Lexo Campaign: McInnis, Groups Violated Finance Laws | News


Demonstrating just how rankled local Republicans still are over the ugly state Senate primary this past spring, defeated challenger Michelle Lexo’s campaign has filed a complaint alleging violations of campaign finance laws by incumbent Sen. Tom McInnis and groups that supported him.

Lydia Boesch, who served as Lexo’s campaign treasurer, detailed the allegations in a July 27 letter to Sheryll Harris, in the campaign finance division with the State Board of Elections. Patrick Gannon, a spokesman for the state board, confirmed that the letter was received Monday.

The allegations will be reviewed and then a decision made on whether any action is warranted. Action could range from requiring amended campaign finance reports, to levying fines, or turning the matter over to a district attorney’s office for criminal charges.

Boesch’s complaints mainly target McInnis, who lives in Richmond County, and the NC Republican Senatorial Committee (NCRSC) — since renamed the NC Senate Majority Fund. The letter also raises concerns about campaign mailers paid for by the NC Chamber, NC Property Rights Fund, Homebuilders Educational Fund and Main Street Merchants for a Better NC.

“It is very clear that Mr. McInnis, the NCRSC, the NC Chamber of Commerce, and other organizations cooperated in a concerted, coordinated effort to defeat Ms. Lexo through a relentless assault of mailers that were intended to destroy her character in the eyes of likely primary voters,” Boesch wrote in the complaint. “The first mailers were relatively calm. The closer to the primary date, the more vitriolic the mailers became, as they contained unfounded, outrageous, unsubstantiated false statements, clearly intended to affect the outcome of this race.”

McInnis, reached by phone Tuesday morning, called the claims “ludicrous” and said there was no coordination. He said he has not seen a copy of Boesch’s letter.

“It sounds like a bunch of sore losers,” McInnis said. “I had no knowledge of anything the NC Chamber, NC Property Rights Fund, Homebuilders Education Fund and Main Street Merchants did. My campaign did not coordinate anything with anyone. They did that totally on their own without my knowledge or consent. I have no control over any third-party money that is spent on my campaign or anyone else’s campaign. I don’t know where they (Lexo) are coming from. It is the most ludicrous thing I have heard in my life.”

The NCRSC paid more than $62,000 for 10 mailers for McInnis over the course of the campaign, according to campaign finance reports. McInnis’ campaign repaid $60,000 to the NCRSC before the May 8 primary.

The other four groups spent a combined $72,000 on eight mailers, according to Boesch’s letter: NC Chamber, $29,516 for three mailers; NC Property Rights Fund, $22,748 for three; Homebuilders Educational Fund, $12,156 for one; and Mainstreet Merchants for a Better NC, $2,720 for one.

“Many of the mailers contained a significant number of false statements about Ms. Lexo,” Boesch wrote. “At no time did any of the organizations contact Ms. Lexo before the mailers were sent to determine if the statements they were publishing were true. Taken together as a whole, these mailers amounted to significant derogatory reports about Ms. Lexo that were intended to affect Ms. Lexo’s chances to win this primary election.”

Cady Thomas, senior vice president of the N.C. Realtors Association, said Tuesday that while she has not read the complaint, the NC Property Rights Fund — the association’s political fundraising arm — does not coordinate with any candidate or other groups.

“We have a strict process that we follow,” she said. “We do not ever talk with a candidate.”

Thomas added that their mailers focused on McInnis and did not speak of Lexo.

“We only engage in a positive manner, which is our policy,” she said.

Tim Minton, director of governmental affairs for the N.C. Homebuilders Association, said Tuesday morning that its political action committee did not coordinate in anyway with McInnis or the NCRSC. He said campaign finance laws prohibit that.

“We take that very seriously,” he said. “The rules are very specific. There has never been any coordination with any candidate. Ours (mailer) was about Sen. McInnis saying that he is a big proponent of home ownership. We keep it very simple.”

The Pilot also reached out to — but has not yet heard from — representatives of the Senate Leadership Fund (formerly NCRSC), NC Chamber, the NC Property Rights Fund, which is the political action committee for the N.C. Association of Realtors and Main Street Merchants, which is a super PAC of the N.C. Retail Merchants Association.

“The mailers from NCRSC stated, ‘Paid for by the North Carolina Republican Senatorial Committee and Authorized by McInnis for State Senate,’” Boesch wrote.

“A Moore County resident questioned Mr. McInnis about this ‘Paid for . . .’ designation,” she wrote. “He responded that the NCRSC was ‘loaning’ him money for the mailers. That seemed odd because, if it was a loan, the mailers would have said ‘Paid for by McInnis for State Senate.’”

Boesch included copies of each of the mailers with her letter.

She asserts in her letter that one of the reasons the NCRSC sent the mailers is because it was cheaper that what it would have cost if McInnis’ campaign had mailed them out.

“We have been advised by the owner of Red Dome Consulting that NCRSC had a contract with the U.S. Postal Service that allowed the NCRSC to send the mailers at 10 cents less than it cost Ms. Lexo to send her mailers,” Boesch wrote. “Mr. McInnis derived a benefit from the lower postal rate of the NCRSC. In addition to reporting the cost of the mailers as an in-kind contribution, he also should have reported this differential in postal rates.”

