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Election Regulators Take Notice of Democratic Party’s Fundraising

by Christine Stuart | Feb 12, 2014 4:11pm
(11) Comments | Commenting has expired
Posted to: Congress, Election 2014, Election Policy, Ethics

istockphoto

The state Democratic Party’s ability to raise money, especially from state contractors, has not gone unnoticed.

Late Tuesday, the State Elections Enforcement Commission adopted an unsolicited advisory opinion outlining when it’s appropriate for a state campaign or candidate to receive money from a federal account, either directly or indirectly.

Without accusing the Democratic Party of doing anything wrong, the agency that regulates elections sought to clarify questions raised by the news media and state contractors, who are banned from giving money directly to a party’s state account.

“Of most concern is the fact that much of the reported fundraising has involved Connecticut state contractors, who are prohibited from making contributions to party committees registered with the SEEC,” regulators wrote in their opinion.

Connecticut’s Democratic Party raised a total of $2.1 million last year in its federal account. About a quarter of that money came from $10,000 donors, some of whom do business with the state and its agencies. The Connecticut Republican Party raised about $528,503 last year in its federal account.

The question about how this money sitting in a party’s federal account can be used in a state campaign in 2014 or by a candidate who is using Connecticut’s clean elections system has been a hot topic of debate.

“The issue then is the extent to which expenditures can be made from the federal account that benefit Connecticut candidates, directly or indirectly, and who ultimately must pay for them,” the SEEC opinion says.

Earlier this year, the Democratic Party returned $40,000 in donations made to its state account. The party declined to say why the donations were returned, but at least three of the four came from state contractors.

The opinion states early on that “a lack of clarity seems to have arisen due to the intersection of federal law and state law.”

In general, “the federal account cannot spend its funds to make expenditures with the state account for Connecticut candidates for statewide office or the General Assembly,” the opinion says. “The overarching principle to be followed is simple: Connecticut committees pay for their expenses with money raised within the Connecticut campaign finance system, i.e. from permissible contributions or public financing grants, properly reported under Connecticut law.”

However, there are some ways in which federal and state committees can share expenses.

When it comes to how the party uses its staff, “if the staff paid by the federal account were working with state committees to support and benefit state candidates, those candidates would be required to reimburse the federal committee for such time.”

However, “if the federal committee may not accept such funds, then the arrangement would result in an impermissible contribution. The staffing must be structured to accommodate both state and federal law.”

The cost of sharing overhead, like office space or voter lists, come with their own rules, too.

When it comes to voter lists, a state campaign can purchase a list from a federal campaign or party committee, “so long as the sale was for fair market value.”

But when it comes to headquarter space, petition drives, utilities, or other overhead, those costs “could be allocated between federal committees and state committees as joint expenditures, if a state candidate or committee obtained a benefit.”

James Hallinan, a spokesman for the Connecticut Democratic Party, declined comment for this report.

Democratic Gov. Dannel P. Malloy, Connecticut’s first governor elected under public campaign financing, has not said whether he will seek another term. At the same time, he has not been bashful about his fundraising efforts for the party and other organizations like the Democratic Governors Association, which could spend money independently of the party in support of a gubernatorial re-election campaign.

State election regulators concluded that “federal law does not create a loophole in the Citizens’ Election Program and other Connecticut campaign finance laws that would allow federal committees to make expenditures that are also contributions regarding Connecticut candidates.”

Regulators said this remains true even after passage of last year’s changes to the campaign finance law, which allowed individuals to contribute more money to parties and parties to contribute unlimited amounts of money back to clean election candidates.

But Republican Party Chairman Jerry Labriola Jr. said the advisory opinion supports what Republicans have been saying all along.

“From the start, it’s been obvious that Dan Malloy plans to extort campaign cash from state contractors in a pay-to-play shakedown — and that the State Democrats plan to use that money to support his re-election,” Labriola said Wednesday. “Now, even the State Election Enforcement Commission is taking notice of the Democrat’s strategy of obfuscating state election law to boost Dan Malloy’s chances at a second term.”

Labriola pointed out that there’s no U.S. Senate race in Connecticut this year, and Connecticut’s five Democratic members of Congress have sufficient money in their campaign coffers to wage their re-election bids without the help of the state party.

“With no U.S. Senate race and five entrenched incumbent candidates for Congress who are already awash with special interest and big union money, where else does the State Democratic Party have to spend their ill-gotten contributions?” Labriola wondered.

Tom Foley, the Republican who lost to Malloy in 2010 by just 6,404 votes, said he’s glad election regulators have taken notice of the fundraising pattern of the Democratic Party.

“The very unusual State Elections Enforcement Commission warning to Governor Malloy for his shaking down state contractors for contributions to the state party is a welcome confirmation that this practice is unacceptable and undermines the intent of our state election laws,” Foley, who is running again in 2014, said in a statement.

While Hallinan declined comment on the SEEC opinion he wanted to comment on Foley’s statement.

