(NOTE: I started writing this story back in March, when I learned about former U.S. Senate candidate Duane Sand’s lawsuit against Job Service North Dakota. I finished writing about that lawsuit then — and posted the story — but never finished the financial end of the story of Duane’s campaign. Well, here it is. It’s pretty long, and I was going to run it in two parts, but then I decided it would be easier (for me) to just put it here and let you read it in two parts if you get weary of the detail involved. Have at it.) 

CAMPAIGN DEBTS, WIDOWS AND CONSERVATIVES

As I have reported here before, Duane Sand’s campaign for the U.S. Senate in 2012 raised more than a million dollars, most of it through direct mail, using a shady Washington D.C., mail firm well-known for sending out lots of letters and keeping most of the money.

When Duane ended his short-lived 2012 campaign (he lost in the primary to Rick Berg), he was in debt to the mail house, so he kept on raising money. Or rather, they kept on raising money for him. He didn’t really have to do anything. A company called Base Connect just kept cranking out letters to conservative mailing lists. By the end of the year they hit the $1 million mark, but most of it, probably 85 to 90 percent, stayed with Base Connect and its affiliated companies.

As I explained earlier, they did everything for Duane, from conceptualizing and printing a fundraising brochure, to writing the fundraising letter, to buying the mailing lists, to printing the letters, addressing and stuffing the envelopes, affixing postage and hauling them to the post office. And picking up the mail with the responses in them, and depositing the money in Duane’s account. All Duane had to do was lend them his name. But then most of the money went right back to them in fees and mailing expenses.

There have been a lot of stories written about this company. None of them full of praise. Google them.

So when Duane filed his 2012 FEC report (actually, another affiliate of Base Connect, a fellow named Scott Mackenzie, who called himself Duane’s “Campaign Treasurer,” filed it for him), it showed that he was in debt $92,714 at the end of 2012 — almost all of that to Base Connect and its affiliates.

Duane really didn’t do much about that for a couple of years, but there’s a funny thing about FEC reports: As long as there is an outstanding debt by the candidate or his committee, they have to keep filing reports. Four reports a year, in April, July, October and at the end of the year.

So even though Duane has not been on the ballot for more than four years (he lost the Primary in June of 2012), he is still filing those reports. Or rather, Scott Mackenzie is. Each report filed quarterly between 2012 and the end of 2015 showed that debt of $92,000 to Base Connect and its affiliates.

But then on his 2015 year-end FEC report, filed in January of this year, those debts mysteriously disappeared. The companies wrote them off as bad debts. The reason: at the same time, Base Connect itself disappeared.

But the people working for Base Connect didn’t disappear. They reappeared in another incarnation: ForthRight Strategy. Same owners, same address, same phone number. Just a new name. The name Base Connect had become so notorious they had to get a new identity.

Here is what happened in Duane’s case. Base Connect and its affiliates just kept mailing and mailing and mailing, all the way through 2012, even though Duane’s campaign was over June 12, when he lost the primary. And the bills kept piling up for those mailings. Highly inflated bills. But finally the money quit flowing.

So when it was all over, Base Connect and its affiliates had raised a million dollars, and had invoices showing Duane still owed them about $90,000 for their services. Even though they had already taken almost all the money from the people who sent it in.

Well, Duane had the good sense not to pay them out of his own pocket. He outlasted them. When they shut down their business and reopened with a new name in 2015, the debts disappeared with the old name. At the very end of the 2015 FEC Report, Treasurer Mackenzie wrote: “The Committee contacted vendors to confirm the outstanding balance and was told there were no outstanding balances for Base Connect, Legacy List Marketing Inc., or Century Data Systems Corp. Therefore the balances were zeroed out …”

Just like that. Actually, it was a phony statement because Mackenzie is part of the Base Connect network, so he was just talking to himself and his partners. They all agreed there was never going to be money to collect from Duane, so they wrote it off.

But at the same time as almost $90,000 in debts to the fundraising companies disappeared, almost $60,000 in personal debts appeared on his 2015 report. $12,000 of that debt was to himself — money he lent the campaign to pay his legal bills for his North Dakota court case, which I wrote about back in April. The rest was in smaller amounts, mostly in the $2,500 range, to more than 20 people around the country. I puzzled over that for a while, until I finally put the answer together.

