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In a decision that critics called “pathetic,” “troubling” and “unfortunate” with “unlimited potential for corruption,” the country’s election regulator has explicitly authorized a private slurpy fund. First notice for politicians
last week The Central Election Commission’s decision published last week. The decision regarding the payment of rent by the former Republican Congressman the Republican Party PAC (LOU PAC) to his wife.
According to legal experts, such a deal appears to be quite possible in the law. But in canceling the complaint The four-person majority commission also took the opportunity to issue a more comprehensive statement. It formally announced for the first time that the long-derided PAC leader was a private fund. Completely exempt from the ban on personal use.
In the FEC analysis it is clearly written that “The prohibition against personal use applies to ‘Using Funds in Campaign Accounts of Current or Past Candidates Only’”
The agency sent the matter to Congress, writing: “If there is no change in the Commission’s regulations, The prohibition on personal use will not apply to LOU PAC as it is not an authorized candidate committee.”
Leadership PACs are unique fundraising committees. Although they are not the committee that Officially “permitted” But they have the direct support of candidates and incumbents. The original idea was for politicians to support their allies without exceeding their contribution limit.
But many applicants also use their LPACs to cover seemingly personal expenses. Treat yourself to luxury vacations, great food, and even a trip to Disney Parks.
Despite the notoriety But these boards have grown in popularity in recent years. with some candidates gaining an advantage before even being elected. Look at Rep. George Santos (R-NY) or failing Senate GOP hopeful Dr Mehmet Oz. The most well-known example is former President Donald Trump, who created the “Save America” leadership PAC shortly after losing the 2020 election.
Trump then raised tens of thousands of dollars for that PAC for making misleading claims about election fraud. with many solicitations suggesting that their massive donors will fuel the “Election Defense Fund” that did not exist in the first place. in fact Trump has sent huge amounts of money into his LPAC account to be used for various purposes. Including expenses in his own hotel. a donation to a group working with a former employee, and a “consultant” fee to his wife’s favorite designer.
Reform groups are demanding that the FEC come up with a formal rule on LPAC funds, which is different from the conventional PAC money that direct candidates run. The FEC has so far resisted those claims.
Public Citizen’s head of government affairs, Craig Holman, is also a watchdog. called the ruling “pathetic”, saying the commission was “Dancing Through the Law”
“It’s a pathetic decision by the FEC,” Holman told The Daily Beast. But they have proven to be a way for politicians to raise money for other lawmakers and candidates. Now, the FEC has opened a new can of worms and is officially recognized as the leader’s PAC. Can be used for personal purposes Lobbyists or those with special interests can give lawmakers money to go into their own pockets. That’s not what these PACs were originally designed for. And yet another reason they should be banned.”
Paul S. Ryan, a campaign finance expert, said that while the LPAC has been a “pain point” for years, the decision created new incentives for corruption.
“One aspect of corruption concerns is allowing someone to use the money they collected while they were members of Congress to pay their retirement expenses. That’s a huge incentive to raise money while in office for later personal use,” Ryan said, noting that many incumbent retirees to lobbyist work. where they remain in close contact with elected officials.
“This ruling represents an unfortunate and troubling deregulation. This only increases the threat of corruption,” he said.
This is how it all happened.
Federal law prohibits candidates from using campaign funds for personal use. Barletta was accused of using the PAC in his campaign and leadership to violate the prohibition.
After losing his 2018 re-election bid, Barletta replaced the campaign committee with a PAC, which inherited the remaining cash from donors. The new PAC then took the money raised in the campaign and transferred it to his leadership PAC. LPAC then paid Barletta’s wife a monthly rent for the property the couple jointly owned.
The FEC ruled that Barlettas did not violate regulations because it appeared to pay fair market value for that rent. But the decisions didn’t stop there. It took an additional step by saying that the leader’s PAC was exempt from the prohibition on personal use.
But Barletta’s case has more wrinkles. He had first transferred campaign money to his leader PAC. That extra step, the FEC said, puts previously regulated funds outside the scope of the law. Transparency advocates say this allows politicians to spend their campaign money with impunity in and out of office.
