The opinion of the court was delivered by: THOMAS F. HOGAN
This is an action brought by the Federal Election Commission ("Commission" or "FEC") under 2 U.S.C. § 437g(a)(5)(D) to enforce two conciliation agreements entered into by the defendants with the Commission in settlement of violations of the Federal Election Campaign Act of 1971, as amended (the "Campaign Act" or "Act"). The Commission filed a motion for summary judgment on July 26, 1993. After carefully considering this motion, the defendants' opposition, the reply, and the entire record in this matter, the Court will grant the Commission's motion for summary judgment.
There is no genuine dispute regarding the material facts of this case. They are as set forth below.
A. Prelude to Conciliation Agreements
In October 1990, the Commission received a complaint alleging that Throw the Rascals Out ("TRO") and Committee of 100 Democrats ("100 Democrats") had violated various provisions of the Campaign Act. FEC Exh. 1. The Commission notified TRO and its treasurer at the time, Dennis O. Wedra, Jr., and 100 Democrats and its treasurer, Dominick A. Fusco, of its receipt of the complaint. FEC Exh. 2. TRO is the principal campaign committee of Dominick A. Fusco, a candidate for the United States House of Representatives in New York's 19th Congressional District. See 2 U.S.C. § 431(5). TRO has been renamed as the Committee to Elect Fusco to Congress, and Mr. Fusco is its treasurer. FEC Exh. 3. 100 Democrats is a political committee within the meaning of 2 U.S.C. § 431(4).
The Commission, pursuant to 2 U.S.C. § 437g(a)(2), found reason to believe that TRO and Mr. Wedra, as its treasurer, violated 2 U.S.C. §§ 441d(a), 434(b) and 441a(f), and that 100 Democrats and Mr. Fusco, as its treasurer, violated 2 U.S.C. §§ 433(a), 434(a), and 441a(a). FEC Exh. 4 & 8. Those political committees and their treasurers were notified of the Commission's finding (FEC Exh. 5) and they requested pre-probable cause conciliation of the alleged violations, FEC Exh. 6 & 7, pursuant to 2 U.S.C. § 347g(a)(4)(A)(i) and 11 C.F.R. § 111.18(d). The Commission granted their requests. FEC Exh. 9.
On January 22, 1992, Mr. Wedra resigned as treasurer of TRO. FEC Exh. 10. On January 29, 1992, the FEC received a letter from Mr. Fusco stating that he "has taken control of the books and records of [TRO] and has prepared the enclosed report and will continue to do so until all committee obligations have been satisfied." FEC Exh. 11.
On December 19, 1991, Mr. Fusco executed an agreement with the Commission on behalf of 100 Democrats and himself to conciliate those violations of the Act with which they had been charged. FEC Exh. 12 ("100 Democrats Agreement"). Both 100 Democrats and Mr. Fusco, as its treasurer, are designated as "Respondents" in the agreement. The agreement, in pertinent part, states that "Respondents will file a statement of organization with the Commission pursuant to 2 U.S.C. § 433(a) and, thereafter, shall file scheduled reports disclosing all contributions received and disbursements made pursuant to 2 U.S.C. § 433(b)." Id. at P VI(2). The agreement further provides that it is to become effective as of the date that all parties have executed it and the Commission has approved it. Id. at P VII. Finally, it gave 100 Democrats and Mr. Fusco thirty days from the effective date to comply with its requirements. Id. at P IX.
On April 1, 1991, Mr. Fusco executed a conciliation agreement with the Commission on behalf of TRO to conciliate those violations of the Act with which that organization and its treasurers had been charged. FEC Exh. 13 ("TRO Agreement").
The agreement names both TRO "and its treasurer" as "Respondents." It also specifically states that "Dominick A. Fusco is the treasurer of Throw the Rascals Out. Previously, until January 22, 1992, Dennis G. Wedra, Jr., was the treasurer of Throw the Rascals Out."
Id. at P IV(2). The agreement provides, in pertinent part, that "Respondents will pay a civil penalty to the Federal Election Commission in the amount of three thousand and five hundred dollars ($ 3,500.00), pursuant to 2 U.S.C. § 437g(a)(5)(A). . . ." Id. at P VI. The payments were to be made in ten consecutive monthly payments of $ 350.00 beginning thirty days from the effective date of the agreement. Id. The Commission, however, reserved the right to accelerate any remaining payments and cause the entire balance to become due upon ten days written notice to the Respondents should the Commission not receive timely payment of any installment. Id. The agreement further provides that it is to become effective as of the date that all parties have executed it and the Commission has approved it. Id. at P VIII.
