COLUMBUS | The day lawmakers passed the 1995
campaign finance reform bill, Democratic state senators had boxes of
detergent sitting on their desks. It was their way of saying
loopholes in the law would allow county political parties to launder
money.
"I was appalled that they left this enormous loophole," said Peg
Rosenfield, an election specialist for the League of Women Voters of
Ohio.
The law puts limits on how much political action committees and
individuals can give in a year.
But it allows county political parties to accept anonymous,
unlimited donations to their operating funds, and to make unlimited
cash gifts to the state party and to legislative campaign funds.
County parties can also give $540,500 to statewide candidates,
$108,000 to state senate candidates, and $53,500 to house candidates
each year.
In two recent election cycles, 1997-98 and 1999-2000, county
Democratic and Republican parties funneled $2.8 million per cycle to
campaigns and state parties.
The biggest leap came on the Republican side where county parties
went from giving $788,000 in 1993-94 to $1.32 million in 1999-2000.
Democrats sent between $1.4 million and $1.5 million through their
county parties in each of those election cycles.
"A lot of money flows through them because the other conduits
have been shut off," said University of Akron political scientist
John Green, who has been studying campaign finance since 1980.
For example, a wealthy donor used to be allowed to give $50,000
to a governor candidate but is now limited to $2,500. So he might
give the candidate $2,500, chip in $16,500 to the state political
party fund and then spread around what's left of his $50,000 in
$5,000 chunks to county parties' funds, which can then be given to
the candidate.
Parties traditionally have had a strong role in Ohio politics,
with many large county parties acting as "banks" giving candidates
loans, grants and lines of credit and taking deposits.
"This is not a new thing at all. I think it's become more common
than it used to be because the county parties are now a major way to
raise and distribute money," Green said. "The thing to know is none
of this is illegal. This is all written into the law. It's just that
candidates and local parties are beginning to figure out how to do
it."
In 1999, lawmakers passed legislation requiring electronic filing
of campaign finance reports for political action committees,
legislative caucuses, state political parties and statewide
candidates. All of those reports are available on the Internet
through the Ohio Secretary of State's Web site, making it easy to
look up who is giving to whom.
But county political parties aren't required to file
electronically or in one central location, making it more difficult
to track the money. Donors can quietly give money in the 88 Ohio
counties with little chance it'll all get tallied up by the media or
a public interest group.
Even with careful study, it's difficult to discern where all the
money comes and goes in a large county political party.
For example, a flow chart built from Montgomery County GOP
campaign finance reports ends up looking like a beehive, with money
shuttled among the party's campaign fund, judicial fund, state
candidate fund and operating fund, as well as the Ohio Republican
Party and various candidate campaign funds.
"In the largest county parties, that's very, very typical.
There's just a real web of activity," Green said. "I personally
don't think it is done to confuse people, although that is the net
effect sometimes. I think it's because what parties do is very
complicated."
While finance filings with the Secretary of State and the local
county boards of elections are public records, what goes in and out
of the operating fund of a political party is not. Local parties can
legally accept anonymous, unlimited donations for their operating
fund.
Operating funds pay for staff salaries, office supplies and rent.
Cuyahoga County GOP's operating fund typically has $300,000 in it
during local election years and $400,000 in it during gubernatorial
or presidential election years, said state Rep. Jim Trakas of
Independence, who heads the Cuyahoga County Republican Party central
committee.
Michael Colley, chairman of Franklin County GOP, said his party
has disclosed all contributions and expenditures from all accounts
for at least 10 years. This sets him apart from the state GOP, and
the party organizations in several of Ohio's other large counties.
"We don't conduit money and we don't accept contributions in
excess of $5,000 and we don't accept anonymous contributions,"
Colley said.
Recent events have focused attention on party operating funds.
Last month, it came to light that Cleveland-area stockbroker
Frank Gruttadauria, who worked for firms that handled $5.9 billion
in trades for the state treasurer's office, anonymously gave $50,000
to the Hamilton County GOP's operating fund.
The party's fundraiser, Eric Sagun, asked Gruttadauria to make a
donation. (Gruttadauria has since been jailed on suspicion of
bilking clients.)
Sagun also works for state Treasurer Joe Deters' campaign. Deters
used to head the Hamilton County GOP and last year received more
than $300,000 from the county party for his campaign.
The revelation led Democrats to start calling it the Hamilton
County Republican Laundromat and demanding full disclosure of all
operating funds.
Hamilton County GOP Chairman Mike Barrett, who opposes
disclosure, said the laundromat comments are "political season
talk."
"We've done everything in Hamilton County by the book. I'll stand
by that," Barrett said.
Bills are pending in the Ohio House and Senate to require
disclosure of political party operating funds. Two top Republicans
Secretary of State J. Kenneth Blackwell and Attorney General Betty
Montgomery have urged legislators to adopt the bills, and a Deters
spokeswoman said the treasurer would work with lawmakers to open the
operating funds.
But some political observers doubt any campaign finance reform
will pass unless there's a huge public outcry for change.
"It's hard to believe people who say they're for disclosure and
then don't actively work for it," said Catherine Turcer, campaign
reform director for Ohio Citizen Action. "It's time for them not to
just talk. It's time for them to act."
Other politicians are on record against disclosing operating
funds, including Senate President Richard Finan, R-Evendale. Finan
is in a position to block legislation he doesn't like but simply not
bringing it to the floor for a vote.
State Sen. Jeff Jacobson, Montgomery County Republican chairman
and principle author of the 1995 campaign finance reform law, told
The (Cleveland) Plain Dealer last month he'd rather
die than disclose his operating fund. He said later he made the
comment in jest, but still he declines to disclose his operating
fund.
"I'm sure (the comment) was melodramatic," Turcer said, "but it
also shows how forceful he feels about this and indicates how
difficult it would be to get it out of him voluntarily."
The state Democratic Party disclosed its operating fund in March
2000 and now barely uses it, said party Chairman David Leland. The
state party does not take anonymous contributions and pays for its
operating expenses out of other open funds, Leland said.
It is unclear whether county Democratic parties do the same, but
Dennis Lieberman, Montgomery County chairman, said he would open his
operating fund for inspection.
Jacobson said operating funds aren't used to influence election
outcomes so there's nothing wrong with keeping them private. Donors
often give to the operating fund with the understanding that it
won't become public, he said. "As long as we can offer that
opportunity, we will."
Jacobson and Ohio Republican Party spokesman Jason Mauk also
noted that it wouldn't be fair for Republican parties to disclose
their operating funds while unions and environmental groups, which
traditionally support Democrats, can keep theirs secret.
"It's a really good excuse but it is apples to oranges," Turcer
said.
Turcer and Green said following the money in Ohio politics is
difficult and sometimes dull for the average voter, but they said
it's important to know who is giving to politicians because it
ultimately can affect public policy.
Contact Laura Bischoff at (614) 224-1624 or
laura_bischoff@coxohio.com ON THE WEB www.state.oh.us/sos
www.ohiocitizen.org/money.html
[From the Dayton
Daily News: 04.15.2002]
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