"Now Simmons has reemerged as the main financial backer of American Issues Project, the latest in a long list of political groups Simmons has financed with the intended goal of influencing public perception of Democratic candidates and derailing their political aspirations. The groups have operated under tax-exempt status under section 501(c)4 of the United States tax code giving them free rein to raise unlimited amounts of cash to run negative campaign ads.
Critics believe these swift-boat type groups have abused the tax-exempt code and should be categorized as a political committee under federal election and campaign finance laws, which would limit donations to $42,000 and require the organizations to disclose the identity of their donors.
Up until last week, Democrats have not issued a forceful challenge to the way the swift-boat groups have operated. In the past, Democratic candidates have decided to ignore the attack ads funded by individuals like Simmons so as not to draw more attention to the negative claims contained in the ads—even though many of the allegations are untrue—or provide the groups with additional publicity.
But when the American Issues Project rolled out a stinging television advertisement against Sen. Barack Obama, tying the Democratic presidential nominee to domestic and foreign terrorists, the Obama campaign responded swiftly, urging the Department of Justice to launch a criminal inquiry into the American Issues Project, as well as the organization’s officers and donors, alleging violations of the Federal Election Campaign Act. Ed Failor Jr., a former aide to Sen. John McCain’s presidential campaign heads the organization.
Papers filed with the Federal Election Commission show that Simmons, who has raised between $50,000 and $100,000 for the McCain campaign, donated $2.9 million to the group on Aug. 12, all of which is being used to finance the attack ads against Obama.
Robert Bauer, general counsel for the Obama for America campaign, said in an Aug. 21 letter to John Keeney, the deputy attorney general of the DOJ’s criminal division, that the organization Simmons has funded is attempting to “evade the structures of election law” by advocating the “defeat of the Presidential candidacy of Barack Obama,” which would require the group to operate under the rules of a political action committee.
On Tuesday, Bauer stepped up his call for a DOJ probe, sending a second letter to the Justice Department demanding the agency specifically investigate and prosecute Simmons.
"We reiterate our request that the Department of Justice fulfill its commitment to take prompt action to investigate and to prosecute the American issues Project, and we further request that the Department of Justice investigate and prosecute Howard (sic) Simmons for a knowing and willful violation of the individual aggregate contribution limits," Bauer wrote.
A Justice Department spokesman said the agency was “reviewing” the letter and had no further comment.
...
Moreover, his daughters had alleged that Simmons violated campaign finance laws by donating at least $130,000 to Republican candidates through his family trust and in his daughters’ names between 1991 and 1995.
The Justice Department investigated Simmons to determine whether he violated federal election, tax or other laws. The Federal Election Commission leveled hefty fines against Simmons and longtime friend, former Sen. Phil Gramm, an aide to McCain’s presidential campaign, in 1993 for campaign finance law violations. Simmons paid a $19,800 fine to the FEC for exceeding campaign finance limits.
In a deposition, Simmons admitted he made about $200,000 in contributions in the names of his family members in excess of campaign finance legal limits.
If the DOJ launches a probe into the American Issues Project—and Simmons—it could lead to a radical change in the way these freewheeling, unregulated, Republican connected organizations have operated over the past five years. ..."
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www.pubrecord.org/politics/291.html?task=view
