Jefferson Could Tap Campaign Funds

Posted December 8, 2008 at 6:31pm

While Rep. William Jefferson (D) lost his bid for re-election Saturday, any cash remaining in the Louisianan’s campaign coffers could find a new use in his legal defense fund.

Under guidelines issued by the Office of Government Ethics and the House Committee on Standards of Official Conduct governing legal funds, Jefferson is not prohibited from converting his unused campaign funds to the legal defense fund he established in 2005.

The Louisiana lawmaker is charged in a 16-count federal indictment with offering and accepting hundreds of thousands of dollars in bribes to promote business ventures in West African nations, and he could face years of legal battles.

Whether Jefferson will opt to convert his campaign funds to his legal defense fund remains to be seen. A spokesman for Jefferson’s campaign did not return a telephone message Monday.

According to records filed with the Federal Election Commission in late November, Jefferson’s campaign reported $86,000 in cash on hand.

But the Louisianan’s campaign also stated $257,000 in debt or loans as of that date.

Much of that debt is carried by Jefferson himself from multiple loans he made to the campaign in 2006 totaling about $189,000.

In addition, the campaign reports a $25,000 loan from the Dryades Savings Bank of New Orleans, a $22,000 loan from Liberty Bank of New Orleans, and two loans listed under MBNA Visa for $14,000 and $8,000, respectively.

In the meantime, the legal defense fund raised $172,000 through Oct. 31, according to quarterly filings with the House ethics committee, but the fund has not made any expenditures in 2008.

Under House ethics rules, legal defense funds may only be used to pay legal expenses and any costs associated with raising contributions, and any excess funds must be returned to contributors after a fund is shuttered.

Donors are limited to a $5,000 annual contribution per legal defense fund, although the same donor could still give the maximum $2,300 to the lawmaker’s campaign coffers.

A single donor could effectively donate $12,300 to a legal defense fund each cycle. Public Citizen’s Craig Holman is critical of the loophole allowing House Members to transfer campaign money to their legal defense funds.

“I’ve never liked the idea of House rules allowing candidates to transfer their campaign funds to their legal defense funds,” Holman said, adding that even donors who support a candidate’s election campaign “may or may not have had any intentions of providing funds for [a Member] to defend himself in a violation or a potential violation of the law.”

Senators who maintain legal defense funds are prohibited under that chamber’s rules from making such a transfer.

In late November, Jefferson filed a petition in the U.S. Court of Appeals for the Fourth Circuit requesting the full court revisit his case, after a three-judge panel refused to dismiss charges against him.

The U.S. District Court for the Eastern District of Virginia earlier canceled an expected December trial pending the outcome of the appeals process.