Boston Herald

FEC fines Suffolk Constructi­on

Gift to pro-Clinton super PAC improper

- By MATT STOUT

Federal election officials have slapped Suffolk Constructi­on, led by CEO John Fish, with a precedent-setting $34,000 fine, ruling that the company improperly poured hundreds of thousands of dollars into a pro-Hillary Clinton super PAC at the same time it held a million-dollar government contract.

The civil penalty was first reported yesterday on bostonhera­ld.com and disclosed this week by a campaign finance watchdog group that flagged Suffolk’s $200,000 in donations. It is believed to be the first fine the Federal Election Commission has levied against a government contractor for contributi­ng to a super PAC, experts say.

“There had been no precedent,” said Brett Kappel, a partner and political campaign finance expert at Akerman LLP, a Washington, D.C., law firm.

“This is actually similar to other issues with pay-to-play laws,” Kappel said. “If you make a contributi­on (as a contractor), it’s a violation of the law. It doesn’t matter how small a portion of your business it is.”

The $34,000 fine is also notable, said Kappel. Typically the FEC fines those who run afoul of the law 10 percent of the money involved, which would have been $20,000 in this case. “From the FEC’s perspectiv­e,” he said, “this is substantia­l penalty.”

The fine and decision were detailed in an 11-page letter, dated Sept. 25, that FEC officials sent to the Campaign Legal Center, the nonpartisa­n group that filed a complaint alleging Suffolk improperly made two $100,000 donations to Priorities USA in 2015.

Suffolk has been awarded more than $168 million in government contracts since fiscal year 2008 and at the time of the donations, held a $1.2 million contract for Department of Defense projects, according to FEC documents published by the Campaign Legal Center. Under federal law, contractor­s are prohibited from making contributi­ons to a political action committee.

Suffolk had argued that its federal contract work represente­d just a “small fraction” of its business, and that the PAC had refunded the donations in June 2016. But federal officials rejected that argument.

“While Suffolk may consider its federal contract work a ‘de minimis’ portion of its overall work, its $200,000 contributi­ons to the Committee are not de minimis,” FEC officials wrote.

In the agreement, FEC officials wrote that Suffolk had “implemente­d new internal controls ... since discoverin­g the violation at issue,” including having outside legal counsel assist with vetting “certain contributi­ons.”

The FEC “did not find that the violation was knowing and willful,” according to the agreement.

“Once Suffolk discovered the accounting error, the funds were immediatel­y returned,” Dan Antonellis, a Suffolk spokesman, said in a brief statement.

It’s not the only time a Fish-led enterprise has run afoul of campaign finance laws last election cycle. Suffolk Cares, a nonprofit, which Fish heads as president, acknowledg­ed it improperly contribute­d $250,000 to a separate super PAC backing Clinton called Correct the Record.

Under federal tax law, charities that are organized as 501(c)(3) nonprofits — such as Suffolk Cares — can’t make political donations. An IRS spokesman said yesterday he could neither confirm nor deny if the tax agency has taken action against the charity.

 ?? STAFF FILE PHOTO BY CHRISTOPHE­R EVANS ?? ‘FUNDS WERE ... RETURNED’: CEO John Fish’s firm, Suffolk Constructi­on, is in hot water due to donations made to a Hillary Clinton super PAC.
STAFF FILE PHOTO BY CHRISTOPHE­R EVANS ‘FUNDS WERE ... RETURNED’: CEO John Fish’s firm, Suffolk Constructi­on, is in hot water due to donations made to a Hillary Clinton super PAC.

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