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The House and the Spouse: Bill Passed Yesterday Prohibiting Compensation for Spousal Campaign Work PDF  | Print |  Email
By Bob Bauer   
July 24, 2007
This article was posted at Bob Bauer's Blog and is reposted here with permission of the author.
 
For years, candidates have enjoyed “wide discretion” in the use of their personal campaign monies, up to the point that there was a question of “personal use.”  See FEC Advisory Opinion 2001-08; 11 CFR Part 113 (Use of Campaign Accounts for Non-Campaign Purposes). The House yesterday acted to expand the personal use restriction, passing a bill to prohibit the payment for services rendered by a spouse to a candidate’s campaign committee or Leadership PAC. 

 

Spouses (and other family members) could once labor for their candidate’s committee, for pay, if their services were fairly valued and compensated by market standards.  Now the House, reacting to highly publicized allegations of excess, has imposed a blanket prohibition of paying the spouse for these services, and it has also included a requirement that the candidates report any compensation of other family members.  

 

The bill has been fashioned with interesting features and it was changed on notable points from the version originally introduced. It may influence, beyond the immediate issue addressed, the development of the law on Leadership PACs and on candidates’ personal liability for campaign finance law violations.

First:  the personal use restrictions of existing law applies to a candidate’s personal or authorized committee.  The new bill passed by the House subjects the use of Leadership PAC money—money held by a committee established, maintained and controlled by the candidate—to similar restrictions on the compensation of spouses.  This may be the first step toward eventually putting Leadership PACS on the same footing, for purposes of the personal use restriction, as authorized or personal committees.

 

Second:  the bill provides that prohibited compensation would be of the direct or indirect kind, and that the candidate—not the committee—would be responsible for paying any penalty imposed for a violation, so long as the candidate knew of the prohibited payment. The candidate committee cannot assume liability for the violation, even by agreement with the candidate: the liability is the candidate’s alone, borne personally.  By and large, candidates are seldom exposed to direct liability under the campaign finance laws and, when they are, their committees often bear the costs. The bill prohibiting spouse compensation strikes out in a different direction. This could set a precedent for similar efforts, in other areas, to hold the candidate liable by express command of the law.

 

Third:  the original bill, as introduced, was clearer on some points and more permissive, on its face, in others. For example, it made an exception for reimbursements paid to a spouse for otherwise lawful travel expenses incurred for the benefit of the committee. It provided for reimbursement in “nominal amounts” for “supplies and equipment,” so long as the total amount of the excepted payments did not exceed $500 in a calendar year. 

 

The introduced version also defined the nature of “indirect compensation” in at least one circumstance: when payment was made to an entity in which a spouse was an officer or director. This was removed in the final version, leaving unspecified the definition of “indirect compensation.” It remains to be seen how the FEC will exercise its own discretion to prescribe by rule the possible applications of the new law.

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