000 related to a loan he failed to repay to Vern.”
In September 2008, Buchanan filed suit against Kazran for failing to repay a $2.5 million loan. Kazran countered the claim in his own lawsuit, in which he accused his former business partner of fraud.
In the past few years, at least 14 lawsuits have been filed by Buchanan’s former employees, each alleging pressure to contribute to his campaign and the offer of reimbursements in return. Buchanan has vehemently denied those allegations each time they’ve cropped up, again playing defense during his 2010 campaign, in which allegations of campaign fraud continued to surface.
Read the FEC’s full motion here (.pdf).