The Ohio Republican Party has agreed to pay a $100,000 fine by the Federal Election Commission for illegally using state money in federal campaigns.

The cash was used to hire FactGem, a data company run by Megan Kvamme and her husband, Drive Capital founder and former JobsOhio director Mark Kvamme, who was a close associate of former Ohio Gov. John Kasich.

In 2014, The Dispatch reported that the Ohio GOP had $1 million budgeted for the effort run by the high-tech start-up and paid $50,000 a month to help Kasich win re-election in 2014 and possibly to assist his 2016 presidential campaign.

“Consider Ohio a big test run for this project — if it works, it goes national,” a Republican insider said at the time.

The Ohio GOP chairman at the time, Matt Borges, told The Dispatch in 2014 that he first approached Mark Kvamme late in 2012 because of Kvamme’s background. The California venture capitalist, whom Kasich brought to Ohio in 2011 to start the state's new privatized economic development effort, helped shape LinkedIn, the social promotion site for business professionals.

In March, the federal election panel found "reason to believe" that the Ohio GOP broke federal campaign finance laws. An ensuing investigation led to a conciliation agreement with the state party last month that was made public Friday.

The original complaint was filed by the Ohio Democratic Party.

The Democrats' communication director, Kirstin Alvanitakis, said “First Steve Chabot and Dave Joyce can’t keep track of their donors’ money. Now we see the Ohio GOP illegally gave more than half a million dollars to a Kasich crony for an unusable database. Why would any donor trust Ohio Republicans with their money?”

Joyce, a GOP congressman from northeast Ohio, saw his former campaign treasurer plead guilty to embezzling $160,000 of campaign funds last month. Chabot, a Republican congressman from Cincinnati, learned last week that authorities are investigating the theft of $100,000 from his campaign coffers.

In a statement, Ohio GOP executive director Rob Secaur noted that the Kvamme violations happened in 2014. That was well before current party leader Jane Timken ousted Borges in early 2017 in a power struggle between President-elect Donald Trump and Kasich, who had installed Borges.

"The violation involved improper payments for a failed data project; this violation was separate from several other FEC violations which are no longer pending that occurred during Matt Borges' tenure," Secaur said. "We are pleased that this issue is resolved and now the ORP is in good standing with the FEC.”

Mandi Merritt, spokeswoman for the Republican National Committee, said in a statement: "It is disheartening to know that this incident would have happened under former Chairman Matt Borges’ tenure. Chairman Timken has been a fantastic advocate for President Trump and our party, and we can't think of anyone to better help deliver the state's 18 electoral votes for us in 2020."

In November 2013, Borges hired FactGem for $50,000 a month for "Project Ruby," a proposed database that could be tapped to drive voter turnout by the GOP. While the information was used in campaigns for federal offices, about $490,000 of the $568,500 used to pay for it came from non-federal sources, the FEC found.

The distinction is important because federal money has restrictions such as limits on the size of contributions, while non-federal money does not.

The commission also ordered the party to shift $490,000 in internal accounts to satisfy federal election law.

And the Ohio Republican Party was told to "cease and desist" from breaking the law, with a warning that the federal agency could re-open the case and impose more penalties.

The state GOP said it has gotten rid of Borges, instituted rules that require broader approval for party expenditures, implemented "robust" record-keeping and document retention policies, and enacted disciplinary procedures for any party staffers violating the new rules.

An attempt to reach Borges was unsuccessful.

drowland@dispatch.com

@darreldrowland