Politics, Professional Responsibility & Prison

Transcription

1 Politics, Professional Responsibility & Prison How Lawyers Can Counsel Their Corporate Clients To Influence Government Officials And Participate Safely In The Political Process Jonathan W. Hugg Ted Planzos James E. Tyrrell, III Philadelphia, October 22, 2015 The Legal Intelligencer

2 CORPORATIONS HAVE RIGHTS A corporation is a person protected by the Equal Protection and Due Process Clauses of the Fourteenth Amendment (which incorporates the Bill of Rights) Santa Clara County v. Southern Pacific R. Co., 118 U.S. 394 (1886); Smyth v. Ames, 169 U.S. 466 (1898); Minneapolis & St. Louis R.R. Co. v. Beckwith, 129 U.S. 26 (1889)

3 SOME CONSTITUTIONAL RIGHTS OF CORPORATIONS Fourth Amendment protection against unreasonable search and seizure (However, not the Fifth Amendment privilege against self-incrimination) Fifth Amendment protection against the government taking property without just compensation Fifth Amendment protection against double jeopardy Standing to sue for civil rights violations Standing to challenge state and local regulations that violate the Commerce Clause Protection by the Contracts Clause

4 CORPORATIONS HAVE FIRST AMENDMENT RIGHTS First Amendment protection extends to corporations First Nat'l Bank of Boston v. Bellotti, 435 U.S. 765 (1978) First Amendment protects political speech by corporations NAACP v. Button, 371 U.S. 415 (1963) and Grosjean v. American Press Co., 297 U.S. 233 (1936)

5 CITIZENS UNITED v. FEC, 130 S.CT. 876 (2010) Corporations (and unions) have the same free speech rights as individuals No sufficient governmental interest justified limits on the political speech of non-profit or for-profit corporations. Unconstitutional to restrict independent expenditures However, disclaimer and disclosure requirements are constitutional

6 CONFLICTS BETWEEN ETHICS, LAW, AND POLITICS? Lawyers Have a Professional Obligation to Be Truthful and Fair Public figures suing for defamation must prove actual malice New York Times Co. v. Sullivan, 376 U.S. 254 (1964) Problems of Politics: Dishonesty, Inconsistency, Money

7 RULE OF PROFESSIONAL CONDUCT 4.1 Rule 4.1. Truthfulness in Statements to Others. In the course of representing a client a lawyer shall not knowingly: (a) make a false statement of material fact or law to a third person; Comment: Misrepresentation (1)Alawyer is required to be truthful when dealing with others on a client s behalf, but generally has no affirmative duty to inform an opposing party of relevant facts. A misrepresentation can occur if the lawyer incorporates or affirms a statement of another person that the lawyer knows is false. Misrepresentations can also occur by partially true but misleading statements or omissions that are the equivalent of affirmative false statements. For dishonest conduct that does not amount to a false statement or for misrepresentations by a lawyer other than in the course of representing a client, see Rule 8.4. Statements of Fact (2) This Rule refers to statements of fact. Whether a particular statement should be regarded as one of fact can depend on the circumstances...

8 RULE OF PROFESSIONAL CONDUCT 4.3 Rule 4.3. Dealing with Unrepresented Person. (a) In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. (b) During the course of a lawyer s representation of a client, a lawyer shall not give advice to a person who is not represented by a lawyer, other than the advice to secure counsel, if the lawyer knows or reasonably should know the interests of such person are or have a reasonable possibility of being in conflict with the interests of the lawyer s client. (c) When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer s role in the matter, the lawyer should make reasonable efforts to correct the misunderstanding.

9 RULE OF PROFESSIONAL CONDUCT 4.4 Rule 4.4. Respect for Rights of Third Persons. (a) In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person. Comment: (1) Responsibility to a client requires a lawyer to subordinate the interests of others to those of the client, but that responsibility does not imply that a lawyer may disregard the rights of third persons. It is impractical to catalogue all such rights, but they include legal restrictions on methods of obtaining evidence from third persons. and unwarranted intrusions into privileged relationships, such as the client-lawyer relationship.

10 RULE OF PROFESSIONAL CONDUCT 8.4 Rule 8.4. Misconduct. It is professional misconduct for a lawyer to:... (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation; (d) engage in conduct that is prejudicial to the administration of justice; (e) state or imply an ability to influence improperly a government agency or official or to achieve results by means that violate the Rules of Professional Conduct or other law; or (f) knowingly assist a judge or judicial officer in conduct that is a violation of applicable rules of judicial conduct or other law.

