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Schor's leadership fund June 27, 2023
June 28 - Yesterday's story (below) was wrong about the nature of the mayor's "Schor Leadership Fund". I guessed that it was a 527 organization, but it has been pointed out to me that it is an "independent" committee. Here is its Statement of Organization. The Michigan Campaign Finance Act defines an independent committee as
The expenditure limit is 10 times the limit for an individual, or $24,500 (see chart). (Contributions to a candidate are called expenditures.) So the Schor Leadership Fund will be able to make contributions up to $24,500 to each of Schor's preferred city council candidates. Contributions to an independent committee are unlimited.
I also said leadership funds are allowed at the state level, but not the local level. Wrong again. Leadership committees are simply independent committees. The word "leadership" does not appear in the Campaign Finance Act.
Pre-primary campaign finance statements are due July 28. At that time we will be able to see who contributed to the Schor Leadership Fund and which candidates benefited.
Finally: Is it me, or does the logo in Schor's email resemble the city logo?
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Lansing mayor Andy Schor was not happy in May when city council made some changes to his proposed budget, including a cut in funding for the mayor's office. So he vetoed it. According to the State Journal,
On May 21, City council voted to override his veto. At-large member Peter Spadafore was the only one who voted against the override.
This was a bitter defeat for the mayor, and he wants to make sure that - in the future - more members of the council "share his vision of growth for the city". Schor supporters received this email on June 12:
Note that he mentions his "vision" four times, but doesn't say what that vision is. And he doesn't say how he is going to use your money.
Up for re-election this fall are first ward council member Ryan Kost and third ward member Adam Hussain. At-large members Carol Wood and Patricia Spitzley are not running again, so their seats are "up for grabs" as Schor puts it. He apparently doesn't think Kost and Hussain can be defeated.
Some may question whether it is ethical for a mayor to raise money to elect council members who share his vision, whatever that vision is. I wonder if it is legal. What is this "Schor Leadership Fund"? Leadership funds are allowed at the state level, but not the local level. They are used to raise money for other candidates.
The name of his own official campaign committee is "Schor for Lansing" and he has had that since 2012. Its balance at the end of 2022 was $167,269.46. Since Michigan campaign finance law limits contributions to other candidates to the purchase of a $100 fundraiser ticket, he can't significantly support other candidates from his Schor for Lansing committee.
My guess is that the Schor Leadership Fund is a 527 account. Here's how Wikipedia defines a 527 organization:
Schor has had a 527 account for years called the Schor Lansing Fund. He solicits contributions and then gives the money to various local charities and community organizations. I wrote about it in November 2019. He also has a 527 account called the Schor Leadership Fund that was set up in August 2014 and apparently not used. No contributions or expenditures have been reported to the IRS. On the form used to set up the account, he gave as its purpose "Independent Action Committee." Maybe he is resurrecting that account for this new effort to elect his preferred council candidates.
If so, there are problems. The Michigan Campaign Finance Act requires the reporting of any payment made to influence the nomination or election of a candidate. Campaign reports for candidates for local office are submitted to the county clerk, who makes them public and uses them, among other things, to make sure contribution limits are not exceeded. The limit for an individual contributing to a candidate for council-at-large is $2,100. Schor's 527 leadership fund seems to be an end run around the Campaign Finance Act.
Former mayor Virg Bernero had a 527 account which he used and abused extensively, yet he must have known that it could not used to contribute to the campaigns of favored candidates. He used it to pay for 980 restaurant meals over his 12 years as mayor and he spent nearly $500 on flowers from a Pontiac flower shop owned by his aunt. But he did not use it to contribute to candidate campaigns. Instead, he added $2000 to the paychecks of two of his campaign staffers who then each contributed $1000 to Kathy Dunbar and $500 each to Jessica Yorko and Tina Houghton (story here).
You can see the documents for any 527 organization by going to this page on the IRS website: This is what you will see:
First, check the box for the form you want. Form 8871 is the Political Organization Notice of Section 517 Status. It contains the information that was used to set up the account. Form 8872 is the report of contributions and expenditures. Reports are quarterly and electronic. Form 990 is the tax return for a 527 organization.
Then enter your search criteria, the name of the organization or the EIN. If you don't have either, try the name of the owner. I used "Schor" to find Andy Schor's two 527 organizations, but the organization name doesn't necessarily contain the owner's name. Bernero's was City Adminisrative Account, with Administrative misspelled. I used "city" and then scrolled through pages of hits until I found it.
Send comments, questions, and tips to stevenrharry@gmail.com or call or text me at 517-730-2638. If you'd like to be notified by email when I post a new story, let me know.
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