07/31/2008

By GARY D. ROBERTSON  / Associated Press

A new Republican political committee seeking to get Charlotte Mayor Pat McCrory elected North Carolina governor is breaking the law by how it funnels money through its national group, according to a complaint filed Wednesday.

Now a group supported by the Democratic Governors Association has formed an independent political organization and appears poised to run television advertisements in North Carolina.

The campaign finance group Democracy North Carolina asked the State Board of Elections to investigate a political action committee of the Republican Governors Association, which has collected more than $380,000 since it organized in May.

Group executive director Bob Hall said in a letter to the board that the RGA North Carolina 2008 Political Action Committee is misleading the public about who is giving to the North Carolina effort. He said that breaks campaign finance rules.

Association spokesman Chris Schrimpf said late Wednesday his group "has always followed the rules" and called Hall's accusations part of a "silly complaint."

Roughly three dozen donors from across the country have given between $10 and $100,000 to the committee, according to finance reports filed with the board. The committee had not reported any expenditures through June 30.

Hall contends the donations actually were sent to the association, which is earmarking the money for the North Carolina campaign but treating them as if they were given directly to the new committee.

That violates state campaign finance laws, Hall argues, for giving "in the name of another" and for failing to disclose properly the true source of the committee's money.

Some donors interviewed said they didn't realize the money was going to be used in North Carolina, where McCrory is taking on Democratic Lt. Gov. Beverly Perdue in the November election.

Hall said the contribution method by the new committee and other political groups fails to provide the public a clear picture of how they receive money.

"It is not too much to ask that these entities obey the law and tell the donors exactly what their money is being solicited for," Hall wrote.

State elections director Gary Bartlett said board staff investigators are researching the complaint and should report to him by early next week. The five-member State Board of Elections could order a civil penalty against the political action committee and for the group to comply with the rules.

The Democratic Governors Association, which is working to elect governors from the party, said late Wednesday it was supporting the Alliance for North Carolina, a so-called "527" group formed July 8, according to a document filed with the Internal Revenue Service.

The Alliance's purpose is "to communicate independently with citizens of North Carolina on issues of importance" that don't expressly advocate for any candidate, the filing said.

The Republican Governors Association said late Wednesday the Alliance had purchased more than $300,000 of air time for a week starting Thursday in several North Carolina television markets, citing ad buy information.

Democratic association spokesman Brian Namey said it backs the alliance because its leaders "are raising issues that are important to North Carolina" but referred other questions to the Alliance.

Group president Craig Varoga didn't return a phone call and e-mail Wednesday night seeking comment. Varoga is a Washington-based political consultant who previously worked for former Iowa Gov. Tom Vilsack's unsuccessful presidential campaign.

The 527s — named after a portion of the federal tax code — can accept donations from corporations or unions but are limited by state law in how those funds can be used for television and radio ads. For example, their television ads cannot directly support or oppose a candidate and the group is barred from coordinating their efforts with candidates. Corporate-funded ads also must cease 60 days before Election Day.

In recent years, the board has scrutinized the role of "527" groups such as the Republican Governors Association and the Democratic Legislative Campaign Committee, which raises money for state legislative candidates nationwide.

Kim Strach, a deputy elections director, said earlier this week these types of groups are barred from giving directly to North Carolina political committees if they have received corporate or union donations.