Living off politics: Why the Lamborn campaign loan story matters
Doug Lamborn might be a heavy-handed, often pandering congressman with a bumbling streak, but because he’s a Republican who represents Colorado Springs, he’s about as politically safe as a politician can be.
The most recent election, in which Lamborn hardly needed to campaign against a much better-funded conservative Democrat, retired general Irv Halter, was a case study in this heavily Republican military town. Though the incumbent aired no TV ads and refused to participate in public debates, he glided to re-election 60-40 pretty much on auto-pilot in a district that’s demographic and geographic makeup basically means the Republican candidate wins, whoever it is, whenever it’s time for general election voters to cast ballots for Congress.
This is why a recent newspaper report that Lamborn reimbursed himself from his campaign account is especially important. As gerrymandering and self-sorting means safer seats for members of Congress, and entrenched politicians take money from special interests to just go through the motions of a campaign while investing the money back into their personal accounts, they’re effectively using their donors to subsidize their lifestyle. It’s living off politics, plain and simple.
One way to do that is through personal loans.
On Dec. 31, Pam Zubeck of The Colorado Springs Independent, an alt-weekly newspaper, reported how Lamborn had paid himself $2,772 in interest from a personal loan to his campaign account. The practice is perfectly legal and isn’t even uncommon in Congress for members in both parties— if the politician initially reports that the loan is intended to accrue interest.
“Lamborn originally told regulators [the loan] was interest-free, a violation of campaign finance regulations,” Zubeck wrote. A Lamborn spokesman told the paper the congressman always intended for the loan to accrue interest and stating otherwise in campaign filings was a mistake that will be corrected. Whether Lamborn will face problems from the regulatory agency that oversees federal campaign spending remains to be seen. An attorney at the Federal Election Commission says the agency can’t comment “on matters that might come before the Commission.” The last time the agency addressed general matters concerning interest payments for members of Congress was in advisory opinions in 1987 and 1991.
The requirement that members of Congress publicly disclose accurate filings about loans to their campaigns “helps give voters and prospective donors a complete picture, before the election, of a candidate’s finances,” says Paul S. Ryan, senior counsel at the Campaign Legal Center, a nonpartisan national nonprofit that focuses on money in politics. “Voters and donors have a legal right to know where a candidate’s campaign funds are coming from and where they’re going. A candidate’s failure to disclose, before an election, interest to be paid to the candidate himself with campaign funds deprives voters and donors of important information on which they might judge the candidate.”
The Associated Press followed up on Zubeck’s story with a four-paragraph item, but offered no context for why anyone should care.
So, what’s the big deal? We aren’t talking about tax money, but rather private donations raised from various individuals. Why should Lamborn’s constituents, or anyone, give a hoot what he does with money from his campaign?
“Bribery of a public official is a crime,” says Luis Toro, the director of Colorado Ethics Watch, a nonprofit that watchdogs government accountability through legal action. “If a constituent or business owner directly gave Rep. Lamborn money for his votes in Congress, that would be a crime, and we all understand that. Through a campaign finance loophole you can do effectively the same thing. … By giving your campaign an interest-free loan, it becomes a money-making proposition from a member [of Congress]. It gives the member a direct financial interest for raising money from donors.”
What Toro is saying is that politicians have found a way to use the money given to them by their donors to personally enrich themselves. That $2,772 Lamborn earned from his campaign through interest didn’t just come out of the ether. The money came from those who donated to his campaign.
The problem is compounded by the way candidates these days are raising their campaign cash.
Members of Congress, especially safe ones like Lamborn, aren’t receiving campaign checks merely from members of their community who want them to go to Washington and fight for their interests. Small-dollar checks from the shoemaker on Main Street or the local barber aren’t fueling the war chests of these congressional campaigns. Instead, a large portion of candidate funding comes from big-moneyed special interests and political action committees.
In Lamborn’s case, that kind of money makes up the bulk of it.
As Zubeck reported in The Indy, “Lamborn raised $590,021 for this 2014 campaign, 55 percent of which came from political action committees.” That number is actually even higher if you subtract Lamborn’s $100,000 personal loan from the equation.
Who are those donors?
The PACs represent a wide range of industries: banking groups, medical associations, petroleum, coal, communications, fast food, airliners, booze, sugar growers, and more. According to the Center for Responsive Politics, Lamborn’s top industry givers come from the oil and gas world, defense contractors and the pro-Israel lobby. The actual people who gave him the most money are associated with a duty free retailer, a company owned by Denver billionaire Phil Anschutz, a California real estate company, Honeywell International, and Koch Industries.
When it comes to what Lamborn did with some of that campaign cash, The Indy reports that he paid his wife nearly $14,000 for campaign-related work during the latest cycle and around $33,000 in 2012. A Lamborn spokesman said the congressman’s wife is “an experienced and knowledgeable member” of the campaign team and was compensated, as others were, for her work.
In 2013, CBS aired an illuminating “60 Minutes” segment that explored the lucrative ways in which members of Congress and their families personally profit from their campaigns for public office. Former GOP Congressman Ron Paul of Texas, for instance, paid six family members for campaign work. Democratic Congresswoman Maxine Waters also tossed big payouts into the family tree for work on her campaigns. CBS’s Steve Kroft found that former Republican Congressman Rodney Alexander paid his two daughters $130,000 for work during a campaign in which he had no Democratic opposition and won against a Libertarian candidate with 78 percent of the vote.
The segment also examined the issue of candidates cashing in on personal loan interest, showing how Democratic Congresswoman Grace Napolitano charged her own campaign at a rate of 18 percent.
Peter Schweizer, a fellow at the Hoover Institution who has researched the phenomenon of living off politics, put it into perspective. “I think campaign fundraising is increasingly not just about winning elections,” he told “60 Minutes.” “It’s a lifestyle subsidy.”
Living off politics as a member of Congress seems like nice work if you can get it — but good luck with that in Colorado Springs. One family business might have already cornered that market.
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