Being a Lawmaker Can Be Lucrative Family Business, Report Concludes

Mar 23, 2012 2:32pm

 

ABC News’ Jonathan Karl, Gregory Simmons and Robin Gradison report:

How would you like a job where you can expense your fitness training, hire your kids and your spouse, earn 18 percent interest on your money and funnel millions of dollars of other people’s money to places your family members work?

A 347-page report released Thursday by Citizens for Responsibility and Ethics in Washington singles out members of Congress who do all of that – and guess what?  It’s perfectly legal and it’s bipartisan.

“Often the scandal in Washington isn’t what is illegal, it’s what’s legal,” said CREW Executive Director Melanie Sloan.

You can read the full report HERE.

CREW looked at every member of Congress and found that 248 had paid a family member, loaned themselves money with a favorable interest rate, or earmarked for a non-profit or family business in which they had a direct interest.

Eighty-two members of Congress have put family members on their Congressional or campaign payrolls, including Republican presidential hopeful Rep. Ron Paul, R-Texas, who has dished out over $300,000 to his daughter, brother, grandson, granddaughter and three other relatives since 2007.

Paul’s campaign manager told ABC News it’s all above board and “family members have received a tiny fraction of the jobs and salaries” in Paul’s campaigns.

California Republican Jerry Lewis’ wife is among the highest paid members on the congressman’s staff, making more than $130,000 a year as an administrative assistant.

The congressman’s office did not respond to ABC News’ request for comment.

The report also singles out Rep.  Keith Ellison, D-Minn., for paying his son $7,000 in the last campaign.

” I don’t think a person on a campaign who is related to the candidate should be excluded for that purpose if they are otherwise a good person,” Ellison said when confronted by ABC’ News. “[My son] might be the most qualified person on my whole campaign.”

Rep. Lynn Woolsey, D-Calif.,  paid her daughter $43,000 for help in her last campaign.

“You pick the best people you know to help you with your re-elections,” Woolsey told ABC News. “My daughter brought actual sanity to our shop. She really earned that money. Every penny of it.”

When asked about the issue of members using their position to benefit their family, House Speaker John Boehner said it was perfectly legal.

“I think all members should be held responsible to the highest ethical standards and I believe that virtually every member of Congress tries to do that,” Boehner told ABC News.  “I think when it comes to the issue of campaign funds if there’s legitimate work being done, people ought to be paid for it.”

Another lucrative and legal maneuver is to loan one’s campaigns cash.  As the rule stands, a member of Congress can lend their campaign money at a commercially reasonable rate.

“There’s always a question about what commercially reasonable is and we have the Federal Election Commission which isn’t great about enforcing any campaign finance laws,” Sloan said.  “Sometimes [members of Congress] just never have the loan paid back so they can keep collecting the interest. ”

Rep. Grace Napolitano, D-Calif., loaned her campaign $150,000 and charged an 18 percent interest rate on the loan from 1998 until 2006, then dropped to a 10 percent interest rate in 2006.  Her campaign committee reported more than $94,000 earned from in interest during the 2008 and 2010 election cycles alone.

The CREW report also finds 38 members who funneled tens of millions of taxpayer dollars to entities that employ their family members.

Then there’s the case of Illinois Republican Aaron Schock.  The mega-fit congressman had his campaign pay for his $319 P90X fitness video, five-star hotels in Greece and Miami, and sea plane ride in St. Croix.  Not bad.

Schock’s office did not return calls for comment.

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