May 29, 2014

Sec of State investigation of Gov's fundraising violation doesn't add up

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You might remember a story during this year’s legislative session where Secretary of State (SOS) Dianna Duran alleged that fundraising links maintained by Act Blue, a third-party site helping Democrats raise money online, violated state prohibitions on fundraising during the legislatives session.

But we knew that Republican’s maintain a similar system which she failed to include in her investigation, so we started digging.

We found that multiple Republican legislators and Governor Martinez herself had active online fundraising links using Piryx, a third-party online donation vendor which services conservative candidates and causes.   So we filed a complaint with the SOS’s office, the department responsible for overseeing compliance with fundraising laws. Our complaint asked: “Are the governor, 3 senators, and 4 representatives listed in violation or compliance with the legislative session fundraising prohibition in the Campaign Reporting Act?”*

The SOS’s office initiated an “investigation” and then told us that she had concluded that the Piryx links we referenced were inactive, so no law was broken.

SOS Letter

Missi Sousa, one of Martinez’s campaign & PAC staffers, even wrote the Secretary of State saying:

Sousa Email

 

But the numbers just don’t add up.

The prohibited fundraising period for the governor this year went from January 1, 2014 to March 12, 2014 (state law prohibits the governor from soliciting campaign donations during the legislative session and bill signing period). And, yes, Piryx is technically a third-party fundraising platform so maybe Sousa can argue that they have no “control over” the platform, but their own finance reports show that they paid thousands of dollars to the company to process credit cards used to collect hundreds-of-thousands of dollars in donations during the period when they were prohibited from asking for dollars.

And they accepted a lot of donations over the prohibited fundraising period.

The chart below is a compilation of all the Piryx processing fees Susana Martinez paid during the 2014 prohibited period (with +/- 1 day on each end). Each fee is a percentage of the total donation the Martinez campaign collected through Piryx’s online fundraising.  Tracking the dollars is pretty simple.   Piryx charges a simple 5.75% fee for each transaction it processes (if you are thinking of running for office, use something else.  This is WAY higher than progressive sites like Democracy.com or ActBlue) – for example, if Jane Doe gave Susana Martinez a $100 donation through Piryx, Martinez would report the full $100 donation, but pay Piryx $5.75 for the service, leaving the campaign with $94.25.

So figuring out how much the campaign raised online through Piryx is pretty simple. During the first week of the prohibited fundraising period, the campaign reported paying Piryx $2,288 in fees.  Quick math tells us that they raised $36,598 online through Piryx that week (that’s almost 1/2 of their total take of $79,913 that week).

And it wasn’t just during that week.  They kept paying Piryx to process contributions throughout the prohibited period, including on the very day the campaign told the Secretary of State they had nothing to do with Piryx.

 

 CLICK TO ENLARGE

Martinez Piryx

If the Martinez campaign truly had no affiliation with the account they wouldn’t have had to pay processing fees to Piryx for the donations they received. Someone affiliated with the Martinez campaign with access to the campaign bank account appears to have linked Piryx’s platform to their bank account account to deposit donations into Martinez’s account.  They even have access to the donation record date for every donor and contribution coming in through Piryx and every corresponding processing fee paid out to the company.

 

So what’s really going on here?

The Piryx payments happen in some big bursts with declining amounts ($2,104 in one case, followed by $876 the next day and $104 the next).  Campaign experts and development professionals know that is the tell-tale sign of an online contribution ask: A big instant response the first day, a smaller response the second day from late email openers and declining success for the next two days until most everyone has checked their email and responded by the fourth or fifth day).

Without some big ask, thousands of dollars don’t just come pouring into your campaign coffers on the same day by coincidence, unless someone asked people to donate.

So, did the Martinez campaign lie when she stated that they had no affiliation with the Piryx account accepting donations for the governor?  What about the payments they kept making after they claimed to have no affiliation with the platform?

Did the SOS purposely ignore evidence (i.e. the public campaign finance reports in their own office that document the Piryx donations and which are overseen by the SOS) in order to keep their friend Susana out of hot water?

New Mexico deserves an answer.

 

By the way:  Martinez and her campaign are no strangers to using Piryx to process donations online.  In 2011, the Albuquerque Journal’s Thom Cole wrote about the governor’s PAC soliciting donations during the same prohibited period.

Her campaign manager, Jay McCleskey, offered this excuse to the Journal:

Governors are also subject to the session fundraising prohibition, and a question arose in 2011 about whether Gov. Susana Martinez’s political action committee, Susana PAC, had violated the fundraising prohibition by leaving a donation link on its website during a special session of the Legislature.

The link was removed shortly after I inquired about it, although the Secretary of State’s Office hadn’t made a final decision on whether the fundraising prohibition had been violated.

Martinez political adviser Jay McCleskey said the link was inadvertently left up and was removed out of an abundance of caution.

Secretary of State Dianna Duran also uses Piryx for her campaign.

We’ve filed a second complaint asking Duran to reopen her “investigation” and ask the governor’s campaign how they raised tens-of-thousands of dollars, and paid thousands in fees, through online processors without any online solicitation or weblink.  Read the new complaint letter here.

Read the full letter online

Read the full letter online by clicking here (view on Scribd)

 

*The other Republican legislators named in our complaint were Sen. Craig Brandt, Sen. Mark Moores, Sen. Lisa Torraco, Rep. Alonzo Baldonado, Rep. Kelly Fajardo, Rep. Jason Harper, and Rep. Terry McMillan