Draft Report Clears Sorrell Of Campaign Finance Illegalities

Jan 21, 2016

A report completed by a lawyer appointed to investigate alleged illegal campaign finance activity and other actions by Democratic Attorney General William Sorrell and reviewed by a panel of county state’s attorneys does not recommend any sanctions or penalties, according to a draft report of his findings obtained exclusively by the Vermont Press Bureau.

The investigation, conducted by independent counsel Thomas A. Little, “took its scope from the six allegations of the Complaint” filed by attorney Brady Toensing, the vice chairman of the Vermont Republican Party. Four allegations investigated by Little involved campaign finance laws, one allegation involved violations of federal and state criminal statutes and one allegation involved a conflict of interest.

Little, who declined to comment on the report Thursday, was tasked with reporting his findings for review to a bipartisan group of eight state’s attorneys that form a new Campaign Finance Review Committee. That committee was to review Little’s investigative findings and determine if any action against Sorrell was warranted.

Sorrell, who has not seen the report but was told of its contents by the Vermont Press Bureau, hailed its outcome.

“I have a lot of respect for Tom Little,” Sorrell said Thursday evening. “I was confident that it would be an investigation conducted with thoroughness and integrity. Just as I said right along, I intended to cooperate fully with this but I know the facts and I know the law. As the state’s chief law enforcement officer, adhering to the law has been important to me … for my almost 19 years as attorney general.”

Democratic Gov. Peter Shumlin appointed Little, a former state representative from Shelburne, as independent counsel charged with investigating Sorrell’s campaign finance activity following extensive coverage of potential violations last March by Seven Days, the weekly Burlington newspaper. The appointment of Little took place after Sorrell declined to, in effect, investigate himself.

Toensing filed a complaint last April based on the Seven Days reporting and followed up with further allegations in May. Toensing alleged that Sorrell did not properly report campaign expenditures on 16 separate occasions, illegally coordinated with a super PAC set up by the Democratic Attorney Generals Association and coordinated improperly with Dean Corren, then a Progressive candidate for lieutenant governor. Toensing also alleged that Sorrell received campaign contributions from a law firm that he later hired on behalf of the state.

Toensing declined to comment Thursday because he had not seen an official copy of the report.

The first allegation claimed “improper and illegal coordination between the Attorney General Sorrell campaign and the Committee for Justice and Fairness (CJF) PAC – alleged to have been established by the Democratic Attorneys General Association (DAGA).”

CJF spent about $200,000 in support of Sorrell’s 2012 primary race against Chittenden County State’s Attorney T.J. Donovan. Toensing claimed CJF coordinated its expenditures, which included former Gov. Howard Dean — who first appointed Sorrell to his position — in advertisements. Toensing, who did not provide evidence of illegal coordination, alleged that CJF was subject to a $2,000 per election spending limit and that CJF’s expenditures were required to be reported by Sorrell’s campaign.

“The Count 1 investigation concluded that there is insufficient evidence to support a finding of any violation of Title 17 and, therefore, for any enforcement action,” the report states.

The second count investigated by Little involved two separate allegations — that the Democratic Attorneys General Association “committed a series of campaign finance law infractions, including failure to timely register as a Vermont PAC, failure to timely and accurately file required reports and failure to abide by contribution limits,” and that Sorrell “observed a double standard” by enforcing the law against the Republican Governors Association PAC during the 2010 gubernatorial campaign of Republican Brian Dubie but not against the DAGA PAC during Sorrell’s 2012 primary campaign.

The report said the investigation into campaign finance violations against DAGA and the CJF PAC “will continue through completion with an assessment of possible enforcement action.” However, since the allegation “does not allege campaign finance law violations against Sorrell” the report states that “there is insufficient basis for a willful neglect of duty proceeding against Sorrell.”

The third allegation in the investigation “asserted that the Sorrell campaign failed to itemize reimbursement expenditures with the specificity required by Vermont law.” The complaint included copies of Sorrell’s filed reports with Sorrell’s description of reimbursements to himself from his campaign. They included “reimbursement,” “reimbursement for computer,” and “reimbursement for mileage.” Toensing alleged that more detail was required.

According to the report, the position of Secretary of State Jim Condos “is that finance reports should not contain too many reimbursement entries, since the law makes it clear that the preferred practice is for all expenditures to be made from the campaign’s checking account or with a campaign debit or credit card — not by the candidate who then must seek reimbursement.”

The report states “There is no sound basis for enforcement action on Count 3.”

