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Attorney General opens “dark money” group

Bill Britt

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By Bill Britt
Alabama Political Reporter

Republican State’s Attorney General Steve Marshall launched a non-profit organization in May as part of his campaign plan to win the seat he now occupies, thanks to disgraced former Governor Robert Bentley, who appointed him. Bentley has the State’s most famous non-profit group, ACEGOV.

Under current law, candidates like Marshall can raise and spend unlimited amounts of money with limited restrictions using groups that operate in gray areas of the law, as noted by The Center for Public Integrity.

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Political non-profits are often disparaged as “dark money,” these organization can be used in like manner to the PAC-to-PAC-transfers. “Financial restrictions on 527s are very few: there are no upper limits on contributions to these committees, and no spending limits, either. Any type of donor may contribute, from individuals to unions to corporations, even other non-profits. There is no specific prohibition on foreign contributions,” states The Center for Public Integrity.

During the 2013 Legislative Session, the Republican supermajority cast aside all pretense of living under the campaign finance reforms they enacted in 2010. Legislation sponsored by then Sen. Bryan Taylor deleted sections of the code that referred to “private foundations” in the PAC-to-PAC ban, opening the floodgates to create dark money foundations. Taylor now serves as “chief” legal counsel to Governor Kay Ivey, who promised to make transparency a hallmark of her administration.

Taylor’s bill (SB244) allows so-called advocacy non-profit organizations to play directly in State elections. These 501(c)(4) organizations and 527s have been used by various public officials and outside special interests to influence elections and legislation while keeping their donor list secret.

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In the last week of May, “Steve Marshall for Alabama,” a non-profit organization, regulated under IRS code 527 was registered with the Secretary of State. Its purpose according to the filing is, “To support the election of Steve Marshall to Alabama Public Office.” The director of the dark money group is Steven T. Marshall. Using his non-profit Marshall can fund his campaign for the State’s highest law enforcement job with unlimited fundraising and spending without tax liabilities. Because these groups report to the IRS and not the Federal Election Commission or the State political reporting, donations can be masked for a longer period of time before reporting as required under a Principal Campaign Committee which gives the public immediate access to who is funding the group.

Recently, The Alabama Political Reporter’s Josh Moon discovered that Marshall received campaign contributions which link to powerful groups and individuals who may want to influence the outcome of several matters currently before the Attorney General’s office. Marshall’s campaign consultant, David Ferguson, denied the contributions were tainted saying they were vetted “by the Chief Investigator.” Ferguson, a former operative for former Gov. Bentley, could not identify the name of the Chief Investigator, presumedly referring to Jim Lambert who is the Attorney General’s Chief Investigator.

However, Ferguson contacted APR to say he had misspoke and the contribution were vetted by Marshall’s Chief Deputy Clay Crenshaw.  In an email received this morning Ferguson wrote, “The Chief Deputy, not Chief Investigator, is actually making sure no contributions have action associated with the Attorney General’s office.”

Marshall’s filings show the registering agent is “J.A. Newman,” a.k.a. Ashley Newman, and J. Ash Newman, according to various Secretary of State filings.

Better known in Montgomery as Ashley Newman, she is the Principal at Newman and Associates, LLC., which, according to her LinkedIn profile, is a “Montgomery, Alabama Area Nonprofit Organization Management” company.

Newman has registered several well-known nonprofits, including “Strange for Senate,” owned by Sen. Luther Strange, and the Foundation for Accountability in Education, Inc. Their directors are State Senate President Pro Tem Del Marsh and Kate Anderson, a fundraiser with strong ties to former Gov. Bob Riley and convicted felon former Speaker of the House, Mike Hubbard.

In 2013, Conservatives for Alabama’s Future, another dark money group that claimed it was “a community of citizens who believe in less government, lower taxes, and traditional family values to make our great State better,” was in fact funded by the Foundation for Accountability in Education.

Newman, in the last few months, has gathered attention from the Secretary of State’s Office, which referred Strange’s FCPA reports to the Ethics Commission. As reported by APR during Strange’s 2014 Attorney General’s race, Newman served as Treasurer of his campaign. In 2016, her company Newman and Associates was paid $20,688.83 categorized as “administrative” by Alabamians for Strange in varying amounts. Payments for work on Strange’s State campaign and his Federal one intersected with Newman and Associates receiving $10,657 since January from Strange for Senate for “accounting services,” and received payments from both campaign accounts simultaneously in December 2016.

A call to the Secretary of State’s Office confirms the matter has been sent to the Ethics Commission.

When announcing his bid to become Attorney General by election, Marshall said, “Our top priority will be to maintain an effective working relationship with our local Law Enforcement. Sheriffs, District Attorneys, Police, and Investigators are the front lines of public safety, and we will support them in every way possible,” according to a report in al.com.

Marshall inherited an Attorney General’s office that distinguished itself by prosecuting public corruption taking on the powerful and elites who illegally used government to enrich themselves. Marshall has listed fighting public corruption as a fourth tier item on his stated priorities.

