Donald Trump and the art of the campaign expense

By Dan Christensen, FloridaBulldog.org 

Inside Donald Trump's Boeing 757

Inside Donald Trump’s Boeing 757

Donald Trump knows how to make money, even when he’s running for president.

Federal records show that Trump’s campaign paid the Republican frontrunner and 10 companies he owns more than $1.64 million for various campaign expenses since the billionaire businessman began his run last spring.

The payouts amounted to nearly one of every three dollars the Trump campaign spent through Sept. 30, according to campaign reports, including an amended quarterly report filed Dec. 17 with the Federal Elections Commission.

Most of that money, $1.2 million, was paid to Tag Air, the holding company for the luxury Boeing 757 with 24-karat gold plated seat belts that Trump uses on the campaign trail. The jet can accommodate up to 43 passengers. The payout was the fair market value of those flights, according to the campaign. You can take a video tour of the plane here.

Another $410,000 went to Trump and Trump entities to reimburse payroll expenses and pay rent, hotel and restaurant bills.

Trump himself was paid more than $100,000, including $45,000 for rent and $60,000 in reimbursements for campaign payroll expenses he incurred, the records show.

The Trump campaign pie also was sliced to pay rent to The Trump Corporation, Trump Tower Commercial LLC, Trump Plaza LLC, and Trump CPS LLC. Together, they collected more than $278,000.

Trump Payroll Corp., too, was paid nearly $18,000 for pre-paid payroll expenses. Campaign checks also went to Trump Restaurants LLC and Trump hotels in New York and Las Vegas for meals and lodging, though in much lesser amounts.

While noteworthy, it’s not unlawful for Trump’s campaign to pay Trump or his companies for their services. Indeed, federal law often requires it.

“It’s not illegal as long as they’re paying fair market value,” said prominent Washington, D.C. campaigns and elections lawyer Jan Witold Baran. “In fact, if a campaign uses the goods and services of a corporation they have to pay for it. Otherwise, it would be an illegal corporate contribution even though the candidate might be the 100 percent owner of the business. That has been the policy of the Federal Elections Commission for decades.”

Federal election law, however, does not contemplate a mega-wealthy candidate like Trump.

“There’s no question that Trump is conducting a campaign that’s unique in many respects. I’ve been doing this for 40 years and I never heard of a candidate disclosing his financial numbers and complaining they were too low – that I’m really richer than these forms say,” said Baran.

GIVING MONEY TO A BILLIONAIRE

Trump and campaign manager Corey Lewandowski have said repeatedly – most recently in a radio interview with Lewandowski three weeks ago – that Trump is self-funding his campaign. While that was true last spring when Trump seeded his campaign with a $1.8 million loan, it no longer is.

The Trump campaign solicits credit card donations on its website, telling supporters to “Stand with Donald Trump to Make America Great Again.” Through Sept. 30, the campaign reported accepting $3.8 million in contributions – a number that’s sure to rise with the campaign’s year-end report due Jan. 31.

Donald Trump

Donald Trump

About $2.8 million of those contributions to billionaire Trump were given by small donors whose names aren’t required to be disclosed because they contributed $200 or less.

Neither the Trump campaign nor Dan Scavino, a senior advisor to the campaign, responded to requests for comment.

What the Trump campaign took in from outside contributors in the last reported quarter is less than what it spent, $4 million. In all, the campaign’s reported net operating expenditures were $5.4 million.

Some other major Republican candidates have spent much more.

For example, Sen. Marco Rubio raised $14.8 million in contributions and spent $6.9 million on operating expenditures through Sept. 30. Jeb 2016 Inc., the campaign committee set up by former Florida Gov. Jeb Bush, raked in $24.2 million in individual contributions and spent $14.5 million during the same period.

All those contributions, and Trump’s as well, are designated for the primary elections. $2,700 is the maximum an individual may give for the primaries.

The Trump campaign’s first television ad, released Sunday, marks a turning point in spending. To date, Trump has benefitted from untold hours of free coverage. With the Iowa caucus on Feb. 1, the New Hampshire primary on Feb. 9 and Super Tuesday on March 1, he and other candidates are expected to shell out big bucks to blanket the airwaves.

Can Trump turn a profit on his campaign — that is, see his loans repaid in full and additional campaign dollars flowing to his companies? It will depend on his fortunes in the primaries, his contributors’ staying power and his determination to win.

Senate ethics committee asked to investigate Marco Rubio for improper use of campaign funds

By Francisco Alvarado, FloridaBulldog.org 

Rubio speaking at the 2015 Conservative Political Action Conference (CPAC) in National Harbor, Maryland Photo: Gage Skidmore via Wikimedia

Rubio speaking at the 2015 Conservative Political Action Conference (CPAC) in National Harbor, Maryland Photo: Gage Skidmore via Wikimedia

A national watchdog group is claiming U.S. Sen. Marco Rubio may have broken U.S. congressional ethics rules by allegedly using funds from a political action committee to pay a writer who helped pen the Miami Republican presidential candidate’s 2012 memoir, An American Son.

Citizens for Responsibility and Ethics in Washington, or CREW, wants the U.S. Senate Select Committee on Ethics to investigate whether Rubio converted campaign funds to personal use, which is a violation of Senate rules, according to a Dec. 17 letter the group’s executive director Noah Bookbinder sent committee chairman Johnny Isakson (R-Ga.) and vice-chairwoman Barbara Boxer (D-Calif.).

