NorthwestFebruary 10, 2004

Money given to Kempthorne for general expenses of holding office apparently exempt from campaign limits

Bob Fick

BOISE -- State Attorney General Lawrence Wasden said Monday the eight contributions made to Gov. Dirk Kempthorne's re-election campaign that exceeded the $5,000 prescribed campaign finance law limit were legal.

In a nonbinding opinion, Wasden said the changes made in the finance reporting law in 1997 clearly intended to create a situation where donors could exceed the general campaign limits in the case of incumbents.

Secretary of State Ben Ysursa said he will propose legislation this session to close what he sees as a loophole allowing unlimited contributions to finance general expenses of holding an office.

Under the 1997 amendments, eight contributors gave the Kempthorne campaign money last year that pushed their total financial support for his second term over the $5,000 limit for the general election. The eight combined for $23,000 in 2003 on top of the money they contributed during the actual campaign the previous year.

Both Ysursa and Kempthorne campaign treasurer Larry Jeffries asked for Wasden's interpretation. Jeffries maintained the law allowed the contributions since they support the expenses of holding office, not getting elected to it.

Jeffries, a Boise certified public accountant, pointed out the provision on the 2003 campaign finance report because Kempthorne had previously said he would not seek a third term in 2006, eliminating any need to generate cash for another campaign.

The 2002 campaign, however, carried a $190,000 debt into 2003. It paid off just $40,000 of it last year. At the same time the campaign reported new bills from consultants for $48,500.

The campaign opened 2004 with only $21,000 in the bank and debts of $199,000. Virginia political consultant MPGH Agency was due more than half that money for work during the campaign, but the campaign's other creditors also included former chief of staff Phil Reberger for $1,500 and former campaign manager Jason Lehosit for $5,000.

The governor raised only $75,000 last year, and backers said he netted about $40,000 from a Jan. 31 fund-raising dinner in conjunction with the annual Governor's Ball.

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The contributions over the limit for the 2002 election cannot but used to retire the election debt, but they can finance other activities in Kempthorne's office.

While about $40,000 of the cash the campaign raised last year paid off debt, another $30,000 financed other expenses including a number involving Kempthorne's chairmanship of the National Governors Association.

In a letter to Wasden, Jeffries cited the 1997 law that allows in addition to contributions to the political campaign "any other amounts contributed to an individual for the purpose of supporting his activities as a holder of any state, county, city, school district or other public office."

There was no indication in the law that those contributions are subject to any limit.

Jeffries said the state provision was taken from the federal campaign finance law that provides for creation of so-called office accounts to defray official expenses of carrying out the responsibilities of an office.

Because of questions about the campaign's interpretation of the law, one of the contributors, Avista Corp., has asked for a refund.

"This course of action allows no room for misinterpretation of Avista's position regarding strict adherence to campaign contribution limitations," Avista representative Neil Colwell told the campaign in a letter.

In addition to Avista, the other contributors were Simplot Co., Qwest Communications International Inc., Potlatch Corp., Intiut Inc., Hewlett Packard Co., Eli Lilly and Co. and Advantage Workers Compensation Insurance Co.

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