Boesch alleges that the other reason McInnis had the NCRSC send the mailer “is the value of this perceived endorsement by the Senate Republicans.”

“The ‘Paid for by the North Carolina Republican Senatorial Committee’ designation on the NCRSC mailers unquestionably was viewed as an endorsement of Mr. McInnis by Senate Republicans,” she wrote. “The value of that endorsement also should be computed and reported by Mr. McInnis as an in-kind contribution.”

‘Unlevel Playing Field’

Boesch wrote that McInnis received “substantial benefits” from this agreement through the reduced postal costs the NCRSC paid to send out 10 mailers and through the endorsement McInnis received from the “paid for by NCRSC” on the mailers.

The letter alleges that the NCRSC provided extensive consulting services to and on behalf of Mr. McInnis.

“Those services included, but are limited to, planning strategy, performing opposition research, obtaining polling data, and push-polling,” Boesch wrote. “Ms. Lexo had to pay for those types of consulting services; Mr. McInnis did not. This clearly results in an unlevel playing field. The value of the consulting services the NCRSC provided to Mr. McInnis should be calculated and reported as an in-kind contribution.”

Boesch says in the letter that the NC Chamber and the NC Property Rights Fund “coordinated” with McInnis and the NCRSC. It says both the NC Chamber and the NC Property Rights Fund filed independent expenditure reports.

“It’s our understanding this means they did not ‘coordinate’ with Mr. McInnis or the NCRSC, which acted as a consultant to the McInnis campaign,” she wrote. “We do not have the authority to investigate the records of any of these organizations, but we strongly suspect that there was significant and ongoing coordination between the McInnis campaign, the NCRSC, the NC Property Rights Fund, and the NC Chamber.

“The same pictures and similar language are used in the mailers sent by all of these organizations. In addition, the comment made by a Moore County resident with close connections to Mr. McInnis that this race was ‘going to get ugly’ points to a coordinated plan, set in place early in the campaign, to assault Ms. Lexo’s character through mailers. In fact, negative mailers and media comprised the vast majority of Mr. McInnis’ campaign.”

Boesch added that the timing of the mailers “strongly suggests that someone was coordinating this effort. We suspect it was the NCRSC.”

She wrote in the letter that Mainstreet Merchants for a Better NC and Home Builders Education Fund put out “advocacy’ mailers, not “educational” pieces. She said both Mainstreet Merchants for a Better NC and Home Builders Education Fund filed electioneering communications reports.

“It’s our understanding the promotional materials they put out must be educational, but not adversarial or advocacy pieces,” Boesch wrote. “The attached mailers appear to have crossed the line and are advocacy pieces for Mr. McInnis. We have not been able to gain access to any of the radio ads, but have been told that the radio ads played in Moore County clearly advocated for Mr. McInnis; they were not educational.”

Minton, the government affairs director for the NC Homebuilders Association, said his organization is careful not to advocate in any way.

“We don’t say vote for this candidate or support this candidate,” he said.

‘Insurmountable’ Barriers to Victory

Boesch noted that Lexo’s husband, Jim, already submitted a letter to the state board about the “many egregious false statements contained in the mailers, especially the mailers sent out by the NC Chamber and the NCRSC, which were authorized by Mr. McInnis.” She said they provided a few examples.

“To truly investigate his claim, we hope you will meet with Mr. and Ms. Lexo and go over each of the mailers,” Boesch wrote. “More importantly, none of the organizations who made false statements about Ms. Lexo ever called her to determine if what they were printing (or broadcasting) was true. The mailers these organizations sent, and perhaps the newspaper and radio ads, were published at a minimum with reckless disregard of the truth or falsity of their claims, and possibly with actual knowledge that their statements were false.

“This also strongly supports our claim that these organizations coordinated their efforts to destroy Ms. Lexo’s character. One organization making false claims can be attributed to simply negligence or that organization’s disregard for the truth; several organizations strongly suggests coordination, especially when none of those organizations contacted Ms. Lexo about the claims they were making.”

Boesch said in the letter that Micehlle Lexo wanted to run “a clean campaign, based solely on the merits.” She anticipated that the campaign “could and would focus on Mr. McInnis’ voting record and her position on the issues.”

“Instead, the NCRSC decided as soon as Ms. Lexo filed to run that, if they could not persuade her to withdraw from the race, she would be defeated,” Boesch asserts. “The NCRSC then coordinated with Mr. McInnis, the NC Chamber, the NC Property Rights Fund, the Home Builders Education Fund, Mainstreet Merchants for Better NC, Keep Ag Growing Inc., and possibly other organizations to run a campaign on Mr. McInnis’ behalf that would consist primarily of derogatory reports made with no regard for their truth or falsity, that were intended to destroy Ms. Lexo’s chance of winning in the primary.”

Boesch wrote that the Lexos contributed more than $79,000 of their own money to her campaign “in order to attempt to refute the onslaught of the inflammatory, false mailers.”

“She wanted to win, she thought she could win, and she believed she had no choice but to attempt to refute the barrage of false mailers,” Boesch wrote. “But, even the $79,000 they contributed wasn’t enough. The $130,000-plus spent against her plus the false statements were insurmountable for her campaign.”



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