Most Americans believe it’s against the law for congressmen and senators to profit personally from their political office but it’s an open secret in Washington that that’s not the case. As the saying goes the real scandal in Washington isn’t what’s illegal, it’s what is legal.
Raising funds for campaigns is no longer just about winning elections – it’s a lifestyle subsidy according to Peter Schwiezer, author and fellow at the Hoover Institution. For several years he and a team of researchers investigated the way Congressmen and Senators personally benefited from the hundreds of millions of dollar in political contributions that have poured into the system from donors and special interest groups.
While regular campaign funds cannot be used for personal expenses there are ways around it. Like all things in Washington, the devil is in the details and loopholes are usually put in place for a reason. When Congress passed the Ethics Reform Act of 1989, it plainly stated that “a member shall convert NO campaign funds to personal use.
Trevor Potter, former chairman of the Federal Election Commission says it certainly didn’t take long for Congress and the Senate to figure out a way around the Ethics Act. They quietly invented something called leadership PACS which, since they did not exist when the Act was passed nor were they technically campaign funds, they were exempt from the personal use prohibition.
Today, nearly every congressman and senator has a leadership PAC, not just the leaders. And they are used to solicit contributions from friends and supporters in order to advance their political agendas, their careers and, in many cases, their lifestyle. They have become the second largest political revenue stream for members of Congress who use them to line their own pockets.
Leadership PAC spending sprees in the third quarter of 2018 alone included at least $124,162 blown at the luxury Greenbrier resort in West Virginia; $160,809 at St. Regis resorts; $53,165 at Ritz Carlton hotels; $46,121 at Charlie Palmer Steak restaurant in Washington, D.C.; and $19,760 at Disney properties, according to a letter sent to the FEC by the Campaign Legal Center, a nonpartisan government watchdog, and former elected officials.
Since 2013, leadership PACs have been used to pay for $252,000 at Charlie Palmer Steak in D.C., $741,000 at various St. Regis hotels and resorts around the country, more than $614,000 in the Virgin Islands and Puerto Rico, and at least $469,000 at various Walt Disney properties. There were also more than $871,000 in golf-related expenses, possibly including membership fees to some of the most elite and expensive golf clubs in the country.
While it is only fair to mention that not all congressmen use their PACS for personal benefit, the Federal Election Commission has called the level of abuse substantial and has consistently recommended to Congress that they should outlaw the personal use of these funds. That is akin to putting the fox in charge of the hen house.
Leadership PACs have become a political annuity for Congress that members can cash in when they leave office or hold onto for the future. Most often, members will keep the PAC and use it in retirement for everything that is vaguely a political expense. If they become a lobbyist, which close to half of “retiring” members do, the PAC then becomes their lobbying slush fund. And the PACs don’t even die when the member dies – Someone else just continues to spend it.
There are lots of things in Washington that would seem to be illegal but really aren’t, if you know your way through the loopholes. Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a small group that tracks campaign expenditures, said “even though there are anti-nepotism rules that prevent members of congress from hiring their family members on the official staff, it’s perfectly acceptable to use campaign funds to hire your wife, husband, children, grandchildren and in-laws on the campaign payroll.” Not only do members hire their families but they also work with family members who are lobbyist even when they lobby on issues in which the member is working. In other words, serving your country has now become something of a family business.
Congressmen can also benefit by loaning money to their political campaign funds from the PACs and then charge above market and at times exorbitant interest rates. The worst offender to date was Grace Napolitano who loaned herself $150,000 at 18% interest over a 12 year period, earning $228,000 in interest.
Congressmen come and go but it appears that corruption is here to stay.
“With many of the PACs, they are fundraising for the purpose of fundraising and subsidizing the next fundraiser. You spend $17,000 for a fundraiser at the Saratoga racetrack, then use the funds you raise there to fund your next fundraiser at the next resort, then all you are doing is flying around and rubbing shoulders with rich donors. That is a problematic situation.” Brendan Fischer, program director, Campaign Legal Center
Source: Washington’s open secret: Profitable PACs, CBS News60; Money in Politics: Congressional PACs are Personal ‘Slush Funds’ Used for Disneyland and Luxury Hotels, Watchdog Alleges, by Nina Burleigh, Newsweek ; Former Lawmakers Ask FEC to Stop Politicians from Using PACs as Personal Piggy Banks, by Jay Cassano, Sludge