Zekelman fined US$975,000 for illegal donations to Trump-aligned group

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Local steel billionaire Barry Zekelman has been fined US$975,000 (C$1.2 million) in the US for illegal contributions made in 2018 to a political action committee set up to assist candidates “who support the agenda of the Trump-Pence administration.”

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It’s the third-largest penalty ever levied by the US Federal Election Commission, according to the Washington, DC-based Campaign Legal Center. A government watchdog group, it filed the complaint three years ago under a law prohibiting a “foreign national” from making direct or indirect contributions in a US election.

While three contributions totaling US$1.75 million (C$2.2 million) were deemed illegal, the FEC, in a “conciliation agreement” made public on Friday, also concluded the federal regulatory agency that enforces US campaign finance law “did not find that the violation was knowing or willing.”

In a sworn declaration, Zekelman, CEO and executive chairman of Zekelman Industries Inc., told the FEC that he had discussed potential contributions to America First with executives of Wheatland Tube, a Pennsylvania-based subsidiary, who reported to him. The defendants argued they did not know that having Zekelman participate in such communications “could have any legal implications.”

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According to The New York Times, Zekelman’s donations to America First Action, a so-called Super PAC, helped him secure an invitation to a private dinner with then-President Donald Trump and his son Donald Trump Jr. at which he lobbied for action on steel tariffs. It was reporting by The New York Times in 2019 on Zekelman’s role in the Super PAC donations that led to the election commission complaint being filed by the Campaign Legal Center.

Zekelman’s private session with Trump at a Trump hotel, at which he pressed the US president to use his executive power to curb foreign steel imports from Asia, came shortly after an initial contribution by the Wheatland Tube of US$1 million to America First in April 2018. The Super PAC, formed by Trump campaign leaders, received further donations that year of US$250,000 in June and US$500,000 in October.

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According to the Campaign Legal Center, the Trump administration went on to rule in favor of Zekelman Industries and its claims made against foreign competitors. “Sales and profits subsequently emerged at the privately held company,” said the group, whose motto is “advancing democracy through law.”

As part of the FEC-approved conciliation agreement released April 8, Zekelman, a foreign national, was found to have “participated in Wheatland Tube’s decision-making process in the making of the contributions.”

The decision released last week comes with a potential silver lining for Zekelman Industries. The respondents in the case agreed to make a request to America First Action to have its US$1.75 million in political contributions refunded to the Wheatland Tube. That would more than make up the civil penalty of US$975,000 levied by the FEC.

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An alternative, according to the agreement, would be a request that the Super PAC “disgorge the $1,750,000 in contributions to the US Treasury.”

Contacted Monday, a spokeswoman for Zekelman told the Windsor Star neither he nor the company wished to comment on the matter.

According to the just-released Forbes list of 2022 billionaires, the Windsor-born and -raised Zekelman saw a huge gain this past year in his net financial wealth, from US$2.3 billion in 2021 to US$3.3 billion (C$4.2 billion) today. That 44-per cent hike put him in the 913th spot among the world’s 2,668 billionaires, according to Forbes, and placed him above Trump’s 2022 net worth of US$3 billion.

Zekelman, frequently in the news with wife Stephanie for their many local and international philanthropic activities, took over the helm at Atlas Tube in Harrow with his brothers following their father’s sudden passing in 1986. The company was sold to the Carlyle Group in 2006 for US $1.2 billion but then bought back by the family in 2011.

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Zekelman Industries, with annual revenues of US$2.8 billion, is one of North America’s largest steel pipe and tube makers, with customers in industry, construction, infrastructure, energy, agriculture, national defense and transportation.

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A controversial US Supreme Court decision in 2010 — Citizens United v. Federal Election Commission — gave the green light to unlimited corporate, labor union and trust fund political donations, fueling the rise of “Super PACs” producing giant pools of funds for campaigns through undisclosed means. A court majority said any such restrictions were prohibited under the free speech clause of the First Amendment, while opponents, including then-President Barack Obama, argued the decision gave excessive power to special interests with deep pockets.

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