Denham cleared of campaign wrongdoing

McClatchy NewspapersSeptember 26, 2011 

WASHINGTON — A politically divided Federal Election Commission has deadlocked over whether Rep. Jeff Denham, R-Atwater, Calif., may have violated campaign laws in his inaugural House race last year.

Stymied by the partisan split on some allegations, and dismissing others as unfounded, the six-member commission closed the potential Denham investigation. Practically speaking, this amounts to a victory for the first-term congressman.

"I'm glad to see this politically motivated case closed," Denham said. "As an Air Force veteran, I have always supported the veteran community and will continue to do so in the future."

All told, the FEC dismissed as unfounded five allegations concerning the Denham 2010 campaign and deadlocked on three other allegations.

More broadly, Denham's year-long encounter with the Federal Election Commission exemplified how a carefully maintained balance of power sometimes can render the FEC incapable of taking decisive action.

Three Democratic appointees wanted to further pursue the Denham case, potentially using subpoenas and depositions. Three Republican appointees did not. The deadlock at a closed-door Aug. 2 meeting led the commission to vote 6-0 to drop the matter altogether, public records made available this month show.

Prompted by complaints lodged by Fresno-area GOP activists Tal Cloud and Michael Der Manouel, Jr., attorneys had been examining the relationship among Denham's 2010 campaign, a charity called Remembering the Brave and a May 28, 2010, benefit held at the Chukchansi Gold Resort and Casino.

The benefit for family members of slain soldiers preceded the June 8, 2010, primary, in which Denham was facing former Rep. Richard Pombo, R-Tracy.

Denham eventually contributed a total of $225,000 in state campaign funds to Remembering the Brave. The small, Colorado-based charity, in turn, had sponsored the Chukchansi event and promoted it with ads prominently featuring Denham, an Air Force veteran and, at the time, chairman of the state Senate Veterans Affairs Committee.

Cloud, Der Manouel and other critics alleged the Chukchansi benefit's ads effectively amounted to congressional campaign advertising for Denham, though the money was not reported as such.

Two complaints were eventually filed with the FEC, raising an assortment of related charges.

Following their preliminary inquiry, officials cleared the Chukchansi tribal government and the Sacramento consulting firm Gilliard, Blanning & Associates. There was no reason to believe either violated campaign finance laws, officials determined.

Officials likewise determined there was no reason to believe the Denham congressional campaign and Remembering the Brave had made or received prohibited campaign contributions.

"It does not appear that the ads at issue promote or support Denham or attack or oppose any of his opponents," the FEC report stated.

The initial FEC inquiry, though, found the ads were nonetheless "electioneering" materials because they included an individual who was running for office within 30 days of a primary election. This meant disclosure requirements applied.

The initial inquiry found there was reason to believe Remembering the Brave had violated the rules by failing to report the spending. The charity could not be reached Monday.

The initial inquiry also concluded there was reason to believe Denham's state campaign committee, by seemingly supplying the funds used for the ads, had improperly transferred funds for use in a federal election.

De Manouel predicted Monday that the FEC's deadlocked decision means other candidates will follow Denham's lead and start donating surplus state campaign funds to charities that will advertise the candidates' names.

"I think the FEC has created a loophole that is not wise," Der Manouel said.

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