Who Paid For The Smear Campaign?

Goodness, they were busy over at the Hampton Roads Chamber - in the political action committee office anyway - on October 12th. 

Counting money. Lots of it.

Meanwhile, local power brokers in Virginia Beach were probably suffering from writer’s cramp by day’s end. Or carpal tunnel syndrome.

All those checks!  Big ones, too. But not so big that they’d be made public prior to the election.

Let’s back up.

Remember those amateurish-but-ultimately-effective TV ads that ran in the waning days of the 2018 local election campaign? You know, the misleading ones that cast Virginia Beach City Councilman John Moss as a politician opposed to restrictions on eminent domain, opposed to money for flood control and opposed to full-day kindergarten?

In reality, Moss supported stronger eminent domain legislation than the measure he voted against at City Council. He also supported a budget that would have given MORE money to flood mitigation than the pittance the city budget called for two years ago.

And he was essentially agnostic on the issue of full-day kindergarten, refusing to vote to hike taxes to lengthen the school day. The schools run an annual surplus, he pointed out. No need to increase taxes.

Moss is a budget wonk, a grassroots guy, and he tries to hold the line on taxes.

It appears those deceptive ads were effective. Moss - who was believed to be the favorite in the crowded at-large field - barely held his seat. In the end it was absentee ballots, cast before the venom was aired, that saved him. He beat Dee Oliver - a member of the Chamber’s Virginia Beach board of directors - by just 347 votes. Moss trailed Oliver on election night, but his margin of victory in absentee ballots - 712 - pushed him over the top and kept him there through the recount.

The anti-Moss ads were produced for PACs connected to two groups: The Hampton Roads Chamber of Commerce and the Virginia Beach Education Association.

But who gave the loot to those two PACS so they could buy the ads?

Here’s a breakdown of the biggest Chamber PAC donors for 2018, according to the Virginia Public Access Project, which tracks the money in Virginia politics:

Bruce L. Thompson. Oct. 12, 2018: $9,950

Douglas Dorn Ellis. Oct. 12, 2018: $9,995

Armada Hoffler. Oct.12, 2018: $9,950 

Michael D. Sifen On Oct. 12, 2018: $9,950.

John F. Malbon. Oct. 12, 2018: $9,000

Notice anything curious about these donations, other than that they were all made on the same day? Yep, they were all just a few bucks shy of $10,000.

Interesting.

And whaddya know. Virginia law demands that “large dollar contributions” - those of $10,000 or more - must be reported within three days.

Here, read it for yourself:

§ 24.2-949.7. Large dollar contribution reporting requirement for political action committees.

In addition to the quarterly reports required by § 24.2-949.6, political action committees shall report any single contribution or loan of $10,000 or more received at any time during the calendar year within three business days of receipt of the contribution or loan.

Let’s connect the dots. By keeping their donations just under the 10 grand level, the names of these fat-cat donors were shielded until December 31 - long after the Nov. 6 election was in the rearview.

In fact, the HRBizPAC as it calls itself, received $79,845 on a single day: Oct 12 . Very helpful. Because three days later the PAC stroked its first check to D.I.A. Inc, the company that produced the ads. The initial payment was $78,300.

It gets better. 

When you peruse contributions to the teachers’ association PAC, you see some of the same names. And similar amounts.

The largest donors to the teachers’ group, which never raised more than $6,200 in a single year until it collected $73,577 in 2018, were:

Bruce L. Thompson. Oct. 10, 2018: $9,950

Michael D. Sifen. Oct. 8, 2018: $9,950.

Wendel Taylor Franklin. Oct. 11, 2018: $9,500.

John F. Malbon. Oct. 5, 2018: $9,000.

Robert N. Taylor. Oct. 8, 2018: $5,000.

JLM Companies LLC. Oct. 23, 2018: $5,000.

Ben Davenport. Oct. 16, 2018: $4,000.

John O Wynne. Oct. 10, 2018: $5,000.

Harry T. Lester. Oct. 9, 2018: $5,000.

Both PACs made large payments to D.I.A., Inc. shortly after they raked in the dough. All told, the Chamber PAC spent $88,300 on the anti-Moss ads. The teachers’ PAC spent $60,500. We’re concerning ourselves today primarily with the HRbizPAC because the negative advertising is unprecedented for that group.

