“The Ballenger Report” predicted last year that Democratic Gov. Gretchen Whitmer would escape after commiting ‘campaign finance murder,’ and, sure enough, now she has.
A group that ran ads last summer featuring Democratic Gov. Gretchen Whitmer clearly violated the Michigan Campaign Finance Act — even newly-elected Secretary of State Jocelyn Benson, like Whitmer a Democrat, has admitted that.
But, unsurprisingly, Benson last week gave the Whitmer campaign only a measly $37,500 fine after the organization got away with spending some $2 million in TV ads to defeat Whitmer’s two primary campaign challengers, Abdul El-Sayed and Shri Thanedar. The “settlement” was part of a “conciliation agreement” between Benson’s state Elections Division and the Whitmer-affiliated Build a Better Michigan (BBM) campaign, which was allowed to escape without admitting any culpability whatsoever.
The meager fine represents only 2% of the total amount spent illegally by lobbyist Mark Burton, who ran BBM and is now Whitmer’s chief strategist in the governor’s office. A similar violation in 2014 by a Republican-affiliated group in support of a Republican candidate resulted in penalties administered by then-Secretary of State Ruth Johnson (now a Republican state senator) that matched the amount illegally spent. Such a penalty for BBM would near $2 million.
“Jocelyn Benson (has) managed to pull every tooth from Michigan’s campaign finance law, to save Gretchen Whitmer and her chief strategist millions of dollars in fines and fees,” said Tony Daunt, director of the GOP-affiliated Michigan Freedom Fund. “Benson has declared that violations of Michigan campaign finance law will essentially go unpunished. Her behavior is partisan, and it is corrupt.”
But The Ballenger Report told you this would happen, back on July 23, 2018. In fact, even this Report underestimated the extent to which Whitmer and BBM would get away with “campaign finance murder.” Here is what we published at that time, in its entirety:
“Timing is everything, and the Gretchen Whitmer for Governor campaign evidently believes it can run out the clock on complaints that it is trashing Michigan’s campaign finance laws.
How else to explain a decision by a mysterious “dark money” group coordinating with Whitmer to spend at least $2 million between now and the Aug. 7 primary even if it means that, LATER, after this year’s elections are over, Whitmer and her campaign are willing to pay some $4 million in fines? After all, by then she’ll be governor and any campaign finance malfeasance will be overlooked or forgotten, or it will be easy to raise money to pay the penalty.
In this year’s Democratic Party gubernatorial primary, a soft-money 527 non-profit called Build a Better Michigan (BBM) has been broadcasting a 30-second ad featuring Whitmer, who appears in the ad and speaks directly into the camera. The ad is supposedly an “issue ad” like such ads run for Mark Schauer by the Democratic Governors Assn during the 2014 gubernatorial campaign. Sounds innocuous? Uh-oh! The ad superimposes the graphic “Gretchen Whitmer Candidate for Governor.” That makes it what is called “express advocacy.” Just putting “Candidate” before “for Governor” does not somehow exempt it from the charge that it is “express advocacy.”
So what are “express advocacy” ads? They are NOT what are called “issue ads,” meaning ads that do not contain words of express advocacy. Issue ads do not contain words of express advocacy for a particular candidate or cause, and therefore issue ads can be paid for using corporate or labor union funds WITHOUT public disclosure of the contributors.
That’s not what the BBM ads are. They are “express advocacy” ads for Gretchen Whitmer as a candidate for Governor. By the way, what IS BBM? It’s a Michigan non-profit corporation whose mailing address is 700 13th Street, NW, Suite 600, in Washington, D.C. 20005. Its directors and officers are Mark Burton, listed as director and president (Burton was chief of staff for Whitmer when she was Senate Minority Leader). A woman named Suzanne Shkreli, who was the defeated Democratic nominee against incumbent Republican U.S. Rep. Mike Bishop (R-MI-8) two years ago, is listed as director and treasurer. Former state Senator Tupac Hunter (D-Detroit) is listed as a director and BBM secretary. He was the Democratic Minority Floor Leader when Whitmer was the Dems’ senate leader. In fact, if you’re looking for a plausible Democratic running mate as Lieutenant Gov. with Whitmer this coming November, he’s your man, along with ex-state legislator Buzz Thomas (D-Detroit).
The difference between issue and express advocacy ads began with the U.S. Supreme Court decision of Buckley vs. Valeo in 1976. That decision said that only “express advocacy” communications can be regulated, not advertisements centered on “issues.”
