Some lame duck politicians still collecting campaign cash

He spent slightly more than $100,000 from his campaign fund last year, including $1,400 spent in a single day at Fabiano's Candies in Lansing. Records show Kahn bought the candy as gifts for those attending a Valentine's fund-raiser Feb. 9.

Other expenditures included about $22,000 in payroll charges, bookkeeping help and reimbursements for staff expenses such as mileage; $20,000 he gave to the Senate Republican Campaign Committee; about $19,000 he reimbursed himself for short-term loans to his campaign fund; about $9,800 for food and meals, and about $6,400 for hotel rooms and meeting rooms for fund-raisers.

Though some states have tighter spending restrictions, such expenses are legal under Michigan's campaign finance law.

"I'm very comfortable with having to justify any expenditures made," Kahn said.

Kahn reported reimbursing himself about $19,000 in "in-kind" loans in 2011 after buying items for his campaign committee. But only about $4,000 worth of those reported expenditures specified what was purchased.

Fred Woodhams, a spokesman for the Michigan Secretary of State, said officials were still reviewing Kahn's 2011 report Friday, but if he failed to detail what was bought with the in-kind loans, he violated reporting rules.

"Those records are available," Kahn said Tuesday, adding that he wasn't aware of any problems with the report.

Breaking the rules?

Kahn said he's still eligible to run for the state House or might seek another state office. In both cases, he would be able to shift money from his Senate fund to another state-level campaign committee, though donors who gave him money in 2011 would have to count those donations against what they could give him for any new office.

Kahn said he is also considering a 2014 challenge to U.S. Sen. Carl Levin, a Democrat from Detroit. If he does, he can't shift money from his state campaign fund into a federal campaign account.

Though Kahn is still weighing his options, other lame-duck lawmakers have made up their minds.

"I'm running for the (state) Senate," Rep. Chuck Moss, R-Birmingham, said of why he continues to raise money for his state House account when he is serving his third and final term.

Moss, who chairs the House Appropriations Committee and raised about $57,000 for his campaign committee in 2011, said he tells potential donors their money will support his bid for an Oakland County Senate seat. He said $10,000 his committee paid to Marketing Resource Group, a political consultant, in May 2011 was related, at least in part, to his Senate campaign.

Asked why he hasn't formed a Senate campaign committee, Moss said it relates to the timing of his announcement.

Chris Thomas, director of the state's Bureau of Elections, said although transfers of funds from one committee to another are permitted, "you don't get to use your House candidate committee as a fund-raising vehicle for another office." Once candidates decide what office to seek, they are required to set up a new committee to handle finances for that office, he said.

Moss said Wednesday he didn't know that, and that if there is a problem, he will fix it.

Robinson, the campaign watchdog, said he believes many lame-duck lawmakers break the rules by using their existing campaign committees to raise and spend funds for a future office because they don't want to make their plans public.

State oversight lacking

Officials in the Bureau of Elections are supposed to flag problems with campaign finance reports by sending the committee an error or omission notice.

Robinson said the bureau doesn't have enough staff to scrutinize the thousands of reports it gets each year and expenditures get little oversight.

Thomas also said he doesn't know whether the reports get as much scrutiny as they should.

A Free Press review of reports for 2011 filed by lame-duck lawmakers turned up several apparent or possible problems that weren't flagged by state officials:

• Sen. John Gleason, D-Flushing, who can't seek another Senate term but said he plans to run for Genesee County clerk, reported spending $6,385 from his Senate campaign fund in 2011 for magnets, bumper stickers and buttons. Gleason said many constituents like to collect campaign paraphernalia as souvenirs.

• Moss reported spending $850 from his House campaign fund in August to cover filing charges with the U.S. Treasury Department for setting up a nonprofit organization. He told the Free Press he created the Forward Michigan Foundation under Section 501(c)(4) of the Internal Revenue Code to accept corporate donations and perform good works to assist in reinventing Michigan.

• Sen. Tupac Hunter, D-Detroit, who can't run for the Senate again and withdrew from the Wayne County treasurer's race, reported $7,200 in payments in 2011 to Detroit-area political consultant Eric Foster and his firm. Hunter also reported $4,100 in car repairs and about $6,300 for two years worth of auto insurance payments. Hunter said the consulting expenses were legitimate because they paid for polling and advice related to his office, not to a future race. The auto expenses are allowed because he uses his vehicle almost exclusively for commutes and constituent business, he said.

• Rep. Kenneth Horn, R-Frankenmuth, who won election in 2010 to his third and final House term, reported spending $572 in June 2011 at a custom apparel shop in his home district. His report described the expenditure as "apparel for Ken's campaign." Horn did not return a phone message, but one of his staffers said the campaign bought shirts with Horn's name on them for volunteers to wear at a parade.

Woodhams said all of the expenditures are OK if they meet the definition of "incidental office expenses."

What the law allows

Hunter said lawmakers can't be criticized for following the law as it is written.

In Montana, surplus campaign funds can be moved into a constituent-services account after an election, but checks can't be written from both a campaign account and a constituent account, which can't be used to pay consultants or pollsters, said Mary Baker, program supervisor for Montana's commissioner of political practices.

Officeholders are encouraged to close their campaign accounts soon after an election, and they can't move funds from one campaign account to another, as they can in Michigan, she said.

Thomas, the elections director, declined to say whether Michigan needs tighter controls.

Even today, Michigan's Campaign Finance Act of 1976, which predates the term limits for state lawmakers that voters approved in 1992, does not clearly allow for fund-raising by lawmakers who can't be re-elected.

The act defines a political contribution as "a payment ... or donation of money or anything of ascertainable monetary value, or a transfer of anything of ascertainable monetary value to a person, made for the purpose of influencing the nomination or election of a candidate."

The Free Press found a ruling from 1978 by former Secretary of State Richard Austin that says a "fund-raising event" does not include events from which the proceeds are not used to influence elections. That could suggest lame-duck lawmakers can't hold fund-raisers.

However, "There is no express prohibition against a term-limited official continuing to hold fund-raisers," said Gisgie Gendreau, a spokeswoman for the secretary of state.

Declaratory rulings have the force of law for the particular situation in which the request for the ruling arose, though not necessarily in a broader context.

Thomas said he's confident lame-duck lawmakers are entitled to raise funds to pay off campaign debts and pay incidental office expenses. If contributions to lame-duck lawmakers didn't fall under the definition spelled out in the act, it could mean the contributions they receive wouldn't have to be publicly reported, he said.