Today, Daylin Leach and his congressional campaign staff released documents, including an official legal complaint letter to the Federal Election Commission, for alleged violations. In the press conference this morning, Leach told journalists that he believed the data proves that the Margolies campaign “knowingly spent illegal General Election campaign funds after completely exhausting available Primary funds in the first quarter of 2014.”
Federal election law states that an individual may donate up to $2600 for a primary or general election. If more than that is spent, the remainder is earmarked according to federal law to the general election fund, with the $2600 saved for the earlier electoral hurdle. The Leach campaign alleges that these remaining funds, meant to be inaccessible at this date, were spent on a daily basis, with 122 checks written using inappropriate funds. Ken Smukler disagrees.
When interviewed by the Philadelphia Inquirer, Ken Smukler, senior advisor to Margolies said the campaign ”has at all times complied with all federal campaign laws. Period.” He called Leach’s attack an attempt “to save his desperate campaign.”
As it stands, Leach is currently leading in terms of fundraising, with hundreds of thousands of dollars invested in television ads, an effective way of reaching a large audience. Arkoosh has the support of a six-figure independent expenditure, being invested in radio ads. Boyle, another candidate in this three way primary, also has released an ad and today announced his endorsement by the Philadelphia City Committee. All three candidates seem to be doing okay right now.
With all that, on the final day of Quarter 1, Margolies had just $7,145 cash on hand, including the unitemized, low dollar donations she had collected that do not require a donation date on campaign finance report forms. She has the support of President Clinton, her in law, and he even stumped for a fundraiser in her honor, on April 10th. It’s unclear at this point when the campaign actually paid in advance for the fundraiser, with so few resources available. This is a question I’ve posed to the Margolies campaign, and I urge other publications with a little more clout than me to continue to ask this question, because it deserves an answer, at the very least to Margolies’ own donors.
According to Leach legal advisor Adam Bonin, the case is quite clear. Though there is a 2009 case with similar charges that ended with no conviction, Bonin cited the regulation that candidates who lose their primary must reimburse all general election donations immediately to donors. So in effect, until (or if) Margolies wins the primary battle, that money is not technically hers to spend, even if she spent the money and was able to fundraise and cover up this loan before the March deadline.
Typically campaigns, especially congressional campaigns with more campaign finance rules as well as more money coming in and being spent on the candidate, create safeguards to ensure that funds earmarked for general election purposes are not utilized until the moment it is legal. Some campaigns opt for two separate bank accounts, one for the primary election and one for the general election, to make things very clear. Other campaigns have one bank account but use stellar record keeping to keep track of the balances in the primary election territory, so as not to breach that legal wall.
I’ll have more in depth analysis tomorrow, not only about the legal precedents, but also the impact on this particular campaign, how and why this occurred, and who is ultimately responsible or will be held responsible.