The Chatter: Grimes under fire for potential illegal contributions from father and in new super PAC ads

08/19/2014 01:37 PM

UPDATED WITH GRIMES CAMPAIGN STATEMENT: Democratic U.S. Senate candidate Alison Lundergan Grimes is under fire with questions about services provided to her campaign by companies owned by her father, which could potentially be considered an illegal in-kind contribution.

Politico reporter Manu Raju was first to report on the cost difference in what a normal campaign bus rental and what Grimes is paying for the rental of a 45-foot-long bus she is using to campaign around the state. The bus, featuring a large photo of Grimes on the side, was acquired by a company owned by her father—former Kentucky Democratic Party chair Jerry Lundergan—shortly after the campaign began.

From the Politico story:

A review of Federal Election Commission records shows Grimes paid less than $11,000 through June to rent the bus for at least 24 days, amounting to about $456 per day. Officials at four bus companies said they typically charge $1,500 to $2,000 a day to rent a similarly sized bus, and Senate Minority Leader Mitch McConnell’s campaign said it spent at least $2,200 per day to rent essentially the same bus during a swing earlier this month. That would amount to a savings of tens of thousands of dollars for the Democrat’s campaign.

The Politico story also compares the amount paid for the bus rental to one rented by Tennessee U.S. Sen. Lamar Alexander over the summer for a 15 day tour totaling $40,000 in rental fees compared to just under $11,000 paid by the Grimes campaign through June.

The Grimes campaign lawyer told reporter Manu Raju the campaign carefully examined market prices for other providers in the state and arrived at what they called a reasonable reimbursement fee for the rental. The lawyer said they believe the way the Grimes campaign arrived at the rate “applies with the applicable rules.”

However, if the campaign has broken FEC rules and the commission were to take up the matter, Grimes could be forced to pay a civil penalty for “accepting an illegal corporate contribution and failing to report an in-kind contribution.”

As for other questionable expenses, the Politico story points to campaign events catered by Lundergan’s company Lundy’s and held in the Carrick House in Lexington owned by another one of Grimes’ father’s companies.

For instance, Raju reports that Grimes primary night victory party cost the campaign $7,466, with $3,706 of that going to Lundy’s Special Events. But by comparison, the story states that the McConnell victory party in Louisville—a similarly sized event—cost $22,550 total.

But the Politico article also brings up other payments to family members by the Grimes campaign:

The Grimes campaign has paid at least $67,000 for goods and services provided by her relatives or companies associated with her family members. The campaign rents office space from Grimes’ mother, Charlotte, according to spending reports. And it has paid a company that employs the candidate’s husband, Andrew Grimes, for office supplies. The expenses are a small fraction of the $5.2 million spent by the campaign through June.

In response to the story, the campaign of Kentucky U.S. Sen. Mitch McConnell said in a statement that Grimes will have to face some tough questions about her father’s involvement in the campaign.

“The revelation that Alison Lundergan Grimes has potentially accepted large, illegal gifts and services from her father, Jerry Lundergan’s corporate interests is shocking and should set off warning bells for all Kentuckians concerned about ethics in public office. Alison has a lot of tough questions to answer about how her family, and their corporate interests, have improperly subsidized her political operation,” McConnell campaign manager Jesse Benton said in the statement.

Throughout the campaign, news outlets have reported on the help Grimes’ father brings to the campaign but also the potential baggage as well. That baggage has been brought up on multiple occasions by McConnell and his campaign as a possible target as family seems to become a larger issue in the race.

In a statement about the story, the Grimes campaign said the article has no truth behind it and is a plant from the McConnell campaign after a Yahoo! News story about McConnell’s wife—former U.S. Labor Secretary Elaine Chao—and her membership on the boards of groups with anti-coal agendas.

“This hit-job from the McConnell campaign is nothing more than a baseless distraction after news broke of the McConnells pocketing over $600,000 in payments from organizations trying to kill Kentucky coal plants. Mitch McConnell has yet to explain their involvement on boards that are actively hurting Kentucky miners and families – he owes Kentuckians answers. The people of the Commonwealth are tired of Mitch McConnell’s decades of deception and dirty campaign tricks,” Grimes campaign spokeswoman Charly Norton said in a statement. “Our campaign will not be bullied by McConnell and his allies, who have received at least six letters from the FEC for campaign finance violations this cycle. Our legal team has researched this matter, done their due diligence and these disparaging attacks are inaccurate.”

The statement from the Grimes campaign marks the first time they have commented on the Chao story.

New ads paint Grimes as anti-coal and praises McConnell on death tax
With another big ad buy in the state, the Kentucky Opportunity Coalition—a group backing Senator McConnell— is using a busy week surrounding the Kentucky State Fair to highlight McConnell’s record and hit Grimes on coal.

The first ad, titled “Beholden”, seeks to portray Grimes as an automatic vote for the anti-coal agenda as the group says the negative ads run in the state on behalf of the candidate are funded by anti-coal donors.

“The group spending millions to elect Grimes? It’s backed by Barack Obama and his allies. Because Obama needs followers in the Senate beholden to him. People like Alison Grimes,” the announcer in the ad says.

The other ad released by the group praises McConnell’s efforts to repeal the death tax. In a release about the ad, the group cites a news article to point to part of the deal reached by McConnell to avoid the “fiscal cliff” that prevented an increase in the death tax which they say would have especially hurt Kentucky farmers and families.

The group’s senior advisor, Scott Jennings, said in a statement that it was important for the ad to be released during a week the Kentucky State Fair is happening in Louisville and farmers from all over the state would be in the area, a “prime opportunity to once again educate citizens on the devastating effect of the death tax.”

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