[House Report 114-643]
[From the U.S. Government Publishing Office]
114th Congress } { Report
2d Session } HOUSE OF REPRESENTATIVES { 114-643
_____________________________________________________________________
IN THE MATTER OF ALLEGATIONS RELATING
TO REPRESENTATIVE VERNON G. BUCHANAN
__________
R E P O R T
OF THE
COMMITTEE ON ETHICS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
June 24, 2016.--Referred to the House Calendar and
ordered to be printed
___________
U.S. GOVERNMENT PUBLISHING OFFICE
59-006 WASHINGTON : 2016
________________________________________________________________________
COMMITTEE ON ETHICS
CHARLES W. DENT, Pennsylvania LINDA T. SANCHEZ, California
Chairman Ranking Member
PATRICK MEEHAN, Pennsylvania MICHAEL E. CAPUANO, Massachusetts
TREY GOWDY, South Carolina YVETTE D. CLARKE, New York
SUSAN W. BROOKS, Indiana TED DEUTCH, Florida
KENNY MARCHANT, Texas JOHN B. LARSON, Connecticut
REPORT STAFF
Thomas A. Rust, Chief Counsel/Staff Director
Patrick M. McMullen, Director of Investigations
Clifford C. Stoddard, Jr., Counsel to the Chairman
Daniel J. Taylor, Counsel to the Ranking Member
Molly N. McCarty, Investigator
Michael Koren, Investigative Clerk
LETTER OF TRANSMITTAL
----------
House of Representatives,
Committee on Ethics,
Washington, DC, June 24, 2016.
Hon. Karen L. Haas,
Clerk, House of Representatives,
Washington, DC.
Dear Ms. Haas: Pursuant to clauses 3(a)(2) and 3(b) of Rule
XI of the Rules of the House of Representatives, we herewith
transmit the attached report, ``In the Matter of Allegations
Relating to Representative Vernon G. Buchanan.''
Sincerely,
Charles W. Dent,
Chairman.
Linda T. Sanchez,
Ranking Member.
C O N T E N T S
__________
Page
I. INTRODUCTION.....................................................1
II. PROCEDURAL HISTORY...............................................3
III. HOUSE RULES, LAWS, REGULATIONS, AND OTHER STANDARDS OF CONDUCT...6
IV. BACKGROUND.......................................................6
A. BUSINESS DISPUTES BETWEEN REPRESENTATIVE BUCHANAN
AND MR. KAZRAN, AND THE DRAFT AFFIDAVIT............ 6
B. ALLEGATIONS OF REPRESENTATIVE BUCHANAN'S INVOLVEMENT
WITH, AND KNOWLEDGE OF, CONDUIT CONTRIBUTIONS TO
VBFC............................................... 10
1. SUNCOAST FORD (SCF)............................... 10
2. VENICE NISSAN DODGE (VND)......................... 11
3. HYUNDAI OF NORTH JACKSONVILLE (HNJ)............... 12
V. FINDINGS........................................................16
A. 52 U.S.C. Sec. 30122............................... 16
B. TITLE 18............................................ 17
C. HOUSE RULE XXIII, CLAUSES 1 AND 2................... 22
VI. CONCLUSION......................................................25
VII. STATEMENT UNDER HOUSE RULE XIII, CLAUSE 3(C)....................25
APPENDIX A: REPORT AND FINDINGS OF THE OFFICE OF CONGRESSIONAL
ETHICS (REVIEW NO. 11-7565).....................................26
IN THE MATTER OF ALLEGATIONS RELATING TO REPRESENTATIVE VERNON G.
BUCHANAN
_______
June 24, 2016.--Referred to the House Calendar and ordered to be
printed
_______
Mr. Dent, from the Committee on Ethics,
submitted the following
R E P O R T
In accordance with House Rule XI, clauses 3(a)(2) and 3(b),
the Committee on Ethics (Committee) hereby submits the
following Report to the House of Representatives:
I. INTRODUCTION
Since 2012, the Committee has investigated allegations
regarding Representative Vernon G. Buchanan and his campaign,
as well as his interactions with an investigation by the
Federal Election Commission (FEC) of those allegations.
Following its investigation, the Committee concluded that there
is insufficient evidence to support a finding of any violation
by Representative Buchanan. This Report details the Committee's
findings and conclusions.
On January 27, 2012, the Office of Congressional Ethics
(OCE) transmitted a Report and Findings (Referral) relating to
Representative Buchanan to the Committee. OCE's Referral
recommended that the Committee further review allegations that
Representative Buchanan ``attempted to influence the testimony
of a witness in a proceeding before the FEC'' by coercing the
witness to sign a false affidavit in violation of federal law
and House Rules. OCE's Referral provided additional information
about the allegation that Representative Buchanan attempted to
improperly influence the testimony of his former business
partner, Sam Kazran, by presenting Mr. Kazran with an affidavit
for his signature which included false statements about
wrongdoing with respect to Representative Buchanan's
campaign.\1\
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\1\A referral from the OCE to the Committee may include a
recommendation that the Committee further review an allegation or
dismiss it and provide the Committee with certain types of information
regarding the allegation, but not the names of any cooperative
witnesses or any conclusions regarding the validity of the allegations
or the guilt or innocence of the individual who is the subject of the
review. See H. Res. 895 Sec. 1(c)(2)(C).
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The Committee agreed with OCE's recommendation and did
further review the allegations in its Referral. On May 9, 2012,
the Committee published OCE's Referral and a response from
Representative Buchanan, and announced that the Committee would
investigate the matter under Committee Rule 18(a).
In addition to the allegations regarding improperly
influencing a witness, the Committee examined a broader range
of allegations than the allegations for which OCE recommended
further review. The Committee investigated allegations relating
to Representative Buchanan's campaign, including whether
several car dealerships partly owned by Representative Buchanan
illegally reimbursed their employees for contributions to
Representative Buchanan's House campaigns and whether
Representative Buchanan himself may have been aware of the
unlawful reimbursements at the time they occurred, or had some
role in directing or approving of them.\2\
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\2\Some of the allegations reviewed by the Committee occurred prior
to the 111th Congress, prior to the Committee's general investigative
jurisdiction, which includes the current and three previous Congresses.
However, pursuant to House Rule XI, clause 3(b)(3) and Committee Rule
18(d), the Committee voted to determine that these allegations were
directly related to alleged violations that occurred within the
Committee's general jurisdiction and did investigate those allegations.
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Together, these allegations were the subject of review by
four different entities--the Committee, OCE, FEC, and
Department of Justice (DOJ)--as well as related civil
litigation in state court. In the course of its investigation
the Committee reviewed over 6,000 pages of materials, including
statements by 22 witnesses. Much of this material was generated
through the course of the related investigations and
proceedings. The Committee also interviewed Representative
Buchanan, who agreed to appear before the Committee for a
voluntary interview.
The FEC investigated the allegations of unlawful
reimbursements and the allegations concerning Representative
Buchanan's knowledge of, and involvement with, the corporate
reimbursement of campaign contributions, and the allegation
that he attempted to influence Mr. Karzan's testimony before
the FEC. The FEC closed its investigation as it related to
Representative Buchanan on February 1, 2011, taking no further
action against him.
Additionally, beginning in late 2011, the DOJ investigated
similar allegations relating to Representative Buchanan. The
DOJ closed its investigation around September 2012.
The allegation related to attempting to improperly
influence the testimony of Mr. Kazran was also one of several
allegations that arose in a civil suit between Mr. Kazran and
Representative Buchanan in Florida state court. On November 10,
2014, at the close of Mr. Kazran's case-in-chief, the Florida
Circuit Court for Sarasota County directed a verdict in favor
of Representative Buchanan with regard to the allegation that
he improperly influenced testimony.
Finally, OCE reviewed the allegation that Representative
Buchanan attempted to improperly influence the testimony of Mr.
Kazran before the FEC and ultimately recommended that the
Committee further review that allegation.
As is true with all of its investigations, the Committee
conducted an independent review without deferring to the
findings or conclusions of any other entity. In this matter,
the Committee also reviewed the allegations that were the
subject of proceedings before the FEC, DOJ, and in the Florida
Circuit Court for Sarasota County.
Consistent with the resolutions in the matters before the
FEC and DOJ, as well as in the related civil litigation, the
Committee concluded that there is insufficient evidence to
sustain any of the aforementioned allegations or to warrant any
action against Representative Buchanan. Specifically, the
Committee concluded that three car dealerships partly owned by
Representative Buchanan did, in fact, illegally reimburse their
employees for contributions to Representative Buchanan's House
campaigns. However, the Committee found that the evidence is
insufficient to conclude that Representative Buchanan himself
was aware of the unlawful reimbursements when they were made,
or had any role in directing or approving of them. The
Committee further concluded that the evidence is insufficient
to find that Representative Buchanan attempted to improperly
influence the testimony of Mr. Kazran before the FEC. However,
as discussed further in this Report, the Committee cautions
Representative Buchanan to exercise more diligence over affairs
related to his campaign.
Accordingly, the Committee unanimously voted to release
this Report and take no further action in this matter.
II. PROCEDURAL HISTORY
As noted above, the issues discussed in this Report were
the subject of other investigations and hearings. On August 19,
2008, Citizens for Responsibility and Ethics in Washington
(CREW) filed a complaint with the FEC against Representative
Buchanan, as well as a number of corporations with which he was
affiliated and officers and employees of those corporations,
alleging violations of the Federal Election Campaign Act
(FECA). Specifically, CREW alleged that employees at two car
dealerships owned by Representative Buchanan were compelled to
donate to Representative Buchanan's campaign committee, Vern
Buchanan For Congress (VBFC), and that their campaign
contributions were later unlawfully reimbursed from corporate
funds. On October 6, 2008, Representative Buchanan disclosed to
the FEC that VBFC may have unknowingly violated the FECA by
accepting contributions from employees of another car
dealership owned by Representative Buchanan, who were then
reimbursed by the dealership. While these allegations were
similar in nature to the CREW allegations, CREW's complaint
related to different contributions and corporations. The FEC
investigated both CREW's complaint and Representative
Buchanan's self-report, including the allegations concerning
Representative Buchanan's knowledge of, and involvement with,
the corporate reimbursement of campaign contributions. The FEC
closed the investigation as it related to Representative
Buchanan on February 1, 2011, taking no further action against
him.\3\
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\3\The FEC continued to investigate allegations of conduit
contributions by other corporate entities and individuals, even after
it concluded its investigation of Representative Buchanan himself. The
FEC sued Mr. Kazran (eventually obtaining a settlement against him and
a default judgment against the related corporate entity), and reached
conciliation agreements with a number of other individuals and
entities. See infra Part IV.B. The FEC appears to have concluded all
business related to this investigation in March 2012. Additionally, in
2010, the FEC undertook an unrelated investigation of contributions to
Representative Buchanan's campaign that were reimbursed by a company
not owned by or directly affiliated with Representative Buchanan;
Representative Buchanan was not a party to that proceeding. See Federal
Election Commission, In the Matter of Timothy F. Mobley, et al., MUR
6516. The FEC found that the companies in question, which were also
targeted by a related DOJ investigation, knowingly reimbursed
contributions to Representative Buchanan's campaign, and the FEC
entered into conciliation agreements with those companies and the
individuals who owned and controlled them.
