I wonder if Demo's do this too. Probably. Bold mine:
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In Fundraising's Murky Corners Candidates See Little of Millions Collected by Linda Chavez's Family
By Matthew Mosk
The Washington Post
Monday 13 August 2007
Linda Chavez rose to prominence in the 1980s as a tart-tongued Reagan administration official and candidate for the Senate,...
In the years since she was forced to pull her nomination as Bush's labor secretary after admitting payments to an illegal immigrant, Chavez and her immediate family members have used phone banks and direct-mail solicitations to raise tens of millions of dollars, founding several political action committees with bankable names: the Republican Issues Committee, the Latino Alliance, Stop Union Political Abuse and the Pro-Life Campaign Committee. Their solicitations promise direct action in the "fight to save unborn lives," a vigorous struggle against "big labor bosses" and a crippling of "liberal politics in the country."
That's not where the bulk of the money wound up being spent, however. Of the $24.5 million raised by the PACs from January 2003 to December 2006, $242,000 - or 1 percent - was passed on to politicians, according to a Washington Post analysis of federal election reports. The PACs spent even less - $151,236 - on independent political activity, such as mailing pamphlets.
Instead, most of the donations were channeled back into new fundraising efforts, and some were used to provide a modest but steady source of income for Chavez and four family members, who served as treasurers and consultants to the committees. Much of the remaining funds went to pay for expenses such as furniture, auto repairs and insurance, and rent for the Sterling office the groups share. Even Chavez's health insurance was paid for a time from political donations.
"I guess you could call it the family business," Chavez said in an interview.
There is nothing illegal about running political committees the way she and her family have done, and Chavez said that none of the money has been spent for personal items and that she has done nothing wrong.
Still, Chavez Inc. offers a revealing window into a largely unregulated corner of the world of political money, where few constraints exist on spending, candidates often benefit hardly at all and groups face little accountability from donors who remain largely unaware of where their money goes.
More than 2,700 "multi-candidate committees" such as those run by Chavez and her family members are registered with the Federal Election Commission, and unlike the more conventional committees used by candidates to fuel their campaigns, the multi-candidate groups face few rules governing how they can spend money. Only about a dozen are audited each year. And they face little of the public scrutiny that confronts candidate-run committees because no opponent scours their spending reports for irregularities.
"Nobody is looking at these," said Melanie Sloan of the group Citizens for Responsibility and Ethics in Washington. "It would be nice to know if other people are doing what Ms. Chavez is doing."
Even less information is publicly available about spending by politically oriented nonprofit foundations - such as those established separately by Chavez and her family members. The four foundations collected $1.4 million from 2003 to 2006 and paid many Chavez family members a steady salary, according to tax records.
Chavez said the goal of her fundraising committees has been to advance her political agenda and nothing more. "I have never tried to enrich myself or my family and have consistently taken salaries from my organizations that were lower than the market, with very few benefits," she said.
But the spending by Chavez PACs appears to depart from standard practices by some other issue-oriented groups, according to lawyers and ethics experts. The National Rifle Association's political committee, for instance, spent nearly a third of the $11 million it raised in the 2006 cycle on political activities, including $1.2 million in direct donations to candidates.
In the 2004 and 2006 election cycles, Chavez's anti-union PAC raised $913,469 and spent less than a fifth on political activity. The Latino Alliance raised $1.2 million and spent 3 percent on political activity. The Pro-Life Campaign Committee raised $7.7 million and spent less than 1 percent on political activity, as did the Republican Issues Committee, which raised $14.6 million, the analysis found. Most of the money came from small donors.
The amounts the PACs spent on telemarketing could not be readily tallied. But an FEC investigation of the Pro-Life Campaign Committee turned up documents showing that the Arizona telemarketing firm Capitol Communications regularly retained as much as 95 percent of the money it collected, to cover its fundraising expenses. Chavez's husband, Christopher Gersten, said the firm handled fundraising for the Republican Issues PAC in the same manner.
Over the past five years, Chavez's family members have been directly paid $261,237 from the PACs, according to FEC reports. In 2001, the PACs paid Christopher Gersten $77,190, her son Pablo $25,344 and her son David $9,687.
Chavez and her immediate family members also earned income from executive positions they held in their nonprofit foundations, such as One Nation Indivisible and Stop Union Political Abuse. Her salary from her Center for Equal Opportunity foundation ranged from $125,000 to $136,250 between 1997 and 2003 and was $70,313 in 2004, the last year for which records are available.
The foundation paid her son David $83,200 in 2004 as its vice president for development. From 1998 to 2001, Christopher Gersten was paid $64,000 a year from another family foundation, the Institute for Religious Values.
Several of those who donated to the Pro-Life Campaign Committee, run by Pablo Gersten, said they were surprised to learn how little of the money was spent where they expected. David Barnes, 45, a typesetter from Williston, Tenn., gave the group $500 in February 2006, figuring "the money would go to back candidates who are pro-life."
"I'm appalled," Barnes said. "I try to be a responsible giver. I'm aware that with many charities you have to be careful. I knew better. I contributed based on an outward appearance and didn't do my homework."
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