Between May 14 and October 3, 2012, the Rubio-affiliated Reclaim America paid a total of $20,000 to book author Mark Salter for “strategic consulting,” according to a 2012 quarterly campaign finance report filed by the PAC. However, Bookbinder’s letter claims that the payments to Salter came around the same time he was helping Rubio organize and revise the memoir, for which the senator received an $800,000 advance.

“Campaign contributions should be used for their intended purpose—campaigning,” Bookbinder said in a statement. “It is up to the ethics committee to make sure that actually happened here.”

Alex Conant, spokesman for Rubio’s presidential campaign, and Reclaim America treasurer Lisa Lisker did not respond to emails requesting comment. In an interview with the National Journal, Salter said his Reclaim America payments were for “work unrelated to the book.”

According to CREW’s letter, it is unclear what the $20,000 actually paid for. Bookbinder cites a 2013 Tampa Bay Times article that states: “Rubio used his PAC to pay $20,000 to Mark Salter, a strategist who helped run John McCain’s 2008 presidential campaign, for help writing a memoir.” Bookbinder also noted that Rubio personally profited from the memoir when he received his six-figure advance.

SECOND COMPLAINT

This marks the second time in three months that CREW has accused Rubio and one of his political organizations of breaking federal campaign finance laws and regulations. In October, Bookbinder filed a complaint with Internal Revenue Service Commissioner John Koskinen asking for an investigation into the non-profit group Conservative Solutions Project Inc.

The complaint states that Conservative Solutions Project exists only to benefit Rubio’s presidential campaign, spending more than $8 million on television ads supporting the senator’s bid for the Republican nomination. Under federal law, 501(c)(4) organizations like Conservative Solutions Project must be primarily engaged in promoting social welfare and are excluded from participation in political campaigns.

Bookbinder noted that Conservative Solutions Project is closely affiliated with a PAC that uses the same name and was set up to support Rubio’s presidential run. The two organizations share board members, fundraising consultants and spokesmen, Bookbinder said.

“Groups registered as social welfare organizations need to be just that, social welfare organizations,” Bookbinder said. “This is just a blatant attempt to get around the law and keep secret donors supporting Sen. Rubio’s campaign.”

Rubio’s campaign finance activities have faced scrutiny from watchdogs and federal regulators since he first ran for federal office in 2010, when his campaign accepted $210,173 in excessive contributions that resulted in an $8,000 civil penalty by Federal Elections Commission in 2012.

Two years later, the FEC warned the Rubio campaign it was accepting individual contributions that exceeded the $2,700 maximum after each of its four quarterly filings in 2014. This past September, his presidential campaign refunded more than $120,000 in excessive contributions that had been flagged by the FEC.

Lawmakers protect title loan firms while borrowers pay sky-high interest rates

GOP governors, including Rick Scott, take cue from Obama on how to push policy

By Rachel Baye, Center for Public Integrity 

The Let's Get to Work political group began running this ad featuring Florida Gov. Rick Scott, called "On the Move," in March to help promote the Republican's proposed tax-cut plan. Use of such political groups to push policies, rather than elections, is a new twist on how governors are using political money. Youtube/Let's Get To Work

The Let’s Get to Work political group began running this ad featuring Florida Gov. Rick Scott, called “On the Move,” in March to help promote the Republican’s proposed tax-cut plan. Use of such political groups to push policies, rather than elections, is a new twist on how governors are using political money. Youtube/Let’s Get To Work

Two Republican governors are copying an unusual tactic from President Barack Obama’s political playbook: using pet political groups seeded by donors to push policies, not just candidates.

Political organizations tied to Florida Gov. Rick Scott and Illinois Gov. Bruce Rauner are diverging from the typical so-called leadership PACs used by federal lawmakers and some governors to amass power because they are not just giving campaign contributions to like-minded legislators. Instead they are pushing the governors’ legislative agendas with public campaigns far removed from the campaign trail. (more…)

Rubio’s ambition tied to hundreds of millions of dollars in losses for South Florida schools

By William Gjebre, FloridaBulldog.org 

Marco Rubio

Marco Rubio

Miami-Dade, Broward and Palm Beach public schools have lost hundreds of millions of dollars since 2004 when the Florida Legislature changed the way schools are funded – an action linked to the political ambitions of Republican Party presidential candidate Marco Rubio.

The New York Times reported Oct. 21 that then-State Rep. Rubio bargained for political support to become speaker of the Florida House in exchange for not opposing measures that diverted funds from large school districts like his home county of Miami-Dade to smaller districts upstate.

Rubio served as Florida House Speaker from 2006-2008. According to The Times, he secured the position in 2003 with backing from upstate legislators after he agreed not to oppose measures that would reduce funding to heavily populated areas with higher property tax bases like Miami and increase spending in less dense, rural regions in the state.

Rubio, 44, now a first-term U.S. senator and serious Republican challenger for his party’s presidential nomination next year, did not respond to requests for comment left with his campaign and his Senate office. The Times, however, reported that Rubio previously said there were no tradeoffs in his successful effort to become Speaker of the House, and that he had complained that there was excessive spending and waste of funds by the Miami-Dade school district.

The changes that have cost South Florida’s school districts so much included alterations to the school funding formula that determined student allocations. One change to the Florida Education Finance Program (FEFP) involved the addition of an “amenity factor” to the so-called district cost differential, or DCD, which at the time sent more money to large districts due to their higher costs of living.

