Political Payrolls Include Families

latimes.com

Political Payrolls Include Families

Dozens of members of Congress have paid relatives for campaign work, records show. The practice, though legal, is coming under scrutiny.
By Richard Simon, Chuck Neubauer and Rone Tempest
Times Staff Writers

April 14, 2005

WASHINGTON — At least 39 members of Congress have engaged in the controversial practice of paying their spouses, children or other relatives out of campaign funds, or have hired companies in which a family member had a financial interest, records and interviews show.

House campaign funds have paid more than $3 million to lawmakers' relatives over the last two election cycles, records show.

The practice is not illegal but has come under new scrutiny following reports that House Majority Leader Tom DeLay's wife and daughter had received hundreds of thousands of dollars since 2001 from his political action and congressional campaign committees. It also comes after disclosures that relatives of members of Congress have been hired by special interests as lobbyists or consultants.

Lawmakers are barred from putting relatives on their congressional payrolls, but they can pay them to work on their campaigns as long as the family member does bona fide work and isn't paid significantly more than the market rate.

The bipartisan practice has been increasingly criticized by government watchdogs and members of Congress.

"Instinctively, it doesn't pass the smell test for me, and I don't think it would for my constituents," said Rep. Ray LaHood (R-Ill.). LaHood said he had never employed relatives and thought the practice was wrong.

"Public service should not be a way to build a family fortune," said Celia Wexler, vice president for advocacy at Common Cause.

Many lawmakers who have hired relatives say their motivation is confidence, not profit.

"I need a campaign manager I can trust," said Rep. Dana Rohrabacher (R-Huntington Beach), whose wife, Rhonda, is now paid $40,000 a year to run his campaign. Over the last four years, she has received $114,894, records show.

DeLay, a Texas Republican, has defended the payments to his wife, Christine, and his daughter, Danielle DeLay Ferro, saying his family members provided valuable service to his campaign. They received $473,801 over the last two election cycles, records show.

His daughter has managed some of his recent congressional campaigns and has worked as a fundraiser for his political action committee, and his wife provides "strategic guidance" for the political action committee.

The Times developed a list of names of relatives and businesses owned by relatives on campaign payrolls from interviews, news accounts and personal financial disclosure reports. Campaign reports do not have to disclose whether recipients of funds are related to a candidate, so The Times' list is most likely incomplete.

The Times analyzed Federal Election Commission data compiled by the Center for Responsive Politics, a nonprofit, nonpartisan organization that researches campaign finance issues. The analysis, which covered 2001 through 2004, did not include such items as reimbursements for travel or other routine campaign expenses.

Among the recipients of the largest payments were members of DeLay's family and those of Rep. Richard W. Pombo (R-Tracy). Pombo paid his wife and brother $357,325 from his political fund over the last four years for duties listed as bookkeeping, fundraising, consulting and other unspecified services, records show.

The amount paid to Pombo's family members in the last election cycle was more than his opponent spent on his entire campaign. Pombo declined to be interviewed.

Including Pombo, five of the top six congressional families in The Times' analysis of two election cycles were Californians. The campaign fund of Rep. Zoe Lofgren (D-San Jose) paid $251,853 to her husband's firm, according to the candidate's campaign filings. She was followed by Rep. Howard L. Berman (D-North Hollywood), $205,500; Rep. Bob Filner (D-San Diego), $154,504; and Rep. Howard P. "Buck" McKeon (R-Santa Clarita), $152,362.

Altogether, at least 10 lawmakers in the 53-member California House delegation have hired family members, according to records and interviews.

Rep. Pete Stark (D-Hayward) paid his wife, Deborah, $119,000 from his campaign fund over the last four years to serve as his campaign manager, records show. In the last election, she earned $2,400 a month as campaign manager and was awarded a $2,400 bonus.

"It's just a matter of paying her for the professional job she was doing," Stark said.

In addition, Sen. Barbara Boxer (D-Calif.) paid her son, a lawyer, $130,000 over four years to run her political action committee, according to her campaign filings.

A spokesman for Sen. Dianne Feinstein (D-Calif.) said that she had not put family members on the campaign payroll.

No computer database was available to allow for a comprehensive search of Senate campaign expenditure records.

In the case of Pombo, 44, politics has been a family affair since the former ranch hand, butcher and truck driver first ran for Congress.

Beginning with his first House race in 1991, Pombo's younger brother Randy has been his campaign manager and treasurer. Another younger sibling, Ray, sometimes catered the congressman's tri-tip and oysters barbecue fundraisers.

In the early years, wife Annette remained in the background, managing the couple's Tracy household, raising their three children and contributing a recipe for Apple Walnut Crisscross Pie to her husband's official website.

But by March 2003, Annette, a Tracy High School valedictorian who has a degree from Loyola Marymount University, had joined the campaign. She was paid $85,275 for her work over the last two years, records show.

Randy Pombo has been paid $272,050 in the last four years, records show.

In the 2003-04 campaign cycle, Pombo paid more to his family members — $217,000 — than his opponent, Jerry McNerney, spent on his campaign. McNerney, a Pleasanton mathematician, spent $154,677. He lost to Pombo 61% to 39%.

Wayne Johnson, a partner in the Sacramento political consulting firm JohnsonClark Associates, which also worked for Pombo, described a family-run campaign operation.

"Randy has been there from the beginning, back when they were bootstrapping everything and Richard, who was then a Tracy city councilman, was not even expected to make it out of the primary," Johnson said. "And I know that when you called down there during the last campaign season, Annette was the one answering the phone."

