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Monday, March 18,2013

Campaign cash refund

Lynne Martinez returns a $100 contribution from ‘Sam Eyde Construction Company’ out of fear that it may have violated campaign finance laws

by Andy Balaskovitz

This story was updated Oct. 31.


Monday, Oct. 31 — 1st Ward Lansing City Council candidate Lynne Martinez said today that she returned a $100 campaign contribution from “Sam Eyde Construction Company” out of uncertainty that the donation was from a corporation, which would have been illegal.

“It was a totally human error. The check I got had ‘Sam Eyde Construction Company’ — it wasn’t identified as a corporation,” said Martinez, who is up against Jody Washington in the 1st Ward race. “I’m not taking any chances that it was a corporation. It’s not very clear to me.”

It’s illegal for political candidates to accept campaign contributions from corporations.
However, Lansing City Clerk Chris Swope - who donated $50 to Martinez's campaign - said limited liability companies can make donations to candidates, but it must list individuals involved with the LLC and the donation if that’s the case. If an LLC makes a donation, “a written statement containing the name, address, date and amount being contributed by each partner ,or member, must accompany the check,” according to the state Bureau of Elections. Martinez’s finance report does not list the individuals who are part of the LLC, if that’s the case.

However, it is unclear whether the donation came from an LLC or a corporation. The state lists “Sam Eyde Construction, Inc.” as a dissolved corporation, while “Sam Eyde Management Company” is a registered LLC. The donation came from “Sam Eyde Construction Company.”


MLive.com reported today that Martinez raised the most out of any other Lansing City Council candidate between Aug. 23 and Oct. 23.

Rich Robinson, of the Michigan Campaign Finance Network, said if the donation came from a corporation, Martinez would have to return the check in a worst-case scenario. If it came from an LLC, she’d likely get an “error and omissions” statement from the Ingham County Clerk’s Office, asking for a list of the individuals.

Martinez received the donation on Oct. 3. A candidate manual issued by the state Bureau of Elections says: “A prohibited contribution must be returned as soon as the committee recognizes that it has received a contribution that cannot be accepted.

“A contribution that is returned within 30 business days of receipt is not considered to be a contribution and is, therefore, not a violation of the Act.”

It also says: “Prohibitions against corporate contributions apply to all types of corporations, including large and small corporations, non-profit and for-profit corporations, professional corporations and sub-chapter S corporations. The only exception is for a corporation formed strictly for political purposes only.”

As for accepting contributions from a corporation, Section 169.254 of the Michigan Campaign Finance Act says: “A person who knowingly violates this section is guilty of a felony punishable, if the person is an individual, by a fine of not more than $5,000.00 or imprisonment for not more than 3 years, or both, or, if the person is not an individual, by a fine of not more than $10,000.00.”

Swope said it would need to be proven that Martinez knowingly violated the act to charge her with a felony: "I think the key word is knowingly,'" Swope wrote in an e-mail. "What I think they're trying to do is avoid punishing people for errors, such as this one where it may not be completely clear if it's a corporation or LLC. Or in other words, someone would have to be able to prove it was done on purpose to be a violation."

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