Tim Keller

Who ever would have thought State Auditor Tim Keller--known as a watchdog of New Mexican tax dollars--would be accused of money laundering? Well, welcome to the 2017 ABQ mayor's race where the heat on Keller is getting hotter than a Tucumcari parking lot in July. Here's how it's coming down. . .

Keller's campaign stumbled when KOB-TV questioned cash contributions Keller had received, perhaps in violation of the city's public financing law.

That law does not allow publicly financed hopefuls like Keller to take cash donations. "In-kind" contributions are permitted for goods given or services rendered. For example, a supporter donating office space to the campaign is a traditional in-kind donation.

But in this case and what drew the charges of money laundering from his foes, is Keller's campaign labeling cash donations as in-kind and using them to pay the firm of Keller's political consultant---Rio Strategies--run by Alan Packman. The question du jour: Is paying Packman's heavy payroll an "in-kind" donation?

In the six minute TV piece Keller's campaign manager was drilled repeatedly about the propriety of the in-kind cash donations for "professional services" but was never quite able to give a satisfying answer. All the while Packman stood off to the side--apparently unaware he was on camera and visibly upset by the line of questioning.

It took all of a New York minute before the state Republican Party and GOP mayoral hopeful Wayne Johnson scrambled their jets and started a bombing raid on the Keller camp. The NM GOP said:

The man who is supposed to keep New Mexico’s finances clean is breaking the very law that he helped write. Keller is accepting monetary contributions improperly designated as in-kind contributions in order to subvert the law that clearly states he is not allowed to accept cash contributions as a taxpayer-funded candidate. The Attorney General, the Secretary of State, and the Albuquerque City Clerk should investigate this illegal campaign finance scam and take immediate action against Keller and his campaign.

The R's attorney weighed in by asserting that allowing donations to the consulting firm running Keller’s campaign--is the “laundering of money contributions."

And it was Johnson who filed the official complaint against Keller with the City Ethics Board. That's politically smart because he wants to be seen as the chief GOP rival to polling front-runner Keller--not Dan Lewis. Only the two top vote-getters will be eligible for the November run-off election that will be held if none of the eight candidates in the race manages 50 percent of the vote.

REGROUPING

Chavez & Berry

Keller's campaign, which could not get out of the corner in that TV interview, tried to regroup by later calling the complaints "frivolous" and saying past publicly financed campaigns have "used the exact same procedure." From the Keller camp:

It’s no surprise that the Republican Party is filing a frivolous complaint against the leading candidate for Mayor. Tim Keller has always been committed to open and ethical government and our grassroots campaign is in full compliance with the law, including adhering to the $38,019.10 cap on such contributions. This is the exact same procedure used by the current mayor when he used public financing.

The problem with the Keller statement is that Tim Keller is not former Mayor Chavez or current Mayor Berry. They are not known as watchdogs of the state treasury and enforcer of statewide ethics. Keller is. Or was, if his rivals get their wish.

A consultant who worked on the 2009 mayoral campaign in which Chavez and Berry took public financing said his memory and check of the records from then does not support the conclusion that those candidates did the same as Keller. The consultant said the in-kind contributions were not as large as those that Keller received and, importantly, were not taken after the candidates received their initial distribution of public funds. Keller did receive in-kind donations after that distribution which appears to be prohibited.

And the other question: What about paying your campaign consultant with donated money and calling it an in-kind donation? Is that a legitimate good or service? That, the consultant said, is a new definition and needs to be adjudicated.

It appears Keller's team failed on basic campaign strategy when they failed to get clearance for the cash donations by simply getting an e-mail from the City Clerk approving them. We'll see how the investigation of all this plays out, but the political damage has been done.

SLOWIN' THE MO?

The hit on Keller's campaign could not have come at a worst time--just as he was going up on the air with his first TV ad in the hopes of slowing the momentum of fellow Dem contender Brian Colón who doubled his support in the polls with this first TV outing.

The only saving grace for Keller is that the Thursday night TV report ran at about 11 p.m because of a late football game. But the GOP follow-up complaints drew heavy attention, garnering circulation on social media and--not surprisingly--a front pager in the ABQ Journal and an AP rewrite of that piece that was distributed nationally.

Making matters more complicated for Keller--who is wildly popular with the Dem Party's progressive wing--is that this is the second time he has been in the barrel over his campaign finances. The newspaper last month came with a 1,300 word hit on the political committee that is supporting Keller's campaign and that has raised several hundred thousand dollars to advertise on his behalf. That raised questions about his commitment to public financing.

The committee is led by a former campaign manager of Keller's--Neri Holguin--raising the question of whether his campaign would--in violation of campaign rules-- coordinate with the committee. His campaign says the entities are completely separate.

Because publicly financed candidates get only $380,000 to run their campaigns Keller was warned when he undertook the mayoral race that publicly financing could cramp his style. Keller's chief foe--Dem Brian Colón--has raised $750,000 putting Keller at a disadvantage.

Now Keller's opponents are having a field day painting an image of Keller as a manipulator of the law that is so popular with progressives and not a true believer in public financing.

