TRENTON - A Republican gubernatorial candidate's ties to an antitax lobbying group raise questions about whether he was entitled to receive nearly $500,000 in taxpayer-funded campaign financing.
Steve Lonegan was state director of Americans for Prosperity New Jersey for nearly three years until he applied for two-for-one matching funding from the New Jersey Election Law Enforcement Commission.
State law requires applicants to disclose prior management of issue-advocacy groups to avoid potential campaign conflicts, and to reveal their donors and expenditures if they've recently run such a group. Lonegan said he was not subject to those requirements because he had been paid by the organization's educational foundation.
"I worked for Americans for Prosperity Foundation," said Lonegan, a former mayor of Bogota in North Jersey.
Lonegan filed papers with the election commission certifying that he hadn't created or managed an issue-advocacy group before running for governor. However, numerous press releases on the group's Web site are signed, "Steve Lonegan, executive director, AFP-NJ." The foundation is not mentioned.
Fred Herrmann, executive director of the Election Law Enforcement Commission, said it would investigate Lonegan's funding application if a citizen complained or if the commissioners discovered violations, but that neither had happened to date.
The commission is charged with reviewing applications for public financing and determining whether candidates qualify for public money; the commissioners handle any disputes and can fine candidates for violations.
Lonegan, one of four Republicans hoping to unseat Democratic Gov. Corzine in November, was the first candidate to qualify for matching funding. Corzine, a multimillionaire who spent $40 million to run for governor in 2005, is expected to pay for much of his own campaign.
Lonegan, who announced his campaign in December, petitioned for matching funding after raising $385,000 from nearly 3,000 donors. He has received $471,000 in matching public campaign money.
The law that allows candidates to apply for two-for-one matching funding requires them to disclose working for any issue-advocacy groups in the four years before becoming a candidate.
Candidates can qualify for matching funding if they worked for such a group, but only after they provide details of the group's fund-raising - including those who have given it money and those it has given money to.
The law was adopted in 2001 to prevent publicly funded candidates from running shadow political campaigns by promoting themselves through issue-advocacy groups that have looser public-disclosure requirements than political campaigns. The law arose after 2001 gubernatorial candidate Bob Franks sued fellow Republican Bret Schundler for accepting public financing while promoting himself through such a group.
AFP New Jersey, with Lonegan as its director, helped defeat Corzine's toll-hike plan, and successfully campaigned against 2007 ballot initiatives supporting stem-cell research and property-tax relief. Through radio ads and press releases, AFP also opposed the Paid Family Leave Act, which allows New Jersey workers to take up to six weeks off of work with pay to care for a new child or sick relative.
Lonegan said the AFP foundation educated voters on legislative issues but did not take positions. He said he had resigned to focus full time on his second run for governor, after an unsuccessful bid four years ago.
AFP is based in Washington and active in 22 states, where it advocates for limited government and fiscal restraint. The group also educates and lobbies voters on economic policy, its Web site says.
Under the federal tax code, AFP is considered a lobbying organization and subject to the state election commission's disclosure requirement. The foundation has a tax-exempt status that prohibits it from engaging in campaign activities and limits its ability to lobby.
In New Jersey, AFP and its foundation share staff and office space. The arrangement between the two allows AFP to borrow staff and reimburse the foundation for the hours, said John Flynn, the organization's lawyer.
Foundation tax records show Lonegan was paid a $93,247 salary in 2007. The foundation's 2007 tax return states that it spent no money on lobbying that year.
Asked whether Lonegan also had worked for AFP, Flynn would not address the question directly. He would say only that "any lobbying activity would have been through AFP."
Further complicating the issue is the form candidates who apply for matching money are asked to fill out.
While state election law spells out that the reporting requirement for issue-advocacy activity dates back four years, the form asks only whether the candidate is now involved in managing such a group.
"I did not form, create, and nor do I manage" an issue-advocacy group, Lonegan said.