$25,000 Super PAC Spending in Royal Oak Race Includes Disgruntled Developer

$25,000 Super PAC Spending in Royal Oak Race Includes Disgruntled Developer

(Crystal A. Proxmire, Oct. 20, 2017)

Royal Oak, MI – Voters in Royal Oak may have noticed an increase in campaign literature and robo calls this election season thanks to a Super PAC funded in part by a developer who is currently suing the city. The Super PAC, a Political Action Committee,” advertises that “It’s time for a clean-sweep in city hall,” and “The Mayor and City Commission are auctioning off your city to the special interests. They should be going… going… gone!”

The issue of who is funding these messages has been a hot topic on social media this week, and the Oakland County Times has done our best to sort out what is happening.

According to online campaign finance reports, developer Donald Nahat was, up until Oct. 19, listed as the sole contributor of $25,000 to a Super PAC called “Citizens for a Responsible Royal Oak” that has been funding campaign literature and robo-calls in support of candidates that are running with a main premise of stopping the Civic Center development, which is being done in partnership with the Boji Group.

Nahat is a developer that owns several properties in Downtown Royal Oak including the one that houses Lockhart’s BBQ and an office building at Third Street and Troy that used to house The Daily Tribune. In Feb. 2017 Nahat proposed an office building in the same area as the Civic Center project, but on his own land, and asked for a tax break according to the Oakland Press. He told Oakland County Times that he is still marketing that project through Colliers International.

He is also part of a lawsuit against the City trying to stop the Civic Center project, which is adjacent to property that he is hoping to develop. In a July 2017 article about the lawsuit he was critical of the City giving tax breaks to a developer.

The PAC money has funded robo calls and multiple mailings that accuse incumbents of being beholden to developers and not being responsible to tax payers because of the incentives used in the civic center development.

Super PAC spending is legal under campaign finance laws thanks to a Federal ruling that gives corporations freedom to spend money in elections over and above what individual citizens are permitted.

The PAC is encouraging people to vote for Mike Skinner for Mayor and Commission Candidates Randy LeVasseur who is running for a two year partial term and Kim Gibbs and Richard Karlowski who are running for four year terms. Each of those candidates has been vocally opposed to the Civic Center development which is at the center of the lawsuit.

News of the PAC spending in the local Mayor and City Commission race spread quickly on social media this week, and on Oct. 19 the campaign finance report for the PAC was amended to remove Nahat’s name and replace it with other donors.

When asked about the filings, Nahat said “I am not spending $25 k in this race. The accountant for the PAC inadvertently put my name on all the donations to the PAC.”

Among the newly listed donors is at least one business in the same building as Nahat’s firm Huntington Real Estate Group.

PACs are independent campaigns which are prohibited by law from coordinating with candidates.

In a Facebook discussion with former City Commissioner Jim Rasor, when asked about the funding, LeVasseur’s campaign page said “Hi Jim. I haven’t received any PAC money. Sorry to disappoint you.”

However, a picture taken from Gibb’s Facebook page, shows LeVasseur and the other candidates in front of an ice cream truck that was paid for by the PAC at a rally hosted on the lot that is owned by Nahat where he is hoping to build his office building.  The Sept. 9 rally was held to “Save the Farmers Market,” which has never been slated for removal yet remains a message shared by those opposed to the Civic Center, and also was promoted as a way to meet the candidates.

LeVasseur told Oakland County Times “I oppose the civic center development because giving $5.5 million of taxpayer funds to a private developer, and spending over $2,000 per household on government facilities, is bad for our city. Those funds should be used to benefit people in our neighborhoods, not just a handful of special interests downtown. I’m happy to have support from lots of people in the community, but my focus is on the residents.”

When asked if he was concerned that a Super PAC was investing so much in the race, he replied “I’m not a fan of it. Unfortunately money is a big part of politics. It doesn’t surprise me, though, that our election this year is getting a lot of attention. The current commission’s actions have been very divisive.”

Gibbs responded with a similar sentiment about the Civic Center and about the incumbents. In regards to the PAC funding she said “I don’t like it, but the reality is I’m an underdog in this race. The incumbents have powerful friends who are willing to spend boat loads on their campaigns. At most, this just helps level the playing field. Serving the residents truly is what matters for me.”

Karlowski clarified that his concerns over the Civic Center project have to do with the process and specifics of the plan such as the choice of developer. “It is a false argument to lump everything under the guise of a “Civic Center Development” as if opposition to one thing is opposition to all. I am not opposed to the need for a new police station or city hall,” he said. He criticized the Boji Group as well as the fact that tax incentives are coming from the City and not from the DDA. His response included many criticisms of the project, which are also described in his prior candidate interview with Oakland County Times.

When asked about Nahat’s funding of campaign materials on his behalf, Karlowski said “As for Mr. Nahat’s ‘development interests’ I have no idea what those are, and as stated above, they have no impact on my position regarding the Boji office building. Further, I have not gotten any cash or in-kind contributions from Mr. Nahat.”

Skinner said “I have nothing to do with the PAC and have only heard that Mr. Nahat is one of many people who has contributed to the pack. I believe that they must have made a mistake in filing the paperwork. I would contact Mr. Nahat.” His campaign, which is separate from the PAC, has been funded with the majority “from citizens with a few business owners chipping in. No more than $1000 in any case.”

Donations to individual candidate campaigns are limited to $1,000. But to PACs, donations are unlimited.

A letter dated Aug. 11, 2017 from Michigan Department of State, Bureau of Elections to Citizens for a Responsible Royal Oak explains how PACs work.

“The U.S. Supreme Court decision issued on January 21, 2010 (Citizens United v Federal Election Commission) directly impacts the Michigan Campaign Finance Act… the prohibition against contributions from these organizations to candidates and committees remains in effect. With the decision, corporations, unions and domestic dependent sovereigns may use their treasury funds for independent expenditures on behalf of state or local candidates. There is no limitation on the amount of money that can be spent nor is there any restriction on the time frame for independent expenditures. …”Independent expenditure” means an expenditure by a person if the expenditure is not made at the direction of, or under the control of, another person and if the expenditure is not a contribution to a committee.”

Each candidate in the Royal Oak Mayor’s Race and Commissioners Race, apart from David Poulton, has done interviews with Oakland County Times. In the interviews they shared their views on the Civic Center project and other priorities for the city. For more on each candidate, view their videos by clicking on the pictures below.

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