Secret “Dark Money” Funds One of the Detroit Mayoral Super PACs

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November 3, 2013; Detroit Free Press


The editorial board of the Detroit Free Press has had its fill of dark money in Michigan politics. In a lengthy and pointed editorial, the Freep described the big money 501(c)(4)s supporting both candidates for mayor of Detroit, focusing on the most recent donations from the super PAC supporting Benny Napoleon, and concluded, “It sure flunks the smell test—but it’s probably not illegal. Increasingly, that’s the abysmally low standard applied to political fund-raising in Michigan.”

Napoleon was supported by a super PAC called Detroit Forward. Super PACs are required to disclose their donors. However, it received a “substantial donation” from a 501(c)(4) called the Michigan Community Education Fund, which doesn’t have to disclose. Heading both Forward and the Fund is Chris Jackson, a Detroit businessman. The Michigan Community Education Fund is the “donor” of 36 percent of the Detroit Forward’s $413,750 fundraising total so far.

Facing Napoleon in the mayoral contest was Mike Duggan (elected mayor just yesterday), whose super PAC, Turnaround Detroit, has raised nearly $3 million. The state is investigating Turnaround Detroit based on a complaint filed by Detroit Forward, and this week Turnaround repaid the compliment by filing a complaint that the Michigan Community Education Fund was really only a shell entity to funnel money to Detroit Forward.

The Freep editorial demonstrates how the national phenomenon of dark money through dubious social welfare organizations has filtered down to municipal elections with all of its corrupting impact. “This is about money laundering, dissembling, shallow theater and the perpetual war of annihilation for annihilation’s sake,” said Rich Robinson, director of the Michigan Campaign Finance Network. “I think that’s what politics is now.”

But the Freep recognizes that secrecy is only part of the problem. The donors to Turnaround Detroit have been disclosed, since Turnaround is a PAC, but the donors are big time players: Penske gave $250,000; Quicken Loans, headed by Dan Gilbert, who has been acquiring much of downtown Detroit for his Quicken Loans firm (and who this year purchased a controlling interest in the Greektown Casino, where Duggan has been on the board), gave $80,000, though that had to be taken back because of a charge that it might have violated prohibitions on campaign donations by casinos; former Compuware CEO Peter Karmanos donated $200,000; and Vanguard Health, which purchased the Detroit Medical Center when Duggan was CEO, added $100,000. It is a list of big donors, which undermines the spirit of the campaign finance law “which seeks to control the extent to which money (from individuals or corporations) warp the political process.”

501(c)(4)s have been active at the state level for some time. Governor Rick Snyder’s New Energy to Reinvent and Diversity Fund (NERD Fund), a (c)(4) that doesn’t have to disclose, pays for the salary of Snyder advisor Richard Baird and the living expenses of Detroit ‘s emergency manager Kevyn Orr, though Snyder has said he wants the NERD fund to shut down and be replaced by an organization that does disclose its donors. Other state politicians have, or more accurately, are associated with other 501(c)(4)s. It causes a big problem in the money flowing into judicial races, which has exploded in recent years. Given the secrecy of the money supporting judges, it becomes difficult if not impossible to disqualify judges who might be compromised in particular cases by the sources of their campaign funding, unless they voluntarily recuse themselves on that basis.

The editorial closes with Robinson of the Michigan Campaign Finance Network again: “It’s just as though this whole thing is seeping down into the culture, and dark money becomes more of the way of politics,” Robinson says. “And there’s great peril in that.” The Freep makes a compelling case.—Rick Cohen

  • Brooks Kelley

    While what you say is true, one must understand that this was still a historically significant election for Detroit. One being of course that the city is bankrupt (or probably will be determined to be bankrupt.) The other being that this election may mean that the polarization that was in the region may be finally ending. In the region, there has been a divide at 8 mile which is the general border on the north with Detroit and non-Detroit (the suburbs). The city of course is predominately (probably 90%+) black while most of the suburbs are predominately non-black (but not necessarily Caucasian. Duggan who is white got onto the ballot through a write in candidacy. Then he was able to convince enough voters that he was the better person. They actually ran a generally civil campaign with some minor disputes. The advantage was that both candidates were qualified. I am not a voter so I do not know the reasoning of those that voted but there also may be those that felt that Napoleon could be beneficial to the city in his current position as Sheriff of Wayne County of which Detroit is the major part of. The best would be that both can work together and maybe they can get some of the major problems of Detroit addressed. the advantage that Duggan has is he may be able to build the alliances with the suburbs to be able to return the City of Detroit to its former greatness. The downtown is reviving after a lot of investments in businesses from major supporters including helping to get the City of Detroit new police cars and fire trucks so that they can actually respond on a more timely basis and be able to do their work. The next step will be getting the residential areas safe and revived which hopefully can get done although many so far have tried and failed.