An update to this piece appears here.
We have spent the past week or so reviewing the final campaign finance documents submitted by each campaign, PAC, and independent expenditure in the 2023 Chapel Hill municipal election cycle.
Campaign finance law is tricky and arcane, so much so that North Carolina requires campaign treasurers to complete mandatory training. And it’s not unexpected for first-time campaigns to amend their filings once or twice. A number of town council candidates did that this cycle. No biggie.
But then there’s the Chapel Hill Leadership PAC.
This is the political action committee formed seven years ago by CHALT, a community group that’s “opposed nearly every major development proposal” in Chapel Hill since its inception in 2014/2015. They recruit and endorse local candidates to run for elected office, and they raise a lot of money to help their campaigns.
CHALT’s PAC has had the same treasurer for the past seven years. And their most-recent campaign filing is flat-out bizarre.
For starters, it’s strangely organized, repeats transactions that don’t need to be repeated, has an incorrect filing date, and fails to follow some of the guidelines in the state Board of Elections’ Campaign Finance Manual. None of these issues rise to the level of the penalties that have been assessed in the past on CHALT PAC*, but they make the reports difficult to parse.
However, there are a few items we haven’t been able to figure out.
The numbers don’t add up correctly
On the second page (form CRO-1100), CHALT reports a total of $42,905 in contributions from individuals.
This total is repeated on each of the 10 individual pages detailing individual contributions (forms CRO-1210). Here’s an example from page 2:
And, each of those 10 individual pages lists the total for that page only (for example, on page 1 of 10, the total is listed as $1,530). But if you add up the 10 individual pages, the total is only $39,065. That’s a discrepancy of $3,840.
We reached out to Tom Henkel, the treasurer of CHALT’s PAC on February 11th and reported these errors. (You can read our email here.)
He responded that: “All bottom lines on the CRO 1210s are correct.”
But we’ve added together the numbers multiple times and… they’re not.
A bit of history
For years, the Town of Chapel Hill has limited the amount of money that can be donated to individual candidates. For example, in 2023 the limit for individuals was $357. However, PACs can raise up to $6,400 per person.
CHALT started their PAC in 2015. In previous cycles, they raised a lot of money, but nothing compared to the 2023 cycle.
The amount they raised in 2023 – $42,905 – is equivalent to purchasing 30,000 chicken fingers from Raising Cane’s, if you buy one hundred of their 300-finger “tailgate” packages, which also comes with a gallon of Cane’s Sauce™.
The reasons for the CHALT PAC’s increase in donations goes back to the summer of 2023: Last August, we reported on a group of wealthy homeowners in the historic district who planned to throw $120,000 into the 2023 mayoral and town council race because they wanted to overturn a recent decision to allow duplexes in Chapel Hill.
Our scoop caused the planned $120,000 PAC to shift gears: instead of forming a “separate PAC on short notice” – as one of their emails noted – they encouraged supporters to donate to CHALT’s PAC. And many did – the PAC received donations from more individuals than they had in previous cycles.
Though they didn’t reach their $120,000 goal, the PAC did secure $42,905 in funding to support the slate of Adam Searing for mayor and David Adams, Breckany Eckhardt, Elizabeth Sharp, and Renuka Soll for town council. This is in addition to the money the candidates raised themselves: in total, the slate raised $104,873.16.
Only Sharp was elected.
Who contributed to the CHALT PAC?
Unsurprisingly, many of the individuals who contributed to the CHALT PAC also contributed to the individual slate candidates. (Remember, individuals can donate a maximum of $357 to a candidate and $6,400 to a PAC.)
The most that one household donated to the slate was $15,656 – Steve and Lisa Jones, a couple in the historic district, both maxed out to the PAC and also contributed maximum amounts to 3 and 5 candidates respectively. Julia Grumbles, whose emails initially brought the $120,000 PAC to light, maxed out to 4 candidates but didn’t contribute to the PAC.
One other Chapel Hill resident, Joan Preyer donated the maximum ($6400) to CHALT’s PAC. Preyer is the wife of John Preyer, the chair of the Board of Trustees at UNC and a Republican who has donated hundreds of thousands of dollars to conservative causes.
Other large donors to the CHALT PAC include:
- Blake Allison Brooks, listed as a CEO of an architecture firm in Dallas, who donated $5,000;
- Greg Fitch of Fitch Creations (and, interestingly, a real estate developer!), who donated $4,500 (and $200 to candidates);
- Karl Brumback, a New York City resident who owns a house near downtown. He donated $3,200.
