Venture Investments Inc. Wichita Crossing LLC. Regency 21 LLC.
In Wichita City Council races this year, vaguely named LLCs and corporations pepper the donation sheets of candidates. Since the council changed its campaign finance policies in 2015 to permit corporations and businesses to donate in city elections, these sources now make up a significant portion of campaign contributions — in one case, over 60%.
This influx is what concerned the League of Women Voters Wichita-Metro when it spoke against the policy change six years ago, according to Carole Neal, the organization’s voter service chair.
“City elections are supposed to be nonpartisan and are supposed to represent not only their district, but the whole of Wichita,” Neal said. “And any time you have a large amount of money influx into campaigns, it doesn’t hold everybody equal.”
The majority of corporate and LLC donations so far in this year’s City Council elections went to incumbent candidates, according to a review of the candidates’ July 2021 primary expenditure reports by The Wichita Beacon. The next financial disclosure is due Oct. 25, a week before Election Day.
Using the Kansas secretary of state’s business entity search, The Beacon found developers and owners of construction companies in Wichita made up about 46% of all LLC and corporate donations to incumbents. In several cases, the same people are associated with multiple LLCs that donated the maximum amount — a legal tactic, but one City Council candidates challenging incumbents found concerning.
“I don’t really know that it’s fair that people are able to max out in every single one of their LLCs,” said Maggie Ballard, who is running in the District 6 race. “That just seems a little strange to me.”
Why did the policy change?
The city’s Law Department recommended the council change the campaign finance policy in 2015, according to City Attorney Jennifer Magaña. In addition to corporations, the policy permitted donations from political action committees, partnerships and business groups.
The change was supposed to put the city in compliance with decisions in two U.S. Supreme Court cases — Citizens United and McCutcheon v. Federal Election Commission, she added in an email to The Beacon.
But neither of the cases legalized direct corporate or LLC campaign contributions in federal races, said Beth Rotman, the director of money in politics and ethics at Common Cause, a national good governance nonprofit focused on campaign finance and government accountability. In fact, contributions directly from corporations are still not legal at the federal level and in many states. Contributions from some types of LLCs are permitted in federal races.
“Usually if something isn’t allowed, it’s corporate,” Rotman said.
Kansas is one of 28 states that permit corporate campaign contributions.
Who are Wichita’s corporate donors?
About 46% of the LLCs and corporations donating to incumbents had ties to owners of construction companies or developers in Wichita. No challengers received donations from LLCs with ties to local developers or construction companies.
The majority of those donations went to District 3 Council Member Jared Cerullo and District 6 Council Member Cindy Claycomb.
One developer, George Laham, has connections to five separate LLCs and corporations that donated the $500 maximum to Cerullo’s campaign. These contributions alone made up 23% of all donations Cerullo received from January to July 2021.
Laham is president of Laham Development. In the past decade, the city granted about $41.25 million in economic development incentives to projects tied to Laham. He did not respond to a request for comment.
Claycomb has come under fire for receiving donations in past years from multiple LLCs associated with one developer, Dave Burk. This year’s expenditure report did not list any donations from Burk or LLCs associated with him.
But it did show several instances of construction company owners donating the maximum amount to her campaign using multiple avenues: their corporation, separate LLCs and as an individual. D. Craig Nelson, president of Conco Construction, gave $500 as an individual, while Conco Construction and DCNDDN, LLC — an LLC of which Nelson is a member — separately donated $500 each.
Conco Construction and Nelson did not respond to a request for comment.
The Kansas Campaign Finance Act permits individual companies to make campaign contributions, even if they have the same owner, said Mark Skoglund, executive director of the Kansas Governmental Ethics Commission.
“For example, someone who has multiple LLCs, as long as those LLCs are giving from their own capital, each LLC can make a campaign contribution in the name of the LLC,” Skoglund said.
District 3 candidate Michael Hoheisel and District 1 candidate Myron Ackerman said their campaigns had a policy of not accepting corporate or LLC money. Ballard received about $2,100 from nine corporations and LLCs, five of which were local businesses.
What does corporate money mean?
Donations from LLCs and corporations are nothing more than dollars to fund his campaign, Cerullo said.
“I’ve met with every single person who has donated me money, and I’ve told them to their face that your money will not buy my vote,” Cerullo said.
Council member Jeff Blubaugh, who voted to allow the 2015 policy change, wrote that he had seen “no change in influence or pressure” as a result of allowing corporate donations. District 1 Council Member Brandon Johnson also said a donor has never pressured him on a policy or vote.
The ethics policy the city passed in May does not preclude City Council members from voting on policies that involve campaign donors, Johnson said. But Claycomb added in an email that “no ethical council member would allow a campaign contribution to influence their vote.”
Johnson argued that City Council incumbents receive more corporate dollars because “you’ve had the chance to prove yourself as the type of leader you are,” Johnson said. Research shows that incumbents in state and federal races typically receive more donations, overall, than challengers.
But challengers Hoheisel and Ackerman expressed concern that corporate donations to incumbents sullied the campaign and policy process.
“I’m very cautious when the money gets involved, and one or two individuals or a couple of corporations can drown out the voices of some people who should count,” Hoheisel said.
The future of local campaign finance
When the City Council passed its ethics policy in May, council members also discussed local campaign finance reform.
Half the City Council candidates — including Hoheisel, Ackerman and Johnson — said they would support removing corporations and LLCs from the donor rolls, reversing part of the 2015 policy.
“If it’s one individual or married couple giving, I think that’s a great equalizer,” Johnson said. “It means we candidates have to work harder on the city level.”
Ballard said she’s concerned about LLC money in council elections but did not specify how she would change local campaign finance policy.
Claycomb wrote in an email that she would consider limiting campaign contributions from those who want to apply for city contracts.
But Cerullo said all donations, including those from corporate donors, were a vital part of his ability to run a campaign.
“The simple fact is, these elections aren’t free,” Cerullo said. “And I don’t have $50,000 of my own money to pay for these mailers, the polls that need to be done, the volunteers that need to be paid to help us door knock, the yard signs.”
