Big Power Company Looks To Be Pursuing Best Legislature Money Can Buy
Consumers Energy a big giver to 'dark money' group that targets pro-consumer legislators
Editor's note: Bill Zeiser is the editor of RealClearPolicy and a Hillsdale city councilman representing the third ward. Disclosure: Zeiser is a supporter of Adam Stockford, one of the candidates mentioned below.
People who live in Michigan’s 58th House of Representatives district have almost certainly seen social media ads for Republican state representative candidate Andrew Fink, sponsored by a lobbying group called Citizens for Energizing Michigan’s Economy, or CEME.
The group, which is funded by the energy industry, is also flooding the district with mailers. Some residents say that they have received as many as ten Fink mailers, with five of them from CEME. They are also running TV commercials and sponsoring widely disseminated internet ads for Fink — something previously unheard of in the rural district which comprises Hillsdale and Branch counties.
The ads make no mention that Fink is running for office. Instead, they ask people to call their representatives and tell them to support Fink’s “plan” to defend Michigan’s Christian conservative values. The plan is not explained in the ads, nor on a CEME website about Fink, despite the fact that at least one of the ads encourages readers to visit the site to learn more.
CEME is what is sometimes called a “dark money” organization. Established under section 501(c)(4) of the federal government’s Internal Revenue Code, such groups are allowed to receive unlimited donations from corporations and individuals in order to fulfill a mission of “social welfare.” These organizations are distinct from political campaigns which have strict limits on how much money they can receive from donors.
In contrast, these groups are only required to disclose very limited information about their donors, which is how those that do not make disclosures earned the “dark money” sobriquet. They are also allowed to spend unlimited money on lobbying, provided that they do so in support of their social welfare mission. That is why the ads about Fink mention a “plan,” but never say what he is running for, or even that he is a candidate.
Notwithstanding the obscure sources for its funding, CEME has deep pockets. The Energy and Policy Institute reported that according to documents filed with the Michigan Public Service Commission, Jackson-based Consumers Energy contributed $43.5 million to CEME between 2014 and 2017. An August 2018 story from the Michigan Campaign Finance Network reported that CEME had become the state’s largest buyer of TV ads for the 2018 state legislature election.
CEME has not escaped criticism. A 2018 complaint filed with the IRS alleged that like ads about Fink, ads placed for a 2018 campaign to be more about a candidate than a broad "social issue." The allegation that CEME skirts campaign finance laws was followed by a January 2019 mandate by the Michigan Public Service Commission requiring Consumers Energy to cease donations temporarily to CEME and other 501(c)(4) groups.
Many residents are left bewildered by the onslaught of ads. One woman’s publicly viewable Facebook post remarked that she had been away for a week and returned to five Fink mailers. “Someone is spending a lot of money to get this guy elected, but what’s their reason?” she wondered. The ads were remarkable enough to prompt a story in the Hillsdale Daily News and the Coldwater Daily Reporter, the 58th district’s local newspapers.
While the reasoning behind CEME’s show of support for Fink is unclear, past advocacy efforts from the group have centered around preventing deregulation of the energy industry. The group’s interest in Fink’s Christian conservatism seems doubtful; they are sponsoring nearly identical ads for several other candidates from throughout the state, including Democrat Ranjeev Puri, whom they tout as “an experienced leader who worked for President Barack Obama.”
Tax records show that CEME has donated hundreds of thousands of dollars to organizations on both sides of the aisle, such as the Progressive Advocacy Trust, Faithful Conservatives for Michigan, and both the Democratic and Republican Parties. CEME’s president is listed as Howard Edelson, well-known Democratic strategist and manager of former Michigan Gov. Jennifer Granholm’s successful 2006 reelection campaign.
In a statement posted on his campaign Facebook page, Fink dismissed speculation as to CEME’s motives, writing, “Opposition to my campaign is naturally going to raise questions about anything good for our campaign. Sometimes even going so far as to convince a newspaper it’s front-page news. … If someone wants to say positive things about me because of my support for Michigan jobs and Michigan-based energy, that’s fine by me.”
