Vermont AG silent on potentially illegal donations to single-payer candidates

By Bruce Parker | Vermont Watchdog

Despite receiving complaints that a single-payer advocacy group has been making potentially illegal donations to candidates, the Vermont Attorney General’s Office offered no public response in time for Tuesday’s election.

In recent months, Vermont Leads, the top advocate of single-payer health care in Vermont, has sent campaign contributions to dozens of progressive and Democratic candidates in hopes of electing state lawmakers friendly to Gov. Peter Shumlin’s health care agenda.

While those donations may have violated Vermont’s campaign finance laws, Attorney General William Sorrell has issued no response to complaints sent to his office, even though he has known about the controversy since August.

“All I can tell you right now is that it is under investigation by our office and it’s in the investigation stage,” senior assistant attorney general Michael Duane told Vermont Watchdog.

Duane, who oversees the General Counsel and Administrative Law Division handling the probe, said he couldn’t offer any timeline for action against Vermont Leads.

“We’re not going to release any information during the course of an investigation, so I’m not going to speculate,” he said, adding, “Our office is sensitive to the fact that complaints regarding campaign violations come in during the campaign season.”

While Vermont Leads was initially created in 2012 with $100,000 from the Service Employees International Union, the group received most of its 2014 funding from the Vermont NEA. In recent months, Vermont Leads has donated money to candidates it believes will provide the strongest support for single-payer health care.

However, on Aug. 26, Sorrell received an email informing his office Vermont Leads appeared to be donating money to candidates without properly revealing the source of those funds on campaign finance disclosure forms, as required by Vermont law. When the attorney general’s office failed to respond to the email, a formal written complaint was sent Sept. 12.

According to that first complaint, Vermont Leads PAC donated $1,900 to candidates despite reporting no carryover funds between the 2012 and 2014 elections. The political action committee had no carryover funds, the complaint noted, because Vermont Leads PAC transferred a surplus of $27,989 to Vermont Leads Inc., its 501(c)(4) sister organization. That money transfer is relevant not only because it left Vermont Leads PAC without carryover funds, but also because it showed coordination between groups that must remain independent and functionally distinct according to Vermont law.

The first complaint was just the tip of the iceberg, as the attorney general learned of even more potentially egregious violations in October.

In a second written formal complaint dated Oct. 7, the attorney general was informed Vermont Leads Inc. donated money to candidates even though the group reported on its March campaign finance disclosure form it had received $66,000 from the Vermont NEA. Under Vermont law, advocacy groups that take in contributions of more than $2,000 are prohibited from donating directly to candidates. The second complaint also alleged Vermont Leads Inc. had failed to register as a PAC in the state of Vermont.

Sharon Toborg, a resident of Barre who filed both formal complaints, said she has yet to receive a response from the AG’s office, despite the fact the money has been spent and election results can’t be reversed.

“I think the most amazing thing is that I have heard absolutely nothing from the attorney general,” Toborg told Vermont Watchdog.

“Here we are before an election, there are concerns about what a PAC is doing, and attempts to get clarity on the law (go unanswered). … How can you have election and campaign finance laws if the attorney general can’t even answer questions about them in a timely fashion before an election?” she asked.

In particular, Toborg is seeking for Sorrell to say whether Vermont Leads meets the definition of an independent-expenditure-only committee (IE PAC). In Vermont, independent-expenditure-only committees may take in unlimited contributions, but are prohibited from donating to candidates or parties.

When Vermont Watchdog asked Duane if Vermont Leads was an independent-expenditure-only committee or not, he said, “It’s a matter under investigation, and I’m not going to comment in the middle of an investigation.”

Duane added it would be imprudent to comment because the case involves potential penalties, injunctions and court action, and because the attorney general has limited authority to act based on complaints.

“There’s a process, and the attorney general does not have the ability to unilaterally order somebody to do something they may not want to do without the intervention of a court,” Duane said.

While Duane refused to speculate what penalties Vermont Leads might incur if the contributions are illegal, he spoke generally about penalties for violating campaign finance laws.

“(There’s) a civil penalty of up to $10,000 for each violation. … There’s also allowance for injunctive relief under the same section. And if a person knowingly and intentionally violates the law, there’s a fine of not more than $1,000 or imprisonment for not more than six months, or both. So there are criminal penalties, there are civil penalties, and then there’s injunction relief as well,” Duane said.

According to Toborg, Vermont Leads has since filed amended campaign finance disclosure forms in response to her claims, a move she says is evidence the group may have violated the law. Toborg said she is outraged at the inaction by the attorney general.

“The point of this is Vermont Leads (spent) a whole bunch of money on elections that under the law they aren’t allowed to … and the law is not monitored or fairly applied,” she said.

Peter Sterling, the director of Vermont Leads, didn’t return Watchdog.org’s request for comment.

Contact Bruce Parker at bparker@watchdog.org