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RPNM Press Release. FOR IMMEDIATE RELEASE
Contact: Annaliese Wiederspahn annaliese@gopnm.org
Republican Party of New Mexico

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FOR IMMEDIATE RELEASE

May 3, 2012

Contact: Annaliese Wiederspahn
annaliese@gopnm.org
Phone: 505-298-3662


NM GOP FILES FORMAL FEDERAL ELECTIONS COMPLAINT AGAINST INDEPENDENT SOURCE PAC

Fraud, Failure to Report Among Charges
 
ALBUQUERQUE - The Republican Party of New Mexico today filed a formal complaint with the Federal Elections Commission against the union-funded Super-PAC "Independent Source PAC," which is run by Bill Richardson's private investigator, Michael Corwin. ISPAC is funded entirely by a national labor union, who contributed $190,000 to the PAC.
 
 
ISPAC is already under federal investigation by the FEC for failing to file proper disclosure reports, among other violations. (see: http://query.nictusa.com/pdf/914/12330003914/12330003914.pdf#navpanes=0
 

RPNM's complaint alleges several more clear violations of federal law, including:
  • ISPAC is  committing fraud by stating to the FEC that it is making independent expenditures to promote President Obama, when the clear purpose of its expenditures and commercials is to smear Republican elected officials and candidates at the state and local level, and on issues that have nothing to do with the Presidential campaign, such as the law to repeal driver's licenses for illegal immigrants.
  • ISPAC committed the fraud in order to avoid New Mexico state laws, which places limits on PACs engaged in these activities at the state level.
  • ISPAC has illegally failed to file numerous required disclosure reports with the Federal Elections Commission.
  • ISPAC's commercials break federal law by failing to make proper disclosures to the public.
"Michael Corwin has picked up where his former client Bill Richardson left off — skirting laws to illegally funnel money into campaigns," said Republican Party of New Mexico spokesman Annaliese Wiederspahn. "Corwin's activities have nothing to do with the presidential campaign and everything to do with smearing Republicans at the state and local level on issues like driver's licenses for illegal immigrants, and ending social promotion in education."  
 
Wiederspahn noted that this isn't the first time Corwin has been accused of breaking federal election law. In 2010, Corwin created a website littered with falsehoods against a congressional candidate that many felt was an anti-Catholic smear. The campaign Corwin had been working for immediately disowned the website and claimed Corwin had gone rogue. However, it was later discovered that funds from the campaign had been funneled through a media consultant to pay Corwin and it was alleged that payment was for the research and creation of the website. 
 
"This is a shady group that is blatantly breaking federal law and has demonstrated through their actions that they have absolutely no credibility," said Wiederspahn.
###

Background:
Copy of Republican Party of New Mexico Complaint filed May 3rd, 2012

Mr. Anthony Herman, Esq.
General Counsel
Federal Election Commission
999 E Street, NW
Washington, D.C.  20463
 
BY E-MAIL
May 3, 2012
 
COMPLAINT BEFORE THE FEDERAL ELECTION COMMISSION
The New Mexico Republican Party files this complaint seeking an immediate investigation into Independent Source PAC’s (“ISP”) and the Communication Workers of America’s (“CWA”) numerous violations – including potential knowing and willful federal criminal violations – of federal campaign finance law.

ISP, a SuperPAC, has filed multiple false independent expenditure reports.  ISP has also utterly failed to properly report, account for, and disclaim its independent expenditure activity.  Moreover, ISP appears to have conspired with CWA to defraud the Federal Election Commission (the “Commission”).  In doing so, ISP and CWA are defying federal campaign finance law – and denying the people of New Mexico the very transparency and accountability that the law mandates. 

ISP’s and CWA’s violations are ongoing, are potentially criminal in nature, and the Commission must act to stop their numerous violations of the Federal Election Campaign Act of 1971, as amended (the “Act”), 2 U.S.C. §§ 431 et seq., Federal Election Commission (“FEC”) regulations, and 18 U.S.C. §§ 371 and 1001.

