Ethics Commission Staff Recommends $18,000 Fine for Maine Leads



AUGUSTA — Failing to register as a ballot question committee may net Maine Leads the highest penalty ever assessed under Maine’s campaign finance law. The Maine Commission on Governmental Ethics and Election Practices meets Thursday to decide if the conservative nonprofit’s failure to report funding should merit an $18,000 fine.

 

While the amount would be the highest issued by the commission to date, it is not the highest allowed by statute. Commission staff recommends waiving $2.2 million of the possible penalty.

The commission investigated Maine Leads’ political contributions following a complaint by Deborah Hutton, a former Democratic state representative from Bowdoinham. After more than three months of investigations and hearings, the commission ruled 4-1 in October that Maine Leads was in violation of reporting rules and ordered a late filing.

Jonathan Wayne, executive director of the Maine Commission on Governmental Ethics and Election Practices, outlined the staff-recommended penalty against Maine Leads in advance of the commission’s monthly meeting scheduled for Nov. 19.

Maine Leads raised more than $200,000 in 2007 and 2008 from three national nonprofits in support of its ballot question initiatives that sought to qualify three referendum questions for Maine’s November 2009 ballot, yet failed to register in 2007 as a ballot question committee. Maine Leads also funded three political action committees (PACs) with $75,000 and went on to fund petition-gathering efforts by paying more than $160,000 to fund the work for former Maine Leads staffer Trevor Bragdon.

Ultimately, the commission ruled Oct. 1, 2009, that Maine Leads acted as a ballot question committee. Its actions helped place a tax reform initiative (TABOR II) on the ballot as Question 4, and an excise tax initiative as Question 2.

That ruling indicated Maine Leads was required to disclose the identities of its funders and should have filed as a ballot question committee in 2007 and begun filing quarterly campaign finance reports in January 2008 through November 2009.

Further, Wayne argues Maine Leads’ director, Roy Lenardson, was well versed in Maine’s campaign finance law, in part due to Lenardson’s complaints filed with the commission against opponents to TABOR. Lenardson’s role with the Maine Heritage Policy Center in 2007, when the commission ruled MHPC acted as a ballot question committee when donating to tax-reform initiatives, was also cited by Wayne.

“While some organizations could have argued that the ballot question committee reporting requirement was relatively new, we do not find that argument convincing in the case from Maine Leads,” Wayne wrote.

Maine Leads followed the commission ruling in October and reported receiving donations from the National Taxpayers Union, $155,000; the National Taxation Limitation Committee, $20,313; and, the Sam Adams Alliance, $27,423.

Maine Leads’ late filing, by statute, triggered a penalty review. Commission staff calculated the late filing penalties for failing to file in January 2008 through 2009 could result in a $2.2-million penalty.

Dan Billings, attorney for Maine Leads, argues failing to disclose funding did no public harm. He asserts Maine Leads’ donations were reported by the three PACs that received $25,000 each from Maine Leads and that Maine Leads’ work to help gather petition signatures was reported on the nonprofit’s Web site.

Wayne disagrees.

“There is a very good chance that Maine voters would not have known the extent of Maine Leads’ efforts and financial activity conducted to influence their laws had Deborah Hutton not requested that the Commission conduct the investigation,” Wayne wrote.

“The Commission staff recommends granting a partial waiver of the preliminary penalties, which total more than $2 million,” Wayne wrote. “The preliminary penalties are grossly disproportionate to the harm suffered by the public from the late disclosure. The staff recommends assessing four penalties of $4,500 each.

“We believe a total penalty of $18,000 reflects the serious harm to the public caused by the delayed disclosure of Maine Leads’ financial activity, but acknowledges the factual circumstances could have been more present to make the violation even more egregious. The proposed penalty also recognizes the high level of knowledge and experience with campaign finances reasonably attributable to Maine Leads’ staff.”

This is not the first time the commission has levied penalties for failing to report campaign finances. In 2009, the commission assessed reduced a preliminary penalty of $93,000 against the Scarborough Village Partnership to $12,250 and in 2008 reduced a $68,000 preliminary penalty against Fed UP With Taxes to $10,000.

“A total penalty of $18,000 would be the largest assessed by the Commission against a PAC or BQC, to the best of my knowledge,” Wayne wrote.

For more political news, pick up a copy of The Ellsworth American.

 

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