Malloy campaign law settlement was a mockery and a sham
The recently settled case between the State Elections Enforcement Commission (SEEC), the Democratic State Central Committee (DSCC) and the Dan Malloy for Governor campaign needs further disclosure. The DSCC and Malloy campaign made a sham of the Citizen’s Election Program (CEP). The settlement was made without allowing State Elections Enforcement Commission the ability to conduct a reasonable investigation.
Despite public pronouncements of cooperation, they made a mockery of the investigation. In response to SEEC requests, they only provided 300 pages of evidence before they refused to cooperate — including ability to interview witnesses. The last time I investigated a governor, I reviewed hundreds of thousands of documents.
By way of background, PA 2013-180 significantly changed the landscape of public financing in Connecticut and the rules that would be in effect during the 2014 election cycle. The DSCC was able to increase the amount of individual contributions it could receive from $5,000 to $10,000 and was able to make unlimited expenditures to the benefit of the governor campaign from the DSCC State account through what is called organizational expenditures. Thus allowing the DSCC through the State account to support the Governor well beyond the $6,500,000 Citizens Election Program grant. The DSCC took advantage of the law change and made in excess of $500,000 in organizational expenditures in support of the governor.
Despite no major federal positions in play in the 2014 election cycle, (President, U.S. Senate and arguably no competitive Congressional races), the DSCC raised record amounts through the federal account. The DSCC Federal Account could not make unreimbursed expenditures, on behalf of the governor campaign because it included funds from contributors from CEP prohibited sources like state contractors, Political Action Committees (PACS) and unions. The reimbursement needed to be made from the CEP compliant contributions received in the DSCC State account.
A review of the DSCC certified federal filings (from June 2013 – Dec. 31, 2014) reflect that the DSCC made expenditures well in excess of $1 million for the benefit of a non-federal candidate (beyond what was reimbursed from the State account).
This number is from the DSCC filings and represents the amount of expense allocated by the DSCC and certified by them to reflect the amount spent to pay expenses including staff allocated to working on activity related to a non federal candidate. These expenses include paying the salary of DSCC staff including Jon Blair (the ultimate Malloy campaign manager, a DSCC employee from June 2013- April 2014) and Michael Mandell (the ultimate Malloy spokesperson, employed by DSCC from December 2013-April 2014).
Although federal law allows for expenses like these to be paid from the DSCC Federal Account, the CEP program requires it be reimbursed with funds from the CEP compliant DSCC State account. When Malloy signed the CEP paperwork to receive a $6.5 million grant, his campaign had already received the benefit of most of those expenditures. The paperwork he signed certified he had not and would not receive contributions from prohibited sources. The DSCC Federal Account was not a permissible source. These DSCC expenditures were fully coordinated with close confidants to the Malloy campaign.
The attorney for the DSCC and Gov. Malloy represented publicly that contributions from state contractors had been segregated. This was not entirely true. An account was established to capture some state contractor funds, but it was open well after hundreds of thousands of state contractor contributions were collected and only after the SEEC complaint re: Northeast Utilities was filed. Ultimately virtually all the funds from the segregated state contractor account were funneled back into the main DSCC Federal operating account and available and used to pay expenditures that benefited the Malloy campaign, including the mailers.
The use of the mailers promoting Malloy, which was the original basis of the complaint, was conduct consistent with the Malloy campaign receiving non-reimbursed benefit from the DSCC Federal Account. Initially, the mailers were classified on the DSCC Federal filings as 100 percent Federal Election Activity.
Amended filings reflect the mailer expenditures were recast as 85 percent for the benefit of a non-federal candidate. Again, expenditures which the Malloy campaign agreed not to accept as a condition to receive the public grant.
Additional mailers reported as Get Out The Vote were allocated by the DSCC on their federal filings as 85 percent for the benefit of a non-federal candidate which only adds to the amount of benefit the Malloy campaign may have received inappropriately. Since the DSCC refused to cooperate, the investigation was blocked and these expenditures could not be evaluated.
Based upon the Democratic State Central Committee’s own certified federal filings, the Malloy campaign received well in excess of $1 million in contributions from a prohibited source, the DSCC federal account. The public deserves to know what happened in the smoke filled room, the very credibility of the governor and Citizens Election Program is at stake.
Charles Urso recently retired as the lead investigator for the State Elections Enforcement Commission. He previously was an FBI agent whose investigations included the corruption case against Gov. John G. Rowland.
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