For Immediate Release
August 6, 2008
Katie List
(603) 644.4720
 

"NH ADVANTAGE" APPEARS TO HAVE VIOLATED NH ELECTION LAW
Petition to NH Attorney General Cites Seven Apparent Election & Tax Law Violations By Group and its Leaders, Rep. Candidates Mike Biundo and Tammy Simmons

(Manchester) The political group known as "New Hampshire Advantage Coalition" has apparently violated NH election law and may have violated nonprofit tax law by failing to file its required financial disclosures, failing to put disclaimers on its election materials, and by using its nonprofit status to promote the candidacy of its two leaders, Mike Biundo and Tammy Simmons, according to a complaint filed with the New Hampshire Attorney General by former NH Democratic Party Chair Kathy Sullivan.
 
"It's time to clear the air on the New Hampshire Advantage Coalition - who they are, where their money comes from, which powerful interests they are protecting, and why these candidates think they can abuse nonprofit laws to promote their campaigns," said Sullivan. "This group is caught in a tangled mess of election and tax laws in a desperate attempt to hide their powerful friends."
 
The NH Advantage Coalition, according to press reports, was founded to focus on "raising money to support candidates" [Portsmouth Herald, 11/26/06]. In an op-ed authored by Mike Biundo, the organization's chairman, Biundo is described as the "Chairman of the New Hampshire Advantage Coalition, an organization... with the underlying goal of local control, no sales tax, and electing representatives of the people" [NH Insider, 2/15/08]
 
NH Advantage Coalition was formed as a PAC, but has not filed any required financial disclosure with the Secretary of State to disclose expenditures or donors. New Hampshire law requires reporting by political committees that spends more than $500 in support of a political candidate or measure.
 
After starting as a PAC, the group quietly filed as a "nonprofit" group. Under IRS regulations, non-profits such as NHAC cannot directly or indirectly promote candidates or their campaigns.  But the group's Executive Director and Chairman are both candidates for the NH Legislature - while the group spends significant time and resources pushing their message and candidacies around the state under its nonprofit label.  The two leaders, Mike Biundo and Tammy Simmons, have significant ties to the New Hampshire Republican Party, and are themselves both candidates for the New Hampshire House of Representatives from Manchester.
 
Meanwhile, the group is circulating campaign materials in an attempt to influence the NH elections, without the legally required disclaimer explaining who paid for the materials.
 
The complaint asks the Attorney General's office to: investigate all activities of the New Hampshire Advantage Coalition, obtain records to expose the truth behind their tangled web of deception, order them to stop operating in New Hampshire, report any violations to the appropriate state and federal agencies, determine whether the group owes any outstanding taxes, determine whether their nonprofit status should be revoked, and look into whether the actions of its leaders require further investigation.
A copy of the complaint is below:

July 29, 2008
 
 
 
Kelly A. Ayotte, Attorney General
Office of the Attorney General
33 Capitol Street
Concord, New Hampshire 03301
 
Dear Attorney General Ayotte:
 
          I am a registered voter in Ward 8 of the City of Manchester, New Hampshire, and am filing this complaint pursuant to N.H. RSA 664:18, which permits any registered voter to complain to the Attorney General of any violation of the provisions of RSA 664. 
 
          This complaint concerns the political activities of New Hampshire Advantage Coalition ("NHAC"), a New Hampshire "non-profit" corporation established on March 22, 2007.  NHAC is the latest incarnation of an organization calling itself "NH Advantage Coalition PAC" that filed as a political committee with the State of New Hampshire in 2006.  As discussed below, however, whatever its current form or title, NHAC is an alter ego for Republican candidates and organizations, engaging in partisan political activity in New Hampshire but with an ongoing pattern of disregard for the requirements of RSA 664.  Specifically, NHAC is being used as a vehicle for political speech  by its chairman, Michael Biundo, and its executive director, Tammy Simmons, who are candidates for the New Hampshire legislature, as well as promoting Republicans generally.
 
STATUTES AT ISSUE
 
          The specific statutes which have been or are possibly being violated are:
 
          RSA 664:3, failure to register as a political committee;
          RSA 664:4, prohibited political contributions;
          RSA 664:5, prohibited political expenditures;
          RSA 664:6, reporting by a political committee;
          RSA 664:14, signature, identification, and lack of authorization;
          RSA 664:15, approval of candidate or fiscal agent; and
          RSA 292, voluntary corporations and associations.
 
