UPDATE:
SANTA FE — The former head of Santa Fe’s ethics board has filed an ethics complaint against mayoral candidate Javier Gonzales, charging that his campaign has been working in concert with political action committees in violation of the city’s public campaign financing program.
Union leader Jon Hendry. left, shown here when he was a marketer for the state Tourism Department and speaking to film producer Kevin Painchaud in Park City at the Sundance Film Festival years ago, has become a target of a campaign ethics complaint over Santa Fe’s mayoral campaign.
The complaint, filed by Santa Fe attorney Fred Rowe, who chaired the Ethics and Campaign Review Board for eight years, says three groups supporting Gonzales are all linked by union leader Jon Hendry “as intermediary for their concerted actions.”
Rowe said the groups, which have reported spending $20,000 supporting Gonzales, are gaming Santa Fe’s public financing system intended “to keep outside money from corrupting mayor elections.” He said they are gaming Santa Fe’s public financing system “which seeks to keep outside money from corruptng mayor elections.”
Gonzales responded via e0mail: “From what I can see, the complaint has no facts to substantiate any charge.”
Rowe supports Patti Bushee, who with fellow city councilor Bill Dimas is competing against Gonzales for mayor, but said the complaint has nothing to do with that. “It was filed by me as a private citizen and as an attorney,” he said.
Assistant City Attorney Zachary Shandler said he couldn’t say when the ethics board would hear the complaint. He said under the code parties have 10 days to respond, but that clock doesn’t start until they are served. He noted that the chair of the ECRB, Justin Miller, could also decide to shorten the time period. Election day is March 4.
Under Santa Fe’s public campaign financing code — being used for a mayor’s race for the first time this year — candidates can receive $60,000 of tax-payer money if they agree not to accept private donations.
Gonzales, Dimas and Bushee all have accepted public funding and eschewed outside fundraising.
But two PACs and another union-affiliated group have reported spending to support Gonzales. Also, the local public employees’ union has offered to pay “volunteers” to do pro-Gonzales outreach. The outside spending has become an issue in the publicly financed campaign, although there is no legal restriction on spending by outside groups.
Among Rowe’s complaints is that a $1,925 payment made by pro-Gonzales Progressive Santa Fe PAC to a Washington D.C. firm to conduct “research” was not reported as a direct contribution to Gonzales. This “contravenes” Gonzales’ public financing application “which states that his ‘current campaign will not accept any further contributions,’” Rowe alleged.
Rowe also takes issue with a $5,700 payment by the union-financed Santa Fe Working Families PAC to a polling firm. He claims the company produced a “tilted” poll showing Gonzales surging and that the poll likely constituted another improper contribution to Gonzales.
Gonzales’ response says his campaign has asked PACs to “stand down and respect that my campaign, and my campaign alone speaks for me.”
He also denied that Hendry, head of the New Mexico Federaton of Labor, is an “intermediary” linking the outside groups to his campaign.
He noted Hendry said publicly in the fall that he was leaving Progressive Santa Fe. Hendry offered to join Gonzales’ volunteer steering committee but then dropped out of that, too, and never attended any campaign meetings, Gonzales said.
He added that no opposition research, “or research of any kind, forwarded to me or anyone affiliated with my campaign.”
Bushee attacks
Over the weekend, Bushee again decried the spending by outside groups in a news release, after the latest round of campaign spending reports on Friday.
“It looks like the mayor’s race is for sale again,” she said. Bushee said Gonzales’ PAC backing “flies in the face of the 2008 decision (when public campaign finance was approved in an election) by a huge majority of Santa Fe voters to clean up our City’s electoral politics and stop the ‘influence auction’ they were fast becoming.”
Monday, Dimas said the outside spending for Gonzales “is defeating the whole purpose of a publicly financed campaign, and defeats the purpose of a level playing field.”
Dimas also referred to activity that is basis for another part of Rowe’s ethics complaint. The American Federation of State, County and Municipal Employees, which is not reporting any campaign spending, has offered to pay “volunteers” to do work supporting Gonzales, with the pay coming after the election. Rowe maintains the city code exempts as reportable campaign contributions only volunteer services without compensation.
The union has said the payments aren’t campaign contributions that haeve to be reported because the “paid volunteers’” work will only be “member-to-member” outreach, not targeting non-AFSCME voters.
Dimas said: “Now you have a PAC paying people 11 dollars an hour going door to door for you and neither of the other candidates have that opportunity at our disposal.”