Alabama ranks high in legal and illegal public corruption.

Marshall was a Democrat until he switched parties in 2011. He was first  appointed District Attorney of Marshall County by then Gov. Don Siegelman, who was convicted on Federal public corruption charges. He gained his current office from Bentley.

Marshall group is a 527 not a 501(c)(4) according to campaign consultant David Ferguson.

 

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House passes General Fund Budget

Brandon Moseley

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By Brandon Moseley
Alabama Political Reporter

The Alabama House of Representatives passed the state General Fund Budget on Tuesday.

The General Fund Budget for the 2019 fiscal year is Senate Bill 178. It is sponsored by Sen. Trip Pittman, R-Montrose. State Rep. Steve Clouse, R-Ozark, carried the budget on the House floor. Clouse chairs the House Ways and Means General Fund Committee.

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Clouse said, “Last year we monetized the BP settlement money and held over $97 million to this year.”

Clouse said that the state is still trying to come up with a solution to the federal lawsuit over the state prisons. The Governor’s Office has made some progress after she took over from Gov. Robert Bentley. The supplemental we just passed added $30 million to prisons.

The budget adds $50 million to the Department of Corrections.

Clouse said that the budget increased the money for prisons by $55,680,000 and includes $4.8 million to buy the privately-owned prison facility in Perry County.

Clouse said that the budget raises funding for the judicial system and raises the appropriation for the Forensic Sciences to $11.7 million.

The House passed a committee substitute so the Senate is either going to have to concur with the changes made by the House or a conference committee will have to be appointed. Clouse told reporters that he hoped that it did not have to go to conference.

Clouse said that the budget had added $860,000 to hire more Juvenile Probation Officers. After talking to officials with the court system that was cut in half in the amendment. The amendment also includes some wording the arbiters in the court lawsuit think we need.

The state General Fund Budget, SB178, passed 98-1.

Both budgets have now passed the Alabama House of Representatives.

The 2019 fiscal year begins on Oct. 1, 2018.

In addition to the SGF, the House also passed a supplemental appropriation for the current 2018 budget year. SB175 is also sponsored by Pittman and was carried by Clouse on the floor of the House.

SB175 includes $30 million in additional 2018 money for the Department of Corrections. The Departmental Emergency Fund, the Examiners of Public Accounts, the Insurance Department and Forensic Sciences received additional money.

Clouse said, “We knew dealing with the federal lawsuit was going to be expensive. We are adding $80 million to the Department of Corrections.”

State Representative Johnny Mack Morrow, R-Red Bay, said that state Department of Forensics was cut from $14 million to $9 million. “Why are we adding money for DA and courts if we don’t have money for forensics to provide evidence? if there is any agency in law enforcement or the court system that should be funded it is Forensics.”

The supplemental 2018 appropriation passed 80 to 1.

The House also passed SB203. It was sponsored by Pittman and was carried in the House by State Rep. Ken Johnson, R-Moulton. It raises securities and registration fees for agents and investment advisors. It increases the filing fees for certain management investment companies. Johnson said that those fees had not been adjusted since 2009.

The House also passed SB176, which is an annual appropriation for the Coalition Against Domestic Violence. The bill requires that the agency have an operations plan, audited financial statement, and quarterly and end of year reports. SB176 is sponsored by Pittman and was carried on the House floor by State Rep. Elaine Beech, D-Chatham.

The House passed Senate Bill 185 which gives state employees a cost of living increase in the 2019 budget beginning on October 1. It was sponsored by Sen. Clyde Chambliss, R-Prattville and was being carried on the House floor by state Rep. Dimitri Polizos, R-Montgomery.

Polizos said that this was the first raise for non-education state employees in nine years. It is a 3 percent raise.

SB185 passed 101-0.

Senate Bill 215 gives retired state employees a one time bonus check. SB215 is sponsored by Senator Gerald Dial, R-Lineville, and was carried on the House floor by state Rep. Kerry Rich, R-Guntersville.

Rich said that retired employees will get a bonus $1  for every month that they worked for the state. For employees who retired with 25 years of service that will be a $300 one time bonus. A 20-year retiree would get $240 and a 35-year employee would get $420.

SB215 passed the House 87-0.

The House passed Senate Bill 231, which is the appropriation bill increase amount to the Emergency Forest Fire and Insect and Disease Fund. SB231 is sponsored by Sen. Steve Livingston, R-Scottsboro, and was carried on the House floor by state Rep. Kyle South, R-Fayette.

State Rep. Elaine Beech, D-Chathom, said, “Thank you for bringing this bill my district is full of trees and you never know when a forest fire will hit.

SB231 passed 87-2.

The state of Alabama is unique among the states in that most of the money is earmarked for specific purposes allowing the Legislature little year-to-year flexibility in moving funds around.

