A Brockton-based construction firm and its owner have agreed to pay a $150,000 penalty after illegally using company funds to funnel campaign donations to such leading political figures as Governor Charlie Baker, Mayor Martin J. Walsh, and former governor Deval Patrick.
J. Derenzo Companies made a $125,000 payment to the state. And the company owner, David Howe, made a $25,000 contribution to charity, the state Office of Campaign and Political Finance announced Tuesday.
It is the second largest civil forfeiture ever leveled by Massachusetts campaign finance regulators.
J. Derenzo, which has worked for and closely with government entities and describes itself as “one of New England’s premier sitework contractors,” reimbursed its employees and their family members for donations to eight political figures and to the state Democratic Party, the state said.
The contributions appeared on reports filed with campaign finance regulators by the political candidates and committees as donations from J. Derenzo employees and their family members. In fact, the firm had dipped into its petty cash accounts to reimburse the donors, according to its agreement with regulators.
The candidates who received the money and still have active political committees agreed to give the donations to charity, according to a statement released by the regulators on Tuesday. None of the candidates knew of the scheme.
In all, the J. Derenzo contributions added up to at least $37,000,the state said. The donations included $4,500 to Baker, $4,000 to Lieutenant Governor Karyn Polito, $5,000 to Democratic state Senator Michael Brady of Brockton, $5,000 to the Democratic State Committee, $14,500 to Walsh, and $2,000 to Democratic attorney general candidate Warren Tolman.
The other recipients — former mayor Thomas Menino, former lieutenant governor Timothy Murray, and former governor Deval Patrick — received a combined $2,000. Their committees are no longer active.
The company and Howe, its president, violated two critical maxims of the state’s campaign finance law, the state said. The statute prohibits a person from disguising the true source of donations. It also bans corporate contributions.
The use of corporate funds carries a fine of not more than $10,000, imprisonment for up to a year, or both, according to state law. Violating the “true source” statute carries penalties of not more than one year imprisonment or a fine of not more than $1,000.
Howe could not be reached for comment. But his firm released a statement saying that its owners were not aware of those sections of the law.
“Our honest effort to encourage employee engagement in the political process brought to light some OCPF restrictions that we were previously unaware,’’ the statement reads. “We sincerely appreciate the guidance offered by the OCPF, which was immediately implemented. We now fully comply with these regulations and continue our commitment of encouraging employee participation in the political process.”
On his company website Howe said the firm’s philosophy is to use its resources to “make a positive impact.”
“I truly believe that it is our responsibility as business owners to look outside of our own walls and work to make a positive impact on our community,” Howe says.
OCPF officials did not comment on the case. But in a newsletter released last year, OCPF director Michael Sullivan showed no inclination to press criminal charges against similar campaign finance violations. He urged candidates to be vigilant as the to true source of donations.
“It’s a problem we’d like to resolve through education, not by opening more cases,” Sullivan said. “We urge candidates to ask questions if they receive several employee contributions from one company. Before depositing, ask the question, ‘Are these funds really from the individuals signing the checks?’ ”
The campaign finance office has levied $566,000 in fines since 2013 against companies that violated the “true source” sections of the political finance laws.
The largest such fine ever imposed, $185,000, came in 2016 against Vincent Barletta, the owner of two Canton-based businesses who used his firms’ money to funnel hidden donations to candidates.
In the Barletta case, regulators found that, on at least 60 occasions between 2010 and 2015, the businessman, who owns two Canton-based companies that are among the state’s major contractors on public public infrastructure work, used $35,000 from various business entities that he controlled to give to employees who then donated the funds as contributions to candidates.
Frank Phillips can be reached at email@example.com.