Charlie Smithson, executive director of the IECDB, said his staff has informed him that Huck PAC did not file the Verified Statement of Registration (VSR) with his office within 15 days of making the $2,500 contribution to Team Vander Plaats. Filing a VSR is required if an out-of-state or federal committee makes a contribution in excess of $50 to an Iowa committee.

“Notice was sent to the PAC today concerning the alleged failure to file,” Smithson said. “Pursuant to Ethics Board rule 351-4.59(6) the PAC will be assessed a $25 fine. If the report is not filed within the next 10 days additional sanctions may be imposed.”

Those sanctions could include a letter of reprimand, an additional fine of up to $2,000 or a referral for criminal prosecution, although Smithson said these types of situations rarely escalate to this level of punishment.

The last disclosure form filed by Huck PAC with the IECDB was in July 2008.

A spokesman for Huck PAC did not respond to a request for comment by the Iowa Independent.

UPDATE at 4:30 p.m. — David John, deputy director for Huck PAC, has confirmed that the disclosure violation was the result of a “small oversight by our accounting firm, which has since been corrected.” The form has now been turned in, John said.

Burt was arrested Feb. 11 in Ankeny after a night of drinking that began at a reception at Embassy Suites in downtown Des Moines that was paid for by the Iowa Pharmacy Association (IPA). The reception was attended by 20 lawmakers and Gov. Chet Culver.

Iowa law dictates that lobbyists file disclosure reports within five business days following the date of receptions they host during a legislative session where lawmakers are invited. The IPA only filed disclosure reports for the February event Wednesday, after reporters began asking questions.

Iowa Citizens for Community Improvement, a Des Moines-based activist organization, said while the media and political observers focus on Burt’s bad behavior, the real scandal is Iowa’s lax disclosure laws.

“This lack of disclosure and transparency is clear proof that the state of Iowa needs comprehensive campaign finance reform and clean election laws to restore the credibility of our electoral process, including campaign contribution limits and public financing of elections,” said Iowa CCI Board President Barb Kalbach.

In 2005, state lawmakers voted to strip oversight powers from the nonpartisan Iowa Ethics and Campaign Disclosure Board, giving the power instead to the state House and Senate ethics committees. Iowa CCI believes the direct result is a downturn in reports being filed.

There were 117 “Session Function” reports filed in 2005. That number dropped to 101 in 2006 and 104 in 2007. By this year, only 90 reports were filed concerning lobbyist-sponsored functions held during the legislative session where all lawmakers were invited.The total amount of money spent during the session on these receptions went down each of the last three years, until 2009, when it jumped from $194,848 to $235,828.

Allowing legislators to have control over parties designed to lobby them is a recipe for disaster, CCI contends.

“What other profession in the state is allowed to regulate themselves?” said Ed Rethman, Iowa CCI member from West Des Moines.  “Are doctors allowed to license themselves?”

Charlie Smithson, executive director of the Iowa Ethics and Campaign Disclosure Board, said before the law was changed, disclosure reports were filed directly with his office. Smithson’s staff would also check the social calendar and call groups to make sure reports were filed on time.

When the law was changed, reports were filed directly with the legislative committees.

“When I became a secondary repository and oversight responsibilities were with the House/Senate Ethics Committees we discontinued our processes of ensuring the filing of reports as we no longer had enforcement jurisdiction,” he said.

Eric Rosenthal, a former chairman of the Linn County Republican Central Committee, has been the subject of an open investigation since November 2007. The charges, filed by former Linn County Republican Chairwoman Kathy Potts in the summer of 2007, stem from checks written by the county party to Rosenthal. He filed in March as a candidate for Linn County Supervisor.

Mike Robinson, a former chairman of the Linn County Democratic Central Committee who suspended his campaign for a state legislature seat in House District 35 in September, is also under the scrutiny by the state agency. Robinson called off his candidacy citing personal reasons prior to the ethics complaint being made public.  The suspension of his campaign, however, was not done early enough for the candidate’s name to be removed from the ballot.

Robinson’s investigation involves the possible co-mingling of personal and campaign funds, as alleged by former members of his campaign committee. Robinson did not respond to Iowa Independent’s request for comment.

Charlie Smithson, executive director of the Iowa Ethics Board, indicated that a formal investigation into the complaints involving Robinson was initiated after a review of his October campaign finance report.

Rosenthal’s alleged violations were the subject of a state panel review last week. While it was hoped that the review might shed light on the case which has been active for nearly a year, Smithson told the Iowa Independent in an e-mail earlier this week that the “situation is not resolved.”

“We have received responses from Mr. Rosenthal and are in the process of looking through that information and checking with vendors and the Linn County Republican Party,” Smithson said. “Unfortunately, we are also now in the middle of the 2008 election with issues coming up that are needing immediate attention.”

Smithson said the board plans to continue the investigation into the allegations, but does not expect the situations to be resolved prior to the November general election.

