Questions linger about Grimes campaign's payments for bus owned by father's company

syoungman@herald-leader.comAugust 21, 2014 

LOUISVILLE — New questions surfaced Thursday about Democrat Alison Lundergan Grimes' use of a campaign bus owned by her father's company, an issue threatening to become a major distraction in her bid to unseat Senate Minority Leader Mitch McConnell.

After Thursday morning's 51st annual Kentucky Farm Bureau Ham Breakfast in Louisville, Grimes was asked about a revelation in Politico hours earlier that her campaign had given media outlets contradictory answers about how much it is paying to use the bus.

Grimes, Kentucky's secretary of state, responded by saying she had "full confidence" in her campaign-finance compliance team and dismissed the questions as "baseless, unfounded, bullying accusations from the McConnell campaign."

Politico reported Monday night that the Grimes campaign was paying less than $500 a day to use the bus, based on campaign expenditure reports made to the Federal Election Commission. Other companies told the Washington publication that a 45-foot bus similar to the one used by Grimes would cost $1,500 to $2,000 a day.

McConnell and his allies have suggested the savings Grimes' campaign has realized by using her father's bus amounts to an illegal in-kind contribution from a corporation.

Grimes' father, Jerry Lundergan, bought the bus using one of his many catering-related companies, Signature Special Event Services, for about $300,000 as Grimes began campaigning last summer.

After the Politico article, Grimes' campaign released price quotes and other documents Tuesday from a handful of businesses, which the campaign said it had used to determine the fair market value of the bus it was renting from her father.

However, one company it cited sells but does not rent buses, and another, Star Coaches in Atlanta, later told The Associated Press that the Grimes campaign was getting a "sweetheart deal."

Don Neuen, vice president of operations for Star Coaches, didn't quibble with the $456-a-day rate the Grimes campaign is paying to use the 11-year-old bus, but he said the campaign should have to pay for the bus each day, whether it is used or not, because it is wrapped in large photos of Grimes and her campaign logo.

"If they're paying 11 grand to have that bus wrapped for 266 days and use it however many days they want to use it? That's a sweetheart deal," Neuen told the AP.

As the campaign labored to explain the price disparity Tuesday, Grimes' press secretary, Charly Norton, told the Herald-Leader that the cost of fuel for the bus was not included in the average daily rate of $456 derived by Politico.

"Does the $11K the campaign paid for the bus include fuel costs?" the Herald-Leader asked Norton in an email Tuesday night.

"The driver and bus rental are included in the fee we pay; fuel is additional," Norton responded.

But Politico wrote Thursday morning that Norton's answer to the Herald-Leader "directly contradicts what they told Politico in an Aug. 8 email and what Federal Election Commission reports show."

"In that email, the Grimes campaign broke down all of its expenditures for the bus, saying its payments were for 'bus rental + fuel costs,'" Politico wrote. "And that included two payments made on June 30 to Signature Special Event Services ... for $5,334 and $1,145, which were listed in the FEC filings for 'transportation, fuel.' (Take a look for yourself on p. 3,450 of its July 15 quarterly report.) Those costs were included in the $10,939 total."

With Lundergan standing a few feet behind her Thursday morning, Grimes was asked whether she planned to review the bus expenditures.

"I have full confidence in my compliance team that have stood with us over the course of the past year-and-a-half," Grimes said.

When asked whether she thought federal campaign finance violations were a serious issue, Grimes repeated her argument that the charges were "baseless."

She then ignored a question about whether her campaign had tried to mislead reporters intentionally.

The Herald-Leader later asked Norton whether she was trying to mislead reporters.

"No, we stand by what we've said so far," Norton said. "Our independent team, our compliance team, our lawyers, independent businesses all verify, stand by what we have provided so far."

Later Thursday, Norton told the Herald-Leader that the campaign's contract with Signature Special Event Services calls for paying the company a daily rate of $180 for the bus and $200 for a driver, with fuel costs paid separately. When asked to provide a copy of the contract, Norton said she couldn't without approval from the campaign's legal staff.

Politico also reported Thursday morning that Signature Special Event Services is licensed as a private carrier rather than a for-hire passenger carrier. That followed a story Wednesday by CN|2 Pure Politics that said the company responded to its online inquiry for transportation services in Lexington with an email that stated, "we do not do transportation."

A company official later backtracked, telling Pure Politics the company had about six vehicles that are used by employees and could be rented by others.

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

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