Settlement ends SEEC investigation of Foley

State elections officials accepted a settlement Wednesday with Republican gubernatorial hopeful Tom Foley over a $15,504 poll he commissioned last spring through his out-of-state, independent political group, Voters for Good Government.

Despite agreeing to a complex settlement that requires him to count the poll as an expenditure by his recently created exploratory campaign for governor, Foley said he thinks the State Elections Enforcement Commission was acting contrary to U.S. Supreme Court decisions liberalizing rules for political spending.

“I could fight. It could take years and millions of dollars,” Foley said. “It doesn’t make sense.”

Foley agreed to reimburse Voters for Good Government, a Delaware corporation that lists Foley as its treasurer, for the cost of the poll. The group must pay the state $15,504, a sum that the commission’s attorney, Kevin Ahern, described as “a civil penalty.” Foley, who remains the group’s treasurer, agreed to pay an additional $600.

“The parties concur that the instant Agreement does not constitute an admission of liability by the Respondents, but rather the settlement of a contested matter,” reads the settlement that was signed Tuesday by Foley and formally accepted Wednesday by the commission.

The commission and Foley agree on key facts, while agreeing to disagree on the interpretation of the laws dictating when political speech and activites become reportable expenditures under state elections law.

Voters for Good Government is a tax-exempt organization formed in 2012 under Section 527 of the Internal Revenue Code, the portion of U.S. tax law that has given rise to unlimited independent expenditures by political groups known by the shorthand, “527s.”

With Foley as treasurer, the group spent heavily last fall in a late, unsuccessful effort to win Republican control of the state Senate. It turned its attention early this year to Foley’s own prospects for governor, a job he nearly won in 2010.

In March, Foley contacted his pollster from 2010, the Tarrance Group, a national GOP polling and political consulting firm in Virginia, and commissioned a poll of 500 likely voters in Connecticut that was designed with Foley and his former campaign manager, Justin Clark.

The poll was conducted from March 18 to 20, measuring the relative popularity of Gov. Dannel P. Malloy, the Democrat who defeated Foley, and a potential Republican field of Foley, House Minority Leader Lawrence F. Cafero of Norwalk, Senate Minority Leader John McKinney of Fairfield and Danbury Mayor Mark Boughton.

Tarrance sent a bill to Foley’s terminated campaign committee from 2010. Foley paid the bill with a check from Voters for Good Government.

SEEC investigators concluded that the moment Foley contracted for a poll about his own potential run for governor in 2014, he was a candidate under state law, required to create either a candidate committee or an exploratory committee, steps allowing him to raise and spend money on his own behalf.

“These items were promotional of a Foley candidacy and as such were deemed to be made for the purpose of influencing Mr. Foley’s nomination for election to public office,” Ahern told the commission. “This act automatically triggered Mr. Foley’s candidacy for public office.”

Foley created an exploratory committee on Sept. 10, when he knew of the SEEC investigation.

“Basically, this is an unnecessarily complicated resolution to an issue that comes to whether I filed a form with the SEEC on time,” Foley said. “It’s a disagreement about when to file a form with the SEEC. They said it should have been filed in March.”

Foley said using a Delaware corporation to finance a poll measuring his political strength was not an attempt to avoid disclosure, though 527s have limited disclosure requirements. He said he chose Delaware for the ease of its corporate laws.

The settlement prompted crowing from Democrats and a mix of private smiles and public criticism from Republicans, who have watched Foley, a former ambassador and businessman from Greenwich, make an issue of ethics and integrity of legislators and the governor.

“So much for Mr. Ethics,” said James Hallinan, a spokesman for the Connecticut Democrats. “Here’s a suggestion for Mr. Foley: when you talk about the problems that exist in Connecticut, start by looking in the mirror.”

McKinney, one of his rivals for the GOP, said Foley needs to more fully explain.

“The state of Connecticut needs new leadership and the Republican Party needs to put forward a candidate strong enough to defeat Governor Malloy and help turn our state around,” McKinney said by email. “This violation of state elections laws as referenced in the stipulated agreement is a serious matter. The facts in the agreement also raise many new questions from what was previously reported that need to be answered. Ambassador Foley should step forward and publicly answer any and all questions.”

One element of the settlement is that if Foley qualfies for and accepts public financing, his grant will be reduced by the cost of the poll.

The settlement was the second major news story about Foley in what’s been a difficult 24 hours. His 1981 arrest was back in the news with the disclosure that The Hartford Courant had obtained police reports unavailable in 2010.

Foley is one of three Republicans with an exploratory committee for governor. The other two are Boughton and state Sen. Toni Boucher, R-Wilton. McKinney, a formally declared candidate for governor, has a candidate committee.