FACTS
“Independent” Source PAC is wholly funded by the Communication Workers of America (“CWA””).  CWA is a Washington, D.C.-based labor organization that vehemently opposes New Mexico Governor Susana Martinez.  See Att. A

New Mexico state law, however, made it difficult for D.C.-based CWA to fund a negative campaign against Governor Martinez because of the $5,000 cap on contributions from organizations such as CWA to in-state PACs, including contributions made to independent expenditure-only in-state PACs.[1] [1-19-34.7(A)(2)(C) NMSA 2009].

ISP was registered with the Commission on January 23, 2012. It’s first contribution from CWA was reported as received on October 13, 2011.  In 2011, ISP received a $100,000 contribution from CWA. 

Between January 1 and March 31, 2012, ISP received a $90,000 contribution from CWA.  CWA is ISP’s sole donor.  ISP has made no other independent expenditures, or conducted any other activity aside from administrative activity, outside of those described in this complaint. 

ISP then began spending this money in January 2012 – over $91,000 on broadcast and cable television advertising. 
To date, ISP has aired five ads:

(1)           “Education Privatization,” “Parents’ Rights” and “Suzanna Martinez’s Attack On Parents’ Rights” attack Governor Martinez’s efforts to reform and improve New Mexico’s public education system and better the lives of New Mexico’s children and families;
 
(2)           “Drivers License” attacks Governor Martinez for upholding the law, protecting New Mexico’s citizenry, and refusing to issue New Mexico drivers licenses to illegal aliens; and

(3)           “Dirty Downs Deal” attacks Governor Martinez, albeit incoherently, over ISP’s apparent theory concerning a state contract award. 

Each ad’s call to action is “call Governor Martinez and tell her x.”  The only officeholder pictured in any ad – and she appears in each of them – is Governor Martinez.
The ads’ scripts read as follows:

“Education Privatization”: “Susana Martinez is trying to get rid of neighborhood schools by opening the door to out-of-state profit-making virtual schools. She is playing with our kids’ future.  Turning them into guinea pigs while sending our scarce educational dollars to enrich out-of-state corporations. New Mexico education dollars need to go our classrooms our teachers and our kids, not to making out-of-state corporations rich. Contact Susana Martinez and tell her you want a real education for your kids. Paid for by Independent Source PAC” (Independent Source PAC, “Education Privatization” http://youtu.be/kLFAV51oyzk, Accessed 04/19/12)

“Parents' Rights”: “Governor Susana Martinez wants to cut parents out of making decisions about their own child’s education.  She says parents’ rights are ‘petty status quo’.  She says no to a compromise that protects parents’ rights to choose if their child advances or stays behind.  Should a state institution make important decisions about your child's future or should you?  Contact Governor Martinez and tell her to stop interfering with your rights as parents.  Paid for by Independent Source PAC.” (Independent Source PAC, “Parents' Rights” http://youtu.be/UrW0u409d64, Accessed 04/19/12)

“Susana Martinez's Attack on Parents' Rights”: “Governor Susana Martinez wants to cut parents out of making decisions about their own child’s education.  She says parents’ rights are ‘petty status quo’.  She refuses any compromise on mandatory retention.  So parents will no longer be allowed to choose if their child advances or stays behind.  Should a state institution make important decisions about your child's future or should you?  Contact Governor Martinez and tell her to stop interfering with your rights as parents.  Paid for by Independent Source PAC.” (Independent Source PAC, “Susana Martinez's Attack on Parents' Rights” http://youtu.be/NRQkUPpMc6E, Accessed 04/19/12)

“Driver's License”: “Why is Susanna Martinez making New Mexico a more dangerous place?  Top law enforcement officials agree, the public is much safer when everyone has a driver’s license.  Martinez won't compromise to strengthen license regulations for undocumented workers. This means no to helping police find and arrest criminals, no to stopping hit and runs, and no to reducing fraud.  She would rather force people into the shadows just to score political points.  Susanna Martinez refuses to compromise and we all lose. Paid for by Independent Source PAC” (Independent Source PAC, “Driver's License spot” http://youtu.be/3FdBlV7sqrM, Accessed 04/19/12)