11 LAWYERS MAY BE DISCIPLINED FOR NON-LEGAL ACTIVITIES, INCLUDING POLITICS ABA Formal Opinion 336 (1974): A lawyer, whether acting in his professional capacity or otherwise, is bound by applicable disciplinary rules of the Code of Professional Responsibility...lawyers are subject to discipline for improper conduct in connection with business activities, individual or personal activities, and activities as a judicial, governmental or public official. State v. Russell, 610 P.2d 1122 (Kan. 1980) (citing Chernoff s Case, 26 A.2d 335 (Pa. 1942): An attorney may be disciplined for criticism in the heat of a political contest if such criticism is carried beyond the limits of truth and fairness In re Nixon, 385 N.Y.S.2d 305 (N.Y. App. Div. 1st Dep t 1976): We note that while Mr. Nixon was holding public office he was not acting in his capacity as an attorney. However, the power of the court to discipline an attorney extends to misconduct other than professional malfeasance when such conduct reflects adversely upon the legal profession and is not in accordance with the high standards imposed upon members of the Bar.

12 CORPORATE POLITICAL ACTIVITIES

13 Pay to Play Corporate PACs Ethics and Gift Rules

14 Pay-to-Play Definition PAY-TO-PLAY LAWS Practice of an individual or business entity making campaign contributions to a public official with the hope of gaining a lucrative government contract Usually does not take the form of outright bribery, more often involves an individual or business entity buying access for consideration Pay-to-Play Laws In general, restrict individuals and entities with current or potential future government contracts from making certain types of political contributions

15 STATE PAY TO PLAY LAWS Pennsylvania Reporting Statute Municipal Pension Statute New Jersey

16 PA REPORTING STATUTE - OVERVIEW State contractors awarded non-bid contracts must report all political contributions made by its officers, directors, associates, partners, limited partners, owners, employees, or members of their immediate family that individually or in the aggregate exceed $1,000 during the preceding year. The Secretary of the Commonwealth will publish the itemized list of contributions and the list shall be public record.

17 PA REPORTING STATUTE WHO IS COVERED? Recipients all recipients of political contributions are covered for the disclosure requirement. Contributors any officer, director, associate, partner, limited partner, individual owner or his spouse and any unemancipated child; any employee and his spouse and any unemancipated child.

18 PA REPORTING STATUTE PENALTIES The Attorney General shall have prosecutorial jurisdiction. Violators shall be guilty of a misdemeanor, and upon conviction, shall be sentenced to pay a fine not exceeding one thousand ($1,000) dollars, or to undergo an imprisonment of not more than one (1) year, or both, in the discretion of the court.

19 PA REPORTING STATUTE DOES IT APPLY TO PACS? The business entity is required to report all political contributions, but contributions from affiliated PACs fall outside the language of the statute.

20 PA MUNICIPAL PENSION STATUTE - OVERVIEW Persons or affiliated entities may not enter into a contract for professional services with a municipal pension system if that person or an affiliated entity has made a contribution within the last two years to a municipal official or candidate for an office that controls the municipal pension system. Service contracts with a municipal pension system also require disclosure of all contributions over the last 5 years to any candidate or committee in the state that amounts in the aggregate to at least $500.

21 PA MUNICIPAL PENSION STATUTE WHO IS COVERED? Recipients Municipal officials and candidates for office who control the municipal pension system. Contributors Successful or prospective municipal pension system service contractors, and any affiliated entity, which means any subsidiary or holding company of a lobbying firm or other business entity owned in whole or in part by a lobbying firm; a 501(c) organization established by a lobbyist or lobbying firm or an affiliated entity are also covered.

22 PA MUNICIPAL PENSION STATUTE - PENALTIES If the disclosure requirement is violated, the municipal pension system shall void the professional services contract and prohibit future contracts for up to three years. If the disclosure requirement is violated two times within 36 months, all contracts between the violator and the municipal pension plan shall be void, and future contracts shall be prohibited for at least three years.

23 PA MUNICIPAL PENSION STATUTE DOES IT APPLY TO PACS? It applies to affiliated 501(c) organizations, as well as 501(c) organizations affiliated with lobbying firms, but the language of the statute does not cover other types of advocacy organizations.

