What was it: in-kind contribution or unpaid campaign debt?
LAS VEGAS — While President Obama’s fundraising woes are making national headlines, is his Obama for America campaign looking to cut costs by shortchanging school districts and municipalities for the cost of his events?
As the President crisscrosses the country in his bid for re-election, holding campaign rallies and fundraisers in towns and cities across America, local governments keep attempting — and failing — to get his campaign to pay its event-related expenses.
In Las Vegas, however, taxpayers — who for nearly four years had been on the hook for about $25,000 — finally received some reimbursement late last month.
It was — coincidentally enough — on the very day that the Clark County School District finally released to Nevada Journal district invoices and other public records for the Obama campaign’s 2008 use of district facilities.
When now-President Obama was merely candidate Obama, Nevada was a swing-vote state and a political battleground. Candidate Obama flew in and out of Las Vegas often, holding political rallies at local high schools — and leaving unpaid expenses behind.
Now, all around the country, something quite similar is going on.
In Durham, N.H., town leaders recently scheduled a special public meeting to discuss the campaign’s refusal to reimburse campaign-related police and fire services.
Ultimately, an anonymous donor stepped forward, offering to pay the expenses, and the meeting was postponed.
In the City of Newport Beach, Calif., City Manager Dave Kiff invoiced Obama for America $35,043.04 for extra police officers, reserve officers and overtime pay to cover a February fundraising visit.
Newport Beach spokesperson Mary Locey told Nevada Journal last week that, “the City has not received payment [due June 9] or a response from the campaign.”
As such local governments make headlines, controversy and debate grow.
In Las Vegas, during the years following Obama’s first use of district facilities, CCSD officials simply — and quietly — moved the Obama campaign’s outstanding bill out of the normal invoicing process.
According to a Nevada Journal source, the bill sat for years in a folder on a district administrator’s desk.
There were no headlines or chances for public discussion of the tens of thousands of dollars in campaign-related public-safety costs owed by the Obama for America campaign.
According to a generic payment summary finally released June 22 by the school district, Obama for America was charged a total of $53,116.12 for two political rallies the campaign hosted at Bonanza and Coronado high schools in the fall of 2008. The Bonanza High School charge was $31,508.23, while Coronado’s was $21,598.89.
This included over 500 hours of school police services, totaling $24,631 in overtime costs for event-related public-safety services.
Although the Obama for America campaign had signed off on police overtime charges prior to the rallies, the campaign later failed to pay the tab until 2012.
“We have made numerous attempts to collect the outstanding balances to no avail,” wrote CCSD’s director of intergovernmental relations, Nicole Rourke, in a 2010 email to Obama campaign contact, Ann Marie Habershaw.
“I would appreciate your help in resolving this matter,” pleaded Rourke.
However, Rourke’s plea produced no payments.
Habershaw is currently the chief operating officer for the Obama for America 2012 campaign. In 2010, Habershaw was the chief operating officer for the Democratic National Committee.
When Durham, N.H., last month asked the Obama campaign to cover an estimated $20,000 - $30,000 in police and fire services for an upcoming campaign event, Habershaw released the following statement:
As a private organization, OFA does not participate in security or traffic control planning. All such decisions, including their impact on costs incurred by federal, state or local governments, are exclusively within the control of the appropriate government officials. Should there be a question about the allocation of expenses among the cooperating authorities, we assume that it should be directed to the U.S. Secret Service.
Nevada Journal sent inquiries to Habershaw and the campaign’s Nevada state general-election director, Emmy Ruiz, asking if that statement explained the campaign’s long failure to pay the Clark County School District.
Those inquiries remain unanswered. However, Aoife McCarthy, press secretary for the Obama for America campaign, told Nevada Journal she doesn’t know why the campaign did not pay.
“I don’t know the back story behind it,” McCarthy said in a conversation last month. “I wasn’t here in 2008 when the charges were actually incurred.” She did say, however, that the campaign had recently made payment.
And indeed, one day after CCSD finally provided some of the requested public records to Nevada Journal, the district informed the publication that “the Obama campaign just paid the bill.”
Nevada Journal’s public-records request to the district had asked in part for “any records which demonstrate attempts to collect monies due.” Only two of the records initially produced by CCSD were responsive.
