Full Campaign Disclosure: Here Comes Late Money

Charges, countercharges, and lawsuits in City Council campaigns

Wes Benedict (l) and Sal Costello announce their lawsuit against the Real Estate Council of Austin Good Government PAC and the Austin Police Association PAC.
Wes Benedict (l) and Sal Costello announce their lawsuit against the Real Estate Council of Austin Good Government PAC and the Austin Police Association PAC. (Photo By John Anderson)

Early last Thursday, April 28, in a brief and emotional statement delivered in front of his Wilshire Woods home, Place 1 candidate Lee Leffingwell announced that he will remain in the City Council race and serve if elected, following a week's hiatus after the April 22 suicide of his wife, Mary Lou McLain. "My wife, a nurse and a passionate health care advocate, was devoted to serving others," Leffingwell said. "I know in my heart that she would not be pleased if I ended my work to make a difference in our community." Since the campaign is nearly over (election day is Saturday, May 7), there will be few remaining public appearances, and campaign spokesman Mark Nathan said he expected most of the remaining work would belong to volunteers and supporters. Leffingwell remains the heavy favorite in the race. "If I am fortunate enough to be elected by the voters," he concluded, "I will serve in honor of [Mary Lou's] memory." (For the full statement, see "Leffingwell Still In," News, April 29, 2005.)

This week, Leffingwell may have had reason to regret his decision, as the following days have been filled with charges and countercharges concerning alleged campaign finance violations and hoodwinking the voters – charges touching in one way or another on several of the major candidates, including Leffingwell.

Most prominently, Place 4 challenger Wes Benedict has maintained a steady drumbeat of accusations against incumbent Betty Dunkerley, charging that her campaign filings have been inaccurate stretching back to her 2002 race against Beverly Griffith (and others), and that she has accepted over-the-limit contributions, and too much money from nonresidents. On Tuesday, Nathan, who is also Dunkerley's spokesman, said that only a single check of $100 had to be returned, and that the campaign is systematically attempting to confirm residential addresses for donors who may or may not live within Austin city limits.

On Friday, the campaigns and PACs filed their "eight-days-out" reports with the city clerk, and the reports raised a whole new series of questions – and at least one lawsuit. On Monday, Benedict filed suit against the Real Estate Council of Austin Good Government PAC and the Austin Police Association PAC, "for failing to disclose contributions and expenditures, for making campaign expenditures in the name of another, and for violating the City of Austin campaign contribution limits." His charges reach back to the 2003 election cycle – when RECA's PAC directly contributed late money to the APA PAC, which spent it to support Brewster McCracken in his runoff against Margot Clarke – and across the current board to Dunkerley, Leffingwell, and Place 3's Gregg Knaupe, all of whom are being promoted by the APA. This time, Benedict's lawsuit charges, "RECA-PAC is bundling the contributions of its officers and directors to the APA-PAC, to disguise RECA's involvement with APA's ads in favor of [Dunkerley]." Benedict's charges are being echoed to a degree by other campaigns, notably Clarke's – Clarke spokesman Elliott McFadden commented, "What they're doing is legal, but it seems disingenuous to pretend that the support is coming from the Police Association, when in fact it's coming from RECA." More bluntly, the Clarke campaign's latest fundraising e-mail asks, "Why are the special interests of big developers hiding behind a badge?"

Indeed, the APA's latest filing, which lists more than $25,000 in new contributions, is virtually a roster of RECA's executive committee, marked by such prominent names as Jackson Walker lawyer Tim Taylor ($1,000), Cencor Urban's Tom Terkel ($500), Cypress Realty's Steve Clark ($1,500), Endeavor Real Estate Group's Kirk Rudy ($250), and a host of other names associated with major corporate or development interests, including a couple of direct corporate contributions – development consultants Bury Partners ($1,500) and Carter & Burgess Inc. PAC ($500). These are all no doubt distinguished citizens, but hardly the first names that leap to mind as notable defenders of the Thin Blue Line. Moreover, the APA's filing failed to list occupations for any of these donors, as is required by state law. (In a related mystery, the Austin/Travis Co. EMS Employee Association PAC – which is supporting the same candidates as the APA – reported a $20,546 expenditure sourced to no donation, saying it's not required to report the contribution until after the election, a curious way to balance the political books.)

In addition, although some campaign scuttlebutt contends that the $100 limit does not apply to noncandidate PACs – a contention twice reported flatly as fact in this week's Statesman – it's difficult to square that interpretation with the plain sense of Article III, Sec. 8(I) of the City Charter, governing noncandidate committees: "No political committee … shall accept contributions in excess of one hundred dollars ($100) per calendar year per contributor, or from a source other than natural persons." (That provision provides another basis of the Benedict lawsuit.)

Speaking for RECA, Chuck McDonald issued a statement strongly rejecting Benedict's lawsuit as a "desperate political ploy" and pointing out that "RECA" had not in fact contributed anything to APA – rather, only Austinites who happen to be RECA members. McDonald continued, "Frankly, our organization cannot understand the criticism of individual members of the business community who have exercised their constitutional rights by legally contributing to and supporting individuals and organizations involved in the political process."

APA President Mike Sheffield rejects any notion that the APA's campaign efforts are in any way "tarnished by association with [RECA] folks," adding that he thinks the argument represents an outdated version of Austin's old developer-environmentalist political battles. "I've known most of these folks for years, and it's a democratic system open to everyone to participate," he said. "Some are participating by supporting public safety, through our committee. If we were supporting some clearly pro-development candidate, maybe I could understand the argument. … But people like the message that we have – we want a safe Austin and a better Austin." He points out, moreover, that the APA's endorsements were internal association decisions and preceded the RECA-related donations by weeks or months – "so they could hardly be determining or controlling what we've done."

The public safety PACs are acting independently of the campaigns, but spokesmen for Leffingwell, Knaupe, and Dunkerley also rejected Benedict's charges. To the extent that they affect the Place 3 race, Knaupe spokesman Mark Littlefield dismissed the claims as sour grapes – "Back in January, all four campaigns were fighting for those [public safety organization] endorsements, and the APA and the others would be raising and spending money to support whomever they chose. We got it, they didn't. … I'm disappointed they would try to taint the support of police officers with these charges." While the Austin campaign finance law tends to give independent PACs "free rein to do whatever they want to do," said Leffingwell and Dunkerley spokesman Nathan, "we're honored to be endorsed by the police, the EMS, and the firefighters." He also suggested that Benedict should look to his own house, in the wake of charges that the Austin Toll Party's People for Efficient Transportation PAC has made in-kind contributions to its endorsed candidates (Clarke, Benedict, and Casey Walker in Place 1) in excess of the $100 limit. "I'm taken aback by the hypocrisy of Wes Benedict and the Toll Party," Nathan said. "They paid thousands of dollars for the petition signatures that created their mailing lists, and they paid [petition campaign chair] Linda Curtis as well, and now they say the list is worth less than $100. Yet they're hell-bent to charge other campaigns with doing something sinister."

On that note, also this week the Clarke campaign posted a corrected filing, recording that it is rejecting the $91.67 in-kind contribution from PETPAC and will pay "fair-market value" for its one-third portion instead. McFadden said the campaign is calculating its share as a third of an industry standard $25 per thousand names, or $188.

*Oops! The following correction ran in our May 13, 2005 issue: The photo caption to "Full Campaign Disclosure: Here Comes Late Money" incorrectly stated that Wes Benedict and Sal Costello filed suit against Betty Dunkerley. Actually, the suit was filed against the Real Estate Council of Austin Good Government PAC and the Austin Police Association PAC.

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