“Dirty Downs Deal”: “Susana Martinez is good to her friends, especially if they anti-up a lot of money to Susana PAC.  She says she is against government corruption but that didn't stop her from manipulating the odds to benefit her pals at the Downs at Albuquerque.  She got them a billion-dollar contract by muscling her way into the deal, stacking the deck with her cronies and playing it close to the vest by withholding information. Does this sound like a fair deal for New Mexico?  For more information go to Independent Source PAC.” (Independent Source PAC, “Dirty Downs Deal :30” http://youtu.be/MSf323axcws, Accessed 04/19/12)

None of ISP’s ads – not one – name or show a single federal candidate, reference any federal candidate’s election or defeat, or refer to President Obama in any way whatever. 
Each of ISP’s independent expenditure reports, however, state that ISP’s expenditures are made in support of President Barack Obama.

ISP’s independent 48-hour expenditure reports also appear to be filed long after the related ads aired, and while they account for the purchase of air-time show no accounting for any other costs associated with the expenditures, such as a creative or production cost.  Such costs, however, do appear to be reported on ISP’s quarterly reports, indicating funds were expended, but not properly reported on ISP’s 480hour expenditure reports as required by law.

Finally, four of the five adsare disclaimed with a written ISP web address only, and the audio states only that they are “paid for by Independent Source PAC.”  None of the ads state that ISP is responsible for the ads’ content in either verbal or written form, as required by law.
 
VIOLATIONS
Knowing and Willful False Reporting and Conspiracy to Defraud the Commission
ISP’s Form 5 48-hour reports state that its expenditures were made in support of President Barack Obama.  The ads themselves, however, do not make a single mention of either President Obama or Vice President Biden.  They make no general reference to either the Democratic or Republican Parties.  They neither support nor oppose a single federal candidate.  They do one thing: attack Governor Martinez’s state policies.  (Governor Martinez is not a federal candidate).
18 U.S.C. § 1001 makes it a federal crime to knowingly and willfully:
(1)  falsify, conceal, or cover up by any trick, scheme, or device a material fact;
(2)  make any materially false, fictitious, or fraudulent statement or representation; or
(3)  make or use any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry.

18 U.S.C. § 371 makes it a federal crime for any two people to conspire to either commit any offense or defraud any agency of the United States and to commit any act to effect such conspiracy.
By stating in their numerous signed filings that their independent expenditures supported President Obama, ISP essentially admits to filing false 48-hour reports.  None of ISP’s ads even mention President Obama (or any other federal candidate for that matter), much less expressly advocate for his election – the actual standard that such a statement by ISP requires.

Attempting to explain how its ads support President Obama, ISP Director Corwin stated “we seriously think [Governor Martinez] would be horrifically bad as a vice president.”  Att. B.  Of course, Governor Martinez is not running for Vice President, or any other federal office.  ISP’s statement, aside from being nonsensical, only further demonstrates that their ads had nothing to do with supporting President Obama’s election campaign. 

Regardless, the ads are clear on their face – and ISP’s filed 48-hour reports falsely state that the ads say something they do not.  ISP has expended over $190,000 in such expenditures; they have produced and aired 5 ads; and they have filed [2] 48 hour reports – all objectively false.   ISP’s violation is knowing and willful.  It is a crime.

It appears that ISP also conspired with CWA to defraud the Commission in order to avoid New Mexico state law. 

CWA is ISP’s sole donor.  ISP was created immediately before CWA’s contribution was received by ISP. ISP’s own director Michael Corwin’s on-the-record statements make it clear that ISP is a state PAC masquerading as a federal PAC – and that the federal PAC’s focus is now on “unseating conservative state legislators.”  Att. B. 

