An investigation by the Maryland State Board of Elections has found that the watchdog group Change Maryland engaged in “exploratory activities” to benefit a possible run for governor by its founder, Larry Hogan, now the state’s Republican nominee.
But in a letter made public Thursday, the board’s staff dismissed two formal complaints about Hogan’s relationship with the group, saying that Maryland has few rules governing exploratory bids and that the board has no authority to regulate them.
Among the activities that benefited Hogan was a poll commissioned by Change Maryland in September that tested his standing against Democratic candidates for governor, including Lt. Gov. Anthony G. Brown, now the Democratic nominee. Hogan, an Anne Arundel County businessman, declared his candidacy for governor about four months after the poll.
Two of Hogan’s GOP primary rivals — Harford County Executive David R. Craig and Del. Ronald A. George (Anne Arundel) — filed a complaint in May alleging that Hogan had illegally benefited from the resources of Change Maryland, a group that kept a critical eye on the administration of Gov. Martin O’Malley (D) through occasional studies and frequent Facebook postings.
Hogan vigorously denied wrongdoing.
“We always viewed this as a politically motivated complaint and assumed it wouldn’t go anywhere,” Hogan spokesman Adam Dubitsky said Thursday. “I guess the board agreed.”
From the time of its founding in 2011, Change Maryland had used its resources primarily “to promote its chairman,” the complaint alleged. Of particular concern was that the group did not disclose its donors and expenditures, as a campaign organization would be required to do. Craig and George also said that donors did not realize they were boosting Hogan’s political fortunes when they gave money to his watchdog group.
On Thursday, Brown’s campaign manager, Justin Schall, took a shot at Hogan, saying it was time for him “to stop hiding his secret donors.”
“Maryland voters deserve to know the truth,” Schall said. “Even his Republican opponents asked Hogan to come clean and disclose who has been funding his campaign these last three years.”
The elections board staff said the legislature had never given the board regulatory authority over potential candidates who are “testing the waters” — authority that George said the board should have.
“I think it’s definitely something that has to be done, or we’re going to see more of this,” he said.
House Speaker Michael E. Busch (D-Anne Arundel) said the legislature will consider addressing the situation during the session that begins in January.
In addition to the complaint by Craig and George, the board also dismissed a similar complaint regarding Change Maryland brought by a Baltimore-area couple,
Change Maryland was set up in 2011 as a limited liability company with Hogan as the sole owner. Its stated purpose, according to a filing with the state, was “to engage in the business of making citizens aware of what is happening in their state government, identify bad policy and provide alternatives through social and earned media.”
After Hogan declared his candidacy, his campaign purchased the assets of Change Maryland, a move the campaign said allowed it to use the group’s information as it wanted. The campaign said it had valued Change Maryland’s assets at $79,720, based on a consultant’s review of the organization’s Facebook page, Web site and mailing list.
In its letter Thursday, the election board’s staff said that in addition to activities that supported its stated purpose, Change Maryland “did engage in exploratory activities for the benefit of Mr. Hogan.”
The letter cites the finding of an advisory committee on campaign finance established by Attorney General Douglas F. Gansler (D) in 2010 that, under current state law, the line between exploring a bid for office and becoming a candidate is “sometimes blurry.”
Potential candidates can engage in activities including “raising and spending funds for conducting surveys, polls, mailings or other activities in an effort to determine if the individual is a viable candidate” without setting up a campaign committee or disclosing donors and expenditures.
Gansler’s committee called on the General Assembly to give election officials the power to regulate exploratory bids, and recommended adopting rules similar to that of the federal government and other jurisdictions where “testing the waters” is a regulated activity.
Under federal law, someone exploring a run for office must become a candidate once he or she has spent more than $5,000. At that point, donors and expenses must be retroactively disclosed. Several states have other thresholds that trigger registration as a candidate. In the District, potential candidates must register an exploratory committee as soon as they begin testing the waters.
The poll commissioned by Change Maryland in September had Brown leading Hogan in a general election matchup, 46 percent to 32 percent. But a memo on the poll said the race was a statistical dead heat — 45 percent to 43 percent — among voters who had heard of both candidates.
In a Washington Post poll early last month, Brown led Hogan 51 percent to 33 percent among all registered voters in a hypothetical general election matchup.