Tuesday, August 28, 2007

What are they doing in Ohio?

The Turner Report, the blog that gave me a lot of information about what All Children Matter has been doing in Missouri, updated its reporting last night, and its most recent post is worth reading (http://rturner229.blogspot.com/2007/08/two-years-after-his-death-walton.html). Mr. Turner writes that the late John Walton, son of late Wal-Mart founder Sam Walton, "continues to fund All Children Matter from beyond the grave. Apparently, Mr. Walton made sure that his estate would continue to fund his favorite causes, including the nation's top voucher proponent, All Children Matter."

Documents from the Virginia State Board of Elections indicate All Children Matter's Virginia PAC, which provided the $200,000 to fund the negative campaign advertising in the waning days of the 2004 election that propelled Matt Blunt into the governor's mansion, has received $4.1 million from Mr. Walton during the past year. Mr. Walton has been the PAC's biggest contributor since the beginning of 2006. It is almost a guarantee that some of Mr. Walton's money will make its way into Missouri in 2008.

And John Walton has been dead for two years now.

But I want to share something more interesting about what ACM has been allegedly caught doing in Ohio, in violation of Ohio law. And based on what I've found on the internet this evening, Ohio isn't the only place it's happening. There's some sort of litigation going on in Wisconsin, too, which I'll get to.

First, the secretary of state in Ohio called two weeks ago for a hearing when she discovered that ACM sent $870,000 to Ohio through its political action committee based in Virginia, called ACM-VA. WAVY-TV reported here (http://www.wavy.com/Global/story.asp?S=6921183&nav=23ii) that

A Virginia political action committee's transfer of $870,000 to an Ohio affiliate has caught the eye of Ohio's chief elections official, who is investigating the donations' ties to Ohio's biggest charter-school operator. The Columbus Dispatch reports that Akron industrialist David Brennan, who also is president of the for-profit White Hat Management charter schools in Ohio and six other states, has given $200,000 since 2004 to All Children Matter.

The Virginia group transfered $870,000 to an Ohio affiliate last year to help elect Republicans -- the subject of a state election-law complaint. Ohio Secretary of State Jennifer Brunner argues that the influx violated state campaign laws. The Ohio Elections Commission has set a hearing on the matter for August 23rd.

The Columbus Dispatch added more details in a report on August 14 here (http://www.dispatch.com/dispatch/content/local_news/stories/2007/08/14/CTYCAP_ART_08-14-07_B3_A07K1LO.html). According to its report, ACM responded to the secretary of state's charges by saying, essentially, that neither she nor the Ohio Elections Commission warned it in advance that sending this money from Michigan through Virginia into Ohio was against the law, and that they shouldn't do it. In fact, the commission did send ACM an advisory, but ACM says the commission interpreted ACM's question differently, so it went ahead with its funding plans around the law.

A national group supporting school choice is under fire for its election activity in Ohio. But leaders say a 2006 Ohio Elections Commission advisory failed to directly warn it not to proceed. All Children Matter, a Michigan-based organization whose primary political action committee is registered in Virginia, started an Ohio PAC in 2006 and spent nearly $860,000 helping Republican candidates. The group was not active in Ohio campaigns prior to 2006, though it used Ohio-based direct mailing companies to help with campaigns in other states.

Ohio Secretary of State Jennifer Brunner recently filed a complaint with the Ohio Elections Commission arguing that All Children Matter illegally transferred $870,000 from its Virginia PAC to its Ohio PAC. Virginia does not have campaign-contribution limits and allows corporation contributions; Ohio's limit for PACs is $10,670, and corporate money is barred. Her complaint was filed with the Elections Commission, which sent All Children Matter an advisory opinion in May 2006.

"There was an advisory opinion issued to us, but it did not address the statute in a way that we had asked, so we moved forward," said Greg Brock, the group's executive director. "The only reference it made was that we had to be properly registered in Ohio. By the time the advisory opinion was issued, a couple months after we asked for it, we had already registered our committee, so that was a moot point." The advisory does talk about the need to register, but also says, "It would not be possible for an existing All Children Matter PAC from another state to (properly file) with the Ohio secretary of state."

An editorial in the Cleveland Plain Dealer here (http://www.cleveland.com/printer/printer.ssf?/base/opinion/1187425921238390.xml&coll=2) spells out the difference:

At issue is more than $850,000 in campaign contributions that a Virginia political action committee favoring school choice gave to its Ohio counterpart in 2006. The two states' PACs - both called All Children Matter - consider themselves affiliates and believe it was legal to transfer funds from one to the other. But Brunner's campaign finance administrator, J. Curtis Mayhew, notes that Ohio law requires that the Virginia PAC establish a formal presence within the state. Mayhew says the Ohio Elections Commission pointed out that requirement when All Children Matter-Ohio inquired in May 2006 - which was before Democrats swept all but one of the state's executive offices.

