The Washington PostDemocracy Dies in Darkness

Hogan raising ‘dark’ money to boost his agenda, stop costly education plan

Gov. Larry Hogan (R) greets diners at Chick and Ruth’s Delly in Annapolis.
Gov. Larry Hogan (R) greets diners at Chick and Ruth’s Delly in Annapolis. (Marvin Joseph/The Washington Post)
Placeholder while article actions load

Maryland Gov. Larry Hogan is reprising his role as a grass-roots agitator, asking top supporters to raise at least $2 million for a lobbying and public relations campaign that would herald his Republican agenda and try to rouse opposition to Democratic priorities.

A fundraising memo obtained by The Washington Post emphasized that Hogan’s new super PAC and a related nonprofit organization “can accept unlimited donations.” The campaign will target a costly plan embraced by the Democratic-majority legislature to address inequity in public schools and deep disparities in student achievement, among other things.

Campaign finance watchdogs said the governor’s solicitation illustrates a troubling trend that has escalated over the past decade, as public officeholders find methods to raise unlimited amounts of money — some from undisclosed donors — in ways often prohibited for traditional candidate committees.

The second of six fundraisers listed in the memo took place in Annapolis earlier this month, with donors asked to give as much as $10,000 apiece.

“People who want access and influence over a public official are going to open their wallets and write a check. And they don’t really care” into which account “the elected official is depositing that check,” said Paul S. Ryan, vice president of policy and litigation at the nonprofit Common Cause, a government watchdog group. “The law is not up to date in most places with this practice.”

Entities similar to Hogan’s caused political trouble for D.C. Mayor Muriel E. Bowser (D) in 2015 and New York City Mayor Bill de Blasio (D) this year, after government-transparency advocates said the fundraising activity can blur ethical boundaries. Controversy over a political nonprofit aligned with former Missouri governor Eric Greitens (R) contributed to his downfall in 2018.

Roughly one-third of sitting governors have ties to such outside influence groups, according to a report last year by Citizens for Responsibility and Ethics in Washington.

Big money for the White House and for Congress. Now for D.C. city hall, too?

In Maryland, contribution limits and disclosure rules constrain how much money can flow to accounts controlled by candidates. But those rules no longer apply to Hogan, because he is not running for office, said Jared DeMarinis, campaign finance director for the Maryland Board of Elections.

Hogan is term-limited, and he decided this spring not to challenge President Trump in the 2020 Republican primary. Like many states’, Maryland’s campaign finance laws have not been updated to cover advocacy by an elected official who is not a candidate.

“This is a new model,” DeMarinis said.

The governor is trying to accomplish indirectly what he has largely been unable to do from inside the State House: pressure the General Assembly to side with him on contentious policy questions. Democrats have veto-proof majorities in both chambers and have easily overturned Hogan’s vetoes of bills to raise the minimum wage, restore voting rights to felons and permanently protect oyster sanctuaries, among other things.

“He’s not going to be able to find enough like-minded legislators among Democrats, unless he pressures them through the public,” said Mileah Kromer, a political science professor at Goucher College. It’s the tool “left in his arsenal,” she added.

The effort has drawn concerns from critics, such as Ryan, who note that people who want to curry favor with the governor could donate unlimited sums with limited public transparency.

Hogan declined to be interviewed about the fundraising push, as did his longtime supporter Thomas Kelso, who is chairing the campaign. “We will do whatever we can to advocate for the Governor’s agenda,” Kelso said in a statement.

Boosters hope to raise $2 million by year’s end for the super PAC, the Change Maryland Action Fund, and the nonprofit organization, Change Maryland. The latter grew out of the anti-tax crusade Hogan launched on Facebook in 2012, which ultimately powered his ascent to the governor’s mansion.

The money aims to build public support for Hogan’s second-term goals, including anti-tax messaging tied to the education plan, redistricting reform and installing toll lanes on Interstates 495 and 270.

Donors can expect their money to be “spent to direct the public to call, email, crowd hearing rooms and put pressure on their legislators,” the memo said, adding that because both accounts can accept unlimited donations, “we won’t have nearly the amount of confusion that we did with the different entities during the campaign.”

“We are switching from an electoral focus to an education and mobilization effort,” the memo said.

Senate President Thomas V. Mike Miller Jr. (D-Calvert) and House Speaker Adrienne A. Jones (D-Baltimore County) declined to comment on the effort.

Other Democrats expressed outrage, saying Hogan should use the considerable power of the governorship to work with the legislature to shape policy details, not engage in an election-style public persuasion campaign framed in bumper stickers and catchphrases.

