Family Affair

Rep. Jackson used campaign funds to pay his wife, who is now a Chicago City Councilor

Via Bloomberg, we learn that Rep. Jesse Jackson Jr. has been paying his wife a consulting fee from his campaign account for the past eight years.  He was also helping to finance her campaign for Chicago City Council:

Representative Jesse Jackson Jr.’s congressional campaign organization has paid his wife at least $247,500 since 2001, including at least $95,000 after Sandra Jackson joined the Chicago City Council two years ago, according to federal election records.

Jackson’s political committee also gave at least $298,927 in cash and in-kind contributions to Sandra Jackson’s campaign fund, which bankrolled her races for a city council seat that pays more than $100,000 per year and an unpaid position on the Cook County Democratic Committee.

Sandra Jackson, known as Sandi, received the $95,000 for political consulting after pledging during her campaign to give “my full attention” to the alderman’s post.

Jesse Jackson got a Federal Election Commission advisory opinion in 2001 saying his campaign could pay Sandi Jackson for consulting work without violating a ban on personal use of political donations. Even so, the Chicago Democrat’s fundraising is so entangled with his family’s interests that he’s pushing the limits of propriety, said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a nonprofit ethics watchdog group.

“Much of this may be legal, but let’s refer back to an old quote: the scandal in Washington often is what’s legal,” said Sloan, whose group in 2007 reported on relatives who profit from their ties to members of Congress. “Mr. Jackson is availing himself of the full range of loopholes by which he can transfer money to his family.”

Aides say both Jacksons take care to avoid legal or ethical conflicts.

CREW documented the payments from campaign accounts to family members in our report, Family Affair, in June of 2007.  Shortly after in July of 2007, the U.S. House of Representatives voted to ban payment to spouses from campaign accounts.

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Report says FBI investigating payments from Michael Steele's Senate campaign fund to his sister

CREW has long had an interest in payments made from elected officials to family members from political campaign funds.  We've issued two reports on this subject, Family Affair - House and Family Affair - Senate, which document that kind of spending.  Upon release of the initial report on House spending, Melanie Sloan said: 

CREW's report, Family Affair, shines a spotlight on the troubling practice of lawmakers using their congressional positions as profit centers for family members. Our hope is that the release of Family Affair spearheads a public debate leading to changes in existing law to end these abuses.

CREW decided to undertake the study in light of several well publicized cases of members of Congress using their positions to enrich their family members.  The House report generated an enormous of media coverage and led to legislation that banned spousal pay.

The issue of paying family members from campaign funds became news over the weekend.  On Saturday, The Washington Post first reported that federal authorities were investigating payments made from the 2006 Senate campaign of Michael Steele to his sister.  (Steele is the new chair of the Republican National Committee.)  The payments were made in 2007 -- after the sister's company was dissolved.  The Post had more today, including a response from Steele delivered on ABC's This Week: 

The payment to Steele's sister was the focus of questions yesterday.

Campaign records indicate that $37,262 paid to Brown Sugar Unlimited covered catering and Web services. But it came 11 months after Turner, a pediatrician who lives in Potomac, had legally dissolved the company.

In the ABC interview, Steele said that not paying his sister for her work would have been a violation of campaign finance law. He criticized The Post for publishing a story where "there is no story" and said he provided receipts to prove the expenses were legitimate. On Friday, a spokesman for Steele provided a receipt for catering costs totaling almost $15,000 for two events, about half the total. The spokesman said they were searching for receipts to document the rest.

When asked about the timing of the payment, after Turner had dissolved the company, Steele told host George Stephanopoulos:

"That, I don't know about. What I do know about is the fact that, as she understood it, the company was still in existence. Her lawyers were telling her they were in the process of dissolving the company, so at the time when the checks were written back to her to reimburse her, she just said, 'Go ahead and write the checks to the company,' because the company had, you know, done the services that were provided."

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Fighting Transparency: "But I want to know what you are going to DO with the list? "

At CREW, we’re compiling a list of Political Action Committees (PACs) controlled by members of the U.S. House and Senate.

