Treasurer John N. Kennedy has statewide name recognition, but another big reason why he’s considered a leading candidate for the U.S. Senate is because he sits on nearly $3 million in campaign contributions.
But some of Kennedy’s GOP opponents question whether Kennedy can shift that money to a federal Super PAC, formed by a longtime aide, to support his bid in the Nov. 8 election to fill the U.S. Senate seat being vacated by David Vitter. It’s a common sidestep for state officials to get around a federal prohibition against using money raised for state campaigns in federal races.
Polls show that Kennedy is widely known by the electorate having been elected to his fifth term as Louisiana’s top money manager with 80 percent of the vote last fall. The question is whether a state official can use the millions in money leftover from a campaign.
A memo, backed by one of the nation’s preeminent lawyers on campaign law, that is circulating around Louisiana political circles, asks that very question.
“The answer is no,” the memo stated.
Such a move would violate federal law, specifically the part that forbids a federal candidate — or his agent — from directly or indirectly establishing or financing an organization that aids his campaign.
Ben Ginsberg, a Washington, D.C. lawyer, said he helped write the memo and agrees with its content.
The Federal Elections Commission examines 10 factors listed in federal regulations to determine whether the Super PAC was indirectly established, financed or controlled by the candidate. Factors include whether the candidate or his agent played a significant role in forming the Super PAC and whether the candidate has control over the hiring and firing of the Super PAC personnel, according to the memo.
Kennedy has $2.85 million “funds on hand” in his state campaign account, according to the latest disclosure, filed on Feb. 16 with the Louisiana Board of Ethics for activity through the end of 2015.
James Hartman, the Kennedy campaign’s spokesman, wrote in an email: “The Treasurer is not prepared to discuss these issues at this time.”
But a lawyer connected to the Kennedy campaign, not willing to be publicly identified because of the campaign’s position, said the memo’s interpretation is incorrect.
“Making a donation, which is what we’re talking about,” the lawyer said, “doesn’t trigger establishing, maintaining or controlling an entity.”
Such a reading of the law would mean that every single donation would have a similar effect. “That’s nonsensical and the Federal Elections Commission has never taken that position,” the lawyer said, adding that Kennedy would, at some point, make the contribution to the Super PAC.
“We’ve seen the legal memo that was written by Ben Ginsberg and others,” said Justin Brasell, a consultant for Lafayette Republican U.S. Rep. Charles Boustany’s campaign for the Senate. “From that memo and from other attorneys we’ve talked to, it looks like it would be illegal for him (Kennedy) to transfer the money into that account.”
Boustany raised $2.5 million in 2015 and had $1.65 million of funds on hand on the last day of the year, according to his federal disclosure.
Another Republican candidate, U.S. Rep. John Fleming, of Minden, agrees. “Federal campaign finance laws are very clear regarding coordination between candidates and Super PACs. We certainly hope all the candidates in the race are following both the spirit and letter of the law,” Matt Beynon, a campaign spokesman, said in an emailed statement.
Fleming had $2.27 million on hand.
The other candidates running for Vitter’s Senate seat — Democrats Caroline Fayard and Foster Campbell as well as Republican Rob Maness — did not respond to requests for comment.
Kennedy would have to contribute to the Super PAC and a complaint would have to be submitted before the FEC would become involved.
The Super PAC, Make Louisiana Proud, was formed on Jan. 30 by Jason Redmond, who has worked for Kennedy for the past 20 years and managed Kennedy’s first successful campaign for statewide office in 1999.
Redmond wrote in an email that the Make Louisiana Proud PAC was formed “to support the election of State Treasurer John Kennedy to the U.S. Senate this fall.” The Super PAC operates independently of Treasurer Kennedy and his senate campaign committee, as required by federal law, Redmond wrote.
Make Louisiana Proud collected $96,000 in contributions — $50,000 of which came from Ruston businessman James E. Davison — and spent $54,000 about half of which went to Redmond, according to FEC disclosures.
A 64-year-old Zachery native, Kennedy served in the cabinets of Govs. Buddy Roemer and Mike Foster before being elected state treasurer.
He publicly announced for the Senate on Jan. 26, saying “Some politicians call me a troublemaker, a misfit, a rebel, a square peg in a round hole, because I’m not part of the club. I think I make the right people mad. My job is to protect taxpayers, not seek the approval of my political peers.”
Kennedy made his intentions official on Feb. 16 when he filed the paperwork with the Federal Elections Commission
Kennedy made two unsuccessful stabs at becoming a U.S. Senator, running as a Democrat in 2004 and as a Republican in 2008.
Kennedy’s latest U.S. Senate campaign account hasn’t yet reported any financial activity. Those disclosures, which would cover finances through March 31, won’t be made public by the FEC until mid April.
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