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Flemming says rival Muri under FEC ‘investigation’

Post by Brad Shannon / The Olympian on Aug. 5, 2012 at 6:40 pm |
August 5, 2012 6:40 pm

Republican Stan Flemming’s campaign went very public with an accusation Sunday that rival GOP hopeful Dick Muri in the state’s new 10th Congressional District is under investigation by the Federal Election Commission, telling supporters about it in an email. Muri’s campaign registered initially to run in the 9th district, which Muri had done unsuccessfully in 2010, but it was slow in changing its registration this year to reflect he was running in the 10th.

The Olympian and News Tribune have been looking into this claim and others by Flemming in the past two weeks, which Flemming’s campaign raised after the newspapers asked questions about unusual non-bank loans he has obtained from a Beverly Hills lender. The newspapers’ accounts of the loans and another story by the Associated Press have cited three lawyers expert in FEC campaign finance law that say such loans, which made up the bulk of Flemming’s fundraising, raise questions.

Muri’s campaign consultant Alex Hays says there was a glitch in getting the FEC site to accept updated documents that show Muri is running in the new district. Once a document had been filed and they tried to amend it, there were problems – and staffers from the campaign talked to the FEC about it, Hays said.

“One, we may have made a mistake. Two, the FEC may have made a mistake,’’ Hays said, acknowledging a complaint was filed against Muri. “We never have said we were running in the 9th except during that unknown period (in 2011) during redistricting. We always said he’d run where he lives,’’ Hays added.

Flemming’s campaign manager, Carol Cain, has declined to say who flied the complaint against Muri but says it was not by the campaign. She did not identify the other party.

Cain also has said in an email that Muri’s delay in getting the filing right until April is “not horrible” in the grand scheme of things but shows “a disregard for the rules.’’

The complaints between Muri and Flemming are flying in the waning days of the Aug. 7 primary election. Only two candidates move on to the November ballot. Also running are Democrat Denny Heck of Olympia, Democrat Jennifer Ferguson of University Place, Progressive Independent Sue Gunn of Thurston County, and independent Steve Hannon of Yelm.

Gunn and Hannon are making an issue of Heck’s nearly $1.4 million warchest that includes $100,000 of his own money, and Hannon also has questioned Flemming’s loans.

The Olympian’s story on the Flemming loans is here and AP’s piece on the ‘atypical” loans is here. The FEC has declined to say if it has received complaints or is investigating whether the $200,000 in loans may actually be contributions in excess of what the law allows.

The newspapers asked the FEC last week about its review of Muri’s failure to update his filing papers for three months. So far, the FEC has not replied to say whether it has received a complaint about Muri’s late-filing of his candidacy in the 10th.  The Flemming campaign did share a partly redacted, or blacked-out, copy of what appears to be a confirmation note – dated April 23 from the FEC. It says an unspecified and amended complaint about Muri has been given a number – which Flemming’s campaign says is a “matter under review,” or a step before an investigation.

Interestingly, the FEC site does appear to be slow in registering new data. For instance, it still lists nine congressional districts for Washington on its congressional campaign map – although it does have a drop-down menu that lists all candidates running for Congress in Washington state, including those running in the 10th.

Muri said Sunday there was clearly no attempt to deceive.

The late-filing complaint was one of a handful the Flemming campaign has made – and his complaints mounted as the newspapers began asking questions about the loans he took from Spanky LLC, an organization that formed on behalf of Sherry Hackett of Beverly Hills to do private lending. The organization is not registered to make loans with California financial regulators but makes loans for investment purposes, according to Hackett’s husband, David Loftus. Hackett and Loftus also are donors to Flemming’s campaign.

Of Flemming’s complaints, one appears unfounded and so I did not report it. The claim was that Muri, who serves on the Pierce County Council, missed close to 60 council sessions while campaigning for Congress in 2010. Flemming also is on the county council and the candidates have been bickering over each others’ attendance at work sessions, where votes are not taken.

County records provided to a News Tribune reporter showed Muri attended all but one work session in 2010, and Muri says that session was on county business to talk to a chamber of commerce group about county business.

The newspapers are still looking into other complaints Flemming has brought about Muri.

One is that Muri violated county council ethics rules by accepting a $150 membership in the Tacoma Rifle and Revolver Club, which a supporter donated as a contribution to his campaign.

The gift is reported on Muri’s campaign finance forms as coming from Bob Brown, who lives in Fircrest. Muri has said he is unsure he would use the membership even once in the year he has it, and he said it is not something he would have sought for himself.

The county council’s attorney, Susan Long, said the council’s ethics rules do not really address a gift that would be given to such a campaign as a contribution – provided the contribution is legal under state or federal election law. The county does have a $100 yearly limit on contributions that a county employee can make to a candidate for county office, but the donor in this case, Bob Brown, is not a county employee, according to Muri, who described him as a retired Army officer and Boeing engineer.

Asked about this last week, the Flemming campaign declined to comment.

But The Olympian kept looking into the matter, and it appears Muri’s gift may not be allowable under the same FEC rules that suggest Flemming’s loans are not clearly legal.

On page 53 of the FEC’s candidate guidelines, it says personal use of campaign funds is not allowed – which a gun club membership might be considered.

The rules also spell out contributions that would not be considered personal use but it does not mention such a club membership.

But, on page 55 of the guidelines, a section does address dues, fees and gratuities and its wording suggests the membership gift is not allowed as a contribution. Specifically, the guidelines say: “Campaign funds may not be used to pay for dues to country clubs, health clubs, recreational facilities or other nonpolitical organizations unless the payments are made in connection with a specific fundraising event that takes place on the organization’s premises.’’

Hays initially said the membership was required to let Muri address the gun club.

But the president of the club, Duane Hatch of Gig Harbor, and its secretary, Burleigh Cubert, of Olympia, say both candidates addressed the club’s executive board – which later gave a dual endorsement of both candidates. Burleigh, who is a Muri supporter, and Hatch, who did not say who he favors, both said neither candidate needed to be a member.

And Hatch said he would have allowed Democrat Denny Heck or the other three candidates in to talk if any had asked to.

I talked to Muri late this afternoon. He said he will have Hays call the FEC in the morning, and if there is a problem they will find out “how to make it right.”

BACKGROUND: For more information on the new 10th district field, find my most comprehensive overview story of the race and its six candidateshere. We also ran profiles of the candidates in May – which can be found here for Republican Dick Muri of Steilacoom, here for Republican Stan Flemming of University Place, here for Democrat Jennifer Ferguson of University Place, here for Democrat Denny Heck of Olympia, here for Progressive Independent Sue Gunn of Thurston County, and here for independent Steve Hannon of Yelm.

The newspapers’ voter guides also have details – here for The Olympian and here for The News Tribune.

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