Today, when I called Rep. William Clay’s (D-MO) congressional office they referred me to the campaign director, Michelle Clay (who I presume is his sister and registered lobbyist we mentioned in our report, Family Affair - House.)

When I called Ms. Clay, she asked me to repeat where I was calling from four times. When I asked her if Rep. Clay was associated with a PAC she said, “Why do you want to know?” I replied that we were trying to compile a complete list of associated PACs. She asked, “I know, I heard you but I want to know what you are going to DO with the list?”

I told her that we were simply going to post the list in an effort to improve transparency in government. Angrily, she yelled “who did you think you are calling here? You’re trying to improve transparency in government and yet you call here with your underhanded and sneaky reasons. People are always coming at us with underhanded and sneaky tactics, I know why you’re calling.”

I tried to reassure her that we were simply compiling a list – that’s all. She said that if I would not honestly answer her question she would not answer mine. This went back and forth a bit as she angrily continued to accuse me of lying about my reasons for calling while I kept trying to assure her that it was JUST FOR A LIST. Finally, Ms. Clay said that Rep. Clay does not have a PAC, but even if he did she wouldn’t tell me. She then asked if the government had asked me to call her. I gave her CREW’s name again, and explained that that we are a non-profit – not part of the government. She repeated that Rep. Clay does not have a PAC, but asked if I knew how to set one up. I told her I didn’t and quickly got off the phone. It was a bizarre conversation.

Surprising that Rep. Clay has someone this rude, unhelpful and paranoid running his campaign.

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New York Times editorial on members paying family from campaign funds (based on CREW's Family Affair reports)

We rarely, if ever, post entire articles or editorials. But, an editorial in today's New York Times is based completely on the work of CREW. Our report, Family Affair - Senate, and its predecessor, Family Affair - House, provide the foundation. So, in its entirety:

A worthy House measure to clamp down on members of Congress who employ relatives using campaign donations has disappeared into the maw of the Senate. A nonprofit watchdog group, Citizens for Responsibility and Ethics in Washington, may have come up with a reason why. It has uncovered at least 20 senators who have paid out more than $500,000 in campaign funds to family members since 2000.

The House bill, passed last summer and sent to the Senate, is itself only a half-loaf measure. It would ban the use of political donations to pay spouses, but it would allow these funds to be used to hire other family members, as long as those payments are fully disclosed. The House was shamed into acting by the Jack Abramoff Congressional corruption scandal, and by CREW’s revelation that 72 House members had spent $5 million in campaign funds to employ family members and their companies since 2000.

The Senate, at least so far, has been harder to shame. That is not entirely surprising, considering another discouraging CREW finding: that 31 senators — nearly one-third of the Senate — have one or more family members registered in the lobbying industry.

The Senate has also lagged on other ethics issues. Unlike the House, it still refuses to require electronic filing of its campaign finance data. It clings to an old slow-motion paper system that builds in months of obfuscation by requiring print records that have to be scanned and e-mailed to election officials, who in turn have to do their own processing and printing before the information is publicly available. Senate Republican leaders have, scandalously, been blocking a good bill that would force campaign reporting into the digital age.

The ethical issues here are not hard. Congressional campaigns, which these days are awash with millions of dollars in special-interest contributions, should not be seen as an opportunity to hand out cash to relatives. If Congress cannot muster the ethical fortitude to rein in these familial emoluments, the very least it should do is require members to disclose them up front and expeditiously, so taxpayers do not need to wait for groups like CREW to publicize their conflicts of interest.

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Senator Enzi pays daughter-in-law from campaign funds, a "troubling practice" in CREW's view

In June of 2007, CREW released a report, Family Affair, our first-ever analysis of the misuse of power by the chairmen and ranking members of all House of Representative committees and subcommittees, as well as top leadership positions, to financially benefit their family members. The 96 members constituted only those U.S. Representatives holding key positions in the U.S. House of Representatives.

