Will There Be Consequences for a Democratic Law Firm Caught Funneling Campaign Funds?



by David French November 3, 2016 2:32 PM

We’ll soon see whether campaign-finance law applies equally to the Left.

In September 2014, conservatives across the land howled in protest as a judge sentenced noted writer, speaker, and documentarian Dinesh D’Souza to eight months in a community confinement center, imposed a $30,000 fine, and mandated weekly therapy sessions after he pled guilty to a petty violation of federal campaign-finance laws. And, make no mistake, he was guilty. He’d asked friends to contribute maximum donations to Wendy Long’s doomed race for New York Senate and then reimbursed them for their donations. Simply put, that’s illegal. Campaign-finance limits would be meaningless if wealthy individuals could give large sums of money through webs of friends and cronies.

The conservative objection was simple — D’Souza may be guilty, but the feds were seeking prison time mainly because he was a noted Obama critic and bestselling conservative author. Even Alan Dershowitz — hardly a conservative — said the case smacks of “selective prosecution” and noted that the use of straw donors was so common that he’d been solicited to participate in similar schemes. In a target-rich environment, the Left had conveniently singled out one of the president’s most strident (and popular) critics. Liberals wouldn’t receive the same treatment.

Or would they? Crying bias is a common defense tactic, and partisan media is all too willing to believe its allies. Indeed, Democratic donor Pierce O’Donnell tried exactly the D’Souza tactic in 2008 when federal prosecutors pursued him for a similar scheme. O’Donnell claimed that the Bush administration prosecuted him for $28,000 in straw donations to John Edwards only because he was openly critical of the president’s civil-rights policies and represented Hurricane Katrina victims in a high-profile lawsuit. He eventually reached a plea agreement that allowed him to keep his law license but required him to spend 60 days in prison, four months in a halfway house, and pay a $20,000 fine.

In other words, D’Souza’s defenders weren’t quite right. His prosecution wasn’t unprecedented. At least one relatively prominent Democrat had endured similar punishment. The system is fair. Case closed.

But the case for fairness is never closed, and now the system faces a far more significant test. It’s easy to prosecute minnows. But what happens when a whale swims into the sea? Reporters at the Boston Globe have uncovered what appears to be a truly massive scheme to evade campaign-finance laws. And it wasn’t the least bit subtle. Here’s how the Globe starts its story:

Jon Tester didn’t come all the way from Montana for the scrambled eggs and bacon. The US senator, virtually unknown in Boston, was in a conference room at the Thornton Law Firm that June morning to cash in at one of the most reliable stops on the Democratic fund-raising circuit, a law firm that pours millions into the coffers of the party and its politicians.

Tester, a massive, jovial man who raises livestock on his family farm, was more compelling than many of the other breakfast guests, all of them political candidates the firm hoped would defend the interests of trial attorneys. But the drill was basically the same. The personal injury lawyers listened politely for a few minutes, then returned to their offices. And Tester walked away with $26,400 in checks.

But a striking thing happened the day Tester visited in 2010. Partner David C. Strouss received a payment from the firm labeled as a “bonus” that exactly equaled his $2,400 contribution to Tester’s campaign, the maximum allowed. A few days later, partner Garrett Bradley — until recently the House assistant majority leader on Beacon Hill — got a bonus, too, exactly matching his $2,400 gift to Tester.

All told, it appears that three lawyers donated a whopping $1.6 million to Democratic candidates and the Democratic party. They received bonuses of $1.4 million, “often in the exact amount of the donation and on the same day.” Democratic politicians are now scrambling to give back the donations, with Hillary Clinton, Edward Markey, and Elizabeth Warren collectively refunding hundreds of thousands of dollars.

The firm is claiming the bonuses were legal because the sums were then deducted from the partners’ capital accounts. In other words, the “bonuses” weren’t truly bonuses at all, but rather transfers of partner equity. Essentially, claims the firm, they weren’t being reimbursed for the donations, they were merely transferring money out of each partner’s capital account and advancing them a check. It’s a creative defense, no doubt, but one that hardly seems to square with the intent of the program. We shall see if it works in court.

If, that is, the case gets to court. We live in a cynical time, and in the age of Hillary Clinton’s e-mail scandals and IRS tea-party targeting (where the Justice Department appeared keen to “piece together” cases against tea-party groups but was utterly indifferent to mountains of evidence of IRS wrongdoing), there is a growing sense that the bigger the liberal, the higher the threshold for prosecution — at least when the liberal is engaged in the virtuous work of winning elections and attacking the Right. Ends and means, you know.

While there is abundant evidence of double standards in virtually every legal matter involving the Clintons — and while the Obama administration’s handling of the tea-party IRS cases has been nothing short of disgraceful — I’m still not sold on the notion that our justice system, from top-to-bottom, is as biased as many conservatives fear. But cases like this one — with incriminating evidence so obvious and the defense hardly airtight — do represent an interesting test. Will the DOJ be at least as zealous as it was when D’Souza was in the crosshairs? Time will surely tell.

— David French is a staff writer for National Review and an attorney.

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