Another change involved so-called “compression or equalization” funding in which school districts rich in local property taxes – like Miami-Dade, Broward and Palm Beach – saw funds above a statewide average taken away and given to less property-rich districts. Under this take-from-the-rich-and-give-to-the-poor arrangement, school districts in South Florida became known as “donors.”

The changes, signed into law by then-Gov. Jeb Bush, were effective starting in the 2004-2005 school year.

At the request of FloridaBulldog.org, Miami-Dade Public Schools compiled a list of the cumulative gains and losses from then until now due to those funding changes at school districts in each of Florida’s 67 counties.

MIAMI-DADE THE BIGGEST LOSER

Miami-Dade County Public Schools was the biggest loser of state funds, with an eye-popping total loss of slightly more than $1 billion.

Broward County Public Schools took the second biggest hit, ranking 66th among Florida’s 67 county school districts with total losses from 2004 thru 2015-16 due to the funding changes of $509 million.

Palm Beach Public Schools was third with losses of $335 million, and ranked 65th among the counties, according to the list. Even Monroe County schools lost big: $30.5 million, ranking 63rd.

The Miami-Dade School’s study also found the biggest winner from the funding changes was Duval County, with a cumulative gain of $309 million since the 2004-2005 school year. Hillsborough County ranked second with a $271 million gain and Polk County was third with a gain of $225 million.

Federick Ingram

Federick Ingram

Fedrick Ingram, the recently elected vice president of the Florida Education Association and outgoing president of the United Teachers of Dade, said the funding loss in South Florida impacted teacher salaries and resulted in some program cuts.

“He (Rubio) could have assisted the local area … but supported more funds for the north (schools districts), ‘’ Ingram said. “He chose personal ambition.”

School districts in Broward and Palm Beach confirmed that they, too, suffered significant cumulative losses as a result of the changes to the funding formula and the district cost differential since 2004. They calculated their total losses to be millions of dollars lower than what Miami-Dade found.

Broward County Public Schools lost approximately $346 million since 2004 as a result of the changes, according to the district’s public information office. An official with knowledge of financing at Palm Beach County Public Schools said that district lost $189 million through last year as a result in the changes.

The Times story outlined how Rubio, after being elected to the House in a special election in 2000, set out to curry favor with House Republican leaders, leading to his ascent to House speaker after making the alleged deal.

While the Legislature was in session in 2004, the Miami-Dade School Board attempted to thwart the funding changes. Records show that on April 14, 2004 the board instructed staff that its top issue was to “preserve” the existing favorable district cost differential.

But a month later, with the change apparently by then approved by the Legislature, the Board instructed staff to hire lawyers to sue to stop it. The legal effort was later joined by the Broward and Palm Beach school districts.

SCHOOL DISTRICTS’ CASE TOSSED OUT

The courts, however, dismissed the case about June 2005. But not before legal costs rose to $620,000, the Miami-Dade School Board was later informed. Broward paid $150,000 and Palm Beach, $125,000.

It didn’t take long before Miami-Dade and other large districts felt the pain of the funding cuts.

Then-Miami-Dade Superintendent Rudy Crew outlined the financial impact of the changes at the March 12, 2008 School Board meeting.

“The continuation of the loss of the DCD has meant that between 2004 and now this district has lost approximately $200 million,” said Crew, according to the minutes. He went on to discuss a series of budget cuts that included layoffs and furlough days.

Two months later, at its May 5, 2008 meeting, the school board was informed that the losses were worse than originally thought.

“Another impact has been equalization of local millage where the state adopted a policy that deprived Miami-Dade and other like counties of general revenues coming from general revenue taxes – sales taxes, explained then-Associate Superintendent Alberto Carvalho, according to the minutes.

“The impact of that on Miami-Dade over the past four years, beginning in 2005-2006, with a $10 million hit progressing all the way to 2007-2008, current year, to the tune of $67 million, and projected to become $18 million next year,” Carvalho said.

Adam Hasner, a former Florida legislator who was a part of Rubio’s Tallahassee team, did not return calls for comment. The New York Times story reported Hasner praised Rubio for looking out for the entire state rather than just his home county.

But that stance also appears to have helped Rubio achieve what only two other South Florida politicians have accomplished in the last half-century: capturing the powerful post of Speaker of the Florida House.

While Miami-Dade school officials fumed about the funding cuts, at least one education watchdog cheered the changes. Charlotte Greenbarg, who for years has closely monitored education in Miami-Dade and Broward, said the funding change was necessary because the large districts had wasteful spending practices.

Miami-Dade, Greenbarg said, was top heavy with high-paying administrators, many of them earning more than $100,000 year while teachers were paid much less.

As Marco Rubio pushes past Jeb Bush in polls, Democrats shift sights

By Francisco Alvarado, FloridaBulldog.org 

Jeb Bush, left, and Marco Rubio

Jeb Bush, left, and Marco Rubio

With Marco Rubio overtaking Jeb Bush in polls for the Republican presidential nomination, national Democratic political organizations have turned up their attacks on the U.S. senator, accusing him of breaking Senate ethics rules and federal election laws by soliciting campaign donations from his Senate office and using Senate staff to work on his campaign.