Based on a report in today's Billings Gazette, the practice is not limited to the House. Wyoming Senatoe Mike Enzi (R) has paid hundreds of thousands of dollars to his daughter-in-law:

Wyoming Sen. Mike Enzi has spent much of the money he has raised since he was last re-elected in 2002, including campaign payments totaling more than $150,000 to his daughter-in-law for fundraising.

Enzi Strategies, a company owned by daughter-in-law Danielle Enzi, received an additional $170,000 from the Republican senator's political action committee - Making Business Excel - between 2003 and 2006, according to the Center for Responsive Politics.

Danielle Enzi also serves as treasurer for the political action committee, which pays the consulting fees to Enzi Strategies.

Enzi won re-election with 73 percent of the vote in 2002. He has raised $1.2 million since that race and has spent $923,285 in operating expenses, according to campaign finance records filed with the Federal Election Commission last week.

CREW's Melanie Sloan commented on the revelation about Enzi's spending:

The director of a Washington-based ethics group, Citizens for Responsibility and Ethics in Washington, said candidates should be required to disclose any family campaign connections to constituents.

"We think its a troubling practice," Melanie Sloan said.

Troubling indeed. Shortly after CREW released Family Affair, the House passed legislation prohibiting the practice of paying spouses -- but not other family members -- from campaign funds.

 

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House members "complaining" about legislation to ban campaign payments to spouses

On Monday, the House of Representatives passed legislation that would ban the use of campaign funds to pay spouses.  CREW documented this abusive practice in our report, Family Affair.  Yesterday, The Politico reports that some members of Congress who have utilized this practice are none too happy:

House members are complaining that their spouses could lose their jobs, their family incomes could drop and, perhaps, the entire pattern of their family lives could change if an ethics reform bill just passed by the House becomes law.

The bill would bar campaigns from employing a lawmaker's spouse. Its backers argue that employing a spouse creates an implicit conflict of interest, tempting lawmakers to overpay and tipping off contributors that some of their largesse will go directly to the lawmaker's family.

But what seems an obvious conflict to some is a way of life to others.

Rhonda Rohrabacher has 3-year-old triplets and a work-at-home job as campaign manager to her husband, Rep. Dana Rohrabacher (R-Calif.).

She made $57,000 in the 2006 election cycle, according to a recent report by the liberal watchdog group Citizens for Responsibility and Ethics in Washington.

Under the proposed ban, Rhonda Rohrabacher would be out of a job.

"It's gonna hurt me," Rep. Rohrabacher said. "My family would be deprived of that income. I think it's baloney. I think it's just a way of not having to look at issues by making it a personal matter."

Unlike other ethics reforms, which prohibit lobbyists from buying meals for lawmakers or curtail congressional travel, the spouse proposal strikes an intimate blow to a handful of legislators.

Rep. Buck McKeon (R-Calif.) paid his wife, Patricia, $110,000 in the last election cycle to do fundraising and prepare campaign finance reports, according to CREW.

He found the new reform proposal so alarming that he sought out one of the bill's original sponsors, Rep. Mike Castle (R-Del.), to personally voice his opposition.

"It would definitely cause me some problems, probably financial problems," McKeon said. "And if I had to bring in someone else to do the same work, I wouldn't have that same kind of trust."

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LA Times cites CREW study in article on passage of bill banning payment to spouses from campaign funds

CREW is getting very good coverage in the articles about passage of the legislation banning payment to spouses from campaign funds.  The Los Angeles Times cites the findings of our report, Family Affair, in its piece today: 

Under a bill the House approved Monday, members of Congress would no longer be able to put their spouses on their campaign payrolls, a practice criticized as a way for lawmakers to profit from political donations.

The action comes after a number of lawmakers, including Rep. John T. Doolittle (R-Roseville), have come under scrutiny for paying their spouses from campaign funds.

Doolittle's wife took 15% of the campaign contributions she raised for her husband, once earning $90,000 from a single event.

But dozens of other lawmakers from both parties have paid their spouses, children or other relatives out of campaign funds.

Citizens for Responsibility and Ethics in Washington, a watchdog group, found that at least 64 House members paid relatives from their campaign funds or PACs during the last three election cycles.

