State campaign finance officials plan to ask Attorney General Maura Healey to consider criminal prosecution of partners at Boston’s Thornton Law Firm, saying they have evidence that the firm illegally reimbursed lawyers and their spouses for up to $175,000 in campaign contributions to state candidates and causes.
In a letter to the law firm’s partners and their spouses last month, Office of Campaign and Political Finance director Michael Sullivan said he intends “to present to the attorney general evidence of violations” of the state’s campaign finance law from 2013 to 2016. The letter also outlined for the partners what they had done wrong:
“You violated Section 10, which prohibits individuals from making a campaign contribution in any name other than his own and except his own, nor in any manner intended to disguise the true origin of the contributions,” said Sullivan in the letter.
If the case is indeed referred to the attorney general, it would mark the first time state officials sought criminal penalties for straw donations.
The allegations, if proven, would make this one of the largest reimbursement cases in US history, if not the largest — both in terms of the total amount of money involved and the length of time over which the scheme was carried out, said Brett Kappel, an election law expert at Akerman LLP, a Washington, D.C., law firm.
“To have something like this go on for years, with many candidates and committees, is very unusual,’’ Kappel said. “It undermines faith in the campaign finance system.”
Sullivan’s agency, along with the US Attorney and the Federal Election Commission, launched probes of Thornton’s campaign contributions last fall after the Globe and the Washington, D.C.-based Center for Responsive Politics revealed the firm’s longstanding practice of reimbursing partners for political donations. The reimbursement program helped Thornton become a leading supporter of the Democratic Party nationally, as its partners gave millions over a decade.
Thornton Law Firm’s lawyers have insisted the reimbursement system was legal, since the lawyers were being repaid out of their equity — or ownership — in the firm. At a hearing before Sullivan Wednesday, a private accountant argued that the reimbursements — recorded as “bonuses” in the law firm’s payroll records — were actually deducted from each partner’s “capital account” at the firm.
Brian Kelly, Thornton Law’s attorney, said it “would be inappropriate for us to comment on an ongoing review.” But in November Kelly told the Globe:
“The Thornton Law Firm has done nothing wrong, and it consulted with an outside law firm and accountant 10 years ago when its political donation program — involving the personal funds of equity partners only — was implemented.”
Campaign finance experts said disguising the real source of campaign contributions is a serious offense, misleading the public and potentially allowing hidden donors to greatly exceed donation limits. Since 2013, the Office of Campaign and Political Finance has investigated 11 such “straw donor” cases, but all were resolved with civil fines — $566,000 in all.
If convicted at the state level, individual partners and their spouses could receive up to a year in jail for each violation and a fine of up to $1,000. The law firm could be fined up to $50,000 per violation for funneling donations through its partners.
Last fall, Healey called on federal authorities and state campaign regulators to investigate the practice when the stories about Thornton were first published but she wouldn’t comment on the possible referral to her office.
If the case is referred to her, she can launch her own investigation, but she could also seek criminal charges based on Sullivan’s review. Conversely, if the campaign finance office does not make the referral, Healey could still launch her own investigation.
Thornton, whose practice focuses on asbestos cases, is a small firm that hits above its weight in politics. Led by firm founder Michael Thornton and Garrett Bradley, the former assistant House majority leader, Thornton Law was the 11th ranked law firm nationally for political contributions in 2014, even though it wasn’t even among the 100 largest law firms in Massachusetts.
But revelations about Thornton’s donation reimbursement program sparked a stampede of politicians returning donations from Thornton lawyers, including Healey, who was one of the first politicians to do so.
So far, at least 30 committees or politicians, including Hillary Clinton, Elizabeth Warren and many other top Democrats, have returned more than $1 million, based on a review of campaign finance records.
Most senators and members of Congress returned the money to the US Treasury rather than giving it back to Thornton. Local and state candidates refunded money directly to the donors, or gave an equivalent amount to local charities.
Among Massachusetts members of Congress who received a large number of donations from Thornton lawyers, only Michael Capuano and William Keating so far have not returned them. A spokeswoman for Capuano said on Wednesday that he will donate money to the MBTA “to boost ridership on the Fairmount (commuter rail) Line,” wrote spokeswoman Jan Harrington in an e-mail.
A spokeswoman for Keating said that he will not return the more than $30,000 he received from Thornton lawyers unless it is “determined that the donations were illegal.”
Some other politicians and committees that have received substantial funding from Thornton partners over the years — such as Senators Lindsey Graham, Republican of South Carolina, and Jack Reed, Democrat of Rhode Island, and the Democratic Congressional Campaign Committee — have not returned the contributions.
Thornton Law now faces scrutiny on multiple fronts, the most serious of which is a federal grand jury that is hearing evidence on possible violations of federal campaign laws.
Federal prosecutors want to know whether the Thornton reimbursement program was intended to encourage political giving from lawyers. The firm’s lawyers have insisted the donations were voluntary.
At the state level, campaign finance regulators’ investigation was constrained by a three-year statute of limitations on violations.
As a result, they only reviewed donations made between 2013 and 2016, a period in which Thornton lawyers and their spouses made more than $175,000 in donations.
The hearing on Wednesday gave Thornton Law Firm an opportunity to argue against a criminal referral. Individual partners and their spouses have also been offered a chance to appear before Sullivan, although no other hearings have been held so far.
A spokesman said the political finance office has no deadline for making a referral except that charges need to be filed before the three-year statute of limitations expires.