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Rep. Vern Buchanan's former company violated law, Federal Election Commission says

WASHINGTON — The Federal Election Commission is asking a federal court to impose a $67,900 fine on a company formerly co-owned by Rep. Vern Buchanan that it says engaged in an "extensive and ongoing scheme" to reimburse employees who made contributions to the Sarasota Republican's congressional campaign.

In a motion for default filed Friday in U.S. District Court in Florida, the FEC says Hyundai of North Jacksonville — which Buchanan once partially owned — violated federal campaign finance law by making contributions in excess of the legal limit and by reimbursing employees who made the contributions.

Buchanan is not named as a defendant in the suit. The owner of the company said Tuesday he's acknowledged the company reimbursed employees, but said it was a "directive" issued by Buchanan.

"I've done nothing wrong," said Sam Kazran, who said he told the FEC he was unfamiliar with campaign finance law. "I am not a politician, just a regular Joe. I had no idea."

He said Buchanan told a group he needed to raise $1 million "to look good.

"It was 'This is what I need to do and this is what you need to do to take care of it,' " Kazran said.

A Buchanan campaign spokesman called Kazran's allegation "absolutely false."

"Sam is lashing out because he was slapped by a summary judgment today by the Hillsborough County Circuit Court for $624,000 related to a loan he failed to repay to Vern."

Buchanan's campaign said in a statement that the lawsuit is "an issue between the FEC and Hyndai of North Jacksonville, which Vern Buchanan has no interest or stake in." The campaign had said in December when the FEC filed the suit against Kazran that it was Buchanan's campaign that brought the matter to the FEC's attention two years earlier.

The FEC complaint says employees at the dealership — which was partially owned by Buchanan from 2004 to 2008 — contributed to his campaign between 2005 and 2007.

But, the contributions, it says in the court documents, "were made by HNJ which reimbursed each individual for the funds she/he provided to the campaign."

Federal law prohibits "undisclosed conduit contributions," in which a donor conceals a contribution by funneling it through someone else.

The FEC says in 2005 and 2006, employees gave 24 contributions totaling $49,500 to Buchanan, and that in 2007 it made eight contributions totaling $18,400. Buchanan was first elected to Congress in 2006 and was re-elected in 2008 and 2010.

The FEC noted that in addition to being illegal reimbursements, the contributions also exceeded the company's contribution limit, which would have been $4,200 in 2006 and $4,600 in 2008.

"HNJ illegally spent $67,900 in an attempt to influence an election for Congress, presumably believing this to be a worthwhile investment," the FEC said.

It notes that when contributions are made in the names of others, "the true source of the contributions is intentionally sealed from the public, thereby thwarting the public's informational and anti-corruption interests."

The FEC is also asking the court for an injunction to prevent HNJ— which is no longer operating — from breaking the law again, arguing that it was "not a mere error or lapse in judgment. It was an extensive and ongoing scheme that spanned two election cycles, three calendar years and dozens of secret, illegal contributions."

It notes that HNJ has "never acknowledged any wrongdoing" and that its refusal to appear before the court "manifests a complete absence of a commitment not to violate the same legal provisions in the future."

Kazran said he responded in April to the FEC, denying that he arranged for employees to contribute to Buchanan, but admitting that employees were reimbursed for contributing to Buchanan.

Kazran and Buchanan have clashed in the past. Buchanan in September 2008 filed a suit in Duval County against Kazran for failure to repay a $2.5 million loan. Kazran countered in a lawsuit claiming fraud against Buchanan in past dealings.

Rep. Vern Buchanan's former company violated law, Federal Election Commission says 05/31/11 [Last modified: Tuesday, May 31, 2011 9:16pm]
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