Dems: Reps. violating campaign finance laws, tax code

Alabama Democratic Party Chairman Judge Mark Kennedy
Alabama Democratic Party Chairman Judge Mark Kennedy

MONTGOMERY, AL (WSFA) - State Democratic Party Chairman Mark Kennedy said he has filed complaints with the Montgomery County District Attorney's office and the IRS against State House Republicans.  Kennedy accused the Republicans of using "shell organizations" to get around campaign finance laws.

Kennedy cited two organizations:  the Alabama House Republican Caucus, LLC and the House Republican Caucus Foundation, a non-profit.

The Democratic Party provided documents to the press, which party staffers said showed the Alabama House Republican Caucus, LLC made and received political contributions.  They claimed the LLC is operating as a Political Action Committee or PAC.

"They're accepting political contributions and then they're making political contributions and even the people they give to say it's a PAC," Kennedy said.  "The problem is an LLC is not accountable, they do not have to file reports."

Todd Stacy, the Communications Director for House Speaker Mike Hubbard, said the LLC operates the Caucus, and does not exist to make political contributions.  However, it is not against campaign finance laws for LLCs to make contributions.

Kennedy also said the Republican Caucus Foundation gave $28,050 to the New Alabama Leadership Committee, a PAC controlled by Senate Majority Leader Jabbo Waggoner.   The contribution was reported on the PAC's campaign finance forms filed with the state.

The Democrats provided documents that show the foundation has the 501(c)(3) designation, meaning its political activities must be limited.  Two national experts on campaign finance law and nonprofits told WSFA 12 News, it's against the federal tax code for that type of organization to make donations to PACs.

"They can't do that," Ellen Aprill said flatly.  Aprill is a Professor at the Loyola Law School in Los Angeles, She specializes in laws relating to taxes and nonprofits.

Stacy provided WSFA 12 News with a copy of a receipt from the foundation, which shows the $28,050 was intended for a Senate Caucus Foundation Fundraiser.  Stacy said transferring the money into a PAC was an "error."

Republicans also pointed out that two organizations linked to Democrats have had issues of their own in regard to campaign finance laws.

"If Mark Kennedy wants to play campaign finance police, he might want to start by looking within his own party," said Rep. Micky Hammon of Decatur, who is the House Majority Leader.

Until the past two months, the Alabama Democratic Conference hadn't filed required campaign finance reports since 1998.  The Alabama New South Coalition still hasn't filed any reports, according to a check of the Secretary of State's website.

"We intend to have the toughest ethics laws, and we intend to enforce those laws," said Rep. Micky Hammon of Decatur, who is the House Majority Leader.  "It's been a long time coming, and I promise you that everything we're doing is above board and legal."

Democrats also accused Republicans of lying about the date when a $50,000 contribution from the Republican State Leadership Committee PAC to the Alabama 2014 PAC was returned.  The contribution was made after the state's ban on PAC to PAC transfers took effect.

The Democrats said the return wasn't made until July 28th, after they held a press conference on the matter.  But Republicans said the contribution was returned on June 24th, a month before that press conference.  Campaign finance reports for the respective PACs showed both dates.

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