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In March 2005, David James called Rep. Ron Paul’s (R-Texas) Congressional office for some documentation.
James’s nonprofit group, the Liberty Committee, had paid for one of Paul’s flights, and James needed a receipt or boarding pass to document the expense. He’d been pushing Paul for the paperwork and now, on the phone, he was “putting his foot down.”
“So I called the office manager,” James recalled. “They knew me, like, as well as they knew Ron. And I said, ‘Liberty Committee is paying for this expense. I need to get the boarding pass or the ticket or something.’”
The office manager said Paul’s Congressional office no longer had documentation for that flight; Paul had sent it in to the House Finance Office for reimbursement. But Liberty Committee had already sent a check to American Express to cover the charge on Paul’s credit card.
“I don’t care what flights the Liberty Committee pays for,” James said, “because Ron never took enough in expenses to come anywhere near his value to us. And this was piddly. But it’s just what it was.”
James first thought it was accidental and faxed a letter to Paul’s office, requesting that its money be returned for the flight. Paul did repay the $403.70, but the episode strained their relationship and led to a falling out a year later.
In a subsequent conversation, James raised the issue, and Paul “was very curt, and he simply said, ‘Yep, well, happens all the time,’” James, 64, told Roll Call.
Roll Call reported Feb. 6 that Paul was repeatedly paid twice for flights between Washington, D.C., and his Congressional district, receiving reimbursement from taxpayers and also from a network of political and nonprofit organizations he controlled, according to public records and credit card statements for an American Express card in Paul’s name.
Spokesman Jesse Benton said then it was “possible that wholly inadvertent errors were made in a handful of instances” in which flights were reimbursed twice, but he maintained that “absolutely zero taxpayer funds were ever misused.”
But James’ recollection and new documents obtained by Roll Call suggest Paul was aware that he was often being reimbursed twice for individual flights. In all, Roll Call found 26 flights in which several layers of documentation show double payments: credit card statements that detail the ticket purchases, a payment to Paul from his taxpayer-funded House account for reimbursement of a flight and Federal Election Commission records or copies of checks that verify a second payment from a separate group for the same flight.
Roll Call obtained copies of checks from the Liberty Committee to American Express that paid for Paul’s expenses. The records obtained by Roll Call cover about 17 nonconsecutive months. Beyond the 26 flights, documents show an additional 31 flights where it appears Paul was double-reimbursed but the records lack sufficient detail to prove duplicate payments.
Paul recently told James that his office is investigating the payments and will return money to Liberty Committee if duplicate payments are found. Roll Call provided Paul with the documents it used in this report, as well as a summary of James’ recollections. Paul’s office said they are “reviewing” the records.
James, a former fundraiser for the late Sen. Jesse Helms (R-N.C.), began working for Paul in 1988 when Paul ran for president as the Libertarian Party’s candidate. His job was to connect Paul with conservatives who were wary of the libertarian label — thinking it meant moral anarchy.
“I just could not understand how a man with this incredible message had not gotten further,” James said.
After the presidential campaign, James began working for the Foundation for Rational Economics and Education, orchestrating the National Endowment for Liberty project, a series of television shows titled “At Issue” that explored libertarian themes.
In 1998, two years after Paul returned to Congress after more than 10 years out of politics, Paul tasked James with founding the Liberty Committee, a nonprofit group that would lobby for libertarian legislation.
“He needed an organization that would step on toes, that people would look at and try to find something wrong with and make an issue of, and was pristine,” James said, adding that the group kept meticulous records. “Liberty Committee was set up to be unassailable.”
Paul only reluctantly allowed the group to operate independently, insisting its checkbook be kept in his Clute, Texas, business under the care of a family member — Nora LeBlanc, the mother-in-law of Paul’s youngest daughter, Joy.
Paul’s business office in Clute is where Lori Paul Pyeatt, his daughter, works as treasurer for Paul’s presidential and Congressional campaigns, Liberty PAC, the Campaign for Liberty and FREE.
Paul has built a national reputation and personal brand, which he is now using in his second run for the Republican nomination for president, as a leading advocate of smaller government, personal liberty and decreased federal spending. He has for years traveled the country assailing the reach of the federal government in military, fiscal and monetary affairs. And he has used an array of outside groups to support his travel and other expenses.
On Jan. 18, 2005, for example, Paul purchased a Continental Airlines ticket from Washington, D.C., to Montrose, Colo., via Denver for $1,076.78. The Liberty Committee paid for that ticket and one other flight with a Feb. 21 check signed by LeBlanc. But taxpayers also paid Paul $1,076.78 for the same flight on Feb. 11.
For years the Liberty Committee paid some of Paul’s expenses, but the issue of double payments led to a permanent rift with James. After James brought it up, Paul stopped sending expenses for reimbursement. Instead, he wanted the names of the Liberty Committee’s donors and for James to make cash transfers to FREE, James said. James said he consulted with attorneys for the group and declined to honor Paul’s request.
In March 2006, James’ wife passed away after a fight with lung cancer. Reeling from the loss, he reacted angrily weeks later when Paul tried to alter how James was compensated, telling Paul in a letter he would not be part of a “Ponzi scheme.”
Paul apologized, but feelings between the two stayed raw.
Then, in a surprise to James, Paul’s lawyer sent a letter demanding the Liberty Committee stop using Paul’s name or likeness in its fundraising letters. Paul also tried to wrest control of the group from James, urging its board members and vendors to side with him over James. They stayed with James. The day after the 2006 elections, James demanded LeBlanc send Liberty Committee’s financial records and checkbook from Clute to the group’s office in Falls Church, Va. She did.
Paul and James have not worked together since, but the Liberty Committee continues to push libertarian legislation, including Paul’s proposals.
On Feb. 15, James sent a fax to Paul’s Clute office citing Roll Call’s reporting and asking for about $10,000 in reimbursement for nearly 20 double-billed trips.
“It makes me damned angry that he would have taken the Liberty Committee, which was designed to work to pass liberty-oriented legislation and withstand any scrutiny and have contaminated it from the very beginning,” James said.
“It never in a million years occurred to me that this man would be capable of what we can now see. So when there’s mass hysteria and disbelief when this is published, I am not surprised. I was right with them.”