PORTLAND — The Maine Commission on Governmental Ethics and Election Practices ruled last week that The Portland Press Herald did not violate state election law when it donated ad space that was used to promote an elected mayor referendum in Portland.

Tom Valleau, a former Portland Charter Commission member, complained to the commission about the approximately $46,500 in free advertising donated by the Press Herald/Maine Sunday Telegram in the week before last November’s referendum vote.

The commission accepted the newspaper’s argument that the purpose of the donation was to further a business relationship with the Portland Regional Chamber, not to influence the election.

The newspaper donated at least six-full page ads to the chamber, a business-advocacy group that supported having a popularly elected mayor, rather than a mayor appointed by the City Council.

Voters approved the referendum 12,963 to 11,825.

Valleau, who opposed the change, said the newspaper should have registered as a ballot question committee.

The five-member Ethics Commission heard more than an hour and a half of testimony on the complaint on Thursday, Feb. 17, before voting 4-1 to accept a staff recommendation that the law was not violated.

Jonathan Wayne, executive director of the commission, said in a Feb. 18 letter to Valleau that the newspaper should carefully consider similar donations in the future.

“Depending on the factual circumstances, donating free space to others for electoral advocacy could have campaign finance implications for the recipient organizations – for the newspaper – in terms of limitations on contributions to candidates or reporting obligations,” Wayne said.

The commission found that, in this particular case, the newspaper was not required to register as a BAC, since it had a standing business arrangement with the chamber.

That arrangement, which began roughly around September 2010, allowed the newspaper to be a major sponsor of the chamber in exchange for a weekly quarter-page ad. Such a designation typically costs about $25,000.

The newspaper successfully argued that, even though the Publisher and Editor Richard Connor conceded to knowing the ads would support the referendum, the exchange was intended to further the business arrangement with the chamber, not influence the election.

Connor estimated the newspaper, which also endorsed the elected mayor referendum, has contributed about $750,000 in free advertising to nonprofit groups like the chamber.

MaineToday Media attorney Daniel Walker said MaineToday Media has an “ad hoc” policy on helping nonprofits.

Michelle Lester, MaineToday Media vice president of advertising, who was at the hearing, said there are no written policies or contracts for free ads, which are not provided on a value-for-value basis.

“The purpose was not to influence the campaign,” Walker told the commission last week. “The purpose was to provide support to its nonprofit business partner, the chamber, in expressing its public view.”

“In this case their positions aligned in this case,” Walker added.

One commissioner asked whether the newspaper would have donated free ads to a nonprofit group that was advocating against having an elected mayor.

“We probably would have, yes,” Lester said.

Walker pressed other portions of the newspaper’s arguments that were not accepted by the staff. Those arguments include protection under the First Amendment, and that the value of the ads were less than $5,000.

Although it found no violations, Ethics Commission staff argued that ads fall outside of First Amendment protection and accepted the fair market value of the ads listed on the finance report.

Several commissioners said the arrangement presented serious issues and implications for local elections and raised questions about the purpose in lieu of an actual contract between the two groups.

Margaret E. Matheson, an independent from Augusta, on Friday said she voted against the staff recommendation because she wanted more information.

“I didn’t know if we had enough of a record to make a decision,” she said.

During the hearing, Matheson sought more information from Connor, who was not present, about a conversation he had with a chamber volunteer at a community event that led to the ads.

Matheson also probed deeper into whether the newspaper was motivated by the content of the ads. She asked Lester whether the newspaper would have run an ad from the chamber that promoted a specific business. Lester said she would not have.

Valleau said on Monday he believes his complaint got a fair hearing. And he still believes the Press Herald should have registered as a BAC.

“I feel as though the Press Herald caught a break on this one,” Valleau said. “Looking to the future, I don’t think a newspaper should be choosing sides and giving out free ads.”

Randy Billings can be reached at 781-3661 ext. 100 or [email protected]

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