Republicans too protect culture of corruption
Cartoon of lots of bags with dollar signs on them

To remedy a broken campaign finance system, the 2016 Democratic Party Platform advocates a number of reforms, including ending “secret, unaccountable money in politics by requiring . . . significantly more disclosure and transparency.”

In recent years, however, information has come out indicating Ohio Democratic leaders at the state level and in Columbus have acted to conceal sources of campaign funds. The undisclosed contributors received substantial benefits from Democratic elected officials.

As for Republican leaders, they’ve been no better on the problem of hidden donors.  

Alleged concealment of donors supporting Richard Cordray, Kevin Boyce and David Pepper in 2010

In 2016 the law firm BakerHostetler issued a state-commissioned investigation report on the crimes of former deputy treasurer of state Amer Ahmad, who is serving 15 years in federal prison. From 2009 to 2010, Ahmad orchestrated the largest bribery and kickback scheme in the state government’s history.

As state treasurer, Richard Cordray hired Ahmad in May 2008 as his chief financial officer. Cordray left the office about eight months later to become attorney general. Ahmad’s crimes began under Cordray’s successor, Kevin Boyce, who had made Ahmad deputy treasurer.

The report says Ahmad claimed that when Cordray and Boyce were unsuccessfully running in 2010 to retain their offices, arrangements were made to have Cordray supporters give to Boyce’s campaign for treasurer, while Boyce supporters gave to Cordray’s campaign for attorney general. Ahmad said this was done to hide “pay-to-play,” i.e., paying campaign contributions to receive benefits from government.

The report points to $11,000 in contributions to Cordray’s campaign from securities broker Douglas Hampton, who was involved in the bribery and kickback crimes with Ahmad and also eventually sentenced to prison. Although Hampton was a registered Republican and repeat Republican donor, he wanted the Democrat Boyce reelected so that his longtime friend Ahmad could continue steering him state securities business providing exorbitant returns.

Hampton would kick back a portion of the proceeds to Ahmad, keep a portion for himself and use a portion for campaign donations. But he gave his substantial contributions to Cordray’s campaign, not Boyce’s.

The report says that not long after Hampton contributed to Cordray’s campaign, seven donations of $1,000 each went to Boyce’s campaign from members of a Cleveland law firm. Because the state treasurer could award financial services work but not legal work, the contributions would have been expected to go to the attorney general, who awards legal work.   

Ahmad explained those curious donations by alleging that Sara Guice in the Ohio Democratic Party “arranged for Hampton to donate to the Ohio Attorney General race and then balanced it with donations to Boyce from a law firm seeking work from the Ohio Attorney General.”

That way, when Boyce’s office awarded securities business to Hampton, he would not be listed as a donor to Boyce’s campaign. And when the law firm was hired as special counsel for the attorney general, its attorneys would not be on the list of campaign donors to Cordray. Whether the intent of these deceptive practices was to hide “pay to play,” they could certainly be used for that purpose.

The report further says Ahmad claimed there was a pattern of such “cross payments” of campaign contributions, including ones involving David Pepper’s unsuccessful 2010 campaign for state auditor. According to the investigators’ summary of Ahmad’s interview, Ahmad said Guice coordinated with Democratic fundraiser Melissa Barnhart on cross payments regarding Pepper’s campaign. Pepper now chairs the Ohio Democratic Party.

Ahmad’s allegations receive independent support

Some would argue that because Ahmad is a proven liar and thief, his claims are not credible.  Similar claims, though, were made in a 2012 letter to the FBI from Seth Metcalf, who at the time was general counsel and chief financial officer in State Treasurer Josh Mandel’s office. 

Metcalf referred to Hampton’s thousands of dollars in contributions to Cordray’s campaign. He then noted that attorneys Kevin Kurgis and Bernard Fox each gave $10,000 to Boyce’s campaign in 2010. Metcalf said Kurgis has an extensive contribution history but had never before given to a state treasurer’s race. Metcalf believed that the two attorneys were limited by law to making $1,000 contributions to Cordray’s campaign because of receiving unbid special counsel contracts from the attorney general’s office.