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On August 24, 2011, CREW wrote to the DOJ, requesting an
investigation into not only the alleged violations of FECA
previously disposed of by the FEC, but also a series of alleged
crimes including obstruction of justice, witness tampering, and
bribery, related to a draft affidavit prepared for Mr.
Kazran.\4\ Representative Buchanan's attorneys acknowledged a
DOJ investigation, but that investigation was subsequently
closed without formal charges.\5\ On December 18, 2013, CREW
filed suit against the DOJ under the Freedom of Information Act
(FOIA), seeking the release of its investigative file in that
matter.\6\ The DOJ ultimately released certain documents
regarding Representative Buchanan to CREW, and the parties
settled their suit on June 29, 2015.\7\
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\4\See Letter from CREW Executive Director Melanie Sloan to FBI
Assistant Director James W. McJunkin (Aug. 24, 2011), available at
http://www.citizensforethics.org/legal-filings/entry/crew-files-fbi-
complaint-against-rep-vern-buchanan.
\5\DOJ has never publicly acknowledged a date by which it ended its
investigation, publicly stating only that it had in fact closed the
investigation. See CREW v. DOJ, No. 13-cv-2000 Docket #2 para. (Answer)
(Mar. 6, 2014). But media reports indicate that this decision may have
been made as early as September 2012. See, e.g., Adam C. Smith, Justice
Department closes investigations against Vern Buchanan with no charges,
Tampa Bay Times (Sept. 11, 2012), available at http://www.tampabay.com/
blogs/the-buzz-florida-politics/content/justice-department-closes-
investigations-against-vern-buchanan-w-no-charges.
\6\CREW v. DOJ, Docket #1 (Dec. 18, 2013).
\7\Id.
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On October 3, 2011, OCE notified the Committee that it had
initiated a preliminary review of allegations that
Representative Buchanan ``may have attempted to influence a
witness to sign a false affidavit related to an FEC
investigation of campaign contributions to his campaign
committee.''\8\ On October 31, 2011, OCE notified the Committee
that it commenced a second-phase review of these allegations.
On January 27, 2012, OCE sent its Referral to the Committee,
recommending further review of the allegations. OCE's Referral
found substantial reason to believe that a single paragraph of
the draft affidavit may have been false, and that consequently,
Representative Buchanan may have violated three separate
criminal statutes.\9\ OCE also included in its Referral a
section noting that, depending on the facts surrounding the
FECA allegations, additional paragraphs in the draft affidavit
``may'' be false,\10\ but it is unclear as to whether OCE found
substantial reason to believe those allegations.\11\
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\8\The FECA violations investigated by the FEC occurred from 2005
through 2007; OCE's investigative authority does not extend to
violations that occurred prior to 2008. See H. Res. 895 Sec. 4.
\9\OCE found that a number of witnesses, including Representative
Buchanan, had failed to fully cooperate with OCE's review, and
accordingly noted in its Referral that it was permitted to draw a
negative inference from that lack of cooperation. See OCE's Referral
para. 87. Despite this, OCE ``judged the evidence adduced to be more
than sufficient to support its determination,'' irrespective of such an
inference. Id.
\10\See OCE's Referral para. 70-86.
\11\Subsequent correspondence from OCE stated that ``OCE did not
adopt Mr. Kazran's statement that Representative Buchanan directed him
to reimburse campaign contributions.'' Letter from David Skaggs and
William Frenzel to Chairman and Ranking Member of Committee on Ethics
at 4 (Apr. 2, 2012).
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Some of the allegations in this matter were also the
subject of a civil suit between Mr. Kazran and Representative
Buchanan in the Florida Circuit Court for Sarasota County.
Representative Buchanan's holding company filed suit against
Mr. Kazran in Duval County on September 4, 2008.\12\ The suit
alleged that Mr. Kazran had failed to repay a $2.5 million
loan. In turn, Mr. Kazran filed suit against Representative
Buchanan in Sarasota County on September 25, 2008. His
complaint was largely based on claims that Representative
Buchanan had engaged in fraud related to his business dealings
with Mr. Kazran, but the complaint also included allegations
that Representative Buchanan abused the legal process by
attempting to force Mr. Kazran to sign a false affidavit.\13\
It appears based on the dockets for both cases that
Representative Buchanan eventually chose not to pursue his
claims in Duval County, instead countersuing Mr. Kazran in
Sarasota County and litigating his claims there. Representative
Buchanan won summary judgment motions on some of the claims
against him; Mr. Kazran's remaining claims, as well as
Representative Buchanan's own causes of action, went to trial
on November 3, 2014. On November 10, 2014, at the close of Mr.
Kazran's case-in-chief, the court directed a verdict in favor
of Representative Buchanan. On December 5, 2014, following a
jury verdict, the court entered judgment in favor of
Representative Buchanan on his own claims against Mr. Kazran,
and ordered Mr. Kazran to pay Representative Buchanan $2.5
million plus interest.
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\12\See 1099 Mgmt. Co., LLC v. Gwinnett, LLC, No. 2008 CA11480
(Fla. Cir. Ct., Duval Cty.).
\13\Kazran v. Buchanan, 2008 CA 15448 (Fla. Cir. Ct., Sarasota
Cty.).
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A number of factors caused the Committee's review of these
allegations to take longer than normal, beginning with the
convoluted set of parallel proceedings described above.
Exacerbating that complication, Representative Buchanan
initially responded to the Committee's request for information
by requesting that the Committee defer its inquiry at least
until the conclusion of DOJ's investigation, and then, once DOJ
had closed the matter, Representative Buchanan requested that
the Committee close its own inquiry with no further
investigation based solely on DOJ's decision. The Committee
declined to do so, and continued its own investigation. These
requests, and the Committee's consideration of them, resulted
in a delay of at least fifteen months. The Committee faced
further delays as it attempted to obtain evidence collected in
the other inquiries described above.
As noted above, the Committee reviewed over 6,000 pages of
materials, including statements by 22 witnesses. Much of this
material was generated through the course of the parallel
investigations described above.\14\ The Committee also
interviewed Representative Buchanan, who agreed to appear
before the Committee for a voluntary interview.
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\14\The Committee determined that this information was sufficient
to dispose of this matter, and chose not to re-interview certain
witnesses who had already been questioned, including Mr. Kazran. In
part, this determination was based on independent concerns about Mr.
Kazran's credibility, as outlined infra at Part IV. Additionally, the
Committee's review of the extant testimony did not reveal sufficient
evidentiary gaps to warrant duplicative interviews. Finally, because
the Committee's determination rested on a legal conclusion regarding
the elements of the offenses, the bulk of the outstanding factual
questions were not relevant to its final conclusion. See infra Part
V.A.
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III. HOUSE RULES, LAWS, REGULATIONS, AND OTHER STANDARDS OF CONDUCT
A number of criminal statutes prohibit actions that
intentionally interfere with ongoing government investigations.
First, 18 U.S.C. 201(b)(3) prohibits bribing a witness, which
is the act of corruptly giving, offering, or promising anything
of value to any witness with the intent to influence the
witness' testimony. Second, 18 U.S.C. Sec. 1505 prohibits
persons from corruptly obstructing an executive branch agency
proceeding. Obstruction of a proceeding is defined as ``do[ing]
something to sway or change or prevent any action likely to be
taken in the . . . proceeding.''\15\ Finally, 18 U.S.C.
Sec. 1512(b)(2)(A) prohibits witness tampering, which includes,
among other things, corruptly persuading a witness in an
official proceeding to fail to offer testimony, or to offer
testimony that is false. An ``official proceeding'' includes
agency proceedings as well as those in court.\16\
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\15\11th Cir. Federal Criminal Pattern Jury Instructions at 347.
\16\18 U.S.C. Sec. 1515(a)(1)(C).
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The Federal Election Campaign Act (FECA), 52 U.S.C.
Sec. Sec. 30101 et seq., imposes a number of restrictions on
campaign contributions, including a prohibition on making a
campaign contribution in the name of another person.\17\
Contributions that violate FECA Section 30122 are sometimes
described as ``reimbursed'' or ``conduit'' contributions.
Violations of Section 30122 are punishable based on the
aggregate amount of offending contributions; contributions over
$2,000 are misdemeanors punishable by a fine and up to a year
imprisonment, while contributions over $25,000 are felonies
punishable by a fine and up to five years imprisonment.
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\17\Previously codified as 2 U.S.C. Sec. Sec. 431 et seq.
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Finally, House Rule XXIII, clauses 1 and 2 state that ``[a]
Member . . . of the House shall behave at all times in a manner
that shall reflect creditably on the House,'' and ``shall
adhere to the spirit and the letter of the Rules of the House .
. .'' (emphasis added).
IV. BACKGROUND
A. BUSINESS DISPUTES BETWEEN REPRESENTATIVE BUCHANAN AND MR. KAZRAN,
AND THE DRAFT AFFIDAVIT
From at least 2005 through 2008, Representative Buchanan,
either directly or through a corporation he owned--1099
Management Company, LLC (1099 Management)--held an ownership
interest in several car dealerships, including Venice Nissan
Dodge (VND), Suncoast Ford (SCF), and Hyundai of North
Jacksonville (HNJ).\18\ HNJ was, at the time relevant to this
matter, a car dealership in Jacksonville, Florida.
