Grow Connecticut, Inc., an independent expenditure group that just paid nearly $200,000 to run ads opposing the re-election of Gov. Dannel P. Malloy, was created last year by the campaign-finance law firm of Tom Foley, the Republican nominee for governor, after Foley's ties to another super PAC were exposed by an elections enforcement case.
The group is run by Liz Kurantowicz, the former state Republican Party official who managed Voters for Good Government, the independent-expenditure group that ran afoul of the State Elections Enforcement Commission last year by paying Foley's pollster, an expense that the commission says Foley's campaign should have incurred.
Grow Connecticut is a "527," a political organization formed under Section 527 of the Internal Revenue Code to make independent expenditures. Commonly called super PACS, they are permitted to raise and spend unlimited amounts of money to influence elections -- as long as they do not coordinate with the candidates they are trying to elect.
It's biggest donor is the Republican Governors Association, whose chairman, Gov. Chris Christie, recently campaigned with Foley and headlined a state party fundraiser in Greenwich, the candidate's hometown.
The Mirror's review of IRS records last year found that Voters for Good Government, also known as VFGG, paid $15,504 to Foley's pollster, $17,133 to his press spokesman and $43,850 to his media consultant in 2013. The latter two expenses were not part of the elections enforcement case.
VFGG was able to pay some of Foley's early political expenses after receiving money from Citizens for Democracy, a 527 group whose chairman is Larry J. Lawrence of Greenwich, the treasurer of Foley's 2010 and 2014 gubernatorial campaigns.
VFGG, Citizens for Democracy and Grow Connecticut all were registered with the IRS as 527s by James E. Tyrrell III of Clark Hill, a Washington, D.C., law firm that advised Foley's campaign in 2010 and defended Foley before the elections commission in 2013.
On Friday, The Mirror asked the Foley campaign if those relationships should give rise to a claim of illegal coordination -- an accusation the state Republican Party made against Malloy last week over his fundraising for the Democratic Governors Association, which is funding Connecticut Forward, a 527 opposing Foley.
In an interview Friday and an exchange of emails over the weekend, Kurantowicz and Foley's campaign spokesman, Chris Cooper, said Grow Connecticut is doing nothing that could be construed as illegal coordination with the Foley campaign, notwithstanding the tangle of relationships.
"None of the people you mention as involved with Grow Connecticut, Inc. has any involvement in Tom’s campaign. Tom is no longer involved with VFGG and C for D [Citizens for Democracy]. As far as we know, VFGG and C for D do not have any plans to make expenditures in Tom’s race. Coordination is not an issue if there are no expenditures," Cooper said Sunday night. "Neither Tom nor anyone in his campaign is involved with Grow Connecticut, Inc. The mere existence of relationships, prior or current, doesn’t mean there is coordination."
“These are important boundaries everyone respects. There are no coordination issues and will be no coordination issues,” Kurantowicz said Friday.
Two days after Foley won last week's Republican primary for governor, Grow Connecticut registered as a political action committee in Connecticut, a prelude to raising and spending money in the state.
Barring a finding of coordination, Grow Connecticut and Connecticut Forward are legally permitted to raise and spend unlimited amounts of money to support or oppose Foley and Malloy, whose own campaigns must live within contribution and spending set by state law.
The growing role of independent expenditure groups, which live outside the rules that apply to candidates and their campaigns, is especially sensitive in Connecticut, a state that created a voluntary public financing program to restrict the influence of state contractors and other interests on elections after scandal forced the resignation of Gov. John G. Rowland.
Malloy has helped the state Democratic Party and the Democratic Governors Association raise money from donors who cannot give directly to him, yet their money will help the party and DGA support his re-election. Foley, a Greenwich businessman, is now helping the state GOP raise money from donors who no longer can give money to him.
State parties, which are allowed to coordinate with their nominees' campaigns, can accept maximum donations of $10,000. But 527s, whether they are supporting presidential candidates or state campaigns, also often have ties to the those campaigns, even as they maintain their status as independent expenditure groups.
Under state law, there is a rebuttable presumption of coordination under certain circumstances, such as a 527 and a campaign sharing staff or consultants.
"There is absolutely no concern of coordination, none whatsoever," said Kurantowicz, the former executive director of the state Republican Party.
With Kurantowicz as director, Voters for Good Government made a splash in 2012 by spending about $300,000 on a last-minute burst of negative ads and mailings aimed at trying to defeat a half-dozen Democrats and flip control of the state Senate.
Voters for Good Government's ties to Foley were revealed in October 2013, when an investigation by the State Elections Enforcement Commission found that it had paid for a poll Foley used in March 2013 to promote his then undeclared candidacy for governor. The survey was conducted by Foley's campaign pollster, The Tarrance Group, with input from Foley and Justin Clark, the manager of his 2010 and 2014 campaigns.
In a settlement, Foley agreed to reimburse the group $15,504 for the poll, report it as a campaign expense and pay a $600 civil penalty. The 527 group paid a $15,504 penalty.
Two months after Foley's relationship to Voters for Good Government became public in the elections enforcement settlement, Tyrrell filed papers with the IRS creating a new independent-expenditure group: Grow Connecticut, Inc.
Aside from accepting one initial contribution on April 30, 2014, there was no record of activity by Grow Connecticut until after Foley's victory last week in the GOP primary, when Clark Hill faxed a registration form to the State Elections Enforcement Commission registering it as a state PAC.
Clark Hill is considered expert in structuring and running super PACs. One of its senior partners is Charlie Spies, treasurer of the super PAC that spent $142 million in 2012, most of it on ads attacking Mitt Romney's opponents during the primary and general election campaigns.
On its registration, Grow Connecticut declared itself as authorized to make expenditures in campaigns for statewide office and the General Assembly. Kurantowicz said a wide range of political involvement is possible.
“I think we’re looking at the landscape of opportunities to talk about the issues facing Connecticut,” said Kurantowicz, said a Connecticut-based employee of CAP Public Affairs, a national political consulting firm whose founders include two former senior staffers of the Republican National Committee. “I think everything is on the table.”
In its initial state registration, Grow Connecticut said it received no contributions, neglecting to mention a donation in April: $25,000 from Craig R. Stapleton of Greenwich, a GOP fundraiser and former ambassador to Czechoslovakia who is married to a first cousin of President George H.W. Walker Bush.
It disclosed the $25,000 contribution and $250,000 from the Republican Governors Association in a second filing with the state.
With no limits on the source or amount of contributions, 527s can raise money quickly.
Voters for Good Government raised $479,500 in an eight-day period from Oct 22 to Nov. 2 in 2012 -- and most of it from two donors: $340,00 from the Republican State Leadership Committee, whose backers include Walmart, AT&T, Exxon Mobil, Citigroup, Comcast, Koch Industries and the U.S. Chamber of Commerce; and $100,000 from Thomas Peterffy, a Greenwich billionaire.
By contrast, it took Foley and Malloy months to raise the $250,00 necessary to qualify for the state's voluntary public financing program, which bars donations in excess of $100. Both Foley and Malloy have qualified for public financing of $6.5 million for their general-election campaigns.