Citizens for Energizing Michigan’s Economy (CEME), a dark money 501(c)(4) that has received at least $43 million from Consumers Energy since 2014, is promoting at least five candidates who are running in competitive primaries.
Brandon Hofmeister, senior vice president of governmental, regulatory and public affairs for Consumers Energy, Howard Edelson, a former Consumers Energy lobbyist, and Ronn Rasmussen, a former vice president for the utility, all lead the 501(c)(4), according to CEME’s latest filing with the State of Michigan. Consumers Energy also confirmed that Hofmeister is on CEME’s board.
Republican candidates John Damoose, Andrew Beeler, Pat Outman and Andrew Fink, and Democratic candidate Ranjeev Puri have benefited from CEME advertisements and possible mailers in recent weeks. Those five candidates are also running in their first elections.
November 13 update: Damoose, Beeler, Outman, Fink, and Puri have all been declared winners in the general election.
The utility’s political action committee, CMS Energy Employees for Better Government, contributed $1,500 to Damoose, Beeler, Outman, Fink, and Puri on June 30. The PAC has not contributed to the other candidates in these races.
“Good Christian values mean good Michigan policies,” begins one CEME advertisement that touts John Damoose’s experience in “creating jobs and promoting Christ.”
“In Michigan, we honor America and stand up for Christian values. Conservative Andrew Fink understands that,” begins another CEME advertisement.
The advertisements are similar for all of the conservative candidates, but CEME changed the tone and topic for Democrat Ranjeev Puri: “He’s an experienced leader who worked for President Barack Obama” who has a plan “to make sure everyone has the education, health care, and skills to succeed.”
Sierra Club, Planned Parenthood of Michigan, and Moms Demand Action Gun Sense have endorsed Puri, whereas conservative groups such as the Michigan Freedom Fund and the Michigan Right to Life PAC are supporting the other CEME-backed candidates.
The advertisements all end by telling Michigan voters to “call your legislator” and either “tell them you back conservative John Damoose’s plan for Christian values in Michigan”, “back Pat Outman’s plan to put folks back to work,” or “support Ranjeev Puri’s plan for new opportunities for Michigan.”
CEME is also sending several various political mailers to promote their chosen candidates.
Several CEME mailers sent to voters that promote John Damoose were provided to the Energy and Policy Institute. The mailers for Damoose focus on his plan to promote “peace through Christ.”
The Hillsdale Daily News recently reported on CEME’s involvement supporting Andrew Fink in Michigan’s District 58 House election. Hillsdale Mayor Adam Stockford, who is running against Fink in the Republican primary, told The Daily News, “I think it’s suspicious that Consumers is spending thousands on Facebook boosts, shady flyers, website banners, and even television ads to manipulate this election.”
Daren Wiselely, another candidate in the Republican primary, said, “When an energy company like Consumers, which spent over a million dollars in 2018 to defeat House Energy Committee Chair Gary Glenn in his Republican primary, invests in a race, it goes against the interests of the voters.”
Ethan Petzold, who is running against Puri in House District 21 Democratic primary, told the Energy and Policy Institute, “We’ve seen mailers and digital ads from this group [CEME] during the race. I’m proud of the campaign that we have run which hasn’t received any support from dark money groups. Our campaign is funded by grassroots donors and labor organizations representing hardworking Michiganders.”
CEME spent $12.9 million during the 2018 election year, according to its annual tax filing and reporting by The Detroit News. CEME had $7.4 million in cash available at the end of 2018 and $21.5 million in total assets.
In a Michigan Public Service Commission filing, Consumers Energy reported giving $20 million to CEME in 2017, which is the amount of money CEME reported raising through dues in 2018. Much of that money was spent on advertisements critical of Republican Senator Gary Glenn. Glenn was chairman of the House Energy Committee at the time and in a competitive primary race, which he ultimately lost. Glenn was supportive of competition within the electric industry, which would break up aspects of Michigan utilities’ monopolies.
After his defeat, Glenn told Midwest Energy News, “By hanging my hide on the wall, utilities will intimidate even more legislators. Many legislators walk around scared of their own shadow when it comes to utility lobbyists. I am more disappointed in that than I have been about having lost the race — the fact that they’ll be able to intimidate other lawmakers by pointing to what they did in my race.”
The IRS characterizes501(c)(4) groups as “social welfare” groups; they do not have to disclose their donors. They are allowed to engage in some political activities, but not as their “primary activity,” and they are prohibited from campaigning “on behalf of or in opposition to any candidate for public office,” which is likely why the advertisements avoid telling Michiganders to vote for the candidate. This loophole led Patrick Anderson, a tax policy expert in Michigan, to file a complaint in 2018 against CEME with the IRS.
