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Seven nonprofits violated Michigan’s campaign finance law by funding ballot proposals while keeping the identities of their donors secret, a Washington, D.C.-based group has argued in complaints filed with the office of Michigan Secretary of State Jocelyn Benson.
The Foundation for Civic Accountability and Trust (FACT) — a group formerly led by Donald Trump-appointed former acting U.S. Attorney General Matthew Whitaker — filed the complaints Wednesday against 501(c)(4) welfare organizations funding progressive initiatives in Michigan over the past three years.
The electoral measures in question include Reproductive freedom for alla proposal that would enshrine reproductive rights in the Michigan Constitution, and Michiganders for Fair Loansthat would cap interest rates on payday loans, which is the only state piece of legislation so far to meet the signature submission deadline this year.
Millions of donations from “dark money” groups — nonprofits not required to disclose their donors — poured into Michigan ballot campaigns favored by progressives and conservatives. By the end of 2021, nearly 90% of all ballot measure contributions — $9.6 million of the $10.4 million — came from dark money groups, Bridge previously reported.
FACT, however, did not file a complaint against conservative ballot measures that received the bulk of their contributions from black money groups. For example, Michigan Guardians for Democracy — a Lansing-based nonprofit group that does not disclose its donors — is the primary funder of three conservative ballots: Secure MI Vote, Unlock Michigan and Let MI Kids Learn.
The DC-based group itself has ties to black money groups and has a history of be funded by anonymous donorscampaign finance monitoring group OpenSecret Reported. A single six-figure donation from an anonymous donor accounted for 100% of the organization’s funding in 2015, 2016 and 2017. The group has a history of filing complaints against civil servants and liberal organizations.
This week’s complaints come as proposals on abortion rights and payday loans could appear on the November ballot for Michigan voters.
The reproductive rights proposal, boosted by last month’s U.S. Supreme Court ruling that ended federal abortion protections, has garnered nearly 800,000 signatures, nearly doubling the required minimum number of valid signatures, campaign co-chairman Linh Song said earlier this week. Michiganders for Fair Lending obtained 405,625 signatures in June — more than the required 340,047 valid signatures, though state election officials have yet to verify the validity of those signatures.
FACT filed the complaints after Benson, the state’s Democratic Secretary of State, referred a similar complaint against two conservative nonprofits to the state’s Democratic Attorney General, Dana Nessel, for investigation last month. .
Organizations – Michigan! My Michigan! and Michigan Citizens for Fiscal Responsibility — appear to have solicited $2 million to support Unlock Michigan, a successful ballot initiative to repeal Michigan Governor Gretchen Whitmer’s emergency power during the pandemic, according to the state discovery. Benson previously dismissed a similar complaint and deemed the evidence at the time “insufficient”.
The office “does not have any comment on complaints that have not gone through the review process,” Benson spokeswoman Tracy Wimmer told Bridge on Friday of the latest complaints filed this week.
The ballot initiative campaigns in question relied heavily on funds from nonprofit organizations that are not required to disclose donors, leaving the true source of those funds in the dark, FACT argued in its complaints. In some cases, the campaigns have donated similar amounts they received days ago from these nonprofits, suggesting “coordination” between the entities, according to the complaints.
For instance, the Abortion Rights Issues Committee received a combined $1.4 million from the national and Michigan accounts of the American Civil Liberties Union and a New York advocacy group, the Center for Reproductive Rights, between January and March, according to funding records from countryside.
This accounted for 98% of the ballot proposal campaign funding during this period.
Between February and March, the campaign received $1.4 million from nonprofit donors and paid $1.2 million for polling and signature collection services, according to the complaints.
In the same way, Michiganders for Fair Lending received $4.1 million in March, with 99% of the funds coming from the ACLU and a DC-based liberal black money group, the Sixteen Thirty Fund, according to campaign records.
A spokesperson for the ACLU Michigan did not immediately return a request for comment on Friday.
Altogether, funds from seven nonprofits — totaling $9 million — make up the bulk of funding for five ballot proposals over the past three years, the group said in a news release Friday.
“In most cases, the organizations involved were almost the sole funders of the Voting Matters Committees (up to 99.9%) – meaning the Voting Matters Committee would not exist without the funding and these organizations were essentially the Voting Matters Committee,” the press release said.
The nonprofits should have been subject to disclosure rules because they raised funds “for the purpose of supporting the Ballot Questions Committee”, the group argued. And it’s a violation of Michigan law for an organization to raise funds for ballot initiatives “to protect the organization’s donors from reporting requirements,” according to the complaints.
“Put simply, the organizations have transferred large amounts of their anonymously raised money to fund ballot issues committees that require full disclosure,” FACT said on Friday.
Eric Ventimiglia, executive director of the conservative group Michigan Rising Action, said Benson had “a clear history of selective enforcement and protection of his political allies.”
“The complaints filed by FACT will test Benson’s ability to meet standards consistent with previous decisions of the Board of Elections,” Ventimiglia said in a statement Friday. “Failure to apply the same standards to liberal groups would cement Benson’s double standard of punishing his political opponents and protecting his allies.”
Bob LaBrant, a longtime strategist who filed the Unlock Michigan lawsuit, told Bridge on Friday that he “welcomes” the complaints filed by FACT. But there is a difference between FACT’s complaints and his, he said.
Welfare organizations are allowed to make political contributions as long as that is not their primary purpose, according to the Internal Revenue Services. What matters is whether these nonprofits raise funds to serve as “financial conduits” for ballot campaigns, LaBrant said.
Benson’s office noted that Michigan! My Michigan! and Michigan Citizens for Fiscal Responsibility gave Unlock Michigan $2.3 million — nearly 90% of the petition group’s funding — during the 2020 election cycle. But neither group had that much money at the start. of 2020, suggesting they may have raised funds specifically for Unlock Michigan, according to an October 2020 letter from Benson staff.
But social welfare organizations such as the ACLU have a budget greater than the amount of contributions they have made to the ballots, LaBrant noted.
“What was their total budget and what other programs do they have other than serving as a channel for making input to the Voting Matters Commissions?” said LaBrant. “That’s the key question here.”
The new complaints also targeted:
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