Rapper Pras Michel hit with campaign finance complaint

Introduction

Campaign finance watchdogs have filed a complaint with the Federal Election Commission against hip-hop musician Pras Michel — one of the founders of the Fugees — and a politically active company under his control.

In the new complaint, the Campaign Legal Center and Democracy 21 argue that Pras violated the law by giving money to a super PAC through his company without disclosing that he was the source of the funds. Federal law prohibits making political donations in someone else’s name, which the groups argue was the effect of the corporate contribution.

As the Center for Public Integrity recently reported, Pras’s company, SPM 2012 Holdings LLC, donated $875,000 in 2012 to Black Men Vote — a super PAC that supported the re-election of President Barack Obama in the battleground states of Ohio and Virginia.

“[This] looks to us like an individual’s contribution that was routed through an LLC, and it consequently obscured the identity of the true donor,” Campaign Legal Center attorney Paul S. Ryan told the Center for Public Integrity.

“The LLC was no more than a straw donor,” Ryan continued. “There’s reason to believe that the law was violated, and the FEC should investigate.”

Through a spokeswoman, Pras declined to comment. But attorney William Kirk, the treasurer of the Black Men Vote super PAC, called the new complaint baseless.

“I don’t believe an FEC complaint regarding this matter would have any merit,” Kirk said. “Based on my understanding of the campaign finance laws and the facts, as they say, ‘There is no there there.’”

Kirk continued: “Personally, I think an artist like Mr. Michel should be applauded for his efforts — fully legal — to encourage young African-American men to vote and become civically engaged. I would hate to think or find out that [this complaint had the effect of] discouraging such participation.”

Super PACs — which may raise unlimited amounts of money to help elect or defeat political candidates — must regularly disclose the names of their donors in filings with the FEC.

In this case, Black Men Vote reported the name of the donor behind the $875,000 as SPM Holdings LLC, not Pras as an individual.

Last month, Pras told the Center for Public Integrity that SPM was “just a holding company to do my everyday business through.”

In a recent exchange, Kirk stressed that Pras’s LLC “was not some special company set up for the purposes of making a campaign contribution.”

David Mason, a Republican attorney and former FEC chairman, cautioned that not all LLC contributions should be viewed as inappropriate as super PACs are allowed to accept money from many types of companies, including LLCs.

“The fact that a contribution was made by an LLC isn’t on its face evidence of a straw donation,” Mason said.

Overall, Black Men Vote raised roughly $1.3 million ahead of the 2012 election. Pras was responsible for more than 90 percent of its money, between the donations he made in his own name and those from his company.

As of June 2013, Black Men Vote had about $10,000 in debts and $4,300 in its bank account, according to its most recent campaign finance filing. The group has not filed federally mandated disclosures since then.

In the past, the Campaign Legal Center and Democracy 21 have filed similar complaints against limited liability companies that contributed to Restore Our Future, a super PAC that backed Republican Mitt Romney’s unsuccessful 2012 presidential bid. Those complaints are still pending.

For its part, SPM 2012 Holdings LLC was formed in July of 2012 — roughly four months before it contributed to Black Men Vote, according to Delaware business records.

Since then, Pras’s LLC has not made any additional federal political donations, although Virginia campaign finance filings show one additional state-level political contribution: $30,000 in January 2014 to Democrat Terry McAuliffe, Virginia’s current governor.

And electoral politics hasn’t been its only pursuit. Since the fall of 2012, Pras’s company has been listed in property records as the owner of a four-bedroom, three-bathroom home valued at roughly $340,000 in Coconut Creek, Florida.

Individuals have long been allowed to use LLCs to make donations to federal candidates — but campaign finance records must list both the name of the LLC and the name of the person, or people, responsible for the money. This is to ensure that individuals don’t exceed campaign contribution limits and that candidates don’t receive corporate money.

Neither of these prohibitions applies to super PACs, which were first created in 2010 in the wake of the U.S. Supreme Court’s Citizens United v. FEC decision and a subsequent federal court ruling.

Since then, the six-member FEC, which is charged with enforcing and regulating federal campaign laws, has not formally discussed whether super PACs should have additional disclosure rules — although at least two of its current Democratic-appointed commissioners favor additional reporting requirements.