Starting Points: diversion of contributions

Jun 2, 2010

Money intended to help candidates often ends up funding PACs themselves

Image by pjchmiel via Flickr

By R. Jeffrey Smith
Washington Post Staff Writer
Wednesday, June 2, 2010; A03

Minority Leader John A. Boehner has collected more than $1.4 million from business interests this election cycle for a committee he says he created to help fellow Republican lawmakers. But Boehner's committee has spent only about a third of its money helping other candidates.

About two-thirds of its expenditures have gone instead to costs the committee describes as necessary to raise money, including fine meals and trips to luxurious resorts where the congressman mingles with corporate-directed groups and lobbyists. Boehner (Ohio) has spent more than $182,000 through the committee on frequent travel with donors to Florida and similar vacation spots, according to Federal Election Commission records, including $70,403 at the Ritz-Carlton in Naples and more than $30,000 at Disney Resort Destinations.

As it turns out, Boehner's use of funds collected for others by his "leadership PAC," or political action committee, is more the rule than the exception among Republican and Democratic lawmakers. Most leadership PACs have given away less than 40 percent of their expenditures this cycle, even though they typically say they are collecting and bundling donations for others, according to data compiled by the Center for Responsive Politics at the request of The Washington Post.

Offering perks

Instead, the PACs spend the bulk of their money funding their own operations, spending sizeable sums on fundraisers that also offer sweet perquisites for members and their aides. The PACs have financed distant resort stays and expensive meals for members in New York, Miami, Beverly Hills and elsewhere and paid for private jets, liquor, flowers, limousines, ski lift and baseball tickets, and even horse track visits, according to tallies submitted monthly to the FEC.

Lawmakers say luxurious settings and donor perks add to the appeal of fundraising events, and Boehner spokesman Don Seymour said the congressman's resort trips were all "overhead costs for fundraisers that ultimately benefit Republican campaigns."

The committee's contributors in January 2009, when Boehner pulled in $223,000 at a Naples golfing fundraiser, were from the insurance, tobacco, pesticide, health-care and investment industries, among others.

Last year, the six-member FEC unanimously questioned the unbridled use of such funds. Lawmakers are generally barred from converting campaign donations to personal use, but leadership PAC receipts effectively have no such prohibition.

Since 1978, when Rep. Henry A. Waxman (D-Calif.) and his supporters gained FEC approval for the first leadership PAC, 405 current lawmakers have followed suit. Their collective revenues have risen 13-fold over two decades, reaching $46 million in the 2008 cycle.

Resorts

Many leadership PACs spend heavily on Washington-based consultants, accountants and lawyers. But fundraisers held at beach and ski resorts are among the most common winter expenditures. This cycle, House Majority Leader Steny H. Hoyer (D-Md.) has spent $52,700 on travel with donors to resorts; his committee also spent $9,800 on entertainment tickets and a limousine company. Less than half of its expenditures went to other candidates, the center's tally shows.

House Minority Whip Eric Cantor (R-Va.), whose leadership PAC raised $2.1 million, more than any other on Capitol Hill, has spent $1.9 million this cycle, including $136,000 on golf events, baseball tickets, skiing, resorts and related restaurant meals. The committee's expenditures on popcorn, candy, cookies and chocolates totaled $13,400.

Overall, just 44 percent of Cantor's expenditures have gone to other campaigns, and in November his leadership PAC split the bills for a $60,000 Beverly Hills fundraising event with a separate committee that Cantor created explicitly to finance his reelection. That decision demonstrates the blurred lines between the money flow for a lawmaker's reelection and what the official collects for colleagues.

Hoyer spokeswoman Stephanie Lundberg said he holds fundraisers at resorts to ensure "that contributions are as high as possible" and noted that his contributions to others have been above average. If a serious proposal is made to strengthen the spending rules, she added, "Mr. Hoyer would certainly look at it."

Justin Kitsch, a spokesman for Sen. Byron L. Dorgan (D-N.D.), said the lawmaker considers his expenditures of $2,094 for ski lift tickets "reasonable" because the event raised 10 times more than it cost; he also said Dorgan's contributions to others will increase as the election approaches. Cantor spokesman Brad Dayspring declined comment.

Leadership PACs were initially created by lawmakers seeking leadership spots who disbursed cash to colleagues to win their votes. Meredith McGehee, policy director at the nonprofit Campaign Legal Center, which supports campaign finance regulation, says that by itself, that is "a very questionable purpose."

Then undeclared presidential candidates -- including, in 2006, Sens. John McCain, Evan Bayh, Joseph R. Biden and Hillary Rodham Clinton -- used proceeds to finance early travel to primary states. But the PACs also have evolved into a way "to fund your personal lifestyle, so you don't really have to pay for anything yourself," McGehee said. "It's where this special-interest money flows," to three-quarters of the entire Congress.

From other groups

According to the Center for Responsive Politics, more than half of the funds now come not from individuals but from other PACs, which typically have well-formed legislative goals. Top donors this cycle have been, in order, the International Brotherhood of Electrical Workers, AT&T, Honeywell International, FedEx and United Parcel Service, followed by insurance, banking, real estate and defense firms, according to Doug Weber, the center's senior researcher.

Last year, the FEC recommended including such PACs in the prohibition on personal use of campaign funds. It told Congress that the commission had "seen a substantial number of instances where individuals with access to the funds received by political committees have used such funds to make unauthorized disbursements" for their expenses.

But interest in change has been scant, with all 23 House and Senate party leaders tapping into such funds. When Congress rewrote its ethics laws last year, House members demanded that the first legal definition of leadership PACs be drawn as narrowly as possible and barred only their use for corporate jet flights. All other expenditures in practice are permitted, said Paul S. Ryan, the campaign center's associate legal counsel.

Brendan Daly, a spokesman for House Speaker Nancy Pelosi (D-Calif.), who oversaw the rewrite, said that "as we consider further reform, we will examine updating those regulations." Pelosi's committee -- PAC to the Future -- passed along $519,000 to others, reported no trips and financed a single catered event, costing $1,125, FEC records show.

But at the other end of the spectrum, 30 Democrats and 17 Republicans have collected $1.07 million without spending a dime on other candidates, the data shows.

A committee created by Rep. Rodney Alexander (R-La.), called Restore Our Democracy, collected nearly $100,000 this cycle and spent nearly two-thirds to finance his participation with donors or friends in two Mardi Gras balls, FEC records show. Alexander's committee has not used any funds directly for an election campaign.

One of the largest contributors to Alexander's group was the political action committee of the Adams and Reese law firm, registered to lobby the House on behalf of Louisiana State University and its biomedical research center. The law firm took in $120,000 from those clients, and Alexander, a member of three House appropriations subcommittees, sponsored federal earmarks totaling $8.15 million for them, according to records compiled by Taxpayers for Common Sense.

Alexander's chief of staff, Adam Terry, did not respond to e-mailed and telephoned questions. Rep. Paul E. Kanjorski (D-Pa.), chairman of a key financial regulatory subcommittee, has collected since 2004 virtually all of his Citizens for Action leadership committee funds from insurance, lending and investment firms. He's paid about a fifth -- more than $112,000 -- in consulting fees to his 45-year-old nephew Peter Kanjorski.

Ed Mitchell, a spokesman for Kanjorski's campaign, said that Peter Kanjorski's hiring was based on his ability and trustworthiness.

Research editor Alice Crites contributed to this report.