24 NEW JERSEY PAY TO PLAY LAW - OVERVIEW Any current or prospective non-bid contractor for a legislative contract with an actual or expected value of $17,500 is prohibited from making a reportable contribution during the term of any current contract or in the year before any prospective contract to any party committee at the level of government at which the contract resides (State, county, municipal); any leadership committee or a presiding officer s committee for state agency contracts that require a presiding officer s approval Any current or prospective contractor for a state contract with an actual or expected value of $17,500 is prohibited from making a reportable contribution to the Governor, Lt. Governor, or a state or county political party if the contract is with the state for services or land.

25 NJ PAY TO PLAY LAW WHO IS COVERED? Recipients for legislative contracts - political party committees, legislative leadership committees, presiding officer committees, county committees, candidate committees of office holders, municipal committees of a political party, candidate committees of office holders. Recipients for state contracts - any candidate or holder of the public office of Governor or of Lieutenant Governor, or any State or county political party committee.

26 NJ PAY TO PLAY LAW WHO IS COVERED? Contributors any natural or legal person, business corporation, professional services corporation, LLC, partnership, limited partnership, business trust, association or any other commercial entity; all principals who own or control more than 10 percent of the profits or assets or 10 percent of the stock; any subsidiaries, any political organizations organized under section 527 directly or indirectly controlled by the business entity; if the business entity is a natural person, that person s spouse or child is included.

27 NJ PAY TO PLAY LAW REMEDIES FOR VIOLATION: LEGISLATIVE CONTRACTS If a business entity makes a contribution that would cause it to be ineligible to receive a public contract or, in the case of a contribution made during the term of a public contract, that would constitute a violation of this act, the business entity may request, in writing, within 60 days of the date on which the contribution was made, that the recipient thereof repay the contribution and, if repayment is received within those 60 days, the business entity would again be eligible to receive a contract or would no longer be in violation, as appropriate.

28 NJ PAY TO PLAY LAW REMEDIES FOR VIOLATION: STATE CONTRACTS If a business entity inadvertently makes a contribution that would otherwise bar it from receiving a contract or makes a contribution during the term of a contract in violation of this act, the entity may request a full reimbursement from the recipient and, if such reimbursement is received within 30 days after the date on which the contribution was made, the business entity would again be eligible to receive a contract or would no longer be in violation, as appropriate. It shall be presumed that contributions made within 60 days of a gubernatorial primary or general election were not made inadvertently

29 NJ PAY TO PLAY LAW - PENALTIES Violations can result in a penalty up to the value of the awarded contract or disqualification from state contracting for up to 5 years. Purposeful concealment or misrepresentation of contributions is a fourth degree crime.

30 NJ PAY TO PLAY LAW FURTHER REQUIREMENTS Business are required to provide a written certification that it has not made a contribution that would bar the award of the contract. and they are also required to report all contributions made during the preceding four years to any 527 organization that meets the definition of a continuing political committee.

31 NJ PAY TO PLAY LAW DOES IT APPLY TO PACS? Affiliated PACs fall within the aggregate limit for the business entity.

32 ENFORCEMENT EXAMPLES Ford-Scott and Associates: forced to forfeit an $88,000 auditing contract with Atlantic County because the firm made a $4,600 contribution to the Sheriff. Ford-Scott was barred by a Judge from obtaining future contracts for four years. Earle Asphalt: made an impermissible party contribution, later hired counsel and at the advice of counsel requested the money be returned. The money was returned outside of the 30 day window and therefore the company failed to fully comply with the provision for inadvertent prohibited contributions. The company was disqualified from a $6 million paving contract. Birdsall Services: bundled contributions that individually fell under the reporting requirement. The total contribution amount was over $500,000. The firm agreed to a plea deal which required a $1 million criminal fine, $2.6 million in civil penalties, and the executives were forced to forfeit $3.95 million in insurance proceeds.

