July 19, 1997
F.E.C. Fines German Citizen for U.S. Campaign Gifts
By LESLIE WAYNE
News Analysis: Did the GOP Senators and their Staffs Prove their Case? GOP Panel Sees No Major Flaw in Fund-Raising Rules
ASHINGTON -- The Federal Election Commission on Friday levied a $323,000 fine against a German businessman, the largest penalty ever against an individual for campaign-finance violations.
In a settlement agreement, the businessman, Thomas Kramer, admitted making illegal campaign contributions directly, through his businesses and through his secretary, to a number of state and federal party committees and candidates.
The fine comes as the Senate Governmental Affairs Committee is holding hearings on campaign-finance abuses involving illegal foreign contributions in the 1996 elections.
Kramer, a German citizen who runs businesses in Florida, made more than $320,000 in campaign contributions in the 1994 elections to both Republicans and Democrats, either directly or through his secretary, other intermediaries or through 17 businesses that he owned. Of this amount, $287,600 came through Kramer's businesses, at his direction.
Federal law prohibits foreign nationals, except those who hold registration cards granting them permission to live and work in the United States, from making contributions to elections in this country, or from directing others to do so. It is also unlawful for anyone to make campaign contributions in someone else's name.
Kenneth Gross, a former enforcement director at the election commission, said Friday: "Cases where there is a concealment of the true identity of the contributors are the types of cases that tend to attract higher penalties. But what's really relevant about this case is that it deals with foreign contributions and foreigners, and those cases are few and far between."
This is the second-largest penalty in the commission's history. The highest fine was imposed in 1994 when Prudential Securities agreed to pay $550,000 for the use of corporate sites for fund-raising for a number of federal candidates.
Both federal candidates and parties, as well as Florida politicians and parties, received money from Kramer. The single largest recipient was the Florida Republican Party, which received $205,000, of which $95,000 came directly from Kramer.
Others who received contributions from Kramer included the Democratic National Committee, the Democratic Senatorial Campaign Committee, the National Republican Senatorial Committee and Sen. Connie Mack, R-Fla.
The Florida Republican Party was also fined $82,000; the other recipients were sent warning letters but were not fined. The national party committees can accept "soft money" contributions, to be used for party-building activities. In a letter to the FEC that the commission made public Friday, Roger Witten, Kramer's lawyer, said his client made the donations inadvertently.
"At the time Kramer made or caused these contributions, he was not aware that foreign nationals may not make contributions in connection with candidate elections in the United States," the letter said.
By entering into a settlement with the commission, Kramer avoids having to face the possibility of an even higher financial penalty that could have resulted if the case had gone to trial. And it sharply reduces the possibility that the Department of Justice will pursue a criminal case against him.