Doctor, heal yourself: FEC fines thousands of doctors after superb admission | Wiley Rein LLP
The Federal Election Commission (FEC or Commission) recently fined a group of New York-based doctors several thousand dollars after the partnership admitted it reimbursed doctors nearly $ 45,000 for their federal political contributions. Although the Commission also sanctioned two members of the management of the partnership, the amount of the combined penalty for all parties involved was lower than normal due to the decision to use the FEC. sua sponte process of self-reporting violations to the Commission.
In March 2018, Crystal Run Healthcare LLP filed a sua sponte submission with the FEC explaining that the partnership reimbursed nearly three dozen federal political contributions to 17 physicians over a seven-year period. Most of the refunded contributions were made between June 2012 and September 2016, with most contributions related to a 2015 fundraiser for the Congressional campaign of Representative Sean Patrick Maloney (D-NY).
The federal contributions were made because the partnership had a history of reimbursing political contributions from New York State physicians based on what it believed to be a permitted practice under state law. The process in place involved physicians submitting receipts for their contribution to the partnership, which in turn resulted in an “increase” in each partner’s income allowance from the practice. In late 2017, Crystal Run learned her practices were illegal after a plaintiff in a lawsuit alleged the partnership had made hundreds of thousands of dollars in illegal contributions to Gov. Andrew Cuomo’s campaign. As a result of this development, the partnership hired a law firm and an accounting firm to review its files, and the partnership concluded that it should self-report its violations to the FEC.
In its examination of the matter, the Commission considered whether the violations in question were willful and willful, which is a higher order violation punishable by greater civil penalties. The FEC weighed this conclusion, in part, due to a disclaimer on the Maloney Fundraiser Invitation – i.e.[t]the funds I donate are not provided to me by another person or entity for the purpose of making this contribution â- and the fact that at least one doctor has read similar language on Maloney’s website and wondered if he should have contributed. Ultimately, however, Commission staff spoke out against such a conclusion because the partnership self-reported the breach, never attempted to hide refunds, worked closely with the Commission to resolve the issue. problem and implemented “significant corrective and compliance actions” to prevent the problem from recurring. The Commission also dismissed the case against most of the individual partners whose contributions were repaid, although it ultimately sanctioned two Crystal Run officials – the CEO and the COO – for their involvement in the practice. and reimbursement of contributions.
At the time of its settlement negotiations with the Commission, approximately $ 25,800 of illegal contributions remained within the limitation period for settlement. In the end, the Commission reached an agreement with the partnership to settle the case in the amount of $ 5,000, and the two officials of the partnership were fined $ 1,500 and $ 1,000, respectively. . Since the partnership self-reported the breaches, these penalties were significantly lower than the amounts the Commission would otherwise have requested.