“The notion that a governor would spend even a second on this, rather than focusing on the fact that Maryland eighth-graders are doing math well below the national average is abhorrent,” said state Sen. Bill Ferguson (D-Baltimore City), an outspoken advocate of the education plan who is on a committee charged with figuring out how to pay for it.

“What’s his plan?” Ferguson said. “We’ve heard nothing but ‘no.’ ”

Hogan spokesman Michael Ricci said the governor supports the mission of the education plan but is trying to force political leaders to be upfront about how it will affect residents’ pocketbooks.

“He’s simply asking them to do their job,” Ricci said.

Landmark Maryland education bill to become law without Hogan’s signature

Hogan has proved adept at political branding. His 2014 campaign-trail attack on a storm-water-management fee he derided as “the rain tax” helped pressure the legislature to partially repeal it after he took office.

He has already ramped up a direct mail and social media campaign to rail against funding for the education plan, named for William E. “Brit” Kirwan, the former University of Maryland System president who chaired the advisory group that spent years developing it.

Hogan has called the plan, which could cost up to $3.8 billion a year, “well meaning” but “half-baked” and too expensive. He labeled it “The Kirwan Tax Plan,” even though no public official so far has proposed increasing taxes to pay for it. (To partially finance the plan, lawmakers have floated legalizing and taxing recreational marijuana use.)

The governor has circulated memes on his Facebook page warning of doomsday increases, any one of which would generate $3.8 billion in state tax revenue: income taxes up by 39 percent, sales tax up by 89 percent and more than a fivefold increase in the property tax.

Such rhetoric has drawn howls from Democrats, including Maryland Democratic Party Chair Maya Rockeymoore Cummings, who accused the governor of collecting “dark” money to finance a fearmongering campaign to manipulate public opinion.

“The more you can disconnect the conversation from facts and real figures,” she said, “the more you can manipulate the public.”

To build the case that Maryland needs to overhaul its education system, the Kirwan commission cites data showing, among other things, that only 40 percent of Maryland high school graduates can pass a standardized Algebra 1 exam and read at a 10th-grade level.

It recommended free preschool for every 4-year-old; training teachers better and paying them more; expanding resources for poor and special-needs students; enhancing career and technology training; and implementing tougher accountability standards. To implement the plan, the state would have to increase education spending by roughly 22 percent over 10 years. Local governments would also increase their spending.

A committee that is working on ways to pay for the plan includes Hogan’s budget secretary, David R. Brinkley. The group has not yet issued recommendations.

Public opinion in Maryland sends conflicting signals to policymakers, said Kromer, who directs the Goucher Poll. About two-thirds of residents said Maryland spends “too little” on public education, but a majority also think their taxes are too high.

The Change Maryland Action Fund was created in February, as the governor was giving “serious consideration” to challenging Trump. The super PAC can accept unlimited donations but must disclose donors and expenditures to the IRS, experts said, and it must list the names of donors with state ethics officials if it engages in lobbying.

The Change Maryland nonprofit organization, a 504(c), can accept unlimited donations and generally is not required to disclose donors.

President Barack Obama similarly morphed his 2012 campaign organization into a political nonprofit, Organizing for America, that is exempt from donation limits and disclosure laws. It was the first time a sitting president created such a group, and his supporters promised to disclose donors anyway.

Although some states — notably California — have passed regulations to limit these organizations’ influence on state-level matters, “We’re seeing a proliferation of these officeholder-controlled nonprofits that operate outside campaign finance rules and seem to be used to curry favor with the officeholder,” said Adav Noti, senior director of the Campaign Legal Center.

In Maryland, the coalition backing the education reforms has no plans to respond to Hogan’s advocacy with a corresponding fundraising push. Instead, it has planned 32 community forums across the state to discuss shortcomings in local schools and rally support to fix them.

“We hope to engage hundreds and thousands of people in their own communities,” said Sean Johnson, political director with the Maryland State Education Association, which is part of the broader coalition.

“There is a growing consensus we have a crisis,” he said. “People expect their leaders to resolve it.”

Maryland Gov. Larry Hogan promises business leaders he will ‘battle’ Democrats

Hogan won’t spend millions earmarked by Democrats for building schools, other priorities

Opinion: The river of dark money just got darker and wider

Local newsletters: Local headlines (8 a.m.) | Afternoon Buzz (4 p.m.)

Like PostLocal on Facebook | Follow @postlocal on Twitter | Latest local news