33 MSRB Rule G-37 FEDERAL PAY TO PLAY LAWS SEC Rule 206(4)(5)

34 FEDERAL PAY TO PLAY LAWS MSRB RULE G-37 MSRB Rule G-37 Prohibits brokers, dealers, municipal securities dealers, and their PACs from engaging in municipal securities business with government issuers within two years after they contribute more than a de minimis amount to an official employed by the issuer

35 SEC Rule 206(4)(5) FEDERAL PAY TO PLAY LAWS SEC RULE 206(4)(5) Prohibits investment advisors and their PACs from providing advisory services for compensation for two years if they make political contribution to official who is in position to influence selection of the advisor Prohibits advisors from paying third parties to solicit government clients on their behalf unless third party is a SEC-registered investment advisor subject to P2P restrictions Covers pension plans, 529 plans Strict liability Penalty is two-year ban on receiving payment for advisory services

36 CORPORATE POLITICAL COMPLIANCE BEST PRACTICES Institute pre-clearance procedures for contributions by covered contributors. Create a system to determine who should be subject to pre-clearance procedures. Educate covered contributors on compliance with the determined procedures. Regularly confirm that covered contributors have complied with pre-clearance procedures. Establish a monitoring practice with legal personnel. Maintain thorough records with regards to these steps.

37 CORPORATE PACS Establishing a PAC Steps Solicitation State PACs: PA & NJ What can a PAC do?

38 ESTABLISHING A CORPORATE PAC Registering a Separate Segregated Fund with FEC Designate necessary officers Name the SSF File Statement of Organization

39 PAC SOLICITATION A corporate PAC may only solicit a restricted class of potential contributors, and may not solicit the general public, but may accept otherwise legal, unsolicited contributions from contributors outside of the restricted class. A corporation or its SSF may solicit its restricted class at any time. The restricted class of a corporation consists of: The corporation s executive and administrative personnel; The stockholders; and The families of the above two groups. An SSF may also solicit, at any time, the restricted class of any parent, subsidiary, branch, division or affiliate of the connected organization.

40 New Jersey STATE PACS In New Jersey, business entities can form Continuing Political Committees (CPC). This is done by filing a registration, appointing officers, designating a depositor and receiving certification. Certain industries are barred from created a CPC. There are ongoing reporting requirements. Pennsylvania In Pennsylvania, business entities can form a separate segregated fund. The segregated fund is to be created by voluntary individual contributions, including those solicited by the corporation or unincorporated association and to be utilized for political purposes. This segregated fund is created by registering, appointing officers, and filing a statement of organization. There are ongoing reporting requirements.

41 WHAT CAN A PAC DO? Federal PACs Contribute to federal and nonfederal candidates; contribute to political committees; make independent expenditures. State PACs Contribute to nonfederal candidates and political committees; make independent expenditures.

42 House rules overview: ETHICS & GIFTS FEDERAL SUMMARY Prohibits gifts related to official actions, solicitation from those with interests before House Gifts less than $50 are acceptable, but buydowns are prohibited Gifts from lobbyists, foreign agents, and entities that employ these individuals are prohibited Senate rules overview: Gifts are prohibited, unless under $50 for an individual gift or $100 for a cumulative year of gifts from one source Gifts from lobbyists, foreign agents, and entities that employ these individuals are prohibited Lobbyists are further restricted (no personal hospitality or legal defense funds)

43 ETHICS & GIFTS - PENNSYLVANIA Prohibits gifts, loans, or any other offer of monetary value to a public official, public employee or nominee or candidate for public office or a member of his immediate family or a business with which he is associated, if based on the offeror's or donor's understanding that the vote, official action or judgment of the public official or public employee or nominee or candidate for public office would be influenced.

44 ETHICS & GIFTS NEW JERSEY Prohibits a lobbyist or government affairs agent from giving any compensation, reward, employment, gift, honorarium or other thing of value, totaling more than $250 in a calendar year. This does not apply if the lobbyist is a member of the legislator's immediate family. This section applies to members of the legislator's household.

45 CAMPAIGN FINANCING LAWS

46 The objective of campaign financial laws is to regulate the influence of money on politics and serve to fill a gap in the coverage of federal laws addressing corrupt payments to federal officials that are disguised as campaign contributions. Principle objective of campaign finance laws is to minimize as much as possible the corruptive influence of money in politics by: Limiting size of contributions that an individual may contribute Prohibiting contributions from entities such as corporations, unions and banks Imposing rigid disclosure requirements

47 CAMPAIGN FINANCING CRIMES The Federal Election Campaign Act (FECA) regulates financing of federal campaigns: 2 U.S.C FECA limits the amounts that may be contributed to candidates and political committees and also prohibits contributions from certain sources altogether. FECA Violations based on providing false information may also violate: 18 U.S.C. 371 (Conspiracy) 18 U.S.C (False Statements) 18 U.S.C (Obstruction of Justice)

48 TYPES OF STATUTES There are four main types of federal campaign financing laws: Laws that limit the amount of contributions; Laws that prohibit contributions and expenditures by persons and entities whose participation in the federal election process has been deemed by Congress to present a sufficient potential for corruption as to warrant outright prohibition; Transparency laws that place before the voting public pertinent facts concerning the raising and spending of campaign funds; and Public funding laws.

