Update On Alison Lundergan Grimes’ ‘Sweetheart Deal’

August 21, 2014
Contact: Allison Moore 502-618-1372

LOUISVILLE – Team Mitch today released the following background document detailing the revelations that Alison Lundergan Grimes may have accepted illegal gifts and services from her family’s corporate interest.

Politico Originally Reported That The Grimes Campaign Might Have Violated Campaign Finance Laws

Alison Lundergan Grimes’ Father Bought Her Campaign Bus And Rented It To The Campaign In Possible Violation Of Campaign Finance Law. “Left unmentioned amid the hubbub is this: Her father’s company acquired the bus just as the campaign got underway last year — and is renting it to his daughter for a fraction of what other companies would typically charge, according to a POLITICO analysis. Federal campaign finance law bars a campaign from receiving goods and services below the fair market value from a corporation, regardless of whether it is owned by a family member.” (Manu Raju, “The Grimes family discount,” Politico, 8/19/14)

The Use Of Grimes’ Campaign Bus Could Represent An Illegal In-Kind Corporate Contribution. “The difference between what the company is charging her campaign and the fair market value of the bus rental could be considered an illegal in-kind contribution, according to legal experts. “If it’s coming from a corporation, it’s illegal,” said Larry Noble, who served as general counsel of the FEC for 13 years and now works at the Campaign Legal Center, a watchdog group. Corporations are prohibited from donating cash or gifts to a campaign, while individual donors’ limits cannot exceed $5,200 per election cycle. Lundergan, Noble added, “can volunteer himself to the campaign, but what he can’t do is volunteer his company.” (Manu Raju, “The Grimes family discount,” Politico, 8/19/14)

Grimes Could Face Civil Penalties From The Federal Election Commission. “If the FEC were to take up the matter and find the Grimes campaign at fault, the agency could ultimately force the Democrat to pay a civil penalty for accepting an illegal corporate contribution and failing to report an in-kind donation.” (Manu Raju, “The Grimes family discount,” Politico, 8/19/14)

A Company Owned By Alison Grimes’ Father Bought The Bus

One Of Jerry Lundergan’s Companies Bought The Grimes Campaign Bus Right As Her Campaign Was Getting Underway. “Lundergan has several companies under the parent company SR Holdings Inc., including Signature Special Event Services, which owns the campaign bus. According to a copy of the vehicle’s registration obtained by POLITICO, the title of the bus was transferred to Signature Special Events on Aug. 30, 2013, from a Florida-based company, Robins Fantasy Inc., just as Grimes began to campaign.” (Manu Raju, “The Grimes family discount,” Politico, 8/19/14)

Grimes Campaign Says They Have Paid $456 A Day For Use Of Her Campaign Bus. “A review of Federal Election Commission records shows Grimes paid less than $11,000 through June to rent the bus for at least 24 days, amounting to about $456 per day.” (Manu Raju, “The Grimes family discount,” Politico, 8/19/14)

The Company That Previous Owned The Grimes Campaign Bus Rented It Out For $1,500 A Day. “The firm that sold the bus to Lundergan’s company typically charges about $1,500 per day to rent the same vehicle.” (Manu Raju, “The Grimes family discount,” Politico, 8/19/14)

Bus Operators Say A Typical Bus Rental Cost “About $2,000” A Day. “Several bus operators said the campaign appears to be paying significantly less than usual for its daily rental costs. “It typically costs about $2,000 per day,” said an operator of a bus company working in Kentucky, who asked for anonymity to avoid angering potential clients. “That’s the industry standard.” (Manu Raju, “The Grimes family discount,” Politico, 8/19/14)

A Company Grimes Uses To Support Her Claim, Calls The Amount Grimes Campaign Has Paid For Their Bus “A Sweetheart Deal”

Star Coach Vice President Says Paying Under $11,000 For 266 Days Use Of A Bus Is “A Sweetheart Deal”. “In an interview with the Associated Press , the Vice President of Star Coaches Inc — one of the companies used to make the estimate based on information on their website—said that the $456 rate paid by the campaign is a “sweetheart deal” because he would have charged the campaign every day regardless of whether or not the bus was used. “If they’re paying 11 grand to have that bus wrapped for 266 days and use it however many days they want to use it? That’s a sweetheart deal,” Star Coach VP Dan Neuen told the AP.” (Jacqueline Pitts, “Campaign bus controversy continues as Lundergan's company responds to an online inquiry "don't do transportation",” CN2, 8/20/14)

Grimes Campaign’s Response Raises More Questions Than It Answers

Grimes Campaign Estimate “Appears To Include Her Fuel Costs”. “Given the miles campaigns travel across their respective states and the high price of gas, companies that do not provide fuel costs would certainly provide lower estimates. The $456 per day that the Grimes campaign has paid for her bus rental appears to include her fuel costs. (Manu Raju, “Alison Lundergan Grimes rebuts bus claims,” Politico, 8/19/14)

