Political donations exceeded cap

3 companies linked to Italian gun maker Beretta donated $12,000 to Ehrlich campaign

October 22, 2006|By John Fritze | John Fritze,Sun reporter

Three companies with ties to the Italian gun manufacturer Beretta together contributed more than the $4,000 political donation cap set by state election law -- giving a total of $12,000 to Gov. Robert L. Ehrlich Jr.'s re-election campaign in August.

Beretta USA, a U.S. subsidiary of Italy-based Beretta Holding, gave $4,000 to Ehrlich. Benelli USA and Stoeger Industries, also Beretta subsidiaries, separately gave $4,000 each to Ehrlich's campaign, according to the Maryland State Board of Elections.

After questions were raised about the arrangement by The Sun last week, the companies -- all of which have offices in Accokeek -- agreed to rescind a $4,000 contribution from Stoeger, according to an attorney for the company.

"Our interpretation of the law still is that because these three corporations have separate boards of directors that each is allowed to give its own donation," said Jeff Reh, general counsel for Beretta USA. "But the Ehrlich campaign views these issues very cautiously, and rather than create an issue we thought it would be easier just to rescind the donation."

Maryland campaign finance laws prohibit donors -- including businesses with certain ties -- from giving more than $4,000 to a candidate for state office and more than $10,000 overall to candidates during a four-year election cycle. The limits are designed to ensure that a small group of contributors do not influence the outcome of a race.

It is not uncommon for companies to set up multiple firms, usually limited liability companies, to skirt campaign finance caps. However, in this case the three firms are long-established companies. The arrangement also involves a gray area of campaign finance law because the companies have an international parent company.

Campaign aides for Baltimore Mayor Martin O'Malley, who is running against Ehrlich, attempted to tie the Beretta contributions to Ehrlich's decision earlier this month to send dollar bills to potential donors. Maryland elections officials referred a complaint about the practice to the state prosecutor's office.

"This is not surprising from a campaign that's already under criminal investigation," said O'Malley spokesman Rick Abbruzzese.

Stoeger, Benelli and Beretta USA are all subsidiaries of the same Italy-based company, according to Hoover's Inc., a company that develops company profiles. Stoeger is owned by Benelli. But Reh said that the Italian parent company's ownership of Benelli and Beretta USA are slightly different -- meaning that, in the company's interpretation, both may make separate contributions.

However, Stoeger's ties to Benelli are stronger, which led officials to the conclusion that those subsidiaries could not be treated separately for campaign donation purposes.

The state's online campaign finance database notes that all three contributions were recorded Aug. 21, though an Ehrlich aide said the checks were written on different dates. State law generally requires campaigns to record contributions on the day they are received -- as the Ehrlich campaign did in this case -- not the check date.

Shareese N. DeLeaver, an Ehrlich campaign spokeswoman, said the campaign adheres to all campaign finance laws.

"All companies that contribute to the Ehrlich campaign are well aware of campaign finance laws," DeLeaver said. "The Ehrlich campaign will continue to act within the confines of the law."

john.fritze@baltsun.com

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