Baker, state GOP’s use of federal funds questioned

Governor Charlie Baker.Jessica Rinaldi/Globe Staff/File/Globe Staff

Governor Charlie Baker’s political operation and the state Republican Party are relying on the party’s federally raised donations to rebuild his campaign account, despite a 1998 Massachusetts law banning the use of federal funds for state political activities.

Since Baker took office in January, his campaign committee has used the state GOP staff and its headquarters to solicit, collect, and organize donations at events to bulk up his depleted political account, according to several party officials and others involved in the fund-raising for the governor.

The staff and office rent are paid with money from the party’s federal account, according to the GOP’s federal campaign finance reports. That staff has helped to collect $550,000 for Baker since January, records show.

Campaign finance watchdogs say Baker’s decision to use the GOP staff is an end-run around state rules. The 1998 law seeks to ensure that Massachusetts’ campaign finance regulations, which impose more restrictive caps on donations and require more frequent disclosures than federal rules, are applied to fund-raising activities of state political figures. They say the practice of using federal funds is contrary to the statute’s purpose of ensuring only money raised and disclosed according to state laws is used to influence state elections.

“It is a cutting-edge campaign practice that exploits a provision of federal campaign finance law in order to evade more restrictive state campaign laws,’’ said Paul S. Ryan, senior counsel at the Washington, D.C.-based Campaign Legal Center, a nonpartisan election finance reform organization.

The conflicting Massachusetts and federal laws have created a muddle of legal issues that have never been litigated, according to Ryan.

“The state has a contrary interest, but no court has weighed in on this issue and the FEC has not explicitly opined on it,’’ he said.

Three GOP officials confirmed the use of federal resources in interviews and e-mails.

GOP leaders, who declined to be quoted by name during interviews about the matter, say that they are not breaking any laws. They cite a Federal Election Commission ruling that mandates the party use its federal account to pay for any staff member who spends time in any given month on “activities in connection with a federal election,” even if they are working at times on state politics.

Party leaders insist that the entire nine-member staff is involved monthly in some form of federal election activity that justifies paying 100 percent of their salaries from federal funds.

The state Republican Party, using its federal account, is providing the same fund-raising support for Baker’s political ally, Lieutenant Governor Karyn Polito, party officials confirmed. She has raised close to $271,000 for her state campaign committee since January, so far avoiding, as Baker is, most of the costs for staff, rent, and office expenditures.

In recent weeks the Globe asked the state GOP about the Baker and Polito committees’ publicly filed finance reports through May 15 that showed no overhead, office expenses, or staff salaries. Subsequently finance director David J. Drummond submitted a bill to the Baker and Polito committees.

In finance reports filed last week, Baker’s committee reported its first payment — $2,000 — to Drummond while Polito’s committee paid the party finance director $1,000 on the same day, May 18. No other details were revealed. But a person with knowledge of the transaction said the fees covered Drummond’s work for the month of April.

The GOP said it would not release the bill or any contractual documents that may exist between Drummond and the committees.

The party chairwoman issued a statement asserting that the activities of Drummond are legal because he recently collected those fees from the governor’s and lieutenant governor’s political committees. Drummond, who was paid $2,393 in salary from the federal account in April, has been working for the state party since at least January.

“Finance director Dave Drummond is compensated in accordance with the law by the Baker and Polito Committees. The party is happy to support that fund-raising activity,” said Kirsten Hughes, MassGOP chairwoman, speaking for the two committees. Her statement did not address the work of the rest of federally funded staff or the cost of office rent and supplies that went into the fund-raising work.

Baker, Polito, and the Republican State Committee’s staff would not respond to questions about the legality of the fund-raising activities.

Both the Massachusetts Democratic and Republican parties have a state political account, which is governed by the state’s campaign finance law, and a federal account, which must follow federal law and be used for federal elections. The biggest difference: The individual donation limit per year to a party’s federal account is $10,000, twice the amount allowed to a state party committee’s account and 10 times what a donor can give annually to Baker’s state committee.

Pam Wilmot, executive director of Common Cause Massachusetts, said that while the party believes federal law mandates that its staff be paid out of the federal account, Baker is under no obligation to use those staffers for his own fund-raising.

His decision to do so, she said, allows the heavy influx of federal money, raised through individual donations of up to $43,400, that comes into the GOP’s coffers to support state political work. That undermines the state’s more restrictive contribution limits and gives him a strong financial advantage over potential opponents.

“Outsourcing the governor’s fund-raising to the federal account of the state party is concerning for two reasons: First, the governor doesn’t have to pay the salary costs of his fund-raisers, and second, because it allows federal money, raised with higher contribution limits to support state work,’’ she said. “This gives him an advantage over any other candidate.”

The reliance by Baker and Polito on the GOP’s federal account is in contrast to former governor Deval Patrick, whose state political committee paid for a staff and an office to raise his political funds.

Besides staffing Baker’s fund-raising team, the state Republican Party is also using federal funds for state politics in other areas.

The Republican Party has spent $12,423 from the federal account for rent for its Boston headquarters — where the finance staff works to raise money for Baker and Polito, as well as the state party itself — since Jan. 1, a period during which there has been very little federal election activity.

The party also used the federal account to pay $6,800 worth of rent this past winter for a party office in Shrewsbury used by a candidate for state representative, Hannah Kane, as a campaign headquarters in a special election. The party’s political director, Chris Lane, who is paid about $2,400 a month, helped coordinate her campaign while getting paid with federal funds. Charlyce Bozzello, who was drawing a salary from the party’s federal funds, served as a field director.

Brian Wynne, the party’s executive director, said in a statement that the Shrewsbury office is used “for party administration, as well as Republican candidate activity at all levels. It is paid for and reported in compliance with the law.”

Martha Coakley ran into problems over federal and state bans on the crossover of funds when the Globe reported in late 2013 that she used her federal funds left over from the 2010 US Senate race to pay thousands of dollars of bills owed by her state committee and for some of her state political activities. Coakley, who was the state’s attorney general and running for governor at the time, was forced several months later by the state Office of Campaign and Political Finance to pay a $23,813 fine.

Shortly afterward, the state GOP, reacting to further media reports of other potential violations by Coakley, called on the office to appoint a third-party investigator to review the charges. Nothing came of that request.

“Campaign finance laws are in place to uphold the integrity of the political system and an immediate investigation is required to stop Martha Coakley from trampling these laws all over again,” Hughes, the state chairwoman, said at the time.