Supporters of Betsy DeVos and her opponents are battling over unpaid fees against the now dormant group All Children Matter Inc., which she led. | Getty DeVos paid legal fees, but not election fine, for Ohio school choice group

When the now-dormant school choice group that Betsy DeVos led until recently needed money to pay its legal fees, she wrote a check. But the GOP mega-donor hasn't helped the group pay a $5.3 million fine that a judge ordered it to pay to the state of Ohio.

Some Senate Democrats are making the unpaid fine a political issue, accusing DeVos of acting as if she’s above the law. DeVos supporters, meanwhile, have questioned whether the fine is proper in the first place, and stress that DeVos is not personally liable for the debt.


There's nothing wrong with paying the attorneys first, legal experts say. But they say the case highlights how difficult it can be to hold politically active groups accountable.

DeVos’ group, All Children Matter Inc., along with two of its affiliated political action committees, were fined $5.3 million in 2008 for breaking Ohio elections law. State election officials found that the group had funneled $870,000 in contributions to its Ohio PAC from its Virginia PAC, skirting a $10,000 cap on contributions in Ohio. The state commission told POLITICO that DeVos' group initially asked Ohio if the transfer would be permissible. Elections officials advised they did not consider it legal, but the advocacy group did it anyway.

All Children Matter and its PACs haven’t paid the elections fine, which includes a $25-per-day late fee dating back to when the fine was first levied, in 2008. But with DeVos’ help, the group paid $28,500 to an Indiana law firm after a judge found the group liable in 2013. The Indiana attorney assisting the group was Jim Bopp — the attorney who spearheaded the landmark Citizens United case.

DeVos was not personally named in the case, but she was director of the group for more than a decade, until November when President Donald Trump tapped her to lead the Education Department.

Sen. Tom Udall (D-N.M.), who joined three other Democrats and independent Sen. Bernie Sanders in requesting that DeVos pay down the fine, told POLITICO that if DeVos and her husband, Dick, could contribute funds to help the group pay for legal fees, they surely could contribute to help pay the penalty for what he called “blatant campaign violations.”

“This is a troubling approach to the legal system that makes it look like because they believe they are right on the policy issues, they also believe the law shouldn't apply to them,” Udall said. “That's not how the world works for the rest of the 99 percent of regular people, who don't have the luxury of walking away from their debts, including the student loans Ms. DeVos would oversee as Education secretary.”

Bopp called it "blackmail" for the senators to ask DeVos to pay a fine she's not "legally responsible for or morally responsible for." He argued that if DeVos were to give the group $5.3 million to pay the fine, it would violate the same $10,000 contribution cap that led to the fine in the first place.

“If some senator thinks that I’m going to advise Betsy DeVos to make a $5 million illegal contribution to an Ohio PAC, they are nuts. That is illegal," Bopp said. "It would be illegal for her to make that contribution by paying the judgment. That would be illegal and she would be subject to civil and criminal penalties for doing that.”

The Ohio elections commission that levied the fine said that's not the case.

"If that money is paid, in terms of paying off a fine to the AG’s office, then it’s not a contribution," said Philip Richter, executive director and staff attorney at the Ohio Elections Commission. "It’s paying an outstanding debt that the committee owes to the state of Ohio."

State officials, however, said they made little effort to collect the fine because they believed the group was defunct and had no assets.

Lloyd Hitoshi Mayer, a law professor at Notre Dame, said it’s legal for the group to pay its attorneys first. But if a nonprofit like All Children Matter, Inc. wants to avoid paying a fine, he said, its officials just have to spend all of its money first, then start a new group and tell their supporters to donate to that one instead.

“It avoids paying the penalties, but it also allows organizations to break the law, as appears to have happened here, with impunity,” Mayer said.

When asked about the group’s ability to pay legal fees, but not the fines, a Trump transition team spokeswoman said DeVos was not a party to the court case. DeVos was never personally named in the Ohio case although her ethics paperwork lists her as the group’s director from 2005 until November.

“Betsy DeVos helped found and fund the pro-charter school PAC, All Children Matter,” the spokeswoman said. “The state's case was against the PAC and, as such, the fine was levied against the PAC. Mrs. DeVos was not named and has no actions pending with the Ohio Elections Commission."

The judgment names the nonprofit group, as well as the PACs.

A spokesman for the Ohio attorney general, which collects such fines, said the office reviewed the group’s assets in debt-collection proceedings. To their knowledge, the groups have no “collectible assets,” said Dan Tierney, the attorney general’s spokesman.

“If they do start-up operations and once you start putting in assets, obviously that would change the situation,” Tierney said.

Tax filings show All Children Matter took in $44,000 in 2013 and 2015 — about half from checks written by DeVos or her husband — and spent all of that to pay the attorneys who defended the group in its Ohio legal battle. Those payments included $28,500 in payments made after the final judgment in the case. All Children Matter also paid more than $16,000 in legal fees in 2013 to Taft Stettinius & Hollister in Columbus, Ohio, another firm that represented them in the case.

View DeVos faces tough questions during confirmation hearing Betsy DeVos faces tough questions during her confirmation hearing on Tuesday.

The group reported having $275 at the end of 2015, according to the most recently available tax filings.

Bopp said the legal fees All Children Matter paid his firm stem primarily from work he did as part of a legal dispute related to the fine. The case focused primarily on whether the campaign treasurer for the group’s nationwide PAC and its Ohio affiliate could be held liable for the fine. A judge ruled she could not be.

Nonetheless, the fine has risen as an issue in DeVos’ confirmation bid. Udall, Sanders, Sherrod Brown (D-Ohio), Jeff Merkley (D-Ore.), and Ed Markey (D-Mass.) have written two letters to DeVos asking her to pay the fine — or at least explain why it hasn’t been paid.

On Friday, an ethics agreement that DeVos signed showed that she’d agreed to resign from her position in All Children Matter and have no financial interest in it. But a spokeswoman for Udall said that “doesn’t change the fact that her PAC broke the law and owes $5 million.”

DeVos also started another advocacy group, the American Federation for Children, which she ran from 2004 until November. The group advocates for the same policies as All Children Matter, and she also agreed to step down from it in her agreement with the Office of Government Ethics.

DeVos’ supporters have argued that the case involving All Children Matter was a politically motivated attack by the Ohio secretary of state and that the fine is obsolete in a post- Citizens United world. That 2010 Supreme Court ruling gives companies, nonprofits and unions carte blanche to spend unlimited funds directly on election-related politicking — as long as that activity is not coordinated with a candidate or political party.

Bopp, who argued the landmark case, contended the fine would not stand under the Citizens United ruling. “I am completely convinced that this fine is 100-percent illegal,” he said.

But some legal experts caution that is not a foregone conclusion

“It often takes a second ruling, either at the Supreme Court or by a lower court, to determine retroactive application to a specific set of facts in a specific case,” Mark C. Miller, director of the Law & Society Program at Clark University previously told POLITICO. “There is never a simple answer.”

