Federal Election Commission fines Sen. Rand Paul's presidential PAC over contributions

LOUISVILLE, Ky. — The Federal Election Commission has fined Sen. Rand Paul’s 2016 presidential campaign committee $21,000 for how it handled certain financial contributions, according to documents The Courier Journal obtained.

The penalty stemmed from a complaint the late J. Russell Lloyd, the Louisville Democratic Party’s former chairman who died early last year, filed in November 2016, according to a letter the FEC recently sent that was addressed to Lloyd.

The complaint and the FEC's subsequent inquiry concerned a political action committee called Freedom for All Americans, which used to be known as Rand Paul for President Inc. and was the Kentucky Republican's principal campaign committee during his presidential run in 2015 and 2016.

The FEC found reason to believe Paul's campaign committee violated federal rules, according to the commission documents The Courier Journal obtained, which weren't available to the public as of Wednesday evening.

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Specifically, the FEC said the committee failed to either refund $165,749 in contributions for the 2016 presidential election or redesignate them for use in a different election within 60 days after former President Donald Trump won the Republican nomination for that race.

A spokesperson for Paul declined to comment Wednesday.

Adav Noti, senior director and chief of staff for the nonpartisan, Washington-based Campaign Legal Center, said the $21,000 fine is not insignificant.

“In the big picture, the FEC is legendary for not really penalizing anybody, so any penalty of significance from the FEC is noteworthy," he said. "And $21,000 — although it’s not a bank-breaker for a presidential campaign, it’s not nothing, either."

Noti also said 60 days generally is "ample time" for presidential campaigns to refund donors if they don't win their party's primary election.

"It is not common for a presidential campaign to be penalized for failing to refund donors money as required by law," he said.

In addition to Lloyd’s complaint, the FEC’s Reports Analysis Division made a separate referral about Paul’s campaign committee, per the FEC documents. That referral concerned its failure to refund $257,658 of contributions within 60 days after Paul suspended his campaign in February 2016.

The committee argued suspending a campaign isn’t the same as withdrawing from one and said Paul remained a candidate until Trump won the GOP nomination for president in July 2016.

However, the FEC documents said the committee’s “own actions negate its claims” because it started the process of redesignating contributions to other Paul-affiliated committees the month after the senator suspended his presidential bid.

Even assuming Paul's candidacy didn’t officially end until July 2016, the FEC documents said the senator's campaign committee still missed that 60-day deadline for contributions totaling $165,749.

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The FEC cited that failure in a June 2021 agreement it reached with the Freedom for All Americans PAC (which used to function as Paul's presidential campaign committee).

That conciliation agreement said the committee “ultimately remedied all general election contributions” to Paul's presidential campaign but violated federal rules by failing to do so for $165,749 in contributions within 60 days after Trump became the Republican Party's nominee.

It stipulates the committee will "cease and desist from committing further violations" of those rules and pay a civil penalty of $21,000.

The FEC documents The Courier Journal obtained also discussed another alleged violation of campaign finance rules, although that issue wasn't part of the conciliation agreement or associated with the penalty.

Lloyd's complaint alleged the senator's leadership PAC, the Reinventing a New Direction PAC (or RAND PAC), made in-kind contributions to Paul and his presidential campaign committee that exceeded federal limits.

The FEC documents said "the evidence suggests" RAND PAC paid for expenses on Paul’s behalf before he launched his campaign for the White House in April 2015 that likely were related to his future presidential bid.

They also said the FEC found reason to believe Paul and his campaign committee accepted such excessive in-kind contributions and that RAND PAC and the campaign committee failed to properly disclose the contributions.

Noti told The Courier Journal: "The allegations regarding the leadership PAC are quite serious, and the fact that the FEC in 2019 (which was extremely gridlocked, even by FEC standards) found reason to believe the law had been violated is an indication that the violations were also exceptionally well-substantiated."

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"It will be important to see whatever explanation the full file provides as to why the FEC dismissed those violations in 2021," he added. (Those documents aren't publicly available yet.)

Both of those committees denied violating federal law, per the documents.

The committees argued there’s no evidence Paul took "actions to explore a presidential run" before launching his bid and said RAND PAC didn't contribute to Paul's presidential campaign or "alleged pre-candidacy efforts."

Instead, they said all RAND PAC’s expenses were to advance its "organizational mission of supporting 'pro-liberty' candidates."

The FEC documents said, however, RAND PAC appears to have "spent a small fraction of its funds" on supporting "pro-liberty" candidates in 2013, 2014 and 2015.

Ultimately, the allegations about RAND PAC's spending did not appear in the agreement the FEC reached with the Freedom for All Americans committee.

Instead, the FEC fined the Freedom for All Americans PAC for missing the deadline for refunding some contributions and "determined to dismiss the remaining allegations and close the file," according to the documents.

Reach reporter Morgan Watkins: 502-582-4502; mwatkins@courierjournal.com; Twitter: @morganwatkins26.

This article originally appeared on Louisville Courier Journal: Sen. Rand Paul's presidential PAC fined by Federal Election Commission