Representative Buchanan owned a majority stake in HNJ until
2008, when he sold his interest to Mr. Kazran, who had been up
to that point the president and minority owner of HNJ.\19\
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\18\See Representative Buchanan's Financial Disclosure Statement
for January 1, 2004-April 30, 2006 (filed May 12, 2006).
\19\See FEC v. Kazran, No. 10-cv-1155, Docket # 1 at Sec. 16 (M.D.
Fla. Dec. 17, 2010).
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Over the summer of 2008, Representative Buchanan's business
relationship with Mr. Kazran began to deteriorate. The fallout
from that relationship was then litigated on a continuous basis
and in a number of forums until at least late 2014. To
summarize, when Representative Buchanan sold his interest in
HNJ to Mr. Kazran, he loaned Mr. Kazran the funds used to
purchase his equity interest, essentially converting his
ownership in HNJ into a loan to Mr. Kazran.\20\ In 2008, Mr.
Kazran sought additional funds from Representative Buchanan to
purchase Kia dealerships in Jacksonville, which Representative
Buchanan provided in the form of a $2.5 million personal
unsecured loan.\21\ Representative Buchanan alleged that Mr.
Kazran stopped repaying this loan in the summer of 2008.\22\
Representative Buchanan was concerned that Mr. Kazran might
declare bankruptcy, and he began negotiating a settlement that
involved paying Mr. Kazran millions of additional dollars in
exchange for ownership of other dealership properties.\23\ Mr.
Kazran, for his part, claimed that Representative Buchanan
breached a variety of agreements between them and their related
businesses.\24\ Representative Buchanan and Mr. Kazran ended up
filing suit against each other in at least two state
courts.\25\
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\20\FEC, In the Matter of Vern Buchanan et al., MUR 6054
(hereinafter ``FEC Investigation''), Deposition of Representative
Buchanan.
\21\Id.
\22\Id.
\23\Id. It is worth noting that in 2008, a state court in Georgia
held Mr. Kazran in contempt based on actions taken after a business he
controlled entered receivership. See infra Part IV.B.3.
\24\See generally Kazran v. Buchanan, 2008 CA 15448 (Fla. Cir. Ct.,
Sarasota Cty.).
\25\See id.; see also 1099 Mgmt. Co., LLC v. Gwinnett, LLC., 16
2008 CA 011480 (Fla. Cir. Ct., Duval Cty.).
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As discussed more fully below at Section IV.B.3., the
evidence shows that before the breakdown in the relationship
between Mr. Kazran and Representative Buchanan, over the course
of two election cycles in 2006 and 2008, Mr. Kazran instructed
HNJ employees and other individuals to contribute to VBFC.\26\
Mr. Kazran subsequently directed the HNJ controller to write
checks drawn from HNJ accounts to those individuals to
reimburse their contributions. The reimbursed contributions
totaled $67,900.\27\ On September 8, 2008, while the parties
were discussing the resolution of their legal disputes, Mr.
Kazran sent an email to John Tosch--the CEO of Representative
Buchanan's company, 1099 Management, LLC--stating that HNJ had
reimbursed its employees for their contributions to VBFC:
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\26\FEC Investigation, General Counsel's Report #7 at 4-5.
\27\Id.
This is the 1st set of [reimbursement] checks, there
are more to follow, It [sic] gives me great regret to
have done this for Vern when he doesn't even hesitates
[sic] for a second to sue me and my wife over 20k.
Maybe he can consider taking part of this 80k+ as one
month of payment so my wife doesn't cry out of fear of
loosing [sic] our home.\28\
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\28\OCE's Referral, Ex. 8.
This September 8, 2008 email appears to have been the first
clear indication to Representative Buchanan that Mr. Kazran had
directed HNJ to reimburse contributions its employees made to
VBFC. However, there had been prior communications between Mr.
Kazran, Representative Buchanan, and their respective
associates regarding campaign contributions generally. On
August 26, 2008, Mr. Kazran emailed Representative Buchanan to
discuss their legal dispute, and noted that he was ``the only
one in our group that has donated over 80k'' to VBFC.\29\ On
August 27, 2008, Joshua Farid, formerly the CFO of HNJ and Mr.
Kazran's brother-in-law, wrote to Mr. Tosch and referred to the
support that ``the dealership'' had provided to Representative
Buchanan's campaign, ``to a tune of $80K.''\30\ While neither
of these communications clearly alleged that HNJ had reimbursed
its employees for their contributions to Representative
Buchanan's campaign, they might have alerted Representative
Buchanan or his associates and counsel that something was
amiss.\31\
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\29\OCE's Referral para.para. 60, 61.
\30\Id.
\31\For example, a review of Mr. Kazran's contributions to VBFC
would indicate that he did not make $80,000 in contributions to the
campaign in his own name, which could raise the question of what the
``over $80K'' figure referred to.
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On October 2, 2008--approximately three weeks after Mr.
Kazran's September 8, 2008 email to Mr. Tosch--Mike Lindell,
the attorney representing Representative Buchanan in his civil
dispute with Mr. Kazran,\32\ transmitted a Term Sheet outlining
a proposed settlement of the outstanding disputes between Mr.
Kazran and Representative Buchanan. Representative Buchanan's
signature appears on this Term Sheet, but during his testimony
before the Committee, he could not recall signing the document,
and stated that he may have signed it without reading it.
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\32\This attorney is not the same attorney that represented
Representative Buchanan or VBFC in the FEC Investigation, OCE's
inquiry, or the Committee's review.
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Much of this Term Sheet was similar to previous settlement
proposals between the parties, insofar as it proposed that
Representative Buchanan and Mr. Kazran would settle their
disputes, in exchange for which Representative Buchanan would
purchase certain dealership assets from Mr. Kazran and help him
pay off obligations at another dealership, through a cash
payment of $2.9 million.\33\ Unlike the previous proposals,
however, this Term Sheet included a draft affidavit regarding
the reimbursed campaign contributions.\34\ The draft affidavit
was prepared for Mr. Kazran's signature, and accordingly refers
to him in the first person.\35\ It stated that ``[d]uring the
course of tense and somewhat hostile negotiations between my
lawyers and me, and representatives for [Representative]
Buchanan, I advised a representative of [Representative]
Buchanan that one or more of the dealerships of which I was in
operational control had reimbursed certain individuals who had
contributed to [VBFC].''\36\ It went on to state that
``[b]efore September 2008 neither I, nor to my knowledge any
other person who had ever advised [Representative] Buchanan or
any of his representatives had any information that [these
dealerships] reimbursed certain individuals for contributions
made to [VBFC].''\37\ The affidavit further stated that Mr.
Kazran had not heard Representative Buchanan threaten
discrimination or reprisal to dealership employees for failing
to make a contribution, had not heard Representative Buchanan
approve of plans to reimburse contributions, and had not been
advised by any third party that Representative Buchanan was
aware of plans to reimburse contributions.\38\
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\33\OCE's Referral, Ex. 1.
\34\Id.
\35\Id.
\36\Id.
\37\Id. (emphasis added).
\38\Id.
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The precise nature of Representative Buchanan's involvement
in the process of either constructing the draft affidavit or
attempting to get Mr. Kazran to sign it is very much in
dispute. Representative Buchanan claimed in testimony before
the FEC and the Committee that he had not seen the draft
affidavit at the time it was provided to Mr. Kazran, although
it was attached to the settlement term sheet that he
signed.\39\ Indeed, during his testimony before the Committee,
Representative Buchanan stated that he could not remember ever
having reviewed the affidavit, despite it being a central part
of both the FEC and OCE investigations.
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\39\FEC Investigation, Deposition of Representative Buchanan.
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All of Mr. Kazran's written communications regarding the
reimbursed contributions and the settlement were directed at
either Mr. Tosch or Representative Buchanan's litigation
counsel, and not to Representative Buchanan directly. However,
Mr. Kazran stated to OCE that he had dinner with Representative
Buchanan and Mr. Tosch in early October 2008, and at that
dinner the two men pressured Mr. Kazran to sign the draft
affidavit. Representative Buchanan, in his testimony before the
FEC and the Committee, denied ever speaking directly to Mr.
Kazran about the affidavit, and noted that Mr. Kazran stated in
two emails that Mr. Kazran ``attempted to speak with
[Representative Buchanan] directly but he did not answer,''\40\
and ``[a]t no time [did Representative Buchanan and I]
discuss[] signing documentation that has nothing to do with our
agreement [sic].''\41\ Mr. Tosch, for his part, denied ever
discussing the affidavit in person with Mr. Kazran, and stated
that all of his participation in negotiations during this
period consisted of either conversations between the two sides'
attorneys, or unsolicited and unreciprocated contact from Mr.
Kazran to Mr. Tosch, not the other way around.\42\
---------------------------------------------------------------------------
\40\VGB-HCE 004296.
\41\VGB-HCE 004312.
\42\FEC Investigation, Deposition of John Tosch. Representative
Buchanan noted in his testimony that the time period in question
included his wedding anniversary (during which he would have been
unavailable for a dinner with Mr. Kazran). FEC Investigation,
Deposition of Representative Buchanan. Additionally, Representative
Buchanan recorded votes on bills in the House on the evening of October
2, 2008, and on the afternoon of October 3, 2008. 154 Cong. Rec.
H10671-05 (2008) (Roll Call No. 676); 154 Cong. Rec. H10805 (Roll Call
No. 681).
---------------------------------------------------------------------------
On the other hand, it is clear that Representative Buchanan
knew by at least October 2008 of the allegation that HNJ
reimbursed its employees for contributions to VBFC, as
evidenced by a voicemail message that Representative Buchanan
appears to have left for Mr. Kazran. While the transcript of
the voicemail does not indicate its date, Mr. Kazran told OCE
that he received and recorded the voicemail after he received
the draft affidavit on October 2, 2008, and after he allegedly
had a conversation during which Representative Buchanan urged
Mr. Kazran to sign the draft affidavit.\43\ In the voicemail,
Representative Buchanan did not specifically discuss the draft
affidavit, but on one occasion he did assert that Mr. Kazran
faced legal liability for any reimbursed contributions, while
at the same time denying his own involvement:
---------------------------------------------------------------------------
\43\OCE's Referral, Ex. 2 Sec. Sec. 31-33.
