Fed. Election Comm'n v. LatPAC
| Decision Date | 31 March 2022 |
| Docket Number | 1:21-cv-06095 (ALC) (SDA) |
| Parties | Federal Election Commission, Plaintiff, v. LatPAC et al., Defendants. |
| Court | U.S. District Court — Southern District of New York |
REPORT AND RECOMMENDATION
Pending before the Court is a motion by Plaintiff Federal Election Commission (the “Commission”) for a default judgment. (Comm. Not. of Mot., ECF No. 26.) For the reasons set forth below, I respectfully recommend that the motion be GRANTED.
RELEVANT FACTS[1]
This is an action by the Commission against Defendants LatPAC and Chalin A. Askew (“Askew”), in his official capacity as treasurer of LatPAC, alleging violations of the Federal Election Campaign Act (“FECA”). (See Compl., ECF No. 1, ¶ 1.) On June 29, 2016 LatPAC registered with the Commission under the FECA as an unauthorized political action committee that supports/opposes more than one federal candidate, [2] and designated Askew as its treasurer. (Id. ¶¶ 6-7, 23.) On July 20 2016, Askew filed LatPAC's 2016 July Quarterly Report with the Commission. (Id. ¶ 24.) The Report disclosed no receipts, no disbursements, no cash on hand and no debts. (Id.)
On October 31, 2016, December 28, 2016, and February 16, 2017, the Commission's Reports Analysis Division notified LatPAC and Askew of their failure to file LatPAC's statutorily-required 2016 October Quarterly Report, 2016 Post-General Election Report, and 2016 Year-End Report, respectively. (Compl. ¶ 25.) On March 16, 2017, LatPAC filed an amended statement of organization, reaffirming that LatPAC was an unauthorized political action committee that supports/opposes more than one federal candidate, with Askew serving as treasurer. (Id. ¶ 26.)
Since March 2017, LatPAC and Askew have not filed any of the statutorily-required reports for LatPAC with the Commission. (Compl. ¶ 27.) The Commission's Reports Analysis Division notified LatPAC and Askew of their failure to file each of the required reports. (Id.) In particular, LatPAC and Askew were required to, but failed to file, a 2016 October Quarterly Report, 2016 Post-General Election Report, 2016 Year-End Report, 2017 Mid-Year Report, 2017 Year-End Report, 2018 April Quarterly Report, 2018 July Quarterly Report, 2018 October Quarterly Report, 2018 Post-General Election Report, 2018 Year-End Report, 2019 Mid-Year Report, 2019 Year-End Report, 2020 April Quarterly Report, 2020 July Quarterly Report, 2020 October Quarterly Report, and 2020 Post-General Election Report. (Id. ¶ 28.) The 2021 Mid-Year Report was due on July 31, 2021. (Id.) Between October 31, 2016 and December 18, 2020, the Commission's Reports Analysis Division sent LatPAC and Askew sixteen letters regarding LatPAC and Askew's failure to file LatPAC's statutorily-required disclosure reports. (Id. ¶ 29.)
On February 8, 2018, the Commission received an administrative complaint alleging, among other things, that a total of $28, 400 in contributions that the complainant gave to and raised for LatPAC from March to June 2017 was unaccounted for. (Compl. ¶ 31.) On February 14, 2018, the Commission notified LatPAC and Askew that it had received information indicating that LatPAC and Askew may have violated provisions of the FECA. (Id. ¶ 32.) The Commission's letter provided LatPAC and Askew with a copy of the administrative complaint and gave them the opportunity to respond. (Id.) LatPAC and Askew did not submit a timely written response. (Id.) The Commission's disclosure database shows that LatPAC and Askew, in his official capacity as treasurer, failed to report any receipts or disbursements by LatPAC or Askew, in his official capacity as treasurer, at any time whatsoever, including a failure to report any contributions made or raised by the complainant. (Id. ¶ 33.)
After reviewing the available information, on October 24, 2018, the Commission decided by a 4-0 vote to find reason to believe that LatPAC and Askew, in his official capacity as treasurer, had violated 52 U.S.C. § 30104(a) and (b) by failing to file reports disclosing, among other things, receipts, disbursements, cash on hand and debts, and the Commission authorized an investigation. (Compl. ¶ 34.) On October 31, 2018, the Commission notified LatPAC and Askew of its reason-to-believe determination, including the factual and legal analysis supporting this determination. (Id. ¶ 35.)
