Monday, May 3, 2010

Federal Election Commission investigating Lee McGroarty Campaign

The campaign of 42nd Congressional candidate Lee McGroarty has posted a comment on his web site that states his campaign is being investigated by the Federal Election Commission (FEC) for possible violations of the Federal election laws. He also posted the official complaint and the campaign's response to it. He admitted being "unaware" of one of the laws he is accused of violating.

The McGroarty campaign states, "McGroarty and has campaign have cooperated fully with the FEC investigation." Yes, it actually said "has campaign" instead of "his" campaign.

McGroarty has filed amended FEC filings as a result of the investigation. We reported several weeks ago about McGroarty filing an amended return and that it was odd he would change a donation from one person to a donation from two people.

According to the FEC any one can file a complaint that would lead to an FEC investigation.

According to the complaint it appears that the McGroarty campaign is being investigated for several possible violations. The allegations are;

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  • McGroarty's campaign shared office space with McGroarty's three corporations.

Monetary and in-kind (non-monetary) contributions to federal campaigns from corporations are illegal. The complaint claims the McGroarty campaign was not paying rent for the office space so the corporation was donating the space. It also states that the McGroarty campaign's fax line was the same as his corporations. That would also be an in-kind contribution from a corporation.

  • McGroarty's campaign website domain,, was paid for by one of McGroarty's corporations.

The complaint includes an attachment from that shows Retire America Corporation as the registrant. It also shows Retire America Corporation as the Administrative and Technical Contact.

  • McGroarty improperly spent a donation designated for the general election.

The campaign donation limit is $2400 per election. The McGroarty campaign listed a donation from one individual as $2400 for the primary and $2400 for the general. According to the complaint, at the end of 2009 the campaign had less than $2400 cash on hand, which means they spent money they could not spend until the primary was finished. If McGroarty loses the primary he would have to return the $2400.

McGroarty, in his response stated that since he and his family own the office building he was "unaware I or my campaign was required to pay the corporation for use of space in our own building." He has since paid rent and included a copy of the check and lease.

Regarding the web site domain McGroarty claims it is "untrue." He says the domain name has been "separated" from the corporation.

McGroarty claims the donation for both elections "was an unknown mistake." He claims that since the check, which lists both a husband and wife, was only signed by the husband, it was coded by campaign treasurer Adam Hoover as a primary and general election donation. The campaign has since amended their returns to list it as a donation for $2400 from the husband and $2400 from the wife for the primary.

McGroarty seems to downplay the investigation, even referring to the "minor nature of the complaint." But this could be really serious. If found guilty of violations his campaign would face possible fines and the negative press that would surely follow. McGroarty might just be putting on a front because on Thursday night McGroarty wrote on his Twitter page, "There's a storm coming..."

McGroarty is challenging Rep. Gary Miller, Phil Liberatore and David Su for the Republican nomination in the 42nd Congressional district.

Legal Note: The fact that there is an FEC investigation is legally to be kept secret until the investigation is completed unless the person filing the complaint, or the person the complaint is against, make it public. The McGroarty campaign posted the complaint, their response to it, and a statement about the investigation, on their campaign website. So according to the FEC site, they waived their right to keep the "substance," or "information contained in the complaint" private.

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