News » News Features

Kevin Kelley's Community Chest

How a Cleveland City Council Campaign Fund Rewards Allies and Stifles Dissent

by

mainpic_12-6-17.jpg

Last month, Ward 13 Cleveland City Councilman Kevin Kelley was re-elected as council president by a unanimous vote of his colleagues. The unanimity was assured by an outdated political instrument known as the Unit Rule, which mandates that all council Democrats must vote with the majority or else face banishment from the party caucus. While the U.S. Democratic Party abolished the Unit Rule for its own nominating conventions in 1968, the rule actually does make sense in a politically divided legislature, where voting blocs can use it to leverage the full might of their membership. But in Cleveland City Council's current makeup — that is, 100-percent Democratic — the Unit Rule's function is authoritarian. It serves only to silence dissent.

The Unit Rule is brutally effective in the hands of Kevin Kelley, who typically holds a vote to invoke the Unit Rule before a vote is taken on the issue at hand — his presidency, for example. This ensures a unanimous outcome. But certain city council veterans roll their eyes when this happens, because the point of the Unit Rule is to ensure that all party members vote with the majority once a majority is established via caucus vote. It's not intended to guarantee unanimity on every issue from the start.

But this is Cleveland.

And so Kelley was being sincere when he told Cleveland.com that he was confident he "[had] enough votes" for his reelection as council president, and therefore saw no need to wait for official tallies in Wards 1 and 7, where provisional ballots had not yet affirmed that challengers Joe Jones and Basheer Jones defeated incumbents Terrell Pruitt and T.J. Dow in the city's general election on Nov. 7. In fact, Kelley was understating things. He knew that the Joneses' votes would be moot. Thanks to the Unit Rule, he didn't just have enough votes, he had all the votes.

The Unit Rule is by no means the only instrument that incentivizes conformity and obeisance to power on council. One of the clearest, though seldom reported on in depth, is something called the Council Leadership Fund.

Like the Unit Rule, the Council Leadership Fund is wielded by the council president, who controls the purse strings. It began long ago, predating even councilman Mike Polensek, who was first elected to the body in 1978. It is a pot of money that fluctuates in size — it ballooned in 2007 and 2008 to more than $400,000 in available funds — and has long been used to help finance the re-election campaigns of incumbent councilpeople, provided the incumbent councilpeople remain in the good graces of the council president. That means doing what they're told.

Former council president Marty Sweeney confirmed the fund's purpose to Scene in 2009.

"If you're supportive, it's there," he said.

Current council president Kevin Kelley confirmed much the same, responding in general terms to a series of questions that Scene posed about the fund.

"The Council Leadership Fund is a PAC of council leadership," he wrote, in a statement provided by a council spokesperson. "It has been in existence longer than anyone knows. It's similar to PACs at the state or federal level, to support Republican or Democratic caucuses. The fund supports those council people who support council leadership's agenda."

Most councilpeople are grateful to hitch a ride on the gravy train because the gravy is plentiful. And in many of the city's wards, independent fundraising, even by well-known incumbents, can be a challenge. That's less the case for citywide elections. Scene reported on mayor Frank Jackson's June campaign fundraiser in Gates Mills. That event, dubbed "Frank's Fat Cat Festival" by protesters, netted the mayor nearly $150,000 in big contributions from the region's elites — prominent figures in the fields of law, finance and real estate.

Many of those same elites, operating as firms or as individuals, have contributed to the Council Leadership Fund as well. In the fall of 2017 (the as-of-yet unaudited "Pre General" filing), the Fund raised $128,405 in contributions. This was the most in a single reporting period since 2007. For the first time in several years, the fund's balance eclipsed $200,000.

The vast majority of the most recent fundraising, and existing reserves besides, went to the Cuyahoga County Democratic Party, on which Kevin Kelley now serves as vice-chair. Modest chunks were distributed to Kelley's aligned council colleagues to aid their campaigns.

This is how the Council Leadership Fund has operated for years. Scene examined the financial filings of the Council Leadership Fund from 2010 to 2017, an era that spanned the council presidencies of both Martin Sweeney and Kevin Kelley. The filings illustrate how Cleveland lawmakers remain in power by conforming with council leadership — by "not rocking the boat," as one councilperson put it to Scene recently — and how consultants and other professional contractors are rewarded for their contributions.

This dynamic is a familiar one, observable daily in corridors of power from the statehouse to Washington, D.C. It's easy to deride politicians who are so beholden to campaign donors that, in effect, they become employees of their benefactors. Take, for example, the National Rifle Association; Big Pharma; the Koch Brothers and their affiliates; the rib-sucking, 10-gallon-hat-wearing Houstonians of the oil & gas lobby, and so on.

Is the situation in Cleveland all that different?