Because the Virginia PAC's contributions are not allowed, Mayhew wrote, the Ohio group must refund them. Not only does the Ohio PAC not have the money to do so, Columbus attorney William Todd countered in a letter to Mayhew, it does not believe it must. By his reading of state statute, the two PACs are in fact affiliates; besides, Todd continued, "it is our understanding that such transfers between affiliated PACs regularly occur in Ohio and that your office has not attempted to assert this interpretation of the statute."

Here's a question that I thought of while reading these matters from Ohio: Right now, we only have Parents for Choice in Education, which is mostly funded by ACM and a handful of wealthy partners here in Utah. But is it possible that, after building its operation here in Utah through PCE for the past few years, it will open a base of operation here and use it to run voucher campaigns across the West, the way it runs its campaigns in the East through Virginia? It already looks at us as a small, cheap state where it's easy to do its business. If it succeeds here in November, does anything stop ACM from setting up a real base of operation here?

I'm remembering that there seemed to be a pattern in ACM's operations in Utah and Missouri -- a pro-voucher in-state "institute," a wealthy in-state partner, and a process to fund legislative campaigns for lawmakers who would support voucher legislation. In the Ohio articles, the only part of the pattern I haven't seen yet is the pro-voucher "institute."

The hearing on this issue was held just last week. I don't know if the elections commission took any action there yet, but the Akron Beacon Journal spelled out the issue this Sunday here, and reading it made me think about how money gets sent into Utah and passed around to help lawmakers get elected, and to help one another get elected, and to influence how we think and vote on issues like the voucher referendum in November. As much as I want to ask, "What do we know about what's going on," I sometimes think it's more important to ask, "What DON'T we know about what's going on." What we DON'T know about these people from Michigan could hurt us a lot worse than what we can easily find out, because they clearly have drawn a target on Utah and they know how to do what they're doing.

The Akron Beacon Journal's story is here (http://www.ohio.com/news/willard/9381836.html) and it says,

Ohio's current campaign finance system hinges on full disclosure and limited contributions. The public should be able to follow the money, and caps on contributions should ''level the playing field'' for individuals and political action committees. This is a myth. Last week, lawyers for Secretary of State Jennifer Brunner and a pro-charter school PAC named All Children Matter Ohio squared off before the Ohio Elections Commission. Brunner alleges the Ohio PAC exceeded contribution limits and illegally received $870,000 from a sister PAC based in Virginia that never registered in Ohio.

The true source of the money was hidden because the Virginia PAC dumped the dollars into Ohio through five and six-figure checks. The Ohio PAC spent the money on 29 Republican candidates for statewide office, the General Assembly and the State Board of Education. There is an Akron angle. David Brennan, the charter school entrepreneur, gave money to the Virginia PAC.

Let's clear the legal cobwebs here.

Brunner is arguing that so-called fat-cat contributors such as Brennan are maxing out on their contribution limits to candidates in Ohio. They then contribute to a PAC in Virginia. The out-of-state PAC launders the money back to Ohio in a way that cannot be traced directly to the fat cats. This does trample the spirit of Ohio's campaign finance reform.

But let's be honest. Ohio's campaign laws are filled with so many loopholes for PACs, parties, candidates and caucuses that there is no need to cross state boundaries to bypass contribution limits and circumvent disclosure requirements.

Last year, 10 candidates for state representative, including Jon Husted, R-Kettering, faced no opposition in the general election. Essentially, they were elected when the polls closed after the primary on May 2. Although they had no reason to do so, the 10 candidates raised $1.46 million after securing their seat and spent even more $1.87 million because they had money left over after the primary. According to campaign finance reports maintained by Brunner's office, Husted spent $1.2 million. Bill Seitz, R-Cincinnati, spent $173,000, and Jim Carmichael, R-Wooster, spent $111,000. Republicans are not the only ones funneling money. Armond Budish, D-Mansfield, an unopposed freshman in an open seat, spent $238,000 after the primary.

Legislators who are unopposed or in secure seats and raise money for candidates in heavily contested races to avoid contribution limits and disclosure are called ''banks.'' These ''banks'' launder the money to the point where it is impossible to determine whether the funds came from an individual or a PAC that had already contributed the maximum to a candidate in a contested race. So the contribution limits and the disclosure requirements in Ohio's campaign finance laws are meaningless.

The All Children Matter Ohio PAC could have used this and other loopholes to collect and distribute funds to candidates without landing before the elections commission or eventually in court with Brunner. Brunner alleges the Virginia PAC didn't register in Ohio and therefore did not have the legal standing to move money to its affiliate, All Children Matter Ohio. But what Brunner's legal beef really amounts to is that the Ohio PAC violated the law because it didn't follow the rules established by legislators to launder campaign contributions in Ohio.
And that's no myth.

Do we have loopholes that big in Utah? Are our campaign finance laws just as "meaningless" as this reporter says Ohio's law are?

After learning what we have learned about ACM and PCE, the bigger question looks like, What don't we know about what they're doing? In Utah? In Missouri? In Texas? In South Carolina? In Ohio? And in Wisconsin?

And who is asking the questions to find out those answers for us before November?