ADLF Calls for Investigation Into Potential Bush Violation of Federal Law

Publicly available reports indicate that Jeb Bush has violated the Campaign Act of 1971 by using his leadership PAC, Right to Rise PAC, Inc., to raise money for his exploratory efforts in excess of the federal contributions limits.  Additionally, Mr. Bush is raising money for exploratory efforts in excess of what could be reasonably necessary to explore his candidacy, but he has failed to register and report as a candidate, and he has not designated an authorized campaign committee as the Act requires.  Finally, facts indicate that Mr. Bush has established, and is directing and controlling an independent expenditure-only committee, Rise to Rise Super PAC, Inc.  Mr. Bush is also raising and spending soft money.  The American Democracy Legal Fund has requested the Federal Election Commission investigate this matter promptly as it strongly suggests that Mr. Bush has violated federal law.

The complaint is available in full below and here.

The American Democracy Legal Fund holds candidates for office accountable for possible ethics and/or legal violations. It was established by David Brock and is run by Brad Woodhouse.

BEFORE THE

FEDERAL ELECTION COMMISSION

Brad Woodhouse

American Democracy Legal Fund

455 Massachusetts Avenue, NW

Washington, DC 20001,

Complainant,

v.

Mr. John Ellis "Jeb" Bush

P.O. Box 14349

Tallahassee, FL 32317

Right to Rise PAC, Inc., and James P. Robinson, Treasurer

P.O. Box 14349

Tallahassee, FL 32317

Right to Rise Super PAC, Inc., and Charles R. Spies, Treasurer

601 Pennsylvania Avenue NW

North Building, Suite 1000

Washington, DC 20004

Respondents.

COMPLAINT

Complainant files this complaint under 52 U.S.C. § 30109(a)(1) against Mr. John Ellis "Jeb" Bush; Right to Rise PAC, Inc. and James P. Robinson, its treasurer, in his official capacity; and Right to Rise Super PAC, Inc., and Charles Spies, its treasurer, in his official capacity (collectively, "Respondents") for violating the Federal Election Campaign Act of 1971, as amended ("the Act"), as described below.  

Publicly available reports indicate that Mr. Bush has violated the Act by using his leadership PAC, Right to Rise PAC, Inc., to raise money for his exploratory efforts in excess of the federal contributions limits. Additionally, Mr. Bush is raising money for exploratory efforts in excess of what could be reasonably be necessary to explore his candidacy, but he has failed to register and report as a candidate, and he has not designated an authorized campaign committee as the Act requires.  Finally, facts indicate that Mr. Bush has established, and is directing and controlling an independent expenditure-only committee, Rise to Rise Super PAC, Inc.  Mr. Bush is also raising and spending soft money in violation of 52 U.S.C. § 30125(e)(1).  We urge the
Commission to investigate these violations.  

A. FACTS

On December 16, 2014, Mr. Jeb Bush, former Governor of Florida, announced his decision to "actively explore the possibility of running for President of the United States."  In his announcement, Mr. Bush shared his plans to launch a leadership PAC.  Mr. Bush formed his leadership PAC, Right to Rise PAC, Inc., ("the leadership PAC") on January 6, 2015.  Less than two weeks later, Mr. Bush established a Super PAC under the same name -- Right to Rise Super PAC, Inc. ("the Super PAC") -- on January 16, 2015.  

Publicly available news reports indicate that Mr. Bush has begun his campaign for President.  Mr. Bush has resigned from each of his corporate and nonprofit board positions, and his creation of a leadership PAC and independent expenditure-only committee shows that he is actively fundraising for his campaign and organizing staff.  In fact, The Wall Street Journal has reported that Mr. Bush is currently encouraging his fundraisers to amass large amounts of contributions for his leadership PAC.  Indeed, a pledge form for Mr. Bush's leadership PAC sets forth different levels of membership for potential donors.  According to the pledge form, fundraisers can join his "national executive committee" if they raise $500,000 by March 31; donors who collect $250,000 can join the "national committee"; donors must raise $100,000 to join the state executive committee, and $50,000 for the state committee.

B. LEGAL ARGUMENT

1 Mr. Bush has used his leadership PAC to raise money for exploratory purposes in excess of the federal contribution limits.

The Act provides that funds used for exploratory purposes are subject to federal contribution limits and must come from permissible sources under the Act.  If the individual raising exploratory funds later becomes a candidate, funds raised and spent to "test the waters" must be reported by the campaign as contributions and expenditures.  Under the 2015-2016 election cycle limits, a candidate may not accept funds from individuals in an amount exceeding $2,700 per election.  

By contrast, donors may contribute up to $5,000 per calendar year to a candidate's leadership PAC.  Contributions made to a candidate's leadership PAC will not count against the candidate's campaign contribution limits.  Thus, under the 2015-2016 election cycle limits, an individual donor could contribute up to $5,000 to a candidate's leadership PAC and then another $5,400 to the same candidate's campaign committee.   

