Complaint: Schuette supporters won’t disclose donors

Chad Livengood
Detroit News Lansing Bureau

Lansing — A Michigan political group that spent at least $3.6 million aiding the elections of Attorney General Bill Schuette is unlawfully dodging disclosure of its contributors by claiming to be an arm of an unregistered Republican political committee, according a complaint filed with the Internal Revenue Service.

Citizens for Responsibility and Ethics in Washington asked the IRS to investigate the Michigan Advocacy Trust, an organization run by Republican lawyer Richard McLellan that spent heavily backing Schuette’s re-election last year.

“MAT spent millions of dollars on television ads intended to support Schuette in his campaigns for Michigan attorney general and attack his opponents,” CREW executive director Noah Bookbinder wrote in a complaint sent Wednesday to the IRS. “Yet it is trying to elude the law’s disclosure requirements, erroneously invoking exemptions designed to avoid duplicated reporting in an attempt to avoid any disclosure at all.”

In three pages disclosed to the IRS, the Michigan Advocacy Trust claims to be “an administrative account of the 23rd Michigan State Senate Republican District Political Party Committee of Ingham County” that is not subject to disclosing its election activities to the Michigan Secretary of State’s Office or the IRS.

The Secretary of State’s Office has no such Republican political party committee on file for the 23rd Senate District in Ingham County.

McLellan said the Michigan Advocacy Trust’s issue advocacy ads allow it to evade campaign finance disclosure laws because the 23rd District committee does not spend money advocating the election of candidates.

The 23rd District committee is exempt under state law from disclosure of contributors, expenses and even its own existence, he said.

“This committee is lawfully created. It files every piece of paper that it’s required to file,” McLellan told The Detroit News. “We’re totally in compliance with the law.”

Michigan Advocacy Trust spent at least $3.6 million in 2010 and 2014 helping Schuette get re-elected by running ads that criticized his Democratic opponents, according to spending data compiled by the Michigan Campaign Finance Network.

CREW contends MAT should have to disclose its spending and donors under Section 527 of the IRS code governing political groups.

“Disclosure laws exist for a reason — to allow the people to know who is paying to influence elections and politics,” Bookbinder said Thursday in a statement. “While the IRS allows exemptions for 527 groups who have already disclosed financial activity to the state, you actually have to disclose to the state to claim them.”

The group’s 2014 TV ads featured Schuette on screen talking about his efforts to crack down on human trafficking, test abandoned sexual assault evidence kits in Detroit and his efforts against violent crime.

Schuette participated in the filming of the ads, spokesman John Sellek said.

“We have no control over third-party groups, those who attack Bill or praise him,” Sellek said Thursday. “But Bill will work with any group that wants to fight against girls being trafficked or getting rapists off the streets. He’s fighting for justice on those issues and encourages anyone who will help spread the word.”

Michigan Advocacy Trust also ran ads last fall with Detroit police and firefighters saying Schuette fought to protect their pensions in the city’s bankruptcy.

One MAT ad accused Schuette’s Democratic opponent, Mark Totten, of lying about his experience as a volunteer part-time federal prosecutor.

None of the group’s contributors has been disclosed, but its TV spending gets disclosed by broadcast television stations that aired the ads.

Each of the ads stopped just short of telling voters to cast a ballot for Schuette or vote against Totten.

“Every script is reviewed to make sure we’re only focusing on policy,” McLellan told The News. “It’s not like this is a new invention.”

“There’s a lot of issue advocacy that’s not disclosed,” he added. “There’s a lot of these committees.”

CREW’s complaint says Michigan Advocacy Trust also aided the campaigns of Republican precinct delegates who were on the ballot in the August 2014 primary in an effort to help Lt. Gov. Brian Calley win re-nomination at a state GOP convention later that month.

Schuette and Calley are both leading potential candidates for governor in 2018.

McLellan said he had no response to CREW’s complaint, but questioned the group’s political allegiances.