One was the 2010 email from Rourke to Habershaw.
The other was an email from the district to the Obama campaign, dated Nov. 4, 2008. It acknowledged receipt of the campaign’s payment of the district’s $25 facility-usage application fee, which CCSD requires prior to use of district properties. By that date, however, the Obama campaign had already held multiple campaign rallies at CCSD high schools, the last of which had taken place Nov. 1.
Five days after Nevada Journal made its initial, June 6, 2012, public-records request, CCSD chief of staff Kirsten Searer informed reporters the records had been compiled, and she expected to release them the following day.
However, CCSD did not release the records until June 22.
Various records which should normally exist, such as sales orders and records indicating proof of payment, were missing from CCSD’s production. Two days later, Nevada Journal provided CCSD a spreadsheet noting the missing records.
“We were not intentionally withholding documents,” CCSD Communication Officer Amanda Fulkerson said earlier this week. “In fact, because of our deep search we turned up a check (aka additional record) and sent that to you today.”
“We worked swiftly to provide you with the information as soon as we could nail down where it was held within the district.”
On July 9, CCSD produced five new sales orders, each printed on June 29, 2012, and three photocopies of checks.
No district records released to Nevada Journal by CCSD documented any efforts by the district after 2010 to collect the Obama campaign’s outstanding debts. Nor did the records released include any relevant billing statements, payment notices, letters or other written requests for payment.
Not until Nevada Journal began enquiring about the outstanding debt two years later was the debt finally paid.
Under federal law, providing a good or a service to a political candidate at less than normal cost constitutes an in-kind political contribution, a Federal Election Commission spokesperson told Nevada Journal.
Nevada Deputy Secretary for Elections Scott Gilles told Nevada Journal that the state’s local governments legally can make campaign contributions.
“In general,” responds Gilles, “Title 24 does not restrict or limit a governmental entity’s ability to make contributions and Ch. 294A treats governmental entities like any other person or group (see, NRS 294A.009(4)) and all the other campaign finance rules and restrictions would apply.”
Federal campaigns and contributions, says Gilles, are governed by federal law.
Fulkerson, however, says that the district’s government affairs “team went beyond their duty and helped the finance department retrieve the funds by proactively trying to identify contacts responsible for the bill for nearly two years after the Obama campaign was on hiatus.
“It’s not surprising the bill was paid recently,” she wrote, “as the Obama For America campaign has been resurrected and now has an active finance department.”
However, campaign reports filed by the treasurer of Obama for America, Martin Nesbitt, demonstrate that the campaign did have an active finance department during that time period, routinely disbursing payments.
Fulkerson also insists that the district “followed protocol” in the Obama debt matters. “The school District's protocol is for finance to send the entity an invoice for the space after the event has concluded. This protocol was followed and the Obama campaign was billed,” she said.
However, CCSD’s official written policy, number 3613 R (see page 16 (C) and (D)), requires that after receiving the budget department’s notification of all direct and indirect costs, the accounting department will create a detailed estimate, which “… must be paid before the event can be scheduled.” (Emphasis added)
“All fees must be paid to the Accounting Department,” states another section, “before the event can be listed on the master schedule.”
However, in contradiction of this written policy, CCSD invoiced the Obama campaign after the events. Additionally, those invoices were not even created until weeks after the district had received payment from the campaign.
Invoices provided by CCSD listed most itemized charges for the Bonanza and Coronado events but omitted any charges for school police services, which totaled $24,631.72. FEC records confirmed that the Obama campaign made payments equivalent to the itemized charges.
A third campaign event held at Chaparral High School, before the Bonanza and Coronado events, was also invoiced after the fact. However, in that instance, Obama for America paid the $561 in police overtime, and that fact was reflected on CCSD’s subsequent invoice.
Nevada Journal has been unable to confirm payments for two other campaign events held at Del Sol and Green Valley high schools earlier in 2008. Although CCSD did supplement its disclosure with sales-order records for the events, the district provided no proof substantiating payment.
Nevada Journal was unable to reconcile those CCSD sales orders and invoices with the campaign’s financial disclosures.
Obama campaign press secretary McCarthy told Nevada Journal she would look into the matter and respond.
By publication date, however, she had not.
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