Louisiana Committee for a Republican Majority

LCRM money games set tone for Republican 'Ethics' hypocrisy

"Watch what we do, not what we say."

John Mitchell: Richard Nixon Campaign Manager, U.S. Attorney General, and convicted felon.

John Mitchell would feel right at home in today's Louisiana Republican Party, particularly its high-roller cabal the Louisiana Committee for a Republican Majority (LCRM).

The organization is, in the wake of the sex scandals engulfing co-founder Senator David Vitter, proving that it was no accident that it was named after and patterned on Tom DeLay's corrupt Texans for a Republican Majority.

Campaign finance reports filed by the LCRM since the September 20 deadline show that the organization's Louisiana members have appeared to shift tactics in their patterns of contributions in ways that may restrict the organization's ability to run its game plan and may expose the campaigns they have supported to thousands of dollars in fines for violations of the Louisiana Campaign Finance Disclosure Act by the LCRM, its members and imitators.

Taken as a whole, the actions of the LCRM, its members and other deep-pocketed Republicans who either imitate or collaborate with them give lie to what has been the core issue of the Republican appeal to voters: Republican's alleged ethical superiority to Democrats.

Funny from the First

The LCRM has been playing fast and loose with the campaign finance laws since their inception. It was clear from the outset that the LCRM wanted to be able to spend big dollars on campaigns. That meant it needed to be classified as a "Large Political Action Committee" under Louisiana law. That, in turn, required that it have at least 250 contributors.

A close examination of early LCRM campaign finance reports shows that the heavy hitters were not sure they could meet their goal. So, in true Republican fashion, they fudged the numbers.

They did this by making a series of small contributions to the LCRM by Limited Liability Corporations (LLCs) that the core group controlled.

LCRM Chairman Joseph Canizaro contributed to LCRM through at least seven LLCs that he controls.

Michael Polito of Baton Rouge used five LLCs (in addition to MAPP Construction) that he controls. Documents in the Louisiana Secretary of State's Corporate Database list several of Polito's LLCs as having former Ethics Board lead attorney Grey Sexton as the agent of record. Sexton gave up the job he'd held for more than 20 years rather than comply with a new provision in the state Ethics Code that would have required him to provide a public list of his outside clients.

However, Canizaro and Polito pale in comparison to the use of LLCs by Boysie Bollinger. Bollinger, who contributes to LCRM via Bollinger Shipyards, is listed as a member of 19 LLCs that contributed $50 each to LCRM to ensure that they crossed the Large PAC threshold.

All of the contributions from the LLCs controlled by Canizaro, Polito and Bollinger were made in 2006, the start-up year for LCRM.

The LCRM (and others) have put LLCs to work in other ways that will be explained in a bit.

Funny Fees

John Diez has been publicly identified as the Executive Director of the LCRM. Yet Diez's name has yet to appear on an LCRM expenditure report.

That's because the LCRM pays Diez's company, Campaign Opinion Research, what it lists as "Executive Director Fees." The LCRM must be pleased as punch with the job John Diez is doing because it's paid more to Diez's company in executive director fees than for any other company for any other service.

According to LCRM campaign finance reports, between April 21, 2006 and August 27, 2007, the LCRM paid Campaign Opinion Research $233,252.42. Include reimbursement for office expenses and travel and the figure rises to $240,726.26.

The only other payout that comes close to that figure is the $171,698.88 the LCRM has paid to GCR & Associates of Birmingham, AL, for computer services — including $30,000 to write campaign software.

In DeLay's operations, his wife and daughter were paid consulting fees for services they provided his PACs. Is the LCRM concealing payments to someone other than Diez in these fees?

Game Plan

Using the DeLay operations as a model (and Bob Perry's penchant for backing attack organizations) it's apparent that the LCRM's game plan was to formally endorse some candidates while conducting smear campaigns against Democrats in districts where they did not endorse.

This is precisely what LCRM did in special elections early this year. In north Louisiana, the LCRM backed Bob Morris in House District 1. The following month, the LCRM didn't endorse any candidate in the House District 94 race, but ran a smear campaign against Democrat Deborah Langhoff. They group later endorsed Baton Rouge Republican and lobbyist Kyle Ardoin in his race for the House District 68 seat.

The LCRM plan also called for it to provide candidate training sessions. That's all fine and good, but it does raise some interesting questions of legality if the LCRM is going to now conduct supposedly independent spending on behalf of those same campaigns in the form of attacks against Democratic opponents.

Things appear to have gone a bit haywire this summer in the wake of the Vitter sex revelations.

Based on the September LCRM campaign finance report on its expenditures (Schedule E-1), the organization held a candidate workshop in Alexandria at the Louisiana Convention Center in July. It paid for the $2,715.50 to the center on August 13, but it also paid for a hotel room (probably for staff) at a Holiday Inn in Alexandria on July 27.

At least a partial list of attendees can be discerned by using the in-kind expenditures portion of that report (Schedule E-2). There are 28 campaigns and a PAC listed. Representatives from each campaign heard presentations from the consultants that the LCRM had assembled for the event; some probably contracted with the consultants as a result of the event.