VIOLATIONS OF FEC RULES 

The prospect list run by Base Connect turned up some wealthy folks. Nearly two dozen people sent more money to Duane than the law allowed. In the 2012 election cycle, the limit on contributions to federal candidates was $2,500 per election: $2,500 for the primary, $2,500 for the general. A couple of dozen people sent $5,000 in separate checks of $2,500, one for each election. Except that Duane lost the primary, so he wasn’t on the ballot in the general. So he was only allowed to keep $2,500 of that. He had to return the other $2,500.

Because Duane never really saw the money, and likely never even read his FEC reports filed by Mackenzie, he likely didn’t even know there was a problem. Maybe he didn’t even know the rules.

But MacKenzie and the folks at Base Connect did. And they were careless or greedy, and not only kept the contributions, but reported them to the FEC. Somebody at the FEC was watching. And three times during 2012, Duane’s treasurer, Mackenzie, received letters from the FEC telling them some individuals had exceeded the limit, and the money had to be refunded or reallocated (by reallocated, that could mean putting some of it in a spouse’s name, for example).

So here’s what Mackenzie did: Almost everything each donor gave over the legal limit was re-listed in a new FEC report as a “debt.” In other words, if someone gave Duane $5,000, he owed them a refund of $2,500. That got listed as a debt. There were a bunch of those. Debts show up on FEC reports. And the FEC apparently was satisfied with that arrangement. A promise to pay was good as a refund, at least for the time being.

The most recent report is for the first quarter of 2016, signed by Mackenzie on April 14, 2016. In that report there are still at least 20 people who are owed money by the campaign, in amounts ranging from $300 to $5,000, all of whom donated to Duane’s campaign in amounts exceeding $2,500. The total amount comes to about $43,000.

So what’s been done is that instead of refunding the excess amounts, the campaign shifted about $43,000 to “debts” instead of “gifts.” No doubt the excess gifts went to the fundraising companies, which kept most of the money that was raised. But the company is gone now.  And guess who’s stuck for it? Yep. Duane.

Maybe Duane intends to pay them back sometime. We’ll see. He still lists a $5,000 debt to his Bismarck lawyer, Deborah Carpenter, plus the $12,000 loan he made to his campaign in 2014, for total debts to individuals now standing at about $60,000. The campaign is more than four years gone now, so raising any money from donors to pay those debts seems unlikely.

It will be interesting to see how he solves this. I almost feel sorry for him. He got taken, big time, by those Washington slicksters. They should have refunded the money to the donors immediately after the primary campaign ended in June 2012. Instead, they pocketed it, leaving Duane holding the bag. But Duane’s a big boy, and he likes playing politics, and sometimes bad things come of that. Really bad. Like a $60,000 debt.

And it HAS to be paid back because, technically, those donors gave Duane more than the law allowed, and technically, he “spent” it. Never mind that he never saw a penny of it. Friends of Duane Sand, his campaign committee, is responsible for returning excess contributions. Except there’s no money to pay it back.

If you would like an example of how he came to exceed the limits received from some donors, here’s the list on the FEC report for a lady in Georgia, Jane Pelham Doyle. Jane donated $4,375 to Duane in 2011-12. That’s $1,875 over the limit of $2,500. Here’s her giving history to the Sand Campaign:

2011-2012 Contributions to Duane Sand for June, 2012 Primary Election

Doyle, Jane W Pelham 9/6/2011 $100

Doyle, Jane W Pelham 9/20/2011 $50

Doyle, Jane W Pelham 9/28/2011 $100

Doyle, Jane W Pelham 11/8/2011 $135

Doyle, Jane W Pelham 11/23/2011 $135

Doyle, Jane W Pelham 12/19/2011 $170

Doyle, Jane W Pelham 12/22/2011 $35

Doyle, Jane W Pelham 1/19/2012 $202.50

Doyle, Jane W Pelham 2/6/2012 $203

Doyle, Jane W Pelham 3/1/2012 $203

Doyle, Jane W Pelham 3/16/2012 $250

Doyle, Jane 4/2/2012 $305

Doyle, Jane W Pelham 4/17/2012 $250

Doyle, W Pelham 5/9/2012 $305

Doyle, Jane W Pelham 6/4/2012 $100

Doyle, Jane W Pelham 6/8/2012 $458

Doyle, Jane W Pelham 6/18/2012 $458

Doyle, Jane W Pelham 7/6/2012 $458

Doyle, Jane W Pelham 8/17/2012 $458

Total in 2011-2012: $4,375

The FEC report shows that the campaign owes her $1,875. But sadly, Jane passed away this spring, on March 2, at the age of 92. I guess that’s one way to get rid of the debt. She’s still listed as a creditor on the April FEC report. Probably the estate hadn’t been settled by then. She’d only been dead a month. I’m not sure if Duane sent a sympathy card.

