Wendy Traub hasn’t run for office in a decade, but she still occasionally receives restitution checks because of her campaign activities.

Traub was a candidate for state representative in District 65, located in Torrington, in 2010 and 2012.  During her first campaign she, like many freshmen candidates, received some guidance from the state Republican party. As part of that process, she was asked whether she had a company in mind to print mailers for her campaign. She didn’t, and the state party representative suggested using a company that already produced mailers for a lot of the party’s campaigns.

Traub said she worked out the pricing for using a local printer versus party’s recommended provider and realized it was a lot cheaper to go with the latter.

“I wanted to get the best bang for my buck. Cheaper meant more mailers to more people.” said Traub. So she went with the party’s recommendation.

What she didn’t know at the time was that the party’s recommended company, Direct Mail Systems, Inc. in Clearwater, Florida—was involved in an illegal kickback scheme that had been orchestrated by George Gallo, a former chief of staff to the Republican minority leader in the House of Representatives.

According to the U.S. Attorney’s Office for the District of Connecticut, part of Gallo’s job responsibilities as chief of staff involved designing the House Republican Campaign Committee’s (HRCC) campaign program. The HRCC is a state-registered political action committee that provides materials and support to candidates running for the House of Representatives as Republicans.

Gallo and others first began developing the program in 2008, in anticipation of Connecticut’s public financing system for campaigns going into effect. One of the HRCC program’s goals was to provide centralized campaign services, such as direct mail, to candidates. Gallo selected the vendors who participated in the program.

One of the companies Gallo reached out to was Direct Mail Systems, Inc. According to the U.S. Attorney’s Office, Gallo told the company that the implementation of public financing in the state would lead to more and better-funded Republican candidates. Gallo proposed that the company become a HRCC member and, in return for the business they would receive, send him payments worth ten percent of the revenue they received from candidates in the HRCC program. The company accepted.

During the 2008, 2010, and 2012 election cycles, Gallo lied to candidates and GOP House minority leader Lawrence Cafero, about whether he had any financial relationship or received compensation from the HRCC vendors. According to the U.S. Attorney’s Office, he received “approximately $117, 266.63” in compensation from Direct Mail Systems, Inc. during that time.

Gallo was charged over the scheme and pled guilty to one count of mail fraud on April 27, 2015. He was later sentenced to one year and one day in prison, followed by three years of supervised release, and was ordered to pay restitution in the amount of $117,617.63 in monthly installments of $500, or in another amount recommended by his probation officer and approved by the court. Hence the checks Traub receives.

Gallo’s case illustrates one element of what critics call imperfections within the Citizens’ Election Program (CEP). Though it was implemented with the goal of freeing candidates from the influence of lobbyists and big money donors by providing a public funding source, running more candidates in races remains potentially lucrative for political parties.

And while another of CEP’s goals was to enable candidates from more diverse backgrounds to run for office—ostensibly removing the need to either possess money or have the backing of someone with money—that has so far not translated into a boost for minor party and petitioning candidates, who rarely participate in the program.

Connecticut’s public financing program has been touted as a “national model” by Common Cause, a national group that advocates for “democracy that works for everyone” and which worked to make the program law.

CEP, which is voluntary, provides publicly funded grants to candidates running for office provided they raise enough money in small-dollar donations from enough qualified donors to meet a set threshold for the office for which they’re running. 

While Connecticut isn’t unique in providing a public financing option for some candidates, the setup of the program is.

According to the National Conference of State Legislatures, 13 states have some form of statewide public financing option, but the types of candidates eligible to receive funding varies by state.

Of the 13 states that offer public financing, 12—Arizona, Connecticut, Florida, Hawaii, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, Rhode Island, and Vermont—offer it for candidates for governor and lieutenant governor. Five states—Arizona, Connecticut, Hawaii, Maine, and Minnesota—provide public financing to candidates for state legislative offices and only New Mexico and West Virginia provide it to candidates for state supreme court, as well as others. Connecticut offers public financing to all of these offices, and also to candidates for secretary of state, state comptroller, state treasurer, and attorney general.

Connecticut is also one of only three states, along with Arizona and Maine, that use so called clean election programs as a method of providing public financing. Other states use matching fund programs.

