California Democrat Rep. Ted Lieu’s used donor dollars in interesting ways, like that $50,000 contribution to his alma mater, Stanford University, while his son was a high school sophomore.
He’s also using donor dollars to make contributions to his wife’s school board campaign committee. Since 2018, Ted Lieu for Congress has contributed over $15,000 to Betty Lieu for School Board.
Mrs. Lieu was first elected as a trustee of the Torrance Unified School District in 2018, and Ted’s campaign first contributed to her on November 26, 2018, a $888 contribution.
On January 4, 2019, a $5,000 contribution and on January 15, 2019, a $2,000 contribution, both from Ted’s federal campaign account.
Then on July 3, 2019:
And then $2,000 on March 31, 2021.
Three of the contributions are listed as going to Betty Lieu for School Board 2018 and two are listed as going to Betty Lieu for School Board 2019, but the accounts are one and the same. Ted’s treasurer should know this since he’s also Betty’s treasurer.
In addition, Ted’s using his campaign email account to solicit funds for Betty’s school board campaign. These emails were sent in 2020.
Federal election law allows federal candidates to use their email list or other campaign resources to solicit funds for other candidates and transfer campaign funds to other candidates, but they are prohibited from converting campaign funds to personal use or using campaign funds to make a gift or donation to a family member under both federal election law and House ethics rules. From the section of the House Ethics website regarding charitable donations and transfer of campaign funds to another candidate (emphasis mine):
The Federal Election Campaign Act (FECA) generally allows Members to donate campaign funds to any entity of the kinds described in § 170(c) of the Internal Revenue Code – including a charitable or educational organization, or a governmental entity – provided that there is no conversion to personal use through the donation….
[I]f otherwise lawful, campaign funds may be transferred to another candidate, or invested for use in a future political campaign, provided, again, that there is no conversion of funds to personal use.
And regarding the use of campaign funds for gifts:
Use of campaign funds for a gift or donation is permissible only if the outlay serves a bona fide campaign or political purpose, and in this regard, the regulation specifies that a Member may not use campaign funds to make a gift or donation to a family member.
These contributions and solicitations clearly violate the spirit and letter of the FECA and House Ethics rules. But, there’s more.
In Ted’s email solicitation to supporters he says:
Betty still has some campaign debt from her first race in 2018. Helping her clear the debt would be a big boost for her re-election campaign.
How does one rack up so much debt in a school board election that an email solicitation from a congressman is required to retire the debt? It’s not like Betty Lieu was an unknown quantity in Torrance; Ted has been an elected official either for the city or representing it since 2002. And, most candidates for school board only raise and spend a few thousand dollars, according to an October 2018 report in the Daily Breeze, Torrance’s local newspaper (emphasis added):
Most of the candidates in the race have each raised roughly $1,500, according to financial disclosures.
Lieu, meanwhile, has only received $600 this year — but loaned herself $35,000. She has spent nearly $10,000 of that as of Sept. 22, records show.
Lieu actually loaned herself a total of $60,000 to run for school board, records show.
Yes, her personal fundraising was anemic at the time, but thanks to cash infusions from her husband’s campaign and from his donors (some of whom don’t live anywhere near Torrance) she’s been able to pay herself back $23,000 of that $60,000.
For instance, she’s received $5,000 from Shau-Wai Lam of Summit, NJ, the chairman emeritus of DCH Auto; $2500 from Chester Pipkin of Stateline, NV, CEO of Belkin Int’l and another $2,500 from his ex-wife; $1,000 from James Rosenwald of Rolling Hills, CA; and $1,000 from Carl Alberti of Los Angeles, all of whom have donated thousands to Ted Lieu’s campaign. A few of Betty’s smaller-dollar and out-of-state donors are also contributors to Ted’s campaign.
In addition to the major ethical and legal issues with Ted Lieu’s conversion of campaign funds to personal use, do Ted’s donors know that both their contributions to his campaign and to Betty’s are going to pay off loans that Betty allegedly made herself?
Profiting off of one’s status as a Member of Congress has been a problem for a long time and especially in terms of converting campaign funds to personal use. There’s a major campaign to end the practice of “hiring” spouses as a means of laundering money; a bill was recently introduced by Reps. Mike Gallagher and Tom Tiffany to end the practice:
“For too long, lawmakers of both political parties have engaged in the ethically dubious practice of pocketing campaign funds by ‘hiring’ their spouses and laundering the money as campaign related expenses,” said Rep. Tiffany. “It is outrageous and inappropriate for Members of Congress to convert campaign donations to personal funds in this way. It feeds public perceptions of corruption, undermines public trust in Congress, and must come to an end. Regardless of political party, we should all be able to agree that running for political office shouldn’t be part of a family enrichment scheme.”
It’s hard to see how funneling campaign contributions to a spouse’s campaign is any different than laundering money by “hiring” a spouse to do nothing, and it’s time that both the House Ethics Committee and the FEC look into these contributions.