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Politics > News Hits

Fun with funds

How pols get unlimited donations via 527s

 

Published 7/14/2010

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On his official Michigan House webpage, George Cushingberry's event two weeks ago was a celebration of the blues put on by the local elected official eager to host a party.

"I am pleased to sponsor this annual event and I'm asking residents and blues enthusiasts from all over to join me at our historic jazz performance hall, Jovonne's Lounge. Together, we can help support this famous landmark and pay tribute to its performers and the one-of-a-kind music it helped create," Cushingberry said on his official website. There was no mention of an admission fee, cover charge or political donation.

But on his campaign website, Friends of George Cushingberry, it was a different matter. "Donations expected to Northwest Leadership fund," the announcement there read.

The Northwest Detroit Leadership Account is one of 18 so-called 527 organizations operating in Michigan, according to the Center for Responsive Politics, a watchdog group. Named after the number of U.S. tax code section that also applies to candidate committees and political action committees — better known as PACs — the 527s differ in that they are exempt from Federal Election Commission or state election commission regulations limiting how much money can be contributed to them.

"527 committees are tax-exempt groups established to raise unlimited money for general political activities, such as voter mobilization efforts," according to the Center for Responsive Politics. "They are prohibited from directly supporting or opposing a specific candidate."

As the nonprofit group Source Watch points out, as long as a 527 group doesn't "use the 'magic' words that expressly advocate someone's election or defeat, and/or directly subsidize federal campaigns themselves," they are free to collect "unlimited donations from corporations, unions and wealthy individuals."

All this bothers Rich Robinson, executive director of the Michigan Campaign Finance Network, another watchdog group.

"They seem to be mostly kind of a personal mad money drawer for a lot of elected officials," he says.

Cushingberry's 527 lists its founder as one of the fund's primary beneficiaries. Of the $48,350 the fund raised in the 2008 election cycle, $14,700 went to Cushingberry. Of the $37,610 raised in advance of the 2010 election, he's so far received $15,200. The listed reason for the payments is primarily to reimburse Cush for "officeholder expenses" he has shelled out.

Details of what those expenses might be aren't revealed. Attempts to contact Cushingberry weren't successful.

The roughly $37,000 that the Northwest Detroit Leadership Account has raised this election cycle pales next to the Cox Administrative Account's nearly $230,000 — yes, that's Mike Cox, the Michigan Attorney General who's seeking the Republican gubernatorial nomination.

Other 527s, says Robinson, are linked to Democratic gubernatorial candidate Virg Bernero, Gov. Jennifer Granholm, Secretary of State Terri Lynn Land and Oakland County Sheriff Michael Bouchard.

Incidentally, but always of interest to News Hits hacks, the "Fix Lansing, Get Michigan Back to Work" group, received all $25,000 of its contributions in the first quarter of this year from the Moroun family, according to tax records.

That's the clan with patriarch Manuel "Matty" Moroun, who owns the Ambassador Bridge. Moroun's company, the Detroit International Bridge Co., donated $10,000 to the Fix Lansing 527 at the end of last year.

Bouchard, according to the Center for Responsive Politics, has netted $3,200 from the fund. The fund has also handed out almost $25,000 this election cycle so far to Great Lakes Strategies, a political consulting group with ties to Land, Michigan Senate Majority Leader Mike Bishop and other Republican candidates.

For a look at Michigan's 18 currently operating 527s, check out opensecrets.org, the site run by the Center for Responsive Politics.

But back to Cushingberry: Term-limited out of this House seat this year, the former Wayne County Commissioner is seeking the Democratic nomination for the state Senate in the 4th district, which encompasses much of western Detroit. He faces three other challengers in the August primary — Michael Garrett, Carron Pinkins and former state Rep. Virgil Smith. The winner will face Republican Frederick Robinson II in the November general election.

News Hits was written by Metro Times staff writer Sandra Svoboda. You can reach her at 313-202-8015 or ssvoboda@metrotimes.com.

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