TRAVERSE CITY -- Acme Trustee Frank Zarafonitis' day began on a good note, when he learned Meijer Inc. would pay a fine for illegal campaign acts in the township and that criminal charges could be pursued against the people who crafted that strategy.
But reality struck late Tuesday, when Zarafonitis discovered that Secretary of State Terri Lynn Land's deal with Meijer Inc. -- civil fines totaling $190,138 for violations in 2005 and 2007 Acme elections -- undercut any possibility of state election law criminal cases against Meijer and its hired hands.
"The wind has been taken out of my balloon," Zarafonitis said. "It's like saying, 'go ahead and do it guys, all you are going to get is a little fine.' For the big corporate boys who can afford it, what difference does it make?"
A spokesman for Michigan Attorney General Mike Cox said neither Cox's office nor Grand Traverse County's prosecutor can pursue criminal charges against individuals involved in Meijer Inc.'s illegal campaign finance activity.
Cox spokesman Rusty Hills said Land did not consult with the AG's office on the settlement agreement she reached with Meijer late last week and announced Tuesday.
"The attorney general is now precluded from investigating any campaign-related charge, such as improper donations, corporate donations or the laundering of contributions," Hills said.
Denny Rohn, president of Concerned Citizens of Acme Township, went from optimistic at the early news to "bummed" when she heard of the statement from Cox's office.
"It isn't right," Rohn said. "People were dishonest, they broke the law."
Acme Township attorney Chris Bzdok previously questioned the potential for a "sweetheart deal" between the state and Meijer because of the company's substantial campaign contributions to Land. He said the agreement should have specified it covered "only" Meijer the corporation and not individuals.
"That's agreements 101," Bzdok said. "(Land) left a loophole large enough to drive a truck through."
"... It's a good deal for the folks who broke the law," he said.
Hills said the Grand Traverse authorities could pursue obstruction of justice or perjury charges that are not covered by the campaign finance act.
"If they intend that to mean the attorney general is precluded by the agreement from pursuing an investigation of individuals who have violated the act, I would disagree," said Grand Traverse Prosecutor Alan Schneider. "I think I have to have some further conversation with someone at the AG office and hopefully I can persuade them otherwise."
Schneider appealed a Grand Traverse County Circuit Court ruling in April that held a county prosecutor has no authority to instigate an investigation of criminal violations of the campaign finance act.
Schneider had asked Land to refer the case for criminal investigation to Cox. He also asked Cox to send it back to him for investigation.
"I'm confident if we prevail on appeal we will be free to pursue our investigation," Schneider said. "The agreement won't be a bar to anything."
Land's deal requires Meijer Inc. to pay the largest campaign finance violation fine in state history to resolve part of a state investigation into the retailer's efforts to manipulate two Acme Township elections -- a 2005 zoning referendum in Acme Township, and an unsuccessful 2007 recall election that targeted the township board.
Both elections were part of a years-long controversy over the Grand Rapids-area retailer's stalled efforts to build a new superstore along M-72.
"Our campaign finance laws are about open disclosure and in this case Meijer tried to avoid both," Land said in a statement. "The overall goal of the Campaign Finance Act is to ensure compliance and disclosure, which we achieve with these settlements in addition to a record fine."
Fines didn't satisfy some Acme Township officials, though.
"To a corporation like Meijer, $190,000 isn't a lot of money and this needs to be fixed so it doesn't happen again," said township Supervisor Wayne Kladder.
Schneider this year launched a criminal probe into Meijer's elections violations, after a lawsuit filed by Acme Treasurer William Boltres unearthed Meijer's illegal activity.
But a local circuit judge last month ruled that state law doesn't allow Schneider to pursue aspects of that investigation, including Schneider's efforts to force Meijer executives to turn over some documents and potential witnesses through subpoena.
Schneider asked that any agreement specifically exempt individuals from being covered by the agreement and require Meijer to cooperate with a criminal investigation. The agreement did neither.
Land spokeswoman Kelly Chesney said it was not Land's intent to give individuals involved in the campaign finance violations blanket immunity from criminal prosecution.
"Our intent was to put together a conciliation agreement with Meijer," Chesney said. "We did not have any complaints against individuals."
When asked if Land believed fines would act as deterrent to future illegal activity, Chesney said: "We are implementing the letter of the law to implement the steepest financial penalty the statute allows."
The fines levied by Land were broken down separately for violations in both a 2005 big box moratorium referendum that voters narrowly overturned, as well as for the 2007 recall vote against the township board.
Land said the agreement also specifies internal controls and company restructuring by Meijer to prevent future campaign finance violations.
Breaking down the fines
The two conciliation agreements outline numerous campaign finance violations alleged by the state against Meijer, including:
-- Four incomplete campaign finance reports related to the 2007 recall election against the township board.
-- Failure to file various campaign statements disclosing money spent against the proposed "big box" zoning moratorium in 2005 that township voters narrowly overturned.
-- Failure to file organizational statements as a ballot question committee with the county prior to the 2005 big box moratorium vote, and for not filing an annual campaign statement during that year.
-- Payment of 20 corporate expenditures totaling $55,437 to influence the recall vote in February of 2007.
The state's sanctions for the recall vote activity include civil fines of $79,437, equal to Meijer's improper expenditures plus $11,000 for payments made to the Seyferth, Spaulding and Tennyson Inc. public relations firm for work on the recall campaign. Also included is $9,000 ($1,000 each) for each expenditure made to the Dickinson Wright PLLC law firm that assisted with the recall, and $4,000 ($1,000 each) for its incomplete campaign finance statements.
The state also docked Meijer another $55,437 from its Political Action Committee, which officials said should have paid for the company's political campaign activity. That brought the total sanctions for the 2007 recall vote activity to almost $135,975.
From the 2005 big box moratorium vote, Meijer agreed to a civil fine of $50,463. That total included $46,463 in undisclosed expenditures plus $4,000 ($1,000 each) for not filing four necessary campaign finance documents. Also included is $4,800 in late filing fees payable to the Grand Traverse county clerk's office.
See related story
AG: Meijer deal bars criminal probe - May 13, 2008 03:46 pm
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