11/18/2011 12:18 pm ET Updated Nov 18, 2011

Mitt Romney Supporters Broke Campaign Finance Law In 2002

WASHINGTON -- When Mitt Romney first ran for governor in Massachusetts, his friends pulled out all the stops, including going so far as to break campaign finance laws, according to a new story out of the Boston Phoenix.

In the final weeks before the 2002 election, Romney's friend from Bain & Company Robert Manginn and Romney donor John Childs contributed $25,000 each to an account set up by their lawyer. The lawyer then funneled the money to a D.C.-based front group named "Citizens for Good Government" to run radio ads calling on supporters of the Green Party candidate Jill Stein to vote for Romney instead. The contributions violated Massachusetts law requiring all groups making independent expenditures to properly disclose the source of the funds.

This story was reported by David Bernstein in the Boston Phoenix on Friday:

Maginn worked with Romney at Bain for almost two decades, and has served as national co-chair of his presidential fundraising team. Maginn serves in the same capacity for Brown's Senate campaign. ...

In the final days of that 2002 race, Maginn, along with deep-pocketed GOP donor John Childs, secretly funded a radio ad urging supporters of Green Party candidate Jill Stein to vote for Romney. Maginn and Childs each funneled $25,000 through an attorney to a Washington front group, avoiding disclosure requirements for ads in the final week of an election.

Maginn and Childs fessed up to the dirty trick after the election, when the state Office of Campaign and Political Finance (OCPF) traced the money to them. They were penalized with a laughable $500 fine.

This incident closely resembles a recent scandal involving a donor to Restore Our Future, the super PAC that is supporting Romney's presidential bid. That scandal involved another of Romney's Bain buddies, Ed Conard, contributing $1 million to a shell corporation, W Spann LLC, which in turn contributed $1 million to Restore Our Future in an effort to obscure the original source of the money. Conard was forced to come forward as the man behind the contribution after W Spann LLC shut down so it would never have to file an annual corporate disclosure, which would have included the names of senior officers.

While Manginn and Childs were forced to identify themselves and pay a small fine in 2002, their actions would now be totally legal on the federal level. The Supreme Court's Citizens United v. Federal Election Commission (FEC) decision that allowed corporations and unions to spend freely on independent expenditures also freed certain nonprofits to act in the same way. These nonprofits are protected by law from disclosing their donors. Also, a super PAC, which would have to disclose their donors, could receive a contribution from a non-disclosing entity like an unidentified LLC or a nonprofit. In short, donors who want to hide their identity now have many legal avenues to do so.

Even before the Citizens United decision, the FEC gutted disclosure rules. Back in 2007, the agency decided a rule requiring all entities making independent campaign expenditures disclose how those expenses arre funded only applied when funds are specifically earmarked for a particular independent expenditure. Since the FEC issued this rule, no group has received a donation that would qualify as a specifically earmarked contribution, according to filings, and no money has been disclosed.

CORRECTION: This article was changed to reflect that Robert Manginn worked at Bain & Company, not Bain Capital.

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