An item Jeff initially reported as a $27,000 loan from a law firm, then listed for months as a campaign debt, then erased from her reports entirely, has surfaced again with a new twist.
Jeff’s lawyer has notified Secretary of State Brad Winter’s office that most of that amount, which she owes for legal fees from her unsuccessful fight to get on the ballot in 2014, will be treated as a personal debt rather than a campaign debt.
That means it would no longer show on Jeff’s campaign finance reports, and the public wouldn’t know when – or even whether – it was paid off.
Jeff, a Democrat with a reputation as a maverick, served from 2009 to 2014 in the state House. This year, she is challenging state Sen. Benny Shendo, D-Jemez Pueblo, for the Senate District 22 seat in the June 7 primary.
Jeff was initially disqualified from this year’s ballot, because she owed more than $1,000 in fines for a delinquent finance report in 2015, but she settled with Winter’s office for $100.
The Secretary of State’s Office said Thursday that the new personal-debt arrangement is acceptable. But critics said it doesn’t make sense for Winter’s office to allow Jeff to now call the campaign debt a personal debt.
“We know that was connected to her defense of her petition signatures, her ballot qualification,” said Ben Shelton of Conservation Voters New Mexico. The organization – which labels Jeff as “anti-conservation” and is backing Shendo – underwrote the challenge that kept Jeff off the ballot in 2014.
“If it was a personal debt, why did she report it to begin with?” asked Viki Harrison, executive director of Common Cause New Mexico.
Harrison also objected that Jeff’s repeated amending this year of previous years’ reports has prevented transparency and “made a joke out of our reporting system.”
Amy Bailey, general counsel for the secretary of state, said state law “just simply doesn’t address” the issue of personal debt vs. campaign debt, and that, after discussion in the office, it was decided Jeff was in compliance with the law.
“At this point, it seems like she did the best that she could have,” Bailey told the Journal.
Jeff initially reported in July 2014 that her campaign had received $27,921 in loans, $26,721 from the Gallagher & Kennedy law firm – which she labeled “Campaign debt for legal fees incurred” – and $1,200 from Jeff herself.
Gallagher & Kennedy represented her in 2014 when her candidacy for re-election was challenged. Courts ruled she didn’t have enough valid voters’ signatures on her nominating petitions, and she was kept off the ballot.
As a loan, the Gallagher & Kennedy item would have violated the state’s campaign finance laws. While candidates can pump as much of their own money as they want into their campaigns, there are limits on other contributors. Under the law, loans are defined as contributions, according to the secretary of state.
By September 2014, however, Jeff was reporting the sum as campaign debt, which she continued to do through 2015. But this year, she amended those reports multiple times and eliminated references to the debt.
A May 2 letter to the secretary of state from Jeff’s current lawyer, Republican House member Zach Cook of Ruidoso, said Jeff was represented in court in 2014 by Germaine Chappelle of Gallagher & Kennedy, and that the firm charged Jeff $27,921.
Cook said that, as part of the settlement to get on the ballot this year, Jeff was told by Winter’s office to close out prior year campaign accounts. But to do that she would have had to repay her campaign debt, so she removed it from the reports, Cook said.
Cook also said he met with Gallagher & Kennedy to discuss how to resolve the reporting issue and agreed that Jeff would show two in-kind campaign contributions, totaling $4,800, from T.J. Trujillo, one of the firm’s lawyers. That showed up on the report she filed May 9.
“The remainder of the attorneys’ fees, in the amount of $23,120.82 will be treated as a personal debt of Sandra Jeff and not as a campaign debt,” Cook wrote.
Neither Cook nor Trujillo returned phone calls from the Journal seeking comment. Jeff provided Cook’s letter in response to questions from the Journal .