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Fund-raising loophole fills Mass. GOP coffers

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Massachusetts Governor Charlie Baker.
Massachusetts Governor Charlie Baker.Keith Bedford

Adam Weiner, an emerging force in Boston's development community who several years ago won state approval to build over and alongside the Mass. Pike, has donated to politicians in the past, but nothing compared to his recent showering of Charlie Baker and his political operations with campaign cash.

A month after the governor took office last year, Weiner, whose project will depend heavily on Baker administration approvals, donated $48,400 to two state GOP fund-raising groups. Much of that money ended up with committees controlled by Baker operatives. And those donations came just months after he gave $300,000 to the Republican Governors Association, which spent more than $11 million to back Baker in the 2014 election.

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Weiner is just one of numerous high rollers with interests before state government who are helping to keep the usually financially strapped state GOP flush with cash.

Their interest in the Republican Party is not surprising. What's new, however, is their ability to help Baker with single donations of up to $43,400, circumventing the state's strict limits on political contributions and transparency requirements.

These large donations are funneled through the Massachusetts Victory Committee, a complicated and robust joint fund-raising effort between the state and national parties that was established in 2013. Because of its national component, it was set up under federal guidelines, which allows annual donations up to $43,400 — far above the $5,000 cap set for state-regulated political donations to party accounts and the $1,000 annual limit for donations to Baker's campaign committee.

The nearly $1.7 million that was raised by the joint committee in 2015 — almost exclusively from Massachusetts donors — was split between the state and the national Republican parties. The national GOP, in turn, sent back a series of large lump sums totaling $447,000 to the Massachusetts party's federal committee with no identification of the contributors. In the past, the national party has given only a very small fraction of that amount in similar nonelection years.

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This appears to be the only such arrangement nationwide, according to FEC filings. A senior adviser to Baker said the arrangement is legal.

"The governor has always and will continue to religiously adhere to all applicable campaign finance rules," Jim Conroy said.

The windfall has given the governor and state Republicans a major financial boost as they try to gain footing on Democratic-dominated Beacon Hill, control a divided GOP, and shore up Baker's chances of reelection in 2018.

The new fund-raising arrangement also underscores the reliance of both Baker and the Massachusetts GOP, which he controls, on money raised under federal guidelines to fund its operations, which are overwhelmingly aimed at state political activities.

Some campaign finance experts say that usage flouts state rules and that the lump-sum payments from the national committee lack transparency.

"Frankly I am not sure how they are doing it without breaking Massachusetts law,'' said Pam Wilmot, executive director of Common Cause Massachusetts. "This scheme allows them to both give more money than is allowed under Massachusetts law and to do it in the shadows without the accountability of public disclosure."

State party officials insist that the arrangement adheres to the federal campaign finance laws.

"The Massachusetts Republican Party, the Republican National Committee, and the Massachusetts Victory Committee are all making regular, public disclosures about their contributions, expenditures and transfers when, as, and to the fullest extent required by law," said Brian Wynne, the state GOP's executive director.

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While money raised under federal rules has traditionally gone to support only candidates for federal office, that line has now been increasingly blurred in Massachusetts.

With no serious federal candidates to support last year, almost all of the money — $1.2 million after expenses — that flowed into the state GOP's federal account last year from both the Victory Committee (in individual donations) and from the national party (in lumps sums with no donors identified) has been used to fund state political operations.

The Globe reported last spring that Baker's campaign committee, which has no staff and pays neither rent nor utilities, uses the federally funded party employees and party headquarters for its operations.

These include providing resources and paying overhead for Baker's own record-breaking fund-raising operation. The issue is currently under review by the state Office of Campaign and Political Finance.

The GOP's state account, which operates under stricter state rules for donations and disclosures, spent just $223,000 during the same period last year.

Massachusetts campaign regulators, citing a 1998 state law, say that federal committees are sharply restricted in paying for state political activities or providing "anything of value" to a committee organized to support a candidate for state office.

Republican officials counter that they primarily use the federal money for “party building” — bolstering databases, building voter files, and beefing up other operations — as is allowed by federal statute.

Baker has also avoided scrutiny in his raising over $300,000 — much of it via $10,000 donations — to fund his successful attempt in the March 1 elections for GOP state committee seats to consolidate control of the party. He is not legally required to disclose his unprecedented fund-raising and has refused the Globe's request to do so voluntarily.

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The Mass. Victory venture was set up in September 2013, the month Baker announced his candidacy for governor. Usually such special committees disband after the election, but Mass. Victory has continued to raise funds.

Here is how it works: The joint committee takes the first $10,000 from a donation and gives it, under the name of the donor, to the Massachusetts GOP federal committee, the highest amount allowed by law each year.

The balance of the original donation — which can be up to $33,400 — goes to the Republican National Committee.

The RNC then makes lump sum donations back to the state committee.

As a result, many large donors, including some with frequent business issues before the Baker administration, appear in public filings only as $10,000 donors to the state GOP's federal account even though they may have donated considerably more.

"I am surprised and dismayed at the lack of transparency surrounding these contributions and the amount of money that is filtering back to the Massachusetts Republican Party from untraceable sources,'' said Wilmot.

Mass Victory can't accept corporate money. But its list of donors is sprinkled with car dealers, developers, and CEOs of corporations needing government approvals.

Weiner, the developer, said he has donated to candidates from both parties in the past. "I am part of a generation that often, when provided the opportunity to donate, does so out of an allegiance to ideals. Therefore, and naturally, there are times when I support either or both parties," he said.

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Weiner said that, so far, his contact with the state transportation agencies has been only with career bureaucrats, not with the Baker administration officials.

Other major donors to the fund include the following.

 Two companies headed by Ernest Boch Jr., the well-known Norwood car dealer who gave $43,400 last May, are registered as a State House lobbying group.

  Wayne Capolupo, whose firm SPS New England has done $303 million worth of highway construction for the state, gave $45,000 to the Massachusetts Victory fund in two donations between 2014 and 2015.

 Gilbert Winn, CEO of WinnCompanies, whose fortune is built around state assisted housing financing, gave $30,000 last year.

 Longtime Boston developer Robert L. Beal, whose huge real estate company specializes in state government-subsidized affordable housing, has given $86,800 in two donations to Mass. Victory in 2014 and 2015 — and $5,000 more to the GOP’s state committee.

 Former New York mayor Michael Bloomberg appeared to back up his $42,400 contribution to Mass. Victory on Oct. 24, 2014, with a $250,000 donation to the Republican Governors Association. Bloomberg endorsed only Baker and one other GOP gubernatorial candidate that year but donated a total of $1.45 million to RGA in three donations in that fall election.

 Alan McKim, chief executive of Clean Harbors, which has collected $5 million since 2013 in contracts with state agencies to clean up hazardous waste spills, contributed $25,000 to Mass. Victory last June.

McKim, who, besides Weiner, was the only other who responded to a request for comment, said through a spokesman that his donations had nothing to do with his business.

"It's a personal contribution,'' said the company's public relations officer Eric A. Kraus. "It doesn't reflect anything about the company or the company's business. He made the contribution and he had personal reasons for it.''


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