Campaign Expenditure Transparency Act

Mr. Speaker, I rise today in support of H.R. 2630, the Campaign Expenditure Transparency Act. This is legislation that I introduced to my colleague, Representative Castle, in early June in order to ensure that Federal officer holders and candidates are not personally enriched from expenditure of campaign funds. I want to thank Mr. Castle, the majority leader, the chairman of this Committee on House Administration for working to bring this bill to the floor today.

Numerous Members of Congress employ their spouses and family members for campaign activity, and the vast majority of them do this work appropriately and ethically. Unfortunately, others have not, and this practice has shown the potential to foster corruption and invite abuse. I joined my colleague, Mr. Castle, in introducing this legislation because I believe it will help preserve the integrity of the institution and end the perception that office holders and candidates can benefit themselves financially from their campaigns or service.

The Campaign Expenditure Transparency Act would end the practice where Federal office holders and candidates employ their spouses in their

campaigns and financially benefit from contributions to the campaign. The bill also requires a separate disclosure to the FEC of all of the payments, including direct and indirect compensation which are made to immediate family members.

Specifically, H.R. 2630, as amended, would prohibit any Federal office holder or candidate from directly or indirectly compensating his or her spouse from any political committee he or she controls for services to the committee. This language was used to ensure that someone could not get around this prohibition by acting as a subcontractor or vendor to another individual or company receiving payments from the political committee.

Additionally, this would ensure that the legislation does not prevent a spouse from being employed by a company that provides a service to a political committee, unless the spouse's compensation is increased as a result of that business. For example, a spouse could be employed by a phone company that the campaign contracts with so long as the spouse's compensation is not increased based on that contract.

Similarly, a spouse that is a shareholder of a publicly traded company could receive dividends from that company notwithstanding the fact that a committee purchased services from that company.

The legislation also does not prohibit committees from paying for legitimate travel and campaign expenses that are incurred by a spouse, as long as the FEC has determined the expenses to be appropriate campaign expenditures. The bill recognizes that spouses are often properly involved in campaign activity and that committee funds can be used to reimburse appropriate expenses.

The Campaign Expenditure Transparency Act, as amended, stipulates that the penalty for violation of the provisions of the bill, if the candidate knew of the violation, would be imposed on the candidate and not on the committee. The amended version of the bill also clarifies the penalty is not a reimbursable expense by the committee.

The legislation has the strong support of a number of reform-oriented organizations, including Democracy 21, the Campaign Legal Center, League of Women Voters, Common Cause, Public Citizen, and U.S. PIRG.

I would also like to stress that many of our colleagues again have employed their spouses or immediate family members in their campaigns and have done so lawfully and ethically. Our family members are frequently our most trusted advisers and are willing to put in long hours for little compensation. However, we are aware of cases in which this practice has been abused, and it is for this reason that this legislation is regrettably necessary. Given the low public confidence in all public institutions at this point, this legislation is one important way to begin restoring the public's faith that elected officials are working in the public's interest and not in their own. I encourage my colleagues to support this legislation.

I want to take just a minute to address some of the comments that my friend from Texas has made.

First, of course, there is nothing in this legislation that would break up a good team. There is nothing in this legislation that prohibits spouses from working. And where, like most families these days, both members of the household need to work to support that family, there is nothing in this bill that would stop it.

It does provide that a spouse that has CPA skills or other skills employ those skills on someone else's behalf for compensation. They are more than welcome to provide those skills, as many of our spouses do, I think almost all of our spouses do, on a volunteer basis to help our campaigns. But the appearance of propriety, and in some cases the actual impropriety, of having spouses working on commissions where a percentage of everything the campaign raises effectively goes into the household of the office holder is one of the driving forces behind this legislation.

I should mention that in my colleague's own home State of Texas, the State legislature and the Governor have passed and signed legislation prohibiting this practice in Texas. So if you were running for the State legislature in Texas or you were an office holder in the State legislature in Texas, you would not be able to employ your spouse and pay your spouse out of campaign funds. That is a misdemeanor in Texas. So there are States that are really leading the way in terms of making sure that we avoid any appearance of impropriety. And I think that Congress, given the problems have been manifest in this institution as well, needs to follow the example of some of those forward-thinking States.

