Leadership PACs are a campaign-finance scandal
Rep. Duncan Hunter, R-Calif., and his wife were indicted in August on suspicion of using campaign money to pay for lavish vacations, meals, alcohol, clothes and even family visits to the dentist. In all, they allegedly spent more than $250,000 in campaign money on personal expenses.
There’s some irony in the charges, however. Although the behavior may strike many observers as greedy, from a legal perspective Hunter’s mistake was not that he indulged his taste for luxury using donations from the public. Rather, it was that he simply drew from the wrong pile of donated money.
Had the money for Hunter’s vacations come out of his leadership PAC rather than his personal campaign committee funds, there probably would be no scandal. Although the law prohibits members from using their campaign committee money for personal use, the Federal Election Commission does not enforce similar restrictions on leadership PACs. The result is that leadership PACs have essentially become slush funds, and almost every member of Congress has one.
Many members have spent lavishly out of their leadership PACs without paying any legal price. According to a report by Issue One and the Campaign Legal Center, Sen. Rand Paul, R-Ky., spent $4,492 on limousine service in Rome, Rep. Devin Nunes, R-Calif., spent $15,000 on Celtics tickets in 2017, and Rep. Gregory Meeks, D-N.Y., has spent more than $9,000 at a Las Vegas resort this election cycle. Sen. Bill Nelson, D-Fla., spent more than $40,000 between 2015 and 2018 on fundraising events at Disney World and Universal Orlando Resort.
The loophole that allows members to use leadership PAC money for such expenses is one of the most egregious in campaign finance law. Because of the personal-use ban that applies to campaign money, the FEC scrutinizes borderline expenses, such as pricey dinners. But it tends to give a pass to similar expenses from leadership PACs, with predictable effects on politicians’ behavior.
The FEC is considering a fix for this loophole, but members of both parties appear reluctant to give up the perks that leadership PACs provide.
What are leadership PACs, and how did they come to escape the strictures that have been placed on other sources of political money?
They were an outgrowth of the 1970s House reforms that attempted to create a more democratic institution. Following Watergate, a wave of progressive Democrats was elected to Congress and arrived eager to shake things up. Most of the committee chairs at the time were older, conservative Democrats who controlled what bills went to the House floor. The reforms stripped these chairs of some of the power they wielded over the legislative agenda; that power was redistributed to subcommittee chairs and to party leaders.
Leadership PACs became part of the broader trend toward greater member autonomy; the ability to raise and redistribute money became a new route to power.
But specifically, it was Rep. Henry Waxman, D-Calif., who brought the idea of leadership PACs with him from the California legislature, where he’d served. In 1978, the FEC gave him permission to register the first federal leadership PAC.
Political action committees that raised and spent money to elect and defeat candidates had been around since the 1940s, mainly representing business, labor, and ideological interests. Leadership PACs were a twist on the concept, allowing officeholders to raise and spend money on behalf of other candidates.
When Waxman set up his federal leadership PAC, he was seeking a subcommittee chairmanship on the House Energy and Commerce Committee. He distributed campaign contributions to his committee colleagues, and won the post by a 15 to 12 vote. That a two-term member who was fourth in seniority on the subcommittee could win such a coveted position showed the power of leadership PACs.
Members of Congress – particularly leaders – had long given money to their colleagues in need, but that money was contributed on an ad hoc basis and came out of their personal campaign accounts. Leadership PACs let them raise and give in larger amounts – and made it easy for their colleagues to keep tabs on their generosity.
The trend took off. In 1978, fewer than 10 leadership PACs were registered with the FEC; by 1988, there were 45, and in 1998, there were 120. Today, more than 90 senators and at least two-thirds of House members have leadership PACs. House leaders routinely recommend that their newly elected colleagues establish them as soon as they land in Washington.
But now that most members have leadership PACs, their value has diminished, and their use has shifted. In part, that’s because the dynamics of the House have once again changed. The 1994 Republican Revolution created a unified majority that voted to centralize power in the leadership. Republican leaders believed that the 1970s reforms had created a fractured, undisciplined majority, one in which members were more interested in promoting themselves than the party. Under a new Republican system developed in reaction, leaders reasserted firm control over the agenda and legislative process. Rising through the ranks required strict party discipline and a willingness to raise money for the party. Those who played along were rewarded with chairmanships and leadership posts.
The sheer amount of money in the system has helped make leadership PACs obsolete – at least for their original purpose. Today, less than 45 percent of leadership PAC funds go to candidates. Instead, members use them to pay for vacations, meals, golf club memberships – again, the same sorts of things that Hunter paid for with his personal campaign funds. Many members claim European travel, trips to Disney World, golf vacations, and bills at high-end restaurants as legitimate fundraising expenditures – the idea being that they are entertaining big donors to keep them on the hook.
Members today see more value in buying the ongoing support of big donors than the support of their rank-and-file colleagues. But focusing on donors who benefit the party comes at the expense of attention to ordinary constituents’ interests, and can also lead to corruption. Leadership PACs have become a way for members to enjoy the riches that comes with the territory of entertaining big donors.
The distinction the law draws between campaign funds and leadership PAC money is indefensible. House Democrats have suggested that anti-corruption measures will be one of their priorities if they win majority control in November. Yet Democrats have failed to ask the FEC to place personal use prohibitions on leadership PACs.
Closing this loophole would cut off a legal means for spending copiously on themselves and their donors. It would also be a significant step toward genuine campaign-finance reform.