I think the threatening of the political stuff and all
that, you got more liability than you know if you start
telling people that you reimbursed people, because
technically you have that liability. All I told you,
and I've always made it clear is that you can't
reimburse people. They've got to give it under their
free will. You know that. At 12, 18 points, we're going
---------------------------------------------------------------------------
to win the election anyway.\44\
\44\FEC Investigation, Deposition of Sam Kazran. Representative
Buchanan appears to have left a second voicemail message for Mr.
Kazran, which did not directly mention reimbursed contributions, and
instead focused on the private business disputes between him and Mr.
Kazran, encouraging him to agree to a settlement. Nothing in the
transcript of the recorded voicemails indicated the dates on which they
occurred, but it is worth noting that by October 6, 2008, the draft
affidavit had been removed from the proposed Term Sheet.
Mr. Kazran ultimately refused to sign the draft affidavit,
and on October 6, 2008, VBFC filed a self-report to FEC
disclosing the improper contributions from HNJ and asking for
guidance on how to dispose of those funds.\45\ VBFC ultimately
disgorged the contributions, consistent with FEC's
recommendation. Also on October 6, 2008, Representative
Buchanan's litigation counsel recirculated a revised Term
Sheet, which did not contain the draft affidavit.\46\ On
October 16, 2008, Representative Buchanan's litigation counsel
revised the Term Sheet again and sent it to Mr. Kazran's
attorneys; this version still excluded the draft affidavit, but
increased Representative Buchanan's proposed cash payout to $3
million. In the end, no agreement was reached.
---------------------------------------------------------------------------
\45\See FEC Investigation, Sua Sponte Submission from VBFC (Oct. 6,
2008).
\46\VGB-HCE 004315-19.
---------------------------------------------------------------------------
The parties continued to litigate their dispute in Florida
state court. Mr. Kazran included in subsequent versions of his
civil complaint allegations related to the draft affidavit,
among other allegations.\47\ Specifically, Mr. Kazran alleged
that Representative Buchanan abused the legal process by
attempting to force Mr. Kazran to sign a false affidavit.
Ultimately, the court granted partial summary judgment in favor
of Representative Buchanan for some of Mr. Kazran's claims,
then entered a directed verdict against Mr. Kazran and in favor
of Representative Buchanan on the rest of Mr. Kazran's
claims.\48\ While that disposition indicated that the court had
rejected Mr. Kazran's claims about the draft affidavit, the
record does not make clear the court's legal or factual
rationale for doing so. Representative Buchanan prevailed on
his own claims against Mr. Kazran after a jury trial.\49\
---------------------------------------------------------------------------
\47\Kazran v. Buchanan (Aug. 10, 2012) (Third Amended Complaint).
\48\Kazran v. Buchanan (Dec. 5, 2014) (Final Judgment).
\49\Id.
---------------------------------------------------------------------------
B. ALLEGATIONS OF REPRESENTATIVE BUCHANAN'S INVOLVEMENT WITH, AND
KNOWLEDGE OF, CONDUIT CONTRIBUTIONS TO VBFC
1. Suncoast Ford (SCF)
SCF was, at the time relevant to this matter, a car
dealership in Port Richey, Florida. Representative Buchanan
owned a majority stake in SCF, but was not involved in its day-
to-day operations; Gary Scarbrough was the operating minority
partner. Four SCF officers and employees--Mr. Scarbrough,
Kenneth Lybarger, Harold Glover, and M. Osman Ally--each
contributed $4,600 to VBFC in March 2007 via personal
check.\50\ According to Mr. Lybarger, SCF's controller, Mr.
Scarbrough, subsequently directed him to cut checks from SCF's
bank account to reimburse the four SCF officers and employees
for their VBFC contributions.\51\ Mr. Scarbrough told the FEC
that, while Representative Buchanan had asked him on a number
of occasions to contribute to VBFC, he could recall very little
about the reimbursements themselves.\52\ Eventually, an auditor
who worked for Buchanan Automotive Group reviewed SCF's books
and discovered the reimbursements. SCF then notified VBFC of
the reimbursements, and VBFC refunded the contributions to the
individuals in question.\53\ Mr. Scarbrough testified that, at
the time he caused SCF to reimburse the individual
contributions, he did not know that such reimbursement violated
campaign finance laws, and that doing so was a ``mistake.''\54\
The FEC found, based on these uncontested facts, that SCF and
Mr. Scarbrough had both knowingly violated 52 U.S.C. 30122, and
directed SCF and Mr. Scarbrough to pay fines of $7,000 and
$8,500, respectively.\55\ However, the FEC found no evidence
that Representative Buchanan was involved in or aware of SCF's
decision to reimburse its employees' contributions to VBFC.\56\
Representative Buchanan testified before the Committee that he
was not involved in or aware of reimbursed contributions at SCF
at the time they occurred.
---------------------------------------------------------------------------
\50\See FEC Investigation, Conciliation Agreement with Gary
Scarbrough at para.4 (Dec. 20, 2011).
\51\See FEC Investigation, General Counsel's Report #10 at 3 (Apr.
29, 2011).
\52\See Id. at 4.
\53\See FEC Investigation, Conciliation Agreement with Gary
Scarbrough at para.8.
\54\FEC Investigation, General Counsel's Report #10 at 6.
\55\See FEC Investigation, Conciliation Agreement with SCF at VI
(Dec. 20, 2011); FEC Investigation, Conciliation Agreement with Gary
Scarbrough at VI.
\56\FEC Investigation, General Counsel's Report #9 at 12, 15 (Jan.
25, 2011).
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2. Venice Nissan Dodge (VND)
VND was, at the time relevant to this matter, a car
dealership in Venice, Florida. Representative Buchanan owned a
majority stake in VND, but was not involved in its day-to-day
operations, which were handled jointly by minority owner Shelby
Curtsinger and general sales manager Donald Caldwell.\57\ On or
about September 15 or 16, 2005, Caldwell met with VND employees
Jack Prater, Carlo Bell, Jason Martin, Marvin White, and
William Mullins, and gave each man $1,000 in cash.\58\ Mr.
Caldwell obtained the funds he used for this distribution from
the VND accounting office, and the funds were drawn from a VND
bank account.\59\ Each of the five VND employees who received
the $1,000 in cash contributed the same amount to VBFC through
personal checks written within a day or two after they received
the cash.\60\ Mr. Caldwell admitted that, around the same time
he gave the $1,000 to each of the five VND employees, he
discussed with each of them the possibility that they might
contribute to VBFC.\61\ The import of that conversation,
however, was a matter of some disagreement. Mr. Bell alleged
that Mr. Caldwell had explained that the $1,000 was a
reimbursement for donating to VBFC, and that when Mr. Bell
objected, Mr. Caldwell asked him if he was ``on the team'' or
not.\62\ Messrs. Prater, Martin, White, and Mullins, however,
asserted that the bonuses were not connected to their
contributions and that they gave to VBFC of their own free
will.\63\ These four VND employees, as well as Mr. Caldwell,
testified that the $1,000 cash payments were not unusual in the
car sales business, and that they were paid to the VND
employees for reaching certain performance targets.\64\ Despite
this factual dispute, the FEC determined that there was
probable cause to believe that the $1,000 cash payments, and
the subsequent donations to VBFC, constituted a violation of 2
U.S.C. 441f.\65\ While VND and Mr. Caldwell never admitted
guilt or responsibility for the violations, they nevertheless
agreed to pay a fine of $11,000, and to request that VBFC
disgorge the $5,000 in question.\66\ VBFC disgorged those funds
on October 7, 2010, by check to the U.S. Treasury. As was the
case for the contributions for SCF, FEC found no evidence that
Representative Buchanan was involved with or aware of VND's
decision to reimburse its employees' contributions to VBFC.\67\
Representative Buchanan testified to the Committee that he was
not involved in or aware of reimbursed contributions at VND at
the time they occurred.
---------------------------------------------------------------------------
\57\FEC Investigation, Conciliation Agreement with VND and Donald
Caldwell at para.para.1-2 (Aug. 11, 2010).
\58\Id. at para.12.
\59\Id. at para.11.
\60\Id. at para.13.
\61\FEC Investigation, General Counsel's Report #4 at 3 (June 2,
2010).
\62\FEC Investigation, Complaint at Ex. A. David Padilla, a former
VND employee, similarly alleged that he was approached with an offer to
contribute to VBFC and be reimbursed by VND; Mr. Padilla stated that he
refused to participate. See Id. at Ex. D.
\63\See FEC Investigation, Statement of Reasons by Vice Chair
Caroline C. Hunter at 4-5 (Dec. 19, 2011).
\64\Id. at 4-5.
\65\FEC Investigation, Conciliation Agreement with VND and Donald
Caldwell at para.15.
\66\Id. at V-VI. It is important to note that the FEC's vote to
accept this agreement with VND and Mr. Caldwell was not unanimous--one
Commissioner credited the testimony of Mr. Caldwell and the VND
employees other than Mr. Bell and concluded that the evidence did not
``establish probable cause that a violation did occur.'' FEC
Investigation, Statement of Reasons by Vice Chair Caroline C. Hunter at
7.
\67\FEC Investigation, General Counsel's Report #9 at 15.
---------------------------------------------------------------------------
3. Hyundai of North Jacksonville (HNJ)
Similar to both SCF and VND, the FEC found that Mr. Kazran
and HNJ had violated 52 U.S.C. 30122 by reimbursing HNJ
employees for contributions to VBFC. However, unlike the other
two dealerships, the FEC was unable to reach an agreement with
Mr. Kazran in its ordinary process, and instead filed suit
against him and HNJ in the United States District Court for the
Middle District of Florida.\68\ Mr. Kazran never admitted
liability for his actions, but did ultimately settle the suit
and agree to pay a fine of $5,500.\69\
---------------------------------------------------------------------------
\68\FEC v. Kazran, No. 10-cv-1155 Docket #1 (M.D. Fla. Dec. 17,
2010).
\69\FEC v. Kazran, Docket #65 (Feb. 29, 2012). HNJ appears to be a
defunct entity and did not enter an appearance in the case. Thus, the
district court entered default judgment against HNJ for the full amount
of the reimbursed contributions. FEC v. Kazran, Docket #69 (Mar. 8,
2012).
