Pro-charter school group pays record $425,000 settlement to state

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A New York group that poured $15 million into a pro-charter school committee pushing last year's failed ballot question

A New York group that poured $15 million into a pro-charter school committee pushing last year's failed ballot question to lift the state cap on schools was actually funneling in donations from an array of wealthy donors, including a pair of high-ranking Gov. Charlie Baker appointees, state campaign regulators revealed today.

Paul Sagan, the chair of the state's Board of Elementary and Secondary Education, gave $500,000 and Mark Nunnelly, Baker's newly appointed technology secretary, donated $275,000 to the group, Families for Excellent Schools – Advocacy, or FESA, campaign finance officials said.

Following a probe by the Office of Campaign and Political Finance, the group agreed to pay a $426,000 civil forfeiture -- the largest in OCPF's history -- after the state campaign finance officials determined its flurry of donations to the Great School Massachusetts ballot question committee were "intended to disguise the true source of contributions."

In fact, OCPF determined, FESA should have registered with the state and disclosed its donors during the campaign, when it repeatedly cut checks for hundreds of thousands of dollars to Great Schools Massachusetts as it worked to promote lifting the cap on charter schools.

The ballot question, which Baker himself campaigned for, ultimately failed.

Sagan gave the group $496,000 over the course of two days in early August, which was about the time he also gave $100,000 to another committee supporting the ballot question, records show. That donation, which was legal and made public during the campaign, drew fire from the question's appointments, who said it was inappropriate for Sagan to donate given his position.

At the time, Baker defended the donation and called the controversy a "nothing burger."

A spokesman for Families for Excellent Schools said the group had sought legal advice on how to comply with campaign finance laws, and it did not earmark or "take direction from donors" about how the donations would be used.

"Though we believe we complied with all laws and regulations during the campaign, we worked closely with OCPF to resolve this matter so we could move forward with our mission of working alongside families desperate for better schools," Jeremiah Kittredge, CEO of Families for Excellent Schools, said in a statement.

Nunnelly, a former Bain Capital executive, was the state's executive director of the Massachusetts Office of Information Technology when he donated a total of $275,000 in installments in October and again early November, shortly before election day. Baker last month appointed Nunnelly as the secretary of the new Executive Office of Technology Services and Security, a newly created cabinet position focused, in part, on the state's cyber-security capabilities.

FESA was Great Schools Massachusetts' primary contributor, accounting for 70 percent of the $21.7 million it raised, state campaign finance officials said. OCPF began investigating because the size of its support had them concerned that the group should have organized as a ballot question committee with the state, and thus be required to disclose its donors.

OCPF officials found that contributions from FESA "closely followed" its own donations. For example, in one stretch in August, individuals contributed $2.5 million to FESA, and within one, it turned around to make five separate wire transfers to the ballot question committee totaling the same amount.

The group had several other high-profile donors, including Amos Hostetter, co-founder of the Barr Foundation who gave $2,025,000, and Seth Klarman of the Baupost Group, who gave $3.3 million.

“Massachusetts voters deserve to know the identity of all those who attempt to influence them before Election Day,” OCPF director Michael J. Sullivan said in a statement. “Complete and accurate disclosure of campaign activity is the goal of OCPF and the cornerstone of the campaign finance law.”

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    Article Pro-charter school group pays record $425,000 settlement to state compiled by www.bostonherald.com