Key Points
- “Rep. Martha McSally has improperly maintained a campaign fundraising operation for the House of Representatives even after declaring — and raising money for — her Senate run, a liberal group backing a potential opponent says.”
- “End Citizens United notes in its complaint that McSally’s campaign has already moved $1 million from her House committee to her Senate committee since announcing Jan. 12 she was running for the seat being vacated by Republican Sen. Jeff Flake. ‘Representative McSally has invented her own set of rules, courting donors to support a nonexistent campaign for the House of Representatives so she can have two bites at the apple while running for Senate,’ the group argues in its complaint.”
- “The new complaint follows a rare FEC audit of McSally’s campaign finance reporting after years of dispute over details of her spending and unusually vague identification of her donors.”
Arizona Republic – Liberal group: Martha McSally improperly raising money for House, Senate at same time
Ronald Hansen; Yvonne Wingett Sanchez
Rep. Martha McSally has improperly maintained a campaign fundraising operation for the House of Representatives even after declaring — and raising money for — her Senate run, a liberal group backing a potential opponent says.
End Citizens United, a Washington-based political action committee, filed a complaint Friday against McSally, a Republican, over the matter with the Federal Election Commission.
The complaint, shared in advance with The Arizona Republic, comes as top-tier candidates on both sides of the Senate race are hauling in millions of dollars for what is shaping up to be a costly battle over the seat.
Given the high stakes of the race — one of the most closely-watched in the nation — the marquee candidates and their surrogates will be poring over opponents’ financials.
End Citizens United notes in its complaint that McSally’s campaign has already moved $1 million from her House committee to her Senate committee since announcing Jan. 12 she was running for the seat being vacated by Republican Sen. Jeff Flake.
“Representative McSally has invented her own set of rules, courting donors to support a nonexistent campaign for the House of Representatives so she can have two bites at the apple while running for Senate,” the group argues in its complaint.
McSally’s campaign maintains the dispute with the FEC relates to issues from years ago and involved accounting disagreements, not shielding information from the agency. Her spokeswoman, Torunn Sinclair, said the campaign is waiting for the FEC matters related to an audit of the House campaign committee before closing it.
“We have been in full and complete compliance for years now,” Sinclair wrote in a statement to The Arizona Republic. “This matter is old news.
“When the campaign committee first became aware of the issue we built the best compliance team in the county, compiled of former FEC auditors, accountants and smart legal minds to address any issues and help us stay in compliance.”
The FEC allows transfers between candidate committees for different offices, but they are subject to rules, such as maintaining the same individual contribution limits and disclosing donors’ identities.
The new complaint follows a rare FEC audit of McSally’s campaign finance reporting after years of dispute over details of her spending and unusually vague identification of her donors.
End Citizens United is aligned with Democrats and advocates overhauling political spending rules to erase unlimited and undisclosed money in elections. The group has already endorsed U.S. Rep. Kyrsten Sinema, D-Ariz., her party’s front-runner in the Senate race and a potential McSally opponent in the fall elections.
House committee lingers
McSally formally kicked off her Senate campaign Jan. 12, flying from Tucson to Phoenix and Prescott to confirm what had been an open secret for months.
Still, after the announcement, her House campaign committee raised at least $156,000 from individuals and PACs from Jan. 13 through March 1, FEC records show.
At least some donors appeared in both the House and Senate reports, though it was unclear whether their donations were tallied separately or combined.
The House campaign also paid $283,000 in expenses after Jan. 12, though it is unclear when the services billed to the campaign occurred.
McSally’s House campaign has no reported debt and she has not signaled an interest in running a parallel campaign for her current Tucson-based House seat. That suggests there is no clear reason for her House committee to remain operative, but she had not filed to terminate the committee as of Wednesday, according to FEC records.
Brett Kappel, a campaign finance attorney in Washington, D.C., said the lack of debt with McSally’s House campaign will be a key point for the FEC as they examine the complaint. The FEC will also want to examine whether she was still a candidate for the House seat after she declared for the Senate seat.
“Once she declared for the Senate, the House campaign can only raise money to pay existing debts because she’s no longer a candidate for the House,” Kappel said. “If her House campaign had debts — unpaid debts as of that point — the House campaign could continue to raise money in order to pay those debts.
“The fact that there are two (committees) operating simultaneously is not determinative of whether it’s a violation,” Kappel continued. “Now, if she had no debts, then she would have a problem: if the House campaign has no debt and she was no longer a candidate for the House, then she couldn’t be raising money for the purpose of raising money for the House.”
A history of FEC problems
The FEC complaint could add to McSally’s problems following the rules documenting the flow of money in federal politics.
Last week, the FEC unanimously adopted the findings of an audit that concluded her 2014 campaign committee, McSally for Congress, repeatedly misreported what it collected and spent, failed to fully identify many of its donors and failed to properly acknowledge some of its eleventh-hour contributions, among other problems.
The audit mostly re-examined McSally’s campaign finances involving her 2014 House run, in which she defeated then-Rep. Ron Barber by 167 votes, making it the closest congressional race in the country that year.
McSally’s campaign told the FEC that it had made changes to better follow the agency’s rules and also noted that the “volume of contributions … was overwhelming at times.”
The audit found that McSally’s campaign understated its available cash at different points in 2013 and 2014 by a total of nearly $104,000. She also overstated her revenue by $110,000 and overstated expenses by $94,000 in those years, according to the audit.
The mistakes lingered even after the committee filed amended financial statements to the FEC, the agency found.
McSally’s campaign maintained to the FEC that the amended statements were done properly, though the agency disagreed.
Auditors found that McSally’s campaign took in $319,000 in contributions that exceeded legal limits and did not file required reports for $100,000 in contributions that came in the campaign’s waning days.
FEC auditors acknowledged claims by McSally’s campaign that it had made “best efforts” to fully identify the occupation and employer of its donors beginning with her 2012 congressional run. Even so, the agency noted there was $688,000 in contributions where the committee could not fully identify the donors.
Identification appears to remain an issue in at least some cases.
Of the first 100 donors identified in her initial Senate campaign finance report, 31 noted that their occupation and employer information was requested.
That included J. Larry Nichols, a donor who gave the maximum $5,400 and whose Oklahoma City address suggests he is the CEO of Devon Energy, a Fortune 500 company.
It also included H.R. Perot, another maximum donor whose Dallas address suggests it is either the Texas billionaire who twice ran for president in the 1990s or his son.
No such trouble for Sinema
While McSally’s campaign again faces complaints about following FEC rules, it stands in contrast — at least for now — with Sinema’s campaign, which has largely avoided controversy in shifting from running for the House to running for the Senate.
None of Sinema’s donors in her latest Senate report indicated the campaign needed more information from its contributors.
A day after she announced she was running for the Senate, Sinema’s campaign committee, formally changed its name from Sinema for Congress to Sinema for Arizona and made clear she was no longer a House candidate.
McSally and Sinema both hold House seats that are considered competitive, even though both won by double digits in 2016. They have both been among the most prolific fundraisers in the House for years.
In the first three months of this year, for example, McSally raised $3.4 million for her Senate race, including $1.1 million in transfers from her House committee. Sinema raised $2.5 million.
Sinema’s campaign has taken heat for accepting contributions from controversial donors, most notably from the now-indicted executives of Backpage.com. Last year she eventually gave back about $53,000 in contributions tied to the website accused of knowingly accepting ads offering sex with underage girls, but fumbled several times in trying to do so.
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