Delaney Files Complaint with FEC as TV Ad Wars Commence in District 6 Congressional Race
Incumbent alleges campaign law violations by 'Super PAC' funded by Hoeber's husband
Candidates Amie Hoeber, left, and John Delaney, right
A so-called “Super PAC” funded almost exclusively by the husband of Republican candidate Amie Hoeber on Wednesday begun running more than $100,000 worth of ads on a Washington-area broadcast TV station, criticizing Hoeber’s opponent, Democratic Rep. John Delaney, in the District 6 congressional contest.
The ad campaign by the group, Maryland USA, was launched the same day as Delaney filed a complaint with the Federal Election Commission, charging that Maryland USA has “illegally coordinated” its activities with Hoeber’s personal campaign committee. As a result of these activities, the complaint alleged that Delaney and his campaign “face a significant competitive harm” in what is widely regarded as Maryland’s most hotly contested congressional race this fall.
Under a 2010 Supreme Court ruling in Citizens United vs. FEC and a subsequent federal court decision, Super PACs such as Maryland USA can accept unlimited contributions from individuals and corporations. But federal law bars coordination between so-called “independent expenditure groups,” including Super PACs, and the personal campaign committees of candidates—which are restricted in the amount they can receive from any individual, and are barred from accepting direct corporate contributions.
Since its creation more than 14 months ago, Maryland USA—with the exception of a $1,000 contribution from another individual—has been exclusively funded by Hoeber’s husband, Mark Epstein, who has pumped $2.4 million into the Super PAC. Epstein, to whom Hoeber has been married for nearly three decades, is among the founders of Qualcomm, a San Diego, California-based telecommunications firm.
“This Super PAC funded by Amie Hoeber’s husband has achieved national notoriety for the brazenness with which [it] has flouted the law,” Delaney’s attorney, Brian Svoboda of the Perkins Coie law firm, charged in a press release. Citing FEC filings indicating that Epstein had served as an officer of Hoeber’s personal campaign committee even after the formation of Maryland USA, Svoboda asserted that the Super PAC’s “violations of law are so blatant that Congressman Delaney felt that he had to act on behalf of Marylanders, now that its illegally funded ads have begun to flood the airwaves.”
In a statement issued following release of Delaney’s complaint, Hoeber called the incumbent’s complaint “completely fraudulent,” adding, “Our campaign activities have been vetted by one of the best political attorneys in the country. This is a desperate act by a desperate man. It shows that John Delaney is clearly worried—he can’t defend his record so he depends on making baseless attacks.”
According to public filings with the Federal Communications Commission, Maryland USA executed a contract with WRC/Channel 4—the NBC affiliate in the Washington market—Tuesday night for $111,750 in ads, to run from Wednesday through the end of September. The ads, while primarily slated to appear adjacent to local news broadcasts, began running Wednesday afternoon during a soap opera and syndicated talk shows hosted by Ellen DeGeneres and Steve Harvey, and also appeared during The Tonight Show with Jimmy Fallon.
As of Wednesday evening, FCC filings for the other three broadcast TV stations in the Washington area did not show any purchase of ad time by Maryland USA. The Delaney campaign has yet to begin running ads in the Washington market via broadcast or cable TV, but is expected to begin doing so in the near future.
Echoing an op-ed piece that Hoeber wrote for The Huffington Post earlier this month, the ad now appearing on WRC/Channel 4 criticizes Delaney’s practices while a financial entrepreneur prior to his 2012 election to Congress from the 6th District—which extends from Potomac, Gaithersburg and the northwestern portion of Montgomery County nearly 200 miles through Maryland’s western panhandle.
In particular, the ad alludes to controversial residential foreclosure practices by Aeon Financial, to which Delaney made a $30 million loan in 2009 while he was CEO of Capital Source, a commercial lending firm that he started. “In business, Delaney financed companies that foreclosed on homeowners and provided poor care to seniors,” the 30-second ad spot declares.
In an interview last month, Delaney—who recent filings show to be among the five wealthiest members of Congress—noted that another company he started, Health Care Financial Partners, had made loans to hospitals and nursing homes, while acknowledging, “From time to time, companies we financed did some things they get in trouble for.” But he defended himself by asking, “If Bank of America lent money to a nursing home and the nursing home got in trouble for a Medicare violation, is that BOA’s problem?”
The Maryland USA ad also criticizes Delaney’s record during two terms on Capitol Hill, declaring, “In Congress, Delaney wants tax breaks for corporate profits overseas. And Delaney’s energy plan means higher costs for Maryland families.” The latter statement appears to be a reference to a Delaney-sponsored bill to tax greenhouse gas emissions linked to climate change.
The charge regarding Delaney’s advocacy of tax breaks for corporate profits abroad is a bit of a rhetorical stretch: At present, taxes on such overseas profits can be deferred for years, putting this money outside the reach of U.S. tax authorities. The “Infrastructure 2.0 Act” touted by Delaney would cut the tax rate on such profits from 35 percent to 8.75 percent on a one-time basis, as an incentive to quickly “repatriate” these corporate revenues to the United States and make them subject to taxation. Under Delaney’s bill, the money would go primarily toward a fund to rebuild the nation’s infrastructure.
“To change Washington, we need outsider Amie Hoeber in Congress,” the ad goes on to say, pinning an “outsider” label on Hoeber even though her years of service in the federal government exceed Delaney’s. Hoeber spent nearly seven years during the Reagan administration as a deputy undersecretary of the Army prior to going into business as a national security consultant. Delaney never held public office until his 2012 election to the House.
A spokesman for Maryland USA did not return phone and email messages seeking comment on the ad or the Super PAC’s plans for future TV advertising.
The complaint filed by Delaney is aimed at both Maryland USA and Hoeber’s personal campaign committee, Amie Hoeber for Congress, as well as Hoeber and Epstein personally.
“The incontrovertible facts unmistakably show two committees coordinating expenditures and structuring their operations to undermine key pillars of the campaign finance architecture, resulting in excessive and forbidden campaign contributions,” Delaney’s complaint charged.
The complaint noted that Maryland USA filed a statement of organization with the FEC on July 22, 2015, followed by a statement of organization by Amie Hoeber for Congress a week later. The latter statement listed Epstein as “assistant treasurer” and the “custodian of records” for Hoeber for Congress. But his name was removed in an amended filing on Oct. 19, 2015.
“Perhaps recognizing the inherent coordination issues this relationship created, the paperwork was amended to modify the titular roles of the players on the chess board midway through the campaign,” the complaint charged.
It also contended that available evidence “clearly demonstrates that the Super PAC republished substantial portions of campaign materials produced by the principal campaign committee, including candidate statements made directly to the camera. And, it shows the Super PAC and principal campaign committee engaged multiple common vendors to perform similar campaign tasks.”
Delaney and his campaign asked for an “immediate investigation” by the FEC of the allegations in the complaint, while saying the FEC “should impose appropriate sanctions for any and all violations.”
Responded Hoeber: “John Delaney is just trying to distract the voters from the issues. Unlike John Delaney, I’m going to keep meeting voters and run an issues-based campaign.”