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Coakley moves to fix finances

Staff changes made to boost oversight of federal, state coffers

Attorney General Martha Coakley’s federal election finance woes have threatened to damage her gubernatorial bid.

Associated Press/file 2011

Attorney General Martha Coakley’s federal election finance woes have threatened to damage her gubernatorial bid.

As questions linger over her campaign finance records, Attorney General Martha Coakley is trying to clean up the troubled political accounts by replacing her sister as treasurer, retaining a Washington lawyer, and bringing onto her team a Democratic expert on state election finances.

On Monday, Coakley’s political aides filed a series of amended campaign finance reports for her federal account, a move she hopes will help take a potentially damaging issue off the table as she seeks the Democratic nomination for governor of Massachusetts. Her federal campaign committee has also filed papers to dissolve.

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Coakley’s poor oversight of her political accounts, along with her reliance on her sister to oversee both her state and federal funds, is at the heart of the controversy facing the attorney general as she tries to convince Democrats that she will not repeat the political ineptness that helped cost the party a US Senate seat in 2010.

Mishandling of the Senate account since her loss to Republican Scott Brown has stirred concerns within the party’s ranks.

Public records show that Coakley has now replaced her sister, Anne Gentile, as treasurer of her state political committee. That move came following a Globe article this fall that reported that the federal committee’s accounts were in financial disarray. It also showed that Coakley, who enforces campaign finance statutes as attorney general, had used a small portion of those funds for state political activities, a violation of state law.

In place of Gentile, Coakley has turned to Paul Brountas Jr., a political protege of Governor Deval Patrick, who has overseen accounts of the state Democratic Party.

By bringing him onto her political team, she has turned to someone who party insiders say is a Democratic operative with deep knowledge of financial compliance issues.

Coakley has also hired attorney Marc E. Elias, a leading Washington-based authority on federal campaign finance laws, as she works to straighten out her federal fund. Elias has been helping her negotiate with the Federal Election Commission to resolve her problems, which stem from the filing of poorly prepared quarterly financial reports since her loss to Brown.

While Coakley attempts to dampen the controversy, however, a new issue has emerged: In the final days of the 2010 Senate election, Gentile used $15,000 of her own money to pay for campaign-related services including the rental of Election Day vans and meals for staff. The committee later reimbursed her.

The law states that such payments should generally be considered loans to the committee, but the financial reports at the time do not list any loans.

Federal campaign finance law also considers loans as contributions. The limit at that time on the amount an individual could contribute to a federal candidate was $2,400 per election. That meant Gentile would not have been allowed to lend the campaign more than $2,400.

Coakley’s federal campaign finance records indicated that Gentile had paid $11,088 from her personal funds for the vans, $3,354 for meals, and $586 for other food.

Coakley’s problems came to light after the Globe reported that she had used some surplus funds from the US Senate race to promote her state political activities. Massachusetts campaign finance law bars state candidates or their committees from accepting funds from a federal political committee.

Those payments, amounting to about $6,000, were used to buy an ad in the 2012 state party convention program book and pay a convention fee. The federal campaign funds also paid for her trip last year to the Democratic National Convention. Her aides said her state committee recently reimbursed the federal committee for those expenses.

But her spokesman said she will not reimburse her federal committee for the $3,763 she spent attending the 2012 national convention in North Carolina.

As for the federal committee’s filing of amended reports Monday, Coakley spokesman Kyle Sullivan attributed the poor bookkeeping to “clerical errors.”

The committee also failed to respond to a series of FEC demands over the last several years to clean up the books.

“Attorney General Coakley has acknowledged that mistakes were made in regard to the 2010 Senate campaign, accepted responsibility for them, and has taken aggressive steps to fix the campaign finance errors by hiring financial experts to review the federal account and file amended reports with the FEC,’’ Sullivan said.

Coakley faces further questions over the $35,000 her federal committee has spent for a Washington-based software company to maintain a donor database, despite the fact that she has not run for federal office since 2010 and the committee has been mostly inactive. It would be a violation of state campaign finance law if the database was used for state political activities.

Sullivan said the database was used only to file quarterly federal election reports and has never been used for state political operations.

Frank Phillips can be reached at frank.phillips@globe.com.
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