In the coming weeks, these groups will continue highlighting more of Rubio’s vulnerabilities, from his alleged misuse of a Republican Party credit card to his close friendships with disgraced politicians like ex-congressman David Rivera and former State Rep. Ralph Arza, according to Democratic and Republican operatives in Rubio’s home county of Miami-Dade.

“Marco seems to be the guy on the upswing right now,” said Ben Pollara, a Miami Beach-based Democratic political consultant. “It is only natural that they are turning their fire on him. A true deep dive into his record in Florida is bound to happen.”

Miami-Dade Republican Party Chairman Nelson Diaz concurred. “I’ve noticed Democrats are trash-talking Marco more,” he said. “It might hurt him a little. At the end of the day, people understand candidates are not 100 percent perfect.”

Miami-Dade Republican Party Chairman Nelson Diaz

Miami-Dade Republican Party Chairman Nelson Diaz

Over the past two months, Rubio has ascended in national polls, as well as surveys in early primary states like Iowa, New Hampshire and Florida. While Rubio still trails billionaire real estate mogul Donald Trump and former neurosurgeon Ben Carson, he’s topping Bush, who has tumbled into the single digits after starting his campaign as the presumed front-runner.

A Quinnipiac national poll released Nov. 4 has Rubio garnering 14 percent of Republican voters, trailing Carson and Trump, who virtually tied for first. Bush, on the other hand, had his worst showing yet with 4 percent, placing him fifth behind U.S. Sen. Ted Cruz.

The momentum shift has led to groups like the American Bridge 21st Century political action committee and the American Democracy Legal Fund to escalate their strikes against Rubio.

American Bridge is a super PAC that conducts opposition research for the Democratic Party. Rodell Mollineau, a former staffer of Sen. Harry Reid, is American Bridge’s treasurer and George Soros, the billionaire hedge fund manager and Democrat rainmaker, is one of the PAC’s largest benefactors. Soros contributed $1 million to American Bridge in May, according to filings with the Federal Elections Commission (FEC).

Since Oct. 23, American Bridge has produced three YouTube videos assailing Rubio, but none on the other Republican contenders. Prior to that, American Bridge primarily focused on Bush, having made 41 online clips since the former Florida governor entered the race in June. In contrast, the PAC has produced 10 total videos about Rubio since his presidential announcement in April.

TAKING AIM AT RUBIO

In the most recent American Bridge video about the senator, uploaded on Oct. 29, the PAC takes aim at Rubio’s abysmal Senate attendance record with screenshots of a Sun-Sentinel editorial calling for him to resign. In addition, Rubio is featured in the headlines of 15 of 22 blog posts on American Bridge’s website between Oct. 23 and Nov. 4. Spokespersons for American Bridge and Rubio’s presidential campaign did not respond to multiple email requests for comment.

While American Bridge is hammering Rubio with videos and blogs, the American Democracy Legal Fund — a group helmed by former Democratic National Committee communications director Brad Woodhouse — wants the FEC to investigate Rubio for allegedly breaking Senate ethics rules and campaign finance laws.

According to an Oct. 28 complaint signed by Woodhouse, Rubio solicited campaign contributions during an on-air interview with Fox News when he was inside the Russell Senate Office Building in Washington, D.C. The complaint alleges Rubio said, “obviously if somebody watching this program wants to help us, they should go to marcorubio.com and chip in.”

Woodhouse claimed “Rubio’s campaign donation pitch was a flagrant violation of federal law and Senate rules.” His complaint also accuses Rubio’s Senate staff of providing policy proposals and ideas to his campaign that were crafted during work hours using Senate resources and facilities.

This is not the first time Rubio has run afoul of campaign finance laws. In September, after receiving a warning from the FEC, the Rubio campaign notified federal regulators that it had refunded more than $120,000 to contributors who donated more than the $2,700 maximum allowed by law. Ernest Semersky, an Illinois Porsche dealership owner, received the largest refund: $10,000.

A month later, on Oct. 27, a super PAC called Values are Vital voided a $5,000 check it gave the Rubio campaign after the committee was unable to get a refund. In July, the FEC had warned Values are Vital that its excessive contribution was not allowed by law. According to an Aug. 21 letter to the FEC, the committee’s lawyer James C. Thomas III requested more time to address the problem because the Rubio campaign failed to respond to his email inquiry and a certified letter asking for the refund.

Prior to his April presidential campaign unveiling, Rubio’s campaign had been warned by the FEC after each of its four quarterly filings in 2014 that it had accepted excessive contributions. Two days before Rubio announced his candidacy, the campaign refunded more than $23,000 in excessive contributions and another $27,000 was either reclassified for use in the 2016 general election, or applied to the spouses of donors who gave more than the maximum allowed by federal law. In 2012, Rubio’s campaign and its treasurer paid an $8,000 civil penalty to settle an FEC inquiry into $210,173 in excessive donations accepted in 2010, the year he won his Senate seat.

Pollara said Rubio can expect even more intense scrutiny of his campaign’s financial missteps, his record as a state legislator, and his friendships with Rivera and Arza. Although he hasn’t been criminally charged, Rivera’s ex-girlfriend Ana Alliegro has implicated the former congressman as the mastermind behind a ringer candidate that ran against his nemesis and Democrat Joe Garcia in the 2012 primary. Alliegro made the accusation under oath during a federal court hearing in February. A month later, an administrative judge in Tallahassee ruled Rivera had to pay nearly $58,000 in fines for ethics violations that occurred when he was a state legislator.

