Preface.

This piece is, of necessity, longer than most of what we publish. Admittedly, it’s not for everybody, but should be of interest if you’re into technical issues that are germane to candidate competence and maybe integrity too, particularly as they relate to campaign financing.  Just because something is technical and takes some time to figure out, doesn’t mean it isn’t important.

• This post is about campaign finance reports filed and then amended, multiple times, by Friends for Sheila Dixon.

• It’s about the previous 17 reports going all the way back to 2006 – all of which were amended in February and March of 2015.

• These reports were amended to reduce by $195,830 the amount of cash that the committee claimed to have on hand.  In effect, early last year, Sheila Dixon’s campaign committee told the Maryland State Board of Elections that, years ago, it thought it had almost $200,000 more in its bank account than was actually the case.

• To explain this error, the committee claims to have failed to recognize and report $160,155 of expenses and to have overstated receipts by $900.

• $34,775 of the $195,830 remains unexplained.

Background.

Baltimore Rising is all about economic recovery in the city of Baltimore. That’s our mission. To accomplish our objectives, it will be helpful if the city elects a strong, pro-jobs, pro-business Mayor. For this reason, we’ve been doing an ongoing review of the 6 major candidates who are running. In descending order by their standing in this month’s poll by Gonzales Research, those candidates are:

Former Mayor Sheila Dixon
Maryland Senate Majority Leader Catherine Pugh
Councilman Carl Stokes
Councilman Nick Mosby
The Attorney General’s Criminal Division Chief Elizabeth Embry
Venture Capitalist David Warnock

What do they stand for? What relevant experience do they bring to the office of Mayor? Can they represent Baltimore in a nationwide competition for employers looking for east coast locations?

As for their order in the Gonzales poll and November’s Sun poll before that, for now we suspect it has mostly to do with name recognition. Candidates Embry and Warnock have never run for office before and are not well known. The other 4 candidates have run for office and won, at least once. Most notably, Ms. Dixon was Mayor and President of the City Council before that, both citywide offices. And then her trial and conviction for embezzlement gave her even greater, longer-lasting notoriety. Ironically, her conviction, rather than ruling out her re-election, may be giving Ms. Dixon an early leg up over her opponents. Expect some reordering in the polls as the candidates’ campaigns pick up their pace on the way to April’s primary.

For the record.

Full disclosure before we talk about the attached spreadsheet: We’re not big fans of Sheila Dixon. Why not?

It’s simple. Baltimore Rising is doing everything it can to encourage the economic recovery and all-inclusive growth that will reduce unemployment and poverty. Of the 6 prominent candidates for Mayor, we believe that Ms. Dixon – in light of her lackluster history while in office, conviction for embezzlement and platform for re-election – is clearly the least qualified to be Mayor, to change the course of Baltimore’s economy in a way and on a scale that the people of Baltimore need. The city is desperate for a new Mayor with superior management skills, leadership and vision. That’s clearly not Sheila Dixon.

There are many ways for a person who makes serious mistakes to enjoy a second chance in his or her professional and personal life. Re-electing her Mayor, given how that worked out the first time, just isn’t an opportunity that Ms. Dixon has earned nor does it make any sense for the city. The other candidates offer voters real choices, some better than others of course, but all of them more hopeful than a Sheila Dixon sequel. Why take a chance on someone whose tenure as Mayor can best be described as treading water, punctuated by having been thrown out of office?

At the very least, voters need to ask themselves if Baltimore is now a better place for all our families to live and work than it was before Ms. Dixon took office and as a result of anything see did while she was Mayor? What did she do to effect substantial, material, long-lasting reductions in unemployment, poverty and crime and improvements to public education and other essential services? Is there no other candidate running whose experience, expertise and reputation are more promising?

Campaign finance reporting.

Understandably, Baltimore Rising has been asking the same questions about the 6 major candidates for Mayor. In the course of our review, we have been looking at their campaign finance reports. This post is about reports filed by Ms. Dixon’s campaign committee, specifically the 17 going all the way back to 2006 – all of which were amended in February and March of 2015.

To document our findings, use the link below to see a PDF version of a spreadsheet showing summary information for the 17 reports covering the period from November 22, 2006 through January 14, 2015. It’s complicated and we know it’s always difficult to follow someone else’s work. So feel free to contact us with any questions you may have and to request the Excel spreadsheet on which this PDF is based. All the data we use were taken from the full reports that are available online from the Maryland State Board of Elections website . In order to get the entire table on a single page, we had to make the type small, so you may want to blow it up to make it easier to read.

Friends For Sheila Dixon Campaign Reports Summary Table

Here’s what we’ve found…

• It’s not uncommon for campaign committees to revise their campaign finance reports. Even the most well organized campaigns are messy. It’s the nature of the business. Keeping track of every contribution and expense is much easier said than done. Amending reports, usually very soon after their original filing dates, happens all the time.