Unlike states that provide public financing through matching funds, where the state agrees to match a certain percentage of funds raised by a candidate, sometimes within a set spending limit, clean election programs give an eligible candidate a sum of money equal to the expenditure limit for the election, guaranteeing that candidates who participate in the program have some money in their campaign fund once they hit those benchmarks.

In Connecticut, a qualified candidate’s eligibility is determined by their ability to raise an aggregate number of small-dollar contributions between $5 and $290 from individuals who reside in the district for which they are running, or, for state-wide offices, who live in the state. 

This fundraising mechanism is intended to demonstrate that a candidate has enough public support to justify receiving public funds. As a result, fundraising includes restrictions in excess of those that apply to privately funded candidates. For example, fundraisers that involve a quid pro quo are prohibited, as are auctions, tag sales or raffles. Small money donors who make an eligible contribution must also complete a Qualifying Contribution Certification Form as participation in the program requires documentation that can be used to prove contributions were from permissible sources and don’t exceed permissible amounts.

For both primary and general election grants, the threshold of qualifying contributions a candidate must raise to qualify for a grant differs by the office they are seeking, as does the size of the grant. 

The size of a grant a candidate receives also depends on the office they are running for, the date they submitted their application for CEP funding, and whether they have any opponents.

Much as candidates collecting ballot signatures collect an excess number of signatures to ensure they are above the required threshold if signatures are disqualified, candidates are encouraged to raise “buffer” qualifying contributions of an amount at least 5 percent greater than the required threshold in case donations are deemed ineligible.

“Based on prior elections, committees with less than a 5% buffer when collecting contributions of $100 or less had lower rates of first-time grant approval.” the State Elections Enforcement Commission (SEEC), which oversees the CEP program, noted in a 2022 guide. Any buffer funds raised by the candidate that exceed the qualifying threshold must be transmitted to the Citizens’ Election Fund with their grant application for clean election funding.

Funding for the money disbursed to candidates as grants comes from the sale of abandoned property owned by the state and from donations, with the majority coming from property.

According to the SEEC, the program is designed to improve the electoral process by allowing candidates to run without relying on special interests and allowing state officers and legislators to make decisions free of the influence of special interest donations. Additionally, the program is intended to restore public confidence in elections and legislating, increase citizen participation, and to increase the disclosure of campaign finance records. 

CEP was passed into law during an October 2005 special session of the legislature. Grants were first available to candidates for legislative office in 2008, to candidates for state-wide offices in 2010, and to legislative candidates in special elections in 2006.

According to a 2020 study by Common Cause citing SEEC reported statistics, 73 percent of General Assembly candidates running in the program’s inaugural year joined the program From 2008 to 2018, an average of 76 percent of legislative candidates joined the program. In 2018, 85 percent of legislative candidates joined the program.

The number of candidates who not only applied for but received CEP grants is smaller. In 2018, 335 of the 451 legislative candidates received general election ballot received CEP grants, about 75 percent.  

Year-to-year comparisons of CEP’s impact on races is complicated by the lack of consistently reported data publicly reported by the SEEC. For example, a report for fiscal year 2020-2021, which contains data the SEEC is required by law to annually report to the legislature, notes that 94 percent of General Assembly candidates and 83 percent of all candidates appearing on the ballot participated in CEP. However, that is the only such report that appears on the SEEC’s website.

An overview of CEP’s status following the 2020 election notes that most grants were given during the general election—300 compared to 27 during the primaries for that year. There were just 16 primaries in races eligible to receive CEP grants during that cycle. That report is more regularly available, but data on the 2022 election has not been posted.

CEP participation rates drop sharply when looking only at non-major party candidates.

Connecticut has two major parties—the Democrat Party and the Republican Party—and four minor parties with statewide enrollment privileges: the Green Party, the Independent Party, the Libertarian Party, and the Working Families Party.

Minor parties are defined in state statute as a political party or organization that is not a major party and that runs a candidate in which, for the office in question, received at least one percent of the total votes cast for the same office in the previous election. 

To maintain that status, a minor party must not only field a candidate who meets this threshold, but file party rules and continually run candidates for that office as it comes up for election.

