Gonzales

GOP Senate Candidate Returns Contributions From Conservative PAC

FEC has questions for Club for Conservatives PAC

The Federal Election Commission sent a letter to Club for Conservatives PAC last month with questions about its previously filed reports. (Chip Somodevilla/Getty Images file photo)

Rep. Marsha Blackburn is locked in a competitive and expensive race for Senate. But the Tennessee Republican’s campaign decided to return a sizable contribution from a political action committee that’s facing scrutiny from campaign finance regulators.

“Club for Conservatives PAC did not meet our standards for transparency,” Blackburn campaign spokeswoman Abbi Sigler said. 

Club for Conservatives burst on the scene in October when Brooke Pendley, a student at East Carolina University, started a PAC with help from her father and sent out numerous fundraising emails to boost Republican Roy Moore, who was running for Senate in Alabama.

The PAC was initially registered with the Federal Election Commission in Lexington, Kentucky, and has a mailbox in Charlottesville, Virginia, and an office for volunteers in Clemmons, North Carolina. There’s more background on Club for Conservatives here, here, and here.

Club for Conservatives contributed the maximum amount of $2,700 to Blackburn’s Senate campaign on Dec. 29. But the money was returned to the group on Jan. 4, according to the PAC’s first quarter FEC filing that detailed its financial information for the first three months of the year.

“Blackburn’s was not the only campaign that had questions, but it was the only campaign that was nervous enough (or maybe flush with enough cash) that it returned the contribution,” Nate Pendley, Brooke’s father and the PAC’s assistant treasurer, said in an email.

“We sent it again in the next quarter under the assumption that the campaign’s understanding might have become sophisticated enough to see that the donation was completely legal,” he said. The PAC sent a second $2,700 contribution to the congresswoman on March 31, but her campaign said it returned that check as well.

ICYMI: Fundraising Reports Say a Lot About a Campaign

Some raising, more spending

After a strong start in the heat of the Alabama Senate race and fundraising off sexual misconduct allegations against Minnesota Democratic Sen. Al Franken last year, contributions to Club for Conservatives dipped sharply at the beginning of the year. The PAC raised $162,000 in six weeks from the middle of October to the end of 2017, but the PAC took in just $15,311 in the first three months of 2018, according to the first quarter report filed by Nathanael Pendley on April 18.

“The ebb and flow of the PAC’s activity is due in small part to the political calendar, and in large part to the fact that this is at present an all-volunteer PAC that is at the mercy of the time commitments of our volunteers,” Nate Pendley said.

On the other side of the ledger, Club for Conservatives spent $47,563 in the first three months of the year. Besides the second Blackburn contribution, it gave $2,700 to North Carolina Rep. Ted Budd, $2,000 to Mark Harris (who defeated Rep. Robert Pittenger in the GOP primary in North Carolina’s 9th District), $1,000 to Chip Roy in Texas’ open 21st District, and $500 to North Dakota Rep. Kevin Cramer, who is running for Senate. All contributions were made on March 31, the final day of the reporting period.

On Jan. 29, the PAC reported $22,000 in independent expenditure spending on digital advertising to Paramount Communication to assist Pennsylvania Rep. Lou Barletta, who’s running for Senate, Rep. Devin Nunes of California’s 22nd District, Blackburn and Harris.

The group also spent more than $5,000 on office furniture, flags, and bunting; $2,150 for two months of rent; $741.61 at Best Buy for an “FEC compliance computer” and other office supplies; $574 for an airline ticket for Nate Pendley to travel to Nevada for the Senate race; and $441.98 at Michaels on materials for posters and placards.

Back to the future

Even though second quarter reports aren’t due for another couple of days, the PAC filed a 24-hour report in late spring, and it appears Pendley connected with a former ally.

On May 23, Club for Conservatives filed a separate independent expenditure report detailing spending to Facebook ($6,155.66), Google ($720), and Reach Right LLC ($23,672) to help Republican Dan Crenshaw in the May 22 GOP runoff in Texas’ 2nd District. (He won with 70 percent.)

According to the disclosure, the Reach Right expenses paid for “Voter Contact, ID Supporters, Email Distribution, List Rental.” According to Nate Pendley, the group sent over six million emails to Texas voters and national supporters.

Reach Right LLC was registered with the Wyoming secretary of state on May 4. Club for Conservatives’ FEC report lists a mailing address for Reach Right in Pinehurst, North Carolina, an address shared with a Kay Daly for Congress fundraising website, the draft Sheriff David Clarke for U.S. Senate committee, and the law offices of Jack W. Daly.

Jack Daly is listed as the CEO of Reach Right LLC on his Facebook page and on a May 21 letter by conservative leaders encouraging Ohio Rep. Jim Jordan to run for speaker. An email sent to Daly at the two addresses listed as his contact information for the draft Clarke committee was not returned.

Back in 2000, Jack Daly and Nate Pendley attempted to recruit a homeless man to run against the incumbent North Carolina state auditor who had the same last name to spark confusion on the Democratic primary ballot. In 2016, Nate Pendley appeared on behalf of Kay Daly, Jack’s wife, at a congressional candidate forum in North Carolina. Last year, Pendley worked for the draft Clarke committee, founded by Jack Daly.

FEC asks questions

On June 6, the FEC sent a letter to Club for Conservatives with four questions.

The commission took issue with the year-end report not being signed by treasurer Brooke Pendley (it was signed by Nate Pendley), having incomplete identification for some donors of $200 or more, potentially not filing correct 24-hour independent expenditure notices, and a missing memo on a $13,000 debt to Breitbart News Network LLC.

But, according to its first quarter FEC report, the PAC previously retained compliance help. There was a $4,885 payment on March 15 to Campaign Compliance Clearinghouse of Sheridan, Wyoming (a town of 16,000 people about two hours south of Billings, Montana). “Campaign Compliance Clearinghouse handles all of our FEC concerns, questions, and filings, etc.,” Nate Pendley said.

Campaign Compliance Clearinghouse LLC, which doesn’t appear to have a website, was registered with the Wyoming secretary of state on March 18 (three days after the PAC’s payment) by Cloud Peak Law Group.

A call to Cloud Peak Law Group, the registered agent for the LLC, was returned by Andrew Pierce, who said he could not reveal any information about Campaign Compliance Clearinghouse because of attorney-client privilege, but said he would relay the message seeking comment to the owners. At press time, Campaign Compliance Clearinghouse hadn’t returned the message, and Club for Conservatives declined to provide contact information.

A response from Club for Conservatives to the FEC is due by Wednesday, July 11, or the PAC risks enforcement action.

“Brooke and I are hopeful that Club For Conservatives will be a vehicle that provides a valuable enough service to earn a place among established and genuinely ideological PACs and tax-exempt organizations,” Nate Pendley said. “To start from scratch is very difficult. The road is long and most PACs will never make it long term.”

Club for Conservatives PAC ended March with $59,421 in the bank. Second quarter FEC reports, detailing financial activity for April, May and June, are due July 15.

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