---------------------------------------------------------------------------
The question of Representative Buchanan's involvement in
the HNJ reimbursements is subject to substantially more dispute
than his apparent lack of involvement in reimbursements from
the other two dealerships. Mr. Kazran alleged in his testimony
before FEC and OCE that all the actions he took were at the
repeated direction of Representative Buchanan:
I instructed them to write a check and reimburse
themselves for--because Mr. Buchanan had asked me to
get money. And he specifically told me to get someone
you trust and run it through the corporation.\70\
---------------------------------------------------------------------------
\70\FEC Investigation, Deposition of Sam Kazran; see also OCE's
Referral, Ex. 2 para.14.
Other witnesses testified that, while they did not directly
witness Representative Buchanan directing conduit contributions
at HNJ, they had observed other conversations and conduct that
tended to show Representative Buchanan approving of such
conduct. For example, HNJ's controller, Gayle Lephart, who
reimbursed several HNJ employees for contributions to VBFC,
stated that she overheard Mr. Kazran tell Representative
Buchanan, during a phone call, ``Vern, I'll handle it right
now.''\71\ Immediately after that call, Mr. Kazran directed Ms.
Lephart to reimburse her own contribution to VBFC from HNJ
funds. Joshua Farid stated that he overheard both sides of a
telephone conversation during which Representative Buchanan
told Mr. Kazran to reimburse contributions from HNJ employees
with HNJ funds.\72\ Steve Silverio, one of Representative
Buchanan's former business partners, testified that during a
lunch in August or September 2005, Dennis Slater, who worked
for Representative Buchanan's companies as Chief Operating
Officer (COO), suggested that corporate funds could be used to
reimburse contributions to Representative Buchanan's first
House campaign.\73\ More tangentially, Sal Rosa, a former
officer in one of Representative Buchanan's companies, stated
that before Representative Buchanan ran for office himself,
Representative Buchanan asked Mr. Rosa to have his company
reimburse a political contribution for another candidate. Mr.
Rosa claimed that when he objected, Representative Buchanan
told him to ``finesse it.''\74\
---------------------------------------------------------------------------
\71\OCE's Referral, Ex. 5 para.13-15.
\72\Mr. Farid's testimony is inconsistent with others, including
Mr. Kazran himself, on this point. See infra n. 76 and accompanying
text.
\73\Id. at 10.
\74\FEC Investigation, General Counsel's Report #9 at 14.
---------------------------------------------------------------------------
However, the evidence described above was in many ways
flawed, inconsistent, and ultimately insufficient to prove that
Representative Buchanan was directly involved in, or was even
aware of, the reimbursed contributions from HNJ. None of the
documents contemporaneous with the reimbursed contributions
corroborated Mr. Kazran's testimony; indeed, his testimony
consistently referred to oral direction from Representative
Buchanan, as opposed to memos or emails instructing him to
reimburse contributions. Similarly, none of the witness
testimony described above could consistently corroborate Mr.
Kazran's allegations. By her own admission, Ms. Lephart never
heard Representative Buchanan tell Mr. Kazran to reimburse
contributions,\75\ and Mr. Kazran explicitly rejected Mr.
Farid's claim that Mr. Farid directly overheard Representative
Buchanan tell Mr. Kazran to reimburse contributions during
telephone conversations between Mr. Kazran and Representative
Buchanan.\76\
---------------------------------------------------------------------------
\75\Id. at 7, 9.
\76\See OCE's Referral, Ex. 2 para.25 (``There was no instance when
[Mr. Kazran] allowed someone to overhear a phone call with
Representative Buchanan when reimbursements were discussed. Anyone who
said that is lying.'') (emphasis added); FEC Investigation, General
Counsel's Report #9 at 8 (Mr. Farid's understanding of Representative
Buchanan's involvement was ``based on subsequent conversations [Mr.
Farid] had with Mr. Kazran'').
---------------------------------------------------------------------------
Mr. Silverio's testimony, similarly, did not directly
connect Representative Buchanan to any of the reimbursed
contributions, much less those that specifically took place at
HNJ. While Mr. Silverio alleged that someone associated with
Representative Buchanan suggested using corporate funds for
contributions to VBFC generally, he did not connect
Representative Buchanan directly to the suggestion, nor did he
provide evidence that this suggestion led to any reimbursement
of campaign contributions from corporate funds. In the same
way, Mr. Rosa's uncorroborated testimony suggests that
Representative Buchanan may have failed to comply with federal
election laws when he raised funds for a different candidate,
prior to entering politics himself. But other than an isolated
comment to ``finesse'' the legality of a contribution, Mr. Rosa
provided no additional information about Representative
Buchanan knowing or approving of a specific scheme to reimburse
those contributions. Put another way, the one-off comments that
Mr. Silverio and Mr. Rosa heard and testified to were made in
different contexts and without any contextual connection to the
contributions at HNJ.
Mr. Kazran's uncorroborated testimony suffered from
another, larger problem: his lack of credibility. Mr. Kazran's
statement to OCE was inconsistent with his testimony before the
FEC: he testified to the former that Representative Buchanan
first directed Mr. Kazran to reimburse contributions in June
2006, whereas Mr. Kazran told the FEC that first occurred in
November 2005.\77\ Because HNJ first reimbursed contributions
to VBFC in 2005, Mr. Kazran's testimony to OCE makes it less
likely that Representative Buchanan was involved in at least
those initial contributions, if not the entire series of
reimbursements. Mr. Kazran also appeared at times during the
investigations to be motivated by personal and professional
animus for Representative Buchanan. For example, in the weeks
leading up to the 2010 election, he threatened to publicize the
FEC investigation, in potential violation of the FEC's
confidentiality rules, by filing a lawsuit related to the
investigation.\78\ Perhaps most concerning, a Georgia state
court ordered Mr. Kazran to serve jail time for contempt of
court, arising out of his fraudulent transfer of over $100,000
from car dealerships owned by Mr. Kazran that were in
receivership.\79\ The FEC found that Mr. Kazran's conduct in
that case reflected both on his honesty and his respect for the
law.\80\
---------------------------------------------------------------------------
\77\Compare OCE's Referral, Ex. 2 para. 12 with FEC Investigation,
Deposition of Sam Kazran. In his OCE statement, Mr. Kazran referred to
a conversation he allegedly heard between Representative Buchanan and
two of his colleagues in late 2005 or early 2006, where reimbursements
were discussed. But the other alleged participants in that conversation
denied hearing Representative Buchanan authorize reimbursed
contributions. See, e.g., OCE's Referral, Ex. 10 para. 23.
\78\FEC Investigation, General Counsel's Report # 9 at 3-4. Mr.
Kazran's motives for attacking Representative Buchanan are discussed
more fully in the section above.
\79\Id. at 3.
\80\Id.
---------------------------------------------------------------------------
Viewed in this context, Mr. Kazran's claims about what
happened at HNJ fit less tidily into the totality of the
circumstances. Without corroboration of Representative
Buchanan's instruction to reimburse contributions, the pressure
he may have exercised on his colleagues to donate to his
campaigns appears less like a prelude to an illegal conduit
scheme and more like hard-sell fundraising, which is not
illegal. In the end, the flaws in Mr. Kazran's story and his
character made it at least equally likely that he decided to
reimburse the contributions himself, without Representative
Buchanan's knowledge or involvement. The FEC appears to have
reached this conclusion, and took no further action with
respect to Representative Buchanan.\81\ In his testimony before
the Committee, Representative Buchanan again asserted that he
had not been involved in or had any knowledge of the reimbursed
contributions at HNJ at the time they occurred.
---------------------------------------------------------------------------
\81\FEC Investigation, Notification to Vernon G. Buchanan (Feb. 7,
2011).
---------------------------------------------------------------------------
When recommending that the FEC close its investigation of
Representative Buchanan, the FEC's Acting General Counsel noted
that Representative Buchanan's testimony was ``not particularly
credible.''\82\ For example, the FEC's Acting General Counsel
concluded that, despite Representative Buchanan's testimony to
the contrary, it was unlikely that Representative Buchanan was
not involved in the drafting of the affidavit.\83\ In addition,
Representative Buchanan testified that he could not remember
asking Mr. Kazran to raise funds for VBFC, and testified that
he did not ``know what anybody has raised.'' However, the FEC's
Acting General Counsel noted that VBFC kept lists of the
amounts that Representative Buchanan's partners had raised, and
his campaign treasurer testified that Representative Buchanan
would regularly discuss fundraising activities with his
partners at business meetings and through personal follow-
ups.\84\ Despite these issues, the FEC's Acting General Counsel
recommended dismissal of the investigation of Representative
Buchanan because these ``inconsistencies on background issues
do not necessarily show that [Representative] Buchanan directed
[Mr.] Kazran to reimburse contributions.''\85\ However, the
FEC's Acting General Counsel stated that Representative
Buchanan's ``inability to remember basic facts as to these
uncontroversial, routine issues detracts from his
credibility.''\86\
---------------------------------------------------------------------------
\82\See FEC Investigation General Counsel's Report #9 at 20.
\83\Id. at 19.
\84\Id. at 21.
\85\Id. at 22.
\86\Id.
---------------------------------------------------------------------------
When the Committee interviewed Representative Buchanan, his
recollection of details regarding fundraising from business
partners was similarly vague. He had very little specific
recollection of having solicited campaign donations from any
particular partner or group of partners, although he
acknowledged that ``sometimes people would ask me if they could
help in the campaign'' after having meetings with his partners.
He noted that the campaign did track donors, but that his own
focus was on ``relationships and people that I've worked with
over the years [and soliciting a] maxed out contribution,'' as
opposed to asking his colleagues to host large-scale
fundraisers or bundle contributions from their own networks.
When asked about the similarities between the alleged
conduit contributions at the aforementioned companies,
Representative Buchanan denied that he had any knowledge or
involvement in any of them, or of any coordination between
these entities. Rather, Representative Buchanan postulated:
I have 55 entities. You're talking about Dodge where
there is five or six people reimbursed $1,000. You're
talking about a Ford store that's up in the Clearwater
area that was $10,000, and Sam Kazran, that I'm aware
of, and we raised in excess of $10 million [in campaign
contributions]. [T]he reality of it is, when you raise
that much money over a period of 12 years almost,
you're going to have some incidences. . . . I do think
that we had partners that were naive. . . .
Unfortunately some of them were just overzealous to
some extent. I don't think it's a lot in terms of the
magnitude over all, but it's too much by any standard .