“We agree with the Secretary’s admonition about best practices, etc., and encourage the Secretary to give serious consideration to adopting rules to further implement the reporting statutes and to expressly require more detailed information about reimbursement expenditures. Candidates for offices of public trust and power should treat the campaign finance reporting statutes as the floor amount of information to provide to the public — not the ceiling,” it states.

The fourth allegation in the investigation involves illegal coordination between Sorrell’s 2014 re-election campaign and the 2014 campaign of Progressive Dean Corren who was running for lieutenant governor. The report notes that it is clear “that Sorrell and Corren collaborated to host a press conference at a Burlington gas station on September 15, 2014 to raise concerns about Chittenden County gasoline prices and promote corrective legislation.”

“Sorrell does not deny that the event was coordinated with the Corren campaign, but dismisses the suggestion that because Mr. Corren was involved in coordinating and attending the event in his capacity as a candidate for office, that the event was a campaign event for himself,” the report states. “Sorrell affirmed in his sworn testimony that at the event there were no Sorrell campaign staff or paraphernalia (posters, stickers, and buttons), no solicitation of campaign contributions, and no “vote for me” rhetoric.”

Again, the report found no violations committed by Sorrell.

“The alleged facts do not show a campaign finance violation. Incumbents running for re-election — and their campaigns, however, must be vigilant and diligent about refraining from using the incumbent’s office in a manner that crosses the line into activity that triggers Chapter 61 disclosure and reporting obligations,” it states.

The fifth allegation “alleges violations of federal mail and wire fraud criminal statutes,” accusing Sorrell of soliciting and receiving “campaign donations “and other favors (travel expenses, for example) in exchange for him granting access to himself and hiring a particular law firm to represent the State as a plaintiff in MTBE gasoline additive litigation — to benefit the donors.”

According to one Seven Days report, a Texas-based law firm contributed $10,000 to Sorrell’s re-election bid after it asked him to filed a lawsuit against the oil and gas industry. Sorrell agreed to the suit and hired the firm to represent the state, meaning they would earn a share of whatever funds the state received as a result of the suit.

The report found the allegation beyond its scope and authority and did not issue a ruling or recommendation. It leaves open the possibility of an investigation by federal authorities.

“Investigation of the allegations contained in Count 5 of the complaint is beyond the scope of this investigation into campaign finance violations and would need to be done by an investigative body with appropriate jurisdiction, authority and resources,” the report states.

“No inferences one way or the other should be drawn from this concerning the accuracy of the Count 5 allegations,” the report also state.

Sorrell said Thursday he is not aware of any ongoing criminal investigation in the charge. He said he is aware that the investigation by Little did include contact with federal authorities.

“I didn’t take any bribes. I didn’t commit any fraud through the mail, or whatever,” he said.

If a federal or state criminal investigation is launched Sorrell said he will fully cooperate and request that the testimony he provided to Little’s investigation be handed over.

“I hope they also in referring it over to federal authorities give them my sworn testimony in writing and then orally. I’m happy to make that public. If federal authorities want to investigate, fine. I didn’t violate any criminal laws at all. If they wish to investigate I’ll cooperate with their investigation. I’m not worried about that — at all,” he said.

The sixth and final allegation investigated by Little alleges that Sorrell hired attorney Richard Cassidy for work on behalf of the state while Cassidy “was representing two persons under investigation by the Consumer Protection Division of the Attorney General’s Office.” Toensing alleged “a conflict of interest that should have prevented Cassidy from representing Sorrell,” and hiring Cassidy “violated Sorrell’s “ethical duties to the State of Vermont.”

Again, the report noted that the allegation did not fall within the investigation’s scope.

“These allegations do not establish a campaign finance violation; the appropriate place for an attorney conflict of interest concern to be discussed and reported is by contacting the Bar Counsel or Disciplinary Counsel,” the report states.

Sorrell said the investigation was “driven from a politically partisan position.” He decried the “tens of thousands of dollars” of taxpayer money that it will end up costing.

“I think it’s unfortunate that we had to expend this much taxpayer dollars to do this, but my own personal integrity and the integrity of my office are of upmost importance to me. So if that’s the price of letting Vermonters of all political stripes know of my integrity, I’m fine with that,” he said.

Sorrell, the longest-serving attorney general in state history, announced last September that he would not seek re-election. He was already facing the Little investigation and a strong challenge for the post from Donovan when he made the announcement in September.

This story was originally published by the Vermont Press Bureau, and republished here through a partnership with the bureau.