Federal Politics

Published — April 8, 2016 Updated — Today at 2:31 pm EST

Federal Election Commission dismisses complaint against rapper

Pras Michel bankrolled pro-Obama super PAC Black Men Vote

Introduction

Grammy Award-winning rapper Pras Michel, a founding member of the Fugees. (AP)

A divided Federal Election Commission has dismissed a complaint against rapper Pras Michel, a co-founder of the Fugees who funded a pro-Barack Obama super PAC in 2012.

A complaint filed last year by two campaign finance reform advocacy groups alleged that Michel had violated federal law by giving money to super PAC Black Men Vote through his company — known as SPM Holdings LLC — without disclosing that he was the source of the funds.

The super PAC spent $1.3 million during the 2012 election supporting Obama’s re-election. Since then, limited liability companies have increasingly been used to bankroll a range of liberal and conservative super PACs.

The FEC’s recent move, announced last week along with decisions in three other years-old cases involving super PAC donations from limited liability companies, shows how divided its six commissioners are on whether certain corporate vehicles are skirting political disclosure requirements.

The FEC’s three Democratic-appointed commissioners argued that Michel should be sanctioned for using his limited liability company to inject $875,000 into Black Men Vote during the fall of 2012 without identifying himself as the true source of the money.

But the commission’s three Republicans disagreed, as did the FEC’s office of general counsel.

The FEC’s Republican commissioners acknowledged that, “under certain circumstances,” LLC contributions to super PACs may violate the federal prohibition on giving money in the name of another donor.

But, they concluded, this case was not one of them.

Part of the reason why not? The FEC’s office of general counsel concluded that SPM Holdings LLC was “an active business entity” and “not merely a ministerial conduit or vehicle for transferring Michel’s contributions.”

Neil Reiff — a campaign finance lawyer retained by Michel, who had also donated $350,000 to Black Men Vote in the fall of 2012 in his own name — told the FEC that the rapper had used SPM Holdings LLC to make additional contributions because of “cash flow” reasons and “business convenience.”

In a letter to the FEC, Reiff called the complaint against Michel, which was brought by the Campaign Legal Center and Democracy 21, “baseless.” Reiff further argued that Michel was being used “as a pawn to conduct a public relations campaign” regarding the reform groups’ discontent with existing campaign finance laws.

Under what circumstances might a majority of the FEC’s six commissioners agree to a corporate LLC has been misused to violate campaign finance law?

It’s not exactly clear.

“The speech rights recognized in Citizens United would be hollow if closely held corporations and corporate LLCs were presumed to be straw donors — thus, triggering investigations and potential punishment — each time they made contributions,” wrote Republican commissioners Lee Goodman, Caroline Hunter and Matthew Petersen. “Because closely held corporations and corporate LLCs are constitutionally entitled to make contributions to super PACs, such contributions shall be presumed lawful unless specific evidence demonstrates otherwise.”

In the three other recently dismissed cases involving LLC donations to super PACs, the Republican commissioners voted against punishing the companies despite the fact that the office of general counsel urged the commission to find these contributors in violation of the law.

As in the case involving Michel, the Democratic-appointed commissioners supported sanctioning the donors in these three cases.

“Congress certainly did not intend for donors to be able to conceal their identities by routing their personal contributions through corporate entities,” wrote Commissioners Ann Ravel, Steven Walther and Ellen Weintraub. “The current law clearly prohibits contributors from using the names of LLCs to shield their identity from disclosure to the public.”

For decades, donors have been prohibited from making political contributions in the name of another person in order to evade contribution limits. Super PACs, which were created following the U.S. Supreme Court’s Citizens United v. FEC decision in 2010, are allowed to accept unlimited contributions from individuals, corporations and labor unions.

The fact that Michel was behind SPM Holdings LLC was first reported by the Center for Public Integrity last year.

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SOUTH JERSEYTed SiroisMark SullivanTom LarkinAnonymous Recent comment authors
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Mark Sullivan
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Mark Sullivan

Trump needs to conduct these activities because the entire MSM media, excluding Fox, is campaigning against him 24/7/365.

Didn’t Monica’s boyfriend’s wife and various criminal enterprises outspend Trump by almost 2-1?

CapitalistRoader
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CapitalistRoader

Why wouldn’t he get an early start on fund raising? Hillary outspent him two-to-one in 2016. The Dem’s are the party of big money. The President knows this and is attempting to get a jump on it. Of course the Dem candidate will outspend him in 2020 so it’s only rational that he starts fund raising now.

George Young
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George Young

Oh brother. We just 8 years of the Campaigner – in – Chief. Where was this journalistic rectal thermometer then. Just another article about 2000 words too long that merely takes another slap at Trump for something he far from initiated.

j stevenson
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j stevenson

The big difference between Trump and all the rest is his refusing to accept funds from lobbyists, so they don’t have the White House access they are used to. These are the donors who buy the presidency and are as pixxed off that he won the election as are the media and the Dems. Lobbyists have never been shut out of the WH and Trump has told them he is not for sale.

jan v
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jan v

all the lobbyists are running all our government agencies and all the career civil servants who know how to run the country have been fired. YOU think this is a good thing ? what a crock…

thomas alessi
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thomas alessi

I am for Trump

Anonymous
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Anonymous

Trump needs to be impeached and tossed in prison. Then have the key thrown away so he will never be free. Then he can see how it feels not to have freedom.

Mark Sullivan
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Mark Sullivan

Thank you for the usual insightful leftist low IQ Snowflake response.

barney
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hes not imprisoning them hes sending them back to their country chill tf out

SOUTH JERSEY
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SOUTH JERSEY

WHY DONT YOU HAVE FREEDOM?

Tom Larkin
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Tom Larkin

First, something positive. I was happy to learn of empirical information in article. BUT, the article was so slanted against President Trump as to be deemed fake news (“Perhaps Trump just lied.” (Two different issues)). The article mentions that President Trump raised over $67 million, but ended 2018 with $19 million. President Trump spent over $40 million 2016 and 2017. President Trump conducted 57 political rallies. The article notes the hats and T-shirts sold, but NEVER MENTIONS THE INCREASE IN THE NUMBER OF REPUBLICAN SENATORS during a mid-term election that lost the House and the number of political rallies in… Read more »

Ted Sirois
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Ted Sirois

At least Trump is getting donations from willing donors. Fresh from his first election, Obama used billions of our children’s tax dollars to save thousands of union jobs in the car industry and bailed out the banks and many Wall Street businesses. This secured his source of reelection funds for his reelection four years later.

South Jersey
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South Jersey

TRUMP 2020; IS AN AMAZINGLY SMART MAN! VERY ORIGINAL & CREATIVE. I AM HAPPY TO HAVE HIS AS POTUS.

SOUTH JERSEY
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SOUTH JERSEY

THIS ARTICLE WAS OBVIOUSLY WRITTEN BY, A TRUMP-HATE-GROUP. THAT FEELS; IT IS NOT NORMAL TO BE SUCCESSFUL WITH YOUR OWN BRAND NAME. WHEN, IF FACT, IT IS NORMAL! >>>>> THIS IS >>> FAKE NEWS!!! <<<< ie: A PACK-OF-LIES; SPUN INTO; DEFAMATION OF CHARACTER. FOR A SINISTER-AGENDA OF; FASCIST DEMOCRATIC SOCIALIST, COUP D'ETAT

David
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David

Are you on some kind of drugs? Writing in caps makes me think that you are grumpy old fart or a uneducated hillbilly.