Michigan Gov. Whitmer use of loopholes to raise millions attracts scrutiny

Oct. 25: Whitmer blows past donor limits, raises more than 9 GOP candidates combined
Oct. 15: Michigan Gov. Whitmer may have to return or donate millions in contributions
Sept. 21: Michigan Republicans sue over Gov. Whitmer fundraising loophole

LANSING— About $3.4 million collected by Gov. Gretchen Whitmer’s campaign could be in jeopardy if a campaign finance complaint filed by a conservative group is successful.

The Michigan Freedom Fund filed a complaint with the state Bureau of Elections Wednesday that alleges the first-term Democrat violated campaign laws on its way to raising a record $8.6 million from Jan. 1 to July 20. The complaint seeks sanctions.

Whitmer’s campaign makes no secret that it is using a 1984 ruling that exempts candidates facing a recall from limiting individual contributions to  $7,150 per donor.

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“Gov. Whitmer is deliberately breaking the law and illegally taking millions of dollars... because she believes the rules don't apply to her,” said Tori Sachs, executive director of the Michigan Freedom Fund.

According to Monday’s campaign disclosures, 154 donors contributed more than the state’s $7,150 individual campaign limits. Some of them include Mark Bernstein, a personal injury lawyer and a member of the University of Michigan Board of Regents ($257,150), and Illinois Gov. J. B. Pritzker ($250,000).

Mark Fisk, spokesperson for Whitmer’s campaign, called the complaint “bogus” and “completely ludicrous and without merit.”

“There have been nearly 30 recall petitions filed against Gov. Whitmer and governors under threat of recall are exempt from campaign finance limits to defend themselves,” Fisk told Bridge Michigan in an email Wednesday night. 

The original ruling

The ruling used by the Whitmer campaign was signed in 1984 by former Democratic Secretary of State Richard Austin. 

It was a response to a request from then-Oakland County Prosecutor L. Brooks Patterson, a Republican, for clarification on whether state Sen. Phil Mastin, D-Pontiac,  could exceed campaign finance caps because he was facing a recall.

Austin ruled that campaigns could exceed contribution limits — which at the time were $450 for individuals — if the money went to fend off a recall. He argued that was fair because committees to recall candidates aren’t subject to donation limits.

The ruling hasn’t been challenged in court. The Michigan Freedom Fund claims the loophole is inapplicable because none of the recall efforts against Whitmer can be considered “active,” since none have made it past  the state Board of Canvassers.

“It is absurd for anyone to believe that any of the proponents of these recall petitions against Gov. Whitmer were actively seeking a recall election,” the complaint read.

The Michigan Freedom Fund, which has ties to the DeVos family in west Michigan, also claims that Secretaries of State don't have the authority to amend or interpret the Michigan Campaign Finance Act.

The current Secretary of State, Jocelyn Benson, is a Democrat and Whitmer ally. Her spokesperson, Tracy Wimmer, said complaints go through a review process “and we typically don’t comment during that period.”

Experts disagree

Any ruling could have far-reaching consequences, potentially opening the door for future governors to circumvent fundraising limits and getting huge head starts on opponents.

Since the early 1990s, every governor of Michigan has faced a recall petition at one time or another — but  neither Republicans Rick Snyder and John Engler nor Democrat Jennifer Granholm used the ruling to exceed campaign limits.

Fisk told Bridge Michigan the excess contributions “can be used to fight the recalls or if the funds are not used, they can be legally transferred to another account.” 

But experts told Bridge that Whitmer might have to return any money not used to defend herself from recalls.

“If there's ultimately no recall election, she has to either return the money or contribute it to some other legal purpose,” said Mark Brewer, an attorney and former chair of the Michigan Democratic Party.

“So this is not money that she's going to be able to use next year in the general election.”

If the campaign spends the money for something other than fighting recalls, it could be violating the law, said Richard Hall, a professor of public policy at the University of Michigan.

He added that Austin’s ruling appears at the very least to violate the spirit of the Michigan Campaign Finance Act and likely will take a court to resolve.

“If you agree that limits on campaign contributions to candidates is a good thing, as I do, then this is clearly circumventing those laws,” Hall said.

He added a court may have to decide whether Austin’s ruling violated the plain language of the Michigan Campaign Finance Act, or was needed because the law was too ambiguous. 

Others disagreed.

Bob LaBrant, a longtime Republican strategist, predicted Austin’s ruling would remain and opponents of it would have better luck petitioning the Legislature to ban the campaign cap exception.

He said recall organizers need to be better prepared.

“My response to that is, well don't go to the State Board of Canvassers until you line up your funding,” LaBrant said. “Because you have a very limited timeframe to collect signatures.”

Democratic attorney Steven Liedel, who served as counsel for Whitmer’s transition team, said it is “disingenuous” for the Freedom Fund to argue that Benson or other Secretaries of State don’t have the power to issue campaign finance rulings.

“Republicans over the years have requested dozens of them, “ Liedel said. “People are entitled to rely on them.”