By contrast, a major party is defined as a political party or organization whose candidate for governor in the most recent election received at least 20 percent of the vote, or who in the most recent election had a number of enrolled members on the active party list equal to at least twenty percent of the total number of voters enrolled in political parties across the state.

During the most recent election cycle, 190 of the 367 candidates for legislative seats who appeared on the general election ballot participated in the CEP program. That means roughly 51.8 percent of general election candidates in legislative races participated in CEP. Eight candidates are listed as having participated in the program but did not receive a grant.

In the governor’s race, not a single general election candidate from any party participated in the CEP program. For other statewide races for Constitutional office—secretary of state, treasurer, comptroller, attorney general—the major party candidates participated in CEP while minor party and write-in candidates did not. 

There were 28 minor or third party, write-in, and petitioning candidates in the 2022 general election. None of them received CEP funding and only two applied for a grant. Of the two candidates, one ran as a Democrat in the primary and lost, then sought the Green Party’s nomination for the general election. 

Dating back to 2016, no minor party, write-in, or petitioning candidate has received CEP funding during a general election, despite over 100 such candidates appearing on the ballot. In 2020 and 2018, none of the non-major party candidates running even applied for a grant. In 2016, five non-major candidates did apply for grants but did not receive one.

Inside Investigator reached out to both major parties and all four state-recognized minor parties to ask about how they felt about CEP and made decisions about applying for grants but did not receive a response.

That most minor party and petitioning candidates will not qualify to receive a full grant likely plays a role in the low rate of those candidates applying for CEP funding. Additionally, non-major party candidates have to take additional steps beyond fundraising and applying for a CEP grant than do major party candidates.

Major party candidates are eligible to receive the full amount of a CEP grant, with some limitations. In 2017, the legislature passed a grant reduction schedule. As a result, the later a campaign applies for a general election grant, the smaller the amount they receive. The size of the grant is also dependent on whether a candidate is running unopposed or has full or limited opposition. 

Minor party candidates are eligible to receive a full grant for the general election if they have obtained the nomination from a party that received at least 20 percent of votes cast for the same office, in the same district, in the most recent election. They are eligible to receive a grant worth two-thirds the party received at least 15 percent of the vote, and one-third if the party received at least 10 percent of the vote. 

Petitioning candidates are eligible for a full general election grant if they have obtained ballot access and petition signatures of an amount that equals at least 10 percent of the votes cast for that office in the most recent general election.

Minor party candidates and petitioning candidates who do not receive the full grant amount for which they are eligible can raise additional contributions up to the amount of the full grant for the general election for their office. They may also be eligible to receive supplemental grant money if they report a deficit in post-election disclosure statements.Connecticut is also one of a handful of states that allows cross-party endorsement, also called fusion voting, of candidates. Under this system, a candidate’s name appears on the ballot multiple times if they receive the endorsement of more than one party. For example, Gov. Ned Lamont received the nomination of the Democratic Party in the 2022 general election and also the Griebel-Frank for Connecticut Party. As a result, his name appeared on the ballot twice.

For minor parties, cross-party endorsement of major party candidates who can more easily secure CEP grants is one way to achieve some kind of electoral success. It does not mean, however, that the party is financially supporting or benefitting from that candidate’s campaign in any way. They also do not reap any of the advantages of ballot access if an endorsed candidate wins.

In practice, receiving a full grant is often beyond the practical limits of non-major party campaigns, not just because of slightly different fundraising thresholds, but because of Connecticut’s ballot access laws.

Lesley Heffel McGuirk, a petitioning candidate for the race for state representative in District 92 in the most recent election, applied for a CEP grant on September 28, 2022. As a petitioning candidate, McGuirk had to collect petition signatures amounting to at least ten percent of the votes cast for the office in the most previous election just to be eligible to receive a partial grant worth one-third that of what a major party candidate would receive. 

To qualify for the ballot, petitioning candidates in state legislative races must obtain the signatures of eligible, registered voters equal to one percent of the votes cast in the most recent election for the same office they are seeking, or 7,500 signatures, whichever is less. Minor party candidates may also have to petition their way onto the ballot if a previous candidate with the same party designation has not previously run for the same office and received at least one percent of the votes case at the last regular election.

In 2020, there were 13, 349 votes case in the District 29 race. To qualify for the ballot, McGuirk had to collect 134 signatures.

