Two and a half years after D.C.-based Citizens for Responsibility and Ethics in Washington (CREW) released its scathing report on members of Congress who channeled campaign funds to family members, one San Diego-area Congress member hasn't changed his ways.
In the summer of 2007, the CREW report identified Rep. Brian Bilbray, a North County Republican, as one of 64 U.S. House members who engaged in nepotistic spending. During Bilbray's 2006 special election bid, he paid his daughter, Briana Bilbray, a salary of approximately $1,800—a relatively minor payment compared with another local Congress member, Rep. Bob Filner, who paid his wife $505,000 over the course of a decade in exchange for fundraising services.
While Filner, a Democrat, stopped paying his wife shortly after the CREW report was issued, Bilbray actually started paying his. According to campaign finance records, Bilbray has paid Karen Bilbray, who's also his treasurer, more than $17,000 for accounting, bookkeeping and payroll services since 2007.
“I think he's not going to be violating any of the rules, but should this be allowed? No, it shouldn't,” said Bob Stern, president of the Center for Governmental Studies in Los Angeles.
Stern, whose nonpartisan organization promotes ethics reform, argues his view is representative of the political climate in the state. At the end of October, Gov. Arnold Schwarzenegger signed a bill prohibiting state candidates from paying their spouses with campaign funds. The bill, SB 739, which does not affect federal races, passed unanimously in the state Senate and Assembly. (Republican state Sen. Tony Strickland sponsored the bill. Previously, Strickland had been attacked for paying $100,000 to the consulting firm run by his wife, current Assemblymember Audra Strickland. The senator subsequently pulled a 180, admitting to the press he had “exercised bad judgment.”)
Bilbray's payments to his wife were made out to Bilbray Tax Services, with an Imperial Beach address, far outside Bilbray's congressional district. The tax-preparation service shares the cream-colored building with the red tile roof and teal doors at 970 Seacoast Drive. with a condo realty firm and a bowling-ball-cart manufacturer. In prior campaign finance reports, Bilbray has listed the office as his campaign address, and his website, Bilbrayforcongress.com, is registered to the office. However, his reports do not indicate his campaign pays rent for the space.
The tax-services firm itself doesn't have a website and is not registered with the California Board of Accountancy. That's perfectly kosher as long as the firm does not represent itself as run by certified public accountants.
Conventional wisdom would indicate that a campaign accountant would make less in a non-election year than in an election year because of the increased spending and reporting requirements as the election nears. For example, Rep. Susan Davis—whose campaign is significantly smaller than Bilbray's—paid $20,000 for accounting services in 2008 and $7,800 so far this year.
Yet, in 2008, Bilbray paid his wife only $4,000. In 2009—again, a non-election year—Bilbray's payments to his wife's tax firm are up: $9,000 as of September.
Under federal law, payments to spouses are permitted as long as the member of Congress keeps two types of records on hand: first, information proving the services were necessary, and, second, documentation establishing that the Congressman paid market value.
Despite several calls and e-mails from CityBeat, Bilbray and the firm that handles his media requests—Revolvis—did not provide this documentation or answer all CityBeat's questions.
Rather, Revolvis managing partner Duane Dichiara issued a statement via e-mail: “Karen Bilbray owns and operates BTS and has many clients…. [T]he address was used to receive campaign checks to process the necessary compliance records. It was not a ‘headquarters.'”
Dichiara added that accounting is necessary to file reports and the company's price of service “falls within normal range for this scope of work.”
Filner, who represents the southernmost part of San Diego County and all of Imperial County, used a similar argument when he was criticized by the press and CREW for paying Campaign Resources, a company run by his wife, Jane Filner. In 2006, the Federal Elections Commission investigated Filner and found “no reason to believe that Bob Filner and his campaign converted campaign funds to personal use by paying his wife as a campaign consultant.”
Since July 2007, Filner's reports do not contain payments to Campaign Resources. His wife filed for separation in June 2009.
One difference between the Filner and Bilbray campaigns is that Filner was his wife's sole client. Bilbray's campaign is only part of his wife's clientele.
Each year, members of Congress are required to disclose their personal finances. According to Bilbray's reports, his wife collected a salary of $11,000 from Bilbray Tax Services in 2007, 63 percent, or $7,000, of which was generated by Bilbray's campaign. In 2008, Bilbray's wife received a $33,000 salary from Bilbray Tax Services, a 300-percent increase—$3,000 of which came from Bilbray's campaign.
While payments from Bilbray and Filner to their spouses may not be illegal, watchdog groups say they may be unethical.
“There are many instances where elected officials are paying for real services rendered, but there's always an appearance or reality of corruption,” said Kathay Feng, executive director for the ethics-reform organization Common Cause California. “It's very hard to make a distinction, and it does look bad.... When an elected official puts a wife, husband, son, daughter, father-in-law on the payroll, we have to be extra vigilant about the possibility that it's just a way of laundering donor money to put it into the elected official's pocket.”
Two of Bilbray's potential opponents on the Democratic side paid themselves out of campaign money.
Candidate Dave Roberts reimbursed himself $22,310 for a poll conducted prior to deciding to enter the race; the amount mirrors what he paid for a second poll from New York City-based Global Strategy Group. The other candidate, Tracy Emblem, lists a $300-per-month rent payment to herself on a room in her law office; she says no money changed hands, but she reported it nonetheless.
Emblem said her daughter is on her campaign payroll.
“I'm underpaying her, too, and she works all the time, and she's the best qualified person for the job,” Emblem said.
For this reason, Emblem said she doesn't see anything wrong with that or Bilbray's payments to his wife.
“I think that's the fair market value for what you're going to pay a treasurer,” Emblem said. “So if she's doing the work, I don't think that it's an ethical violation. I don't think it is. If he was paying her $2,000 or $3,000 a month, I think you would need to check around.”
CREW Executive Director Melanie Sloan disagrees, pointing out that federal lawmakers are not allowed to employ family members in their official Congressional offices.
“The issue is members of Congress seeming to use their elected positions to enrich their families,” Sloan said. “We have seen a lot of it, and there has been a move by some members of Congress to stop members from at least paying their spouses with campaign funds. If we have those nepotism concerns in official offices, it seems those same concerns should translate to the campaigns.”
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