Last month, Kevin Kelley sponsored legislation to require the filing of financial disclosures alongside initiative petitions. He framed the ordinance as a benefit to voters. He said it was important to educate Cleveland citizens on who was funding voter-led campaigns like the Fight for $15 minimum wage and the opposition to public subsidies for the Quicken Loans Arena renovation.

"This is a small ray of light," Kelley told his colleagues, "a small amount of transparency that we can provide."

Kelley told Scene after the meeting that the legislation was "good for our citizens and good for transparency in general," which we can get behind. So too is a ray of light on council itself, and its sources of money.

The Council Leadership Fund hasn't been examined closely since 2013-2014, when Cleveland.com's Leila Atassi reported on the contributions of city council consultants. The Leadership Fund had drawn attention after conversations by contractor Michael Forlani were caught on FBI wiretaps in its Cuyahoga County corruption probe. In one, Forlani described efforts to funnel $20,000 to the fund through intermediaries to curry favor. A Plain Dealer review of that year's filings showed no such donations, but the prospect of possible untoward contributions and rewards merited a deep dive.

As 2017 draws to a close, in the face of growing concerns about city council's homogeneity under Kevin Kelley and its inability to stand up to mayor Frank Jackson, it's high time for another look.

WHO GIVES?

The largest single donation ($12,000) to the Council Leadership Fund in 2017 came from Albert Ratner, co-chairman emeritus of Forest City, via his RMS Investment Corporation, the real estate management and development firm behind Shaker Heights' Van Aken District. Since 2010, there has been only one other individual donation of that size, from the parking lot magnate Manuel Chavez III, in 2013.

Chavez is one of the fund's many recurring donors. The $12,000 donation in 2013 was his first and largest, but he gave $10,000 in 2014, 2015, and 2017 as well. Chavez is a partner at FastPark, the Cincinnati-based airport parking company which operates a facility at Hopkins.

Other top donations in 2017 came from Jimmy Haslam, the Cleveland Browns owner, who gave $10,000, (the Indians' Paul Dolan only gave $2,500); Doug Price and Karen Paganini of K&D development, who each gave $6,077.76; the law firm Tucker Ellis LLP, which contributed $5,000 for the third time in four years; and Landmark Management, which gave $5,000 via four contributions from Robert Rains, John J. Carney, John M. Carney and Michael Carney.

As in most years, the industries that provided the largest share of 2017 contributions were law and real estate.

In addition to the Tucker Ellis contribution, lawyers from the following firms contributed in 2017: Ulmer & Berne; Mansour Gavin; Collins & Scanlon; Douglass & Associates; Walter Haverfield; Roetzel & Andress; Climaco, Wilcox, Peca & Garofoli; Benesch, Friedlander, Coplan & Aronoff; Spangenberg Shibley & Liber; Bricker & Eckler; Calfee, Halter & Griswold; and Squire Patton Boggs.

Sometimes, these firms donate as PACs. Squire Patton Boggs, for example, and its predecessor Squire Sanders & Dempsey — in whose employ attorney Fred Nance pays very close attention to the region's weight class — typically have given $2,500 each year and listed their Washington, D.C. address. This was the case in 2017. (In 2016, a name was attached to the contribution: partner David Goodman.)

Other times, these firms donate in packs. In 2010, 10 lawyers from Calfee Halter & Griswold each donated $1,000 for a grand total of $10,000. In 2012 and 2013, five Calfee lawyers each gave $1,000. In 2014, Robert Triozzi, (former Cleveland law director and current Cuyahoga County law director) gave $5,000 on behalf of the firm, where he practiced until 2015.

Bricker & Eckler is the firm of former prosecutor (and Kevin Kelley chum) Bill Mason. Mansour Gavin is Tony Coyne's firm. (Coyne was the longtime chairman of the City Planning Commission.)

Walter Haverfield and Roetzel & Andress were the law firms that represented city council clerk Patricia Britt and law director Barbara Langhenry, respectively, in the Q Deal suit. Todd Hunt, the Walter Haverfield attorney for Britt, personally gave $1,000 to the Council Leadership Fund in 2014 and 2015, $500 in 2016, and then $1,000 in 2017 again (along with two other attorneys from Walter Haverfield). Stephen Funk, the Roetzel & Andress attorney, didn't give to the fund personally. The Roetzel contributions came from partner Lewis Adkins: $2,500 in 2012, $1,000 in both 2013 and 2014, and $2,500 in 2015, 2016 and 2017. Funk did, however, give to Frank Jackson's mayoral campaign. (He was representing Langhenry, not Britt, to be fair.) He and four other Roetzel attorneys each contributed $1,000 at Jackson's June fundraiser in Gates Mills.

As in years past, the 2017 Council Leadership Fund filings disclose a Who's Who of the region's top real estate developers. As an exercise, see if you can track down a big Cleveland development project in which the developer did not give to the fund.