Metcalf observed: “Through these abnormal and suspicious campaign contributions the donors benefited Richard Cordray and Kevin Boyce in ways that the donors could have not done directly.”  

He concluded: “The timing, close proximity in dollar amounts and surrounding circumstances suggest that Doug Hampton’s $16,000 contribution to Attorney General Cordray [including a $5,000 contribution to the Ohio Democratic Party] and Messrs. Kurgis and Fox’s combined $20,000 in contributions to Treasurer Boyce were coordinated by Richard Cordray and Kevin Boyce in an effort to ‘swap’ contributions so as to circumvent Ohio campaign finance and/or pay-to-play laws.”

Boyce denied to the BakerHostetler investigators any knowledge of cross payments of campaign contributions. For this article, the Ohio Democratic Party and the Cordray campaign for governor did not respond to email requests for comments on the alleged cross payments of contributions in the 2010 campaigns. They also did not answer requests for their position on cross payments or explain whether the practice is occurring in the 2018 statewide Democratic campaigns.   

Democrats hid the source of a Columbus city contractor’s campaign donations  

Democrats also concealed the source of campaign contributions made by the corrupt city contractor Redflex. From 2005 to 2013, Reflex contributed tens of thousands of dollars to the campaigns of Columbus officials. During that period, city officials awarded the company contracts under which it made millions operating red-light-enforcement cameras at intersections in the city.

Court fillings and news reports show that Redflex used the corrupt lobbyist John Raphael to funnel campaign contributions to the officials. This practice concealed that the actual source was a contractor receiving substantial business from the city.

The funneling of Redfex’s contributions to hide their source could apparently be more involved. In 2011, then-City Council President Andrew Ginther asked Redflex for a $20,000 campaign contribution. The company gave $20,000 to Raphael, who gave it in his name to the Ohio Democratic Party, which then gave $21,000 to Ginther’s campaign.  Raphael also reportedly funneled Reflex campaign contributions through the Franklin County Democratic Party.

At Raphael’s 2016 sentencing hearing for extorting funds from Redflex, federal prosecutors said he made a mockery of Ohio’s campaign finance laws. But he was never charged with violating them.

Is public financing of campaigns the only remedy for those deceitful acts?

The BakerHostetler report expresses doubt whether legal restrictions on cross payments of campaign contributions would work. It explains that “’cross payment’ arrangements can be implemented in various ways to make it difficult to attribute a contribution to a particular politician.”

The report additionally says the funneling of campaign contributions through a lobbyist is a “common practice,” which also occurred in the treasurer’s office scandal in the form of payments to an attorney friend of Ahmad. The report describes what happens: “An entity seeking benefits from the State hires a law firm to lobby on its behalf. It pays the firm lobbying fees, which are passed on in part as political contributions to the decision maker.”

Shortly after the report was issued, Republican state officials including Gov. John Kasich, Attorney General Mike DeWine, Auditor David Yost, then-Senate President Keith Faber and then-House Speaker Cliff Rosenberger were informed that it described alleged deceptive acts involving Democratic campaign contributions. But they have not spoken out about the practices or indicated interest in stopping them.

Could that be because Republicans are doing the same things? And could their failure to act be related to the refusal of Republicans controlling Congress and the Statehouse to end “dark money” – that is, political spending that can’t be traced to its source? Many Republican leaders at both the national and state levels obviously have no problem with the sources of large amounts of political spending remaining hidden from the public.  

The takeaway appears to be that campaign contributions of those doing business with Ohio’s state and local governments can easily be concealed with impunity, including for purposes of hiding “pay to play.” And leaders of both major parties have shown no interest in changing the situation.

The only hope for ending the problem – or at least counteracting some of its harmful effects - may be public financing of campaigns. This would give elected officials less reason to rely on hidden private interests currently funding their campaigns and pulling governmental strings behind the scenes.  It could free up the officials to serve the public interest instead.

Some good news is that the 2016 Democratic Party Platform advocates a matching small-donor public financing system for campaigns. More bad news, though, is that Ohio Democratic leaders have shown little interest in that proposal, either.

Joe Sommer is a Columbus attorney and activist who is retired from Ohio’s state government.

 

Free Press History: