Congress

New members, meet the ‘slush fund’

Many Hill freshmen are already establishing leadership PACs despite association with abuse

 Reps. Alexandria Ocasio-Cortez, D-N.Y., left, and Ilhan Omar, D-Minn., are among the more than two dozen freshman lawmakers who have established so-called leadership PACs, a type of fundraising committee critics say is too often abused. Ocasio-Cortez and Omar have pledged not to accept corporate PAC money. (Tom Williams/CQ Roll Call)

The newest class of congressional lawmakers — some of whom campaigned against corruption and corporate influence in politics — is rapidly adopting a practice that critics say is among the swampier in Washington.

More than two dozen new members of the House and Senate — including prominent freshmen such as New York Democratic Rep. Alexandria Ocasio-Cortez and Utah Republican Sen. Mitt Romney — have established so-called leadership PACs, according to data compiled by government watchdog group Issue One. Leadership PACs are fundraising committees that allow lawmakers to raise money for their colleagues and candidates.

The vast majority of House and Senate members have one, and many say they can be helpful tools to support other politicians and the issues they care about. But the PACs are not subject to the same restrictions on personal spending as individual campaign committees, leading to numerous examples of alleged misuse. Critics say they also allow politicians to evade campaign contribution limits and obscure donations from corporations and other powerful groups.

“The new freshman class of 2018 has said that one of the fundamental issues they ran on, and they heard from their constituents about, was to clean up the corruption in Washington and to diminish the influence of money in politics,” said Tim Roemer, a former Indiana Democratic congressman and U.S. ambassador to India.  “Leadership PACs, as currently structured, add to the problem.”

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An ‘influence game’

Roemer co-chairs Issue One’s ReFormers caucus, a group of former members of Congress, governors and Cabinet members that has urged the Federal Election Commission to close “loopholes” in its regulation of leadership PACs.

Leadership PACs allow lawmakers to accept additional money from donors who have already maxed out donations to their individual campaign committees, effectively raising the cap on campaign donations from deep-pocketed benefactors. Because leadership PACs are little known outside of the Beltway, with obscure names like the Penguin PAC or the Blue Hen PAC, voters are less likely to be watching. 

As of this week, all nine of the new senators have formed leadership PACs, as have 23 of the 92 House freshmen, said Michael Beckel, the manager of research, investigations and policy analysis at Issue One. That brings the total number of Hill lawmakers with leadership PACs to 437 out of 534, or 82 percent.“For many incoming members, leadership PACs are part of the Washington influence game,” Beckel said. “Some of them have more quickly embraced them than others.”

Issue One and the Campaign Legal Center produced a report last year that showed that roughly 60 percent of the $150 million raised by leadership PACs between Jan. 1, 2017, and Sept. 30, 2018, came from political action committees connected to companies, trade associations, labor unions and other groups that frequently have business before lawmakers.

Only 45 percent of the money raised through leadership PACs during that same time period went to contributions to federal candidates or other political committees. Instead, some members of Congress used their leadership PACs for personal expenses that would not be allowed from authorized campaign accounts, including spending at resorts, golf clubs and fine dining establishments, the report found. 

New York Democrat Kathleen Rice plans to reintroduce in the House this week a bill that would reign in abuse of leadership PACs, among other revisions, an aide said. The so-called The Accountability and Transparency Act that Rice introduced with Wisconsin Republican Mike Gallagher and Washington Democrat Derek Kilmer was one of two bipartisan measures unveiled last Congress that aimed to prohibit the “personal” use of money raised through leadership PACs, a restriction already in place for individual campaign committees.

The lack of such basic regulations makes even legitimate use of a leadership PAC appear tainted, said Rep. Scott Petersco-sponsor of the so-called Leadership PAC Limitation ACT, the other bipartisan measure introduced last Congress.“Even things that are legal just make the whole system look terrible,” the California Democrat said. “The notion that you would be spending money on yacht clubs, and Broadway tickets, golf retreats and trips in limousines — it is just not appropriate for elected officials to be doing that, and it does not engender trust.”

‘Useful tool’

But even the some of the staunchest critics of the rules regulating leadership PACs have established their own, including Peters and Rice. Peters’ committee — Supporting House Problem Solvers — spent $153,000 in the 2018 midterm cycle, $151,000 of which went to federal candidates and state party committees. The remainder was spent on compliance.

Peters said the PAC can be a “useful tool” to help colleagues get elected in the absence of a public system to finance campaigns, but lawmakers have to be “rigorous” about ensuring the money is spent properly.

The new members who have already established leadership PACs include high-profile figures like Ocasio-Cortez, who rose to prominence with vows against accepting donations from corporate PACs.

The pledge was understood as a shorthand declaration of liberation from corporate interests.

Ocasio-Cortez’s leadership PAC, Courage to Change, was formed in late November, too recently to have filed any public financial disclosures. Frank Llewelyn, the committee’s treasurer, said the PAC had not started fundraising. The end-of-year balance in its accounts was $4,700, one contribution and one expenditure, he said.  

“We are committed to the highest ethical standards, which is best represented by our ‘no corporate money’ position,” Llewelyn said. “We realize that the regulation of leadership PACs need to be improved.”

Another House freshman, Minnesota Democrat Ilhan Omar, established her Inspiring Leadership Has A Name PAC in October. It had not spent the $5,000 it had raised by the most recent filing deadline at the end of November. Omar’s campaign did not return a request for comment but told the Center for Responsive Politics the PAC does not accept corporate PAC contributions.

Sharing the wealth

Texas Republican freshman Lance Gooden said he hadn’t even heard of leadership PACs before he was advised to start one to help other candidates during his House campaign. Running for a safe GOP seat, he said he raised more money than he needed for the general election.

My intention was to use my leadership PAC going forward to help other candidates who need resources,” he said, adding that he was aware of alleged abuse of such committees.

“My internal rule of thumb is that we have to make sure that a solid majority of this money is spent on other races and not on frivolous expenses.” he said. FEC filings show that almost all of the $17,000 Gooden’s committee disbursed went to other federal and local candidates.

But not all members are so self-disciplined, said Adav Noti, a former FEC lawyer who now works at the Campaign Legal Center.

“It’s not inherently bad to have one if you are one of the few members of Congress who actually uses it for its intended purpose, but that’s fairly rare at this point,” Noti said.

He added that as long as party leaders use fundraising prowess to determine who will rise in the ranks and get coveted committee chairman positions, the incentive for members to establish leadership PACs will remain strong. Zach Wamp, a co-chairman of Issue One’s ReFormers Caucus and a former Tennessee GOP congressman, said he encourages new members to avoid that pressure, though he recognized they were unlikely to follow his advice.It sure looks like now you have to do it in order to advance, but it doesn’t make it right,” he said. “It is a proliferation that is unhealthy. It pollutes the Congress, and it leads to, I would call it, unintentional corruption.”

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