Pelosi PAC Hit With $21K Fine

Posted February 6, 2004 at 6:14pm

By Brody Mullins ROLL CALL STAFF A controversial fundraising committee run by House Minority Leader Nancy Pelosi (D-Calif.) was slapped with a $21,000 fine by the Federal Election Commission for enabling Pelosi to funnel more than $100,000 in illegal contributions to Democratic candidates in late 2002 as she was vying to become Democratic leader.

Despite the fine, Pelosi has not shuttered her second political action committee, new campaign finance reports show. Instead, she used the remaining $140,000 in the Team Majority PAC to subsidize other fundraising expenses, such as the $300,000 salary of her top fundraiser and the cost of renting an MCI Center luxury box for an event at a Simon & Garfunkel concert.

Meanwhile, the new reports show that at least two other Democratic candidates were penalized for accepting contributions from the Pelosi committee in the weeks before the 2002 elections.

Rep. Chris Van Hollen (Md.) and unsuccessful Iowa Democratic candidate Julie Thomas each paid $2,500 fines last year for failing to promptly return $5,000 checks to the Pelosi account. Van Hollen and Thomas had already received the maximum $10,000 donation from Pelosi’s long-established political action committee, PAC to the Future.

More than two dozen other Democrats avoided fines because they quickly returned the excessive donations.

The FEC fines, disclosed in year-end campaign finance reports this week, come as House Democrats complain about a series of moves by Republican lawmakers that they believe violate House ethics rules.

Last week, the Committee on Standards of Official Conduct announced that it has begun an investigation into whether Republicans offered Rep. Nick Smith (R-Mich.) campaign cash in exchange for his vote on Medicare legislation last fall.

That investigation could prompt an end to an informal, seven-year truce on ethics complaints — and prompt a GOP counterpunch.

If so, many Republicans view Pelosi’s use of the twin fundraising committees during her leadership race as a ripe target for an ethics charge.

Pelosi ran afoul of campaign finance regulations in late 2002 when she started a second leadership PAC in order to circumvent the $5,000 annual donation limits.

“The law is pretty simple: You can’t use a second PAC as a ploy to get around the contribution limits,” said Ken Boehm of the National Legal and Policy Center.

After the FEC began looking into the new account, Team Majority PAC asked the nearly three dozen Democrats who had received excessive contributions from the fund to return the money.

The PAC also gave more than $100,000 back to individual donors who had contributed to the committee.

“We have tried to do everything in compliance with what the FEC wants,” said Pelosi spokesman Brendan Daly.

But Pelosi did not fully disband the Team Majority PAC, nor return all of the contributions.

Instead, she used the $140,000 left in the account at the beginning of 2003 to cover the costs of raising money for other accounts.

The reports show that in mid-December, the Team Majority PAC paid to rent the MCI Center suite owned by Washington lobbying firm Cassidy & Associates so that Pelosi could host more than a dozen of her top financial contributors at a private party during a Simon & Garfunkel concert.

The tab for the night, including the $128 tickets for the suite, was picked up by the PAC.

The account also paid for other fundraising expenses for Pelosi last year, including $750 for new campaign finance software, $3,456.22 for legal fees, $111 for stamps and $779.51 for flowers and stationery.

More than half of the money spent by the PAC last year helped to pay the salary of Brian Wolff, Pelosi’s top fundraiser, who doubles as the finance director of the Democratic Congressional Campaign Committee.

In addition to his $77,500 salary from Team Majority PAC, Wolff drew $114,000 from PAC to the Future and $115,000 from the DCCC, a total of more than $300,000.

When she ran for Democratic leader in 2002, Pelosi did not pay Wolff a salary because she was trying to squeeze as many contributions as possible out of the committee for Democratic candidates.

“I worked for her for free and deferred all of my pay,” Wolff said in an interview.

Even this cycle, Wolff does not receive a salary from Pelosi’s personal re-election account, Nancy Pelosi for Congress, despite the fact that he serves as her top fundraiser.

Larry Noble of the Center for Responsive Politics said it would be a violation of campaign finance law for Pelosi to use one of her PACs to subsidize Wolff’s work on her reelection committee.

“They each have to pay their fair share” of Wolff’s salary, Noble said. “If the leadership PAC is subsidizing the salary of an employee of the campaign, it’s considered a contribution from the leadership PAC to the campaign and is limited to $5,000.”

However, Wolff maintained that he does not work for Pelosi’s re-election campaign.

“I don’t really do anything for Nancy Pelosi for Congress,” he said.