Reporting on FEC settlement, NY Times, AP failed to note that most of Freddie Mac's illegal fundraising events benefited Republicans

››› ››› JOE BROWN

An April 19 New York Times article and an April 19 Associated Press article noted that the federally chartered home mortgage company known as Freddie Mac had agreed to pay a record $3.8 million to the Federal Election Commission (FEC) to settle allegations that it violated federal election law by using company resources to host fundraisers for members of Congress, illegally funneling employee contributions to federal candidates, and making an illegal $150,000 contribution to the Republican Governors Association. But the articles did not disclose that the vast majority of the the illegal fundraisers hosted by Freddie Mac benefited Republican lawmakers.

An April 19 New York Times article by reporter Kate Phillips and an April 19 Associated Press article that appeared in the Los Angeles Times, among other newspapers, noted that the Federal Home Loan Mortgage Corp. -- the federally chartered home mortgage company known as Freddie Mac -- had agreed to pay a record $3.8 million to the Federal Election Commission (FEC) to settle allegations that it violated federal election law by using company resources to host fundraisers for members of Congress, illegally funneling employee contributions to federal candidates, and making an illegal $150,000 contribution to the Republican Governors Association (RGA). But the articles did not disclose that the vast majority of the illegal fundraisers hosted by Freddie Mac benefited Republican lawmakers. In contrast, an April 19 Washington Post article by staff writers Kathleen Day and Annys Shin noted that Freddie Mac had used its "corporate resources to raise $1.7 million at political fundraisers, most of them for Republican members of Congress and many involving House Financial Services Committee chairman Michael G. Oxley (R-Ohio)."

As the Post noted, in its civil case against Freddie Mac, the FEC alleged that the company attempted to influence "more than 50 politicians who had direct oversight of the ... company or were considered supportive of it" by hosting "lavish dinners and other events" for them using company money, in contravention of federal election law. An April 18 FEC press release stated that then-Freddie Mac senior vice president for government relations Robert Mitchell Delk and then-Freddie Mac vice president for government relations Clark Camper organized 85 such events between 2000 and 2003.

The FEC conciliation agreements for the case place the number of Freddie Mac fundraisers for Republican candidates at 70 or more, and the number of fundraisers for Democratic candidates at no more than 15. The papers note that Delk "hosted campaign fundraising dinners for the benefit of Republican Members of Congress," later adding that "from October 2000 through May 2003, Mr. Delk hosted seventy campaign fundraisers," raising "approximately $1.7 million." The papers also note that Camper "hosted approximately fourteen campaign fundraising events, primarily for Democratic members of Congress," and that "each [Camper] event for which data is available appears to have raised an average of $17,000." The conciliation agreements also note that then-Freddie Mac chairman and CEO Leland Brendsel hosted one additional event in November 2001, for "a former member of Freddie Mac's Board of Directors, who was a candidate for the U.S. House of Representatives." The papers do not identify the candidate's party.

Internal Freddie Mac documents quoted in the conciliation agreements and cited by the Post show that the vast majority of Delk's events benefited Oxley. One such document, detailing Delk's department's fundraising activities from 2000 to 2003 noted that over one 18-month period, the department -- which also included Camper -- "held over 75 events for members of [the] House financial services committee." The document also noted that "90 percent" of these events "were hosted by M. Delk to benefit Chairman Oxley." The Post also noted that "[i]n many cases, the committee chairman was billed as co-hosting" events, "with the funds distributed to other key Republicans on the committee."

In its case against Freddie Mac, the FEC also alleged that company executives illegally funneled contributions to federal candidates. In the settlement, Freddie Mac neither contested nor conceded this charge, or the charge of illegally hosting fundraising events. Freddie Mac did, however, admit to illegally contributing $150,000 to the RGA in 2002, as the Post also reported.

Although the Times noted Freddie Mac's illegal "$150,000 donation to the Republican Governors Association," this was the only time the word "Republican" appeared in the 477-word article. The Times also noted that "[m]any of the fund-raisers organized by Mr. Delk featured" Oxley, whose "leadership political action committee received repeated donations, as did many members of the same committee, from Freddie Mac." But the article did not identify Oxley as a Republican, nor did it note that most of the beneficiaries of Freddie Mac's fundraising events were Republicans.

Additionally, the April 19 AP article noted that Freddie Mac was accused of holding 85 illegal fundraisers, as well as making the illegal contribution to the RGA, but it understated the degree to which the illegal fundraisers benefited Oxley and his fellow Republicans. The article noted one internal Freddie Mac document quoted in the conciliation agreements, which stated that during 2001, "Freddie Mac had held more than 40 fundraisers for House Financial Services Chairman Michael Oxley, R-Ohio." But the article failed to mention the other internal document quoted in the conciliation agreements and cited by the Post -- stating that "90 percent" of Freddie Mac's 75 fundraisers over one 18-month period benefited Oxley.