“I’m following the rules of public financing,” Dimas added. “Now, I think it has lost it’s purpose by one of the candidates using the PACs to support his campaign.”
Previous complaint
Gonzales hit back at Bushee Monday. “Unlike Patti, we’ve embraced public financing from the very start,” he said.
This a reference to an ethics complaint filed against Bushee over $1,750 she paid a former campaign aide last year before she decided to apply for public financing. Bushee later asked the former aide to “swap checks” so that the payment would be recorded as coming from “seed money” publicly financed candidates can raise and spend to start up their campaigns. The ethics board rejected the complaint against Bushee.
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Fred Rowe, long active in Santa Fe public affair and former chairman of the city’s ethics board, has filed an ethics complaint alleging violations by mayoral candidate Javier Gonzales along with two PACs and a third group which have been spending money to support Gonzales.
Their actions, Rowe alleges in his complaint to the city’s Ethics and Campaign Review Board that he formerly headed, “game Santa Fe’s Public Financing system which seeks to keep outside money from corrupting mayoral elections.”
Gonzales has said repeatedly that the outside groups are campaigning for him without his involvement and that he has sent strong messages that he doesn’t need their help win the mayor’s race over the other two candidates, city councilors Patti Bushee and Bill Dimas.
Bushee, Dimas and Common Cause all have complained that the outside spending for Gonzales is contrary to goals of the city’s public campaign financing system intended to “level the playing field” and keep big money out of city politics. Public financing is being used for a mayor’s race for the first time this year, and all three candidates have qualified for and accepted $60,000 in taxpayer money for their campaigns.
PAC representatives have said from the beginning that their actions are legal and permitted under the city code. They have reported spending about $20,000 to support Gonzales so far.
Gonzales provided an emailed response to the ethics complaint.
“From what I can see, the complaint has no facts to substantiate any charge,” he said.
“Unlike Patti, we’ve embraced public financing from the very start,” he added. This a reference to an ethics complaint filed against Bushee over $1,750 she paid a former campaign aide last year before she decided to apply for public financing. Bushee later asked the former aide to “swap checks” so that the payment would be recorded as coming from “seed money” publicly financed candidates can raise and spend to start up their campaigns. The ethics board rejected the complaint against Bushee.
Gonzales added, “We’ve asked PACs to stand down and respect that my campaign, and my campaign alone speaks for me.”
He also said: “In fact, despite the negative campaign that has been waged against me, we have maintained a positive issue-focused campaign from Day One.
“Here are a few stats you may be interested in: 62 house parties; seven Public Conversations: 865 five-dollar contributors. And now endorsed by eight current and former City Councilors”
Here is Rowe’s complaint in ful with Gonzales’ response to one section):
MEMORANDUM SUPPORTING COMPLAINT Feb.10, 2014
This Complaint charges ongoing violations of the Santa Fe Public Campaign Finance Code’s provisions enforced by the Ethics and Campaign Review Board (ECRB).
As detailed below, those violations stem from wrongful actions by mayoral candidate Javier M. Gonzales in concert with four pro-Gonzales organizations including three Political Action Committees (PACs), all interlinked by Jon Hendry as intermediary for their concerted actions.
Those actions game Santa Fe’s Public Financing system which seeks to keep outside money from corrupting mayoral elections. This system provides for City funding of those mayoral candidates who commit to cap their campaign expenditures at the $60,000 received from the City. But as of February 7, the Gonzales campaign had spent $20,680, yet benefited from an additional $20,000 spent by four pro-Gonzales groups, thus doubling the Gonzales campaign’s outlays to over $40,000 four weeks before the March 4 election. (Att. A).
Due to the urgent need for ECRB disapproval of activities that flout Santa Fe’s public campaign financing system, the ECRB should promptly validate the legal sustainability of the instant complaint, and confirm the true facts of concerted actions by issuing an ECRB subpoena pursuant to Section 6-16.4 (D). (Att. B).
Notably, Assistant City Attorney Shandler’s September 27, 2013 Memorandum advised that “disguised contributions” and pertinent “determinations are often based on specific factual circumstances.” (Att. C). Likewise, Attorney Shandler’s February 7, 2014 Advisory Memo stressed that “independent expenditure groups are prohibited under the Campaign Code from working together (a/k/a coordinating) with a candidate who is receiving public funding”. (Att.D).
