4 FEDERAL ELECTION COMMISSION WASHINGTON, D c 20463 FEB 0 9 2004 , Marc E. Elias, Esq. i_- -- ’ Perkins Coie LLP 607 Fourteenth Street, N.W. Washington, D.C.20005-201 1 RE: MUR 5225 New York Senate 2000 and Andrew Grossman, as treasurer Dear Mr. Elias: I On August 10,2001, the Federal Election Commission notified New York Senate 2000 and Andrew Grossman, as treasurer, your clients, of a complaint alleging violations of certain sections of the Federal Election Campaign Act of 1971, as amended (“the Act”). A copy of the complaint was forwarded to your clients at that time. Upon further review of the allegations contained in the complaint, and information provided by you, the Commission, on February 3,2004, found that there is reason to believe New York Senate 2000 and Andrew Grossman, as treasurer, violated 2 U.S.C. 5 434(b), a provision of the Act, and 11 C.F.R. $5 102.17(~)(8)(i)(A),104.13(a) and 106.6(d). The Factual and Legal Analysis, which formed a basis for the Commission’s findings, is attached for your information. Marc E. Elias, Esq.04 MUR 5225 Page 2 I .- - - . I.-d0!!4 . Marc E. Elias, Esq. MUR 5225 Page 3 You may submit any factual or legal materials that you believe are relevant to the Commission’s consideration of this matter. Please submit such materials to the General Counsel’s Office within 15 days of receipt of this letter. Where appropriate, statements should be submitted under oath. In the absence of additional information, the Commission may find probable cause to believe that a violation has occurred and proceed with conciliation. If you are interested in pursuing pre-probable cause conciliation, you should so request in writing. See 1 1 C.F.R.6 11 l.l8(d). Upon receipt of the request, the Office of the General Counsel will make recommendations to the Commission either proposing an agreement in settlement of the matter or recommending declining that pre-probable cause conciliation be pursued. The Ofice of the General Counsel may recommend that pre-probable cause conciliation not be entered into at this time so that it may complete its investigation of the matter. Further, requests for pre-probable cause conciliation will not be entertained after briefs on probable cause have been mailed to the respondent. Requests for extensions of time will not be routinely granted. Requests must be made in writing at least five days prior to the due date of the response and specific good cause must be demonstrated. In addition, the Office of the General Counsel ordinarily will not give extensions beyond 20 days. This matter will remain confidential in accordance with 2 U.S.C. $6 437g(a)(4)(B) and 437g(a)( 12)(A) unless you notifL the Commission in writing that you wish the investigation to be made public. If you have any questions, please contact Thomas J. Andersen, the attorney assigned to this matter, at (202) 694-1650. I Sincerely, Bradley A. Smith Chairman Enclosure Factual and Legal Analysis . b 1 FEDERAL ELECTION COMMISSION 2 3 FACTUAL AND LEGAL ANALYSIS 4 RESPONDENTS: New York Senate 2000 and MUR 5225 5 Andrew Grossman, as treasurer G 7 I. GENERATION OF MATTER 8 This matter was generated by a complaint filed with the Federal Election Commission by 9 Peter F. Paul. See 2 U.S.C. 5 437g(a)( 1). 10 11. FACTUAL AND LEGAL ANALYSIS’ 11 A. Complaint 12 Complainant Peter F. Paul alleged, inter alia, that he “made cash and in-kind 13 contributions to the federal election campaign of Hillary Rodham Clinton for the U.S. Senate 14 seat representing the State of New York, totaling almost $2 million . .” Complaint at 5. 15 Complainant hrther alleged that his cash and in-kind contributions “have been improperly 16 and/or inaccurately reported by Mrs. Clinton and her federal election campaign committees.” Id. 17 at 4. In support of his allegations, Complainant submitted five exhibits: (1) Letters to Mr. Paul 18 from Hillary Rodham Clinton and then-President Bill Clinton; (2) FEC disclosure information 19 showing a $2,000 contribution from Mr. Paul reported as received by New York Senate 2000 in 20 June of 2000 and rehnded six weeks later; (3) a newspaper article reporting on Mr. Paul’s 21 contribution and refund; (4) copies of checks, bank statements, invoices, and receipts; and (5) a 22 three-page letter fiom Mr. Paul to Senator Hillary Clinton. 