Today's headline in the P-I: "'Illegal' McGavick funds alleged"
After Mike McGavick became a U.S. Senate candidate but while still chief executive of Safeco, the company agreed to give him a lucrative "golden parachute" that amounted to an illegal corporate campaign contribution, the state Democratic Party contends.The state GOP dismisses the Democrats complaint as "frivolous" and "desperate". The Democrats have posted the complaint here.
Richard Pope made an interesting observation: former Democrat Gov. Gary Locke sits on the Safeco board of directors, as does major league Democrat donor and Gregoire campfollower Judith Runstad. If Safeco did make an illegal contribution to McGavick's campaign, directors Locke and Runstad would presumably be implicated. Pope's e-mail to Locke and Runstad follows --
Dear Gary Locke and Judith Runstad:
In today's (Wed 04/26/2006) Seattle Post-Intelligencer, Dwight Pelz and the Washington State Democrat Party have accused Safeco Corporation of making an illegal $17 million contribution to the campaign of Mike McGavick, a candidate for the United States Senate. Prior to his U.S. Senate campaign, Mr. McGavick served for several years as President and Chief Executive Officer of Safeco Corporation.
http://seattlepi.nwsource.com/local/268034_mcgavick26.html
I have reviewed the Safeco Corporation website, and it appears that both of you were on its Board of Directors when they approved what the Washington State Democrats are alleging was an illegal $17 million campaign contribution. In fact, you two appear to be the only members of the Safeco Board of Directors who are licensed attorneys.
http://phx.corporate-ir.net/phoenix.zhtml?c=66188&p=irol-govBoard
I have not yet read the FEC complaint filed by the Washington State Democrat Party. It is not posted on their website, but I have requested them to e-mail a copy of it to me. Hopefully, the Washington State Democrats will publicly release their complaint, so that it is not necessary to make a public records request to the FEC to obtain a copy of it.
If the article in the Seattle P-I is correct, the Washington State Democrats are accusing Safeco Corporation and its Board of Directors of violating federal law. 2 USC 441b(a) prohibits all corporations from making any contributions whatsoever to candidates for federal elected office. Even if Safeco Corporation were a natural person, instead of a corporation, 2 USC 441a(a)(1)(A) would limit its contribution to Mr. McGavick to no more than $2,100 for the primary election, and another $2,100 for the general election.
Moreover, if Safeco Corporation and its Board of Directors acted knowingly and willfully in committing the violation that the Washington State Democrat Party has apparently alleged, this would constitute a federal felony under 2 USC 437g(d)(1)(A)(i), punishable by up to five years in a federal prison and substantial fines, since more than $25,000 was involved.
I am considering whether or not to file a grievance with the Washington State Bar Association against both of you, requesting them to investigate the allegations made by the Washington State Democrat Party, determine whether any of them constitute violations of the Rules of Professional Conduct, and take appropriate action in the event that they do.
I would appreciate any comments you may have on this matter, and in particular your views on the following subjects:
(1) Were you a member of the Safeco Corporation Board of Directors when it approved the compensation packages that the Washington State Democrat Party claims constituted an illegal $17 million campaign contribution?
(2) If so, did you vote to approve the compensation packages? If you did not personally vote to approve, did you take any formal action in the corporate records indicating your dissent or abstention from the Board of Directors decision?
(3) Do the compensation packages approved by the Safeco Corporation Board of Directors constitute an illegal campaign contribution to Mike McGavick, whether for $17 million or any other amount?
(4) Do all items of the compensation packages approved by the Safeco Corporation Board of Directors constitute legitimate compensation for Mike McGavick for the services that he has performed for Safeco Corporation?
(5) If anything in the compensation packages was an illegal campaign contribution to Mike McGavick, did Safeco Corporation act knowingly and willfully in violating the federal campaign finance statutes referenced above?
(6) If anything in the compensation packages was an illegal campaign contribution, did you and the other individual members of the Safeco Corporation Board of Directors act knowingly and willfully in violating the federal campaign finance statutes referenced above?
Thank you for your careful attention in this matter.
