The Craig Fahle Show

DJC Report: Detroit Mayor Duggan's Campaign Finances

Thursday, July 24, 2014

As part of WDET’s partnership in the Detroit Journalism Cooperative, WDET's Bankruptcy Reporter and Next Chapter Detroit Blogger Sandra Svoboda teamed up with Bridge Magazine’s Mike Wilkinson to look at Mayor Mike Duggan’s campaign finances. They look at his Super PAC from last year’s election, and discuss the other fundraising efforts he has underway. Their collaborative reports are the first to document Duggan's campaign finances and funding in a transparent way. Wilkinson and Sandra talked with WDET's Pat Batcheller about their two articles. Below is a transcription of their conversation:

Pat Batcheller: A new fund has been created to help raise private money to pay for some of the projects that the Mayor would like to initiate and then also, you’ve taken and extensive look at how Super PAC money played a significant role in the last mayoral election and how that may change municipal elections across the country. Let’s start with you Mike, on the, what you uncovered regarding this new nonprofit called the Detroit Progress Fund. What is that exactly?

Mike Wilkinson: We learned about this about a week ago that Mayor Duggan had a birthday party over on the riverfront where people were invited to bring their checkbooks so that they could put some money into the Detroit Progress Fund, and it turns out that it was created back in February and the goal of it, well, it’s considered a social welfare nonprofit, a 501c4 and they’re going to use the money to promote the mayor’s agenda.

PB: We’ve seen funds like this before, of course, the Kilpatrick Civic Fund and Gov. Snyder’s NERD fund, both of which raised significant amount of controversy for each politician. The mayor obviously is cognizant of the pitfalls of that, I would think, otherwise, he wouldn’t go down this road. What is he going to do to ensure that he doesn’t fall into those traps?

MW: One of the things when we asked the mayor’s staff about this, they were very quick to respond that it’s going to be different in terms of transparency. By IRS rules they only have to give a limited amount of data every year when they make their filing but they’re going to disclose, unlike what Snyder did initially with the NERD fund and Kilpatrick with the Civic Fund, they’re going to disclose who their donors are, they say, and they’re going to disclose what the money gets spent on. Kilpatrick did not do that and part of what he did end up spending it on, golf clubs and some other personal stuff, ended up adding to his time that he’s now spending in federal prison. And in the NERD fund’s case, the revelation of the fund led to a lot of embarrassment for the governor and he shut it down and said that if he creates a new fund he will disclose.

PB: What kinds of things could this fund be used for?

MW: It’s limited by IRS rules. You can’t get involved in the direct partisan politics. What Kilpatrick had aid he was going to do and what is allowed is I think some of the voter education efforts, but what we can see from the records that are filed with the state, the Detroit Progress Fund is not going to be going into that. It’s more to support the mayor’s agenda, and the one example that John Roach, a spokesman for Duggan gave us, is in the event when they have a high-ranking official somewhere else in the country who’s coming to Detroit to interview for a job, that the fund would be able to pick up the travel and defray the costs so that the taxpayers would not have to.

PB: And of course as we learn more about the Detroit Progress Fund, we know that a significant amount of money was raised for the last mayoral election to support Mike Duggan and his opponent last November, Benny Napoleon. Sandra, you looked into this as far as the influence that Super PACs had on this.

Sandra Svoboda: It was reported during the election last year that both candidates, Benny Napoleon and Mike Duggan, had Super PACs, What I don’t think we realized is how truly unusual that is. In the wake of the 2010 U. S. Supreme Court ruling, Citizens United, which really changed the game of campaigns because of the campaign finances restrictions being loosened on who can pay for what, candidates across the country have been able to use these Super PACs. Or, well, I shouldn’t say it that way. The candidates themselves don’t use the Super PACs because they’re not directly coordinated. But it’s clear when you look at the donors and even more so the expenditures in the Super PACs that they are clearly supporting certain candidates. It happened during the mayoral election which is kind of unique around the country. We don’t see that many big city mayor although the experts, the advocates for campaign transparency that we interviewed expect this to be a much bigger trend.

PB: And you’ve put together a database on Bridge so people can see who the big contributors were and there were some interesting but not necessarily surprising names of some of the biggest donors to the mayoral campaigns, names people are familiar with like Roger Penske, for example.

MW: Mr. Penske, who has long been a supporter of Detroit politics. He’s been a supporter of the city. He’s committed $10 million to the grand bargain in bankruptcy court. He personally gave the Turnaround Detroit Fund for Mr. Duggan $500,000. His corporation gave him another $500,000. He also gave $3500 to his direct campaign committee. So you have people who are able to give huge sums of money and what it does, what I find interesting, if you look back at what was considered the most expensive mayoral election before this one, you go back to, I think it’s 2005 and with Freman Hendrix and Kwame Kilpatrick, it was $5.4 million between two men. Here, Mike Duggan raised himself $2.8 million, another $3.1 million was raised in support of him but the $3.1 million was from only 246 people. They average well over $12,000 a donation. It took him 3,600 people to raise the $2.8 million. So you really narrow your focus of fundraising if you have several big backers. You don’t have to have the wide spread of support at least financially to run a campaign.

