Campaign Finance Hammer Comes Down on Democrats
Not many folks in this town tremble at the prospect of a D.C. Office of Campaign Finance investigation, given its historically light hand when it comes to enforcement. But sometimes trembling is warranted: According to a preliminary report issued earlier this month [PDF], the D.C. Democratic State Committee has got some 'splaining to do.
For one thing, there's a full account of the mismanagement that took place under former treasurer Lenwood Johnson. Authorities found that from early 2007 to early 2009, the DCDSC failed to report 34 contributions totaling more than $158,000 and 19 expenditures totaling more than $85,000, in addition to nearly $14,000 in bank charges. OCF, in the report, also told the committee that they had not been provided with checks and other records that it is required to keep under the law.
But the more serious matters concern the propriety of the separate committee set up by DCDSC chair Anita Bonds and her allies to collect funds for the committee's Democratic National Convention expenses last year. That entity collected $216,000 from various corporate and political interests to pay for hotel rooms, delegation breakfasts, and other expenses at the Denver confab. Prior to the OCF investigation, no disclosure of the donations had ever been made; Bonds claimed that its activities were separate from the state committee's, and thus no disclosure was necessary. There has still been no accounting of how the convention money was spent.
OCF's initial findings certainly seem to indicate that the convention account was an extension of the Democratic State Committee itself, rather than an independent entity not subject to local campaign finance regulations.
For one thing, bank records cited in the report indicate that the convention account was established at Industrial Bank under "DC Democratic State Committee/DCDSC." And a "Donor Sheet," intended to be filled out to accompany contribution checks, bears the DCDSC logo at the top, beside the official convention logo. And at the bottom, the form reads that "Our report will be filed with the DC Office of Campaign Finance, Washington, DC." According to the OCF letter, no such report has ever been filed.
Then there's the matter of the checks themselves: Well over half of the checks deposited in to the convention fund were simply written to the "D.C. Democratic State Committee" or some similar name rather than the "Denver Convention 2008" account.
"It is the opinion of the audit staff that the Denver Convention 2008 Committee was in fact soliciting contributions for activities relating to the DCDSC," the OCF wrote in the letter. That means all the convention donations would be subject to city reporting laws and donation limits.
That latter point is important, since a handful of contributors went well over the $5,000 city limit on donations to political committees. The Adrian Fenty and Jack Evans campaign accounts both gave $10,000, as did Comcast, Triden Development, and the Squire Sanders law firm. If the OCF finding stands, the State Committee would have to return $37,000 total to contributors.
The report has prompted another round of infighting among the DCDSC ranks. To deal with the OCF inquiry, the committee appointed a six-member audit committee loaded with Bonds allies, including national committeeman and former councilmember Vincent Orange. For legal expertise, the committee is relying on its general counsel, Don Dinan, who signed off on the convention committee in the first place.
Last week, given the seriousness of the charges, audit committee member and national committeewoman Deborah Royster had recruited uberlawyer Fred Cooke to volunteer to serve as an independent counsel of sorts and review the OCF allegations. Only Royster and treasurer Dan Wedderburn voted to engage Cooke's services. In the following days, both resigned from the audit committee. In the aftermath, a handful of committee members agitated on the DCDSC e-mail list to bring the matter before the full membership before responding to the report.
Bonds says there’s no need to bring the matter before the membership and that Cooke (famous for representing Marion Barry) “comes to the table with a political portfolio”—good point, that—though she says “the time may come” when his services may be needed.
Bonds goes on to stress that the city's findings are preliminary and that she feels "very confident" that the convention committee was legitimate. "It was not set up as part of the D.C. Democrats. It's a process that has been used for years," she says.
A response was due to OCF on Sept. 1. "All information that has been requested will be provided," Bonds promised last week.
Perhaps the Dems could take a page from their Republican colleagues. According to Paul D. Craney, executive director of the D.C. Republican Committee, his outfit raised their $40,000 in convention funds through existing committee accounts, which are fully reported to the appropriate federal and local authorities.
Says Craney, "I'd be happy to sit down with the [DCDSC] to give them a crash course on how to ethically operate a campaign account."