Bachmann’s leadership PAC could be key to ethics investigation

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WASHINGTON — The recent claims of ethical lapses within Rep. Michele Bachmann’s political organizations have investigators digging into Bachmann’s version of an oft-used but frequently overlooked political mechanism: her leadership PAC.

Despite the name, such political action committees are used by most every member of Congress as a fundraising tool secondary to their chief campaign committees. If a donor gives the maximum legal contribution to a normal campaign committee (such as, “Bachmann for Congress”) but still wants to help out the candidate financially, they can give to the leadership PAC (in this case, “Michele PAC”), which lawmakers use to either underwrite certain political activities or financially support their colleagues’ campaigns.

One thing they can’t do, however, is directly subsidize their own campaign committee, which is what a former Bachmann presidential campaign staffer is alleging.

Peter Waldron, who led some outreach efforts for Bachmann in Iowa, filed a complaint with the Federal Elections Commission in January alleging the campaign used Michele PAC funds to both pay the campaign’s Iowa chairman and give under-the-table paychecks to a consultant named Guy Short, a long-time Bachmann fundraiser and the founder and director of Michele PAC. Lawyers for the PAC and Short say the allegations are baseless and the organization played by the rules.

Heavy overhead spending for Michele PAC

Michele PAC is not a fundraising juggernaut like Bachmann’s regular campaign committee, but it still raised about $1.2 million in 2011 and 2012. That’s a bit more than Nancy Pelosi’s “PAC to the Future,” but much less than PACs from Republican leaders like Eric Cantor ($5.5 million) and John Boehner ($3.7 million).

What sticks out when looking at Michele PAC is its spending: while leadership PACs are ostensibly for supporting other candidates, only 13.5 percent of Michele PAC’s $1.4 million in spending last cycle went toward that, a much lower figure than other PACs from House leadership and within the Minnesota delegation. Most of her donations were in the form of $2,500 contributions to conservative House and Senate candidates, though, like many members, she donated heavily to Minnesota’s 8^th District race between Chip Cravaack and Rick Nolan.

Leadership PAC spending: Percent spent on contributions to other campaigns

Meanwhile, Michele PAC spent about 72 percent on administrative and fundraising costs, according to the Center for Responsive Politics.

That’s not unheard-of, and is sometimes an indicator of a candidate looking to seek higher office, CRP Executive Director Sheila Krumholz said. Republican vice presidential nominee Paul Ryan, for example, also devoted more than 70 percent of his spending to administrative costs and what CRP calls “campaign activities.”

Allegations now under investigation

Michele PAC’s second-largest vendor last cycle was a Colorado consulting firm called C&M Strategies. The company was founded by Short, who raised more than $30 million for Bachmann as her fundraiser. In addition to his role of founder and director of Michele PAC, Short was also national director for Bachmann’s presidential campaign.

Michele PAC paid C&M Stratgies $165,500 in 2011 and 2012, mostly for “fundraising consulting,” according to Federal Election Commission filings. Bachmann’s presidential campaign paid it $104,500. Within that spending, Waldron drew the basis for his complaint to the FEC, which is now reportedly the starting point for an Office of Congressional Ethics (OCE) investigation.

Waldron claims the Bachmann campaign used PAC payments through C&M Strategies to both pay a $7,500-a-month salary to the campaign’s Iowa chairman and pay Short $40,000 in the late stages of the campaign when cash was so tight that lower-level staffers went without a paycheck.

“The role of Michele PAC cannot be understated,” he said. “The role of Guy Short cannot be understated. And the business partnership between Michele Bachmann and Guy Short cannot be understated.”

Of course, if the payments were made to support PAC activities only, as Bachmann officials say, that’s permissible. Individuals are allowed to work for both leadership PACs and campaign committees, as Short was, and pull salaries from both, as long as they’re doing separate work, and Chris DeLacy, a lawyer representing Short and Michele PAC, said the payments were for legitimate purposes and “documented appropriately and properly invoiced.”

“These unfounded allegations being made against Guy Short are coming from a disgruntled former political consultant and are without merit,” he said in a statement. “Mr. Short did not participate in any unauthorized, improper or illegal activities related to Congresswoman Bachmann, her leadership PAC, or her presidential campaign.”

But if the payments are found to be improper, Public Citizen lobbyist and campaign finance expert Craig Holman said the Bachmann campaign could have broken the law: If the campaign didn’t have enough money on hand to pay staffers’ salaries, and, as Waldron alleges, had to dip into Michele PAC’s funds to close the gap for Short, that could be a violation of federal contribution laws.

But such a proposition is getting way ahead of the process: The OCE investigation is ongoing, and reportedly close to making a recommendation to the House Ethics Committee.

PACs more prevalent than ever

Leadership PACs have been around since the 1980s but only recently became fashionable in Washington. Once fundraising vehicles for members of leadership, now nearly every member of Congress one — CRP calculates that since 1998, their numbers have grown 280 percent.

On their face, leadership PACs are ways for members of Congress to solicit contributions from supporters, then distribute them to like-minded candidates, which plays two politically helpful roles for lawmakers.

Minnesota delegation Leadership PAC fundraising and spending

“Providing contributions to colleagues is useful because you help develop the farm team,” CRP’s Krumholz said.  “And that’s useful to the members because they help more senior members inspire and stockpile support.”

Laws and regulations governing leadership PACs are reasonably relaxed. There is a $5,000 contribution limit, but before 2008 PACs didn’t have to report their donors. Though banned from directly financing campaign committees, PAC money can be spent on everything from contributions to other candidates to “indirect campaign activity” like traveling and giving speeches, which has become more common these days, Public Citizen’s Holman, a critic of the PACs, said.

“It’s an unfortunate institution that we should have banned in the first place,” he said. “It’s evolved into something that should not exist.”

Devin Henry can be reached at dhenry@minnpost.com. Follow him on Twitter: @dhenry

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