New records show Republicans blocked FEC probe into claims FPL used conduits to hide its illegal contributions

By Dan Christensen, FloridaBulldog.org

The spirit of the Watergate scandal investigation was invoked after Republicans blocked a probe into claims that Florida Power & Light used a network of conduit corporations to hide $1.27 million in possibly illegal contributions to federal and state political committees. 

New records made public this week by the Federal Election Commission show that an initial inquiry led its Office of General Counsel (OGC) to believe that illegal contributions were made during the scheme, and asked the commission to approve a full investigation to get to the bottom of it.

But that won’t happen. Four votes were needed to proceed. The FEC instead deadlocked 3-3 along party lines, closing the case.

“While the current record establishes reason to believe that the conduit corporations made contributions in the name of another, the identities of the true sources of the contributions are unknown,” says the general counsel’s report signed by a trio of FEC staff attorneys.

The general counsel’s office also had requested authorization to subpoena documents and compel testimony from former FPL boss Eric Silagy and others.

FPL’s parent, NextEra Energy Inc., used that deadlock to suggest in a March 12 press release that FPL had been exonerated by its decision to “close its file regarding a complaint that had made allegations of certain violations of the Federal Election Campaign Act [FECA].” The decision “concluded the FEC’s consideration of the complaint without a finding that the commission had reason to believe that FPL violated the FECA.”

INVESTIGATIVE REPORTING

The three Republican commissioners signed a 13-page “statement of reasons” explaining that they had a problem with the general counsel’s source of information: investigative reporters.

“The overwhelming majority of support for the complaint comes from anonymously-sourced reporting in the press. The commission has long declined to proceed on the basis of such information,” they wrote. “Here, OGC took assertions from Florida news articles at face value.”

Two Democrats, however, retorted that the FEC “should consider all sources of credible information when making reason to believe findings, including factual allegations uncovered by investigative journalism.”

The complaint’s allegations “were primarily based on in-depth investigative reporting by the Orlando Sentinel” and should be further investigated to determine the “true source of the funds.” The newspaper’s reporting, they said, was “detailed and well-sourced,” including “internal emails and memoranda from the political consultants discussing the scheme in its possession.”

“This commission exists because of the intrepid investigative reporting that revealed the Watergate scandal. Watergate inspired a raft of bipartisan legislation aimed at restoring America’s faith in government, and one of those laws created this agency,” they wrote. “Given the commission’s history, it would be ironic, ahistorical, and a serious departure from precedent and practice to refuse to consider information derived from journalistic investigation and reporting.”

THE GENERAL COUNSEL’S REPORT

The general counsel’s 48-page report was in response to a complaint filed by Washington, D.C.’s nonprofit Citizens for Responsibility and Ethics in Washington (CREW) in October 2022. CREW’s complaint was based on reports by the Orlando Sentinel, The Miami Herald and others about a leaked November 2019 email and two accompanying memos sent to Silagy by Jeff Pitts, then-CEO of the Alabama lobbying and political consulting firm Matrix LLC, “reportedly proposing a method for FPL to make anonymous contributions to federal and state political committees by transferring funds through multiple levels of conduit” entities, the report says.

(The FEC confined its preliminary inquiry to federal committees and did not examine the related scandal involving the creation of fake candidates – or “ghost” candidates – used to siphon off votes in a trio of state Senate races.)

“The proposal called for funds to be first sent to and passed through higher-level Matrix-associated conduits, including SUN Marketing & Advertising LLC and Let’s Preserve the American Dream, Inc. (LPAD), before being sent to various lower-level Matrix-controlled conduits, including Florida Promise, that would be reported as the source of the contributions. Thus, the complaint alleges that each of the five alleged lower-level Matrix-controlled conduits…permitted their names to be used to effect contributions in the name of another pursuant to Pitts’s and Matrix’s proposal,” the report says.

Federal law makes it illegal for any person to “make a contribution in the name of another person or knowingly permit his name to be used to effect such a contribution.” If conduit contributions exceed $10,000 in total, and are made knowingly and willfully, they are a felony. Federal law also prohibits corporations, including nonprofits, from contributing.

CREW’s complaint alleged that unknown respondents, possibly including FPL, made five contributions in the name of another, totaling $1.27 million. They are alleged to have done it by contributing through Matrix’s network of conduit companies to five federal independent expenditure-only political committees (IEOPCs).

Those contributions are:

• $1 million reportedly from Florida Promise Inc. to the Senate Leadership Fund on Dec. 8, 2020.
• $100,000 reportedly from the Center for Advancement of Integrity and Justice (CAIJ) to American Valor PAC on Oct 27, 2020. American Valor is an IEOPC that supported now U.S. Rep. Anna Paulina Luna, R-St. Petersburg, and opposed Democrat Charlie Crist.
• $100,000 reportedly from Grow United Inc. to Conservative Action Fund (formerly known as Wingman PAC), on Oct. 27, 2020. The PAC helped elect U.S. Rep. Scott Franklin, R-Lakeland. Earlier in October, Grow United contributed nearly $1.5 million to Florida state political committees and was at the center of the “ghost candidate” scandal.
• $20,000 reportedly from Broken Promises to Concerned Conservatives, Inc. on July 14, 2020. Broken Promises supported Dane Eagle a west coast Republican who ran unsuccessfully for the Republican nomination to represent the 19^th congressional district.
• $50,000 reportedly from Stand Up for Justice to South Florida Residents First, on March 31, 2020. South Florida Residents First supported Miami Republican Congressman Carlos Gimenez, who successfully unseated Democratic nominee Debbie Mucarsel-Powell.

The report says, “To support its central allegation, the complaint alleges that all five of the alleged conduit corporations had ties to Pitts or Matrix through having either Richard Alexander or Sean J. Anderson as a director or officer. Citing news articles, the complaint alleges that Alexander’s sister was a Matrix contractor at the time of the allegations and that Anderson was a former Matrix employee and a good friend of Pitts. The complaint also alleges, without providing a specific basis, that each of the five recipient IEOPCs and their treasurers accepted the contributions with the knowledge that they came from another source.”

DENIALS AND RESPONSES

FPL and all the other individuals and entities named as respondents by the FEC denied the allegations against them. Here’s what the report says was their responses:

FPL said the news stories were from anonymous sources and that “Matrix’s proposal pertained to legal activity only, and that FPL did not contribute to LPAD with the understanding that the funds would ultimately be contributed to federal IEOPCs.”

Ex-FPL CEO Silagy provided a sworn declaration denying that FPL funds donated to nonprofits during 2020 were earmarked to make federal political contributions, the report says. FPL announced that Silagy was retiring in January 2023. His last day in the office was May 15. He left with a compensation package in excess of $13 million, according to Salary.com.

Alexander and Anderson gave a joint response stating the complaint fails to show they accepted “any funds earmarked for making specific political contributions and argue that Matrix’s proposal did not address making federal political contributions.”

LPAD stated it was unaware of Matrix’s proposal and provided a sworn declaration from its executive director stating that it is vested with the sole discretion to spend the funds it receives.

SUN denied making any payments to a political candidate, campaign, committee or any 501(c)(4) entity.

The five alleged conduit corporations are defunct and submitted no response for the FEC to consider. The five recipient IEOPCs and their treasurers said they were unaware of Matrix’s proposal.