Freddie Mac Agrees to Pay $3.8 Million Civil Penalty for FEC Violations, Largest in FEC History

WASHINGTON – Freddie Mac has agreed in a Conciliation Agreement to pay a $3.8 million civil penalty to the Federal Election Commission to settle allegations that it violated the Federal Election Campaign Act and FEC regulations that prohibit corporations from making or facilitating contributions. According to the FEC, it is the largest civil penalty ever obtained by the commission in a civil enforcement action. As a federally chartered corporation, Freddie Mac is prohibited from making contributions in connection to political office. FEC regulations prohibit a corporation from facilitating or acting as a conduit for contributions. The FEC asserted that “between 2000 and 2003, Freddie Mac used corporate resources to facilitate 85 fundraising events that raised approximately $1.7 million for federal candidates.” Freddie Mac documents, said the FEC, described the fundraisers as “Political Risk Management.” In addition to conducting fundraising events, the FEC said Freddie Mac executives used corporate staff and resources to solicit and forward contributions from company employees to Federal candidates. It also found that in 2002 Freddie Mac contributed $150,000 to the Republican Governors Association; RGA later returned the contribution. According to the FEC, “Freddie Mac does not contest, but does not concede, that it violated the Act by using corporate resources to produce campaign fundraising events or collect and transmit contributions from corporate executives to federal candidates. However, Freddie Mac admits it violated the Act by contributing $150,000 to the RGA in October 2002, a contribution that Freddie Mac contends was intended for the party building fund.” Based on Freddie Mac’s payment of the civil penalty and agreement to cease and desist from violating the law, the FEC has decided to send admonishment letters and take no further action concerning former Freddie Mac Chairman and CEO Leland Brandsel; former Vice President Clark Camper, former Senior Vice President of Government Relations R. Mitchell Delk or consulting firms hired by Freddie Mac. FEC Vice Chairman Robert Lenhard said, “The outcome in this matter once again shows the FEC’s commitment to vigorous enforcement of campaign finance law. It sends a clear signal that prohibitions on the use of corporate or union resources to make or facilitate contributions to federal candidates are not just technicalities and that violations have real consequences. It also reminds federally chartered corporations that they have additional obligations under campaign finance law and they must be mindful of those restrictions.” -