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Loophole and Connections Help Gatsas Raise Big Dollars for Governor's Race

NHPR staff
More than one third of campaign contributions to Manchester Mayor Ted Gatsas has come from real estate interests, thanks to a loophole in the state's campaign finance laws.

Ted Gatsas isn’t the first candidate for governor to take advantage of a gap in New Hampshire’s election law that allows wealthy donors to dodge limits on campaign contributions.

But no one has benefited more from the so-called LLC loophole than the Manchester mayor.

 

The loophole lets individuals with multiple corporate alter-egos donate up to $7,000 in the name of each business. And thanks to that loophole, real estate interests account for more than a third of the $1 million in cash collected by Gatsas’ campaign so far. Among the Manchester-based companies that have used it to give money to Gatsas are:

  • The Stebbins family, whose varied businesses over three generations have touched every aspect of commercial development in the city. Nine separate entities with Stebbins ties, including a handful of limited liability corporations, or LLCs, gave a total of $56,000 to Gatsas. Brothers Mark and Hank Stebbins and their wives kicked in another $19,000 in individual contributions.
  • ?Brady Sullivan Properties. The company, which is the subject of investigations by state and federal regulators for alleged illegal dumping of toxic waste, funneled $53,000 to Gatsas via 10 LLCs. Brady Sullivan is also being sued by tenants of a refurbished Manchester mill building who say they were exposed to dangerous levels of lead dust.
  • Manchester developer Dick Anagnost. Four companies that share an address with Anagnost Companies in Manchester contributed $24,000 to Gatsas. A longtime friend and supporter of Gatsas, Anagnost has redeveloped more than a dozen millyard and downtown properties, and is currently working on several projects in the city, including a 145-room hotel. He's also partnering with Gatsas’ finance committee co-chair, AutoFair CEO Andy Crews, on a substance-abuse recovery center.

?In each case, the individuals behind these companies were able to far exceed the legal limit on campaign contributions to a single candidate. Gatsas is the main beneficiary of that loophole in this year's governor’s race -- by a long shot. He’s raised more than a quarter million dollars from LLCs alone. That’s more than every other gubernatorial candidate combined (see chart below).
 

Manchester Mayor Ted Gatsas has raised far more money through the so-called "LLC loophole" than his competitors in this year's campaign for New Hampshire governor.

All told, according to Gatsas’ recent campaign-finance report, the real estate and development industry ponied up nearly $370,000 in corporate and LLC contributions. Like Anagnost, Brady Sullivan and the Stebbins companies, many of the donors have shared in the spoils of Manchester’s continued revitalization under Gatsas, who was elected in 2009 after serving eight years as an alderman.

Corporations of any kind were prohibited from making political contributions in New Hampshire until 1999, when a federal judge ruled the ban unconstitutional.

Since then, the LLC loophole has been used to maximum effect in gubernatorial elections by business owners who, overwhelmingly, have supported Republicans. This year’s race has already set a record in the amount of money raised through LLCs.

In 2012, Democrats Maggie Hassan and Jackie Cilley raised a combined $5,400 from LLCs before the primary. Republicans Ovide Lamontagne and Kevin Smith, meanwhile, shared $348,000 that year.

The amount of money from LLCs going to candidates for New Hampshire governor has hit an all-time high this year.

Nearly all of Smith’s LLC contributions came from two sources: Planet Fitness health clubs, and three dozen or so Dunkin Donut franchises that were traced to the same Westborough, Mass., address. Lamontagne received more support from developers, including $51,000 from 19 LLCs linked to Brady Sullivan.

This year, led by Gatsas’ record haul, Republican gubernatorial candidates have taken in 10 times more in LLC contributions than Democrats.

One reason is the unprecedented involvement of the Stebbins family, who haven't donated more than $3,500 to a gubernatorial candidate in recent elections before giving $75,000 to Gatsas. And their biggest beneficiary before this year was a Democrat - John Lynch, to whom they contributed $9,000 in 2010.

Hank and Allison Stebbins had initially signed on to help raise money for Executive Councilor Chris Sununu’s bid for the corner office. But the couple switched allegiances when Gatsas entered the race.

As Alison Stebbins explained to WMUR in March, “Ted is a long-time friend and grew up in Manchester with my husband. We have supported him in every race he has run and have told him in the past that we would support him as he sought other elected offices.”

What, if anything, the individuals behind these companies expect from a Gatsas administration is hard to know. But having a pro-growth governor in the corner office could help smooth over or reduce regulatory hurdles for the real estate industry and help shape policies, from health care to taxes, that matter to the bottom line.

In Brady Sullivan's case, an on-going investigation by the New Hampshire Attorney General into the company's alleged environmental violations may hinge on the next governor -- and whoever who he or she appoints to lead that office.

Attempts to reach officials with Brady Sullivan, the Stebbins family and Anagnost were unsuccessful.

In a statement, Gatsas spokesman Nate Lamb said, "Ted plays by the same set of rules as every other candidate, and he is proud of his strong campaign and extremely successful fundraising efforts. Ted is the only Republican candidate who has the recourses, the experience and the fiscally responsible values needed to take back the corner office in November.” 

 

 

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