In 2006, Arza was forced to resign from the State House after he was charged with two felonies, including for retaliating against and tampering with a witness. Arza had left a threatening voicemail on the phone of then-State Rep. Gus Barreiro over a dispute involving then-Miami-Dade Public Schools Superintendent Rudy Crew, whom Arza referred to with a racial slur. Arza pleaded guilty to two misdemeanor counts of tampering with a witness and was sentenced to probation, community service, an anger management program, and alcohol abuse counseling.

“The more he gets examined, the worse it will get for Marco,” Pollara said. “It’s like cockroaches. When you see one scurrying around, there are thousands more behind the walls.”
Diaz countered that voters are not going to hold Rubio accountable for the alleged misdeeds of his friends. “People elected Bill Clinton, George W. Bush and Barack Obama knowing all their flaws,” he said. “Voters will accept a flawed candidate.”

Democracy inaction: old equipment and partisan battles threaten election integrity nationwide

By Nicholas Kusnetz, Center for Public Integrity voting

COLUMBUS, Ohio — The offices in a former Kohl’s department store here look inconsequential enough — linoleum floors, fluorescent lights and cookie-cutter furniture. But what happens in this strip mall, and other equally nondescript settings nationwide, could in fact be crucial to the struggle over America’s voting laws and apparatus — a struggle that may go a long way toward determining the outcome of next November’s presidential election.

The Franklin County Board of Elections moved to the north side of this capital city last year after using the site in 2012 to accommodate the rush of people who cast their ballots during Ohio’s early voting period. But that early voting policy is still not set in stone — its duration and details have been stretched and squeezed repeatedly over the past few years by both state law and court order, part of a bitter clash between Democrats and Republicans over access to the ballot, electoral integrity and resources. (more…)

Convicted thief sets up South Florida super PAC with Federal Election Commission’s OK

By Francisco Alvarado, FloridaBulldog.org unum

Four years after being convicted of stealing $35,000 worth of textbooks from Ohio State University’s law school library, Christopher Brian Valdes set up a super PAC this month in South Florida with the blessing of the Federal Election Commission.

Valdes, 28, of West Palm Beach, filed a “statement of organization” for Rescue Our Future with the FEC on Aug. 9 and listed himself as treasurer. The 28-year-old felon says he wants to use the political committee to raise unlimited amounts of money to help elect Jeb Bush president in 2016.

While convicted criminals may legally start and operate a super PAC, there’s no way for the public or prospective donors to know it if they do. The FEC, which regulates campaign finance, does not require PAC officials to disclose their criminal history.

Last month, FEC Chairwoman Ann M. Ravel issued an unusual public warning about the rise of what she called “scam PACs” – fundraising groups run by con artists who prey on small donors unhappy with their elected officials.

“It is assumed the money raised will go to help elect or defeat a candidate. In reality, the money raised largely gets funneled into the pockets of the political operatives who set up these organizations,” she wrote in in a July 13 commentary published by Roll Call.

Valdes did not want to discuss his crime in detail with FloridaBulldog.org. “It was bad decision that is in the past,” he said. “I have moved forward.”

He said in an interview, however, that he wants to raise money to pay for mailers and radio ads touting the former Florida governor.

“Even if Bush gets on the Republican ticket, it is not a sure fire thing that he will win Florida in 2016 just because he is a former governor,” Valdes said. “The state has voted for a Democrat in the last two presidential elections. I believe Rescue Our Future can do a lot to help him.”

Valdes said he is not affiliated with the Bush campaign and is going to campaign for Bush on his own. Whether the campaign wants a convicted thief trolling for dollars on Bush’s behalf remains unclear. Bush’s press office did not respond to an emailed request for comment.

According to a Sept. 6, 2011 story in the Columbus Dispatch, authorities accused Valdes of pilfering more than 200 books that he then advertised for sale online between November 2009 and October 2010. At the time, Valdes was a student of the Moritz College of Law.

Campus police initiated an investigation after receiving an e-mail from a Brazilian lawyer who had bought a volume online and found a crossed-out Ohio State University ink stamp on its inside front cover, according to court documents. Investigators arrested Valdes after setting up a sting involving a hidden camera and a marked book.

To avoid prison, Valdes agreed to plead guilty to a felony. He was placed on five years probation and ordered to pay $34,600 in restitution for books he sold online. Valdes also agreed that he “will not have or pursue employment or education in the field of law,” according to the details of his guilty plea in Franklin County Common Pleas Court.

Valdes claims he has completed his probation and that his voting rights were recently restored. “I have not gotten into any trouble since then,” he said. “And there is nothing on my record before that. It was an unfortunate incident that I’ve put behind me.”

FEC Commissioner Ravel could not be reached for comment. But in her commentary last month she said her agency is powerless to stop “scam artists” intent on ripping off donors.

“The FEC has, for many years, unanimously approved recommendations to Congress that would have taken small steps toward addressing scam PAC activity,” Ravel wrote. “After all, a role of the FEC is to protect consumers, the American voting public, from those who don’t use money contributed to campaigns for proper purposes.

She added: “Unless Congress takes action and gives the FEC the tools to regulate scam PACS, we can expect this problem to grow.”