CWA and ISP have conspired to evade New Mexico limits through the creation of a sham federal PAC and defrauding the Commission.  The formation of the PAC, CWA’s contributions to it, ISP’s creation and airing of its ads, and ISP’s filing its false 48-hour reports are each acts in furtherance of that conspiracy.  That too is a crime.

The Commission must put a stop to it, and refer ISP’s and CWA’s potentially criminal violations to the United States Department of Justice.

Failure to file 48-Hour Reports
In several instances, ISP’s independent expenditure ads aired long before ISP got around to filing the related independent expenditure reports that federal law requires be filed, in this case, within 48 hours of an ad’s public distribution or dissemination.  11 C.F.R. § 104.4.

For example, ISP aired independent expenditure television ads on February 29, 2012.  Att. C (Attach comps). 

It cannot be disputed that ISP failed to make any report related to those expenditures until APRIL 11, 2012, and when it finally reported, those reports were both incomplete in accounting for related costs and false with respect to which candidate they supported.
 
Failure to Disclose Related Costs on 48 Hour IE Reports
ISP’s regular quarterly reports reflect expenditures for production/creative costs that are related to its independent expenditure televised advertisements.  Their 48-hour independent expenditure reports, however, do not contain these costs. 

For example, ISP’s April Quarterly Report states:
“Comcast Spotlight MTN
P.O. Box 60000
San Francisco, California 94160

Purpose of Expenditure: Cable TV Advertisements
Name of Federal Candidate supported or opposed by expenditure: Barak Obama
Office Sought: President
State is New Mexico in District
Date Expended = 02/29/2012
Person Completing Form: Michael Corwin
Date Signed = 04/11/2012
Amount Expended = $6442.47
Calendar YTD Per Election for Office Sought = $6442.47”

Yet none of ISP’s 48-hour reports contain this expenditure.
 
Improper Disclaimers
Federal law is neither new nor ambiguous concerning disclaimers required for television advertisements. 11 C.F.R. 110.119(c)(4) requires that television ads paid for by third parties, such as ISP, and not authorized by a candidate must include:
·      A verbal statement that “XXX is responsible for the content of this advertising”;
·      A similar written statement;
·      A written statement stating that the advertisement was “Paid for by ISP”;
·      A written statement that the advertising was “not authorized by any candidate or candidate’s committee”; and
·      ISP’s street or web address, or telephone number.
ISP’s disclaimers fail to meet these requirements and that failure must be willful, as Mr. Corwin is an experienced political operative who has worked on many federal campaigns, including the presidential campaign of Bill Richardson in 2008.
 
CONCLUSION
The facts are clear:  ISP has violated Federal law, and ISP and CWA have engaged in a conspiracy in violation of federal law.  These violations are ongoing, and are likely to continue throughout the 2012 election cycle and beyond.  The FEC must take immediate action.
On the basis of the foregoing, the New Mexico Republican Party respectfully requests that the FEC:
(1)  Conduct an expedited investigation of the above to determine the exact amount of unreported expenditures;
 
(2)  Refer ISP’s knowing and willful violations to the United States Department of Justice for immediate criminal investigation;
 
(3)  Refer ISP and CWA’s conspiracy to the United States Department of Justice for immediate criminal investigation;
 
(4)  Impose any and all penalties grounded in violations alleged in this complaint, or as otherwise deemed necessary by the Commission
 
Respectfully submitted,

SIGNED
Monty Newman, Chairman



[1] Indeed, the fact that ISP is simply a state PAC masquerading as a federal PAC in order to circumvent New Mexico law is only underscored by ISP Director Michael Corwin’s statement that since he believes Governor Martinez is unlikely to become a Vice Presidential candidate, ISP “will redirect its efforts to trying to unseat conservative members of the state legislature.” (State legislators are not federal candidates or officeholders within the definition of federal law).  Att. B (the 4/17/12 Monteleone AJ article).
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