During a July 24 debate with his three competitors for the Republican nomination, Fink was questioned by fellow candidate Adam Stockford about CEME’s support. Fink stressed to Stockford, Hillsdale’s mayor, that he was unaware of CEME’s reasons for supporting him, but noted that it is the company’s First Amendment right to do so. But in a dramatic turn, candidate Daren Wiseley seized on Stockford’s line of questioning to reveal that according to campaign finance disclosures, Fink received additional funding from Consumers Energy.
Wiseley asked, “Mr. Fink, if you don’t know anything about the advertising that Consumers Energy is running for you, why did you take $1,500 from them?,” asked Wiseley. Fink attempted to distance Consumers’ support from CEME’s, saying, “I never said I don’t know anything about the ads that Consumers is running for me, because Consumers isn’t running them. A group called Citizens Energizing Michigan’s Economy is running them.” Fink denied knowledge of who funds CEME. “Five seconds on Google will tell you,” Wiseley shot back.
Reached for comment, Wiseley expressed frustration at CEME’s ongoing involvement in political races, and emphasized the group’s connection to Consumers Energy. “A lot of folks don’t know the history of Consumers Energy’s spending,” he said. “In 2018, they funneled more than a million dollars through CEME to defeat Gary Glenn, a representative who wanted to reform utilities to lower energy prices.”
Wiseley speculated that CEME is a vehicle for Consumers Energy to alter the political complexion of Michigan to favor its interests. “Consumers researches before they spend a few hundred thousand and they don’t miss when it comes to picking moderate Republicans or liberal Democrats. Of all the lobbyist groups backing Fink, they’re the most accurate. They are a massive corporate special interest with the resources to fully investigate candidates’ backgrounds. Our district needs a strong conservative and Consumers’ spending shows that Fink isn’t it.”
Stockford was not convinced by Fink’s invocation of the First Amendment.
“Free speech is essential, as is the freedom to ask who is spending tens of thousands to try and buy influence in our small rural district,” he said.
Stockford also pointed out that the group shouldn’t be directly supporting Fink, according to IRS regulations.
“Fink admitted in the debate that this group is running ads ‘for him,’” said Stockford, “but the only reason they are allowed to spend unlimited money on the ads is that they are supposedly for a ‘plan,’ and not a candidate.”
He also expressed incredulity at Fink’s claim to have been unaware of CEME’s ads and effectively unable to do anything about the speech of an outside group.
“Had this happened to me, as Fink maintains happened to him, I would have disavowed the commercials and mailers from day one. Democrat or Republican, energy lobbyists have no friend in me,” Stockford said.
Stockford added that the bipartisan nature of CEME’s political spending should make voters all the more suspicious of the group.
“When an organization plays for both sides, that means only one thing — it is concerned not with principles, but power. CEME and Consumers Energy want power in Lansing,” Stockford said.
Katelyn Carey, a spokeswoman with Consumers Energy, said in an emailed statement that the company has not donated to CEME for the 2020 election.
“I want to be clear Consumers Energy has not donated any money to CEME this election cycle,” said Carey. “They are a separate 501(c)(4) and independent organization that is not part of Consumers Energy.”
Reporting from MiBiz noted that Consumers Energy is banned from contributing to 501(c)(4) groups like CEME until at least the end of this year.
Carey said that Consumers Energy was “previously engaged in the political process” in support of “pragmatic policies that are focused on safe, reliable, and affordable energy for Michigan.”
She also emphasized that the utility’s past contributions to CEME were made via “funds driven from our shareholders—people buying stock—and not from customer bills.”
Campaign finance disclosure statements show that Fink received $1,500—the maximum allowable donation — from a Consumers Energy-run group political action committee called Employees for Better Government.
A webpage which characterizes Consumers Energy as “very active in the political process” describes EBG as a way to “give employees a voice in the political process.”
The page says that political donations are directed by “an employee-run steering committee that is independent of the company’s officers and boards of directors.” The committee’s decisions on donation recipients include factors such as “representation of a state or district where the company has a facility or large concentration of employees,” and candidate voting records on issues important to Consumers Energy.
For now, CEME’s motivations remain opaque. The only contact listed on its website is a mailing address shared with a campaign finance lawyer in Okemos.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.