How Congress Uses Donor Money as Slush Funds

Apparently an annual salary of $174,500 and a vast array of taxpayer-funded perks is not enough for most members of Congress.

Otherwise, why would they need "Leadership PACs" - personal political action committees that supposedly raise money for political activities but in practice provide a pipeline of cash to subsidize their already-elite lifestyle.

Now remember, in addition to official salaries more than triple what the average American household earns, members of Congress have an average net worth of about $966,000, according to OpenSecrets.org.

And yet these greedy elitists still feel the need to siphon off some political donations to pay for luxuries they could easily afford anyway.

As Trevor Potter, a former chairman of the Federal Election Commission (FEC), told "60 Minutes," Leadership PAC money "can be used for literally anything."

By law - a law Congress wrote and passed - Leadership PAC money has but a single limitation: It cannot be spent directly on the PAC owner's own election campaign.

How convenient...

"You can use [Leadership PACs] for babysitting..., you can use them for paying for car service. You can use them for travel," Peter Schweizer, a fellow at the Hoover Institution, told CBS News "60 Minutes" in a segment broadcast on Sunday. Schweizer's book on the topic, Extortion: How Politicians Extract Your Money, Buy Votes and Line Their Own Pockets, comes out today (Tuesday).

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Some lawmakers have used their Leadership PAC money to entertain friends on elite golf courses or to treat them to NFL games.

"It's a political slush fund," Potter told "60 Minutes." "Over time, we've had them. They've been outlawed. They spring back in new guises, and this is the latest guise."

And that's not all. When members of Congress leave office, they can keep their Leadership PAC money and use it for their second career as a lobbyist, or in retirement to finance the maintenance of old political connections.

As long as they can dream up a political pretext for spending the money, no matter how vague or stretched, it's a "legitimate" Leadership PAC expense.

Where Leadership PACs Came From

According to the "60 Minutes" segment, Leadership PACs were invented specifically to bypass the Ethics Reform Act of 1989, which stated that campaign funds could not be converted for personal use.

At first only the most senior members of Congress had Leadership PACS, which originally were set up to raise money that could be distributed to other members of their party to secure political alliances and ensure the election of those allies.

But now nearly every U.S. senator - and about two-thirds of the House of Representatives - has a Leadership PAC.

Leadership PACs have become so de rigueur, in fact, that incoming members of Congress now create them before they're even sworn into office.

Some don't even wait to get elected.

Newark Mayor Cory Booker, who just last week won the open seat left by the death of Sen. Frank Lautenberg, D-NJ, created his Leadership PAC in June - of 2011.

And because Leadership PACs are so handy, they enjoy full bipartisan support. While their political brinksmanship forced a government shutdown earlier this month, Republicans and Democrats hold identical positions on political slush funds: They love them.

And it's easy to see why. In addition to providing supplemental income, Leadership PACs allow members of Congress to double-dip from donors who had already given the legal maximum to their regular campaign fund.

The few legislative attempts to restrict the personal use of Leadership PAC funds have been routinely ignored.

What Leadership PAC Money Gets Spent On

Let's have a look at some of the frills our elected officials have spent their Leadership PAC donations on:

Rep. Ander Crenshaw, R-FL, spent $32,000 in Leadership PAC money to take some defense industry donors on a tour of some California wineries. Rep. Robert Andrews, D-NJ, spent $16,000 to fly his family to Scotland for the wedding of a friend that he was considering hiring as a political consultant. Sen. Saxby Chambliss, R-GA, spent $100,000 over the past two years treating his political cronies to some of world's top golf courses. Rep. George Meeks, D-NY, dropped $35,000 on tickets to NFL games for his friends' football watching pleasure. Disgraced presidential candidate Sen. John Edwards, D-NC, used $114,000 to pay mistress Reille Hunter to make a campaign video. In one case, the misuse of funds extended beyond even the lawmaker's death. In 2007, after Rep. Paul Gillmor, R-OH, died suddenly from a heart attack, his staff spent his Leadership PAC money on dinners and pizza parties.

And there are other abuses.

"60 Minutes" noted that many members of Congress also use Leadership PAC money to hire relatives to work on their campaigns.

And the Citizens for Responsibility and Ethics in Washington (CREW) found that at least 15 members of Congress have loaned their campaign funds money, then charged ridiculously high interest rates.

Such schemes can yield serious money, but the profits come directly out of the pockets of their unsuspecting contributors.

One enterprising congresswoman, Rep. Grace Napolitano, D-CA, loaned her campaign $150,000 at 18% interest. Over 12 years, she collected a tidy $228,000.

"Congress has created this domain that allows them to decide whether something is ethical or whether something is good," Schweizer said. "And it's another example, unfortunately, where the rules that apply to the rest of us don't really apply to members of Congress."

Are you outraged over Congressional abuse of Leadership PAC money? Are you tired of an ineffective government run by a privileged class that has forgotten what it's like to be a hard-working, struggling citizen? Go here to tell Washington how you really feel!

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