Watchdog group hits DNC and Sebelius in new FEC complaint

January 31, 2013

A government watchdog group claims the Democratic National Committee has failed to properly disclose its reimbursements for a 2012 trip during which Department of Health and Human Services Secretary Kathleen Sebelius violated the Hatch Act.

The nonprofit organization Cause of Action filed a complaint with the Federal Elections Commission on Tuesday. The government-accountability group is headed by Daniel Epstein, former Republican counsel for the House Oversight and Government Reform Committee.

The U.S. Office of Special Counsel determined in September that Sebelius had violated the Hatch Act – a 1939 law prohibiting executive branch employees from engaging in political activities — by plugging President Obama during a gala last February for the Human Rights Campaign in Charlotte, N.C.

During the event, Sebelius told attendees they should “make sure that we not only come together here in Charlotte to present the nomination to the president, but we make sure that in November he continues to be president for another four years.”

After the rally, Health and Human Services reclassified the secretary’s trip from official to political, according to a report from the Office of Special Counsel.

The DNC has reimbursed about $2,500 to the U.S. Treasury for costs Sebelius and one of her aides incurred while traveling to the event, according to the complaint.

Cause of Action alleges the DNC reported the reimbursements as operating expenses with the FEC, “thereby avoiding any acknowledgement that the purpose of the expenditure was to reimburse the federal government for Secretary Sebelius’s Hatch Act violation.”

The group said federal law requires party committees to report such payments as “independent expenditures,” thus marking them as compensation for political activities.

Cause of Action said Wednesday that the Obama administration effectively made a donation to the DNC and that the committee has never reported that contribution in its FEC filings.

The DNC has downplayed the group’s complaint.

“This is utter nonsense being peddled by right wing partisans who have nothing better to do than dredge up an issue that has long since been resolved,” said party spokesman Brad Woodhouse. “This issue — including the DNC’s role in this reimbursement — has been public for months, has been widely reported and was available to the public on our FEC report — which is in stark contrast to this shadowy group which refuses to release its own donors.”

Cause of Action declined to identify the source of its funding when asked to do so for this article.

“We have a variety of private donors, but Cause of Action, like many other nonprofit organizations, respects the privacy of its donors and does not reveal their identities,” said spokeswoman Mary Beth Hutchins.

Sebelius said in a Sept. 7 letter to the Office of Special Counsel that she had “made a mistake” by promoting the president’s re-election during the Charlotte rally.

Until Sunday, the penalties for violating the Hatch Act were removal from position or a 30-day suspension, although the law gave employers a choice of whether to remove the employees in question. In Sebelius’s case, the Obama administration chose not to punish the secretary.

Congress updated the Hatch Act in December, making violators of the law subject to a broader range of disciplinary actions, including removal, reduction in grade, debarment from federal employment for up to five years, suspension, reprimand, and a civil penalty up to $1,000.

The changes took effect Sunday, but the old penalty structure still applies to Sebelius’s violation.

“This was the most high-level Hatch Act violation in U.S. history, and there was no punishment for her,” Hutchins said.

Cause of Action has been active this year with actions that could potentially embarrass the Obama administration. The group earlier this month helped an electric car start-up and its sister company file a lawsuit against the Energy Department that claims the agency awarded money to politically favored firms in a “fixed” race for federal funds, according to a report in the Washington Post.

In November, Cause of Action filed a complaint with the U.S. Office of Special Counsel requesting that the watchdog agency investigate Interior Secretary Ken Salazar for possibly campaigning for Obama at a series of October rallies in Colorado.

 

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Josh Hicks covers the federal government and anchors the Federal Eye blog. He reported for newspapers in the Detroit and Seattle suburbs before joining the Post as a contributor to Glenn Kessler’s Fact Checker blog in 2011.
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Lisa Rein | January 31, 2013