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Becky Bowers
By Becky Bowers June 24, 2011

Ad claims Rep. Vern Buchanan's 'old business' illegally funneled campaign cash

When it comes to illegal campaign cash, the wheels of justice move slowly. So when a May 2011 court filing brought fresh attention to old claims involving illegal campaign contributions to U.S. Rep. Vern Buchanan, Democrats jumped, airing a radio ad in his Florida district.

"Congressman Vern Buchanan. His old business was caught illegally funneling over $60,000 in campaign donations to Buchanan to influence his election," the narrator of the ad says. "Tell Buchanan to come clean."

The ad ran from June 13-17 and was paid for by the Democratic Congressional Campaign Committee. It relied on news articles about a lawsuit filed by the Federal Election Commission against a business Buchanan once owned, the DCCC said.

The 'old business'

Buchanan, 60, is a wealthy Republican from Longboat Key serving his third term in Congress representing Florida's 13th Congressional District. He built his wealth founding a chain of print shop franchises in Michigan, leaving for Florida in the 1980s as the chain struggled and investing in a range of new businesses, including Florida auto dealerships.

One of those dealerships is at the heart of this claim.

Buchanan had owned a majority interest in Hyundai of North Jacksonville, the FEC says, when his business partner Sam Kazran arranged for dealership employees and relatives to donate to the Vern Buchanan for Congress committee, then be reimbursed by the business. This went on during the 2006 and 2008 campaigns, the FEC says.

(We should note that the date Buchanan legally parted ways with the dealership is a matter of disagreement. The FEC says Buchanan owned 51 percent of the dealership until Kazran completed his purchase of Buchanan's stake to become the sole owner in 2008 — after the suspect contributions were made. Buchanan spokeswoman Sally Tibbetts says Buchanan sold the dealership to Kazran in 2005, putting more distance between the congressman and the illegal contributions.)

What's the big deal with reimbursing contributions? It violates federal election law, which says "(n)o person shall make a contribution in the name of another person." The Federal Election Campaign Act also limits how much a single contributor may give to candidates' campaign committees. Funneling cash through employees would have made it possible for the dealership to bust through that limit.

The Buchanan campaign said they brought the questionable contributions to the attention of the FEC, which then launched the investigation. We can't independently confirm if that's the case, because the FEC does not comment on open cases. However, we found no evidence to the contrary.

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The commission combined the complaint with one filed in 2008 by a Washington group and two employees of a Venice dealership, which you can read more about here.

The FEC investigated, finding probable cause to believe that the Hyundai dealership and Kazran had illegally reimbursed $67,900 in campaign contributions, but it didn't go after Buchanan.

Instead, it's now seeking $67,900 in fines from Kazran.

Kazran, for his part, admits reimbursing campaign contributions, but told the Bradenton Herald he did it at Buchanan's direction. "I've been caught in this political nightmare that I have nothing to do with," he told PolitiFact Florida. But he failed to reach an agreement with the Federal Election Commission — and failed to respond to the complaint on behalf of Hyundai North Jacksonville, which is no longer in business. That means facts in the case stand uncontested. So the commission voted to sue him to collect the fines, asking a judge for a default judgement.

The FEC told the U.S. District Court that the dealership "illegally spent $67,900 in an attempt to influence an election for Congress, presumably believing this to be a worthwhile investment."

And that's the May suit that prompted stories in a blog, the Sarasota Herald-Tribune and the Bradenton Herald that the DCCC cited as it released the script for its Florida radio ad. Jesse Ferguson, speaking on behalf of the committee, the official campaign arm of the Democrats in the U.S. House, used partial quotes from the lawsuit when he said, "The FEC is seeking fines from a business that Vern Buchanan owned at the time for an 'extensive and ongoing scheme' of 'secret illegal contributions' to help his campaign and we’re going to make sure his constituents know about it."

Buchanan's response

What does Buchanan's team say? That the FEC has cleared Buchanan himself — so the ad linking the behavior of Kazran and his dealership to the congressman is "misleading and dishonest."

"It creates the false impression that Vern Buchanan has done something wrong when in fact he has been fully exonerated by the FEC," said Sally Tibbetts, his spokeswoman.

related news release that says Buchanan "has been completely exonerated" is the subject of its own fact-check, and we found the claim to be Barely True. But we'll summarize here by saying that what little information is available so far from the FEC doesn't fully clear Buchanan — though it does mean the commission won't take any further action against him in the case.

Information's limited because the case isn't yet closed, so confidentiality rules apply.

That means for the purposes of this fact-check, we'll rely on what's in the public record — information that the DCCC had access to when it scripted its ad.

The ruling

That ad starts by naming the congressman, then says his "old business was caught illegally funneling over $60,000 in campaign donations to Buchanan to influence his election." 

The FEC and Buchanan's team agree that he owned a significant stake until at least 2005, when suspect campaign contributions started. The FEC says the dealership reimbursed more than $60,000 in contributions. The money went to Buchanan's main campaign committee, and the FEC says the money was spent "in an attempt to influence an election for Congress."

What is contested is Buchanan's role in the scheme.

The FEC has said it will take no further action against him, closing his file. But it didn't go further to declare it had no probable cause to believe he was involved — which would have better supported his team's claim that he's been cleared. Meanwhile, his former business partner still says Buchanan put him up to it, and says he plans another lawsuit to prove it.

While we think the DCCC could have done a better job noting it was Buchanan who turned in the illegal contributions, we rate this ad Mostly True.

Our Sources

Democratic Congressional Campaign Committee, New DCCC Ad Holds Representative Vern Buchanan Accountable For Campaign Finance Scheme, June 13, 2011

Federal Election Commission, Motion for Default Judgment, May 27, 2011

Federal Election Commission, Ongoing Litigation: FEC v. Kazran, accessed June 22, 2011

Interview with Mary Brandenberger, spokeswoman for the Federal Election Commission, June 22, 2011

Vern Buchanan for Congress, About Vern Buchanan, accessed June 16, 2011, Vernon Buchanan (R-Fla), accessed June 20, 2011, 13th Congressional District, accessed June 21, 2011

St. Petersburg Times, "Court records cast doubt on Buchanan's success story," Sept. 21, 2008

U.S. Rep. Vern Buchanan news release, FEC Vindicates Buchanan, June 13, 2011

Citizens for Responsibility and Ethics in Washington, CREW Files FEC Complaint Against Rep. Vern Buchanan, Aug. 19, 2008

PolitiFact Florida, Rep. Vern Buchanan 'exonerated' by FEC, his spokeswoman says, June 24, 2011

Sam Kazran, Defendants Answer to Plaintiffs Complaint, April 25, 2011

Bradenton Herald, FEC says Rep. Buchanan's former Hyundai firm violated law, May 31, 2011

Interview with Sam Kazran, June 22, 2011

Interview with Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, June 20, 2011

E-mail interview with Brett Kappel, Arent Fox, June 14, 2011 blog Washington Wire, FEC Seeks $67,900 From Rep. Buchanan's Former Business, June 1, 2011

Herald-Tribune, Donation charges dog Buchanan, June 1, 2011

Democratic Congressional Campaign Committee, About the DCCC, accessed June 21, 2011

E-mail interview, Jesse Ferguson, spokesman for the Democratic Congressional Campaign Committee, June 14-21, 2011

E-mail interview with Sally Tibbetts, spokeswoman for Rep. Vern Buchanan, June 16-21, 2011

Federal Election Commission, Filing a Complaint: Confidentiality, June 2008

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