REQUESTED RELIEF
 
          I therefore request that you as Attorney General, take the following action:
 
          Investigate the activities of NHAC;
 
          Use your subpoena power to obtain all records of NHAC;
                   Issue appropriate and immediate cease and desist orders prohibiting further activity by NHAC in New Hampshire;
 
          Report any potential state or federal violations to the appropriate agencies;
 
          Determine whether any activities of NHAC submit it to taxation in New Hampshire;
 
          Determine whether any enforcement or other procedures should be undertaken with respect to any individuals or other organizations;
 
          Determine whether the non-profit status of NHAC should be revoked;
 
          Determine whether any filings made by NHAC with state agencies were done in bad faith or contain fraudulent statements; and
 
          Such other and further action as may be appropriate.
 
BACKGROUND
 
          On November 17, 2006, Michael Biundo (who had been defeated for re-election to the state legislature days before) and Jack Heath registered a political committee known as "NH Advantage Coalition," with the New Hampshire Secretary of State.  The election for which the committee registered was the 2008 election cycle (see Exhibit A attached hereto).  Both Biundo and Heath listed their place of principal employment as "Meridian Communications." According to the records of the Secretary of State, there are two entities with the words "Meridian Communications" in their name: Meridian Communications Partners, LLC, and Meridian Communications, LLC.  As of July 28, 2008, according to the Secretary of State's website, neither company is in good standing, and both have principle offices at 175 Canal Street.  The registration does not indicate which (or both) of the two entities is the employer of either of Biundo or Heath. Upon information and belief, Biundo is a principal of at least one of the Meridians.

This filing is incontrovertible evidence that Biundo and Heath planned to  engage in political activity as a political committee in the 2008 election cycle under the umbrella "NH Advantage Coalition."  And, in fact, a website using the name "New Hampshire Advantage Coalition" was established.  Attached as Exhibit B is the home page for the organization's website, as it appeared on January 26, 2007. The mission statement says that among its goals is the election of representatives.  However, despite this goal of supporting candidates, and despite the filing of papers with the Secretary of State establishing itself as a political committee, there was no disclaimer on the web page.  RSA 664: 14, I requires all political advertising to be signed at the beginning or end to include the name and address of the chairman or the treasurer of the political committee.  The term "political advertising" means any communication expressly or implicitly advocating the success or defeat of any party, measure or person at any election.  As a political committee engaging in communication through the website, advocating for the election of candidates sharing NHAC's political ideals, NHAC's failure to include the required disclosure violated RSA 664:14.  As Exhibit B shows, there was a "donate" link on the website, evidence that NHAC was actively soliciting donations for the political committee.  Biundo publicly stated that it was the intention of the organization to raise money for candidates.  In a November 26, 2006 story in the Portsmouth Herald, he stated, "There are other taxpayer organizations in the state, but our group is going to be specifically focused on protecting the New Hampshire Advantage and raising money to support candidates . . ." [emphasis added] (see Exhibit C).
 
          Subsequently, on March 22, 2007, four months after the registration of the political action committee, five incorporators, all giving the same Washington, D.C. address, filed articles of agreement for NHAC as a New Hampshire non-profit corporation with the purpose of "preserving the New Hampshire way of life" (see Exhibit D) .  The principal office of NHAC, however, is listed as 33 Country Walk Drive, Manchester, NH,  the same address given by Michael Biundo on the political committee registration form for NH Advantage Coalition PAC.
 
          Despite the registration of NHAC as a non-profit corporation, it continued to engage in partisan political activity.  The March 31, 2007 version of the NHAC website contained the same  mission statement as the January 26, 2007 website, including the goal of electing representatives (see Exhibit E).  Biundo continued to be listed as the chairman.  This version of the site also listed Tammy Simmons as Executive Director.  On its "media center" page, the site highlighted the Portsmouth Herald story with the headline, "Portsmouth Herald Article - GOP Group Stresses N.H. Advantage."
 
          In other words, even after filing paperwork to create NHAC as a non-profit group, NHAC still featured on its website an article that referred to NHAC as a Republican group, and which included a quote from Biundo that said the group was going to raise money to support candidates.  The website still contained no disclosure as required by RSA 664.

