- The Washington Times - Wednesday, October 1, 2008

EXCLUSIVE:

House Speaker Nancy Pelosi has directed nearly $100,000 from her political action committee to her husband’s real estate and investment firm over the past decade, a practice of paying a spouse with political donations that she supported banning last year.

Financial Leasing Services Inc. (FLS), owned by Paul F. Pelosi, has received $99,000 in rent, utilities and accounting fees from the speaker’s “PAC to the Future” over the PAC’s nine-year history.

The payments have quadrupled since Mr. Pelosi took over as treasurer of his wife’s committee in 2007, Federal Election Commission records show. FLS is on track to take in $48,000 in payments this year alone - eight times as much as it received annually from 2000 to 2005, when the committee was run by another treasurer.

Lawmakers’ frequent use of campaign donations to pay relatives emerged as an issue in the 2006 election campaigns, when the Jack Abramoff lobbying scandal gave Democrats fodder to criticize Republicans such as former House Majority Leader Tom DeLay of Texas and Rep. John T. Doolittle of California for putting their wives on their campaign and PAC payrolls for fundraising work.

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Last year, Mrs. Pelosi supported a bill that would have banned members of Congress from putting spouses on their campaign staffs. The bill - which passed the House in a voice vote but did not get out of a Senate committee - banned not only direct payments by congressional campaign committees and PACs to spouses for services including consulting and fundraising, but also “indirect compensation,” such as payments to companies that employ spouses.

“Democrats are committed to reforming the way Washington does business,” Mrs. Pelosi said in a press release at the time. “Congressman [Adam] Schiff’s bill will help us accomplish that goal by increasing transparency in election campaigns and preventing the misuse of funds.”

Last week, Mrs. Pelosi’s office said the payments to her husband’s firm were perfectly legal, insisting she is compensating her husband at fair market value for the work his firm has performed for the PAC. But ethical watchdogs said the arrangement sends the wrong message.

“It’s problematic,” said Melanie Sloan, executive director of the Citizens for Responsibility and Ethics in Washington (CREW), a nonprofit ethics and watchdog group. “From what I understand, Mr. Pelosi doesn’t need the money, but this isn’t the issue. … As speaker of the House, it sends the wrong message. She shouldn’t be putting family members on the payroll.”

A senior adviser to Mrs. Pelosi described the payments to FLS as “business expenses.”

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