On April 21, 1992, the Commission approved the two conciliation agreements. FEC Exh. 16. They were executed by counsel for the Commission on May 4, 1992. FEC Exh. 12 & 13.
C. Breach of the Agreements
The material facts surrounding the breach of the agreements are not a matter of genuine dispute. Neither 100 Democrats nor Mr. Fusco filed a Statement of Organization with the Commission until December 21, 1992. FEC Exh. 15. Moreover, the Commission claims, those defendants have failed to this date to file any scheduled reports disclosing contributions received and disbursements made pursuant to 2 U.S.C. § 433(b). FEC Memorandum in Support of Motion for Summary Judgment ("FEC Mem.") at 8; Reply at 1; FEC Exh. 24. Mr. Fusco, in his Answer to the Commission's complaint, ("Answer") denies that 100 Democrats failed to file scheduled reports disclosing contributions received and disbursements made pursuant to 2 U.S.C. § 433(b). Answer at 2. Additionally, he claims, in his Opposition to the Commission's Motion for Summary Judgment ("Opposition") (at 4) and a document filed with this Court styled "Supplemental Affirmation in Opposition to Motion," ("Supplement") (at 1) that 100 Democrats filed a report with the Commission showing no federal campaign activity by the committee. The Commission, in support of its claim, submitted the July 22, 1993 sworn declaration of Kent C. Cooper, the Commission's Assistant Staff Director of its Public Disclosure Division. Mr. Cooper states that he has searched for and discovered no reports of receipts and disbursements by Committee of 100 Democrats. FEC Exh. 24. Mr. Fusco and 100 Democrats, have submitted no evidence whatsoever in support of their claim.
Pursuant to the TRO Agreement, the initial payment of $ 350.00 was due to the Commission on June 1, 1992. FEC Mem. at 8, n.3. The penalty was not paid as scheduled, and on July 15, 1992, the Commission notified defendants TRO and Mr. Fusco that it determined to accelerate the remaining payments of the civil penalty. FEC Exh. 23. It is undisputed that as of this date the civil penalty of $ 3500.00 has not been paid. FEC Mem. at 8.
The primary legal defense raised in this litigation has been that Mr. Fusco signed the agreements in a "representative capacity," Answer P 7, and that therefore, he is not personally liable for carrying out the committees' obligations to file reports or for paying TRO's $ 3,500.00 civil penalty. Mr. Fusco claims, as a factual matter, that he is not responsible for the unlawful campaign contribution underlying the TRO Agreement. Moreover, he claims that the Commission "arbitrarily" designated him treasurer of TRO without his consent after Mr. Wedra's resignation. Opposition to Motion for Summary Judgment ("Opposition") at 2-3. As a consequence, he argues that he should have no personal liability for TRO's failure to pay the civil penalty.
Defendants also claim that 100 Democrats failed to file the agreed upon scheduled reports due to an error in its Statement of Organization which it purports either to have resolved or be in the process of resolving. See Opposition at 4; Supplement at 1. Consequently, defendants argue that their late filing is not a willful attempt to ignore the law. Finally, they argue that in any event, the 100 Democrats financial reports are on file with the New York State Board of Elections for public perusal, and that "the Committee spent no money for federal [campaigns], and the F.E.C. is using a sledgehammer to squash a speck." Opposition at 5.
The Commission's response to these arguments is basically twofold. First, it points out that assertions regarding the merits of the underlying violations resolved by the conciliation agreements are irrelevant to this proceeding. The only purpose of this litigation is to enforce the agreements. Under the Campaign Act, for the Commission to obtain relief in this case, it need only establish that those who entered into the agreement violated it. 2 U.S.C. § 437g(a)(5)(D). Consequently, the Commission argues, the Court cannot now review the merits of defendants' arguments that they are not responsible for the underlying violations of the Act. FEC Mem. at 13; Reply at 2.
Second, because there is no dispute over the validity of the agreements, or that the defendants have not complied with them, the only cognizable legal defense that has been put forth is that Mr. Fusco is not personally liable for complying with them. FEC Mem. at 9. The Commission argues that this defense must fail as a matter of law. As a party and signatory to the agreements, Mr. Fusco is personally responsible for the defendant committees' compliance with them. Id. at 9-10. The Commission further argues that under the regulatory scheme established by the Campaign Act, Mr. Fusco, as treasurer of the defendant committees, is in the unique position of being the only individual in either organization who can fulfill their obligations to file their required reports and is in the unique position of being able to seek funds and expend them in order to pay ...