Speedy ECRB action is appropriate here because a subpoena would amplify existing circumstantial proof of concerted actions, dispel conclusory affidavits and blanket denials, and enable the Board to avert a tainted mayoral election. Due to the elusive proof of concealed collective actions, ECRB investigation of serious complaint charges may be the only way to get at the true facts.
Count I : Wrongful PAC Payment of $1925 for Political “Research”
In essence, this Count challenges the failure to report as indirect contributions the $1925 payment by the Santa Fe Progressive PAC for political “research” in concert with the Gonzales campaign.
At the outset, the ECRB recommended and a City Ordinance enacted a clarification so as to include as contributions all expenditures “made in cooperation, consultation or concert with” with mayoral campaign committees to influence the outcome of a city election. Ord. 2014-2. (Att. E).
This PAC’s $1,925 payment for political research, in concert with the Gonzales campaign, contravenes the Javier Gonzales public financing application which states that his “current campaign will not accept any further contributions … from any sources” other than the City’s $60,000 public financing fund. (Att. F). Since this commitment was that the Gonzales CAMPAIGN would not accept extra contributions, blanket personal denials by candidate Gonzales of PERSONAL knowledge of suspect PAC activities are inconclusive and do not wash. Such personal denials hardly cover the large Gonzales mayoral campaign team, which shares the Center for Progress and Justice on Cerrillos Road with unions and Democratic Party headquarters.
Corroborating this Complaint, Santa Fe’s Progressive PAC registered on September 5, 2013 as supporting Javier Gonzales for Mayor, naming Jon Hendry as its Chair and Treasurer. (Att.G). Prior to October 11, 2013, this Hendry-headed PAC hired Blue Searchlight, a DC political research firm. On January 21, 2014, the PAC paid this firm $1,925 for “research”. (Att. H). During the interim, Jon Hendry was actively working in the Gonzales campaign and its Steering Committee. Following an October 12 , 2013 New Mexican story (Att.I) “PAC HIRED COMPANY TO FIND DIRT ON MAYORAL CANDIDATES”, Hendry was replaced as PAC Chair in a revised PAC registration dated October 18, 2013.(Att, J)
Salient facts confirming the Progressive PAC’s and the Gonzales Campaign Committee’s coordination would quickly pop out in response to a Board subpoena for any communications to or from Jon Hendry, by e-mails or otherwise, between September 1, 2013 to date, that relate to Javier Gonzales or Santa Fe’s mayoral contest.
Regardless of concert, the Progressive PAC’s $1925 payment for political ”research” may constitute a reportable contribution as a monetary “contract or agreement” made “indirectly to a candidate or political committee for the purpose of influencing the outcome of a municipal election.” SFCC Subsections 9-2.3 (I) and 9-3.3(G).
(Gonzales, in his emailed comments, responded to this part of the complaint by saying: “As you know, Jon Hendry had informed our campaign last Fall that he had stepped down from the Progressive Santa Fe PAC, and he offered to join our volunteer sixty-person plus Steering Committee. Within days, he asked his name to be removed from the volunteer committee. No committee meeting ever took place in those few days between his offer and then removing his name. Furthermore, he never attended any campaign meetings at all, nor was any opposition research, or research of any kind, forwarded to me or anyone affiliated with my campaign.”)
Count II: Unreported Contributions by Working Families PAC
On top of the expenditures by the Santa Fe Progressive PAC, the Santa Fe Working Families Political Action Committee, located in Albuquerque, filed its Statement of Organization on January 20, as amended on January 23, 2014 (Att.K) This PAC’s original registration stated its support of “Candidates endorsed by AFSCME”. The amended registration declared: “Supporting Javier Gonzales for Mayor. Opposing Bill Dimas and Patti Bushee”.
Reporting contributions of $5,030 as of February 7, 2014, including $5,000 from AFSCME in Washington, DC, this PAC paid $5,700 for a tilted mayoral election poll by DC-based Third Eye Strategies. (Att.L) The poll featured large gains by Javier Gonzales, and was hailed as “good news for Javier supporters” by Keegan King, the Working Families PAC’s Albuquerque organizer and Treasurer.
Although it is early to predict the ultimate campaign activities of this second pro-Gonzales PAC, such actions would likely constitute indirect “contributions” of something “of value” to the Gonzales electoral campaign, reached by SFCC Section 9-3.3. Given this PAC’s support for “Candidates endorsed by AFSCME”, along with AFSCME’s $5,000 contribution and AFSCME’s illicit program for later “paid volunteers” for the Gonzales campaign detailed below, ECRB scrutiny of this second pro-Gonzales PAC may avert further unfair electioneering before March 4.
