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A Decade Later, Details On Campaign Ethics Case

POSTED: 02:05 PM ET, 06/26/2008 by Derek Kravitz

The Federal Elections Commission has closed a decade-old campaign finance ethics case that snared a number of top Republican donors and lawmakers, shuttered an influential Washington consulting firm and resulted in six people paying roughly $75,000 in civil fines.

The case centered on a $3 million political advertising blitz aimed at bolstering Republican candidates in the closing weeks of the 1996 election, which was financed by donations from leading conservative contributors to a company called Triad Management Services.

Triad billed itself as a consulting firm devoted to keeping the Republican majority in Congress, according to promotional materials in 1995 and 1996. Carolyn S. Malenick, a noted Republican donor and former fundraiser for Oliver L. North's Freedom Alliance, operated the firm as its president and sole owner. Robert L. Cone, a former Pennsylvania executive of the Graco children's products company, was Triad's primary source of funding.

Donors' money went from Triad to two political action committees, Citizens for the Republic Education Fund and Citizens for Reform, which financed television and radio commercials and sent out mass mailings in what their officials have said was an effort to counter organized labor's efforts on behalf of Democrats, investigators said.

Senate investigators also believed, but couldn't prove, that some of the political action committees used by the company were funded by Charles Koch and David Koch, who have made billions in the oil business. The Koches declined comment at the time.

Among the details released last week about the FEC's 12-year investigation and lawsuit:

-- John and Ruth Stauffer of Topeka, Kan., the father-in-law and mother-in-law of Sen. Sam Brownback (R-Kan.), gave $10,000 to two political action committees that later gave Brownback the same amounts in contributions to his Senate campaign. The Stauffers agreed to pay a $9,000 civil fine.

"The Stauffers did not know how to achieve their overall goal of a more conservative Congress," their attorney, Benjamin L. Ginsberg, wrote in court documents sent in May to the FEC. "But Triad did, and provided the research and a readymade plan for the Stauffers to meet their goal of giving to PACs to create a more conservative Congress."

-- Brian Babin, a dentist and former candidate for Congress in Texas, and his congressional campaign committee paid a $20,000 civil penalty and a $5,000 in excessive contributions to the U.S. Treasury. Court documents indicate that Babin arranged for $20,000 in donations to be routed through Triad and to his campaign for television advertisements.

-- Robert Riley Jr., the son of Rep. Bob Riley (R-Ala.), and his father's campaign committee paid a $10,000 civil fine for making and accepting excessive contributions, but denied purposely flouting ethics laws.

-- Cone, who reportedly financed Triad with $1.1 million of his own money, paid a $25,000 fine for making excessive contributions.

-- Malenick, 46, of Manassas, Va., denied violating federal elections laws and, in a 2001 letter, said years of legal bills and wrangling over the case had nearly forced her into bankruptcy.

"At all times, I acted and relied on the advice of counsel, the same counsel who has now
abandoned me," Malenick wrote. "Everything was lawyered. I did not and Triad did not in any capacity act unlawfully or in violation of any Federal Election law."

Malenick paid $5,000 in fines ($100 a month for more than four years, ending this year) to settle the lawsuit.

For a list of documents related to the FEC case, click here.

--Derek Kravitz

By Derek Kravitz |  June 26, 2008; 2:05 PM ET
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