Young New Jersey Republican learns campaign finance the hard way, or: “Dad, can I have $16,000?”
November 28, 2011
When my older brother graduated from college, he moved back in with my parents, got a job as a lifeguard and spent the summer looking for full-time work. Hank Lyon went a different route. After graduating from Holy Cross in 2010, and while working for his parents’ various businesses, he decided to run for the office of freeholder in Morris County, New Jersey. Things didn’t quite work out as smoothly as he’d hoped.
Lyon entered the field as a candidate in the June 7 Republican primary election. His only competition: Margaret Nordstrom, the 12-year incumbent, thrice chosen as the freeholder board’s directors, and a former mayor of Washington Township. In putting together his campaign, Lyon made his father campaign treasurer and became a partner in his parents’ LLC. His father claimed that by making Hank a partner in the LLC, Hank could convey to voters his personal interest in property taxes (presupposing it would be tough to convey that interest when you live at home with your parents).
Nordstrom, aware of her opponent’s family resources, kept close watch on Lyon’s campaign finance filings. It didn’t seem she had much to worry about; a month before the election, Lyon’s campaign had collected a little less than $5,000 (compared to her $10,000). Based on those figures, Nordstrom knew Lyon couldn’t spend as much as she previously anticipated, so she scaled back her campaign. This was reinforced when Lyon listed $636.88 as his campaign balance on the 11-Day Pre-Election Report.
Lyon, in a last-second effort to reach out to voters distributed several thousand mailers a week before the election, including six thousand pamphlets implying Nordstrom used her position in the local government to get “Open Space” in her town and accusing her of favoring “redistribution of wealth.”
The election was tight. The final tally was 12,264 for Nordstrom and 12,270 for Lyon. The 23-year-old defeated the incumbent by six votes.
In a post-election campaign finance report, however, Nordstrom was shocked to suddenly see that just before the election, Lyon received a contribution for $16,000, a figure representing roughly 79% of his entire campaign receipts. Nordstrom sued over alleged campaign finance violations. In Superior Court, Judge Thomas Weisenbeck voided Lyon’s nomination citing his campaign finance violations.
During the three-week trial, the facts of Lyon’s campaign finances came out. He previously collected loans from his parents ($2000 from Dad and $1000 from Mom) as well as a few hundred dollars in donations. That wouldn’t cover the cost of the mailings, so Lyon took out funds from the LLC, amounting in $16,000. He believed that as a partner, the money was rightfully his and therefore he could donate as much of it as he pleased. Lyon’s father signed the LLC check, because as a matter of custom he always did.
Lyon should have, according to New Jersey campaign laws, reported any contributions and expenditures greater than $1,200 to the N.J. Election Law Enforcement Commission (ELEC). He reported neither the $16,000 contribution nor the $14,000 mailer expenditure before the election. Furthermore, the judge ruled that the $16,000 contribution from the LLC could not be seen as Lyon’s own money, because he had never been officially written into the partnership (he was subsequently written in, but only after the litigation began). Therefore, the contribution should be considered from the person who signed the check: his father. Since the $16,000 could not be considered Lyon’s own money, it grossly exceeded the $2,600 limit on donations from any third-party. And since Dad already gave him $2000, Lyon could only receive an additional $600 from his father. The $16,000 contribution was illegal.
Judge Weisenbeck ruled the election results could not stand and therefore the Morris County Republican Committee should elect their nominee. Lyon appealed this decision, arguing that such determinations of campaign laws were not for a Superior Court judge, but the ELEC.
Before it reached the Appellate Division, the Morris County Republican Committee held a convention and, in another tight vote, chose Nordstrom over Lyon, 213-208.
On appeal, the ELEC agreed with Lyon’s main contention over jurisdiction and filed a brief with the State Appellate Division, claiming the Superior Court was outside of its jurisdiction. The State Appellate Division agreed with Lyon and ELEC, and granted the commission’s motion to intervene in the case.
The commission hadn’t decided on how to solve the primary mess before Election Day, so Nordstrom was still on the ballot as the Republican nominee for Morris County Freeholder.
On November 8, Margaret Nordstrom defeated Democrat Truscha Quatrone in the general election. It is possible that the ELEC could rule that Lyon’s actions were not violations of campaign laws or that even if they were violations, they should not have voided the primary results. If that happens, Nordstrom’s re-election probably won’t be upheld. A special election between Lyon and Quatrone may be necessary to determine the next freeholder.
The lesson for Lyon should be clear: read the rules more carefully next time, kid. Though there may still be a sliver of hope out there in an ELEC ruling for him, had he followed the campaign regulations by the book, he could have secured the nomination. And in Morris County, per capita one of the richest counties in America, the Republican Lyon would have an easy victory over his Democratic opponent.
Kevin Elliker is a first-year law student at William and Mary.
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