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Lansing —  A group that ran election-season ads featuring Democratic Gov. Gretchen Whitmer violated the Michigan Campaign Finance Act and has agreed to pay a $37,500 settlement, Democratic Secretary of State Jocelyn Benson said Friday.

Benson said her findings are "critical to promoting greater transparency" in political spending, but the conservative Michigan Freedom Fund called the settlement a "feather tickle on the wrist" that spared fellow Democrats from more significant punishment. 

Build a Better Michigan spent more than $2.4 million in 2018 and ran a series of pro-Whitmer television ads that it described as a form of "issue advocacy" traditionally exempt from the Michigan Campaign Finance Act.

But some of those ads violated the law by identifying Whitmer as a “candidate for governor,” Benson said in a letter to attorneys for Build a Better Michigan and Whitmer’s campaign. 

Benson also ruled that the group's spending could not be considered an “independent expenditure” because of apparent coordination with Whitmer’s campaign.

“The fact that BBM obtained video and audio of the candidate speaking directly to the camera from a predetermined script is sufficient to indicate that coordination occurred,” the secretary of state wrote. 

The interpretation, as applied to specific facts of this case, is "necessary to set an important and clear precedent that furthers and promotes transparency in our elections," Benson said. 

Michigan law states that issue advocacy cannot include phrases like “Smith for governor."  Inserting the word “candidate” between Whitmer's name and those words is “indistinguishable,” Benson said. “Both phrases constitute express advocacy.”

As part of a "conciliation agreement" with Michigan Director of Elections Sally Williams and the Whitmer campaign, Build a Better Michigan agreed to pay the $37,500 settlement to the state within 60 days. 

Former Secretary of State Ruth Johnson, a Republican, launched the investigation last year after complaints from the Michigan GOP and the Michigan Freedom Fund, which both blasted Friday's settlement, arguing the fine amounts to a pittance. 

“After only one month in office, Jocelyn Benson’s partisanship has destroyed the credibility of the office of Secretary of State as a fair and impartial referee in our elections," said Michigan Republican Party spokesman Tony Zammit.  "Today, Benson cut yet another backroom deal which bails out her buddy, Governor Whitmer, to the tune of millions of dollars.' 

In 2016, a GOP group called the Michigan Jobs and Labor Foundation agreed to pay a $17,696 fine two years after running two so-called issue ads featuring Sens. Dale Zorn and Ken Horn that included “for State Senate" graphic. The group called it a mistake by a vendor, pulled the ads off the air and self-reported the matter to the state.

The Republican group was fined the same amount it had illegally spent, but Build a Better Michigan will only pay a small fraction of its total spending, said Tony Daunt of the Michigan Freedom Fund.

“If being allowed to spend $2 million illegally on behalf of a candidate and then receive what amounts to a feather tickle on the wrist isn’t corruption, I don’t know what is,” Daunt said.

Benson spokesman Shawn Starkey said the secretary of state's office was "required by law to seek an informal resolution" to the investigation. 

"That’s what we’ve done here," Starkey said. "Each matter is different. We don’t consider this a small fine."

Johnson, now a state senator, disagreed, saying the fine is "exceedingly too small" and arguing there "needs to be a better deterrent" for similar violations. She had ruled on the issue advocacy question in late November.

Benson’s finding that Build a Better Michigan and the Whitmer campaign coordinated is “actually more important” than her ruling on express advocacy, said Craig Mauger, a watchdog with the Michigan Campaign Finance Network.

Coordination laws are designed to prevent a candidate from directly benefiting from unlimited, corporate or anonymous contributions to outside groups that they are not allowed to accept themselves, Mauger said.

Penalties for coordination could have been hefty. Under current Michigan law, an "independent expenditure committee" is prohibited from contributing to candidates. A knowing violation is a felony punishable by up to three years in prison and a fine of up to $20,000 plus an additional fine of up to three times the amount that was spent.

Republicans argued spending by Build a Better Michigan should have been treated as an in-kind contribution to Whitmer. The group had spent more than $1.8 million on television and digital ads by Sept. 30, according to an amended IRS filing provided to the Secretary of State's Office.

Build a Better Michigan was initially headed by Mark Burton, who is now the governor's chief strategist. As part of the conciliation agreement, Whitmer and the group said they disagree with Benson's findings and did not admit to any wrong doing, but Build a Better Michigan agreed not to produce or disseminate any ads containing words of “express advocacy in the future” and to cease operation within 60 days.

As a political group organized under Section 527 of the Internal Revenue Code, Build a Better Michigan has disclosed its spending and donors to the federal government. But because Benson said it should have been subject to the Michigan Campaign Finance Act, it also documented its spending as part of the agreement with the state.

Build a Better Michigan spokesman Mark Fisk called the group’s ads “part of a long tradition of issue advocacy used for years in Michigan by both parties”  and said the group is “proud to have played a role in “promoting affordable health care, improved infrastructure and clean water.”

“While we respectfully disagree with the Secretary of State's determination and settlement, we fully intend to comply with her ruling to put this matter behind us and move forward."

The group ran two separate ads that featured Whitmer speaking directly to viewers in the run-up to the Aug. 7 primary election, which she won over former Detroit health director Abdul El-Sayed and Ann Arbor businessman Shri Thanedar.

The text identifying Whitmer as a candidate for governor “was not delivered in a neutral forum or context but in an advertisement accompanied by a definitively positive message that describes then-candidate Whitmer’s past accomplishments and policy goals if elected to the office she is identified in the advertisement as seeking," Benson said.

Issue advocacy is defined as an attempt to persuade the audience to support or oppose a particular public policy position or social issue, not the election or defeat of a candidate. Ending the ad by directing viewers to “tell your legislators, let’s get it done,” does not satisfy that definition, Benson wrote.

joosting@detroitnews.com

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