December 4, 2003

Campaign finance loopholes scrutinized

By David Steves 
The Register-Guard

SALEM - Prompted by a complaint that Kevin Mannix's gubernatorial campaign hid the names of contributors, Secretary of State Bill Bradbury announced Wednesday plans for a panel to scrutinize loopholes in Oregon's campaign finance disclosure laws.

The panel will recommend election law changes to the 2005 Legislature. Given that Oregon's constitution allows for limitless contributions to candidates and ballot-measure campaigns, Bradbury said it was critical to ensure the public's right to the identity of political donors and the full amount of their contributions.

"The point is so that people know before they vote who's contributing how much to various candidates," the Democratic officeholder said.

The announcement came a week after Bradbury, the state's top elections official, dismissed a complaint against Mannix, alleging he had skirted the state's contribution disclosure law by funneling $50,000 in contributions through political action committees to Mannix's candidate fund in order to hide the donor's identity. The complaint was filed by Richard Burke, a campaigner for Libertarian gubernatorial candidate Tom Cox, who ran against Mannix and Democratic nominee Ted Kulongoski.

The complaint's dismissal followed the advice of a Bend lawyer hired by the state Attorney General's Office to investigate the matter. The attorney, H. Robert Hamilton, reviewed contribution records from Mannix's 2002 gubernatorial campaign, his 2000 attorney general campaign and for two political action committees controlled by Mannix: Justice For All II and Workers Compensation Progress.

In his review, Hamilton found that three companies associated with now-deceased Portland businessman Robert Randall made nine contributions totaling $50,000 to the two noncandidate PACs controlled by Mannix - and that within 24 hours, the two PACs had transferred $25,000 apiece to Mannix's campaign.

That confirmed Burke's contention, as well as the findings of a news report in The Oregonian newspaper.

In addition, the review found that Randall had made two previous contributions, of $5,000 and $7,500, to the Justice For All II PAC, which in turn made a $5,000 loan payment to Mannix's law firm and a $7,500 contribution to Mannix's 2000 attorney general campaign PAC.

Hamilton found other contributions passed through Mannix's noncandidate PACs to mask donors' identities. Within two days after Alan James of Oregon City loaned $25,000 to the Workers Compensation Progress PAC, that PAC transferred $24,500 to Mannix's gubernatorial campaign and $500 to his Justice For All II PAC.

The accounting tactics allowed Mannix to avoid publicly disclosing the identities of contributors to his gubernatorial candidacy, Hamilton agreed. However, such tactics were allowable under Oregon elections law, he concluded.

Mannix said the bottom line was that he had done nothing wrong.

He said Randall had told him he wanted to give the money to the two PACs, rather than directly to his campaign for governor "to show support for the work I've done on criminal justice and workers compensation reform," not to mask his contributions.

Mannix, currently the chairman of the Oregon Republican Party, said he opposed efforts to prevent contributors from giving money to PACs, including those controlled by candidates such as his, which in turn pass that money through to candidates.

He said the state instead should develop a better means of electronically compiling contribution data so people can use the Internet to see how money makes its way from donors to campaigns.

Janice Thompson, a campaign-finance reform advocate who runs the Portland-based Money In Politics Research Action Project, said she, too, would like to see the state improve the electronic campaign finance reporting system. But she said Oregon's system is weak because elected officials haven't been willing to pay for such an upgrade.

"It's lip service when elected officials and politicians say 'We want electronic reporting,' but they don't come up with the money to pay for it," she said.

Thompson said better electronic disclosure should be accompanied by Bradbury's effort to tighten election-law loopholes.

WHAT'S NEXT

Secretary of State Bill Bradbury will name members to a nonpartisan panel to examine campaign finance loopholes next year. It will recommend legal changes to the 2005 Legislature.