Complaint filed against Ferguson
Group accuses congressman of role in money-laundering scheme.
By KATHERINE BLOK, The Express-Times, June 18, 2004
A complaint filed with the Federal Election Commission alleges that U.S. Rep. Mike Ferguson was involved in a money-laundering scheme with a contributor from Ohio, a candidate in Kentucky and six political action committees.
The complaint, brought in April by the nonprofit group Public Citizen, alleges that MIKE PAC, the political action committee established by Ferguson, R-Hunterdon, and five other conservative Republican PACs accepted campaign donations from Cincinnati businessman Quentin Nesbitt. The groups then funneled the money to the campaign of Kentucky Republican Geoffrey Davis, the complaint charges.
According to FEC reports, Ferguson's PAC accepted the $1,000 donation from Nesbitt on Sept. 23, 2003, but did not make a contribution to Davis' campaign. Ferguson's PAC is involved in the complaint because it shares a treasurer and post office box number with three of the other PACs that did make contributions to Davis, said Craig Holman of Public Citizen.
"This is highly suspicious activity of receiving and sending out campaign money," Holman said. "It is quite clearly laundering of campaign money."
Davis won a three-way GOP primary in May and will face Democrat Nick Clooney, the television personality and father of actor George Clooney, in November. Davis lost the fourth district seat to Democrat Ken Lucas in 2002.
Ferguson's chief of staff, Chris Jones, denied the charges leveled by Public Citizen.
"It's half-baked baloney from a partisan liberal activist group and it's completely ridiculous," Jones said. "We responded to the FEC and we're looking forward to complete and total vindication. We're totally confident the FEC will recognize this for what it is, which is completely partisan."
The original red flag arose after Nesbitt made a contribution to Family First, an Ohio PAC, on March 31, 2003, said Holman, Public Citizen's campaign finance lobbyist. Family First neither received nor made any other financial contributions in 2003 other than the receipt of Nesbitt's $5,000 check and the disbursement of the same amount to Davis, Holman said.
Holman said Nesbitt could only contribute more money to Davis indirectly because he already donated the maximum amount -- $2,000 -- for both the 2003-04 primary and general election campaign cycles.
Like Family First, donations equal to the amount of Nesbitt's contributions were made from the other PACs to Davis' campaign within nine days of Nesbitt's donation.
The exception is Ferguson's PAC, which has kept the money. "It just doesn't pass the smell test," Holman said. "If he actually wanted to absolve himself of further indications that he was in fact involved in this, it would seem the ethical course of action would be to return the money. He's declining to even do that. Even if he gave it back, that doesn't absolve him if there's evidence he did want to be involved. The mere fact that he's not even going to send the questionable thousand dollars back, it looks bad."
Jones said returning the money to Nesbitt is not an option.
The Public Citizen complaint, though made in April, was widely publicized this week by the Democratic Congressional Campaign Committee to news outlets in New Jersey and Washington, D.C., because it is the one-year anniversary of the closing of another FEC case involving Ferguson.
Last June, Ferguson agreed to pay a $210,000 FEC fine for using money from his trust fund in his 2000 campaign for Congress. Ferguson's personal loan of $525,000 from a trust fund set up by his parents was ruled an illegal campaign contributions from his parents. At the time, federal election law capped individual campaign contributions at $1,000 per candidate per cycle. The McCain-Feingold campaign finance reform law has since doubled that amount.
The fine levied against Ferguson is among the largest decisions ever rendered against a congressional campaign.
"The anniversary is a good time to look at what is an unresolved question, and that is, does Mike Ferguson have possession of laundered money in his PAC," said Greg Speed, spokesman for the Democratic Congressional Campaign Committee. "Given his track record, he's lost the benefit of the doubt here, so we're raising this question."
If Ferguson keeps the $1,000 from Nesbitt, it will become a "black eye" in the fall campaign, Speed said.
The Democratic Congressional Campaign Committee is backing the campaign of first-time candidate Steve Brozak, a former Marine and businessman from Westfield. Brozak said Ferguson has a "win-at-any-cost mentality" that distracts from a debate of the issues.
FEC spokesman Ian Stirton said complaints made to the agency are confidential until they are closed or rejected by the bipartisan commission. After a complaint is determined valid by the agency's attorneys, the defendants are given an opportunity to respond. A formal investigation could follow, he said.
Holman said the FEC is charged with producing evidence that shows "who knew what and when they knew it." Though Stirton would not confirm that a formal investigation was under way, Holman said he is certain the case is being investigated. He predicted a decision in four to five months, right around the time of the November election.
Reporter Katherine Blok can be reached at 908-475-8044 or by e-mail at
kblok@express-times.com.
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