Former Newton state rep faces campaign finance ethics probe

A former state legislator from Newton is embroiled in an investigation by state campaign ethics officials around the financing of a political mailer targeting a Warren County Democratic state representative during the 2018 midterm elections.

The Iowa Ethics and Campaign Disclosure Board has given its lead attorney subpoena power in an investigation into former Democratic State Rep. Dan Kelley’s involvement in a letter sent out on behalf of the statehouse campaign for Warren County Republican Rebel Snodgrass.

The board voted Nov. 15 to grant its executive director and legal counsel Megan Tooker’s request to open an investigation, giving her the ability to subpoena witnesses for testimony and obtain documents related to the possible violations.

Kelley represented Iowa House District 29, which includes Newton and western Jasper County from 2011 through 2016.

The letter, which was marked “paid for by Dan Kelley for State Representative” and sent to every mailbox in Warren County, levied claims against Snodgrass’ two-time political opponent, Democratic State Rep. Scott Ourth, implying he was responsible for the 1988 suicide of Tom Pappas — chief of staff to then-Maryland congressman Roy Dyson — after rumors surfaced about Pappas sexual orientation and his questionable congressional staff hiring practices. Ourth was a former Dyson staffer and Pappas was his direct supervisor.

News reports in the Washington Post and Chicago Tribune from the time of Pappas' death detail accounts of multiple staffers coming forward accusing him of sexual harassment and other bizarre behavior.

According to board documents, the letter indicates it is written by Kelley himself and was sent with the return address of his home in Newton.

Tooker contacted Kelley about the letter via email Oct. 17 following a phone conversation the day prior. She warned the former state representative the letter was not a permissible campaign expense. She told Kelley if he coordinated the expenditure (letter mailing) with the Snodgrass campaign, it constitutes an in-kind donation from one candidate campaign to the other, which would be a violation of Iowa election law.

Kelley’s most recent campaign committee report with the board in Jan. 2018 indicates a negative balance of approximately $2,400. According to Tooker’s email, Kelley claims there is not money in the account, the negative balance is an accounting error and he plans to correct it, an assertion he’s made since 2016.

“The only reasonable explanation is that you are attempting to misuse your dormant campaign committee to conceal or, at least, delay disclosing who was involved and where you got the money,” Tooker wrote to Kelley. “I am very frustrated with your lack of candor. I would like to help you try to fix this very serious campaign finance violation, but I cannot do so if you aren’t being honest with me.

“If you coordinated the expenditure with the Snodgrass campaign, the campaign has to report the expenditure as an in-kind from the individual(s) who paid for the mailing or has to report the expenditure on its expenditure schedule if the campaign did not directly pay for it,” Tooker added.

Kelley responded Oct. 19 through an attorney and claims since he did not name a specific candidate beneficiary in the mailer, it should not be considered a contribution to a campaign. Kelley told Tooker he sent the letter and received a financial contribution from a friend to mail it throughout District 26. Kelley claims he plans to report the information to the ethics board by the Jan. 22, 2019, disclosure filing deadline.

Tooker’s written request for an investigation details a conversation with an anonymous source who told her Snodgrass campaign staffer Peyton Parker was seen at two post offices in District 26 sending the mass mailing. Parker later confirmed his involvement to Tooker and said a second Snodgrass volunteer, John Thompson, had the idea to write the Ourth “hit piece” which the two discussed around Oct. 8.

Parker was given $2,400 from Snodgrass for postage cost and sent the majority of the letters Oct. 12. Parker told Tooker he sent the remaining letters on Oct. 15 or 16, and Snodgrass gave him additional cash to complete the mailing. Parker estimates the letter cost $2,500 to $2,800 in postage to mail.

The letters were allegedly printed at Spirit 76 printing, a company Thompson and Snodgrass co-own with a third unnamed person.

Parker claims it was Thompson who wrote the letter, and told Tooker he had no personal interaction with Kelley and does not know why the letter said it was paid for by Kelley’s campaign committee.

Tooker said financial disclosures from the Snodgrass campaign make no mention of the letter, which would be considered an in-kind donation whether they came from Kelley or Snodgrass himself, and Iowa Code requires the information to be reported. Any monetary donation, such as payment for postage, must be deposited into the campaign committee’s bank account so it can be tracked and disclosed. Cash expenditures in political campaigns are prohibited. Although Parker said Snodgrass gave him a campaign check for the postage on four to five other mailings, Tooker said it is not yet clear where the cash originated for the Ourth letter.

Parker also told the ethics board director Snodgrass paid him for his work on the campaign with a corporate check from his company Rebel Custom Design, Inc. rather than a campaign committee check, which Iowa law prohibits.

