Michigan candidates pay for breaking finance rules

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Graphic by Zach Robertson

By Jaylyn Galloway

LANSING- What happens when politicians break state rules for how they can raise campaign funds?

They pay fines.

Most penalties are for failure to put identification on campaign materials, misuse of public resources for political purposes and failing to disclose expenses properly. Misuse of public resources can be when government officials use public money in their own campaigns.

Political candidates and political committees can be fined if their campaign finance reports are late or someone files a complaint. The amount of a fine when a complaint is filed is negotiated by the accused and the Secretary of State. Money is returned to the sources the candidates and committees have taken from illegally. The Secretary of State keeps the fines.

Candidates and committees have to regularly report to the Secretary of State where their money comes from, how much they have and how they are spending it. During election years, candidates file five times. In non-election years, they file another three times.

Late-filing costs can go to a maximum of $1,000 per missing report not filed, said Woodhams. But the fine for verified complaints is negotiated by the accused and the Secretary of State can be much larger.

The largest fine that the Secretary of State has ever given was in 2009 for  $225,250, said Woodhams.

That’s when the Mark Schauer and Bob Shockman committees gave contributions to the Senate Democratic Fund that violated the annual $20,000-per-person limit to caucus committees. The three parties involved had to split the costs of the total fine between them.

Such hefty fines are not typical.

The Spartan Newsroom found the Secretary of State had nine campaign-finance complaints resolved via agreement in 2017. They totaled $6,054.95 in fines.

“There are no doubt hundreds, or thousands, of complaints that were resolved over the past 40 years,”said Woodhams.

The largest fine in 2017 was against The Committee to Re-Elect Tom Reich for Sheriff. The candidate for sheriff in Eaton County was fined $3,750 for accepting corporate contributions, Woodhams said. Reich had to return those contributions and pay fines that equaled them.

State law requires the Secretary of State to attempt to resolve violations informally, Woodhams said.  The idea is to promote disclosure of funds raised and spent by political committees and candidates in hopes that the offender will not commit the violation again.

Negotiating a resolution could avoid referral for criminal prosecution, he said. Violators can face up to three years in prison, although Woodhams said he has not heard of anyone going to jail for breaking Michigan campaign finance laws.

Not everyone thinks that Michigan is great at enforcing campaign-finance laws.

“We are not known for firm laws for campaign disclosure,” said Matt Grossman, an associate professor of political science, and director of the Institute for Public Policy and Social Research at Michigan State University.

Generally people get in trouble after the campaign season, he said. When it comes to disclosure, most people don’t know how candidates use money, and how they learn is through the media or the opposing campaign complains about them, Grossman said. Those who slip through the cracks receive and spend large amounts of money and that is a concern, he said.

A 2014 study by the National Money and Institute reported on state disclosure policies on independent spending. Only four states Arizona, Kansas, Montana, and Nevada saw the greatest changes in scores. Michigan received an overall score of 60 out of 120 ranking it one of the worst states when it came to disclosure requirements.

The Michigan Secretary of State has pushed for more disclosure transparency, Woodhams sid.

Secretary of State Ruth Johnson believes transparency is important for democracy and has successfully pushed for additional disclosure laws, including more electronic reporting and more frequent off-year reporting, he said.