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Sloan: Why the FEC Won’t Catch the Next Jesse Jackson Jr.

Reviewing the charging documents in the case against former Rep. Jesse L. Jackson Jr., D-Ill., it is impossible not to wonder how he got away with stealing his campaign funds for so long. For a period of at least seven years, Jackson misused his campaign funds to buy personal items, including a $40,000 Rolex watch, mink capes, mounted elk heads and Michael Jackson memorabilia, among other things.

Part of the problem is that since 2001, the Federal Election Commission — the agency charged with monitoring campaign finances — has specifically permitted candidates to use campaign funds to pay family members. What led the FEC to countenance this? Ironically enough, it was a request Jackson made.

In June 2001, Jackson sought a legal opinion from the FEC as to whether he could hire his wife, Sandi Jackson, as a consultant to provide fundraising and administrative support.

Federal law bars candidates from converting campaign funds to their personal use. Basically, this means candidates can’t use campaign funds to cover expenses incurred irrespective of a run for office: groceries, clothing, mortgage payments and the like. Payments to family members are permitted only if they represent fair market value for bona fide campaign services.

In response to Jackson’s request, the commission issued a formal opinion concluding his campaign could, indeed, pay his wife for her services.

An article appearing in Bloomberg noted that after receiving the green light, between 2001 and 2009, Jackson’s campaign paid Sandi Jackson $247,500. The Jackson campaign seemingly tried to conceal the payments, sometimes reporting them as made to J. Donatella & Associates, the name of Sandi Jackson’s consulting firm, and other times reporting them as paid to Lee Stevens or Lee Steven at the J. Donatella firm. The Jacksons’ oldest child is named Jessica Donatella; Sandi Jackson’s middle name is Lee and her maiden name is Stevens.

While not the first candidate to hire a relative for campaign work, Jackson was the first to obtain a legal opinion from the FEC blessing the practice. Since then, numerous other campaigns have relied on the opinion to hire their own family members, often with negative consequences. Former Reps. J.D. Hayworth, R-Ariz., and John T. Doolittle, R-Calif., whose careers ended as a result of the Jack Abramoff scandal, hired their spouses as fundraisers. Former Rep. Chris Cannon, R-Utah, put six of his eight children — three of whom were under the age of 16 — on his campaign payroll. More recently, former presidential candidate Ron Paul paid salaries to six family members.

In essence, the FEC opinion allowed the Jacksons to legally transfer campaign funds into their personal accounts. Once on that path, it probably wasn’t a big step for Jackson to authorize payments to his wife for work she hadn’t done. Who would know, and how would they get caught?

Last year, my organization, Citizens for Responsibility and Ethics in Washington, issued a report noting that 76 members of the House of Representatives had family members on the payrolls of their campaign committees or political action committees. As we noted then, payments to family members frequently raise questions of self-dealing and ought to be prohibited. At least two states, Iowa and Louisiana, already ban such payments.

The lack of meaningful controls on campaign funds presents other problems, too. Campaign committees routinely reimburse candidates and their family members thousands of dollars for expenses incurred and provide little if any documentation to show they were legitimately related to the campaign. A former aide to Rep. Don Young, R-Alaska, told the FBI the congressman routinely used campaign funds for hunting trips, meals, and charter flights. Rep. Robert E. Andrews, D-N.J., is currently under an ethics investigation for spending thousands of dollars on personal expenses, including a family trip to Scotland. Other members of Congress, such as Rep. Paul Broun, R-Ga., have loaned their campaigns money and charged usurious interest rates.

There are even fewer restrictions on members’ use of leadership PAC funds. For instance, there is no ban on personal use of money in these accounts, meaning they can be treated as slush funds. Unfortunately, Congress specifically prohibited the FEC from conducting the random audits that might reveal and deter misuse of funds. Now, as long as FEC reports look good — even if they have been falsified — the FEC’s hands are tied. Further, campaign committees are virtually the only tax-exempt organizations that never need to be independently audited.

Given the lack of effective oversight and enforcement, it isn’t likely Jackson is the only member of Congress who has illegally converted his campaign funds to his personal use — he’s just one of the few who have been caught.

Melanie Sloan is executive director of Citizens for Responsibility and Ethics in Washington.

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