EP. 35 — CONVERSATIONS: REP. PETER MEIJER

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Weston Wamp: I'm Weston Wamp, and this is “Swamp Stories,” presented by Issue One. 

Weston Wamp: Imagine a world in which a member of Congress could take money from a corporation and put it in a special bank account that’s supposed to be used to support other members of Congress. And then instead use it to eat at opulent restaurants, buy airline tickets, and pay for lodging at luxury hotels.

Thousands of dollars in donations from corporate PACs one day to potentially influence your legislative work, and a series of bougie meals over the next few weeks. These special bank accounts have few rules or regulations, except you have to be a member of Congress or a federal candidate to have one.

Next, imagine that when these spending sprees are disclosed for the public to see and members of Congress are questioned for living lavishly off of their special bank accounts, they don’t apologize. They double down. “You have to spend money to raise money,” they argue. And spending money on resorts and fine dining is legal, they say, if you’re raising money.

Well, it doesn’t take too much to imagine all of this, because Washington has become so shameless that it’s all true. Every word of it.

This is Episode 36: Piggy Bank

Congressman Shays: A leadership PAC is basically a piggy bank for members to go on trips, have fundraisers where they, in fact, get to enjoy the benefits of a resort, golf, whatever. And it's insidious because once you start that process, you don't want to let go.

Weston Wamp: Republican Chris Shays represented Connecticut in Congress for 22 years from 1987 until 2009. Both as a member of Congress and since he left, Shays has been an outspoken advocate for cleaning up money in politics, particularly when there’s the appearance of corruption. 

Congressman Shays: The issue is the meals are the smallest part of the problem, but they're part of the temptation. That's the part of the piggy bank. You can just do things that you couldn't afford otherwise.

Weston Wamp: Leadership PACs are increasingly a part of the strange subculture on Capitol Hill, where lavish spending of campaign dollars can get you in trouble. But a separate bank account can be kept by members where they’re able to receive checks every year from the same donors to their campaigns. And that separate account seemingly has no enforceable rules.

Beyond the “temptation” aspect of leadership PACs that Congressman Shays alludes to, lawyer Brendan Fischer of the Campaign Legal Center explains how leadership PACs have strayed from the purpose for which they were originally intended.

Brendan Fischer: The little bit of background on this is these are kind of a weird FEC creation. So they started back in 1978 when Henry Waxman came to the FEC and said, “I'm aspiring to leadership. Can I set up a PAC to support my colleagues, to donate to my colleagues as part of my bid to make it into House leadership?” And the FEC said, “sure, if you're using this PAC to support other candidates, that's okay.” But at this point, 92% of lawmakers have a leadership PAC. And for many lawmakers, leadership PACs have strayed from their original purpose. And rather than raising money to donate to their colleagues, they're using their leadership PAC as a slush fund. They're using their leadership PAC for thousands of dollars of expenses at golf clubs and elite resorts and steakhouses and high end meals. 

Weston Wamp: In a report last fall, Issue One and the Campaign Legal Center documented several of the most egregious cases of leadership PAC misuse.

And one of the most prolific users of leadership PACs is former Republican Congressman George Holding of North Carolina. In a one month period in 2019, his leadership PAC brought in over $30,000 from just 9 corporate PACs. Lockheed Martin, AT&T, MassMutual, UPS, CVS, Citigroup among them.

That same month Holding wined and dined across the East Coast. From fancy establishments like The Metropolitan Club, Morton’s, the 116 Club, and the Four Seasons in D.C. to Donahue’s and the Union Club in New York City and No. 9 Park in Beacon Hill in Boston.

Over a 13 month period, Holding also brazenly spent $11,000 on six visits to the exclusive, all men’s East India Club in London. 

Brendan Fischer: For many lawmakers, leadership PACs are a loosely regulated campaign account that can take big donations and that lawmakers can use to live like the elites while pretending to represent the rest of us. And I think what you're touching on is the lack of regulation around leadership PACs, because as we discussed and as you well know, a lawmaker cannot use their campaign funds for personal expenses. 

Weston Wamp: The lack of regulation is startling. These once niche PACs are now ubiquitous. And despite the original intent being to raise money to give it to other candidates, many members of Congress now spend just a small fraction of their leadership PAC money on other candidates, political parties, or political groups. Between January 2019 and December 2020, Congressman Holding spent just 2% on politics. Similarly, just 12% of the spending by Democrat Gwen Moore’s leadership PAC was on politics during the same period.