The FEC voted 4 to 2, with two commission Democrats opposed. But the commission’s third Democrat joined three GOP members to assess its level, including actor Linden Baum, a former private-sector attorney. appointed by President Joe Biden to join the FEC in August.
Lindenbaum told The Daily Beast that she was “surprised” to learn of the problem. “Distantly debatable.”
“I try not to comment on any particular matter, saying I don’t believe this was an important decision. It is well accepted that personal use restrictions do not extend to PACs,” said Lindenbaum. “I was surprised to learn that this is a remotely controversial issue, as the FEC has had years of unanimous legal advice asking Congress to amend personal use restrictions to include a leader’s PAC.”
Campaign finance groups don’t see it that way.
Saurav Ghosh, director of federal reforms at the Bi-Party Vigilance Campaign Law Center, wondered why the commission buried such an important new announcement in such a small matter.
“The potential for corruption is really limitless. Although this has been de facto true for many years. Unfortunately, the FEC moved to the official position of a four-voice statement stating that the rule does not apply. That just encourages politicians to view these vehicles as a way to use donor money to advance their own personal goals and interests,” Saurav told The Daily Beast.
He noted that Barletta’s cases “did not necessarily involve statements pronounced as they were issued,” noting that judgments often followed the language of preliminary reports from the Office of General Counsel.
“This reflects a deliberate statement making this rule official. It only adds steps for candidates and office holders to use these funds for improper purposes. And rest assured that the FEC will not take any action,” Ghosh said.
Jordan Libowitz, director of communications for Citizens for Responsibility and Ethics in Washington, said the FEC creates a “dead end” for candidates to spend their own campaign money.
“This ruling states that while you cannot convert campaign funds for personal use, But you can take the extra step of transferring that money to your PAC leader and using it freely for yourself,” Libowitz told The Daily Beast. Personally, from the money raised to their campaign, you go out and organize a fundraising event. Move that money to the leading PAC and do whatever you want with that money.”
Two other Democrats voiced their disapproval in a joint statement last week, one of which, Commissioner Ellen Weintraub, elaborated on those issues to The Daily Beast.
“The law states that personal use restrictions apply to contributions made by applicants. and other donations made by an individual to support the individual’s activities as a federal office holder,” Weintraub explained, citing the U.S. Code. That is the support that the candidate accepts. I don’t think money loses that trait when transferred to a leading PAC.”
(The ruling cites what appears to be conflicting language in Federal Election Commission law, which defines “personal use” as “any use of funds on a current or former candidate’s campaign account”)
Weintraub also argued that in her view PAC leadership participation will qualify for acceptance by applicants. “Most people with PACs as leaders are candidates. and donations to support ‘A person’s activities as a federal office holder’ but a lot of people don’t see it that way,” she said.
(One of those people was GOP Commissioner Sean Cooksey, who referred The Daily Beast’s question to an independent interpretation statement from 2021. In that statement, Cooksey wrote that the injunction “Does not apply to funds legally transferred by a candidate committee authorized after the fund. removed from the campaign account and does not apply to other non-candidate political committees, including leadership PACs.” Refer it back to Congress.)
But Weintraub pointed to the 1989 Ethics Reform Act that Congress had made a commitment to reduce personal use when a candidate leaves office.
“Previously, members were allowed to keep what was left of their campaign accounts. And Congress changed that,” she said.
The new ruling also sends money back to lawmakers, according to Brett Kappel, campaign finance attorney for Hammon Curran.
“The FEC is considering a petition for a rule that would clarify how the personal use ban applies to the Leader’s PAC, but that effort seems exhausted,” Kappel said. law”
Libowitz sees it as a “silver lining” as lawmakers must weigh the new law against their own private financial incentives, public pressure could change that, he said.
“It will take an outcry from voters and donors. which is generally given because they want candidates to be elected Not sending them on vacation,” he said. “I bet the average American doesn’t read the comments presented by FEC, but they won’t be happy to know.”