49 HARD MONEY / SOFT MONEY Hard Money: Funds raised in accordance with the FECA limits and prohibitions. Hard money (sometimes referred to as federal funds ) may be used to influence federal elections. Soft Money: Funds not raised in compliance with the FECA limits and prohibitions. As such, soft money (sometimes referred to nonfederal funds ) may only be used to pay for activities that do not influence federal elections, i.e., activities that FECA does not reach. Since 2002, national political parties and their agents are prohibited from raising or spending soft money. 2. U.S.C. 441i.

50 THE HEARTLAND PROVISIONS OF THE CAMPAIGN FINANCING LAWS According to DOJ in order to warrant criminal prosecution, a FECA violation should involve one of the FECA s substantive or heartland provisions: 2 U.S.C. 441a(a): Limits on amount of contribution; 2 U.S.C. 441b: Ban on contributions and expenditures by corporations and unions; 2 U.S.C. 441c: Ban on contributions from federal contractors; 2 U.S.C. 441e: Ban on contributions from foreign nationals; 2 U.S.C. 441f: Ban on disguised and cash contributions; 2 U.S.C. 441g: Cash contributions over $100 to a federal candidates campaign are forbidden; 2 U.S.C. 441i: Ban on use or direction of soft money by political parties; State and local party committees, must use hard money for federal election activity, including voter registration and get-out-the vote drives and public communications that refer to and support or oppose a federal candidate. 2 U.S.C. 439a: Theft from candidate s political committee.

51 CAMPAIGN FINANCING CRIMES Section 437g(d) provides that a violation of FECA is a federal crime if committed knowingly and willfully and if, with two exceptions, it meets certain monetary thresholds. If the violation involves the making, receiving, or reporting of a contribution, donation or expenditure" that: aggregates $2,000 or more in a calendar year, it is a 1 year misdemeanor 437g(d)(1)(A)(ii) aggregates $25,000 or more in a calendar year, the violation is a 5 year felony, 437g(d)(1)(A)(i), 437g(d)1(D)i aggregates over $10,000 in a calendar year and involves illegal conduit contributions, it is a two year felony, 437g(d)(1)(D)(i)

52 FELONY THEORIES FOR FECA CRIMES False Statements: 18 U.S.C / Aiding and Abetting: 18 U.S.C. 2 Willfully causing submission of false information to the Federal Election Commission violates 18 U.S.C and 2 A treasurer who submits information concerning contributions or expenditures to the FEC knowing the information to be false violates 18 U.S.C A person involved in a transaction reportable under the FECA who attempts to disguise it or misrepresents its source, purpose or amount willfully causes the treasurer of the recipient committee to furnish false information concerning the transaction to the FEC in violation of 18 U.S.C. 2(b) and Conspiracy to Defraud the United States: 18 U.S.C. 371 The conspiracy to defraud approach to FECA crimes is based on Hammerschmidt v. United States, 265 U.S. 182 (1924) which held that a conspiracy to defraud includes a Conspiracy to interfere with or obstruct one of [the federal government s] lawful government function by deceit, craft, trickery, or at least by any means dishonest.

53 VIOLATIONS OF STATE CAMPAIGN FINANCING LAWS All states have campaign finance laws which prohibit contributions from certain sources, in some instances they limit the amounts that can be given to state and local candidates, and in most instances they impose transparency requirements on state and local candidates and political committees that are engaged in influencing state and local elections. While federal law does not directly criminalize violations of state campaign finance laws, two fraud statutes (18 U.S.C and 1346) have been used in recent past to reach certain violations of state campaign financing laws.

