Aide Mixes Business, Politics

Posted October 24, 2007 at 6:40pm

Phil Scaglia wears a lot of hats.

Scaglia, the top-paid staffer in the office of Rep. Emanuel Cleaver (D-Mo.), serves as de facto chief of staff for the Congressman, as well as Cleaver’s campaign manager, using his own consulting firm to do printing, fundraising and events for the campaign.

As previously reported in Roll Call, Scaglia also maintains a lobbying business in the state. Cleaver’s campaign rents office space in Kansas City from a firm that Scaglia represents as a lobbyist.

According to Federal Election Commission reports, on Oct. 12, 2006, the Cleaver campaign paid Powerful Performance Solutions (owned by Scaglia) $8,850 for printing services; paid UGA LLC (a company that Scaglia represents as a lobbyist) $4,800 for office space rental; and accepted from Larry Sells (the owner of UGA LLC) an in-kind contribution of $500 for a fundraising event.

Cleaver’s office argues that there is no conflict of interest involved in these intertwined relationships, but ethics experts suggest that the arrangement creates the appearance of impropriety.

As “office coordinator” for Cleaver, Scaglia was paid about $98,000 in 2006, which made him the highest paid staffer in the office, but kept him below the $111,000 threshold at which Congressional employees are required to file financial disclosure forms and limit their outside earnings.

It is not uncommon for top staffers to maintain Congressional salaries that are below the cap, thereby allowing them to earn outside income.

The arrangement clearly has proven lucrative for Scaglia. According to campaign finance records, the campaign paid Scaglia’s consulting firm $90,000 for printing, $16,000 for fundraising and $30,000 in reimbursement for expenses last year, with no apparent drop in his Congressional pay. Scaglia was never paid direct wages by the campaign.

Already this year, the campaign has reimbursed Scaglia’s firm for $48,000 in expenses, and paid another $10,000 for fundraising. Cleaver’s office notes that these payments are not salary; they cover expenses for events, postage and printing and other campaign activities.

Through the first six months of the year, Scaglia also has earned $45,835 on the Congressional payroll.

Kenneth Gross, an election law expert at Skadden, Arps, Slate, Meagher & Flom, said there is no prohibition on a staff member working as a paid campaign consultant, as long as the campaign work takes place outside the hours that the taxpayers have paid the staff member to provide. “The rules regarding what a staffer does in his own time, particularly doing campaign work, are very fluid,” Gross said. The goal of the rules is to ensure “an overall performance by the staff person that is not diminished by outside activities.”

But ethics watchdogs say the various positions may create confusion about Scaglia’s role.

When Roll Call reported in September that Scaglia maintained a lobbying practice in Missouri, Cleaver’s office responded that Scaglia maintains a “bright line” between his state-based lobbying activities and his Congressional work.

But his firm was paid to conduct fundraising for the campaign and his lobbying clients were among the donors to Cleaver’s 2006 re-election campaign.

Danny Rotert, Cleaver’s spokesman, said Larry Sells of UGA is a longtime Democratic supporter and his relationship to the campaign pre-dates Scaglia becoming campaign manager. As for the Oct. 12 fundraiser and campaign donation, Rotert said Sells owns a theater across the street from the campaign office, which he makes available to Democratic candidates for fundraisers.

That is recorded as an in-kind donation for the purpose of FEC records.

In an e-mail response to questions, Sells told Roll Call, “Phil Scaglia has worked for UGA as a consultant on municipal matters. I have made contributions to Congressman Cleaver and will continue to do so in the future. He is a great Congressman and an old friend.” Regarding the use of the theater, Sells wrote, “UGA has many functions at the Uptown Theater for politicians — Republican, Democrat, Green and Libertarian. The Uptown believes in free speech and promotes it.”

“The situation is very similar to many other Members of Congress and complies with all applicable laws,” Rotert said in response to Roll Call’s inquiries. “Kansas City, like many areas throughout the country, is a small town. There are inevitably going to be longtime friends, clients, and other persons that interact and overlap with each other, but the laws have safeguards in place to protect against conflicts by requiring full disclosure.”

“In 2004, the campaign rented office space from UGA LLC Executive, Larry Sells, a good friend who has been supportive of the Congressman since his days on the City Council. After the 2004 election, Mr. Sells hired PPS, LLC. to consult on some municipal issues. Mr. Sells and Mr. Scaglia have known each other for decades,” Rotert said.

Rotert said the ethics committee has approved Scaglia’s employment arrangements, though he said the approval was oral, not written.

Craig Holman, a campaign finance lobbyist for Public Citizen, said, “That’s not a real approval by the ethics committee.” Since there is nothing in writing, and the ethics committee will not confirm any discussions with Member offices, there is no evidence of what, if anything, the committee approved, Holman said.

A senior Congressional aide familiar with the ethics process said, “The only ethics guidance on which you can rely definitively is written guidance. If you can’t get it in writing, you can’t use it to defend yourself.”

Holman said Scaglia’s multiple roles violate the spirit, if not the letter, of the ethics rules. “He certainly appears to have crossed the line of conflicts of interest,” Holman said.

Ted Van Der Meid, former chief counsel for the House Committee on Standards of Official Conduct and counsel to then-Speaker Dennis Hastert (R-Ill.), said the danger of Scaglia’s many positions is that “people can’t tell where one entity begins and one ends. … You are a staff member but also you have a state lobbying enterprise, you are a campaign manager and have a campaign consulting firm — the constituent may not know who they are talking to at any given moment.”