The high court’s decision contained a famous “footnote 52” that listed eight words or phrases that illustrated “express advocacy.” Those words were “vote for,” “vote against,” “elect,” “defeat,” “support,” “reject,” “cast your ballot for,” or a phrase to the effect of “(Whitmer) for (Governor).” Footnote 52 was intended to provide examples of speech that would lead a reasonable person to conclude that the speaker was advocating for the election of a candidate or the passage or defeat of a ballot measure.
The court felt that limiting campaign finance laws to speech using express advocacy was necessary to avoid a “chilling effect” on speech about issues that are protected under the First Amendment.
In Michigan, the 1976 decision came into play four years ago when a technician in error added the words “for State Senate” into the graphics for TV ads for two Republican candidates for the state Senate, Ken Horn and Dale Zorn. Neither Horn nor Zorn spoke directly into the camera in the ads. The ads were supposed to be issue ads, but because of the technician’s error they instantly became advocacy ads. When the errors were discovered, the ads stopped and the ads were pulled from the stations. Campaign finance complaints were filed by the candidates’ Democratic opponents against the ad’s sponsor — the Michigan Jobs and Labor Foundation (MJLF) — because the ads had violated various sections of the Michigan Campaign Finance Act stemming from the 1976 Buckley decision. The MJLF was forced to sign a conciliation agreement with Secretary of State Ruth Johnson, a Republican, and fined $17,696.60, which was the civil levy equal to the cost of the two media buys that ran before the ads were pulled.
Flash forward to two weeks ago, when the Whitmer campaign began running its “Build a Better Michigan” ads while making essentially the same mistake that the MJLF made on behalf of Horn and Zorn in 2014.
Two complaints have now been filed against BBW — one by the Michigan Republican Party, the other by the Michigan Freedom Fund. However, BBW, unlike the MJLF in 2014, has made no effort to mitigate its violation by either pulling the ad or re-editing it in the studio to remove the offending “Gretchen Whitmer Candidate for Governor” graphic. Instead, BBM has doubled down — it continues its $2 million+ ad buy for Whitmer.
Is there any penalty for this? Yes, a fine equal to the $2 million buy could be imposed by the Secretary of State if she finds a violation of the MCFA has occurred and follows the 2014 MJLF precedent. Whitmer could be vulnerable to the same fine personally. This would be the highest civil penalty ever assessed under the MCFA in its entire history. How would Whitmer and her campaign pay off such a fine?
No problem. Ruth Johnson probably won’t respond to the complaints until September or October. Then BBM could be expected to take the matter into court and string the verdict out till after the election — an election Whitmer would have won using “funny money.” And the Democrats could also expect that a new Secretary of State, Democrat Jocelyn Benson, would be in office and not as eager as Johnson to apply justice.
Another example of trying to run out the clock? BBM is a soft money 527 organization that tells the Internal Revenue Service (Form 8871) that it is not regulated by either the Federal Election Commission (FEC) or any state disclosure agency (in Michigan, that would be the Secretary of State). BBM had a July 15 filing deadline with the IRS to disclose its contributions of $200 or more, or its expenditures of $500 or more. But BBM claimed it could not file its disclosure report (Form 8872) electronically, because it had not been issued a PIN number by the IRS. So BBM says it sent its report by snail mail U.S. Postal Service (what about Federal Express or UPS?), which may cause a “delay” in the report being posted on the IRS website (like, not until after the Aug. 7 primary election?)
Finally, the Whitmer campaign gave in to pressure from its critics on Monday, releasing voluntarily the list of BBM contributors. Prominent on the list were the Teamsters’ DRIVE committee, Emily’s List, UAW CAP, the Philip A. Hart Democratic Club and the Progressive Advocacy Trust.
Too bad one of Whitmer’s primary opponents, Abdul El-Sayed, who tried ineffectively to make an issue of Whitmer’s campaign finance shenanigans in the Democrats’ last gubernatorial debate, was either too timid or too ignorant of campaign finance law to press his case to what might have been a meaningful conclusion.
Now Whitmer and her BBM, with which she’s clearly in collusion, will continue to run their ads to the detriment of her Democratic opponents, El-Sayed and Shri Thanedar, over the next two weeks — and she’ll probably never have to pay the price.”
Well, she did — $37,500.