Wednesday, October 17, 2007

Gifts That Keep on Giving

Campaign contributions are given for a variety of reasons, and I suspect most donors don't think that their donations will be used to pay lawyers advising elected officials in government investigations.  TPM Muckraker reports (here) that a number of Congressmen are using funds from campaign committees to pay their lawyers because they have been caught up in a variety of federal corruption probes.  Among those using campaign money for legal fees, as reported in the most recent quarterly campaign finance reports, are:

  • Rep. Jerry Lewis (Calif.): $26,982 in the quarter and a total of nearly $1 million in the past year to two law firms, including Gibson Dunn;
  • Rep. Don Young (Alaska): $183,785 and a total of $447,000 to two law firms, including Akin Gump.
  • Rep. Rick Renzi (Arizona): $111,042 and a total of $148,000 to two law firms (Patton Boggs and Steptoe & Johnson).
  • Rep. Alan Mollohan (West Virginia): $55,000 and a total of $78,000 to one law firm.

Can it be legal to use campaign contributions for legal expenses?  The Federal Election Commission has interpreted the campaign finance laws as permitting such payments.  In AO 2005-11 (Sept. 26, 2005) (available below), the FEC responded to a request by former Rep. Randy "Duke" Cunningham's campaign committee for a ruling whether it could pay his attorneys during the federal investigation that led to his guilty plea and lengthy prison sentence on bribery charges.  The Opinion states:

The Commission concludes that the Committee may use campaign funds to pay for the legal fees and expenses incurred in connection with the grand jury investigation and legal proceedings that may arise from this investigation because the investigation concerns allegations that are related to Representative Cunningham’s campaign activities or his duties as a Federal officeholder and the legal fees and expenses would not exist irrespective of Representative Cunningham’s campaign or duties as a Federal officeholder. The Committee may also use campaign funds to pay for the legal fees and expenses incurred in responding to the press regarding the grand jury investigation and legal proceedings that may arise from this investigation.

Maybe it's just me, but an investigation of misuse of office for personal gain does not seem to be related to a Congressman's "duties as a Federal officeholder," but that's what the FEC has decided.  It may be that the campaign committee is a bit like an indemnification provision in a corporation's by-laws -- a special form of protection in case there's an investigation related to conduct during the term of office, even it the conduct is criminal, as in the case of Cunningham.  That said, I doubt most donors understand that their contributions can be used to pay lawyers to defend the official in a corruption probe.

The more traditional method for government officials to take donations to pay their lawyers is to set up a legal defense fund, which is subject to different reporting requirements and donation limits than a campaign committee.  Representative William Jefferson of Louisiana, who is under indictment on a variety of corruption-related charges, has decided to go that route rather than use campaign donations to pay for his lawyers. (ph)

Download fec_ao_200511_september_26_2005.pdf

http://lawprofessors.typepad.com/whitecollarcrime_blog/2007/10/gifts-that-keep.html

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