What’s striking about “Friends For Sheila Dixon” – Ms. Dixon’s campaign committee – is that, for whatever reasons, on February 23 and March 13 of last year, the committee revised every one of the 17 prior reports it had filed going back all the way to November 22, 2006, before she was elected Mayor.

Were these revisions prompted by the hiring of a new Treasurer who noticed problems with prior reports? No. All original and newly amended reports bear the signature of the same campaign Treasurer, Geneva Smith. We’re assuming that Ms. Smith actually did the work, but sometimes campaigns hire an accounting firm to prepare their reports. That could be what’s happened here. Ms. Dixon may have hired a CPA or other consultant to audit and then correct her campaign’s earlier submissions.

• The effect of these revisions was to reduce the Committee’s Bank Account Balance, Prior Balance and Cash Balance as of its most recent report, through January 14, 2015, by a whopping $195,830. In effect, Ms. Dixon’s committee is saying that it had been overstating the amount of money it had on hand by almost $200,000. The question is, how do you operate a small business with revenues (funds raised) of $2.1 million when you think you have $200,000 more money available than you really do?

• As to what encouraged Ms. Dixon to go back and revise these reports filed over the past 9 years, we have no idea. Honestly, the need to make these changes does not argue well for her management skills and ability to run the $2.5 billion complex “company” that is Baltimore’s city government.

• For example, in original report covering November 22, 2006 through January 10, 2007, Ms. Dixon showed her Prior Balance – cash on hand at the beginning of the current period – as $284,384. She then filed an amended report, immediately after the original, with a period beginning date of February 27, 1987, showing her Prior Balance as $0. That’s a $284,384 correction that pushed her end of period Cash Balance to a negative $46,798. February 27, 1987 is the registration date, the start date of her campaign committee, hence the $0 Prior Balance – and yet every other number in the amended report refers to the period beginning November 22, 2006.

And then, in the next report her Committee issued, which was for January 11 through August 7, 2007, instead of showing their opening balance as negative $46,798 which would make sense, they showed their Prior Balance as $284,176 – basically ignoring the prior period amended report they submitted earlier that year.

(See spreadsheet columns 1, 1A and 2 in rows 12 through 15.)

• All total, over the 17 reports she revised, her committee’s original reports failed to report expenses of $160,155. That includes $50,514 of expenses that should have been included in her report that was due by November 27, 2007 and $80,961 of expenses missing from her report due by January 20, 2010.

(See spreadsheet columns 5 and 8 in row 43.)

• To understand the math of this last bullet, keep in mind that $195,830 is the amount by which the committee claims to have over-stated its cash reserves in prior periods. To reduce your cash reserves, you need to either show increased expenses and/or decreased receipts. Increasing expenses reduces your Cash On Hand. Reducing your receipts reduces Cash On Hand

The total correction accomplished by the revisions to all 17 reports was $195,830. To make that correction, the Friends For Sheila Dixon added $160,155 of expenses it had originally failed to report and reduced receipts it claimed to have received by $900. Together, the $160,155 increase in expenses and $900 reduction in receipts explains $161,055 of the total $195,830 correction. Unfortunately, that would appear to leave $34,775 of the $195,830 still unexplained.

We know, these bullets are hard to follow. And there are other problems with her reports that the Committee attempted to correct in the amendments submitted earlier this year. The spreadsheet may help you understand what happened which is why we’ve attached it.

What’s clear is that Ms. Dixon’s campaign committee – which raised and pretty much spent almost $2.1 million – apparently had no idea how much money it had in its campaign bank account and wasn’t able to accurately track its expenses. And we’re not talking about small, immaterial errors. The problems with her original reports were very significant.

Without access to her committee’s bank records and receipts, we have no way of knowing how these errors were made, no way to confirm their full extent or validate the committee’s recently amended reports. Perhaps most importantly, there’s no way for us to appreciate how, exactly, Ms. Dixon’s committee managed to operate without accurate knowledge of its bank balance, cash on hand and expenses.

Our problem with Ms. Dixon.

To grow the Baltimore economy, to reduce, if not entirely eliminate the chronic unemployment and poverty that have crippled our city and from which so many of our families suffer daily, requires a Mayor who can inspire the confidence of employers, locally or around the country. Ms. Dixon’s conviction that resulted in her resigning as Mayor early in 2010 will not impress companies and families who might otherwise consider locating here. Mismanagement of her campaign committee’s financing and reports further calls into question her ability to fix a $2.5 billion city government with serious problems that she failed to resolve when she was Mayor – a city government that is struggling to remain solvent while providing essential services to our residents and businesses.

Take a look at the spreadsheet and let us know what you think. As always, we also welcome and will likely publish any comments from Ms. Dixon’s campaign committee that might resolve some of our questions and concerns.