By Dan Schroeder
During the 2007 Ogden municipal election campaign, an entity called Friends of Northern Utah Real Estate accepted over $20,000 in contributions from Envision Ogden and immediately passed this money on to two city council candidates, Blain Johnson and Royal Eccles. This activity violated Ogden's campaign finance disclosure ordinance, which prohibits campaign contributions made by one person in the name of another. The violation is a class B misdemeanor. If Mr. Johnson is convicted as a knowing participant in this activity, he will be disqualified from holding office as a city council member.
Evidence
The receipt of funds from Friends of Northern Utah Real Estate (FNURE) is detailed on the financial disclosure statements filed with the Ogden City Recorder by candidates Blain Johnson and Royal Eccles on October 26, November 28, and November 30, 2007. Johnson received a total of $10,990 in four installments from FNURE, while Eccles received $9700 in two installments. For each candidate this amount constituted more than half of the total contributions received during the campaign cycle--and substantially more than the total contributions received by the candidate's opponent. Johnson's disclosure statements give the address of FNURE as "4723 Harrison, Ogden," which is the same building as his law office. Eccles gave no address for FNURE on his statement.
No entity by the name of Friends of Northern Utah Real Estate, or anything similar, is registered as a business in Utah or as a 527 political organization with the IRS.
Meanwhile, Envision Ogden was organized in early 2007 and conducted various fundraising activities during the first half of that year, including the "Sneak Peek" grand opening of the city-owned Salomon Center on June 15. The organization made a direct contribution of $1500 to Johnson's campaign on September 7, 2007, as disclosed on Johnson's October 26 statement.
However, by early September, Envision Ogden was coming under increasing scrutiny. One citizen asked the Lieutenant Governor's office to inquire into the organization's status. A second citizen submitted a records request to Ogden City, asking for documentation of the arrangement under which Envision Ogden was permitted to use the Salomon Center for its fundraising event. A third citizen called the leader of Envision Ogden and asked about the organization's purpose and how it had been able to use the Salomon Center.
Envision Ogden notified the IRS of its Section 527 status (using the required Form 8871) on March 3, 2008. The form names realtor Abraham Shreve as the chairman and only officer, and Jeff Lucas as the custodian of records. Its 2007 year-end Report of Contributions and Expenditures (Form 8872) was submitted on May 12, 2008. That report lists the direct $1500 contribution to Blain Johnson plus five later contributions, totaling $20,700, to "Northern Utah Friends of Real Estate." The purpose of these contributions is stated to be "city council campaign support." The total amount is just $10 more than the total amount of the six contributions from FNURE reported by Johnson and Eccles. The dates and amounts of the individual contribution installments also correspond to an extent.
In conclusion, it would appear that FNURE simply forwarded political contributions from Envision Ogden to candidates Johnson and Eccles. This effectively concealed the true source of these contributions from voters, both before the election and for more than six months after the election.
Relevant law
Section 1-8-3C of the Ogden City Code prohibits campaign contributions made by one person in the name of another:
C. In Name Of Another: No person shall make a contribution in the name of another person or make a contribution with another person's funds in his or her own name, and no candidate, member of a personal campaign committee, or political campaign committee shall knowingly accept a contribution made by one person in the name of another person or made by one person with the funds of another person.Section 1-8-1 defines "person" very broadly to include organizations and committees. Section 1-8-7 makes violation of the disclosure ordinance a class B misdemeanor, and states that a person convicted of such a violation may not hold the office to which the person was elected, if any.
Implications
Whoever operated FNURE clearly violated Ogden's ordinance and is guilty of a class B misdemeanor. At this time we do not know the identity of that person or persons. However, the address that Johnson gave for FNURE suggests that the entity was operated either by Johnson himself, or by someone else at his law firm, or by someone else in the same building. In any case, it should be easy for a prosecutor to subpoena the bank records and determine who was signing the checks.
Even if someone else signed the checks, Johnson and Eccles would still be guilty of violating the ordinance if they were aware that the FNURE contributions originally came from Envision Ogden.
It seems probable that Envision Ogden violated Ogden's disclosure ordinance by contributing funds through FNURE. It may also have violated another provision of the ordinance by making $4684 in direct expenditures for the 2007 campaign. In addition, Envision Ogden appears to have violated federal tax laws by filing Form 8871 more than a year after it began accepting contributions, by failing to file a mid-year disclosure report, and by filing its year-end disclosure report more than three months after the January 31 deadline. Envision Ogden may have also violated state laws by soliciting contributions while holding itself out to be a charitable organization, and by contributing $2000 to a legislative candidate in 2008 without properly registering with the state or filing its disclosure statement on time.
Finally, Ogden City officials may have violated the law by allowing Envision Ogden to use a city-owned building for a political fundraising event.
Update 3/4/09 8:18 a.m. MT: Dan has just now transmitted to us a new supporting document, for those readers who might be interested in a detailed Envision Ogden event timeline. We are accordingly pleased to present Dan's newly-submitted Envision Ogden Chronology here.
