Millions poured into Michigan petition drives. Their funding is a mystery.

LANSING — A handful of groups have poured millions of dollars into Michigan’s dozen-plus ballot drives that seek major changes to election, education, health and drug policies — but are keeping their donor identities a secret.

Committees working for or against citizen petition initiatives in Michigan have raised a total $10.6 million through December 2021, according to campaign filings submitted in recent weeks.

Of that money, $9.4 million — almost 90 percent of all contributions — comes from nonprofits such as 501(c)(4)s, including social welfare groups or associations of employees.

The organizations are allowed to engage in political activities as long as that’s not their primary purpose. They’re often known as “dark money” groups because they are not required to disclose donors due to their tax-exempt status, making it difficult to trace the source of their revenue or how much they spend on politics.

Both liberal and conservative groups have embraced dark money spending, which topped $1 billion in the 2020 election cycle alone nationwide, according to campaign finance watchdog group Center for Responsive Politics.

Related:

• 2022 Michigan petition drives tracker: What to know about election proposals
• Lee Chatfield raised millions, traveled often. Michigan law kept much secret

The trend allows “wealthy special interests” to “hide their influence” and is bad for democracy, said Aaron McKean, legal counsel for state and local campaign finance at Campaign Legal Center, a Washington, D.C.-based watchdog group.

“It does leave voters in the dark … but it also drowns out the voices of voters because most voters don’t have half a million dollars to spend on an ad campaign.” 

Retired Republican Bob LaBrant said funding ballot measures with private money has become “much more expansive” in recent years in Michigan. It’s a battleground state and one of several where Democratic and Republican-aligned groups are staging legislative fights over voting laws.

Without legal restrictions, special interest groups can set up an infinite number of nonprofits and funnel money through them, LaBrant said, and taxpayers “don’t have a clue” of their identities.

“If you are just going to use 501(c)(4)s to finance all petition drives in Michigan, you’ve just witnessed the death of disclosure under the campaign finance law for petition drives, and I think that’s wrong,” said LaBrant, a former Michigan Chamber of Commerce executive who was involved in politics for decades.

Some of the measures seeking to enact new legislation may not even come before voters in the November election due to a rare state law, which allows the state legislature to adopt into law a proposal as long as it is signed by at least 340,047 voters.

The maneuver allows petitioners to circumvent the governor and evade a general election where measures must be adopted by a simple majority vote.

Coordinated effort?

A pair of Republican-backed ballot initiative committees seeking changes in Michigan’s election system and pandemic response draw their funds from three dark money groups registered at the same Lansing address — a suite atop a Jimmy John’s on Allegan Street.

LaBrant said that reflects a “highly coordinated effort,” but those who manage the groups said that using the same address is merely a convenience for bookkeeping.

The three 501(c)(4) groups — Michigan Guardians of Democracy, Michigan Citizens for Fiscal Responsibility and Michigan! My Michigan! — have given a total $3.3 million to Unlock Michigan, a petition committee that seeks to limit the length of a governor’s emergency orders to 28 days.

That dark money made up almost 90 percent of Unlock Michigan’s total revenue of $3.7 million by the end of December, campaign filings show.

Another ballot committee that shares that address on Allegan Street is Secure MI Vote, a Republican-backed petition drive committee pushing for voter ID requirements, mail-in ballot restrictions and a ban on outside funding for elections.

Of the $841,000 Secure MI Vote raised in 2021, almost 90 percent — $750,000 — came from Michigan Guardians of Democracy.

The location is office space for GOP consulting firm Bright Spark Strategies. Its founder, Heather Lombardini, helps manage each of the nonprofits, business filings show. 

Lombardini helped incorporate Michigan Guardians of Democracy in September. She serves as the president and director of Michigan Citizens for Fiscal Responsibility, which was formed in 2010, and as treasurer of Michigan! My Michigan!, a group tied to Senate Majority Leader Mike Shirkey, R-Clarklake.

“A big part of our business is bookkeeping,” Lombardini told Bridge Michigan in an email. “All the accounts … are for different clients.”

Unlock Michigan spokesperson Fred Wszolek echoed Lombardini, arguing the same address only proves “they share the same bookkeeper. It does not suggest coordination.”

The shared location is not an unusual arrangement for “dark money schemes” but warrants scrutiny, said McKean with Campaign Legal Center. The practice is also common among political action committees in Michigan — groups required to disclose their donors — especially when they are linked to each other.

LaBrant said registering multiple nonprofits at the same address allows wealthy interests to funnel money through different groups without drawing “too much heat.”

Nonprofit managers can easily create new groups as additional fundraising arms if the money already raised is not enough to “finish up the petition drive,” LaBrant said. 

“They’ll just go out and create another 501(c)(4), raise a bunch of unreportable money, and then that outfit will give an additional $500,000 apiece to those two ballot question committees,” he said.

Dark money has been pouring into Michigan for decades, but LaBrant said it is new to witness it at this level. 

In 2013, for example, Right to Life in Michigan successfully pushed for a ballot measure ending public and private insurance coverage for elective abortions. The group raised more than $44,000, most of which came from its own local chapters, a Bridge Michigan analysis shows.

In 2008, Michigan Coalition for Compassionate Care — the ballot committee that successful pushed for medical marijuana legalization — received $1.72 million, including $1.69 million from Marijuana Policy Project, a 501(c)(4) dark money group in Washington, D.C., campaign filings show.