The April 2, 2007 version of the website continued to post the same mission statement, failed to provide any disclosure information on the home page, and is nearly identical to all the prior renditions of the website (see Exhibit F). Its home page included a link to an interview with NHAC chairman Mike Biundo. On its "About Us" page, there are biographical sketches of Biundo, Simmons, and NHAC board member State Rep. Pam Manney.  The media center page continued to headline the Portsmouth Herald article that referred to NHAC as a Republican group.  The first press release on the media center page was a press release quoting both Biundo and Simmons regarding a proposed constitutional amendment.  The release states, "Biundo and Simmons are encouraging people across the state to join with them in stopping this bill by visiting their website . . ." [emphasis added]
         
          The May 1, 2007 version of the website continued to have the same mission statement, and continued to omit the required disclosure from the home page (see Exhibit G).  It has the same biographical information for Biundo, Simmons and Manney, and the media center page continued to tout the Herald article referring to NHAC as a "Republican" group, and also published the press release in which Biundo and Simmons urge people to visit "their" website.
 
          Over the course of the next several months, changes were made to the website, but  references to Biundo continue to abound.  In its current version, a number of press releases and articles are linked on the media center page, containing repeated references to Biundo.  One of the archived press releases available through the site is the March 22, 2007 release with the statement that Biundo and Simmons are encouraging people to visit their "web"site (see Exhibit H).
 
          The goal of NHAC to support candidates for public office was also publicized outside the NHAC website.  Nearly a year after the registration of NHAC as a non-profit corporation, NHAC's executive director and its chairman were describing NHAC as an organization with the goal of electing representatives.  Biundo was the author of a column posted on Feb. 15, 2008, on the website, NH Insider, entitled "NHAC: Why NH now needs CARC 24 to stop an Income Tax."  Biundo is described as "the Chairman of the New Hampshire Advantage Coalition, an organization . . .with the underlying goal of local control, no sales or income tax and electing representatives of the people who vow to keep taxes low and limit spending" [emphasis added]. Biundo stated in the piece, "Good thing for New Hampshire taxpayers that our legislature was in the control of fiscal minded Republicans at the time."  The column was posted on the NH Insider site by  Simmons (see Exhibit I).  This column also was direct advocacy by NHAC for a measure before the New Hampshire legislature.
 
Since the incorporation of NHAC, it has expended substantial amounts of money.  Prior to employing Tammy Simmons as Executive Director, it employed BJ Perry as an executive director.  According to a Feb. 14, 2008 article, it hired a political director (see Exhibit J).  It has maintained its website.  It has published ads and sent out mailings. RSA 664:4 prohibits, however, any contribution of more than $5,000 in value, whether tangible or intangible, to a candidate, a political committee or a political party, for the purpose of promoting the success or defeat of any candidate or political party at any state primary or general election.  RSA 664:6 requires reporting by political committees that spend more than $500 in support of a candidate or a measure.  "Measure" is defined in RSA 664:2,X as "any constitutional amendment or question which is submitted or intended to be submitted to a popular vote at an election."  NHAC specifically supported passage of CARC 24, a proposed constitutional amendment in the New Hampshire legislature.  Therefore, any failure to file a report by NHAC violates RSA 664:6.
 
          The financial activities of both NHAC as a political committee and as a non profit are a mystery.  NHAC, the political committee presumably raised money; it had a donation link on its website, and employed an executive director.  What has happened to the donations made to the committee prior to the non-profit filing?  From March 22, 2007, it also can be assumed that NHAC, the non-profit corporation, was raising and accepting donations, since it presumably paid its executive director, and presumably paid for its website.  The website continued to have a donation link.  Yet, after March 22, 2007, NHAC continued to include an article on its website calling NHAC a "Republican" group, and stated that its mission included electing representatives.  Simmons, the executive director, posted on NH Insider the column by Biundo which described NHAC as an organization with a goal of electing representatives.