For Kelley’s part, Tooker alleges he either paid for the letter or allowed his campaign account to be used in a cover-up.

“It appears that either Mr. Kelley misused his campaign committee to make an impermissible in-kind contribution to Mr. Snodgrass’s campaign or Mr. Kelley allowed his campaign committee’s name to be referenced in the attribution statement mailer by the Snodgrass campaign in order to conceal who was truly responsible for the distribution of the letter,” Tooker wrote.

Officials question DAN PAC USA

Tooker is also looking into Kelley’s role in the creation of the political action committee DAN PAC USA. A second letter, mailed out Nov. 4 to Jasper County swing voters encouraging them to “vote Republican on or before Nov. 6,” was paid for by DAN PAC USA.

The mailer asserts, among other claims, that the Jasper County Democratic Party is pushing a "culture of corruption and cronyism," and claiming the party has been putting "personal agendas and prejudices" before their constituents.
Kelley has been promoting this message on social media since losing the Democratic primary for District 29 to Rep. Wes Breckenridge in 2016, and later losing to him again during a third-party run in the general election later that year.

In her Oct. 19 correspondence, Tooker cautioned Kelley stating if he raised money to pay for the Warren County letter, he should have registered a PAC to disclose those funds and the cost of the mailer; however, Kelley cannot legally create a PAC as long as he has a registered campaign committee. Iowa Code prohibits a candidate for statewide or legislative office to “establish, direct or maintain a political committee.” Although Kelley has not actively sought elected office since 2016, as long as his campaign account exists, he’s considered a candidate by the state of Iowa.

DAN PAC USA was registered one week after Kelley and Tooker’s email exchange. The PAC’s chairperson and treasurer were both listed as Dianna Kelley, who Tooker presumes to be Kelley’s mother. This is unusual, Tooker said, as the ethics board typically requires a PAC to list separate people as chairperson and treasurer before it will approve a statement of organization. But the statement filed for DAN PAC USA lists Dan Kelley’s personal cell phone number and email.

“What’s more troubling is that Mr. Kelley appears to be making at least a half-hearted attempt to conceal his involvement in the PAC by listing his mother as the chair and treasurer instead of himself,” Tooker wrote.

In Kelley’s written response to Tooker’s email, the former Democrat claims he is planning a future run for elected office as a Republican and told Tooker he believed writing and distributing the campaign mailings would establish his loyalty to the GOP.

“My intent was to fight back at folks associated with the (Iowa Democratic Party) who have continued an intimidation campaign against me while showing that I am willing to fight back at Democrats now that I have changed parties,” Kelley wrote. “... I believe this letter will greatly support my candidacy as a Republican candidate which is my intent.”

What’s next?

Despite Kelley’s intentions, it appears the letters have not earned him any accolades with the local Republican Party central committee. Shortly after the Jasper County mailer was distributed— which has also been entered as evidence in the ethics board investigation — the Republicans took to their Facebook page on Election Day, denouncing the tactics used in the letter.

“The Jasper County Republican party does not condone smear tactics of any kind,” the party wrote. “We will not defend the actions of anyone who takes it upon themselves to conduct a mass mailing. The Jasper County Republican Party had no knowledge of, nor did it approve, fund or participate in any way in any recent mailing. It is our focus to help elect Republican candidates and run clean and fair campaigns. Please vote today for the candidates who most reflect your values.”

Brandon Talsma, a Republican Jasper County Supervisor-elect, said Nov. 6 via his campaign Facebook page, “We in no way support (Kelley’s letter). This is not an example of how we have ran our campaign and do not support [sic] degrading the Democrat Party.”

In a phone interview Tuesday, local GOP chair Thad Nearmyer said he didn’t want to comment on an ongoing investigation, but the Republican said he’s not spoken with his members on Kelley’s intentions to run in a future GOP primary.

“This has nothing to do with the Jasper County Republican Party or the Iowa Republican Party for that matter,” Nearmyer said.

Tooker told the Newton Daily News on Monday, Kelley could be facing remedial action or civil penalties up to $2,000 for each violation, if he is found at fault. Tooker said the investigation could take several months to complete.
In an emailed statement to the Newton Daily News on Wednesday, Kelley maintained he did not violate any campaign ethics rules.

“All rules were followed,” Kelley said. “I’m certain this will be confirmed and my committee will not be fined $50 to $200. I’m glad we were able to provide valuable facts and information to voters concerning their local elections.”

Contact Mike Mendenhall at 641-792-3121 ext. 6530 or mmendenhall@newtondailynews.com