Donovan taking hard look at AG’s campaign finance case

Chittenden County State's Attorney TJ Donovan and his Deputy State's Attorney Bram Kranichfeld address reporters at a news conference. Photo by Morgan True / VTDigger

TJ Donovan, the incoming attorney general, addresses reporters last spring. File photo by Morgan True/VTDigger

Vermont’s next attorney general is signaling that he might take a different tack than his predecessor in a long-running campaign finance lawsuit that has exposed problems with the state’s publicly funded election system.

Chittenden County State’s Attorney TJ Donovan, who will be sworn in as attorney general next month, said he doesn’t have all the facts about the state’s case against Dean Corren, who is fighting $72,000 in fines for alleged violations of the public finance rules. The case stems from Corren’s failed 2014 bid for lieutenant governor.

“It’s going to be one of the first cases I ask to get briefed on,” Donovan said in a recent interview.

“What I’ve read in news reports I find troubling. That’s why I want a full briefing to understand the state’s case,” he added.

Further complicating things for Donovan is that his pick for deputy attorney general, Josh Diamond, is expected to be called as a witness for Corren’s defense if the case goes to trial.

Diamond was an attorney for the Vermont Democratic Party, which sent an email to its supporters on behalf of Corren and other candidates during the 2014 campaign. That email is at the heart of the state’s case, leaving Diamond facing the prospect of testifying against his boss.

“If there’s a conflict we’ll navigate it. Ultimately it will be my decision how the case is resolved or whether it goes to trial,” Donovan said.

Corren, meanwhile, says he has racked up close to $24,000 in legal bills defending himself. Supporters have helped pay those expenses.

In the 2014 campaign, Corren received both the Progressive and Democratic nominations. Corren sought and qualified for public financing. Under the public finance law, a candidate for lieutenant governor who raises $17,500 from 750 registered Vermont voters in small contributions in a limited amount of time can qualify for state funding totaling $200,000.

Candidates receiving public money are prohibited from soliciting or facilitating further contributions to their campaigns, and the suit brought by Attorney General William Sorrell claims the state Democratic Party’s email amounted to an in-kind contribution.

Bill Sorrell

Attorney General William Sorrell. File photo by John Herrick/VTDigger

Sorrell sought two $10,000 fines from Corren for accepting the email and not reporting it. As called for by the public funding law, the attorney general also sought $52,000, or the amount remaining in Corren’s war chest at the time the email was sent.

Many in the Legislature viewed the fines as excessive, given that Sorrell estimated the email’s value at $255. Since then, the Legislature has changed the law to give the attorney general flexibility in determining the amount of penalty and did so retroactively, so it could apply to the Corren case.

In a July interview with VTDigger, Sorrell indicated a willingness to settle the case for less than the $72,000 he initially sought, and he blamed Corren and his attorney for dragging out a case that has stretched for close to two years.

Sorrell said Tuesday that he advocated for those changes in the Legislature and doesn’t believe lawmakers would have acted so quickly on reforms without the urgency created by his prosecution of Corren.

Sorrell said he hoped to resolve the case before leaving office, though he acknowledged it no longer appears he will.

Case continues in state court

The two sides have not begun settlement talks because Corren argues the state has no case against him. By continuing to fight, he said, he hopes to clear his name and keep Vermont’s public campaign funding system viable.

“Until we win this case or get some resolution, there is no public financing in Vermont,” Corren said.

His attorney John Franco agrees. “Nobody will touch public financing with a 10-foot pole if this (case) goes forward,” Franco said. “Nobody’s going to risk going through what Dean went through. Two years of agony and more than $20,000 in legal fees.”

The practical effect of the state’s case, according to Franco, is that any publicly financed candidate who receives a party nomination won’t be able to communicate or receive support from that party without being accused of taking illegal in-kind contributions.

No candidates sought public financing during the 2016 election cycle, the first after Sorrell brought his suit against Corren. The law was passed in 1997 and has not been used widely. Public funding is currently available only to candidates for governor and lieutenant governor.

Dean Corren, a Progressive candidate for lieutenant governor, at his Burlington home. Photo by Anne Galloway/VTDigger

Dean Corren at his Burlington home. File photo by Anne Galloway/VTDigger

Corren was the fourth candidate to publicly finance a campaign under the law. Former Gov. Howard Dean qualified for public financing during the primary in 2000 but returned the full grant and did not use the system in the general election, according to information provided by the secretary of state’s office.

Sorrell said he doesn’t believe Corren’s prosecution will have any chilling effect on publicly financed campaigns. The system offers significant benefits, but its users must abide by its restrictions, he said.

“All they had to do was play by the rules, which in our view were quite clear,” Sorrell said.

Sorrell said emails in the original complaint filed by his office show that Corren solicited the message to his supporters, coordination that the law prohibits.

