'Political Slush Funds': The Last Loophole

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ProPublica and ABC News

'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

Lobbyists for the defense, tobacco and financial industries schmoozed with Boehner, seen here in a green sweater, and Chambliss at an evening reception. Campaign finance watchdogs say that such weekend getaways offer donors with special interests the opportunity to build relationships with powerful lawmakers. (ABC News)

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.

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.

Click here to see ProPublica's database and find your congressman's leadership PAC.

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

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.

 

Money and Mistresses

More than 400 members of Congress now have opened their own
leadership PACs, and there are virtually no limits on how they spend
it, just as long as they don't spend it on their campaigns.

Nevada Republican Sen. John Ensign's mistress was on the
payroll of his Leadership PAC. And former North Carolina senator and
presidential candidate John Edwards used leadership PAC money to pay
his mistress $114,000 to produce a series of videos.

More than 400 members of Congress now have opened their own
leadership PACs, and there are virtually no limits on how they spend
it.

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.

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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