The representatives of each campaign organization also took with them at least what is described in various campaign reports as the LCRM's "Campaign Policy Manual," which was valued at $100. Some in the group also were given complimentary copies of "Campaign Software," most likely written by GCR & Associates. The value of that software ranged between $1,000 and $1,500.

Can the LCRM now truthfully claim to make any independent expenditure on behalf of the campaigns that were represented at the summer campaign workshop in Alexandria?

A 1999 ruling by the State Board of Ethics indicates that, if they try this, the LCRM will have some explaining to do. The ruling in Docket #1999-581 included this note:

the Board noted that an expenditure is “independent” only if it is made without consultation, cooperation, and not in concert with, or at the request or suggestion of the candidate, his authorized political committees, or their agents.

This coordination issue is further complicated by the reaction of LCRM's leaders to the Vitter sex scandal.

The Panic

The September 20 LCRM campaign finance report shows that most in-state contributions (Schedule A-1) to LCRM dried up in the wake of the Vitter revelations in late June. None of the core group of contributors who had been on a schedule to contribute $25,000 every six months to LCRM came through with the money that should have been due some time between July 1 and the September 20 report.

Instead of abandoning their mission, a core group from LCRM pushed on by contributing directly to the campaigns of Republicans the organization wanted to help.

Led primarily by Joseph Canizaro and his check book, that group included Boysie Bollinger, and Joseph T. Spinosa. John Georges' Dolphin Marine International and various entities related to the Otto Candies Company contributed to the Mitch Theriot campaign. Michael Polito's MAPP Construction in Baton Rouge played some, as did Morris & Dickson LLC of Shreveport.

Canizaro and Spinosa

Canizaro and Spinosa worked as something of a team; Spinosa, who is on the board of directors of Canizaro's First Bank & Trust, did not contribute to a campaign to which Canizaro did not contribute. Together, they contributed far and wide.

Canizaro contributed $22,000 to 10 of the 28 campaigns that received in-kind contributions from LCRM. Spinosa contributed $19,500 to nine of the 28.

The campaigns that team Canizaro/Spinosa contributed to in the most recent cycle are: Kirby Roy of Hessmer, House District 28; Chris Hazel of Bell, District 27; Danyelle Taylor of Marrero, District 83; Frank Howard of Hornbeck, District 24; Jack Causey of Leesville, District 30; Rick Nowlin of Natchitoches, District 23; Patrick Connick of Gretna, District 84; Ronnie Broughton of Minden, District 10; and Nickie Monica of La Place, District 57.

Michael McMyne of Kenner, a Republican running in District 92, has the distinction of being the only House candidate among the 28 receiving in-kind stuff from LCRM to which Joseph Canizaro contributed ($2,500) but Joseph T. Spinosa did not.

Frank Howard and Jack Causey are worth a bit more attention because of the role in LCRM-related money in their respective campaigns.

According to Howard's September 20 campaign finance report and a special report filed on October 5, the LCRM and members Canizaro, Spinosa, MAPP Construction and Morris & Dickson gave his campaign $11,600 (including in-kinds) of the $25,450 he'd raised.

Causey's report filed on September 19 said that Canizaro, Bollinger, Spinosa and the LCRM provided $9,100 of the $33,100 raised by the campaign. A couple of other Republican heavy hitters added another $5,000 to that total.

Bollinger and Chand

Bollinger contributed to a number of campaigns that did not attract dollars from Canizaro/Spinosa. But, Bollinger apparently tried to make it appear he was part of a team by using an LLC he controls — Chand LLC (pdf) — to contribute $5,000 to these district campaigns, in apparent violation of the cap on contributions in those races.

Using the list of candidates who received in-kind contributions from LCRM as the starting point, Bollinger Shipyards (pdf) and Chand LLC delivered $5,000 contributions to four Republican campaigns: Jonathan Perry of Kaplan in House District 47; Isabella de la Houssaye of Crowley in House District 42; Raymond "La-La" Lalonde of Carencro in House District 39; and Wallace Ellender of Bourg in House District 53. In addition, Bollinger Shipyards gave the campaign of House District 30 candidate Jack Causey of Leesville $2,500; no Chand LLC money was reported in that campaign.

Other GOP Fun with LLCs

The Kyle Ardoin campaign and the Senate campaign of Paul Richard benefited from the LLC shell game, although not directly tied to LCRM sources.

Ardoin's first report from 2007 showed four separate $2,500 contributions from separate "Urgent Care" entities: Urgent Care of Baton Rouge, Lafayette and Slidell, as well as Urgent Care Services (PDFs). Records from the Secretary of State's corporate database show Stephen Lyon is the president of all four companies, Michael Lehman is the director, and the agent of record for the companies is William Dutel.

Richard's Senate campaign was the beneficiary of a total of $5,000 in contributions from two LLCs controlled by Joseph Jaeger, Jr., of Metairie. Matrix Consolidated Companies LLC gave Richard's campaign $2,500 on June 27; so, too, did Jaeger's Metal Construction Company LLC.