Pipeline company with tie to Gov. Scott, and state backing, has history of accidents

By Dan Christensen, FloridaBulldog.org 

With the Clinton Presidential Center in the foreground, this photo shows a Spectra Energy pipeline blowout beneath the Arkansas River in Little Rock on May 31. Photo Courtesy: Tony Cassady

With the Clinton Presidential Center in the foreground, this photo shows a Spectra Energy pipeline blowout beneath the Arkansas River in Little Rock on May 31. Photo Courtesy: Tony Cassady

Spectra Energy, the company that state environmental regulators say should be allowed to construct a 267-mile-long natural gas pipeline in North Florida, has a checkered history of accidents and violations of federal safety rules in the U.S. and Canada dating back decades.

FloridaBulldog.org reported last week that Florida’s Department of Environmental Protection is backing the award of a key environmental permit for the controversial $3-billion Sabal Trail pipeline to a joint venture majority-owned by Houston-based Spectra Energy.

Spectra Energy’s investors have included Gov. Rick Scott. On last year’s financial disclosure form, Scott reported owning a $108,000 stake in Spectra and its affiliate, DCP Midstream Partners. His latest disclosure form, filed in June, no longer details Scott’s securities holdings because he put those assets into a blind trust.

The underground Sabal Trail Transmission is proposed as a nearly 500-mile interstate natural gas pipeline to run from Alabama, through Georgia south to Orange County, south of Orlando. Spectra owns 59.5 percent; Florida Power & Light parent NextEra Energy owns 33 percent; and Duke Energy, which spun off its natural gas business to form Spectra in 2007, recently paid $225 million for a 7.5 percent stake.

Federal and state election records show that FP&L, Duke Energy and their affiliates together have contributed $1.4 million to Let’s Get to Work, the political committee branded with Scott’s campaign slogan. They also gave a total of $5.8 million to the Republican Governors Association in 2013-14, which in turn contributed $18.3 million to Let’s Get to Work last year.

Gov. Rick Scott

Gov. Rick Scott

Spectra Energy operates approximately 22,000 miles of natural gas pipelines in North America. U.S. and Canadian agency files detail the company’s problematic safety record.

From 2006 to date, the U.S. Pipeline and Hazardous Materials Safety Administration recorded 25 incidents that caused more than $12 million in property damage along Spectra’s main line – the 9,000-mile Texas Eastern Transmission that connects Texas and the Gulf Coast with big urban markets in the Northeast. The causes ranged from equipment failure and incorrect operations to pipe corrosion.

The agency found numerous federal rules violations during the same period and slapped Spectra with a total of $400,000 in fines – not counting another $59,000 proposed penalty for failing to construct a pipeline in Pennsylvania in accordance with written specifications.

Spectra’s press office did not respond to detailed requests for comment made over two days.

Florida’s Department of Environmental Protection issued its July 10 notice of intent to issue the permit and easement for Sabal Trail without a public hearing. The WWALS Watershed Coalition, a Georgia based nonprofit and environmental advocate, filed an objection to the permit last week and the department is considering its response.

Was Spectra’s safety record considered in DEP’s decision?

“The department assesses a permit application based on Florida statutes and rules to ensure that all aspects of the proposed operation follow Florida law and are protective of the environment and human health and safety,” DEP spokeswoman Lori Elliott said in a Wednesday statement.

A DRAMATIC RUPTURE

Spectra’s most recent pipeline accident was the dramatic rupture of an auxiliary pipe along its Texas Eastern Pipeline in Little Rock, Ark. on May 31. The buried line, which crossed the Arkansas River near the Clinton Presidential Center, was not in use at the time, but contained four million cubic feet of natural gas that exploded with such force that churning water boiled up high into the air across the span of the river. Eyewitness Tony Cassady, who lives nearby, said the gushing waters had settled back somewhat by the time he managed to snap the photo above.

While no one was injured, the blow out resulted in more than $1 million in damages, according to federal records. The cause has not been determined, but an incident report filed by Spectra in June noted that high rains had caused flooding that had washed away soil that once covered the pipeline on the river’s bank.

Aerial view of the explosion site of Spectra Energy's Nig Creek Pipeline in 2012. Photo: Transportation Safety Board of Canada

Aerial view of the explosion site of Spectra Energy’s Nig Creek Pipeline in 2012. Photo: Transportation Safety Board of Canada

Another vivid example of the power of out-of-control natural gas occurred June 28, 2012 at the Nig Creek pipeline in British Columbia, operated by Spectra’s wholly owned subsidiary Westcoast Energy. The 16-inch pipeline, which had been shut down that night, was filled with pressurized “sour gas” that exploded when the line ruptured, causing a fire and creating a large crater in a remote forest area in British Columbia. Sour gas contains significant amounts of hydrogen sulfide and is highly toxic.

No one was injured in the blast – the nearest town, population 58, was 25 miles away. The cause was later determined to be a crack in a pipe.

So far in 2015, Canada’s National Energy Board has fined Spectra Energy three times for a total of $122,300 – including $88,000 imposed in January after inspectors found violations with “the potential to significantly impact worker safety and infrastructure” at Spectra’s Dawson Creek Gas Plant, also in British Columbia.

Just last month, the board also ordered Spectra to fix “management system failures” at its Westcoast Energy gas processing plants and facilities in western Canada after inspectors uncovered 27 safety issues between April 1, 2014 and June 26, 2015.

“The board expects Westcoast to address safety concerns on a systemic basis,” says the July 14 safety order. “Based on recent violations described below, the board is not confident safety concerns are being addressed in this manner.”

