Local Expert Jim Cousar Weighs In on McCracken Out-of-Town Dollars

Hypothetical Question. (0.00 / 0)

Hypothetically, let's say several years ago, I was working on a COA campaign for a candidate that is not running for anything this year.  The limit for out of town was $15K back then, I think.  By early May we reached the $15K limit.  But a couple of grand more had come in from out of town.  What if I hypothetically just put them in a desk drawer and did not deposit them nor report the them.  If there was a runoff, great - we already had a $2K start on fund raising for the runoff.  If there was not a runoff, we would return the money or maybe use it for debt retirement.

I thought, probably incorrectly, that a candidate could physically have a contribution, but it was not considered accepted until the contribution was reported or maybe even just deposited.

In this hypothetical situation, was that a violation?  But before this question is answered, we should probably ask what the statute of limitations is on this.  

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by: Mark Littlefield @ Wed May 06, 2009 at 12:01:04 PM CDT

Well (0.00 / 0)

If you never deposit a check, then I don't think you've accepted the contribution. If the money is never officially transferred from one account to another, then there is no donation. For example, if I sent a check to Bill Spellman in January, and for some reason there's a mix-up in the post office or it gets lost in his office until after Election Day, that's always his money (until I cancel the check b/c I see that it's never been cashed, or whatever).

The question is how long after a check is written can you accept/cash/report the check? And how do you report it? Do you have to amend a statement from a previous reporting period (that doesn't seem legit)? Or do you report it on your next reporting period, and maybe just file a statement explaining the late nature of the check and how you're not using the money until X date.

Good questions, all. I know what the rules are for state elections; not sure what they are for COA.

Now, a very great man once said that some people rob you with a fountain pen.

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by: Phillip Martin @ Wed May 06, 2009 at 12:12:56 PM CDT

[ Parent ]

no...maybe (0.00 / 0)

from my several and unfortunate dealings with the TEC and FEC, generally speaking a contribution is considered accepted after the contribution is deposited or kept for such a time period that a reasonable person would assume that the contribution was accepted.

at the federal level, there are redesignations, refunds, and other machinations that get around noncompliance issues even AFTER it was reported a certain way.

one could argue that there is no violation until the oversight agency declares there to be one. up 'til then it is interpretation.

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by: colin @ Thu May 07, 2009 at 13:07:56 PM CDT

[ Parent ]

Not exactly impartial (3.00 / 1)

In federal elections, you can accept money for runoffs ahead of time, or for general elections, but you have to do a lot of paperwork to ensure that the money gets returned properly if you're not in the runoff or general election.  Cousar argues that the absence of similar procedures for municipal elections means that there is no "collect now and return later" option, and that McCracken is breaking the law.

It's a reasonable argument, but he made this argument on behalf of the Leffingwell campaign!

Remember that federal rules on reporting contributions are generally a lot stricter than state law. A McCracken lawyer could (and probably will) make the case that the absense of reporting rules actually means that the McCracken campaign doesn't need to be very careful just yet.

I'm no lawyer, and I don't know if that argument holds water. Can't we get a neutral expert to enlighten us?  

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by: LSadun @ Wed May 06, 2009 at 12:12:05 PM CDT

If there is one (0.00 / 0)

I'm all for hearing it. Cousar was asked for by other commenters, and he's the only one we've got so far.

Any lawyers out there want to disagree w/ Cousar's explanation?

Now, a very great man once said that some people rob you with a fountain pen.

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by: Phillip Martin @ Wed May 06, 2009 at 12:14:08 PM CDT

[ Parent ]

I'm not neutral (0.00 / 0)

but if people are willing to give me the benefit of the doubt, I'll try to do the other thing lawyers are supposed to do, which is predict the likely interpretation by a judge.

On that front, I do think that regardless of the law's silence on this issue, that a judge would rule that at the very least, a campaign must make clear at the time of donation to a donor whether the donation is going to the general or run-off.  This is simply because thinking logically through the consequences of collecting and spending money, one has to have a mechanism to return donations if necessary.  If one loses the general, how does one fairly determine who gets the money back for the run-off?  Even if we assume it's First In, First Out, there's no guarantee that the line falls cleanly between two donations.

