Matt Rosendale’s end-run around campaign finance laws is sketchy, slimy, and downright unethical. Maryland Matt’s flagrant attempt at skirting the rules stands in stark contrast to Montana’s proud tradition of good government, fair elections, and a commitment to transparency.
Daily Beast: GOP Senate Hopeful Cooks Books, Skirts Donation Limits
Lachlan Markay, Daily Beast
12 July 2018
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Every day this week has brought major new developments in the controversy over EPA administrator Scott Pruitt’s living arrangements and his handling of agency staffing decisions. Let’s recap some of the big ones.
Montana Senate candidate Matt Rosendale had a problem. A pair of high dollar donors,Tom Rastin and his wife, Karen Wright, kept giving Rosendale more than the $5,400 each individual can legally donate to a campaign per election cycle. And each time, twice to be exact, Rosendale’s team was forced to refund the excess donations.
But with some creative accounting, it appears the the Rosendale campaign figured out a way around the limits – not only for Rastin and Wright, but for other max-out contributors to the campaign. It’s a pretty ambitious end-run around campaign finance laws made possible only by Rosendale’s extensive personal wealth.
Rosendale, Montana’s state auditor, ran for a House seat in 2014, and lent his campaign $1.3 million for the unsuccessful effort. He’s now using the same campaign committee to mount his Senate bid, and when this cycle’s campaign began, the committee still owed Rosendale about $237,000.
In April, the Rosendale campaign began raising money explicitly for the purpose of retiring that debt. Repayment of debts incurred during previous election cycles don’t count towards the $5,400 per-donor limit for the current cycle, the rationale being that they’re effectively donations to a previous campaign and won’t be used to support ongoing political efforts.
Nine donors stepped up in April and May to help retire the campaign’s debt to Rosendale, including Rastin, Wright, Home Depot founder Bernie Marcus and his wife Wilma, veteran political consultant Roy Pfautch, and Texas oil tycoons Wayne and Gayle Laufer. Eight of the nine donors had already maxed out to the Rosendale campaign. The debt retirement contributions would’ve put all nine of them over the per-election limit for individual contributors had they gone towards the Rosendale campaign’s 2018 coffers.
All of those contributions would’ve been generally unremarkable, if perhaps conspicuously generous—these high-dollar Republican donors were, after all, helping to settle years-old debts owed to the candidate himself.
But then the Rosendale campaign pulled an audacious accounting maneuver. On May 14, it used the money from those nine donors to repay $32,831 of the debt the campaign committee still owed to Rosendale. The very next day, Rosendale re-lent the exact same sum to the campaign. In effect, donations to Rosendale’s 2014 campaign were routed through the candidate’s personal bank account and transferred to his 2018 campaign. After the transaction took place, the campaign still owed Rosendale the same amount of money, but he had effectively removed the cash supplied by those nine donors from his campaign’s 2014 balance sheets and placed it on those of his ongoing senate effort, allowing those donors to nearly double the sums they can provide to the latter.
Brendan Fischer, the director of FEC reform programs at the Campaign Legal Center, called the scheme “pretty wacky,” but said it’s likely above board. “Unless the donors were in on the plan, I’m not sure it is illegal,” Fischer told PAY DIRT. “If the donors were told they were helping pay down Rosendale’s 2014 loan to his campaign, I don’t think there is anything stopping Rosendale from turning around and putting his repaid loan back into his 2018 campaign.
The fungible debt retirement tactic appears to have been incorporated into the Rosendale campaign’s fundraising strategy. In a campaign memo provided to potential donors in June and obtained by PAY DIRT, the campaign asks for donations not just to its 2018 account, but also for the purposes of retiring its 2014 debts. “In addition to making contributions to Rosendale’s 2018 primary and general elections,” the memo advises, “contributors that did not max out ($2,600) to the 2014 primary may contribute to debt retirement.” There is nothing in the memo indicating to donors that their debt repayment contributions might effectively end up in the campaign’s 2018 coffers, but the donation form makes sure to note that the “GRAND TOTAL” maximum contribution is $8,000, not $5,400.
The Rosendale campaign still owed the candidate $176,863 as of its latest FEC filing. If the campaign decides to employ the same creative accounting in the future, that’s a lot of money that the campaign can accept above normal individual contribution limits.
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Federal Election Commission
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