Omertà: The New Code of Michigan Campaign Finance Reporting

You Are Going to Know A Whole Lot Less The Next Time You Vote

Michael Kowall Image 2The Michigan House and Senate sent a much revised and dramatically expanded Senate Bill 571 H-3 to Governor Snyder last Wednesday. Introduced by Senator Kowall as a 12 page bill establishing some esoteric campaign finance rules for various types of PACs in Michigan, this bill morphed into a 53 page political grab bag incorporating SB 638 S-2 at the very last minute. It creates a whole new way to conceal political expenditures from public scrutiny until long after an election is over. Think of it as the mafia’s code of omertà applied to Michigan campaign finance.

Michigan’s nitwit news media are decrying the limits placed upon a ‘public body’ in Section 57(3), which prevents them from using public funds to propagandize voters on local ballot questions. This limitation doesn’t go far enough. Remember how the Michigan Municipal League, the Michigan Association of Counties, and the county road commissions pulled out all the stops for Proposal 2015-01? No prohibition against this in SB 571 H-3, but there should be. Citizens should not have to fight their tax dollars in the political arena. Section 57(3) would be a real benefit to Michigan politics if it had been extended to state ballot questions, but it wasn’t.

Now to the really devious aspect of SB 571 H-3, which our nitwit media missed. MCL 169.233(3)(a) currently requires ‘independent committees’ to report their financial expenditures on behalf of candidates and ballot questions four times a year. ‘Independent committees’ currently have to file reports on their campaign finance activities during February, April, July, and October. This is not quite a quarterly basis, but it is fairly well spaced out through the year. MCL 169.233(1) already exempts ‘independent committees’ from the regular election campaign statement reporting schedule – immediately before and after elections – required of most other committees. MCL 169.233(5) requires ‘independent committees’ to file reports of expenditures made within 45 days before a special election, but it is easy to use prepayments and accounts payable to avoid this window during most special elections. And this 45 day reporting window does not exist for regular elections. So you are only going to get quarterly reports from ‘independent committees, except in rare circumstances.

Section 33(3) of SB 571 H-3 completely eliminates the February campaign finance report for all types of committees, including independents. This creates a bastard reporting schedule consisting of two quarterly reports and one semiannual report five months after November elections.. Most political committees have to file pre and post election statements, so their campaign expenditures and sources of funds will continue to be known on a timely basis, regardless of this change. But independent committees are not required to file pre and post campaign reports for regular elections, so they will now have a six month interval after their October reports before they have to report their finances – on April 25th of the following year.

Ending the February report will have clever political strategists targeting all manner of obnoxious ballot proposals – those requiring a lot of corporate ‘independent committee’ money – for the March presidential primary elections held every fourth year. The annual May election will work almost as well, but ‘independent committees’ will just have to pay a late filing fee which is capped by MCL 169.233(7) at $ 1,000 to keep their spending confidential until after the election is over. Small change in a fight like Proposal 2015-01. Most of these ‘independent committees’ have very carefully crafted Articles of Incorporation which absolve all their officers and snuffies of all responsibility for legal violations; only the ‘independent committee’ has any legal liability and it is only a shell. Read Article VI of Michigan’s Voice Articles on page 4, here, for a typical example of these independent committees’ legally endowed irresponsibility.

Election observers will no longer be provided with campaign finance reports disclosing the rogue’s gallery behind tax & spend proposals like 2015-01. Raising your taxes by ballot proposal just got a whole lot easier for those with a lot of money to spend. You won’t ever stop a proposal like 2015-01 again.

GLEP ImageLet’s illustrate another effect of this devious reporting change by applying it to the special November 3rd primary election in the 80th House District. Mary P. Whiteford’s campaign committee has reported that she spent just over $ 41,000 winning this nomination. We also know from a late October filing that the Great Lakes Education Project, a Dick DeVos front ‘independent committee’, spent an additional $ 15,477 on just three mass mailings to voters in the 80th District during the 45 day pre special election reporting period. These mailings supported Mary Whiteford and opposed her opponent Cindy Gamrat.

However, GLEP actually made a total of nine mass mailings during the special primary, so presumably six were paid for after GLEP’s October reporting period ended, and also after the election so the MCL 169.233(5) special election 45 day window did not apply. Something in the vicinity of another $ 31,000 more. Normal people would assume a GLEP account payable at Arena Communications of Salt Lake City would fit the definition of expenditure in MCL 169.206(1), but GLEP’s failure to report six mailings to the BoE by December 3rd suggests that they have found some loophole.

Richard D. McLellan

Richard D. McLellan

Further, a mystery organization called Michigan’s Voice set up by Richard D. McLellan made two additional, last minute mass mailings which cost at least another $ 10,000. Presumably Michigan’s Voice paid for their mailings after the election so the same MCL 169.233(5) special election 45 day window did not apply. Or they could be claiming an exemption from the MCFA under the definition of expenditure in MCL 169.206(2)(j), but they sure used the word ‘support’ a lot in their two mailings knifing Jim Storey.

By eliminating the February campaign finance reports, the Michigan Legislature will keep Allegan County voters in the dark about the avalanche of money behind Mary P. Whiteford until comfortably after the March 8th special general election. SB 517 H-3 got the usual immediate effect vote, so it will apply to the special primary election in the 80th if it is signed by Governor Snyder. So no February report from either GLEP or Michigan’s Voice.

Michigan’s nitwit media are not going to report estimated spending, especially when they favor the candidate who benefited from that spending. Allegan County voters go into the special General completely oblivious to the $ 97,000 plus spent to promote Mary Whiteford in the special primary. Four times the expenditures of her nearest competitor: Jim Storey. They only get to find out after she is sworn in, if ever.

Mary Whiteford Image 2Speaking of Mary P. Whiteford and the last minute zingers in SB 571 H-3, Section 52(6)(c) establishes a new treatment for contributions which makes it much easier to use current contributions to pay off old campaign debt. And Ms. Whiteford still has $ 71,000 in debt from her 2014 run for the 80th. A lot of Michigan legislators also have big ticket debt from past campaigns. Under SB 571 H-3 Section 52(6)(c), they no longer need to get contributors to designate the contributions used to pay off past debt to the election cycle which created the debt, and apply the contribution limits of those past cycles. A neat trick which will put big money in the pockets of legislators who have ‘loaned’ large sums of money to their own campaign committees. A new reason for them to suck up to big money contributors, and not represent their constituents.

This bastardization of Michigan campaign finance law will also conceal money used to suppress recall efforts in the future, particularly in the Senate. Obnoxious legislation like the SB 616/617 reprise of Proposal 2015-01 will be timed to hit the Senate floor so a flood of dark money can be put up to save legislators going against the wishes of their constituents. Legislators and their benefactors will stall recalls with legal folderol until they can be assured a March or May recall vote. Gives them five months of unreported spending to adjust public opinion.Hillary Witch Image A

Michigan’s Republican legislators passed this turkey over Democratic opposition figuring that the special treatment of November, March, and May (with a fine) election expenditures by independent committees would be an ongoing partisan advantage. However, politics is a pendulum and we have already seen Wall Street money go solidly Democratic (can you say Hillary Clinton?). Should Michigan Democrats wise up and outbid our Republican legislators for the affections of Michigan’s special interests, Michigan’s hot money will switch sides in a New York second.

You Betcha! (15)Nuh Uh.(0)

  10 comments for “Omertà: The New Code of Michigan Campaign Finance Reporting

  1. Jason
    December 21, 2015 at 7:42 pm

    A lot more than folks might have expected. Wow.

    One small area of disagreement that I have:

    "Michigan’s nitwit news media are decrying the limits placed upon a ‘public body’ in Section 57(3), which prevents them from using public funds to propagandize voters on local ballot questions. This limitation doesn’t go far enough."

    Believe it or not, even after fighting the most egregious of these, I still think there is a place for proper dissemination of information. This bill is simply the wrong way to do it. And in the meantime, it is apparently making way to hide far worse transgressions in the electoral arena.

    You Betcha! (7)Nuh Uh.(8)
  2. JD
    December 23, 2015 at 9:05 am

    What seems to be the problem (as I see it from fighting the most egregious of these as well) is that my local government is constantly making excuses as to how they cannot possibly afford to disseminate OUR the egregious costs associated with propagandizing AGAINST us..
    We just went through this here locally with our Township legal bill and those who expect to be paid to sit on local Commissions spewing Township leadership propaganda vs representing us or simply serving as their civic duty.

    You Betcha! (3)Nuh Uh.(0)
    • JD
      December 23, 2015 at 9:10 am

      ...and thank you once again (10x25/this site) for bringing us these issues in the most detailed way possible with absolutely nothing 'dumbed down'.

      You Betcha! (3)Nuh Uh.(0)
  3. Sue Schwartz
    December 23, 2015 at 4:35 pm

    If political contributions were tax deductible with no limit on the amount, and a user tax like a capital gains tax to the recipient were charged, you'd see that there'd be contributions from the little guy, and huge capital gains tax generated from committees and PAC's. Those committees and PAC's would require spot audits and have severe penalties for "missteps". The way it is now, a layer or two of bureaucracy, little or no enforcement and inappropriate fines, if any, at the state and federal levels. Basically, these PAC's and committees are money launderers. In fact, the only reporting I'd like to see are those for lobbyists on a quarterly basis on file with the SOS. Is it First Amendment when you're paid to lie to the public?????

    You Betcha! (2)Nuh Uh.(0)

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