Campaign received about $470,000 from a federal fund created by the state GOP

Ehrlich uses U.S. account

Maryland Votes 2006

August 17, 2006|By JOHN FRITZE | JOHN FRITZE,SUN REPORTER

Gov. Robert L. Ehrlich Jr.'s gubernatorial campaign has used more than $470,000 from a federal account created by the state Republican Party to pay for daily operations, providing new fodder for partisan critics who are attempting to link the governor with unpopular White House policies.

The shifting of funds appears to have allowed the Ehrlich campaign to tap into hundreds of thousands of dollars donated to the Maryland Republican Party in the days leading up to a $1 million May fundraising event that featured President Bush.

The federal account received dozens of $10,000 donations in late May and early June, Federal Election Commission filings show.

The money is being spent on everything from salaries to postage, and represents a relatively new practice that lets candidates broaden their pool of financial resources and bypass contribution caps contained in state law. Maryland statutes allow individuals and companies to give a maximum of $4,000 to a state candidate.

While the practice is employed by Democrats and Republicans alike, Ehrlich's campaign is using the federal funds much more heavily than any other candidate this year.

Detailed state campaign finance reports available yesterday show no similar contributions for Mayor Martin O'Malley, Ehrlich's Democratic opponent.

Officials with the Ehrlich campaign and the state Republican Party said yesterday that the system of moving money complies with election law. They characterized the transactions as evidence of a surge in support for the state party after Ehrlich's 2002 victory.

"It's a great indication of the successful record of the governor," said Audra Miller, spokeswoman for the Maryland Republican Party. "The Maryland Republican Party is having great success in our fundraising, and we're proud of the support we've received."

Some of Ehrlich's Democratic critics, however, likened the transfers to soft-money contributions once pervasive in federal elections but restricted by recent reform efforts.

A spokesman for O'Malley suggested that the transfers of federal money into a state race was simply a way for the governor to hide his ties to Bush and other national Republicans. A July poll for The Sun showed six of 10 likely voters disapproved of the president's job performance.

"Resorting to this kind of sleight of hand this early in the campaign certainly speaks to the lack of support in Maryland for Bob Ehrlich," said the spokesman, Hari Sevugan. "If anything, these numbers show that Bob Ehrlich's biggest supporter is George W. Bush."

Both campaigns released fundraising totals this week that showed Ehrlich still has a significant financial advantage heading toward the Nov. 7 general election.

Together, O'Malley and his running mate, Prince George's County Del. Anthony G. Brown, have $5.1 million in cash on hand. Ehrlich and his running mate, state disabilities Secretary Kristen Cox, have a combined $8.7 million in the bank.

But those state account figures do not reflect the support Ehrlich has at his disposal in the state party's federal account. The transfers are not in the form of cash, but pay for services such as staff, printing, postage or payroll taxes and are recorded on finance forms as "in-kind contributions."

Campaign officials would not elaborate on how the money is being used or the extent of its impact on the campaign.

"We are providing complete information as required by Maryland election law and by the State Board of Elections," campaign spokeswoman Shareese N. DeLeaver repeated several times yesterday when asked how the money is being used specifically. "The party should support the top of the ticket as well as local races around the state. This is evidence of a well-funded, well-organized Maryland Republican Party."

DeLeaver and Miller, the party spokeswoman, each received payments from the federal account, records show.

Democrats have made similar in-kind contributions in the past, but they argued that in Ehrlich's case the move was an attempt to bring significant amount of money raised by the national Republican party into the campaign.

Since the beginning of last year, the Maryland Republican Party's federal account has raised about $1.2 million, more than $1 million of which came in the six weeks around Bush's May 31 fundraiser this year - almost all of it in big-dollar donations. During that time, the party collected 81 checks for $10,000 and 34 for at least $5,000.

Donations came from many business leaders who have financial interests regulated by the state, such as Joseph A. De Francis, president of the Maryland Jockey Club; and John C. Erickson, the chief executive officer of Erickson Retirement Communities.

"This is George Bush dumping and pumping national money into Maryland," said Derek Walker, executive director of the Maryland Democratic Party. "That's why Ehrlich has resorted to this at such an early stage."

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