In additions to his hats as founder of NHAC, the political committee, chairman of NHAC, the non-profit corporation, and past and current candidate for public office, Biundo also wears the hat of a principal of Meridian, a for profit company.  Meridian is engaged in the business of political consulting.  According to a July 10, 2008 Union Leader article, for example, it was reported that another non-profit entity, Employee Freedom Action Committee, had hired Meridian to assist in attacks on Jeanne Shaheen.  Biundo was specifically quoted in the story.  Given Meridian's political consulting activities, and Biundo's interest in the company, any financial ties between Meridian and NHAC should be disclosed.  NHAC's Articles of Agreement state that no part of its net earnings shall inure to the benefit of any private individual, except for reasonable compensation for personal services actually rendered.  Only the Attorney General, with her subpoena powers, can review the records of NHAC to determine whether any financial remuneration is being paid to Meridian - benefitting Biundo individually - and whether NHAC is operating within the requirements of New Hampshire law governing non-profit organizations.  N.H. RSA 292:1 permits the formation of non-profit corporations for limited purposes.  If NHAC - formed just days after Biundo's loss in the 2006 election - is engaging in political activity directly benefitting the political candidacies of Biundo and Simmons (and potentially others), then questions of compliance with RSA 292 must be addressed.  Moreover, as a 501(c)4 corporation, any political speech by NHAC cannot promote candidacies. However, each time the name of chairman Biundo or executive director Simmons appears in news story, or on their web site, NHAC is promoting them.  The strategy decisions made by Biundo and Simmons in their capacities as the leadership of NHAC cannot be separated from their own self interest as candidates for office.   
 
          There also are significant connections between the Republican Party and the leadership of NHAC.    According to the website of the Manchester Republican Committee, Simmons is treasurer of the Manchester Republican Committee; the earlier versions of the NHAC website described her as a member of the New Hampshire Republican State Committee. According to a January 17, 2007 article in the Union Leader, Biundo has also been a member of the Republican State Committee and chairman of the Ward 8 (Manchester) Republican Committee. 
 
          It is a mockery of New Hampshire's campaign finance laws to have a corporation with the same address as a candidate for office, with a chairman and executive director who both (1) running for office, (2) current or former members of the Republican State Committee, and (3) officers of local or ward Republican committees, spending in excess of $5,000 during the election cycle when its activities benefit Biundo, Simmons, and other Republican candidates.  When Biundo as chairman, or Simmons as executive director, of NHAC, make any public statement, it is impossible to separate them from Simmons and Biundo the candidates, Biundo and Simmons the Republican committee members, and Biundo the political consultant advising other "non-profits" engaged in political activity. 
 
          The activities engaged in by Biundo and Simmons under the auspices of NHAC have clear and direct benefit to them as candidates.  Currently,  NHAC is engaged in a petition drive to place referenda on ballots in communities throughout New Hampshire.  One of the communities is Manchester, where both Biundo and Simmons are candidates.  In addition, NHAC has developed a pledge which it is asking candidates to sign. In a May 21, 2008  newspaper article, Biundo even stated that NHAC intended to tell voters who had signed the pledge, and in the article attacked Democratic legislators:
 
Tax-watchdog group pushing pledge to control state spending
 
The Union Leader May 21, 2008 CONCORD - A tax-fighting group will ask candidates for state office this fall to pledge that they'll keep state spending hikes within the rate of inflation. Michael Biundo, chairman of the New Hampshire Advantage Coalition, said the group will solicit signatures this campaign season and will make sure voters know who has signed up. He and others blamed Democrats in the Legislature for raising state spending and making the pledge necessary.

In establishing this pledge for candidates, and promising to let voters know who has signed the pledge, Biundo is directing NHAC to undertake activities directly benefitting both his candidacy, and the candidacy of Simmons.  In addition, both Biundo and Simmons use NHAC as a vehicle to publicize themselves in New Hampshire media outlets, another direct benefit conferred on them by NHAC.  The alter ego nature of the organization is emphasized by the reference to the NHAC website as "their" (i.e., Biundo and Simmons) website.
 
          RSA 664:5 prohibits expenditures made for the purpose of promoting the success or defeat of any political party, measure, or candidate, except by registered political committees or committees authorized by candidates.  As stated above, NHAC advocated for the success of CARC 24.  In addition, the political speech of Biundo and Simmons through NHAC promotes their own candidacies.  Therefore, the failure of NHAC, the non-profit corporation, to register as a political committee violates RSA 664:5.
 
          Also, RSA 664:15 prohibits political advertising by or on behalf of a candidate unless signed or authorized in writing by the candidate or his fiscal agent.  Given the entanglements of NHAC, candidates Biundo, Simmons, the Republican Party, and Meridian, all advertising by NHAC needs to be examined for compliance with RSA 664:15.
 
          Biundo, the chairman of NHAC, and Simmons, its executive director, cannot claim that NHAC's  expenditures are "independent" of Biundo and Simmons, the candidates; the definition of independent expenditures in RSA 664:2 states that the expenditure is made without cooperation or consultation with any candidate, and which are not made in concert with, or at the request of, any candidate [emphasis added].  Since Simmons and Biundo are both candidates, and constitute the leadership of NHAC, it is impossible for NHAC to make any expenditures independent of themselves.     
 
