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U.S. Rep. Mike Kelly, R-Butler, center, and then-Rep. Lou Barletta, of Hazleton, right, applaud a speech by then-President Donald Trump in 2018. Mr. Kelly is now the focus of an ethics investigation for misuse of his political action committee funds.
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Law­mak­ers scrutinized for ‘lav­ish’ spend­ing on resorts, high-end restaurants and limousines

Stephanie Strasburg/Post-Gazette

Law­mak­ers scrutinized for ‘lav­ish’ spend­ing on resorts, high-end restaurants and limousines

Watchdog group targets Rep. Kelly, others over campaign funds

Amid the spectacular ski slopes of the northern Utah mountains, U.S. Rep. Mike Kelly used political donations to pay for four visits to an exclusive resort known for its downhill events and picturesque views of the greater Rocky Mountains.

In all, the trips totaled nearly $52,000 at the St. Regis Deer Valley retreat, where balconies, sprawling sun decks and inground pools face snow-capped mountains and lush evergreens.

But Mr. Kelly did not limit his travel to just the five-star vacation spot during the 2020 election cycle . From the same pool of funds, he spent $19,000 at Georgia’s Sea Island where five miles of private beach line the small isle of upscale cottages and golf greens.

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The House Committee on Ethics will continue to investigate a complaint against U.S. Rep. Mike Kelly, it announced late Thursday. The report confirms that the probe focuses on whether Mr. Kelly, a Republican, had privileged information at the time his wife, Victoria Kelly, bought stock in the owner of a steel plant in the Kellys’ hometown of Butler.
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The GOP House member from the working-class area of Western Pennsylvania dipped into his leadership PAC — a pot of money that’s supposed to help political allies — and spent about $160,000 on airfare, trendy resorts and other expenses that are now the focus of an ethics complaint to a government panel that investigates lawmakers for misconduct.

Mr. Kelly is not alone in making controversial expenditures using the special pool of money that experts say has turned into a “slush fund” that allows candidates to spend without the traditional campaign limits.

The Campaign Legal Center, a Washington finance watchdog, filed complaints with the Office of Congressional Ethics against Mr. Kelly and two other representatives, Seth Moulton, D-Mass., and Gwen Moore, D-Wis., raising critical questions about whether the lawmakers abused their positions and violated ethics rules.

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In each case, the watchdog group highlighted expenses that appeared to veer beyond what the political action committee funds were designed to support — including expensive restaurants, StubHub tickets, and travel across the country.


The Campaign Legal Center filed complaints with the Office of Congressional Ethics against Mr. Kelly and two other representatives, Seth Moulton, D-Mass., and Gwen Moore, D-Wisc., raising critical questions about whether the lawmakers abused their positions and violated ethics rules.(John Locher/Associated Press)

“The fact that voters can see large sums of money spent for lavish lifestyles of members erodes the public trust,” said Kedric Payne, general counsel at the Campaign Legal Center.

While much of the national controversy in recent years has swirled around dark money and unlimited spending by donors, leadership PACs have created their own corruption risks that have escaped much of the scrutiny of modern campaign reform.

Created in the wake of the Watergate scandal in the 1970s, leadership PACs carried limits on how much money could be contributed to them, but they also came with a major flaw: There were few curbs on how the money could be spent.

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In the ensuing decades, the PACs would explode dramatically among members of Congress, with the vast majority of lawmakers now controlling at least one PAC and collectively spending more than $180 million in the last election cycle.

A report from the Campaign Legal Center and another watchdog, Issue One, highlights how far the use of leadership PACs has strayed from their initial purpose.

Dozens of lawmakers across the country recently spent only a small fraction of their overall leadership money on political purposes, like helping struggling candidates with funds for their campaigns — the very reason the PACs were founded.

Mr. Kelly, of Butler, spent just 22% of the money he collected for his fund on other campaigns and political causes during the last election cycle — the lowest rate of Pennsylvania’s congressional delegation, according to Federal Election Commission data analyzed in the report.


U.S. Rep. Mike Doyle, D-Forest Hills, used 26.2% of his leadership PAC money on the election of other Democratic candidates, the second lowest rate.(Alexandra Wimley/Post-Gazette)

Another southwestern Pennsylvania lawmaker, Democratic House member Mike Doyle, had the second lowest rate, with just 26% of his PAC spent on political purposes.

In contrast, others spent their money on causes for which the PACs were created, with the typical lawmaker putting 70% toward political uses in the last cycle, according to the report.

“The lower the percentage, the more serious the questions are about how that money is being spent,” said Michael Beckel, research director at Issue One.

