A campaign finance report filed a month after the election has finally revealed the sources of $51,385 spent against Dusty Johnson during the final days of South Dakota’s Republican U.S. House primary campaign.
The expenditures were funded by $67,000 in contributions from six individuals and one corporation to the Hold Washington Accountable political action committee. All of the individual donors had previously contributed to the campaign committee of Shantel Krebs, who was one of Johnson’s opponents in the three-way race.
Hold Washington Accountable received the money from May 22 to May 31 but was not required to report the source of the contributions to the Federal Election Commission until July 15. The election was June 5.
The individual contributions to Hold Washington Accountable included two from the Black Hills: $10,000 from Larry Pillard, of Custer, the retired former chairman of the board of Tetra Laval Group, a multinational corporation focused on food production, packaging and distribution; and $8,000 from Pat Hall, a real-estate developer from Rapid City.
The other contributions were $25,000 from Herzog Contracting, of St. Joseph, Mo.; two contributions totaling $10,000 from William Metz, of Sioux City, Iowa; $5,000 from Greg Carmon, of Brandon; $5,000 from Mark Nylen, of North Sioux City; and $4,000 from Louis George, of Sioux Falls.
The contributions were used to advertise against Johnson, who was formerly chief of staff to Gov. Dennis Daugaard. Johnson advanced to the Nov. 6 general election by finishing first in the primary election ahead of Krebs, who is South Dakota’s secretary of state, and state Sen. Neal Tapio.
Hold Washington Accountable is registered with the FEC as a super PAC. Super PACs are empowered by court decisions such as the 2010 Citizens United case to raise and spend unlimited amounts of money in support or opposition to candidates, so long as there is no coordination with the candidates.
During the campaign, a spokesperson for the Krebs campaign denied any coordination with Hold Washington Accountable, despite connections revealed in public documents.
One connection is Robert Phillips III, aka Rob Phillips, of Dublin, Ohio, who is the treasurer of Hold Washington Accountable. Phillips is also the chief operating officer of Axiom Strategies, a national political consulting firm that received nearly $110,000 in payments while working for Krebs’ campaign committee, according to FEC reports.
Another connection — revealed in the July quarterly report to the FEC from Hold Washington Accountable — is Louis “Lou” George, of Sioux Falls. George gave $4,000 to Hold Washington Accountable while also serving as the treasurer of Krebs’ campaign committee.
Hold Washington Accountable was created on Nov. 16, 2017, about seven months before the June 5 primary election. By the time of Hold Washington Accountable’s 2017 year-end report to the FEC, the super PAC had reported only one transaction: the receipt of a $50 loan from Phillips.
Because super PACs are allowed to file campaign finance reports quarterly, Hold Washington Accountable filed only one more report before the June 5 election. That report, filed on April 1, still showed the $50 loan from Phillips as the super PAC’s only financial activity.
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Meanwhile, South Dakota’s Republican U.S. House primary campaign was starting to heat up.
In mid-May, Krebs was targeted by negative advertising paid for by Citizens for a Strong America Inc., which is a super PAC funded by wealthy, out-of-state donors whose identities were disclosed in FEC filings prior to the election.
Citizens for a Strong America Inc. appeared to have been spawned by No Labels, a Washington, D.C., nonprofit that advocates for political moderation and problem-solving. Johnson acknowledged having met with representatives of No Labels months earlier but said his campaign did not coordinate with Citizens for a Strong America Inc.
During the latter half of May, Citizens for a Strong America Inc. spent a total of $310,777.20 against Krebs. In the midst of that onslaught, money finally began flowing to Hold Washington Accountable, which spent $51,385 on anti-Johnson advertising that was disseminated from May 30 to Election Day, June 5.
It was impossible at the time for voters to learn where Hold Washington Accountable’s money came from, because none of the contributions that the super PAC received in May had to be reported until the next quarterly deadline on July 15.
That July report now reveals that Hold Washington Accountable served mostly as a conduit for anti-Johnson contributions from pro-Krebs donors who had already given the maximum $2,700 per election that an individual may contribute to a candidate committee.
And the super PAC wasn’t the only method used by some Krebs donors to get around the $2,700 limit.
Larry Pillard, for example, gave $5,400 to the Krebs campaign committee by earmarking half of the money for the primary election and the other half for the general election, while his wife, Deborah, did the same thing. Larry Pillard also gave $10,000 to Hold Washington Accountable, bringing the total amount of contributions from the Pillards to $20,800.
An FEC spokeswoman told the Rapid City Journal on Friday that a candidate who accepts general-election contributions before the primary and then loses the primary must typically refund the general-election contributions within 60 days of the primary. An exception allows general-election contributions to be used before the primary, the spokeswoman said, for deposits or advance payments on goods and services to be provided after the primary.
The Krebs campaign committee’s reports to the FEC show $25,600 in contributions earmarked for the general election, among nearly $683,000 in total fundraising by the committee. The committee had a balance of about $86,000 on hand at the end of June.
Following her loss in the U.S. House primary, Krebs remains the South Dakota secretary of state, a post to which she was elected in 2014. Her duties include oversight of campaign-finance reporting at the state level.