Campaign Finance Violation Complaints Filed Against deGruy

In the category of you have to appreciate the irony comes this story about two youngsters running for City Council.  Ward 5 Councilor Dana Gutwein boasted on her Facebook page that her membership on the Council’s campaign finance subcommittee led to Lakewood’s new rules being “the best in the state”.  [Technically the new rules do nothing to stop the unlimited flood of special interest money to independent expenditure committees, similar to political action committees, who campaign for or against candidates they choose – but that is another story.]

About a month after Gutwein’s boast, a campaign finance violation complaint was filed with the City under the previous rules against her political ally, failed Ward 1 candidate Kyra deGruy.  The complaint notes deGruy used her donors’ campaign contributions to give $2,000 to Gutwein.

The documentation accompanying the complaint shows deGruy gave Gutwein the $2,000 in December 2017, a month and half AFTER the 2017 election.  The significance of the timing is that it was done after the last report required to be filed regarding any 2017 election campaign financing activity.  The actual admission was not made until November 2018, over a year after the election and during a quiet period in which observers are usually not paying attention.

The complainant questioned why this action was reported so late, wondering whether this may have been an effort, “… of the candidates to disguise the “pass through” of campaign contributions made to Kyra deGruy, Ward 1 to support the candidacy of Dana Gutwein, Ward 5 in the upcoming 2019 election.” [Quote from complaint]

What’s interesting is the rationale deGruy gave for this payment.  She claims this payment was for “consulting” provided by Gutwein.  While legitimate campaign expenses are required to be reported during the election campaign, the Secretary of State’s records raise questions about the legitimacy of this “expense”.  Gutwein created a “consulting” business in February 2015 when she was running for office. The SOS records show this “business” was terminated in mid-2016 and the business name was assumed by another person in April 2017.

Despite the SOS declaring Gutwein’s consulting business was defunct in 2016, deGruy is giving her “consulting fees” in late 2017.  We don’t know if Gutwein claimed the money as personal income for IRS purposes.

While there is no way the people can know for certainty what deGruy and Gutwein are doing with the money donors contributed to them, the issue does illustrate the problem associated with trying to publicly account for things like “dark money”.

The practice of making donations or expenditure AFTER the deadline of the last campaign report has been going on for years.  For example, in 2016, a year after his 2015 mayoral race, Adam Paul received $7,300 (including $500 from Comcast, $1,000 from Waste Management, and $1,500 from Greg Stevinson).  Paul has continued this practice.  In 2018, three years after his 2015 election and before he declared for re-election in 2019, special interests contributed another $2,000 to Adam Paul.

The practice of giving “consulting” fees to friends and allies is also a common practice among establishment candidates.  For example, Adam Paul gave $1,500 to Brent Fahrberger, a prominent Democrat.  Another common practice is to hire family members as campaign staff.  When Betty Boyd ran for City Council in 2013, she paid her underemployed daughter, who was living at home with her, several thousand dollars from her campaign donors to be her “campaign manager”.

Although these accusations raise questions about how committed these candidates are to REAL transparency, most political observers speculate the City will not punish these activities since they are common practice.

One comment

  1. As was predicted, the City Clerk dismissed the complaint so we don’t have a ruling on the practice of candidates giving each other “consulting fees”.

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