August 15, 2016

Will Late Filing by PAC Lead to Fines?

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An independent expenditure group appears to have broken Oklahoma Ethics Commission rules by failing to disclose its campaign activities until well after this year’s primary.

State records show a newly formed political action committee called Conservatives for Common Sense spent nearly $50,000 in opposition to state Sen. Nathan Dahm, R-Broken Arrow, and in support of one of his opponents the District 33 GOP race, which Dahm went on to win.

Unlike typical contributions, independent expenditures don’t flow directly to a candidate. They pay directly for campaign ads, mailers and other activities and must be made without the coordination or solicitation of the candidate.

Oklahoma requires this type of spending to be reported to the Ethics Commission by the first business day following the payment and if the total contributions are over $5,000 and made within two weeks of an election.

Conservatives for Common Sense spent the money on direct mailers, phone calls and social media ads within two weeks of the June 28 primary, commission records show. This triggered four reports that were due June 16, June 17, June 21 and June 22, according to the commission’s website.

However, all four of the reports weren’t filed until July 30.

The delay is one of the longest among candidates and PACs that have been active this election season.

Only 4 percent of reports were filed late for each of the last two major filing deadlines for legislative candidates and PACs, commission records show. Most of those reports were late by only a day or two.

Although information is scarce on the Conservatives for Common Sense, state filings show the group was formed May 24 in order “to support and educate like-minded conservatives that support common sense solutions instead of political rhetoric.”

The filing lists the chairman as Milton Blackburn, of Oklahoma City, and John Craig, of Edmond. Calls to both were not returned. Campaign finance filings show the bulk of the PAC’s money came from labor groups, including several firefighting associations based in Oklahoma and Washington, D.C.

Ashley Kemp, executive director of the Ethics Commission, said she wasn’t familiar with this specific case. She noted that it can take weeks to go through the process for the commission to formally recommend assessment of late fees.

“But if someone is late, we are going to assess them a late filing fee,” she said.

Because the flings were more than five days late, the PAC likely would face the state’s maximum compliance violation of $1,000 for each required report. The commission can seek steeper fines but that rarely occurs, Kemp said.

“If it was something that was particularly egregious or intentional, and we had reason to believe that, we could elevate it by opening an investigation,” she said. “But for something that appears just missing a deadline, it probably won’t be elevated.”

In the past, the Ethics Commission struggled to collect late filing fees. It decided to stop assessing the fees altogether in 2014 because of ambiguity in the agency’s rules and fee schedule.

But new rules, which went into effect July 1, 2015, set a fine of $100 for the first day for a late filing, $100 per day for each of the next five days and $400 on the seventh day. Those apply to political parties, PACs and candidates. For independent expenditures, the fines are $200 each day for five days. In all, the fine is limited to $1,000 per late report.

Ethics Commission records show that it has sent out notices for violations totaling $57,800 over the past year. Several of these cases involved older or inactive candidate committees that were never officially terminated.

Kemp said the commission hasn’t had much trouble collecting these fees, which are due 30 days after the notice is issued.

If a group doesn’t pay, she said, the commission can open an investigation or force a judgment from a district court. Kemp said the agency hasn’t pursued these options because the new rules were only put in place last year.

“So far it’s working pretty well,” she said.