However, to receive a partial CEP grant, McGuirk had to collect far more signatures than that, roughly 1,335, to receive a one-third grant. To receive a two-thirds grant, she would have had to collect just over 2,002 signatures, and 2,670 to receive a full grant. That’s the bare number of signatures required to be collected—in reality, candidates must collect more than that to have a safe buffer in case signatures are invalidated. 

The Connecticut Secretary of State’s office does not publicly report the number of ballot signatures collected by a candidate. But, as McGuirk applied for a CEP grant, she must have received at least enough signatures to qualify for a partial grant. 

As a state representative, and because she submitted her application on September 28, McGuirk also had to collect at least $6,082.08 from supporters. This amount was if she were only eligible for a one-third grant. To qualify for a full grant, she would have had to collect $18,246.25. According to SEEC filings, McGuirk received $3,190 in individual contributions over the course of her campaign—not enough to qualify for even a partial grant.

CEP uses small dollar donations as a measuring stick for public support. Arguably, if a candidate can’t raise the funds, they can’t demonstrate public support and there’s nothing wrong with their inability to secure CEP funding.

For the five candidates who decided to participate in the CEP program in 2016, failure to meet the threshold for qualifying donations is also the reason they failed to secure a grant.

But ballot signatures are also a measuring stick for public support. And major party candidates don’t have to collect them. Non-major party candidates do, plus they have to collect qualifying contributions—an extra step they must take to prove they have public backing.

If the goal of CEP is more diverse and representative candidates, then the inability of smaller party candidates to secure CEP funding, and the apparent lack of interest in participation from non-major party candidates, may signal a problem. 

According to the secretary of state’s office, the majority of registered voters are affiliated with the Democrat or Republican parties in only 33 towns in the state. In the remaining 136 towns, the majority of voters are not affiliated with a party. That means the majority of voters in 80 percent of Connecticut towns don’t have a formal party affiliation. 

The problem may not be a lack of public support for non-major party candidates, but that the thresholds are set too high for unaffiliated and minor party candidates, which do not necessarily have the fundraising networks that major parties do. 

Inside Investigator reached out to Common Cause for comment about their opinion on CEP’s treatment of minor parties and petitioning candidates but did not receive a response. 

CEP has relatively high rates of participation for legislative candidates, but what impact does this have on competitive elections?

According to Ballotpedia, Connecticut’s incumbency rate for legislative races was 97 percent in 2022. The year before that, it was 95 percent. In 2018, it was 91 percent. All three figures put the state towards the higher end of the rate on which incumbents in state elections get re-elected, which varied between 85 percent in 2018 and 2016 and 77 percent in 2020.

The partisan advantage in party-dominant districts across the state has had similarly mixed results over the last few electoral cycles. Most party-dominant districts in the Senate—which all favor Democrats—have seen slight declines in the level of disparity between voters registered with the dominant party and the next biggest party. The same holds true for House districts. But some districts have seen slight increases. Eight House districts have also dropped from the list of dominant districts between 2016 and 2018, while five House districts have become party dominant districts between 2020 and 2022. 

Electoral competitiveness has also been inconsistent since CEP was instituted for legislative races in 2008. The state first began tracking the number of legislative races uncontested by a major party in 1998. In that cycle, 19.5 percent of Senate races and 28.5 percent of House races were uncontested by another major party. Those numbers increased in 2000 and again in 2004.  The data available from the Secretary of State’s office only runs through 2016, but shows the number of uncontested elections in both chambers falling in 2008, 2010, and 2012 before rising again in 2014. In 2012, the year with the lowest recorded number of uncontested elections documented by the Secretary of State’s office since CEP went into effect, 17.6 percent of races were uncontested.

According to Ballotpedia, 17 percent of state legislative races were uncontested in 2020. That number rose to 21.9 percent, or 41 separate legislative elections, in 2022.

The majority of legislative races in 2022—25.6 percent—had a margin of victory of less than ten percent. Races with a margin of victory between 10.1 and 20 percent accounted for 17.6 of legislative results. 17.1 percent of races have a margin of victory between 20.1 and 30 percent. Just over 10 percent of legislative races had a margin of victory of over 50 percent in 2022.

