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‘Political Slush Funds’: The Last Loophole

September 28, 2009

‘Political Slush Funds’: The Last Loophole

Leadership PACs Let Politicians Spend Money Freely on Leisure Outings

By MARCUS STERN and JENNIFER LAFLEUR of ProPublica, BRIAN ROSS, AVNI PATEL and ASA ESLOCKER of ABC News
Sept. 25, 2009

For people who love golf, the chance to play at the five-star Greenbrier resort in West Virginia is a dream come true. Especially if someone else pays for it.

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House Minority Leader John Boehner’s PAC spent $550,000 on travel and entertainment expenses around the country, more than any other lawmaker, according to a ABC News/ProPublica analysis of disclosure data. In the past three years, Boehner has travelled to Palm Springs, CA; Boca Raton, FL; and Scottsdale, AZ to raise money for his PAC.

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That was the case this summer for two powerful members of Congress, House Republican Minority leader John Boehner of Ohio and Republican Sen. Saxby Chambliss of Georgia.

Accompanied by top corporate lobbyists , the two golf-loving Republicans spent a luxurious weekend at the Greenbrier, the kinds of cozy gatherings new ethics reform laws were supposed to curb.

“You’re seeing the quintessential Washington insider pay-to-play game,” said Meredith McGehee, Policy Director at the nonpartisan Campaign Legal Center.

Many people assumed these types of outings were ended when Congress passed reforms in 2007. But those reforms didn’t mention what has come to be an important source of funding for politicians: leadership political action committees, or PACs, whose money can be spent for almost any purpose, including golf.

Members of Congress are supposed to use their leadership PAC funds to support other politicians. But in the 2008 election cycle, Chambliss spent more money from his PAC on golf outings, $225,000, than on donations to other political campaigns, $204,000. On Capitol Hill, his leadership PAC is known to some as a golf PAC.

Chambliss declined to be interviewed for this story, but in a statement he said he holds the golf outings only to raise money. Top of Form

A spokesman for Boehner’s PAC, The Freedom Project, also defended the spending as legitimate and said that through his PAC, he contributed “more than any other Republican in the House.”

McGehee and others call leadership PACs modern-day slush funds. Some members of Congress use them for pretty much whatever they want, including subsidizing their lifestyles and hobbies.

In a joint report with the investigative journalism group ProPublica, ABC News found that members of Congress used leadership PAC money to pay for visits to ski resorts, casinos, Disney World and the Super Bowl. Senate Majority Harry Reid of Nevada used leadership PAC money to throw a $39,000 inaugural party. New York Democratic Rep. Charlie Rangel ordered a $64,000 oil portrait of himself.

Reid spent 53 percent of his PAC money on campaigns he was supporting. That’s $1.1 million.

Federal Election Laws even allow members of the Congress to spend the money on themselves or their friends and families. Senate rules do not even mention leadership PACs, although hundreds of millions of dollars pour into these funds every election cycle.

Lobbyist Jim Ervin might bristle at McGehee’s use of the phrase slush fund, but he seems to agree in spirit.

“I think that it’s more than appropriate for Senator Chambliss to do whatever he wants with the leadership PAC money. Certainly I think golf is completely acceptable,” he said. Ervin and two of his clients – defense contractors Lockheed Martin and General Dynamics — put $30,000 into Chambliss’ leadership PAC in the last election cycle. Top of Form

Leadership PACs give incumbents an unfair advantage because challengers typically can’t raise the maximum amount of money allowed for their campaign committees, much less for a leadership PAC, said former FEC Commissioner Brad Smith.”For the most part it’s really kind of an incumbent racket,” he said.

The FEC disclosure forms that leadership PACs file are so cursory that lawmakers don’t have to disclose who participated or contributed at a PAC fund-raiser, the day the event was held or how much money was raised.

When Chambliss’ leadership PAC ran up a $50,394 bill at the Ritz-Carlton Naples on Jan. 25, 2008, the only stated purpose was, “PAC EVENT/LODGING/BANQUET/GOLF.”

Chambliss’ love of golf is so legendary in Washington political circles that he has been teased for letting golf interfere with his political and legislative business.

In 2003, then-President Bush told a crowd at a golf fund-raiser for Chambliss that the senator had intercepted him on his way to the dais and said, “If you keep it short, we might be able to get a round of golf in.”

Chambliss also took heat for skipping a sensitive closed-door Iraq war intelligence briefing in 2005 to golf with Tiger Woods.

Lawmakers who leave Congress sometimes keep their PACs — or they hand them down like valuable heirlooms to their successors, with the same tight circle of lobbyists and fund-raising professionals often continuing as the core of the organization.

Chambliss’ Republican Majority Fund has been around for decades. Former Sen. Howard Baker of Tennessee controlled the PAC when he was the Senate Republican leader until 1985. He handed it off to then-Sen. Don Nickles of Oklahoma. When Nickles retired from the Senate in 2005, he handed it off to Chambliss.

Laura Rizzo, who ran the leadership PAC for Nickles, now runs it for Chambliss. More than one-third of the PAC’s expenditures during the 2008 campaign cycle — $237,536 – was paid to Rizzo for “PAC FUNDRAISING CONSULTING.”

Nickles, whose passion for golf is as legendary as Chambliss’, now has a successful lobbying practice. Nickles Group and its clients contributed $37,500 to Chambliss’ Republican Majority Fund during the 2008 campaign cycle.

Neither Nickles nor Rizzo returned calls seeking comments about their long associations with the Republican Majority Fund.

In March, the FEC’s six commissioners, three Democrats and three Republicans, sent Congress a list of legislative recommendations, including one to prohibit personal use of leadership PAC funds. Their letter went to House Speaker Nancy Pelosi and Vice President Joe Biden, in his capacity as president of the Senate. It also was sent to members of the House and Senate committees that oversee the FEC.

So far, the FEC has gotten no response. ProPublica left messages at the offices of the speaker, majority leader and chairmen of the two committees seeking comment, but got no replies.

This was a joint investigation by ABC News and ProPublica – an independent, nonprofit newsroom that produces investigative journalism in the public interest. ProPublica Director of Research Lisa Schwartz and Justin Grant, ABC News, contributed to this report.

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