Brendan Fischer: I don't know that there's necessarily a clear percentage for how much should be spent on donations versus spent on fundraising and overhead. Certainly 50% is entirely reasonable. 50% of overall leadership PAC money being spent for donations is the least that we should expect, but there's a lot of lawmakers who spend far less than that. In the report that we put out with Issue One, we found 120 sitting lawmakers who spent less than half of their leadership PAC money on political donations in 2019 and 2020. So certainly we should expect a lot more than that.

Weston Wamp: What’s happening here is that under the guise of expenses related to fundraising, members have exposed a giant loophole.

Brendan Fischer: When looking at some of these individual leadership PACs, like Rand Paul's leadership PAC, for example, these leadership PACs are supposed to exist so that lawmakers can donate to their colleagues. And if they're not doing that, if they're not using leadership PAC funds to make political donations, then what are you fundraising for? It looks a lot like you're fundraising for the purpose of fundraising. You're fundraising at one fancy resort in order to finance your next fundraiser at another elite resort. And that really creates the appearance of corruption, if not the reality of it.

Weston Wamp: As I pointed out earlier when describing just one month of donations to Congressman Holding’s leadership PAC, large corporations are often the biggest funders of leadership PACs. And given the way these PACs subsidize the lifestyles of many members of Congress, that is highly problematic.

Brendan Fischer: Because it's one thing to use donor money to get your message out to voters and support your campaign. It's quite another to use donor money to finance a lavish lifestyle or a high flying lifestyle. If a donation is being used to support your round of golf at a country club, rather than your ads on TV, then that donation begins to look a lot more like a bribe. And lawmakers are going to be far more accountable to those donors as a result.

Weston Wamp: It’s the extravagant living that most outrages people, and gets a lot of the attention in the media. But, this question of buying influence is central: members of Congress get nearly all of their leadership PAC funds from PACs connected to companies, trade associations, labor unions and other groups which have business before these powerful lawmakers. Shays also touched on this issue.

Congressman Shays: The real challenge with leadership PACs is you have to raise money from lobbyists. And you have to raise hundreds of thousands of dollars. That's the real problem with leadership PACs. 

Weston Wamp: Shays also questions the wisdom of leadership PACs in the first place. Should members of Congress be able to buy their way to the top? 

Congressman Shays: The second real problem with leadership PACs is, it's used primarily to buy chairmanships of full committees, and to buy chairmanships of subcommittees. In other words, it used to be seniority would determine your place in line to be the next leader. And then what happened was that some very fine potential chairman based on seniority found that people below them became the chairman because they were willing to raise lots of money for the leaders and for members to help get them elected.

Weston Wamp: Harkening back to a different time when members of Congress could cobble together up to $25,000 in extra income with the help of lobbyists by giving speeches, Congressman Shays says the use of leadership PACs for personal use is an old problem that’s rearing its head again.

Congressman Shays: In the past, you would have members call up a lobbyist and say, "It's Christmas time now, I need a little bit more money. Can I come and speak to your employees? And can you give me $2,000 that I can then get?" And it was used specifically as income. Well, we eliminated that. And so now, we've got the same problem in another way, and that is, we're raising that money. We, members of Congress, are raising this money in their so-called leadership PAC, and then they're spending it for personal expenses. And by the way, that's actually tax-free.

Weston Wamp: But, as Fischer explains, the solution to this mess is stunningly simple, and has gained support from both parties.

Brendan Fischer: Congress could extend the personal use ban to leadership PACs. There's a bipartisan bill that would do just that. The FEC, we think, also has the authority to extend the personal use span to leadership PACs. So we at the Campaign Legal Center along with Issue One and a bipartisan group of former lawmakers filed a rulemaking petition with the FEC back in 2018, asking them to do just that, but so far the FEC has not acted on that petition. But short of the FEC or Congress taking some sort of action then, certainly there's a lot more that journalists and the public can do to monitor how lawmakers are spending leadership PAC funds.

Weston Wamp: On the next episode of “Swamp Stories,” we’re going to talk to the authors of “The Steal,” a new book that gives a day by day account of the attempt to overturn the 2020 election.

Weston Wamp: Thanks for listening to “Swamp Stories,” presented by Issue One, the country's leading political reform organization that unites Republicans, Democrats, and independents to fix our broken political system. Please subscribe to the podcast and share it with your friends. Even better, rate and review it on iTunes to help us reach more listeners. You can find out more at swampstories.org. I'm your host Weston Wamp. A special thank you to executive producer, Ethan Rome, senior producer Evan Ottenfeld, producer Sydney Richards, and editor Parker from ParkerPodcasting.com. “Swamp Stories” was recorded in Tennessee, edited in Texas and can be found wherever you listen to podcasts.

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