Fundraising group assails the Doolittles

20 Apr 2006 // Rep. John Doolittle's practice of paying a 15 percent fundraising commission to a company owned by his wife violates the ethical standards of the industry, a national group of fundraising professionals told the congressman this week.

The 27,000-member Association of Fundraising Professionals said in a letter to Doolittle that its long-standing ethics code "explicitly prohibits percentage-based compensation" and urged his campaign to cease doing so with Julie Doolittle's company, Sierra Dominion Financial Solutions.

Neither the congressman nor Julie Doolittle was available for comment Wednesday. Richard Robinson, the congressman's top aide and political adviser, said they were traveling and are unreachable.

But Robinson said commissions are standard in the political fundraising business.

"Not only is Sierra Dominion's arrangement common in the industry, but it is consistent with the history of Congressman Doolittle's own campaigns," he said. "Over the course of his career, the congressman has hired several fundraisers who have worked on a commission basis."

The Doolittle campaign's insistence that commissions are not only legal under Federal Election Commission rules but common practice in the professional fundraising business is what stunned the professional fundraisers association.

Association head Paulette Maehara said she was so alarmed when she read the campaign's explanation for the practice in a weekend story in the Washington Post that she wrote Doolittle's office to complain. She said she also would have written Julie Doolittle except that her company is not publicly listed.

"This is absolutely not the standard in the industry," she said. "Fundraisers can charge a flat fee, an hourly fee or a combination of both. We do support incentive compensation as long as it is not based on the percentage of the money raised."

Maehara said paying commissions for fundraising places the incentive on personal gain rather than the best interest of the client.

"My motive becomes getting the most money out of you that I can," she said.

Since September 2003, when Doolittle's political action committee first began paying Sierra Dominion, the one-person company operating out of the couple's suburban Virginia home has received about $180,000.

The most recent payments, totaling $6,255, were reported this week to the FEC by the congressman's re-election committee, which began using Sierra Dominion for fundraising work last summer.

Over the past three years, Doolittle has accepted more than $70,000 from lobbyists and businesses linked directly to both the Jack Abramoff lobbying scandal and the bribery of former Rep. Randy "Duke" Cunningham.

Doolittle has refused to return any of that money, or any of the tens of thousands in other contributions from Abramoff clients. To do so arguably would require him to dig into his own family bank account, since Sierra Dominion profited from those contributions.

Doolittle confirmed in a February interview with The Bee that his arrangement with his wife's company is to pay her a flat 15 percent commission on what she brings in for the campaign, even when he is making the actual solicitation calls. He said the commissioned-based arrangement is good for both of them.

"If she isn't raising money, she isn't making anything herself," Doolittle said in the interview. "Somehow I have the feeling that if she were paid a flat fee, there would be others who find fault with that. Some just don't like the family being involved in this."

A Bee review of fundraising records last fall revealed that more than a dozen House members employed their spouses for campaign work in one form or another. But Sierra Dominion's deal with Doolittle was unusual because of the way Julie Doolittle was compensated.

By paying her a commission, 15 percent of every contribution goes into the Doolittles' household budget.

"It may be legal, but that doesn't mean it's ethical," said Naomi Seligman Steiner, deputy director of Citizens for Responsibility and Ethics in Washington. "It's just so outrageous to be putting money into your household from campaign contributions."

Maehara said that while the vast majority of members in her association are professional fundraisers for philanthropic organizations, about 5 percent are political fundraisers - a significant percentage since political fundraising is a small component of the industry.

"This is a big deal for us," she said. "We've worked hard to eradicate this practice, and our prohibition on commission-based fundraising has really changed the industry practice."

Another professional organization, the American Association of Fundraising Counsel, similarly regards commission-based fundraising as unethical, according to the organization's Web site.

"Contracts providing for a contingent fee, a commission, or a fee based on percentage of funds raised are prohibited," it says. "Such contracts are harmful to the relationship between the donor and the institution and detrimental to the financial health of the client organization."

Robinson said he thinks Maehara simply doesn't do enough work with political fundraisers to understand that commission-based fundraising is not unusual.

"Such an arrangement is common in the political community because candidates want to ensure that fundraisers are only compensated for their performance and do not collect a salary without producing results," he said.

"Likewise, Representative Doolittle wanted to make sure that Sierra Dominion was compensated only for its effective work and that it was not accused of receiving payments without generating results - a charge that has been frequently leveled against members of Congress whose family members receive a salary instead of a commission," he said.

In the February interview, however, Doolittle suggested that the commission-based arrangement may be something Julie Doolittle will want to change.

"I'm not saying she may decide she wants to go to the flat fee," he said. "Frankly, most people seek the flat fee because it provides a floor, whereas this is totally risk based - you don't produce, you don't earn any money."