D.I.A. is the agency that dreamed up the clever “Take ORF” ads for the Norfolk airport and the “From Here You Can Go Anywhere” campaign for Tidewater Community College.

But the president of D.I.A., Dave Iwans, is also known because in 2009 he pleaded guilty and was fined for violating campaign advertising laws . He had produced fliers distributed at minority polling places on Election Day 2008 that featured photoshopped images of mayoral candidate Will Sessoms and Barack Obama looking chummy.

Ironically, Sessoms was supporting John McCain for president, while his opponent, the late Mayor Meyera Oberndorf, supported Obama.  

Iwans wasn’t in trouble for presumably trying to trick minority voters into thinking Sessoms and Obama were pals. His legal problems arose because he neglected to attach the required disclaimer showing who paid for the ads.

Iwans called it an oversight, saying that he paid for the materials himself.

A spokesman for the prosecutor who was brought in to try the case disagreed.

"This wasn't a personal political expression by Dave Iwans," he said at the time, according to The Virginian-Pilot. "This was intended to deceive voters.”

When I talked to Iwans on Thursday afternoon he confirmed that the two anti-Moss ads were produced by his agency. He said the ads began to air about two weeks before the election. That’s the perfect time to hit the public with an ad campaign, he told me.

”Spending early and then not having enough money to finish is a big mistake,” he said. “People aren’t focused on elections early.”

What he didn’t say was that by waiting until almost the eve of the election to launch an assault on a populist candidate without the funds to fight back inflicts maximum damage. 

Yet Moss told me yesterday he wasn’t completely blindsided. A prominent businessman at the Beach called Moss and gave him a heads-up.

“He told me that there were some ugly ads coming,” Moss recalls. “He wanted me to know that the Chamber had asked him to contribute to help pay for them, but he turned them down. 

“He said that while he didn’t usually agree with me he thought I’d done good job and that if the Chamber didn’t like it they should just run a better candidate.”

Despite the warning, Moss couldn’t effectively counterpunch. He didn’t have the cash to go up against the nearly $150K campaign.

Some members of the Chamber were stunned by the negative advertising. Sure, the organization usually endorses business-friendly candidates, but its PAC had never engaged in dark ads targeting one candidate.

“I don’t recall any ads for or against candidates,” said Virginia Beach Chamber Board of Directors member Delceno Miles, president/CEO of the Miles Group. ”The Chamber usually endorses candidates which just means they can use our name.

“I saw them (the ads) when you did,” she said, confirming that even board members weren’t consulted. “That’s not what the Chamber does. It was pretty aggressive and I didn’t know why they just picked one candidate to go after like that. 

“I’m not going to quit the Chamber over this but I hope they don’t do anything like that in this year’s election or ever again.”

Another of the Chamber’s Virginia Beach Board of Directors, Mike Standing owner of Waterman’s Surfside Grille, wasn’t happy either.

“They didn’t talk to the board of directors, they didn’t talk to the members,” Standing said. “A small group of developers was able to get together and use the Chamber’s name to advance their agenda. 

“That’s not right. Let them form their own PAC, but don’t ruin the reputation of the Chamber over this.”

“I don’t always agree with John Moss,” Standing added. “But I think we all agree he has integrity… Frankly, I think Moss and Jessica Abbott and Bobby Dyer are good for business because they want a level playing field.”

I left Chamber president Bryan K. Stephens a voicemail yesterday but he didn’t return my call. Ira Agricola, the Chamber’s Executive Vice President for Government Affairs did however, but said he couldn’t comment on the PAC’s activities. Only Stephens could speak on the matter. 

Still waiting.

If Stephens calls, I have lots of questions.

Who was behind the ad campaign? Were past or present city officials pulling the strings? Was this done to help Chamber board member Dee Oliver who ran against Moss? Has the Chamber become a political pit bull, willing to ditch its polite pro-business image to torpedo candidates who get under the skin of some of its members?

These two groups were clearly desperate to defeat Councilman John Moss and willing to distort his record to do it. They weren’t successful, but they came awfully close.

In the process, the Chamber tarnished its reputation and looks like a tool of local crony capitalists.

 If I belonged, I’d resign.