In response to questions from the Post-Gazette, Mr. Kelly’s campaign manager, Melanie Brewer, said that “lawmakers from both parties hold destination fundraisers each year” and that the congressman’s trips were no different.

“While some candidates and campaigns have the luxury of personal investments, Mike does not. These trips are fundraisers, and we are evaluating all fundraising options moving forward to increase return on investment.”

Mr. Beckel said that even if the money is being used for legitimate fundraising purposes, it can go against the stated purpose of the PACs if lawmakers are “constantly just spending money to spend on the next fundraising event, to spend on the next fundraising event,” he said.

Mr. Doyle, of Forest Hills, was not singled out by the campaign watchdogs, but an analysis by the Post-Gazette found that his leadership PAC spent more than $100,000 at the Ritz-Carlton, primarily for two fundraising events in the spring of 2019 and 2020.

During the 2020 campaign cycle, the PAC only spent $66,400 on contributions to other campaigns.

His PAC also paid more than $62,000 to a Seattle law firm for legal and compliance services. Mr. Doyle, who recently announced he would not seek re-election, did not respond to interview requests.



Questionable spending

Spending by Mr. Kelly’s leadership PAC, Keep America Rolling, raised alarms with the Campaign Legal Center, which filed the complaint with the Office of Congressional Ethics, a nonpartisan body that investigates allegations of misconduct against House members.

In addition to the tens of thousands paid to the resorts in Utah and Georgia, the leadership PAC racked up thousands in expenses at five-star destinations like The Breakers, a palatial oceanfront resort in Palm Beach, Fla., less than three miles from former President Donald Trump’s Mar-a-Lago club.

His PAC also ran up tabs at the Four Seasons Hotel Las Vegas and The Venetian Las Vegas, one of the largest hotels in the world.

The spending also included roughly $20,000 on airfare and train tickets, as well as $560 on a limousine service in Park City, Utah, where the St. Regis resort is located.

Many of the expenses were labeled as fundraising events in federal filings, but the Campaign Legal Center questioned that claim after the watchdog group was unable to find significant contributions that would indicate large fundraisers.

“If a member of Congress was to say ‘Hey, this was for a campaign event.’ They should be able to provide a calendar that could show this was a campaign use. I just haven’t seen that,” said Mr. Payne.

Mr. Kelly is also facing a separate investigation by the House Ethics Committee regarding a stock purchase made by his wife Victoria Kelly in April 2020.

Last week, the committee released a blistering report in which investigators found “substantial reason” to believe the congressman’s wife made the transaction — netting tens of thousands in gains — based on confidential information picked up by her husband.

The Office of Congressional Ethics, which authored the report, recommended that the House committee issue subpoenas for Mr. Kelly, his wife, Mr. Kelly’s former chief of staff, and former Commerce Secretary Wilbur Ross, all of whom did not cooperate with the probe.

In addition to Mr. Kelly, the Campaign Legal Center also called into question the expenses of Mr. Moulton and Ms. Moore — hundreds of thousands of dollars — from their leadership PAC war chests.

In the case of Mr. Moulton, who briefly ran in the 2020 Democratic presidential primary, the watchdog group singled him out for using less than 10% of his money on other candidates, out of $1.7 million in all.


The Campaign Legal Center filed complaints with the Office of Congressional Ethics against Mr. Kelly and two other representatives, Seth Moulton, D-Mass., and Gwen Moore, D-Wisc., raising critical questions about whether the lawmakers abused their positions and violated ethics rules.(Morry Gash /POOL/AFP via Getty Images)

Ms. Moore’s PAC also spent the vast majority of her money on non-political causes, including tens of thousands on hotels, travel and dining, along with online ticket vendors for events.

In response to the complaint, Mr. Moulton’s campaign said his PAC worked to encourage donors to give hundreds of thousands of dollars directly to other campaigns, and that “simple percentages alone [do] not accurately reflect that work.”

“The CLC is wrong. I look forward to setting the record straight,” he said in a written statement to the Post-Gazette.

Ms. Moore said in a statement to an NBC affiliate that the $280,000 she spent covered the costs of hosting fundraising events.

Lawmakers under fire

Several lawmakers in the past have come under fire for their use of leadership PAC funds, at times part of larger ethics inquiries.


In 2007, former Democratic House member Charlie Rangel of New York was harshly criticized after he dipped into his PAC to pay for a portrait he commissioned of himself, even though the Federal Election Commission approved the money.(Lauren Victoria Burke/Associated Press)

In 2007, former Democratic House member Charlie Rangel of New York was harshly criticized after he dipped into his PAC to pay for a portrait he commissioned of himself, even though the Federal Election Commission approved the money. The price: $64,500.

