Whitmer ad donors may stay 'dark' through Michigan Democratic gov primary

Jonathan Oosting | The Detroit News

Lansing — Donors behind a $1.8 million ad campaign featuring gubernatorial hopeful Gretchen Whitmer may not be revealed until after the Aug. 7 primary despite a recent federal deadline, fueling accusations of interest group influence by a Democratic rival.

Build a Better Michigan, a political organization launched by Whitmer’s allies that is running friendly ads across the state, was required to file its initial disclosure report to the Internal Revenue Service on July 15. The group did so by mail rather than electronically, President Mark Burton said Monday.

Build a Better Michigan did not respond to requests to voluntarily release the document during what could be a lengthy publication delay by the IRS. Instead, the group on Friday released a "fact sheet" listing donor categories but not individual contributors.

An agency spokesman told The Detroit News it can take as long as eight to 10 weeks for the IRS to upload a report submitted by mail to its public website, meaning Build a Better Michigan’s full donor disclosure document may not be public until sometime between Sept. 15 to Sept. 30.

Democrat Abdul El-Sayed, competing with the former Senate minority leader for the Democratic nomination, blasted Whitmer in a Thursday night debate over what he called a “dark money group” whose lack of disclosure is “corrupting our Democratic primary.”

“We need to know where the money’s coming from,” El-Sayed said after the debate. “Especially if it’s unlimited corporate contributions.”

Groups like Build a Better Michigan organized under section 527 of the Internal Revenue code are allowed to accept unlimited contributions from unions or corporations. But unlike nonprofits paying for some ads in the Republican gubernatorial primary, 527s are required to disclose donors.

Whitmer on Build a Better Michigan Democrat Gretchen Whitmer discusses delayed disclosure by a group who is running ads to benefit her.

Most 527 organizations file reports electronically, but Burton said Monday that Build a Better Michigan had to file by mail because it had not received a PIN number from the IRS. Doing so means the group met its legal obligation.

Burton said the group would disclose donors this month when he announced an initial $1.8 million advertising campaign on June 12, but went silent this week amid requests to voluntarily disclose a copy of the report the group mailed to the IRS.

"Build a Better Michigan remains 100 percent in compliance with the IRS, and our duty to timely report was 100 percent fulfilled," Burton said Friday, releasing an overview of fundraising efforts to counter what he called "tired conspiracy theories" from partisan critics.

The group said it raised more than $2.23 million in the second quarter. Nearly $2 million came from union groups, affiliates and “progressive” organizations or clubs, it said. Another $159,850 came from individuals, $57,500 from small businesses and $30,000 from medium and large businesses, according to Build a Better Michigan.

The group did not name any of its donors, which it was required to do in its report to the IRS.

Whitmer appears in the group’s ads but does not control it. On Thursday, she said she thinks Build a Better Michigan should voluntarily release its disclosure report to the press if it will take weeks for the IRS to upload.

"My understanding is the report has been filed," Whitmer said. "They had to do it by snail mail for some reason because they didn't get the PIN from the IRS."

The East Lansing Democrat dismissed accusations of interest group bias from El-Sayed, who has also criticized her for raising campaign cash at a fundraiser hosted by Blue Cross Blue Shield of Michigan executives.

“It’s a ploy by someone who is in third place, and I’m not going to play those games. I’m staying focused on the issues that matter to people,” said Whitmer, the daughter of former Blue Cross Blue Shield of Michigan CEO Richard Whitmer.

A small portion of Build a Better Michigan’s funding was recently revealed in disclosure reports filed electronically by other 527 political groups, none of them corporate. Emily’s List, which aims to help elect pro-abortion rights Democrat women and has endorsed Whitmer, gave the group $250,000 on June 14. The International Association of Firefighters kicked in $50,000 on May 29.

Build a Better Michigan is so far the second-largest spender on broadcast television ads in the state this election cycle, outpaced only by self-funded Democratic gubernatorial candidate Shri Thanedar, said Craig Mauger of the Michigan Campaign Finance Network.

As of this week, the group had run an estimated $1.09 million in broadcast TV ads, according to the campaign finance network’s analysis of Kantar Media/CMAG ad tracking data. The organization could have more money to spend, Mauger said, but it’s also very likely they’re spending on cable.

Build a Better Michigan’s delayed disclosure shows Whitmer “plays politics by Republican rules,” El-Sayed argued Thursday. “She has used a legal technicality to game the system and circumvent the public trust.”

Republican Attorney General Bill Schuette and Lt. Gov. Brian Calley are both getting gubernatorial campaign assists from “dark money” nonprofits that will never be required to disclose donors because their ads do not direct viewers to vote for either candidate.

The Fund for Michigan’s Tomorrows, a 501(c)4 nonprofit, had spent an estimated $407,000 on pro-Schuette ads through July 2, according to a Michigan Campaign Finance Network report. The Fund for Michigan Jobs, also a 501(c)4 nonprofit, had spent $148,000 on pro-Calley ads.

Questions over the timing of Build a Better Michigan’s eventual disclosure points to other flaws in Michigan’s campaign finance system, which has “so many different reporting loopholes and different mechanisms to try to influence the outcome of an election,” Mauger said.

“This is something that comes up year after year, whether people are able to either delay disclosure or completely not disclose the source of their money. It hinders the public’s ability to know what’s going on,” he said.

The state Bureau of Elections is investigating a complaint filed against Build a Better Michigan by the Michigan Republican Party. The group is running “issue ads,” which are not supposed to direct a viewer to vote for a candidate, that identify Whitmer as a “candidate for governor” while outlining her campaign themes.

Burton has called the complaint a “frivolous” political attack. Build a Better Michigan requested and received an extension to formally reply to the GOP complaint, said Secretary of State Spokesman Fred Woodhams. The reply is now due Aug. 6, meaning the bureau will not finish its review by the primary.

joosting@detroitnews.com

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