Reply #24: More...

[KingoftheJungle]

"FEC v. TRIAD MANAGEMENT SERVICES (02CV1237)
On June 21, 2002, the Commission asked the U.S. District Court for the District of Columbia to find that Triad Management Services, Triad Management Services, Inc., (collectively Triad) and Carolyn Malenick violated the Federal Election Campaign Act (Act) during the 1996 federal election cycle. The Commission alleges that Ms. Malenick and Triad violated the Act by, among other things, failing to register and file as a political committee and accepting and making excessive and prohibited contributions. 2 U.S.C. §§ 433, 434, 441a(a)(1), 441a(f) and 441b.

Background
According to its 1996 promotional materials, Triad was a consulting firm devoted to keeping the Republican majority in Congress. From 1995 to 1996, Ms. Malenick operated Triad Management Services as a sole proprietorship, and she became the president, sole director and owner of Triad Management Services, Inc., when Triad incorporated in May 1996. The Commission began its investigation of Triad in response to a series of administrative complaints filed between 1996 and 1998. After failing to reach a conciliation agreement with the defendants, the Commission filed this court complaint.

Court Complaint
According to the Commission's court complaint, before Triad incorporated it accepted $790,215 in federal election contributions—including $200,000 in 1995 and $465,000 in 1996 from a single individual. Once Triad became a corporation, it accepted an additional $746,971 in contributions, of which $726,621 came from a single individual and $10,000 came from other corporations. The Commission alleges that during the 1995-1996 election cycle, Triad also:

Made federal election expenditures totaling approximately $1.6 million;
Solicited contributions for 1996 Congressional candidates;
Collected and forwarded 230 contribution checks made out to federal candidates or campaign committees, totaling $185,000; and
Paid for the creation and distribution of publications that expressly advocated the election or defeat of federal candidates.
Ms. Malenick and Triad did not register or report this alleged activity to the Commission.

The Commission contends that once Triad exceeded $1,000 in contributions or expenditures in a calendar year, it became a political committee under the Act and was required to register and file regular reports. 2 U.S.C. §§433 and 434. Under the Act, Triad was also required to file disclosure reports once it made independent expenditures in excess of $250. 2 U.S.C. §434(c). The Commission alleges that Triad knowingly accepted prohibited corporate contributions and contributions in excess of the Act's limits, and also made excessive contributions and in-kind contributions to federal candidates. 2 U.S.C. §441a(a). Moreover, the Commission alleges that after Triad incorporated, it made prohibited corporate contributions to and expenditures for and against federal candidates.

Triad also allegedly organized a coalition of political committees that regularly met and agreed to consult on targeted candidates and campaigns. The Commission contends that Triad solicited contributions for these political committees and collected and forwarded contributions to them.

According to the Commission's complaint, Triad was the sole source of funds for two committees, the American Free Enterprise PAC (AFE) and Citizens Allied for Free Enterprise (CAFE), which received $81,235 from Triad that was used to contribute to candidates it recommended. Triad established, financed, maintained and controlled AFE and CAFE and was thus affiliated with them. Since affiliated committees share a single contribution limit, the Commission argues that the committees exceeded the contribution limits when they each contributed the maximum legal amount to the same federal candidates. 2 U.S.C. §441a(a) and 11 CFR 110.3(1). The Commission alleges that Triad directed and controlled contributions made by AFE and CAFE that resulted in excessive contributions.

Relief
The Commission asks the court to:

Find that the defendants committed these violations of the Act;
Enjoin them from engaging in further similar violations;
Order Triad Management Services and Triad Management Services, Inc., to register as political committees with the Commission and to file disclosure reports dating back to 1995;
Order the defendants to disgorge to the U.S. Treasury all excessive and prohibited contributions that they received during 1995 and 1996; and
Assess appropriate civil penalties for each violation. See 2 U.S.C. §437g(a)(6)(B).

http://www.fec.gov/pdf/record/2002/aug02.pdf#page=4