Grimes responds to news report raising questions about possible violations

syoungman@herald-leader.comAugust 19, 2014 

In response to Republican demands for more information, Democratic U.S. Senate candidate Alison Lundergan Grimes disclosed additional information Tuesday about her campaign's use of a bus provided at seemingly discounted prices by her father's company.

Grimes, Kentucky's secretary of state, disputed a news report Monday night that questioned whether her campaign had accepted illegal in-kind contributions from the company owned by her father, former Kentucky Democratic Party chairman Jerry Lundergan.

Grimes campaign spokeswoman Charly Norton dismissed the article by Politico as a "hit job from the McConnell campaign."

Lundergan, an influential presence in his daughter's campaign, bought the campaign's 45-foot bus through a company called Signature Special Event Services just as Grimes began campaigning last summer.

A Politico review of reports filed by the Grimes campaign with the Federal Election Commission found that through June, the campaign had paid $11,000 to rent the bus for 24 days. That works out to about $456 a day.

"Officials at four bus companies said they typically charge $1,500 to $2,000 a day to rent a similarly sized bus, and Senate Minority Leader Mitch McConnell's campaign said it spent at least $2,200 a day to rent essentially the same bus during a swing earlier this month," Politico wrote. "That would amount to a savings of tens of thousands of dollars for the Democrat's campaign."

In statements to Politico and the Herald-Leader, Grimes campaign attorney Marc Elias disputed the suggestion that the campaign had paid below-market price.

"The law requires that the campaign pay 'the normal and usual fare or rental charge for a comparable commercial conveyance of sufficient size to accommodate all campaign travelers,'" Elias said in a statement provided by the campaign. "In determining the appropriate rate, the campaign obtained quotes for the rental cost of a comparable vehicle from other providers in the Kentucky and regional market, and arrived at a reasonable reimbursement cost. We have reviewed the campaign's methodology and agree that it complies with the applicable rules."

On Tuesday afternoon, the campaign released emails and letters from two transportation companies that had quoted it prices for bus rentals. The campaign said the price quotes were used to determine the appropriate amount to reimburse Lundergan's company.

In a letter dated Sept. 5, 2013, Staley Coach and Sales in Tennessee gave Jerry Lundergan an estimated cost of $150 to $175 a day for an H3-45 Star Coach, which is similar to the Grimes campaign bus. A message left Tuesday with Staley Coach and Sales was not immediately returned.

Another company, Northside RV in Lexington, said in a Sept. 27 email that it would charge $5,050 to rent a "Class A Motor Home" for four weeks. At that rate, the motor home would cost about $180 a day.

The price quotes given to Lundergan do not appear to include the cost of gas or a driver, which were included in the price quotes obtained by Politico. The $456-a-day that the Grimes' campaign paid her father's company includes the cost of a driver, but not the cost of gas, Norton said.

Following the story by Politico, Republicans raised questions about whether Lundergan's company made illegal in-kind contributions to his daughter's campaign by providing its bus at discounted prices.

"Alison Lundergan Grimes may have violated federal law by taking an illegal contribution from her father's corporate interests. This is a serious matter and should be addressed by Ms. Lundergan Grimes immediately," said Brook Hougesen, a spokeswoman for the National Republican Senatorial Committee. "Alison Grimes owes Kentuckians answers over the potentially illegal in-kind gifts and services, and should take questions on the matter today to clear up this legal matter."

The Politico story also listed other services provided by Lundergan's companies at costs that were significantly less than what McConnell has paid.

"Altogether, the campaign has paid Lundergan's catering and events companies about $35,000 for everything from prop rentals to fuel costs," Politico wrote. "It's trickier to gauge fair-market value for some of the other outlays, though it's unclear why Grimes' primary-night party, for instance, was substantially cheaper than McConnell's."

Larry Noble, who was general counsel for the FEC for 13 years before joining the Campaign Legal Center, told Politico that Lundergan can volunteer on his daughter's campaign, but he can't "volunteer his company."

"If they can show that in fact that her campaign could have gone on the open market and gotten the bus for that price, then it's market value," Noble told Politico. "But if all the evidence is that the bus would have cost several times as much, then that's not going to work."

The FEC could impose civil fines on the Grimes campaign if it conducted an investigation and found that the campaign received services from a corporation at below-market rates.

In its response to the Politico story, the Grimes' campaign also made its most pointed comments about former U.S. Labor Secretary Elaine Chao, who is McConnell's wife. Yahoo News reported recently that Chao serves on the board of Wells Fargo and Bloomberg Philanthropies, two groups associated with efforts to eradicate coal-fired power plants.

"This hit-job from the McConnell campaign is nothing more than a baseless distraction after news broke of the McConnells pocketing over $600,000 in payments from organizations trying to kill Kentucky coal plants," Norton said. "Mitch McConnell has yet to explain their involvement on boards that are actively hurting Kentucky miners and families — he owes Kentuckians answers."

During his own bus tour last week, McConnell answered repeated questions about his wife's involvement on the boards.

"She's not going to resign," McConnell said. "They do a lot of good things. They do some things she does not approve of, and she doesn't approve of their efforts in the coal industry."

On Tuesday, Chao was a factor in McConnell's latest television ad, a rebuttal to a Grimes ad that says McConnell became a multimillionaire while in public office. However, most of the couple's wealth comes from a gift from Chao's father and an inheritance she received after her mother's death.

McConnell's newest ad says Grimes' advertisement "shamelessly attacks Mitch McConnell for his wife's inheritance after her mother died."

Despicable," the narrator says.

Sam Youngman: (502) 875-3793. Twitter: @samyoungman. Blog: Bluegrasspolitics.bloginky.com.

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