New legal advice from the agency that regulates Connecticut elections suggests that state contractors using a common workaround to give money to state political parties could be violating the law in certain scenarios.
Previous advice from the State Elections Enforcement Commission, in the form of an opinion of counsel provided to the Connecticut Democratic Party in 2007, suggested the party “expressly state that it is soliciting funds only for its federal account,” with the word “federal” underlined, “to avoid the appearance of violating the ban against soliciting prohibited contributions.”
New advice issued earlier this month outlines an even more cautious view from the agency suggesting some prominent examples of executives of companies with close ties to the state, including Northeast Utilities CEO Thomas May, may have violated state campaign finance laws by donating to the Democratic Party’s federal account with the intent of supporting candidates for state office.
May’s solicitation, first reported by The Courant, asked his employees to give to the party’s federal account and “to join me in financially supporting Connecticut’s Governor Dannel P. Malloy.”
State parties are allowed to keep two separate accounts, one to support candidates for state and local office and another for federal candidates.
The ethics and contracting reforms enacted following the resignation and imprisonment of former Gov. John Rowland made it illegal for state contractors to donate to candidates.
The state contractor ban also prevents them from contributing to a party’s state account. The ban does not apply to candidates for federal office or to a party’s federal account.
Parties are allowed to transfer funds from their federal account to the state account, using the national party as an intermediary, and then to provide direct support for candidates for state office, significantly weakening the ban and obscuring the connections between contractors and the politicians they support.
Even without directly transferring funds, the party accounts are accounting devices with little practical distinction. Parties pay some of their employees with money from both accounts. If an employee paid partially by each account solicits a state contractor to donate to the party, which account is doing the solicitation?
In a July 2, 2014, opinion of counsel, SEEC’s lowest level of legal advice, the agency expanded on its previous advice to the Democratic Party, this time to the principal of a state contractor, William Ducci. According to the Federal Elections Commission website, Ducci has donated to a number of Republican candidates for federal office.
“The short answer to your question is that Connecticut law does not prevent a Connecticut state contractor from contributing to the federal account of the state party committee, to the maximum extent allowed by federal law,” wrote Shannon Clark Kief, SEEC’s legal compliance director. “There would be scenarios where such a contribution would be problematic, for example, if the contribution was solicited for the benefit of Connecticut (non-federal) candidates and that money was later used to make expenditures for that purpose.”
“Such expenditures, if coordinated with the state party committee’s state account, might be considered disguised contributions from the state contractor to the state party committee’s state account. Such contributions would be impermissible for a state contractor to make,” Clark Kief continued. “It is illegal for any person to, directly or indirectly, pay, give, contribute or promise any money or other valuable thing to defray the cost of any campaign or election to any committee, other than to a campaign treasurer. If the contribution was made to the federal account of the state party to defray the cost of a Connecticut candidate’s campaign, that too would be impermissible.”
SEEC spokesman Joshua Foley said “the basic answers are the same” although the law has changed in the time between the two opinions. “It’s more nuanced,” Foley said. “Our thinking on it, I guess, got more refined.”
Ducci, of Ducci Electrical, asked SEEC whether he could contribute to a state party’s federal account without negatively affecting his company’s state contracts.
“Frankly, after waiting all these months, I am very disappointed,” Ducci said. “I asked a very specific question as to whether or not I could contribute, and what I received was a five page ‘Opinion of Counsel.’ What I had hoped for was an answer to my question.”
“The opinion includes several different vague and highly subjective caveats, including who solicited the contribution, what purpose it was solicited for, what the money is ultimately spent on, and which political candidate the money ultimately goes to help, any one of which could make the contribution illegal,” Ducci said. “Bear in mind that most if not all of these are out of my control.”
”I’m not a lawyer, I’m a contractor. I was trying to do the right thing by asking for a straight answer before making a contribution, but I can’t seem to get one,” Ducci said.
Because of the ambiguity, Ducci said, contractors might get away with giving to the party in power, “but it sure sounds pretty threatening if you are contributing to the other camp.”’
Donors to the Democratic Party’s federal account include:
Employees of companies involved in a joint venture selected by the Department of Transportation to manage a $500 million development in Stamford gave nearly $100,000 since DOT made the decision.
A former Republican-party donor gave almost $6,000 since the election of Gov. Dannel Malloy in 2010, while one of his companies received $4.3 million from the state bond commission and another got $18.2 million of contracts and subcontracts from DOT since 2011.
Two employees of Mystic Aquarium, a beneficiary of state funding, donated $6,000 in January, as have First Five companies, developers of affordable housing and other companies receiving state assistance.
Employees of another DOT contractor, HAKS Engineers, gave $45,000 in November possibly at a fundraiser attended by Malloy and have continued to give this year.