FEC: Sen. Mike Braun campaign finance violations rise to civil, not criminal level

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The Federal Election Commission found Wednesday that Sen. Mike Braun violated campaign finance rules during his 2018 campaign, but after the Indiana senator supplied new information he likely will face civil rather than potential criminal penalties.

The final audit report the commission approved on Wednesday featured less severe allegations of impropriety than the original draft report released in November.

In addition to Braun's campaign supplying FEC auditors with additional documentation clearing him of some wrongdoing, Braun also benefited from a recently decided Supreme Court decision giving campaigns more financial flexibility.

More: High-priced secretary of state race has become a referendum on Gov. Holcomb

Still, the commission ruled that the Indiana Republican overstated the amount his campaign received and spent by over $6 million each and didn't properly disclose the required information of about 1,363 contributors, meaning the campaign didn't include the occupation and name of employers for those contributions.

His campaign also improperly disclosed joint fundraising memos worth $930,000 and the correct balances and terms for more than $11.5 million worth of loans.

Brett Kappel, a campaign finance expert at Washington, D.C.-based Harmon Curran, said Braun likely will be fined a substantial amount. He said the violations are significant even without all of the allegations contained in the draft report.

"The stuff that remains, these are significant reporting issues, but they’re significant primarily because of scale," Kappel said. "The amount of money involved is what makes them unusual."

Joshua Kelley, Braun's chief of staff and senior political advisor attributed the remaining mistakes to a past treasurer.

"The Final Audit Report shows the FEC Commissioners confirmed Senator Braun's loans and debt repayments fully complied with federal law," Kelley said, "while the remaining items are minor reporting and clerical issues stemming from the negligence and unexplained absence of a former treasurer and we are confident these minor issues will be easily resolved before this process is complete."

During the 2018 campaign, Braun beat out then Democratic Sen. Joe Donnelly in a high-priced election cycle, in part due to millions of dollars in personal loans.

Braun's personal loan was 'normal business'

A major difference between the draft audit report and the final report was the removal of a claim that Braun's campaign appeared to accept $8.5 million dollars of potentially improper loans.

In the draft audit report, FEC auditors said the lack of documentation appeared to indicate most of that money came from financial institutions "that did not appear to be made in the ordinary course of business" because there was no proof banks were assured repayment.

Braun's campaign later submitted documentation showing otherwise and FEC auditors withdrew their claims of impropriety, saving Braun's campaign from a potential criminal conviction.

Kappel argued Braun's campaign should have supplied the required information earlier in the process, or asked for an extension, to avoid the initial negative draft audit report.

Impact of a Supreme Court decision

Braun also appears to have significantly benefited from the outcome of a court fight between Republican Sen. Ted Cruz's campaign and the FEC.

Originally, auditors found that Braun's campaign paid the candidate back too much money in loans and interest repayments immediately following the 2018 primary election. Congress had capped that amount at $250,000. Braun surpassed that by more than $750,000.

But in the final audit report, dated just days before the impactful Supreme Court decision, the audit staff recommended the commission refrain from making a finding due to the then ongoing court case.

Indiana Senator Mike Braun answers questions from an IndyStar reporter on Wednesday, Feb. 17, 2021, at Tavern On South off of West South Street in Indianapolis.
Indiana Senator Mike Braun answers questions from an IndyStar reporter on Wednesday, Feb. 17, 2021, at Tavern On South off of West South Street in Indianapolis.

Just days later the Supreme Court sided with Cruz in a 6-3 decision, finding that the federal law restricting the repayment of loans "burdens core political speech without proper justification." Those who dissented worried that candidates being able to personally use money from contributions after being elected, "pose(s) a special danger of corruption."

The decision also impacted a finding in the draft audit report that Braun appeared to receive contributions exceeding the limit, totaling more than $1 million worth of excess.

In the final report, the auditors recommended no finding of impropriety, because the court's ruling eliminating the repayment limit on candidate loans would make some contributions no longer excessive.

Auditors estimated more than $730,000 worth of contributions would have still been excessive, even when excluding the dollars impacted by the Cruz decision.

Democratic commissioner Ellen Weintraub pushed to include the excessive contributions in the findings of the final report, but was shut down by Republican commissioners, in part because of how late in the process the finding would have been added and concerns about whether Braun's campaign had enough time to respond.

For a finding to be included in the final audit report, it needs to be approved by a majority of commissioners. Republicans hold half the seats.

"We’re still looking at over $700,000 in excessive contributions that it seems like the commission is prepared to ignore," Weintraub said during the hearing, "and I would urge us not to do that.”

The audit division of the FEC could send the report to a separate enforcement arm of the FEC to determine whether Braun's campaign will face any fines. It's not yet clear how large any fines would be.

USA Today contributed to this story.

Call IndyStar reporter Kaitlin Lange at 317-432-9270 or email her at kaitlin.lange@indystar.com. Follow her on Twitter: @kaitlin_lange.

This article originally appeared on Indianapolis Star: FEC final audit: Sen. Braun broke campaign finance rules