This was a pretty quick response to an accusation over three years in the making. I’ll begin with fellow candidate Ron George’s perspective, which is reflected in statements within from David Craig’s campaign:
Today, the Ron George & Shelley Aloi for Maryland campaign joined the Craig-Haddaway for Maryland campaign in filling a complaint with the Maryland Board of Elections alleging illegal coordination between between Change Maryland, LLC and Larry Hogan’s various campaign committees.
“These actions by Change Maryland, LLC and Larry’s campaign committees represent an egregious breach of the public trust and utter disrespect for the law. We expect candidates for public office to hold themselves to a higher standard. These laws are designed to promote transparency,” said David Craig.
“The public should know where contributions are coming from and where they are going; It’s a matter of public trust. Furthermore, they should expect those who want to make more laws follow the laws we already have,” said Delegate Ron George.
On January 31, 2014, Change Maryland, LLC filed its most recent contributions and expense report for the period of January 1, 2013 through December 31, 2013 listing total contributions received of $145,995 while expending $213,040.
“We believe that all current and prior activities of Change Maryland, LLC appear to be directed by Larry’s campaigns and those activities should be considered part of his gubernatorial campaign for reporting purposes. With this complaint, we are asking the State Board of Elections to investigate. If the Board of Elections doesn’t, we can expect organizations in the future to skirt campaign finance laws to hide where their money comes from and where it goes. I hope the Board of Election agrees with us that the process should be transparent and uphold the integrity of law,” said Paul Ellington, campaign manager for Craig-Haddaway for Maryland.
Hogan responded, almost immediately:
“The entire premise of these allegations by two desperate campaigns is utterly absurd and patently false. Had David Craig and Ron George bothered to do even a cursory check, they would have seen that the “about” page at Change Maryland’s Facebook page (https://www.facebook.com/
ChangeMaryland/info) and website (www.changemaryland.org), clearly states Paid for By Hogan-Rutherford to Change Maryland. In short, Larry Hogan for Governor owns Change Maryland and has since he became a candidate.
Unlike David Craig’s campaign which has already been found guilty and fined for violating campaign laws, our campaign has worked closely with the Maryland Board of Elections to ensure from day one that we comply fully with all state laws.”
Before starting his campaign for governor, Larry Hogan’s team sought guidance from the State Board of Elections on whether or how Change Maryland, a 527 political organization, could interface with a campaign for governor, also a 527 political organization. The guidance received was that Hogan for Governor could purchase the assets of Change Maryland much like campaigns purchase mailing or contact lists from any other organization. Immediately upon registering as a campaign for governor, with the SBE, the campaign entered into a purchase agreement for all of Change Maryland’s assets at fair market value.
Obviously there’s the question of how they determined what “fair market value” was, but we’ve known for three years that Change Maryland could be a handy vehicle to keep Hogan’s name in circulation after his abortive 2010 campaign. The question came up on one of his first interviews as Change Maryland leader, with Maryland Reporter‘s Len Lazarick.
As far as the market value, if you look at the first Hogan financial statement the apparent “fair market value” for Change Maryland is $18,164.05, which is listed as an “asset purchase” made April 7. It was about 2 1/2 months after the campaign was formed, and the “contact list” pales in comparison to what the campaign had paid to date for mailings – for that purpose, the Hogan-Rutherford campaign spent nearly $121,000 employing a New York-based firm called SCM Associates during the initial months of its campaign. It was almost as if someone thought at the last minute, “hey, we better cover ourselves on this one.”
I’ll admit I’ve had campaign finance questions about my unusual situation of being a blogger and candidate for which I’ve sought advice from the Board of Elections, but $18,000 seems to be a lowball estimate for an organization whose 527 clearly states it churned through over $350,000 last year, raising over $140,000 by itself in a year when only one of the opposing candidates did as well.
So we have found out that the “perpetual campaign” is not just a Barack Obama phenomenon. Obviously he wasn’t going to admit it publicly, but all along many have suspected that Change Maryland was simply the lead-in to the 2014 Larry Hogan for Governor campaign – after all, why bring up a past campaign if you’re not running, as this archived Change Maryland page shows – just as any number of PACs created by particular failed candidates were formed as a way to keep their name in the limelight and (more importantly) create a donor database.
The beauty of Change Maryland, though, was that contributions to it didn’t count against a contribution limit to Hogan for Governor, and there’s little doubt that list is being mined again. In one respect, it’s a stroke of genius and perhaps there’s some sour grapes from the others about not coming up with the idea themselves. After all, we could speculate back in 2011 when Change Maryland was formed that David Craig and Charles Lollar were probably going to run in 2014, along with perhaps Brian Murphy and maybe even Michael Steele. (The entry of Ron George was a little bit more out of left field.)
These accusations, however, served to blunt the news that Hogan had reached the seed money threshold required to qualify for matching funds.
By qualifying for matching funds, the Hogan campaign is guaranteed $2.6 million immediately after the primary. The Hogan campaign has received contributions totaling over $600,000 from more than 3,000 contributors since formally entering the race in late January. By reaching the matching funds threshold, will also receive over $260,000 in Fair Campaign Finance Act matching money. In all, by qualifying for the match, the campaign says it will spend over $4 million “taking on the political establishment.”
Obviously Hogan has to win the primary to cash in, and that’s by no means certain when “undecided” has such a big share of the electorate. Classifying his opponents as desperate seems a little premature, and it may be a pretty tense couple days before the party’s unity rally slated for June 26.
I don’t think anything will come of this, but there is the potential for an October surprise if Hogan wins the primary and the Board of Elections indeed decides there’s some fire among all the smoke. I trust the other side about as far as I can throw them.