Baxter pleads guilty in Unlock Michigan case

Updated at 2:04 p.m.

One of the political fundraisers at the center of the Unlock Michigan dark money scandal pleaded guilty to a reduced misdemeanor charge on Tuesday.

Sandra Baxter appeared Tuesday before Ingham County Circuit Court Judge James Jamo to accept a plea deal offered by the Michigan Department of Attorney General. She faced a charge of perjury for lying to investigators about the extent of her fundraising efforts for the Unlock Michigan ballot proposal, which sought to repeal the state’s gubernatorial emergency powers law in the early days of the pandemic.

Baxter on Tuesday pleaded guilty, instead, to one count of knowingly providing a false or misleading statement to a police officer during a criminal investigation. The charge carries a sentence of one year in jail and or a $2,500 fine.

Baxter raised money for the Michigan! My Michigan! fund associated with former Michigan Senate Majority Leader Mike Shirkey (R-Clarklake). It is alleged that she funneled money raised by the Shrikey-associated fund to Unlock Michigan, offering wealthy donors some cover to hide their donations to a politically-sensitive effort.

In court on Tuesday, an assistant attorney general said Baxter now admits to providing a false or misleading material statement to law enforcement, and that the state would not be seeking jail time for Baxter. It would be seeking the maximum fine.

Baxter told Jamo she understood the charges and agreed to plead guilty.

Attorney General Dana Nessel also charged Heather Lombardini, the head of Michigan Citizens for Fiscal Responsibility, or MCFR, with forgery and uttering and publishing as a result of the same probe into Unlock Michigan. Lombardini was the president of the MCFR, which also was associated with Shirkey, and was the treasurer of Michigan! My Michigan! It was alleged that Lombardini acted similarly as Baxter – that she encouraged some of Michigan’s wealthiest businesspeople and political funds associated with large businesses to donate to MCFR with the intention of moving that money to Unlock Michigan’s signature collection effort to move the initiative forward.

Either way, the prosecution was aimed at deterring others from abusing the non-profit political campaign fund system, which Nessel said was currently run amok by politicos bending the rules and without recourse because Michigan’s campaign finance law was mostly toothless and needed stronger regulation of 501 C(4) accounts.

Long-term deterrence remains an open question

A former political strategist and an attorney who jumpstarted investigations into Baxter and Lombardini both say Nessel missed an opportunity to charge Shirkey and Unlock Michigan’s political donors in a conspiracy to commit a crime.

The assertion came from Bob LaBrant, an attorney and longtime former Republican government affairs strategist and consultant, and Mark Brewer, a seasoned campaign finance and election attorney and the former Michigan Democratic Party chair, following the disclosure of donor names associated with the Unlock Michigan ballot committee scandal that resulted in criminal charges against Baxter and Lombardini.

Shirkey and the donors involved were not charged with crimes in the matter. The charges that were brought against Baxter and Lombardini were for perjury and forgery, respectively, and only in the context of Michigan’s campaign finance laws.

That said, the investigations and subsequent prosecutions of Baxter and Lombardini may not have materialized if LaBrant and Brewer hadn’t made two complaints highlighting what they believed were active attempts by the two funds to hide who was donating to Unlock Michigan for the purposes of collecting signatures.

In interviews with Michigan Advance, LaBrant and Brewer said that instead of going after Baxter and Lombardini, the attorney general should have charged Shirkey and the multitude of donors in a criminal conspiracy to launder money from the political non-profit funds to the effort to gather signatures for Unlock Michigan.

“I think there was a criminal conspiracy here,” Brewer said. “I think that they knew what they were doing was illegal. In some of the documents disclosed, Shirkey clearly knew that people were making contributions to these [nonprofit campaign funds] as conduits to Unlock Michigan. He was in charge of Michigan Citizens for Fiscal Responsibility, a [fund] set up and established by the Senate Republican Caucus, and while his name wasn’t on the board of directors, he clearly controlled it.”

Labrant said similarly, noting that although neither the consultants charged in the scheme nor the donors themselves fully understood the difference between using one nonprofit fund to raise money and use another as a “laundromat,” it was still clear to him that what transpired was a criminal conspiracy.

“If we really wanted to put a stake to the heart of dark money, [the attorney general’s office] should have charged a number of these people with criminal conspiracy,” Labrant said. “Including some of the business owners.”

A request seeking comment from the Michigan Department of Attorney General was not returned at the time of publication. Shirkey also did not respond to a request for comment.

However, in a release issued Tuesday afternoon, Nessel said that knowingly providing false information during an investigation undermines the integrity of our legal system and that Baxter’s plea “makes clear that those who attempt to deceive investigators will be held accountable. My office remains committed to uncovering the truth and prosecuting individuals who obstruct justice.”

