UPDATED: LLC ordered to nix campaign donations

BY CHAD HUNTER
Reporter
05/10/2019 12:15 PM
TAHLEQUAH — The Cherokee Nation Election Commission is demanding that a limited liability company stop contributing to the campaigns of David Walkingstick and Meredith Frailey, who are running for principal and deputy chief respectively.

A cease-and-desist letter unanimously approved May 6 by the EC is addressed to Cherokees for Change LLC and its registered agent, Gregory Russell Appleton, who at one time was listed as the Walkingstick campaign’s financial agent.

The letter signed by EC Chairwoman Shawna Calico alleges Cherokees for Change “is engaged in violations” of election law that states, “No corporation, partnership, and/or any other legal entity shall contribute to any Cherokee Nation campaign or candidate.” Digital advertising and direct mail paid for by Cherokees for Change LLC are considered in-kind contributions, EC officials said.

A May 9 investigative memorandum from Attorney General Todd Hembree alleges there is “little dispute” that Cherokees for Change was “funneling the donations it received into in-kind contributions.”

“The contributions that are funding Cherokees for Change, LLC are not being reported to the Cherokee Nation Election Commission,” the memo states. “It is operating without any oversight …”

Cherokees for Change is listed with the Oklahoma Secretary of State’s Office as having an Oklahoma City address. It was formed on Feb. 21, according to state records.

Appleton’s attorney, A.J. Ferate, said his client did not make in-kind contributions to the Walkingstick-Frailey campaigns.

“There’s a very major difference between in-kind contributions and an independent expenditure,” Ferate said. “There’s no prohibition on that in Cherokee law.”

Ferate said Appleton was briefly a financial advisor for the Walkingstick campaign.

“That ended some time ago,” Ferate said. “He left the campaign before starting this entity.”

A financial disclosure report filed by the Walkingstick campaign on March 15 lists Appleton as the campaign’s financial agent through Feb. 28. The next report for March 1-31, filed April 18, lists the financial agent as Walkingstick, who now faces a possible hearing based on complaints lodged against him by CN citizens, in addition to his alleged connection with Cherokees for Change.

“The sufficiency of the evidence will have to be judged by the Cherokee Nation Election Commission, but the Attorney General recommends that a hearing be set to determine whether in-kind contributions made by Cherokees for Change, LLC were made in connection with the Walkingstick campaign,” Hembree’s memo states. “If Walkingstick did accept illegal in-kind contributions from Cherokees for Change, LLC, he would be subject to disqualification.”

Hembree’s investigation was prompted by a complaint filed April 23 by CN citizen Elizabeth Stroud, who accused Cherokees for Change LLC of “blatant violations of campaign finance laws.”

Following Stroud’s initial complaint, Cherokees for Change “refunded some of the money” it accepted, according to Hembree.

“Because contributions made to Cherokees for Change, LLC were never reported to the Election Commission by the Walkingstick campaign, it is impossible to know how many contributions were made or refunded,” the memo states. “The Office of the Attorney General has confirmed that not all contributions were refunded.”

Hembree also contends there is evidence that Walkingstick’s mother set up a post office box for Cherokees for Change “so that the organization would be able to use a Park Hill return mail address on its direct mail campaign.” Hembree alleges that Walkingstick was named as “an individual who could receive mail at that post office box.”

“The Walkingstick campaign and Cherokees for Change, LLC shared an address for nearly a month,” the report states.

Hembree’s memo also cites “evidence that Walkingstick called potential donors and, when he could not convince them to give donations to his campaign directly, would hand them over to Rusty Appleton so that they could support Cherokees for Change, LLC without having to report any of their contributions to the Cherokee Nation Election Commission.”

“For convenience, he even allowed Cherokees for Change, LLC to set up shop in the middle of at least one of his campaign’s official fundraisers and directly lobby attendees for donations,” the memo states. “This provided clear advantages if a wealthy donor was willing to give more than $5,000 and a candidate wanted a convenient way around the Cherokee Nation’s election laws.”

The AG’s report recommends that Frailey not be subjected to a hearing “given the lack of evidence that she had any knowledge about or conversations with any of the individuals associated with Cherokees for Change, LLC or its donors.”

The Walkingstick campaign had no comment as of press time.
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