Watchdog Accuses Key PAC in Alabama Race of Hiding Donors

(CN) – Worried other political action committees could follow suit in the midterm elections, a campaign finance watchdog complained to the Federal Elections Commission that a PAC supporting Democratic U.S. Senator Doug Jones misreported millions of dollars in contributions in last year’s Alabama special election.

Democrat Doug Jones speaks Tuesday, Dec. 12, 2017, in Birmingham, Ala., after winning Alabama’s special Senate election. (AP Photo/John Bazemore)

In a complaint filed Monday, the Campaign Legal Center claims super PAC Highway 31 avoided disclosing the names of its pro-Jones donors by listing its ad buys and other expenditures in its reports to the FEC as debts.

It wasn’t until after the closely watched special election in Alabama between Jones and Republican Roy Moore that the PAC revealed most of its cash came from Senate Majority PAC, which was formed in 2011 with the goal of seating Democrats in the U.S. Senate.

CLC’s media strategist Corey Goldstone said in an emailed statement, “CLC fears that if the FEC allows Highway 31 to get away with this secrecy scheme, other campaign operatives in the 2018 midterms will use this model to keep the names of their billionaire donors secret and further exploit the system to their own benefit.”

A large turnout by black voters carried Jones to victory in the special election held last December to fill the vacancy in the Senate left by U.S. Attorney General Jeff Sessions.

In the month leading up to the election, Highway 31 – named for the Alabama route that offers a path between Mobile, Montgomery and Birmingham – was one of the biggest spenders in support of Jones and against Moore, who was accused by several women of engaging in sexual impropriety with them decades ago when they were teenagers.

Birmingham attorney Edward Still, who is listed in the FEC complaint as treasurer of Highway 31, declined to comment.  The PAC’s executive director Adam Muhlendorf did not respond to a request for comment by press time.

According to CLC’s complaint, Highway 31’s run began on Nov. 6 and ended Jan. 19. In November, it started recording expenditures: $800,000 to Bully Pulpit Interactive and $3,475 to Denise Nelson Voiceovers, for example.

Still, the amount of money coming in and the contributions it received were reported as zero.

“It is hard to believe that the vendors here would, in the ordinary course of business, extend hundreds of thousands of dollars in credit to an entity that was formed just two weeks earlier and had a total of $0 in its bank account,” the complaint states.

When the pre-special reporting period closed on Nov. 22, Highway 31 reported it racked up $1.2 million in debt and still had no contributors.

Then, two days after that reporting period closed, Senate Majority PAC dropped $1.2 million in Highway 31’s coffers, according to the complaint, which was used to repay its debts.

By the time the polls in Alabama opened on Dec. 12, Highway 31 had injected $4.2 million into the race without disclosing who had given it the cash, the complaint alleges.

“When national groups flood states with campaign cash in the last month, voters should know who is seeking to influence their vote,” CLC’s Goldstone said via email.

Weeks later, Highway 31 filed a year-end report with the FEC on Jan. 19. Among its 43 pages, Highway 31’s report finally revealed that Senate Majority PAC gave almost $3.2 million, Priorities USA donated $910,000 and League of Conservation Voters contributed $250,000. That same day, Highway 31 issued a termination report.

“Democrats talk the talk about supporting transparency in political money, but then national Democratic groups push aggressive new legal theories to undermine the transparency laws that are on the books,” Brendan Fischer, CLC’s director of federal and FEC reform, said in a statement.

The complaint argues Highway 31 should have disclosed guarantees of payment and extensions of loans in their reports to the FEC, per the Federal Election Campaign Act.

Besides calling on the FEC to investigate Highway 31, the CLC’s filing said the agency “should seek appropriate sanctions for any and all violations, including civil penalties sufficient to deter future violations.”

However, that could be a challenge.

“The agency is mired in gridlock and has yet to take action on many outstanding complaints,” Goldstone wrote. “With the 2018 midterm election approaching, it’s more important than ever that the FEC enforce the law so candidates do not feel free to commit the same violations.”

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