“I’m a little incredulous that someone who was just fined by the SEEC would issue the kind of ridiculous statement Tom Foley just issued,” Hallinan said. “Axel Foley has more credibility on SEEC related matters than Tom Foley.”

The SEEC determined Foley was a candidate for governor and was no longer exploring after he paid for a poll released last April.

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(11) Comments

posted by: Lawrence | February 12, 2014  7:20pm

Mr. Labriola, what have you to say, then, to these two paragraphs on the same subject, from ‘another news story’:

“Malloy helped his party use its federal account last year to raise $2.1 million, including $570,000 from a roster of $10,000 donors, many of whom do business with the state. By comparison, it raised only $335,806 through a state account used exclusively to support campaigns for state office.

The state Republican Party also relied more heavily on its federal account, though it badly trailed the Democrats in fundraising. Last year, it raised $528,501 in federal donations and $111,949 through its state account.”

It seems, Mr. Labriola, that you are not angry with the procedure itself, but more with your paltry outcome.

Citizens United is napalming America with
corporate cash and 1% tithes. The Democrats fight back with a slingshot. So what?

posted by: Not that Michael Brown | February 13, 2014  7:08am

Editors,
I discern from the photo that Democrats are taking cash money and putting it in their pockets.  Is that what you trying to imply?

posted by: Christine Stuart | February 13, 2014  8:06am

Christine Stuart

Instead of trying to illustrate the story with a photo in a way that would imply what you’re implying Mr. Brown, I looked for some generic art that illustrated fundraising. If you would like to suggest another photo that I have permission to use than I’m happy to accept a suggestion. My email is ctnewsjunkie (at) gmail.com Please feel free to contact me any time.

posted by: SocialButterfly | February 13, 2014  9:10am

@Lawrence: Why are your Democratic observation skills only limited to two paragraphs on Jerry Labriola, Jr.?

posted by: Lawrence | February 13, 2014  11:48am

Mr. Labriola states unequivocally that Democrats are committing a crime: extortion. So his outspokenness and cynicism deserves the most attention.

BTW, IF Democrats break or have broken the law, prosecute them to the fullest extent.

But don’t claim a crime has been committed when you have no evidence, and are only angry that you have raised just one-fifth to one-seventh of what the Democrats have.

Don’t worry, CT GOP—sugardaddy Koch brothers and Greenwich billionaires will come riding to your rescue in October with hours of bull**** TV ads.

posted by: art vandelay | February 13, 2014  12:09pm

art vandelay

I think a full federal investigation into the activities of Malloy, the Democratic Party, Unions,  Community Activists & Corporations is long overdue.

posted by: SocialButterfly | February 13, 2014  12:22pm

@Lawrence;  Your deep dislike of Republicans does not allow you to write an unbiased letter that does not promote the false Democratic prosperity theme that controls your misguided beliefs. 
Many voters thought like you , “which is a reason for the deep problems being swept under the rug in Connecticut
and United States.’

posted by: SocialButterfly | February 13, 2014  1:30pm

@Art Vandelay; our Democratic Party leaders led by Sen. Blumenthal
will not allow such an investigation and which is also probably why Pres. Obama is not being impeached.  God is no longer blessing our country—since we removed him from office.

posted by: Lawrence | February 13, 2014  1:47pm

I don’t dislike Republicans. I dislike falseness and bigotry. Play it straight and you’re allright with me.

posted by: dano860 | February 13, 2014  1:50pm

I think the base of the story is not that the democrats have a large or small bank account. It is that they have caught the attention of the SEEC, w/o being solicited.
It appears the the SEEC has placed a shot across their bow with regards to the placement of the funds raised. “The opinion states early on that “a lack of clarity seems to have arisen due to the intersection of federal law and state law.””
They must maintain a separate and distinct line of accounting between the State party and the Federal party. This goes for any party that has a horse in the race.
What raised the flag to the SEEC? Perhaps it was the fact that some of the $10K donors do business in the State? Perhaps it was the letter that the CEO sent to his underlings saying they need to contribute to Dannel? Was it the $40K that they felt they didn’t need so the returned it? The SEEC didn’t say so we are left to guess and hope that the SEEC has the ability to oversee all of the fund raising and spending that all parties will be doing.
Dannel said the other day that the Repubs will have fun with the number of candidates they have. Well we now know that he is running (he just hasn’t said it publicly yet), he believes that he is the Dems choice. IF he isn’t running they will be having a heck of a lot of fun filling in the hole he will leave them at the near last minute.
When the Repubs finally settle on a candidate the funds will pick up. If he is one of the signers of the Connecticut Collusion Firearms bill there won’t be many and they won’t be large.
I feel many of us would rather stay with a known loser than go with a RINO back stabber. Then we get to watch those near liable commercials…MORE FUN!

posted by: SocialButterfly | February 13, 2014  9:27pm

@Lawrence: It’s good that you do not exclude a political party from being politically correct. I don’t care for “false prophet politicians either.”  Once they get in power—they tend to get very careless with the truth.  That’s why our country and state are hurting.  Some of our leaders “appear to have “sold their souls.”