Building up campaign funds from developers

The Political Game

`Loophole': A provision of state election law, often used by builders, lets donors get around the $4,000 limit on contributions.

January 27, 2004|By Michael Dresser and Kimberly A.C. Wilson | Michael Dresser and Kimberly A.C. Wilson,SUN STAFF

MONTGOMERY County Executive Douglas M. Duncan has a good friend in Francis O. Day III.

The Rockville developer, his family members and about a dozen companies he controls have contributed almost $75,000 to the likely 2006 Democratic gubernatorial candidate - using a provision of Maryland election law that lets donors get around the state's $4,000 limit on contributions to a single candidate over each four-year election cycle.

Fifteen of the contributions worth $68,000 - all but one for $4,000 - were listed as coming from the same Rockville address Sept. 9. Another $4,000, from Maria Day, came from the family home in Potomac.

Most of the contributions were attributed to limited liability corporations apparently controlled by Day. Under Maryland law, each LLC is treated as a separate entity under election law as long as its ownership mix varies even slightly from the others.

The provision - considered a loophole by campaign finance reform advocates - is popular among developers, who typically set up a new corporation for each project they undertake.

Day is an old hand at using the so-called loophole. For the 2002 election, he, his relatives and entities he controlled gave more than $40,000 to Republican Robert L. Ehrlich Jr.'s successful gubernatorial campaign.

Ehrlich used the provision aggressively in 2002, and it appears that Duncan is following the governor's lead.

In addition to Day's contributions, Duncan also collected $20,000 since the last election from various entities controlled by developer Sami Totah. At least $16,000 came in from companies sharing the same office suite as DANAC Corp., a major player in the redevelopment of downtown Rockville.

Day was out of town and Totah did not return a call seeking his comment.

Kate Sheckells, Duncan's political director, said the campaign was aware that some of its supporters were contributing through multiple partnerships and LLCs but did not regard it as a loophole.

"We're honestly just following the law," she said. "This is what's on the books right now."

Sheckells said Duncan is in favor of campaign finance reform and would support an "improvement" in the law.

James Browning, executive director of the watchdog organization Common Cause/Maryland, said the aggressive use of the provision shows the state's campaign finance laws aren't working.

Browning said the provision gives developers more potential influence than average citizens and even other business owners.

"The danger of few people putting so much money in the process is that they're in a strong position to ask for favors later on," Browning said.

The provision could be especially dangerous if it were used in local races such as for the General Assembly or a county council, Browning said.

"The loophole means if you've picked a fight with one developer, you're really picking a fight with eight or nine or however many LLCs he or she has," he said.

Browning said he is expecting to see bills filed this year to tighten the law, but he said they are unlikely to pass unless they receive bipartisan support.

Schaefer says Ehrlich needs to toughen up

From a former governor to the current governor, Comptroller William Donald Schaefer has some friendly advice for Ehrlich: Develop more of an edge.

After watching the opening days of this year's General Assembly session, Schaefer said he was dismayed to see lawmakers override several of Ehrlich's vetoes. Lawmakers restored an energy efficiency bill, a liquor license measure in Baltimore and a bill to restore pensions benefits for certain state workers.

"You don't let the legislature override your vetoes," Schaefer said. "It should have been his legislative staff saying if you sign the veto, they're going to override you."

To avoid getting shown up in the future, the comptroller says the governor needs to shed some of his boy-next-door persona.

"He's a nice man and he believes in the tooth fairy and things like that," the comptroller said.

Schaefer speaks from experience. He was the last Maryland governor to have a veto overridden - in 1989. His successor and nemesis, former Gov. Parris N. Glendening, never had a veto overridden.

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