23 ~~ ~ I All of the facts in this matter occurred prior to the effective date of the Bipartisan Campaign Reform Act of 2002 (“BCRA”), Pub. L. 107-155, 116 Stat. 81 (2002). Accordingly, unless specifically noted to the contrary, all citations to the Act herein are as it read prior to the effective date of BCRA and all citations to the Commission’s regulations herem are to the 2002 edition of Title 1 1, Code of Federal Regulations, which was published prior to the Commission’s promulgation of any regulations under BCRA. i MUR 5225 2 am Fktual and Legal Analysis New York Senate 2000 and Andrew Grossman, as treasurer 1 1. Complaint Letter 2 The complaint letter alleged in its opening summary that Senator Hillary Rodham 3 Clinton, Clinton for Senate, New York Senate 2000, former Clinton for Senate finance director 4 David Rosen, former Democratic National Committee (“DNC”) chair Edward Rendell, former 5 DNC Regional Finance Director Stephanie Berger, Democratic hdraiser James Levin, and 6 former President William Jefferson Clinton “appear to be in violation of’ 2 U.S.C. 55 43 1, et 7 seq. and 434(b) and 11 C.F.R. 53 104.3, 110.9(a), and 110.9@). Complaint at 1. 8 Peter F. Paul described himself in the complaint as “an acclaimed Hollywood executive 9 with extensive experience in event production, entertainment marketing, and media positioning,” 10 and co-founder of Stan Lee Media, Inc., which by early 2000 “enjoyed a market capitalization of _-- - .. 11 approximately $350 million.” Id. at 2. Complainant sought to “build” Stan Lee, the creator of 12 several well-known comic book figures for Marvel Comics, “into a major cultural and branded 13 entertainment figure.” Id. Complainant stated that he believed “one way to achieve this goal 14 was through politics.” Id. 15 According to the complaint, Mr. Paul was approached by a former protkgk, event I 16 producer Aaron Tonken, “about elevating Stan Lee’s public profile, recognition and acceptance i-- -3 17 by contributing money to the Democratic Party.” Id. The complaint alleged, “Tonken induced 18 Mr. Paul to contribute $30,000 to the DNC” in connection with a February 17,2000 event at 19 Caf6 Des Artistes in Hollywood, California. Id. Complainant described his role as both a 20 contributor and a “co-host” of the event. Id. 21 Based on his discussions with DNC officials Edward Rendell and Stephanie Berger, 22 Complainant believed “his substantial contribution to the DNC would enable [him] to better 23 position himself to enlist [then-President Clinton’s] support for recognizing Stan Lee’s MUR 5225 3 Factual and Legal Analysis New York Senate 2000 and Andrew Grossman, as treasurer 1 significant contributions to literacy and global popular culture, including a Kennedy Center 2 Honor and a White House presentation of a Presidential Medal of Freedom.” Id. Complainant I 3 stated that he “was prepared to commit a significant portion of his family share holdings in SLM 4 [Stan Lee Media, Inc.], then valued at approximately $90 million, in order to achieve his strategy 5 of elevating Stan Lee’s public profile, recognition and acceptance through the good offices of 6 The White House,” and therefore was “induced to become a major contributor.” Id. 7 The complaint further alleged that “California DNC Finance Chairwoman Stephanie 8 Berger and David Rosen, the Director of Finance for Mrs. Clinton’s Senate campaign, asked 9 Mr. Paul to make a $150,000 commitment to co-host a luncheon for Mrs. Clinton at Spago 10 [restaurant] in Beverly Hills on June 9,2000.” Id. at 3. Complainant stated that he “agreed to -- - - - ---- ---- --- __ - .. 11 support Mrs. Clinton’s U.S. Senate campaign, however, by making a $55,000 payment towards 12 satisfying a $150,000 commitment to co-host the June 9,2000 luncheon and tea with Stan Lee.” 13 Id. 14 The complaint further alleged, “On July 11,2000, Mr. Paul participated in a conference 15 call with Rosen and other fundraisers for Mrs. Clinton to discuss Mr[.] Paul’s and Stan Lee’s 16 sponsoring a fundraiser for Mrs. Clinton just prior to the Democratic National Convention in Los 17 Angeles, California.” Id. Complainant allegedly “suggested a Hollywood Tribute to the 18 President, the proceeds of which would be used to elect Mrs. Clinton to the U.S. Senate.” Id. 19 The complaint stated that this event “was to be held on the grounds of the home of radio magnate 20 Ken Roberts, in Brentwood, California.” Id. Complainant alleged that he “agreed to finance the 21 Hollywood Tribute findraiser. All finds raised fiom persons attending the fundraiser would 22 constitute net contributions to Mrs. Clinton’s U.S.Senate campaign.” Id. Complainant stated 23 that his “sole and exclusive intention was to influence the outcome of Mrs. Clinton’s U.S. Senate MJJR 5225 4 Factual and Legal Analysis New York Senate 2000 and Andrew Grossman, as treasurer 1 campaign, not any other election campaign.” Id. The complaint further alleged, “The President 2 and Mrs. Clinton knew this to be the case because Mr.