Dawnna Dukes’ campaign racks up $730,000 in debt as challengers rise


Highlights

Financial reports are missing required details showing how her debt has grown by more than $500,000.

At least 23 donors who gave money to Dukes’ campaigns within the last decade have donated to rival Sheryl Cole.

State Rep. Dawnna Dukes’ re-election campaign is off to a rocky start, as the veteran Austin Democrat has accrued more than $730,000 in outstanding loans, raised just $2,250 in recent months and has lost two dozen past supporters who have flipped their allegiance to former Austin City Council Member Sheryl Cole, one of Dukes’ five primary challengers.

Cole, meanwhile, raised $91,483 in the second half of 2017 and has a little over $45,000 on hand as she prepares for the March 6 primary, which features an unusual number of challengers thanks to Dukes’ recent legal troubles and frequent absences from the Capitol.

Attorney Jose “Chito” Vela III raised more than $30,000. “We have the funds we need to finish strong,” he said.

Dukes’ finances were revealed this week in a pair of campaign reports filed with the Texas Ethics Commission. One of the reports was submitted after Tuesday’s filing deadline. Dukes has been fined multiple times in the past for late and inaccurate reports and currently owes the commission $500.

READ: Austin Rep. Dukes prevails in her corruption case

The most recent reports are missing required details showing how Dukes’ debt has grown by more than $500,000 since mid-July, and do not offer a clear picture of her finances.

Dukes acknowledged the flaws in the paperwork, saying in a text message Tuesday, “I’ve noticed some mistakes too.” Any errors were inadvertent, she said. State law gives her up to two weeks to correct and resubmit them.

She blames a two-year criminal investigation and negative media attention for her troubles with fundraising and for contracts lost by her personal consulting business. Dukes said she had to take out the loans to cover legal bills incurred as she fended off charges of falsifying government records and abusing her office. The charges were dropped in October after the Travis County district attorney’s office acknowledged it could not prove wrongdoing.

“Massive negative media scrutiny and criminal investigations caused irreparable harm to my financial relationships and business health,” wrote Dukes, who went on to say she has “been restructuring my financial picture due to the finance obligations caused by the unfair, meritless, baseless accusations mentioned above.”

Read Rep. Dawnna Dukes’ full statement here

Support shifting

Further complicating Dukes’ re-election effort is what appears to be a fracture in her support base. An American-Statesman analysis shows at least 23 donors who had given money to Dukes’ campaigns within the past decade have instead donated about $9,000 to Cole since the start of 2017, including a $2,500 contribution from the Austin Firefighters Association PAC.

Local Democratic heavyweights such as U.S. Rep. Lloyd Doggett and state Sen. Kirk Watson have also lined up behind Cole.

The Rev. Gaylon Clark, who presides over a major church in Dukes’ district, Greater Mt. Zion Baptist Church, gave more than $1,500 to Cole.

Dukes raised just $2,250 from three donors in the most recent reporting period. She has also pledged to donate $210,000 of her own money to her campaign and has collected additional pledges of $1,000 from U.S. Rep. Al Green, D-Houston, and $10,000 from state Rep. Garnet Coleman, D-Houston.

“Nothing has changed. I support her,” said Coleman, who also publicly defended Dukes in November, calling Austin’s politics “vicious” and adding that Dukes is vulnerable as the only black legislator from a place with a dwindling black population.

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Mark Littlefield, an Austin lobbyist and campaign consultant who has endorsed Cole, said there’s good news and bad news for both Cole and Dukes when it comes to campaign finances.

For Cole, her proven ability to raise money while running against an incumbent lawmaker of the same party – a difficult task under normal circumstances – makes her campaign viable, Littlefield said. The bad news for Cole is that the length of her campaign, which launched after Dukes announced her since-canceled retirement plans in September 2016, means that she has had to spend more money than a typical challenger at this point in the election cycle, Littlefield said.

For Dukes, the bad news is that she hasn’t or couldn’t raise money in recent months. The good news, Littlefield said, is that she doesn’t need as much money because, as a 12-term incumbent, she is well known in her district. And the heightened attention to the race will allow her to get voters’ attention through the press rather than advertising.

“Sheryl has an edge on money now, and I don’t anticipate Dawnna being able to close that gap anytime soon. If the lobby isn’t backing her now, I’m not sure the lobby is going to back her later,” Littlefield said. “The good news for Dawnna is that she is such a compelling character and this story already has so many exotic twists and turns that it’s going to be pretty easy to get earned media.”

Legal fees driving debt

Dukes said the majority of her campaign loan debt has gone to covering legal fees related to the 13-count felony indictment that charged her with falsifying travel reimbursement vouchers at the Capitol.

The Travis County district attorney’s office dropped the case last year after a key witness who works for the House changed his testimony and exculpated Dukes, according to prosecutors. Two misdemeanors charging Dukes with abuse of official capacity also were dropped.

At a pretrial hearing last year, her attorneys unsuccessfully requested to withdraw from the case, listing Dukes’ inability to pay legal fees as one of the reasons.

Dukes’ campaign reported an outstanding loan balance of $577,632 on the last day of 2017, up from $150,000 in mid-July. Dukes did not list any new loans that could have caused the spike in her campaign debt, which is required. Another Dukes campaign coffer, called a candidate or officeholder account, includes the same shortcoming, showing a $159,975 outstanding loan balance from an unidentified loan. Between the two accounts, the outstanding balance is $737,607.

Moreover, Dukes reports having $210,657 on hand in her campaign account, but does not state where it came from. She reported having $250 in the July filing.

State law requires campaigns to detail loans as well as contributions, said Ian Steusloff, general counsel of the Texas Ethics Commission.

READ: Texas Ethics Commission ends 4-year investigation into Empower Texans

There are two laws that give candidates grace periods of up to 14 days to correct their reports if they realize they had mistakenly submitted inaccurate information, according to Steusloff.

If those grace periods pass, filers can still correct their reports at any time. But if someone submits a complaint alleging that reports included false information, the Ethics Commission may consider any subsequently amended reports as late submissions, possibly leading to fines, Steusloff said.

Dukes has had problems previously with campaign finance reports. In 2008, the Ethics Commission fined her $2,800 for failing to report the details of credit card purchases made with campaign funds. In 2010, she was hit with an $800 penalty for incorrectly reporting information on donors.

In mid-2016, Dukes and her sister Ateja Dukes, who is her campaign treasurer, owed the commission a total of $2,500 racked up in five separate $500 fines for failing to submit campaign reports and personal financial disclosure forms on time. Dukes currently owes $500 for failing to submit a campaign finance report on time.

After reviewing Dukes’ most recent filings, Austin attorney and Texas campaign finance expert Buck Wood said Dukes’ campaign reporting warrants investigation.

“I’ve never seen anything like it before,” he said. “This is an ongoing problem with her reporting, and I think it’s time for the DA to do something because the Ethics Commission can only give her a fine.”

House District 46, which Dukes has represented for 24 years, includes parts of East Austin, North Austin, Pflugerville and Manor.

Three other Democratic candidates — Ana Cortez, Casey L. McKinney and Warren Baker — reported little donation activity or did not file a report. Nnamdi Orakwue, who recently switched from Democrat to independent, received $3,275 and has $17,420 on hand.



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