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Family Affair - House - Summary and Conclusions

Family Affair - House - Summary and Conclusions

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Published by CREW

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Categories:Types, Letters
Published by: CREW on Feb 15, 2011
Copyright:Attribution Non-commercial

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04/06/2012

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Reps. Joe Barton, Brian Bilbray, Chris Cannon, Randy Forbes, Steven LaTourette, DonManzullo and Joseph Wilson.
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5 U.S.C. § 3110;
see also
Congressional Handbook, note 6, sec. 2.I.A.2, at 2.1.
EXECUTIVE SUMMARY
In light of several well publicized cases of members of Congress using their positions tofinancially benefit their family members, Citizens for Responsibility and Ethics in Washington(“CREW”) decided to undertake a systematic investigation to uncover the extent of this activity.CREW limited its investigation to 2002, 2004 and 2006 election cycles, and examined the 337members of the House of Representatives who are the chairs or ranking members of Housecommittees and subcommittees as well as the five House leadership positions: Speaker of theHouse, Majority and Minority Leaders and the Majority and Minority Whips.Some members of Congress who have been publicly criticized for paying family members, likeRep. John Doolittle (R-CA), are not included in the report because they are neither committeechairs nor ranking members.  There may well be other members who should have been includedin the report but are not because -- as a result of name changes and a lack of availableinformation -- CREW did not uncover the family relationships.  Similarly, because members of Congress are not required to disclose their affiliation with political action committees (“PACs”),CREW inadvertently may have omitted PAC disbursements that should have been included. CREW’s key findings:96 (41 Democrats and 55 Republicans) used their positions to financially benefit familymembers;64 (26 Democrats and 38 Republicans) paid family members through their campaigncommittees or PACs;24 (10 Democrats and 14 Republicans) have relatives who lobby Congress;19 (9 Democrats and 10 Republicans) used campaign committees or PACs to pay afamily business or a business that employs a family member;17 (11 Democrats and 6 Republicans) used campaign committee funds or PAC funds tomake campaign contributions to relatives;15 (3 Democrats and 12 Republicans) used their positions to benefit a family member ora family member’s client;At least 7
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(all Republicans) paid offspring who ranged from school-age to college-age.Although it is illegal for members of Congress to hire family members as employees on theirofficial staff,
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it is not illegal for lawmakers to employ family members through campaign
 
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FEC Advisory Opinion 2001-10, July 17, 2001.committees or PACs.  It is illegal, however, to convert campaign funds to personal use.  TheFederal Election Commission (“FEC”) has indicated that certain uses of campaign funds will beconsidered per se personal use, including salary payments to family members, unless suchpayments are at fair market value for bona fide campaign related services.  The FEC presumesthat a relative is hired because he or she is qualified for the job and is paid what a similarlyqualified professional would be paid.
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CREW has rarely been able to verify the qualifications of relatives on the campaign payroll, but the legitimacy of at least some payments -- those made tochildren, for example -- appears dubious.It is also legal for the close relatives of members to lobby, yet the unique access offered to theselobbyists creates a situation ripe for abuse.CREW hopes that this report will shine a spotlight on the troubling practice of lawmakerstreating their congressional positions as profit centers for family members.  Based on thesefindings, Congress and the FEC should seriously consider changing existing law to end theseabuses.
 
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FEC, AO 2001-20, July 17, 2001.
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Id.
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Id.
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2 U.S.C. § 439a; 11 C.F.R. § 113.2(d).
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11 C.F.R. § 113.1(g).
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11 C.F.R. § 113.1(g)(1)(i).
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11 C.F.R. § 113.1(g)(1)(i)(H).
LEGAL IMPLICATIONS
Many of the financial arrangements uncovered during this project are legal.  In some cases,however, the practices revealed may violate existing federal laws and/or rules of the House of Representatives.  The Department of Justice, the Federal Election Commission (“FEC”) and theHouse Committee on Standards of Official Conduct may wish to consider whether the actions of any of the members of Congress named in this report violated any of the following laws or rules.
Conversion of Campaign Fund to Personal Use
In July 2001, the FEC issued an Advisory Opinion regarding payments by campaign committeesto family members.
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Rep. Jesse Jackson, Jr. (D-IL) sought an opinion as to whether hisprincipal campaign committee could hire his wife as a consultant to provide fundraising andadministrative support.
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Ms. Jackson had previously served as chief of staff for a congressman,press secretary for another congressman, and she had worked for national presidential campaignsin 1988 and 1996.
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 The FEC noted that the Federal Election Campaign Act prohibits the conversion of campaignfunds to personal use.
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Generally, personal use is “any use of funds in a campaign account of apresent or former candidate to fulfill a commitment, obligation or expense of any person thatwould exist irrespective of the candidate’s campaign or duties as a Federal officeholder.”
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 Certain uses of campaign funds will be considered per se personal use, including salarypayments to family members, unless they are fair market value payments for bona fide,campaign related services.”
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If a family member is providing bona fide services to thecampaign, any salary payment in excess of the fair market value of the services provided ispersonal use.
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 In applying these provisions to Rep. Jackson’s request for an opinion, the FEC stated that thecampaign committee could hire Ms. Jackson as long as she was paid no more than the fairmarket value of bona fide services, the contract contained terms customarily found in

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