Will all of this slow Keller's momentum after he has taken the lead in the two public polls in the campaign? It could depend on how Keller fights back in the final weeks.
For the rising star of Democratic politics this campaign has suddenly turned from a "don't worry, be happy" event to a guy in a street fight encircled by enemies with knives at his throat.

UNPACKING PACKMAN

Alan Packman

The calls for an investigation of Keller's campaign financing opens up a can of Democratic worms, starting with Attorney General Balderas. He received a request for a criminal investigation of the matter from NM GOP attorney Blair Dunn, but because Balderas has openly endorsed Keller rival Colón--including a TV spot for him--Balderas can't investigate the allegations. He says he will refer the matter to the "proper authorities." He has yet to specify those authorities. It certainly can't be Secretary of State Maggie Toulouse Oliver. . .

Oliver is a client of Rio Strategies and Alan Packman and would also have to take a pass on the case. BernCo District Attorney Raul Torrez is another who is or has been a client of Packman and Rio. He also would be disqualified.

Rio Strategies and Packman have emerged in recent years as the dominant political consulting group for prominent state Democrats. It's services don't come cheap. The firm charged Oliver $10,000 a month even when her primary election was months away.

The firm's deep reach into Dem politics has been compared to that of McCleskey Media Strategies run by veteran consultant and Gov. Martinez adviser Jay McCleskey. He, too, has run into trouble navigating the campaign finance thicket, having been investigated by a federal grand jury, but escaping any criminal charges.

While Packman and McCleskey have drawn comparisons in terms of their reach in their respective parties, the comparison stops there. McCleskey has had a highly successful track record, including electing Martinez twice, helping the R's gain control of the state House for two years and getting a Republican elected ABQ mayor in 2009 for the first time in 25 years. Rio's success is more modest. It includes electing Oliver but only after she first lost an SOS election to Republican Dianna Duran. The firm successfully consulted Keller in his run for auditor as well as Torrez for DA, but he was unopposed in the general election.

Now Rio is following the path carved by McCleskey--trying to elect an ABQ mayor and governor. Their governor candidate is Democrat Jeff Apodaca who, like Olivier, is no doubt following very closely the developments with Keller and Rio.

A self-described "Santa Fe Alligator" picks up on the impact that the Keller situation could have on other Dems:

The other candidate that will get drawn into the shady (but still legal they claim) optics of Keller's in kind cash debacle is Secretary of State Maggie Toulouse Oliver. She is under attack by the Koch brothers and will be vulnerable. She is also a client of Rio Strategies so any complaints to her office she'll need to recuse herself. The Keller debacle is happening at the same time she is pushing for more transparency in reporting. Unless she distances herself, Koch will soon be making the connection to Alan Packman's loose interpretation of campaign rules. The optics are just ugly. A

And saying "it's technically legal" won't cut it from a candidate whose job as State Auditor is to double check taxpayer money. Not only has Keller endangered his mayoral run, he could potentially have damaged forever his squeaky clean image. Could he win auditor as a guy who lets his campaign do the dirty work? This is worse than Rio Strategies seems to think it is. Rio Strategies is tainted and any candidate on their slate is going to have issues.

From the perspective of Keller and Packman it must all seem unfair and perhaps even ridiculous that a flap over in-kind donations could cause such a storm. What about Brian Colón's past involvement in campaign finance controversy and the role his law firm plays in city government with those hefty contracts? Fair questions. But this is not a race for auditor or state senate. When the stakes are higher, the punches thrown go lower. They may be unfair but they still hurt.

FOLLOWING THE MONEY 

The latest batch of mayoral campaign finance reports were released Friday. In short, they show Brian Colón the best prepared for the media battle that will play out in the final weeks; Keller is in okay shape but will need that independent political committee that has raised money for him; Republicans Dan Lewis and Wayne Johnson are essentially tied in financial resources and Ricardo Chaves has to make a move. Republican Chaves has given his political consultant Bob Cornelius $150,000 of his personal funds to spend and the clock is ticking. Will Ricardo open his wallet wide or not?

All campaign reports can be found here.

By our count since the start of the campaign Johnson has raised $293,000 and Lewis $272,000. And that tells much of the tale of this contest. If there were only one major GOP candidate in the race they would likely have raised over $700,000, if not more. But the R's are splitting their votes and the money.

Colón reports $220,000 in cash on hand but he has already bought substantial TV time and prepaid for campaign mailers. We totaled about $220,000 he has bought for TV and $45,000 for its production. He pre-paid $45,000 for his mail and $12,000 for radio. He could add to that total if he needs to or hold back much of that $200,000 and hope to use it for an eventual run-off election.

Keller has $118,000 in cash after making an $88,000 TV buy. The committee supporting him reports $174,000 in cash and has not yet bought any media.

Insiders report a committee formed with deep business connections and opposing Keller called "Make ABQ Safe" will run a negative campaign against him but it won't approach the $200,000 area first speculated but more on the order of $100,000. That's still enough to make a dent and keep the committee promoting Keller on it its toes.

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(c)NM POLITICS WITH JOE MONAHAN 2017