DeVos Inc Fined for Violating Ohio Campaign Finance Law

by: philgoblue

Sun Apr 13, 2008 at 17:03:29 PM EDT

On Thursday, 3 April, All Children Matter -- a Grand Rapids-based school choice and privatization advocacy group founded, led and financed by Dick and Betsy DeVos was fined by the bi-partisan Ohio Elections Commission a record $5.2 million for campaign finance violations in Ohio.

The Elections Commission said the All Children matter funneled $870,000 in campaign contributions through its Virginia PAC to its PAC in Ohio in 2006 in order to skirt Ohio campaign cotnribution limits, which restrict PACs to $10,000 donations.  Virginia allos unlimited contributions and corporate money to be donated to PACs.  Thus in 2006 alone, David Brennan of Akron, Ohio's biggest charter school operator, donated $50,000 to the ACM Virginia PAC which was then transfered to Ohio Republicans that back school privatization.  Had Brennan donated to AMC Ohio, he would have had to limit his annual contribution to $10,000.  All money from ACM went to back Republican candidates in statewide and legislative races -- including Ohio House Speaker Jon Husted, former Secretary of State and gubernatorial candidate Ken Blackwell, and several others -- either through direct contributions or via $360,000 in campaign mailings and $290,000 in radio and TV advertising.

Secretary of State Jennifer Brunner said in a press release:

"Those who participate in Ohio political campaigns must follow the state's laws and play fairly. We are pleased the Ohio Elections Commission has made such a strong statement in favor of fairness and accountability."

Attorney General Marc Dann added:

"Going into the 2008 elections, this decision sends a strong message about playing by the rules. This also supports Ohio's strong belief in transparency - the public needs to know where campaign money is coming from and who's giving it."

Naturally, William Todd, a columbus lawyer representing All Children Matter claimed that the decision was politically motivated:

"[All Children Matter] are getting ripped up by what looks like a very, very vicious attack on their philosophy."

Nevermind that the Ohio Elections Commission, made up of two Republicans, two Democrats and an independent rulled unananimously, 5-0.

Acting chairman of the Commission Martin Parks, a retired Republican judge, scoofed at ACM's argument that the decision was politically motivated:

"I have been here for five years. We really haven't had a problem with partisan politics."

Todd's other argument seems to be that he couldn't figure out Ohio campaign finance laws, which he refers to as "crap."  

Again, nevermind that Philip Richter, executive director of the Elections Commission warned ACM in a May 2006 advisory opinion that a transfer of funds from ACM Virginia to ACM Ohio would be a violation of Ohio law. Richter's opinion instructed ACM PAC Virginia to file documentation to establish its existence in Ohio.  It never did.  Instead, the ACM PAC chose to ignore the warning, and proceeded to transfer the $870,000 from Virginia to Ohio in six installments.

Richter was quoted in the Grand Rapids Press as saying that:

"One of the reasons for the issuance of the advisory opinion was to make sure there was no skirting of laws on where money came from and how it was received."

Rich Robinson, executive director of the Michigan Campaign Finance Network, a nonprofit watchdog group, doubts that All Children Matter was unaware what it was doing in Ohio, but instead was using Virginia's permissive laws to raise money in massive ammounts and then attempt to sneek it through the back-door into Ohio:

"This whole thing is built on enormous contributions. This vehicle (All Children Matter) has been created to push what I view as the DeVos signature issue."

All Children Matter was founded five years ago by Dick DeVos, former Amway executive and 2006 Republican nominee for governor in Michigan. Dick resigned from ACM in 2005 and passed the presidency to his wife, Betsy DeVos, former chair of the Michigan Republican Party. The DeVos family financed the Kids First! Yes! school voucher proposal on the 2000 Michigan ballot which was soundly defeated by nearly 69%-31% despite DeVosInc's $5 funding of the campaign.  Indeed, since 1999, the couple has spent more than $7 million promoting voucher schemes, charter schools and other forms of privatization and the candidates -- mostly Republicans -- who back those causes.  The PAC is run out of an office on Monroe Center between the DeVos Place and the Amway Grand Plaza Hotel in downtown Grand Rapids, even though it's set up in Virginia (again, most likely because of that state's permissive laws on PAC donations). Greg Brock is the Executive Director of ACM.

Commission members put the fine at the standard tripple the ammount of the illegal contribution and fined ACM twice -- $2.6 for making the contribution from Virginia and $2.6 million for accepting it in Ohio.

One of America's great newspapers, The Toledo Blade, editorialized that the fine for the contravention of a state law that prohibits such "back door" transfers of political money finally "put some real teeth in state election law."

And Ohio isn't the only state where DeVosInc/ACM is under investigation for violating the law.  In Wisconsin, Government Accountability Board is reviewing a 2006 allegation that All Children Matter laundered money and violated campaign rules by failing to register with the state and disclose its donors.  

In 2006, Betsy DeVos gave ACM PAC $210,000.  Other donors include Wal-Mart heir John Walton ($4.2 million), Julian Robertson of Tiger Management ($500,000), hedge fund manager Bruce Kovner ($250,000) and Wisconsin businessman Robert Kern ($250,000).

In light of the DeVos-Green Billboard Swap (discussed here by the MDP and here by BFM) one has to question whether DeVosInc is committed to following political finance laws.

As Michigan Democratic Chairman Mark Brewer put it:

"This is just another example of a family that thinks they are above the law. If you are going to insert yourself into the public debate, we are going to hold you accountable."

I wonder of our Attorney General Mike Cox is investigating these issues?

Sources: Cleveland Plain Dealer, Detroit News, Toledo Blade, and the Grand Rapids Press here and here.