Many Members’ Spouses Paid for Campaign Work

Posted November 1, 2004 at 6:33pm

For the more than a dozen lawmakers whose wives are on their campaign payrolls, politics isn’t just a family affair. It’s the family business.

Take Lori McInnis, who is both wife and campaign manager for Rep. Scott McInnis (R-Colo.). She’s been collecting a monthly salary of $3,150, which makes her one of the highest-paid wives working on a spouse’s campaign — even though her husband is preparing to retire from Congress.

And McInnis is not alone. A survey of lawmakers’ financial disclosure records reveals that at least 15 lawmakers’ wives have been directly employed by their husband’s campaign committees this election cycle. Some were paid just miscellaneous reimbursements for expenses, but others earned $500, $1,700, $2,400 and in some cases more than $3,000 a month.

House rules prohibit lawmakers from putting their spouses or relatives on their Congressional payroll. Campaigns, however, are another story.

Although candidates may not make any sort of “personal use” of campaign funds, the Federal Election Commission does not prohibit family members from receiving salaries from campaigns, as long as they are providing actual campaign services. The pay rate must also reflect a “fair market value.”

According to campaign finance reports, the ranks of the highest-paid spouses include: Kayi Lewis, who earns $3,130 a month from the campaign of Rep. Ron Lewis (R-Ky.); Laurie Stupak, who earns about $2,430 a month as finance director for Rep. Bart Stupak (D-Mich.); and Rhonda Rohrabacher, who receives a monthly salary of about $2,340 from the campaign of Rep. Dana Rohrabacher (R-Calif.).

On the lower end of the pay scale, Elizabeth Ney makes about $1,730 a month from the campaign of her husband, Rep. Bob Ney (R-Ohio); Kim Wamp collects $1,340 per month from the campaign coffers of Rep. Zach Wamp (R-Tenn.); and Cheryl Flake earns about $500 a month from the campaign of Rep. Jeff Flake (R-Ariz.).

In another practice that appears to be on the rise, some House lawmakers’ campaigns are making significant payments to businesses owned or run by their wives.

For instance, the campaign of Rep. Jim Gibbons (R-Nev.) has paid more than $70,000 to a Reno-based business called Politek Inc. that is owned by his wife, all for “consulting and fundraising” services in the current election cycle, according to Gibbons’ FEC records.

Gibbons’ wife, recently retired Nevada state Assemblywoman Dawn Gibbons, founded the firm in August 2003 and is listed in state incorporation records as the president, treasurer and secretary of the company.

At the time, she told the Reno Gazette-Journal that she started the business because “someone has to make some money in this family.”

But Jim Denton, Gibbons’ campaign manager, emphasized that the the money was not going directly to Dawn Gibbons. Rather, he said, the payments were primarily intended to pay for the services of another employee of Politek Inc. who has been working nearly full time on the Gibbons’ campaign.

Denton said that the woman’s “withholding taxes, Social Security, and income taxes are all paid for by Politek, because she is an employee of Politek, but 90 percent of her work at Politek has been on the Gibbons campaign.”

Denton acknowledged that Gibbons — who won 74 percent of the vote in 2002 and is expected to cruise to a re-election victory this fall — is not engaged in a hotly contested race this cycle, but said the Congressman has faced a “constant fight for name recognition” in Nevada. Many Nevada politicos consider him the gubernatorial frontrunner for 2006.

In the meantime, Julie Doolittle, the wife of Rep. John Doolittle (R-Calif.), made headlines over the summer when a grand jury investigation into an unrelated matter revealed that her company had received 10 percent commissions for setting up fundraisers for her husband’s political action committee.

According to The Sacramento Bee, Julie Doolittle’s company, Sierra Dominion Financial Services, earned about $28,000 in commissions from her husband’s Superior California Federal Leadership PAC — equal to 10 percent of the PAC’s total receipts — through June of this year.

Margaret Taylor, the wife of Rep. Gene Taylor (D-Miss.), also serves on her husband’s campaign, earning approximately $1,200 per month for her services, his FEC reports show.

According to Taylor’s annual financial disclosure report, Margaret Taylor also earns sales commissions from a company called Southern Graphics, which is listed as a vendor in Taylor’s campaign disbursements.

Campaign finance experts emphasize that paying a family member for legitimate campaign services is perfectly legal.

The FEC put its official stamp of approval on such arrangements in 2001, when the agency issued a formal advisory opinion to Rep. Jesse Jackson Jr. (D-Ill.), who wanted to hire his wife, Sandi, as a campaign consultant.

Jackson wanted to hire his wife to assist with fundraising, and to provide administrative support and services for his campaign organization and operations.

The FEC ruled it was perfectly permissible for a candidate to pay salaries to family members for “bona fide, campaign-related services” as long as they were being paid “no more than the fair market value” for those services.

Jackson spokesman Frank Watkins said the Congressman’s wife is no longer working directly on her husband’s campaign, primarily because Jackson faces no serious opponent this year, but he added that she has been active in Democratic presidential politics.

As for McInnis, FEC filings show that she continued to collect a salary from the campaign through September, even though McInnis formally announced his retirement from the House in September 2003. This scenario is more troubling to campaign finance experts.

“Once a candidate has announced his intention not to run for re-election, he has no need for a campaign manager because the campaign is over,” noted one attorney who frequently advises candidates on the ins and outs of the law.

“The only campaign official who still needs to be on the payroll is the campaign treasurer, who has a duty to carry out the necessary steps to terminate the committee — refund contributions, pay outstanding debts.”

But McInnis aides defended his wife’s role and her paycheck to the Rocky Mountain News, which recently questioned the arrangement.

“She’s worked very, very hard,” Mike Hesse, McInnis’ chief of staff, told the newspaper. Hesse said that although the campaign is winding down, McInnis’ wife has stayed busy refunding some contributions that were made early in the election cycle, as well as deciding what to do with her husband’s leftover campaign funds.

McInnis had about $1.1 million cash on hand through early October.