          Nor can NHAC claim that it is merely engaging in "issues advocacy." A candidate for office cannot take his or her candidate hat off when engaging in political speech - and Simmons and Biundo, as the executive director and the chairman of NHAC, are engaging in political speech through NHAC.  A press release posted on the organization's website states, in part,
"It has become trendy to say you're for low taxes, or even against a sales or income tax. The problem is, once elected, too many officials act like teenagers with their first credit cards. The only path to low taxes is an efficient government that is always looking for ways to control spending." As of today, over forty current office holders and future candidates have signed the pledge and are joining Mayor Guinta and possible gubernatorial candidate Senator Joe Kenney in pledging their support to defend the New Hampshire Advantage.
 
This clearly is political speech, promulgated by Biundo, a candidate for office, through the auspices of NHAC which benefits Biundo. A candidate cannot escape being a candidate merely by moving from one podium to another. 
 
          NHAC has also violated RSA 664: 14 in its efforts to place referenda on the ballot in local communities.  RSA 664: 14 requires all political advertising to be signed; subsection II requires any enterprise or organization promoting the success or defeat of a measure to have the chairman or the treasurer of the organization sign the advertising, including his or her address. Neither the website for NHAC  nor a palm card that it has distributed advocating for the referenda contain this minimal amount of information (see copy of palm card attached as Exhibit K). RSA 664:2 defines "political advertising" as any communication which expressly or implicitly advocates the success or defeat of any party, measure or person at any election.  The definition of "political advertising in RSA 664:1 expressly makes the provisions of RSA 664:14 through 17-a applicable to municipal elections.
 
          Further, since NHAC is engaged in activity benefitting the candidacies of Biundo and Simmons, its qualification as a 501(c)4 is questionable.  Non-profit 501(c)4 corporations are not permitted to promote specific candidates; the activity benefitting Biundo and Simmons taints all of the organization's activities.  Under the circumstances, the Attorney General may wish to (a) notify the Internal Revenue Service of the activities of NHAC, (b) to inquire whether NHAC should lose its 501(c)4 status, and (c) herself determine NHAC should lose its New Hampshire non-profit status.
 
          Also, the Articles of Agreement of NHAC state that its object is exclusively for educational and social welfare purposes.  However, the political activities engaged in by NHAC, such as the use of the organization to promote Biundo and Simmons, are not "educational" or "social welfare."  Promotion of social welfare does not include direct or indirect participation or intervention in political campaigns  of any candidate for public office.  See IRS Reg. 1.501(c)(4)-2(iii).  NHAC is engaged in direct and indirect participation and intervention by having political candidates as spokesmen and chairman and executive director, by soliciting pledges from candidates, promising to publicize the names of candidates who sign the pledges, by blaming Democrats for spending increases, and by promoting referendum to be voted on in the same election at which these candidates stand for office. 
 
          Also, NHAC filed as a registered political committee on November 17, 2006.  Based on a review of the Secretary of State website, NHAC has not filed any reports pursuant to RSA 664:6.  While it may have morphed (whether such morphing is legally permissible is itself questionable) into a non-profit, there is no doubt that it should at the very least, have filed reports for the political committee.
 
          In summary, NHAC and its chairman, Biundo, and its executive director, Simmons, are acting in violation of RSA 664. They are using NHAC as an alter ego for their own political speech and political activities, disregarding the $5,000 contribution limit and refusing to disclose donors.  In addition, they have established a pattern of failing to comply with the disclosure requirements of RSA 664 by not placing signatures on their website, their mailing, their ad and their palm card.  The use of a New Hampshire non-profit corporation under these circumstances is not appropriate, and may itself also violate both New Hampshire and federal law.
 
          It is incumbent upon the Attorney General to take swift action, as the election is only four months away.  Biundo has stated that NHAC has purchased television ad time on WMUR prior to the November election.  Unless immediate action is taken, we can expect the activities of NHAC to increase in scope.  In addition, the role of Biundo in working with at least one other non-profit in his capacity as an employee and principal of Meridian, and his other political activities conducted through Meridian, display an entanglement of for-profit, non-profit, and personal political activity with the potential for further issues under RSA 664.
         
          Thank you for your attention to this matter.
 
                                                                   Very truly yours,
 
 
 
                                                                   Kathleen N. Sullivan