The Sixth Circuit has upheld the felony conviction of a former state party chair for illegal campaign contributions by a corporation he owned, in a case that both serves as an important reminder of the prohibition on corporate contributions to federal campaigns and shows that the Justice Department may be stepping up criminal election law enforcement while the Federal Election Commission is consumed by deadlock.
In 2019, former Kentucky Democratic Party Chair Jerry Lundergan and Dale Emmons, a campaign consultant, were convicted for illegal campaign corporate campaign contributions to Lundergan’s daughter’s U.S. Senate campaign. The contributions in question were payments by Lundergan’s corporation to vendors that did work for the campaign. Purchases included political consulting services, campaign event audio-video production, robocalls, and mass mailings, which Lundergan’s company paid for without seeking reimbursement from his daughter’s campaign. Emmons both received vendor payments and funneled payments from his business to other vendors. For their actions, Lundergan and Emmons were convicted of making unlawful corporate contributions, conspiracy to defraud the United States, false statements to the government, and falsification of records or documents. Lundergan was sentenced to 21 months in prison and a $151,000 fine, while Emmons received three years of probation and a $50,600 fine.
In the appeal of the convictions, a key issue was whether the jury received proper instructions on the distinction between a corporation’s so-called independent expenditures and coordinated expenditures, which involve knowledge or direction by a campaign. The distinction is vital because, under the seminal 2010 Supreme Court decision Citizens United, independent expenditures are constitutionally protected speech, while coordinated corporate expenditures remain illegal campaign contributions.
The defendants argued that the jury instructions did not adequately clarify the distinction, and that the trial court erred by refusing to instruct the jury about the Federal Election Commission’s three-prong test for “coordinated communications” to be considered campaign contributions. That test requires consideration of (1) the source of payment, (2) the content of the communication, and (3) the interaction between the person paying for the communication and the candidate’s campaign.
The Sixth Circuit rejected defendants’ argument, concluding that the jury instructions were proper. “The key difference between contributions and independent expenditures is that contributions must be made to a candidate or campaign,” the Court wrote, “whereas independent expenditures are those payments made independently from the campaign, without coordination.” The jury instructions not only made this distinction, the Court said, but also included a clarification that a “corporation, . . . if there is no coordination, can make unlimited independent expenditures.”
While Citizens United eased restrictions on corporations, it did not eliminate the risks of corporate political activity. In fact, as partisan deadlock continues to slow enforcement by the Federal Election Commission, the Department of Justice may be more inclined than ever to police corporate involvement in campaigns, raising the stakes even higher by resort to criminal enforcement of election laws. A decade after Citizens United, the Lundergan case shows that when corporations participate in elections, risks remain high.