Robert Merrick of Latter & Blum (pdf) Real Estate had that company give Richard's campaign $2,500 on June 14; he had another company, RWM Inc., (pdf) give $2,500 on June 26; Merrick then personally contributed $2,500 on June 26, as well.

LCRM member Edward Diefenthal appears to have gotten the most creative with LLCs. Deifenthal used various iterations of his Southern Scrap & Recycling business to make four $5,000 contributions to Bobby Jindal's gubernatorial campaign in December of 2006. The contributions came from Southern Recycling Sales, Southern Scrap and Recycling of New Orleans, Southern Scrap and Recycling of Baton Rouge, and Southern Scrap and Recycling of Morgan City.

If creating a series of LLCs allows individuals or corporations to circumvent campaign contribution caps, then Louisiana does not, in fact, have campaign contribution caps.

While the use of LLCs might well afford campaigns a temporary advantage by providing access to funds they might not otherwise have, the State Board of Ethics has also ruled that responsibility for accurate record keeping falls to the candidates and campaigns. This could mean that campaigns could be subject to significant fines if the use of LLCs in this way was ruled to be in violation of the Campaign Finance Disclosure Act.

73 Spring Street, Suite 408, NYNY

Finally, there are the peculiar activities centered on contributions coming into Republican campaigns from an address in New York city. The address is 73 Spring Street, Suite 408.

What raises eyebrows is the fact that three different entities make contributions to Louisiana Republican legislative campaigns linked the LCRM. All of the contributions are at the maximum allowable level of $2,500. Making things even more odd is the fact that one of the entities has a name that matches that of a Louisiana political committee.

On August 31, Raymond "La-La" Lalonde's campaign for the District 39 seat received $2,500 from 188 Claremont Street LLC (pdf) with 73 Spring Street, Suite 408 in New York listed as its address. New York Department of State documents show that 188 Claremont is controlled by Rich & Rich which is based at the same address, along with the firm serving as agent of record.

Jack Causey's campaign for House District 30 received $2,500 from 188 Claremont on August 15. Chris Hazel, running in House District 27, received $2,500 from 188 Claremont on the same day.

August 15 was the day that Ronnie Broughton's campaign for the seat in House District 10 booked a $2,500 contribution from 4220 Broadway LLC, with an address given as 73 Spring Street, Suite 408, New York, New York. Gerald Long's campaign for Senate District 31 received a similar $2,500 contribution from Broadway on September 13.

Kirby Roy's campaign for the House District 28 seat received a $2,500 contribution from "LAC" on August 29. The address for LAC was listed as "73 Spring Road, NY, NY 10012." Thankfully, another Republican legislative campaign with ties to LCRM received a similar contribution that provided a bit more detail that enables the identity of LAC to be determined.

Harold Williams of Baton Rouge is a Republican candidate for the House seat in District 29. His campaign reported receiving a $2,500 contribution from Louisiana Action Council on August 15. The address provided for Louisiana Action Council by Williams' campaign is "73 Spring Street, Room 408, NY, NY 10012."

The Louisiana Action Council is a Louisiana-based organization engaged in political activity tied to Republican campaigns. It has a website. The website makes no mention of a New York affiliation. Could it be that LAC just passed along a check from a New York interest to Williams' campaign and the campaign (thinking it was all legitimate) simply filed the address that was on the check in its campaign finance report?

The Claremont and Broadway LLCs appear to be linked to real estate operations. Could the entities at this address be serving as a pass throughs for contributions from other, unidentified sources who want to keep their identities hidden?

This is where the DeLay model again becomes instructive. The convictions that were obtained against Texans for a Republican Majority in 2005 involved concealing the source of campaign funds in the 2002 Texas elections, where corporate money cannot legally be used in campaigns. DeLay and his operatives got contributions from corporations, ran the money through Americans for a Republican Majority (ARM PAC), and ARMPAC then passed the money through to the Texas operation and then on to candidates.

All of the contributions found thus far linked to 73 Spring Street, Suite/Room 408 in New York, came after the Vitter sex scandal broke and after in-state money dried up from the LCRM core members. Was this New York address the out-of-state point where Louisiana money (possibly from LCRM-related sources) could be de-identified and re-routed into Louisiana campaigns?

It's an interesting question that will likely require some entity with subpoena power to be able to find the answer.

Connecting the Dots

Taken together, these activities reveal a group of wealthy Republicans engaged in a pattern of apparent violations of campaign finance laws in pursuit of the goal the Senator David Vitter and his wife Wendy laid out for LCRM before he became engulfed in a scandal that centered on his hypocrisy — a family values Republican with a history of engaging in sex with prostitutes.

The consistent thread is hypocrisy. Republicans, after all, have based their campaigns on them having the moral and ethical high ground when compared to Democrats. Ethics is their mantra; it is the basis of their claim to power.

What these activities reveal is that it is all a scam. The LCRM, its members and its beneficiaries apparently believe ethics is so important that they are violating campaign ethics laws in order to gain the power to enforce their vision.

It's not about ethics. It's really just about the power. In the case of the LCRM, any excuse to grab it will do.

More to come — Soon!

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Louisiana Democrat2Democrat by Mike Stagg is licensed under a Creative Commons Attribution 3.0 License.