WASHINGTON (CNN) - Citizens Club for Growth, a so-called “527” political organization affiliated with the conservative anti-tax group “Club for Growth,” has agreed to pay a $350,000 civil penalty to settle a lawsuit filed against it by the Federal Election Commission.
The lawsuit arose after the Democratic Senatorial Campaign Committee filed a complaint with the FEC in 2003 alleging that the group was violating federal election laws. After an investigation, the FEC concluded that the 527 was required to register as a political action committee because it was accepting contributions and engaging in activities intended to influence the outcome of federal elections.
In a statement released on its Web site Wednesday, Citizens Club for Growth emphasized that it had acted with the good-faith belief that it was not violating federal election law when it failed to register as a PAC. The statement also emphasized that it had agreed to the settlement with the FEC in order to avoid protracted litigation costs.
“If we had proper respect for the First Amendment, such a lawsuit never would have taken off the ground to begin with,” said Chuck Pike, vice president for both the Citizens Club for Growth as well as the Club for Growth.
A separate statement released Wednesday by the Club for Growth, a 501(c)4 non-profit organization, stressed that the two groups are separate legal entities, and that settlement only affects Citizens Club for Growth and other 527s.
If approved by the federal trial court in Washington, D.C., the $350,000 settlement would be the largest civil penalty ever obtained by the FEC once an enforcement action was pursued in court, according to the FEC’s press release issued Wednesday.
- CNN Associate Producer Martina Stewart