WASHINGTON - A nonprofit watchdog organization plans to file a complaint with the Federal Election Commission that accuses Fannie Mae and Freddie Mac of making illegal campaign contributions during the 1999-2000 election cycle.
National Taxpayers Union president John Berthoud has written a letter of complaint, which has been posted on the group's Web site but was inadvertently not transmitted to the commission, asking for an investigation of whether the two companies violated the federal ban on government-chartered companies' directly supporting candidates for public office.
The complaint says that the government-sponsored enterprises contributed to "nonfederal" accounts that the Democratic and Republican national committees maintain partly to fund some federal, state, and local candidates. In his letter, Mr. Berthoud claims that so-called soft money contributions to nonfederal accounts are often used to influence elections and that the contributions to such accounts by the two GSEs were illegal.
"We have not seen the complaint, but we are confident that our contributions followed the letter of the law," said Robert McCarson, a Fannie Mae spokesman. A Freddie Mac spokeswoman could not be reached for comment.
In an interview Wednesday, Mr. Berthoud said that the complaint was spurred by media reports last week that Fannie and Freddie had given more than $4 million during the last election cycle.
The complaint notes that contributions to party accounts to fund office space are exempt from the restriction but says public records show that more than $400,000 of Freddie Mac's gifts and nearly $340,000 of Fannie's were made to accounts not covered by that exemption.
At least one campaign finance expert said the National Taxpayers Union's claim could have problems passing legal muster.
Thomas E. Mann, a senior fellow at the Brookings Institution, said, "I think NTU is wrong in its reading of the law. Corporate soft money contributions to political parties are used for a variety of non-building-fund activities, including issue advertising and get-out-the-vote," that are permissible under the law.