Yet Grimes Campaign “Appears To Be Silent On Fuel And Driver Costs”. “On Tuesday, the campaign also highlighted online rates advertised by several other companies to argue that the amount it pays to rent its bus is “well within market rates,” but they all appear to be silent on fuel and driver costs. (Manu Raju, “Alison Lundergan Grimes rebuts bus claims,” Politico, 8/19/14)

Staley Coach & Sales Estimate Does Not Include Fuel Costs. “The $150-$175 estimate also did not include driver or fuel costs, Staley said.”  (Manu Raju, “Alison Lundergan Grimes rebuts bus claims,” Politico, 8/19/14)

Coast To Coast Coach’s Estimate Does Not Include Fuel Costs Or Driver Fees. “Another company the Grimes campaign cited, Coast to Coast Coach rentals, on Tuesday cited a $450-per-day rental cost. But a representative said that does not include fuel costs for a vehicle — which typically runs about 5-6 miles per gallon — nor does it include the $200-per-day driver fee.” (Manu Raju, “Alison Lundergan Grimes rebuts bus claims,” Politico, 8/19/14)

North Side RV’s Quote Was For Just The Bus Rental. “The campaign said it received a quote of $180 per day from North Side RV for a 35-foot bus, which is smaller than her rental.” (Manu Raju, “Alison Lundergan Grimes rebuts bus claims,” Politico, 8/19/14)

Grimes Campaign Saying One Thing To Kentucky Reporters On Fuel Costs And Another Thing To Politico

Grimes Has Told Kentucky Reporters That Its $456 Per Day Cost For Her Bus Does Not Include The Price Of Fuel. “There's another problem: Fuel costs. Since the initial POLITICO story raised questions about the rental deal, the Grimes campaign has been scrambling to convince the media that its roughly $10,939 in expenditures to rent the bus — or roughly $456 per day — is well within market value, as required by federal law. To buttress their argument, campaign officials have told several Kentucky media outlets that its daily rental costs of $456 do not include the price of fuel.” (Elizabeth Titus, “DSCC targets Louisiana — Alaska air wars rage on — Immigration cools as CO-06 issue,” Politico Morning Score, 8/21/14)

Yet, In Emails To Politico, Grimes Campaign Says Those Costs Include Fuel. “But that argument directly contradicts what they told POLITICO in an Aug. 8 email and what Federal Election Commission reports show. In that email, the Grimes campaign broke down all of its expenditures for the bus, saying its payments were for "bus rental + fuel costs." And that included two payments made on June 30 to Signature Special Event Services (Lundergan's company) for $5,334 and $1,145, which were listed in the FEC filings for "transportation, fuel." (Take a look for yourself on p. 3,450 of its July 15 quarterly report.) Those costs were included in the $10,939 total. (Elizabeth Titus, “DSCC targets Louisiana — Alaska air wars rage on — Immigration cools as CO-06 issue,” Politico Morning Score, 8/21/14)

Finally, Signature Special Events “Does Not Do Transportation” And Is Not Licensed To Provide Commercial Busing Services

In An Email, Signature Special Events, Which Owns The Grimes Campaign Bus, Says They Do Not Provide Transportation To Customers. “The he said, she said of the legal questions over how the campaign of Democratic U.S. Senate candidate Alison Lundergan Grimes is renting her 45-foot campaign bus continued Wednesdayas companies cited by the Grimes campaign take issue with the numbers and an inquiry through the quote request section of Jerry Lundergan’s business’ website says they do not provide transportation services. Signature Special Events Services, the company owned by Mr. Lundergan, said in an email request the company does not provide any type of transportation services to ordinary customers, according to a response from the company to an online request for a quote.” (Jacqueline Pitts, “Campaign bus controversy continues as Lundergan's company responds to an online inquiry "don't do transportation", CN2, 8/20/14)

Jerry Lundergan’s Company Is Not Licensed To Operate Commercial Buses Suggesting That The Bus Was Purchased Solely For Campaign Use. “It turns out the company owned by Jerry Lundergan doesn't offer transportation services even though it is renting a 45-foot bus to his daughter, Alison Lundergan Grimes (http://goo.gl/6jvuBe). Moreover, a review of federal records shows Lundergan's company is licensed as a private carrier, rather than as a for-hire passenger carrier. These twin developments suggest that the bus was purchased expressly for use of the campaign, and it could lend fodder to the Mitch McConnell camp that Grimes is accepting an illegal corporate in-kind donation. The Grimes campaign denies that it did.” (Elizabeth Titus, “DSCC targets Louisiana — Alaska air wars rage on — Immigration cools as CO-06 issue,” Politico Morning Score, 8/21/14)

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