SS: And that’s the difference in the post-Citizens United era. There can be these unlimited amounts of fundraising going to campaigns through the Super PACs, not coordinated through the campaigns but certainly supporting. And we as voters, we as the public don’t necessarily know where that money’s coming from.

PB: So that’s why you created this database to give people an avenue to find out where the money came from. How does it work?

MW: If you were a regular citizen and you wanted to know who supported Mike Duggan, you would have had to go to two different places: to the Wayne County Clerk’s election database, contribution database, and to the Secretary of State at the Michigan level. What’s interesting about Duggan’s Super PAC is it started in Wayne County and then it moved to the state and unless you combine the two, you wouldn’t get a full picture. What we did was take that in addition to his campaign contributions and clearly identify which money was going directly to him and which was going to his Super PAC so you can see a fuller perspective and then you can see that the people who gave to the Super PAC, most likely, in most case also gave to the campaign. So you can tell there are these veins of support that run both ways.

SS: And thanks to the Internet and technology, this information is available to the public. What Mike did was put it in one site that you can get at BrigeMI.com where people can look themselves. They can see who contributed from their hometowns. They can run certain names. It really helps give a picture, a more complete picture of what’s going on in our politics.

PB: Were there any surprises that you found in the data?

MW: I think we all have known from the 2012 presidential campaign the vast amount of money that has poured into Super PACs. I don’t think I really understood there was this amount of money being spent locally. Kwame Kilpatrick had a leadership PAC called Generations. Some people Karmanos, Penske, well, I’m not sure about Penske, had given him a significant amount of money. So we saw it there. That money, he was allowed to give to other candidates but here we’re able to see people like Karmanos. We see Vanguard Health, which bought the DMC where Mike Duggan worked before. You see DTE putting in a lot of money. A Quicken Loans PAC. And you see there are people who have these reserves of wealth that they wanted to share on Mike Duggan’s vision, and I think it’s important going forward as Mike Duggan spends a lot of money to make the city, to improve the city to see if there’s any correlation. And it’s a transparency issue he’s talked about. He wants to be transparent and with our database on BridgeMI.com, we’re going to kind of help make it transparent.

SS: I think on a related issue, one of the things I hear in covering the bankruptcy is the number of people outside of the area, attorneys especially, and financial consultants, who are working on the bankruptcy. We see the same thing with Duggan’s campaign contributions. There is a lot of money coming from outside the city of Detroit and there is some criticism from within the city, people who don’t like that outside money is helping determine the outcome of elections.

PB: Not just the outside money but one could reasonably ask, I suppose, if these donors are giving these donations through the Super PAC and also through the Detroit Progress Fund, if they’re giving donations to these, are they getting something in return, and you’re not necessarily alleging that that’s taking place, but it is something that would certainly be a reasonable question.

SS: I think journalists call that “job security.” We have our work cut out for us in the next few years to look at this.

MW: One thing I find really interesting about the Super PAC and the transparency issue, is the wealth of electronic data has allowed us, we get to see who has sported Mike Duggan, now the Super PAC is not coordinated and it’s independent, but because of that transparency, Mike Duggan knows who supported him. And what I wonder if Roger Penske’s assistant calls up and wants a meeting with the mayor, does that meeting gets scheduled as a guy who gave $3,400 to his campaign committee or is it as a guy who gave $1 million to the Super PAC? I’m presuming the latter.

SS: And I think one of my favorite quotes in the story is Rich Robinson from the Michigan Campaign Finance Network, who of course is our statewide watchdog and compiles a lot of information campaign finance around the state he says nobody writes four-, five- and six-figure checks out of good humanitarian reasons.

PB: You can assume they’re wanting something in return. What do these funds tell us about where things are with Mayor Mike Duggan?

MW: He has a lot of support from people who have deep financial interests in the city. He also had a lot of support from people in the city. There were a lot of people who gave him $5, $10, $25. I think what we have to make sure as journalists and as watchdogs is just to keep an eye on: does anyone benefit more because of those contributions. We will be able to look at that as contracts are let, as decisions are made. I think when a guy like Roger Penske gives $1 million between himself and his corporation, I’m not sure he wants Belle Isle paved for the Grand Prix, I think he wants a voice in government. And I’m going to guess that he’s going to get it.

SS: I think also what it shows us is that the dynamics of national politics and the so-called dark money going through Super PACs is coming to local elections, and that’s something that as a journalist, the one agenda I’m allowed to have is the transparency and openness in government, and it kind of scares me that we might see that dynamic determining some of the smallest, most local elections.

MW: The good thing is because of the records that are out there. Because of databases like we were able to compile on BridgeMI.com, we are going to be able to keep an eye on it. Five years ago, this was a pdf at the Wayne County building. That was electronic but then a couple years before that you were given folders that were three, four, five inches thick for Kilpatrick. You would have had to wade through just tens of thousands of pages and people didn’t have the ability to do that. Well, now they do.



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