. . we don't take employee contributions anymore.
V. FINDINGS
A. 52 U.S.C. 30122\87\
---------------------------------------------------------------------------
\87\Previously codified as 2 U.S.C. Sec. 441f.
---------------------------------------------------------------------------
A federal campaign finance statute, 52 U.S.C. 30122,
prohibits persons from making contributions in the name of
another. The prohibition applies not only to persons who make
such contributions, but also to persons who assist in such
contributions, including ``those who initiate or instigate or
have some significant participation in a plan or scheme to make
a contribution in the name of another[.]''\88\ The statute
applies to ``knowing'' and ``willful'' violations,\89\ which is
not to say that violations require a specific knowledge of the
law, but rather that the defendant ``acted deliberately and
with knowledge that the representation was false.''\90\ The FEC
investigated the reimbursed contributions from Buchanan-
affiliated companies to VBFC, and did not find that
Representative Buchanan was responsible for violations of
Section 441f.\91\ While the FEC staff noted that the matter
``came close'' to such a finding with respect to reimbursed
contributions from one of the dealerships--HNJ--the FEC
nevertheless voted to close the matter and take no further
action.\92\
---------------------------------------------------------------------------
\88\11 C.F.R. Sec. 110.4(b)(1)(iii); 54 Fed. Reg. 34098 (1989).
\89\See 52 U.S.C. Sec. 30109(a)(5)(B), 30109(d), previously
codified as 2 U.S.C. Sec. 437g.
\90\United States v. Hopkins, 916 F.2d 207, 214 (5th Cir. 1990).
\91\FEC Investigation, General Counsel's Report #9 at 27.
\92\Id.
---------------------------------------------------------------------------
The Committee's own review of the evidence led to the same
conclusion reached by the FEC. The witnesses to Representative
Buchanan's involvement with the conduit contributions at HNJ
contradicted each other and could not substantiate a direct
link between Representative Buchanan and the reimbursed
contributions. Ms. Lephart heard only Mr. Kazran's side of a
telephone conversation, which did not include any explicit
direction from Representative Buchanan. Mr. Farid, who was Mr.
Kazran's relative, claimed to have heard both sides of a
conversation between Mr. Kazran and Representative Buchanan,
but Mr. Kazran said that was a lie. Mr. Kazran himself had
provided inconsistent testimony when speaking to the FEC and
OCE, and his credibility was further compromised when a state
court in Georgia convicted him of contempt in 2008 for
diverting funds from one of his companies in violation of a
court order.
The Committee was initially troubled that three different
Buchanan-affiliated companies were caught reimbursing
contributions to VBFC, along with a fourth company owned and
controlled by Representative Buchanan's close friend, Timothy
Mobley. Such facts reasonably raise questions about
Representative Buchanan's involvement in the various schemes
and explain why so many entities investigated these
allegations. The Committee was also concerned that Mr. Silverio
testified that one of Representative Buchanan's close
associates suggested reimbursing contributions as a general
matter, and that Mr. Rosa testified that, before Representative
Buchanan even ran for office himself, he suggested reimbursing
contributions for another candidate from corporate funds.
However, when viewed in the context of all the available
evidence, these facts, on their own, were not sufficient to
conclude that Representative Buchanan knew of the unlawful
reimbursements prior to September 2008, or had some role in
directing or approving of them. Indeed, it is not unreasonable
to conclude that each dealership's management, in response to
intense fundraising efforts from VBFC, made a similar error in
judgment and reimbursed contributions independent of the
choices of one another. Moreover, none of the witnesses could
credibly claim that they heard Representative Buchanan direct
the reimbursement of campaign contributions to VBFC, or even
show that he knew of them. While Mr. Silverio did testify that
an associate of Mr. Buchanan suggested reimbursing
contributions through corporate funds, as the FEC said, Mr.
Silverio's testimony ``eliminated [Representative] Buchanan's
involvement in this incident.''\93\ The witness who came
closest to implicating Representative Buchanan directly--Mr.
Rosa--testified about a conversation that occurred before
Representative Buchanan even ran for his House seat and
concerned a different candidate. All told, there was
insufficient evidence to conclude that Representative Buchanan
knew of or directed conduit contributions at any companies with
which he was affiliated.
---------------------------------------------------------------------------
\93\FEC General Counsel's Report #9 at 11.
---------------------------------------------------------------------------
Accordingly, the Committee did not find that Representative
Buchanan violated Section 30122.
B. TITLE 18
Three statutes criminalize improper influence over the
testimony of witnesses before federal tribunals. Those
statutes--sections 201(b)(3), 1505, and 1512(b)(1) of Title
18--criminalize related conduct in slightly different ways.
First, 18 U.S.C. 201(b)(3) prohibits persons from knowingly and
corruptly giving, offering, or promising anything of value to a
witness, with the intent of influencing that witness'
testimony. Second, 18 U.S.C. 1505 prohibits persons from
knowingly and corruptly influencing, obstructing, or impeding
pending proceedings before a federal agency, such as the FEC,
or from knowingly and corruptly endeavoring to influence,
obstruct, or impede such a proceeding. Third, 18 U.S.C.
1512(b)(1) prohibits persons from knowingly and corruptly
intimidating, threatening, engaging in misleading conduct, or
corruptly persuading another person with the intent of
influencing a person's testimony. All of these statutes
prohibit ``knowing'' and ``corrupt'' actions, which is to say
that a particular act only violates the law if it was taken
with the intent to accomplish the wrongful end.\94\ The Supreme
Court has clarified that, at least with respect to Section
1512, liability is limited to ``persuaders conscious of their
wrongdoing.''\95\ And the statutes themselves state that they
do not apply to actions that ``consisted solely of lawful
conduct and [where] the defendant's sole intention was to
encourage, induce, or cause the other person to testify
truthfully,''\96\ as well as ``the providing of lawful, bona
fide, legal representation services in connection with or
anticipation of an official proceeding.''\97\
---------------------------------------------------------------------------
\94\See, e.g., Arthur Andersen v. United States, 544 U.S. 696
(2005); United States v. Bhagat, 436 F.3d 1140 (9th Cir. 2006).
\95\Arthur Andersen, 544 U.S. at 706.
\96\18 U.S.C. Sec. 1512(e).
\97\18 U.S.C. Sec. 1515(c).
---------------------------------------------------------------------------
Paragraph 5 of the draft affidavit would have required Mr.
Kazran to swear that he, Mr. Kazran, did not know that HNJ
reimbursed its employees' contributions to VBFC until September
2008, after the reimbursements occurred.\98\ However, the
record shows that Mr. Kazran did know of the reimbursed
contributions before September 2008. First, Mr. Kazran has
admitted directing the reimbursements in 2005, 2006, and
2007.\99\ Additionally, Ms. Lephart and Mr. Farid both
testified that Mr. Kazran was involved in the
reimbursements.\100\ However, to demonstrate that
Representative Buchanan attempted to improperly influence Mr.
Kazran's testimony would require a showing that Representative
Buchanan knew the statement about Mr. Kazran's knowledge was in
the draft affidavit, and knew that statement was false.
---------------------------------------------------------------------------
\98\OCE's Referral Sec. 37.
\99\Id. para. 38-41, Ex. 2.
\100\Id. para. 43-50.
---------------------------------------------------------------------------
The Committee reviewed the available evidence and
ultimately concluded that the evidence was insufficient to find
that Representative Buchanan knowingly or corruptly attempted
to influence Mr. Kazran's testimony in an unlawful way. This
finding was consistent with the reviews of the FEC, DOJ, and
the Florida state court. OCE, however, found substantial reason
to believe Representative Buchanan improperly influenced Mr.
Kazran's testimony before the FEC. OCE noted in its Referral
that the fact that some witnesses, including Representative
Buchanan, failed to cooperate with its investigation permitted
it to draw an adverse inference against those witnesses.
However, OCE determined that, even without such an inference,
the evidence was ``more than sufficient'' to support its
determination.\101\
---------------------------------------------------------------------------
\101\Id. para. 87.
---------------------------------------------------------------------------
Thus, despite the lack of cooperation from Representative
Buchanan, OCE found there was substantial reason to believe
that Representative Buchanan knew that paragraph 5 was false.
This finding was based on certain communications between Mr.
Kazran and either Representative Buchanan or Representative
Buchanan's employees. As a threshold matter, OCE noted that the
September 8, 2008 email itself disclosed Mr. Kazran's
involvement in the reimbursed contributions, giving
Representative Buchanan notice that Mr. Kazran would have known
about them before that date.\102\ OCE further relied on two
emails sent by Mr. Kazran and Mr. Farid to employees of
Representative Buchanan in August 2008, discussing campaign
contributions, noting that HNJ had supported Representative
Buchanan ``to a tune of $80K'' and that Mr. Kazran was ``the
only one in our group that has donated over 80k'' to VBFC.\103\
Finally, OCE noted that Representative Buchanan himself stated
in an October 2008, voicemail that Mr. Kazran had legal
responsibility for the reimbursed contributions, and therefore
must have known of Mr. Kazran's own involvement.\104\
---------------------------------------------------------------------------
\102\Id. para. 53-57.
\103\Id. para. 62-63.
\104\Id. para. 65.
---------------------------------------------------------------------------
Representative Buchanan has offered two responses to the
allegation that he intended to cause Mr. Kazran to sign a false
affidavit. First, he has stated that Paragraph 5 of the draft
affidavit was true on its face.\105\ However, Representative
Buchanan reaches this conclusion by ignoring key language from
Paragraph 5, namely the statement that Mr. Kazran did not know
of the illegal reimbursements before September 2008. FEC's
Acting General Counsel found that this portion of the affidavit
was false,\106\ and the Committee reached the same conclusion.
---------------------------------------------------------------------------
\105\Letter from Counsel to Representative Buchanan to OCE
(``Representative Buchanan's OCE Response'') at 3.
\106\Id. at 3-4.
---------------------------------------------------------------------------
Second, and more persuasively, Representative Buchanan
asserts that Paragraph 5, while it is ``admittedly inartful and
contains typos,'' was intended to establish that Representative
Buchanan had no knowledge of the reimbursed campaign
contributions prior to Mr. Kazran's September 8, 2008, email to
Mr. Tosch.\107\ In other words, Representative Buchanan claims
that the false language in Paragraph 5 was a drafting error,
and that this is clear from the general purpose of the draft
affidavit, the circumstances surrounding it, and the sections
other than Paragraph 5. Representative Buchanan also claims
that he did not see the draft affidavit until years after it
was provided to Mr. Kazran.