Back in the U.S., Spectra owns or co-owns eight natural gas pipelines, including the 745-mile Gulfstream Natural Gas, which runs beneath the Gulf of Mexico from lower Mississippi and Alabama to Tampa Bay. All but two of those pipelines – Gulfstream and the 67-mile Big Sandy pipeline in eastern Kentucky – have reported at least one incident since 2006.

Spectra Energy's pipelines

Spectra Energy’s pipelines

In 2014, the U.S. pipeline administration investigated a frightening episode in Searsmont, Maine involving the Maritimes and Northeast Pipeline, a joint venture of Spectra, Emera and ExxonMobil. The 684-mile pipeline transports natural gas from offshore Nova Scotia to markets in the northeast U.S.

The event happened at a pipeline compressor station, which helps move gas through a pipeline by keeping it under sufficient pressure, shortly before midnight on Dec. 31, 2013. Neighbors told a Bangor Daily News reporter they heard a roaring noise that was so loud it caused nearby homes to shake and some residents to flee.

“TERRIFYING EXPERIENCE”

“It was absolutely the most terrifying experience I’ve ever had,” Susan Totman told the newspaper.

Federal pipeline regulators said the noise, which lasted more than a half-hour, was caused by the release of gas jetting from a valve in an emergency shutdown system that was unintentionally opened. About 70 million cubic yards of gas were released, says an agency report on the incident.

The pipeline operator was later found to have violated federal regulations by failing to timely inform them of the accident. Last month, on July 24, regulators imposed a $34,500 fine that company officials did not contest.

Other Spectra pipelines have had problems, too.

Agency records list three incidents in 2010 involving equipment failure and excavation damage along Spectra’s East Tennessee pipeline that caused $238,000 in property damage. In 2013, the company received a warning letter after inspectors found four probable safety violations.

Spectra’s Southeast Supply Header is a 286-mile pipeline that funnels natural gas through Louisiana, Mississippi and Alabama to the Gulfstream pipeline and on to Florida. Records show that a construction-related equipment failure near Hazlehurst, Miss. in January 2010 caused $562,000 in property damage and led to $200,000 in safety violation fines.

But Spectra’s longest and most troubled pipeline is the Texas Eastern Transmission.

In 1989, Spectra and its Texas Eastern limited partnership paid a $15 million fine and entered into a consent decree with the Environmental Protection Agency to clean up PCB (polychlorinated biphenyl) contamination at numerous cites along the pipeline in 14 states.

Texas Eastern had used the banned substance and suspected carcinogen in its compressors as a fire retardant, and over time it had leaked into the pipeline system. The $500 million PCB cleanup cost included the assessment of 462 sites for contamination, installing 707 groundwater monitoring wells and removing and disposing of 600,000 tons of contaminated soil, the EPA said in a 2002 announcement that the cleanup had been completed.

Texas Eastern also paid Pennsylvania $218.6 million in penalties and costs to clean up 19 sites in that state where PCBs were dumped.

In 1994, a buried Texas Eastern pipeline in Edison, N.J. ruptured and ignited “sending flames several hundred feet in the air,” according to a National Transportation Safety Board report. Heat from the burning gas set fire to an apartment complex more than 100 yards away, destroying several buildings.

Dozens of people were injured and more than 100 families were left homeless, but there were no fatalities. Damage was estimated at $25 million. The probable cause of the rupture: mechanical damage to the pipe that created a crack that metal fatigue caused to grow to critical size.

Trump, Gimenez let off easy after breaking lobbying laws, critics say

By Francisco Alvarado, FloridaBulldog.org 

Donald Trump, right, and Miami-Dade Mayor Carlos Gimenez

Donald Trump, right, and Miami-Dade Mayor Carlos Gimenez

Donald Trump’s efforts to take over management of a public golf course is at the center of a recently concluded Miami-Dade ethics commission probe that has come under fire for not admonishing the billionaire developer and county Mayor Carlos Gimenez for breaking local lobbying laws.

Critics accuse Michael Muraswski, advocate for the Miami-Dade Commission on Ethics & Public Trust, of giving a free pass to rich, powerful, and politically connected individuals who break the rules. Murawski’s role is to prosecute persons who break the county’s conflict of interest and ethics laws.

In Trump’s case, Murawski failed to present evidence to the ethics commission board at a June 17 meeting in which the advocate recommended a finding of no probable cause against the billionaire candidate for president and the mayor, said Eston “Dusty” Melton, a prominent county hall lobbyist.

Murawski also recommended the board dismiss a complaint against Trump’s environmental consultant Edward Russo despite concluding he did not register as a lobbyist for his client until Feb. 24, seven days after the ethics investigation was initiated.

Melton said Murawski similarly let celebrity soccer star David Beckham off the hook in an unrelated 2014 ethics case accusing him of illegally lobbying Gimenez and county commissioners to give him public waterfront land for a Major League Soccer stadium.

“I think it is clear that in certain cases, particularly complaints against high profile individuals, the findings and materials given to board members of the ethics commission are deeply and remarkably flawed,” Melton told Florida Bulldog. “As a consequence, some of the decisions made by the ethics commission are seriously embarrassing for those who care a lot about the rule of law.”

Miami-Dade’s lobbyist registration requirements are designed to allow the public to know who is trying to influence government decision makers. Principals and their representatives – consultants and lobbyists included – who seek to do business with local government must register with the county clerk prior to any interactions with public officials. Failure to do so is punishable by a fine of up to $500 or a temporary ban from county hall, a penalty that is rarely enforced.

