By Adam Pagnucco.
The Montgomery County Democratic Central Committee (MCDCC) is making news again, this time concerning money that they owe to the U.S. Internal Revenue Service (IRS). Moderately MoCo broke the story on July 12 and MoCo360 followed on August 2. What should we make of this?
I have little to add to prior reporting on the IRS issue. Based on conversations with multiple sources, I believe that the issue is due to a clerical mistake by past party officials. I have not heard allegations or seen evidence of any fraud, misconduct, embezzlement or other wrongdoing. More information will probably emerge so we shall see if I’m right.
In the meantime, the incident reveals more serious issues inside MCDCC, an organization that has been in turmoil for quite some time. They include:
Lack of transparency
MCDCC’s current leadership dislikes having its members talk to the press and actively discourages it, instead preferring to channel communications through their chair. Here’s the thing: no policy is going to stop members from talking to the press, but it will raise the level of resentment inside the organization. At the moment, MCDCC’s failure to more specifically lay out the issues around the IRS problem is encouraging inaccurate and damaging speculation that does not serve the group’s interest. MCDCC should put out a comprehensive statement outlining the specific causes of the IRS issue, how the issue is being remedied and the specific steps the committee is taking to prevent its recurrence. Such a statement would help stakeholders move on.
Bad blood
I have been writing about MCDCC for more than 15 years and a certain level of disagreement inside the group is normal. What is not normal are leaks of internal and sensitive financial information. The leak itself is more of a story than the underlying IRS problem. Much of this arises from internal dissatisfaction with the leadership’s policy of limiting transparency as well as debates about whether the group should appoint its own members to the General Assembly. Whoever bears responsibility for the deterioration in the body’s collegiality, it’s apparent that this group of people is currently incapable of productively working together for a common cause.
Lack of fundraising
Few if any of MCDCC’s activities are more important than fundraising. In the past, MCDCC provided invaluable assistance in clearing Republicans from state and county office in MoCo, a project that was completed in 2006. Since then, the county party has been a player in assisting Democrats outside of the county with financial and other support. Fundraising is an important part of that, especially since Montgomery County has the largest (and wealthiest) group of Democratic donors in the state and one of the biggest donor clusters in the nation.
MCDCC raises money for a federal account regulated by the U.S. Federal Election Commission (FEC) and two state accounts regulated by the State Board of Elections. The two state accounts, one administrative and one electoral, are jointly filed in common reports.
The chart below shows MCDCC federal fundraising by cycle from 1980 through 2022. Nominal dollars are shown in blue and real 2022 dollars adjusted for inflation with the Washington region CPI-U are shown in red. Each data point reflects fundraising over a two-year period.
In nominal terms, MCDCC’s take of $202,374 in the 2022 cycle has fallen steadily since its record take of $520,450 in the 2008 cycle. The picture is worse when adjusting for inflation. In 2022 dollars, MCDCC’s peak cycle was 1992, when it raised $789,654. That means in real dollars, MCDCC’s federal fundraising has dropped by 74% over the last 30 years.
And it could get worse. According to the FEC, MCDCC’s federal account has raised just $16,964 in the first six months of this year.
The State Board of Elections records do not go back as far. The chart below shows state account data for the last four four-year cycles – 2010, 2014, 2018 and 2022 – in both nominal (blue) and real (red) dollars.
This decline is not as bad. In nominal dollars, state fundraising in the 2022 cycle ($228,701) was better than in 2010 and 2018. However, in 2022 dollars, state fundraising in 2022 was the worst of the four cycles and was 20% lower than in 2014.
Now let’s be fair to the current members of MCDCC. It’s much harder for a single local committee to raise money than it was 30 years ago for two reasons. First, there has been an explosion in online fundraising, which did not exist decades ago, that has helped committees from across the nation raise money here. And second, there has been an explosion in different kinds of political groups, like independent expenditure committees, 501(c)(4) organizations, Super PACS and more. There is much more competition for donor dollars now than in prior generations. And as the home of a big cluster of donors, Montgomery County is probably targeted for solicitations more than most.
On the other hand, while MCDCC has no control over the national political environment, it does control how it presents itself to the public. Backroom drama, leaks, opaque proceedings and refusing to reform its appointment process are a bad look. Who wants to throw money into a snake pit? Unless the central committee opens up and embraces meaningful reform, its problems will converge and further limit its fundraising and general effectiveness.
Update: The Baltimore Sun wrote about this issue today and included on-the-record quotes from District 18 MCDCC Member Ed Fischman.