---------------------------------------------------------------------------
\107\Id. at 4.
---------------------------------------------------------------------------
While OCE focused on the plain reading of Paragraph 5, and
the false statement it contained, it did not explain why
Representative Buchanan would have wanted Mr. Kazran to swear
that Mr. Kazran was unaware of the reimbursed contributions
prior to September 2008, given that the draft affidavit was
intended to be filed with the FEC, to establish Representative
Buchanan's lack of knowledge of the reimbursement scheme.
However, Representative Buchanan's intentions regarding the
draft affidavit are critical to the determination of whether
his provision of an admittedly false affidavit to Mr. Kazran
was a violation of any of the criminal statutes OCE cited.
Ultimately, the Committee did not find sufficient evidence
that Representative Buchanan knowingly or corruptly attempted
to influence Mr. Kazran's testimony in an unlawful way. As a
threshold matter, an offer of a monetary settlement in exchange
for the execution of an affidavit, without further evidence of
corrupt intent, is not illegal. Indeed, such offers are a
standard element of settlement discussions in commercial
litigation. Of course, if Representative Buchanan knowingly or
corruptly attempted to cause Mr. Kazran to sign a false
affidavit, he may have violated the statutes OCE cited in its
Referral.\108\ But proof of such a violation requires an
analysis of Representative Buchanan's intent; it is not enough
merely to show that Representative Buchanan's attorney
presented an affidavit containing a single false statement to
Mr. Kazran. Thus, the Committee considered the totality of the
circumstances surrounding the language at issue.
---------------------------------------------------------------------------
\108\It is worth noting that OCE did not cite any case law or other
precedent supporting its application of the three statutes in question
to the facts as OCE found them.
---------------------------------------------------------------------------
This analysis necessarily begins with Representative
Buchanan's knowledge of the contents of the affidavit.
Representative Buchanan testified that he had not seen the
affidavit at the time it was presented to Mr. Kazran, and OCE's
Referral did not cite any evidence to the contrary. While the
FEC's Acting General Counsel found that ``[i]t is improbable
that Buchanan's attorneys drafted the affidavit and presented
it to Kazran without Buchanan's involvement,''\109\ there is no
evidence, either in documents or testimony, showing that
Representative Buchanan actually reviewed the final document,
including the disputed language in Paragraph 5, before his
attorney presented it to Mr. Kazran.\110\ Thus, the Committee
could not conclude that Representative Buchanan provided an
affidavit to Mr. Kazran that Representative Buchanan had read
and knew to be false.
---------------------------------------------------------------------------
\109\FEC General Counsel's Report #9 at 19.
\110\Of course, the October 2, 2008 Term Sheet does bear
Representative Buchanan's signature. Representative Buchanan
acknowledged that he may have signed the signature page of the October
2, 2008 term sheet without reviewing the rest of the document,
including the affidavit. The signature lines are on a separate page
from the settlement terms and the affidavit.
---------------------------------------------------------------------------
Moreover, as Representative Buchanan has explained, the
idea that Paragraph 5 was intended to establish Mr. Kazran's
lack of knowledge of the reimbursed contributions before
September 2008 makes very little sense given the context of the
draft affidavit and the surrounding dispute. By October 2,
2008, Representative Buchanan had been aware for a month that
HNJ employees had made improper contributions to VBFC. If
indeed he was not involved in those contributions, he
understood that liability would rest on those who were
responsible, namely Mr. Kazran. The voicemail recorded by Mr.
Kazran confirms Representative Buchanan's understanding, when
he stated that ``technically [Mr. Kazran has] that liability.''
In fact, not only did Representative Buchanan appear to
understand Paragraph 5 (and the rest of the draft affidavit) to
disclaim only his own knowledge and not Mr. Kazran's knowledge,
Mr. Kazran himself understood the draft affidavit in this way,
stating that the draft affidavit made him the ``fall guy'' and
``blame[d] everything on [Mr. Kazran.]''\111\ The FEC also
appears to have adopted this understanding of Paragraph 5,\112\
as both its questioning of Mr. Kazran and an initial report
from the General Counsel focused on the draft affidavit only
insofar as it might disclaim knowledge on the part of
Representative Buchanan.\113\ Put another way, many persons
used context clues to read paragraph 5 in a way that, while
inconsistent with its plain text, placed it in line with the
rest of the circumstances.
---------------------------------------------------------------------------
\111\See OCE's Referral, Ex. 2 para. 31; FEC Investigation,
Deposition of Sam Kazran.
\112\See FEC Investigation, General Counsel's Report #9 at 17-19.
\113\See FEC Investigation, Deposition of Sam Kazran; FEC General
Counsel's Report #2, 20.
---------------------------------------------------------------------------
Such a conclusion is even more reasonable considering the
nature of the draft affidavit itself. It is not uncommon for
attorneys to secure statements from witnesses in anticipation
of a proceeding, which can include drafting a proposed
statement for discussion with that witness. It is also not fair
to assume, without other evidence, that such drafts represent a
premeditated and intentional attempt to put words in a
witness's mouth, or that they are not subject to negotiation
and revision. Courts that have confronted similar issues have
held that simply providing a potential witness with a draft
affidavit for his signature does not, by itself, constitute the
obstruction of justice.\114\
---------------------------------------------------------------------------
\114\See, e.g., United States v. Brand, 775 F.2d 1460, 1469 (11th
Cir. 1985); see also Resolution Trust Corp. v. Bright, 6 F.3d 336, 341
(5th Cir. 1993) (``Placing statements in a draft affidavit that have
not been previously discussed with a witness does not automatically
constitute bad-faith conduct''); Harrington v. United States, 267 F.
97, 101 (8th Cir. 1920) (``It is not an unlawful attempt to influence
or impede a witness, or the due administration of justice, for one to
seek to obtain from a witness a statement of the facts as he believes
them to be, without the exercise of undue influence, even though such a
statement may conflict with prior testimony given by the one making the
statement. Such an effort is not regarded with favor, because of the
temptation to influence the witness unduly; but the mere request for a
statement believed to be true . . . is not corrupt conduct.'').
---------------------------------------------------------------------------
On a similar note, it is unclear that simply providing
paragraph 5 in the course of settlement negotiations
constituted ``corrupt persuasion'' under Section 1512, or
obstruction of justice, or witness bribery. There appear to
have been no consequences for Mr. Kazran's refusal to sign the
draft affidavit in terms of the ongoing dispute between him and
Representative Buchanan. The Term Sheets before and after the
one that included the draft affidavit do not evidence an
attempt to increase the value of any settlement that included
the draft affidavit; rather, the monetary value of
Representative Buchanan's settlement offer to Mr. Kazran
increased after the draft affidavit was dropped from the
agreement. Similarly, far from being a nonnegotiable condition
for Representative Buchanan, the evidence suggests that his
attorneys continued to negotiate in the same way they had,
irrespective of whether the draft affidavit was included. Even
Mr. Kazran's September 8, 2008 email disclosing the reimbursed
contributions came in the context of these same settlement
negotiations, and so it appears that it was Mr. Kazran, not
Representative Buchanan, who injected the campaign finance
issues into the unrelated commercial dispute between the two
men. Nor does the fact that Representative Buchanan countersued
Mr. Kazran in the commercial dispute establish any corrupt
intent to influence his testimony. Courts considering
allegations of witness tampering in settlement negotiations
have held that ``threats of litigation do not form the basis of
a witness tampering allegation,''\115\ and that ``[i]n a
litigious society such as ours, it is thin-skinned to think
that a threatened counter-suit, or otherwise, in response to an
initial threat of legal action is witness intimidation rather
than a mere puffing or power play among negotiators.''\116\
---------------------------------------------------------------------------
\115\G-I Holdings, Inc. v. Baron & Budd, 179 F.Supp.2d 233
(S.D.N.Y. 2001).
\116\Philadelphia Reserve Supply Co. v. Nowalk & Assoc., Inc., No.
91-CV-0449, 1992 WL 210590 at *6 (E.D. Pa. Aug. 25, 1992).
---------------------------------------------------------------------------
It is notable that DOJ received a citizen complaint
regarding these same allegations, and chose not to pursue
criminal charges against Representative Buchanan. Similarly,
Mr. Kazran included related allegations regarding the draft
affidavit in his complaint against Representative Buchanan in
Florida state court, and Representative Buchanan prevailed in
that case. The Committee is not privy to the internal rationale
for DOJ's decision, and did not observe the Florida state
proceedings firsthand. The Committee would not defer to these
decisions, even if their basis was clear. But based on the
Committee's own analysis above, it has found no reason to
deviate from the result reached in those two forums.
Accordingly, the Committee found insufficient evidence that
Representative Buchanan violated Section 201, 1505, or 1512 of
Title 18.
C. HOUSE RULE XXIII, CLAUSES 1 AND 2
As stated in previous reports,\117\ the Committee observes
two basic principles when applying the first two clauses of the
Code of Conduct. First, Members must at all times act in a
manner that reflects creditably upon the House. This standard
was created to provide the Committee ``the ability to deal with
any given act or accumulation of acts which, in the judgment of
the [C]ommittee, are severe enough to reflect discredit on the
Congress.''\118\ Clause 1 ``encompass[es] violations of law and
abuses of one's official position.''\119\ It is a
``purposefully . . . subjective'' standard.\120\
---------------------------------------------------------------------------
\117\See, e.g., Comm. on Ethics, In the Matter of Allegations
Relating to Representative Alcee L. Hastings, H. Rept. 113-663, 113th
Cong. 2d Sess. at 14-15 (2014); In the Matter of Allegations Relating
to Representative Don Young, H. Rept. 113-487, 113th Cong. 2d Sess. 45-
46 (2014); In the Matter of Allegations Relating to Representative
Shelley Berkley, H. Rept. 112-716, 112th Cong. 2d Sess. 36-37 (2012).
\118\114 Cong. Reg. 8778 (Apr. 3, 1968) (Statement of
Representative Price).
\119\Ethics Manual at 16.