Sincerely yours,
Richard Pope
Ignoratio elenchi (also known as Irrelevant conclusion) is the logical fallacy of presenting an argument that may in itself be valid, but which proves or supports a different proposition than the one it is purporting to prove or support.
For example, let's say a post argues that illegal votes were cast in the 2004 Washington state election. (As one or two posts here have.) A commenter who replies with "What about Florida in 2000?", or something similar, is committing this fallacy. Even if they are right in their discussion of the Florida election — and they rarely are — what they are saying is irrelevant to the argument made in the post.
Some commit this logical error unintentionally; they see a post they don't like, and they react emotionally by changing the subject. Others commit the error deliberately in an effort to weaken the effect of a post by redirecting the discussion. I cannot see into another person's heart, so I won't give examples of the deliberate use of the fallacy, but I think you can find some without much effort.
But I will give you this general observation: When someone commits this fallacy, they are, in effect, conceding that they have lost this particular argument. And that, I think, tells us how we should treat this logical fallacy when we see it. We should thank the person for their concession of defeat, and return to the subject of the post. If you want to be fancy, you might write something like this:
Your comment was an example of Ignoratio Elenchi. Thank you for conceding defeat. Now, back to the subject of the post.
Feel free to borrow that paragraph, if you like.
Feel free to borrow paragraphs, if you like, but don't pretend they're your own words...
Posted by: jep on April 26, 2006 01:10 PMWrong "Jim". Your comment was an example of Ignoratio Elenchi. Thank you for conceding defeat. Now, back to the subject of the post.
Per the law, candidates AND donors are liable for illegal contributions. If this golden parachute is illegal to receive, then it is illegal to donate.
If McGavick is cleared, then the Safeco board will be cleared.
Posted by: SouthernRoots on April 26, 2006 01:11 PM("I was at lunch when they did that!")
Funny thing about the Dims....as often as they crap in their own nests, it's a wonder that they don't get caught more....
Posted by: alphabet soup on April 26, 2006 01:21 PMWoops! This state (Trollington) is full of them!!!
Posted by: A Watchdog on April 26, 2006 01:21 PMNot sure, but the CEO of Real Networks happens to be the largest political donor in the state of WA - all of which support democrats and left-leaning causes. The Seattle Times did a ranking of the top ten a little while back, sorry I don't have a reference.
Posted by: Hi Fred on April 26, 2006 01:30 PMExactly, this is employee compensation. It is a real stretch to try and turn it into a campaign contribution.
Posted by: Danno on April 26, 2006 03:18 PMThe assumption is, Soros and Glaser are pre-funding Franken's Senate race. A candidate can spend any amount of his own money on his own campaign, and Franken's salary is his own money. If they had not figured this out, Soros and Glaser would have been limited to giving his campaign $2100 each, instead of millions.
It is clever, and perfectly legal, and just points out the futility of attempts to limit campaign funding.
Posted by: Legast on April 26, 2006 03:37 PMThe compensation for Safeco's CEO is established by the compensation committee of the board of directors. (per the Safeco compensation committe charter). Neither governor Locke nor Ms. Runstad were members of the compensation committee in 2005 when the alleged wrongdoing occurred. See http://www.safeco.com/safeco/investor/annualreport/ar2005/board_of_directors.asp
The bottom line is neither recipient of Pope's letter had any authority to influence McGavick's compensation in 2005. So the charge remains - why did Safeco hook old "Lobbyist Mike" up with such a sweet deal after he announced his run for the Senate. If your interested in free and fair elections you should be interested in this.
Posted by: MaryL on April 26, 2006 04:37 PMSo where is this "Safeco compensation committee charter" you are talking about? Locke and Runstad aren't on the compensation committee, but executive compensation must ultimately be approved by the entire board of directors, after first going through the compensation committee. It is the same thing for any corporation or legislative body -- first the committee acts, then the entire body acts.
In any event, Locke and Runstad's responses will be interesting to read. I would imagine that they will state that McGavick's compensation package was entirely legal and in no way a campaign contribution, rather trying some flimsy legality that any blame should be solely put on the "compensation committee".
Posted by: Richard Pope on April 26, 2006 05:07 PMhttp://www.sec.gov/Archives/edgar/data/86104/000119312505238392/dex101.htm
The separation contract is entered into between McGavick and the Safeco Corporation Board of Directors. So Locke and Runstad were parties to that contract as board members.