- Chatham County resident Julie McClintock – who cannot vote in Chapel Hill elections – donated $1,735 to the PAC (and $1550 to slate candidates).
- McClintock’s husband, John Morris, also a Chatham County resident, donated $1,000 to the PAC and $1200 to slate candidates.
Six other donors gave more than $1000, in total, to the PAC and candidates combined. The remaining 12 donors gave under $1000, combined, to the PAC and the slate candidates.
Independent Expenditures
Two groups (NEXT NC Action Fund and Shameful Nuisance/Triangle Blog Blog – that’s us!) and one individual filed independent expenditures for election-related expenses including mailers, flyers, and signs. NEXT NC spent $2709.53 and we spent $699.79. Both of those amounts covered elections in both Chapel Hill and Carrboro.
Dwight DeBree is the co-owner of Tru Deli. DeBree also maxed out donations to four slate candidates. He spent 1716.83 as an independent expenditure on signs for the Searing slate.
Here’s a bar chart showing how much money came into the 2023 municipal election cycle from independent expenditures.
Now, let’s look at all independent expenditure and PAC contributions for the 2023 election cycle in Chapel Hill.
What did the CHALT PAC spend money on?
No surprise here–the bulk of the money was spent on mailers. More than $22,000 went to Professional Mail Services Inc., with four separate transactions around $5,000 each. Around $10,000 went to Title Fight, LLC, a political consulting firm in Iowa that works on behalf of Democratic candidates, for what is listed as social media ads.
An additional $1,000 payment was made to a campaign consultant, Zack Czajkowski, a principal with Title Fight LLC, who is the son of former Chapel Hill council member and mayoral candidate Matt Czajkowski.
Around $600 was spent on canvassing materials, and around $1,700 was spent on reimbursing Julie McClintock for printing expenses and a post-election party held at Tru Deli, owned by Dwight DeBree.
Suspicious In-Kind Contributions
CHALT PAC also reported an in-kind contribution that feels suspicious. Back in October, the Daily Tar Heel reported on a September campaign event for the Searing slate of candidates that appeared to violate campaign finance law. It appeared to be sponsored by the Friends of Bolin Creek, a 501(c)(3) which is not allowed to engage in such campaigning. Friends of Bolin Creek and CHALT share an IP address and a PO BOX, and emails to both organizations go to Julie McClintock.
Then-CHALT PAC assistant treasurer Charles Humble, who also served as David Adams’ campaign manager, tried to reserve space on the American Legion site on behalf of the Friends of Bolin Creek and an unregistered nonprofit, Friends of Legion Park. When told that was not permitted, he reserved and paid the $35 registration fee for Umstead Park. He claimed that the event would “provide all candidates in the municipal races a chance to briefly describe where our park system is relative to our needs and how we should move forward.”
But they only invited the slate candidates.
When the Daily Tar Heel started poking around, Julie McClintock (current secretary / former president of Friends of Bolin Creek and a founder of both Friends of Bolin Creek and CHALT), explained that the payment on behalf of Friends of Bolin Creek was an “error” and that it was always intended to be hosted by CHALT (or it’s PAC, presumably). And so the CHALT PAC campaign finance report includes an in-kind contribution from Julie McClintock for $35, the same amount of the fee – although, of course, she didn’t make the initial payment to the town.
McClintock also made a $200 in-kind contribution for the update of the CHALT’s website. Presuming this was the significant update of the CHALT website in late August, we are curious who would make such a significant design update for only $200. It’s a real bargain – and well below what market-rate would be for such an extensive redesign and upgrade.
When asked about these discrepencies, CHALT treasurer Tom Henkel said, “Regarding Julie’s in-kind contributions, she thought it was proper to reserve the park for the candidate forum as a regular CHALT forum, which I did not know about as the CHL-PAC treasurer. Then I saw the DTH story and asked her about it. I told her that since it was the election season, I had to report this event in my campaign finance reports, which I did in a revised report for that time period. She then asked about the revision of the CHALT website, for which she paid $200. Again, since it was during the election season, I said that I had better report that, as well.”
Missing expenditures
The campaign finance form is missing expenditures. CHALT touted that an ice cream truck would appear at their September 24th campaign event and give away free ice cream. Pictures of the event show an ice cream truck, and also people eating ice cream. No expenditure appears for the ice cream truck.
