Foundation for Transparency in Government Lacks Transparency

Six months after it organized to recall the mayor of Lawrence, Mass., the group has not filed financial disclosure forms with the state, in apparent violation of campaign finance laws intended to ensure transparency.

by Keith Eddings, The Eagle-Tribune / January 19, 2016
Downtown Lawrence, Mass. Wikimedia Commons/EraserGirl
Downtown Lawrence, Mass. Wikimedia Commons/EraserGirl

(TNS) — LAWRENCE — It operates a bustling headquarters in a downtown office building, where it has recruited what it says are dozens of volunteers, printed T-shirts and placards, acquired a cell phone account, published a full-page newspaper ad and conducted a petition drive that collected more than 8,000 signatures.

But there's one thing the Foundation for Transparency in Government hasn't done. Six months after it organized to recall Mayor Daniel Rivera, the organization has not filed financial disclosure forms with the state, in apparent violation of campaign finance laws intended to ensure transparency.

The laws require such organizations to name a treasurer, open a bank account and report their fundraising and expenses to the state Office of Campaign and Political Finance on the 5th and 20th of every month. The Foundation has not done so.

In addition, the organization has been operating for several months — without charge — out of a building at 33 Franklin St. owned by Gino Mills LLC, a real estate holding company, where it shares a second-floor suite with RM Technologies Inc., a construction demolition company.

State campaign finance laws prohibit corporations from contributing to political action committees. The prohibition extends to in-kind contributions of goods and services, which includes the use of telephones, computers, fax machines and other office equipment and furnishings of the type Gino MIlls and RM Technologies are providing free to the recall campaign, along with the office space itself and utilities such as the electricity that is keeping the lights on for the recall.

Office space in downtown Lawrence rents for between $6 and $8 a square foot per year, according to Michael Sullivan, a former mayor now involved in real estate in Lawrence. The second floor at 33 Franklin St. is 3,151 square feet, so the monthly rent for the space would be between $1,575 and $2,100, using Sullivan's figures.

Rafael Danielito Guzman, who owns RM Technologies and is part owner of Gino Mills, and Louis Farrah, the lawyer for the recall, said the laws don't apply to the Foundation for Transparency in Government because the organization is only a loose group of volunteers and not a political action committee.

State law defines a PAC as any group that raises and spends money – including in-kind contributions — to promote a candidate or a ballot referendum such as a recall.

“If a group pools resources for the purpose of influencing the nomination or election of a candidate, then the group is a political committee and must organize with OCPF,” said Jason Tait, a spokesman for the state Office of Campaign and Political Finance. "Recall efforts are, generally, included."

Tait emphasized that he was speaking generally and would not comment on the operations of Foundation for Transparency in Government.

In 2014, a similar group that led the successful recall of Fall River Mayor Will Flanagan organized as a PAC, named a treasurer, opened a bank account and filed disclosure reports with OCPF. The group reported raising $7,918 and spending $7,718, its reports show.

"We felt it was in the best interests of the recall" to organize as a PAC and file regular financial disclosures with the state, said Robert Camara, a former firefighter who served as chairman of the Fall River recall group, called Citizens Alliance for Accountability in Government. "There was going to be enough difficulty with the recall, with all the attempts at spinning everyone's positions, without injecting financial improprieties into the equation. The last thing we needed was to have any gray areas. We accounted for every single penny."

Guzman and Farrah said OCPF's definition of a PAC doesn't fit their organization, but were not specific about why. Farrah said he is volunteering his legal work to the Foundation; OCPF does not require candidates or PACs to disclose work by volunteers.

“It's a group of people who have a grievance against an incumbent mayor, and now has a grievance against the Board of Registrars,” Farrah said, referring to the city agency that struck 3,070 names from recall petitions that the foundation submitted last month, leaving it 655 names short of the 5,645 needed to force a recall referendum. Most of the signatures were struck because the addresses next to them did not match those on file with the city's Election Division.

“I spoke to another lawyer, more experienced than me (in campaign finance law),” Farrah said, but would not name the lawyer. “He said this citizen group doesn't fall within the gamut of being a political action committee.”

Guzman used similar language to wave off the suggestion that Foundation for Transparency in Government is operating as a PAC and so should be publicly disclosing its fundraising and spending and its officers.

“I'm part of a group of citizens, not any political action committee, committed to recalling the mayor,” said Guzman, whose request to build a parking garage on a city-owned lot was denied by Rivera. “I'm not part of any PAC, and I don't want to be a PAC.”

In December, the Foundation purchased a full-page ad in Rumbo, a Spanish-and-English-language newspaper published in Lawrence, thanking those who signed its recall petitions and criticizing Rivera for posting their names on the Internet. Preparing for an upcoming hearing where it hopes to revive its recall effort by restoring at least 655 of the 3,070 names that the Board of Registrars struck from its petitions, the foundation asked in the ad that those who signed its petitions to verify their signatures by calling a Sprint cell phone number that is answered by a recording in Spanish only.

Rumbo's publisher, Dalia Diaz, said the ad was placed by Guzman and costs $1,200. She said she has not been paid.

Guzman said the Foundation will do fundraising to pay for the ad. Fundraising for a political objective is a fundamental function of a PAC.

“At some point, we'll get together,” Guzman said. “Everyone will put in $50, $100. We'll eventually pay.”

The Foundation for Transparency in Government recently joined forces with a second campaign to recall Rivera, which has until Jan. 23 to submit its petitions to the city. The second recall group, which calls itself Citizens for Justice in Lawrence, also is operating out of Guzman's suite of offices on Franklin Street, where it is coordinating its work with the first recall campaign.

Citizens for Justice in Lawrence also has not filed financial disclosure forms with the state, named a treasurer or opened a bank account. But like the first recall group, it is receiving in-kind contributions of office space, equipment, furnishings and utilities from Guzman's corporations.

Its leader, Jennifer Lopez, did not return a phone call.

Rivera would not comment for this story.

©2016 The Eagle-Tribune (North Andover, Mass.), Distributed by Tribune Content Agency, LLC.