Trucks Drive Through Maryland Campaign Finance Laws

Maryland's two candidates for governor have raised a record $24 million, with millions more expected before the general election — in part because supporters have found ways to sidestep contribution limits.

According to state law, donors may not give more than $4,000 to a candidate for state office and cannot donate more than $10,000 overall to state candidates during a four-year election cycle.

But wealthy donors are using numerous strategies — all of them apparently legal — that allow them to make virtually unlimited contributions, The (Baltimore) Sun reported in Sunday's editions.

Donors are giving through multiple companies or to state and federal campaign accounts controlled by state parties that then shift the money back to candidates.

"It's a joke," said Bobbie Walton, executive director of Common Cause Maryland, who has called for an overhaul of the state's campaign finance rules. "There's always one more way to take money that is under the control ... of an individual and allow them to double or exponentially increase their contributions."

Campaign finance records released last week show that Republican Gov. Robert Ehrlich received $470,000 from a federal account created by the Maryland Republican Party, which used the money to buy services for his campaign — including salaries, office equipment and postage.

Elections officials say the practice is legal, and campaign aides say that using state party accounts is necessary because statewide elections are so expensive.

The Maryland Democratic Party has a similar federal account but has not yet used it to help the campaign of Ehrlich's challenger, Baltimore Mayor Martin O'Malley. Still, supporters of both candidates have found ways to exceed the $4,000 limit.

For example, R. Michael Gill, chief executive officer of Hoyt Capital Corp., a Lutherville investment company, gave $10,000 to the state GOP's federal account May 24. State records show that Gill had already given checks totaling $4,000 to Ehrlich's campaign in a series of three contributions between 2003 and 2004.

George Mahoney, who owns Monumental Paving and Excavation in Baltimore, was one of 11 donors who contributed $10,000 to the state Democratic Party's federal account in recent years. Records show that he had previously given more than $5,000 to committees formed by O'Malley and his running mate, Delegate Anthony Brown, D-Prince George's. Mahoney also gave $2,000 to the party's state account.

Mahoney said he was simply using money to support a candidate he believes in.

"I'm for Martin O'Malley and the Democratic Party, and I'm not ashamed to say that," Mahoney told The Sun.

Even before the most recent financial disclosures, more than $6 million had been funneled into state campaigns since 2003 under a loophole that allows contributions to be made through multiple companies, according to a Common Cause report issued earlier this year. Developers, who routinely set up numerous business entities to own and operate real estate projects, are particularly fond of the strategy.

State Prosecutor Robert Rohrbaugh said in a report last year that the use of multiple companies to make donations had left the state's election finance law "virtually unenforceable."

"It's very difficult to trace the funds," Rohrbaugh said. "You can't tell on the face of any contribution what the ownership is."

Spokespeople for the Ehrlich and O'Malley campaigns said that taking money from multiple companies is a necessary part of running for office. Neither candidate has proposed making any changes to the state's campaign finance law if elected.

State Sen. Roy Dyson, D-St. Mary's, the chairman of the Senate subcommittee on ethics and election law, said there has not been enough momentum in the General Assembly to change the way campaigns are financed.

"These laws can be circumvented in a legal way," Dyson said. "It's not a very good system."