All the financial terms of the contract, except for one, were fixed by the Safeco Board of Directors in the separation contract.
The only financial figure left to any uncertainty is McGavick's annual bonus for 2005. In Section 3.2, that bonus may be decided by the entire Board of Directors, or the Board of Directors may delegate this one decision to its Compensation Committee. The terms "Compensation Committee" and "Committee" are not mentioned anywhere else in this separation contract.
Pelz appears to be alleging that McGavick's 2005 annual bonus, in addition to the other amounts complained of, was also an illegal campaign contribution -- saying it was something that McGavick was not legally entitled to.
So even if Locke and Runstad did vote to delegate this one decision (2005 annual bonus) to a Compensation Committee that they did not belong to, Pelz's complaint would still allege that Locke and Runstad did something wrong by providing a mechanism for other board members to grant McGavick a campaign contribution, even if Locke and Runstad did not personally decide the amount thereof.
Posted by: Richard Pope on April 26, 2006 05:18 PM
You are wrong. Per Safeco's corporate structure, the compensation committee sets CEO compensation. The entire board does not participate in that decision. You owe Governor Locke and Ms. Runstad appologies for wasting their time.
The charter can be found here http://media.corporate-ir.net/media_files/irol/66/66188/corpgov/CompensationCommitteeCharter_1104.pdf
The first line reads "the compensation committee shall discharge the Board of Directors' responsibilities relating to compensation of Safeco's executive officers." The authority to set the CEO's compensation has been delegated to the committee. There's nothing in the charter or elsewhere to suggest that the entire board participates in setting executive compensation.
Here's a suggestion, why don't you focus your energy on trying to figure out exactly why Safeco gave millions of dollars to McGavick after he began his bid for the Senate. Perhaps you should direct your letter to the members of Safeco's compensation committee.
Posted by: MaryL on April 26, 2006 05:24 PMBut the relevant contract -- and the one that Pelz complains about -- is the December 6, 2005 separation contract. It was entered into by the entire Safeco Corporation Board of Directors. Pelz claims that the 12/06/2005 contract gave McGavick an illegal campaign contribution, by giving him an alleged $17 million that he was not entitled to under the 01/05/2005 contract.
Posted by: Richard Pope on April 26, 2006 05:28 PMI suppose it never occurred to you that Safeco gave McGavick millions of dollars because he was an excellent CEO? I'm a Safeco customer and, while I generally detest insurance companies, I love their service.
I guess for someone who supports Democrats - who rarely if ever hold private sector jobs and are usually politicians for life (Gregoire, Sims, McDermott, et al) - it WOULDN'T occur to you that someone actually EARNS their pay in a private corporation, huh?
I believe you'll find that Mike's exit package was pretty much in line with any CEO that has served for a company such as his and hand the success he's had.
Further, if you had a brain in your head you'd realize that if there was ever an attempt to pass illegal money around, it wouldn't have been under the nose of Gary Locke or documented in such a way that every tom, dick and Mary could trace it. They would have used something like cattle futures instead. (You know - the way that ex-Walmart Board member Hillary Rodham Clinton did.)
The demo operatives on this board are an excellent example of why John Kerry lost nationally and a whole boatload of dems lost in regional races in the last cycle. They come up with this subterfuge and actually believe anyone outside of the Seattle PI editorial pages is going to believe it.
Posted by: johnny on April 26, 2006 08:55 PMMaryL ~
"Neither governor Locke nor Ms. Runstad were members of the compensation committee in 2005 when the alleged wrongdoing occurred."
Mr. Locke is a member of the Audit Committee of the Board of Directors. Ms. Runstad is a member of the Finance Committee.
johnny's absolutely spot-on, what a bunch of idiots. The last line of the article is so surreal, it's complete Washington socialist and/or John Kerry doubletalk:
"That the golden parachute he got wasn't as big as it could have been doesn't make it legal," Steele said.
Posted by: Larry on April 26, 2006 09:27 PMMaybe the new State R chair should just send that out?
Posted by: Gary on April 27, 2006 06:24 AM