Hearing Report Raises Serious Questions about Super PAC Tied to Rauner

Hearing Report Raises Serious Questions about Super PAC Tied to Rauner

UPDATED: According to board chairman, Charles W. Scholz, the board found that "Yes, they [Liberty Principles PAC] did not have a 'paid for by' [disclaimer] and so that complaint was filed on justifiable grounds, and yes, they coordinated so that complaint was filed on justifiable grounds so why would we go to public hearing because all the facts in this were contained in the fake newspaper that we all had in front of us. That's what we made our decision on." (Both the general counsel and hearing officer for the elections board had serious concerns about Liberty Principles PAC's statements and recommended the case proceed to public hearing.) The board also agreed that if every super PAC did what Liberty Principles PAC did, it would open up a pandora's box of campaign finance abuse. Complainants Jonathan and Clair Kaye can now proceed to judicial review of the case and file a lawsuit in district court to obtain relief. Given the breadth of federal case law on independent expenditure committees and coordination, a court action could signal trouble for Liberty Principles PAC. (The original March 14th order against Liberty Principles PAC stated that both complaints were filed on justifiable grounds yet no penalty or fine was levied against the PAC.)

A closed hearing report from the State Board of Elections raises troubling questions about Liberty Principles PAC, an independent expenditure committee, which received $1.8 million during the primary from Gov. Rauner's Turnaround Illinois committee. Rauner's PAC is also funded by former Chicago Tribune owner Sam Zell.

Did election officials give Liberty Principles PAC a pass on campaign violations? If so, why?

If you want to hear more about this Rauner-tied PAC's insider dealings and the public hearing that has been scheduled for Friday, read on.

To date, four campaign finance complaints have been filed against Liberty Principles PAC, run by Dan Proft, a Cicero political operative, alleging "coordination" between the PAC and its supported candidates during the primary. "Coordination" is prohibited under Illinois campaign finance law.

The complaints concern Liberty Principles PAC's use of political mailers disguised as weekly newspapers to support candidates and attack their GOP opponents for office. The PAC hired Newsinator LLC, run by former Illinois GOP chairman Andy McKenna, which "interviewed" candidates the PAC was supporting in the March primary. The articles were then "published" in newspaper form and mailed by Liberty Principles PAC to voter households across eight legislative districts.

On March 14th, in two of those cases, the Illinois Board of Elections overruled recommendations of both its hearing examiner and the board's general counsel in a stunning 7-0 unanimous decision (Coffrin abstaining), but few, if any, in the media ever questioned why.

In fact, some media even laughingly dismissed the complaints. Clearly, they aren't doing their job.

Former Republican candidate, Jonathan Kaye, one of the complainants, has filed a motion to reconsider, charging that members of the elections board, appointed by Gov. Rauner, should have recused themselves in the case. The motion has forced the case to public hearing on April 15th - something that was recommended by the hearing examiner, but overruled, in the board's order.

Kaye has a point: Board member Bill Cadigan served on Rauner's gubernatorial transition team and, as revealed in the case transcripts, could have passed as co-counsel to Liberty Principles PAC's Christine Svenson.

But the March 15th hearing also left key issues in the complaint unresolved.

Hearing officer Kim Patrick clearly didn't buy the PAC's argument that it had no control or approval of the content included in the newspapers. The only candidates "interviewed" by the fake newspapers, intended to confuse the public, were the candidates Proft's PAC supported, including Dan McConchie, Allen Skillicorn, Reggie Phillips, Mike DeSutter, and Paul Schimpf. The PAC's fake newspapers also attacked the GOP opponents of these same candidates.

Patrick argued in her report:

The Committee's claim that it has no control or approval of the content included in the newspapers is, frankly, difficult to believe. Additionally, the exact nature of the working relationship between the Committee and Newsinator LLC is not clear, nor is the nature of the Newsinator service itself. It is therefore difficult to determine if, by employing Newsinator, the Committee is in fact coordinating its expenditures with candidates. There are enough unanswered questions to support a recommendation for this part of the complaint to move to a public hearing.

Patrick also questioned whether Liberty Principles PAC's spending should be considered in-kind contributions instead:

If then, the newspapers are not in fact independent expenditures, this raises additional questions and concerns including: the legality of an independent expenditure committee such as Liberty Principles PAC engaging in non-independent expenditure spending; whether the spending should instead be considered as in-kind contributions to the candidate(s) involved; and whether the penalties for such activity described in Section 5/9-8.6(d) should apply.

However, in its final order, the board completely disregarded Patrick's concerns. Citing confusion, election officials skirted the question and recommended formulating a new "rule" instead:

The PAC shall include a proper attribution of source on all future materials, and any repeat violation of Section 9.5(a) may subject the PAC to a civil penalty not to exceed $5000.00; and neither issue raised (attribution of source or improper coordination with candidate) shall proceed to public hearing.

If this isn't "coordination," what is? Can an independent expenditure committee simply use a paid agent - in this case the former head of the Illinois GOP - to bypass campaign finance laws against "coordination"? Or did the board just make a special exception for this PAC tied to Bruce Rauner? Are election officials selectively prosecuting cases? And what is Rauner's response to this?

Election officials have not cited this kind of "confusion" on other campaign finance complaints.

The Illinois Board of Elections has discretion to penalize campaign violators with heavy fines ranging from 10% to 150% of donations. For instance, Kim Foxx's campaign for state's attorney was recently fined more than $19,000 for failing to disclose a $25,000 poll paid by County Board President Toni Preckwinkle.

Yet Liberty Principles PAC didn't even receive a slap on the hand - even on its violation of the statute regarding "paid for by" disclosure.

In the recent primary, Gov. Rauner and his shady surrogates spent millions on high-profile proxy wars and only ended up with rotten egg on their faces.

As one Springfield blogger put it, "Everyone with even semi-honest eyes could see that Rauner was a big loser. He [Rauner] won several other [GOP] primary races, but he basically steamrolled a bunch of unprepared amateurs with overwhelming financial resources and (in most cases) viciously negative ads."

One of those "amateurs" was Kaye, who despite being attacked by Liberty Principles PAC (and having few resources to defend himself) received 40.4% of the vote in his race. His complaint deserves an unbiased hearing.

Will Kaye finally receive justice at the public hearing? Don't count on it.

But he might in the court of public opinion.

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