Just 50 Michigan Committees Are Responsible For Half Of The $1.5 Million In Unresolved Campaign Finance Fees

But Getting Those Groups To Pay Their Outstanding Fees Won’t Be Easy. Many Have Been Out Of Compliance For Years. Others Say There’s No Way They Could Pay What They Owe.

 

 

By CRAIG MAUGER
Michigan Campaign Finance Network


LANSING (June 17, 2019) — The group Michigan Is Yours launched with a lofty goal. Then, it quietly floundered. Now, it lives on in the purgatory of a campaign finance system that critics allege prevents cooperation.

According to disclosures, Michigan Is Yours formed in February 2010. Its goal was to get voters’ approval for a handful of new casinos across the state. But the proposal’s backers didn’t gather enough signatures to qualify for the ballot.

The committee eventually became “defunct,” as its treasurer, Darryl Mathis, said. The committee stopped filing required fundraising disclosures in 2012. But the committee never sent the necessary paperwork to the state to officially dissolve. In the eyes of the committee, it was “defunct.” In the eyes of the law, however it was illegally missing reporting deadline after deadline after deadline after deadline.

Asked for his reaction to the fact the state says Michigan Is Yours has racked up $22,200 in outstanding fees for missing campaign finance reports, Mathis responded with an incredulous laugh, “You’d have to get me up off the floor.”

Unfortunately, the story of Michigan Is Yours is not uncommon. As new Secretary of State Jocelyn Benson pushes for better collection of unpaid campaign finance penalties, an analysis of nearly 2,000 outstanding fees shows how difficult the effort for better enforcement under current state law may be.

 

 

Through the Freedom of Information Act, the Michigan Campaign Finance Network (MCFN) obtained the data behind the $1.5 million in outstanding campaign finance fees the Secretary of State has identified. The majority of those outstanding fees are belong to just 50 political action committees (PACs), ballot committees or candidates.

Some of them never filed any campaign finance disclosures after officially registering with the state. Many others stopped filing campaign finance disclosures years ago and have repeatedly ignored the state’s requests for new disclosures or for the payment of their late filing fees.

The state’s law is designed to ensure that political groups raising money to directly benefit candidates and causes disclose their donors and spending on a regular schedule. Committees can face penalties of up to $2,000 for failing to turn in a required disclosure. PACs are required to file quarterly fundraising disclosures, meaning they are supposed to file four disclosures per year.

When they don’t file their disclosures, the Department of State sends letters notifying them that they failed to file and that they will accrue fees until they file the disclosures.

MCFN talked to treasurers and record-keepers behind some of the committees that have the most unpaid fees. Many of them seemed unaware of the outstanding fees their committees have collected.

That’s despite the fact that some of them have accumulated more than $15,000 in outstanding fees, according to the state’s data.

“I’m very surprised,” said Thomas Kent, who formed a PAC called Corridor Progress in September 2011.

After the PAC formed, it never filed any campaign finance disclosures. Kent said the PAC never raised any money. Because the committee didn’t seek a reporting waiver it could have gotten while it wasn’t raising money, the PAC missed a new reporting deadline each quarter and faced a new late fee from the state.

“It is easy to create,” Kent said of setting up a PAC. “I thought that it was a good idea, and then, I forgot about it.”

The state’s numbers say Corridor Progress has about $20,000 in outstanding fees. But like other committees with outstanding fees, that’s not necessarily what the committee would have to pay to resolve the matter.

Still, Corridor Progress is one of the 50 committees responsible for the majority of the outstanding fees, according to the state’s numbers. Of the $1.5 million in outstanding fees the Department of State has identified, $794,329 — or about 51 percent — is attributed to just those 50 committees that owe the most.

The Michigan Campaign Finance Network created a sortable spreadsheet of the outstanding fees based on data obtained from the state. You can access it in spreadsheet form by clicking here.

 

 

Shawn Starkey, a spokesperson for the Michigan Secretary of State, said the department’s legal office will soon be sending out letters to candidate committees and PACs that have outstanding fees.

Starkey said if PACs don’t contact the state, “we will refer their accounts to treasury for collection.” If the candidate committees don’t respond, “we will take additional actions for collection and will publicly post the list of delinquencies,” Starkey added.

 

‘This Is My Aunt’s Phone’

While there are some committees connected to current state officeholders and even one member of Congress that have small amounts of outstanding fees, the committees that have the most are far from household names.

