Mattel agrees to pay FEC fines from campaign contribution case

Friday, December 6, 2002

WASHINGTON -- Mattel Inc., maker of Barbie dolls and other famous toys, agreed along with two of its former employees to pay $477,000 in fines for making political donations in the names of other people, the third-largest fine ever imposed by the Federal Election Commission.

The fines, announced Thursday, stem from $120,714 in donations that came out of Mattel funds from 1996 to 2000. The money went to 23 Democrats and Republicans, two party committees and five political action committees.

Among the recipients: the Democratic National Committee, the Gore 2000 presidential campaign; committees for California's Democratic senators Barbara Boxer and Dianne Feinstein.

Several Republicans also were among the recipients, including committees for Reps. Lincoln Diaz-Balart and Ileana Ros-Lehtinen, both of Florida, and Steven Kuykendall of California.

The FEC said it found no evidence that any of the recipients were aware that the toy maker was the true source of the donations.

The reimbursement arrangement involved Mattel senior vice president Fermin Cuza and Mattel consultant Alan Schwartz, according to agreements signed with the FEC. Cuza was in charge of government affairs for the toy company.

Mattel will pay $94,000, Cuza will pay $188,000 and Schwartz will pay $195,000.

Mattel at Cuza's direction paid Schwartz's firm for consulting services and Schwartz used the money to make donations to federal candidates and political committees. Schwartz also used money from Mattel to reimburse people, including Cuza, for donations to political committees, according to the documents.

The Federal Election Campaign Act prohibits making a contribution in the name of another person and also bars corporations from making contributions from their general treasury funds in connection with any election for federal office.

Cuza directed the hiring of Schwartz as a company consultant, the FEC said.

Separately, the state of California announced Wednesday that $454,000 in fines were being proposed against Mattel, Cuza and Schwartz for donations in the names of others to 25 campaign committees in state and local races. The recipients included political committees for California Gov. Gray Davis and state Attorney General Bill Lockyer.

Regarding the matter before the Federal Election Commission, Mattel spokeswoman Jules Andres said, "The actions taken were in direct violation of Mattel policy and without the knowledge or approval of the company. ... When we learned of the wrongdoing, we immediately investigated and self-disclosed the situation to the various regulators and then cooperated fully with their investigation."

There was evidence that Cuza concealed the payments from his superiors at Mattel, the FEC said.

The biggest FEC fine -- $719,000 -- came in September against Democrats accused of soliciting illegal contributions in the 1996 election from foreigners in China, Venezuela and other countries, and of promising meetings with then-President Clinton and Vice President Al Gore in return.

Those penalized included the Democratic National Committee, fined $115,000; the Buddhist Progressive Society, $120,000, and the Clinton-Gore campaign, fined $2,000.

The second-biggest FEC fine, $550,000, came in 1994 against Prudential Securities.

Prudential's top officers solicited about $185,000 in contributions from employees between April 1986 and July 1990 and raised at least $65,000 from other sources, including companies doing business with Prudential and other securities firms. Federal law prohibits employers soliciting donations from workers.

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