FEC fines Suffolk Construction
Gift to pro-Clinton super PAC improper
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.
‘FUNDS WERE ... RETURNED’: CEO John Fish’s firm, Suffolk Construction, is in hot water due to donations made to a Hillary Clinton super PAC.