From the April 19 Washington Post article:

Freddie Mac will pay a record $3.8 million fine to settle civil charges that it violated federal election law by using corporate resources to raise $1.7 million at political fundraisers, most of them for Republican members of Congress and many involving House Financial Services Committee Chairman Michael G. Oxley (R-Ohio).

The agreement with the Federal Election Commission also settles allegations that the company violated election law by contributing $150,000 to the Republican Governors Association in 2002.

The settlement, which Freddie Mac agreed to without admitting or denying it broke the law, stems from an orchestrated effort by the McLean-based mortgage company to court key lawmakers through lavish dinners and other events, the settlement shows. Organized by then-Freddie Mac chief lobbyist Mitchell Delk, the effort pumped money into the campaigns of more than 50 politicians who had direct oversight of the government-chartered company or were considered supportive of it.

Federal law prohibits companies from donating directly to candidates or using corporate money for such fundraising.

[...]

Delk's lawyer, Ken Gross, said, "We're pleased to have it behind us." Camper declined to comment, as did Oxley, the Republican National Committee and the Republican Governors Association.

The settlement provides details from internal Freddie Mac documents, including a presentation by Delk to the Freddie Mac board in 2000 in which he said, "I am an active fundraiser for a number of key members, hosting events for other donors that have raised nearly half a million dollars during the current Congress."

In a 2002 document, Delk wrote of holding "more than 40 fundraisers" for Oxley. That document's summary stated: "We proposed to Chairman Oxley a political model that was bold and unprecedented. We offered to use our fundraising model to marry his interest as Chairman with our interest in assisting committee members supportive" of Freddie Mac's goals.

Another document, summarizing lobbying efforts from 2000 to 2003, said, "Delk embarked on fundraising effort on behalf of corporation; past 18 [months], held over 75 events for members of House Financial Services Committee; raising almost $3 million (90 percent of events were hosted by M. Delk to benefit Chairman Oxley)."

Not all of the money raised went to Oxley. In many cases, the committee chairman was billed as co-hosting the event, with the funds distributed to other key Republicans on the committee.

From the April 19 New York Times article:

Freddie Mac, the home mortgage powerhouse, agreed on Tuesday to pay $3.8 million in civil penalties to the Federal Election Commission, which had accused it of improperly funneling corporate executives' donations to candidates and holding lavish fund-raisers that often benefited congressmen on an influential House committee.

It is the largest fine that the F.E.C. has obtained in a civil case.

Dating from the 2000 elections, the events detailed in the agency's filings show that one of the corporation's executives, Robert Mitchell Delk, was the host of 70 campaign fund-raisers held mainly at the expensive Galileo restaurant here. Those events raised about $1.7 million for federal candidates.

The agency found that Freddie Mac, a federally chartered corporation that promotes home ownership, had violated laws or regulations that prohibit it from some campaign fund-raising activities like using corporate resources for fund-raisers.

Freddie Mac did not contest the findings nor did it concede that it had broken campaign finance rules in most of the instances cited from 2000 to 2003. It did, however, admit to a violation involving a $150,000 donation to the Republican Governors Association that was used for last-minute get-out-the-vote efforts in 2002. The association refunded the money to Freddie Mac eight months later, after Mr. Delk asserted, according to agency records, that he had learned it was not used for general party-building purposes, as the law required.

[...]

Many of the fund-raisers organized by Mr. Delk featured Representative Michael G. Oxley, the powerful chairman of the Financial Services Committee, and agency records show that Mr. Oxley's leadership political action committee received repeated donations, as did many members of the same committee, from Freddie Mac.

From the April 19 AP article:

Freddie Mac was accused of illegally using corporate resources between 2000 and 2003 for 85 fundraisers that collected about $1.7 million for federal candidates.

Much of the fundraising benefited members of the House Financial Services Committee, a panel whose decisions can affect Freddie Mac.

The fundraisers were organized by then-Freddie Mac lobbyists Robert Mitchell Delk and Clark Camper, who described them to the corporation's board as "political risk management," the commission said.

The lobbyists told Freddie Mac officials that the fundraising effort was needed to help the company achieve its lobbying goals. Delk wrote in his 2001 performance appraisal that Freddie Mac had held more than 40 fundraisers for House Financial Services Chairman Michael Oxley, R-Ohio.

The commission also found that Freddie Mac officials used staff and resources to raise money from company employees to give to candidates, and that in 2002 the corporation itself gave $150,000 to the Republican Governors Assn., which ultimately returned the money.

Posted In
Government, Ethics
Network/Outlet
The New York Times, Associated Press
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