I thank the gentleman for yielding the time.

At this point, I am happy to yield to my colleague, Mr. Castle, the cosponsor of this legislation, for 3 minutes.

Mr. Speaker, I thank the gentleman for his support.

I reserve the balance of my time.

I thank the gentleman for his comments, but it is hard to avoid the irony of my colleague's objection that the bill is going too fast. For weeks now, we have been hearing the objection that the ethics reform measures in the House have been moving too slow; that we passed the lobbying reform bill in the House, that it hasn't gone through the Senate, we haven't gone through the conference committee. We are not progressing with the process of trying to clean up the institution.

It's going too slow. Well, today we're hearing the problem with this bill is it's going too fast. It seems like we can't get the speed exactly quite right. It's either too slow or too fast.

The reason that we're here today and moving quickly on this bill is that the bill was the subject of an amendment by my colleague in a separate bill introduced by a Republican Member, an amendment introduced by myself, a Democratic member on the Rules Committee. The bill itself was introduced by Members on both sides of the aisle. The subject matter is very straightforward. Should we pay spouses out of campaign funds, or should we not pay spouses out of campaign funds? Should we disclose whether family members are getting paid, or should we not disclose whether family members are getting paid out of campaign funds?

There is, I think, a fairly broad, almost unanimous agreement on the merits of the bill. Even my friend that just stood up to object to the bill says he agrees with the substance and the intent of the legislation. So it's a consensus work product, a bipartisan work product, and given the criticism that we haven't moved fast enough, we're trying to move fast. This is an effort to move fast, but also to move thoughtfully, and that's why we're here today.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I just want to address very quickly the comments by my friend, and then reserve the balance of our time. I don't have any remaining speakers.

I think that, if anything, there's a more compelling case here in Congress than there is in my friend's home State of Texas to enact a prohibition like the one contemplated in this bill. Texas may be in session only 180 days of the year. My guess is that the Texas members of the legislature are paid probably substantially less than we're paid in Congress, and the financial burden on those members of the legislature is probably, therefore, greater than the financial burden that we face. Whether they have to have a full-time campaign office or not probably depends on what kind of a district they're running in. If it's a very competitive district, then they probably pretty much have to be in campaign mode all the time. So if Texas can do it, where their members are paid less, where the financial pressures are probably greater, we should be able to do it here.

It's not often, I have to say, that I point to Texas as the example to follow, but when Texas gets it right, I'm more than happy to acknowledge it.

There is also, I think, a certain irony with my friend's argument that the Democratic majority promised an open government, and then here we're offering this bill, and we're moving quickly on this bill, and his stating opposition to a bill that is designed to bring transparency to the process.

I don't know how you can argue in favor of open government and be opposed to a bill that offers greater transparency. Part of the reason the present system is inadequate is people do pay family members, but there's no way for the public to know that they're family members because they may not have the same last name, or they may pay a business that is controlled by the family member. And so there's no transparency, and the public doesn't know that that money is really going to the family; that when the candidate is out there, or the officeholder, asking for contributions for their campaign, that a certain percentage, whether it's explicitly on a commission, or it's just by virtue of a paycheck, that a certain part of that money is going into either the candidate's own pocket or the officeholder's own pocket because it's going to their spouse, or it's going to their son- in-law who doesn't bear the same name, and people aren't aware that it's going to the candidate's son-in-law and daughter.

So this does bring about greater transparency. I think it's needed.

There are Members that have been very open also. And this is why we've gone to a prohibition vis-a-vis spouses. There are Members who have been very open about the fact that they pay their spouse on a commission for every dollar they bring into the campaign, and they make the same argument my friend makes, which is it's very out in the open. Everybody knows about it. People that contribute to my campaign know that a certain percentage of that is going to go to my spouse, and they make the same argument; it must be fine since people are aware of it.

