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FEDERAL ELECTION COM'N v. GUS SAVAGE FOR CONGRESS

April 12, 1985

FEDERAL ELECTION COMMISSION, PLAINTIFF,
v.
GUS SAVAGE FOR CONGRESS '82 COMMITTEE AND THOMAS J. SAVAGE, TREASURER, DEFENDANTS.



The opinion of the court was delivered by: Leighton, District Judge.

MEMORANDUM

This is a Rule on defendants Gus Savage for Congress '82 Committee ("Committee") and Thomas J. Savage, as Treasurer, to show cause why they should not be held in civil and criminal contempt for violating an order of this court. On June 8, 1984, a default judgment was entered against defendants, directing them to file all outstanding reports required by the Federal Election Campaign Act of 1971, as amended, 2 U.S.C. § 431 et seq. (the "Act"), and to pay a civil penalty of $5,000. When defendants failed to comply with the order, plaintiff Federal Election Commission ("FEC") moved for the Rule; it relied on the enforcement section of the Act, which provides in pertinent part:

    If the Commission determines after an
  investigation that any person*fn1 has violated
  an order of the court . . . it may petition the
  court for an order to hold such person in civil
  contempt, but if it believes the violation to be
  knowing and willful it may petition the court for
  an order to hold such person in criminal
  contempt.

2 U.S.C. § 437g(a)(11).

The Rule was issued on September 12, 1984; defendants were not present, but on September 21, they appeared and responded. Plaintiff was directed to file a traverse to defendants' response, focusing on legal and factual issues before the court. Both parties were allowed to submit legal memoranda addressing issues thus presented, including whether the sanction of contempt should be imposed.

An additional hearing was held on October 19, 1984. Mr. Savage informed the court that defendants were in full compliance with the default judgment order; thus, under the circumstances, they believed further sanctions were unnecessary. The FEC did not dispute this but argued that the delay in compliance had caused substantial harm and warranted a finding of contempt. The court was told that there was no decided case under the contempt provisions of the Act, and that this was the first time the FEC had sought such a sanction for recordkeeping violations of the federal election laws.

Evidence has been presented, arguments having been made, oral and written presentations have been submitted to the court; the only issue to be resolved is whether defendants' conduct merits a finding of contempt in this case. That issue arises out of the following facts.

I

U.S. Rep. Gus Savage (D., Chicago) is a member of the United States House of Representatives from the Second Congressional District in Illinois.*fn2 In 1982, after becoming a candidate for that office, he designated a political committee to serve as his principal campaign committee, the Gus Savage for Congress '82 Committee, as required by the Act, 2 U.S.C. § 432(e)(1). The Act also requires that every political committee shall have a treasurer. 2 U.S.C. § 432(a). Political committees and treasurers are liable for reporting requirements under the Act. 2 U.S.C. § 434. Gus Savage's son, Thomas J. Savage, was asked to serve as treasurer of his father's committee. Thomas J. Savage is neither lawyer nor accountant. By his own account, he had little' familiarity with the pertinent accounting principles and practices, or with the complex reporting provisions of the Act; he had no legal expertise, and had a poor understanding of what his obligations as treasurer of a major political campaign committee would entail. Nonetheless, he consented to act in that capacity for his father.

After the 1982 election, it came to the attention of the FEC that certain irregularities existed with regard to the Committee's and treasurer Savage's responsibilities under the Act.*fn3 The agency therefore began an investigation of the matter. Under provisions of the statute, the FEC must follow certain steps when it instigates an investigative procedure. These include:

    1. a determination that it has reason to
  believe a violation has occurred or is about to
  occur, and the provision of notice and an
  opportunity to comment to the respondent,
  2 U.S.C. § 437g(a)(2);
    2. an investigation of the allegations by the
  FEC, id.;
    3. a determination that there is probable cause
  to believe that a violation has occurred or is
  about to occur after receiving a brief from the
  general counsel and a response from the alleged
  violator, 2 U.S.C. § 437g(a)(3); and
    4. an attempt for at least 30 days to correct
  or prevent the alleged violations by informal
  means of conference, conciliation, and
  ...

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