Publicly available news reports indicate that Mr. Bush is raising funds for exploratory purposes through his leadership PAC in an apparent attempt to circumvent the contribution limits.  Indeed, Mr. Bush's Facebook announcement regarding his decision to explore a run for President stated that he would create a leadership PAC to "facilitate conversations with citizens across America to discuss the most critical challenges facing our exceptional nation."  That is simply not the function of a leadership PAC -- it is exploratory activity.  Leadership PACs are to be used by candidates and officeholders to raise money to support other candidates, not to supplant the functions of an exploratory or campaign committee.  Commission regulations make clear that a candidate's leadership PAC must be kept entirely separate from the candidate's campaign and authorized campaign committee, and therefore may not be used for exploratory or campaign purposes.

Mr. Bush's use of a leadership PAC as his primary fundraising vehicle for exploratory and campaign efforts is a violation of the Act.  Because the leadership PAC has higher contribution limits than the limits imposed on an exploratory or campaign committee, Mr. Bush has accepted contributions to fund his exploratory activities in excess of the limits set by federal law.   

2. Mr. Bush has failed to register and report as a candidate in violation of the Act.   

Under the Act, an individual becomes a candidate for federal office, triggering the Act's registration and reporting requirements, when his campaign exceeds $5,000 in contributions or expenditures.  Among other requirements, a candidate must file a statement of candidacy within 15 days of becoming a candidate.  However, the regulations permit an individual who has not made the decision to run for office to raise funds for "testing the waters" to make that decision.  While an individual is testing the waters, he may raise or expend funds for activities such as conducting a poll, making telephone calls and traveling.  An individual crosses the line from exploratory efforts to candidacy if he takes actions relevant to conducting a campaign; those
actions include "rais[ing] funds in excess of what could reasonably be expected to be used for exploratory activities or undertak[ing] activities designed to amass campaign funds that would be spent after he or she becomes a candidate."  

Publicly available news reports indicate that Mr. Bush's leadership PAC, which is his exploratory vehicle, is accumulating funds in excess of what could reasonably be expected to be used for his exploratory efforts.  Although Mr. Bush's leadership PAC has not yet filed reports disclosing its contributions and expenditures with the Federal Election Commission, news reports strongly suggest that Mr. Bush is amassing campaign funds through his leadership PAC in amounts that make it clear that he is no longer in the exploratory phase of his candidacy.  For example, donor pledge forms for Mr. Bush's leadership PAC indicate that the PAC is encouraging bundlers to raise large sums of money -- exceeding $500,000 -- to contribute to the leadership PAC.  There is no legitimate non-campaign purpose for such a large fundraising effort.    

Accordingly, Mr. Bush has qualified as a candidate under the Act, and he has violated the Act by failing to (1) register as a candidate with the Commission and (2) designate a principal campaign committee to raise and spend money for his campaign. 

3. Mr. Bush has established and is directing and controlling an independent
expenditure-only committee.  Additionally, he is raising soft money in violation of the Act.

The Act prohibits federal candidates and their agents from establishing, directing, controlling, or soliciting money for an entity that raises money outside of the federal contribution limits such as an independent expenditure-only committee.  When the Commission is considering whether a candidate has "established" an independent expenditure-only committee, the Commission focuses principally on whether the candidate "directly or through his agent, had an active or significant role in the formation of the entity."  When considering whether a candidate "finances" or "maintains" an independent expenditure-only committee, the Commission considers a number of factors, including whether the candidate, directly or through his agent, provides funds or goods in a significant amount to the committee, or causes or arranges for funds in a significant amount or on an ongoing basis to be provided to the committee.  Finally, when determining whether a candidate "controls" an independent expenditure-only committee, the Commission will consider factors such as (1) whether the candidate has the authority or ability to direct or participate in the governance of the entity; (2) whether the candidate has the authority to hire, appoint, demote, or otherwise control the officers or decision-makers of the committee; and (3) whether the candidate has a common or overlapping membership with the committee that indicates a formal or ongoing relationship between the candidate and the entity.  A federal candidate is also prohibited from soliciting, raising, and spending funds in excess of the contribution limits through an independent expenditure-only committee.

In light of Mr. Bush's actions indicating that he is a candidate for President in the 2016 election, we request that the Commission investigate Mr. Bush's role in the establishment, organization, and operation of the Right to Rise, Inc. Super PAC, Inc.  Publicly available reports indicate that Mr. Bush played a role in the launching of the independent expenditure-only entity, and may control the operations of the committee from behind the scenes.  Additionally, facts show that Mr. Bush has solicited and raised funds for the independent expenditure-only committee by attending "multiple high-dollar fundraisers."  If Mr. Bush or his agents established Right to Rise Super PAC, Inc., and if Mr. Bush has been directing, controlling, or raising funds for the committee, his actions are a plain violation of 52 U.S.C. § 30125(e)(1).  Mr. Bush should not be
permitted to create a loophole in federal campaign finance law by purposefully failing to declare himself a candidate in order to raise money for a soft money entity in excess of the federal limits. 

C. REQUESTED ACTION

As we have shown, Mr. Bush and Respondents have violated the Act by using a leadership PAC to raise money for exploratory purposes in excess of the contribution limits.  Additionally, Mr. Bush has failed to register and report as a candidate despite amassing more funds than what is reasonably necessary to "test the waters."  Finally, facts demonstrate that Mr. Bush has established, and is directing, controlling, and raising funds for an independent expenditure-only committee in violation of the law.  We respectfully request that the Commission investigate these violations, and that Respondents be enjoined from further violations and be fined the maximum amount permitted by law.