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Joseph Curl: Presidential hopefuls play blame game

EDITORIAL: What is the problem?

“She’s followed all the appropriate rules and regulations in terms of records and paperwork,” said Brendan Daly, Mrs. Pelosi’s spokesman. “When [former treasurer] Leo McCarthy became ill, she thought that it was best that that firm did the accounting and she’s paid fair market value in San Francisco.”

Between 1999 and 2006, FLS collected $500 per month to cover rent, utilities and equipment for the leadership PAC, according to the FEC records. The PAC’s address is listed as a personal mailbox in San Francisco, across the street from FLS’s Montgomery Street office building, but the rent payments went to an office space.

In early 2007, the PAC’s treasurer, Leo T. McCarthy, former Democratic speaker of the state assembly and lieutenant governor in California, died. Mr. Pelosi took over as treasurer and his company’s PAC payouts rose.

At that point, FLS started charging the PAC $24,000 per year for accounting work. In January 2008, the PAC’s rent - paid to FLS - also quadrupled from $500 to $2,000 per month.

Mr. McCarthy, the previous treasurer, had done the work as a volunteer, according to FEC documents and Jennifer Crider, a senior adviser to Mrs. Pelosi and spokeswoman for the Democratic Congressional Campaign Committee. She said FLS’ accounting fees are in line with costs for other PACs.

The jump in rent was an adjustment to reflect San Francisco’s pricey real estate market, Miss Crider said. The rent was adjusted to $1,250 per month, with $750 in back rent to reflect that the rent should have been increased in mid-2007. This was the first increase since the PAC was established in mid-1999, records show.

Over the first six months of 2008, FLS was the largest vendor for Mrs. Pelosi’s PAC. Brian Wolff, a political consultant, is the second-largest vendor, bringing in $22,500 this year.

FLS’ payments represent 11 percent of the $213,900 the PAC raised over the first half of this year, according to the FEC documents.

PACs, which are designed to help politicians contribute to other candidates and build influence with colleagues, operate under lighter restrictions than traditional campaign committees.

Meredith McGehee, policy director at the nonpartisan Campaign Legal Center, said putting family members on a PAC payroll is bound to raise questions and, in some cases, allow for abuse.

“The reality is that under the current system, PACs are rife with self-dealing transactions,” she said. “The laws and regulations could and should be strengthened.

“There is a point now that you’re starting to talk about real money,” she said of Mrs. Pelosi’s PAC. “This is not just a mom-and-pop operation and any self-dealing transaction by a member of Congress is going to get scrutiny, particularly with large amounts of money and prominent members.”

It is illegal for members of Congress to hire family members to work on their official staff, but hiring relatives to work on a campaign or PAC is legal.

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