LaBrant has filed two unsuccessful complaints, arguing Michigan Citizens for Fiscal Responsibility — a main funder for Unlock Michigan — should be subject to disclosure requirements because it continues to raise funds to advocate for the ballot measure, and in doing so, qualifies as a ballot question committee. 

Michigan’s secretary of state’s office found no violation of campaign finance law in either of LaBrant’s complaints. LaBrant said another complaint he filed in summer 2021 against all three nonprofits funding Unlock Michigan is pending.

Jamie Roe, spokesperson for Secure MI Vote, told Bridge Michigan his committee follows the law.

“People who contribute to us are people who share our desires to secure elections,” Roe said.

A bigger concern, he said,  keeping “special interests” out of government-run elections. Secure MI Vote’s ballot proposal would ban private donations to elections — such as the millions of dollars Facebook founder Mark Zuckerberg and his wife, Priscilla Chan, donated to a nonprofit that funneled money to governments nationwide to help cover costs of the 2020 election.

“We are far more concerned about that occurring with outside special interests and corporate interests funding aspects of government election administration,” Roe said. “As far as the state’s election rules go, we don’t make those. If the people have the desire to change them, the Legislature is at liberty to change them.”

Liberal dark money pours in

Left-leaning groups fighting Secure MI Vote have so far outraised it — and done so with dark money.

Protect MI Vote, a little-known ballot committee formed in May, was designed to rival its conservative counterpart, according to a Michigan Democratic Party pamphlet encouraging people to report Secure MI Vote petitioners gathering signatures by calling a hotline.

An automated mail voice on the other end greets callers by welcoming them to the “campaign hotline,” and all calls are directed to a voicemail. The ballot committee does not have a website or any social media page.

Protect MI Vote received $2.5 million — 90 percent of its revenue so far — from the Sixteen Thirty Fund, a Washington, D.C.-based dark money group that raised $390 million in 2020, according to tax returns obtained by OpenSecrets. The Sixteen Thirty Fund was the biggest funder to other dark money groups bankrolling liberal super PACs in the 2020 election cycle, OpenSecrets reported.

Protect MI Vote paid $1.8 million to Fieldworks, LLC, a campaign fieldwork firm with offices in Washington, D.C., and Michigan. The same company has received payments from the Michigan House and Senate Democratic Funds and Promote the Vote, which championed constitutional amendments in 2018 that allowed for straight-ticket voting, same-day voter registration and no-excuse absentee ballot voting, among other things, past campaign filings show.

Naomi Seligman, a spokesperson for Protect MI Vote, did not directly answer if the group has any transparency concerns about its donors.

“Protect MI vote is grateful to all of our donors and supporters, including Sixteen Thirty Fund, who share our commitment to protecting Michigan voters’ access to the ballot box,” Seligman said in a statement. “We will continue to raise and invest the resources necessary to ensure Michigan voters are aware of the deceptive nature of this initiative and the consequences to our freedom to vote.”

Other groups

Apart from election reform, dark money has flowed into other groups seeking to transform education, minimum wage and payday loan policies.

• Let MI Kids Learn, which aims to establish a scholarship program in Michigan funded by tax-exempt contributions to support private tuition and homeschooling materials, received $1.7 million in 2021, including $1.6 million in dark money.That includes $800,000 from Get Families Back to Work, a group sharing the same office address as the Republican Governors Association in Washington, D.C., $450,000 from State Government Leadership Foundation, a D.C.-based conservative nonprofit, $100,000 from Michigan Guardians of Democracy and $25,000 from Lansing nonprofit Great Lakes Education Project’s advocacy arm.
• Michiganders for Fair Lending, a group pushing for a 36-percent cap on payday loan interest rates, received almost all of its funding — $25,000 — from the Sixteenth Thirty Fund in D.C. The dark money group also helped conduct “research” for the ballot committee that amounted to $55,450 in value.
• Raise the Wage MI, which seeks to increase the state’s minimum wage to $15 an hour over five years, received almost all of its funding — nearly $1.4 million — from the political action arm of One Fair Wage, a Massachusetts-based nonprofit.

A number of ballot measure committees have not filed campaign finance reports because they are newly formed. They include:

• Promote the Vote 2022, which would expand voting access through a constitutional amendment
• Audit MI, which would force a “forensic audit” of the 2020 election and change how Michigan conducts audits after elections. The group is not required to form a committee since it has not raised or spent more than $500 under state law.
• MI Right to Vote, which is sponsoring measures ending the Legislature’s ability to enact laws proposed by petition drives and reforming elections in ways similar to that proposed by Promote the Vote 2022. The group told Bridge Michigan they have formed a ballot committee, but the secretary of state’s website has not posted that information.
• Reproductive Freedom to All, which would establish do away with a law predating Roe v. Wade that makes abortion a felony in Michigan, and it would establish a state constitutional right of reproductive freedom.
• Michigan United, which would repeal truth in sentencing laws that require those convicted of crimes to serve their entire minimum sentences. It would also establish credits that reduce sentences for those displaying good behaviors.

Of the committees that have reported finance, only two have not received contributions from dark money groups. Empower MI Vote, a group formed to battle Secure MI Vote, raised $10,050 — $10,000 of which came from the Michigan Democratic Party.

Voters not Politicians, a ballot committee formed by the nonprofit of the same name, is also fighting Secure MI Vote. The ballot committee received $150,685 from individual donors.