The Commission's ensuing investigation revealed, among other things, that LatPAC and Askew had accepted, but failed to disclose, more than $92, 000 in receipts by LatPAC, including more than 225 separate contributions; that LatPAC and Askew had made, but failed to disclose, more than $92, 000 in disbursements by LatPAC; and that LatPAC and Askew had failed to disclose any of LatPAC's debts or obligations at any time, including a debt of $4, 000 incurred in late 2017 which was still outstanding as of September 2020. (Compl. ¶ 36.) After numerous attempts by the Commission's Office of the General Counsel to contact Askew, he contacted the Commission in November 2019 and stated that he was going to take corrective action, including filing the missing reports by January 1, 2020. (Id. ¶ 37.) However, Askew failed to take these steps. (Id.)
Following the Commission's investigation, on September 30, 2020, the Commission's Office of the General Counsel notified LatPAC and Askew that the General Counsel was prepared to recommend that the Commission find probable cause to believe that they had violated 52 U.S.C. § 30104(a) and (b). (Compl. ¶ 38.) The notice included a brief stating the General Counsel's position on the legal and factual issues of the matter, and informed LatPAC and Askew of their right to file their own brief stating their position on the issues and replying to the General Counsel's brief. (Id.) LatPAC and Askew did not submit a written response. (Id.)
On March 11, 2021, the Commission decided by a 6-0 vote to find probable cause to believe that LatPAC and Askew, in his official capacity as treasurer, had violated 52 U.S.C. § 30104(a) and (b) by failing to file LatPAC's statutorily-required reports and to disclose LatPAC's receipts, disbursements, cash on hand, and debts. (Compl. ¶ 39.) On April 6, 2021, the Commission notified LatPAC and Askew of its probable-cause determination, including the factual and legal analysis supporting this determination. (Id. ¶ 40.)
Also starting on April 6, 2021, the Commission endeavored for a period of not less than 30 days to correct the violations through informal methods of conference, conciliation, and persuasion, including by providing a proposed conciliation agreement to LatPAC and Askew. (Compl. ¶ 41.) However, despite multiple attempts to reach LatPAC and Askew, they did not respond to these contacts, and the Commission was unable to reach a conciliation agreement with Defendants. (Id.)
On June 23, 2021, the Commission decided by a 6-0 vote to authorize the filing of this civil lawsuit against LatPAC and Askew, in his official capacity as treasurer, for violating 52 U.S.C. § 30104(a) and (b) by failing to file LatPAC's statutorily-required reports and to disclose LatPAC's receipts, disbursements, cash on hand and debts. (Compl. ¶ 42.)
On July 15, 2021, the Commission filed its Complaint in this action. (See Compl.) After LatPAC failed to appear by counsel, and Askew failed to abide by Orders of the Court, in an Opinion and Order, dated January 7, 2022, the Court requested that the Clerk of Court enter a default against LatPAC and Askew, pursuant to Federal Rule of Civil Procedure 55(a). See Fed. Election Comm'n v. LatPAC, No. 21-CV-06095 (ALC) (SDA), 2022 WL 72304, at *3 (S.D.N.Y. Jan. 7, 2022).[3] On January 12, 2022, the Clerk of Court entered a default against LatPAC and Askew. (See Default, ECF No. 24.)
On January 13, 2022, the Court directed that the Commission file its motion for a default judgment against Defendants no later than February 3, 2022 and that Defendants file any response no later than February 25, 2022. (See 1/13/22 Order, ECF No. 25.) On February 3, 2022, the Commission timely filed it motion for a default judgment, and related papers.[4] (See Comm. Not. of Mot.; Comm. Mem., ECF No. 27; Dillenseger Decl., ECF No. 28; Roser Decl., ECF No. 29; Ward Decl., ECF No. 30; Proposed Findings, ECF No. 32.) The Commission seeks a $56, 400 civil penalty, plus declaratory and injunctive relief. (See Comm. Mem. at 8-16.)
On February 25, 2022, Askew filed an unsworn page-and-a-half opposition to the Commission's motion. (See Askew Opp., ECF No. 35.) In his opposition, Askew conceded liability for the violations at issue; agreed to the injunctive report-filing relief the Commission sought, except as to the deadline for compliance; and agreed that a civil penalty “may be proper to impose, ” but objected to the requested amount. (See id. at 1-2) Askew argued that LatPAC is unable to pay the $56, 400 civil penalty sought by the Commission. (See id. at 1.) LatPAC did not appear through counsel to make any submission in opposition to the Commission's motion.
On March 30, 2022, the Commission filed its reply. (Comm. Reply, ECF No. 39.)
The Commission is the independent agency of the United States government with exclusive jurisdiction over the administration, interpretation and civil enforcement of FECA. See 52 U.S.C. §§ 30106(b)(1), 30107(a), 30109. The Commission is authorized to promulgate regulations implementing the Act, id. § 30107(a)(8); to institute investigations of possible violations of the FECA id. § 30109(a)(1)-(2); and to initiate civil actions in the United States district courts to obtain judicial enforcement of the Act. Id. §§ 30107(e), 30109(a)(6).
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