The holiday glee started early for Kevin Mannix last week, when the state Department of Justice ruled out bringing criminal charges against him for political money-laundering.
The decision is less of an exoneration of Mannix, the head of the state Republican Party, than it is an indictment of Oregon's swiss-cheese election laws--which claim to require full disclosure of who's making campaign contributions, but really don't.
The story starts in August 2002, when an Oregonian article by Jeff Mapes and Lisa Grace Lednicer exposed, among other things, a case of apparent political money-laundering. In 1997 and 2000, Mannix, a former state lawmaker, had set up two political action committees to support changes in Oregon's legal system, called Justice For All II and Workers Compensation Progress. On Sept. 7, 2001, with Mannix locked in a tough primary race to become the Republican nominee for governor, Portland businessman Robert Randall, a longtime backer of conservative causes, used three of his companies to give a combined $50,000 to the two committees.
Hours later, Mannix transferred that money to his governor's campaign, and in subsequent governor's campaign reports he listed the PACs as the source, not Randall.
Funneling political contributions through a third-party to disguise their source is not uncommon, particularly at the federal level (see "Dirty Money," WW, April 2, 1997). In December 2002, a jury found that Oregon initiative activist Bill Sizemore had improperly laundered $1 million through a D.C.-based nonprofit because donors did not want their names associated with his.
But Mannix, when confronted by The Oregonian, said Randall--who by then had passed away--wasn't trying to disguise his contributions. Rather, Mannix said funneling them through the committees allowed Randall to "symbolically" express his support for Mannix's views on Oregon's legal system. (Interestingly, during the subsequent Sizemore trial, former aide Becky Miller testified that Randall had used phony stock certificates to launder $170,000 to Sizemore's initiative campaigns because he did not want his name to appear on contribution reports.)
Based on the O's article, Libertarian Party activist Richard Burke filed a complaint accusing Mannix of violating Oregon's campaign money-laundering ban--which prohibits accepting contributions under a "false name." Attorney General Hardy Myers, a Democrat who defeated Mannix to get the elective post, assigned it to retired state prosecutor H. Robert Hamilton, a Republican, to avoid the appearance of a conflict of interest.
In his Nov. 23 report, obtained by WW, Hamilton confirmed the reporters' findings. What's more, he found that Randall had similarly funneled money to Mannix on two earlier occasions--and he wasn't alone. In May 2002, Hamilton noted, Oregon City businessman Alan James loaned $25,000 to the Mannix committee called Workers Compensation Progress, which promptly turned around and loaned $24,000 to Mannix's gubernatorial campaign.
Despite the appearance that some Mannix money was accepted under a "false name," however, Hamilton found a huge loophole in the law: It does not apply to money contributed from a committee treasurer to a committee treasurer. And Mannix was the treasurer of all the committees involved.
Contacted by WW, Mannix said he was happy to be cleared of any legal impropriety. However, he described the money-laundering ban as "obsolete" and contrary to the free-speech rights of campaign contributors who wish to support a cause.
He said there was no intent to disguise contributions, though sometimes the original donors' names were not listed in his governor's-campaign reports.
"Full reporting does occur, and there's full transparency there," says Mannix, who says he supports full posting of all campaign reports online to make it easier to track the cash. "Now, sometimes you may have to hold three or four transparencies in front of you to see what you want to see, in terms of 'Well, I'd like to know where this money came from or that money came from.' But it is all there."
Hamilton, however, found that wading through 1,500 pages of documents wasn't easy. "Significant amounts of money flowed repeatedly here and there, and from some back and forth, between entities mentioned herein, the PACS, the non-profits, the campaigns, the candidate, his law firm, and one of his companies," he wrote in his report.
Last year, Secretary of State Bill Bradbury tried to plug loopholes in state election law, but a bill he authored never made it out of a House committee. Now, in the wake of Hamilton's report, Bradbury says he has decided to convene a committee to look at the issue, in hopes of persuading the 2005 Legislature to finally make Oregon's "full-disclosure" laws fulfill their promise.