October 26, 2016
A joint investigation by MLive and the Michigan Campaign Finance Network recently found that a third of Michigan state lawmakers are connected to “secretive” non-profit and administrative accounts. These accounts are largely funded by corporations, which can’t contribute to campaigns under state law.
Some lawmakers, hoping to avoid the appearance of undue corporate influence, have been quick to clarify that their accounts are used strictly for non-political expenses. But an analysis of IRS records by CREW found that money from administrative accounts connected to two state lawmakers ended up in the coffers of a dark money non-profit that spent hundreds of thousands to influence Michigan elections in 2014.
Prosperous Michigan Fund, an administrative account linked to state Senate Majority Floor Leader Mike Kowall (R), and Michigan Success Fund, an administrative account tied to state Rep. Al Pscholka (R), both contributed to dark money group Michigan Citizens for Fiscal Responsibility (MCFR) between July and October 2014. During that period, MCFR gave $155,000 to a super PAC boosting state Republicans and $135,000 to the Republican State Leadership Committee, which spent on Michigan state elections.
Prosperous Michigan Fund made two contributions to MCFR, totaling $27,500. The timing of the group’s contributions to MCFR suggests the money may have been intended for political use, but passed through the non-profit first in order to obscure the source. Take a July 2014 transaction by the Prosperous Michigan Fund as an example.
On July 29, 2014 state Sen. Kowall’s administrative account gave $20,000 to MCFR:
That same day, Hardworking Americans Committee placed a $33,000 ad buy:
MCFR and Prosperous Michigan Fund both have ties to a self-described “premier Republican communications company” in the state, The Sterling Corporation, further suggesting a political relationship between the two organizations. MCFR’s president, secretary, and treasurer all work for The Sterling Corporation, and Prosperous Michigan Fund paid the firm more than $30,000 for “fundraising consulting” in 2014. As of January, MCFR and Prosperous Michigan Fund were both located at the firm’s address.
In the two weeks leading up to the 2014 elections, the administrative account tied to Sen. Kowall gave another $7,500 to MCFR, while Rep. Pscholka’s administrative account, Michigan Success Fund, chipped in $10,000 on October 27 as the non-profit continued to fund groups boosting state Republicans.
Sen. Kowall seems to have an ongoing relationship with MCFR. MCFR contributed $350 to Prosperous Michigan Fund last October. Then in July, Prosperous Michigan Fund paid MCFR $1,364 for a “travel reimbursement.”
MCFR initially claimed on its 2014 tax returns not to have engaged in any political activity, despite campaign finance reports documenting the group’s contributions to political organizations. A CREW complaint in June prompted the group to amend its returns the next month, admitting to hundreds of thousands of dollars in political contributions, including $75,000 given to the Michigan Republican State Committee. Some of that money appears to have first come from the supposedly non-political administrative accounts of Sen. Kowall and Rep. Pscholka.