But part of the problem is that people making the contributions are aware of it, and so they know that by giving an officeholder a contribution, they're also giving that officeholder a personal contribution through their spouse. And maybe that interest that wants to curry favor with that Member thinks, what better way than giving a contribution where I know actually a part of that's going to go directly into the pocket of the officeholder.

So that's part of the reason why we're here. And I urge my colleagues to support the bill.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I'll close very briefly.

I appreciate the points that my colleague is making. There is a need for the transparency, even in the case of a spouse, particularly a spouse that may not carry the same last name as the officeholder.

But more particularly, if a spouse even has the same name, or a son with the same name sets up a company, the company doesn't bear the officeholder's name, there's no way for the public to know that that money is actually going to the family.

But more than that, you know, I think sometimes we get in the habit of thinking about how does this affect us; how does this affect our family; does this seem right to us, rather than how does the rest of the country view this. What does the rest of the country think about this? What does someone out in California or Texas or any of our 50 States think about this?

And I don't think they view it the same way we're discussing here today. I think they look at this and they say, gosh, when I send a contribution to this Presidential candidate or this Senate candidate or this congressional candidate, I expect that to go to the campaign. I don't expect that to go to their family. That's not right. And I don't think they would be moved by saying, well, you know, those officeholders, they often have a difficult financial situation themselves, and certainly many do. But I think that the public has the right to expect that when they support a campaign, when they support a candidate, that the funds go to the campaign, they don't go the candidate or their family. Or if they're going to go to the family, outside of the spouse, that there's very broad disclosure so that the public can make an informed decision about how they want to use their resources.

That's the purpose of the bill. I urge my colleagues to support it.

Again, I want to thank my colleagues Mr. Castle and Mr. Platts on the other side of the aisle. I want to thank our chairman and our majority leader and our Rules Committee Chair for their support, as well as the Speaker.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I have a parliamentary inquiry. My understanding of the rules is that the time may be controlled by someone who is in opposition.

I do not know if the Republican representative is in actual opposition to this bill.

Mr. Speaker, I am opposed to the bill and, when asked under the rules, would claim the time in opposition.

Mr. Speaker, I yield myself such time as I may consume.

The majority says they want to end the culture of corruption. There has been both the appearance of impropriety here in Congress and, in some cases, actual impropriety. These improprieties, despite any demagoguery, know no party bounds.

But the big elephant in the room that no one wants to talk about, in recent years, has involved other issues, issues like spouses going to work for major companies who have large government contracts and benefit from having an employee in the lawmaker's home. Does the Democratic majority seek to end this problem with this bill? No, they don't. That might step on important toes.

Another major problem that is not transparent is spouses themselves who lobby. Does the Democratic majority seek to end or regulate that by this bill? The answer is, no, they do not. That might step on too many important toes here in Washington.

So who will be affected by this bill in which the Democratic majority avoided any hearings to gather evidence and thereby prevented any opportunity for people like me to come forward with evidence and move toward this lack of transparency in this back-room process to shove it down our throats here on the floor?

It is said that they want to stop officeholders from enriching themselves or their families. I am one of those who would be affected, and it may be helpful to know exactly what kind of an effect it will have.

My story is this: While practicing law in Tyler, Texas, it became apparent that we had a major problem in one of our highest-level trial courts. I tried for months to find someone with the

experience and qualifications who would step up and run against this incumbent Republican.

I could not find anybody, since people said, well, he was the first Republican elected in our county, so let's just let him stay. No one is owed a public office.

I was reluctant to take a pay cut and go to work at the courthouse, but in November of 1991, having found no one at that point who was willing to step up, my wife and I decided that that was our lot in life, for me to bring in less money, but help by making our community a better place in which to live. There was a tremendous backlog of felony cases in which the defendants were out on bond and had not gone to trial.

I got elected. Though the backlog was staggering, and new cases continued to pour in in record numbers, within 10 years I had helped, and with the good help of a good district attorney, we moved and reduced the number of pending cases, trying cases, record numbers, moving cases. We reduced the number of backlog cases by 80 percent or more.

