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THURSDAY, April 18 — Lansing Mayor Andy Schor has followed through on his promise to register his fundraising account for “incidental expenses” with the Internal Revenue Service.
City Pulse reported in February that nearly $170,000 had been contributed to the “Schor Lansing Fund” since Schor was elected in November 2017 and about $70,000 has been spent, much of it on his inaugural celebration. Schor also used it for $1,132 in expenses for the annual U.S. Conference of Mayors meeting, in Washington. Another $911 paid for food at Lansing Lugnuts games. About $10,000 more was spent at local fundraisers or donation-based dinner events.
The account — identified as a 527 account in federal tax code — has been fueled largely with tax-free donations from developers, lawyers, lobbyists and labor and other enterprises doing business with the city.
Until he registered the account with the IRS, the account had existed entirely outside of the purview of federal authorities.
Schor argued that politicans not running for federal office may be exempt from reporting contributions to such accounts, although he made a list of donations and expenditures public when asked.
“I still think there is some vagueness in the law, but we’re going to voluntarily file,” he said after confirming he had registered the account, which requires quarterly reporting.
Politicians frequently use 527 accounts to operate outside the bounds of typical campaign finance laws. Donations and expenditures to such accounts aren’t capped. Scnor can use the funds for just about any expense deemed to be related to serving as the city’s mayor.
Schor previously said the funds help assist in getting “great things going on in this city.”
“It’s an avenue to support these important charities because I don’t have the capacity to do it on my own,” Schor explained earlier this year to City Pulse. “I just make sure these contributions are going to the right place.”
Critics argue that contributors are special interests seeking favor from officials by supporting a slush fund.
Schor maintained such an account as a state legislator before he was elected mayor. That account stayed below $25,000, the federal threshold for reporting. Schor decided to register his 527 mayoral account with the IRS and submit his expense reports after City Pulse raised questions about the fund’s explosive growth spurt.
Before last month, the IRS had no record of the account. Records confirmed the fund has since been registered. And while reports that detail expenses and contributions aren’t yet online, Schor confirmed they have been filed.
Schor previously cited a possible exemption to the filing requirements to justify his continued uncertainty. IRS guidelines exempt a “political committee of a state or local candidate.” He said that exemption made mandated filing a legal grey area, but ultimately he thought it better to file voluntarily.
The IRS lists fines of up to $10,000 for those who fail to file quarterly expense reports, though experts in the field have suggested that federal enforcement has been lax in recent years. Schor also said he’ll plan to seek a waiver of those penalties if he’s eventually found to be in violation of any federal laws for the missed reports.