Democratic committee fined $104,000

Thursday, March 23, 2006

JEFFERSON CITY, Mo. -- A political committee dedicated to helping Democrats win seats in the Missouri House must pay a $104,000 state fine for financial misconduct during the 2002 elections.

The fine, one of the largest ever levied by the Missouri Ethics Commission, stems from an admission by the House Democratic Campaign Committee that it mixed its money with another committee, came under the control of a candidate for office and failed to properly report donations and spending in support of candidates.

In addition to the committee, U.S. Rep. Russ Carnahan, D-St. Louis and a former House member, must pay a $600 fine for his involvement with the committee's practices.

The fines are the result of an internal investigation, said Robert Connor, executive director of the Ethics Commission. Additional fines are possible, Connor said.

In addition to Carnahan and the committee, the statement of facts that accompanied the fine said former lawmaker Bill Gratz of Jefferson City and Team Missouri, a committee that commingled funds with the Democratic campaign committee, also violated campaign finance laws.

Both the Democratic committee and Team Missouri are considered continuing committees under Missouri law, which means they are not established to elect any single candidate.

"The counsel is still pulling the cases together to present to the commission," Connor said.

According to the statement of facts, Carnahan and Gratz wrote checks on the Democratic committee's accounts but were not officially named as treasurers for the committee. Those actions violated two laws, one aimed at making only treasurers responsible for the financial activities of a committee and the other designed to make sure that no candidate for office controls the financial accounts of a continuing committee.

According to the commission records, checks written to the Democratic committee were deposited in the account of Team Missouri and checks written to Team Missouri were deposited in the accounts of the Democratic committee. Neither committee correctly reported the checks and, in some cases, the checks were deposited without proper endorsement.

The fine was calculated based on a formula tied to the amount of money mishandled, Connor said.

Poor record keeping was to blame for the violations, said Jack Cardetti, spokesman for the Missouri Democratic Party. The committee has different officials and a better tracking system now, Cardetti said.

"Obviously the system they use now will make sure those type of errors don't happen again," he said.

The fine comes as the legislature debates whether to change the campaign finance system. A bill the Senate passed last week would repeal the current caps on individual contributions to candidates and instead apply them to regional political party committees. Supporters believe the change will make it clearer for the public to follow who is giving money to which politicians.

The fine against Carnahan was based on signing checks he shouldn't have. Carnahan spokesman Glenn Campbell said the congressman would pay the fine from his personal funds.

The Democratic committee must pay $60,000 by July 31. But the rest of the fine will be suspended if it follows campaign finance laws through 2008, the Ethics Commission said. The committee also must correct its campaign finance reports from 2002.

The state Republican Party condemned the Democrats' actions.

"Democrats will stop at nothing to try and manipulate our state's campaign finance laws," Republican Party spokesman Paul Sloca said.

Staff writer Rudi Keller contributed to this report.

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