News Column

U.S. Senate candidate Land discloses joint account, but questions remain

July 24, 2014

By Todd Spangler, Detroit Free Press



July 25--WASHINGTON -- Republican U.S. Senate candidate Terri Lynn Land's campaign insisted Thursday that her nearly $3 million in contributions to herself are legal and proper, even as Michigan Democrats called on state and federal authorities to investigate.

Land's campaign this week filed a correction to her federal financial disclosure, revealing a previously undisclosed joint checking account she controls with her husband Dan Hibma from which she has drawn $2.9 million for her race.

The Free Press first revealed the existence of the account a week ago, but the campaign's filing still leaves doubts as to whether the funds drawn from it were put there expressly for campaign use and, if so, whether they may violate contribution limits.

Candidates may give as much as they like to their campaigns and can tap liberally into jointly held bank accounts. But the law is murkier on spouses making funds available for a campaign, being constrained by the standard limit of $5,200 per election cycle.

Land's legal counsel, Charlie Spies, said he is confident the campaign is on safe legal ground.

"Married couples may share income, put their money into joint accounts and spend their resources ... as they choose," he said. "There is FEC (Federal Election Commission) precedent for her being able to use resources from her joint account."

Precedent, however, is less clear when considering why the U.S. Supreme Court has kept in place contribution limits on spouses and relatives if they could simply move assets among accounts. FEC rulings on the subject have been somewhat inconsistent.

Jan Baran, a Republican election law expert in Washington, said it's not only a question of whether the money came from a joint account but one of "where did the money come from originally," and its purpose.

In the case of Land, the de facto Republican nominee to replace U.S. Sen. Carl Levin and a former Michigan secretary of state responsible for enforcing election laws, the original source of the funds remains unclear.

Her campaign said a portion of the funds came from assets she controls herself, though a significant amount would appear to have come from assets solely under the control of her husband.

As the Free Press reported last week, Land's federally required financial disclosure showed she and Hibma had assets worth as much as $35 million between them, but they listed no joint assets. Of the total, only about $1.5 million was under her control.

The disclosure of the joint account also didn't change that total much, or explain where the $2.9 million had come from since it has no more than $100,000 in it now, according to the Land campaign.

Land's campaign told the Free Press the couple has a history of sharing income, which could be a factor if federal officials investigate. It also cited a 2006 FEC ruling allowing a woman to put assets in a joint account tapped by her husband's campaign.

In that case, the candidate's wife sold $10,000 worth of stock and put the proceeds in a joint account, which the candidate used for a loan to his campaign. FEC staff concluded it was a violation; the commission, without explanation, ruled otherwise.

In other, similar matters, the FEC has contradicted itself: In 2003, for instance, it ruled funds given to a candidate from a family trust -- which he would have received anyway under certain other conditions -- violated the limit.

"The law is murky here," said Bradley Smith, a former FEC member and a professor at Capital University Law School in Columbus, adding that if such a contribution is said to violate the "spirit" of the contribution limit, that's another way of saying it doesn't violate the letter of the law.

"I think they'd be on pretty solid ground defending it," he said.

-- Brian Dickerson: For Terri Lynn Land, happiness is escaping from Mackinac

-- Mike Thompson: Terri Lynn Land's troubling campaign finances

The state Democratic Party, meanwhile, filed complaints with both the Michigan Secretary of State's Office and the FEC.

In the state complaint, Democrats demanded an explanation for how Land could have listed herself as an owner of her family's real estate company, Land & Co., in earlier contributions to her own secretary of state campaigns -- for which Hibma was campaign treasurer -- if she wasn't. She has since said she has never had an ownership role with the company and all of their assets related to it are solely in Hibma's name.

In the FEC complaint, the Democrats asked whether Land's self contributions -- if from assets controlled by Hibma -- potentially violate the contribution limit.

"Since Terri Lynn Land refuses to answer questions about her controversial and potentially illegal Land & Co. finances, the only way for Michiganders to know the truth is through investigations by the State of Michigan and Federal Election Commission," said Lon Johnson, the chairman of the state Democratic Party.

At both the state and federal levels, officials review complaints to determine if they have merit before moving forward. Even if they do, action can take months or even years in some cases.

Contact Todd Spangler: 703-854-8947 or tspangler@freepress.com

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(c)2014 the Detroit Free Press

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Source: Detroit Free Press (MI)


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