Some years later one of my daughters said, while I was still on the bench, ``Daddy, we have to watch our spending, and you could make a lot more money. Why don't you?'' I said, ``Sweetheart, if I have not taught you that there are some things more important than money, then I have failed.'' She said, ``I know, but it would be nice to have some big money come in from time to time anyway.''

My wife and I felt our best contribution that we could make to our community, our State and our country was for me to be a judge, and that's what we did. After years on the bench, it became clear that we desperately needed some legislative changes, and I believed it a constitutional violation to legislate from the bench.

When a term to which I was appointed to finish as chief justice of an appellate court expired, I had to decide whether or not to stay on the bench in a justice role or wait and potentially run for Congress. Again, my wife, my partner, and I made the joint decision to step out in faith, not take a sure job, and potentially run for Congress.

After leaving the bench, I successfully completed the ruling training and testing to become a recognized international arbitrator as well as a mediator, and was told I had the potential of making in a month what a Congressman makes in a year. But this country needed help, and it seemed to my wife and me, after much consideration, consultation and prayer, that this was a place, once again, where I could help.

My wife Kathy has an MBA in accounting, had done excellent accounting work and had done so before she was invited to substitute at a high school for students with problems. She loved, as she said: ``Seeing the light come on in these young people,'' and she taught there for years before I began to run for Congress.

She gave up her teaching job and worked for months without pay toward our goal. She is an incredible organizer and the most trusted friend I could have. We had the same goals of making this a better country. She knows our district; my supporters know her and love her and trust her. She makes constant appearances for me when I can't be there because of conflicts here in the District. She is invaluable to my reelection and works tirelessly, including in the evenings, when the day's appearances do not allow her to do her job then.

As far as my family situation, we have one daughter who graduated in May from college and two more to go.

The laws are such now that you really have to have at least one campaign employee even in nonelection years, and that hardworking confidante has been my wife. We began to pay her what she could make teaching, and it was completely transparent. Everything, as both sides know, has to be filed, and the public knows we are a campaign team with full transparency because of existing laws requiring transparency by campaigns. She gets paid much less than she could in business and has been offered more money in another job, and that is also why this has been a mutual sacrifice.

One other thing: when we committed to make this run for Congress in 2003, which we knew would be over a 1\1/2\-year process, we gave all the energy, all the effort, all the work. We truly pledged, as was put in the Declaration of Independence, our lives, our fortunes, and our sacred honor.

Because I was running and could not provide the money production I had been before being a judge, my wife and I struggled with the decision, and ultimately decided to cash out my judicial retirement as well as her teacher retirement to live on while we pursued this dream of making America better.

As most of America does not know but Members of Congress here do know, there is no great big fat cat retirement for Members of Congress, despite the e-mails people may read at this time unless someone has been here for many years. And, yes, Mr. Speaker, America should know that we are all enrolled in Social Security here in Congress. It may have not always been true, but it is now.

An article recently indicated that, according to financial disclosure reports, I am the poorest Texan in Congress. As one other Texas Member of Congress said just a couple of weeks ago when he heard my wife and I both cashed out our hard-earned retirements to make a run for Congress, he said, Wow, you really did come here for all the right reasons. And I would certainly like to think so.

But if this bill becomes law, there will be no rich Members of Congress reined in, no blatant abuses will be ended. None of the people who have gotten enormously wealthy while in public office will feel any pinch at all. If this bill becomes law, I will now have to fire my comparatively low paid but imminently trusted and qualified, actually overqualified, and currently only campaign employee despite the complete transparency and financial disclosures that are currently required. This bill doesn't drain the swamp, as has been represented, but protects the big swamp while adding another hurdle for anyone who does not have wealth to get here.

In this job, it is important to have a spouse who can make campaign appearances when necessary or helpful. A couple in which both need to work to put kids through college will have more difficulty in getting elected, because you can't afford to have one or both not work still make appearances and put kids through school.

My wife, as said earlier, works long and late, often at home at night to fulfill the requirements of a job which keeps getting more and more difficult because of the burdens placed by this body in an effort to look like we are reining in corruption. This bill does show, though it does not affect anything that is already transparent, it does show when it comes to doing something meaningful to end this corruption, the majority is going to look the other way and not talk about the elephant in the room.

