1st District hopefuls file finance reports
Dispute breaks out over McDermott campaign donations
Campaign finance reports for five of the 14 Democratic candidates running for the 1st Congressional District seat have been released, showing Hammond Mayor Thomas McDermott Jr. with a lead and an accusation from one of the other dozen Democratic challengers.
As of Dec. 31, 2019, McDermott raised $170,779.80; State Rep. Mara Candelaria Reardon, D-12th, raised $98,692; attorney James Harper raised $84,993.62; North Township Trustee Frank Mrvan raised $53,916; and Gary investor and attorney Sabrina Haake raised $40,867.09, according to the Federal Election Commission. The five are all Democrats.
By comparison, U.S. Rep. Pete Visclosky, D-Gary, who is not seeking reelection, has $606,791.09 in his campaign fund, according to the FEC.
Not all candidates filed reports. Three of the six Republican candidates — Delano Scaife, Dion Bergeron and Mont Handley — filed reports but show no funds.
While the candidates accepted some money from associates and committees they are affiliated with — Harper received $1,000 from Robert P. Harper of Harper and Harper LLC, and Haake, who campaigned for Gary Mayor Jerome Prince, received $1,000 from the Committee to Elect Jerome Prince — Harper recently called out McDermott for a $1,000 donation he received from his mayoral campaign and a number of donations from city employees.
McDermott “has a history of coming close to and crossing the line when it comes to campaign finance,” and most recently he violated the FEC disbursement and transfer rules, Harper said.
“It is important that voters in
Northwest Indiana know that their representatives are going to follow the campaign finance rules, and the mayor hasn’t done that,” Harper said. “A small violation of the law is still a violation of the law.”
On Nov. 20, 2019, the Committee to Elect Thomas McDermott for Mayor gave $1,000 to McDermott for Congress, according to FEC data.
McDermott said “everything (he) did was 100% legal,” adding that the $1,000 from his mayoral account was a donation not a transfer.
“I can’t transfer $175,000 from McDermott for Mayor into McDermott for Congress; that is not allowed. However, McDermott for Mayor has the right, just like anybody else, to donate $1,000 towards McDermott for Congress, and it did,” McDermott said.
McDermott said his team spoke to the FEC Monday about the transfer “and they said there is no advisory opinion that goes against what happened.”
The FEC cannot make a ruling because it does not have enough commissioners for a quorum, Eleanor Powell, associate professor of political science at the University of Wisconsin
Madison, said. Currently, the FEC has three commissioners, with three vacant seats, and four commissioners are needed for a quorum, she said.
“They couldn’t make a ruling, so it’s not necessarily that it is allowed but they can’t make a ruling saying it is not allowed … because they lack enough people to be able to make rulings right now,” Powell said.
Powell said there are many gray areas in campaign finance rules. An individual can donate up to $2,800 per election to a candidate, but “there are all sorts of ways you can increase those numbers,” Powell said.
Political action committees can be formed, which benefit candidates because a PAC can donate $5,000 per election, Powell said.
But, “where things get even messier” is the creation of Super PACs, which can indirectly spend unlimited amounts of money on a candidate, like airing advertisements, without coordinating with the campaign, Powell said.
FEC rules about making disbursements and transfers state “a candidate’s authorized (federal) committee may not accept funds or assets transferred from a committee established by the same candidate for a nonfederal election campaign.”
“This is sort of an odd part of campaign finance rules, where if (a candidate) were transferring money from a campaign committee for a different federal office, that would be allowed,” Powell said. “Because the states all have their own diverse campaign finance rules, you can’t transfer money from a nonfederal account to a federal account, because often the same rules wouldn’t have applied in terms of how that money could be used.”
The FEC disbursements and transfers rules state that “at its option, however, a non-federal committee of the same candidate may refund its leftover funds to its contributors and may coordinate arrangements with the federal campaign for a solicitation of those same persons.”
Which means, Powell said, that “the cleanest, most above board” way to shift money from a mayoral campaign to a federal campaign would be to return the money in the mayoral campaign to the donors and then the donors could donate the money to the federal campaign.
Powell said the FEC created this rule because some states don’t have contribution limits, which contradicts with federal contribution guidelines.
Additionally, at least five city employees have donated to McDermott for Congress, giving anywhere between $250 to $1,000, according to FEC data. Multiple Lake County elected official committees, including Oscar Martinez for Sheriff and Citizens to Elect Dave Uran, donated mostly $1,000 to McDermott for Congress.
McDermott said he will accept money from PACs because “it takes money to run for Congress, and it takes money to win.”
“If employees want to give money to the person running for Congress, and that’s their mayor, they have the right to do so. They are Americans just like anybody else. I did take some PAC money, and I’ll continue to take PAC money,” McDermott said. “I don’t necessarily agree with the FEC’s rules on how much money you could raise. I don’t love campaign finance the way it is right now, but these are the rules and I follow the rules.”
Candidates can follow the law by checking campaign finance rules ahead of time and participate in FEC training sessions to ensure campaign contribution are legal, Powell said.
“It’s hard enough to adhere to the rules as written, and if you go into these gray areas it can get pretty messy,” Powell said.