“In order for the Board to do its due diligence and to be fair to Mr. Rosenthal and Ms. Potts, we are going to do a full and thorough investigation and we are not going to rush any results,” he said. “It would have been useful if this complaint would have been received closer to 2004, and it would have been useful for responses from Mr. Rosenthal to come earlier than June and October of 2008.”

Potts admits that her own hesitation to formally file the complaint against Rosenthal may have presented an obstacle to those who now have to investigate the matter, but she still feels that waiting to officially file was the appropriate thing for her to do.

“I spoke face-to-face with Mr. Smithson in 2005 shortly after I was elected as chair of the Linn County Republicans,” Potts said. “At that point, I told Smithson about the discrepancies and asked for his advice. He told me that since the Democrats were not complaining and because he was now aware of the situation, I didn’t have to do anything else.”

Potts said that she also addressed the matter internally with Republican Party leaders and made an appeal for them to resolve the situation.

“A year later — in 2006 — I resigned because I couldn’t get the committee to do the ethical thing,” she said.

The complaint, which references county party disbursements from the 2004 general election cycle, was filed by Potts in the summer of 2007. The state agency launched its official investigation in November with a letter requesting information and documents from Rosenthal.

That initial letter was answered by John Daufeldt, Rosenthal’s attorney, with a promise for further information in January or February of 2008. The promised response, however, was not given to the state until June. A follow-up by the state garnered more information from Rosenthal’s attorney earlier this month.

Rosenthal said he has not purposefully dragged his feet in responding to the charges, but was overwhelmed by family medical crisis involving both his wife and mother. He adds that much of the information the state needed was difficult to find due to the passage of time.

“I had dramatically scaled back my full-time practice of real estate to deal with these health issues prior to the notice of this complaint on Nov. 16, 2007,” Rosenthal wrote in e-mail to Iowa Independent. “I had to file my nomination papers from the hospital. Friends collected the signatures and the hospital notary notarized the nomination petition.”

Rosenthal said that because he had been involved with the effort to expand the Linn County Board of Supervisors from three to five members and to have all members elected by district (in lieu of at-large), he “wanted to continue to change county government to make it more representative and responsive.”

The fact that Rosenthal received funds from the county Republican party is not in dispute. The investigation focuses on if those funds, which Potts claims were given to Rosenthal for distribution to vendors, were used by Rosenthal for personal benefit.

Documents obtained from the Ethics Board show that Rosenthal presented the Linn County Republican Central Committee with reimbursement forms for two invoices from a local vendor. Potts has stated that shortly after her election as chair, the vendor phoned and requested payment for those same invoices, totaling roughly $600.

“I told him that, according to the books, we’d already paid those bills,” she said. “But he was adamant that he had not been paid so I began to look into it.”

She found a check, written by the Linn County Republican Treasurer to Rosenthal, that had been deposited into his personal banking account. Via his attorney, Rosenthal has not denied depositing the check, but maintains that not only was he owed additional reimbursements, but that disagreements on a county level contributed to the situation.

“I understand why the current discussion of these events focuses on the political ramifications of the investigation,” he said. “However, the deep disagreements within the committee at that time stemmed primarily over, one, how the Sept. 1, 2004 effective date of McCain-Feingold was to be applied at the local level; and, two, prior committee practices that allowed for the expenditures now questioned.”

According to Rosenthal, he had “many unreimbursed expenses as chair,” including furniture for the 2004 headquarters and out-of-town mileage.

Rosenthal, who has used his background in accounting in marketing pushes for his supervisor bid, said the issue “will be resolved by the Board without regard to the political ramifications, as it should be.” He added that this is the same approach he “would advocate professionally,” and the reason why he has “been reluctant to air my side of the story, regardless of the political consequences.”

Iowa's 527 groups have been active this year, and could help determine which party controls the Iowa legislature.

Two of Iowa’s largest and most influential 527s have been hard at work lately, using loopholes in the law to help spread their messages and advance their political agendas, though most voters may not even know the groups exist.

The activities of 527s by law can not advocate for or against a specific candidate, but often they will try to shape opinion of a political candidate or party in the context of a specific issue. Such “issue advocacy” won’t explicitly tell you to elect or defeat a particular candidate, but the advocacy group’s view of the candidate’s stance on their issue is clear.

The most recent case of this comes from a Des Moines-based 527 called Midwest Enterprise Group. Earlier this month the group sent out mailers condemning Republican Jarrett Heil, who is running for the Iowa Senate in District 22, for supporting a nationwide sales tax. The mailings did not trigger campaign finance law because they never said whether voters should or shouldn’t support the Republican, stating only that they should call him and “tell him Iowa families are already paying enough taxes.”

“[527s] are involved politically, but they aren’t technically campaigning,” said Charlie Smithson, executive director of the Iowa Ethics and Campaign Disclosure Board (IECDB), the government agency that polices campaign finance in the Hawkeye State. “They have to be careful about what they say.”

