Dueling Lawsuits Challenge PACs

     RALEIGH, N.C. – Two lawsuits, one against the Republican Governors Association and one against the Democratic Legislative Campaign Committee, accuse the organizations of illegally funneling money to Political Action Committees in North Carolina. Both PACs have raised lots of money, but plaintiffs claim neither has reported spending money on fund raising.

     In the case against the Democrats, Kimberly Hendrix and the Pitt County Republican Party sued the Democratic Legislative Campaign Committee and DLCC North Carolina PAC. The Republicans accuse the Washington, D.C.-based Democratic Legislative Campaign Committee, a 527 group not regulated by the Federal Elections Commission, of taking corporate donations and sending more than $1.5 million to the North Carolina PAC.
     The plaintiffs claim the organization in Washington collects the money from donors and makes no mention of the North Carolina group to which it sends the money, which would be illegal for the PAC to raise, to North Carolina.
     The Republicans accuse the two organizations of breaking state elections law by taking illegal corporate contributions and making and accepting contributions in another’s name. It alleges that the North Carolina PAC filed incomplete and misleading disclosures with the state and the 527 group didn’t file any disclosures.
     The plaintiffs want an injunction to stop the North Carolina PAC from accepting contributions and the two groups to stop trying to affect elections in North Carolina until they comply with elections law. The plaintiffs, represented by Kieran Shanahan of Raleigh, also want a declaratory judgment that the 527 group is an alter ego for the North Carolina PAC.
     In the case against the Republicans, a voter in Wake County sued the Republican Governors Association, RGA North Carolina 2008 PAC and the State Board of Elections for similar reasons.
     Carolina Valand says the RGA, another DC-based 527 group, takes corporate contributions and sends the money to the North Carolina PAC. The complaint, filed in Wake County Court, claims the PAC has raised more than $387,000 without reporting any fund-raising expenses. The group pays for an advertising campaign supporting Republican Pat McCrory’s bid for governor.
     The state Board of Elections held a hearing on the case against the Republicans this month and elections officials testified that the two organizations were breaking the law, but the board dismissed the petition. Valand wants the Board of Elections dismissal overturned, and a temporary restraining order and injunction to stop the North Carolina PAC from taking any more money from the 527 group and from spending any more of the money it has received.
     Valand is represented by Hill Allen with Tharrington Smith of Raleigh.

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