HARTFORD -- The State Elections Enforcement Commission has issued a legal opinion raising concerns about the state Democratic Party's heavy use of its federally regulated campaign account to collect money from executives of firms with state contracts – who are banned by state law from contributing to Connecticut candidates and party committees.
"Of most concern is the fact that much of the reported fundraising has involved Connecticut state contractors, who are prohibited from making contributions to party committees registered with the SEEC," said the advisory opinion approved at a meeting Tuesday. "It is a matter of great importance to the integrity of Connecticut elections that funds that are generally prohibited from being used in Connecticut elections are not, in fact, used to make expenditures in Connecticut elections."
The opinion doesn't resolve questions created by differing state and federal rules for how a party is allowed to finance a campaign for state offices – including using money from a federal account to pay for a party's expenses as it runs a state campaign, such as the upcoming governor's race.
The commission's opinion didn't mention Democrats or Republicans, and it didn't allege any illegal activity.
However, the opinion appeared to be a response to news reports about the successful fundraising effort by Gov. Dannel P. Malloy and the state Democratic Party. Malloy and the Democrats raised $2 million over the past year for their federal account and much of it came in chunks of tens of thousands of dollars from executives for companies banned from state campaign contributions.
The opinion made an overall declaration about whether funds from the federally regulated account can be used to support – or oppose – candidates for state office. "The answer is that they may not," the opinion said. "Connecticut committees must pay for their expenses for state candidates with money raised within the Connecticut campaign finance system…"
But it left open a number of complicated questions. For example: It acknowledged that the Federal Election Commission requires a party's federal account to be used to pay the salaries of any state party employees who spend more than 25 percent of their time in connection with "federal election activity." That means that the state party's operations can be largely funded by a federal account that's fed by money from state contractors. Those are the special-interest funds that the state's public-financing system originally intended to purge from politics.
The opinion says parties should organize their staffing, where possible, to keep federally- and state-funded activities separate.
The opinion left some questions unanswered. One involved so-called get-out-the-vote efforts on behalf of congressional candidates, for which federal-account funds are used. Getting out the vote for a Democratic congressional candidate can benefit a candidate for state office just as much – such as Malloy, who is expected to seek re-election although he hasn't formally declared his candidacy.
It also doesn't address the question of whether contributions can be solicited for the federal account on behalf of Malloy's re-election – which was how a Northeast Utilities' top executive sought tens of thousands of dollars in donations from his top managers last September. The SEEC now is investigating a citizen complaint that that NU solicitation was illegal.
State GOP chairman Jerry Labriola said that "it's been obvious that Dan Malloy plans to extort campaign cash from state contractors in a pay-to-play shakedown – and that the State Democrats plan to use that money to support his re-election."
Republican gubernatorial candidate Tom Foley said: "The very unusual [SEEC] warning to Governor Malloy for his shaking down state contractors for contributions to the state party is a welcome confirmation that this practice is unacceptable."
State Democratic Party spokesman James Hallinan responded: ""I'm a little incredulous that someone who was just fined by the SEEC would issue the kind of ridiculous statement Tom Foley just issued. Axel Foley has more credibility on SEEC related matters than Tom Foley." Axel Foley was the character played by Eddie Murphy in the movie "Beverly Hills Cop."