IDP Files Ethics Complaint Against Nussle

Tuesday, February 21, 2006

Charlie Smithson
Executive Director
Iowa Ethics and Campaign Disclosure Board

Dear Mr. Smithson,

I am writing to formally complain about a disturbing irregularity in the campaign finance disclosure report of gubernatorial candidate Jim Nussle. Iowa’s campaign finance reporting laws were established to shine a light on the financial activities of candidates for public office and to ensure voters that all money raised or spent to benefit any candidate would be publicly reported and made available to all Iowans.

It has become clear, by a simple review of Mr. Nussle’s state campaign finance reports and his federal campaign finance reports, that Mr. Nussle’s federal campaign committee has been making expenditures which clearly benefit his gubernatorial campaign, yet he has failed to report any of the expenditures as contributions (direct or in-kind). These expenditures have been made in secret and withheld from your board.

Mr. Nussle formally announced his candidacy for Governor on June 1, 2005 and had been raising money aggressively in the first half of the year. His gubernatorial web site posts newspaper articles from February of 2005 demonstrating that he has been a candidate for governor, not congress, since that time.

Mr. Nussle is not running for Congress and hasn’t been running for reelection to Congress throughout 2005. In fact, Mr. Nussle raised $1,213,027 before his announcement, which is almost exactly half of his total for the year of $2,478,994.

There are three areas of concern that warrant an investigation into ethics violations.

1. Mr. Nussle’s state finance report fails to show any in-kind donations from the federal “Nussle for Congress Committee,” while six individuals were simultaneously paid out of both accounts. Since there is no campaign for Congress, the staff and consulting paid by the federal committee was supplementing the salary and consulting fees paid by the gubernatorial campaign. The activities of the staff and consultants benefited only the gubernatorial campaign because Mr. Nussle was not running for reelection to Congress at any point in 2005. By not reporting these in-kind donations on his state report, it appears that Mr. Nussle has violated the letter and the spirit of campaign disclosure laws. Not paying staff members’ entire salaries from the gubernatorial account shifts the expenses of the gubernatorial campaign to the congressional campaign. The employees in question include such high-profile members of Congressman Nussle’s gubernatorial campaign staff as Campaign Manager Nick Ryan, Communication Director Maria Comella, and Treasurer Tamara Werger.

2. The development costs of Nussle’s gubernatorial campaign website may have been paid for by the congressional campaign account, with no record of an in- kind donation to the gubernatorial campaign account. In the congressional filing, TSE Enterprises was paid a sum of $5,400.00 between 2/22/05 and 6/10/05 for website production. The last payment came after the Congressman had formally announced his intentions to run for governor. It is especially troubling that there is no active “Nussle for Congress” website to account for this expense. In the state gubernatorial campaign filing there is no account of website production, but the same firm--TSE Enterprises-- is paid on 8/08/05 for website maintenance. The appearance is that Nussle paid for the development of his gubernatorial website with funds from his congressional campaign, again, without properly recording the transaction as an in-kind contribution to his gubernatorial account.

3. Three congressional campaign expenditures, totaling $33,839.69 for media-production, were made to McCarthy Marcus Hennings in 2005. Particularly of interest is the $26,500.00 expenditure made on 4/4/05, less than one and half months before the congressman officially announced that he was running for governor. The official announcement tour of his bid for Governor was accompanied by a video, which can be found on his website. However, in the gubernatorial campaign state report there is no report of video or media production expenses to McCarthy Marcus Hennings until two months after his announcement. It seems clear that the congressional campaign paid for the initial video on 4/4/05, which was then used by the gubernatorial campaign with no acknowledgement of the contribution in the state report.

Thank you for your time and your consideration of these matters with the board. Please see attached documents for further documentation and feel free to contact me if you have further questions or need additional information. I look forward to hearing from you soon.

Sincerely,

Mike Milligan
Executive Director