Anderson told Midwest Energy News, “The campaign activity of CEME is so flagrant and egregious that it made a mockery of not only tax laws but also campaign finance laws. This is much more than one nonprofit that got a little bit out of hand. This is a multi-million dollar coordinated campaign.”
Katelyn Carey, spokeswoman for Consumers Energy, told The Detroit News, “We support CEME as we support their mission to educate elected officials and the general public on issues facing Michigan, including pragmatic energy policies that are focused on safe, reliable, and affordable energy for Michigan.”
None of the mailers or advertisements mention energy or utility issues. The candidates’ campaign websites do not offer obvious reasons for why a Consumers Energy-funded 501(c)(4) group would specifically promote these individuals.
Damoose’s campaign website features Michael Crichton’s 2004 novel, State of Fear, as a “body of work that has helped shaped me as the candidate.” Crichton used the novel to cast doubt on the validity of global warming evidence. After the release of the book he continued to publicly downplay carbon dioxide’s role in causing climate change. (Scientists agree that carbon dioxide is the main man-made greenhouse gas that is driving the observed climate change since the mid-20th century.)
Consumers Energy’s CEO Patti Poppe has positioned the utility to be an industry leader in combating climate change. The utility has pledged to achieve net-zero carbon emissions by 2040. “Consumers Energy is proud to take a stand for Michigan and for the planet. We are committed to take actions that eliminate our carbon footprint and do our part to combat climate change,” Poppe said when the utility made its net-zero announcement earlier this year.
Under a January 2019 rate case settlement agreement, Consumers Energy agreed that it will not contribute to IRS 501(c)(4) or 527 entities while the rates are in effect. However, Hofmeister previously said this settlement does not apply to the utility’s parent company, CMS Energy.
|Consumers Energy/CMS Energy contributions to CEME (Source: MPSC filings)
|CEME’s revenue (Source: IRS tax filings)
|CEME not listed
Carey told the Energy and Policy Institute, “To be clear, CMS and Consumers Energy has not donated any money to CEME this election cycle. CEME is a separate 501c4 and independent organization that is not part of CMS or Consumers Energy. Previously, we are engaged in the political process, supported pragmatic policies that are focused on safe, reliable, and affordable energy for Michigan. Any past contributions to Citizens for Energizing Michigan’s Economy came from the company in the form of non-customer, shareholder dollars. In other words, funds driven from our shareholders – people buying stock – and not from customer bills.”
CEME’s support of candidates that have also received Consumers Energy PAC money occurs while Ohio politicians are distancing themselves from a 501(c)(4) called Generation Now, the group that federal prosecutors have charged in a bribery and racketeering scheme. FirstEnergy routed $60 million through the 501(c)(4) to finance Representative Householder’s takeover as House Speaker. Householder returned FirstEnergy’s largesse by ramming through HB 6, the law that bailed out FirstEnergy’s nuclear and coal plants that were economically struggling, as well as other coal plants in which FirstEnergy subsidiaries held partial ownership.
Consumers Energy and FirstEnergy’s use of 501(c)(4) entities are just the latest examples of utilities contributing to 501(c)(4) organizations that have advocated for officials and policies that would aid the utilities’ interests. In 2019, Arizona Public Service and its parent company, Pinnacle West Capital Corp., finally admitted to contributing $10.7 million to dark-money groups that worked to elect APS’ preferred candidates to the Arizona Corporation Commission, which regulates APS.
The Ohio corruption scandal also revealed that American Electric Power has been contributing to its own 501(c)(4) entity, a group called Empowering Ohio’s Economy, which itself contributed to entities controlled by Householder’s alleged criminal enterprise, as the Energy and Policy Institute reported on late Friday, July 24, and the Columbus Dispatch confirmed the next day. When the stock market opened the following Monday, AEP’s stock plummeted relative to other utilities. FirstEnergy’s shares have also plunged.
Consumers Energy does not disclose its 501(c)(4) contributions to shareholders; neither does DTE Energy, which has also contributed to CEME in the past.
Patrick Doherty, director of corporate governance at the New York Office of the State Comptroller, brought forth a shareholder resolution in 2020 on behalf of the New York State Common Retirement Fund to force Consumers Energy to fully report its political spending and its policies and procedures for making political contributions with corporate funds. During the shareholder meeting, Doherty said, “Our fund believes that a complete disclosure by the company is necessary for investors to be able to fully evaluate the political use of corporate funds.”
The Board of Directors recommended shareholders vote down the proposal, and it was defeated.
DTE Energy’s Board of Directors also recommended shareholders vote against a similar resolution brought by Mercy Investment Services, an entity affiliated with the Sisters of Mercy. That resolution was also defeated.