“The party could have acted on its own and spent $500,000 as an independent expenditure. Any PAC could have done the same thing,” Sorrell said. What’s not allowed is the coordination, he added.

Franco said the email promoted events where three or more candidates would be present and therefore met an exemption to what’s considered a contribution.

Sorrell called that an attempt to “shoehorn” what took place into an exemption that doesn’t apply.

The state’s case against Corren in Washington County Superior Court is in the discovery phase. Sorrell is seeking copies of additional communications between Corren and the Democrats.

At the same time, Franco requested during discovery that the attorney general’s office explain how it arrived at the $255 value of the email. In November, the attorney general’s office responded, saying that figure was arrived at through settlement negotiations with the Democratic Party and therefore exempt from disclosure, according to Franco.

Sorrell said he was not involved in that aspect of the discovery process. However, he said his office was merely attempting to show the email had value, adding that the office’s original complaint states the email is worth “at least” $255. He maintains its value is likely much greater.

The Democratic Party agreed to pay a $10,000 penalty. Its executive director said it was a question reasonable minds could disagree on and the party wanted to move on and avoid costly litigation.

The attorney general’s office said it has not gathered any expert testimony on the value of the email, according to Franco.

That’s where Diamond’s involvement comes back into play. A former attorney for Corren has testified that Diamond told him the state Democratic Party couldn’t price an email on an a la carte basis.

That’s because the party operates what is known as a coordinated campaign, where candidates pay for the party’s support. It’s therefore never had to price a specific service such as a message to its mailing list.

Franco said Diamond’s testimony on how the Democratic Party operates would be integral to Corren’s defense if the case goes to trial.

Issues go beyond Corren’s case

For Corren, the problems with Vermont’s public financing of campaigns don’t end with his case. He pointed to a prohibition on publicly financed candidates announcing their candidacy before February in an election year.

That ban led David Zuckerman, who is now lieutenant governor-elect, to file a motion in late 2015 in a federal countersuit by Corren against Sorrell, with the hope of overturning the February start date. The motion was unsuccessful, and Zuckerman chose to forgo public financing.

Corren said his focus now is on urging the Legislature to fix Vermont’s public finance system before the 2018 election cycle. He’s working with the Peace and Justice Center’s Clean Elections campaign, which has helped pay his legal costs.

Vermont Secretary of State Jim Condos. Courtesy photo

Vermont Secretary of State Jim Condos. Courtesy photo

The nonprofit has helped Corren raise $14,000 of the $24,000 he’s spent on his legal defense with donations from Ben & Jerry’s as well as other politicians interested in public financing, Corren said.

Secretary of State Jim Condos said another issue lawmakers should consider if they open up the public finance law is how to pay for it. Back in the late 1990s when Corren, then a state representative, helped write the law, it was paid for with a percentage of corporate registration fees.

Every year, lawmakers looking to plug budget holes would appropriate that money for other purposes, which never allowed any reserves to build up. Eventually, the Legislature reallocated the money back into the general fund.

Now, without any dedicated revenue source, Condos would have to find money in his office’s budget for publicly financed campaigns. If lawmakers change the system and it becomes popular with candidates, the secretary of state would likely have to seek funding through the midyear budget adjustment process, Condos said.

“It could create a real headache for us,” he said.

The secretary of state also wondered if the current publicly financed campaign amounts — $600,000 for a governor’s race and $200,000 for the lieutenant governor — are enough to be competitive in the era of unfettered campaign spending.

“You’ve got to question after the money they raised and spent (on the 2016 governor’s race) if $600,000 is enough to compete,” Condos said.

The campaign set a record this year, with $13 million spent on the race to be Vermont’s 82nd governor.

Morgan True

Morgan True is VTDigger's Burlington bureau chief covering the city and Chittenden County. A Seattle native, he graduated from Boston University with a Bachelor of Science in Journalism before working for several publications in Massachusetts. Read more

Email: mtrue@vtdigger.org

Follow Morgan on Twitter @true_morgan

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  • Tiki Archambeau

    “All they had to do was play by the rules, which in our view were quite clear,” Sorrell said.

    Quaint insight from an AG who thinks nothing of being handed a fat envelope full of money, gives the payee a lucrative legal case, then calls the envelope a “campaign contribution.”

  • Neil Johnson

    It’s cleat that those in power DO NOT want anything other than big money influencing our elections. Why do I think I can even say that?

    1) The make a law and program that is too complicated and people can’t use, as evidenced by those trying to use the system.

    2) The cut the funding by moving money into general fund. This is a continuous, disastrous issue Vermont faces on a daily basis. Peter paying Paul.

    It’s unfortunately the “Vermont Way” of late. Politicians and leaders can say, look at all we are doing to promote fair government, when actually the rules keep the status quo.

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