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02/1/2013

Who will heed the call of accountability?

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This week, Cause of Action filed an FEC complaint revealing the Democratic National Committee’s violation of the Federal Election Campaign Act (FECA) in a potential attempt to hide its reimbursement for Secretary of Health and Human Services Kathleen Sebelius’ Hatch Act violation.

At a Human Rights Campaign Gala in February 2012, speaking in her official capacity, Secretary Sebelius campaigned for the election of Walter Dalton as Governor of North Carolina and of Barack Obama as President of the United States – a violation of federal law.  In attempting to belatedly “fix” her Hatch Act violation, Secretary Sebelius received reimbursement from the DNC for the cost of her attendance at the Gala, and five months later (and only at the behest of the Office of Special Counsel) those of HHS staffer AJ Pearlman, who supported Sebelius at the event.  However, the DNC failed to properly file these reimbursements under FECA, another breach of the law.

Cause of Action further found that during Sebelius’ effort to avoid responsibility for her Hatch Act violation, she retroactively reclassified her speech at the HRC Gala as a political instead of an official event. Securing reimbursement from the DNC for the event in an attempt to pretend the abuse never happened was enough to convince the President that no discipline was necessary in Sebelius’ case. Secretary Sebelius escaped the most high-profile Hatch Act violation in history completely unscathed.

But that’s not the end of the story. Sebelius’ classification of the event as political means that AJ Pearlman now stands in violation of the Hatch Act as well. As a government employee, Pearlman cannot participate in political events on work time.  Once Sebelius reclassified her speech as political, the DNC chose to reimburse HHS for Pearlman’s expenses as well. Pearlman, who had prepared Sebelius for the event and was in attendance with her, is now in violation of the Hatch Act, an offense punishable by firing, as her actions were done on the taxpayers’ dime.

The DNC violated FECA as it scrambled to fix Sebelius’ mistake.

Pearlman’s career has been jeopardized as a result of the law Sebelius broke.

When will Secretary Sebelius take responsibility for her own actions?

When will the OSC properly investigate these new allegations of Hatch Act violations?

Will the new revelations Cause of Action has brought to light about Sebelius’ corruption convince the President to finally ask her to accept the consequences of her actions?

We filed complaints this week with the Federal Election Commission against the DNC and with the OSC concerning AJ Pearlman.  Will these agencies heed the call of accountability?

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01/30/2013

The Hill: Watchdog slams DNC, Sebelius in FEC complaint

Watchdog slams DNC, Sebelius in FEC complaint

By Elise Viebeck – 01/30/13 04:30 PM ET

A government watchdog group is claiming that the Democratic National Committee (DNC) failed to properly disclose its support for a 2011 trip in which Kathleen Sebelius violated the Hatch Act.
The DNC classified its payment to the Health and Human Services (HHS) Department, which Sebelius leads, as an “operating” rather than an “independent” expenditure, Cause of Action said.
The group filed a complaint with the Federal Election Commission (FEC) on Wednesday.

“What has come to light in our investigation is that the reimbursement for [Sebelius’s] campaigning wasn’t properly filed by the DNC,” said Cause of Action Executive Director Dan Epstein. “The FEC has an obligation to investigate and take appropriate measures to enforce their own rules.”

In September, federal investigators found Sebelius guilty of making “extemporaneous partisan remarks” during a speech at a Human Rights Campaign gala last February. The comments amounted to a violation of the Hatch Act, which bans some political activity by government employees, the Office of Special Counsel said.
The White House responded by saying that the U.S. Treasury was repaid and Sebelius “met with ethics experts to ensure this never happens again.”
The incident prompted criticism from Republicans, and Cause of Action slammed President Obama on Wednesday for giving Sebelius “a pass on the most high-profile Hatch Act violation in history.”
The group called on federal investigators to probe the actions of a Sebelius aide, A.J. Pearlman, for whom the DNC also reimbursed some expenses.

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01/30/2013

Washington Examiner: Complaint: Sebelius’ illegal campaign trip for Obama worse than we thought

Read the full story here. Washington Examiner

“Not only is it that the DNC is not being transparent about what it’s using its funds for reimbursement of, but it’s also violating the intent and letter of the Federal Elections Campaign Act,” Cause of Action’s Dan Epstein said in a phone interview with The Washington Examiner. “Whether it’s to cover up the Hatch Act violation or to just not properly report it, it’s very clear that it’s not properly reported — [for] the reason why, one would have to look into the minds of the lawyers at the DNC.”

Epstein floated the idea that the DNC reimbursed HHS (rather than the Treasury Department) and classified it as travel, rather than as a reimbursement for an independent expenditure in order to avoid the appearance that the Treasury Department had effectively loaned money to the Obama campaign for the trip (which would be another violation of federal law, he said).

Cause of Action also noted another wrinkle: HHS’ reclassification of the trip as a campaign trip means that A.J. Pearlman, the adviser who traveled to the event with Sebelius, also violated the Hatch Act.

“That assistant’s participation in the event in North Carolina would in fact be a Hatch Act violation,” Cause of Action said in another complaint to the Office of Special Counsel.

Cause of Action blamed Obama and Sebelius for compromising Pearlman. “The consequence here is that A.J. Pearlman is thrown under the bus by Sebelius. Sebelius asked the DNC to reimburse HHS for A.J. Pearlman’s activities, which basically [means] A.J. Pearlman violated the Hatch Act, which means A.J. Pearlman needs to be disciplined, most likely fired,” Epstein explained. “Even though she didn’t intend to engage in any political activity, she was just doing what she was told.”

