Watchdog: Follow the Money

Strange spending raises questions about North Dakota-based Republican super PAC

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Watchdog,Michal Conger,North Dakota,Campaign Finance,Follow the Money,FEC,Super PACs

Shortly after former North Dakota congressional contender Shane Goettle ended his bid for the Republican nomination in April 2012, he joined Odney Advertising to start its public affairs and lobbying arm.

Then in May 2012, Goettle started a super PAC called the "Brighter Future Fund," with Odney president Pat Finken listed as the PAC's treasurer.

Goettle used the super PAC to stay involved in the congressional race as if he'd never lost the primary, raising money and running ads supporting other Republican candidates, including his primary rival.

He was also sending the money to his own advertising firm.

Strangely, most of the donations were small enough that they could have easily been given directly to his former primary rival rather than to a group barred from coordinating and sure to spend it less strategically than campaign advisers.

Strangest of all, the North Dakota Republican Party also made the unheard-of move of giving to the super PAC instead of performing party-like functions itself. Goettle is now the party's treasurer.

The Brighter Future Fund raised about $133,000 during the 2012 election cycle, most of it from the state's fast-growing energy industry and the state GOP.

The PAC paid two vendors: Odney and a Texas-based law firm, Gober Hilgers. Odney received $86,000. About $29,000 of that supported two North Dakota Republican candidates with radio advertising.

Those amounts might be dismissed as chump change unlikely to change the race. They were also so small that it made little sense to funnel them through a super PAC, whose usefulness stems from the fact individuals can give more to them than they can to individual candidates.

The ads supported Kevin Cramer, Goettle's former primary opponent, and former Rep. Rick Berg, who vacated the House seat to run for the Senate.

The other $54,000 Odney received went to "monthly retainers" and "management expenses," according to Federal Election Commission filings.

Federal election regulations don't require a PAC to detail how its money is spent once it goes to a vendor like Odney.

They do, however, require the PAC to list all its independent expenditures, which is money spent on advertising for or against a candidate.

The Brighter Future Fund effectively served as a way for Goettle to retain influence in the House race after losing his bid for his party's nomination.

Super PACs, which can accept unlimited donations, are a product of the Citizens United ruling that declared certain campaign spending caps as unconstitutional abridgments of political speech protected by the First Amendment.

But the Brighter Future Fund had few donors who exceeded the maximum that could be given to Cramer or Berg.

Goettle told the Washington Examiner that the money paid to Odney went toward administrative costs and a door-knocking campaign to promote the energy vote.

That included staff to coordinate the effort and flyers for the door knockers to hand out.

Odney handled the PAC's payroll and hired the staff for the get-out-the-vote effort, he said.

How Odney spent the money, however, was not clearly reported, and these expenses don't show up as independent expenditures.

"It wasn't a money-maker for Odney, I can tell you that," Goettle said.

But Odney was by far the biggest recipient of the Brighter Future Fund's spending in 2012. Gober Hilgers received about $6,000 for legal services.

The PAC chose Odney because "firms with the capabilities Odney has are rare," he said. Donors were mostly personal connections, he said, and wouldn't have been comfortable giving to a PAC that only benefited the firm.

It's not illegal for a business to use a PAC to generate income for itself. Only a candidate's principal campaign committee is prohibited from what's called personal use, or using the PAC to pay itself.

"Even if that's what they were doing [fattening their wallets], that's not illegal, and to me that's troubling," said Paul S. Ryan, senior counsel at the Campaign Legal Center, which advocates on behalf of stricter campaign finance regulation.

A get-out-the-vote campaign wouldn't necessarily be reported as an independent expenditure unless it was candidate-specific, according to an FEC spokesman.

However, Odney also described its candidate-specific radio ads as "get-out-the-vote" ads in state filings, even though they were reported as independent expenditures supporting specific candidates, making the nature of the door-knocking and flyers unclear.

Goettle was also treasurer of a short-lived super PAC called the Brighter Future Committee, which was active from September 2012 to January 2013 and ran ads against Pam Gulleson, Goettle's would-be general election opponent, according to FEC filings.

The PAC's expenditures similarly went to Odney and Gober Hilgers. The committee raised $32,000 — $7,000 of which came from Odney president and Brighter Future Fund treasurer Pat Finken.

The PAC's address was the same as that of Odney's Bismarck office, according to FEC data.

The committee paid $5,000 to Gober Hilgers for legal services and $26,000 to Odney for the radio ads, which are listed as independent expenditures, according to FEC and state filings.

The Brighter Future Fund and Odney share several key staff members. When he took his job at Odney, Goettle told the Bismarck Tribune he and Finken had known each other for years before he joined the firm.

And when Goettle resigned from the fund in December, new director Cory Fong took over the same day he left an elected position as state tax commissioner to join Goettle in Odney's lobbying department.

Fong told a local publication that he previously worked with Goettle at the state commerce department.

He told the Examiner that he's "still getting his bearings" and couldn't speak to the PAC's activities during the 2012 cycle.

In June 2013, Goettle became the registered treasurer of the North Dakota Republican Party committee, according to FEC filings.

The party gave the Brighter Future Fund $50,000 in the 2012 cycle, by far its largest donation. Party donations to super PACs are very unusual, since the party can run the same types of ads that a super PAC can.

The party understated its receipts and spending by hundreds of thousands of dollars and "failed to disclose debts and obligations totaling $235,563" in 2009 and 2010, according to an FEC audit report released Wednesday.

The findings are among the more serious uncovered by the FEC at major party organizations and can result in fines.

Several expenditures during that period went to Odney, according to FEC filings. The party has paid Odney $14,000 since 2007.

Goettle replaced Robert Harms, who was treasurer during the audit period and currently serves as chairman.

The party has received a whopping 192 letters warning of filing discrepancies from the FEC since its inception. By comparison, the much-larger Republican National Committee has received 322.

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