Whether CEP has directly made races more competitive or more diverse is not straightforward. But what about the program’s effect on candidates and campaigns?

Traub says she doesn’t feel she was pressured to use the direct mail service the state party recommended, but as a first-time candidate was also more likely to take suggestions from people who had been involved in campaigns for longer.

Those with campaign experience were also able to change Traub’s mind about taking CEP funds, which she received in both elections.

“I was one of those people who went in saying I didn’t want to take public funding.” said Traub. But she was also facing an incumbent with name recognition and, as a result, a greater ability to fundraiser.

“At first, I thought no. But I got talked out of it—your opponent’s going to do it; don’t hate the players, hate the game; you’re taking advantage of something that everyone else has an advantage to.” Traub added, describing the arguments that won her over to the decision to apply for public financing.

Ten years later, Traub isn’t sure if she’d make the same decision. Traub added that she thinks there are layers to using CEP funding. If a candidate is funding their own campaign, she said she thinks a candidate is probably going to make more spending decisions themselves. With CEP funding, however, Traub thinks a candidate is more likely to spend it all.

Traub also questioned some of the allowable uses for CEP funds, including for child care costs, which became an allowable use for grant money in June 2022. 

“What are you going to do when you get into office? That’s where your local party comes in. They should be able to help you raise those funds.” said Traub.

Traub also said there’s a lot of interpretation with how CEP funds are spent.

“If you don’t get audited, it’s very easy to use the campaign funding to buy, let’s say, tablets or laptops, which are supposed to be used for the campaign. But what happens after it’s done? There are weird things like that. Another is buying food. You can buy food for volunteers, but then, it’s very easy for somebody like me who has a family to just take them out to dinner three times a week. There’s not enough time and not enough money to audit everyone.” said Traub.

As for whether CEP funding eliminates corporate influences on candidates, Traub isn’t sure that’s the case.

“My argument would be that there are so many PACs [political action committees] and superPACs that donate to towns and parties that money will still get to where those big corporations are trying to go to.” said Traub. “Influence is going to be there, whether it’s to your direct campaign or through your town committee. Every organization has a PAC fund. That money is always going to be used to help the candidate. I don’t know if there’s any way to stop that from happening.”

Gallo and his mail house kickback scheme is not the only example of a Connecticut official running into legal trouble over CEP.

In May 2021, Connecticut State Senator Dennis Bradley, D-Bridgeport, and Jessica Martinez, his former campaign manager, were indicted on federal charges they had conspired to defraud the CEP.

According to the indictment from a federal grand jury in New Haven, Bradley held a March 18 campaign event for his 2018 Senate campaign at the Dolphin Cove restaurant in Bridgeport and paid the facility more than $5,000 from his personal funds from associated costs, including printed invitations and a band. CEP rules place a $2,000 limit on a candidate’s use of personal funds.

The indictment further alleges that to cover up the illegal use of personal funds, Bradley, Martinez, and other co-conspirators claimed the event was not campaign related but was a thank you party for friends and clients at Bradley’s law firm. Additionally, the affidavit claims Bradley accepted donations at the March 18 event from at least 18 people, then falsified contribution cards, then omitted the expenses from the event from financial disclosure documents and used the misleading contribution information to obtain CEP funding. 

Bradley’s case is still pending. After Bradley and Martinez pled not guilty to the charges, Bradley’s trial was delayed indefinitely in June 2022 over a dispute about admissible evidence. 

Dave Mullane, a resident of Stratford, has also alleged that the relatively small amount of funds candidates need to raise in order to receive a CEP grant—$5,800 in qualifying donations in exchange for $13,270 for a state representative running a primary in a major party—has led to abuse by party officials in his town. According to Mullane, Stratford Republicans are running legislative candidates who have no chance of being competitive in order to obtain CEP money and distribute it to party officials who work as campaign staff, sometimes on multiple campaigns at once.

Further, Mullane, who reported his allegations to the SEEC, also claims the agency has not taken claims of potential CEP abuse seriously, taking years to complete an investigation. 

Inside Investigator will be taking a closer look at Mullane’s claims and the SEEC’s process for investigating allegations of fraud against CEP grant holders in part two of this investigation.

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