A PAC called Paul for Mid-Michigan currently has the most unresolved fees, according to the state’s data: $26,000. It’s unclear who “Paul” is. However, the PAC’s top donor was TV host Jo Ann Paul-Stanton, who gave $1,000.

The PAC formed in 2010. It raised $1,600 before it stopped filing campaign finance disclosures in 2012. Its treasurer, Brent Stanton of Livonia, didn’t respond to requests for comment.

The candidate committee that has collected the most outstanding fees is the Committee to Elect Douglas Wilson at $19,000. Wilson ran for the state House in 2012 in Oakland County’s 45th District. He got 3,542 votes, finishing in second place in the Democratic primary. That’s 3,542 more votes than disclosures he filed. He never filed a single campaign finance report.

Wilson didn’t return a request for comment.

Many committee treasurers didn’t return phone calls, and some of the phone numbers listed for the committees owing fees were no longer in service.

A committee called Diamond PAC formed in January 2002 and filed its last disclosure in October 2011. When the author of this story contacted the committee’s listed phone number, the person on the other end of the line said, “This is my aunt’s phone, and she doesn’t even speak English.”

According to past MCFN reporting, Diamond PAC was once connected to Wayne County Commissioner Jewel Ware and raised $43,455 in 2002 alone, according to disclosures.

There were multiple committees on the list with outstanding fees that were connected to current officeholders. Most owed very small amounts or the fees were relatively new.

For instance, the candidate committee of Shauna Ryder Diggs, a member of the Board of Regents for the University of Michigan, has accumulated multiple late reporting fees. The committee now has $1,525 in outstanding fees, according to the state’s data.

Some committees connected to former officeholders had much larger outstanding fee totals.

Two old candidate committees of former Rep. Thomas Stallworth have $15,000 in outstanding fees each. Stallworth, who ran for the Senate in 2014, said his campaign finance documents were lost in a computer crash and he’s been working with an accountant to recreate the filings he owes.

For other PACs facing heavy fees, the situations were also complicated.

A super PAC called Michigan Rising formed in 2011. It raised $42,070 by April 20, 2012. Then, it stopped filing campaign finance disclosures. It has accumulated $21,000 in late reporting fees.

Jan BenDor, who was previously affiliated with the super PAC, said the super PAC’s treasurer had the records but became severely disabled because of injuries sustained in past military service.

“None of my efforts were successful in resolving the reporting requirements,” she wrote the Department of State in a 2015 email. “The bank account was closed and there is no committee in existence.”

The department continued to levy fees against the committee.


Facilitating Cooperation?

BenDor said that the state’s campaign-finance system doesn’t facilitate cooperation.

“I tried to explain to them what happened,” she said of the Michigan Rising situation. “But apparently, they just want to carry it on their books forever, which is their prerogative. It’s not going to result in anything.”

BenDor said the state’s campaign finance system doesn’t require there to be a board of directors for a PAC or even a back-up treasurer. Those types of requirements could prevent situations where one person controls all of the records and becomes ill, preventing the PAC from meeting reporting deadlines.

BenDor echoed something others stated in the process of reporting this story: The campaign finance system through which PACs and candidates file their disclosures is not user friendly.

“The reporting system for state PACs is incredibly bulky and difficult,” as she described it, adding that it’s easy for groups with paid staffs to manage the disclosure system but more difficult for volunteer-led organizations.

Currently, the law allows for late filing fee “waivers” if a person responsible for filing campaign finance disclosures becomes severely ill or dies. It also allows for waivers if there are “unique, unintentional factors beyond the filer’s control not stemming from a negligent act or non-action,” according to the state’s campaign finance manual.

That same manual says specifically that waivers are not allowed in situations where someone simply wasn’t aware of the requirements or didn’t receive notices from the state.

Asked about $20,000 in fees faced by a committee that allegedly never raised any money, Starkey of the Department of State said that’s why it’s important people file their required reports and stay in contact with the department.

“If they come in to close their accounts and file the required reports, it’s likely they could owe less depending on how much they have raised and spent,” Starkey said.

Darryl Mathis, the treasurer of Michigan Is Yours, suggested the state do a better job communicating with committees. Mathis said he wasn’t aware the late reporting fees were still being levied against his committee.

Asked if the committee had the money to pay $22,200 in potential fees, Mathis said simply “Nowhere near.”

The committee’s last reported balance was $0.

 

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Press Release Press 2019 News Campaign Finance Pacs Super Pacs Foia Secretary Of State
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