Sources: FBI probing Pickering campaign funds

The FBI has been investigating State Auditor Stacey Pickering’s campaign finance records since at least March, multiple sources, including one of his former campaign staffers, confirmed.

It appears investigators are looking into his campaign’s purchase of a car, a recreational vehicle and a garage door and into reimbursements for more than $135,000 in non-itemized travel to himself and others during off campaign years and whether he reported or paid taxes on personal spending from campaign funds.

Pickering says he has “had no conversation with the FBI on this matter” and his office continues to work joint investigations with the federal agency. He accuses his primary opponent, Madison Mayor Mary Hawkins Butler, of spreading “nasty innuendo and insinuation” and called his former staffer “disgruntled” and said she’s working for Butler.

Tiffany Parrish worked as a fundraiser on Pickering’s first, successful run for state auditor in 2007, and left shortly thereafter. Parrish said she was surprised when FBI agents recently showed her that a BMW 325i she sold Pickering in 2011 was listed on his campaign finance report as a “fundraising fee expense” instead of a car.

The FBI would neither confirm nor deny an investigation.

Parrish said agents have asked her numerous questions about the car and other Pickering campaign spending and staff. She said they also inquired about a couple of auditor’s office no-bid contracts that have raised questions in the past. Parrish said agents first contacted her in March, met with her in person later and have followed up with numerous questions through recent weeks. She declined detailed comment on the FBI’s questions. “Due to the ongoing investigation, I am unable to talk about it,” she said.

Parrish, who has worked on numerous campaigns, said she did some consulting work for Butler’s state auditor campaign in early March. Records show she was paid $534 by the Butler campaign in early March, but Parrish said she has done no work since and is not a staffer or volunteer for Butler.

Parrish said she was paid $8,900 for the BMW with a check from the Pickering campaign in June 2011 and was told it would be used by the campaign.

But sources close to the investigation say investigators are questioning whether Pickering purchased the BMW for his daughter to drive, first to high school in Laurel and now to college at the University of Mississippi.

A photo of the car registered to Pickering obtained by The Clarion-Ledger shows what appear to be an Ole Miss parking sticker and a Kappa Delta sorority sticker on its back windows. A social media post by Pickering’s daughter showed an odometer rolling over 200,000 miles and said, “A milestone was reached today, ladies and gents.” Parrish said both photos appear to be of her former car.

Pickering would not consent to an interview and canceled an editorial board meeting scheduled Thursday with The Clarion-Ledger. He sent a brief written statement saying he knows nothing of an FBI investigation and criticizing Butler and Parrish. He said in the statement, “We will not let these negative campaign tactics disrupt our positive message in the final 12 days of this Republican primary election.”

‘Not a gift’

State law does not prohibit candidates spending campaign money on personal expenses. But an attorney general’s opinion warns that spending money raised for a political campaign for other purposes “could present a number of legal problems not to mention ethical questions, particularly if the contributions are used in any personal manner.”

“Simply put, a campaign contribution is not a gift to be used as a person may please,” the opinion says. “Any conversion to personal use and it could be considered income and subject to income tax … Whether or not there is an understanding between the giver and the receiver of the contribution would also affect the use of the money.”

State Department of Revenue spokeswoman Kathy Waterbury said money converted from a campaign to personal use would be taxable and should be reported as income.

“If someone’s making a campaign contribution, it’s usually with the intent that it’s used for TV time, newspaper ads, all those other things,” Waterbury said. “If the candidate is paying rent or buying groceries, converting it to personal use, then at that point it becomes taxable income.”

Pickering’s campaign finance reports show a large amount of non-itemized travel expenditures, with payments to himself, a credit card, his wife and two banks. For 2012, 2013 and 2014, all off-years for statewide campaigns, these expenses total $135,637. During roughly this period, taxpayers reimbursed Pickering $11,125 for official state auditor travel.

In 2012, according to his campaign finance report, Pickering’s campaign spent more than $50,000 in travel. He reimbursed himself $16,231 in “travel, cellular, postage” payments, reimbursed his wife $9,850 for travel, and paid $15,533 in travel expenses to American Express and $8,414 to Regions Bank. The payments to himself included one for $8,266.

For 2013, Pickering reimbursed himself $23,198 for travel plus smaller amounts to American Express and banks, for a total of $40,149.