Most of the rest of those listed are also in their 80s and 90s. It’s a waiting game from here on out, I guess. We’ll see just how patient the FEC is about these kinds of things.

Here’s one more example. Susan Brunoff, age 87, New Holland, Pa., contributed $5,325. The FEC report shows Duane owes her $2,825.

2011-2012 Contributions to Duane Sand for June, 2012 Primary Election

Brunoff, Susan Mrs 12/20/2011 $100

Brunoff, Susan Valeria Mrs 1/16/2012 $225

Brunoff, Susan Mrs 2/6/2012 $500

Brunoff, Susan Valeria Mrs 2/28/2012 $225

Brunoff, Susan Mrs 3/26/2012 $100

Brunoff, Susan Valeria Mrs 4/13/2012 $338

Brunoff, Susan Valeria Mrs 5/8/2012 $338

Brunoff, Susan Mrs 5/22/2012 $500

Brunoff, Susan Valeria Mrs 5/31/2012 $499

Brunoff, Susan Valeria Mrs 6/14/2012 $676

Brunoff, Susan Mrs 7/6/2012 $500

Brunoff, Susan Mrs 7/31/2012 $500

Brunoff, Susan Mrs 8/17/2012 $500

Brunoff, Susan Mrs 9/13/2012 $324

Total in 2012: $5,325

OK, so you get the idea. Elderly women are being talked out of their money.

My guess is they are not all poor widows. Many are women of means. For example, Elloine Clark, the widow of a wealthy Texas lawyer who invested wisely in oil (isn’t that how all Texans get rich?), really overcontributed to Duane — she is listed as being owed $5,000 in Duane’s report. In the 2012 election, she contributed more than $334,000 to various candidates and PACs, according to FEC reports. And she gave another $311,000 in the 2014 election cycle.

And she’s still giving. She gave $100,000 to Carly Fiorina this year and smaller amounts to Bobby Jindal and Ted Cruz. The widow Clark told USA Today recently she likely will focus on contributing directly to the politicians she supports rather than filling up super PACs’ bank accounts. “I want my candidate to get the money,” she said. Plus, she added, “I’m not that wealthy. The price of oil is down.”

Well, you get the picture. I thought about calling Duane and asking him how he plans to resolve this, but he’s a busy man and I don’t want to bother him. I hope he figures it all out. I’m sure it’s no fun waking up every morning with something like this hanging over your head. Still, he liked waking up in the morning when he was a politician and seeing his name in the morning papers. I guess this is the price you pay for fame.

Meanwhile, I hope someone finds a way to put those folks at Forthright Strategy (formerly Base Connect) in the pokey one of these days. They deserve it. If you want to read some shocking things, go look at their website.

Here’s a couple of examples: They ran the fundraising campaign for South Dakota U.S. Senate candidate Dr. Annette Bosworth in 2014. They brag on their website that they raised $2,031,004 (exactly) for her campaign and gave her $500,000 of it, keeping a million and a half for themselves. For former Florida Congressman Allen West they raised $2,513,304, and sent the congressman $475,379 of that. The rest went for “expenses.” There’s a whole list of these. It’ll leave you shaking your head. It did me.  Because these conservatives fall for it. The candidates mostly don’t win, but they sure have a fun time playing politics. And what the heck, most of those widows are rich anyway.

I know I said this is my last story ever about Duane Sand, but if he ever gets those debts paid off, I’ll report in.

One last note: The latest FEC report for Friends of Duane Sand 2012, which you can look at here to see what I am talking about, lists an address of 418 Rosser Ave., Suite 100, Bismarck, N.D. 58502, the same address the committee has been using since 2011. I have a friend who works in that building and who says Duane hasn’t been seen there in a while — a few years.

So I thought I’d check. Turns out the sign on the door of that office says it is headquarters for the North Dakota Right To Life Association. Duane’s moved on. Not sure what the penalty is for giving the FEC a phony mailing address, but maybe the nice folks at Right To Life are forwarding his mail for him. Easier than going through that change of address thing.