Lawmakers offer a variety of reasons for putting family members on the campaign payroll.

Rep. Ron Lewis (R-Ky.), whose wife, Kayi, receives $40,000 a year from the congressman's campaign fund to serve as his campaign manager, acknowledged being "very nervous about appearances." But he said he would "rather run the risk of a bad appearance than to have somebody steal all my money or to have some errors [in campaign finance reports] costing me big fines."

Boxer said that she had heard horror stories from colleagues about campaign workers who had absconded with funds, and she knew that she would never have that problem if she put her son, Doug, in charge.

Boxer added that she turned to her son because he was the most qualified candidate. "Who is the best person to run your operation — that's the key thing to me," she said.

Several lawmakers said the family members they hired were professional consultants who had worked for other candidates. And, they said, they often obtained services at bargain prices.

"My wife did this for many years before she worked on our campaign," said Filner, whose wife Jane's company, Campaign Resources, was paid $154,504 in campaign funds during the last two election cycles.

Berman's campaign paid $205,500 to two firms headed by his brother Michael, a longtime campaign consultant, over the four-year period. The congressman said he thought the payments included debts he carried over from his 1998 and 2002 campaigns.

"The good news for me is that one of the most talented campaign strategists happens to be my brother," Berman said.

Berman, a former member of the House ethics committee, said that according to the chamber's rules, "you are not supposed to use your campaign funds for personal expenses or matters unrelated to politics. The test is what kind of work they are performing. I'm getting one of the most talented campaign strategists at a pretty good price. Out on the commercial marketplace, my brother makes a lot more money."

Lofgren's campaign paid her husband's company, Collins Day, $251,853 during the four-year period for fundraising, filing campaign finance reports and other political activities.

Lofgren noted that Collins Day also worked for other politicians.

"It's really important that [campaign finance reports] be done right," Lofgren said. She joked that when she was a county supervisor, her husband did the work as a volunteer — "and it was always late." Now that she pays his company, she said, "it gets done."

Rep. Elton Gallegly (R-Simi Valley) said his wife, Janice, worked as an unpaid volunteer for his campaign for 18 years before she began receiving $2,600 a month last year for tasks such as keeping the campaign books. He said her compensation was far less than what she made before giving up her job as an escrow officer to work on the campaign. She has been paid a total of $28,636, records show.

"She's always been an independent woman," Gallegly said. "So it was at my suggestion that she get some kind of compensation so she wouldn't have to come to me every time she wanted to buy something for one of the grandkids. If you average it over 18 years, she's made about $140 a month."

A spokesman for McKeon said the congressman's wife, Patricia, was a "valuable part of the congressman's campaign team" who ran the campaign office, filed campaign finance reports and oversaw all of the congressman's fundraising. Records show she was paid $152,362 over four years by McKeon's campaign committee.

"There is no one who the congressman trusts more," the spokesman said, noting that McKeon's wife worked on the congressman's campaign without pay for seven years.

Opinions vary on whether hiring relatives is appropriate and ethical.

Kenneth Gross, a former chief of enforcement at the FEC, said, "When you're in a high position, so many people are trying to get a piece of you that sometimes you have to retreat to family as among the few people who you really, truly can trust — who you believe have only your best interest in mind."

As long as a family member is performing legitimate campaign work and payments are disclosed, "there certainly shouldn't be any rule against it," said Gross, a Washington lawyer.

Fred Wertheimer, president of Democracy 21, a campaign finance watchdog group in Washington, said the practice should be prohibited. Campaign payments to family members could potentially become a way to get around the ban on the personal use of political funds, he said.

"In many races for Congress, there is no serious opposition, and members build up substantial war chests that can easily lead to the temptation to start making payments to family members, which can in effect become payments … to the benefit of members themselves," he said. "This kind of activity does create problems in terms of public perceptions. It does create the potential for self-dealing."

FEC regulations permit salary payments to family members for "bona fide, campaign-related services," according to a 2001 advisory opinion issued to Rep. Jesse L. Jackson Jr. (D-Ill.). Jackson had asked the commission whether he could hire his wife, Sandi, as a paid campaign consultant.

"Any salary in excess of fair market value of the services provided is personal use," the opinion said, noting that it was illegal for candidates to use campaign funds for personal use.

There is one complaint before the FEC about a member of Congress paying relatives for campaign work.

The Colorado Democratic Party filed a complaint against former Rep. Scott McInnis (R-Colo.) last year questioning McInnis' payment of $39,000 to his wife, Lori, from his congressional campaign committee after he announced he would not be seeking reelection. Democrats labeled the payments excessive and "unseemly."

McInnis said that the payments to his wife were legitimate and complied with FEC rules. He said a response to the complaint had been filed with the FEC.

"Her work is public and all her payments are public," McInnis said, adding that his wife's salary had been based on the pay scale for congressional employees with similar responsibilities. "She ran the campaign with an iron fist."

Rep. Ralph M. Hall (R-Texas), whose political committee paid his daughter-in-law Jody $123,761 for the last two campaigns, said, "I don't see anything wrong with it if she's doing real work for real pay."

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ON THE WEB

Previous stories on the practice of hiring lawmakers' family members can be found at latimes.com/lawmakers.

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Staff writers Walter F. Roche Jr. and Mary Curtius in Washington and researchers Mark Madden in Washington and Janet Lundblad in Los Angeles contributed to this report. Tempest reported from Sacramento.