The SGF includes appropriations for the Alabama Medicaid Agency, the courts, the Alabama Law Enforcement Agency, the Alabama Department of Corrections, mental health, and most state agencies that are no education related. The Alabama Department of Transportation gets their funding mostly from state fuel taxes.

The Legislature also gives ALEA a portion of the gas taxes. K-12 education, the two year college system, and all the universities get their state support from the education trust fund (ETF) budget. There are also billions of dollars in revenue that are earmarked for a variety of purposes that does not show up in the SGF or ETF budgets.

Examples of that include the Public Service Commission, which collects utility taxes from the industries that it regulates. The PSC is supported entirely by its own revenue streams and contributes $13 million to the SGF. The Secretary of State’s Office is entirely funded by its corporate filing and other fees and gets no SGF appropriation.

Clouse warned reporters that part of the reason this budget had so much money was due to the BP oil spill settlement that provided money for the 2018 budget and $97 million for the 2019 budget. Clouse said they elected to make a $13 million repayment to the Alabama Trust fund that was not due until 2020 but that is all that was held over for 2020.

Clouse predicted that the Legislature will have to make some hard decisions about revenue in next year’s session.

 

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Day Care bill delayed for second time on Senate floor, may be back Thursday

Sam Mattison

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By Samuel Mattison
Alabama Political Reporter

The day care bill, which would license certain day care centers in Alabama, was once again delayed on the state Senate floor after one lawmaker requested more information.

Its brief appearance Tuesday ended with state Sen. Gerald Dial, R-Lineville, saying a compromise had not yet been worked out with the bill’s detractors.

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Alabama’s Senate has been hesitant to act on the legislation because of complaints of state Sen. Shay Shelnutt, R-Trussville, who has been an opponent of the bill since its introduction last year. The bill’s delay on Tuesday marks the second time its been taken off the Senate’s agenda.

The bill has had a rocky time in this year’s session, but the bill’s sponsor state Rep. Pebblin Warren, D-Tuskegee, said she is still confident about its passage out of the Legislature.

Warren, D-Tuskegee, filed the bill this session with the support of influential lawmakers including Gov. Kay Ivey, who told reporters last year that she though all day cares should be licensed.

Mainly sparked by the death of 5-year-old boy in the care of a unlicensed day care worker, the bill had great momentum coming into this year’ session.

Despite the growing support from lawmakers, Religious groups had concerns that the bill would increase state-sponsored reach into religious day cares in churches and non-profit groups.

Spearheading the dissenters was Alabama Citizens Action Program, a conservative religious-based PAC.

Warren, proponents, and ALCAP announced a compromise to the bill while it was still in the Alabama House.

Announced by ALCAP originally, the new bill was a weaker version in that it did not require that all day cares in the state be regulated. Instead, religious-based day cares would only need to be registered if they received federal funds. At a Senate committee meeting in February, Warren said a similar requirement was about to come from federal law in Congress.

The bill moved through the House in a overwhelming vote in favor of the proposal and passed unanimously out of a Senate committee a few weeks ago.

Warren, speaking to reporters after its passage from the House, said she was unsure if the bill would encounter resistance in the upper chamber.

It was the Senate that killed the daycare bill last year amid a cramped last day where senators took the bill off the floor. The bill may face similar complications this year, as lawmakers seem to be preparing to adjourn within a few weeks.

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Fantasy sports bill fails on Senate floor

Sam Mattison

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By Samuel Mattison
Alabama Political Reporter

Would-be Fantasy Sports players in Alabama will have to wait to legally play in the state following a Senate vote on Tuesday.

The Alabama Senate decisively killed a bill to exempt fantasy sports from the state’s prohibition on gambling.

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Not even entertaining a debate on the Senate floor, the proposal was killed during a vote for the Budget Isolation Resolution, which is usually a formality vote preluding a debate.

Fantasy sports are contests where participants select players from real teams to compete on fantasy teams using the real-world players’ stats.

Since 2016, the practice has been illegal in Alabama following a legal decision by the Attorney General’s Office that categorized it as gambling.

The bill’s sponsor, state Sen. Paul Sanford, R-Huntsville, predicted the bill’s failure during a committee meeting two weeks ago, where the bill passed unanimously.

Sen. Paul Sanford speaks to reporters after a Senate Committee meeting on Feb. 28, 2018. (Samuel Mattison/APR)

Speaking to reporter’s after the committee meeting, Sanford said the decision to file the bill was mainly a philosophical belief that the practice shouldn’t be illegal.

Sanford, a fantasy sports player before its ban, said that fantasy sports are a way to bring people closer together and not a means to win money. The Huntsville senator is not seeking re-election.

The bill’s failure in the Senate follows its trajectory last year too. A similar version of the bill, also sponsored by Sanford, failed in the Senate during the final days of the 2017 Legislative Session.

Since Sanford is retiring, it is unclear if the bill will even come back next session, or if it will even have a Senate sponsor.

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Attorney General opens “dark money” group

by Bill Britt Read Time: 5 min
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