This bill, as I say, will not affect the major problems in Congress; but if it were to become law, it will end a beautiful partnership.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, at this time I would like to yield to the gentleman from the 22nd District of California, an outstanding Member of Congress, Kevin McCarthy, for 4 minutes.

Mr. Speaker, I yield myself such time as I may consume. And I do appreciate the comments that have been made from my friend from California. And I would agree. I was not aware that anyone had ever been paid commissions or a spouse or a Member of Congress had ever been paid commissions. That's entirely inappropriate. And I would agree on any measure that would go forward on that basis, making such a process inappropriate.

I do find it troublesome that, at the same time, we want to demonize paying somebody less than what would be the going market value for services for the most overqualified person and the most trusted person to do that job.

I always appreciate allusions to my home State of Texas, but Texas does have a lot of things that I think would be good for us to adopt here. They're only in session 180 days every other year. That may be something else we want to look at doing in following Texas.

But also, in Texas, the campaign laws do not necessitate, as I believe the Washington, the Federal laws do, a full-time, every-year campaign office.

Mr. McCarthy, though, I would point out, never said anything about speed. His objection, and one of my objections, is about process. We were promised the most open government in history when the Democratic majority took over. That was something to which I was looking forward to, even though we were not going to be in the majority, and so far this is yet one other straw on the camel's back that indicates that's just not going to happen.

But let's face it. There are problems with improprieties in Congress, but there are so many requirements with campaigns regarding transparency that if someone is actually working there and making an appropriate wage, that appears to me to be about the most transparent thing a candidate and a spouse can do. It's nothing behind the scenes, there's no behind-the-scenes lobbying. There's no in-home lobbying. There's nothing of that nature. You have a partnership, and I think that can be a good thing, although I agree if there are abuses, as the gentleman pointed out, those should be addressed.

So, in any event, I know that my friend Mr. Schiff and my friend Mr. Castle are both honorable men, and we disagree on what should be done on this bill. But I came forward today because I just could not simply get on the rah-rah bandwagon that I felt like many people would be getting just to make it look like they wanted to end improprieties, when really what this is dealing with is something to say there's something being done about ethics. The bottom line is that the elephant's still sitting in this Chamber, big as ever, getting bigger, and so far that elephant has not been addressed.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I'm not sure that I would say that the financial pressures we're holding off in the State legislature in Texas is greater. They have a great deal more flexibility in many ways.

But the gentleman, as I understood to say, indicated there's no way to know when a campaign is paying family. And we just had to file financial disclosures. I had to list the sources of income for my wife. And as I understand it, there's also, you would, even if your children or other immediate family members have different names, I can see if there's something that's not required for disclosure in that financial disclosure form that we could have legislation and make that so that it heightens the transparency.

What I disagree with is the overall ban on allowing two people who sacrifice their lives, their fortunes, their sacred honor to be able to work together full time to continue to run for office. And there apparently are areas that need to be addressed, that need to be considered. But I come back to the fact that apparently the reason this seems to be rushed into the room is because people more powerful would say, we'll do the little things that may make people feel like we're doing something, but we're not going to address the big issues that really are hurting this body.

But anyway, there are some things that apparently do need addressing. I'm all for transparency. I think sunlight is truly the best disinfectant. But since this bill goes much further than that, then I do urge a ``no'' vote on this bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I thank my friend and colleague from California for his work on this bill. I think that Congressman Schiff has done a wonderful job in putting together and listening to what needs to be done on H.R. 2630, the Campaign Expenditure Transparency Act, to end the practice of making campaign payments to a candidate's spouse; and I am in agreement to the legislation.

While I support going one step further to prohibit the same payments to immediate family members and introduced legislation to do so, I am pleased to lend my support to H.R. 2630, which I believe takes us in the right direction.

Some Members of Congress employ their spouses and family members for campaign activity without abusing the system; however, the practice of paying spouses and family members creates the potential for campaign finance and ethics abuses.

