The Journal Gazette
Tuesday, March 15, 2016 11:51 pm

Where does campaign cash go?

Niki Kelly | The Journal Gazette

INDIANAPOLIS – Millions of dollars pour into Indiana campaigns every year. But where it goes is almost as interesting as where it came from.

Potbelly and Panera reap a lot of campaign business. Some officials rely on credit cards, making it harder for voters to see what the dollars are buying. And Gov. Mike Pence expenses his NRA and posh D.C. club memberships.

The Journal Gazette reviewed the most recent campaign finance report for all statewide elected officeholders, as well as legislative caucus leaders, to see what expenditures are being claimed.

Pence spent by far the most in the first six months of this year – almost $1 million. Others spent between $10,000 and $52,000. There are no statewide elections this year.

In comparison, former Gov. Mitch Daniels spent about $544,000 in the same time period of 2007.

But Pence spokesman Robert Vane isn’t worried about whether the campaign is spending too much too fast.

"We are confident the governor will have the resources he needs to run a successful campaign," he said. "Smart campaigns make strategic investments in building a good infrastructure, a solid team and implementing a plan. That is what this campaign is doing."

The majority of the campaign cash examined flows to consultants for research, polling and ads. And many of the expenses are expected – from office space and computers to phones and water coolers.

But candidates also spend a lot of money on food.

Lt. Gov. Sue Ellspermann – or others with her campaign – like to go to Weber Grill and Patachou, restaurants near the Indiana Statehouse. There were 13 visits in six months, spending more than $400.

Pence’s campaign spent more than $8,400 on food in six months. Of that, more than $1,400 went to Panera Bread and $1,200 to Potbelly, a sandwich shop. And that doesn’t include an additional $20,000 on catering for fundraisers or larger meetings.

"The campaign ensures our committed staff and volunteers are well-fed and cared for, and we often provide food at fundraising events or grassroots training events," Vane said. "As you know, this is a pretty common thing in politics."

Some candidates don’t itemize all their expenses, though. Instead, they use credit cards for convenience and then count credit card payments as expenditures. The practice is tricky because it means Hoosiers can’t see exactly what money is being spent on.

Attorney General Greg Zoeller reported $13,740 to First Bankcard in credit card payments the first half of 2015.

Senate President Pro Tem David Long of Fort Wayne reported $27,691 with Cardmember Service, and House Democratic Leader Scott Pelath reported $13,380 on his American Express. Long and Pelath’s expenditures were from 2014 – a legislative election year. They aren’t required to file a 2015 report.

Pelath said the card was used for expedience and largely covered fuel and food.

"I do an immense amount of traveling," he said – noting he blew out three tires and threw a rod in his car last year.

Pelath added that a fundraiser at a downtown Indianapolis steakhouse added $3,200 to the credit card.

He said the Election Division instructed him how to report the credit card payments.

But Brad King, Republican co-director of the Election Division, said the office generally tells candidates to indicate what the expenditure was for, not just say Visa or MasterCard.

He also cited a notation on the back of the campaign finance forms that says "under normal circumstances you should not list a credit card issuer as a recipient. If making a payment on a credit card, list vendor, not the credit card company."

Long’s campaign said only "these expenses were miscellaneous, incidental expenditures and reported as such," and Zoeller’s campaign said the credit card covers "campaign expenses of meals and other miscellaneous expenses while he is traveling or hosting meetings."

King admits he has never seen a complaint for a candidate spending contributions inappropriately. That could be because Indiana’s law is so vague.

It says money received by a candidate or committee can be used to defray any expense "reasonably related" to the campaign for office, continuing political activity or activity related to service in an elected office.

It also notes that "money received by a candidate or committee as a contribution may not be used for primarily personal purposes."

King said the core of that language was added in 1987 as part of a larger ethics package. At that time, an investigation followed an Indianapolis News report that then Superintendent of Public Instruction Harold Negley had borrowed thousands in interest-free loans from his campaign committee and had used campaign funds for personal expenses, including haircuts, yard work and tennis club fees.

The investigation widened, though, and Negley, a Republican, ultimately resigned in April 1985 after pleading guilty to felony charges of ghost employment and official misconduct.

King said using campaign dollars for personal purposes is generally not a criminal issue, noting that a person could be charged with an infraction that includes a fine up to $10,000. Or the election commission can fine a committee up to $1,000.

Andrew Downs, head of the Mike Downs Center for Indiana Politics at IPFW, said Indiana’s expenditure rules match the relatively lax oversight of contribution rules.

"It is an extreme rarity to challenge what someone is spending money on because it’s so general," he said. "Is it really advancing your cause to buy a ticket to another person’s fundraiser? ‘Did you need to buy that tie? Yes, I was shooting a commercial.’ "

He said the rules could be made more specific, such as specifying who traveled on a plane ticket. And he said not itemizing credit card spending lets candidates hide a lot of things.

So what exactly is reasonably related?

Pence used campaign dollars to cover his $35 National Rifle Association membership renewal as well as his $400 membership to the posh National Republican Club of Capitol Hill.

Vane said those are standard expenses for political campaigns.

Pence also spent $174,000 on the common construction wage fight. Some of that was on ads he did favoring the legislative change this year. And he directly gave $75,000 to the Indiana Opportunity Fund, a political action group started by GOP lawyer James Bopp in 2012 to drive approval of the right-to-work law.

Vane said the governor "was proud to invest some of the campaign’s capital to repeal the 80-year-old common construction law; Hoosiers taxpayers don’t deserve to pay artificially inflated prices on public construction projects."

The Pence campaign is paying six staffers and Vane, a part-time contract employee.

Democrat John Gregg, who is running for governor, spent only $50,000 in the first six months, almost all on a few consultants and a video on his website regarding his entry into the race.

A second Democratic candidate for governor, Sen. Karen Tallian of Portage, spent only $1,000.

Many candidates give money to other candidates.

State Auditor Suzanne Crouch, for instance, gave $1,000 to Republican Evansville Mayor Lloyd Winnecke and $500 to the local Republican Party. Likewise, Gregg gave $5,000 to Winnecke’s opponent for mayor, Democrat Gail Riecken. And Ellspermann gave $5,000 to Indianapolis GOP mayoral candidate Chuck Brewer.

"I believe it is important for elected officials at all levels to support other elected officials, candidates and party organizations who share their goals and vision for the state," Crouch said.

Everyone gives to their respective state party organizations. And on the legislative side, Long gave $180,000 to the Senate Majority Campaign Committee to try to retain and gain seats in the 2014 election. Similarly, House Speaker Brian Bosma spent $67,000 for get-out-the-vote efforts and Senate Democratic Leader Tim Lanane gave $23,000 to the Indiana Democratic Senate Caucus.

A few had fines for campaign finance violations – Crouch for $3,000 and State Treasurer Kelly Mitchell for $2,000.

And Ellspermann spent more than $5,000 on the National Lieutenant Governors Association meeting, which was hosted in Indianapolis. Included in that was $1,009 at South Bend Chocolate Co. But those planning expenses were later reimbursed by the national group.

Flowers are also a popular expense, with several candidates spending hundreds on colorful bouquets. Pence’s campaign spent more than $3,200 on flowers.

Pence also has a fair amount of travel expenses – including more than $21,000 for plane tickets and $18,000 in hotels.

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