In addition to the hefty contributions from K&D, representatives from the following firms contributed this year (with notable projects in parentheses):

Landmark Management (Bridgeview Apartments, Colonial Marketplace); MRN Ltd. (East Fourth Street, Uptown); Richard Bowen + Associates/Shaker Associates (Third District Police Station/Midtown); Weston Inc. (The Standard, West Sixth & St. Clair); Forest City; FastPark; Geis Companies ( Cuyahoga County HQ, The 9); The Finch Group (The Innova Project); Cumberland Development (Cleveland Lakefront, 5th Street Arcade); Carnegie Management and Development; Chelm Properties (Cleveland Business Park); First Interstate Properties (Steelyard Commons, One University Circle); and Foran Development Group (West 25th Street Lofts).

For all of the above, save Carnegie, Cumberland and Foran, these were not first-time contributions to the fund since 2010. Adam Fishman of Fairmount Properties (Flats East Bank), John Ferchill of the Ferchill Group (North Point Office Complex, Cleveland Institute of Art) and Peter Rubin of the Coral Company (Shaker Square), among other well-known developers, did not donate in 2017, but have donated in years' past.

Other regular contributors to the fund include financial executives — including Mr. Umberto Fedeli himself, the insurance magnate who hosted Jackson's Gates Mills event, and who has made six contributions of $500 and one of $750 since 2013 — the DeGeronimo family of Independence Excavating Inc., who regularly contribute thousands; Marc Divis of Cleveland Thermal, "Downtown Cleveland's leading business district energy provider"; sports team owners and their families and partners, and union PACs.

In addition to the Cleveland Teachers Union and Employees for a Better America (formerly the Continental Airlines Employee Fund), the most consistent union contributions come from the construction trades. Pipefitters Local 120, Local 38 (Electrical Workers), Sheet Metal Workers #33 and the Cleveland Building and Construction Trades Council (which is composed of 17 unions) generally contribute every year. Terry McCafferty of Local 120, and Dave Wondolowski of the Construction Trades Council, were also outspoken proponents of the Q Deal. They both testified at Cleveland City Council in support of the project.

PHOTO BY SAM ALLARD
  • Photo by Sam Allard

Dan Gilbert and his wife Jennifer, both of Franklin, Michigan, each donated $5,000 in the fall of 2014. Executives from Gilbert's network of companies, Rock Ventures (Matthew Cullen, Jeffrey Cohen, Steve Rosenthal and Nathan Forbes), contributed to the fund in the fall of 2013 for the first and only time.

That reporting period (the "Post General" 2013 filing) was notable for another reason: The only other two contributions came from the Friends of Armond Budish PAC ($1,000) and Robert Dykes, the CEO of Triad Research Group ($500). The Dykes donation is significant because his firm had just received $100,000 from the City of Cleveland to redraw the city's wards. That redistricting process was a notoriously secretive one and led to the bizarrely shaped Ward 10, the "Eugene Miller Ward," which Jeff Johnson nevertheless carried in 2013 — more on which shortly.

Payment into the fund by consultants hoping for contracts, or as gratitude for ongoing contractual relationships, is common. The payments are sometimes small (perhaps even symbolic), as in the case of Mary Anne Sharkey. Sharkey's Mita Marketing just received another Cleveland City Council contract, worth as much as $60,000, to provide "big picture" public relations strategy and assist with crisis communications in 2018. She contributed, under the names Mary Dirk and Mary Ann Dirk, $250 in 2016 and 2017. Sam Salim, who owns Madison Graphics and receives regular printing work for city council yard signs and mailings, donated $100 in 2014 and $250 in 2016 and 2017.

The most extreme example of this relationship is former city councilman John Zayac and his Project Group. Zayac told Cleveland.com's Leila Atassi in 2014 that he likely would not contribute to the Council Leadership Fund at the same level if his contract were to be terminated. (In fact, he began contributing less after Atassi's reporting.)

Zayac's Project Group just received another annual contract from city council, worth as much as $200,000, for monitoring public utility projects in 2018. This year, Zayac's wife Marie Simon donated $500 to the fund, but Zayac gave nothing personally. In both 2016 and 2015, the Project Group PAC gave $2,500. In 2010, 2011, 2013, and 2014, however, the PAC gave a minimum of $2,500, and Zayac himself, his wife, his Project Group partner Michael Tuan Bustamante and even his sister, Michele Hejnal, contributed to the fund at varying levels.

Former city councilman Jim Rokakis runs the Thriving Communities Institute at the Western Reserve Land Conservancy. His organization just received another annual city council contract, worth as much as $150,000, to continue its work on demolition and reforestation issues in 2018. Rokakis gave $250 to the Council Leadership Fund in 2014 and $1,000 in both 2016 and 2017. In 2015, the summer that Kevin Kelley and councilman Tony Brancatelli provided $20,000 in casino revenue funds to Rokakis' organization to help pay for a citywide property assessment survey, Rokakis gave twice, donating $1,000 in both August and October.

