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This story was inspired by a question from a BGA reader.
On a bright morning just a few weeks ago, a line of politicians and political aides stretched around a strip mall parking lot in Springfield — Republicans, Democrats, women running for county judge, men running for federal office. They were all there to get their names on the March primary ballot.
As different as they may be, behind each of those candidates is one common denominator: the need for campaign cash.
Every three months, especially during election season, news headlines tout how much cash candidates have raked in as they vie for public office. Voters hear about the horse race in dollars of who outraised who, but what candidates do with that money is a different story.
TV commercials! Consultants! Office space! Novelty costumes for events! It’s not cheap to run a campaign, and candidates, even at the local level, spend millions in hopes that the road will lead to cinching (or retaining) public office.
But there are rules behind how that campaign cash is collected and spent. Earlier this month, a Republican congressman in California, Duncan Hunter, said he would be stepping down from office after pleading guilty to charges he misused campaign funds by spending more than $250,000 in campaign cash for personal expenses. Local politicians also have to abide by laws but they seem to only get in trouble when they run afoul of federal laws, not state ones.
So who makes the rules about how they can spend the money voters contribute? And where is the line drawn between a campaign cost and a personal write-off?
Defining ‘personal use’
Both federal campaign laws and the Illinois election code include a laundry list of possible things officials might want to spend campaign funds on, and whether or not they actually can.
How officials can legally use the money they’ve raised all hangs on the definition of “personal use.” In essence, an expenditure is considered personal use if an official uses campaign contributions to pay for a cost that would exist even if they weren’t an officeholder.
Politicians aren’t supposed to spend campaign contributions on personal expenses because that would be another stream of income that isn’t reported to the government and not taxed.
Among the expenses the Illinois election code warns against: repayment of personal debts, tuition, membership or club dues, clothing or laundry expenses. But most of the prohibited categories come with a qualifier: expenses are allowed if they’re part of campaign operations.
Food and refreshments at a political event? That seems like a legitimate cost. But what about a nice dinner with a friend who also happens to be a donor? The law says officials can’t buy an automobile with campaign funds — unless, of course, it’s used primarily for political purposes. So is driving around your district a political purpose? Despite a definition that seems simple enough on paper, it’s harder to apply to the real-world activities of campaigns and political offices.
“There is a lot of gray,” said Ron Michaelson, former director of the Illinois State Board of Elections. “You can’t think of all the hundreds of possibilities as to what is personal and what’s political.”
Does anyone ever get in trouble?
The way the rules are written make it easy to stretch the law, especially at the state level where there is no enforcement arm of the state board of elections. But politicians still get investigated or charged for inappropriate use of campaign money.
The Federal Election Commission provides oversight and makes judgments on whether an official broke laws regarding campaign finance and personal use but Illinois doesn’t have a similar oversight structure, at least not institutionally. The Illinois State Board of Elections’ primary concern is making sure campaign donations are accurate and expenditures are specific, not enforcing or investigating spending misuse.
“Unless you’re doing something that creates an income tax liability, it’s pretty difficult to run afoul of the state law,” campaign finance expert Kent Redfield said. “When people get in trouble in terms of how they spend money, it usually involves federal law enforcement.”
That’s what happened in 2013, when former U.S. Rep. Jesse Jackson Jr. of Chicago pleaded guilty to misusing $750,000 of his campaign money. Federal prosecutors outlined about 3,100 purchases that fell under the personal use category, including electronics, vacations, dining and even a fedora owned by Michael Jackson. His wife, ex-Ald. Sandi Jackson, pleaded guilty to falsifying the couple’s tax returns to cover up the spending.
On the other hand, even questionable spending dug up by inquiring minds might not set off a federal probe. Take Joe Berrios, ousted Cook County assessor and former county chairman of the Democratic Party, who had meetings for years at high-end Chicago restaurants that added up to nearly $200,000 over nearly six years. Even since he lost his re-election bid for assessor, Berrios — who is still the party’s committeeman in the 31st Ward — has spent more than $12,000 in campaign cash on “meetings” and “meals,” according to state election records. On Tuesday, the Chicago Sun-Times reported a federal grand jury has subpoenaed records related to Berrios’ ward organization and two campaign committees, though the documents sought were not connected to unusual campaign spending.
Federal vs. state
Even though Illinois politicians aren’t getting dinged by state election officials, the rules in Illinois used to be even more lax.
In fact, up until 1998, politicians in Illinois could legally use campaign funds for their own personal expenses. That’s when the state legislature prohibited the practice. Still, personal spending wasn’t ended completely — they left in a lucrative loophole for sitting officeholders, which allowed politicians to withdraw and convert campaign cash to personal use up to whatever they had on hand on June 30, 1998 when the state campaign spending laws were overhauled.
Over the years, Illinois has continued to tighten up its campaign finance laws. Michaelson noted that in previous years, politicians would fill out expenditure statements to the state with vague line items such as “VISA: $50,000.” And while the state board now requires more specificity, Michaelson said the nature of campaign expenditures “is always a contested and controversial area.”
But identifying valid expenditures isn’t always easy, even for the feds.
In September, when Andrew Yang, the entrepreneur and 2020 Democratic presidential candidate, said he would use campaign funds to give ten people $1,000 a month for the next year, questions swirled around whether those handouts were personal use or legitimate campaign costs. But Yang is moving ahead with his unorthodox plan, in part because the FEC is essentially out of service.
In Illinois, experts say a combination of the lack of governmental oversight and vague legislative language make for a political landscape where more sunshine isn’t always welcomed by officials.
“[There’s] a general kind of tradition or culture of a lack of transparency,” said Redfield. “And kind of a presumption that [the nature of campaign spending] isn’t the public’s business.”
So what’s there to be done to make sure politicians spend correctly? With weak legal language and a state apparatus that focuses more on accurate reporting of income, Illinois is operating essentially on an honor system.
“Now [enforcement] is left more to the public at large, to opponents of candidates, to watchdog groups, journalists,” Michaelson said. “If there’s monkey business going on, have somebody try to find it.”