For 2014, the campaign paid $45,460 in travel, including $27,893 to American Express and $2,605 to himself.

Pickering’s finance reports also show a payment in May of last year of $3,082 to Laurel Overhead Door for a “campaign expense.”

In 2007, Pickering began making campaign payments of $701 a month to Regions Bank in Laurel listed as campaign use of a recreational vehicle. No such payments show in his 2008 report, but start again in 2009. From early 2011, what appears to be similar payments are labeled “travel expense.” They total more than $55,000.

Staffers campaigning

It appears state auditor’s office employees or contractors often work on Pickering’s campaigns. His reports show he reimbursed Brett Kittredge, former communications director for the state auditor’s office, more than $2,400 for Facebook ads while Kittredge was employed there. Recent reports show campaign payments and reimbursement to Mimi Taylor, a manager in the auditor’s office, of more than $4,600 for accounting and campaign finance compliance work and travel reimbursement for June. Will Craft, listed by the auditor’s office as a special projects worker, was reimbursed $2,045 for campaign travel.

Most state employees are not prohibited from working on campaigns, as long as they do it on their own time and do not use state resources. Some take extended leaves of absence to work on campaigns. Neither Taylor nor Craft could be reached for comment Thursday.

Kittredge, who left the auditor’s office in February, said, “I never did anything for the campaign.”

He said he was reimbursed for the Facebook ads he placed.

“I think that was simply promoting official (state auditor’s) work, but having the campaign pay for it rather than the state pay for it,” Kittredge said. He said no investigators have questioned him about Pickering.

Parrish said FBI agents asked her about contracts his office had with Lisa Shoemaker, Pickering’s former communications director, and James H. Johnson, a Republican fundraiser and consultant.

A December Clarion-Ledger series on the state’s widespread use of no-bid contracts raised questions about Shoemaker and Johnson, who have worked for the state auditor’s office and Pickering’s campaign.

In 2010, Shoemaker left as Pickering’s agency spokeswoman to work on Steven Palazzo’s successful campaign for Congress. Instead of replacing her, Pickering hired Shoemaker under a no-bid contract at $60 an hour plus expenses to continue handling communications and media through June 2013. When asked in 2010 about her work on Palazzo’s campaign, Shoemaker said she was on leave from the auditor’s office, but it appears she was instead working for Pickering under contract.

Pickering in July 2011 contracted veteran Republican fundraiser and campaign adviser James H. Johnson as a consultant for the state auditor’s office. Pickering said he paid Johnson about $95,000 over more than two years. The contract called for Johnson to “assist with special projects, provide strategic planning and local government services … (and) to speak to civic clubs and other organizations on behalf of the auditor.”

Both Shoemaker and Johnson also did campaign work for Pickering during the time they held contracts with the auditor’s office, records show.

From 2010 through 2012, the Pickering campaign reimbursed Shoemaker more than $5,500 for travel and other expenses.

For 2012 and 2013, Pickering’s campaign reimbursed Johnson more than $1,800 for expenses.

The Pickering campaign appears to have paid the two auditor’s consultants for expense reimbursement only.

Politics or not?

Butler, on the campaign stump, has questioned whether Pickering has spent campaign money on personal expenses and, if so, whether he has paid taxes. She has raised the questions at at least one event where Pickering was also in attendance. He does not appear to have clearly answered the questions, calling them “rumors” and saying all information is filed on his campaign finance reports.

Butler said Pickering “needs to answer about the vehicles and garage door and other purchases and whether he’s paid taxes and whether he’s being investigated.”

Pickering said: “This is nothing more than last-minute election year politics at its dirtiest.”

Contact Geoff Pender at (601) 961-7266 or gpender@jackson.gannett.com. Follow @GeoffPender on Twitter.

Pickering campaign expenses

Campaign finance reports from Auditor Stacey Pickering include:

• $135,637 in non-itemized travel expenses for 2012-2014, all off-years for elections
• $8,900 listed as “fundraising fee expense” to Tiffany Parrish, who said she did not work for him that year but instead sold him a BMW for that same amount
• Reimbursements to state auditor staffers for campaign-related work
• $3,082 to Laurel Overhead Door for a “campaign expense”