Conservative Group Pays $350,000 for Not Being Registered Political Committee

A conservative, free market group that worked on behalf of Republican candidates in the 2000 and 2004 elections has agreed to pay $350,000 in civil penalties for failing to register as a political committee.

The Federal Election Commission said the Citizens Club for Growth spent $1.28 million during the two election cycles advocating the election or defeat of federal candidates. The FEC said the committee acted as a political committee that should have publicly reported its contributions and expenditures.

The case has been pending as a federal lawsuit brought by the FEC against the organization. The agreement, if approved by a federal judge, would mark the end of the lawsuit.

In addition to the money spent directly advocating for or against candidates, the FEC found that the "vast majority" of the Club's $15.1 million in spending between August 2000 and the end of 2004 was on candidate research, polling and ads connected to federal elections.

The case is the latest in a series of actions by the FEC to penalize independent political groups that spent money to influence elections but did not register as political committees. The groups, called 527 organizations for the section of the IRS code under which they were formed, played a significant role in the 2004 congressional and presidential elections by raising unlimited amounts of money from labor groups, corporations and wealthy individuals.

Political action committees are restricted in the size of the contributions they receive and must report who their donors are and how their money is spent.

Citizens Club for Growth has since been replaced by a new Club for Growth that operates both a lobbying arm and a political committee registered with the FEC.

Chuck Pike, vice president of the Citizens Club for Growth, said the organization's board decided to settle the case because "further litigation costs would waste the resources of the pro-growth movement."

He criticized the FEC for bringing the lawsuit in the first place. "No government agency should have the right to deem words 'forbidden,' and no group or individual should fear legal action for exercising their First Amendment rights," he said in a statement.