The scheme laid bare in court

It was alleged that Lombardini actively raised funds for Unlock Michigan via Michigan Citizens for Fiscal Responsibility by telling wealthy donors and corporations that they could donate to the latter and those funds would go to the former without anyone ever knowing about it. She was charged with uttering and publishing and forgery, but the uttering and publishing charges were  dropped following a preliminary examination in Lansing’s 54-B District Court. 

Baxter was alleged to have lied to investigators about the situation when asked about her fundraising efforts for Michigan My Michigan and their association with Unlock Michigan. Baxter was given the opportunity to correct her statements under oath and chose not to do so, the department alleged. She was subsequently charged with perjury and was bound over by the same district court to stand trial.

While Baxter’s plea means she will no longer have to face trial, Lombardini’s situation is still up in the air. Although she has been bound over to face trial, a hearing before Ingham Circuit Court Judge Wanda Stokes was held on June 4 to determine if the bind over order should be thrown out. Stokes said she would have a decision soon.

It was at that hearing on June 4 in which the Michigan Department of Attorney General disclosed what was described as a treasure trove of emails showing Lombardini had allegedly assured donors to Michigan Citizens for Fiscal Responsibility that their money would be given to Unlock Michigan. There was also an alleged understanding that no one would ever know that the donors were actually funding early signature gathering operations for Unlock Michigan because the money would be moved from one fund to another. 

Also detailed during that hearing was a list of 15 donors who were initially not disclosed, which included some businesses and also Dick DeVos, the former 2006 Michigan GOP gubernatorial nominee, and husband of former U.S. Secretary of Education Betsy DeVos.

The names of donors to political 501 C(4) organizations on Internal Revenue Service Form 990s are typically redacted, even as the forms are open for public inspection. In unredacted documents obtained by the attorney general’s office via subpoena, a list of 15 once-shielded political donors to Michigan Citizens for Fiscal Responsibility were finally exposed on June 4 as giving approximately $1.35 million to the fund.

According to information compiled by The Detroit News, the list includes:

• Grand Rapids businessmen Dan DeVos and Dick DeVos, who both gave $50,000; 
• J.C. Huizenga, the founder of Huizenga Group, who gave $25,000;
• Michigan Energy First – a DTE affiliate – which gave $100,000;
• Health Alliance Plan – a Henry Ford Health affiliate – which gave $20,000; and
• Dan Hibma, husband of former Secretary of State Terri Land, who gave $25,000;

For Brewer, the end goal was never to have Baxter or Lombardini prosecuted – it was to disclose the political donations being made to Unlock Michigan under a cover of darkness. To that end, Brewer told the Advance that he was pleased to see those names and donations released publicly.

“The people of Michigan have a right to know who’s funding a ballot question committee [a political fund] to hide donors. It’s not only illegal, but it just serves the public,” Brewer said. “After several years of fighting, we finally have most of the disclosure. We don’t have all the donors disclosed, but we’re making progress finally.”

That said, LaBrant noted that the disclosures made in court show that Shirkey and the donors acted in concert to further an unlawful scheme.

Part of the disclosures made in court on June 4 included emails in which Lombardini and Shirkey had told donors to Michigan Citizens for Fiscal Responsibility donors that their contributions would be funneled to the ballot question committee Unlock Michigan and that they would have some plausible deniability if asked about the contributions from Democratic stakeholders, much like Whitmer’s office.

In LaBrant’s view, existing case law holds that if two or more persons make an agreement to violate the law or to do an unlawful act, it meets the definition of a criminal conspiracy. That includes making a contribution to a 501 C(4) organization – which is not illegal in and of itself, but is done to basically hide contributions from the disclosure laws – and then have that money be used with knowledge that it’s going Unlock Michigan.

“I’m just the guy that filed the complaint,” LaBrant said. “It just seems to me that there was an opportunity lost to have a little bit more significance [in the charges].”

LaBrant said Nessel’s prosecution of Lombardini and Baxter would likely have some deterrent effect, but it was unknown if the initial sting would last years into the future for wealthy donors seeking to conceal their contributions in the same manner.

“They will probably be very reluctant to engage in that kind of behavior again,” LaBrant said. “But guess what? Five years from now, 10 years from now, who’s going to remember that? If they had gone after Mike Shirkey, every Senate majority leader in the future would say, ‘wait a second, I’m not going to do this.’”

This story was updated to reflect that Lombardini is also charged with a count of uttering and publishing. A comment from AG Nessel was also added.