I listened carefully to the gentleman from Texas, who I think is very persuasive, anyhow, and understand his point of view, and as a matter of fact raises a couple of valid points. One is that the bill did not go through normal committee systems, which I think is a valid point. Another is the issue of lobbying by spouses and family members, which I think is perhaps even more abusive than what we are talking about here today and is something to be taken into consideration. But I do feel that if payment to a spouse becomes part of the Member's family income, the Member for all practical purposes is receiving a direct personal financial benefit of campaign funds, and I do believe that should be stopped.

Obviously, if the spouse wishes to work in some other capacity, that certainly would be allowed, but not directly involved with the campaign.

I believe there is a transparency issue here, and I believe that 2630 does move us in the direction of increased transparency, which I think is important; and I urge my colleagues on both sides of the aisle to join me in supporting this legislation. This may not end all abuses in campaign circumstances and in many instances there would not be an abuse, but it does end the possibility of it and certainly the transparency end of it, which I think is very important, as well. And I appreciate the gentleman yielding time.

Mr. Speaker, I am pleased to join my colleague Representative Adam Schiff in supporting H.R. 2630, the Campaign Expenditure Transparency Act.

By ending the practice of making campaign payments to a candidate or Federal officeholder's spouse and by requiring the disclosure of any payments made to other family members, we can eliminate the perception that campaign payments are a means for converting campaign funds to the family's personal use. While I support going one step further to prohibit the same payments to immediate family members, and have introduced legislation to do so, I am pleased to lend my support to H.R. 2630, which takes us in the right direction.

Specifically, H.R. 2630 would prohibit the campaign from compensating the spouse of the candidate. The prohibition would create an exception for reimbursements on travel, and an exception for nominal reimbursements up to $500 in a calendar year. The bill also requires disclosure to the Federal Election Commission, FEC, of all reimbursements.

H.R. 2630 would also require disclosure to the FEC of payments to immediate family members of the candidate or Federal officeholder. The prohibition and disclosure requirements would also apply to businesses where the spouse or family member is an officer or director of the business. Penalty for violation of these provisions would be imposed on the candidate or officeholder.

Numerous Members of Congress employ their spouses and family members for campaign activity without abusing the system. However, the practice of paying spouses and family members creates the potential for campaign finance and ethics abuses. If a payment to a spouse becomes part of the Member's family income, the Member, for all practical purposes, is receiving a direct personal financial benefit of campaign funds.

I believe it is our responsibility to close the gaps in our laws and in our rules that have been exposed and to restore the confidence of the American people in their elected officials.

H.R. 2630 moves us in the direction of increased transparency and I urge my colleagues on both sides of the aisle to join me in supporting the legislation.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2630) to amend the Federal Election Campaign Act of 1971 to prohibit authorized committees and leadership PACs of a candidate or an individual holding Federal office from making payments to the candidate's or individual's spouse, to require such committees and PACs to report on disbursements made to the immediate family members of the candidate or individual, and for other purposes, as amended.

Mr. Speaker, I yield myself as much time as I may consume.

Mr. Speaker, I stand with the House leadership in full support of H.R. 2630, the Campaign Expenditure Transparency Act.

This legislation will help to reassure Americans that their public officials are working in their interest and not for personal gain. This bill will amend the Federal Election Campaign Act to protect candidates or Federal officeholders from either directly or indirectly compensating their spouses with funds from any authorized political committee under their control.

H.R. 2630 also creates an important new requirement to disclose any compensation paid from campaign coffers to the immediate family members of the candidate or officeholder. The bill ensures that the rigid penalties for violations are enforced personally against the candidates or officeholders. It would prohibit political committees from reimbursing candidates or officeholders for any penalties.

Some may say this legislation may prevent some from running for office because they will run the risk of accidently violating the law. This is not the case. These penalties may only take effect if the candidate or officeholder is aware of the violation.

H.R. 2630 is another way we can restore the confidence that the people's House is working for all Americans. I urge all Members to support this legislation.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield to the gentleman from California (Mr. Schiff) such time as he may consume.

Mr. Speaker, I ask unanimous consent that Mr. Schiff be allowed to control the balance of the time on our side.