Transcripts reveal state board's debate over Susan Gwinn election case

How strong was the original campaign-finance complaint lodged against Athens County Democratic Party Chair Susan Gwinn? Members of the state elections board seemed to find it fairly convincing, based on transcripts from a hearing in the case.

After a hearing in June, the Ohio Elections Commission found cause to believe that Gwinn had violated state campaign-finance reporting laws, during her unsuccessful campaign last year to unseat incumbent Democratic Athens County Prosecutor C. David Warren.

In the wake of this ruling, Gwinn was indicted in Athens County Common Pleas Court on multiple criminal charges for alleged campaign-finance offenses.

She was also later charged for allegedly organizing a plan to pay Ohio University student campaign volunteers a $5 bounty for every voter they brought to the polls for early voting in the November general election.

Gwinn's supporters have suggested that her political opponents "“ Warren in particular "“ have trumped up the criminal charges as part of a vendetta against her. (A recently filed affidavit has alleged that Warren made a threatening comment at one point in the presence of a witness, suggesting he planned to "get even" with Gwinn.)

It certainly doesn't seem out of the question that there's some element of political payback involved in the investigation of Gwinn's campaign activities.

A transcript of the June OEC hearing obtained by The Athens NEWS, however, suggests at the very least that members of the bipartisan commission "“ who voted unanimously to refer the case for possible criminal prosecution "“ were strongly impressed by the evidence against Gwinn presented by special prosecutor Dave Yost, a Republican who serves as Delaware County prosecutor and is running for Ohio attorney general.

Commissioner Harvey H. Shapiro, for example, suggested that the evidence shows Gwinn was clearly trying to skirt finance reporting requirements, when two people sent her money, and she then deposited it into her personal bank account, later using it for campaign expenses.

"In my mind, it's clearly an attempt to avoid the election laws and financial recording of them," Shapiro said.

Shapiro's political affiliation is listed as independent on the OEC's Web site.

OEC Executive Director Philip C. Richter told the commission that in concluding Gwinn probably broke the law, he was "most persuaded" by information obtained from her brother, who told investigators that when he sent a number of money orders to Gwinn, he felt he was making a loan to his sister, knew she was running for office, and knew she would need the money for her campaign.

"That certainly, to me, appeared to make that kind of a link between the making of the loan and the moving of the monies, shall we say," Richter said.

Yost told the OEC that Gwinn tried to conceal the source of $27,000 in donations to her campaign when she ran against Warren in the 2008 Democratic primary.

"This stinks to high heaven," Yost declared.

Gwinn's attorney Dennis W. McNamara told the commission that Gwinn did nothing illegal when she accepted personal loans from her brother and a long-time friend to help fund her campaign, and didn't list them as donations or campaign-related loans on her campaign-finance report.

"Candidates often, frequently, use their own money for campaign purposes," the attorney said. "Candidates frequently borrow money."

It's clearly not a crime, McNamara argued, to use your own money "“ even if it's borrowed "“ to pay for an election campaign.

"It's not a violation of the statute, and it's no concealment," McNamara insisted. "She is allowed to borrow money; she is allowed to use her own funds (for a campaign)."

McNamara noted that the OEC complaint against Gwinn "comes after about eight or nine months of investigation by (Yost) and two investigators appointed by Mr. Warren, who beat Ms. Gwinn in the primary."

After initially investigating Gwinn's party-related expenditures with Time Warner Cable, he said, Yost and his assistants "investigated lots of things for many months. Went through her bank account records, subpoenaed all sorts of records, and then found these contributions. And with nothing that they could take to a grand jury, (they) filed this complaint alleging vague and specious charges."

Gwinn, according to McNamara, has "done nothing wrong except irritate a vindictive person" "“ presumably referring to Warren.

Yost, however, argued that Gwinn is "a sophisticated, skilled and experienced actor in the elections realm," and must have known the legal implications of having her brother send her a number of separate money orders, in chunks that each totaled less than $3,000.

The prosecutor pointed out that the purchase of $3,000 or more in money orders triggers federal reporting requirements, and strongly implied that Gwinn was trying to dodge these by the way she had her brother send the money.

The purchase of the money orders was "structured to avoid detection of who was purchasing this and who the source of these funds was," Yost alleged.

Though Gwinn claims she was simply self-funding her campaign with the help of personal loans from a friend and a relative, Yost argued that what she was doing, if legally permissible, would provide any political candidate with a simple method of money-laundering to hide who's actually putting money into a campaign.

"If this arrangement was proper, then every donor, every lender to a campaign, could simply make a personal loan to the candidate and let the candidate make the loan and we have no transparency any more," Yost maintained. "It looks like every campaign is self-funded."

He also noted that Gwinn reported some of the supposed loans as a loan from herself to her campaign committee. Thus, he argued, if Gwinn won the election, and could continue raising money from political donors, "she can repay herself."

After hearing the testimony, Richter recommended a finding that Gwinn had broken the law, and a fine of $5,000.

Democrat John R. Mroczcowski, the vice-chair of the commission, then independently raised the issue of whether Gwinn's case should be referred for possible criminal indictment, according to the transcript.

"The complexity (of the case), as I see going through this and hearing it this morning, is it borders, in my mind, prosecution," Mroczowski said. He then asked Richter whether there were "criteria we should be looking at" to decide whether a criminal referral was appropriate.

Richter responded that there "really isn't an objective standard" for making this decision, but that the commission might want to refer a case for criminal prosecution for "most egregious violations."

Mroczowski appeared at that point to be a little hesitant, suggesting the commission "probably should hear more testimony on the circumstances" before making "that kind of grievous recommendation."

Shapiro, however, then made a motion that the case should be referred for prosecution, a motion that was seconded by Republican OEC member Bryan Felmet.

The commission did not discuss the motion, but voted unanimously in favor of it.