The Doug Largent Band played at the September 24th event. Pictures of the event show several musicians. No in-kind expenditure appears for the band appearance.
As we mentioned before, the August revamp of CHALT’s website was listed as a $200 expenditure. However, website hosting and newsletter fees are not listed.
Both website hosting and newsletters are listed as expenses for all of the candidates who ran, but there is no expenditure listed for web hosting for the CHALT website or the newsletter that CHALT sends out.
We searched back through campaign finance forms from 2015 onwards – CHALT’s never mentioned who pays for their website, which is where their PAC accepts donations and where they list endorsements, or their newsletter, which was sent out several times in the weeks leading up to the campaign and contained campaign-related material and endorsements.
In October, we emailed CHALT and asked who paid for the CHALT website hosting. The [email protected] email – which goes to Julie McClintock – responded as follows: “In answer to your question, any CHALT election expense is reported transparently and is fully viewable in the reports sent to the Board of elections…
The political action committee reports all election expenses as well as donors as required by NC Election law and we embrace transparency.”
Unusual and incomplete filings of donors
PACs are required to file campaign expenses to the state using a different schedule than candidates. Whereas candidates must file an organizational report, a 35-day report, a pre-election report, a mid-year semi-annual report, and a year-end semi-annual report, a PAC only has to file mid-year semi-annual filings and year-end semi annual filings.
Here’s what a candidate filing page looks like for the 2023 cycle. It’s not unusual to see some amendments.
Here’s what the CHALT PAC page looks like:
During the 2023 cycle, CHALT filed an incomplete 35-day report and an incomplete pre-election report – which they didn’t even have to do. But neither filed report was accurate. Both reports left off several donations that CHALT’s PAC received during those time periods that were later reported on their year-end report.
A decade of this
Nearly a decade ago, Henkel petitioned the town to investigate itself for “apparent financial mismanagement.” The people who signed the petition Henkel submitted went on to form CHALT and a non-profit newspaper called The Local Reporter (which we’ve also covered.)
Over the past decade, CHALT has accused candidates, town staff, electeds, this blog, and other political groups of financial mismanagement. They’ve posted our addresses online to try to bully us. It’s a steady drumbeat of accusations – and a political tactic, plain and simple.
Meanwhile, Charles Humble served as the campaign manager for David Adams while simultaneously serving as the assistant treasurer of the CHALT PAC for several months. (He stepped down at the end of September; Adams’ campaign started in July.) Emails show that CHALT held weekly check-ins with candidates to coordinate. CHALT repeatedly said that they weren’t endorsing candidates in the election, when they sent out emails entitled “Chapel Hill Needs These Five Candidates” with pictures of the slate and their PAC funded signs at polling places and online and sent out a ton of mailers about their slate of candidates. And, of course, the campaign finance stuff we detailed in this article.
Do they think we’re stupid? Or just that most people aren’t paying attention to this stuff?
It’s hard to say.
We plan to continue to stay on top of this.
*About that penalty mentioned in the sixth paragraph
The public records of campaign finance filings by CHALT PAC reflect several late filings. After the first late filing, in 2018, the $250 penalty was waived. After the second late filing, in 2020, CHALT PAC was fined $500. There is no record that this penalty was paid. And in 2021, CHALT PAC was fined for a late filing for a third time, once again for $500. This time CHALT PAC appealed, and in November 2021, the State Board of elections rejected its appeal.
We asked Henkel, CHALT’s treasurer, about the 2021 penalty. He said, “Those reports you cite were the result of inexperienced SBE staff members not performing their jobs well.” He shared an email with a Board of Elections staff member who said in December 2021 they would review the matter and respond soon, but Henkel reported the staff member never responded and CHALT has never paid.
It seems clear to us that CHALT was penalized. The fact that the “inexperienced SBE staff members not performing their jobs well” [sic] never responded following that December email or have not tried other efforts to collect what is a pretty small penalty, given the millions of dollars spent on elections in the state, doesn’t lead us to believe that CHALT has been absolved of any penalties.
So we’ll continue to report that CHALT PAC has been penalized, a sign of their sloppy campaign finance reporting. Oh yeah, and we’ve sent this entire article – along with screenshots, emails, and extensive documentation, to the State Board of Elections. We hope they perform their jobs well.
This article was written by Geoff Green and Melody Kramer. Geoff donated $650 across four Chapel Hill candidates in the election cycle, and Mel donated $10 (as an in-kind donation of a table, which was later returned!) to a campaign in Carrboro.