Bowerbank Breaks Law, Then Launders Money To Himself?!

A positive development from last year's General Assembly was closing the loophole that forced contributions given through third party groups (like ActBlue), that were designated for specific candidates to be reported as contributions from the person who gave them- not from the group.  In other words, if you logged onto ActBlue, and said you wanted to donate $500 to a candidate, the contribution would be reported from you, not ActBlue.  Otherwise, the entire disclosure system would have been destroyed as people could donate through services like this and avoid any public scrutiny.  In Virginia, where we have no donation limits, and rely on disclosure laws, this was a disaster of a loophole, basically destroying our entire campaign finance system- until it was closed last year.

As a lawyer told me, "The new law defines a "designated contribution" as "a contribution that is designated specifically and in writing for a particular candidate or candidates and that is made using a political committee solely as a conduit." Va. Code Ann. § 24.2-945.1(A) (2009). Under the new rule, if a candidate's campaign committee receives a designated contribution from a Virginia political committee, an out-of-state political committee, or a federal political action committee, the campaign committee must report the name and other required information of the person who designated the contribution. Id. § 24.2-947.4(B)(3)".

I was surprised to see one campaign didn't follow this new law- it was Jon Bowerbank for Lt. Governor, led by the less than capable Jon Paul Lupo.  As you can see here, the campaign is hiding the identities of over $72,000 worth of donors through ActBlue, running seriously afoul of the law.

But what makes this worse, is ActBlue discloses its donations separately and it appears Bowerbank is laundering money to himself, by donating to his campaign through ActBlue and then disclosing it as money from ActBlue.  Make Sense?  See this and this.  Bowerbank donates $10,000 to ActBlue on 9/29, and gets $10,565 on 9/30.  Hmm....

I don't have a problem with Bowerbank being a self-funded candidate, but he is going to violate campaign finance law in order to make it appear he has more public support- then we have a big problem with it. 

It is also possible this is just another error by the incompetent Jon Paul Lupo, in which case Bowerbank should probably make that clear and fire him immediately.

Comments

Vedy intedestink....

[Pete in Williamsburg]

Very interesting. Bowerbank is a political newbie and should be able to plead ignorance on this. However, if he doesn't fire the offending staffer who tried this clumbsy ploy, Bowerbank will earn some condemnation.

I don't think this story is as big as this post makes it out to be. Even if Jon failed to properly report the donations (which im sure was done unknowingly) its not as if he did something improper by donating to his own campaign. As a Bowerbank supporter - I have not been persuaded to think something is amiss here and I doubt any of his supporters would be.

And the alternative- Jody Wagner who is at least partly responsible for the current deficit / fiscal crisis in Virginia is a better choice?

Also- this probably does not rise to the level of law breaking, the critical factors of intent / motive:

"In Western jurisprudence, concurrence, (or contemporaneity or simultaneity), is the apparent need to prove the simultaneous occurrence of both actus reus ("guilty action") and mens rea ("guilty mind"), to constitute a crime; except in crimes of strict liability. In theory, if the actus reus does not hold concurrence in point of time with the mens rea then no crime has been committed."
http://en.wikipedia.org/wiki/Concurrence

[cvllelaw]

Before you get your knickers into too big a twist, just be aware that the term "designated contribution" did not exist in Virginia law at the time that the contribution to ActBlue was made; that term did not get defined in the Code until the new law took effect on January 1, 2009. So there could be a really sticky little question about whether a designated contribution doesn't have to get reported because under the applicable law at the time of the contribution it didn't have to be, or whether it DOES have to be reported because at the time that the report was due, it would be treated separately. I would not be surprised if someone on his campaign staff called the SBE for clarification; certainly I would if I were they.

I would have a hard time arguing that Bowerbank broke the law in any way that reflects meaningfully on him or his staff.

[cvllelaw]

Another thing that makes this stupid, though -- it probably cost about $300 in discount fees to make the ActBlue contribution. So he and his staff felt it was worth $300 to run this little dodge, to help cover up the fact that he has little popular support.

Cvlle law, are you sure that the new law took effect on Jan 1, 2009? I haven't read it, but most laws in Virginia take effect the July following their passage. In this case, that would have been July 1, 2008.

[reston libertarian]

As for lawbreaking:
It appears that the new law goes into effect as of January 1, 2009. But the report in question is for the reporting period July 1 2008-December 31, 2008. The report must be provided by January 15. The law likely applies to the reporting period rather than the time the report is filed, otherwise a repot filed on December 31, 2008 would have different requirements than one filed January 1, 2009 even if they bother referred to the same reporting period.

As for what Bowerbank’s VPAP statement shows: It shows that only a smidgen of people have made any donations, and that 80% of his contributions are self funded. There is nothing about receiving $10K more through actblue that would make someone believe that Bowerbank has a broad base of financial support. VPAP shows this is a self funded campaign.

This looks like a non-issue.

Yes anon 2:48 cvllelaw is sure it takes effect January 1, 2009 (sorry to speak on your behalf). Check the code cite and you’ll see that the Gen Assembly must have chosen to delay enforcement of this provision until the beginning of the calendar year.

http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+24.2-945.1

[Doug in Mount Vernon]

just curious Ben, do you EVER do stories not based on personal vendettas?

The only reason to contribute to your own campaign through ActBlue and then not report the individual contributions is to inflate your ActBlue number and make it look like you're raising more grassroots money than you really are. Otherwise, why pay the credit card processing fees, wait for the turnaround on the ActBlue check, etc.? And why not report the individual contributions as other candidates have done, recognizing as Ben points out that the the spirit of the disclosure laws is to give the public access to information on who is giving money to candidates - and reporting ActBlue money as lump sums, while perhaps legal, is certainly obviously a subversion of the spirit of that law.

Again, the only reason to do this is to hide the donors - or in Bowerbank's case, the donor.

[Adam Sharp]

This is frustrating because I originally followed the practice of disclosing designated contributions, and was told I was doing it wrong by the SBE. They even published this memo:

http://www.sbe.virginia.gov/cms/Campaign_Finance/Designated_Contributions_Policy.pdf

Now the law has changed, but that memo is still on the SBE Campaign Finance website.

The SBE needs to either a) update their website with the new, accurate information or b) make it clear that only contributions received on or after January 1, 2009 are effected by the change in the rules.

[Peter Foley]

Yet another example of a guy who does not know what he is doing. Why did Bowerback hire a guy who is just a pathological liar or just plain incompetent.

Maybe he should have hired someone with experience and from the State rather than some guy who has never run a race in Virginia before.

Classic example of a guy with more money than sense. You cant cut corners by hiring someone on the cheap.

You get what you pay for. In this case Jon Paul Lupo.

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