The painting was hoisted in the hearing room where Mr. Rangel chaired the powerful Ways and Means Committee — a position he lost in a larger ethics scandal.

Another Democratic House member, Rob Andrews of New Jersey, tapped into PAC money — more than $16,000 — to pay for a family trip to Scotland in 2011.

He refunded the money after the payments were made public, but ultimately resigned after the House ethics committee launched an inquiry into the Scotland trip as well as other allegations of misspending campaign funds.

Though ethics investigations may generate bad publicity for lawmakers, they typically lack significant penalties.

The House Committee on Ethics can issue sanctions, or escalate to the full House a recommendation for a reprimand, fine or censure, but such cases are rare.

“Enforcement is not vigorous,” said Michael Kang, a law professor at Northwestern University and an expert in campaign finance, “It’s basically Congress regulating themselves.”

One way to crack down on leadership PAC misspending would be to ban the use of such money for personal expenses — similar to how normal campaign funds are regulated.

As it stands, one of the few limits on the funds is that they cannot be used for the candidate’s own campaign.

“It’s a giant loophole,” Mr. Kang said. “It’s odd that we limit more strictly how campaign committee money is used, but the way leadership PAC money is used is largely unregulated.”

Bills to ban personal use of the money have been introduced in Congress multiple times in the past decade, but none have gained momentum.

Henry Waxman, a once-powerful House member who created what was considered the first leadership PAC in 1978, originally envisioned the fund as a valuable tool to help elect fellow Democrats.

At the time, new candidates might have leaned more heavily on corporations and interest groups to help seed their campaigns.

“It was a better way to help those candidates than having to rely on PACs of special interests,” said Mr. Waxman, a Californian who served in Congress from 1975 to 2015.

However, as the use of the new tool expanded, he lamented how the money morphed into “slush funds.”

“More and more people aren’t imposing limits on themselves,” said Mr. Waxman, former chairman of the House Committee on Oversight and Reform. “Power can be corrupting and money can be corrupting, and that’s why there have to be limits on both.”

Bradley Smith, a former chair of the Federal Election Commission, said reforms have not taken place because leaders of both parties are buoyed by the dollars.

Although Mr. Smith generally favors looser campaign finance laws, he has been critical of leadership PACs.

“You have an incentive to watch campaign funds more. With leadership PACs, there’s more room for, ‘Well, let’s have a nice dinner,’” he said.

With few rules on spending and little incentive to be frugal, the danger of using leadership PACs for personal enrichment increases.

“If one is a bit on the corrupt side, it is easier to do it with leadership PACs,” Mr. Smith said.

Joel Jacobs: jjacobs@post-gazette.com; Ashley Murray: amurray@post-gazette.com

 

First Published: October 31, 2021, 10:00 a.m.
Updated: October 31, 2021, 12:35 p.m.

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U.S. Rep. Mike Kelly, R-Butler, center, and then-Rep. Lou Barletta, of Hazleton, right, applaud a speech by then-President Donald Trump in 2018. Mr. Kelly is now the focus of an ethics investigation for misuse of his political action committee funds.  (Stephanie Strasburg/Post-Gazette)
U.S. Rep. Mike Doyle, D-Forest Hills, used 26.2% of his leadership PAC money on the election of other Democratic candidates, the second lowest rate.  (Alexandra Wimley/Post-Gazette)
Mr. Kelly’s leadership PAC ran up tabs at the Four Seasons Hotel Las Vegas and The Venetian Las Vegas, one of the largest hotels in the world.  (Ethan Miller/Getty Images)
Mr. Kelly’s leadership PAC ran up tabs at the Four Seasons Hotel Las Vegas and The Venetian Las Vegas, one of the largest hotels in the world.  (Ethan Miller/Getty Images)
In 2007, former Democratic House member Charlie Rangel of New York was harshly criticized after he dipped into his PAC to pay for a portrait he commissioned of himself, even though the Federal Election Commission approved the money. The price: $64,500.  (Lauren Victoria Burke/Associated Press )
The Campaign Legal Center filed complaints with the Office of Congressional Ethics against Mr. Kelly and two other representatives, Seth Moulton, D-Mass., and Gwen Moore, D-Wisc., raising critical questions about whether the lawmakers abused their positions and violated ethics rules.  (John Locher/Associated Press)
The Campaign Legal Center filed complaints with the Office of Congressional Ethics against Mr. Kelly and two other representatives, Seth Moulton, D-Mass., and Gwen Moore, D-Wisc., raising critical questions about whether the lawmakers abused their positions and violated ethics rules.  (Morry Gash /POOL/AFP via Getty Images)
Stephanie Strasburg/Post-Gazette
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