An OSC spokesperson said it could not comment on the Hatch Act complaint, due to privacy laws.

 

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01/30/2013

CoA Takes Action Against DNC, Sebelius Aide for breaking the law

Cause of Action filed a complaint before the Federal Election Commission (FEC) today alleging that the Democratic National Committee (DNC) and Andrew Tobias, treasurer of the DNC,  violated the Federal Election Campaign Act (FECA) and FEC regulations when they reimbursed the Department of Health and Human Services for Secretary Kathleen Sebelius’ 2012 Hatch Act violation.

In September, the Office of Special Counsel (OSC) found Sebelius guilty of violating the Hatch Act, but claimed that the DNC’s reimbursement meant that the “issue had been resolved.”  Cause of Action has found that the DNC failed to properly disclose its reimbursements as independent expenditures, therefore violating FECA.

Cause of Action’s investigation also raises the question as to whether Sebelius’ use of her official capacity to support President Obama’s re-election was paid for by a loan from the United States, later reimbursed by the DNC, but nevertheless in potential violation of 18 U.S.C. § 595.

Cause of Action is also filing a complaint with OSC requesting an investigation into Sebelius’s aide, AJ Pearlman. The complaint states that though Pearlman’s expenses were reimbursed, she was never investigated for potential violations of the law – including a violation of the Hatch Act.

Please see these important documents below:

FEC complaint against the DNC 

FEC complaint exhibits

OSC complaint against AJ Pearlman

 Full Press Release

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01/30/2013

Cause of Action Files FEC Complaint against DNC

FOR IMMEDIATE RELEASE                                                                                                 CONTACT:      

JANUARY 30, 2013                                                                                Mary Beth Hutchins, 202-400-2721

Jamie Morris, 202-499-2425

 

Cause of Action Files FEC Complaint Against Democratic National Committee For Failing to Properly Disclose its Reimbursements for Kathleen Sebelius’ Improper Political Activity

 

Request also made to Office of Special Counsel to investigate Hatch Act violation by Sebelius aide

 

 

WASHINGTON – Cause of Action (CoA), a government accountability organization, filed a complaint before the Federal Election Commission (FEC) today against the Democratic National Committee (DNC) and specifically against Andrew Tobias both individually and in his capacity as Treasurer of the DNC for violating the Federal Election Campaign Act (FECA) and FEC regulations when reimbursing the Department of Health and Human Services for Secretary Kathleen Sebelius’ 2012 Hatch Act violation.

In September, the Office of Special Counsel (OSC) found Sebelius guilty of violating the Hatch Act, but claimed that the DNC’s reimbursement meant that the “issue has been resolved.”  Cause of Action has found that the DNC failed to properly disclose its reimbursements as independent expenditures, therefore violating FECA.

“While the President gave Secretary Sebelius a pass on the most high-profile Hatch Act violation in history, what has come to light in our investigation is that the reimbursement for her campaigning wasn’t properly filed by the DNC,” explained Cause of Action’s Executive Director, Dan Epstein. “While HHS sought reimbursement from the DNC prior to the OSC’s Hatch Act investigation being complete, the DNC attempted to classify these payments as operating expenditures, and failed to report them accurately on multiple months’ reports. The FEC has an obligation to investigate and take appropriate measures to enforce their own rules as well as FECA.”

Moreover, Cause of Action’s investigation raises the question as to whether Sebelius’ use of her official capacity to support President Obama’s re-election was paid for by a loan from the United States, later reimbursed by the DNC, but nevertheless in potential violation of 18 U.S.C. § 595.

Cause of Action is also filing a complaint with OSC requesting an investigation into Sebelius’s aide AJ Pearlman, for whom the DNC also reimbursed expenses to HHS, yet no investigation into Pearlman’s potential violation of the law was conducted.

According to internal documents procured by Cause of Action through Freedom of Information Act requests, the following facts came to light about the February 25, 2012 event at which Secretary Sebelius campaigned for President Obama and Walter Dalton’s candidacy for Governor of North Carolina:

  • March 2012 – DNC fails to report to the FEC any contribution, debt, or other obligation from HHS for relevant reporting period.

 

  • Apr. 12, 2012 – DNC issues check to HHS for $1,003.69 and reported the expense under the category of “Other Federal Operating Expenditure” in their FEC report.

 

  • Jul. 9, 2012 – OSC interviews Sebelius about HRC gala for investigation.

 

  • Jul. 18, 2012 – OSC advises HHS that there were additional costs associated with Sebelius’ attendance at the gala and needed to be reimbursed to the Treasury.

 

  • Jul. 23, 2012 – HHS requests reimbursement from DNC for additional $1,500 travel costs for Sec. Sebelius’s aide.

 

  • Aug. 2, 2012 – DNC again reports payment expense under category of “Other Federal Operating Expenditure.”

The FEC complaint can be found here and the OSC complaint can be found here.

 

About Cause of Action:

Cause of Action is a nonprofit, nonpartisan organization that uses investigative, legal, and communications tools to educate the public on how government accountability and transparency protects taxpayer interests and economic opportunity. For more information, visit www.causeofaction.org.

 

To schedule an interview with Cause of Action’s Executive Director Dan Epstein, contact Mary Beth Hutchins,  202-400-2721 or Jamie Morris, jamie.morris@causeofaction.org.

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