Calley’s part-time legislature bid taps ‘dark money’

Jonathan Oosting
Detroit News Lansing Bureau

Lansing — Lt. Gov. Brian Calley’s petition drive to “clean up” the Michigan Legislature by making it a part-time body is benefiting from a “dark money” group that can accept unlimited anonymous contributions and is led by former and current government lobbyists.

Recent campaign finance reports filed with the state show $200,000 of the $202,956 the Clean MI committee raised in the first 10 days of the petition drive came from “Fund for Michigan Jobs,” a tax-exempt nonprofit with ties to Calley and causes the Portland Republican supports.

The fund does not disclose the identity of corporate or individual donors but reported raising $110,000 in 2015, spending $39,240 and ending the year with $87,717 in savings, according to its most recent filing with the Internal Revenue Service. It raised $66,215 in 2014 and $138,500 in 2013.

The 501(c)(4) nonprofit is headed by Larry Meyer, former chairman and CEO of the Michigan Retailers Association, who said Calley has pitched several funding requests to the independent board over the years.

“We felt it fell within the mission of informing and assisting in public discourse,” Meyer said of the part-time Legislature petition, explaining he has not personally decided whether he supports the concept. “And it passed muster for legal requirements.”

The board voted to approve the petition drive funding, but Meyer said Fund for Michigan Jobs Vice President John Pirich was “recused of any consideration on the matter” because he serves as legal counsel for Calley’s ballot committee. Pirich is also registered as a state lobbyist for his law firm, Honingman Miller Schwartz and Cohn LLP of Lansing.

Fund Treasurer John Llewellyn, a former state representative who recently retired as a lobbyist for the Michigan Bankers Association, said the board has not decided whether it will contribute additional money to Calley’s committee.

“I think it’s good to have a public discussion concerning the structure of state government,” Llewellyn told The News. He said he personally hopes the part-time Legislature proposal will also spur separate talk of term limits reform, which is not part of Calley’s potential 2018 ballot proposal.

Llewellyn said the nonprofit is funded by “people who are interested” in the activities of the fund.

“That as far as I’ll go,” he said.

Craig Mauger, a watchdog with the Michigan Campaign Finance Network, said ballot committees across the country are increasingly relying on contributions from 501(c)(4) nonprofits that are not required to disclose donors.

“It protects the identity of the original source of the money,” Mauger said. “It’s especially interesting in this case because the lieutenant governor is involved in promoting this part-time legislature campaign,” which is unpopular with some interest groups and state legislators.

“So if you’re a donor that wants to curry favor with both the Legislature and the lieutenant governor, this is a way to give to something the lieutenant governor supports without alienating legislators who like their full-time positions,” Mauger said.

Fund has ties to Calley

Asked if the public deserves to know more about who is funding the part-time legislature petition drive, or if the committee is concerned the nonprofit doesn’t disclose donors, a Clean MI spokesman directed questions about the contribution to the Fund for Michigan Jobs.

While the $200,000 donation dwarfed other contributions in the first days of the petition drive, the committee is expected to report additional fundraising numbers later this month.

“Clean MI Government has received support from concerned citizens who want to clean up Lansing and will continue to seek support from Michiganders in every corner of Michigan who support slashing politicians’ pay and benefits and cutting the amount of time they spend in Lansing,” said spokesman Matthew Dobler.

The Fund for Michigan Jobs was formed in 2008, while Calley served in the state Legislature. His brother, Steven Calley, originally served as vice president of the nonprofit board, but “he is no longer involved and hasn’t been for a long time,” Llewellyn said.

In 2014, the fund reimbursed Calley for sponsoring two Michigan Special Olympians and sponsored a state employee 5-kilometer run that the lieutenant governor helps organize, according to IRS records. Lewellyn said the fund has also supported some of Calley’s work with autistic children.