As long as 527s (named after the tax code that governs them) avoid “express advocacy,” they are not governed by campaign finance laws. This means they can accept unlimited contributions from corporations to help spread their group’s message.

“You can do an awful lot of talking and have a huge influence on an election without expressly advocating,” Smithson said. “That’s why people get frustrated with these types of organizations.”

In Iowa, there are five 527s registered with the IECDB, with the two biggest and most influential being Midwest Enterprise Group and the Iowa Leadership Council. There could be many more, but tracking the organizations can be difficult.

For the Democrats

Midwest Enterprise Group was formed in August 2007 with the purpose of “educating citizens about an array of civic issues,” according to paperwork filed with the Internal Revenue Service (IRS). The Center for Responsive Politics reports that in 2008, the group raised nearly $457,000, almost entirely from corporations.

Midwest Enterprise Group sent out this mailer attacking Republican Jarrett Heil for his position on a nation wide sales tax.

Gambling interests make up many of the group’s donors, including Riverside Casino and Golf Resort LLC, Ameristar Casinos and Harrah’s Operating Co. Other big donors include Iowa Health Care Association, which gave $25,000 last September and another $60,000 this summer; MidAmerican Energy Co., which gave $25,000 last year; and Anheuser-Busch Cos. Inc., which has given $10,000 this year.

Surprisingly, some of the group’s money comes from companies and individuals long considered to be supportive of Republicans, such as Hawkeye Renewables, the company started by Bruce Rastetter, who has been mentioned in some political circles as a potential Republican candidate for governor in 2010. The company has given $25,000.

According to its IRS filings, in 2008 the group donated $115,000 to the Iowa Democratic Party Building Fund. Smithson said this is legal because each party’s “building fund” is a separate account that cannot be used to advocate for candidates.

“They can do things like pay mortgage or rent, certain overhead costs, but cannot give to candidates or use for express advocacy,” he said. “It’s a segregated fund both parties have.”

So while the group cannot give money directly to the party or its candidates, it can use corporate money to help pay for other expenses the parties may incur. That way parties can spend their money where it counts: getting their candidates elected.

The director of Midwest Enterprise Group is Melissa Peterson, a paid lobbyist with the firm Eide & Heisinger LLC. According to her bio on the firm’s Web site, Peterson previously worked in the office of state Senate Majority Leader Mike Gronstal and served as finance director for the Iowa Senate Democratic Campaign from 2004-2006.

Last August, Peterson incorporated her own consulting firm, MP Advantage Inc. Since then, one of the only other expenses Midwest Enterprise Group has incurred is a monthly fee to MP Advantage for “consulting services” or “fundraising services,” thus far totaling nearly $60,000.

Its only other expenditures are for legal services, which are provided by Perkins Coie, an international law firm whose clients include nearly all Democratic members of the United States Congress and several presidential campaigns, including Barack Obama’s.

Peterson did not respond to repeated requests to comment for this story.

For the Republicans

In 2008, the Iowa Leadership Council has raised $476,000 and spent nearly $440,000, according to the Center for Responsive Politics. Its biggest donor was Reynolds American Inc., parent company of RJ Reynolds Tobacco Co., which gave $40,000. Other prominent donors include corporations that also gave to Midwest Enterprise Group, including Hawkeye Renewables and Iowa Health Care Association.

Several casinos also gave the 527 money, but not nearly as much as they gave to their Democratic counterpart. This could be due to the fact that state Democrats helped pass a statewide smoking ban that exempted casinos.

House Minority Leader Christopher Rants, R-Sioux City

This group was started in 2006 with a $1,000 donation from House Minority Leader Christopher Rants. At the time, he said the group would serve as the first conservative counter to liberal national organizations such as MoveOn.org. Prominent Democrats condemned the group, with House Speaker Pat Murphy telling the Cedar Rapids Gazette on Sept. 2, 2006, that the group takes “payoff money” from gambling, predatory lending and tobacco interests.

From July 1 to Sept. 30, Iowa Leadership Council spent $169,804 on polling and research. The IECDB’s Smithson said the group is then legally permitted to turn that information over to candidates or parties, a major difference between Iowa campaign law and federal campaign law.

“Iowa does not regulate coordinated activities between a 527 and a candidate, but 527s would have to be careful what they gave to the candidate to avoid it being an in-kind contribution which would trigger campaign laws,” he said.

Polling is considered informational and not a form of express advocacy, Smithson said.

So while corporations can’t donate to a candidate to pay to conduct a poll in the field, they can donate to a 527 that can do the poll and give the information to any candidate of its choosing.

The contact person listed for the group is Allison Kleis, who works in Rants’ legislative office. She did not respond to a request for comment.

Some of the research produced by the Iowa Leadership Council can be found on Web sites — like this one — which the group created to target select House Democrats.