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Unpaid fine by Betsy DeVos PAC subject of misleading attack by Cordray on DeWine in Ohio
Democrat Richard Cordray says that his Republican opponent in the Ohio governor’s race, Attorney General Mike DeWine, has been remiss at collecting a fine from a member of President Donald Trump’s administration.
"Education Secretary Betsy DeVos owes Ohio $5.3 million for campaign finance violations and Mike DeWine's office refuses to collect the fine," Cordray said in a July Facebook ad.
That record breaking fine by the Ohio Elections Commission did happen, but Cordray isn’t telling the full story about the challenges in collecting it.
The DeVos-affiliated political action committees were fined by the state of Ohio in 2008, and the fine was upheld in court. But Cordray omits that DeWine has made an effort by filing a lawsuit and winning a judgment. The fines were a subject of litigation for years, including when Cordray was attorney general before DeWine ousted him in the 2010 election.
In 2003, DeVos and her husband, billionaire Amway heir Richard DeVos, formed All Children Matter to help candidates who support school vouchers, including in Virginia and Ohio.
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In 2008, the bipartisan Ohio Elections Commission found that the Virginia PAC sent $870,000 to the Ohio PAC, ignoring a warning in an advisory opinion that such a transfer would be illegal under Ohio’s campaign finance laws. The commission voted unanimously to fine the Virginia and Ohio PACs $2.6 million each.
The PACs challenged the commission’s ruling in court, but the court dismissed the case because the PACs failed to sue the proper entity. The litigation continued, though. In February 2010 while Cordray was attorney general, the Ohio Courts of Appeal upheld the lower court ruling, and the Ohio Supreme Court refused to take it up a few months later.
We asked Cordray’s campaign spokesman why he didn’t collect the fine when he was attorney general. "It was being litigated for almost the entirety of his tenure as attorney general," Mike Gwin said.
In November 2010, DeWine beat Cordray to take over as attorney general.
In 2013, DeWine ultimately got a court judgment to enforce the fine. But by then, the PACs had wound down and had minimal assets, leaving nothing to collect.
When Trump nominated DeVos as his education secretary, a group of Democratic senators including Ohio’s Sherrod Brown, said she should pay the fine.
In a letter to senators, DeVos disputed that she was personally liable.
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"I was an unpaid volunteer director for ACM Inc. and I did not have day-to-day management responsibilities," she wrote. "I was never a party to the legal proceedings." (She was, however, listed as a director on tax filings.)
She also wrote that All Children Matter no longer existed and didn’t have the funds to pay the fines.
Greg McNeilly, a political adviser to DeVos, made many of the same arguments to PolitiFact in an email.
Cordray said, "Education Secretary Betsy DeVos owes Ohio $5.3 million for campaign finance violations, and Mike DeWine's office refuses to collect the fine."
The All Children Matter PACs were fined in 2008, and that was upheld by the courts. The PACs ultimately closed, and they never paid the fines.
But Cordray makes it sound like DeWine ignored the whole matter, and that’s not the case. He got a court judgment that upheld the fines against the PACs. But by then, there was nothing for DeWine to go after. The fines were ultimately the responsibility of the PACs, not DeVos personally.
The statement contains an element of truth but ignores critical facts that would give a different impression. We rate this statement Mostly False.
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Our Sources
Richard Cordray, Facebook ads, July 2018
Ohio Elections Commission, Case summary 2007S-001
Ohio Elections Commission, Advisory opinion 2006ELC-03, May 25, 2006
Salt Lake Tribune, "Outsiders fund 'school choice' PAC," 2006
Education Week, "School Choice Group Grows as Force in State Elections; All Children Matter targets candidates opposing vouchers," Sept. 27, 2006
Associated Press, "Ohio levies record fine against education PAC run by Betsy DeVos," April 4, 2008
Associated Press, "School choice expanding as record fine languishes," March 29, 2011
Politico, "DeVos paid legal fees, but not election fine, for Ohio school choice group," Jan. 24, 2017
Columbus Dispatch, "RECORD FINE; Political group's appeal refused; Court won't hear case about money funneled to GOP," June 24, 2010
Columbus Dispatch, "Betsy DeVos, PAC backed by Education pick owes Ohio millions;" Nov. 24, 2016
Washington Post, "Democratic senators press Trump’s education pick Betsy DeVos to pay years-old $5.3 million fine," Dec. 14, 2016
Cleveland Plain Dealer, "Democrats say Trump education nominee Betsy DeVos owes $5.3 million to Ohio," Jan. 10, 2017
Ballotpedia, "Fact check: Does Betsy DeVos owe Ohio taxpayers $5 million?" Jan. 26, 2017
Court of Appeals Ohio, All Children Matter v Ohio Secretary of State, 2010
Ohio Democratic Party press release, "If DeWine Can’t Find DeVos to Collect $5.3M Owed Ohioans, He Should Try Looking in D.C.," Jan. 17, 2017
Center for Responsive Politics, All Children Matter, Accessed July 25, 2018
IRS tax filings, All Children Matter, 2012-2018
Franklin County Court of Common Pleas, Ohio Elections Commission v All Children Matter Final judgment entry, Dec. 11, 2013
Interview, Dan Tierney, Ohio Attorney General Mike DeWine spokesman, July 26, 2018
Interview, Mike Gwin, Richard Cordray campaign spokesman, July 26, 2018
Interview, Greg McNeilly, Betsy DeVos political adviser, July 27, 2018
Interview, Donald C. Brey / Partner at Taft Stettinius & Hollister LLP who represented All Children Matter, July 26, 2018
Interview, Philip C. Richter, Ohio Elections Commission executive director/staff attorney, July 26, 2018
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Unpaid fine by Betsy DeVos PAC subject of misleading attack by Cordray on DeWine in Ohio
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