Calley launched the Clean MI petition drive May 30 on Mackinac Island after a separate independent political action committee ran a series of ads that appeared to tease his potential run for governor to succeed Gov. Rick Snyder, who cannot seek re-election due to term limits. A day after the petition drive announcement, the Fund for Michigan Jobs donated $200,000 to the cause.

The contribution was by far the largest the committee had received through June 9, representing 98.5 percent of its donations in the 10 days following launch. Clean MI reported raising another $2,956 from 26 smaller donors, including $100 from Calley himself.

The Fund for Michigan Jobs has largely operated under the radar since 2012, when it contributed $565,000 to a committee called Taxpayers Against Monopolies. The nonprofit raised $623,000 that year alone.

The anti-monopoly committee successfully fought a ballot proposal backed by Ambassador Bridge owner Manuel “Matty” Moroun to block construction of a new international crossing connecting Detroit and Canada. The planned Gordie Howe International Bridge remains a top priority for Snyder’s administration.

A ‘social welfare’ nonprofit

To earn federal tax exempt status, a 501(c)(4) nonprofit must operate exclusively to promote “social welfare.” While such organizations are allowed to engage in some political activities, politics must not be a primary focus. IRS rules prohibit the groups from directly or indirectly participating in campaigns on behalf of a specific candidate for public office.

In 2015, the Fund for Michigan Jobs reported spending $6,800 to sponsor and host events “that promote the general welfare of the residents of Michigan and encourage citizen participation in civic involvement.” It spent another $6,128 on unspecified registration fees for policy conferences “to engage in discussions on improving the state’s business climate.”

Snyder has been linked to similar nonprofits and came under fire in 2013 when it was revealed that his New Energy to Reinvent and Diversity Fund was paying the salary of a top adviser and the living expenses of then-Detroit Emergency Manager Kevyn Orr, raising questions about the motivation of anonymous donors and potential conflicts of interest.

The Republican governor shut down the so-called NERD Fund in 2014 and replaced it with a new version he said would voluntarily disclose donors.

Calley’s part-time legislature petition would change the Michigan Constitution to roughly cut in half legislator pay and limit the state Legislature from holding regular session beyond April 15 of each year.

The Clean MI committee revised the language this month to protect against future legal challenges, a move that also required it to toss out thousands of signatures as it seeks to collect more than 315,000 valid signatures needed to get the measure on the 2018 ballot.

While critics have argued a part-time legislature could increase the power of lobbyists who will remain in Lansing full-time, Calley has argued the opposite.

“The Lansing establishment knows a part-time legislature will decentralize and weaken the influence lobbyists have on legislators and will go to great lengths to see this initiative not make the ballot,” Dobler said. “Most lobbyists are opposed to this proposal because it takes away their power and gives it back to the citizens of Michigan.”

The committee is also working with individuals who have been accused of past questionable practices. Clean MI reported paying $35,000 to Mobilize the Message of Virginia for petition collection, recruitment and management. The firm is run by a conservative consultant who has faced criticism elsewhere for operating alleged “scam PACs” that spend large chunks of their money on internal operations.

Calley’s 10-point plan “to clean Michigan’s government” includes expansion of the Freedom of Information Act to the governor and Legislature, financial disclosure requirements for state officials, but no significant campaign finance reforms.

Top ballot issue donors

The top donors to the Clean MI Government ballot committee from May 30 to June 9:

■Fund for Michigan Jobs: $200,000

■Russel Milne, Milne Ford Inc., Grosse Pointe Woods: $2,000

■Lt. Gov. Brian Calley, Portland: $100

■Mark Kappler, Grand Ledge: $100

■John Gisler, Scotts: $100

■Joyce Bower, Byron Center: $100

■Steven Barnum, Caledonia: $50

■Charles Reed, Onekama: $50

■David Dishaw, Wyoming: $50

■Greg Smith, Livonia: $50

■Lambert Damstra, Byron Center: $50

Source: Michigan Secretary of State’s Office