54 18 U.S.C. 1341: Mail Fraud MAIL FRAUD The federal mail fraud statute prohibits the use of the mails to further a scheme or artifice to defraud. In McNally v. United States, 483 U.S. 350 (1987), the Supreme Court ruled that a scheme to defraud citizens of the honest services of a public official was not, in itself and in the absence of a proven pecuniary loss, a violation of the mail fraud statute. 18 U.S.C. 1346: Honest Services Fraud In response to McNally, Congress passed 18 U.S.C. 1346, which defines a scheme or artifice to defraud for the purpose of mail and wire fraud statutes to include a scheme to deprive another of the intangible right of honest services. United States v. Turner, 459 F.3d 775 (6th Cir. 2006): held that candidates do not owe a fiduciary duty of honest services to the public in the sense that public office holders do, and that 1346 does not apply to schemes by candidates for public office to violate state campaign financing laws.

55 SCHEMES TO DIVERT CAMPAIGN FUNDS Campaign fund diversion cases generally fall into three factual scenarios A. Diversion by a candidate or campaign agent of incoming contributions to the candidate or committee before the contributions are deposited B. Embezzlement by a campaign agent or other person of contributions to a candidate or committee that have been deposited into a campaign s account; and C. Establishment of a fictitious political organization for the purpose of raising funds to be converted to personal use. Scenarios A and B include theft of contributions to a candidate which can be prosecuted as violations of 2 U.S.C. 439a or 18 U.S.C. 1341, 1346 Embezzlement of funds contributed to a political committee may be prosecuted as violations of 18 U.S.C. 1341, All three scenarios can prosecuted as reporting offenses under 2 U.S.C. 434 or as a violation of 18 U.S.C (false statements).

56 RECENT FECA PROSECUTIONS U.S. v. Harber (EDVA): 2015: Tyler Harber, a congressional consultant, pled guilty to one count coordinating federal election contributions and one count of making a false statement to FBI. Harber caused $325,000 in coordinated contributions by directing a PAC he created to purchase political advertising opposing a rival candidate. Harber sentenced to 24 months imprisonment. This was the first prosecution for coordinating between political committees. U.S. v Calhoun (DDC): 2013: Lee A. Calhoun, an executive for a DC based company pled guilty to a misdemeanor violation 441f, for knowingly and willfully permitting his name and the names of his relatives to be used to disguise contributions to political action committees and the campaign committees for a candidate for U.S. President, and candidates for the U.S. Senate and House of Representatives.

57 RECENT FECA PROSECUTIONS U.S. v. Xing Wu Pan and Jia Hou 2013 (SDNY): As a result of an FBI undercover investigation, Pan and Hou were convicted after a jury trial for fraud in connection with scheme to defraud NYC by using straw donors to funnel illegal campaign contributions to a candidate s campaign for citywide election. One object of the scheme was to increase the amount of matching campaign funds from NYC. Hou was convicted of attempted wire fraud (18 U.S.C. 1343), one count of obstruction of justice and false statements to FBI (18 U.S.C and 1001). Pan was convicted of conspiracy to commit wire fraud (18 U.S.C. 1349) and attempted wire fraud. U.S. v. Bigica: 2012 (DNJ): Joseph Bigica pled guilty to one count of conspiracy to violate FECA (18 U.S.C. 371) in connection with his use of conduit contributions of approximately 100,000 made through 19 family, friends, and employees. U.S. v. Timothy Mobley and Timothy Hohl 2012: (MD Fla): Mr. Mobley was a real estate developer in Tampa and Mr. Hohl was his accountant. Both men pled guilty for their roles in funneling corporate contributions and contributions in excess of the legal limits to a state political party and to the campaign of a Member of Congress using straw contributors whom Mobley and Hohl reimbursed.

58 RECENT FECA PROSECUTIONS U.S. v. Tigani: 2011 (DDel): Tigani pled guilty to two counts of violating 2 U.S.C. 441b(a) and 441f and two counts of making materially false statement on income tax returns (26 U.S.C. 7206(1). Mr. Tigani while president of N-K-S Distributors, directly and indirectly solicited numerous NKS employees to make political contributions to federal and state candidates. He used NKS non-payroll checks to reimburse the conduits for the contributions made on behalf of Tigani and the company. By doing this Tigani illegally bundled campaign contributions in violation of state and federal contribution limits and in violation of federal ban on direct corporate contributions. Total amount of illegal contributions was approximately $220,000.

59 THE END CLUB FED?

60 THANK YOU