Crosschecking Finds 181 Unreported PAC, Corporate Contributions

Some of the Legislature’s top leaders were among more than 50 candidates who failed to report 181 political contributions totaling $145,875 when the Registry of Election Finance conducted an annual “crosscheck” review mandated by a current state law.
House Republican Chairman Glen Casada, sponsor of a bill that critics say would undermine the present law, was found to have two unreported $1,000 contributions from political action committees. House Democratic Caucus Chairman Mike Turner, who staunchly opposed the bill, had more unreported donations than anyone on the list — 18 totaling $19,875.
Both men expressed surprise when contacted last week after Drew Rawlins, executive director of the Bureau of Ethics and Campaign Finance, provided a list of the 2012 “crosscheck” results on request. Neither changed his position on the bill (HB643), which fell two votes short of passage on the House floor during the legislative session and which Casada plans to bring back for another try next year.
(Note: For the Registry’s list, click on this link: CrossIndexInfo.ods

The list has 51 legislative candidates — 37 of them sitting legislators this year — plus Gov. Bill Haslam, who was reported as failing to report one $1,000 PAC donation.
Prominent lawmakers on the list include Senate Republican Caucus Chairman Bill Ketron of Murfreesboro, who had eight cited donations totaling $6,100; House Government Operations Committee Chairman Judd Matheny, R-Tullahoma, with seven totaling $2,850 and Rep. Joe Carr, R-Lascassas, who is currently running for Congress, with five totaling $2,650.
East Tennesseans found to have undisclosed contributions from PACs or corporations include Rep. Joe Armstrong, D-Knoxville, with seven totaling $3,900; Rep. Kent Calfee, R-Kingston, with three totaling $1,250; Rep. John Ragan, R-Oak Ridge, with two totaling $1,000; Sen. Frank Niceley, R-Strawberry Plains, with two totaling $700; Rep. Andrew Farmer, R-Sevierville, with one for $1,000; and Rep. Dennis Powers, R-Jacksboro, with one for $250.
Collectively, the 181 listed contributions amount to only about 2.5 percent of all contributions made to state candidates by PACs and corporations last year, according to Rawlins.
“If anyone is correct 97.5 percent of the time, I consider that to be pretty good,” Rawlins said.
The Registry of Election Finance is required to conduct the crosscheck under a law passed as part of 2006 ethics reform legislation. Basically, the Registry takes a list of all contributions reported by PACs and corporations and matches it against a list of all contributions reported as received by candidates.
The law says that a candidate, once notified of the missing contribution on his or her report, can avoid a civil penalty by filing a revised report to include the contribution — provided there are no more than two donations and they total $2,000 or less. Twenty-six of the candidates on the 2012 list exceed the threshold and could face civil penalties of varying amounts — as little as $50 or as much as $10,000.
Rawlins said that “almost 100 percent” of the candidates traditionally will promptly correct an undisclosed donation, once being notified about it.
Candidates above the threshold can offer an explanation to the Registry board, in person at a meeting or via letter, and in a typical case where the missing donation is due to an innocent oversight, the board can dismiss the case or impose a minimal fine.
Rawlins said that, historically, explanations have ranged from computer glitches to misplaced deposit slips and contribution checks that were never delivered and cashed — some perhaps lost in the mail and, in some cases, where the person assigned to deliver the check failed to do so. Rawlins said he could not recall a case where it appeared a candidate had deliberately tried to hide a donation.
The Registry staff is still in the process of sending out notices to candidates found failing to disclose a 2012 contribution, especially those made late in the year, Rawlins said. Listed legislators contacted last week — including Casada, Turner and Armstrong — said they had not received notices yet.
Turner said he was “shocked” to learn he had 18 unreported donations and is reviewing records to figure out what happened. An initial suspicion, he said, is that checks to his personal campaign account were mixed up with those to Turner PAC, a political action committee he founded and runs. There also may be checks that he did not deposit into his campaign account until after the last reporting deadline in January of this year, Turner said.
Armstrong and Casada said they are uncertain what happened with checks on the list, but would investigate, find out and make any corrections necessary.
“Sometimes things get lost, particularly when you’ve got people volunteering (as campaign workers) involved,” said Armstrong, adding that he recently set up a new system to keep track of his political disclosures. Casada’s bill would have exempted corporations from the current requirement that they file a disclosure statement listing their contributions to candidates, which would mean corporate contributions would not be available for crosschecking by the Registry. Under present law, corporations are treated as if they were PACs and required to file a disclosure.
Direct corporate contributions to candidates became legal for the first time in Tennessee in 2012 and relatively few corporations made donations then. Of the 181 donations on the Registry list, 15 appear to be corporate donations.
Casada said that “in the eyes of the law” corporations are people and, because individuals who donate to campaigns do not have to send a report to the Registry, companies should not have to do so, either. PACs would still have to file reports under his bill, but Casada said PACs are different because they can collect money from multiple sources while a corporation is typically a single-source donor, just like an individual.
Current law allows PACs and corporations to give more money than individuals and that would not be changed by the bill. A corporation or PAC can give up to $7,400 to a House candidate or $11,200 to a Senate candidate while an individual can give no more than $1,500 to a House candidate or $3,800 to a Senate candidate.
In an April 17 House floor debate on Casada’s bill, Democrats criticized the provision eliminating the need for corporate filings. House Minority Leader Craig Fitzhugh, D-Ripley, offered an amendment that would have stripped it from the bill, which has several other provisions. He said it provides a needed safeguard that helps candidates learn about their mistakes.
The amendment was killed on a mostly party-line vote. Only two Republicans joined Democrats in backing Fitzhugh’s amendment.
When the overall bill came up for a vote, however, only 48 of the House’s 70 Republicans voted for it, meaning it fell two votes shy of the 50 needed for passage. House Speaker Beth Harwell was among Republicans refusing to vote one way or the other, and she has since voiced opposition to the provision.
Senate Speaker Ron Ramsey, on the other hand, backs the bill and says that its failure in the House was a factor — “the straw that broke the camel’s back” — in a post-session decision to end joint fundraising operations by the House and Senate Republican Caucuses.
Casada said he now believes 60 Republicans will back it, responding to “logic after an explanation” rather than reacting to an “emotional debate” on the floor that also involved other provisions such as more than doubling the amount of money partisan caucuses can spend on campaigns and making it easier for insurance companies to make campaign contributions.
Casada said his own apparent failure to list two PAC contributions of $1,000 each — “the mistake could be on the PAC’s part,” he noted — does not indicate a need for corporations to file disclosures so they can be crosschecked.
“We don’t ask that of individuals,” he said in an interview, suggesting at one point that crosschecking may not be necessary because in most cases “there’s not any malfeasance.”
“If someone going to be dishonest, they’re going to be dishonest,” he said. “If individuals give us money, we could just as easily not report that.”
Turner said that he believes “the system we have now works pretty well” and crosschecking is a desirable part, even though he was found have apparently made multiple mistakes.
“The crosschecking helps you find your mistakes,” he said. “And I think that treating corporations like an individual is wrong.”
A spokesman for Haslam said the PAC contribution the governor’s re-election campaign is listed as failing to report appears to have duly disclosed in a filing, though with date differing by several weeks from when Sanofi-Aventis US Inc Employees PAC reported making it. He also said Haslam has no position on Casada’s bill.

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