FEC finds Frist violated law by failing to disclose $2.4 million personal loan
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Thursday June 1, 2006
Earlier today, Citizens for Responsibility and Ethics in Washington (CREW) received notice from the Federal Election Commission (FEC) indicating that in response to a complaint filed by CREW, the FEC found that Senate Majority Leader Bill Frist's 2000 Senate campaign committee, Frist 2000, Inc. violated federal campaign finance laws, RAW STORY can report. Their release follows.
CREW's complaint alleged -- and the FEC agreed -- that Frist 2000, Inc. failed to disclose a $2.44 million loan taken out jointly by Frist 2000, Inc. and by Frist's 1994 campaign committee, Bill Frist for Senate, Inc. The result of the discrepancy was to make it appear that Frist 2000, Inc. had significantly more money that it actually had.
In June 2000, Senator Frist took $2 million of the money that had been contributed to his 2000 Senate campaign and invested it in the stock market, where it promptly began losing money. In November 2000, Senator Frist sought to collect $2.2 million he had lent his 1994 Senate campaign committee. As a result of the stock market losses, however, Frist 2000, Inc. did not have enough money to repay the loan. Senator Frist solved this problem by having the 1994 and the 2000 campaign committees jointly take out a $2.44 million bank loan at a cost of $20,000 a month interest. Frist 2000, Inc. did not report this debt on its FEC disclosure forms.
The Federal Election Campaign Act (FECA) requires full disclosure of any loans taken out by campaign committees. Yet only the 1994 campaign committee, which had been largely dormant, disclosed the loan.
In a conciliation agreement reached with Frist 2000, Inc. and the committee's treasurer, the FEC stated that the campaign committee violated the law by failing to report the loan on the 2000 Year End Report and by failing to report the repayment of the loan on the 2001 Mid-Year Report. The FEC fined Frist 2000, Inc. $21,000, as required by statute.
Melanie Sloan, CREW's executive director, said "it is gratifying to see that the FEC recognizes that Senator Frist's campaign committee broke the law. Apparently, the FEC disagreed with Sen. Frist's aide's dismissal of the complaint as 'incorrect' and 'politically driven.'"
FEC DOCUMENTS AVAILABLE HERE.