The Federal Election Commission rejected staff recommendations for a full-scale investigation into charges that Rep. Geraldine A. Ferraro (D-N.Y.) used a complex real estate deal to channel $100,000 illegally into her successful 1978 House campaign, it was disclosed yesterday.
In six key votes behind closed doors, the six-member FEC split on motions "to find reason to believe" that Ferraro, the Democrats' 1984 vice-presidential nominee, and her husband, John A. Zaccaro, broke the law by using a real estate deal to hide an illegal corporate campaign contribution.
On three occasions, the commission voted along partisan lines, 3 to 3, preventing further action. A majority vote is needed for an investigation to proceed beyond preliminary stages.
"I am pleased and regard myself as completely vindicated by the commission's actions," Ferraro said in a statement issued by her office here.
She was en route to giving a speech in Wisconsin last night and was unavailable for questioning.
Last week, the House Committee on Standards of Official Conduct found that Ferraro committed technical violations of House rules when she failed to disclose her interest in her husband's real estate firm. The panel did not call for disciplinary action, however.
The FEC votes were taken Nov. 27 but were not disclosed until yesterday when John F. Banzhaf III, a lawyer who made the original complaint to the agency, released a letter and a report from the FEC revealing its decision. In addition to Banzhaf, The Fund for a Conservative Majority also filed a complaint.
The documents released yesterday show that Charles N. Steele, the FEC's general counsel, and Kenneth A. Gross, its associate general counsel, recommended that the staff begin a detailed inquiry into a 1978 real estate deal in which Ferraro made a $100,000 profit in five months.
The basic complaint against Ferraro, her husband, her campaign committee and a network of business associates was that the real estate deal was phony.
According to the complaints, the money was either an illegal corporate gift or a contribution from her husband exceeding the $1,000 limit for individuals.
Ferraro needed the money to pay off a $100,000 loan her husband had made to her campaign that the FEC had found to be illegal.
Under the law, a candidate can give unlimited amounts to his or her campaign, but relatives and other individuals are limited to $1,000. Corporations cannot give money to federal candidates.
According to a 16-page summary of the case submitted to the FEC by Steele and Gross, Ferraro bought a half interest in the lower Manhatten property on May 1, 1978. Five months later, she sold her half interest "and received approximately $100,000 as a result of her sale." In January 1979, Zaccaro bought back the half interest for $100,000.
The complaints alleged that these transactions did not involve legitimate business deals but instead were conduits to provide Ferraro with $100,000 for her campaign.
Banzhaf denounced the FEC votes as "a travesty" and said he would appeal in federal court.