Joe Demma — Gov. Herbert’s ex-campaign manager — filed for bankruptcy the same day he helped launch a controversial PAC that would pay him $100k-plus

(Courtesy photo) Joseph Demma when he ran for the Salt Lake County Council in 2012.

Joe Demma, longtime campaign and government aide to Gov. Gary Herbert and current vice president of Mountainland Technical College, was mired in financial problems in early 2016 when he took two actions that would help ease the pressure.

On Feb. 17 of that year, he helped launch a controversial political action committee that in the next two years would pay Demma more than $100,000, but did not donate any money to other campaigns or causes like virtually all other PACs do.

On the same day, Demma filed for personal bankruptcy — which soon would erase more than $80,000 in debt.

The same-day public records filings and Demma’s debts add a twist to the emerging story about actions of the Americans for an Informed Electorate PAC co-founded by Demma, first reported last week by The Salt Lake Tribune.

Despite its failure to contribute to any candidate or cause, the group raised more money than any other Utah PAC last year: $1.8 million — far surpassing amounts amassed by other political powerhouses such as Realtors, labor unions, banks and even Herbert’s lucrative Governors Leadership PAC (which took in $621,700).

Many of Informed Electorate’s larger donors, all senior citizens, told The Tribune that phone calls led them to believe they were donating to liberal or conservative causes. Some were surprised that reports show more was charged to their credit cards than they thought. Most said they would not have donated if they knew the PAC was not giving to other causes.

Demma earlier told The Tribune that the group was formed to help voters feel more empowered by sharing opinions, with results sent to politicians. But he and another PAC leader acknowledge their surveys are unscientific. Demma said they shared results mostly by posting them on a website, though some were sent to Congress.

Utah law requires that PACs raise and spend money for “political purposes.” Demma says the actions of Informed Electorate qualify and that it broke no laws.

But Lt. Gov. Spencer Cox said he asked law enforcement to investigate the group 18 months ago. Sources say the FBI is doing that. Cox said he believes PAC spending for political purposes should include donating to candidates or causes, not just paying a PAC’s workers and funding its operations. He also says it may be wise to ask the Legislature to more clearly spell out the requirements.

Demma did not respond to phone calls Friday and Monday seeking comment on the bankruptcy and whether the PAC was formed to help ease his financial struggles.

He filed a Chapter 7 bankruptcy to liquidate his holdings (and not reorganize his debt) to seek a fresh start financially. It wiped out more than $80,000 in debt — much of which appeared to be unpaid credit card bills.

That included $45,351 owed to America First Credit Union; $14,099 to American Express Bank; $7,288 to Security Service Federal Credit Union; $5,025 to Wells Fargo Card Services; $1,186 to U.S. Bank; $2,439 to Mountain Land Collections; and $939 to Express Recovery Services.

It also included some medical debts: $4,967 to Intermountain Health Care; $1,374 to Gold Cross Ambulance; and $768 to Foothill Family Clinic.

In bankruptcy court filings, Demma indicated his intent to retain a home in Cottonwood Heights and a 3-year-old Ford Explorer (valued at $24,700) through reaffirmation agreements promising to keep up loan payments on them.

Records show the home was sold in 2017. The Demmas then moved to Sandy. Their new home (valued by the county assessor at $287,600 — several thousand dollars less than the old one) is registered in the name of Demma’s wife, Stacy. Credit for a mortgage is often difficult to obtain after a bankruptcy.

Meanwhile, records show that the PAC was generating extra money for Demma.

Analysis by The Tribune indicates that the PAC raised nearly $4.8 million between 2016 and 2018. About $800,000 went to what leaders say are four or five employees in the three years for salaries, consulting fees, health insurance, travel, entertainment and car maintenance.

For example, in 2016, the PAC paid Demma $35,000 in consulting fees. That doubled in 2017 to $77,500. This was on top of his $75,020 in compensation for his state job that year as then-director of public relations for Mountainland Technical College. (The following year, Demma’s state compensation jumped 80 percent, to $137,116, when he became vice president of the school.)

Also, Demma may have been included in the $206,000 that the PAC said went to general staff salaries in 2017, although it did not disclose amounts by employee.

Demma has said he pulled away from day-to-day operations of the PAC two years ago because he was too busy with his state job. But the PAC reported paying him $2,500 in consulting fees last year. Demma and his wife are also still listed as directors of a sister corporation, which Demma says was an oversight.

Herbert’s office last week issued a statement saying the governor did not know about the PAC, decried what it called its “unethical actions” and alluded to Demma leaving the governor’s employment in 2010. But Demma’s LinkedIn profile says he consulted for Herbert until 2016, when Herbert won reelection as the PAC was formed and Demma filed for bankruptcy.

Demma was chief of staff to Herbert when he was lieutenant governor. He managed Herbert’s short-lived 2004 campaign and his 2010 campaign for governor. Demma also ran unsuccessfully for the Salt Lake County Council in 2012.

Justin Harding, Herbert’s chief of staff, issued a statement on Tuesday, saying Demma had a no political role with the governor in recent years.

“In the past five years, Gov. Herbert has not once formally sought out Demma’s advice, nor has Demma ever participated in any political meeting of which I’ve been a part. He doesn’t attend the Governor’s political meetings, now, in the past, nor will he in the future,” he said.

As Demma now is vice president of Mountainland Technical College, Jared Haines, interim commissioner of the Utah System of Technical Colleges, said the system has taken no action against him after reports of the PAC controversy. “Any action would be determined by the college,” he said.

Mountainland Technical College President Clay Christensen did not immediately respond to phone calls seeking comment.