Campaign Legal Fees Increasing

New Disclosure Rules, OCE May Explain Rise

Posted February 24, 2010 at 6:39pm

Congressional campaigns are spending more on legal services, according to a Roll Call analysis of Federal Election Commission data.

That analysis, based on payments to a variety of law firms favored by Members for assistance with campaign law or ethics matters, including Perkins Coie and Wiley Rein, shows a significant increase in spending between the 2005-06 cycle and the end of 2009.

Spending at those law firms by incumbent lawmakers’ re-election committees and political action committees totaled at least $5.69 million in the 2007-08 cycle, up from $2.26 million in the previous cycle.

Spending at those firms in first half of the 2009-10 cycle reached at least $6.05 million.

It can be impossible to determine the specific purpose of such expenditures — commonly labeled only as “legal fees” or “attorney fees” on campaign finance forms — which can encompass anything from assistance with campaign finance reports to legal counsel for ethics investigations or even advice on gift or travel rules.

But attorneys who specialize in compliance and ethics law, including at some of those firms surveyed, peg the increase not only to changes made under the Honest Leadership and Open Government Act, which implemented stringent ethics and lobbying rules in the 110th Congress, but to the addition of the Office of Congressional Ethics to the House’s internal review process.

“When you look at all of the different challenges that are confronting Members, the need for legal services has increased dramatically,” said Stefan Passantino, chairman of the political law team at law firm McKenna Long & Aldridge.

Passantino said compliance issues, including new lobbyist bundling disclosures, make up a major portion of legal spending, but he also pointed to an “increased ethics environment” for the jump in expenditures.

The House established a two-tier ethics process in 2008, creating the OCE to review alleged violations and recommend investigations to the chamber’s ethics committee. The OCE initiated its first inquiries in 2009, reviewing 25 matters last year, according to public reports.

“There are many times where there are investigations that might focus on one Member, but the call for information extends well beyond. … There becomes an exponential increase in the need for pure legal services,” Passantino said, later adding, “It’s definitely a real increase in actual expense.”

Defense attorney Stan Brand, a former House general counsel, would only discuss his practice generally, but he acknowledged, “From what I’ve observed and from my colleagues, there’s an uptick.”

“It’s attributable to one thing, which is the Office of Congressional Ethics,” Brand said. But he added that the increase in legal spending could also be attributed in part to “the general increase in regulatory provisions and scrutiny.”

Former FEC Commissioner Karl Sandstrom, currently of counsel to Perkins Coie’s political law practice, suggested recent changes to ethics and lobbying rules have also prompted greater diligence in other areas, including annual financial disclosure reports.

“As the rules become more complex, it’s a mix of not just campaign finance rules, but campaign finance and ethics and lobbying rules,” Sandstrom said. “So many changes have been made, I think you get more Members and candidates who want someone to review their filings, not just to the FEC but to the [House] Clerk with respect to the financial disclosure.”

Under the ethics reforms enacted in the 110th Congress, financial disclosures as well as travel records became available on House-administered Web sites.

“Then you have increased disclosure by lobbyists and you want to make sure your reports are consistent with what others are reporting,” Sandstrom said.

Democratic fundraiser Michael Fraioli suggested the upturn in payments to law firms could also represent a switch to compliance specialists, not only to address changing regulations but more significant income and expenses.

“Not so long ago, your FEC reports were done by a friend or a CPA back home who might volunteer their services,” Fraioli said. “You’d be hard-pressed to find any House campaign, certainly any Senate campaign … that doesn’t use a professional compliance person.”