BLOGGER’S COMPLAINTS OPEN PROBE

The ethics commission opened a probe on Trump, Gimenez, and Russo based on complaints filed in February by Miami watchdog blogger Al Crespo. Crespo accused the Republican presidential contender and his consultant of not registering as lobbyists, and Gimenez of failing to inform them that they had to register.

Al Crespo

Al Crespo

Crespo, who operates the Crespogram Report,  alleged Murawski has purposely misrepresented portions of ethics complaints he and others have filed against public officials in an attempt to minimize their wrongdoing.

“Murawski has set himself up as the chief manipulator of the facts to reach the conclusion that he wants,” Crespo said.

Trump, who leads the Republican presidential field in some polls, owns the Trump National Doral golf club. He first broached the subject of taking over the county-owned Crandon Park Golf Course while playing there with Gimenez and Russo in October 2013.

In a June 2 interview, Russo told ethics investigators Trump was not keen on letting anyone know he was interested in taking over Crandon. He also stated that Trump and he began their full court press on Gimenez during and immediately following their golf game at the public golf course on Key Biscayne.

“Russo said that they were giving the mayor a gift,” says a summary of the interview. “They are lobbying him when they are the guys who should be lobbied. [Russo] and Trump wanted to do this anonymously.”

According to the investigative file, Gimenez, his then-chief-of-staff Lisa Martinez, and Miami-Dade Parks Department Director Jack Kardys met with Russo on Jan. 28, 2014 to continue discussions on what Trump had to do to submit a proposal.

Using Trump National Doral letterhead, Trump sent a signed pitch letter to Gimenez about a month later. The proposal: Trump would spend $10 million of his own money to renovate Crandon in exchange for allowing his company to lease the golf course for $1 a year.

Over the next two months, emails from Kardys to his subordinates indicate that Gimenez was anxious to send Trump a reply. On March 31, the parks director informed his deputy, George Navarrete, that the “mayor wants Trump letter today – see me first thing.”

But no reply was drafted by April 12, 2014 when Kardys emailed Navarrete again to express his concern. “I hope this is moving because the mayor will be furious if Trump calls him for a lack of response – please advise,” Kardys wrote.

GIMENEZ ADVISES TRUMP

Three days later, Gimenez signed an official letter to Trump explaining how he could submit an unsolicited proposal and that Kardys would be his point of contact.

Trump’s formal proposal arrived in August, along with deposit check for $25,000 from Trump Golf Acquisitions LLC.

Ten months had elapsed since the day Trump and Russo met Gimenez on the golf course, but neither Trump nor Russo registered to lobby the mayor, records show. Nor did Gimenez ever instruct Trump or Russo to register, Crepo’s complaint alleged.

Nevertheless, in his June 5, 2015 memo Murawski recommended the ethics commission find no probable cause against the mayor or Trump. He also recommended Russo be given a letter of instruction because Trump’s consultant insisted he was unaware of the county’s lobbyist registration requirements.

The ethics commission considered the matter at a closed-door session on June 18. Audio of that meeting shows Murawski told commissioners Trump’s only dialogue with the mayor was their informal talk at Crandon in October 2013, and that Gimenez quickly stopped being involved. He also argued that no formal bidding process was ever initiated that would have required Trump to register, or required Gimenez to tell him he had to register.

“The conclusion is that [Trump] wasn’t a lobbyist,” Murawski told the board. “We covered this in the David Beckham case when Mr. Beckham met with the mayor and some commissioners initially to discuss his proposal of having a soccer stadium here in Miami-Dade County. We concluded in that case that there is a certain ‘meet and greet’ period where you can generally discuss ideas but there is nothing concrete in the pipeline; nothing to be voted on.”

Lobbyist Melton, a former Miami Herald reporter, said he was so stunned by Murawski’s actions after hearing the audio that he felt compelled to address the advocate’s “botched analysis” at the July 8 ethics commission meeting.

Melton told commissioners that Murawski had failed to inform them how Trump and Gimenez had exchanged official correspondence in March and April about how to draft an unsolicited proposal, action that Melton said constitutes lobbying.

“Mr. Murawski framed his entire recommendation regarding Trump around the golf game only,” Melton told the board. “Mr. Murawski entirely ignored Trump’s personal, ongoing, formal, written lobbying activities that followed, many months after the golf game.”

In a brief phone interview with the Florida Bulldog, Murawski dismissed Melton’s criticisms. “He cherry-picked one or two lines and took what I said out of context,” he said. “I give very little credit to what he said.”

Murawski declined further comment, saying he will address Melton’s accusations at next month’s ethics commission meeting.

Marcia Narine is a law professor at St. Thomas University who has served on the ethics commission board for about a year. She said she does not believe Murawski hid information, and says the ethics commission did not go easy on Gimenez and Trump.
“It can appear that this was glossed over because the person is a presidential candidate,” Narine said. “That is not the case at all. I think the commission acts in good faith to do the job the public expects us to do.”

Miami attorney and ethics commission chairman Nelson Bellido also denied the board is making bad decisions, noting its members will take a “second look” at the Trump-Gimenez case at its Wednesday, Aug. 12 meeting.

“We are absolutely not a rubber stamp,” Bellido said. “We are there to listen to all sides. I don’t come in with any bias or political bent. I take the job very seriously.”

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