If one were to argue that the law's silence means that the campaign gets to independently determine whose donations go to which stage, then that still doesn't solve the problem of the line falling in the middle of someone's donation, plus the fact that this would seem to clearly thwart legislative intent re transparency and outsider influence.  How can one know which outsiders are influencing in what way if we have no idea whose contributions are being used and whose are being saved?

Thus, my prediction that a judge would rule that a campaign merely keeping internal track of the division of funds is not enough.  There must be some effort to mark those donations at the outset in order to comply with the law.

Again, the above is not legal advice, and I'm not anyone's lawyer.  Anyone who wants legal advice needs to consult their own attorney.

"In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H.L. Mencken

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by: PI Lawyer @ Thu May 07, 2009 at 18:41:34 PM CDT

[ Parent ]

"the line falling in the middle" (0.00 / 0)

So pretend the runoff isn't even an issue - if the limit is $30K, and my donation makes the total go to $30,005, how can they possibly handle that case? Give me back $5? Give 5 people back $1?

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by: m1ek @ Fri May 08, 2009 at 09:06:40 AM CDT

[ Parent ]

Or... (0.00 / 0)

Or not accept your donation and call you up and say to resend a check for $5 less.  If someone's accounting is so sloppy that they don't realize that they've just violated campaign law, one must wonder how that person would be in regards to the city's budget.

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by: David O. @ Fri May 08, 2009 at 10:41:18 AM CDT

[ Parent ]

I am not a lawyer but I play one on Burnt Orange (3.00 / 1)

Jim Cousar is a great guy and I wish he was supporting my candidate this time around, but he is not. He did what a good attorney does with his client--provided him with an interpretation of the law in support of his client's wishes. I value his opinion, but I think his interpretation is a bit of a political stretch.

Whether you call it the "legislative intent" or "the problem to be solved," the reason for the out of town limits was to lower the influence of people from outside of Austin in our municipal elections. If Brewster did not spend those dollars and has designated them for the runoff and if Brewster does not exceed the cap on the runoff (assuming there is one and he is there) then how are outsiders influencing the election?

This election charter was about what you CAN'T do. You CAN'T take more that $350 from any one person. You CAN'T take have more than $33,000 non-resident for the initial election. You CAN'T have more than $20,000 non-resident in the run-off. Merely because the city forms did not anticipate an appropriate application of the law does not mean that it is against the law.

There are a LOT of nuances to this. I don't think what Littlefield suggested is against the law, but it violates the intent of transparency that we want from the donor and expenditure filings. In the instance of Phillip's question, let me add a layer. Let's say that Phillip is going to bundle for Mark Littlefield's campaign. Phillip secures 10 contributions of $350 from his friends in support of Mark and promptly emails Mark about his success. But Phillip does not deliver the checks to Mark until after the filing period. But Mark knows that Phillip has been out there. It Phillip a bundler? Or is Phillip NOT a bundler until he delivers the bundle? The intent is to create transparency around your donors and your contributions.

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by: McKinney @ Wed May 06, 2009 at 16:07:27 PM CDT

Good point (0.00 / 0)

I don't know what kind of laws govern how bundlers report (or if any exist).

Now, a very great man once said that some people rob you with a fountain pen.

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by: Phillip Martin @ Wed May 06, 2009 at 16:53:47 PM CDT

[ Parent ]

I'd still like to hear from a neutral expert since Cousar is working for Lee (0.00 / 0)

Ultimately, this comes down to a question of processing.  Cousar is suggesting that the ordinance imposes an implicit burden that a campaign has to return a contribution and then wait until after the runoff to go back to those donors and ask them again for a contribution.  Brewster is arguing that the money can be collected and set aside for use after May 9th during the runoff or returned in the unlikely event he doesn't make the run-off.  

That seems like a perfectly straightforward approach.  The issue isn't collecting the money before the general election; it is whether the money is spent before the general election, which would be a clear violation.

It is also possible that Brewster could comply with this requirement by sending his donors an e-mail offering them the choice of returning the donation above $350 or applying the excess to the potential run-off.