Rokakis told Scene that his contributions were unrelated to his contractual work. He has been donating to the fund since the late 1990s, he said, and gave to individual city councilpeople as well.

"The current council president is a strong leader and effective manager of the Council process," Rokakis wrote in an email. "There is no tougher job in elective office that I know of than the job of Cleveland City Councilperson. I support their work. I would contribute to their efforts regardless of whether we contacted with them or not."

WHO GETS?

The most egregious use of the Council Leadership Fund — and the most astonishing line items to encounter in the financial filings we reviewed — was the aggressive attempt by council president Martin Sweeney, in 2013, to secure Ward 10 for councilman Eugene Miller. Sweeney had specifically redrawn that ward for Miller, to the vocal frustration of his colleagues, in an effort to unseat Jeff Johnson. This proved unsuccessful. As it happened, Miller ran for the seat again in 2017, which Johnson will be vacating after his failed mayoral bid. Miller lost to county councilman Anthony Hairston in November.

But in the fall of 2013 (as reported in both the "Pre-General" and "Post-General" campaign finance filings for that year), Sweeney poured more than $20,000 into Eugene Miller's campaign efforts, paying for canvassing, consulting, printing and mailing, all from the Council Leadership Fund.

Since then, no favoritism of that magnitude has surfaced. Under Kelley, council members typically receive modest contributions of $1,000 or $1,500, based on campaign needs. But favoritism does still exist.

On Oct. 10, Kevin Bishop, who won the Ward 2 city council seat in November, was given $1,000 from the Council Leadership Fund. This was striking because Bishop was not yet a sitting member of city council. Before he set one foot inside City Hall as a duly elected representative, he had already received more support from the Council Leadership Fund than the man he was to replace, Zack Reed.

That is, at least since 2010. Reed and Jeff Johnson are the only two council members who haven't received a dime from the fund in the period we reviewed in detail. Mike Polensek, Kevin Conwell and Dona Brady all received modest contributions and printing dollars from Martin Sweeney, but have received nothing under Kevin Kelley. Brady told Scene that this was "no big deal." It was merely her preference.

Brian Cummins, much like Reed and Johnson, was a leadership fund outcast and had received nothing from 2010-2017. But after Cummins flipped his vote on the Q Deal in April, a decision Cummins admitted was motivated by political pragmatism, Kelley rewarded him. Cummins received payments of $1,500 in June and October. The $3,000 total for Cummins was the second-highest among all councilpeople in 2017. Only Phyllis Cleveland, Kelley's majority leader, received more: three contributions totaling $4,000.

"It's no more than a slush fund for the council president," said departing councilman Zack Reed, when we asked him about the Fund. (Reed was an outspoken critic of the fund under Marty Sweeney as well.) "The hypocrisy is, they raise money on behalf of city council, using the council name. But it's based purely on personality. If the council president does not like you, you don't get the money. Now I learned long ago how to raise [my own] money. The problem is people who don't raise money, or can't, are beholden to the council president. They vote how they're told to vote. That's the sad fact."

In December 2016, Kelley gave $1,000 contributions to many of his colleagues: in fact, to everyone but Zack Reed, Jeff Johnson, Mike Polensek, Kevin Conwell, Dona Brady, Brian Cummins and Mamie Mitchell. Five of these seven outcasts, the men, were among the six opponents to the Q Deal, (all but T.J. Dow).

The Mamie Mitchell omission is interesting. She had been a regular recipient of contributions and marketing dollars when Sweeney controlled the fund. And she was one of seven councilpeople to receive a $1,000 contribution in 2015, when Kelley was in control. The omission suggests that city council leadership knew she wouldn't be around much longer and that, in keeping with rumor, the installation of Blaine Griffin in her Ward 6 seat was planned long before it was made public.

Blaine Griffin was officially appointed in May — though it was uncontroversial, his appointment was ratified via the Unit Rule — and he immediately benefited from his "incumbent" status. He received a $1,500 contribution a month later to help his council campaign. Griffin won Ward 6 by a wide margin.

The single largest contribution that the Council Leadership Fund has made since 2010, however, was not to a councilperson. It was a $50,000 donation to the Cuyahoga County Democratic Party in the fall of 2013. That donation was followed by three additional donations totaling $40,000.

But this fall, that generosity was surpassed. From July 19 through Oct. 10, the Council Leadership Fund donated $137,500 to the County Democratic Party, of which Kevin Kelley would soon be appointed vice-chair.

The Council Leadership Fund's "Post-General" 2017 financial report is due Dec. 15. Check back at clevescene.com afterward for a breakdown.

2 comments

Comments (2)

Showing 1-2 of 2

Add a comment
 

Add a comment