The measure, approved on a voice vote, comes as a broader overhaul of lobbying rules has stalled. But with Congress suffering from dismal job-approval ratings, Democratic leaders were anxious to showcase progress on ethics reform, an issue that was a central theme in their successful campaign last year to win the majority.

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House passed the ban on spousal pay from campaign funds

Yesterday, the U.S. House of Representatives passed legislation that prevents payment to spouses from campaign funds.  The Washington Post intimates that CREW's study, Family Affair, provided the impetus for the House action:

The measure, passed on a voice vote, was sponsored by Reps. Adam B. Schiff (D-Calif.) and Michael N. Castle (R-Del.). It would not bar other family members from working on a lawmaker's campaign but would require disclosure.

The vote follows a study released last month by the liberal-leaning watchdog group Citizens for Responsibility and Ethics in Washington that found that nearly 100 chairmen and ranking minority members of House committees used their roles to benefit their families, including employing spouses and other kin for campaign or consulting work.

Schiff originally conceived of the measure as an amendment to an ethics bill passed in May, then decided to offer it separately. "Specifically I was concerned about cases where a spouse was being paid on a commission basis," he said, describing an arrangement made and later discontinued by Rep. John T. Doolittle (R-Calif.), who paid his wife, Julie, a portion of the donations she brought in.

By making such agreements, Schiff said: "You're essentially telling a donor, 'Part of what you give to my campaign, you give to me.' That's inherently a conflict."

Schiff said he is "reaching out" to find sponsors for a Senate version of the bill.

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Rep. Schiff's "Campaign Expenditure Transparency Act" will be voted on tonight

Just received notice that H.R. 2630, the "Campaign Expenditure Transparency Act" will receive a vote in the U.S. House of Representatives tonight. The bill is currently on the suspension calender which, according to the House Whip's office means "Bills considered on the Suspension calendar are debatable for 40 minutes; may not be amended; and require a two-thirds vote for passage. If a recorded vote is requested, it will be postponed."

The legislation, sponsored by Rep. Adam Schiff (D-CA) and Rep. Mike Castle (R-DE) prohibits payments to a candidate's spouse from campaign committee funds -- or from a Leadership Political Action Committee (PAC). It also requires the reporting of any payments to family members from those funds.

CREW's report, Family Affair released last month, was the first-ever analysis of the misuse of power by the chairmen and ranking members of all House of Representative committees and subcommittees, as well as top leadership positions, to financially benefit their family members.  Family Affair, named 96 members from 33 states: 41 Democrats and 55 Republicans, who used campaign funds to pay family members.  Under the Schiff-Castle bill, were it to become law (and it should become law) that practice will end for spouses.

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Papers continues to cover "nepotism" in Congress

CREW's report, Family Affair, continues to generate interest.  This report clearly struck a nerve as people learned that members of Congress were using campaign funds to pay their family members.  The term "nepotism" kept popping up as it did in the headline of this article, "Study Finds Nepotism in Congress":

There are least 64 members of Congress who used campaign funds to pay family members, including San Bernardino Reps. Jerry Lewis, Howard “Buck” McKeon and Joe Baca, according to a recent report.

The report, released by Citizens for Responsibility and Ethics in Government, lists 64 congressmen who have either paid a family member, has a family member that is a lobbyist, made a contribution to a family member’s political campaign, paid a company in which a family member has a financial interest or has used a position to benefit a family member.

According to the study, Republican McKeon’s campaign committee paid his wife, Patricia McKeon, $110,806 in salary and an additional $10,528 forreimbursements.

“We have always followed the rules,” said McKeon, who represents Victorville. “Patricia only gets paid for the work she does, and that’s the right thing to do.”

And then there was this revelation:

Republican Jerry Lewis employs his wife, Arlene, as his chief of staff. She is paid a salary of nearly $111,000.

No one from Lewis’ officereturned calls for comment. 

House rules prohibit the hiring of a spouse to work on a congressman’s staff, but this doesn’t violate that rule because she worked for him before they were married.

 

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