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October 31, 2014

May Campaign Funds Be Used for Holiday Gifts? | A Question of Ethics

Q. Over the holidays, I saw news reports that some members of the House use funds from their campaigns to purchase holiday gifts for constituents. As a concerned citizen, this practice surprised me. I would think that money donated to campaigns should be used solely for campaign purposes. Is it really okay to use campaign funds to buy holiday gifts?

A. Great question. Answering it actually requires considering two different bodies of law: federal election law and House ethics rules. Broadly, the use of campaign funds is governed by the Federal Election Campaign Act and regulations administered by the Federal Election Commission. However, active members of the House must also abide by House ethics rules administered by the House Ethics Committee.

In most cases, the Ethics Committee defers to the FEC’s determinations on permissible uses of campaign funds. But, at least in theory, there may be instances where the Ethics Committee prohibits uses that the FEC allows. Thus, the Ethics Committee has cautioned: “A Member’s use of campaign funds for federal office is permissible only if it complies with the provisions of both the House Rules” and FEC regulations.

So, let’s start with the FEC regulations. In principle, you are correct: The regulations require that campaign funds be used solely for campaign or other official purposes. Campaign funds, the regulations state, “shall not be converted by any person to personal use.” Violations of this restriction can result in stiff civil penalties and fines from the FEC. In some circumstances, where criminal conduct is involved, misusing campaign funds can result in even harsher penalties from the Department of Justice. Former Rep. Jesse L. Jackson Jr., for example, is currently serving a 30-month prison sentence in part for using campaign funds for personal use.

The tricky question is what counts as “personal use.” The regulations define personal use as when funds are used to fulfill a commitment, obligation or expense that would exist irrespective of the member’s campaign or duties as a holder of federal office. This is sometimes referred to as the “irrespective test.” The FEC lists uses that are presumed to fail the irrespective test and are therefore typically considered “personal uses,” including, for example, a home mortgage, clothing, country club fees and tuition payment.

As you point out, recent news stories have described House members using campaign funds to buy holiday gifts. Campaigns must file reports describing the various uses of campaign funds, and some members’ campaign reports have historically described purchases of ornaments, cards and other items from the House gift shop. In many cases, the reports specify that the items are for constituents.

So are these gifts allowed? Provided certain conditions are met, yes. FEC regulations explicitly exclude “gifts” from the definition of personal use. “Gifts of nominal value … made on a special occasion such as a holiday, graduation, marriage, retirement, or death are not personal use, unless made to a member of the candidate’s family.” In promulgating this regulation, the FEC explained that candidates and officeholders frequently send small gifts to constituents and supporters on special occasions as gestures of sympathy or goodwill, and that expenses for such gifts “would not exist irrespective of the candidate’s or officeholder’s status.” The FEC cautioned, however, that the gifts must be of nominal value. Moreover, they may not be to family members because members would presumably make gifts to family members irrespective of their campaign or federal office (one would hope).

As for the House Ethics Committee, it has issued guidance which cites approvingly the FEC regulations that allow members to use campaign funds to buy gifts of nominal value on special occasions. “Such gifts,” the Ethics Committee guidance states, “may include the relatively inexpensive House or Capitol souvenir items sold by the House gift store or the U.S. Capitol Historical Society, and thus a Member may use campaign funds to purchase such nominal-value gifts for the Member’s supporters or contributors.” However, the committee’s guidance cautions that use of campaign funds for a gift is permissible only if it “serves a bona fide campaign or political purpose” and, of course, that the recipient may not be a family member.

So, to sum up, you are right that the law prohibits personal use of campaign funds. Holiday gifts of nominal value to constituents just don’t count as personal use.

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