Keep in mind that this $9,000 represents only some 25+ donors ($9,000/$350 limit per person).  Also keep in mind that under the ordinance "out of town" includes Westlake as well as Corpus.

Oh, and for the record, I accused Nathan of mud-slinging, which isn't the same as dirty campaigning.  Mud-slinging involves making accusations instead of talking about issues.  Dirty campaigning involves the classic tricks of stealing your opponents signs and the new tricks of creating anonymous groups to circumvent disclosure laws.  

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by: Jeb @ Thu May 07, 2009 at 11:04:05 AM CDT

[ Parent ]

For the record... (0.00 / 0)

You said:

Keep in mind that this $9,000 represents only some 25+ donors ($9,000/$350 limit per person).

Not true. The amount Brewster went over actually came from 50 donors, ranging from $20 donations up to $350. That's double what you just said.

You also said:

Also keep in mind that under the ordinance "out of town" includes Westlake as well as Corpus.

Also not true. The revised 2006 ordinance now allows donors from Westlake and any other zip codes touching the City of Austin to not be counted as "out of town" donations.

If you look at the list of the 50 out of town donations in question, you'd see that they come from cities in Texas that are far from Austin as well as outside the state.

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by: Amy Everhart @ Thu May 07, 2009 at 11:17:02 AM CDT

[ Parent ]

Thanks for the clarifications (0.00 / 0)

The first was just a ballpark minimum (I did show my math).  I hadn't gone looking for the lists.  Also, 25+ includes 50.  

I didn't know that about the 2006 revisions.  That's disturbing.  I'm alot more concerned about out of town donations from Westlake than I am from Corpus.  The folks in Westlake that work in Austin but don't vote in Austin have a lot more interest in influencing our elections.

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by: Jeb @ Thu May 07, 2009 at 19:44:26 PM CDT

[ Parent ]

This begs the question (0.00 / 0)

if McCracken was raising money for the runoff, meaning he INTENDED to raise this extra money, then why wasn't he also raising $700 individual donations and $1,400 donations from couples? If he had done that too then it would be clear this was his intent, but since he didn't it looks like it is a convenient explanation after the fact. Least that's how I see it. Because you could bank a whole lot more for the runoff easy by asking big-money donors to double up now, right?

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by: BeatrixKiddo @ Thu May 07, 2009 at 13:26:59 PM CDT

[ Parent ]

It's pretty clear that none of this was planned (3.00 / 1)

"Hey, we're over the $33K limit"

"Don't worry about it -- we can save it for the runoff"

If McCracken's team was careful, they would have gotten statements from the donors designating their contributions for the runoff, similar to what federal candidates do when they get contributions for primary + general election. If they were trying to break the rules, they would have held the checks until Sunday and not reported them until them. If they were media savvy, they would have given the money back as soon as the story broke.

They didn't do any of these things, which tells me that this was a blunder, pure and simple.  

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by: LSadun @ Thu May 07, 2009 at 14:59:52 PM CDT

[ Parent ]

bingo! (0.00 / 0)

Blunder it is. Kinda like accidentally pissing off the whole city of St. Louis...

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by: BeatrixKiddo @ Thu May 07, 2009 at 20:54:28 PM CDT

[ Parent ]

Actually, I liked the St. Louis ad, (0.00 / 0)

and residents of St. Louis don't vote in Austin elections.  

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by: LSadun @ Thu May 07, 2009 at 23:29:04 PM CDT

[ Parent ]

No (0.00 / 0)

That whole St. Louis thing was ridiculous. Not the ad so much as the conversation that followed the ad. That was just bo-ring.

Now, a very great man once said that some people rob you with a fountain pen.

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by: Phillip Martin @ Fri May 08, 2009 at 12:08:06 PM CDT

[ Parent ]

Election Law Experts you can rely on (0.00 / 0)

For Austin city election law, Jim Cousar. For state election law, Buck Wood. Does not matter who they may or may not have been supporting, they are both very good lawyers. If anyone can recommend a local expert on federal election law, I would like to hear it.

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by: ssuits @ Fri May 08, 2009 at 19:31:43 PM CDT