Count III: Unlawful Deferred Payments to Campaign “Volunteers”
Basically, this Count challenges a Code violation by AFSCME’s announcement o/a January 28, 2014, to arrange “SANTA FE PAID VOLUNTEER OPPORTUNITIES” and to organize “PAID VOLUNTEERS” to work on the Gonzales mayoral campaign. (Att.M). According to the AFSCME announcement, this would “Help Elect (Go Javier Gonzales!)” for Mayor. The solicitation for paid “canvassing and phone banking” explicitly tendered a “Stipend: Union members will receive an $11/hour stipend to be paid after the March 4 election.”
Those payments are to be made by the Northern NM Central Labor Council, AFL-CIO, which endorsed Javier Gonzales for mayor. Jon Hendry is President of the NM AFL-CIO, and was former Secretary-Treasurer of the Northern NM Central Labor Council.
Significantly, Section 9-2.3(I)(2) exempts only volunteer services “provided without compensation”. Moreover, the February 7, 2014 Shandler Advisory Memo stressed that reporting such payments cannot be deferred until after the election.
Any doubt as to this Code evasion by a pro-Gonzales group is dispelled by AFSCME’s own announcement prior to January 4, 2014 (Att N): DON’T WAIT TO TAKE ACTION—VOLUNTEER DIRECTLY FOR THE MAYORAL CAMPAIGN. The announcement stated that “our members and retirees are still free to volunteer (no stipend available due to campaign finance laws) for Javier Gonzales’ campaign for mayor”. A January 9, 2014 Central Labor Council e-mail confirmed that “Due to campaign finance rules we cannot offer stipends for this volunteering”. The AFSCME announcement also touted a ”Kickoff canvass for Javier Gonzales for Santa Fe Mayor” at the Gonzales for Mayor HQ Center for Progress and Justice on Cerrillos Road. This same Center is the shared address of IATSA Local 480 which lists as its Business Agent Jon Hendry, who is also President of NM AFL-CIO. (Att.O)
Count IV: Pro-Gonzales Flyers by Working America (Tarin Nix)
Last week’s wave of pro-Gonzales flyers by Working America of Santa Fe, organized by Tarin Nix after leaving the Bushee campaign, shows the rising tide of coordinated private electioneering that mocks Santa Fe’s public financing system. (Att. P). To date, Working America is the fourth private group promoting the Gonzales candidacy in material ways.
Notably, Javier Gonzales and Working Together organizer Tarin Nix (a recent ECRB complainant) joined and spoke at an August 29, 2013 rally following his declaration to run for Mayor. This partisan event was likewise held at the Center for Progress and Justice on Cerrillos Road, the hub of the Gonzales campaign and several union operations.
As of February 7, 2014 pro-Gonzales Working Together had collected $5,832, including $5,000 from Working Together in Washington, DC, and Tarin Nix had left Working Together. Notably, Working Together is a local affiliate of the AFL-CIO, of which Jon Hendry is New Mexico President.
Conclusion: ECRB Should Avert A Tainted Mayoral Election
All told, the foregoing chronicle reveals an ongoing program to subvert Santa Fe’s public financing system. To treat as separate the collective campaign activities emanating from the Center of Progress and Justice is naïve. Unless demonstrated otherwise, strict ECRB remedies are apt– including decertification from public financing, restitution of public financing funds, and monetary penalties. Strong deterrent relief is justified in light of candidate Gonzales’ serial reporting offenses (Att. Q), and refusal to request dissolution of his campaign supporting PACs.
To be sure, unions and independent entities have a First Amendment right to speak out before a municipal election. Arizona Free Enterprise Club v. Bennett, 131 S,Ct. 2806 (2011); Citizens United v. Federal Elections Commission, 130 S.Ct. 876 (2010); Buckley v. Valeo, 424 U.S. 1 (1976). But after endorsing and cooperating with a candidate, private entities are no longer independent and cannot buy a publicly funded mayoral election.
Above all, the ECRB should honor its civic mission and avert a tainted mayoral election. Backed by an investigative subpoena, the Board should disapprove the pro-Gonzales PACs’ subversion of Santa Fe’s public campaign financing system, which was deplored by a January 26 Editorial because “it stinks”. (Att.R)