Lee Chatfield charges renew debate over ‘toothless’ Michigan ethics laws
- The attorney general and secretary of state are calling for stricter ethics laws in Michigan to root out the Capitol’s ‘dark money-fueled culture’
- That push comes after House Speaker Lee Chatfield was charged on allegations of misusing nonprofit funds for personal gain
- Two bills from a larger package hoping to address lacking campaign finance transparency will see testimony at committee meeting Thursday
LANSING — A criminal case against former House Speaker Lee Chatfield has reignited debate about Michigan’s ethics and campaign finance laws, as Attorney General Dana Nessel says she’s “basically pleading” with lawmakers for reforms.
“The Michigan Campaign Finance Act is effectively toothless, useless and utterly worthless as a deterrent to these crimes,” Nessel said.
“The statutes governing political funds and donor disclosures in the state couldn’t be more futile if they were literally drafted by crooks for the very purpose of violating them.”
Chatfield, who exited as House speaker in January 2021, was charged this week with using money from political nonprofits to pay his personal credit card, fund trips to Florida and the Bahamas and write checks to relatives.
Federal law keeps donors to such nonprofits secret, but other states including New York and Connecticut have added separate rules requiring stricter disclosures.
Related:
- Former Michigan House Speaker Lee Chatfield, wife face corruption charges
- Dana Nessel charges ex-aides of Lee Chatfield with misusing campaign funds
- Sister-in-law: Ex-MI House Speaker Lee Chatfield sexually assaulted me as teen
Michigan has not done so, and politicians from Chatfield to Govs. Gretchen Whitmer and Rick Snyder have used them to collect millions of dollars without disclosing donors.
The nonprofits are also commonly used to pay for events and other expenses, which Nessel said renders them “public slush funds” that allow for “legal types of bribery that Lansing has become accustomed to.”
Legislation would require more disclosures, add stricter limits to gifts to politicians, require stricter registration of some political nonprofit and institute a one-year ban on lawmakers, the attorney general, secretary of state, governor and lieutenant governor leaving office to become lobbyists.
The legislation, however, would not prevent the outright thievery Chatfield is accused of, noted House Minority Leader Matt Hall, R-Richland Township.
He noted that Chatfield still faces a host of charges that could imprison him for 20 years, proving that laws already exist to charge bad actors.
House Democrats’ plan “is not going to do anything” and is “just a way of looking tough,” Hall said.
Nessel acknowledged the probe only began when Lee Chatfield’s sister-in-law, Rebekah, came forward more than two years ago and accused him of sexual assault.
“No one would or could have seen the mountain of potential evidence,” said Nessel, who added her investigators did not find enough evidence to bring charges in the sex abuse allegations.
It’s uncertain whether any of the proposed legislation could have allowed the state to investigate Chatfield any sooner — or at all.
A House committee on Thursday is expected to debate two bills in the package, one requiring a lobbying cooling period and another giving the secretary of state the ability to seek a court order to stop alleged campaign finance violations once a complaint is filed.
Politicians split on ethics bills
Chatfield is the latest former House speaker charged with corruption. Last year, Rick Johnson was sentenced to 55 months in prison for taking $152,000 in bribes while he led a state board that oversaw marijuana licenses.
Nessel is also investigating a $25 million grant to a now-scuttled Clare health campus that was pushed by Chatfield’s successor, Jason Wentworth, and went to his former aide.
She and fellow Democrat, Secretary of State Jocelyn Benson, said ethics reforms would help root out Lansing corruption, especially legislation to require members of political nonprofits to disclose if they work for a politician.
In Chatfield's case, his Peninsula Fund nonprofit was run by two longtime aides, Rob and Anne Minard, who face separate criminal charges.
Chatfield is accused of using dollars from the Peninsula Fund and other entities to obtain “luxury purchases” from brands like UGG and Coach, as well as vacations in the Bahamas and to Universal Studios in Florida.
His wife is charged with helping pay off her husband’s personal credit card bill by using his nonprofit Peninsula Fund, which was organized as a “social welfare organization.”
While other states have enacted tougher disclosure laws on so-called “dark money” nonprofits, the laws have prompted privacy and free speech concerns.
In at least one state, Virginia, lawmakers have proactively banned state departments from forcing such donor disclosure.
"You always have to strike a balance between protections of the First Amendment and the very clear public interest," Benson acknowledged.
But because there is a "compelling government interest" to deter corruption, "there are opportunities to regulate funds like these," she said.
The package would require certain political nonprofits register with the Secretary of State’s Office within 10 days of creation. But funds would only have to disclose affiliations with lawmakers if their relatives or employees oversee the funds.
Hall said that would only deter “the dumb politicians.”
“Who are these people that are going to put their family members and staff on these accounts? They just won’t,” he said, “so then no one will register.”
One of the measure’s sponsor, Rep. Julie Brixie, D-Okemos, called the changes an “important first step.”
“This is the first low-hanging fruit … the first step is to say: ‘I’m an elected official, and I have an affiliation with these accounts,’” she said, “‘and because of that we’re going to register what the name of the account is with the secretary of state’.”
How does Michigan rank nationally?
Michigan’s campaign finance laws have routinely ranked poorly among states.
A 2015 report from the Center for Public Integrity gave Michigan a failing grade for integrity and accountability. In 2022, the Coalition for Integrity put Michigan at 29 out of 51 when it came to strength of state campaign finance laws.
Without reforms, Nessel said “the predictable product of the dark money-fueled culture we have here in Lansing” would continue.
Benson agreed, saying the case against Chatfield “underscores a failure of our current laws prohibiting corruption in state government.”
The Michigan Campaign Finance Act is "startling" in its inadequacy and in "dire need" of modernization and tougher enforcement power, Benson said.
“The fact that (my) office does not have subpoena power — that we have to essentially enable or allow for serendipitous revelations like the one in this case — to enable any sort of revelation that wrongdoing occurred to enable accountability, strikes at the heart of what the Michigan Campaign Finance Act is actually supposed to do."
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