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Democratic congressional candidate Stephanie Schmid. (Photo: Kevin Sanders for the New Jersey Globe)

Schmid refunds contributions, admits campaign finance errors to FEC

Federal Election Commission threatened legal action against NJ-4 Democrat, urged prompt refunds of illegal contributions

By David Wildstein, October 07 2020 9:50 am

Less than a month after Stephanie Schmid was warned of possible legal action over campaign finance violations, the Democratic congressional candidate has refunded thousands of dollars in contributions and acknowledged several reporting errors to the Federal Election Commission.

Schmid had been facing an internal investigation by the FEC over allegations that she didn’t properly disclose some campaign contributions for her run for Congress against 20-term incumbent Christopher H. Smith (R-Hamilton).

The Democratic candidate from New Jersey’s 4th district blamed the reporting issues over miscommunications with her campaign treasurer, Jason J. Hinton.

“The treasurer was unaware that these receipts were initially received before the end of the quarter as they were in control of the campaign committee,” Hinton said in a statement to the FEC.  “The committee’s campaign staff is located in New Jersey while the Treasurer is located in Washington, DC.”

Hinton said that some contributions were not entered as 2nd quarter donations in their campaign finance software program, but instead in the 3rd quarter when he became aware of them.

Since corporations are not permitted to contribute to federal campaigns, Schmid has returned a $300 check from Dora Radiology Associates, Inc.

“The check was a corporate check,” Hinton said.

A $500 contribution from a non-federal Ocean County Democratic Committee account was also returned.  The Schmid campaign said they were “was unable to secure proof of permissible source of funds.”

Schmid also admitted that she never reported a $500 donation from Sharon Lessing that was made in March and acknowledged that it was over the legal limit.  An additional $2,800 was redesignated to the general election.

Another accounting error regarding joint fundraising committee activities that reported the date Hinton received notification and not the dates the checks were received and deposited is being remedied.

“(The) Committee acknowledges the guidance from the FEC,” Hinton said.  “Upon noticing the error, amended 48-hour Report filings were promptly submitted by this Committee, independent of agency prompting, in furtherance of the interests of accuracy and transparency.”

Since becoming a candidate, Schmid has filed a total of seven amendments to five campaign finance reports.  Now the FEC is threatening legal action against her campaign if they don’t properly disclose their contributions.

Among the issues related to Schmid’s filings was a $100,000 loan she made to her own campaign on June 27.

Schmid did not report the contribution immediately before the FEC before the July 7 Democratic primary.  Federal law requires candidates receiving donations of over $1,000 in the final days of a campaign be reported within 48 hours.

The Yale-educated lawyer also neglected to report the contribution on her July 15 report and did not disclose her own loan until an amended report on July 29.

In her amended report, the Schmid campaign says her $100,000 loan was “based on new information.”

In today’s filing, Hinton gave the FEC an explanation of the issue.

“Upon learning from the candidate and campaign manager that, in fact, these were initially received by the Committee before the end of 2Q, and after consulting counsel to confirm the propriety of amending both the July Quarterly filing and the relevant 48-Hour Report, the filings were promptly amended to accurately reflect the 2Q receipt date,” Hinton said. “Again, these corrections were self-initiated by the Committee in the interests of accuracy and transparency.”

The New Jersey Globe had brought the discrepancy to the attention of the Schmid campaign prior to the filing of the correction.

The FEC, in their September letter to Schmid, pushed them into the direction of refunding contributions that were not permissible by law.

“Although the Commission may take further legal action concerning the acceptance of prohibited contributions, your prompt action to refund the prohibited amount will be taken into consideration,” FEC senior campaign finance and reviewing analyst Michael Dobi wrote to Schmid.

Records show that Schmid filed four 48-hour reports between June 28 and July 3, but none of them reflected her campaign loan.  She did file a report on July 5 reflecting a July 4 loan, even though her check was dated June 27.  Essentially, she amended a report that never actually existed.

Schmid still has other campaign finance-related issues pending with the Federal Election Commission that remain unresolved.

Stephanie Schmid’s check loaning $100,000 to her campaign. (Image: New Jersey Globe.)
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