\120\114 Cong. Reg. 8778 (Apr. 3, 1968) (Statement of
Representative Price).
---------------------------------------------------------------------------
Second, the Committee notes the proposition that the Code
of Conduct and other standards of conduct governing the ethical
behavior of the House community are not criminal statutes to be
construed strictly, but rather--under clause 2 of House Rule
XXIII--must be read to prohibit violations not only of the
letter of the rules, but of the spirit of the rules. Ethical
rules governing the conduct of Members were created to assure
the public of ``the importance of the precedents of decorum and
consideration that have evolved in the House over the
years.''\121\ The standard ``provide[s] the House with the
means to deal with infractions that rise to trouble it without
burdening it with defining specific charges that would be
difficult to state with precision.''\122\ The practical effect
of Clause 2 is to allow the Committee to construe ethical rules
broadly, and prohibit Members, officers and employees of the
House from doing indirectly what they would be barred from
doing directly. The Ethics Manual states that ``a narrow
technical reading of a House Rule should not overcome its
`spirit' and the intent of the House in adopting that and other
rules of conduct.''\123\
---------------------------------------------------------------------------
\121\House Comm. on Standards of Official Conduct, Report under the
Authority of H. Res. 418, H. Rept. 90-1176, 90th Cong. 2d Sess. 17
(1968).
\122\114 Cong. Reg. 8778 (Apr. 3, 1968) (Statement of
Representative Price).
\123\Ethics Manual at 17 (citing House Select Comm. on Ethics,
Advisory Opinion No. 4, H. Rept. 95-1837, 95th Cong. 2d Sess. app. 61
(1979)).
---------------------------------------------------------------------------
The Committee has endeavored to read the applicable laws
and rules in this matter in light of these provisions in the
Code of Conduct. This is somewhat in tension with the general
rule that criminal statutes such as those that formed the basis
of OCE's Referral are to be construed narrowly.\124\ But even a
broad reading of applicable rules does not create liability in
the absence of substantial evidence of wrongdoing. Clause 2 of
the Code of Conduct is intended to capture instances where
there is such evidence that a party violated the spirit of the
rule, not to create a lower standard of proof. Innuendo is not
evidence. In this case, the FEC, DOJ, and a Florida state court
examined the facts of Representative Buchanan's relationship
with Mr. Kazran, and none of them were able to substantiate any
violations of election laws or witness intimidation. The
Committee has reviewed the evidence and does not find
sufficient basis to reach an alternative conclusion.
---------------------------------------------------------------------------
\124\See generally United States v. Wiltberger, 18 U.S. (5 Wheat.)
35, 43 (1820).
---------------------------------------------------------------------------
Having said that, the Committee is concerned that, when
recommending that the FEC dismiss the investigation of
Representative Buchanan, the FEC's Acting General Counsel found
that the evidence ``comes close'' to showing that
Representative Buchanan directed or was aware of reimbursed
contributions from HNJ. Moreover, if indeed that evidence of
his involvement had been more substantial, even Representative
Buchanan's proffered interpretation of Paragraph 5 of the draft
affidavit--that he did not know of reimbursed contributions at
HNJ before September 2008--would have been false, and
consequently, the Committee's conclusion regarding the import
of the draft affidavit may have been different.
Indeed, it is troubling that part of the ``close'' case for
the FEC's Acting General Counsel was its determination that
parts of Representative Buchanan's own testimony were ``not
particularly credible.''\125\ To be clear, the Committee's own
review of Representative Buchanan's testimony led the Committee
to slightly different conclusions about Representative
Buchanan's candor. For example, the FEC's Acting General
Counsel concluded it unlikely that Representative Buchanan was
not involved in the drafting of the affidavit, because (1) the
affidavit related to matters outside the scope of the private
dispute between Representative Buchanan and Mr. Kazran, which
was the primary focus of the negotiations, and (2) because it
related to a matter that could have had electoral consequences
for Representative Buchanan in advance of the 2008 House
elections.\126\ Representative Buchanan's testimony before the
Committee was similarly vague and unclear regarding his role in
drafting the affidavit, especially his continued lack of recall
with respect to the document, despite no fewer than three
investigations regarding it. It would be more understandable if
Representative Buchanan claimed that the passage of time had
made it difficult to recall the process of drafting an eight-
year-old affidavit, but it is more difficult to ascertain
precisely how he might have remained ignorant of a two-page
document that has become so central to his own reputation.
---------------------------------------------------------------------------
\125\See FEC Investigation General Counsel's Report #9 at 20-22.
\126\Id. at 19.
---------------------------------------------------------------------------
But despite this lack of clarity, the evidence is simply
insufficient to show precisely what role he had in drafting the
affidavit, if any. Apart from the circumstances the FEC's
Acting General Counsel describes, the General Counsel cited no
evidence to contradict Representative Buchanan's testimony that
he had almost nothing to do with the affidavit, and even if he
had been more engaged, that does not suggest that he would have
caught the false statement in paragraph 5 that so many others
apparently missed.\127\
---------------------------------------------------------------------------
\127\It would have been prudent for Representative Buchanan to have
read the affidavit before his attorneys transmitted it to Mr. Kazran,
particularly given that Representative Buchanan signed the Term Sheet
to which the affidavit was attached.
---------------------------------------------------------------------------
On the other hand, some of the FEC's Acting General
Counsel's concerns about Representative Buchanan's credibility
arose because other, credible evidence contradicted his
testimony, especially as it related to his involvement in his
campaign's fundraising activities. While Representative
Buchanan testified that he could not remember asking Mr. Kazran
to raise funds for VBFC, and testified that he did not ``know
what anybody has raised,'' the FEC noted that VBFC kept lists
of the amounts that Representative Buchanan's partners had
raised, and his campaign treasurer testified that
Representative Buchanan would regularly discuss fundraising
activities with his partners at business meetings and through
personal follow-ups.\128\ Indeed, Representative Buchanan's
lack of recall about basic details of his fundraising, while
perhaps explainable by his tendency to rely on others to work
out the details of his strategies, made his testimony before
the Committee at least difficult to follow, if not difficult to
believe.
---------------------------------------------------------------------------
\128\Id. at 21.
---------------------------------------------------------------------------
The FEC's Acting General Counsel concluded, and the
Committee agreed, that ``inconsistencies on background issues
do not necessarily show that [Representative] Buchanan directed
[Mr.] Kazran to reimburse contributions.''\129\ But as the
recommendation of the FEC's Acting General Counsel stated,
Representative Buchanan's ``inability to remember basic facts
as to these uncontroversial, routine issues detracts from his
credibility.''\130\ If there were additional evidence that,
beyond simply failing to recall basic and uncontroversial
facts, a Member had provided false testimony on material facts
to a government agency, the Committee would likely consider
such false testimony a violation of Clauses 1 and 2 of the Code
of Conduct. Representative Buchanan, and all Members, should
assiduously guard their credibility, as it is an integral part
of the public trust they inherit through their service.
---------------------------------------------------------------------------
\129\Id. at 22.
\130\Id.
---------------------------------------------------------------------------
The Committee notes that in both the circumstances
surrounding contributions to VBFC reimbursed through Buchanan-
affiliated companies, and in the circumstances surrounding the
draft affidavit, Representative Buchanan has put forth very
little evidence, if any, regarding his own oversight and
compliance efforts. He testified to the FEC that VBFC sent a
letter to Buchanan-affiliated companies regarding election laws
after he learned of problems with reimbursed contributions, but
never produced such a letter to the FEC or the Committee, and,
while he testified that he no longer accepts contributions from
employees of Buchanan-affiliated companies, he apparently took
no corrective action with respect to any employees implicated
in the conduit contributions. In his testimony before the
Committee, Representative Buchanan could not explain the
unusual pattern of reimbursed contributions from multiple
corporate entities with which he was affiliated, beyond stating
that such violations are bound to occur, and that perhaps his
colleagues became ``overzealous''' in their desire to assist
his campaign. The Committee does not believe such violations
are bound to occur in every campaign, and like Representative
Buchanan, is unable to explain how multiple corporate entities
came to participate in similar but separate conduit
contributions schemes benefitting Representative Buchanan's
campaign. Had Representative Buchanan or his campaign been more
proactive in explaining the law to colleagues at the time they
were soliciting donations--particularly after they first became
aware there were concerns about compliance with respect to
contributions associated with a company associated with
Representative Buchanan--perhaps the subsequent similar issues
could have been avoided. Similarly, issues with respect to the
draft affidavit might have been avoided had Representative
Buchanan read the affidavit. The Committee cautions
Representative Buchanan to exercise more diligence over affairs
related to his campaign.
VI. CONCLUSION
VBFC accepted campaign donations from individuals who were
subsequently reimbursed through the corporate funds of
companies affiliated with Representative Buchanan. The FEC
investigated those donations and failed to find sufficient
evidence that Representative Buchanan directed or knew of any
unlawful reimbursements. DOJ also reviewed allegations against
Representative Buchanan and similarly closed its investigation.
A Florida state court hearing a private dispute between Mr.
Kazran and Representative Buchanan, including claims that the
draft affidavit was an abuse of the civil process, held against
Mr. Kazran and for Representative Buchanan. OCE's Referral
recommended further review regarding the wording of a single
paragraph in a draft affidavit Representative Buchanan's
attorney's proposed to Mr. Kazran, for use in the FEC
investigation. The Committee has independently reviewed the
evidence in this case and reached a conclusion in accord with
the FEC, DOJ, and the state trial court. The Committee
concluded that the existing evidence is insufficient to sustain
any of the aforementioned allegations or to warrant any action
against Representative Buchanan. However, the Committee noted
that Representative Buchanan admitted that he had relatively
limited knowledge or involvement with certain facets of his
campaign.
Because the evidence is insufficient to conclude that
Representative Buchanan himself was aware of the unlawful
reimbursements at the time they occurred, or had any role in
directing or approving of them, and the evidence is
insufficient to find that Representative Buchanan attempted to
improperly influence the testimony of Mr. Kazran before the
FEC, the Committee has determined to take no further action in
this matter, and upon publication of this Report, considers the
matter closed.
VII. STATEMENT UNDER HOUSE RULE XIII, CLAUSE 3(c)
The Committee made no special oversight findings in this
Report. No budget statement is submitted. No funding is
authorized by any measure in this Report.
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