Bloomberg News

Clinton Backers Rejected by High Court on Campaign Charge

February 25, 2013

The U.S. Supreme Court turned away an appeal by two men accused of illegally channeling more than $150,000 in corporate money to Hillary Clinton’s 2008 presidential campaign.

William P. Danielczyk Jr. and Eugene R. Biagi argued unsuccessfully that part of their indictment violated the constitutional free-speech guarantee and a 2010 Supreme Court decision that let corporations spend unlimited sums on elections.

In rejecting the appeal today without comment, the high court declined a chance to expand the 2010 ruling, Citizens United v. Federal Election Commission, and allow direct corporate contributions to political candidates.

The court said last week it will consider a different campaign-finance issue during the nine-month term that starts in October. In that case, Republicans are challenging federal limits on the total amount of money individuals can give to candidates, political parties and political committees every two years.

Danielczyk and Biagi are accused of using funds from Galen Capital Corp. to reimburse so-called straw donors who gave money to Clinton’s campaign. Danielczyk was the chairman of Galen, based in McLean, Virginia, and Biagi was its secretary.

A federal trial judge threw out one of the seven charges against the two men, saying the Citizens United decision meant that companies can make campaign donations directly to candidates as long as they comply with general legal limits.

A federal appeals court in Richmond, Virginia, disagreed, saying the majority in the Citizens United case explicitly declined to allow corporate contributions.

The indictment, which covers Clinton’s 2008 presidential bid and 2006 Senate run, also charges Danielczyk and Biagi with conspiracy, obstruction of justice and causing false statements.

The case is Danielczyk v. United States, 12-579.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net


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